Document:

Exhibit 10.2

 

Joint
OPERATING AGREEMENT

 

PEL
512 South Block

SOUTH
AUSTRALIA

 

Discovery
Energy SA Pty Ltd

 

WESI
PEL512 Pty Ltd

 

    	 

    	 

    

 

Table
of Contents

 

	ARTICLE 1 - DEFINITIONS AND INTERPRETATIONS	1
	 	1.1	Definitions	1
	 	1.2	Interpretation	7
	 	 	 	 
	ARTICLE 2 - TERM AND TERMINATION	8
	 	2.1	Term	8
	 	 	 	 
	ARTICLE 3 - SCOPE	8
	 	3.1	Scope	8
	 	3.2	Participating
    Interest	9
	 	3.3	Ownership,
    Obligations and Liabilities	9
	 	 	 	 
	ARTICLE 4 - OPERATOR	9
	 	4.1	Designation
    of Operator	9
	 	4.2	Rights
    and Duties of Operator	9
	 	4.3	Operator
    Personnel	11
	 	4.4	Information
    Supplied by Operator	11
	 	4.5	Settlement
    of Claims and Lawsuits	12
	 	4.6	Limitation
    on Liability of Operator	13
	 	4.7	Insurance
    Obtained by Operator	13
	 	4.8	Commingling
    of Funds	15
	 	4.9	Resignation
    of Operator	15
	 	4.10	Removal
    of Operator	15
	 	4.11	Appointment
    of Successor	16
	 	 	 	 
	ARTICLE 5 - OPERATING COMMITTEE	17
	 	 	 	 
	 	5.1	Establishment
    of Operating Committee	17
	 	5.2	Powers
    and Duties of Operating Committee	17
	 	5.3	Authority
    to Vote	17
	 	5.4	Subcommittees	17
	 	5.5	Notice
    of Meeting	17
	 	5.6	Contents
    of Meeting Notice	17
	 	5.7	Location
    of Meetings	18
	 	5.8	Operator’s
    Duties for Meetings	18
	 	5.9	Voting
    Procedure	18
	 	5.10	Record
    of Votes	19
	 	5.11	Minutes	19
	 	5.12	Voting
    by Notice	19
	 	5.13	Effect
    of Vote	19
	 	 	 	 
	ARTICLE 6 - WORK PROGRAMS AND
    BUDGETS	20
	 	 	 	 
	 	6.1	Preparation
    and Approval	20
	 	6.2	Exploration
    and Appraisal	22
	 	6.3	Development	23
	 	6.4	Production	24
	 	6.5	HSE
    Plan	25
	 	6.6	Contract
    Awards	25
	 	6.7	Authorization
    for Expenditure (“AFE”) Procedure	26
	 	6.8	Over-expenditures
    of Work Programs and Budgets	27
	 	 	 	 
	ARTICLE 7 - OPERATIONS BY FEWER
    THAN ALL PARTIES	28
	 	 	 	 
	 	7.1	Limitation
    on Applicability	28

 

    	i 

    	 

    

 

	 	7.2	Procedure
    to Propose Exclusive Operations	29
	 	7.3	Responsibility
    for Exclusive Operations	30
	 	7.4	Consequences
    of Exclusive Operations	30
	 	7.5	Premium
    to Participate in Exclusive Operations	32
	 	7.6	Order
    of Preference of Operations	33
	 	7.7	Stand-By
    Costs	34
	 	7.8	Special
    Considerations Regarding Deepening and Sidetracking	34
	 	7.9	Use
    of Property	35
	 	7.10	Lost
    Production during Tie-In of Exclusive Operation Facilities	35
	 	7.11	Conduct
    of Exclusive Operations	36
	 	 	 	 
	ARTICLE 8 - DEFAULT	37
	 	 	 	 
	 	8.1	Default
    and Notice	37
	 	8.2	Operating
    Committee Meetings, Data, and Entitlements	37
	 	8.3	Allocation
    of Defaulted Amounts	38
	 	8.4	Remedies	39
	 	8.5	Survival	44
	 	8.6	No
    Right of Set Off	44
	 	 	 	 
	ARTICLE 9 - DISPOSITION OF PRODUCTION	45
	 	 	 	 
	 	9.1	Right
    and Obligation to Take in Kind	45
	 	9.2	Disposition
    of Crude Oil and/or Natural Gas	45
	 	 	 	 
	ARTICLE 10 - ABANDONMENT	45
	 	 	 	 
	 	10.1	Abandonment
    of Wells Drilled as Joint Operations	45
	 	10.2	Abandonment
    of Exclusive Operations	46
	 	10.3	Provision
    for and Conduct of Abandonment	46
	 	 	 	 
	ARTICLE 11 - SURRENDER, EXTENSIONS
    AND RENEWALS	46
	 	 	 	 
	 	11.1	Surrender	46
	 	11.2	Extension
    of the Term	46
	 	 	 	 
	ARTICLE 12 - TRANSFER OF INTEREST
    OR RIGHTS AND CHANGES IN CONTROL	47
	 	 	 	 
	 	12.1	Obligations	47
	 	12.2	Transfer	47
	 	12.3	Change
    in Control	49
	 	 	 	 
	ARTICLE 13 - WITHDRAWAL FROM
    AGREEMENT	51
	 	 	 	 
	 	13.1	Right
    of Withdrawal	51
	 	13.2	Partial
    or Complete Withdrawal	51
	 	13.3	Rights
    of a Withdrawing Party	51
	 	13.4	Obligations
    and Liabilities of a Withdrawing Party	52
	 	13.5	Emergency	52
	 	13.6	Assignment	52
	 	13.7	Approvals	53
	 	13.8	Security	53
	 	13.9	Withdrawal
    or Abandonment by All Parties	53
	 	 	 	 
	ARTICLE 14 - RELATIONSHIP OF
    PARTIES AND TAX	53
	 	 	 	 
	 	14.1	Relationship
    of Parties	53
	 	14.2	Tax	53
	 	14.3	United
    States Tax Election	54
	 	 	 	 
	ARTICLE 15 - VENTURE INFORMATION
    - CONFIDENTIALITY - INTELLECTUAL PROPERTY	54
	 	 	 	 
	 	15.1	Venture
    Information	54

 

    	ii 

    	 

    

 

	 	15.2	Confidentiality	55
	 	15.3	Intellectual
    Property	55
	 	15.4	Continuing
    Obligations	56
	 	15.5	Trades	56
	 	 	 	 
	ARTICLE 16 - FORCE MAJEURE	56
	 	 	 	 
	ARTICLE 17 - NOTICES	57
	 	 	 	 
	 	17.1	Form
    of Notices	57
	 	17.2	Delivery
    of Notices	57
	 	17.3	Change
    of Address	57
	 	 	 	 
	ARTICLE 18 - APPLICABLE LAW -
    DISPUTE RESOLUTION - WAIVER OF SOVEREIGN IMMUNITY	58
	 	 	 	 
	 	18.1	Applicable
    Law	58
	 	18.2	Dispute
    Resolution	58
	 	18.3	Expert
    Determination	59
	 	18.4	Waiver
    of Sovereign Immunity	60
	 	 	 	 
	ARTICLE 19 - GENERAL PROVISIONS	60
	 	 	 	 
	 	19.1	Conduct
    of the Parties	60
	 	19.2	Conflicts
    of Interest	61
	 	19.3	Public
    Announcements	61
	 	19.4	Successors
    and Assignees	62
	 	19.5	Waiver	62
	 	19.6	No
    Third Party Beneficiaries	62
	 	19.7	Joint
    Preparation	62
	 	19.8	Severance
    of Invalid Provisions	62
	 	19.9	Counterpart
    Execution	62
	 	19.10	Entirety	63

 

	Exhibit
    A 	-	Accounting
    Procedure	 
	 	 	 	 
	Exhibit
    B 	-	Contract
    Area	 

 

    	iii 

    	 

    

 

JOINT
OPERATING AGREEMENT

 

THIS
AGREEMENT is made as of ______________ (the “Effective Date”) among:

 

Discovery
Energy SA Pty Ltd ACN 158 204 052 of Level 8, 350 Collins Street, Melbourne VIC 3000, a company existing under the laws of
Victoria, Australia (hereinafter referred to as “DESAL”) and, WESI PEL512 Pty Ltd ACN 635 946 682 of Suite
33.01, Chifley Tower, 2 Chifley Square, Sydney NSW 2000, a company existing under the laws of New South Wales, Australia (hereinafter
referred to as “WESI”).

 

The
companies named above may sometimes individually be referred to as “Party” and collectively as the “Parties”.

 

This
Agreement is premised on the fact that:

 

DESAL
holds one hundred percent (100%) of the rights to explore, develop and produce hydrocarbons covering Petroleum Exploration Licence
(PEL) 512 (hereinafter referred to as “Licence”). The Licence was issued by the Government of the State of South Australia
(hereinafter referred to as “Government) to DESAL on 26 October 2012; and

 

The
Parties have entered into a Farmout Agreement dated effective ___________ (as amended, supplemented, restated or otherwise modified
from time to time, hereinafter referred to as “Farmout Agreement”) under which DESAL, subject to the terms of the
Farmout Agreement and in exchange for the consideration expressed in the Farmout Agreement, agreed to transfer certain beneficial
and legal interests in its rights and obligations in the Licence to WESI insofar as the Licence relates to the area shown as the
South block of the Licence labelled as Block A on the map attached as Exhibit B and the Lycium block labelled as Block B on the
map attached as Exhibit B and referred to in this Agreement as the Contract Area, excepting and reserving unto DESAL certain beneficial
interests in the West Block;

 

The
Parties desire to define their respective rights and obligations concerning operations and activities under the Licence;

 

In
consideration of the premises set out above and the mutual covenants, agreements, and obligations set out below and to be performed,
the Parties agree as follows:

 

ARTICLE
1 - DEFINITIONS AND Interpretations

 

	1.1	Definitions

 

As
used in this Agreement, the following capitalized terms shall have the meaning ascribed to them below:

 

Accounting
Procedure means the rules, provisions, and conditions contained in Exhibit A.

 

Acquired
Party means the Party subject to a Change in Control.

 

Acquirer
means the Party or third party proposing to acquire Control in a Change in Control.

 

Act
means the Petroleum and Geothermal Energy Act 2000 (SA).

 

AFE
means an authorization for expenditure under Article 6.8.

 

Affiliate
means a legal entity that at any tier Controls, is Controlled by, or is Controlled by an entity that Controls, a Party.

 

Agreed
Interest Rate means interest compounded on a monthly basis, at LIBOR plus three (3) percentage points, applicable on the first
Business Day before the due date of payment and afterwards on the first Business Day of each succeeding Calendar Month. If the
resulting rate is contrary to any applicable usury law, then the rate of interest to be charged shall be the maximum rate permitted
by applicable law.

 

    	1

    	 

    

 

Agreement
means this agreement, together with the Exhibits attached to this agreement, and any extension, renewal, or amendment agreed
to in writing by the Parties.

 

Anti-Bribery
Laws and Obligations means for each Party: (i) the Laws relating to combating bribery and corruption, and/or the principles
described in the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed in
Paris on December 17, 1997, which entered into force on February 15, 1999, and the Convention’s Commentaries; and (ii) the
laws relating to combating bribery and corruption in the countries of such Party’s place of incorporation, principal place
of business, and/or place of registration as an issuer of securities, and/or in the countries of such Party’s ultimate parent
company’s place of incorporation, principal place of business, and/or place of registration as an issuer of securities.

 

Appraisal
Well means any well (other than an Exploration Well or a Development Well), whose purpose at the time drilling commences,
is to evaluate the areal extent of an existing Discovery and/or the volume of Hydrocarbon reserves contained in an existing Discovery.

 

Business
Day means a Day on which the banks in Australia are customarily open for business.

 

Calendar
Month means one of the twelve (12) calendar months of the Gregorian Calendar commencing on the first Day of each calendar
month.

 

Calendar
Quarter means a period of three (3) consecutive Calendar Months commencing January 1 and ending March 31, commencing April
1 and ending June 30, commencing July 1 and ending September 30, or commencing October 1 and ending December 31.

 

Calendar
Year means a period of twelve (12) consecutive Calendar Months, commencing January 1 and ending December 31.

 

Cash
Call means any request for the Parties to advance their respective Participating Interest shares of estimated cash requirements
for the next Calendar Month’s Joint Operations in accordance with an approved Work Program and Budget.

 

Cash
Transfer means a Transfer where the sole consideration, other than the assumption of obligations relating to the transferred
Participating Interest, is cash, cash equivalents, promissory notes, or retained interests (e.g. production payments) in the Participating
Interest being transferred.

 

Cash
Value means the portion of the total monetary value (expressed in Australian dollars) of the consideration being offered by
the proposed transferee (including any cash, other assets, and tax savings to the transferor from a non-cash deal) that reasonably
should be allocated to the Participating Interest subject to the proposed Transfer or Change in Control.

 

Change
in Control means a direct or indirect change in Control of a Party (whether through merger, spin-off, sale of shares or other
equity interests, or otherwise) through a single transaction or series of related transactions, from one or more transferors to
one or more transferees, in which the market value of the Party’s Participating Interest represents more than 30% percent
of the aggregate market value of the assets of the Party and its Affiliates that are subject to the change in Control. For this
definition, market value will be determined based upon the cash a willing buyer would pay a willing seller in an arm’s length
transaction.

 

Commercial
Discovery means any Discovery that is sufficient to entitle the Parties to apply for authorization from the Government to
commence exploitation.

 

Completion
means operations intended to complete a well through the Christmas tree as a producer of Hydrocarbons in one or more Zones,
including the setting of production casing, perforating, stimulating the well and production Testing conducted in such operation.
“Complete” and other derivatives shall be construed accordingly.

 

    	2

    	 

    

 

Consenting
Party means a Party that agrees to participate in and pay its share of the cost of an Exclusive Operation.

 

Consequential
Loss means any losses, damages, costs, or liabilities caused (directly or indirectly) by any of the following arising out
of, relating to, or connected with this Agreement or the operations and/or activities carried out under this Agreement: (i) reservoir
or formation damage; (ii) inability to produce, use or dispose of Hydrocarbons; (iii) loss or deferment of income; (iv) punitive
damages; or (v) indirect damages or losses whether or not similar to the foregoing.

 

Contract
Area means as of the Effective Date the South block of the Licence labelled as Block A on the map attached as Exhibit B and
the Lycium block labelled as Block B on the map attached as Exhibit B. The perimeter or perimeters of the Contract Area shall
correspond to the South and Lycium blocks shown in Exhibit B as covered by the Licence, as such area may vary from time to time
during the term of validity of the Licence.

 

Control
means the ownership directly or indirectly of fifty (50) percent or more of the voting rights in a legal entity.

 

Corporations
Act means the Corporations Act 2001 (Cth).

 

Crude
Oil means all crude oils, condensates, natural gas liquids and other Hydrocarbons in a liquid state at standard pressure that
are covered by the Licence.

 

Day
means a Gregorian Calendar day unless otherwise specifically provided.

 

Deepening
means an operation to drill a well to an objective Zone below the deepest Zone in which such well was previously drilled,
or below the deepest Zone proposed in the associated AFE (if required), whichever is the deeper.

 

Default
Amount means the amount of the Defaulting Party’s share of Joint Account charges that the Defaulting Party has failed
to pay when due under this Agreement or the Farmout Agreement.

 

Default
Interest Rate means interest compounded on a monthly basis, at LIBOR plus three (3) percentage points, applicable on the first
Business Day before the due date of payment and afterwards on the first Business Day of each succeeding Calendar Month. If the
resulting rate is contrary to applicable usury law, then the rate of interest to be charged shall be the maximum rate permitted
by such applicable law.

 

Default
Notice means the notice of default given to a Defaulting Party.

 

Defaulting
Party shall have the meaning ascribed in Article 8.1.A.

 

Default
Period means the period beginning on the fifth (5th) Business Day after the date that the Default Notice is received under
Article 8.1.A and ending when the Defaulting Party has remedied its default in full by paying the Total Amount in Default.

 

Delivery
Point means the point at which title and risk of loss of each Party’s Entitlement passes to such Party.

 

Development
Operations means operations and activities, including acquiring G&G Data and drilling Development Wells, conducted under
an approved Development Plan.

 

Development
Plan means an overall plan and cost estimate for the development of Hydrocarbons from a Commercial Discovery.

 

Development
Well means any well drilled, whose purpose relates to the production of Hydrocarbons under a Development Plan.

 

Discovery
means the discovery of an accumulation of Hydrocarbons, the existence of which until that moment was unproven by drilling.

 

    	3

    	 

    

 

Dispute
means any dispute, controversy, or claim (of any and every kind or type, whether based on contract, tort, statute, regulation,
or otherwise) arising out of, relating to, or connected with this Agreement or the operations and activities carried out under
this Agreement, including any dispute as to the construction, validity, interpretation, enforceability, breach, or termination
of this Agreement.

 

Effective
Date shall mean the date first written above in this Agreement.

 

Encumbrance
means with respect to any interest or asset, a mortgage, lien, pledge, charge, or other burden.

 

Entitlement
means the quantity of Hydrocarbons (excluding all quantities used or lost in Joint Operations) that a Party has the right
and obligation to own, take in kind, and dispose of under this Agreement and the Licence, as such right and obligation may be
modified by any lifting, balancing, sales and other agreements entered into under Article 9.

 

Environmental
Loss means any losses, damages, costs, or liabilities (other than Consequential Loss) caused by a discharge of Hydrocarbons,
pollutants, or other contaminants into or onto any medium (including land, surface water, ground water and/or air) relating to
this Agreement or the operations and activities carried out under this Agreement, including: (i) injury or damage to, or destruction
of, natural resources or real or personal property; (ii) cost of pollution control, cleanup and removal; (iii) cost of restoration
of natural resources; and (iv) fines, penalties, or other assessments.

 

Exclusive
Operation means those operations and activities carried out under this Agreement, the costs of which are chargeable to the
account of fewer than all the Parties.

 

Exclusive
Well means a well drilled as an Exclusive Operation.

 

Exploitation
Area means that part of the Contract Area that is established for development of a Commercial Discovery under the Licence
or, if the Licence does not establish an exploitation area, then that part of the Contract Area that is delineated as the exploitation
area in a Development Plan approved as a Joint Operation or as an Exclusive Operation.

 

Exploitation
Period means any periods of exploitation during which the production and removal of Hydrocarbons is permitted under the Licence.

 

Exploration
Operations means operations and activities, including acquiring G&G Data and drilling Exploration Wells, whose purpose
is to explore for accumulations of Hydrocarbons.

 

Exploration
Period means any periods of exploration set out in the Licence.

 

Exploration
Well means any well, whose purpose at the time drilling commences, is to explore for an accumulation of Hydrocarbons, which
accumulation was at that time unproven by drilling.

 

Farmout
Agreement has the meaning given in the recitals to this Agreement, together with all exhibits and appendicies thereto, as
such agreement, exhibits and appendicies may be amended, supplemented or otherwise modified from time to time.

 

Force
Majeure has the same meaning as is set out in the Licence.

 

G
& G Data means only geological, geophysical, geochemical and, other similar data and information that is not obtained
through a well bore.

 

Government
means the government of the State of South Australia and any political subdivision, agency or instrumentality of such government.

 

Gross
Negligence / Willful Misconduct means any act or failure to act (whether sole, joint or concurrent) by any person or entity
that was intended to cause, or was in reckless disregard of or wanton indifference to, harmful consequences such person or entity
knew, or should have known, such act or failure would have on the safety or property of another person or entity.

 

    	4

    	 

    

 

Hydrocarbons
mean all substances that are covered by the Licence, including Crude Oil and Natural Gas.

 

HSE
means Health, Safety, and the Environment.

 

HSE
Plan shall have the meaning set out in Article 6.6.A.

 

Joint
Account means the accounts maintained by Operator under this Agreement and the Accounting Procedure to record costs, receipts,
and credits of Joint Operations.

 

Joint
Operations means the operations and activities within the scope of this Agreement (or whose purpose at the time undertaken
was within the scope of this Agreement) conducted by Operator on behalf of all Parties, including Exploration Operations, Appraisal
Operations, Development Operations, Production Operations, and operations and activities for the purposes of Decommissioning.

 

Joint
Property means, at any point in time, all wells, facilities, equipment, materials, information, funds, and property (other
than Hydrocarbons) held for use in Joint Operations.

 

Laws
mean those laws, statutes, rules, and regulations of South Australia governing the Licence and this Agreement.

 

LIBOR
means the interest rate per annum equal to the London Interbank Offered Rate as administered by the ICE Benchmark Administration
(or any other person that takes over administrative of such rate for U.S. dollars) for one month U.S. dollar deposits, as published
in London by the Financial Times or if not published, then by The Wall Street Journal.

 

Licence
means Petroleum Exploration Licence (PEL) 512 issued by the Government to DESAL on 26 October 2012 insofar as the Licence
pertains to the Contract Area and any licence granted under the Act in substitution, replacement, extension or renewal of that
licence insofar as it pertains to the Contract Area. If a separate petroleum exploration licence is granted covering the Contract
Area as provided herein, Licence means that licence and any licence granted under the Act in substitution, replacement, extension
or renewal of that licence

 

Minimum
Work Obligations mean those work and/or expenditure obligations specified in the Licence that must be performed in order to
satisfy the obligations of the Licence in the then current period or phase of the Licence.

 

Natural
Gas means all Hydrocarbons in a gaseous state at standard temperature and pressure (including wet gas, dry gas, and residue
gas) that are covered by the Licence, but excluding Crude Oil.

 

Non-Consenting
Party means each Party who elects not to participate in an Exclusive Operation.

 

Non-Operator
means each Party to this Agreement other than Operator.

 

Operating
Committee means the committee established under Article 5.

 

Operator
means the Party designated in Article 4 or 7.12.F.

 

Operator
Indemnitee means any of the Operator, its Affiliates, or their respective directors, officers, and employees. Operator
Indemnitees means all of them.

 

Participating
Interest means each Party’s undivided share (expressed as a percentage of the total shares of all Parties) in the rights,
interests, obligations, and liabilities of the Parties derived from the Licence as it covers the Contract Area and this Agreement.

 

Party
means each of the persons and entities named in the preamble, including their respective successors and assignees to rights,
interests and obligations in the Contract Area, generically, and Parties means all of the persons and entities named in
the preamble, including their respective successors and assignees to rights, interests, and obligations in the Contract Area,
collectively.

 

    	5

    	 

    

 

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

 

Production
Bonus means the bonus, if any, payable by the Parties under the Licence.

 

Production
Operations means operations and activities intended to extract Hydrocarbons for commercial purposes, especially operations
and activities concerning producing wells (including Recompleting and Reworking), and field separation, processing, storage, and
handling of Hydrocarbons upstream of the Delivery Point, conducted to progress a Development Plan and/or a projected production
schedule.

 

Public
Official means (i) any officer, employee, director, principal, consultant, agent or representative, whether appointed or elected,
of any government (whether central, federal, state or provincial), ministry, body, department, agency, instrumentality or part
of any of them, or any public international organization, or any state or government owned or controlled entity, agency, enterprise,
joint venture, or partnership (including a partner or shareholder of such an enterprise); (ii) any person acting in an official
capacity for or on behalf of (a) any government, ministry, body, department, agency, instrumentality or part of any of them, or
(b) any public international organization, or (c) any political party or political party official or candidate for office.

 

Recompletion
means an operation whereby a Completion in a Zone (or part of a Zone) is abandoned in order to attempt a Completion in a different
Zone (or different part of a Zone) within the existing wellbore.

 

Reserve
Fund shall have the meaning set out in Article 8.4.C.

 

Reworking
means an operation conducted in the wellbore of a well after it is Completed to secure, restore, or improve production in
a Zone (or part of a Zone) that is currently open to production in the wellbore. Such operations include well stimulation operations,
but exclude any routine repair or maintenance work, drilling, Sidetracking, Deepening, Completing, Recompleting, or Plugging Back
of a well.

 

Secondee
means an employee of a Non-Operator or its Affiliate, who is subject to Secondment.

 

Secondment
means the placement under Article 4.3 of an employee of a Non-Operator or its Affiliate in Operator’s organization to
provide services under a Secondment Agreement between Operator and such Non-Operator or its Affiliates.

 

Security
means (i) an irrevocable standby letter of credit or irrevocable commercial bank guarantee issued by a bank; (ii) an on-demand
bond issued by a surety corporation; (iii) an irrevocable guarantee issued by a corporation or government; (iv) any financial
security required by the Licence, this Agreement or the Farmout Agreement; and (v) any financial security agreed from time to
time by the Parties; provided that the bank, surety, corporation or government issuing the guarantee, standby letter of credit,
bond, or other security (as applicable) has a net worth sufficient to pay its obligations in all reasonably foreseeable circumstances.

 

Senior
Executive means any individual who has authority to settle a Dispute for a Party.

 

Senior
Supervisory Personnel means, with respect to a Party, any director or officer of such Party, and any individual who functions
for such Party or one of its Affiliates at a management level equivalent or superior to any individual functioning as such Party’s
senior onsite manager or supervisor(s) who is responsible for or in charge of the conduct of seismic acquisition, drilling, construction
or production and related operations, or any other field operations, but excluding all individuals functioning at a level below
such field manager or supervisor.

 

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

 

    	6

    	 

    

 

South
Block means the South block of the Licence labelled as Block A on the map attached as Exhibit B and the Lycium block labelled
as Block B on the map attached as Exhibit B.

 

Testing
means an operation conducted in the well bore that is intended to evaluate the capacity of a Zone to produce Hydrocarbons.
“Test” and other derivatives shall be construed accordingly.

 

Total
Amount in Default means the sum of: (i) the Amount in Default; (ii) third-party costs of obtaining and maintaining a Security
held by the non-defaulting Parties, or the funds paid by the Parties to allow Operator to obtain or maintain Security, under Article
8.3.A.2; plus (iii) interest at the Default Interest Rate accrued on the amount calculated under (i) from the date this amount
is due by the Defaulting Party until paid in full by the Defaulting Party and on the amount calculated under (ii) from the date
this amount is incurred by the non-defaulting Parties until paid in full by the Defaulting Party.

 

Total
Available Production means all Hydrocarbons produced in the Contract Area and saved less the quantities used for Joint Operations
and any losses.

 

Transfer
means any sale, assignment, novation, Encumbrance or other disposition by a Party of any rights or obligations that pertain
to the Contract Area and that are derived from the Licence or this Agreement (including its Participating Interest), other than
its Entitlement and its rights to any credits, refunds or payments under this Agreement, and excluding any direct or indirect
Change in Control of a Party; provided that “Transfer” shall not be interpreted to include any sale, assignment, novation,
Encumbrance or other disposition by DESAL of any rights, interests, or obligations in the West Block.

 

Urgent
Operational Matters means decisions on matters involving the use of a drilling rig, vessel or other equipment (not normally
maintained in the Contract Area) that is standing by in the Contract Area.

 

Venture
Information means the information and results developed or acquired in Joint Operations, which will be Joint Property, unless
provided otherwise in this Agreement and/or the Licence.

 

West
Block means the West block of PEL 512 labelled as Block C on the map attached as Exhibit B.

 

Work
Program and Budget means a work program for Joint Operations and corresponding budget as described and approved under Article
6.

 

Zone
means a stratum of earth containing or thought to contain an accumulation of Hydrocarbons separately producible from any other
accumulation of Hydrocarbons.

 

	1.2	Interpretation

 

	1.2.A
    	Title
    and Headings. The title and topical headings used in this Agreement are for convenience only and shall not be construed as
    having any substantive significance or as indicating that all of the provisions of this Agreement relating to any topic are
    to be found in any particular Article.
	 	 
	1.2.B
    	Derivatives.
    A capitalized derivative or other variation of a defined term will have a corresponding meaning and be construed accordingly.
	 	 
	1.2.C
    	Singular
    and Plural. Reference to the singular includes a reference to the plural and vice versa.
	 	 
	1.2.D
    	Gender.
    Reference to any gender includes a reference to all other genders.
	 	 
	1.2.E
    	Article.
    Unless otherwise provided, reference to any Article or an Exhibit means an Article or Exhibit of this Agreement.
	 	 
	1.2.F
    	Conflicts.
    If the provisions in the body of this Agreement conflict with the provisions in the body of the Farmout Agreement, the provisions
    in the body of the Farmout Agreement shall prevail to the extent of such conflict. If the provisions in the body of this Agreement
    conflict with the provisions in any Exhibit, the provisions in the body of this Agreement shall prevail

 

    	7

    	 

    

 

	1.2.G
    	Include.
    The terms “include” and “including” shall mean include or including without limiting the generality
    of the description preceding such term and are used in an illustrative sense and not a limiting sense.

