Common use of Discovery and Appraisal Clause in Contracts

Discovery and Appraisal. 7.1 The CONTRACTOR shall notify MOGE not later than thirty (30) days after any significant Discovery of Petroleum within the Contract Area. This notice shall summarize all available details of the Discovery and particulars of any testing programme to be undertaken. 7.2 If the CONTRACTOR considers that a Discovery merits appraisal, the CONTRACTOR shall submit to MOGE as soon as is practicable after completion of the exploration well in question, a detailed Appraisal Work Programme and Budget to evaluate whether the Discovery is a Commercial Discovery. 7.3 If MOGE considers that an appraisal is merited, according to generally accepted international petroleum industry practice, MOGE may demand the CONTRACTOR that such appraisal be undertaken forthwith, provided that the CONTRACTOR may give reasons also according to generally accepted international petroleum industry practice, why the said appraisal should be deferred and the period of such deferment. 7.4 The Work Programme submitted by the CONTRACTOR to MOGE under Section 7.2, shall describe the Discovery Area, and the location, nature and estimated size of the Discovery, and a designation of the area to be included in the evaluation. The Appraisal Work Programme shall also include a plan of all drilling, testing and evaluation to be conducted in the Discovery Area and all technical and economic studies related to recovery, treatment and transportation of Petroleum from the Discovery Area. 7.5 If MOGE requests any changes to the Appraisal Work Programme and Budget for any Discovery Area, then MOGE shall so notify the CONTRACTOR in writing within fifteen (15) days of receipt thereof and the CONTRACTOR and MOGE shall meet within fifteen (15) days after receipt by the CONTRACTOR of MOGE’s written notification as to these requested changes to endeavor to agree on a revised Appraisal Work Programme and Budget. The Work Programme and Budget approved and adopted shall be CONTRACTOR’s proposal as modified by agreed changes adopted thirty (30) days after receipt by the CONTRACTOR of MOGE’s written notification of requested changes. 7.6 After adoption of the Appraisal Work Programme and Budget, the CONTRACTOR shall diligently continue to evaluate the Discovery in accordance with such programme without undue interruptions. 7.7 Within ninety (90) days after the evaluation is completed, pursuant to Section 7.6 the CONTRACTOR shall notify and report to MOGE whether the Discovery Area contains a Commercial Discovery. Such report shall include all relevant technical and economic data relating thereto. 7.8 For the purposes of this Section, the CONTRACTOR shall make a determination as to whether a Discovery is a Commercial Discovery on the basis of whether that Discovery can be produced commercially after consideration of all pertinent operating and financial data collected during the performance of the Appraisal Work Programme and otherwise, including but not limited to Crude Oil and/or Natural Gas recoverable reserves, sustainable production levels and other relevant technical and economic factors, according to generally accepted international petroleum industry practice, the applicable laws of the Republic of the Union of Myanmar and the provisions of this Contract.

Discovery and Appraisal. 7.1 5.4.1 The CONTRACTOR Contractor shall notify MOGE the Minister of Petroleum of a Discovery of Petroleum and shall forthwith, but not later than thirty ([30) ] days after any significant completion and testing of such Exploratory Well, submit an initial Discovery report with all relevant information to the Minister of Petroleum Petroleum. 5.4.2 If the Contractor considers that the Discovery merits Appraisal, it shall submit and orally present to the Minister of Petroleum, within [90] days following the Contract Area. This notice shall summarize all available details date of submission of the Discovery and particulars of any testing programme to be undertaken. 7.2 If the CONTRACTOR considers that a Discovery merits appraisal, the CONTRACTOR shall submit to MOGE as soon as is practicable after completion of the exploration well in questionreport, a detailed Appraisal Work Programme and Budget to evaluate whether the Discovery is a Commercial Discovery. 7.3 If MOGE considers that an appraisal is merited, according to generally accepted international petroleum industry practice, MOGE may demand the CONTRACTOR that such appraisal be undertaken forthwith, provided that the CONTRACTOR may give reasons also according to generally accepted international petroleum industry practice, why the said appraisal should be deferred and the period of such deferment. 