DATED 28TH JUNE, 1985
BETWEEN:
MAGELLAN PETROLEUM (N.T.) PTY. LTD.
of the first part
UNITED OIL & GAS CO. (N.T.) PTY. LTD.
of the second part
CANSO RESOURCES LIMITED
of the third part
MOONIE OIL N.L.
of the fourth part
PETROMIN NO LIABILITY
of the fifth part
TRANSOIL NO LIABILITY
of the sixth part
FARMOUT DRILLERS N.L.
of the seventh part
AND
GASGO PTY. LIMITED
of the eighth part
AND
THE MOONIE OIL COMPANY LIMITED
of the ninth part
MAGELLAN PETROLEUM AUSTRALIA LIMITED
of the tenth part
FLINDERS PETROLEUM N.L.
of the eleventh part
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MEREENIE GAS PURCHASE AGREEMENT
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with Pritchards
SOLICITORS AND ATTORNEYS
SYDNEY OFFICE: MELBOURNE OFFICE: FOR AND IN CONJUNCTION WITH
TOWER BUILDING ▇▇▇▇▇▇▇ TOWER
AUSTRALIA SQUARE ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇'▇▇▇▇▇▇
SYDNEY, NSW MELBOURNE, VIC Crown Solicitor for the
AUSTRALIA AUSTRALIA Northern Territory of ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇,
POSTAL ADDRESS: POSTAL ADDRESS: ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇ SQUARE ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇. N.T. 5790.
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
TELEPHONE: ▇▇ ▇▇▇▇▇ TELEPHONE: ▇▇ ▇▇ ▇▇▇▇
INTERNATIONAL: INTERNATIONAL:
▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇ ▇ ▇▇ ▇▇▇▇
TELEX: ▇▇▇▇▇ ▇▇▇▇▇: 39326
FAX: G3 ▇▇▇▇▇▇▇ FAX: G2-G3 ▇▇▇ ▇▇▇▇
DX 370 SYDNEY DX 30826 MELBOURNE
ELECTRONIC MAIL: ELECTRONIC MAIL:
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ID 58 UTZ003
MEREENIE GAS PURCHASE AGREEMENT
THIS AGREEMENT made the 28th day of June 1985 BETWEEN MAGELLAN PETROLEUM (N.T.)
PTY. LTD. of the first part, UNITED OIL & GAS CO. (N.T.) PTY. LTD. of the second
part, CANSO RESOURCES LIMITED of the third part, MOONIE OIL N.L. of the fourth
part, PETROMIN NO LIABILITY of the fifth part, TRANSOIL NO LIABILITY of the
sixth part, FARMOUT DRILLERS N.L. of the seventh part, GASGO PTY. LIMITED of the
eighth part, THE MOONIE OIL COMPANY LIMITED of the ninth part, MAGELLAN
PETROLEUM AUSTRALIA LIMITED of the tenth part and FLINDERS PETROLEUM N.L. of the
eleventh part
WHEREAS:
A. The Producers have formed an unincorporated joint venture to develop
existing and potential reserves of recoverable natural gas from the Gas
Field and each Producer is entitled to receive as its own property and
dispose of a share of natural gas produced from the Gas Field equal to
its Ownership Percentage.
B. The Purchaser is a company the whole of whose share capital is owned by
or on behalf of the Territory.
C. The Purchaser proposes to ensure arrangements for the construction of a
pipeline to transport Gas to Darwin and to other delivery points in the
Territory.
D. The Purchaser proposes to sell Gas to the Pipeline Operator for
transportation through the Pipeline and for re-sale to the Consumers at
the various delivery points for use in the generation of electric power
in gas-fired power stations and for other uses.
E. The Purchaser has accordingly agreed to purchase and each of the
Producers in their Ownership Percentages has severally agreed to sell
Gas on the terms and conditions contained herein.
F. The Purchaser also proposes contemporaneously herewith to enter into a
separate agreement for the purchase of natural gas from the Palm Valley
Producers.
G. Each of the Guarantors has agreed that in consideration of the
Purchaser entering into this Agreement at its request it will guarantee
the obligations under this Agreement of certain of the Producers who
comprise its Associates.
NOW THIS AGREEMENT WITNESSES THAT IT IS HEREBY AGREED as follows:
1.00 DEFINITIONS
1.10 In this Agreement, unless the contrary intention appears:-
"Annual Minimum Quantity" means the quantity set out in Schedule A for
the relevant Contract Year in each case as varied from time to time in
accordance with clauses 2.28, 3.53 or 3.63.
"Associates" means: (a) in respect of The Moonie Oil Company
Limited - Moonie Oil N.L., Petromin No Liability and Transoil No
Liability, and their respective successors and assigns;
(b) in respect of Magellan Petroleum
Australia Limited - Magellan Petroleum (N.T.) Pty. Ltd. and United Oil
& Gas Co. (N.T.) Pty. Ltd. and their respective successors and assigns,
and
(c) in respect of Flinders Petroleum N.L. -
Canso Resources Limited and Farmout Drillers N.L. and their respective
successors and assigns
"Base Price" means the price calculated in accordance with Schedule D
hereto.
"Commonwealth Imposts" means any Impost of the Commonwealth of
Australia or any authority thereof.
"Consumers" means any of the following:-
(i) NTEC;
(ii) Any agency of the Territory or entity owned or controlled
directly or indirectly by the Territory but not any such
agency or entity whose function is to sell or reticulate gas
to the public;
(iii) Any party to whom the Purchaser may have sold Gas pursuant to
clause 2.28; and
(iv) Such other party as shall be approved by the Producers.
"Contract Price" means the aggregate of the Base Price and the Imposts
Price.
"Contract Year" means a period of twelve (12) consecutive months
beginning and ending at 8.00 am on the 1st of July each year PROVIDED
HOWEVER that if the Date of Initial Delivery is other than 1st July,
then the first Contract Year shall be reduced proportionately so as to
end at 8.00 am on the 1st of July next following the date of Initial
Delivery.
"CPI" means the Consumer Price Index (All Groups) Weighted Average of
Eight Capital Cities published for each Quarter by the Australian
Bureau of Statistics or such alternative index as may be adopted
pursuant to clause 4.40 hereof.
"CPI Escalation" means escalation or de-escalation by a percentage
equal to the whole of the percentage movement in the CPI where such
percentage shall be 2 percent or more above or below the CPI at the end
of the corresponding Quarter in the previous year taking the CPI for
the Quarter ending as at the Development Date as the base and "CPI
Escalated" has a corresponding meaning.
"Cubic Metre of Gas" or "m3" means the amount of Gas which will occupy
a space of one (1) cubic metre when such Gas is at a temperature of
fifteen degrees Celsius and at a pressure of 101.325 kilopascals
absolute.
"Custody Transfer Area" means the area to be established and fenced by
the Pipeline Operator adjoining the Field Delivery Station and which
shall contain the measuring equipment referred to in clause 6.10.
"Daily Maximum Quantity" means 155% of the Daily Minimum Quantity.
"Daily Minimum Quantity" means the Annual Minimum Quantity for the
relevant Contract Year divided by the number of days in that Contract
Year.
"Daily Peak Demand Quantity" means 176% of the Daily Minimum Quantity.
"Date of Initial Delivery" means the earlier of the following dates:
(a) The date after commissioning of the Pipeline on which the
Producers make the initial delivery of Gas into the inlet
flange of the Pipeline and after which maintain for seven Days
continuously delivery of the Daily Minimum Quantity or such
lesser quantity (if any) as the Purchaser may require during
that time; or
(b) The date of the expiration of 90 Days after the Producers make
the initial delivery of Gas as required by the Purchaser for
commissioning purposes unless at such date the Purchaser can
establish that the Producers are unable to maintain continuous
delivery of the Daily Minimum Quantity.
"Day" means a period of 24 hours commencing and ending at 8.00 am.
"Dedicated Quantity" means natural gas of 66 PJ, subject to variation
pursuant to clauses 3.25(c) and 3.50.
"Development Date" means 31st March, 1985.
"Development Work" means development work carried out by the Producers
within the Gas Field as defined in clause 2.51.
"Excess Gas" has the meaning specified in Schedule D hereto.
"Excess Proven Reserves" means subject to clause 2.25(c) the total
Proven Reserves remaining in the Gas Field after deducting 200% of the
Annual Minimum Quantities still to be supplied pursuant to this
Agreement.
For the purpose of this definition it is acknowledged that it is
paramount that there be no jeopardy to the future supply entitlements
of the Purchaser under this Agreement.
"Field Delivery Station" means those facilities proposed to be
constructed by the Producers in or adjacent to the area of the
Petroleum Lease for delivering Gas into the inlet flange of the
Pipeline.
"Final Contract Years" means the Contract Years numbered 21 to 26
inclusive.
"Force Majeure" means any event or circumstance not within the control
of a party and which by exercise of due diligence such party is not
reasonably able to prevent or overcome including without limiting the
generality hereof:
(a) Acts of God, including but not limited to epidemics,
landslides, earthquakes, floods and washouts;
(b) Strikes or other industrial disturbances which could not
reasonably be prevented;
(c) Acts of the enemy including but not limited to wars, blockades
or insurrections;
(d) Riots and civil disturbance;
(e) Any direct legislative or administrative interference by the
Government of the Territory or the Government of the
Commonwealth of Australia but in the case of any such
interference by the Territory only insofar as it affects the
Producers;
(f) Hydrate obstructions of ▇▇▇▇▇, lines of pipe or production
facilities; and
(g) Cessation or reduction of production from the Gas Field due to
depletion or exhaustion of Proven Reserves by reason of
recovery of Gas therefrom by the Producers after the date
hereof where that cessation or reduction occurs after delivery
of 47.06 PJ provided that in the case of a reduction of
production the Producers are not at that time supplying
natural gas from the Gas Field to a party other than the
Purchaser.