 

ARTICLE
2 - TERM AND TERMINATION

 

	2.1	Term

 

	2.1.A
    	This
    Agreement shall have effect from the Effective Date and shall continue in effect until:

 

	 	2.1.A.1
    	the
    Licence terminates;
	 	 	 
	 	2.1.A.2
    	all
    materials, equipment and personal property acquired for or used in connection with Joint Operations or Exclusive Operations
    have been disposed of or removed; and
	 	 	 
	 	2.1.A.3
    	final
    settlement (including settlement of any financial audit carried out under the Accounting Procedure) has been made.

 

	2.1.B
    	Despite
    Article 2.1.A:

 

	 	2.1.B.1
    	Article
    10 shall remain in effect until all Abandonment obligations under the Licence and applicable Laws have been satisfied; and
	 	 	 
	 	2.1.B.2
    	the
    liability and payment obligations under Article 3.3.B and 3.3.C, Article 4.5, Article 8, Article 15.2, Article 18, and the
    indemnity obligations under Article 4.6.B, 7.3.A, 7.9.E, 10.1.C, 10.2.E.2, 14.2, 191.C shall remain in effect until all obligations
    have been extinguished and all Disputes have been resolved.

 

	2.1.C
    	Termination
    of this Agreement shall be without prejudice to any rights and obligations arising out of or in connection with this Agreement
    that have vested, matured, or accrued before such termination.

 

ARTICLE
3 - SCOPE

 

	3.1	Scope

 

	3.1.A
    	The
    purpose of this Agreement is to establish the respective rights and obligations of the Parties concerning operations and activities
    in the Contract Area, including the joint exploration, appraisal, development, production of Hydrocarbons (including treatment,
    storage, transportation and handling of produced Hydrocarbons upstream of the Delivery Point), the determination of Entitlements
    at the Delivery Point, Abandonment and Decommissioning.
	 	 
	3.1.B
    	The
    Parties confirm that, except to the extent expressly included in the Licence, the following activities are outside of the
    scope of this Agreement:

 

	 	3.1.B.1
    	Construction,
    operation, ownership, maintenance, repair, and removal of facilities downstream from the Delivery Point;
	 	 	 
	 	3.1.B.2
    	Transportation
    of the Parties’ Entitlements downstream from the Delivery Point;
	 	 	 
	 	3.1.B.3
    	Marketing
    and sales of Hydrocarbons, except as expressly provided in Article 7.12.E, Article 8.4 and Article 9;
	 	 	 
	 	3.1.B.4
    	Acquisition
    of rights to explore for, appraise, develop or produce Hydrocarbons outside of the Contract Area (other than through unitization
    with an adjoining licence area under the Licence or Laws);

 

    	8

    	 

    

 

	 	3.1.B.5
    	Exploration,
    appraisal, development, or production of minerals other than Hydrocarbons, whether inside or outside the Contract Area.

 

	3.2	Participating
    Interest

 

	3.2.A
    	Unless
    otherwise provided in this Agreement, the Participating Interests of the Parties as of the Effective Date are: 

 

	Party	Participating
    Interest
	 	 
	DESAL	50%
	WESI	50%

 

	3.2.B
    	If
    a Party Transfers all or part of its Participating Interest under the provisions of this Agreement and the Licence, the Participating
    Interests of the Parties shall be revised accordingly.

 

	3.3	Ownership,
    Obligations and Liabilities

 

	3.3.A
    	Unless
    otherwise provided in this Agreement, all the rights and interests in and under the Licence, all Joint Property, and any Hydrocarbons
    produced from the Contract Area shall, subject to the terms of the Licence, be owned by the Parties in proportion to their
    respective Participating Interests.
	 	 
	3.3.B
    	Unless
    otherwise provided in this Agreement, the obligations of the Parties under the Licence and all costs and liabilities incurred
    by Operator (or by any Party on behalf of all Parties, as set out in this Agreement) in connection with Joint Operations shall
    be charged to the Joint Account and all credits to the Joint Account shall be shared by the Parties, in proportion to their
    respective Participating Interests.
	 	 
	3.3.C
    	Each
    Party shall pay when due, in accordance with the Accounting Procedure, its Participating Interest share of Joint Account charges,
    including Cash Calls and interest, accrued under this Agreement. A Party’s payment of any charge under this Agreement
    shall not prejudice its right to later contest the charge.
	 	 
	3.3.D
    	During
    the “Obligatory Expenditure Work Progam” (as defined in the Farmout Agreement), WESI shall pay and discharge all
    Joint Acount charges, including Cash Calls and interest, attributable to the Participating Interest share of DESAL. During
    the Obligatory Expenditure Work Program, all payments by WESI towards Joint Account charges shall first be applied towards
    amounts attributable to DESAL’s Participating Intrest share and second to WESI’s Participating Interest share.

 

ARTICLE
4 - OPERATOR

 

	4.1	Designation
    of Operator

 

DESAL
is designated as Operator, accepts the rights, duties, and obligations of Operator, and agrees to act as such in accordance with
this Agreement.

 

	4.2	Rights
    and Duties of Operator

 

	4.2.A
    	Subject
    to the terms and conditions of this Agreement, Operator shall have all of the rights, functions, and duties of Operator under
    the Licence, shall have exclusive charge of Joint Operations, and shall conduct all Joint Operations. Operator may employ
    independent contractors and agents, including Affiliates of Operator, Non-Operators, or Affiliates of a Non-Operator, in such
    Joint Operations.

 

    	9

    	 

    

 

	4.2.B
    	In
    the conduct of Joint Operations Operator shall:

 

	 	4.2.B.1
    	Perform
    Joint Operations in accordance with the Licence, the Laws, and this Agreement, and consistent with approved Work Programs
    and Budgets (and if applicable approved AFEs), and the decisions of the Operating Committee not in conflict with this Agreement;
	 	 	 
	 	4.2.B.2
    	Conduct
    Joint Operations in a diligent, safe, and efficient manner in accordance with good and prudent petroleum industry practices
    and field conservation principles generally followed by the international petroleum industry under similar circumstances;
	 	 	 
	 	4.2.B.3
    	Exercise
    due care with respect to the receipt, payment and accounting of funds in accordance with good and prudent practices generally
    followed by the international petroleum industry under similar circumstances;
	 	 	 
	 	4.2.B.4
    	Charge
    to the Joint Account in accordance with this Agreement and the Accounting Procedure any damage, loss, cost, or liability arising
    out of, incident to, or resulting from Joint Operations;
	 	 	 
	 	4.2.B.5
    	Subject
    to Article 4.6 and the Accounting Procedure, neither gain a profit nor suffer a loss as a result of being the Operator, provided
    that Operator may rely upon Operating Committee approval of specific accounting practices not in conflict with the Accounting
    Procedure;
	 	 	 
	 	4.2.B.6
    	Perform
    the duties for the Operating Committee set out in Article 5, and prepare and submit to the Operating Committee in a timely
    manner proposed Work Programs and Budgets (and if applicable AFEs), as provided in Article 6;
	 	 	 
	 	4.2.B.7
    	Acquire
    all permits, consents, approvals, and surface or other rights that may be required for or in connection with the conduct of
    Joint Operations;
	 	 	 
	 	4.2.B.8
    	Upon
    receipt of reasonable advance notice, permit representatives of any Party to have at all reasonable times during normal business
    hours and at such Party’s own risk and cost reasonable access to Joint Operations, to observe Joint Operations, to inspect
    Joint Property, to conduct HSE audits, and to conduct financial audits and to observe taking of inventory as provided in the
    Accounting Procedure;
	 	 	 
	 	4.2.B.9
    	Undertake
    to maintain the Licence in full force and effect consistent with good and prudent petroleum industry practices generally followed
    by the international petroleum industry under similar circumstances. Operator shall timely pay and discharge all costs and
    liabilities incurred in connection with Joint Operations and use its reasonable endeavors to keep the Joint Property free
    from all liens, charges, and Encumbrances arising out of Joint Operations;
	 	 	 
	 	4.2.B.10
    	Pay
    in cash, and/or make available in kind, to the Government on behalf of the Parties, in accordance with the Licence and the
    Laws, all periodic payments, royalties, any domestic supply obligations, taxes, fees and other payments relating to Joint
    Operations but excluding any taxes measured by the incomes of the Parties;
	 	 	 
	 	4.2.B.11
    	Carry
    out the obligations of Operator under the Licence, including preparing and furnishing such reports, records and information
    as may be required under the Licence;
	 	 	 
	 	4.2.B.12
    	Have,
    in accordance with the decisions of the Operating Committee, the exclusive right and obligation to represent the Parties in
    all dealings with the Government with respect to matters arising under the Licence and Joint Operations. Operator shall notify
    the other Parties as soon as possible of the time, place, and agenda of such meetings. Subject to the Licence and any necessary
    Government approvals, Non-Operators shall have the right to attend any meetings with the Government with respect to such matters,
    but only as observers. Nothing contained in this Agreement shall restrict any Party from discussing with the Government any
    matter peculiar to its particular business interests arising under the Licence or this Agreement, but in such event such Party
    shall promptly advise the Parties, if possible before and in any event promptly after such discussions; provided that such
    Party has no duty to divulge to the other Parties any proprietary information involved in such discussions or any matters
    not affecting the other Parties;

 

    	10

    	 

    

 

	 	4.2.B.13
    	Subject
    to Article 9.3 and any decisions of the Operating Committee, assess (to the extent lawful) alternatives for the disposition
    of Natural Gas from a Discovery;
	 	 	 
	 	4.2.B.14
    	In
    case of an emergency (including a significant fire, explosion, Natural Gas release, Crude Oil release, or sabotage; incident
    involving loss of life, serious injury to an employee, contractor, or third party, or serious property damage; strikes and
    riots; or evacuations of Operator personnel): (i) take all necessary and proper measures for the protection of life, health,
    the environment and property; and (ii) as soon as reasonably practicable, report to Non-Operators the details of such event
    and any measures Operator has taken or plans to take in response thereto;
	 	 	 
	 	4.2.B.15
    	Establish
    and implement under Article 6.6 an HSE Plan, which complies with the Licence, Laws relating to HSE, this Agreement, generally
    accepted practices of the international petroleum industry and decisions of the Operating Committee;
	 	 	 
	 	4.2.B.16
    	Establish
    and implement anti-bribery and anti-corruption policies and procedures consistent with Article 20.1;
	 	 	 
	 	4.2.B.17
    	Prior
    to appointing or engaging any independent contractor conduct appropriate and proportionate due diligence concerning relevant
    criteria, including such contractor’s ability to perform the proposed work properly, on time, within budgeted cost,
    and in compliance with applicable legal and contractual requirements;
	 	 	 
	 	4.2.B.18
    	Include
    in its contracts with independent contractors and to the extent practical and lawful, provisions that:

 

	 	(a)
    	Establish
    that such contractors can enforce their contracts only against Operator;
	 	 	 
	 	(b)
    	Permit
    Operator, on behalf of the Parties, to enforce contractual warranties and indemnities against such contractors and their sub-contractors,
    and to recover from such contractors and sub-contractors losses and damages suffered by the Parties that are recoverable under
    their contracts;
	 	 	 
	 	(c)
    	Require
    such contractors to obtain and maintain insurance required by Article 4.7.H;

 

	4.3	Operator
    Personnel

 

Operator
shall engage and/or retain only such employees, Secondees, contractors, consultants, and agents as are reasonably necessary to
conduct Joint Operations. Subject to the Licence and this Agreement, Operator shall determine the number of such employees, Secondees,
contractors, consultants, and agents, the selection of such persons, their hours of work, and (except for Secondees) their compensation.

 

	4.4	Information
    Supplied by Operator

 

	4.4.A
    	Subject
    to Article 15.3, Operator shall provide Non-Operators in a timely manner with copies of the following information, data and
    reports relating to Joint Operations (to the extent to be charged to the Joint Account) in digitized format and if not available
    then in hard-copy as they are currently produced or compiled from Joint Operations:

 

	 	4.4.A.1
    	All
    logs, and surveys;
	 	 	 
	 	4.4.A.2
    	Proposed
    well design and any revisions for each well;

 

    	11

    	 

    

 

	 	4.4.A.3
    	Daily
    drilling reports;
	 	 	 
	 	4.4.A.4
    	All
    Tests and core data and analysis reports;
	 	 	 
	 	4.4.A.5
    	Final
    well recap report;
	 	 	 
	 	4.4.A.6
    	Plugging
    reports;
	 	 	 
	 	4.4.A.7
    	Seismic
    sections and if applicable shot point location maps;
	 	 	 
	 	4.4.A.8
    	Final,
    and if requested by any Non-Operator intermediate, geological and geophysical maps, interpretations and reports;
	 	 	 
	 	4.4.A.9
    	Engineering
    studies, and monthly and annual progress reports on Development Operations, which progress reports shall at least set out
    the then current development schedule, the status of each such Development Operation from inception to date, its cumulative
    costs to date and the cumulative commitments undertaken;
	 	 	 
	 	4.4.A.10
    	Weekly
    production summary and production activity reports, and monthly reports on well, reservoir, field and infrastructure performance;
	 	 	 
	 	4.4.A.11
    	Reservoir
    studies, annual reserve estimates, and annual forecasts of production capability, infrastructure capacity, and scheduled outages,
    provided that Operator makes no representations about the accuracy of its identification of reserves and that each Non-Operator
    retains full responsibility for making its own assessment of reserves for internal and reporting purposes;
	 	 	 
	 	4.4.A.12
    	Before
    filing with the Government, copies of all material reports relating to Joint Operations or the Licence required, or anticipated,
    to be furnished by Operator to the Government, and copies of such reports as filed;
	 	 	 
	 	4.4.A.13
    	As
    reasonably requested by a Non-Operator, other material studies and reports relating to Joint Operations;
	 	 	 
	 	4.4.A.14
    	Data,
    reports, forecasts and schedules under agreements provided for in Article 9;
	 	 	 
	 	4.4.A.15
    	Copies
    of accounting information and reports to be furnished under Article 6.8 and the Accounting Procedure;
	 	 	 
	 	4.4.A.16
    	Monthly
    and annual HSE key performance data and reports;
	 	 	 
	 	4.4.A.17
    	Such
    additional information as a Non-Operator may reasonably request, provided that the preparation of such information will not
    unduly burden Operator’s administrative and technical personnel, that the requesting Party or Parties pay the costs
    of preparation of such information, and that only Non-Operators who pay such costs will receive such additional information;
    and
	 	 	 
	 	4.4.A.18
    	Other
    reports as directed by the Operating Committee.

 

	4.4.B
    	Operator
    shall give Non-Operators access at all reasonable times during normal business hours to all data and reports (other than data
    and reports provided to Non-Operators under Article 4.4.A) acquired in the conduct of Joint Operations and for which a Non-Operator
    may reasonably request. Any Non-Operator may make copies of such other data at its sole expense.

 

	4.5	Settlement
    of Claims and Lawsuits

 

	4.5.A
    	Operator
    shall promptly notify the Parties of any material claims or suits that relate in any way to Joint Operations. Operator shall
    represent the Parties and defend or oppose the claim or suit. Operator may in its sole discretion compromise or settle any
    such claim or suit or any related series of claims or suits for an amount not to exceed the equivalent of 150,000 Australian
    dollars exclusive of legal fees. Operator shall obtain the approval and direction of the Operating Committee on amounts in
    excess of the above-stated amount. Without prejudice to the foregoing, each Non-Operator shall have the right to be represented
    by its own counsel at its own expense in the settlement, compromise, or defense of such claims or suits.

 

    	12

    	 

    

 

	4.5.B
    	Any
    Non-Operator shall promptly notify the other Parties of any claim made against such Non-Operator by a third party that arises
    out of or may affect the Joint Operations, and such Non-Operator shall defend or settle the same in accordance with any directions
    given by the Operating Committee. Those costs and damages that are incurred under such defense or settlement, and that are
    attributable to Joint Operations shall be reimbursed by the Operator to such Non-Operator and charged to the Joint Account.
	 	 
	4.5.C
    	Despite
    Article 4.5.A and Article 4.5.B, each Party shall have the right to participate in any such suit, prosecution, defense, or
    settlement conducted under Article 4.5.A and Article 4.5.B, at its sole expense; provided always that no Party may settle
    its Participating Interest share of any claim without first satisfying the Operating Committee that it can do so without prejudicing
    the interests of the Joint Operations.

 

	4.6	Limitation
    on Liability of Operator

 

	4.6.A
    	Except
    as set out in Article 4.6.D, if applicable, neither Operator nor any other Operator Indemnitee shall bear (except as a Party
    to the extent of its Participating Interest share) any damage, loss, cost, or liability resulting from performing (or failing
    to perform) the duties and functions of Operator, and the Operator Indemnitees are hereby released from liability to Non-Operators
    for any and all damages, losses, costs, and liabilities arising out of, incident to, or resulting from such performance or
    failure to perform, even though caused in whole or in part by a pre-existing defect, or the negligence (whether sole, joint
    or concurrent), gross negligence, willful misconduct, strict liability or other legal fault of Operator (or any other Operator
    Indemnitee).
	 	 
	4.6.B
    	Except
    as set out in Article 4.6.D, if applicable, the Parties shall (in proportion to their Participating Interests) defend and
    indemnify Operator Indemnitees from any damages, losses, costs (including reasonable legal costs and attorneys’ fees),
    and liabilities incident to claims, demands, or causes of action brought by or for any person or entity, which claims, demands
    or causes of action arise out of, are incident to or result from Joint Operations, even though caused in whole or in part
    by a pre-existing defect, or the negligence (whether sole, joint or concurrent), gross negligence, willful misconduct, strict
    liability or other legal fault of Operator (or any other Operator Indemnitee).
	 	 
	4.6.C
    	Nothing
    in this Article 4.6 shall be deemed to relieve Operator from its obligation to perform its duties and functions under this
    Agreement, or from its Participating Interest share of any damage, loss, cost, or liability arising out of, incident to, or
    resulting from Joint Operations.
	 	 
	4.6.D
    	Despite
    Article 4.6.A or 4.6.B, if any Senior Supervisory personnel of Operator or its Affiliates engage in Gross Negligence / Willful
    Misconduct that proximately causes the Parties to incur damage, loss, cost, or liability for claims, demands or causes of
    action referred to in Article 4.6.A or 4.6.B, then, in addition to its Participating Interest share, Operator shall bear all
    such damages, losses, costs, and liabilities.

 

Despite
the foregoing, under no circumstances shall Operator (except as a Party to the extent of its Participating Interest) or any other
Operator Indemnitee bear any Consequential Loss or Environmental Loss.

 

	4.7	Insurance
    Obtained by Operator

 

	4.7.A
    	Operator
    shall procure and maintain for the Joint Account the types and amounts of insurance required by the Licence or the Laws.
	 	 
	4.7.B
    	Operator
    shall procure and maintain any additional insurance, at reasonable rates, as the Operating Committee may require. If such
    additional insurance is, in Operator’s reasonable opinion, unavailable or available only at an unreasonable cost, Operator
    shall promptly notify the Non-Operators so that the Operating Committee may reconsider such requirement for additional insurance.

 

    	13

    	 

    

 

	4.7.C
    	Each
    Party will be provided the opportunity to underwrite any or all of the insurance to be obtained by Operator under Articles
    4.7.A and 4.7.B, through such Party’s Affiliate insurance company or, if direct insurance is not so permitted, through
    reinsurance policies to such Party’s Affiliate insurance company. Any Party exercising its rights under this Article
    shall furnish to Operator details of the proposed insurance. If Operator in its discretion is satisfied with the security
    and creditworthiness of such insurance or reinsurance arrangements, and that the premiums for such insurance or reinsurance
    will not be significantly higher than market rate and will be recoverable under the Licence, then Operator shall procure such
    insurance or reinsurance from such Party.
	 	 
	4.7.D
    	Subject
    to the Licence and the Laws, any Party may elect not to participate in the insurance to be procured under Articles 4.7.A and
    4.7.B; provided such Party:

 

	 	4.7.D.1
    	Promptly
    notifies Operator to that effect;
	 	 	 
	 	4.7.D.2
    	Does
    not interfere with Operator’s negotiations for such insurance;
	 	 	 
	 	4.7.D.3
    	Provides
    to the Operator before the relevant operations begin (and at least annually during the continuance of such operations) a current
    certificate of adequate coverage, or other evidence of financial responsibility that fully covers such non-participating Party’s
    Participating Interest share of the risks that would be covered by the insurance to be procured under Article 4.7.A and/or
    Article 4.7.B, as applicable, and that the Operating Committee determines to be acceptable. No such determination of acceptability
    shall in any way absolve a non-participating Party from its obligation to meet each Cash Call or billing (except, under Article
    4.7.F, regarding the costs of the insurance policy in which such Party has elected not to participate) including any Cash
    Call or billing with respect to damages and losses and/or the costs of remedying the same under this Agreement, the Licence
    and the Laws. If such non-participating Party obtains other insurance, such insurance shall (i) contain a waiver of subrogation
    in favor of all the other Parties, the Operator and their insurers but only with respect to their interests under this Agreement;
    (ii) provide that thirty (30) Days written notice be given to Operator before any material change in, or cancellation of,
    such insurance policy; (iii) be primary to, and receive no contribution from, any other insurance maintained by, or for, or
    benefiting Operator or the other Parties; and (iv) contain adequate territorial extensions and coverage in the location of
    the Joint Operations; and
	 	 	 
	 	4.7.D.4
    	Is
    responsible for all deductibles, coinsurance payments, self-insured exposures, uninsured or underinsured exposures relating
    to its interests under this Agreement.

 

	4.7.E
    	covers
    the risks that would be covered by the insurance to be procured under Articles 4.7.A and 4.7.B.
	 	 
	4.7.F
    	The
    cost of insurance in which all the Parties are participating shall be for the Joint Account, and the cost of insurance in
    which fewer than all the Parties are participating shall be charged to the Parties participating in proportion to their respective
    Participating Interests. Subject to the preceding sentence, the cost of insurance with respect to an Exclusive Operation shall
    be charged to the Consenting Parties.
	 	 
	4.7.G
    	Operator
    shall, with respect to all insurance obtained under this Article 4.7:

 

	 	4.7.G.1
    	Use
    reasonable endeavors to procure, or cause to be procured, such insurance before the relevant operations begin, and maintain,
    or cause to be maintained, such insurance during the term of the relevant operations or any longer term required under the
    Licence or the Laws;
	 	 	 
	 	4.7.G.2
    	Promptly
    inform the participating Parties when such insurance is obtained and supply them with certificates of insurance or copies
    of the relevant policies when issued;

 

    	14

    	 

    

 

	 	4.7.G.3
    	Arrange
    for the participating Parties, according to their respective Participating Interests, to be named as co-insureds on the relevant
    policies with waivers of subrogation in favor of all the Parties but only to the extent of their interests under this Agreement;
	 	 	 
	 	4.7.G.4
    	Use
    reasonable endeavors to ensure that each policy shall survive the default or bankruptcy of the insured for claims arising
    out of an event before such default or bankruptcy and that all rights of the insured shall revert to the Parties not in default
    or bankruptcy; and
	 	 	 
	 	4.7.G.5
    	Duly
    file all claims and take all necessary and proper steps to collect any proceeds and credit any proceeds to the participating
    Parties in proportion to their respective Participating Interests.

 

	4.7.H
    	Operator
    shall use its reasonable endeavors to require all contractors performing work with respect to Joint Operations to:

 

	 	4.7.H.1
    	Obtain
    and maintain any insurance in the types and amounts required by the Licence, the Laws or any decision of the Operating Committee;
	 	 	 
	 	4.7.H.2
    	Name
    the Parties as additional insureds on the contractor’s insurance policies and obtain from their insurers waivers of
    all rights of recourse against the Parties and their insurers; and
	 	 	 
	 	4.7.H.3
    	Provide
    Operator with certificates evidencing such insurance before the commencement of their services.

 

	4.8	Commingling
    of Funds

 

	4.8.A
    	Operator
    may not commingle with Operator’s own funds the monies that Operator receives from or for the Joint Account under this
    Agreement. However, Operator reserves the right to make future proposals to the Operating Committee concerning the commingling
    of funds to achieve financial efficiency.
	 	 
	4.8.B
    	The
    Operating Committee may require Operator to deposit monies received for the Joint Account in an interest-bearing account after
    the approval of the Development Plan.

 

Operator
shall allocate interest earned among the Parties on an equitable basis taking into account the amounts received from each Party
and the date of receipt. Operator shall apply each Party’s allocation of earned interest to such Party’s next succeeding
Cash Call or, if directed by the Operating Committee, pay it to each such Party.

 

	4.9	Resignation
    of Operator

 

Subject
to Article 4.11, Operator may resign as Operator by so notifying the other Parties at least one hundred and twenty (120) Days
before the effective date of such resignation.

 

	4.10	Removal
    of Operator

 

	4.10.A
    	Subject
    to Article 4.11, Operator shall be removed upon receipt of notice from any Non-Operator if:

 

	 	4.10.A.1
    	Operator
    becomes insolvent or bankrupt, or makes an assignment for the benefit of creditors;
	 	 	 
	 	4.10.A.2
    	A
    court order is made or an effective resolution is passed for the reorganization under any bankruptcy law, dissolution, liquidation,
    or winding up of Operator;
	 	 	 
	 	4.10.A.3
    	A
    receiver is appointed for a substantial part of Operator’s assets; or
	 	 	 
	 	4.10.A.4
    	Operator
    dissolves, liquidates, winds up, or otherwise terminates its existence.

 

	4.10.B
    	 Subject
    to Article 4.11, Operator may be removed by the decision of the Non-Operators, as set out below, if Operator has committed
    a material breach of this Agreement and has either failed to commence to cure that breach within thirty (30) Days of receipt
    of a notice from Non-Operators detailing the alleged breach or failed to diligently pursue the cure to completion. Any decision
    of Non-Operators to give notice of breach to Operator or to remove Operator under this Article 4.10.B shall be made by an
    affirmative vote of Non-Operators, excluding any Affiliates of the Operator, holding a combined Participating Interest of
    at least sixty five percent (65%) of the Participating Interests of the Non-Operators excluding the Participating Interests
    held by Affiliates of the Operator. However, if Operator disputes such alleged commission of or failure to cure a material
    breach and Dispute resolution proceedings are initiated under Article 18.2 concerning such breach, then Operator shall remain
    appointed and no successor Operator may be appointed pending the conclusion or abandonment of such proceedings, subject to
    the terms of Article 8.3 with respect to Operator’s breach of its payment obligations.

 

    	15

    	 

    

 

 

	4.10.C
    	If
    as a result of a Transfer, the total Participating Interests of Operator and its Affiliates would become equal to or less
    than thirty percent (30%), then Operator shall promptly notify the other Parties. The Parties shall vote within thirty (30)
    Days of such notification on whether or not Operator should be removed and a successor Operator should be named under Article
    4.11.
	 	 
	4.10.D
    	If
    there is a Change in Control of Operator (other than a transfer of Control to an Affiliate of Operator), Operator shall promptly
    notify the other Parties. The Parties shall vote within thirty (30) Days of such notification on whether or not Operator should
    be removed and a successor Operator should be named under Article 4.11.

 

An
affirmative vote of one (1) or more of the total number of Non-Operators holding a combined Participating Interest of at least
sixty five percent (65%) of the Participating Interest held by all of the Non-Operators excluding Participating Interests held
by Affiliates of the Operator, shall be required to remove Operator under this Article.

 

	4.11	Appointment
    of Successor

 

When
a change of Operator occurs under Article 4.9 or Article 4.10:

 

	4.11.A
    	The
    Operating Committee shall meet as soon as possible to appoint a successor Operator under the voting procedure of Article 5.9.
    No Party may be appointed successor Operator against its will.
	 	 
	4.11.B
    	If
    Operator is removed, other than under Article 4.10.C or Article 4.10.D, neither Operator, nor any Affiliate of Operator, shall
    have the right to be considered as a candidate for the successor Operator.
	 	 
	4.11.C
    	The
    resigning or removed Operator shall, subject to its duty to use reasonable efforts to mitigate the costs related to its resignation
    or removal, be compensated out of the Joint Account for its reasonable costs directly related to its resignation or removal,
    except for removal under Article 4.10.B.
	 	 
