Common use of Authorization for Expenditure Clause in Contracts

Authorization for Expenditure. “AFE”) Procedure (A) Prior to incurring any commitment or expenditure for activities for the Joint Account, which is estimated to be: (1) in excess of one hundred thousand Dollars ($100,000) in an exploration or appraisal Work Program and Budget; (2) in excess of two hundred thousand Dollars ($200,000) in a development Work Program and Budget; and (3) in excess of one hundred thousand Dollars ($100,000) in a production Work Program and Budget, Operator shall send to each Non-Operator an AFE as described in Article 6.7(C). Notwithstanding the above, Operator shall not be obliged to furnish an AFE to the Parties with respect to routine operating costs and general and administrative costs that are listed as separate line items in an approved Work Program and Budget. (B) Prior to making any expenditures or incurring any commitments for work subject to the AFE procedure in Article 6.7(A), Operator shall obtain the approval of the Operating Committee. If the Operating Committee approves an AFE for the operation within the applicable time period under Article 5.12(A), Operator shall be authorized to conduct the operation under the terms of this Agreement. If the Operating Committee fails to approve an AFE for the operation within the applicable time period, the operation shall be deemed rejected. Operator shall promptly notify the Parties if the operation has been rejected, and, subject to Article 7, any Party may thereafter propose to conduct the operation as an Exclusive Operation under Article 7. When an operation is rejected under this Article 6.7(B) or an operation 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 be deemed to be revised accordingly. (C) Each AFE proposed by Operator shall: (1) identify the operation by specific reference to the applicable line items in the Work Program and Budget; (2) describe the work in detail; (3) contain Operator’s best estimate of the total funds required to carry out such work; (4) outline the proposed work schedule; (5) provide a timetable of expenditures, if known; and (6) be accompanied by such other supporting information as is necessary for an informed decision.

Authorization for Expenditure. “AFE”) Procedure (A) Prior to incurring any 7.5.1 Operator shall request approval of an AFE in accordance with Article 9 of the Agreement at a time when the main details of the relevant commitment or expenditure for activities can be ascertained but consistent with giving the Non-Operators ten (10) days advance notice of the date by which approval is required. 7.5.2 The AFE will describe the project, state the justification for the Joint Accountitems of expenditure, which is give the estimate of the items of expenditure necessary to complete the project, and give the estimated phasings of such expenditures. Necessary further details to be: (1) in excess support the estimated cost of one hundred thousand Dollars ($100,000) in an exploration or appraisal Work Program and Budget; (2) in excess of two hundred thousand Dollars ($200,000) in a development Work Program and Budget; and (3) in excess of one hundred thousand Dollars ($100,000) in a production Work Program and Budget, Operator shall send the project will be included as attachments to each the extent reasonably required by the Non-Operator Operators. Any Party which has voted in favour of an AFE as described in Article 6.7(C). Notwithstanding the above, Operator shall not be obliged to furnish sign an AFE to the Parties with respect to routine operating costs and general and administrative costs that are listed as separate line items in an approved Work Program and Budget. (B) Prior to making any expenditures or incurring any commitments for work subject to the AFE procedure in Article 6.7(A), Operator shall obtain the Form indicating its authorisation thereof. After approval of the Operating Committee. If the Operating Committee approves an AFE for the operation within the applicable time period under Article 5.12(A), Operator shall be authorized to conduct the operation under the terms of this Agreement. If the Operating Committee fails to approve an AFE for the operation within the applicable time period, the operation shall be deemed rejected. Operator shall promptly notify the Parties indicating the identity of those Parties whose authorisation have formed part of such approval. Operator shall notify the Parties of a deemed approval of an AFE as soon as such has become effective. 7.5.3 Approval, or where permitted deemed approval, of an AFE constitutes authority for Operator to enter into any commitment or incur any expenditure properly made in relation to any approved AFE, whether or not payments in respect of such commitments and expenditure will result in the final cost of such commitments and expenditure exceeding the estimated cost of such AFE, provided that if at any time it becomes apparent that: (i) commitments yet to be made will or are likely to cause the operation estimated cost to be exceeded; or (ii) expenditure to be incurred under commitments already made will cause the estimated cost to be exceeded by more than 10% or twenty thousand Dollars ($20,000) (whichever is the lower), Operator shall immediately notify the Parties and shall without delay prepare a revised AFE giving the reasons for the increased cost, and shall request approval of the revised AFE and shall not enter into any new commitment in relation to such AFE until the revised AFE has been rejectedapproved, and, subject to Article 7, any Party may thereafter propose to conduct the operation as an Exclusive Operation under Article 7. When an operation is rejected under this Article 6.7(B) or an operation 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 be where permitted deemed to be revised accordinglyapproved. (C) Each AFE proposed by Operator shall: (1) identify the operation by specific reference to the applicable line items in the Work Program and Budget; (2) describe the work in detail; (3) contain Operator’s best estimate of the total funds required to carry out such work; (4) outline the proposed work schedule; (5) provide a timetable of expenditures, if known; and (6) be accompanied by such other supporting information as is necessary for an informed decision.