"Fuel Escalation" means an escalation (but not de-escalation) in
accordance with the formula specified in Schedule E, and "Fuel
Escalated" has a corresponding meaning.
"Gas" means natural gas meeting the quality specifications stated in
Schedule B.
"Gas Delivery System" includes all ▇▇▇▇▇, meters, equipment, facilities
(including the Field Delivery Station), easements, permits and licences
necessary to gather natural gas safely from the Gas Field, separate
liquids therefrom for the purpose of producing Gas, compress and pipe
Gas to the Field Delivery Station, and to test, measure and deliver
such Gas.
"Gas Field" means the natural gas reservoir or series of reservoirs
within the Petroleum Lease.
"Gas Supply Agreements" means the agreements proposed to be entered
into for the purpose of implementing Recital D of this Agreement.
"GJ" means one gigajoule and is equal to one thousand MJ.
"Gross Heating Value" means the gross or higher heating value expressed
in MJ/m3 produced by the complete combustion of one Cubic Metre of Gas
with air, at a temperature of 15 degrees Celsius and at an absolute
pressure of 101.325 kPa, with the Gas free of all water vapour, the
products of combustion cooled to a temperature of 15 degrees celsius
and the water vapour formed by combustion condensed to the liquid
state.
"Guarantor" means each of The Moonie Oil Company Limited, Magellan
Petroleum Limited and Flinders Petroleum N.L.
"Impost" means any impost deduction or charge which is a cost to a
Producer in respect of the production supply or sale of Gas, and
computed for all purposes hereof on a "per GJ" basis. Without limiting
the generality thereof the term shall include (insofar as they relate
to the production supply or sale of Gas) any rents, royalty, resources
rent tax and similar taxes (notwithstanding that such taxes may be
levied on all or part of the income of a Producer or of income derived
from the Gas Field and from the sale of Gas or be expressed to be
income taxes), levy, excise, severance tax, petroleum lease rental or
pipeline licence fee but does not include any income tax (except to the
extent provided above), sales tax on consumables or equipment or
payroll tax.
"Imposts Price" means any increases in Imposts per GJ recoverable by a
Producer pursuant to clauses 4.50 or 4.60.
"Independent Expert" means an independent expert appointed and acting
in accordance with clause 2.60.
"Joule" or "J" means the amount of work done when the point of
application of a force of one ▇▇▇▇▇▇ is displaced a distance of one
metre in the direction of the force.
"kPa" means one kilopascal and is equal to one thousand pascals
absolute.
"Make-up Gas" means the quantity of Gas determined as set out in clause
4.20.
"103m3" means one thousand Cubic Metres of Gas.
"Mega CPI Escalation" means escalation or de-escalation by a percentage
equal to the part of the percentage movement in the CPI which is
greater than 10 percent above or below the CPI at the end of the
corresponding quarter in the previous year taking the CPI for the
quarter ending as at the Development Date as the base and "Mega CPI
Escalated" has a corresponding meaning PROVIDED ALWAYS that if within 2
years from the date of this Agreement any new general Commonwealth
consumption tax is introduced then in the quarter in which such tax
shall first be charged and in the immediately succeeding quarter, the
figure of 12 percent shall be substituted for the figure of 10 percent
in this definition, and in the next 3 succeeding quarters the CPI at
the end of the corresponding quarter in the previous year shall be
deemed to be increased by 2 percent thereof.
"MJ" means one megajoule and is equal to one million joules.
"Month" means a period commencing at 8.00 am on the first day of a
calendar month and ending at 8.00 am on the first day of the next
succeeding calendar month.
"Monthly Minimum Quantity" for a Month means the Daily Minimum Quantity
multiplied by the number of Days in that Month.
"NT Imposts" means any Impost of the Territory or any authority
thereof.
"NTEC" means the Northern Territory Electricity Commission or its
successors or permitted assigns.
"Obligation Gas" means the quantity of gas nominated by the Purchaser
for supply during any one Day in accordance with clause 3.23.
"Ownership Percentages" means the respective ownership percentages of
the Producers as set out in Schedule C, as amended from time to time
pursuant to any assignment in accordance with clause 12.00.
"Palm Valley Agreement" means the Gas Purchase Agreement executed
contemporaneously herewith between the Purchaser (as Purchaser) and the
Palm Valley Producers (as the same may be amended from time to time)
pursuant to which the Palm Valley Producers have agreed to supply Gas
to the Purchaser for transportation through the Pipeline.
"Palm Valley Gas" means natural gas the subject of the Palm Valley
Agreement.
"Palm Valley Producers" means Magellan Petroleum (N.T.) Pty. Ltd.,
C.D. Resources Pty. Ltd., Farmout Drillers N.L., Canso Resources
Limited, International Oil Proprietary, Pancontinental Petroleum
Limited, IEDC Australia Pty. Limited, Amadeus Oil N.L. and Southern
Alloys Venture Pty. Limited and includes their respective successors
and assigns under the Palm Valley Agreement.
"Petroleum Act" means the Petroleum (Prospecting and Mining) Act of the
Territory as amended from time to time and includes any replacement or
re-enactment thereof.
"Petroleum Lease" means Petroleum Leases Numbers O.L.4 and O.L.5 held
by the Producers under the Petroleum Act and any substitute or renewal
lease or other rights permitting the production of natural gas from the
area the subject of the Petroleum Lease.
"Pipeline" means the pipeline forming part of the pipeline reticulation
system from the Field Delivery Station to Darwin and all of its
associated apparatus and works which the Purchaser proposes to cause to
be constructed.
"Pipeline Force Majeure" means inability of the Pipeline to transmit
Gas where such inability is not within the control of the Purchaser,
and which the Purchaser by exercise of due diligence is unable to
prevent. It is acknowledged for the purpose of this definition that any
inability of the Consumers to take delivery of Gas from the Pipeline
outlets shall not constitute Pipeline Force Majeure.
"Pipeline Operator" means such company as shall from time to time
contract with the Purchaser for the purchase of Gas for transmission
through the Pipeline.
"PJ" means one petajoule and is equal to one million GJ.
"Probable Gas" has the meaning specified in Schedule D hereto.
"Producer" means any one of the Producers.
"Producers" means the parties of the first to the seventh parts
inclusive and includes their respective successors and assigns under
this Agreement.
"Proven Reserves" means the estimated quantity of natural gas which
geological and engineering data demonstrate with reasonable certainty
are recoverable in the future under the economic conditions for the
time being prevailing.
"Purchaser" means the party of the eighth part and includes its
successors and permitted assigns under this Agreement.
"Quarter" means a period of three (3) calendar months commencing on 1st
of July or 1st of October or 1st of January or 1st of April and
"Quarterly" has a corresponding meaning.
"Recovery Interest Rate" means a rate of 2% above the arithmetic mean
of the daily authorised dealers published discount rate expressed as a
yield to maturity on 180 day bank endorsed bills of exchange in
Australia over the period of default in respect of which interest is
payable pursuant to clause 7.20.
"Representative" means Moonie Oil or such other company appointed in
its stead pursuant to clause 13.32.
"Schedule A Variation Notice" means a notice given pursuant to clause
3.62.
"Shortfall Gas", "Shortfall Notice" and "Shortfall Period" have the
respective meanings given in clause 3.64.
"Territory" means the Northern Territory of Australia.
"Warranted Quantities" at any time means the Proven Reserves then
warranted by the Producers pursuant to clause 2.21.
"Well" means any well through which natural gas is recovered or deemed
to be recovered from any part of the Gas Field.
1.20 Terminology used to describe units shall be, unless otherwise stated,
in accordance with Australian Standard AS1000-1979 "The International
System of Units (SI) And Its Application", the Commonwealth "Weights
and Measures (National Standards) Act 1960-1966" and Regulations
thereunder and the Australian Gas Association booklet titled "Metric
Units And Conversion Factors For Use In The Australian Gas Industry".
1.30 The singular number shall include the plural and vice-versa.
1.40 Any reference to time shall be to Central Standard Time.
1.50 The headings in this Agreement are for convenience only and shall not
affect its construction.
1.60 References in this Agreement to "a party", "the parties", "any party"
and the like, shall not be taken to include a reference to a Guarantor
except in clauses 10.10, 11.21, 11.60, 12.40, 13 and 14.
2.00 PRELIMINARY
2.10 Separate Agreements with Each Producer
2.11 This Agreement shall be construed as a separate agreement between the
Purchaser and each of the Producers for their respective Ownership
Percentages.
2.12 The rights liability and obligations of the Producers hereunder
(including their liability and obligations in respect of any warranty
covenant or undertaking) shall be several and shall be in the
proportions of their respective Ownership Percentages.
2.13 Failure of a Producer to carry out its obligations under this Agreement
shall not release any other Producer, or the Purchaser in respect of
its obligations to any such other Producer, from any of their
respective obligations under this Agreement. No Producer shall be
responsible for the obligations of any other Producer under this
Agreement.
2.20 Gas Reserves
2.21 (a) Subject to paragraph (c) and to clause 3.67 the Producers
warrant to the Purchaser the present existence within the Gas
Field of Proven Reserves of not less than the aggregate of the
Annual Minimum Quantity still to be delivered during the term
of this Agreement.
(b) The remedies of the Purchaser for any breach of this warranty
by the Producers shall be limited to those provided by clauses
3.40 and 10.20 respectively.
(c) The Producers shall not be liable for breach of warranty under
this clause where reserves of natural gas within the Gas Field
are lost destroyed or cease to be recoverable by reason of
Force Majeure.