	4.11.D
    	The
    resigning or removed Operator and the successor Operator shall arrange to take an inventory of all Joint Property and Hydrocarbons,
    and to audit the books and records of the removed Operator. Such inventory and audit shall be completed, if possible, no later
    than the effective date of the change of Operator and shall be subject to the approval of the Operating Committee. The costs
    and liabilities of such inventory and audit shall be charged to the Joint Account.
	 	 
	4.11.E
    	The
    resignation or removal of Operator and its replacement by the successor Operator shall not become effective before receipt
    of any necessary Government approvals. Upon the effective date of the resignation or removal, the successor Operator shall
    succeed to all duties, rights and authority prescribed for Operator. The former Operator shall transfer to the successor Operator
    all Joint Property, books of account, records and other documents maintained by Operator pertaining to the Contract Area and
    to Joint Operations, and shall endeavor to transfer rights, warranties, indemnities and duties under contracts and licenses
    entered into for Joint Operations. Upon the effective date of its resignation or removal the former Operator shall be released
    and discharged from all obligations and liabilities as Operator accruing after the date the former Operator transfers all
    contracts and data to the successor Operator.

 

    	16

    	 

    

 

ARTICLE
5 - OPERATING COMMITTEE

 

	5.1	Establishment
    of Operating Committee

 

To
provide for the overall supervision and direction of Joint Operations, the Parties establish an Operating Committee composed of
representatives of each Party holding a Participating Interest. Each Party shall appoint one (1) representative and one (1) alternate
representative to serve on the Operating Committee. Each Party shall as soon as possible after the date of this Agreement give
notice in writing to the other Parties of the name and address of its representative and alternate representative to serve on
the Operating Committee. Each Party shall have the right to change its representative and alternate representative at any time
by giving notice of such change to the other Parties.

 

	5.2	Powers
    and Duties of Operating Committee

 

The
Operating Committee shall have the power and duty to authorize and supervise Joint Operations that are necessary or desirable
to fulfill the Licence and properly explore and exploit the Contract Area under this Agreement, the Licence, the Laws, and generally
accepted practices of the international petroleum industry under similar circumstances; provided that Operating Committee may
not compel any Party to exercise, make, or take, or prevent any Party from exercising, making, or taking, any right, decision,
or action concerning any matter or proposal under this Agreement, which right, decision or action is reserved or delegated to
a Party or the Parties.

 

	5.3	Authority
    to Vote

 

The
representative of a Party, or in the representative’s absence the alternate representative, shall be authorized to represent
and bind such Party with respect to any matter that is within the powers and duties of the Operating Committee and is properly
brought before the Operating Committee. Each such representative or alternate representative shall have a vote equal to the Participating
Interest of the Party such person represents. The alternate representative of each Party may attend any Operating Committee meetings,
but shall have no vote at such meetings, unless such Party’s representative is absent. In addition to the representative
and alternate representative, each Party may send technical and other advisors to any Operating Committee meetings.

 

	5.4	Subcommittees

 

The
Operating Committee will establish a Technical Subcommittee and such other subcommittees as may be deemed necessary composed of
repesentatives of each Party. Each subcommittee shall function in an advisory capacity to the Operating Committee or as otherwise
determined unanimously by the Parties. Each Party shall have the right to appoint a representative to each subcommittee.

 

	5.5	Notice
    of Meeting

 

	5.5.A	Operator
                                         may call a meeting of the Operating Committee by giving notice to the Parties at least
                                         fifteen (15) Days in advance of such meeting.

 

	5.5.B	Any
                                         Non-Operator may request a meeting of the Operating Committee by giving notice to all
                                         the other Parties. Upon receiving such request, Operator shall call such meeting for
                                         a date not fewer than fifteen (15) Days nor more than twenty (20) Days after receipt
                                         of the request.

 

	5.5.C	The
                                         notice periods above may only be waived with the unanimous consent of all the Parties.

 

	5.6	Contents
    of Meeting Notice

 

	5.6.A
    	Each
    notice of a meeting of the Operating Committee as provided by Operator shall contain:

 

	 	5.6.A.1
    	The
    date, time, and location of the meeting;

 

    	17

    	 

    

 

	 	5.6.A.2
    	An
    agenda of the matters and proposals to be considered and/or voted upon at such meeting; and
	 	 	 
	 	5.6.A.3
    	Information
    about each matter and proposal to be considered and/or voted on at the meeting (including all appropriate supporting information
    not previously distributed to the Parties) sufficient to enable the Parties to be well informed about such matters and proposals
    before such meeting.

 

	5.6.B
    	A
    Party may add additional matters and proposals to the agenda for any meeting, by giving notice to the other Parties not fewer
    than seven (7) Days before such meeting.
	 	 
	5.6.C
    	On
    the request of a Party, and with the unanimous consent of all Parties, the Operating Committee may consider at a meeting a
    matter and/or proposal not in the agenda for such meeting.

 

	5.7	Location
    of Meetings

 

All
meetings of the Operating Committee shall be held in Melbourne, Victoria, or elsewhere as the Operating Committee may decide.

 

	5.8	Operator’s
    Duties for Meetings

 

	5.8.A
    	Operator’s
    duties, concerning meetings of the Operating Committee and any subcommittee, shall include:

 

	 	5.8.A.1
    	Timely
    preparation and distribution of the agenda;
	 	 	 
	 	5.8.A.2
    	Organization
    and conduct of the meeting; and
	 	 	 
	 	5.8.A.3
    	Preparation
    of a written record or minutes of each meeting.

 

	5.8.B
    	Operator
    shall have the right to appoint the chairman of the Operating Committee and all subcommittees.

 

	5.9	Voting
    Procedure

 

	5.9.A
    	Except
as otherwise expressly provided in this Agreement, decisions, approvals, and other actions of the Operating Committee on all proposals
(other than proposals on matters reserved to the Parties) coming before it shall be decided by the affirmative vote of two (2)
or more Parties that are not Affiliates then having collectively at least sixty five percent (65%) of the Participating Interests.
	 	 
	5.9.B
    	Notwithstanding
    the provisions of Article 5.9(A), the unanimous vote of the Parties shall be required to approve the following:

 

	 	5.9.B.1
    	Subject
    to Article 7, Drilling, Deepening, Testing, Sidetracking, Plugging Back, Recompleting or Reworking Exploration Wells beyond
    the Minimum Work Obligation.
	 	 	 
	 	5.9.B.2
    	Subject
    to Article 7, Development Plans.
	 	 	 
	 	5.9.B.3
    	Subject
    to Article 7, determination that a Discovery is a Commercial Discovery.
	 	 	 
	 	5.9.B.4
    	Unitization
    with an adjoining contract area.
	 	 	 
	 	5.9.B.5
    	Modifications
    in scope of an approved Development Plan which result in a more than 25% increase or decrease in the total cost of the Development
    Plan.
	 	 	 
	 	5.9.B.6
    	Voluntary
    relinquishment of all or any part of the Contract Area.
	 	 	 
	 	5.9.B.7
    	Voluntary
    termination of the Licence.
	 	 	 
	 	5.9.B.8
    	Subject
    to Article 11, Amendments, Renewals and Extensions to the Licence.

 

    	18

    	 

    

 

	5.10	Record
    of Votes

 

The
chairman of the Operating Committee shall appoint a secretary who shall make a record of each proposal voted on and the results
of such voting at each Operating Committee meeting. Each representative shall sign and be provided a copy of such record of votes
at the end of such meeting. Such signed record shall be considered the final record of the decisions of the Operating Committee.

 

	5.11	Minutes

 

The
secretary shall provide each Party with a copy of the minutes of the Operating Committee meeting within fifteen (15) Business
Days after the end of the meeting. Each Party shall notify the secretary within fifteen (15) Days after receipt of such minutes
specifying any objections and corrections to the minutes. A failure to give notice specifying objections and corrections to such
minutes within such fifteen (15) Day period shall be deemed to be approval of such minutes. In any event, the record of votes
under Article 5.10 shall take precedence over the minutes described above.

 

	5.12	Voting
    by Notice

 

	5.12.A
    	In
    lieu of a meeting, any Party may submit any proposal to the Operating Committee for a vote by notice. The proposing Party
    or Parties shall notify Operator who shall give each Party’s representative notice describing the proposal so submitted
    and whether Operator considers such proposal to require urgent determination. Operator shall include with such notice adequate
    documentation in connection with such proposal to enable the Parties to decide. Each Party shall communicate its vote by notice
    to Operator and the other Parties within one of the following appropriate time periods after receipt of Operator’s notice:

 

	 	5.12.A.1
    	Forty-eight
    (48) hours in the case of Urgent Operational Matters; and
	 	 	 
	 	5.12.A.2
    	Fifteen
    (15) Days in the case of all other proposals.

 

	5.12.B
    	Except
    in the case of Article 5.12.A.1, any Party may, by notice delivered to all Parties within five (5) Days of receipt of Operator’s
    notice, request that the proposal be decided at a meeting rather than by notice. In such event, that proposal shall be decided
    at a meeting duly called for that purpose.
	 	 
	5.12.C
    	Except
    as provided in Article 10, any Party failing to communicate its vote in a timely manner shall be deemed to have voted against
    such proposal.
	 	 
	5.12.D
    	If
    a meeting is not requested, then at the expiration of the appropriate time period, Operator shall give each Party a confirmation
    notice stating the tabulation and results of the vote.

 

	5.13	Effect
    of Vote

 

All
decisions taken by the Operating Committee under this Article 5 shall be conclusive and binding on all the Parties, except in
the following cases.

 

	5.13.A
    	If
    under this Article 5, a Joint Operation has been properly proposed to the Operating Committee and the Operating Committee
    has not approved such proposal in a timely manner, then any Party that voted for such proposal shall have the right for the
    appropriate period specified below to propose, under Article 7, an Exclusive Operation involving operations essentially the
    same as those proposed for such Joint Operation.

 

	 	5.13.A.1
    	For
    proposals related to Urgent Operational Matters, such right shall be exercisable for twenty-four (24) hours after the time
    specified in Article 5.12.A.1 has expired or after receipt of Operator’s notice given to the Parties under Article 5.13.D,
    as applicable.
	 	 	 
	 	5.13.A.2
    	For
    proposals to develop a Discovery, such right shall be exercisable for ten (10) Days after the date the Operating Committee
    was required to consider such proposal under Article 5.6 or Article 5.12.

 

    	19

    	 

    

 

	 	5.13.A.3
    	For
    all other proposals, such right shall be exercisable for five (5) Days after the date the Operating Committee was required
    to consider such proposal under Article 5.6 or Article 5.12.

 

	5.13.B
    	If
    a Party voted against any proposal that was approved by the Operating Committee and is of a type that could be conducted as
    an Exclusive Operation under Article 7, then such Party shall have the right not to participate in the operation contemplated
    by such approval. Any such Party wishing to exercise its right of non-consent must give notice of non-consent to all other
    Parties within five (5) Days (or twenty-four (24) hours for Urgent Operational Matters) after Operating Committee approval
    of such proposal. If a Party exercises its right of non-consent, the Parties who were not entitled to give or did not give
    notice of non-consent shall be Consenting Parties as to the operation contemplated by the Operating Committee approval, and
    shall conduct such operation as an Exclusive Operation under Article 7; provided, however, that any such Party who was not
    entitled to give or did not give notice of non-consent may, by notice provided to the other Parties within five (5) Days (or
    twenty-four (24) hours for Urgent Operational Matters) after the notice of non-consent given by any Non-Consenting Party,
    require that the Operating Committee vote again on the proposal in question. Only the Parties that were not entitled to or
    have not exercised their right of non-consent with respect to the contemplated operation shall participate in such second
    vote of the Operating Committee, with voting rights proportional to their respective Participating Interest. If the Operating
    Committee approves again the contemplated operation, any Party that voted against the contemplated operation in such second
    vote may elect to be a Non-Consenting Party with respect to such operation, by notice of non-consent provided to all other
    Parties within five (5) Days (or twenty-four (24) hours for Urgent Operational Matters) after the Operating Committee’s
    second approval of such contemplated operation.

 

	5.13.C
    	If
    the Consenting Parties to an Exclusive Operation under Article 5.13.A or Article 5.13.B concur, then the Operating Committee
    may, at any time, under this Article 5, reconsider and approve, decide or take action on any proposal that the Operating Committee
    declined to approve earlier, or modify or revoke an earlier approval, decision or action.
	 	 
	5.13.D
    	Once
    a Joint Operation for the drilling, Deepening, Testing, Sidetracking, Plugging Back, Completing, Recompleting, Reworking,
    or plugging of a well has been approved and commenced, such operation shall not be stopped without the consent of the Operating
    Committee; provided, however, that such operation may be stopped if:

 

	 	5.13.D.1
    	An
    impenetrable substance or other condition in the hole is encountered which in the reasonable judgment of Operator causes the
    continuation of such operation to be impractical; or
	 	 	 
	 	5.13.D.2
    	Other
    circumstances occur that in the reasonable judgment of Operator cause the continuation of such operation to be unwarranted
    and the Operating Committee, within the period required under Article 5.12.A.1 after receipt of Operator’s notice, approves
    discontinuing such operation.

 

On
the occurrence of either of the above, Operator shall promptly notify the Parties that such operation is being stopped, and any
Party shall have the right to propose under Article 7 an Exclusive Operation to continue such operation.

 

ARTICLE
6 - WORK PROGRAMS AND BUDGETS

 

	6.1	Preparation
    and Approval

 

	6.1.A
    	Within
    thirty (30) Days after the signing of this Agreement, Operator shall deliver to the Parties a proposed annual Work Program
    and Budget detailing the Joint Operations proposed to be performed and the estimated costs forecast to be charged to the Joint
    Account during the remainder of the Calendar Year in which this Agreement was signed and, if appropriate, for the next Calendar
    Year. On or before the 1st Day of September of each Calendar Year afterwards, Operator shall deliver to the Parties
    a proposed annual Work Program and Budget detailing the Joint Operations Operator proposes to be performed and the estimated
    costs forecast to be charged to the Joint Account during the next Calendar Year.

 

    	20

    	 

    

 

	6.1.B
    	During
    the preparation of the proposed Work Programs and Budgets, Appraisal Plans and Development Plans contemplated in this Article
    6, Operator shall consult with the Operating Committee or the appropriate subcommittees regarding the contents of such Work
    Programs and Budgets, Appraisal Plans, and Development Plans.
	 	 
	6.1.C
    	Each
    annual Work Program and Budget shall with respect to the applicable Calendar Year contain inter alia:

 

	 	6.1.C.1
    	An
    itemized list of the operations and activities to be conducted, described in sufficient detail to afford ready identification
    of the nature, scope, location, timing, and duration of each such operation and activity, including:

 

	 	(a)
    	designating
    whether such line item is intended to satisfy the Minimum Work Obligations of the Licence, the commitments of a previously
    approved Work Program and Budget, and/or the commitments of a previously approved Development Plan; and
	 	 	 
	 	(b)
    	specifying
    whether such line item is firm or contingent and the conditions under which the Operating Committee may decide to make a contingent
    line item firm;

 

	 	6.1.C.2
    	An
    estimate of the costs corresponding to each such line item enumerated in sufficient detail to be readily tracked and charged
    under the Accounting Procedure and consistent with the Contract;
	 	 	 
	 	6.1.C.3
    	An
    estimate of funds to be expended by Calendar Quarter;
	 	 	 
	 	6.1.C.4
    	During
    the Exploration Period, a forecast of annual operations and activities and corresponding estimated costs through the end of
    the Exploration Period;
	 	 	 
	 	6.1.C.5
    	Information
    with respect to Operator’s estimated manpower requirements and costs and Operator’s allocation procedures under
    the Accounting Procedure;
	 	 	 
	 	6.1.C.6
    	Reasonable
    and necessary supporting information; and
	 	 	 
	 	6.1.C.7
    	Any
    additional information and detail as the Operating Committee may deem suitable.

 

	6.1.D
    	Within
    thirty (30) Days of such delivery, or earlier if necessary to meet any applicable deadline under the Licence, the Operating
    Committee shall meet to consider, modify (if appropriate), and either approve or reject the proposed Work Program and Budget
    (including any agreed modifications) under Article 5.9; provided that no Work Program and Budget may provide for Appraisal
    Operations that exceed the scope of, or conflict with, any previously approved Appraisal Plan, and/or provide for Development
    Operations that exceed the scope of, or conflict with, any previously approved Development Plan, unless such previously approved
    plans, programs, and budgets are amended at or before the adoption of the annual Work Program and Budget.
	 	 
	6.1.E
    	Any
    Joint Operations that cannot be efficiently completed within a single Calendar Year may be proposed in a multi-year Work Program
    and Budget. Upon approval by the Operating Committee, such multi-year Work Program and Budget shall, subject only to revisions
    approved by the Operating Committee afterwards: (i) remain in effect as between the Parties (and the associated cost estimate
    shall be a binding pro-rata obligation of each Party) through the completion of such Joint Operations; and (ii) be reflected
    in each annual Work Program and Budget. If the Licence requires that Work Programs and Budgets be submitted to the Government
    for approval, such multi-year Work Program and Budget shall be submitted to the Government either in a single request for
    a multi-year approval or as part of the annual approval process, under the Licence.
	 	 
	6.1.F
    	Approval
    of a Work Program and Budget by the Operating Committee shall authorize Operator to submit such Work Program and Budget to
    the Government for approval (if required) under the Licence. If the Government requests changes to such Work Program and Budget
    as a condition to granting its approval under the Licence, Operator shall promptly notify the Parties of the Government’s
    proposed changes and shall submit a revised Work Program and Budget to the Operating Committee for further consideration.

 

    	21

    	 

    

 

	6.1.G
    	If
    a Work Program and Budget is not approved by the Operating Committee at least two (2) Business Days before the last date for
    Government approval under the Licence, Operator may submit to the Government a Work Program and Budget for the applicable
    Calendar Year, setting out those Joint Operations, which are:

 

	 	6.1.G.1
    	consistent
    with the scope of, and not in conflict with, the Minimum Work Obligations of the Licence, the commitments of a previously
    approved appraisal Work Program and Budget, and/or the commitments of a previously approved Development Plan; and
	 	 	 
	 	6.1.G.2
    	reasonably
    necessary to keep the Licence in full force and effect, to satisfy the Minimum Work Obligations of the Licence, to meet the
    commitments of a previously approved appraisal Work Program and Budget, and to meet the commitments of a previously approved
    Development Plan, that in each case are required to be carried out during the relevant Calendar Year. In determining the Joint
    Operations that are reasonably necessary for the purposes of the preceding sentence, the proposed Joint Operations receiving
    the largest Participating Interest vote (even if less than the applicable percentage under Article 5.9) shall be adopted.
    If competing proposals receive equal Participating Interests votes, then Operator shall choose between those competing proposals.

 

In
this event, the Operating Committee shall be deemed to have approved such Work Program and Budget. Operator shall be reimbursed
by the Parties for their Participating Interest shares of costs incurred by Operator and deemed approved under this Article 6.1.G.

 

	6.1.H
    	A
    Party may at any time, by notice to the other Parties, propose that a Work Program and Budget be amended. To the extent that
    such amendment is approved by the Operating Committee, the relevant Work Program and/or Budget shall, subject to obtaining
    any requisite Government approval under the Licence, be deemed amended accordingly; provided that, any such amendment shall
    not deauthorize or invalidate any commitment or expenditure already made by the Operator in accordance with any previous authorization
    given under this Agreement.
	 	 
	6.1.I
    	If
    a Work Program and Budget, as proposed, revised and/or amended, is approved by the Operating Committee and satisfies the requirements
    of the Licence, including (if required) being approved, or deemed to be approved, by the Government, Operator shall, subject
    to complying with Articles 6.8 and 6.9, be authorized to conduct the Joint Operations set out in such approved Work Program
    and Budget.

 

	6.2	Exploration
    and Appraisal

 

	6.2.A
    	Subject
    to Article 6.8, approval of any Work Program and Budget that includes:

 

	 	6.2.A.1
    	An
    Exploration Well, whether by drilling, Deepening or Sidetracking, shall include approval for: Only expenditures necessary
    for the drilling, Deepening or Sidetracking of such Exploration Well, as applicable. When an Exploration Well has reached
    its authorized depth, all logs, cores and other approved Tests have been conducted and the results furnished to the Parties,
    Operator shall submit to the Parties under Article 5.12.A.1 an election to participate in an attempt to Complete such Exploration
    Well. Operator shall include in such submission Operator’s recommendation on such Completion attempt and an AFE for
    such Completion costs.
	 	 	 
	 	6.2.A.2
    	An
    Appraisal Well, whether by drilling, Deepening or Sidetracking, shall include approval for: Only expenditures necessary for
    the drilling, Deepening or Sidetracking of such Appraisal Well, as applicable. When an Appraisal Well has reached its authorized
    depth, all logs, cores and other approved Tests have been conducted and the results furnished to the Parties, Operator shall
    submit to the Parties under Article 5.12.A.1 an election to participate in an attempt to Complete such Appraisal Well. Operator
    shall include in such submission Operator’s recommendation on such Completion attempt and an AFE for such Completion
    costs.

 

    	22

    	 

    

 

	6.2.B
    	Any
    Party desiring to propose a Completion attempt, or an alternative Completion attempt, must do so within the time period provided
    in Article 5.12.A.1 by notifying all other Parties. Any such proposal shall include an AFE for such Completion costs.
	 	 
	6.2.C
    	If
    a Discovery is made, Operator shall deliver any notice of Discovery required under the Licence and shall as soon as possible
    submit to the Parties a report containing available details concerning the Discovery and Operator’s recommendation as
    to whether the Discovery merits appraisal.
	 	 
	6.2.D
    	If
    the Operating Committee determines that the Discovery merits appraisal, Operator within thirty (30) Days shall deliver to
    the Parties a proposed Appraisal Plan for such Discovery, which shall in addition to the information required under Article
    6.1.C contain:

 

	 	6.2.D.1
    	A
    delineation of the proposed Appraisal Area; and
	 	 	 
	 	6.2.D.2
    	Any
    other information concerning the proposed Appraisal Operations requested by a Party,

 

together
with the proposed appraisal Work Program and Budget (or a multi-year appraisal Work Program and Budget under Article 6.1.E) to
carry out the first Calendar Year of the Appraisal Plan, and provisional Work Programs and Budgets to carry out the remainder
of the Appraisal Plan.

 

	6.2.E
    	Within
    sixty (60) Days after receipt of the proposed Appraisal Plan and associated proposed appraisal Work Program and Budget, or
    earlier if necessary to meet any applicable deadline under the Licence, the Operating Committee shall meet to consider, modify
    (if appropriate), and then either approve or reject the proposed Appraisal Plan (including any proposed modifications) and
    the first annual (or multi-year) appraisal Work Program and Budget.
	 	 
	6.2.F
    	If
    the Operating Committee approves the Appraisal Plan and the associated appraisal Work Program and Budget, Operator shall,
    as soon as possible, take such steps as may be required under the Licence to secure approval of such Appraisal Plan and the
    associated appraisal Work Program and Budget for the first Calendar Year by the Government. If the Government requests changes
    to such Appraisal Plan or associated appraisal Work Program and Budget for the first Calendar Year as a condition to granting
    its approval under the Licence, then Operator shall promptly notify the Parties of the Government’s proposed changes
    and may submit a revised Appraisal Plan and associated appraisal Work Program and Budget for the first Calendar Year to the
    Operating Committee for further consideration.
	 	 
	6.2.G
    	If
    the Appraisal Plan is approved by the Government, the associated appraisal Work Program and Budget for the first Calendar
    Year shall be deemed to be incorporated into and form part of the then current annual Work Program and Budget.

 

	6.3	Development

 

	6.3.A
    	If
    the Operating Committee determines that a Discovery may be a Commercial Discovery, Operator, within ninety (90) Days of such
    determination but within any time limit which may be imposed by the Licence, shall deliver to the Parties a proposed Development
    Plan for such Discovery, which shall in addition to the information required under Article 6.1.C contain:

 

	 	6.3.A.1
    	A
    delineation of the proposed Exploitation Area;
	 	 	 
	 	6.3.A.2
    	An
    estimated date for the commencement of Production Operations;
	 	 	 
	 	6.3.A.3
    	A
    production forecast of estimated production of each type of Hydrocarbon to be produced by Calendar Year for the estimated
    productive life of the Commercial Discovery;
	 	 	 
	 	6.3.A.4
    	A
    description of all material facilities to be constructed as Joint Property;
	 	 	 
	 	6.3.A.5
    	An
    estimated Abandonment Work Program and Budget; and

 

    	23

    	 

    

 

	 	6.3.A.6
    	Any
    other information related to Development Operations and Production Operations requested by the Operating Committee,

 

together
with the proposed development Work Program and Budget (or a multi-year development Work Program and Budget under Article 6.1.E)
for the first Calendar Year of the Development Plan, and work schedule for the remainder of the Development Plan.

 

	6.3.B
    	As
    soon as practicable after receipt of the proposed Development Plan and associated proposed development Work Program and Budget,
    each Party shall furnish to Operator and the other Parties any comments, suggestions, or proposed amendments it may have for
    the proposed Development Plan.
	 	 
	6.3.C
    	Within
    ninety (90) Days after receipt of the proposed Development Plan and associated proposed development Work Program and Budget,
    or earlier if necessary to meet any applicable deadline under the Licence, the Operating Committee shall meet to consider,
    modify (if appropriate) and then either approve or reject the proposed Development Plan (including any proposed modifications)
    and the associated first annual (or multi-year) Work Program and Budget.
	 	 
	6.3.D
    	If
    the Operating Committee determines that the Discovery is a Commercial Discovery and approves the corresponding Development
    Plan, Operator shall, as soon as possible, deliver any notice of Commercial Discovery required under the Licence and take
    such other steps as may be required under the Licence to secure approval of the Development Plan and associated development
    Work Program and Budget for the first Calendar Year by the Government. If the Government requests changes in the Development
    Plan and associated development Work Program and Budget for the first Calendar Year as a condition to granting approval under
    the Licence, then Operator shall promptly notify the Parties of the Government’s proposed changes and may submit a revised
    Development Plan and associated development Work Program and Budget for the first Calendar Year to the Operating Committee
    for further consideration.
	 	 
	6.3.E
    	If
    the Development Plan is approved by the Government, the associated development Work Program and Budget for the first Calendar
    Year shall be incorporated into and form part of the then current Work Program and Budget. Operator shall periodically review
    the Development Plan and development Work Program and Budget and propose amendments as may be prudent, and the Operating Committee
    shall consider, modify (if necessary), and approve or reject those proposed amendments under Article 5.9.

 

	6.4	Production

 

	6.4.A
    	Within
    sixty (60) Days before first commercial production, Operator shall deliver to the Parties a proposed production Work Program
    and Budget that shall in addition to the information required under Article 6.1.C contain the projected production schedule
    for the remainder of the Calendar Year in which first commercial production begins and, if fewer than four ( 4 ) Months remain
    in the current Calendar Year, for the next Calendar Year. On or before the 1st Day of September of each Calendar
    Year thereafter, Operator shall deliver to the Parties a proposed production Work Program and Budget that shall in addition
    to the information required under Article 6.1.C contain the projected production schedule for the next Calendar Year.
	 	 
	6.4.B
    	Within
    thirty (30) Days after receipt of the proposed production Work Program and Budget, or earlier if necessary to meet any applicable
    deadline under the Licence, the Operating Committee shall meet to consider, modify (if appropriate) and then either approve
    or reject the proposed production Work Program and Budget.
	 	 
	6.4.C
    	If
    the Operating Committee approves the production Work Program and Budget, Operator shall, as soon as possible, take such steps
    as may be required under the Licence to secure approval of such production Work Program and Budget by the Government. If the
    Government requests changes to such production Work Program and Budget Year as a condition to granting its approval under
    the Licence, then Operator shall promptly notify the Parties of the Government’s proposed changes and shall submit a
    revised production Work Program and Budget to the Operating Committee for further consideration.

 

    	24

    	 

    

 

	6.4.D
    	If
    a production Work Program and Budget is not approved by the Operating Committee before the date by which approval is required
    under the Licence, Operator may submit to the Government a Work Program and Budget for the applicable Calendar Year, setting
    out those Joint Operations that are:

 

	 	6.4.D.1
    	consistent
    with the scope of, and not in conflict with, the commitments of a previously approved Development Plan; and
	 	 	 
	 	6.4.D.2
    	necessary
    to keep the Licence in full force and effect and meet the commitments of a previously approved Development Plan that are required
    to be carried out during the relevant Calendar Year.