Authorization for Expenditure. “AFE”) Procedure (A) Prior to incurring any commitment or expenditure for activities for the Joint Account, which is estimated to be: (1) in excess of one hundred thousand Dollars Two Hundred and Fifty Thousand United States dollars (U.S. $100,000250,000.00) in an exploration or appraisal Work Program Programme and Budget; (2) in excess of two hundred thousand Dollars Five Hundred Thousand United States dollars (U.S. $200,000500,000.00) in a development Work Program Programme and Budget; and (3) in excess of one hundred thousand Dollars Two Hundred and Fifty United States dollars (U.S. $100,000250,000.00) in a production Work Program Programme and Budget, . The Operator shall send to each Non-Operator an AFE as described in Article 6.7(C). Notwithstanding the above, the Operator shall not be obliged to furnish an AFE to the Parties with respect to routine operating costs any Minimum Work Obligations, workovers of ▇▇▇▇▇ and general and administrative costs that are listed as separate line items in an approved Work Program Programme and Budget. (B) Prior to making any expenditures or incurring any commitments for work subject to the AFE procedure in Article 6.7(A), the Operator shall obtain the approval of the Operating Committee. If the Operating Committee approves an AFE for the operation within the applicable time period under Article 5.12(A), Operator shall be authorized to conduct the operation under the terms of this Agreement. If the Operating Committee fails to approve an AFE for the operation within the applicable time period, the operation shall be deemed rejected. The Operator shall promptly notify the Parties if the operation has been rejected, and, subject to Article 7, any Party may thereafter propose to conduct the operation as an Exclusive Operation under Article 7. When an operation is rejected under this Article 6.7(B) or an operation is approved for differing amounts than those provided for in the applicable line items of the approved Work Program Programme and Budget, the Work Program Programme and Budget shall be deemed to be revised accordingly. (C) Each AFE proposed by the Operator shall: (1) identify the operation by specific reference to the applicable line items in the Work Program Programme and Budget; (2) describe the work in detail; (3) contain the Operator’s best estimate of the total funds required to carry out such work; (4) outline the proposed work schedule; (5) provide a timetable of expenditures, if known; and (6) be accompanied by such other supporting information as is necessary for an informed decision.

Authorization for Expenditure. “AFE”") Procedure (A) Prior to incurring any commitment or expenditure for activities for the Joint Account, which is estimated to be: (1) in excess of one hundred thousand Dollars ($100,000) 250,000 U.S. dollars in an exploration or appraisal Work Program and Budget; (2) in excess of two hundred thousand Dollars ($200,000) 200,000 U.S. dollars in a development Work Program and Budget; and (3) in excess of one hundred thousand Dollars ($100,000) 200,000 U.S. dollars in a production Work Program and Budget, Operator shall send to each Non-Operator an AFE as described in Article 6.7(C). Notwithstanding the above, Operator shall not be obliged to furnish an AFE to the Parties with respect to routine operating costs any Minimum Work Obligations, workovers of ▇▇▇▇▇ and general and administrative costs that are listed as separate line items in an approved Work Program and Budget. (B) Prior to making any expenditures or incurring any commitments for work subject to the AFE procedure in Article 6.7(A), Operator shall obtain the approval of the Operating Committee. If the Operating Committee approves an AFE for the operation within the applicable time period under Article 5.12(A), Operator shall be authorized to conduct the operation under the terms of this Agreement. If the Operating Committee fails to approve an AFE for the operation within the applicable time period, the operation shall be deemed rejected. Operator shall promptly notify the Parties if the operation has been rejected, and, subject to Article 7, any Party may thereafter propose to conduct the operation as an Exclusive Operation under Article 7. When an operation is rejected under this Article 6.7(B) or an operation 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 be deemed to be revised accordingly. (C) Each AFE proposed by Operator shall: (1) identify the operation by specific reference to the applicable line items in the Work Program and Budget; (2) describe the work in detail; (3) contain Operator’s best estimate of the total funds required to carry out such work; (4) outline the proposed work schedule; (5) provide a timetable of expenditures, if known; and (6) be accompanied by such other supporting information as is necessary for an informed decision.