2.22 The Producers jointly undertake that so long as this Agreement
continues there shall be furnished to the Purchaser at annual intervals
a report by an independent reservoir engineer estimating the Proven
Reserves in the Gas Field and the annual production capacity of the Gas
Field over its life from the then existing ▇▇▇▇▇.
2.23 So long as this Agreement continues each Producer:
(a) Dedicates and commits exclusively to the fulfilment of its
obligations under this Agreement its interest in that quantity
of natural gas within the Gas Field which is equal to its
Ownership Percentage of the Dedicated Quantity.
(b) Will not supply sell or use any of the natural gas from the
Gas Field otherwise than for the purposes of performing its
future supply obligations under this Agreement except as
provided in clauses 2.24, 2.25, 2.26 and 2.26A hereof and
except for such gas as may be used or lost in drilling
development, testing, producing, processing, compression and
other similar operations on the Petroleum Lease and/or in
preparing treating or transporting Gas for the purposes of
this Agreement and except for gas which may be unavoidably
lost in operations conducted in accordance with good oilfield
practice.
2.24 In the event that from time to time all or any of the Producers
establish to the reasonable satisfaction of the Purchaser that the
reserves in the Gas Field exceed the quantity sufficient to enable each
Producer to perform its future supply obligations under this Agreement
then:-
(a) the Producers jointly shall have the right to increase their
rate of production from the Gas Field beyond the level
required for the Purchaser's purposes to a level which is
unlikely in the reasonable opinion of the Purchaser to
jeopardise the Purchaser's supply entitlements hereunder; and
(b) each Producer shall have the right to sell its interest in
such increased production other than under this Agreement.
2.25 (a) In the event that any Excess Proven Reserves are established
from time to time by the report of the independent reservoir
engineer required pursuant to clause 2.22 any Producer
subject to paragraph (b) of this clause shall be at liberty to
sell its interest in such Excess Proven Reserves from time to
time other than under this Agreement.
(b) In the event that the Purchaser disputes the report of the
said independent reservoir engineer, the Purchaser shall have
the right of access to all relevant information for the
purpose of reviewing the said report and failing agreement
after such review the dispute shall be determined by an
Independent Expert.
(c) (i) In the event that at any time during the term of this
Agreement any Producer is of the opinion that the
Producers have established their ability to supply
Gas in the contracted quantities on a continuous
basis then it may request the Purchaser to review its
requirements in respect of Excess Proven Reserves and
the Purchaser shall thereupon review the production
record of the Producers and also its said
requirements and may agree to reduce the quantity of
Proven Reserves which constitutes Excess Proven
Reserves.
(ii) In the event that the Purchaser fails to agree to
reduce the quantity of Proven Reserves which
constitutes Excess Proven Reserves, either to the
Producer's satisfaction or at all, the Producer may
refer the question to an Independent Expert, who
shall review the production record of the Producers,
reach a determination as to the ability of the
Producers to maintain future continuous supply of Gas
in the contracted quantities, and (if appropriate)
require the Purchaser to agree to a new basis for the
calculation of Excess Proven Reserves.
(iii) No request made by a Producer under paragraph (i) of
this sub-clause, nor any determination by an
Independent Expert under paragraph (ii) of this
sub-clause, shall require the Purchaser to agree to
reduce the amount to be deducted from total Proven
Reserves in calculating Excess Proven Reserves below
200% of the Annual Minimum Quantities still to be
supplied pursuant to this Agreement.
2.26 (a) No Producer shall without the prior written consent of the
Purchaser sell or offer to sell any quantity of natural gas
from the Gas Field until it shall have for a period of 30 days
offered that quantity for sale to the Purchaser at the same
price (including provisions for escalation as to price) as it
would be prepared to sell the same to any other party.
(b) If the Purchaser fails or declines to accept the offer within
such 30 days, the Producer shall be at liberty for a period of
180 days thereafter to sell that quantity to another party at
a price not less than that price or on terms or conditions
conferring economic benefits on the Producer over the life of
the contract at least equivalent to that price.
(c) In the event of the Purchaser accepting the offer in respect
of price the Purchaser and the Producer shall negotiate in
good faith the terms and conditions of a purchase contract.
(d) In the event that a contract is not executed by the expiration
of 60 days after acceptance of price (or such longer period as
the parties shall agree upon) further negotiations shall be
abandoned and the Producer shall be at liberty for a period of
180 days thereafter to sell that quantity to another party at
a price not less than that price or on terms or conditions
conferring economic benefits on the Producer over the life of
the contract at least equivalent to that price.
(e) The Purchaser covenants to keep confidential any offer made by
any Producer.
2.26A. (a) Notwithstanding the provisions of clauses 2.23, 2.24, 2.25 and
2.26 hereof in the event that the Palm Valley Producers shall
have given notice to the Purchaser as contemplated in clause
3.64 hereof of an anticipated failure in delivery of
contracted quantities pursuant to the Palm Valley Agreement
then in the absence of receipt of a Shortfall Notice from the
Purchaser each of the Producers shall be at liberty to supply
to the Purchaser on behalf of the Palm Valley Producers its
Ownership Percentage of the Gas which the Palm Valley
Producers would otherwise fail to deliver; and in so doing a
Producer shall not be in breach of any of the provisions of
the said clauses 2.23, 2.24, 2.25 and 2.26 hereof.
(b) Any such supply of Gas by a Producer on behalf of the Palm
Valley Producers shall be deemed to have been made pursuant to
clause 3.41 (b) of the Palm Valley Agreement and the Producer
shall not be entitled to any payment from the Purchaser in
respect thereof (the intention being that the Producers will
seek payment of an agreed amount from the Palm Valley
Producers).
2.27 (a) The Purchaser shall not sell or offer to sell Gas delivered to
it pursuant to this Agreement except to the Consumers or the
Pipeline Operator or as provided for in clause 2.28.
(b) The Purchaser shall so far as it lies within its reasonable
capacity ensure that Gas delivered to it pursuant to this
Agreement is not sold by the Pipeline Operator to any party
other than a Consumer, or as provided for in clause 2.28, and
is not sold by any Consumer to any party for the purpose of
resale or reticulation to the public.
2.28 (a) The Purchaser may advise the Producers jointly by notice in
writing:
(i) If the Annual Minimum Quantity for the Contract Years
remaining under this Agreement is in excess of the
quantity of Gas required by the Purchaser in those
Contract Years ("the Excess Take or Pay Quantity");
and
(ii) The price at which and the material terms upon which
the Purchaser would be prepared to sell the Excess
Take or Pay Quantity ("the Offered Price and Terms").
(b) The Producers jointly may at their option by notice in writing
to the Purchaser given not later than 90 days after receipt of
a notice provided for in clause 2.28(a) elect to purchase in
their respective Ownership Percentages the Excess Take or Pay
Quantity from the Purchaser upon the Offered Price and Terms.
(c) In the event that the Producers do not jointly exercise the
option provided for in clause 2.28 (b) within the time therein
provided the Purchaser shall be at liberty for a period of 180
days thereafter to sell the Excess Take or Pay Quantity to
another party upon the Offered Price and Terms or on terms
having not less than equivalent economic benefits for the
Purchaser.
(d) If the Purchaser has made a confirmation pursuant to clause
3.52 then the provisions of this clause 2.28 shall not apply
in respect of that Gas.
2.30 Pipeline
2.31 The Purchaser shall at no cost to the Producers complete all necessary
arrangements to cause to be constructed and commissioned the Pipeline
and the gas fired power station at Darwin by 31st December 1987 in
order to take delivery of all Gas to be purchased under this Agreement
PROVIDED THAT the Purchaser shall have no further obligation under this
clause 2.31 if this Agreement is terminated pursuant to clause 9.30.
2.32 The Purchaser shall give not less than one year's notice to the
Producers jointly of the anticipated date of commencement of
commissioning of the Pipeline.
2.33 The Purchaser shall give further notice thereof to the Producers
jointly at quarterly intervals thereafter until commissioning actually
commences.
2.34 At or prior to the giving of the notice provided for in clause 2.32 the
Purchaser shall give notice to the Producers jointly of the precise
location at the existing plant or some other appropriate point in or
adjacent to the Petroleum Lease at which the inlet flange of the
Pipeline will be constructed.
2.40 Gas Delivery System
2.41 Forthwith upon receipt of the notice from the Purchaser provided for in
clause 2.32 the Producers jointly undertake that they will proceed with
due diligence to render the Gas Field suitable for routine production
and install the Gas Delivery System in such manner as to ensure the
continuous supply of Gas in accordance with this Agreement.
2.42 The Purchaser shall have the right to inspect the working drawings of
any aspect of the Gas Delivery System and to inspect the said system
during and after construction.
2.43 The Producers jointly undertake that they will insure or cause to be
insured the Gas Delivery System in adequate amounts for all usual
insurable risks and conditions in accordance with good oil field
practice both during and after construction and shall on demand produce
such policies for inspection by the Purchaser.
2.44 From the date of commencement of commissioning of the Pipeline each of
the Producers shall sell to the Purchaser its Ownership Percentage of,
and the Purchaser shall purchase, Gas required by the Purchaser for
commissioning purposes.
2.50 Development Work
2.51 (a) Subject to the provisions of this clause the Producers jointly
undertake that they will from time to time during the term of
this Agreement duly carry out in accordance with good oil
field practice such work ("Development Work") as is necessary
for the development of the Gas Field to ensure that the Gas
Delivery System will have the delivery capacity and will be
able to deliver to the Purchaser on any Day during the term of
this Agreement the maximum quantity of Gas which the Purchaser
is entitled pursuant to clause 3.23 to nominate for delivery
on any Day, namely the Daily Peak Demand Quantity but ignoring
in the absence of a Schedule A Variation Notice any possible
increase in such Daily Peak Demand Quantity which may result
from such a Notice.