 

	6.5	HSE
    Plan

 

	6.5.A
    	Operator
    shall in the conduct of Joint Operations:

 

	 	6.5.A.1
    	Prepare
    and establish an HSE Plan designed to achieve safe and reliable conduct of operations and activities, to avoid significant
    and unintended impact on the safety and health of people, on property, and on the environment, and to comply with Laws relating
    to HSE;
	 	 	 
	 	6.5.A.2
    	Carry
    out the HSE Plan in conformance with Laws relating to HSE and in a manner consistent with standards and procedures generally
    followed in the international petroleum industry under similar circumstances;
	 	 	 
	 	6.5.A.3
    	Plan
    and conduct Joint Operations consistent with the HSE Plan; and
	 	 	 
	 	6.5.A.4
    	Design
    and operate Joint Property consistent with the HSE Plan.

 

	6.5.B
    	The
    Operating Committee shall at least annually review and approve the details of the HSE Plan, the implementation of the HSE
    Plan, and of the effectiveness of the HSE Plan.
	 	 
	6.5.C
    	In
    the conduct of Joint Operations, Operator shall establish and carry out a program for regular HSE assessments. The purpose
    of such assessments is to periodically review HSE systems and procedures, including actual practice and performance, to verify
    that the HSE Plan is in place and fulfills the requirements of Article 6.6.A, that the HSE Plan is being properly carried
    out and that the HSE Plan as carried out is effective. Operator shall, at a minimum, conduct such an assessment before entering
    into significant new Joint Operations and before undertaking any major changes to existing Joint Operations. Upon reasonable
    notice given to Operator, Non-Operators shall have the right to participate in such HSE assessments.
	 	 
	6.5.D
    	Without
    prejudice to a Party’s rights under Article 4.2.B.8, with reasonable advance notice, Operator shall permit at all reasonable
    times during normal business hours each Non-Operator (at its own risk and cost) to conduct an audit of the HSE Plan, its implementation
    and effectiveness. Where there are two or more Non-Operators, the Non-Operators shall make a reasonable effort to conduct
    joint or simultaneous HSE audits in a manner that will result in a minimum of inconvenience to Operator.

 

	6.6	Contract
    Awards

 

Subject
to the Licence, Operator shall award each contract for Joint Operations on the following basis (the amounts stated are in thousands
of Australian dollars):

 

	 	Procedure
    A	 	Procedure
    B	 	Procedure
    C
	Exploration
    and Appraisal Operations	0
    to 99	 	100
    to 250 	 	>
    250
	Development
    Operations	0
    to 99	 	100
    to 250 	 	>
    250
	Production
    Operations	0
    to 249	 	250
    to 500 	 	>
    500

 

    	25

    	 

    

 

	6.6.A
    	Procedure
    A

 

Operator
shall award the contract to the best qualified contractor, as determined by cost, quality, and ability to perform the contract
properly, on time, within budgeted cost, and in compliance with applicable legal and contractual requirements, without the obligation
to tender and without informing or seeking the approval of the Operating Committee, except that before entering into contracts
with Affiliates of Operator or of any Non-Operator, Operator shall obtain the approval of the Operating Committee.

 

	6.6.B
    	Procedure
    B

 

Operator
shall:

 

	 	6.6.B.1
    	Provide
    the Parties with a list of the entities whom Operator proposes to invite to tender for the contract;
	 	 	 
	 	6.6.B.2
    	Add
    to the tender list any entity whom a Party reasonably requests to be added within fourteen (14) Days of receipt of such list;
	 	 	 
	 	6.6.B.3
    	Complete
    the tendering process within a reasonable period of time;
	 	 	 
	 	6.6.B.4
    	Inform
    the Parties of the entities to whom the contract has been awarded, provided that before awarding contracts to Affiliates of
    Operator or of any Non-Operator, Operator shall obtain the approval of the Operating Committee;
	 	 	 
	 	6.6.B.5
    	Circulate
    to the Parties a competitive bid analysis stating the reasons for the choice made; and
	 	 	 
	 	6.6.B.6
    	Upon
    the request of a Party, provide such Party with a copy of the final version of the contract.

 

	6.6.C
    	Procedure
    C

 

Operator
shall:

 

	 	6.6.C.1
    	Provide
    the Parties with a list of the entities whom Operator proposes to invite to tender for the contract;
	 	 	 
	 	6.6.C.2
    	Add
    to such list any entity whom a Party reasonably requests to be added within fourteen (14) Days of receipt of such list;
	 	 	 
	 	6.6.C.3
    	Prepare
    and dispatch the tender documents to the entities on the tender list and to Non-Operators;
	 	 	 
	 	6.6.C.4
    	After
    the expiration of the period allowed for tendering, consider, and analyze the details of all bids received;
	 	 	 
	 	6.6.C.5
    	Prepare
    and circulate to the Parties a competitive bid analysis, stating Operator’s recommendation as to the entity to whom
    the contract should be awarded, the reasons for the recommendation, and the technical, commercial, and contractual terms to
    be agreed upon;
	 	 	 
	 	6.6.C.6
    	Obtain
    the approval of the Operating Committee to the recommended bid; and
	 	 	 
	 	6.6.C.7
    	Upon
    the request of a Party, provide such Party with a copy of the final version of the contract.

 

	6.7	Authorization
    for Expenditure (“AFE”) Procedure

 

	6.7.A
    	Before
    incurring any commitment or expenditure for a Joint Operation, which commitment or expenditure is estimated to be:

 

	 	6.7.A.1
    	More
    than 300,000 Australian dollars in an exploration or appraisal Work Program and Budget;
	 	 	 
	 	6.7.A.2
    	More
    than 500,000 Australian dollars in a development Work Program and Budget;
	 	 	 
	 	6.7.A.3
    	More
    than 500,000 Australian dollars in a production Work Program and Budget.

 

    	26

    	 

    

 

Operator
shall send to each Non-Operator an AFE as described in Article 6.7.C; provided that, Operator shall not be obliged to furnish
an AFE to the Parties with respect to any Minimum Work Obligations, workovers of wells and general and administrative costs that
are listed as separate line items in an approved Work Program and Budget.

 

	6.7.B
    	Before
    entering into any commitments or making any expenditures subject to the AFE procedure in Article 6.7.A, Operator shall submit
    the corresponding AFE for approval by the Operating Committee. If the Operating Committee approves an AFE for a commitment
    or expenditure within the applicable time period under Article 5.12.A, Operator shall be authorized to enter into such commitment
    or incur such expenditure and conduct the corresponding Joint Operation under this Agreement. If the Operating Committee fails
    to approve an AFE for a commitment or expenditure within the applicable time period, the corresponding Joint Operation shall
    be deemed rejected. Operator shall promptly notify the Parties that the Joint Operation has been rejected, and, subject to
    Article 7, any Party may afterwards propose to conduct such operation or activity as an Exclusive Operation under Article
    7. When a Joint Operation is rejected under this Article 6.7.B or a commitment or expenditure is approved for differing amounts
    than those provided for in the applicable line items of the approved Work Program and Budget, the Work Program and Budget
    shall, subject to obtaining any Government consent required under the Licence, be deemed to be revised accordingly; provided
    that no revised Work Program and Budget may provide for Appraisal Operations that exceed the scope of, or conflict with, any
    previously approved Appraisal Plan, and/or provide for Development Operations that exceed the scope of, or conflict with,
    any previously approved Development Plan, unless such previously approved plans, programs and budgets are amended at or before
    the adoption of the revised Work Program and Budget.

 

	6.7.C
    	Each
    AFE furnished by Operator shall:

 

	 	6.7.C.1
    	Identify
    the corresponding Joint Operation by specific reference to the applicable line items in the Work Program and Budget;
	 	 	 
	 	6.7.C.2
    	Describe
    the Joint Operation in detail;
	 	 	 
	 	6.7.C.3
    	Contain
    Operator’s best estimate of the total commitments and expenditures required to carry out such Joint Operation;
	 	 	 
	 	6.7.C.4
    	Outline
    the proposed work schedule;
	 	 	 
	 	6.7.C.5
    	Provide
    a forecast schedule of commitments and expenditures, if known; and
	 	 	 
	 	6.7.C.6
    	Be
    accompanied by such other supporting information as is necessary for an informed decision, or as may be requested by a Party.

 

	6.8	Over-expenditures
    of Work Programs and Budgets

 

	6.8.A
    	For
    commitments and expenditures with respect to any line item of an approved Work Program and Budget, Operator shall be entitled
    to incur in connection with the corresponding Joint Operation without further approval of the Operating Committee a combined
    over-commitment and over-expenditure for such line item up to ten percent (10%) of the authorized amount for such line item;
    provided that the cumulative total of all over-commitments and over-expenditures for a Calendar Year shall not exceed five
    percent (5%) of the total annual Work Program and Budget in question.
	 	 
	6.8.B
    	At
    such time Operator reasonably anticipates that the total amount of the commitments and expenditures actually incurred plus
    the commitments to be incurred with respect to such line item exceeds the limits of Article 6.8.A, Operator shall furnish
    to the Operating Committee Operator’s reasonably detailed estimate of the total commitments and expenditures required
    to carry out the Joint Operation corresponding to such line item, together with supporting information.

 

    	27

    	 

    

 

	 	6.8.B.1
    	Within
    fifteen (15) Days after receipt of such proposal, or earlier if necessary to meet any applicable deadline under the Licence,
    the Operating Committee shall meet to consider, modify (if appropriate), and then either approve or reject the proposed revised
    Work Program and Budget (including any agreed modifications); provided that no revised Work Program and Budget may provide
    for Appraisal Operations that exceed the scope of, or conflict with, any previously approved Appraisal Plan, and/or provide
    for Development Operations that exceed the scope of, or conflict with, any previously approved Development Plan, unless such
    previously approved plans, programs, and budgets are amended at or before the adoption of the revised Work Program and Budget.
	 	 	 
	 	6.8.B.2
    	If
    the Operating Committee approves the revised Work Program and Budget, Operator shall, as soon as possible, take such steps
    as may be required under the Licence to secure approval of such revised Work Program and Budget by the Government. If the
    Government requires changes to such revised Work Program and Budget Year as a condition to granting its approval under the
    Licence, then Operator shall resubmit the proposed changes to the revised Work Program and Budget to the Operating Committee
    for further consideration.

 

	6.8.C
    	The
    requirements contained in this Article 6 shall be without prejudice to Operator’s rights and duties to make immediate
    expenditures, incur commitments and/or take actions for emergencies under Article 4.2.B.14; provided that Operator shall promptly
    report the particulars of the emergency to the Parties, together with the future actions it intends to take and its estimate
    of the cost of expenditures and commitments incurred or to be incurred. As soon as practicable, Operator shall submit any
    necessary budget revision concerning such emergencies to the Operating Committee for approval and incorporation into the relevant
    Work Program and Budget.

 

ARTICLE
7 - OPERATIONS BY FEWER THAN ALL PARTIES

 

	7.1	Limitation
    on Applicability

 

	7.1.A
    	No
    operations may be conducted under the Licence except as Joint Operations under Article 5 or as Exclusive Operations under
    this Article 7. No Exclusive Operation shall be conducted (other than the tie-in of Exclusive Operation facilities with existing
    production facilities under Article 7.10) that conflicts with a previously approved Joint Operation or with a previously approved
    Exclusive Operation.
	 	 
	7.1.B
    	Operations
    that are required to fulfill the Minimum Work Obligations for the then current phase or period of the Licence must be proposed
    and conducted as Joint Operations under Article 5, and may not be proposed or conducted as Exclusive Operations under this
    Article 7.
	 	 
	 	Except
    for Exclusive Operations relating to Deepening, Testing, Completing, Sidetracking, Plugging Back, Recompletions or Reworking
    of a well originally drilled to fulfill the Minimum Work Obligations for the then current phase or period of the Licence,
    no Exclusive Operations may be proposed or conducted until the Minimum Work Obligations for the then current phase or period
    of the Licence are fulfilled.
	 	 
	7.1.C
    	No
    Party may propose or conduct an Exclusive Operation under this Article 7 unless and until such Party has properly exercised
    its right to propose an Exclusive Operation under Article 5.13, or is entitled to conduct an Exclusive Operation under Article
    10.
	 	 
	7.1.D
    	Only
    the following operations may be proposed and conducted as Exclusive Operations, subject to the terms of this Article 7:

 

	 	7.1.D.1
    	Drilling
    of Exploration Wells and Appraisal Wells;
	 	 	 
	 	7.1.D.2
    	Testing
    of Exploration Wells and Appraisal Wells;

 

    	28

    	 

    

 

	 	7.1.D.3
    	Completion
    of Exploration Wells and Appraisal Wells not then Completed as productive of Hydrocarbons;
	 	 	 
	 	7.1.D.4
    	Deepening,
    Sidetracking, Plugging Back, Reworking and/or Recompletion of Exploration Wells and Appraisal Wells;
	 	 	 
	 	7.1.D.5
    	Development
    of a Commercial Discovery;
	 	 	 
	 	7.1.D.6
    	Any
    operations specifically authorized to be undertaken as an Exclusive Operation under Article 10; and

 

No
other type of operation may be proposed or conducted as an Exclusive Operation.

 

	7.2	Procedure
    to Propose Exclusive Operations

 

	7.2.A
    	Subject
    to Article 7.1, if any Party proposes to conduct an Exclusive Operation, such Party shall give notice of the proposed operation
    to all Parties, other than Non-Consenting Parties who have relinquished their rights to participate in such operation under
    Article 7.4.B or Article 7.4.F and have no option to reinstate such rights under Article 7.4.C. Such notice shall specify
    that such operation is proposed as an Exclusive Operation and include the work to be performed, the location, the objectives,
    and estimated cost of such operation.
	 	 
	7.2.B
    	Any
    Party entitled to receive such notice shall have the right to participate in the proposed operation.

 

	 	7.2.B.1
    	For
    proposals to Deepen, Test, Complete, Sidetrack, Plug Back, Recomplete, or Rework related to Urgent Operational Matters, any
    such Party wishing to exercise such right must so notify the proposing Party and Operator within twenty-four (24) hours after
    receipt of the notice proposing the Exclusive Operation.
	 	 	 
	 	7.2.B.2
    	For
    proposals to develop a Discovery, any Party wishing to exercise such right must so notify Operator and the Party proposing
    to develop within sixty (60) Days, or earlier if necessary to meet any applicable deadline under the Licence, after receipt
    of the notice proposing the Exclusive Operation.
	 	 	 
	 	7.2.B.3
    	For
    all other proposals, any such Party wishing to exercise such right must so notify the proposing Party and Operator within
    ten (10) Days, or earlier if necessary to meet any applicable deadline under the Licence, after receipt of the notice proposing
    the Exclusive Operation.

 

	7.2.C
    	Failure
    of a Party to whom a proposal notice is delivered to reply properly within the period specified above shall be deemed an election
    by that Party not to participate in the proposed operation.
	 	 
	7.2.D
    	If
    all Parties properly exercise their rights to participate, then the proposed operation shall be conducted as a Joint Operation.
    Operator shall commence such Joint Operation as promptly as practicable and conduct it with due diligence.
	 	 
	7.2.E
    	If
    fewer than all Parties entitled to receive such proposal notice properly exercise their rights to participate, then:

 

	 	7.2.E.1	Immediately
    after the expiration of the applicable notice period set out in Article 7.2.B, Operator shall notify all Parties of the names
    of the Consenting Parties and the recommendation of the proposing Party as to whether the Consenting Parties should proceed
    with the Exclusive Operation.
	 	 	 
	 	7.2.E.2
    	Concurrently,
    Operator shall request the Consenting Parties to specify the Participating Interest each Consenting Party is willing to bear
    in the Exclusive Operation.
	 	 	 
	 	7.2.E.3
    	Within
    twenty-four (24) hours after receipt of such notice, each Consenting Party shall respond to Operator stating that it is willing
    to bear a Participating Interest in such Exclusive Operation equal to:

 

    	29

    	 

    

 

	 	(a)
    	Only
    its Participating Interest as stated in Article 3.2.A;
	 	 	 
	 	(b)
    	A
    fraction, the numerator of which is such Consenting Party’s Participating Interest as stated in Article 3.2.A and the
    denominator of which is the aggregate of the Participating Interests of the Consenting Parties as stated in Article 3.2.A;
    or
	 	 	 
	 	(c)
    	The
    Participating Interest as contemplated by Article 7.2.E.3.b plus all or any part of the difference between one hundred percent
    (100%) and the total of the Participating Interests subscribed by the other Consenting Parties. Any portion of such difference
    claimed by more than one Party shall be distributed to each claimant on a pro-rata basis.

 

	 	7.2.E.4
    	Any
    Consenting Party failing to advise Operator within the response period set out above shall be deemed to have elected to bear
    the Participating Interest set out in Article 7.2.E.3.b as to the Exclusive Operation.
	 	 	 
	 	7.2.E.5	If,
    within the response period set out above, the Consenting Parties subscribe less than one hundred percent (100%) of the Participating
    Interest in the Exclusive Operation, the Party proposing such Exclusive Operation shall be deemed to have withdrawn its proposal
    for the Exclusive Operation, unless within twenty-four (24) hours of the expiry of the response period set out in Article
    7.2.E.3, the proposing Party notifies the other Consenting Parties that the proposing Party shall bear the unsubscribed Participating
    Interest.
	 	 	 
	 	7.2.E.6
    	If
    one hundred percent (100%) subscription to the proposed Exclusive Operation is obtained, Operator shall promptly notify the
    Consenting Parties of their Participating Interests in the Exclusive Operation.
	 	 	 
	 	7.2.E.7
    	As
    soon as any Exclusive Operation is fully subscribed under Article 7.2.E.6, Operator, subject to Article 7.12.F, shall commence
    such Exclusive Operation as promptly as practicable and conduct it with due diligence under this Agreement.
	 	 	 
	 	7.2.E.8
    	If
    such Exclusive Operation has not been commenced within ninety (90) Days (excluding any extension specifically agreed by all
    Parties or allowed by the Force Majeure provisions of Article 16) after the date of the notice given by Operator under Article
    7.2.E.6, the right to conduct such Exclusive Operation shall terminate. If any Party still desires to conduct such Exclusive
    Operation, then such Party must resubmit to the Parties notice proposing such operation under Article 5, as if no proposal
    to conduct an Exclusive Operation had been previously made.

 

	7.3	Responsibility
    for Exclusive Operations

 

	7.3.A
    	The
    Consenting Parties shall bear in accordance with the Participating Interests agreed under Article 7.2.E the entire cost and
    liability of conducting an Exclusive Operation and shall indemnify the Non-Consenting Parties from any damages, losses, costs
    (including reasonable legal costs and attorneys’ fees), and liabilities incurred incident to such Exclusive Operation
    (including Consequential Loss and Environmental Loss) and shall keep the Contract Area free of all liens and Encumbrances
    of every kind created by or arising from such Exclusive Operation.
	 	 
	7.3.B
    	Despite
    Article 7.3.A, each Party shall continue to bear its Participating Interest share of the cost and liability incident to the
    operations in which it participated, including plugging and abandoning and restoring the surface location, but only to the
    extent those costs were not increased by the Exclusive Operation.

 

	7.4	Consequences
    of Exclusive Operations

 

	7.4.A
    	With
    respect to any Exclusive Operation, for so long as a Non-Consenting Party has the option under Article 7.4.C to reinstate
    the rights it relinquished under Article 7.4.B, such Non-Consenting Party shall be entitled to have access concurrently with
    the Consenting Parties to all data and other information relating to such Exclusive Operation, other than G&G Data obtained
    in an Exclusive Operation. If a Non-Consenting Party desires to receive and acquire the right to use such G & G Data,
    then such Non-Consenting Party shall have the right to do so by paying to the Consenting Parties its Participating Interest
    share as set out in Article 3.2.A of the cost incurred in obtaining such G & G Data.

 

    	30

    	 

    

 

	7.4.B
    	Subject
    to Article 7.4.C Article 7.6.E and Article 7.8, each Non-Consenting Party shall be deemed to have relinquished to the Consenting
    Parties, and the Consenting Parties shall be deemed to own, in proportion to the incremental Participating Interest that each
    agreed to bear under Article 7.2.E in any Exclusive Operation:

 

	 	7.4.B.1
    	All
    of each such Non-Consenting Party’s right:

 

	 	(a)
    	to
    participate in further operations to drill, Deepen, Recomplete, Rework, Sidetrack, Test in the well, or Deepened or Sidetracked
    portion of a well, in which the Exclusive Operation was conducted; and
	 	 	 
	 	(b)
    	under
    the Licence to take and dispose of Hydrocarbons produced and saved from the well, or from a Recompleted, Reworked, Deepened
    or Sidetracked portion of a well, in which the Exclusive Operation was conducted; and

 

	 	7.4.B.2
    	All
    of each such Non-Consenting Party’s right:

 

	 	(a)
    	to
    participate in any Discovery made during such Exclusive Operation;
	 	 	 
	 	(b)
    	to
    participate in any Discovery appraised in the course of such Exclusive Operation; and
	 	 	 
	 	(c)
    	under
    the Licence to take and dispose of Hydrocarbons produced and saved from any Appraisal Well or Development Well drilled during
    such Exclusive Operation.

 

	7.4.C
    	A
    Non-Consenting Party shall have only the following options to reinstate the rights it relinquished under Article 7.4.B:

 

	 	7.4.C.1
    	If
    the Consenting Parties decide to appraise a Discovery made in the course of an Exclusive Operation, the Consenting Parties
    shall submit to each Non-Consenting Party the approved Appraisal Plan. For thirty (30) Days (or forty-eight (48) hours for
    Urgent Operational Matters) from receipt of such Appraisal Plan, each Non-Consenting Party shall have the option to reinstate
    the rights it relinquished under Article 7.4.B and to participate in such Appraisal Plan. The Non-Consenting Party may exercise
    such option by notifying Operator within the period specified above that such Non-Consenting Party agrees to bear its Participating
    Interest share of the cost and liability of such Appraisal Plan, and to pay such amounts as set out in Articles 7.5.A and
    7.5.B.
	 	 	 
	 	7.4.C.2
    	If
    the Consenting Parties decide to develop a Discovery made or appraised during an Exclusive Operation, the Consenting Parties
    shall submit to the Non-Consenting Parties a Development Plan substantially in the form intended to be submitted to the Government
    under the Licence. For sixty (60) Days from receipt of such Development Plan or such lesser period of time prescribed by the
    Licence, each Non-Consenting Party shall have the option to reinstate the rights it relinquished under Article 7.4.B and to
    participate in such Development Plan. The Non-Consenting Party may exercise such option by notifying Operator within the period
    specified above that such Non-Consenting Party agrees to bear its Participating Interest share of the cost and liability of
    such Development Plan and such future operating and producing costs, and to pay the amounts as set out in Articles 7.5.A and
    7.5.B.
	 	 	 
	 	7.4.C.3
    	Subject
    to Article 7.8, if the Consenting Parties decide to Deepen, Complete, Sidetrack, Plug Back or Recomplete an Exclusive Well
    and such further operation was not included in the original proposal for such Exclusive Well, the Consenting Parties shall
    submit to the Non-Consenting Parties the approved AFE for such further operation. For thirty (30) Days (or forty-eight (48)
    hours for Urgent Operational Matters) from receipt of such AFE, each Non-Consenting Party shall have the option to reinstate
    the rights it relinquished under Article 7.4.B and to participate in such operation. The Non-Consenting Party may exercise
    such option by notifying Operator within the period specified above that such Non-Consenting Party agrees to bear its Participating
    Interest share of the cost and liability of such further operation, and to pay the amounts as set out in Articles 7.5.A and
    7.5.B.

 

    	31

    	 

    

 

A
Non-Consenting Party shall not be entitled to reinstate its rights in any other type of operation.

 

	7.4.D
    	If
    a Non-Consenting Party does not properly and in a timely manner exercise its option under Article 7.4.C, including paying
    all amounts due under Articles 7.5.A and 7.5.B, such Non-Consenting Party shall have forfeited the options as set out in Article
    7.4.C and the right to participate in the proposed program, unless such program, plan or operation is materially modified
    or expanded (in which case a new notice and option shall be given to such Non-Consenting Party under Article 7.4.C).
	 	 
	7.4.E
    	A
    Non-Consenting Party exercising its option under Article 7.4.C shall notify the other Parties that it agrees to bear its share
    of the cost and liability of such further operation and to reimburse the amounts set out in Articles 7.5.A and 7.5.B that
    such Non-Consenting Party had not previously paid. Such Non-Consenting Party shall in no way be deemed to be entitled to any
    amounts paid under Articles 7.5.A and 7.5.B incident to such Exclusive Operations. The Participating Interest of such Non-Consenting
    Party in such Exclusive Operation shall be its Participating Interest set out in Article 3.2.A. The Consenting Parties shall
    contribute to the Participating Interest of the Non-Consenting Party in proportion to the incremental Participating Interest
    that each agreed to bear under Article 7.2.E. If all Parties participate in the proposed operation, then such operation shall
    be conducted as a Joint Operation under Article 5.
	 	 
	7.4.F
    	If
    after the expiry of the period in which a Non-Consenting Party may exercise its option to participate in a Development Plan
    the Consenting Parties desire to proceed, Operator shall give notice to the Government under the appropriate provision of
    the Licence requesting a meeting to advise the Government that the Consenting Parties consider the Discovery to be a Commercial
    Discovery. After such meeting such Operator for such development shall apply for an Exploitation Area (if applicable in the
    Licence). Unless the Development Plan is materially modified or expanded before the commencement of operations under such
    plan (in which case a new notice and option shall be given to the Non-Consenting Parties under Article 7.4.C), each Non-Consenting
    Party to such Development Plan shall:

 

	 	7.4.F.1
    	If
    the Licence so allows, elect not to apply for an Exploitation Area covering such development and forfeit all interest in such
    Exploitation Area, or
	 	 	 
	 	7.4.F.2
    	If
    the Licence does not so allow, be deemed to have:

 

	 	(a)
    	Elected
    not to apply for an Exploitation Area covering such development;
	 	 	 
	 	(b)
    	Forfeited
    all economic interest in such Exploitation Area; and
	 	 	 
	 	(c)
    	Assumed
    a fiduciary duty to exercise its legal interest in such Exploitation Area for the benefit of the Consenting Parties.

 

In
either case such Non-Consenting Party shall be deemed to have withdrawn from this Agreement to the extent it relates to such Exploitation
Area, even if the Development Plan is modified or expanded after the start of operations under such Development Plan and shall
be further deemed to have forfeited any right to participate in the construction and ownership of facilities outside such Exploitation
Area designed solely for the use of such Exploitation Area.

 

	7.5	Premium
    to Participate in Exclusive Operations

 

	7.5.A
    	Each
    such Non-Consenting Party shall:

 

Immediately
upon the exercise of its option under Article 7.4.C, begin to bear one hundred percent (100%) of the Cash Calls made on each Consenting
Party that took the risk of such Exclusive Operations in respect of both Joint Operations and Exclusive Operations until such
Non-Consenting Party has reimbursed the original Consenting Parties (in proportion to the incremental Participating Interest that
each agreed to bear under Article 7.2.E in such Exclusive Operations in which such Non-Consenting Party is reinstating its rights)
an amount equal to such Non-Consenting Party’s Participating Interest share of all costs and liabilities that were incurred
in every Exclusive Operation relating to the Discovery (or Exclusive Well, as applicable) in which the Non-Consenting Party desires
to reinstate the rights it relinquished under Article 7.4.B and that were not previously paid by such Non-Consenting Party.

 

    	32

    	 

    

 

	7.5.B
    	In
    addition to the payment required under Article 7.5.A, immediately after the exercise of its option under Article 7.4.C each
    such Non-Consenting Party shall be liable to reimburse the Consenting Parties that took the risk of such Exclusive Operations
    (in proportion to the incremental Participating Interest that each agreed to bear under Article 7.2.E in such Exclusive Operations
    in which such Non-Consenting Party is reinstating its rights) an amount equal to the total of:

 

	 	7.5.B.1
    	Six
    hundred percent (600%) of such Non-Consenting Party’s Participating Interest share of all costs and liabilities that
    were incurred in any Exclusive Operation relating to the drilling, Deepening, Testing, Completing, Sidetracking, Plugging
    Back, Recompleting, and Reworking of the Exploration Well that made the Discovery in which the Non-Consenting Party desires
    to reinstate the rights it relinquished under Article 7.4.B, and that were not previously paid by such Non-Consenting Party;
    plus
	 	 	 
	 	7.5.B.2
    	Three
    hundred percent (300%) of the Non-Consenting Party’s Participating Interest share of all costs and liabilities that
    were incurred in any Exclusive Operation relating to the drilling, Deepening, Testing, Completing, Sidetracking, Plugging
    Back, Recompleting and Reworking of the Appraisal Well(s) that delineated the Discovery in which the Non-Consenting Party
    desires to reinstate the rights it relinquished under Article 7.4.B, and that were not previously paid by such Non-Consenting
    Party.

