Common use of Work Obligations Clause in Contracts

Work Obligations. 3.1 No later than January 15, 2005 Syntroleum and YFP shall agree upon the selection of the International Operator, or Syntroleum shall commit to drill the Initial Well without the presence of the International Operator. By February 15, 2005 YFP, Syntroleum and the International Operator, if any, shall agree and execute the Agreements not previously executed and YFP shall file the Deed of Assignment as provided in Section 2.5.2. The Technical Services Agreement shall provide that the Technical Advisor shall render assistance to YFP in the conduct of petroleum operations associated with the OML 113 Lease in accordance with the Joint Operating Agreement. Subject to the provisions below Syntroleum will commence or cause to be commenced the drilling of the Initial Well by February 15, 2006. If the Approval Date is a date in excess of ninety (90) days from the date that YFP files the Deed of Assignment, the February 15, 2006 date to commence the drilling of the Initial Well shall be extended by a period of time equal to the number of days in excess of ninety (90) days between the filing of the Deed of Assignment by YFP and the Approval Date. In addition, the obligation of Syntroleum to commence or cause to be commenced the drilling of the Initial Well may be extended by reasons of Force Majeure, Rig Unavailability or Governmental Delay. Syntroleum may at any time after the completion of the drilling of the Initial Well determine to terminate its participation in the OML 113 Lease and in the event it so elects, shall reassign and re-convey the Assigned Interests to YFP at no cost to YFP. 3.2 Subject to the provisions of Section 3.1 above, within twelve months of the plugging and abandonment or temporary abandonment of the Initial Well, Syntroleum will commence or cause to be commenced the drilling of the Second Well. The obligation of Syntroleum to commence or cause to be commenced the drilling of the Second Well may be extended by reasons of Force Majeure, Rig Unavailability or Governmental Delay. If the Declaration of Commerciality is delivered by Syntroleum after the completion of the drilling of the Initial Well, then Syntroleum will drill a Second Well at a location outside of the boundaries of the Aje Field to be selected by Syntroleum in order to test a geological structure within the OML 113 Lease other than the Aje Field. In the event that Syntroleum does not deliver to YFP a Declaration of Commerciality after the Initial Well the location of the Second Well may be drilled at any location selected by Syntroleum on the OML 113 Lease. If Syntroleum fails to commence the drilling of the Second Well within twelve months after the completion of the drilling of the Initial Well as such time period may be extended as provided in this Section 3.2, then Syntroleum shall cease to have any rights or obligations in respect of the OML 113 Lease and shall reassign and re-convey the Assigned Interests to YFP at no cost to YFP. 3.3 Syntroleum may at any time after the completion of the drilling of the Initial Well provide YFP with a Declaration of Commerciality. Production, from the OML 113 Lease shall not commence until a Declaration of Commerciality has been delivered by Syntroleum to YFP. 3.4 Within six months of the plugging and abandonment or temporary abandonment of the Second Well, Syntroleum may at its sole election either (a) terminate its rights under the Agreements and then reassign and re-convey its Assigned Interests to YFP at no cost to YFP; or (b) provide a written declaration to YFP that the OML 113 Lease is provisionally commercial, pay to YFP upon such Notice the Aje Commercial Bonus, and agree to drill the Additional ▇▇▇▇▇. Each Additional Well will be spudded within twelve months of the plugging and abandonment or temporary abandonment of the previous Additional Well. Within six months of the plugging and abandonment or temporary abandonment of each of the Additional ▇▇▇▇▇, Syntroleum shall either (i) terminate its rights under the Agreements and then reassign and re-convey its Assigned Interests in the OML 113 Lease; (ii) provide the Declaration of Commerciality to YFP, or (iii) if all three Additional ▇▇▇▇▇ have not been drilled, elect to drill an Additional Well. 3.5 Prior to the execution of the Joint Operating Agreement, Syntroleum, in consultation with YFP, will prepare the OML 113 annual work program and budget and will appear with YFP before the Government as required to maintain the OML 113 Lease in good standing.