(b) The Gas Delivery System shall have sufficient capacity in
accordance with good oil field practice to deliver to the
Purchaser the Daily Peak Demand Quantity on any Day but
ignoring in the absence of a Schedule A Variation Notice any
possible increase in such Daily Peak Demand Quantity which may
result from such a Notice.
(c) The Purchaser, having particular regard to the fact that Gas
is to be supplied under this Agreement for the purpose of
generating electric power for public consumption, acknowledges
the need for the Gas Delivery System to have excess or
redundant capacity.
(d) The type, size, location and all other matters relevant to the
Gas Delivery System shall be as determined by the Producers
jointly after consultation with the Purchaser.
2.60 Independent Expert
(a) For the purposes of this Agreement an Independent Expert shall
be an expert in the field in question agreed by the parties or
in the absence of agreement determined by the Chairman for the
time being of the Australian Petroleum Exploration Association
(or its successor) or his nominee on the application of either
party with notice to the other.
(b) An Independent Expert shall act as an expert and not as an
arbitrator.
(c) An Independent Expert shall furnish with all reasonable
expedition a certificate as to his decision on any matter in
dispute between the parties and such decision shall be final
and binding.
(d) Each party shall have the right to make written submissions to
an Independent Expert, to receive copies of each other's
submissions and to reply thereto, such right to be exercised
promptly.
(e) The costs of an Independent Expert shall be borne as to one
half by the Purchaser and as to the remaining half by the
Producers in proportion to their respective Ownership
Percentages.
3.00 PURCHASE AND SALE OF GAS
3.10 Term of Agreement
This Agreement shall continue in effect until the expiration of
Twenty-five (25) years from the Date of Initial Delivery (but subject
to clause 4.20(b)) or until the Dedicated Quantity of Gas shall have
been delivered to the Purchaser whichever shall be the earlier.
3.20 Quantity of Gas
3.21 (a) Upon and subject to the terms and conditions contained in this
Agreement in each Month of each Contract Year each of the
Producers severally agrees to sell and deliver in each Month
of each Contract Year:
(i) its Ownership Percentage of the Monthly Minimum
Quantity of Gas;
(ii) its Ownership Percentage of such additional Gas (not
being Gas committed to other contracts in any manner
permitted by the terms hereof) as the Purchaser may
require under clauses 3.22 and 3.24, and
(iii) its share of Default Gas due under clause 3.47,
and upon and subject to the terms and conditions contained in
this Agreement the Purchaser agrees to purchase and take
delivery of the same.
(b) In each Month of each Contract Year the Purchaser's obligation
to purchase the Monthly Minimum Quantity for that Month shall
be reduced by the aggregate of:
(i) any portion of the Monthly Minimum Quantity not
tendered for delivery in that Month whether by reason
of permitted interruption pursuant to clause 3.33 or
pursuant to clause 3.66 or otherwise;
(ii) any portion of the Monthly Minimum Quantity which the
Purchaser has been excused from accepting:
(A) by Force Majeure affecting the Producers; or
(B) by Pipeline Force Majeure.
(iii) all excess quantities which the Purchaser is entitled
to credit against the Monthly Minimum Quantity for
that Month pursuant to clause 3.25 (that is, not
exceeding one half of the Monthly Minimum Quantity).
(c) If in any Month the Purchaser fails to take the Monthly
Minimum Quantity reduced if applicable pursuant to paragraph
(b) the Purchaser shall pay the Contract Price for the
quantity not so taken as if the same had been delivered during
that Month subject always to refund if the Gas Field becomes
depleted in accordance with clause 4.30.
3.22 Subject to clause 3.24 and to any interruptions under clause 3.33,
throughout the term of this Agreement from the Date of Initial Delivery
Gas shall be delivered to the Purchaser on each Day at the rate
required by the Purchaser up the Daily Peak Demand Quantity.
3.23 The following nomination procedures shall be followed:
(a) The Purchaser may on not more than two occasions during a Day
nominate:
(i) the rate at which delivery of Gas is required (not
exceeding the quantities provided for in clause 3.22)
and not in any event exceeding the quantity which on
that Day the Purchaser is entitled to have accepted
for transmission through the Pipeline and which the
Pipeline is capable of accepting on that Day; and
(ii) the Day and hour when such nomination shall take
effect not being less than four hours from the time
of nomination,
the parties shall agree on more frequent nomination procedures
and shorter nomination times under paragraph (ii) in the event
that the Gas Delivery System is automated or for any other
reason is able to accommodate such changes.
(b) The total quantity of Gas which would be delivered by all
Producers during any Day if delivery was to occur at the
nominated rate or rates shall constitute Obligation Gas.
(c) All nominations may be made by telephone but shall be
confirmed by written notification within 24 hours.
(d) Delivery shall be maintained at the rate specified in the
Purchaser's most recent nomination until superseded by a later
nomination.
(e) The Purchaser shall prior to the commencement of every
Contract Year give notice to the Producers jointly of:
(i) Its likely annual requirements of Gas for the next
five Contract Years;
(ii) Its likely Monthly requirements of Gas for the next
twelve Months.
(f) The Purchaser shall prior to the commencement of each Month
give notice to the Producers jointly of its likely daily
requirements of Gas for that Month.
3.24 If on any Day or Days the Purchaser requires amounts of Gas at a rate
in excess of the Daily Peak Demand Quantity it may request by notice
given to the Producers jointly that deliveries be made at such rate and
each Producer will deliver its Ownership Percentage of Gas at such rate
PROVIDED HOWEVER that if the Producers are unable to do so having
regard to the capacity of the then existing Gas Delivery System and
their obligations under other gas sales contracts entered into in
accordance with this Agreement it shall notify such inability to the
Purchaser and shall not be obliged to deliver Gas in excess of its
Ownership Percentage of the Daily Peak Demand Quantity.
3.25 (a) In the event that in any Month of any Contract Year the
Purchaser purchases and takes Gas in excess of the Monthly
Minimum Quantity less any increase therein effected pursuant
to a Shortfall Notice plus all Make-up Gas accumulated up to
and including that Month, such excess shall be carried forward
and credited against the Purchaser's subsequent commitments to
purchase and take the Monthly Minimum Quantity.
(b) No credit pursuant to paragraph (a) shall reduce the
Purchaser's commitments to purchase and take below one half of
the Monthly Minimum Quantity in any Month. Any credit
remaining after any reduction to such level shall be carried
forward as a credit in a subsequent month or months.
(c) If by the application of a credit pursuant to paragraph (a)
the Purchaser in any Month shall purchase and take less than
the Monthly Minimum Quantity in that Month then the quantity
of Gas equivalent to the difference between the Monthly
Minimum Quantity in that Month and the quantity actually
purchased and taken by the Purchaser in that Month shall at
the option of the Producers jointly be debited against the
Dedicated Quantity.
3.30 Continuity of Supply
3.31 It is an essential term of this Agreement that supply of Gas in
accordance with this Agreement shall commence at the time of
commissioning of the Pipeline as notified pursuant to clause 2.30.
3.32 Subject to the terms of this Agreement each Producer undertakes that it
will throughout the term of this Agreement maintain continuity of
supply to the Purchaser at the inlet flange of the Pipeline of its
Ownership Percentage of the Purchaser's requirements of Gas in
accordance with this Agreement.
3.33 The Producers jointly may nevertheless interrupt supply to perform
reservoir tests and evaluations in accordance with and subject to the
following limitations and procedures:
(a) There shall be not more than 6 occasions of interruption in
any Contract Year and the total duration of such interruptions
shall not exceed 144 hours in any Contract Year.
(b) The dates and times chosen for testing shall be arranged with
the Purchaser and with the Pipeline Operator and with the Palm
Valley Producers as far as possible in advance and shall
always unless otherwise agreed correspond with periods of low
demand for electricity and shall not unless otherwise agreed
correspond with periods of interruption under the Palm Valley
Agreement.
(c) The Producers jointly shall be allowed additional
interruptions for unforeseen and unscheduled events (not
constituting Force Majeure) not exceeding a total of
forty-eight (48) hours in each year.
(d) In the event of any interruption in transmission through the
Pipeline or cessation of electricity production at any of the
power stations the Purchaser may notify the Producers jointly
and the Producers jointly undertake to use their best
endeavours to carry out testing during such interruptions in
lieu of those provided for in this clause.
3.34 Whenever a Producer becomes aware that it cannot or may become unable
to maintain continuity of supply in accordance with this Agreement it
shall forthwith advise the Purchaser and the Palm Valley Producers of
that fact so as to enable the Purchaser at the earliest possible time
to make arrangements for purchase of Gas from the Palm Valley
Producers.
3.40 Failure to Supply
3.41 In the event that for any reason other than Force Majeure or permitted
interruptions under clause 3.33 a Producer fails to deliver its
Ownership Percentage of the full amount of Obligation Gas on any Day
then that Producer shall be deemed to have made default in delivery of
the quantity of Gas equivalent to its Ownership Percentage of the
quantity of Obligation Gas on that Day minus the quantity of Gas
actually delivered on that Day by the Defaulting Producer ("Default
Gas") and the following provisions of this clause 3.40 shall apply
PROVIDED THAT the Defaulting Producer shall be deemed not to have made
default in delivery as aforesaid if:
(a) (i) such failure does not exceed two continuous Days;
(ii) the Defaulting Producer delivers not less than its
Ownership Percentage of the Daily Minimum Quantity on
that Day; and
(iii) the Defaulting Producer delivers within the following
two days an additional quantity of Gas equivalent to
the quantity of Default Gas.
or
(b) the Defaulting Producer delivers or procures the delivery of
Gas or natural gas with specifications to which the Purchaser
has agreed from a source other than from the Petroleum Lease
to the Field Delivery Station or any other field delivery
station linked to the Pipeline and the Defaulting Producer
shall be duly paid the Contract Price for any such gas.
or
(c) clause 3.66 operates to relieve the Defaulting Producer of a
default.