 

	7.5.C
    	Each
    such Non-Consenting Party that is liable for the amounts set out in Article 7.5.B shall:

 

Within
thirty (30) Days of the exercise of its option under Article 7.4.C, pay in immediately available funds the full amount due from
it under Article 7.5.B to such Consenting Parties, in the currency designated by such Consenting Parties.

 

	7.6	Order
    of Preference of Operations

 

	7.6.A
    	Except
    as otherwise specifically provided in this Agreement, if any Party desires to propose the conduct of an operation that will
    conflict with an existing proposal for an Exclusive Operation, such Party shall have the right exercisable for five (5) Days
    (or twenty-four (24) hours for Urgent Operational Matters) from receipt of the proposal for the Exclusive Operation, to deliver
    such Party’s alternative proposal to all Parties entitled to participate in the proposed operation. Such alternative
    proposal shall contain the information required under Article 7.2.A.
	 	 
	7.6.B
    	Each
    Party receiving such proposals shall elect by delivery of notice to Operator and to the proposing Parties within the appropriate
    response period set out in Article 7.2.B to participate in one of the competing proposals. Any Party not notifying Operator
    and the proposing Parties within the response period shall be deemed to have voted against the proposals.
	 	 
	7.6.C
    	The
    proposal receiving the largest aggregate Participating Interest vote shall have priority over all other competing proposals.
    In the case of a tie vote, Operator shall choose among the proposals receiving the largest aggregate Participating Interest
    vote. Operator shall deliver notice of such result to all Parties entitled to participate in the operation within five (5)
    Days (or twenty-four (24) hours for Urgent Operational Matters).
	 	 
	7.6.D
    	Each
    Party shall then have two (2) Days (or twenty-four (24) hours for Urgent Operational Matters) from receipt of such notice
    to elect by delivery of notice to Operator and the proposing Parties whether such Party will participate in such Exclusive
    Operation, or will relinquish its interest under Article 7.4.B. Failure by a Party to deliver such notice within such period
    shall be deemed an election not to participate in the prevailing proposal.

 

    	33

    	 

    

 

	7.6.E
    	Despite
    the provisions of Article 7.4.B, if for reasons other than the encountering of granite or other practically impenetrable substance
    or any other condition in the hole rendering further operations impracticable, a well drilled as an Exclusive Operation fails
    to reach the deepest objective Zone described in the notice proposing such well, Operator shall give notice of such failure
    to each Non-Consenting Party who submitted or voted for an alternative proposal under this Article 7.6 to drill such well
    to a shallower Zone than the deepest objective Zone proposed in the notice under which such well was drilled. Each such Non-Consenting
    Party shall have the option exercisable for forty-eight (48) hours from receipt of such notice to participate for its Participating
    Interest share in the initial proposed Completion of such well. Each such Non-Consenting Party may exercise such option by
    notifying Operator that it wishes to participate in such Completion and by paying its Participating Interest share of the
    cost of drilling such well to its deepest depth drilled in the Zone in which it is Completed. All costs and liabilities for
    drilling and Testing the Exclusive Well below that depth shall be for the sole account of the Consenting Parties. If any such
    Non-Consenting Party does not properly elect to participate in the first Completion proposed for such well, the relinquishment
    provisions of Article 7.4.B shall continue to apply to such Non-Consenting Party’s interest.

 

	7.7	Stand-By
    Costs

 

	7.7.A
    	When
    an operation has been performed, all tests have been conducted and the results of such tests furnished to the Parties, stand
    by costs incurred pending response to any Party’s notice proposing an Exclusive Operation for Deepening, Testing, Sidetracking,
    Completing, Plugging Back, Recompleting, Reworking, or other further operation in such well (including the period required
    under Article 7.6 to resolve competing proposals) shall be charged and borne by the Parties as part of the operation just
    completed. Stand by costs incurred after all Parties respond, or after expiration of the response time permitted, whichever
    first occurs, shall be charged to and borne by the Parties proposing the Exclusive Operation in proportion to their Participating
    Interests, regardless of whether such Exclusive Operation is actually conducted.
	 	 
	7.7.B
    	If
    a further operation related to Urgent Operational Matters is proposed while the drilling rig to be used is on location, any
    Party may request and receive up to five (5) additional Days after expiration of the applicable response period specified
    in Article 7.2.B.1 within which to respond by notifying Operator that such Party agrees to bear all stand by costs and other
    costs incurred during such extended response period. Operator may require such Party to pay the estimated stand by costs in
    advance as a condition to extending the response period. If more than one Party requests such additional time to respond to
    the notice, stand by costs shall be allocated between such Parties on a Day-to-Day basis in proportion to their Participating
    Interests.

 

	7.8	Special
    Considerations Regarding Deepening and Sidetracking

 

	7.8.A
    	An
    Exclusive Well shall not be Deepened or Sidetracked without first affording the Non-Consenting Parties under this Article
    7.8 the opportunity to participate in such operation.
	 	 
	7.8.B
    	If
    any Consenting Party desires to Deepen or Sidetrack an Exclusive Well, such Party shall initiate the procedure contemplated
    by Article 7.2. If a Deepening or Sidetracking operation is approved under such provisions, and if any Non-Consenting Party
    to the Exclusive Well elects to participate in such Deepening or Sidetracking operation, such Non-Consenting Party shall not
    owe amounts under Article 7.5.B, and such Non-Consenting Party’s payment under Article 7.5.A shall be such Non-Consenting
    Party’s Participating Interest share of the costs and liabilities incurred in connection with drilling the Exclusive
    Well from the surface to the depth previously drilled which such Non-Consenting Party would have paid had such Non-Consenting
    Party agreed to participate in such Exclusive Well; provided, however, all costs and liabilities for Testing and Completing
    or attempting Completion of the well incurred by Consenting Parties before the commencement of actual operations to Deepen
    or Sidetrack beyond the depth previously drilled shall be for the sole account of the Consenting Parties.

 

    	34

    	 

    

 

	7.9	Use
    of Property

 

	7.9.A
    	The
    Parties participating in any Deepening, Testing, Completing, Sidetracking, Plugging Back, Recompleting, or Reworking of any
    well drilled under this Agreement shall be permitted to use (free of cost) all casing, tubing, and other equipment in the
    well that is not needed for operations by the owners of the wellbore, but the ownership of all such equipment shall remain
    unchanged. On abandonment of a well in which operations with differing participation have been conducted, the Parties abandoning
    the well shall account for all equipment in the well to the Parties owning such equipment by tendering to them their respective
    Participating Interest shares of the value of such equipment less the cost of salvage.
	 	 
	7.9.B
    	Spare
    capacity in equipment that is constructed under this Agreement and used for processing or transporting Crude Oil and Natural
    Gas after it has passed through primary separators and dehydrators (including treatment facilities, gas processing plants
    and pipelines) shall be available for use by any Party for Hydrocarbon production from the Contract Area on the terms set
    forth below. All Parties desiring to use such equipment shall nominate capacity in such equipment on a monthly basis by notice
    to Operator at least ten (10) Days before the beginning of each month. Operator may nominate capacity for the owners of the
    equipment if they so elect. If at any time the capacity nominated exceeds the total capacity of the equipment, the capacity
    of the equipment shall be allocated in the following priority: (1) first, to the owners of the equipment up to their respective
    Participating Interest shares of total capacity, (2) second, to owners of the equipment desiring to use capacity in excess
    of their Participating Interest shares, in proportion to the Participating Interest of each such Party and (3) third, to Parties
    not owning interests in the equipment, in proportion to their Participating Interests in this Agreement. Owners of the equipment
    shall be entitled to use up to their Participating Interest share of total capacity without payment of a fee under this Article
    7.9.B. Otherwise, each Party using equipment under this Article 7.9.B shall pay to the owners of the equipment monthly throughout
    the period of use an arm’s-length fee based upon third party charges for similar services in the vicinity of the Contract
    Area. If no arm’s-length rates for such services are available, then the Party desiring to use equipment under this
    Article 7.9.B shall pay to the owners of the equipment a monthly fee equal to (1) that portion of the total cost of the equipment,
    divided by the number of months of useful life established for such equipment under the tax law of Australia, that the capacity
    made available to such Party on a fee basis under this Article 7.9.C bears to the total capacity of the equipment plus (2)
    that portion of the monthly cost of maintaining, operating and financing the equipment that the capacity made available to
    such Party on a fee basis under this Article 7.9.B bears to the total capacity of the equipment.
	 	 
	7.9.C
    	Payment
    for the use of equipment under Article 7.9.B shall not result in an acquisition of any additional interest in the equipment
    by the paying Parties. However, such payments shall be included in the costs that the paying Parties are entitled to recoup
    under Article 7.5.
	 	 
	7.9.D
    	Parties
    electing to use spare capacity in equipment under Article 7.9.B shall indemnify the owners of the equipment or platform against
    any costs and liabilities incurred as a result of such use (including any Consequential Loss and Environmental Loss) but excluding
    costs and liabilities for which Operator is solely responsible under Article 4.6.

 

	7.10	Lost
    Production during Tie-In of Exclusive Operation Facilities

 

If,
during the tie-in of Exclusive Operation facilities with the existing production facilities of another operation, the production
of Hydrocarbons from such other pre-existing operations is temporarily lessened as a result, then the Consenting Parties shall
compensate the parties to such existing operation for such loss of production in the following manner. Operator shall determine
the amount by which each Day’s production during the tie-in of Exclusive Operation facilities falls below the previous month’s
average daily production from the existing production facilities of such operation. The so-determined amount of lost production
shall be recovered by all Parties who experienced such loss in proportion to their respective Participating Interest. Upon completion
of the tie-in, such lost production shall be recovered in full by Operator deducting up to one hundred percent (100%) of the production
from the Exclusive Operation, before the Consenting Parties being entitled to receive any such production.

 

    	35

    	 

    

 

	7.11	Conduct
    of Exclusive Operations

 

	7.11.A
    	Each
    Exclusive Operation shall be carried out by the Consenting Parties acting as the Operating Committee, subject to the provisions
    of this Agreement applied mutatis mutandis to such Exclusive Operation and subject to the terms and conditions of the Licence.
	 	 
	7.11.B
    	The
    computation of costs and liabilities incurred in Exclusive Operations, including the costs and liabilities of Operator for
    conducting such operations, shall be made in accordance with the principles set out in the Accounting Procedure.
	 	 
	7.11.C
    	Operator
    shall maintain separate books, financial records and accounts for Exclusive Operations which shall be subject to the same
    rights of audit and examination as the Joint Account and related records, all as provided in the Accounting Procedure. Said
    rights of audit and examination shall extend to each of the Consenting Parties and each of the Non-Consenting Parties so long
    as the latter are, or may be, entitled to elect to participate in such Exclusive Operations.
	 	 
	7.11.D
    	If
    Operator is conducting an Exclusive Operation for the Consenting Parties, regardless of whether it is participating in that
    Exclusive Operation, Operator shall be entitled to request cash advances and shall not be required to use its own funds to
    pay any cost or liability attributable to any Exclusive Operations and shall not be obliged to commence or continue Exclusive
    Operations until cash advances requested have been made, and the Accounting Procedure shall apply to Operator concerning any
    Exclusive Operations conducted by it.
	 	 
	7.11.E
    	If
    a Development Plan has been approved under Article 6.3, or if any Party proposes (but does not yet have the right to commence)
    a development under this Article 7 where neither the Development Plan nor the development proposal call for the drilling of
    one or more Appraisal Wells, and should any Party wish to drill an additional Appraisal Well before development, then the
    Party proposing the Appraisal Well as an Exclusive Operation shall be entitled to proceed first, but without the right (subject
    to the following sentence) to future reimbursement under Article 7.5. If such an Appraisal Well is produced, any Consenting
    Party shall own and have the right to take in kind and separately dispose of all of the Non-Consenting Party’s Entitlement
    from such Appraisal Well until the value received in sales to purchasers in arm-length transactions equals one hundred percent
    (100%) of such Non-Consenting Party’s Participating Interest shares of all costs and liabilities that were incurred
    in any Exclusive Operations relating to the Appraisal Well. After the completion of drilling such Appraisal Well as an Exclusive
    Operation, the Parties may proceed with the Development Plan approved under Article 5.9, or (if applicable) the Parties may
    complete the procedures to propose an Exclusive Operation to develop a Discovery. If, as the result of drilling such Appraisal
    Well as an Exclusive Operation, the Party or Parties proposing to develop the Discovery decide(s) not to do so, then each
    Non-Consenting Party who voted in favor of such Development Plan before the drilling of such Appraisal Well shall pay to the
    Consenting Party the amount such Non-Consenting Party would have paid had such Appraisal Well been drilled as a Joint Operation.
	 	 
	7.11.F
    	If
    Operator is a Non-Consenting Party to an Exclusive Operation to develop a Discovery, then Operator may resign, but in any
    event shall resign on the unanimous request of the Consenting Parties, as Operator for the Exploitation Area for such Discovery,
    and the Consenting Parties shall select a Consenting Party to serve as Operator for such Exclusive Operation only.

 

    	36

    	 

    

 

ARTICLE
8 - DEFAULT

 

	8.1	Default
    and Notice

 

	8.1.A	Any
    Party that fails to pay when due its share of Joint Account charges (including Cash Calls and interest), or provide when due
    and maintain any Security required of such Party under the Licence, this Agreement or the Farmout Agreement, or perform its
    obligations under the Licence, this Agreement or the Farmout Agreement, shall be in default under this Agreement (together
    with each of its Affiliates party to this Agreement or otherwise owning an interest in the Licece, a “Defaulting Party”).
    Operator, or any non-defaulting Party in case Operator is in default under this Agreement, shall promptly give a Default Notice
    to the Defaulting Party and each of the other Parties. 
	 	 
	8.1.B	For
    the duration of the Default Period the Party in default shall be a Defaulting Party for the purposes of this Agreement. All
    Default Amounts shall bear interest at the Default Interest Rate from the due date to the date of receipt of payment.

 

	8.2	Operating
    Committee Meetings, Data, and Entitlements

 

	8.2.A	Except
    as provided in Article 8.3.C, the Defaulting Party has no right, during the Default Period, to:

 

	 	8.2.A.1
    	Call
    or attend Operating Committee or subcommittee meetings;
	 	 	 
	 	8.2.A.2
    	Vote
    on any matter coming before the Operating Committee or any subcommittee;
	 	 	 
	 	8.2.A.3
    	Have
    access to any data or information relating to any operations under this Agreement;
	 	 	 
	 	8.2.A.4
    	Consent
    to or reject data trades between the Parties and third parties, nor access any data received in such data trades;
	 	 	 
	 	8.2.A.5
    	Consent
    to or reject any Transfer or otherwise exercise any other rights with respect to Transfers under this Article 8 or under Article
    12;
	 	 	 
	 	8.2.A.6
    	Receive
    its Entitlement under Article 8.4; or
	 	 	 
	 	8.2.A.7
    	Take
    assignment of any portion of another Party’s Participating Interest if such other Party is either in default or withdrawing
    from this Agreement and the Licemce. 

 

	8.2.B	During
    the Default Period the Defaulting Party:

 

May
not Transfer all or part of its Participating Interest, except to non-defaulting Parties under this Article 8.

 

	8.2.C	Despite
    any other provisions in this Agreement, during the Default Period:

 

	 	8.2.C.1
    	Unless
    agreed otherwise by the non-defaulting Parties, the voting interest of each non-defaulting Party shall be equal to the ratio
    such non-defaulting Party’s Participating Interest bears to the total Participating Interests of the non-defaulting
    Parties;
	 	 	 
	 	8.2.C.2
    	Any
    matters requiring a unanimous vote or approval of the Parties shall not require the vote or approval of the Defaulting Party;
    
	 	 	 
	 	8.2.C.3
    	The
    Defaulting Party shall be deemed to have elected not to participate in any operations that are voted upon during the Default
    Period, to the extent such an election would be permitted by Article 5.13 and Article 7; and
	 	 	 
	 	8.2.C.4
    	The
    Defaulting Party shall be deemed to have approved, and shall join with the non-defaulting Parties in taking, any other actions
    voted on during the Default Period.

 

    	37

    	 

    

 

	8.3	Allocation
    of Defaulted Amounts

 

	8.3.A	The
    Party providing the Default Notice under Article 8.1 shall include in the Default Notice to each non-defaulting Party a statement
    of:

 

	 	8.3.A.1
    	The
    amount that the non-defaulting Party shall pay as its portion of the Amount in Default; and
	 	 	 
	 	8.3.A.2
    	If
    the Defaulting Party has failed to obtain or maintain any Security required of such Party in order to maintain the Licence
    in full force and effect, the type and amount of the Security the non-defaulting Parties shall post or the funds they shall
    pay in order to allow Operator, or (if Operator is in default) the notifying Party, to post and maintain such Security. 

 

Unless
otherwise agreed, the non-defaulting Parties shall satisfy the obligations for which the Defaulting Party is in default in proportion
to the ratio that each non-defaulting Party’s Participating Interest bears to the Participating Interests of all non-defaulting
Parties.

 

	8.3.B	If
    the Defaulting Party remedies its default in full before the Default Period commences, the notifying Party shall promptly
    notify each non-defaulting Party by facsimile and by telephone or email, and the non-defaulting Parties shall be relieved
    of their obligations under Article 8.3.A.  Otherwise, each non-defaulting Party shall satisfy its obligations under
    Article 8.3.A.1 before the Default Period commences and its obligations under Article 8.3.A.2 within ten (10) Days after the
    Default Notice.  If any non-defaulting Party fails to timely satisfy such obligations, such Party shall be a Defaulting
    Party subject to the provisions of this Article 8.  The non-defaulting Parties shall be entitled to receive their
    respective shares of the Total Amount in Default payable by such Defaulting Party under this Article 8.
	 	 
	8.3.C	At
    any time before the date of:

 

Notice
of exercise of the rights under Article 8.4.D to compel the Defaulting Party to withdraw from this Agreement or to sell its Participating
Interest, as applicable, a Defaulting Party may remedy its default by paying to the Operator the Total Amount in Default. A Party
may pay a portion of its default by paying to the Operator less than the Total Amount in Default, but shall remain in default.

 

	 	8.3.C.1
    	If
    a Defaulting Party makes any payment, the amount so received shall first be applied first to the payment of interest due and
    then to payment of principal.
	 	 	 
	 	8.3.C.2
    	Operator
    shall pay any such payment to the non-defaulting Parties in proportion to the ratio of the amount each non-defaulting Party
    has paid for the Defaulting Party bears to the total amounts all non-defaulting Parties have paid for the Defaulting Party.
    

 

	8.3.D	If
    Operator is a Defaulting Party, then all payments otherwise payable to the Joint Account under this Agreement shall be made
    to the notifying Party instead of to the Joint Account until the Operator’s default is cured or a successor Operator
    appointed. 

 

	 	8.3.D.1
    	The
    notifying Party shall maintain such funds in a segregated account separate from its own funds and shall apply such funds to
    third party claims due and payable from the Joint Account of which it has notice, to the extent Operator would be authorized
    to make such payments under this Agreement.  The notifying Party shall be entitled to bill or Cash Call the other
    Parties under the Accounting Procedure for proper third party charges that become due and payable during such period to the
    extent sufficient funds are not available.  When Operator has cured its default or a successor Operator is appointed,
    the notifying Party shall turn over all remaining funds in the account to Operator and shall provide Operator and the other
    Parties with a detailed accounting of the funds received and expended during this period.  The notifying Party shall
    not be liable for damages, losses, costs, or liabilities arising as a result of its actions under this Article 8.3.D, except
    to the extent Operator would be liable under Article 4.6.

 

    	38

    	 

    

 

	 	8.3.D.2
    	While
    the Operator is a Defaulting Party, the Operator shall continue to perform its other functions as the Operator that are not
    transferred to the notifying Party by this Article, until Operator is removed or resigns.

 

	8.3.E	If
    all Parties are Defaulting Parties, then the Parties shall be deemed to have collectively decided to withdraw, and the Parties
    agree that they shall be bound by the terms and conditions of this Agreement for so long as may be necessary to wind up the
    affairs of the Parties with the Government, to satisfy any requirements of the Licence and Laws and to facilitate the sale,
    disposition or abandonment of property or interests held by the Joint Account, all under Article 2.

 

	8.4	Remedies

 

	8.4.A	During
    the Default Period, the Defaulting Party has no right to take in kind or separately dispose of its Entitlement, which Entitlement
    shall under this Article 8.4.A vest in and be the property of the non-defaulting Parties. Operator (or the notifying
    Party if Operator is a Defaulting Party) shall be authorized and under Article 8.4.I has a power of attorney to take and sell
    such Entitlement in an arm’s-length sale on terms that are commercially reasonable under the circumstances and, after
    deducting all costs and liabilities incurred in connection with such sale pay the net proceeds to the non-defaulting Parties
    in proportion to the amounts they are owed by the Defaulting Party as a part of the Total Amount in Default (in payment of
    first the interest and then the principal) and apply such net proceeds toward the establishment of the Reserve Fund, if applicable,
    until the Total Amount in Default is recovered and such Reserve Fund is established.  Any surplus remaining shall
    be paid to the Defaulting Party, and any deficiency shall be carried forward as a Default Amount.  When making sales
    under this Article 8.4.A, the non-defaulting Parties shall have no obligation to share any existing market or obtain a price
    equal to the price at which their own production is sold.
	 	 
	8.4.B	If
    Operator disposes of any Joint Property or if any other credit or adjustment is made to the Joint Account during the Default
    Period, Operator (or the notifying Party if Operator is a Defaulting Party) shall be entitled to apply the Defaulting Party’s
    Participating Interest share of the proceeds of such disposal, credit, or adjustment against the Total Amount in Default (against
    first the interest and then the principal) and toward the establishment of the Reserve Fund, if applicable.  Any
    surplus remaining shall be paid to the Defaulting Party, and any deficiency shall be carried forward as a Default Amount.
	 	 
	8.4.C	The
    non-defaulting Parties shall be entitled to apply the net proceeds received under Articles 8.4.A and 8.4.B toward the creation
    of a reserve fund (the “Reserve Fund”) in an amount equal to the Defaulting Party’s Participating Interest
    share of:

 

	 	8.4.C.1
    	The
    estimated Decommissioning Costs, to the extent the Parties have not provided for Decommissioning Security under Article 10;
	 	 	 
	 	8.4.C.2
    	The
    estimated cost of severance benefits for local employees upon cessation of operations; and
	 	 	 
	 	8.4.C.3
    	Any
    other identifiable costs that the non-defaulting Parties anticipate will be incurred in connection with the cessation of operations.

 

Upon
the conclusion of the Default Period, all amounts held in the Reserve Fund shall be returned to the Party previously in Default.

 

    	39

    	 

    

 

	8.4.D	If
    a Defaulting Party fails to fully remedy all its defaults by the thirtieth (30th) Day of the Default Period, or by the fifteenth
    (15th) Day of the corresponding Default Period of any subsequent default occurring within twelve (12) Months of the preceding
    default, then, without prejudice to any other rights available to each non-defaulting Party to recover its portion of the
    Total Amount in Default, at any time afterwards until the Defaulting Party has cured its defaults:

 

	 	8.4.D.1
    	any
    non-defaulting Party shall have the option, exercisable in its discretion at any time, to require that the Defaulting Party
    offer to completely withdraw from this Agreement and assign all of its Participating Interest, as described in Article 8.4.E;
    and/or
	 	 	 
	 	8.4.D.2
    	any
    non-defaulting Party shall have the option, exercisable in its discretion at any time, to require that the Defaulting Party
    offer to sell and assign all of its Participating Interest to any non-defaulting Parties wishing to purchase such Participating
    Interest, as described in Article 8.4.F; and/or
	 	 	 
	 	8.4.D.3
    	any
    non-defaulting Party shall have the option, exercisable in its discretion with respect to a default occurring at any time
    under an approved Development Plan, to require that the Defaulting Party offer to assign a part of the Defaulting Party’s
    Participating Interest in the corresponding Exploitation Area to any non-defaulting Parties wishing to accept assignment of
    such part, as described in Article 8.4.G; and/or
	 	 	 
	 	8.4.D.4
    	any
    non-defaulting Party shall have the option, exercisable in its discretion at any time, to foreclose its mortgage and security
    interest against a pro rata share of the Collateral, as described in Article 8.4.H. 

 

Such
options shall be exercised by providing notice of such election to the Defaulting Party and each non-defaulting Party. Until the
Defaulting Party’s Participating Interest has been assigned in full under this Article 8.4, each option is cumulative, not
exclusive. The exercise of one option that does not result in the assignment of the Defaulting Party’s Participating Interest
shall not preclude the non-defaulting Parties from exercising such option again, or from exercising another option; provided that
if an option set out in Article 8.4.D.2 or Article 8.4.D.3 is exercised, then the other options may not be exercised unless and
until the non-defaulting Parties have been deemed to have elected not to acquire all or part of the Participating Interest of
the Defaulting Party under Article 8.4.F or Article 8.4.G, as applicable. All costs pertaining to any such assignment (including
any stamp duty incurred on the documents signed to effect such assignment) shall be the responsibility of the Defaulting Party.

 

	8.4.E	If
    the option set out in Article 8.4.D.1 is exercised, the Defaulting Party shall be deemed to have proposed to withdraw and
    assign, under Article 13.6, effective on the date of the non-defaulting Party’s or Parties’ notice, its Participating
    Interest to the non-defaulting Parties; provided that any non-defaulting Party that did not join in the notice of exercise
    of such option shall have the right exercisable for ten (10) Days from the date of such notice to notify the other non-defaulting
    Parties that it refuses to accept such proposed assignment.  In the absence of an agreement to the contrary among
    the non-defaulting Parties willing to accept an assignment, any assignment to the non-defaulting Parties after a withdrawal
    under this Article 8.4.E shall be in proportion to the Participating Interests of the non-defaulting Parties, excluding any
    non-defaulting Party that has given notice that it refuses to accept such proposed assignment.
	 	 
	8.4.F	 In
    connection with the option set out in Article 8.4.D.2 each Party grants to each of the other Parties the right and option
    to acquire (the “Buy-Out Option”) under Article 8.4.F.1 all of its Participating Interest for the consideration
    determined under Article 8.4.F.2 (the “Buy-Out Price”) and paid under Article 8.4.F.3. 

 

	 	8.4.F.1
    	Each
    non-defaulting Party may, but shall not be obligated to, exercise such Buy-Out Option by notice to the Defaulting Party and
    each other non-defaulting Party (the “Buy-Out Notice”). The Defaulting Party shall be deemed to have proposed
    to sell and assign, effective on the date of the Buy-Out Notice, its entire Participating Interest to the non-defaulting Parties
    having exercised the Buy-Out Option (each, an “Acquiring Party”). Any other non-defaulting Party that gives an
    Option Notice within thirty (30) Days after the Buy-Out Option is first exercised by an Acquiring Party shall also become
    an Acquiring Party. Any non-defaulting Party that fails to exercise its Buy-Out Option during such thirty (30) Day period
    shall be deemed to have elected not to become an Acquiring Party, and its Buy-Out Option with respect to the Defaulting Party
    shall terminate. Each Acquiring Party shall be deemed to have proposed to acquire a proportion of the Participating Interest
    of the Defaulting Party equal to the ratio of such Acquiring Party’s Participating Interest to the total Participating
    Interests of all Acquiring Parties and pay such proportion of the Buy-Out Price, unless they otherwise agree. 