7.4 The Work Programme submitted by the CONTRACTOR to MOGE under Section 7.2, shall describe the Discovery Area, and the location, nature and estimated size of the Discovery, and a designation of the area to be included in the evaluation. The Appraisal Work Programme shall also include a plan of all drilling, testing and evaluation to be conducted in the Discovery Area and all technical and economic studies related to recovery, treatment and transportation of Petroleum from the Discovery Area. 7.5 If MOGE requests any changes to the Appraisal Work Programme and Budget for any Discovery Area, then MOGE shall so notify the CONTRACTOR in writing within fifteen (15) days of receipt thereof and the CONTRACTOR and MOGE shall meet within fifteen (15) days after receipt by the CONTRACTOR of MOGE’s written notification as to these requested changes to endeavor to agree on a revised Appraisal Work Programme and Budget. The Work Programme and Budget approved and adopted shall be CONTRACTOR’s proposal as modified by agreed changes adopted thirty (30) days after receipt by the CONTRACTOR of MOGE’s written notification of requested changes. 7.6 After adoption statement of the Appraisal Work Programme and Budget, which shall provide for the CONTRACTOR shall diligently continue to evaluate expeditious Appraisal of the Discovery in accordance with such programme without undue interruptionsand the provisions of sub-clauses 5.3.3 and 5.3.4 shall apply to the Appraisal Work Programme and Budget. 7.7 Within ninety (5.4.3 The Minister of Petroleum shall review the submitted Appraisal Work Programme and Budget and within [90) ] days after the evaluation is completedof submission, pursuant to Section 7.6 the CONTRACTOR shall notify and report to MOGE whether the Discovery Area contains a Commercial Discovery. Such report shall include all relevant technical and economic data relating thereto. 7.8 For the purposes of this Section, the CONTRACTOR shall make a determination as to whether a Discovery is a Commercial Discovery on the basis of whether that Discovery can be produced commercially after consideration of all pertinent operating and financial data collected during the performance may request for amendment of the Appraisal Work Programme and otherwiseBudget. Failing notice by the Minister of Petroleum to the Contractor requesting amendment to the Appraisal Work Programme and Budget within [90] days of its submission to the Minister of Petroleum, the relevant Appraisal Work Programme and Budget shall be deemed approved by the Minister of Petroleum immediately upon the expiry of the said period. 5.4.4 After the Appraisal Work Programme and Budget have been adopted by the Minister of Petroleum, the Contractor shall within [60] days evaluate the Discovery. Where Appraisal requires more time, the Minister of Petroleum may, upon request by the Contractor, extend the available time for a period reasonably required to expeditiously complete Appraisal. 5.4.5 If, at the end of the Exploration period, a Discovery has been made, but there has been insufficient time for the Contractor (acting, and having acted, in accordance with the Agreement) to Appraise such Discovery, the Minister of Petroleum shall, at the request of the Contractor, extend the term of the Exploration period in respect to the prospective area of the Discovery and for the period of time reasonably required to expeditiously complete the adopted Appraisal Work Programme and Budget with respect to such Discovery and to determine whether or not the Discovery is commercial, but in any event, such extension to the second additional Exploration period shall not exceed [six] months. 5.4.6 The Contractor shall, not more than [90] days after the Appraisal is completed, report to the Minister of Petroleum about the commercial prospects of the Discovery (including but not limited to Crude Oil and/or Natural Gas recoverable reserves, sustainable production levels and other all relevant technical and economic factorsdata, according such as, but not limited to, location, areal extent, lateral extent, thickness, estimate of in-place and recoverable Petroleum) and its determination of whether the Discovery is commercial or whether further Appraisal is required. 5.4.7 If the Appraisal report relating to generally accepted international petroleum industry practicea Discovery states that the Contractor is of the opinion that the Discovery is non-commercial, the applicable laws Contractor and the Minister of Petroleum shall meet to discuss in good faith ways in which it might be possible to proceed with the development of such Discovery on a commercial basis, including, without limitation, by way of amending the Agreement (but, for avoidance of doubt, the Minister of Petroleum shall be under no obligation whatsoever to agree to any such amendments proposed by the Contractor or vice versa). 5.4.8 If the Contractor reports that the Discovery is a Commercial Discovery, the Development Plan shall be submitted to the Minister of Petroleum for approval, which approval shall be granted within [60] days of the Republic completion of the Union Appraisal Work Programme (unless otherwise agreed in writing), and, upon written request by the Contractor, the term of Myanmar and the provisions Agreement shall be extended, if necessary, in respect of this Contractthe area of that Commercial Discovery. If the Minister of Petroleum has good cause for refusal (such to be notified to the Contractor), the Minister of Petroleum may refuse grant of approval within the same period of time. In case of expiry of the period of [60] days following submission to the Minister of Petroleum without the Minister of Petroleum either approving or refusing grant of approval, the Development Plan shall be deemed approved by the Minister of Petroleum.