3.42 Upon a Defaulting Producer making default in delivery as aforesaid the
Defaulting Producer shall have the opportunity to supply to the
Consumers at their various points of consumption other energy in a form
compatible with the power generation equipment of NTEC and having an
energy content in whole or in part equivalent to the Default Gas. Any
such other energy shall be supplied at the cost and risk of the
Defaulting Producer without charge to the Consumers, and the Purchaser
shall duly pay for such other energy so supplied the Contract Price for
Gas having an energy content equivalent thereto.
3.43 If the Defaulting Producer shall have made default in delivery as
aforesaid and if that Producer shall not have delivered other energy in
exercise of its right under clause 3.42 then the Defaulting Producer
shall subject to clause 3.43A promptly pay and reimburse to the
Purchaser by way of liquidated damages the amount (if any) by which the
Delivered Cost of Substitute Energy exceeds what would have been the
Contract Price of an amount of Obligation Gas deliverable by the
Defaulting Producer having an energy value equivalent to the Substitute
Energy but not exceeding the energy value of the Default Gas provided
that such Substitute Energy shall be obtained as far as practicable in
the circumstances at the least cost.
For the purpose of this clause:
(a) The term "Delivered Cost" shall mean the unit cost actually
incurred by NTEC or which would have been incurred by NTEC had
it been the Consumer in relation to the relevant Substitute
Energy; the cost actually incurred by any other Consumer
(whether greater or smaller) shall be irrelevant;
(b) The term "Substitute Energy" shall mean the total quantity of
energy actually consumed by all Consumers at their various
points of consumption for the purpose of maintaining their
power generation or other operations as a result of the
Defaulting Producer having made default in delivery as
aforesaid.
(c) If any Substitute Energy is held in stock by the Consumers it
shall be costed on a replacement basis from the Consumers'
inventory at the relevant point of consumption.
3.43A Where on any Day the amount of Obligation Gas exceeds the Daily Maximum
Quantity (the difference being hereinafter called "the Excess Amount")
then the Defaulting Producer's obligation to pay liquidated damages in
regard to such Excess Amount under clause 3.43 shall be reduced by 90%.
3.44 The Purchaser shall at the request of any Producer permit a registered
company auditor nominated by that Producer to have access to such of
the books and records of the Purchaser as may be necessary to check any
claims by the Purchaser pursuant to clause 3.43.
3.45 Save as provided in this clause 3.40 no Producer shall be liable to the
Purchaser or any of the Consumers (and the Purchaser shall indemnify
and keep indemnified each Producer against any such liability) for any
other or consequential loss or damage resulting from the failure of a
Producer to supply its Ownership Percentage of any Obligation Gas
during the term of the agreement including inability to generate
electricity loss of electricity supply or loss of profits. No Producer
shall in any event be liable for any liability incurred by the
Purchaser under the Gas Supply Agreements.
3.46 It shall be no defence to any action by the Purchaser for recovery of
damages pursuant to clause 3.43 that the Purchaser shall not have
personally incurred the cost of the Substitute Energy where such
Substitute Energy has been acquired by the Consumers or any of them.
3.47 If a Producer becomes a Defaulting Producer under this clause each
other Producer shall be obliged to deliver each Day on the terms and
conditions herein contained a quantity of Gas equal to the proportion
of Default Gas which its Ownership Percentage bears to the aggregate
Ownership Percentages of all Producers other than the Defaulting
Producer.
3.50 The Final Contract Years
3.51 A Producer ("the Notifying Producer") may at any time prior to 1st
January in the 20th Contract Year give notice to the Purchaser that it
desires to sell to a third party natural gas from the Gas Field which
but for this clause it would be required to sell and the Purchaser
would be obliged to purchase in the Contract Years numbered 21 to 26
inclusive ("the Final Contract Years").
3.52 Except in Contract Years 1 to 10 inclusive (during which period this
clause 3.52 shall not apply) the Purchaser may after receipt of such
notice give notice to the Notifying Producer affirming this Agreement
in respect of the Final Contract Years, in which case this Agreement
(so far as it is a separate agreement with the Notifying Producer)
shall continue in full force and effect according to its terms and the
notice given pursuant to Clause 3.51 shall be of no force or effect.
3.53 Forthwith upon receipt of any notice from a Notifying Producer given in
Contract Years 1 to 10 pursuant to clause 3.51, or in any subsequent
Contract Year if the Purchaser fails to give notice to a Notifying
Producer pursuant to Clause 3.52 within sixty (60) days after receipt
of that Producer's notice under Clause 3.51, then:-
(a) The Notifying Producer shall have no obligation to deliver any
Gas in the Final Contract Years and Schedule A hereto shall
ipso facto be deemed to be amended by deleting all references
to the Final Contract Years and all references in this
Agreement to Annual Minimum Quantities, Monthly Minimum
Quantities and the like shall in respect of the Notifying
Producer be read down accordingly
(b) the Notifying Producer may sell to a third party the Gas which
it is no longer obliged to deliver to the Purchaser in the
Final Contract Years
(c) the Dedicated Quantity shall be reduced by the Notifying
Producer's Ownership Percentage of 37.5 PJ, and
(d) in all other respects this Agreement shall continue in full
force and effect.
(e) The Purchaser may by notice to each Producer other than the
Notifying Producer amend this Agreement (so far as it relates
to each such other Producer) in the same respects (mutatis
mutandis) as provided in paragraphs (a) and (c) above, and
paragraphs (b) and (d) above shall also apply (mutatis
mutandis) in respect of each such other Producer.
3.60 Failure of Delivery under the Palm Valley Agreement
3.61 The Producers, having regard to the fact that natural gas is to be
supplied under both this Agreement and the Palm Valley Agreement for
the purpose of generating electric power for public consumption,
jointly acknowledge that the Purchaser requires continuous delivery of
the Gas the subject of each such Agreement according to their
respective terms.
3.62 If the Palm Valley Agreement shall at any time be terminated by either
the Purchaser or the Palm Valley Producers then the Purchaser may give
notice to the Producers jointly of such termination (a "Schedule A
Variation Notice") which shall specify that the Purchaser requires each
Producer to supply to the Purchaser upon and subject to the terms and
conditions contained in this Agreement its Ownership Percentage of the
whole or any part of the natural gas to which the Purchaser would have
become entitled to delivery under the Palm Valley Agreement, and in
particular shall specify:-
(a) in Part A thereof in respect of each whole remaining Contract
Year an amended Annual Minimum Quantity being the Annual
Minimum Quantity specified in Schedule A increased by the
whole or any part of the relevant Annual Minimum Quantity
specified in Schedule A to the Palm Valley Agreement for that
Contract Year and;
(b) in Part B thereof in respect of each remaining whole Month of
the Contract Year current at the time of such notice, an
amended Monthly Minimum Quantity being the Monthly Minimum
Quantity applicable under this Agreement increased by the
whole or any part of the relevant Monthly Minimum Quantity
applicable under the Palm Valley Agreement; and
(c) in Part C thereof, in respect of the period to the end of the
then current Month, the amount of additional Gas which the
Purchaser requires to be delivered on a daily basis until the
end of such Month.
3.63 As from the date of receipt by the Producers of a Schedule A Variation
Notice:-
(a) Schedule A shall forthwith be varied in the manner specified
in Part A of such Notice with effect from the commencement of
the next succeeding Contract Year;
(b) the Monthly Minimum Quantity applicable for each succeeding
Month of the current Contract Year shall be forthwith varied
in the manner specified in Part B of such Notice with effect
from the commencement of the next succeeding Month, and
(c) the Daily Minimum Quantity of Gas for each remaining Day of
the current Month shall be increased in the manner specified
in Part C of the said Notice with effect from the next
succeeding day
but subject always to clauses 3.66 and 3.67.
3.64 If from time to time or at any time during the term of the Palm Valley
Agreement the Palm Valley Producers fail to deliver contracted
quantities of Palm Valley Gas or give notice to the Purchaser of an
anticipated failure in delivery of contracted quantities, then provided
the Purchaser has not in respect of such failure delivered a Schedule A
Variation Notice the Purchaser may give notice to the Producers jointly
under this Clause ("a Shortfall Notice") which shall specify:
(a) the nature of the delivery failure or anticipated failure
under the Palm Valley Agreement;
(b) the aggregate quantity of Gas which the Purchaser requires
each Day to be delivered by the Producers upon and subject to
the terms and conditions contained in this Agreement in
substitution for Palm Valley Gas ("Shortfall Gas") and
(c) the period during which Shortfall Gas is likely to be required
by the Purchaser ("Shortfall Period").
3.65 Upon receipt of a Shortfall Notice the Daily Minimum Quantity for each
Day of the Shortfall Period shall be ipso facto increased by the daily
quantity of Shortfall Gas specified as aforesaid, but subject always to
clause 3.66 hereof.
3.66 (a) If the Producers are or will be unable despite their best
endeavours but having regard to good oil field practice to
supply upon and subject to the terms and conditions herein
contained any quantity of the additional Gas required to be
delivered by a Schedule A Variation Notice or a Shortfall
Notice then they shall forthwith jointly give notice thereof
to the Purchaser and shall specify therein the extent to which
and period during which they expect to be unable to supply the
required quantities, the reasons therefor, and the additional
Development Work which in their opinion would be necessary in
order to meet the Purchaser's requirements.