Authorization for Expenditure. “AFE”) Procedure (A) Prior to incurring any commitment or expenditure for activities for the Joint Account, which is estimated to be: (1) in excess of one hundred thousand Dollars Two Hundred and Fifty Thousand United States dollars ($100,000U.S$250,000.00) in an exploration or appraisal Work Program and Budget; (2) in excess of two hundred thousand Dollars ($200,000Five Hundred Thousand United States dollars U.S$500,000.00) in a development Work Program and Budget; and (3) in excess of one hundred thousand Dollars ($100,000Five Hundred United States dollars U.S$500,000.00) in a production Work Program and Budget, Operator shall send to each Non-Operator an AFE as described in Article 6.7(C). Notwithstanding the above, Operator shall not be obliged to furnish an AFE to the Parties with respect to routine operating costs any Minimum Work Obligations, workovers of ▇▇▇▇▇ and general and administrative costs that are listed as separate line items in an approved Work Program and Budget. (B) Prior to making any expenditures or incurring any commitments for work subject to the AFE procedure in Article 6.7(A), Operator shall obtain the approval of the Operating Committee. If the Operating Committee approves an AFE for the operation within the applicable time period under Article 5.12(A), Operator shall be authorized to conduct the operation under the terms of this Agreement. If the Operating Committee fails to approve an AFE for the operation within the applicable time period, the operation shall be deemed rejected. Operator shall promptly notify the Parties if the operation has been rejected, and, subject to Article 7, any Party may thereafter propose to conduct the operation as an Exclusive Operation under Article 7. When an operation is rejected under this Article 6.7(B) or an operation 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 be deemed to be revised accordingly. (C) Each AFE proposed by Operator shall: (1) identify the operation by specific reference to the applicable line items in the Work Program and Budget; (2) describe the work in detail; (3) contain Operator’s best estimate of the total funds required to carry out such work; (4) outline the proposed work schedule; (5) provide a timetable of expenditures, if known; and (6) be accompanied by such other supporting information as is necessary for an informed decision.

Authorization for Expenditure. “AFE”") ProcedurePROCEDURE (A) Prior to incurring any commitment or expenditure for activities for the Joint Account, which is estimated to be: (1) be in excess of one hundred thousand Dollars U.S. dollars One Hundred Thousand ($U.S. $ 100,000) in an exploration or appraisal Work Program and Budget; (2) in excess of two hundred thousand Dollars ($200,000) in a development Work Program and Budget; and (3) in excess of one hundred thousand Dollars ($100,000) in a production Work Program and Budget), Operator shall send to each Non-Operator an AFE as described in Article 6.7(C6.6(C). Notwithstanding the above, Operator shall not be obliged to furnish an AFE to the Parties with respect to routine operating costs and general and administrative costs that are listed as separate line items in an approved Work Program and Budget. (B) Prior to making any expenditures or incurring any commitments for work subject to the AFE procedure in Article 6.7(A6.6(A), Operator shall obtain the approval of the Operating CommitteeCommittee to an AFE. If the Operating Committee approves an AFE for the operation within the applicable time period under Article 5.12(A)5.12, Operator shall be authorized to conduct the operation under the terms of this Agreement. If the Operating Committee fails to approve an AFE for the operation within the applicable time period, the operation shall be deemed rejected. Operator shall promptly notify the Parties if the operation has been rejected, and, subject to Article 7VII, any Party may thereafter propose to conduct the operation as an Exclusive Operation under Article 7VII. When an operation is rejected under this Article 6.7(B6.6(B) or an operation 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 be deemed to be revised accordingly. Notwithstanding the above, if an AFE covers commitments or expenditures for Minimum Work Obligations listed as separate line items in an approved Work Program and Budget, the AFE is for informational purposes only and Operator shall be obliged to proceed, subject to Article 6.7, without additional Operating Committee Approval. (C) Each AFE proposed issued by the Operator shall: (1) identify the operation by specific reference to the applicable line items in the Work Program and Budget; (2) describe the work in detail; (3) contain Operator’s 's best estimate of the total funds required to carry out such work; (4) outline the proposed work schedule; (5) provide a timetable of expenditures, if known; and (6) be accompanied by such other necessary supporting information as is necessary for an informed decisioninformation.

