Common use of EXPLORATION PROGRAMS Clause in Contracts

EXPLORATION PROGRAMS. 19.1 Prior to a Production Decision, the Operator shall propose draft work programs, by February 28th of each year, for Management Committee approval and carry out approved programs. Any Feasibility Study (as defined in §21.2) shall be prepared under a separate program and budget and shall be for such term as the Operator feels is appropriate for the completion of such Feasibility Study. 19.2 Each party may, within 30 days of Management Committee approval, elect to contribute its proportionate share of the Costs required to conduct each program. If a party (a“Non-Contributor”) elects or is deemed to have elected not to contribute its proportionate share of a program, the other party (a “Contributor”) that has elected to contribute its proportionate share of the program may give Notice to the Operator and the Non-Contributor stating that it will contribute, in addition to its own proportionate share, the proportionate share of the Non-Contributor. 19.3 Notwithstanding §20.1, the Operator will not proceed with any program which is not fully subscribed. If the parties fully subscribe to a program, the Operator will proceed with such program. 19.4 The Operator may invoice for exploration Costs incurred or to cash call reasonably in advance of requirements. If a party has elected to contribute to a program and does not pay the amount invoiced for said program within 30 days, the Operator may demand payment. If payment is not made within 30 days of demand, and subject to §20.1, the Operator may, in its sole discretion, elect to either: (a) advance all of the unpaid Cost share of the defaulting party. The party or parties making the advance will be entitled to recover the amount so paid, together with interest thereon from the date so paid at the Prime Rate plus 2% calculated monthly. The party or parties making the advance shall have a lien against the defaulting party’s interest, which it may enforce by selling the defaulting party’s interest; or (b) pay the amount of the defaulted payment, in which case the defaulting party shall be deemed to have incurred dilution at a rate equal to twice the standard dilution rate. Thereupon the interests of the defaulting party and each party that made payment shall be adjusted and the deemed total Costs of those parties shall be adjusted to reflect the interest held (i.e.: the defaulting parties deemed Costs shall be reduced by an amount which is equal to the defaulted payment (in this § 19.4 the “reduced amount”) and the total deemed Costs of the parties who made payment on behalf of the defaulting party shall be increased by the payment made plus an equal share of the reduced amount); provided that if a party's interest is reduced to less than 10% it shall be deemed to have assigned and conveyed its interest to the other party, or parties as the case may be, and in consideration therefore the defaulting party will be entitled to receive a NPI capped at such party’s actual contributions to Costs hereunder. The remaining parties shall apportion the assigning party’s deemed Costs amongst them pro rata to their interests and adjust their interests according to § 15.

EXPLORATION PROGRAMS. 19.1 Prior to a Production Decision, the Operator shall propose draft work programs, by February 28th of each year, for Management Committee approval and carry out approved programs. Any Feasibility Study (as defined in §21.2) shall be prepared under a separate program and budget and shall be for such term as the Operator feels is appropriate for the completion of such Feasibility Study. 19.2 Each party may, within 30 days of Management Committee approval, elect to contribute its proportionate share of the Costs required to conduct each program. If a party (a“Nona “Non-Contributor”) elects or is deemed to have elected not to contribute its proportionate share of a program, the other party (a “Contributor”) that has elected to contribute its proportionate share of the program may give Notice to the Operator and the Non-Contributor stating that it will contribute, in addition to its own proportionate share, the proportionate share of the Non-Contributor. 19.3 Notwithstanding §20.1, the Operator will not proceed with any program which is not fully subscribed. If the parties fully subscribe to a program, the Operator will proceed with such program. 19.4 The Operator may invoice for exploration Costs incurred or to cash call reasonably in advance of requirements. If a party has elected to contribute to a program and does not pay the amount invoiced for said program within 30 days, the Operator may demand payment. If payment is not made within 30 days of demand, and subject to §20.1, the Operator may, in its sole discretion, elect to either: (a) advance all of the unpaid Cost share of the defaulting party. The party or parties making the advance will be entitled to recover the amount so paid, together with interest thereon from the date so paid at the Prime Rate plus 2% calculated monthly. The party or parties making the advance shall have a lien against the defaulting party’s interest, which it may enforce by selling the defaulting party’s interest; or (b) pay the amount of the defaulted payment, in which case the defaulting party shall be deemed to have incurred dilution at a rate equal to twice the standard dilution rate. Thereupon the interests of the defaulting party and each party that made payment shall be adjusted and the deemed total Costs of those parties shall be adjusted to reflect the interest held (i.e.: the defaulting parties deemed Costs shall be reduced by an amount which is equal to the defaulted payment (in this § 19.4 the “reduced amount”) and the total deemed Costs of the parties who made payment on behalf of the defaulting party shall be increased by the payment made plus an equal share of the reduced amount); provided that if a party's interest is reduced to less than 10% it shall be deemed to have assigned and conveyed its interest to the other party, or parties as the case may be, and in consideration therefore the defaulting party will be entitled to receive a NPI capped at such party’s actual contributions to Costs hereunder. The remaining parties shall apportion the assigning party’s deemed Costs amongst them pro rata to their interests and adjust their interests according to § 15.