(b) Upon receipt by the Purchaser of a notice given pursuant to
paragraph (a) of this clause the Purchaser may either:
(i) accept the Producers' inability to supply the
additional Gas specified in which case paragraph (f)
of this clause shall apply, or
(ii) require the Producers jointly to proceed with the
additional Development Work specified in the said
notice, in which case paragraph (e) of this clause
shall apply, or
(iii) refer to an Independent Expert the question of the
Producers' inability to supply or the extent (if any)
of the Development Work necessary to meet the
Purchaser's requirements.
(c) Upon any reference pursuant to paragraph (b) of this clause
the Independent Expert shall certify as to:
(i) whether the Producers ought in all the circumstances
(including without limiting the generality thereof
the capacity of the existing Gas Delivery System and
their obligations under other gas sales contracts
entered into in accordance with this Agreement) be
excused from their respective liabilities for such
non-delivery or any part thereof and
(ii) the nature and extent of the additional Development
Work (if any) which would be necessary to meet the
Purchaser's requirements.
(d) Where the Independent Expert certifies that additional
Development Work is necessary to meet the Purchaser's
requirements the Purchaser may either
(i) require the Producers jointly to proceed with such
additional Development Work in which case paragraph
(e) of this clause shall apply, or
(ii) accept the Producers' inability to supply in which
case paragraph (f) of this clause shall apply.
(e) Where pursuant to this clause the Purchaser requires the
Producers jointly to proceed with additional Development Work
then PROVIDED the parties first agree on arrangements for the
recoupment by each Producer of some or all of the costs
thereof, and upon and subject to the terms so agreed, the
Producers jointly undertake that they will proceed with all
expedition to carry out the same but in absence of such
agreement as aforesaid paragraph (f) of this clause shall
apply.
(f) Where and to the extent that pursuant to this clause the
Purchaser accepts or an Independent Expert certifies that the
Producers are unable to supply any part of the additional Gas
requested then no Producer shall be deemed to have made
default in delivery of such Gas and the Daily Minimum Quantity
and Monthly Minimum Quantity for the period in question shall
be reduced accordingly.
3.67 Notwithstanding the foregoing provisions of this clause 3.60 no
Producer shall be obliged to supply Gas pursuant to clauses 3.62 and
3.63 to the extent that such supply would reduce the Proven Reserves of
the Gas Field below the Warranted Quantities unless and until the
Purchaser shall first agree in writing that the Warranted Quantities
shall be reduced to the resulting Proven Reserves.
4.00 PRICE
Contract Price
4.10 The price payable by the Purchaser to each Producer for Gas delivered
under this Agreement by that Producer shall be the Contract Price.
4.20 Make-Up Gas
(a) If the Purchaser has paid for a quantity not taken in a Month
("the Debit Month") the Purchaser may in any subsequent Month
("Credit Months") after it has taken the Monthly Minimum
Quantity as reduced in accordance with clause 3.21(b) for the
relevant Month take free of charge except for payment of the
difference if any in the Contract Price in the relevant Credit
Month and Debit Month a quantity of Gas (hereinafter called
"Make-up Gas") up to the quantity so paid for in the Debit
Month PROVIDED always that Make-up Gas in respect of any one
Debit Month shall not be taken before available balances in
all previous Debit Months have been made taken.
(b) Notwithstanding clause 3.10 but subject to clauses 10.20 and
10.30, this Agreement shall for purposes of this clause remain
on foot beyond 25 years for a period of not more than 5 years
but not beyond delivery of the Dedicated Quantity, until such
time as the Purchaser shall have taken delivery of all Make-up
Gas to which it is entitled, and where (but for this sub-
clause) this Agreement would otherwise be at an end paragraph
(a) shall apply on the basis that the Purchaser shall in any
Month be entitled to take Make-up Gas notwithstanding that no
Minimum Monthly Quantity applies for the Month, PROVIDED
ALWAYS that the Purchaser's rights under this sub-clause shall
be suspended for any period during which natural gas from the
Gas Field is not being supplied either to the Purchaser
(pursuant to a renewal or replacement agreement) or any other
party but the period of 5 years referred to in this paragraph
(b) shall be extended by the period of any such suspension.
(c) To the extent, if any, to which the Contract Price in a Credit
Month is to be taken into account under this clause then such
Contract Price shall be the price applicable in that Month for
Probable Gas, or which would have been applicable in that
Month if the differential prices for Probably Gas and Excess
Gas continued to apply after Contract Year 21.
4.30 Refund if Gas Field Depleted
If at any time the report of the independent reservoir engineer
pursuant to clause 2.22 or any other report of a reservoir engineer
acceptable to the Purchaser and the Producers establishes that Proven
Reserves in the Gas Field together with Proven Reserves in an Alternate
Gas Field (if any) are less than those necessary for the delivery of
the remaining Gas which is required to be delivered under this
Agreement (that is, less than the lesser of:-
(a) the balance of the Dedicated Quantity remaining to be
delivered or
(b) the aggregate of the remaining Annual Minimum Quantities plus
Make-up Gas)
then the Purchaser shall be entitled to have delivered to it to the
extent to the deficiency of Proven Reserves Make-up Gas in priority to
any Annual Minimum Quantities. To the extent that it appears that the
Purchaser will not thereby receive any quantity of Make-up Gas a
Producer shall forthwith upon demand repay to the Purchaser in cash all
payments made to it in accordance with paragraph (c) of clause 3.21 in
respect of such amount plus interest on all such payments from the
respective dates of payment at the same rate as Recovery Interest.
For the purposes of this clause:
(i) "Alternate Gas Field" means a gas field (other than the Gas
Field) from which the Producers shall be entitled and are
capable of supplying Gas for the purposes of this Agreement.
(ii) "Proven Reserves in an Alternate Gas Field" means the quantity
of Proven Reserves in an Alternate Gas Field which are at that
time dedicated and committed for the exclusive purpose of
supplying Gas under this Agreement.
(iii) To the extent that any payments by the Purchaser under clause
3.21(c) have been made at the Contract Price applicable to
Probable Gas all repayments by a Producer under this clause
shall be calculated as if the Purchaser had made such payments
at the Contract Price applicable to Excess Gas.
4.40 Consumer Price Index
4.41 In the event that the CPI shall be discontinued or modified the parties
shall request the Australian Bureau of Statistics to provide figures or
indices which shall give an equivalent comparison to that provided by
the CPI.
4.42 If the parties are unable to obtain from the Australian Bureau of
Statistics figures or indices which given an equivalent comparison to
that provided by the said index and are unable to agree between
themselves as to such figures or indices either the Producers jointly
or the Purchaser may request the President for the time being of the
Institute of Chartered Accountants in Australia or his nominee to
provide at each review date figures or indices which give an equivalent
comparison to that contemplated by the CPI and such figures or indices
shall then for the purposes of this Agreement be deemed to be the CPI.
4.50 Increase in Commonwealth Imposts
(a) For the purpose of this Clause the Base Level of Imposts means
the aggregate of N. T. Imposts and Commonwealth Imposts as at
the Development Date.
(b) If any increase of Commonwealth Imposts has the effect of
increasing the aggregate of N.T. Imposts and Commonwealth
Imposts to 150% or more of the Base Level of Imposts then each
of the Producers shall be entitled to recover as Imposts Price
in respect of Gas delivered by it any part of that increase
and the amount of any subsequent increase of Commonwealth
Imposts which has the effect of increasing the aggregate of
N.T. Imposts and Commonwealth Imposts beyond 150% of the Base
Level of Imposts.
4.60 Increase in N.T. Imposts
4.61 (a) For the purpose of this clause the Base Level of Imposts means
the aggregate of N.T. Imposts and Commonwealth Imposts as at
the later of the Development Date or the Date of Last Review.
(b) If any increase or increases of N.T. Imposts has the effect of
increasing the aggregate of N.T. Imposts and Commonwealth
Imposts to 110% or more of the Base Level of Imposts then each
of the Producers shall be entitled to recover as Imposts Price
in respect of Gas delivered by it the whole of such increase
or increases of N.T. Imposts which since the Development Date
or the Date of Last Review (whichever is applicable) together
shall have had the effect of so increasing the aggregate of
the N.T. Imposts and the Commonwealth imposts. The "Date of
Last Review" shall mean the date on which a Producer last
became entitled to recover increases in imposts pursuant to
this clause.
5.00 ADJUSTMENT OF GAS TO SPECIFICATION
5.10 Rights of Purchaser
5.11 Without prejudice to any other rights or remedies of the
Purchaser against a Producer for losses incurred, in the event
that Gas tendered for delivery hereunder by any Producer (a
"defaulting Producer") fails to meet any of the specifications
set forth in Schedule B:-
(a) The Purchaser shall have the right to refuse to
accept further deliveries from the defaulting
Producer until such failure is rectified, and that
Producer shall become liable for the cost of
alternative fuel supply in accordance with clause
3.40. The Purchaser shall forthwith notify such
refusal by telephone to the Producers jointly and
shall confirm the same by written notification within
24 hours, specifying the nature of the deficiency.
(b) The Purchaser may knowingly or unknowingly accept
such Gas and may install, operate and maintain such
facilities as may be required to cause such Gas to
meet such specifications in which case the Purchaser
shall have the right to recover from the defaulting
Producer all costs incidental thereto, including fuel
supply damages, depreciation, overhead and costs of
capital all of which may be deducted from sums
payable by the Purchaser to the defaulting Producer
hereunder.
5.12 Without prejudice to any other rights or remedies of the
Purchaser against the defaulting Producer for losses incurred
in the event that Gas supplied fails to achieve a minimum
Gross Heating Value of 36MJ/m3, the defaulting Producer shall
compensate the Purchaser for all additional costs payable by
the Purchaser associated with the movement of the additional
volumes of Gas through the Pipeline required to achieve the
energy equivalence of Gas rated at 36MJ/m3 over the period of
delivery of the specification breach. Any statement or
calculation of such costs by the Purchaser shall be prima
facie evidence thereof.