 

    	40

    	 

    

 

	 	8.4.F.2
    	The
    Buy-Out Price shall be determined as follows:

 

Each
Acquiring Party shall specify in its Buy-Out Notice a value for the Defaulting Party’s entire Participating Interest. Within
five (5) Days after the thirty (30) Day period after the Buy-Out Option is first exercised, the Defaulting Party shall (i) notify
the Acquiring Parties that it accepts, with respect to each Acquiring Party, such Acquiring Party’s proportionate share
of the value specified by such Acquiring Party in its Buy-Out Notice (in which case this value is, with respect to such Acquiring
Party, the “Buy-Out Price”); or (ii) refer the Dispute to an independent expert pursuant to Article 18.3 for determination
of the value of its entire Participating Interest (in which case each Acquiring Party’s proportionate share of the value
determined by such expert shall be deemed the “Buy-Out Price” with respect to each such Acquiring Party). If the Defaulting
Party fails to so notify the Acquiring Parties, then the Defaulting Party shall be deemed to have accepted, with respect to each
Acquiring Party, such Acquiring Party’s proportionate share of the value proposed by such Acquiring Party as the Buy-Out
Price. If the valuation of the Defaulting Party’s Participating Interest is referred to an expert, such expert shall determine
the Buy-Out Price which shall be deemed to be equal to the fair market value of the Defaulting Party’s entire Participating
Interest, less the following:

 

	 	(a)	The
    Total Amount in Default;
	 	 	 
	 	(b)	All
    costs, including the costs of the expert, to obtain such valuation; and
	 	 	 
	 	(c)	thirty
    percent (30%) of the fair market value of the Defaulting Party’s Participating Interest. 

 

	 	8.4.F.3
    	The
    Buy-Out Price shall be paid to the Defaulting Party in four (4) installments, each equal to 25% of the Buy-Out Price as follows:

 

	 	(a)	The
    first installment shall be due and payable to the Defaulting Party within 15 Days after the date on which the Defaulting Party’s
    Participating Interest is effectively assigned to the Acquiring Parties (the “Assignment Date”);
	 	 	 
	 	(b)	The
    second installment shall be due and payable to the Defaulting Party within 180 Days after the Assignment Date;
	 	 	 
	 	(c)	The
    third installment shall be due and payable to the Defaulting Party within 365 Days after the Assignment Date; and
	 	 	 
	 	(d)	The
    fourth installment shall be due and payable to the Defaulting Party within 545 Days after the Assignment Date.

 

	 	8.4.F.4
    	On
    the Assignment Date the Total Amount in Default shall be deemed to have been satisfied, and if the assignment under Article
    8.4.F was to fewer than all of the non-defaulting Parties, the Acquiring Parties in proportion to their proportionate share
    of the Buy-Out Price shall pay to each non-defaulting Party that was not an Acquiring Party the portion of the Total Amount
    in Default owed to such non-defaulting Party. 

 

	8.4.G	In
    connection with the option set out in Article 8.4.D.3 each Defaulting Party grants to each of the other Parties the right
    and option to acquire under this Article 8.4.G a part of its Participating Interest in the applicable Exploitation Area (the
    “Withering Option”), in which it is in default.

 

    	41

    	 

    

 

	 	8.4.G.1
    	Each
    non-defaulting Party may, but shall not be obligated to, exercise such Withering Option by notice to the Defaulting Party
    and each other non-defaulting Party (the “Withering Notice”). The Defaulting Party shall be deemed to have proposed
    to assign, effective on the date of the Withering Notice, the Withering Interest to the non-defaulting Parties having exercised
    the Withering Option (each, an “Acquiring Party”). Any other non-defaulting Party that gives a Withering Notice
    within thirty (30) Days after the Withering Option is first exercised by an Acquiring Party shall also become an Acquiring
    Party. Any non-defaulting Party that fails to exercise its Withering Option during such thirty (30) Day period shall be deemed
    to have elected not to become an Acquiring Party and its Withering Option regarding the Defaulting Party shall terminate.
    Each Acquiring Party shall be deemed to have proposed to acquire a proportion of the Withering Interest of the Defaulting
    Party equal to the ratio of such Acquiring Party’s Participating Interest to the total Participating Interests of all
    Acquiring Parties and pay such proportion of the Withering Price, unless they otherwise agree. 
	 	 	 
	 	8.4.G.2
    	The
    Withering Interest shall be determined based on the following formula:

 

	Withering
    Interest =	 	[Withering
    Price x Default Factor x DPPI]
	 	DPETC

 

Where:

 

“Withering
Interest” means the lesser of: (i) the Defaulting Party’s entire Participating Interest, in the applicable Exploitation
Area to be assigned to the Acquiring Parties (expressed as a percentage); or (ii) the part out of the Defaulting Party’s
Participating Interest, in the applicable Exploitation Area to be assigned to the Acquiring Parties (expressed as a percentage).

 

“Withering
Price” means the amount equal to DPETC less DPACP.

 

“Estimated
Total Costs” means the estimated total costs to be expended to complete the approved Development Plan for the applicable
Exploitation Area, including any contingent amounts, amendments and approved cost over-runs arising before the due date of the
Cash Call giving rise to the default.

 

“DPETC”
means the Defaulting Party’s Participating Interest share of the Estimated Total Costs.

 

“DPACP”
means the aggregate costs paid by the Defaulting Party regarding the applicable Development Plan before the date of the Cash Call
giving rise to the default.

 

“Default
Factor” means:

 

1.25,
if less than twenty-five percent (25%) of the Estimated Total Costs have been expended by the Parties;

 

1.20,
if at least twenty-five percent (25%) but less than fifty percent (50%) of the Estimated Total Costs have been expended by the
Parties;

 

1.15,
if at least fifty percent (50%) but less than seventy-five percent (75%) of the Estimated Total Costs have been expended by the
Parties; or

 

1.10,
if at least seventy five percent (75%) of the Estimated Total Costs have been expended by the Parties.

 

“DPPI”
means the Defaulting Party’s Participating Interest as of the due date of the Cash Call giving rise to the default (expressed
as a percentage).

 

    	42

    	 

    

 

	 	8.4.G.3
    	If
    the Withering Interest is effectively assigned to the Acquiring Parties under Article 8.4.G, then from the due date of the
    Cash Call giving rise to the default:

 

	 	(a)	The
    Defaulting Party has no obligation to pay any further Cash Calls under the applicable Development Plan, except to the extent
    of the Defaulting Party’s obligation to fund its revised Participating Interest share of any cost over-runs arising
    after such date;
	 	 	 
	 	(b)	The
    Acquiring Parties shall bear all costs attributable to the Withering Interest and the Defaulting Party’s revised Participating
    Interest under the applicable Development Plan, except to the extent of the Defaulting Party’s obligation to fund its
    revised Participating Interest share of any cost over-runs arising after such date. 

 

	 	8.4.G.4
    	On
    the date the Withering Interest is effectively assigned the Total Amount in Default shall be deemed to have been satisfied,
    and if the assignment under Article 8.4.G was to fewer than all of the non-defaulting Parties, the Acquiring Parties in proportion
    to their proportionate share of the Withering Price shall pay to each non-defaulting Party that was not an Acquiring Party
    the portion of the Total Amount in Default owed to such non-defaulting Party. 

 

	8.4.H	In
    addition to the other remedies available to the non-defaulting Parties under this Article 8 and any other rights available
    to each non-defaulting Party to recover its portion of the Total Amount in Default, if a Defaulting Party fails to remedy
    its default within thirty (30) Days of the Default Notice, the non-Defaulting Parties may elect to enforce a mortgage and
    security interest on the Defaulting Party’s Participating Interest as set forth below, subject to the Licence and the
    Laws.

 

	 	8.4.H.1
    	Each
    Party grants to each of the other Parties, in pro rata shares based on their relative Participating Interests, a mortgage
    and security interest on its Participating Interest, whether now owned or later acquired, together with all products and proceeds
    derived from that Participating Interest (collectively, the “Collateral”) as security for:

 

	 	(a)  	The
    payment of all amounts owing by such Party (including interest and costs of collection) under this Agreement and the Farmout
    Agreement; and
	 	 	 
	 	(b)  	Any
    Security that such Party is required to provide under the Licence, this Agreement or the Farmout Agreement. 

 

	 	8.4.H.2
    	Should
    a Defaulting Party fail to remedy its default by the thirtieth (30th) Day after the date of the Default Notice, then, each
    non-defaulting Party shall have the option, exercisable at any time afterwards during the Default Period, to foreclose its
    mortgage and security interest against its pro rata share of the Collateral by any means permitted under the Licence and the
    Laws and to sell all or any part of that Collateral in public or private sale after providing the Defaulting Party and other
    creditors with any notice required by the Licence or the Laws, and subject to the provisions of Article 12.   Except
    as may be prohibited by the Licence or the Laws, the non-defaulting Party that forecloses its mortgage and security interest
    shall be entitled to become the purchaser of the Collateral sold and shall have the right to credit toward the purchase price
    the amount to which it is entitled under Article 8.4.   Any deficiency in the amounts received by the foreclosing
    Party shall remain a debt due by the Defaulting Party.  The foreclosure of mortgages and security interests by one
    non-defaulting Party shall neither affect the amounts owed by the Defaulting Party to the other non-defaulting Parties nor
    in any way limit the rights or remedies available to them.  Each Party agrees that, should it become a Defaulting
    Party, it waives the benefit of any Appraisal Operation, valuation, stay, extension or redemption law and any other debtor
    protection law that otherwise could be invoked to prevent or hinder the enforcement of the mortgage and security interest
    granted above.
	 	 	 
	 	8.4.H.3
    	Each
    Party agrees to sign such memoranda, financing statements and other documents, and make such filings and registrations, as
    may be reasonably necessary to perfect, validate and provide notice of the mortgages and security interests granted by this
    Article 8.4.H.

 

    	43

    	 

    

 

	8.4.I	The
    Defaulting Party shall promptly join in such actions as may be necessary or desirable to obtain any Government approvals required
    regarding such proposed withdrawal and assignment.  The non-defaulting Parties shall use reasonable endeavors to
    assist the Defaulting Party in obtaining such approvals.  Any penalties, damages, losses, costs (including reasonable
    legal costs and attorneys’ fees) and liabilities incurred by the Parties in connection with such proposed withdrawal
    and assignment shall be borne by the Defaulting Party.  If the Government does not approve the Defaulting Party’s
    proposed withdrawal and assignment, then the non-defaulting Parties (excluding any non-defaulting Party that has given notice
    that it refuses to accept such proposed assignment) shall have the right to retract the notice of proposed withdrawal and
    assignment by notice to all Parties. The acceptance by a non-defaulting Party of any portion of a Defaulting Party’s
    Participating Interest shall not limit any rights or remedies that such non-defaulting Party has to recover any remaining
    balance plus interest owing under this Agreement by the Defaulting Party. For purposes of Article 8.4.E, 8.4.F, 8.4.G, or
    8.4.H, as elected, the Defaulting Party shall, without delay after any request from the non-defaulting Parties, do any act
    required to be done by the Laws and any other applicable laws in order to render the sale of its Entitlement and/or assignment
    of its Participating Interest legally valid, including obtaining all necessary governmental consents and approvals, and shall
    sign any document and take such other actions as may be necessary in order to effect a prompt and valid sale of its Entitlement
    and/or assignment of its Participating Interest.  The Defaulting Party shall promptly remove any Encumbrances which
    may exist on the date of sale of its Entitlement and/or assignment of its Participating Interests (other than any existing
    Encumbrances that affect all Parties in proportion to their Participating Interests).  If all Government approvals
    are not timely obtained, the Defaulting Party shall to the extent allowed under the Licence and applicable Laws hold its Participating
    Interest in trust or escrow arrangement for the benefit of the non-defaulting Parties who are entitled to receive it.  Each
    Party appoints each other Party its true and lawful attorney to sign such instruments and make such filings and applications
    as may be necessary to make such sale or assignment legally effective and to obtain any necessary consents of the Government.  Actions
    under this power of attorney may be taken by any Party individually without the joinder of the others.  This power
    of attorney is irrevocable for the term of this Agreement and is coupled with an interest.  If requested, each Party
    shall execute a form prescribed by the Operating Committee setting forth this power of attorney in more detail.
	 	 
	8.4.J	The
    non-defaulting Parties shall be entitled to recover from the Defaulting Party all reasonable attorneys’ fees and all
    other reasonable costs sustained in the collection of amounts owing by the Defaulting Party.
	 	 
	8.4.K	The
    rights and remedies granted to the non-defaulting Parties in this Article 8 shall be cumulative, not exclusive, and shall
    be in addition to any other rights and remedies that may be available to the non-defaulting Parties, whether at law, in equity
    or otherwise.  Each right and remedy available to the non-defaulting Parties may be exercised from time to time
    and so often and in such order as may be considered expedient by the non-defaulting Parties in their sole discretion.

 

	8.5	Survival

 

The
obligations of the Defaulting Party and the rights of the non-defaulting Parties shall survive the surrender of the Licence, Decommissioning,
and termination of this Agreement.

 

	8.6	No
    Right of Set Off

 

Each
Party acknowledges and accepts that a fundamental principle of this Agreement is that each Party pays its Participating Interest
share of all amounts due under this Agreement as and when required. Accordingly, any Party that becomes a Defaulting Party undertakes
that, in respect of either any exercise by the non-defaulting Parties of any rights under or the application of any of the provisions
of this Article 8, such Party hereby waives any right to raise by way of set off or invoke as a defense, whether in law or equity,
any failure by any other Party to pay amounts due and owing under this Agreement or any alleged claim that such Party may have
against Operator or any Non-Operator, whether such claim arises under this Agreement or otherwise. Each Party further agrees that
the nature and the amount of the remedies granted to the non-defaulting Parties are reasonable and appropriate in the circumstances.

 

    	44

    	 

    

 

ARTICLE
9 - DISPOSITION OF PRODUCTION

 

	9.1	Right
    and Obligation to Take in Kind

 

Except
as otherwise provided in this Article 9 or in Article 8, each Party shall have the right and obligation to own, take in kind and
separately dispose of its Entitlement.

 

	9.2	Disposition
    of Crude Oil and/or Natural Gas

 

If
Crude Oil (or Natural Gas) is to be produced from an Exploitation Area, the Parties shall in good faith, and not fewer than six
(6) Months before the anticipated first delivery of Crude Oil (or Natural Gas), as promptly notified by Operator, negotiate and
conclude the terms of a lifting agreement to cover the offtake of Crude Oil (or Natural Gas) produced under the Licence.

 

ARTICLE
10 - ABANDONMENT

 

	10.1	Abandonment
    of Wells Drilled as Joint Operations

 

	10.1.A	A
    decision to plug and abandon any well that was drilled as a Joint Operation shall require the approval of the Operating Committee.
	 	 
	10.1.B	If
    any Party fails to reply within the period prescribed in Article 5.12.A.1 or Article 5.12.A.2, whichever applies, after delivery
    of notice of Operator’s proposal to plug and abandon such well, such Party shall be deemed to have consented to the
    proposed abandonment. 
	 	 
	10.1.C	If
    the Operating Committee approves a decision to plug and abandon an Exploration Well or Appraisal Well, subject to the Laws,
    any Party voting against such decision may propose (within the time periods allowed by Article 5.13.A) to conduct an alternate
    Exclusive Operation in the wellbore.  If no Exclusive Operation is timely proposed, or if an Exclusive Operation
    is timely proposed but is not commenced within the applicable time periods under Article 7.2, such well shall be plugged and
    abandoned.
	 	 
	10.1.D	Any
    well plugged and abandoned under this Agreement shall be plugged and abandoned under the Laws and at the cost and risk of
    the Parties who participated in the cost of drilling such well.
	 	 
	10.1.E	Despite
    anything to the contrary in this Article 10.1:

 

	 	10.1.E.1
    	If
    the Operating Committee approves a decision to plug and abandon a well from which Hydrocarbons have been produced and sold,
    subject to the Laws, any Party voting against the decision may propose (within five (5) Days after the time specified in Article
    5.6, Article 5.12.A.1 or Article 5.12.A.2, whichever applies, has expired) to take over the entire well as an Exclusive Operation.  Any
    Party originally participating in the well shall be entitled to participate in the operation of the well as an Exclusive Operation
    by response notice within ten (10) Days after receipt of the notice proposing the Exclusive Operation. In such event, the
    Consenting Parties shall be entitled to conduct an Exclusive Operation in the well; provided that the proposed operation may
    not be in the same Zone from which production was previously obtained nor be in a Zone that is produced by any other Joint
    Operation wells.   
	 	 	 
	 	10.1.E.2
    	Each
    Non-Consenting Party shall be deemed to have relinquished free of cost to the Consenting Parties in proportion to their Participating
    Interests all of its interest in the wellbore of a produced well and related equipment under Article 7.4.B.  The
    Consenting Parties shall afterwards bear all cost and liability of plugging and abandoning such well under the Laws, to the
    extent the Parties are or become obligated to contribute to such costs and liabilities, and the Consenting Parties shall indemnify
    the Non-Consenting Parties against all such costs and liabilities.

 

    	45

    	 

    

 

	 	10.1.E.3
    	Subject
    to Article 7.12.F, Operator shall continue to operate a produced well for the account of the Consenting Parties at the rates
    and charges contemplated by this Agreement, plus any additional costs that may arise as the result of the separate allocation
    of interest in such well.

 

	10.2	Abandonment
    of Exclusive Operations

 

This
Article 10 shall apply mutatis mutandis to the Decommissioning of facilities and/or equipment acquired for an Exclusive Operation
and abandonment of an Exclusive Well or any well in which an Exclusive Operation has been conducted (in which event all Parties
having the right to conduct further operations in such well shall be notified and have the opportunity to conduct Exclusive Operations
in the well under this Article 10).

 

	10.3	Provision
    for and Conduct of Abandonment

 

If
under the Licence or the Laws, the Parties are or become obliged to pay or contribute to the cost of ceasing operations, then
during preparation of a Development Plan, the Parties shall make a preliminary plan for the abandonment of wells, and shall negotiate
a security agreement which shall be completed and executed by all Parties participating in such Development Plan.

 

ARTICLE
11 - SURRENDER, EXTENSIONS AND RENEWALS

 

	11.1	Surrender

 

	11.1.A	If
    the Licence requires the Parties to surrender any portion of the Contract Area, Operator shall advise the Operating Committee
    of such requirement at least one hundred and twenty (120) Days in advance of the earlier of the date for filing irrevocable
    notice of such surrender or the date of such surrender.  Before the end of such period, the Operating Committee
    shall determine under Article 5 the size and shape of the surrendered area, consistent with the requirements of the Licence.  If
    a sufficient vote of the Operating Committee cannot be attained, then the proposal supported by a simple majority of the Participating
    Interests shall be adopted.  If no proposal attains the support of a simple majority of the Participating Interests,
    then the proposal receiving the largest aggregate Participating Interest vote shall be adopted.  In the event of
    a tie, Operator shall choose among the proposals receiving the largest aggregate Participating Interest vote.  The
    Parties shall sign any documents and take such other actions as may be necessary to effect the surrender.  Each
    Party renounces all claims and causes of action against Operator and any other Parties on account of any area surrendered
    in accordance with the foregoing but against its recommendation if Hydrocarbons are later discovered under the surrendered
    area.
	 	 
	11.1.B	A
    surrender of all or any part of the Contract Area that is not required by the Licence shall require the unanimous consent
    of the Parties.

 

	11.2	Extension
    of the Term

 

	11.2.A	A
    proposal by any Party to enter into or extend the term of any Exploration Period or Exploitation Period or any phase of the
    Licence, or a proposal to extend the term of the Licence, shall be brought before the Operating Committee under Article 5.
	 	 
	11.2.B	Any
    Party shall have the right to enter into or extend the term of any Exploration Period or Exploitation Period or any phase
    of the Licence or to extend the term of the Licence, regardless of the level of support in the Operating Committee.  If
    any Party takes such action, any Party not wishing to extend shall have a right to withdraw, subject to the requirements of
    Article 13.

 

    	46

    	 

    

 

ARTICLE
12 - TRANSFER OF INTEREST OR RIGHTS AND CHANGES IN CONTROL

 

	12.1	Obligations

 

Subject
to the requirements of the Licence,

 

	12.1.A	Any
    Transfer (except Transfers under Article 7, Article 8, or Article 13) shall be effective only if it satisfies the terms and
    conditions of Article 12.2; and
	 	 
	12.1.B	A
    Party subject to a Change in Control must satisfy the terms and conditions of Article 12.3. 

 

If
a Transfer subject to this Article or a Change in Control occurs without satisfaction (in all material respects) by the transferor
or the Party subject to the Change in Control, as applicable, of the requirements of this Agreement, then each other Party shall
be entitled to enforce specific performance of the terms of this Article, in addition to any other remedies (including damages)
to that it may be entitled. Each Party agrees that monetary damages alone would not be an adequate remedy for the breach of any
Party’s obligations under this Article.

 

Notwithstanding
anything to the contrary, the requirements for assignment or transfer under this Agreement shall not apply to or restrict any
assignment or transfer by DESAL of any interests or obligations pertaining to the West Block.

 

	12.2	Transfer

 

	12.2.A	Except
    in the case of a Party transferring all of its Participating Interest, no Transfer shall be made by any Party that results
    in the transferor or the transferee holding a Participating Interest of less than ten percent (10%) or any interest other
    than a Participating Interest in this Agreement.
	 	 
	12.2.B	Subject
    to the terms of Articles 4.9 and 4.10, the Party serving as Operator shall remain Operator after Transfer of a portion of
    its Participating Interest.  In the event of a Transfer of all of its Participating Interest, except to an Affiliate,
    the Party serving as Operator shall be deemed to have resigned as Operator, effective on the date the Transfer becomes effective
    under this Article 12, in which event a successor Operator shall be appointed under Article 4.11.  If Operator transfers
    all of its Participating Interest to an Affiliate, that Affiliate shall automatically become the successor Operator, provided
    that the transferring Operator shall remain liable for its Affiliate’s performance of its obligations.
	 	 
	12.2.C	Despite
    such Transfer, both the transferee and the transferring Party shall be liable to the other Parties for the transferring Party’s
    Participating Interest share of any obligations (financial or otherwise) that have vested, matured, or accrued under the Licence
    or this Agreement before such Transfer.  Such obligations, shall include any proposed expenditure approved by the
    Operating Committee before the transferring Party notifying the other Parties of its proposed Transfer but shall not include
    costs of plugging and abandoning wells or portions of wells and Decommissioning facilities in which the transferring Party
    participated (or was required to bear a share of the costs pursuant to this sentence) to the extent such costs are payable
    by the Parties under the Licence.
	 	 
	12.2.D	A
    transferee has no rights in the Licence or this Agreement (except any notice and cure rights or similar rights that may be
    provided to a Lien Holder (as defined in Article 12.2.E) by separate instrument signed by all Parties) unless and until:

 

	 	12.2.D.1
    	such
    transferee expressly undertakes in an instrument reasonably satisfactory to the other Parties to perform the obligations of
    the transferor under the Licence and this Agreement to the extent of the Participating Interest being transferred and obtains
    any necessary Government approval for the Transfer and furnishes any guarantees required by the Government or the Licence
    on or before the applicable deadlines; and
	 	 	 
	 	12.2.D.2
    	in
    the case of a Transfer to a transferee other than an Affiliate, each Party has consented in writing to such Transfer, which
    consent shall be denied only if the transferee fails to establish to the reasonable satisfaction of each Party its financial
    capability, including enforceability of remedies under this Agreement against such transferee, to perform its payment obligations
    under the Licence and this Agreement, and its ability to comply with the provisions of Article 19.1.

 

    	47

    	 

    

 

	 	12.2.D.3
    	in
    the case of a Transfer to an Affiliate, each Party has consented in writing to such Transfer, which consent shall be denied
    only if the transferee fails to establish to the reasonable satisfaction of each Party its ability to comply with the provisions
    of Article 19.1, and the transferring Party agrees in an instrument reasonably satisfactory to the other Parties to remain
    liable for its Affiliate’s performance of its obligations.

 

	12.2.E	Nothing
    contained in this Article 12 shall prevent a Party from Encumbering all or any undivided portion of its Participating Interest
    to a third party (a “Lien Holder”) as security relating to financing, provided that:

 

	 	12.2.E.1
    	Such
    Party shall remain liable for all obligations relating to such interest;
	 	 	 
	 	12.2.E.2
    	The
    Encumbrance shall be subject to any necessary approval of the Government and be expressly subordinated to the rights of the
    other Parties under this Agreement under a subordination agreement in favour of and reasonably satisfactory to the other Parties;
    
	 	 	 
	 	12.2.E.3
    	Such
    Party shall ensure that any Encumbrance shall be expressed to be without prejudice to the provisions of this Agreement.

 

	12.2.F	Any
    Transfer of all or a portion of a Party’s Participating Interest, other than a Transfer to an Affiliate or the granting
    of an Encumbrance as provided in Article 12.2.E, shall be subject to the following procedure. 

 

	 	12.2.F.1
    	Once
    the final terms and conditions of a Transfer have been fully negotiated, the transferor shall disclose all such final terms
    and conditions as are relevant to the acquisition of the Participating Interest (and, if applicable, the determination of
    the Cash Value of the Participating Interest) in a notice to the other Parties, which notice shall be accompanied by a copy
    of all instruments or relevant portions of instruments establishing such terms and conditions.  Each other Party
    shall have the right to acquire the Participating Interest subject to the proposed Transfer from the transferor on the terms
    and conditions described in Article 12.2.F.3 if, within thirty (30) Days of the transferor’s notice, such Party delivers
    to all other Parties a counter-notification that it accepts such terms and conditions without reservations or conditions (subject
    to Articles 12.2.F.3 and 12.2.F.4, where applicable).  If no Party delivers such counter-notification, the Transfer
    to the proposed transferee may be made, subject to the other provisions of this Article 12, under terms and conditions no
    more favorable to the transferee than those set forth in the notice to the Parties, provided that the Transfer shall be concluded
    within one hundred eighty (180) Days from the date of the notice plus such additional period as may be required to secure
    governmental approvals.  No Party shall have a right under this Article 12.2.F to acquire any asset other than a
    Participating Interest, nor may any Party be required to acquire any asset other than a Participating Interest, regardless
    of whether other properties are included in the Transfer.
	 	 	 
	 	12.2.F.2
    	If
    more than one Party counter-notifies that it intends to acquire the Participating Interest subject to the proposed Transfer,
    then each such Party shall acquire a proportion of the Participating Interest to be transferred equal to the ratio of its
    own Participating Interest to the total Participating Interests of all the counter-notifying Parties, unless the counter-notifying
    Parties otherwise agree.

 

    	48

    	 

    

 

	 	12.2.F.3
    	If
    a Cash Transfer that does not involve other properties as part of a wider transaction, each other Party shall have a right
    to acquire the Participating Interest subject to the proposed Transfer on the same final terms and conditions as were negotiated
    with the proposed transferee.  If a Transfer that is not a Cash Transfer or involves other properties included in
    a wider transaction (package deal), the transferor shall include in its notification to the other Parties a statement of the
    Cash Value of the Participating Interest subject to the proposed Transfer, and each other Party shall have a right to acquire
    such Participating Interest on the same final terms and conditions as were negotiated with the proposed transferee except
    that the acquiring Party shall pay the Cash Value in immediately available funds at the closing of the Transfer instead of
    the consideration payable in the third party offer, and the terms and conditions of the applicable instruments shall be modified
    as necessary to reflect the acquisition of a Participating Interest for cash.  In the case of a package sale, no
    Party may acquire the Participating Interest subject to the proposed package sale unless and until the completion of the wider
    transaction (as modified by the exclusion of properties subject to preemptive rights or excluded for other reasons) with the
    package sale transferee.  If for any reason the package sale terminates without completion, the other Parties’
    rights to acquire the Participating Interest subject to the proposed package sale shall also terminate.
	 	 	 
	 	12.2.F.4
    	For
    purposes of Article 12.2.F.3, the Cash Value proposed by the transferor in its notice shall be conclusively deemed correct
    unless any Party (each a “Disagreeing Party”) gives notice to the transferor with a copy to the other Parties
    within ten (10) Days of receipt of the transferor’s notice stating that it does not agree with the transferor’s
    statement of the Cash Value, stating the Cash Value that the Disagreeing Party believes is correct, and providing any supporting
    information that the Disagreeing Party believes is helpful.  In such event, the transferor and the Disagreeing Parties
    shall have fifteen (15) Days in which to attempt to negotiate an agreement on the applicable Cash Value.  If no
    agreement has been reached by the end of such fifteen (15) Day period, either the transferor or any Disagreeing Party shall
    be entitled to refer the matter to an independent expert as provided in Article 18.3 for determination of the Cash Value.
	 	 	 
	 	12.2.F.5
    	If
    the determination of the Cash Value is referred to an independent expert and the value submitted by the transferor is no more
    than five percent (5%) above the Cash Value determined by the independent expert, the transferor’s value shall be used
    for the Cash Value and the Disagreeing Parties shall pay all costs of the expert.  If the value submitted by the
    transferor is more than five percent (5%) above the Cash Value determined by the independent expert, the independent expert’s
    value shall be used for the Cash Value and the transferor shall pay all costs of the expert.  Subject to the independent
    expert’s value being final and binding under Article 18.3, the Cash Value determined by the procedure shall be final
    and binding on all Parties.
	 	 	 