EXPLORATION PROGRAMS. 19.1 20.1 Prior to a Production Decision, the Operator shall propose draft work programs, programs by February 28th 28 of each year, year for Management Committee approval and shall carry out approved programswork programs and budgets (“Work Programs”). Any Feasibility Study (as defined in §21.222.2) shall be prepared under a separate program and budget Work Program and shall be for such term as the Operator feels is appropriate for the completion of such Feasibility Study. 19.2 20.2 Each party may, within 30 60 days of Management Committee approval, elect to contribute its proportionate share of the Costs required to conduct each programWork Program. If a party (a“Nona “Non-Contributor”) elects or is deemed to have elected not to contribute its proportionate share of a programWork Program, the other party (a “Contributor”) that has elected to contribute its proportionate share of the program Work Program may give Notice to the Operator and the Non-Contributor stating that it will contribute, in addition to its own proportionate share, the proportionate share of the Non-Contributor. 19.3 Notwithstanding 20.3 Prior to a Production Decision, if a party elects not to contribute its pro-rata share of Costs of a Work Program or Feasibility Study, the other parties may contribute such shortfall pro-rata to their interests and if another party contributes to the shortfall thereby created, the interests of the parties shall be adjusted according to §20.116.4 so that each party holds an interest in the Joint Venture proportionate to its deemed and actual contributions. However, if any Work Program is completed with less than 80% of the budgeted Costs having been incurred, the non-contributing party may contribute, within 30 days of completion of the Work Program, its proportionate share of the actual Costs incurred and thereby maintain its interest. 20.4 Subject to §21.1, the Operator will not proceed with any program Work Program which is not fully subscribed. If the parties fully subscribe to a programWork Program, the Operator will proceed with such programWork Program. 19.4 20.5 If any party dilutes its interest to less than 10% in the Joint Venture, its interest shall then be automatically converted to a royalty of 5% net profit interest on the Property (the “NPI Royalty”), as further defined in Schedule C and except for the NPI Royalty it will cease to have any further rights, title or interest under this Agreement. 20.6 The Operator may invoice for exploration Costs incurred or to cash call reasonably in advance of requirements. If a party has elected to contribute to a program Work Program and does not pay the amount invoiced for said program Work Program within 30 days, the Operator may demand payment. If a written demand is made as aforesaid, it shall contain a reminder to the party upon which demand is being made that its interests under this Agreement will be converted to a NPI Royalty if payment of its proportionate share is not made as demanded. If payment is not made within 30 days of demand, and subject to §20.1, the Operator may, in its sole discretion, other party may elect to either: (a) advance all of the unpaid Cost share of the defaulting party. The party or parties making the advance will be entitled to recover the amount so paid, together with interest thereon from the date so paid at the Prime Rate plus 2% calculated monthly. The party or parties making the advance shall have a lien against the defaulting party’s interest, which it may enforce by selling the defaulting party’s interest; or (b) pay the amount of the defaulted payment, in which case payment and the defaulting party shall be deemed to have incurred dilution at a rate equal to twice the standard dilution rate. Thereupon the interests of the defaulting party and each party that made payment shall be adjusted and the deemed total Costs of those parties shall be adjusted to reflect the interest held (i.e.: the defaulting parties deemed Costs shall be reduced by an amount which is equal to the defaulted payment (in this § 19.4 the “reduced amount”) and the total deemed Costs of the parties who made payment on behalf of the defaulting party shall be increased by the payment made plus an equal share of the reduced amount); provided that if a party's interest is reduced to less than 10% it shall be deemed to have assigned and conveyed its interest to the other party, or parties as the case may be, and in consideration therefore therefor the defaulting party will be entitled to receive a NPI Royalty capped at such party’s actual contributions to Expenditures and Costs hereunder. The remaining parties shall apportion the assigning party’s deemed Costs amongst them pro rata to their interests and adjust their interests according to § 15§16.4.