5.13 It shall be no defence to any action by the Purchaser for
recovery of costs pursuant to clauses 5.11 and 5.12 that the
Purchaser shall not have personally incurred such costs or
shall be entitled to recoup such costs from the Consumers.
5.20 Removal of Constituents
So long as the Gas remains within specification, the Producers jointly
may, prior to delivery thereof or otherwise as the Purchaser may agree,
submit such Gas to any process the Producers jointly desire for the
removal of constituents or elements therein other than for the removal
of methane (except where methane removal is an unavoidable consequence
of the removal of other constituents). Such separate constituents or
elements will remain the property of the Producers in their Ownership
Percentages.
5.30 Quality Tests
The Purchaser and the Producers jointly shall agree upon reasonable
methods and procedures and determine the instruments to be used for
making tests to determine whether Gas conforms to the specifications
set forth in Schedule B.
If the parties are unable to agree upon such procedures any party may
refer the question for determination by an Independent Expert.
6.00 MEASUREMENT
6.10 Measuring Equipment
6.11 Installation
The Purchaser shall ensure that the Pipeline Operator shall furnish,
install, maintain and operate at the Custody Transfer Area all
measuring equipment.
6.12 Compliance with Standards
All measuring equipment shall be of a type approved for the intended
use under the provisions of the appropriate authority where such
approvals are required, or of a type approved by the Producers jointly
where such approvals are not required (such approval not to be
unreasonably withheld).
6.13 Check Measuring Equipment
The Producers jointly may install and operate check measuring equipment
within the Custody Transfer Area (as part of Development Work) provided
the same does not interfere with the operation of the Pipeline.
6.14 Pulsation Dampening
If there are any compression facilities upstream of the Field Delivery
Station, the Producers jointly undertake that they will provide or
cause to be provided sufficient pulsation dampening equipment (as part
of Development Work) to ensure that the compression facilities do not
interfere with the operation of the Pipeline.
6.15 Calibration
(a) The accuracy of the measuring equipment shall be tested and
verified by the Purchaser once each month or at such other
intervals as may be required by the type of equipment.
(b) Reasonable notice of the time and nature of each test shall be
given to the Producers jointly to permit them to arrange for a
representative to observe the test and any adjustments
resulting from such test. If, after notice, the Producers fail
to have a representative present, the results of the test
shall nevertheless be considered accurate.
6.16 Correction
If at any time, any of the measuring equipment is found to be out of
service or registering inaccurately, it shall be adjusted at once to
read as accurately as possible and the readings of such equipment shall
be adjusted to zero error for a period definitely known or agreed upon,
or if not known or agreed upon, for period of sixteen (16) days or
one-half (1/2) of the elapsed time since the last test, whichever is
shorter. The measurement during the appropriate period shall be
determined by the Pipeline Operator on the basis of the best data
available using the first of the following methods which is feasible:
(a) by using the data recorded by any check measuring equipment if
installed and accurately registering; or
(b) by making the appropriate correction if the deviation from the
accurate reading is ascertainable by calibration test or
mathematical calculation; or
(c) by estimating based upon receipts or deliveries under similar
conditions during a period when the equipment was registering
accurately.
6.17 Additional Tests
(a) The Producers jointly may require additional tests at
reasonable intervals.
(b) If upon testing, the deviation from the accurate reading is
found to be less than two percent (2%), each Producer shall
bear its Ownership Percentage of the expense of the additional
test.
6.18 Inspection of Equipment and Records
(a) Each party shall have the right at all times to have access to
the Custody Transfer Area and to inspect measuring equipment
installed or furnished by the other.
(b) Each party shall have the right to inspect the charts and
other measurement or test data of the other at all times
during normal business hours.
(c) The reading, calibration and adjustment of such equipment and
changing of the charts shall be done only by the person
installing or furnishing the same and each Producer shall be
entitled to be present at such time but shall be subject to
all reasonable requirements of the Pipeline Operator with
regard to the security of the Custody Transfer Area and the
equipment.
6.19 Purchaser's Agent and the Producer's Representative
For the purposes of clause 6.00 the Purchaser may appoint the Pipeline
Operator or any other person as its agent to perform or act in its
stead and any Producer may appoint the Representative as its agent to
perform or act in its stead.
6.20 Method of Measurement
All measurements, calculations and procedures used in determining
volume, except for the correction for deviation from ▇▇▇▇▇'▇ Law, shall
be made in accordance with the instructions contained in the Gas
Measurement Committee Report Number 3 of the American Gas Association,
dated April 1955, together with all presently existing supplements,
amendments and appendices to the said Report. Such instructions to be
converted where necessary for compliance with Australian Standard
AS1000-1979 "The International System of Units (SI) and Its
Application", the Commonwealth "Weights and Measures (National
Standards) Act 1960-1966" and Regulations thereunder and the Australian
Gas Association publication "Metric Units and Conversion Factors For
Use In the Australian Gas Industry". The correction for deviation from
▇▇▇▇▇'▇ Law shall be determined from the data contained in "PAR
Research Project NX-19" as published by the American Gas Association in
1962, or any revision thereof acceptable to the Purchaser and the
Producers jointly.
6.30 Unit of Measurement
The unit of volume for purposes of measurement hereunder, shall be one
103m3 of Gas and be expressed to the nearest one-tenth 103m3 or such
other unit of volume agreed to by Purchaser and the Producers jointly.
6.40 Atmospheric Pressure
For the purpose of measurement atmospheric pressure shall be determined
by a recognised formula applied to the nearest one hundredth of a
kilopascal absolute (.01 kPa) and deemed to be a constant.
6.50 Flowing Temperature
The flowing temperature of Gas shall be determined by means of an
approved recording thermometer of standard make. The arithmetic mean of
all readings each day shall be deemed to be the Gas temperature and
shall be used in computing volume.
6.60 Determination of Gas Characteristics
The gas characteristics including, without limiting the generality of
the foregoing, Gross Heating Value, relative density, nitrogen and
carbon dioxide content of gas shall be determined by continuous
recording equipment or by laboratory equipment. If continuous recording
equipment is used the arithmetic mean of all recordings for each day
will be used to determine gas characteristics. If spot samples are
taken or a spot sampler is used, gas characteristics will be determined
from the analysis of the samples using laboratory equipment and
recognised analytical methods.
6.70 Exchange of Metering Information
(a) The Purchaser shall send to the Producers jointly copies of
all measuring and testing charts, measuring data and measuring
information promptly after receipt thereof from the Pipeline
Operator.
(b) The Producers jointly shall cause to be sent to the Purchaser
promptly upon request copies of the information kept or
obtained by them.
6.80 Preservation of Measurement Records
The parties shall preserve all measurement test data, measurement
charts and other similar records for the greater of a period of seven
(7) years or the minimum period required by record retention rules of
any governmental agencies having jurisdiction or the currency of this
Agreement.
7.00 BILLING AND PAYMENT
7.10 Payment for Gas
7.11 The Contract Price for Gas delivered in each Month (including Gas
delivered in accordance with Clause 2.44) shall be charged to the
Purchaser as hereinafter provided. Such charges shall take into account
all adjustments to the Contract Price applicable hereunder.
7.12 In the event that any escalation in the Base Price cannot immediately
be accurately calculated a bona fide estimate of the new Base Price
will be made by the Producers jointly and used until such time as the
new Base Price can be accurately calculated PROVIDED HOWEVER that an
adjustment between the parties to compensate for any over or under
charge will be effected within thirty (30) days of ascertainment of the
extent thereof.
7.13 Monthly Statements
On or before the 12th day of each Month each of the Producers shall
furnish to the Purchaser a monthly statement showing the following
information:
(i) Gas (apportioned between Probable Gas and Excess Gas)
delivered by it during the Month last concluded or (in the
case of the first delivery) during the first period;
(ii) A schedule of the Purchaser's outstanding entitlements for
Make-up Gas for all prior Debit Months.
(iii) The accumulated credits to which the Purchaser is entitled
under clause 3.25 (i.e., credits for Purchases in excess of
the Monthly Minimum Quantity).
(iv) The amount due to the Producer according to measurement,
terms, conditions and prices as provided in this Agreement.
7.14 Annual Reconciliation Statement
On or before the 12th day of the second Month following the end of each
Contract Year the Producers jointly shall furnish to the Purchaser an
annual reconciliation statement showing the aggregate amount of Gas
(apportioned between Probable Gas and Excess Gas) delivered during the
previous Contract Year and the amount of any payment due to any
Producer or to be refunded to the Purchaser by any Producer under the
terms and conditions herein provided.
7.15 Dates of Payment
On or before the 30th day of each Month, or within ten (10) days after
receipt of the monthly statement whichever is later, and on or before
the 30th day of the second Month following the end of each Contract
Year, or within ten (10) days after receipt of the annual
reconciliation statement whichever is later, the Purchaser or a
Producer as the case may require shall pay the other the amounts due as
shown by the said statements.
7.20 Default in Payment
7.21 If the Purchaser fails to make to a Producer any such payment, or any
portion thereof, when same is due, that Producer shall subject to
clause 10.30 not have any rights to damages on that account but the
Purchaser shall be liable for interest thereon at the Recovery Interest
Rate from the date when such payment is due until the same is paid.
Such interest shall be calculated from day to day.
7.22 A Producer may ▇▇▇ for and recover the payment of any amount remaining
unpaid by the Purchaser to that Producer together with interest thereon
as provided in clause 7.21 in any Court of competent jurisdiction.
