Common use of MINIMUM WORK PROGRAMME Clause in Contracts

MINIMUM WORK PROGRAMME. During the Exploration Phase, the CONTRACTOR undertakes the performance of the following minimum Work Programme, it being understood that the work obligations take precedence over expenditure of the estimated amounts: 6.1 During the initial period of the Exploration Phase of three (3) years: (a) An aeromagnetic & gravity survey of approximately three thousand five hundred (3500) line kilometers across the Ndian River Block to aid identification of possible volcanics, basement fabrics and trapping geometries. This will reduce reservoir risk associated with high amplitude reflectors in deep prospects. (b) Geological field work to recover samples of oil seeps and conduct geochemistry studies so as to reduce the gas risk in the Ndian River block. (c) Selective purchase or reprocessing of existing 2D seismic data within or adjacent to the block to enhance interpretation and thereby reduce risk on structural/ stratigraphic model. (d) Integrated interpretation of the complete geological and geophysical dataset into an exploration model for the Eastern Rio del Rey basin, as a basis for seismic acquisition in Phase 2. (e) Seismic acquisition and processing of up to four hundred (400) line kilometers of 2D seismic data subject to a maximum expenditure of five million five hundred thousand U.S. Dollars (US$5,500,000). Total cost of the above mentioned work is estimated at five million nine hundred thousand U.S. Dollars (US$5,900,000). 6.2 During the first renewal period of the Exploration Phase of two (2) years: (a) One (1) Exploration well to be drilled in the Contract Area targeting the late Cretaceous or Miocene age reservoirs. Total cost of the above mentioned work is estimated at six million U.S. Dollars (US$6,000,000). 6.3 During the second renewal period of the Exploration Phase of two (2) years: a) One (1) Exploration well to be drilled in the Contract Area targeting the late Cretaceous or Miocene age reservoirs. Total cost of the above mentioned work is estimated at six million U.S. Dollars (US$ 6,000,000). 6.4 At the beginning of the initial period of the Exploration Phase and thereafter at the beginning of each additional period, the CONTRACTOR shall furnish to the Operating Committee a bank guarantee consistent with that in Annex D of this Contract, for an initial amount equal to the estimated cost of the minimum Work Program to be completed during such period in accordance with Articles 6.1, 6.2 and 6.3 of this Contract. The STATE may call such guarantee in the event of non-performance of the minimum Work Program which it covers, and such guaranty shall be reduced or terminated, all in accordance with the terms specified in said guarantee. 6.5 The CONTRACTOR may interrupt a Drilling which has not reached the depth and/or deepest geologic objective envisioned by the corresponding minimum Work Programme if the CONTRACTOR has encountered petroleum bearing strata, which, according to the CONTRACTOR, constitute a Discovery. In such case, the well drilled shall nonetheless be considered an Exploration well within the framework of the corresponding minimum Work Programme. 6.6 The CONTRACTOR may suspend a Drilling that has not reached the depth or the deepest geologic objective envisioned by the corresponding Work Programme if it has encountered technical Drilling difficulties which in the CONTRACTOR’S opinion, and based on generally accepted practices in the international petroleum industry, justify the suspension. In such case, the Operating Committee shall either deem the CONTRACTOR to have fulfilled the work obligations concerning the well in question, or it shall define an adequate and reasonable substitute work obligation. Any dispute arising from this article which cannot be resolved between the Parties shall be resolved by expert as provided in Article 27.2. 6.7 All work carried out by the CONTRACTOR beyond the minimum Work Programme provided for in any period of the Exploration Phase shall be credited to the minimum Work Programme for the following period of the Exploration Phase. 6.8 If the minimum Work Programme for any period of the ongoing Exploration Phase has been performed during the preceding period of the Exploration Phase, the CONTRACTOR shall nevertheless undertake to carry out in the Exploration Area, during such ongoing period, work that may consist of geophysical or geological work as determined by the CONTRACTOR with the objective to farther define the prospectivity of the Exploration Area. 6.9 The estimated expenditure amounts set forth in Articles 6.1, 6.2 and 6.3 above are expressed in constant U.S. Dollars for the month of the Effective Date, and shall be revised at the end of each Calendar Year starting from the Effective Date, in order to reflect the actual value of the estimated expenditure amounts for purposes of Article 6.9.1 hereafter, in accordance with the method set forth in Article 6.9.2 below: 6 9.1 At the end of each Calendar Year, starting from the Effective Date, the Exploration Costs actually incurred by the CONTRACTOR during such Calendar Year shall be deducted from the total amount of the CONTRACTOR’S estimated expenditure amounts for purposes of Article 6.9.2 hereafter for the current period of the Exploration Phase.