Authorization for Expenditure. “AFE”) Procedure (A) Prior to incurring any commitment or expenditure for activities for the Joint Unit Account, which is estimated to be: (1) in In excess of one hundred thousand Dollars million U.S. dollars ($100,000) in an exploration or appraisal Work Program and Budget; (2) in excess of two hundred thousand Dollars ($200,0001,000,000) in a development Development Unit Work Program and Budget; and (32) in In excess of one hundred thousand Dollars million U.S. dollars ($100,0001,000,000) in a production Production Unit Work Program and Budget, Unit Operator shall send to each Non-Operator an AFE as described in Article 6.7(C9.6(D). Notwithstanding the above, Unit Operator shall not be obliged to furnish an AFE to the Parties with respect to routine operating costs and general and administrative costs and operating expenditures that are listed as separate line items in an approved Annual Unit Work Program and Budget. (B) Technical Operator shall furnish Unit Operator with the form of each AFE required for Technical Operations to permit Unit Operator to distribute the AFE to each Non-Operator. (C) Prior to making any expenditures or incurring any commitments for work subject to the AFE procedure in Article 6.7(A9.6(A), Unit Operator shall obtain the approval of the Unit Operating Committee. If the Unit Operating Committee approves an AFE for the operation within the applicable time period under Article 5.12(A)operation, Unit Operator shall be authorized to conduct the operation under the terms of this Agreement. If the Operating Committee fails to approve When an AFE for the operation within the applicable time period, the operation shall be deemed rejected. Operator shall promptly notify the Parties if the operation has been rejected, and, subject to Article 7, any Party may thereafter propose to conduct the operation as an Exclusive Operation under Article 7. When an operation is rejected under this Article 6.7(B) or an operation is approved for differing amounts than those provided for in the applicable line items of the approved Annual Unit Work Program and Budget, the Annual Unit Work Program and Budget shall be deemed to be revised accordingly. Unit Operator shall be entitled to submit for approval master AFEs covering multiple commitments or expenditures that are subject to Article 9.6(A), and if any such AFE is approved, subsequent AFEs issued for individual commitments or expenditures covered by the master AFE shall be for informational purposes only and shall not require a further approval. (CD) Each AFE proposed by Unit Operator (or sent to Unit Operator by Technical Operator) shall: (1) identify Identify the operation by specific reference to the applicable line items in the Annual Unit Work Program and BudgetBudget but may relate to the total cost of the operation to be performed; (2) describe Describe the work in detail; (3) contain Contain such Operator’s best estimate of the total funds required to carry out such work; (4) outline Outline the proposed work schedule; (5) provide Provide a timetable of expenditures, if known; and (6) be Be accompanied by such other supporting information as is necessary for an informed decision.

Authorization for Expenditure. “AFE”) Procedure (Aa) Prior to incurring any commitment or expenditure for activities for the Joint Account, which is estimated the Joint Operating Team will issue an AFE for items of either a capital or operating expense Nature. In addition the Joint Operating Team will issue an AFE for budgeted minor capital expenditures as directed by the Nigerian National Petroleum Corporation (NNPC). The above will apply to be: (1) in excess of one hundred thousand Dollars ($100,000) in an exploration or appraisal Work Program appraisal, development and Budget; (2) in excess of two hundred thousand Dollars ($200,000) in a development Work Program and Budget; and (3) in excess of one hundred thousand Dollars ($100,000) in a production Work Program Programs and Budget, Operator shall send to each Non-Operator an AFE as described in Article 6.7(C). Notwithstanding the above, Operator shall not be obliged to furnish an AFE to the Parties with respect to routine operating costs and general and administrative costs that are listed as separate line items in an approved Work Program and BudgetBudgets. (Bb) Prior to making any expenditures or incurring any commitments for work subject to the AFE procedure in Article 6.7(A7.6(a), Operator the Joint Operating Team shall obtain the approval of the Operating CommitteeCommittee to an AFE for cost and technical control purposes. A Party may only vote to disapprove an AFE issued in furtherance of an approved Work Program and Budget if (i) some or all of the costs described in the AFE exceed the line items in the approved Work Program and Budget by more than what is permitted under Article 7.7, (ii) the proposed terms of any third party contract described in the AFE do not approximate fair market terms or (iii) in such Party’s good faith opinion, any material technical specifications contained in the AFE that are not in the approved Work Program and Budget are imprudent or are not supported by the known data about the formations being drilled. A Party’s vote shall be considered a vote to approve the AFE unless the Party specifically describes one or more of the three reasons listed above as the basis for its vote of disapproval. If the Operating Committee approves an AFE for the operation within the applicable time period under Article 5.12(A)6.12, Operator the Service Provider shall be authorized to conduct the operation under the terms of this Agreement. If the Operating Committee fails to approve an AFE for the operation within the applicable time period, the operation shall be deemed rejected. Operator The Joint Operating Team shall promptly notify the Parties if the operation has been rejected, and, subject to Article 78, any Party may thereafter propose to conduct the operation as an Exclusive Operation under Article 78. When an operation is rejected under this Article 6.7(B7.6(b) or an operation 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 be deemed to be revised accordingly. (Cc) Each AFE proposed by Operator the Joint Operating Team shall: (1i) identify the operation by specific reference to the applicable line items in the Work Program and Budget; (2ii) describe the work in detail; (3iii) contain Operatorthe Service Provider’s best estimate of the total funds required to carry out such work; (4iv) outline the proposed work schedule; (5v) provide a timetable of expenditures, if known; and (6vi) be accompanied by such other supporting information as is necessary for an informed decision.