	 	12.2.F.6
    	Once
    the Cash Value is determined under Article 12.2.F.5, Operator shall provide notice of such Cash Value to all Parties, and
    subject to the Licence, the transferor shall be obligated to sell and the Parties which provided notice of their intention
    to purchase the transferor’s Participating Interest under Article 12.2.F.1 shall be obligated to buy the Participating
    Interest at said value.

 

	12.3	Change
    in Control

 

	12.3.A	A
    Party subject to a Change in Control shall obtain any necessary Government approval with respect to the Change in Control
    and furnish any replacement Security required by the Government or the Licence on or before the applicable deadlines.
	 	 
	12.3.B	A
    Party subject to a Change in Control shall provide evidence reasonably satisfactory to the other Parties that after the Change
    in Control such Party shall continue to have the financial capability to satisfy its payment obligations under the Licence
    and this Agreement.  If the Party that is subject to the Change in Control fail to provide such evidence, any other
    Party, by notice to such Party, may require such Party to provide Security satisfactory to the other Parties concerning its
    Participating Interest share of any obligations or liabilities that the Parties may reasonably be expected to incur under
    the Licence and this Agreement during the then-current Exploration or Exploitation Period or phase of the Licence.

 

    	49

    	 

    

 

	12.3.C	Any
    Change in Control of a Party, other than one that results in ongoing Control by an Affiliate, shall be subject to the following
    procedure. 

 

	 	12.3.C.1
    	Once
    the final terms and conditions of a Change in Control have been fully negotiated, the Acquired Party shall disclose all such
    final terms and conditions as are relevant to the acquisition of such Party’s Participating Interest and the determination
    of the Cash Value of that Participating Interest in a notice to the other Parties, which notice shall be accompanied by a
    copy of all instruments or relevant portions of instruments establishing such terms and conditions.  Each other
    Party shall have the right to acquire the Acquired Party’s Participating Interest on the terms and conditions described
    in Article 12.3.C.3 if, within thirty (30) Days of the Acquired Party’s notice, such Party delivers to all other Parties
    a counter-notification that it accepts such terms and conditions without reservations or conditions (subject to Articles 12.3.C.3
    and 12.3.C.4, where applicable).  If no Party delivers such counter-notification, the Change in Control may proceed
    without further notice, subject to the other provisions of this Article 12, under terms and conditions no more favorable to
    the Acquirer than those set forth in the notice to the Parties, provided that the Change in Control shall be concluded within
    one hundred eighty (180) Days from the date of the notice plus such additional period as may be required to secure governmental
    approvals.  No Party shall have a right under this Article 12.3.C to acquire any asset other than a Participating
    Interest, nor may any Party be required to acquire any asset other than a Participating Interest, regardless of whether other
    properties are subject to the Change in Control.
	 	 	 
	 	12.3.C.2
    	If
    more than one Party counter-notifies that it intends to acquire the Participating Interest subject to the proposed Change
    in Control, then each such Party shall acquire a proportion of that Participating Interest equal to the ratio of its own Participating
    Interest to the total Participating Interests of all the counter-notifying Parties, unless the counter-notifying Parties otherwise
    agree.
	 	 	 
	 	12.3.C.3
    	The
    Acquired Party shall include in its notification to the other Parties a statement of the Cash Value of the Participating Interest
    subject to the proposed Change in Control, and each other Party shall have a right to acquire such Participating Interest
    for the Cash Value, on the final terms and conditions negotiated with the proposed Acquirer that are relevant to the acquisition
    of a Participating Interest for cash.  No Party may acquire the Acquired Party’s Participating Interest under
    this Article 12.3.C unless and until completion of the Change in Control.  If for any reason the Change in Control
    agreement terminates without completion, the other Parties’ rights to acquire the Participating Interest subject to
    the proposed Change in Control shall also terminate.
	 	 	 
	 	12.3.C.4
    	For
    purposes of Article 12.3.C.3, the Cash Value proposed by the Acquired Party in its notice shall be conclusively deemed correct
    unless any Party (each a “Disagreeing Party”) gives notice to the Acquired Party with a copy to the other Parties
    within ten (10) Days of receipt of the Acquired Party’s notice stating that it does not agree with the Acquired Party’s
    statement of the Cash Value, stating the Cash Value that the Disagreeing Party believes is correct, and providing any supporting
    information that the Disagreeing Party believes is helpful.  In such event, the Acquired Party and the Disagreeing
    Parties shall have fifteen (15) Days in which to attempt to negotiate an agreement on the applicable Cash Value.  If
    no agreement has been reached by the end of such fifteen (15) Day period, either the Acquired Party or any Disagreeing Party
    shall be entitled to refer the matter to an independent expert as provided in Article 18.3 for determination of the Cash Value.

 

    	50

    	 

    

 

	 	12.3.C.5
    	If
    the determination of Cash Value is referred to an independent expert, and the value submitted by the Acquired Party is no
    more than five percent (5%) above the Cash Value determined by the independent expert, the Acquired Party’s value shall
    be used for the Cash Value and the Disagreeing Parties shall pay all costs of the expert.  If the value submitted
    by the Acquired Party is more than five percent (5%) above the Cash Value determined by the independent expert, the independent
    expert’s value shall be used for the Cash Value and the Acquired Party shall pay all costs of the expert.  Subject
    to the independent expert’s value being final and binding under Article 18.3, the Cash Value determined by the procedure
    shall be final and binding on all Parties.
	 	 	 
	 	12.3.C.6
    	Once
    the Cash Value is determined under Article 12.3.C.4, Operator shall provide notice of such Cash Value to all Parties, and
    subject to the Licenec, the acquired Party shall be obligated to sell and the Parties that provided notice of their intention
    to purchase the acquired Party’s Participating Interest under Article 12.3.C.1 shall be obligated to buy the Participating
    Interest at said value.
	 	 	 
	 	12.3.C.7
    	Despite
    anything to the contrary contained in this Agreement, Article 12.3.C shall not apply to any Change of Control of the ultimate
    holding company or parent company of a Party.

 

ARTICLE
13 - WITHDRAWAL FROM AGREEMENT

 

	13.1	Right
    of Withdrawal

 

	13.1.A	Subject
    to this Article 13 and the Licence, any Party not in default may at its option withdraw from this Agreement and the Licence
    by giving notice to all other Parties stating its decision to withdraw.  Such notice shall be unconditional and
    irrevocable when given, except as may be provided in Article 13.7.
	 	 
	13.1.B	The
    effective date of withdrawal for a withdrawing Party shall be the end of the Calendar Month after the Calendar Month in which
    the notice of withdrawal is given, provided that if all Parties elect to withdraw, the effective date of withdrawal for each
    Party shall be the date determined by Article 13.9.

 

	13.2	Partial
    or Complete Withdrawal

 

	13.2.A	Within
    thirty (30) Days of receipt of each withdrawing Party’s notification, each of the other Parties may also give notice
    that it desires to withdraw from this Agreement and the Licence.  If all Parties give notice of withdrawal, the
    Parties shall proceed to abandon the Contract Area and terminate the Licence and this Agreement.  If fewer than
    all of the Parties give such notice of withdrawal, then the withdrawing Parties shall take all steps to withdraw from the
    Licence and this Agreement on the earliest possible date and sign and deliver all necessary instruments and documents to assign
    their Participating Interest to the Parties that are not withdrawing, without any compensation whatsoever, under Article 13.6.
	 	 
	13.2.B	Any
    Party withdrawing under Article 11.2 or under this Article 13 shall at its option: (i) withdraw from the entirety of the Contract
    Area; or (ii) withdraw only from all Exploration Operations under the Licence, but not from any Exploitation Area, Commercial
    Discovery, or Discovery (whether appraised or not) made before such withdrawal.  Such withdrawing Party shall retain
    its rights in Joint Property, but only insofar as they relate to any such Exploitation Area, Commercial Discovery, or Discovery,
    and shall abandon all other rights in Joint Property.

 

	13.3	Rights
    of a Withdrawing Party

 

A
withdrawing Party shall have the right to receive its Entitlement produced through the effective date of its withdrawal. The withdrawing
Party shall be entitled to receive all information to which such Party is otherwise entitled under this Agreement until the effective
date of its withdrawal. After giving its notification of withdrawal, a Party shall not be entitled to vote on any matters coming
before the Operating Committee, other than matters for which such Party has financial responsibility.

 

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	13.4	Obligations
    and Liabilities of a Withdrawing Party

 

	13.4.A	A
    withdrawing Party shall, after its notification of withdrawal, remain liable only for its share of the following:

 

	 	13.4.A.1
    	Costs
    of Joint Operations, and costs of Exclusive Operations in which such withdrawing Party has agreed to participate, that were
    approved by the Operating Committee or Consenting Parties as part of a Work Program and Budget (including a multi-year Work
    Program and Budget under Article 6.1.E) or AFE before such Party’s notification of withdrawal, regardless of when they
    are incurred;
	 	 	 
	 	13.4.A.2
    	Any
    Minimum Work Obligations for the current period or phase of the Licence, and for any subsequent period or phase that has been
    approved under Article 11.2 and with respect to which such Party has failed to timely withdraw under Article 13.4.B;
	 	 	 
	 	13.4.A.3
    	Expenditures
    described in Articles 4.2.B.14 and 13.5 related to an emergency occurring before the effective date of a Party’s withdrawal,
    regardless of when such expenditures are incurred;
	 	 	 
	 	13.4.A.4
    	All
    other obligations and liabilities of the Parties or Consenting Parties, as applicable, concerning acts or omissions under
    this Agreement before the effective date of such Party’s withdrawal for which such Party would have been liable, had
    it not withdrawn from this Agreement; and
	 	 	 
	 	13.4.A.5
    	In
    the case of a partially withdrawing Party, any costs and liabilities concerning Exploitation Areas, Commercial Discoveries
    and Discoveries from which it has not withdrawn.
	 	 	 
	 	13.4.A.6
    	The
    obligations and liabilities for which a withdrawing Party remains liable shall specifically include its share of any costs
    of plugging and abandoning wells or portions of wells in which it participated (or was required to bear a share of the costs
    under Article 13.4.A.1) to the extent such costs of plugging and abandoning are payable by the Parties under the Licence.  Any
    Encumbrances that were placed on the withdrawing Party’s Participating Interest before such Party’s withdrawal
    shall be fully satisfied or released, at the withdrawing Party’s expense, before its withdrawal.  A Party’s
    withdrawal shall not relieve it from liability to the non-withdrawing Parties concerning any obligations or liabilities attributable
    to the withdrawing Party under this Article 13 merely because they are not identified or identifiable at the time of withdrawal.

 

	13.4.B	Despite
    the foregoing, a Party shall not be liable for any operations or expenditures it voted against (other than operations and
    expenditures described in Article 13.4.A.2 or Article 13.4.A.3) if it sends notification of its withdrawal within five (5)
    Days (or within twenty-four (24) hours for Urgent Operational Matters) of the Operating Committee vote approving such operation
    or expenditure.  Likewise, a Party voting against voluntarily entering into, or extending, an Exploration Period
    or Exploitation Period or any phase of the Licence, or voting against voluntarily extending the Licence shall not be liable
    for the Minimum Work Obligations associated therewith provided that it sends notification of its withdrawal within thirty
    (30) Days of such vote under Article 11.2.

 

	13.5	Emergency

 

If
a well goes out of control or a fire, blow out, sabotage or other emergency occurs before the effective date of a Party’s
withdrawal, the withdrawing Party shall remain liable for its Participating Interest share of the costs of such emergency, regardless
of when they are incurred.

 

	13.6	Assignment

 

A
withdrawing Party shall assign its Participating Interest free of cost to each of the non-withdrawing Parties in the proportion
that each of their Participating Interests (before the withdrawal) bears to the total Participating Interests of all the non-withdrawing
Parties (before the withdrawal), unless the non-withdrawing Parties agree otherwise. The costs associated with the withdrawal
and assignments shall be borne by the withdrawing Party.

 

    	52

    	 

    

 

	13.7	Approvals

 

A
withdrawing Party shall promptly join in such actions as may be necessary or desirable to obtain any Government approvals required
in connection with the withdrawal and assignments. The non-withdrawing Parties shall use reasonable endeavors to assist the withdrawing
Party in obtaining such approvals. If the Government does not approve a Party’s withdrawal and assignment to the other Parties,
then the withdrawing Party shall at its option either (1) retract its notice of withdrawal by notice to the other Parties and
remain a Party as if such notice of withdrawal had never been sent, or (2) to the extent allowed under the Licence and Laws hold
its Participating Interest in trust for the exclusive benefit of the non-withdrawing Parties with the right to be reimbursed by
the non-withdrawing Parties for any subsequent costs and liabilities incurred by it for which it would not have been liable, had
it successfully withdrawn. Any penalties or costs incurred by the Parties in connection with such withdrawal shall be borne by
the withdrawing Party.

 

	13.8	Security

 

A
Party withdrawing from this Agreement and the Licence under this Article 13 shall provide Security satisfactory to the other Parties
to satisfy any obligations or liabilities for which the withdrawing Party remains liable under Article 13.4, but which become
due after its withdrawal, including Security to cover the costs of Abandonment, if applicable.

 

	13.9	Withdrawal
    or Abandonment by All Parties

 

If
all Parties decide to withdraw, the Parties agree that they shall be bound by the terms and conditions of this Agreement for so
long as may be necessary to wind up the affairs of the Parties with the Government, to satisfy any requirements of the Licence
and the Laws, and to facilitate the sale, disposition or abandonment of property or interests held by the Joint Account, all under
Article 2.

 

ARTICLE
14 - RELATIONSHIP OF PARTIES AND TAX

 

	14.1	Relationship
    of Parties

 

The
rights, duties, obligations, and liabilities of the Parties under this Agreement shall be individual, not joint or collective.
It is not the intention of the Parties to create, nor shall this Agreement be deemed or construed to create, a mining or other
partnership, joint venture or association or (except as explicitly provided in this Agreement) a trust. This Agreement shall not
be deemed or construed to authorize any Party to act as an agent, servant or employee for any other Party for any purpose whatsoever
except as explicitly set forth in this Agreement. In their relations with each other under this Agreement, the Parties shall not
be considered fiduciaries except as expressly provided in this Agreement.

 

	14.2	Tax

 

Each
Party shall be responsible for reporting and discharging its own tax measured by the profit or income of the Party and the satisfaction
of such Party’s share of all contract obligations under the Licence and under this Agreement. Each Party shall protect,
defend, and indemnify each other Party from any damage, loss, cost or liability arising from the indemnifying Party’s failure
to report and discharge such taxes or satisfy such obligations. The Parties intend that all income and all tax benefits (including
deductions, depreciation, credits and capitalization) regarding the expenditures made by the Parties under this Agreement will
be allocated by the Government tax authorities to the Parties based on the share of each tax item actually received or allocated
to the Participating Interest share of each Party. If such allocation is not accomplished due to the application of the Laws or
other Government action, the Parties shall attempt to adopt mutually agreeable arrangements that will allow the Parties to achieve
the financial results intended. Operator shall provide each Party, in a timely manner and at such Party’s sole expense,
with such information concerning Joint Operations as such Party may reasonably request for preparation of its tax returns or responding
to any audit or other tax proceeding.

 

    	53

    	 

    

 

	14.3	United
    States Tax Election

 

	14.3.A	If,
    for United States federal income tax purposes, this Agreement and the operations under this Agreement are regarded as a partnership
    and if the Parties have not agreed to form a tax partnership, each U.S. Party elects to be excluded from the application of
    all of the provisions of Subchapter “K”, Chapter 1, Subtitle “A” of the United States Internal Revenue
    Code of 1986, as amended (the “Code”), to the extent permitted and authorized by Section 761(a) of the Code and
    the regulations promulgated under the Code.  Operator, if it is a U.S. Party, is authorized and directed to sign
    and file for each U.S. Party such evidence of this election as may be required by the Internal Revenue Service, including
    all of the returns, statements, and data required by United States Treasury Regulations Sections 1.761-2 and 1.6031(a)-1(b)(5)
    and shall provide a copy of such filing to each U.S. Party.  However, if Operator is not a U.S. Party, the Party
    who holds the greatest Participating Interest among the U.S. Parties shall fulfill the obligations of Operator under this
    Article 14.3.  Should there be any requirement that any U.S. Party give further evidence of this election, each
    U.S. Party shall execute such documents and furnish such other evidence as may be required by the Internal Revenue Service
    or as may be necessary to evidence this election.
	 	 
	14.3.B	No
    Party shall give any notice or take any other action inconsistent with the foregoing election.  If any income tax
    laws of any state or other political subdivision of the United States or any future income tax laws of the United States or
    any such political subdivision contain provisions similar to those in Subchapter “K”, Chapter 1, Subtitle “A”
    of the Code, under which an election similar to that provided by Section 761(a) of the Code is permitted, each U.S. Party
    shall make such election as may be permitted or required by such laws.  In making the foregoing election or elections,
    each U.S. Party states that the income derived by it from operations under this Agreement can be adequately determined without
    the computation of partnership taxable income.
	 	 
	14.3.C	Unless
    approved by every Non-U.S. Party, no activity shall be conducted under this Agreement that would cause any Non-U.S. Party
    to be deemed to be engaged in a trade or business within the United States under United States income tax laws and regulations.
	 	 
	14.3.D	A
    Non-U.S. Party shall not be required to do any act or sign any instrument that might subject it to the taxation jurisdiction
    of the United States.
	 	 
	14.3.E	For
    the purposes of this Article 14.3, “U.S. Party” shall mean any Party that is subject to the income tax law of
    the United States in respect with operations under this Agreement.  “Non-U.S. Party” shall mean any
    Party that is not subject to such income tax law.

 

ARTICLE
15 - VENTURE INFORMATION - CONFIDENTIALITY - INTELLECTUAL PROPERTY

 

	15.1	Venture
    Information

 

Except
as otherwise provided in this Article 15 or in Article 4.4 and Article 8.4.A, each Party is entitled to receive all Venture Information
related to operations in which such party is a participant. “Venture Information” means any information and results
developed or acquired as a result of Joint Operations and shall be Joint Property, unless provided otherwise under this Agreement
and the Licence. Each Party shall have the right to use all Venture Information it receives without accounting to any other Party,
subject to any applicable patents and any limitations set forth in this Agreement and the Licence. For purposes of this Article
15, such right to use shall include, the rights to copy, prepare derivative works, disclose, license, distribute, and sell.

 

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	15.2	Confidentiality

 

	15.2.A	Subject
    to the provisions of the Licence and this Article 15, the Parties agree that all information in relation with Joint Operations
    or Exclusive Operations shall be considered confidential and shall be kept confidential, and shall not be disclosed during
    the term of the Licence and for a period of two (2) years afterwards to any person or entity not a Party to this Agreement,
    except:

 

	 	15.2.A.1
    	To
    an Affiliate under Article 15.1.B;
	 	 	 
	 	15.2.A.2
    	To
    a governmental agency or other entity when required by the Licence;
	 	 	 
	 	15.2.A.3
    	To
    the extent such information must be furnished in compliance with the applicable law or regulations, or pursuant to any legal
    proceedings or because of any order of any court binding upon a Party;
	 	 	 
	 	15.2.A.4
    	To
    prospective or actual attorneys engaged by any Party where disclosure of such information is essential to such attorney’s
    work for such Party;
	 	 	 
	 	15.2.A.5
    	To
    prospective or actual contractors and consultants engaged by any Party where disclosure of such information is essential to
    such contractor’s or consultant’s work for such Party;
	 	 	 
	 	15.2.A.6
    	To
    a bona fide prospective transferee of a Party’s Participating Interest to the extent appropriate in order to allow the
    assessment of such Participating Interest (including an entity with whom a Party and/or its Affiliates are conducting bona
    fide negotiations directed toward a merger, consolidation, or the sale of a majority of its or an Affiliate’s shares);
	 	 	 
	 	15.2.A.7
    	To
    a bank or other financial institution to the extent appropriate to a Party arranging for funding;
	 	 	 
	 	15.2.A.8
    	To
    the extent such information must be disclosed pursuant to any rules or requirements of any government or stock exchange having
    jurisdiction over such Party, or its Affiliates; provided that if any Party desires to disclose information in an annual or
    periodic report to its or its Affiliates’ shareholders and to the public and if such disclosure is not required under
    any rules or requirements of any government or stock exchange, then such Party shall comply with Article 20.3;
	 	 	 
	 	15.2.A.9
    	To
    its respective employees for the purposes of Joint Operations or Exclusive Operations, as applicable, subject to each Party
    taking customary precautions to ensure such information is kept confidential; and
	 	 	 
	 	15.2.A.10
    	Any
    information that, through no fault of a Party, becomes a part of the public domain.

 

	15.2.B	Disclosure
    under Articles 15.2.A.5, 15.2.A.6, and 15.2.A.7 shall not be made unless before such disclosure the disclosing Party has obtained
    a written undertaking from the recipient party to keep the information strictly confidential for at least as long as the period
    set out in Article 15.2.A and to use the information for the sole purpose described in Articles 15.2.A.5, 15.2.A.6, and 15.2.A.7,
    whichever applies, with respect to the disclosing Party.

 

	15.3	Intellectual
    Property

 

	15.3.A	Subject
    to Articles 15.3.C and 15.5 and unless provided otherwise in the Licence, all intellectual property rights in the Venture
    Information shall be Joint Property.  Each Party and its Affiliates have the right to use all such intellectual
    property rights in their own operations (including joint operations or a production sharing arrangement in which the Party
    or its Affiliates has an ownership or equity interest) without the approval of any other Party.  Decisions regarding
    obtaining, maintaining and licensing such intellectual property rights shall be made by the Operating Committee, and the associated
    costs shall be charged to the Joint Account.  With the unanimous agreement of the Operating Committee concerning
    ownership, licensing rights, and income distribution, the ownership of intellectual property rights in the Venture Information
    may be assigned to the Operator or to a Party.

 

    	55

    	 

    

 

	15.3.B	Nothing
    in this Agreement shall be deemed to require a Party to

 

	 	15.3.B.1
    	Divulge
    proprietary technology to any of the other Parties; or
	 	 	 
	 	15.3.B.2
    	Grant
    a license or other rights under any intellectual property rights owned or controlled by such Party or its Affiliates to any
    of the other Parties.

 

	15.3.C	If
    while carrying out activities charged to the Joint Account, a Party or an Affiliate of a Party makes or conceives any inventions,
    discoveries, or improvements that primarily relate to or are primarily based on the proprietary technology of such Party or
    its Affiliates, then all intellectual property rights to such inventions, discoveries, or improvements shall vest exclusively
    in such Party and each other Party shall have a perpetual, royalty-free, irrevocable license to use such inventions, discoveries,
    or improvements, but only in connection with Joint Operations.
	 	 
	15.3.C	Subject
    to Article 4.6.B, all costs (including reasonable legal costs and attorneys’ fees) of defending, settling, or otherwise
    handling any claim that is based on the actual or alleged infringement of any intellectual property right shall be for the
    account of the operation from which the claim arose, whether Joint Operations or Exclusive Operations.

 

	15.4	Continuing
    Obligations

 

Any
Party ceasing to own a Participating Interest during the term of this Agreement shall nonetheless remain bound by the obligations
of confidentiality in Article 15.2, and any Disputes in relation thereto shall be resolved under Article 18.2.

 

	15.5	Trades

 

Operator
may, with approval of the Operating Committee, make well trades and data trades for the benefit of the Parties, with any data
so obtained to be furnished to all Parties who participated in the cost of the data that was traded. Operator shall cause any
third party to such trade to enter into an undertaking to keep the traded data confidential.

 

ARTICLE
16 - FORCE MAJEURE

 

If
as a result of Force Majeure any Party is rendered unable, wholly or in part, to carry out its obligations under this Agreement,
other than the obligation to pay any amounts due or to furnish Security, then the obligations of the Party giving such notice,
so far as and to the extent that the obligations are affected by such Force Majeure, shall be suspended during the continuance
of any inability so caused and for such reasonable period afterwards as may be necessary for the Party to put itself in the same
position that it occupied before the Force Majeure, but for no longer period. The Party claiming Force Majeure shall notify the
other Parties of the Force Majeure within a reasonable time after the occurrence of the facts relied on and shall keep all Parties
informed of all significant developments. Such notice shall give reasonably full particulars of the Force Majeure and also estimate
the period of time that the Party will probably require to remedy the Force Majeure. The affected Party shall use all reasonable
diligence to remove or overcome the Force Majeure situation as quickly as possible in an economic manner but shall not be obligated
to settle any labor dispute except on terms acceptable to it, and all such disputes shall be handled within the sole discretion
of the affected Party.

 

    	56

    	 

    

 

ARTICLE
17 - NOTICES

 

	17.1	Form
    of Notices

 

	17.1.A	Except
    as otherwise specifically provided, all notices authorized or required between the Parties by any of the provisions of this
    Agreement shall be in writing (in English), shall be deemed to have been properly given when addressed to the appropriate
    Parties at the addresses as set out below, and:

 

	 	17.1.A.1
    	delivered
    in person or by a recognized international courier service maintaining records of delivery; or
	 	 	 
	 	17.1.A.2
    	transmitted
    by facsimile; provided that the sender can and does provide evidence of successful and complete transmission; or
	 	 	 
	 	17.1.A.3
    	transmitted
    by e-mail; provided that the recipient transmits a manual written acknowledgment of successful receipt, which the recipient
    shall have an affirmative duty to furnish promptly after successful receipt. 

 

	Name:
    WESI     PEL512 Pty Ltd	Name:
    Discovery Energy SA Pty Ltd
	 	 
	Address:
    Suite     33.01, Chifley Tower	Address:
    Level 8, 350 Collins Street
	 	 
	2
    Chifley Square, Sydney NSW 2000	Melbourne
    VIC 3000
	 	 
	Attention:
    Mr Simon Philis	Attention:
    Mr Keith Spickelmier
	 	 
	Email:
    sphilis@wesicorp.com	Email:
    ks@discoveryenergy.com

 

	17.1.B	Oral
    communication does not constitute notice for purposes of this Agreement, and telephone numbers for the Parties are listed
    above as a matter of convenience only.  With respect to facsimile and/or e-mail communication automatic delivery
    receipts issued without direct human authorization shall not be evidence of effective notices for purposes of this Agreement.

 

	17.2	Delivery
    of Notices

 

A
notice given under this Agreement shall be deemed delivered only when received by the Party to whom such notice is directed, and
the time for such Party to deliver any notice in response to such originating notice shall run from the date the originating notice
is received. “Received” for purposes of giving notice under this Agreement shall mean actual delivery of the notice
to the address of the Party specified in Article 17.1 or to the most current address specified in a notice under Article 17.3;
provided that any notice sent by facsimile or email after 5:00 p.m. on a Business Day or on a weekend or holiday at the location
of the receiving Party shall be deemed given on the next following Business Day of the receiving Party.

 

	17.3	Change
    of Address

 

Each
Party shall have the right to change its address at any time and/or designate that copies of all such notices be directed to another
person at another address, by giving written notice thereof to all other Parties.

 

    	57

    	 

    

 

ARTICLE
18 - APPLICABLE LAW - DISPUTE RESOLUTION - WAIVER OF SOVEREIGN IMMUNITY

 

	18.1	Applicable
    Law

 

The
substantive laws of the State of South Australia, exclusive of any conflicts of laws principles that could require the application
of any other law, shall govern this Agreement for all purposes.

 

	18.2	Dispute
    Resolution

 

	18.2.A	Notification.  A
    Party who desires to submit a Dispute for resolution shall commence the Dispute resolution process by providing the other
    parties to the Dispute written notice of the Dispute (“Notice of Dispute”).  The Notice of Dispute shall
    identify the parties to the Dispute and contain a brief statement of the nature of the Dispute and the relief requested. The
    submission of a Notice of Dispute shall toll any applicable statutes of limitation related to the Dispute, pending the conclusion
    or abandonment of Dispute resolution proceedings under this Article 18.
	 	 
	18.2.B	Negotiations.  The
    parties to the Dispute shall seek to resolve any Dispute by negotiation between Senior Executives.  A “Senior
    Executive” means any individual who has authority to negotiate the settlement of the Dispute for a Party.  Within
    thirty (30) Days after the date of the receipt by each party to the Dispute of the Notice of Dispute (which notice shall request
    negotiations among Senior Executives), the Senior Executives representing the parties to the Dispute shall meet at a mutually
    acceptable time and place to exchange relevant information in an attempt to resolve the Dispute.  If a Senior Executive
    intends to be accompanied at the meeting by an attorney, each other party’s Senior Executive shall be given written
    notice of such intention at least three (3) Days in advance and may also be accompanied at the meeting by an attorney.  Despite
    the above, any Party may initiate arbitration proceedings under Article 18.2.C concerning such Dispute within thirty (30)
    Days after the date of receipt of the Notice of Dispute.
	 	 