MINIMUM WORK PROGRAMME. During the Exploration Phase, the CONTRACTOR undertakes the performance of the following minimum Work Programme, it being understood that the work obligations take precedence over expenditure of the estimated amounts: 6.1 During the initial period of the Exploration Phase of three (3) years: (a) An aeromagnetic & gravity survey of approximately three thousand five hundred (3500) line kilometers across the Ndian River Block to aid identification of possible volcanics, basement fabrics and trapping geometries. This will reduce reservoir risk associated with high amplitude reflectors in deep prospects. (b) Geological field work to recover samples of oil seeps and conduct geochemistry studies so as to reduce the gas risk in the Ndian River block. (c) Selective purchase or reprocessing of existing 2D seismic data within or adjacent to the block to enhance interpretation and thereby reduce risk on structural/ stratigraphic model. (d) Integrated interpretation of the complete geological and geophysical dataset into an exploration model for the Eastern Rio del Rey basin, as a basis for seismic acquisition in Phase 2. (e) Seismic acquisition and processing of up to four hundred (400) line kilometers of 2D seismic data subject to a maximum expenditure of five million five hundred thousand U.S. Dollars (US$5,500,000). Total cost of the above mentioned work is estimated at five million nine hundred thousand U.S. Dollars (US$5,900,000). 6.2 During the first renewal period of the Exploration Phase of two (2) years: (a) One (1) Exploration well to be drilled in the Contract Area targeting the late Cretaceous or Miocene age reservoirs. Total cost of the above mentioned work is estimated at six million U.S. Dollars (US$6,000,000). 6.3 During the second renewal period of the Exploration Phase of two (2) years: a) One (1) Exploration well to be drilled in the Contract Area targeting the late Cretaceous or Miocene age reservoirs. Total cost of the above mentioned work is estimated at six million U.S. Dollars (US$ 6,000,000). 6.4 At the beginning of the initial period of the Exploration Phase and thereafter at the beginning of each additional period, the CONTRACTOR shall furnish to the Operating Committee a bank guarantee consistent with that in Annex D of this Contract, for an initial amount equal to the estimated cost of the minimum Work Program to be completed during such period in accordance with Articles 6.1, 6.2 and 6.3 of this Contract. The STATE may call such guarantee in the event of non-non­ performance of the minimum Work Program which it covers, and such guaranty shall be reduced or terminated, all in accordance with the terms specified in said guarantee. 6.5 The CONTRACTOR may interrupt a Drilling which has not reached the depth and/or deepest geologic objective envisioned by the corresponding minimum Work Programme if the CONTRACTOR has encountered petroleum bearing strata, which, according to the CONTRACTOR, constitute a Discovery. In such case, the well drilled shall nonetheless be considered an Exploration well within the framework of the corresponding minimum Work Programme. 6.6 The CONTRACTOR may suspend a Drilling that has not reached the depth or the deepest geologic objective envisioned by the corresponding Work Programme if it has encountered technical Drilling difficulties which in the CONTRACTOR’S opinion, and based on generally accepted practices in the international petroleum industry, justify the suspension. In such case, the Operating Committee shall either deem the CONTRACTOR to have fulfilled the work obligations concerning the well in question, or it shall define an adequate and reasonable substitute work obligation. Any dispute arising from this article which cannot be resolved between the Parties shall be resolved by expert as provided in Article 27.2. 6.7 All work carried out by the CONTRACTOR beyond the minimum Work Programme provided for in any period of the Exploration Phase shall be credited to the minimum Work Programme for the following period of the Exploration Phase. 6.8 If the minimum Work Programme for any period of the ongoing Exploration Phase has been performed during the preceding period of the Exploration Phase, the CONTRACTOR shall nevertheless undertake to carry out in the Exploration Area, during such ongoing period, work that may consist of geophysical or geological work as determined by the CONTRACTOR with the objective to farther define the prospectivity of the Exploration Area. 6.9 The estimated expenditure amounts set forth in Articles 6.1, 6.2 and 6.3 above are expressed in constant U.S. Dollars for the month of the Effective Date, and shall be revised at the end of each Calendar Year starting from the Effective Date, in order to reflect the actual value of the estimated expenditure amounts for purposes of Article 6.9.1 hereafter, in accordance with the method set forth in Article 6.9.2 below: 6 9.1 At the end of each Calendar Year, starting from the Effective Date, the Exploration Costs actually incurred by the CONTRACTOR during such Calendar Year shall be deducted from the total amount of the CONTRACTOR’S estimated expenditure amounts for purposes of Article 6.9.2 hereafter for the current period of the Exploration Phase.