	18.2.C	Arbitration.  Any
    Dispute not finally resolved by alternative Dispute resolution procedures set forth in Articles 18.2.B shall be resolved through
    final and binding arbitration, it being the intention of the Parties that this is a broad form arbitration agreement designed
    to encompass all possible Disputes, including Disputes about the arbitrability of a Dispute. 

 

	 	18.2.C.1
    	Rules.
    The     arbitration shall be conducted under the arbitration rules (as then in effect) of Australian Centre for Internal
    Commercial     Arbitration (ACICA) (the “Rules”).
	 	 	 
	 	18.2.C.2
    	Number
    of Arbitrators.  The arbitration shall be conducted by three arbitrators, unless all parties to the Dispute agree
    to a sole arbitrator within thirty (30) Days after the commencement of the arbitration. For greater certainty, for purposes
    of this Article 18.2.C, the commencement of the arbitration means the date on which the claimant’s request or demand
    for, or notice of, arbitration is received by the other parties to the Dispute.
	 	 	 
	 	18.2.C.3
    	Method
    of Appointment of the Arbitrators.  If the arbitration is to be conducted by a sole arbitrator, then the arbitrator
    will be jointly selected by the parties to the Dispute within thirty (30) Days after the commencement of the arbitration.

 

If
the arbitration is to be conducted by three arbitrators and there are only two parties to the Dispute, then each party to the
Dispute shall appoint one arbitrator within thirty (30) Days of the commencement of the arbitration, and the two arbitrators so
appointed shall select the presiding arbitrator within thirty (30) Days after the latter of the two arbitrators has been appointed
by the parties to the Dispute.

 

	 	18.2.C.4
    	Place
    of Arbitration. Unless otherwise agreed by all parties to the Dispute, the place of arbitration shall be the the
    Melbourne Commercial Arbitration and Mediation Centre.
	 	 	 
	 	18.2.C.5
    	Language.  The
    arbitration proceedings shall be conducted in the English language and the arbitrator(s) shall be fluent in the English language.

 

    	58

    	 

    

 

	 	18.2.C.6
    	Entry
    of Judgment.  The award of the arbitral tribunal shall be final and binding. Judgment on the award of
    the arbitral tribunal may be entered and enforced under the non-exclusive jurisdiction of the Courts of the State of Victoria.
	 	 	 
	 	18.2.C.7
    	Subject
    to Article 18.2.C.6, the Parties agree to submit to the non-exclusive jurisdiction of the Courts of the State of Victoria
    with respect only to any application for interim measures.
	 	 	 
	 	18.2.C.8
    	Notice.  All
    notices required for any arbitration proceeding shall be deemed properly given if sent under Article 17.
	 	 	 
	 	18.2.C.9
    	Interest.  The
    award shall include interest, as determined by the arbitral tribunal, from the date of any default or other breach of this
    Agreement until the arbitral award is paid in full.  Interest shall be awarded at the Agreed Interest Rate.
	 	 	 
	 	18.2.C.10
    	Currency
    of Award.  The arbitral award shall be made and payable in Australian dollars, free of any tax or other deduction.
    
	 	 	 
	 	18.2.C.11
    	Exemplary
    Damages.  The Parties waive their rights to claim or recover from each other, and the arbitral tribunal shall not
    award, any punitive, multiple, or other exemplary damages (whether statutory or common law) except to the extent such damages
    have been awarded to a third party and are subject to allocation between or among the parties to the Dispute.
	 	 	 
	 	18.2.C.12
    	Consolidation.  If
    the Parties initiate multiple arbitration proceedings, the subject matters of which are related by common questions of law
    or fact and that could result in conflicting awards or obligations, then all such proceedings may be consolidated into a single
    arbitral proceeding.

 

	18.2.D	Confidentiality.  All
    negotiations, mediation, arbitration, and expert determinations relating to a Dispute (including a settlement resulting from
    negotiation or mediation, an arbitral award, documents exchanged or produced during a mediation or arbitration proceeding,
    and memorials, briefs or other documents prepared for the arbitration) are confidential and may not be disclosed by the Parties,
    their employees, officers, directors, counsel, consultants, and expert witnesses, except (under Article 15.2) to the extent
    necessary to enforce this Article 18 or any arbitration award, to enforce other rights of a Party, or as required by law;
    provided, however, that breach of this confidentiality provision shall not void any settlement, expert determination or award.

 

	18.3	Expert
    Determination

 

For
any decision referred to an expert under Article 8.4, 12.2 or 12.3, the Parties hereby agree that such decision shall be conducted
expeditiously by an expert selected unanimously by the parties to the Dispute. The expert is not an arbitrator of the Dispute
and shall not be deemed to be acting in an arbitral capacity. The Party desiring an expert determination shall give the other
parties to the Dispute written notice of the request for such determination. If the parties to the Dispute are unable to agree
upon an expert within ten (10) Days after receipt of the notice of request for an expert determination, then, upon the request
of any of the parties to the Dispute, the International Centre for Expertise of the International Chamber of Commerce (ICC) shall
appoint such expert and shall administer such expert determination through the ICC’s Rules for Expertise. The expert, once
appointed, must not have any ex parte communications with any of the parties to the Dispute concerning the expert determination
or the underlying Dispute. All Parties agree to cooperate fully in the expeditious conduct of such expert determination and to
provide the expert with access to all facilities, books, records, documents, information, and personnel necessary to make a fully
informed decision in an expeditious manner. Before issuing his final decision, the expert shall issue a draft report and allow
the parties to the Dispute to comment on it. The expert shall endeavor to resolve the Dispute within thirty (30) Days (but no
later than sixty (60) Days) after his appointment, taking into account the circumstances requiring an expeditious resolution of
the matter in Dispute. The expert’s decision shall be final and binding on the parties to the Dispute unless challenged
in an arbitration under Article 18.2.C within sixty (60) Days of the date the expert’s final decision is received by the
parties to the Dispute. In such arbitration (i) the expert determination on the specific matter under Article 8.4, 12.2 or 12.3
shall be entitled to a rebuttable presumption of correctness; and (ii) the expert shall not (without the written consent of the
parties to the Dispute) be appointed to act as an arbitrator or as adviser to the parties to the Dispute.

 

    	59

    	 

    

 

	18.4	Waiver
    of Sovereign Immunity

 

Any
Party that now or later has a right to claim sovereign immunity for itself or any of its assets hereby waives any such immunity
to the fullest extent permitted by the laws of any applicable jurisdiction. This waiver includes immunity from:

 

	18.4.A	any
    expert determination, mediation, or arbitration proceeding commenced under this Agreement;
	 	 
	18.4.B	any
    judicial, administrative or other proceedings to aid the expert determination, mediation, or arbitration commenced under this
    Agreement; and
	 	 
	18.4.C	any
    effort to confirm, enforce, or execute any decision, settlement, award, judgment, service of process, execution order or attachment
    (including pre-judgment attachment) that results from an expert determination, mediation, arbitration or any judicial or administrative
    proceedings commenced under this Agreement. 

 

For
the purposes of this waiver only, each Party acknowledges that its rights and obligations under this Agreement are of a commercial
and not a governmental nature.

 

ARTICLE
19 - GENERAL PROVISIONS

 

	19.1	Conduct
    of the Parties

 

	19.1.A	Each
    Party with regard to operations and/or activities under this Agreement (i) warrants that such Party and its Affiliates and
    their respective directors, officers, employees and personnel have not made, offered, or authorized, and (ii) covenants that
    such Party and its Affiliates and their respective directors, officers, employees, and personnel will not make, offer, or
    authorize, any payment, gift, promise or other advantage, whether directly or through any other person or entity, to or for
    the use or benefit of any Public Official, any political party, political party official, or candidate for office, or any
    other individual or entity, where such payment, gift, promise or advantage would violate the Anti-Bribery Laws and Obligations
    applicable to such Party.
	 	 
	19.1.B	Each
    Party shall as soon as possible notify the other Parties of any investigation or proceeding initiated by a governmental authority
    relating to an alleged violation of applicable Anti-Bribery Laws and Obligations by such Party, or its Affiliates, or any
    of their directors, officers, employees, personnel, or any service providers of such Party or its Affiliates, concerning operations
    and activities under this Agreement. Such Party shall use reasonable efforts to keep the other Parties informed as to the
    progress and disposition of such investigation or proceeding, except that such Party shall not be obligated to disclose to
    the other Parties any information that would be considered legally privileged.
	 	 
	19.1.C	Each
    Party shall indemnify the other Parties for any damages, losses, penalties, costs (including reasonable legal costs and attorneys’
    fees), and liabilities arising from, or related to the events underlying:

 

	 	19.1.C.1
    	such
    Party’s admission of allegations made by a governmental authority concerning operations and/or activities under this
    Agreement that such Party or its Affiliates or their directors, officers, employees and personnel have violated Anti-Bribery
    Laws and Obligations applicable to such Party; or
	 	 	 
	 	19.1.C.2
    	the
    final adjudication concerning operations and/or activities under this Agreement that such Party or its Affiliates or their
    directors, officers, employees and personnel  have violated Anti-Bribery Laws and Obligations applicable to such
    Party.

 

Such
indemnity obligations shall survive termination or expiration of this Agreement.

 

    	60

    	 

    

 

	19.1.D	Each
    Party shall concerning matters that are the subject of this Agreement:

 

	 	19.1.D.1
    	Devise
    and maintain adequate internal controls concerning such Party’s undertakings under Article 20.1.A;
	 	 	 
	 	19.1.D.2
    	Establish
    and prepare its books and records in accordance with generally accepted accounting practices applicable to such Party;
	 	 	 
	 	19.1.D.3
    	Properly
    record and report such Party’s transactions in a manner that accurately and fairly reflects in reasonable detail such
    Party’s assets and liabilities;
	 	 	 
	 	19.1.D.4
    	Retain
    such books and records for a period of at least 6 Calendar Years; and
	 	 	 
	 	19.1.D.5
    	Comply
    with the laws applicable to such Party. 

 

	19.1.E	Each
    Party must be able to rely on the adequacy of the other Parties’ system of internal controls, and on the adequacy of
    full disclosure of the facts, and of financial and other information concerning operations and/or activities under this Agreement.
    
	 	 
	19.1.F	Each
    Party shall promptly respond in reasonable detail to any reasonable request from any other Party concerning a notice sent
    by such Party under Article 19.1.B and shall furnish applicable documentary support for such Party’s response, including
    showing such Party’s compliance with the undertakings set out in Article 19.1.A and Article 19.1.D, except that such
    Party shall not be obligated to disclose to the other Parties any information that would be considered legally privileged.

 

	19.2	Conflicts
    of Interest

 

	19.2.A	Operator
    undertakes that it shall avoid any conflict of interest between its own interests (including the interests of Affiliates)
    and the interests of the other Parties in dealing with suppliers, customers and all other organizations or individuals doing
    or seeking to do business with the Parties concerning activities contemplated under this Agreement.
	 	 
	19.2.B	The
    provisions of the preceding paragraph shall not apply to:

 

	 	19.2.B.1
    	Operator’s
    performance that is in accordance with the local preference laws or policies of the Government; or
	 	 	 
	 	19.2.B.2
    	Operator’s
    acquisition of products or services from an Affiliate, or the sale of products to an Affiliate, made under this Agreement.

 

	19.2.C	Unless
    otherwise agreed, the Parties and their Affiliates are free to engage or invest (directly or indirectly) in an unlimited number
    of activities or businesses, any one or more of which may be related to or in competition with the business activities contemplated
    under this Agreement, without having or incurring any obligation to offer any interest in such business activities to any
    Party.

 

	19.3	Public
    Announcements

 

	19.3.A	Operator
    shall be responsible for the preparation and release of all public announcements and statements regarding this Agreement or
    the Joint Operations; provided that no public announcement or statement shall be issued or made unless, before its release,
    all the Parties have been furnished with a copy of such statement or announcement and the approval of at least two (2) Parties
    that are not Affiliates of Operator holding fifty percent (50%) or more of the Participating Interests not held by Operator
    or its Affiliates has been obtained.  If a public announcement or statement becomes necessary or desirable because
    of danger to, or loss of, life, damage to property or pollution resulting from activities arising under this Agreement, Operator
    is authorized to issue and make such announcement or statement without prior approval of the Parties, but Operator shall promptly
    furnish all the Parties with a copy of such announcement or statement.

 

    	61

    	 

    

 

	19.3.B	If
    a Party wishes to issue or make any public announcement or statement regarding this Agreement or the Joint Operations, it
    shall not do so unless, before the release of the public announcement or statement, such Party furnishes all the Parties with
    a copy of such announcement or statement, and obtains the approval of at least two (2) Parties which are not Affiliates holding
    fifty percent (50%) or more of the Participating Interests not held by such announcing Party or its Affiliates; provided that,
    despite any failure to obtain such approval, no Party shall be prohibited from issuing or making any such public announcement
    or statement if it is necessary to do so in order to comply with the applicable laws, rules, or regulations of any government,
    legal proceedings or stock exchange having jurisdiction over such Party or its Affiliates as set forth in Article 15.2.

 

	19.4	Successors
    and Assignees

 

Subject
to the limitations on Transfer contained in Article 12, this Agreement shall inure to the benefit of and be binding upon the successors
and assignees of the Parties except for any successor or assignee of DESAL’s rights, interests, or obligations in the West
Block.

 

	19.5	Waiver

 

No
waiver by any Party of any one or more defaults by another Party in the performance of any provision of this Agreement shall operate
or be construed as a waiver of any future default or defaults by the same Party, whether of a like or of a different character.
Except as expressly provided in this Agreement no Party shall be deemed to have waived, released, or modified any of its rights
under this Agreement unless such Party has expressly stated, in writing, that it does waive, release, or modify such right.

 

	19.6	No
    Third Party Beneficiaries

 

Except
as provided under Article 4.6.B, the interpretation of this Agreement shall exclude any rights under legislative provisions conferring
rights under a contract to persons not a party to that contract.

 

	19.7	Joint
    Preparation

 

Each
provision of this Agreement shall be construed as though all Parties participated equally in the drafting of the same. Consequently,
the Parties acknowledge and agree that any rule of construction that a document is to be construed against the drafting party
shall not be applicable to this Agreement.

 

	19.8	Severance
    of Invalid Provisions

 

If
and for so long as any provision of this Agreement shall be deemed to be judged invalid for any reason whatsoever, such invalidity
shall not affect the validity or operation of any other provision of this Agreement except only so far as shall be necessary to
give effect to the construction of such invalidity, and any such invalid provision shall be deemed severed from this Agreement
without affecting the validity of the balance of this Agreement.

 

	19.9	Counterpart
    Execution

 

This
Agreement may be signed in any number of counterparts and each such counterpart shall be deemed an original Agreement for all
purposes; provided that no Party shall be bound to this Agreement unless and until all Parties have signed a counterpart. For
purposes of assembling all counterparts into one document, Operator is authorized to detach the signature page from one or more
counterparts and, after signature of such page by the respective Party, attach each signed signature page to a counterpart.

 

    	62

    	 

    

 

	19.10	Entirety

 

This
Agreement, including any attachments, constitutes the entire agreement of the Parties, supersedes all prior representations, understandings
and negotiations of the Parties relating to the subject matter of this Agreement, and except as set out in Article 19.8, may not
be modified except by a written amendment signed by all Parties.

 

IN
WITNESS of their agreement each Party has caused its duly authorized representative to sign this instrument on the date indicated
below such representative’s signature.

 

	For and on behalf of Discovery Energy SA Pty

                                                                     Ltd ABN 89 158 204 052 in accordance with

                                                                     section 127(1) of the Corporations Act 2001 (Cth):
	)

        )

        )
	 
	 	 	 
	 	 	 
	Signature
    of director	 	Signature
    of company secretary
	 	 	 
	 	 	 
	Name
    (please print)	 	Name
    (please print)
	 	 	 
	 	 	 
	 	 	 
	For and on behalf of WESI PEL512 Pty Ltd

                                                         ACN 635 946 682 in accordance with

                                                         section 127(1) of the Corporations Act 2001 (Cth):
	)

        )

        )
	 
	 	 	 
	 	 	 
	Signature
    of director	 	Signature
    of director
	 	 	 
	 	 	 
	Name
    (please print)	 	Name
    (please print)

 

    	63

    	 

    

 

EXHIBIT
A

 

ACCOUNTING
PROCEDURE

 

    	1

    	 

    

 

EXHIBIT
B

 

CONTRACT
AREA

 

 

    	2Exhibit 10.3

 

Execution
Version

 

FOURTH
AMENDMENT TO SECURITIES PURCHASE AGREEMENT AND

AMENDMENT
TO DEBENTURES

 

This
FOURTH Amendment to Securities Purchase Agreement AND Amendment to Debentures (this
“Amendment”) is dated as of October 18, 2019, and is by and among DISCOVERY ENERGY CORP., a Nevada corporation
(the “Company”), DEC FUNDING LLC, a Texas limited liability company (“Original Purchaser”),
TEXICAN ENERGY CORPORATION, a Texas corporation (“New Purchaser”) and, for purposes of Section 4, DISCOVERY
ENERGY SA PTY LTD, a company formed under the laws of Australia (“Australian Subsidiary”). The Company, Original
Purchaser, New Purchaser and, for purposes of Section 4, the Australian Subsidiary are hereinafter sometimes collectively
referred to as the “Parties” and each individually as a “Party”.

 

WHEREAS,
the Company, Original Purchaser and New Purchaser are party to (i) that certain Securities Purchase Agreement dated May 27, 2016,
as amended by the First Amendment to Securities Purchase Agreement dated August 16, 2016, the Second Amendment to Securities Purchase
Agreement dated February 10, 2017 and the Third Amendment to Securities Purchase Agreement, Amendment to Debentures and Reaffirmation
of Security Documents dated September 19, 2017 (the “SPA”) and (ii) certain Debentures issued by the
Company pursuant to the SPA;

 

WHEREAS,
in connection with the SPA, Australian Subsidiary entered into the Australian Security Agreement and the Subsidiary Guarantees;

 

WHEREAS,
Australian Subsidiary desires to enter into the Farmout Transaction (defined below); and

 

WHEREAS,
subject to the satisfaction of the conditions precedent set forth herein, the Parties desire to amend the SPA and the Debentures
and provide certain waivers and consents under the Australian Security Agreement and the Subsidiary Guarantees, as set forth herein
to facilitate the Farmout Transaction.

 

NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Amendment, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company, Original Purchaser and New Purchaser agree as follows:

 

1. Definitions.
Capitalized terms used in this Amendment but not otherwise defined herein have the meanings given such terms in the SPA. The SPA,
as amended by this Amendment, is hereinafter referred to as the “Agreement”.

 

2. Amendments
to SPA. Subject to the satisfaction of the conditions precedent set forth in Section 6, each of the Company, Original
Purchaser and New Purchaser agree to amend the SPA as follows:

 

(a) The
following definitions are hereby inserted in Section 1.1 of the SPA in appropriate alphabetical order:

 

“Farmout
Agreement” means that certain Farmout Agreement dated October 18, 2019 by and between Australian Subsidiary and WESI,
as amended, restated or modified from time to time as permitted hereby.

 

    	 	 	 

    	 

    

 

“Farmout
Deeds” means, collectively, the “Assignment of Beneficial Interest” and the “Assignment of License”,
as defined in the Farmout Agreement, each as amended, restated or modified from time to time as permitted hereby.

 

“Farmout
Operating Agreement” means that certain Joint Operating Agreement dated October 18, 2019 by and between Australian Subsidiary
and WESI, as amended, restated or modified from time to time as permitted hereby.

 

“Farmout
Documents” means the Farmout Agreement, the Farmout Operating Agreement, the Farmout Deeds and each instrument or other
agreement expressly contemplated by the Farmout Agreement or the Farmout Operating Agreement, each as amended, restated or modified
from time to time as permitted hereby.

 

“Farmout
Transaction” means the transactions contemplated by the Farmout Documents as in effect on the date of the Fourth Amendment,
together with any amendments, restatements or modifications from time to time as permitted hereby.

 

“Fourth
Amendment” means that certain Fourth Amendment to Securities Purchase Agreement and Amendment to Debentures dated as
of October 18, 2019.

 

“WESI”
means WESI PEL512 Pty Ltd.

 

(b) The
definition of “Petroleum Exploration License” in Section 1.1 of the SPA is hereby amended and restated in its
entirety to read as follows:

 

“Petroleum
Exploration License” means and includes (a) that certain Petroleum Exploration License issued to Australian Subsidiary
by the Energy Resource Division of the Department for Manufacturing, Innovation, Trade, Resources and Energy on October 26, 2012,
otherwise referred to as PEL 512 (the “Existing License”) and (b) any replacement Petroleum Exploration License(s)
issued to Australian Subsidiary, separating the Existing License into two (2) Petroleum Exploration Licenses covering, collectively,
the PEL 512 Area.

 

(c) Section
3.1(m) of the SPA is hereby amended by (i) inserting immediately succeeding the reference therein to “except”
the phrase “(i) pursuant to the transfers effected by the Farmout Deeds and (ii)” and (ii) inserting immediately succeeding
the reference therein to “revocation or modification” the phrase “(other than a separation of the Existing License
into two (2) Petroleum Exploration Licenses covering, collectively, the PEL 512 Area)”.

 

(d)
Section 3.1(n) of the SPA is hereby amended by (i) inserting immediately succeeding the reference therein to “Disclosure
Schedule” the phrase “or pursuant to the Farmout Deeds” and (ii) replacing “and” immediately preceding
clause (ii) thereof with “,” and inserting immediately succeeding the reference therein to “subject to penalties”
the phrase “and (iii) Liens granted to WESI by Australian Subsidiary in the Petroleum Exploration License and property associated
therewith pursuant to the Farmout Documents”.

 

    	 	2	 

    	 

    

 

3. Amendments to Debentures. Subject to the satisfaction of the conditions
precedent set forth in Section 6, each of the Company, Original Purchaser and New Purchaser agree to amend the Debentures
as follows:

 

(a) The
definition of “Permitted Lien” in Section 1 of the Debentures is hereby amended by replacing “and”
immediately preceding clause (f) thereof with “,” and inserting immediately succeeding the reference therein to “Permitted
Indebtedness” the phrase “and (g) Liens granted to WESI by Australian Subsidiary in the Petroleum Exploration License
and property associated therewith pursuant to the Farmout Documents”.

 

(b) The
definition of “Petroleum Exploration License” in Section 1 of the Debentures is hereby amended and restated
in its entirety to read as follows:

 

“Petroleum
Exploration License” means and includes (a) that certain Petroleum Exploration License issued to Australian Subsidiary
by the Energy Resource Division of the Department for Manufacturing, Innovation, Trade, Resources and Energy on October 26, 2012,
otherwise referred to as PEL 512 (the “Existing License”) and (b) any replacement Petroleum Exploration License(s)
issued to Australian Subsidiary, separating the Existing License into two (2) Petroleum Exploration Licenses covering, collectively,
the PEL 512 Area.

 

(c) Section
7(k) of the Debentures is hereby amended by inserting the phrase “Except, in all cases under this Section 7(k),
pursuant to the Farmout Deeds,” immediately preceding the reference therein to “sell, lease”.

 

(d) Section
8(a)(vi) of the Debentures is hereby amended by inserting the phrase “, except pursuant to the Farmout Deeds,”
immediately succeeding the reference therein to “Control Transaction)”.

 

(e) Section
7 of the Debentures is hereby amended by inserting the following as a new clause (l) thereof and renumbering the existing
clause (l) as clause “(n)”:

 

“l)amend
or modify the Farmout Documents (including, without limitation, the final drafts thereof delivered on the closing date of the
Fourth Amendment) in any manner material to the Noteholders, without the prior written consent of the Majority Holders.”

 

4. Waivers
and Consents to the Subsidiary Guarantees. Subject to the satisfaction of the conditions precedent set forth in Section
6, pursuant to Sections 5.5 and 5.8 of the Subsidiary Guarantees, each Purchaser hereby (i) consents to the
“Farmout Transaction” (as defined in the Financing Documents) upon the terms set forth in the Farmout Documents and
(ii) acknowledges receipt of notice of the Farmout Transaction.

 

5. Reaffirmation
of Security Documents. Except with respect to the Farmout Transactions, nothing contained herein or done pursuant hereto shall
affect or be construed to affect the security interest, lien, charge or encumbrance heretofore granted and/or any guaranty provided
by the Company and/or the Australian Subsidiary to the Purchasers (including to the Original Purchaser, in its capacity as agent),
or the priority thereof over other liens and security interests, or to release or affect the liability of the Company and/or the
Australian Subsidiary pursuant to the Security Documents. The Company and Australian Subsidiary hereby (a) reaffirm all of the
Security Documents and all security interests, liens, charges, encumbrances or guaranties provided therein and (b) confirm that
all such security interests, liens, charges, encumbrances or guaranties shall secure and guaranty the Company’s obligations
under the additional Debentures purchased by Original Purchaser and New Purchaser pursuant to the SPA including this Amendment.

 

    	 	3	 

    	 

    

 

6. Conditions
Precedent. This Amendment and the agreements of the Parties hereunder are subject to the satisfaction of the following conditions
precedent:

 

(a) Each
Party shall have delivered an executed counterpart of its signature page to this Amendment to each other Party; and

 

(b) Purchasers
shall have received a fully executed and effective copy of the Farmout Agreement, together with final drafts of the other Farmout
Documents, all on terms and in form and substance satisfactory to Purchasers.

 

 7. Representations and Warranties.

 

(a) As
of the date of the effectiveness of this Amendment, and after giving effect to the amendments in Section 2 and Section
3, the Company hereby represents and warrants to New Purchaser and Original Purchaser that the representations and warranties
of the Company and its Subsidiaries contained in the Agreement and in each other Transaction Document are true and correct on
and as of such date (unless as of a specific date therein in which case they shall be accurate as of such date).

 

(b) As
of the date of the effectiveness of this Amendment, New Purchaser hereby represents and warrants to the Company that the representations
and warranties applicable to New Purchaser contained in the Agreement are true and correct on and as of such date.

 

 8. Miscellaneous.

 

(a) Each
of the Parties acknowledges and agrees that from and after the date of the effectiveness of this Amendment, (i) each reference
in the SPA to “this Agreement”, “herein”, “hereof”, “hereunder” or other words
of like import shall mean and be a reference to the Agreement and (ii) each reference in the Debentures to “this Debenture”,
“herein”, “hereof”, “hereunder” or other words of like import shall mean and be a reference
to such Debenture, as amended hereby. Each Debenture hereafter issued shall contain the amended provisions contained herein rather
than those related provisions contained in any previously approved form of Debenture.

 

(b) This
Amendment, the Agreement and the other Transaction Documents (as amended hereby), together with the exhibits and schedules thereto,
contain the entire understanding of the Parties with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules.

 

(c) Sections
5.6 (Headings), 5.9 (Governing Law), 5.11 (Execution), 5.15 (Remedies), 5.18
(Independent Nature, etc.), 5.21 (Construction) and 5.22 (Waiver of Jury Trial) of the
SPA are hereby incorporated into this Amendment, mutatis mutandis, as a part hereof for all purposes.

 

[Signature
Page Follows]

 

    	 	4	 

    	 

    

 

IN
WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed by their respective officers or representatives
thereunto duly authorized.

 

COMPANY:

 

	DISCOVERY
    ENERGY CORP.	 
	 	 	 
	By:	 	 
	 	Keith
    D. Spickelmier, Chairman	 
	 	 	 
	ORIGINAL
    PURCHASER:	 
	 	 	 
	DEC
    FUNDING LLC	 
	 	 	 
	By:	 	 
	 	Steven
    Webster, Manager	 
	 	 	 
	NEW
    PURCHASER:	 
	 	 	 
	TEXICAN
    ENERGY CORPORATION	 
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 

 

For
purposes of Sections 4 and 5 only:

 

	DISCOVERY
    ENERGY SA PTY LTD	 
	 	 	 
	By:	           	 
	Name:	 	 
	Title:	 	 

 

Signature
Page to Fourth Amendment to Securities Purchase Agreement

and
Amendment to Debentures

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