7.30 Disputed Monthly Statements
7.31 In the event of bona fide disputes arising from differences in
measurement a Producer shall waive its suspension and termination
rights contained herein provided the Purchaser makes payments to that
Producer of the amount not in dispute. Monies withheld, and
subsequently found to be payable, shall be due and payable fifteen (15)
days after reconciliation of metering differences together with
interest thereon calculated from the original due date for payment at
the rate and in the manner provided in clause 7.21.
7.32 A Producer upon request, shall furnish to the Purchaser or its agent
copies of all records upon which the Producer has based the statement
referred to in clause 7.13. The Purchaser or its agent shall have
access to each Producer's records and books at all reasonable hours so
far as they affect measurement of and the price due for the Gas sold
hereunder.
7.33 In the event an error is discovered in the amount shown due in any
statement rendered by any of the Producers, adjustment between the
parties to compensate for such error shall be effected within thirty
(30) days of ascertainment of the extent thereof PROVIDED HOWEVER that
the claim therefor shall have been made within two (2) years from the
date of such statement.
7.50 Set Off
(a) Each Producer and the Purchaser shall be entitled to set off
against and deduct from any amounts due and payable to the
other of them under this Agreement any amounts due and payable
to it by the other of them pursuant to the provisions of or
otherwise in respect of the Palm Valley Agreement.
(b) If any Producer who is also a Palm Valley Producer at the time
of execution of this Agreement shall at any time have assigned
or purported to assign its ownership interest in the Palm
Valley Gas Field (being the Gas Field the subject of the Palm
Valley Agreement) or its rights and/or obligations under the
Palm Valley Agreement, in either case without first having
obtained the prior consent of the Purchaser as provided in the
Palm Valley Agreement, then the Purchaser shall also be
entitled to set off against and to deduct from any amounts due
and payable to that Producer under this Agreement any amounts
due and payable to that Producer by such assignee or purported
assignee.
8.00 RESPONSIBILITY FOR GAS
8.10 Passing of Title
Ownership and possession of Gas shall pass from a Producer to the
Purchaser on delivery to the Purchaser as described in clause 8.21.
8.20 Possession of Gas
8.21 A Producer shall be in control and possession of Gas deliverable by it
to the Purchaser until such Gas shall have been delivered to the
Purchaser at the flange connecting the Field Delivery Station to the
Pipeline.
8.22 The Purchaser shall have no responsibility with respect to any Gas
until it is delivered or on account of anything which may be done,
happen or arise with respect to the same before such delivery. After
its delivery of any Gas a Producer shall have no responsibility
therefor but without prejudice to the rights of the Purchaser under
clause 5.10.
8.30 Liability for Taxes
8.31 A Producer shall subject to clauses 4.50 and 4.60 pay or be responsible
for the payment of all taxes, levies, assessments or like charges which
may be charged or imposed in respect of Gas delivered or to be
delivered by it until possession thereof passes to the Purchaser.
8.32 Subject to clause 8.40 the Purchaser shall pay all taxes, levies,
assessments or like charges which may be charged or imposed in respect
of Gas after possession thereof has passed to the Purchaser.
8.40 Liability for Royalties
A Producer shall subject to clauses 4.50 and 4.60 be responsible for
the proper accounting for and payment to the persons entitled thereto
of all royalties payable on all Gas delivered by it including all
components thereof delivered to the Purchaser hereunder and the making
of settlement with all other persons having any interest therein.
9.00 FORCE MAJEURE
9.10 Suspension of Obligations
(a) A party affected by Force Majeure or Pipeline Force Majeure
shall promptly notify each other party of the occurrence and
details of any event or circumstances giving rise thereto and
the estimated delay in performance resulting therefrom.
(b) Subject as herein provided:
(i) the obligations of such affected party under this
Agreement shall thereafter be suspended to the extent
that performance thereof is prevented thereby during
the continuance thereof; and
(ii) where a Producer's obligation to supply Gas in
accordance with this Agreement is suspended under
this clause the obligations of that Producer to sell
and the Purchaser to purchase Gas shall be excused
forever by that Producer's Ownership Percentage of
the Daily Minimum Quantity for every Day or part of a
Day in which such suspension continues.
(c) A Producer shall be excused from its obligation to deliver Gas
under this Agreement to the extent that the Producers are
unable to recover and treat Gas from the Gas Field on account
of Force Majeure.
(d) An obligation to pay money shall not however be suspended or
excused by Force Majeure except as provided in paragraph (e).
(e) In the case of Pipeline Force Majeure the Purchaser shall be
excused from payment in respect of the Monthly Minimum
Quantity for the second to sixth Months thereafter but shall
in respect of such Months continue to pay to the Producers 15%
of the Base Price based on Monthly Minimum Quantities for
those Months by way of reimbursement of their estimated
out-of-pocket expenses. Such payments shall not create any
entitlement to Make-up Gas pursuant to clause 4.20.
(f) The obligation of the Purchaser to pay the Contract Price for
the Monthly Minimum Quantity shall not be suspended by any
Force Majeure affecting the Purchaser other than Pipeline
Force Majeure.
(g) The party affected shall use all possible diligence to
overcome the effect of the Force Majeure or Pipeline Force
Majeure as quickly as possible but this shall not require the
settlement of strikes or labour disputes on terms contrary to
the reasonable wishes of the party affected.
9.20 Termination for Prolonged Force Majeure
If the inability of a Producer to carry out its obligations (after
initial delivery and acceptance by the Purchaser) by reason of Force
Majeure as aforesaid shall continue for one (1) year or more then the
Purchaser may by thirty (30) days notice in writing given at any time
within six (6) months after the expiration of such year, if Force
Majeure is still subsisting at the expiration of the notice period,
terminate this Agreement so far as it is an agreement between the
Purchaser and that Producer without prejudice to any of the rights of
the parties accrued prior to the date of such termination.
9.30 Termination Following Undue Delay in Commencement
If for any reason beyond the control of the Purchaser, it is unable to
accept delivery of Gas by the 31st December, 1987 or if the
construction of the Pipeline is abandoned or becomes incapable of
completion by 31st December 1987 then the remaining rights and
obligations of the parties under this Agreement shall at the option of
the Purchaser or the Producers jointly by notice in writing to the
other party be at an end provided that within 30 days after termination
the Purchaser shall reimburse the Producers for all costs and expenses
necessarily and reasonably incurred in fulfilment of their obligations
under this Agreement subsequent to the notice issued under clause 2.32.
10.00 GUARANTEES/DEFAULT
10.10 Guarantees
10.11 In this clause "Subject Obligations" means each and every one of the
obligations of an Associate arising under this Agreement except and
excluding obligations which have arisen as the direct result of the
Purchaser giving a Schedule A Variation Notice.
10.12 In consideration of the Purchaser entering into this Agreement at the
request of the Guarantors and waiving the provision of any security by
the Producers, each Guarantor hereby irrevocably guarantees for the
entire term of this Agreement the due and punctual performance and
observance of all and each and every one of the Subject Obligations of
each of its Associates.
10.13 The payment by a Guarantor within ten (10) Business Days of a demand of
an amount then due and payable by any one or more of its Associates,
but unpaid, to the place of payment nominated in such demand shall
discharge any and all obligations of that Guarantor in respect of such
amount.
10.14 The guarantee provided by each Guarantor under this Agreement shall be
a continuing guarantee and shall not be discharged until each of its
Associates have paid all amounts which are or may become due under
Subject Obligations of this Agreement.
10.15 The granting of any time concession or any indulgence to or the making
of any composition with any Producer or any forbearance of the
Purchaser to enforce the terms covenants and conditions contained in
this Agreement or any moratorium or other period staying or suspending
by statute or the order of any court or other authority all or any of
the Purchaser's rights remedies or recourse will not stay suspend avoid
release or discharge this guarantee.
10.16 This guarantee and the liability of each Guarantor in respect of its
Associates hereunder shall not be affected by:
(a) reason of any transaction or arrangement that may take place
between the Purchaser and any Producer;
(b) the release, discharge, abandonment or transfer either in
whole or in part and either with or without consideration of
any security now or hereafter held from any Producer; or
(c) any other acts, omissions, laches, mistakes or defaults on the
part of the Purchaser whereby the whole or part of the
liability of any Producer to the Purchaser would but for this
provision have been affected or discharged.
10.17 Nothing in this Agreement shall be construed as a requirement that any
Guarantor consent to or should be made aware of any transaction between
the Purchaser and any Producer including any variation release or
compromise of this Agreement.
10.18 No Guarantor shall be responsible hereunder in any manner whatsoever
for the obligations of any Producer which is not one of its Associates.
10.20 Default by Producers
If any one or more of the following events occurs, namely:
(a) if any order is made for the liquidation of a Producer or a
Producer institutes any proceedings or arrangements for its
liquidation in whole or in part or for the appointment of a
receiver or any receiver is appointed of any of its assets or
a Producer is unable to pay its debts within the meaning of
that expression in the Companies legislation of the Territory
and as a result of any of the foregoing the Purchaser
reasonably believes that the supply of Gas by that Producer to
the Purchaser is placed in jeopardy or that the Purchaser may
be unable to obtain a good discharge in respect of its
obligations;
(b) if a Producer make default in the due performance of any of
its substantial covenants or obligations under this Agreement
(not being a covenant or obligation of the kind referred to in
sub-clause (c) of this clause) and if a Producer fails to
remedy or to commence and diligently continue in good faith to
remedy that default within a reasonable time after notice
specifying the default is given to the Producer; or
(c) if a Producer makes default in the due payment of any moneys
payable hereunder and any such default remains unremedied for
a period exceeding thirty days after notice specifying the
default is given to the Producer;
then and in any such events the Purchaser may by notice in writing to
the relevant Producer (so far as the separate Agreement with that
Producer is concerned):-
(i) Suspend its obligations to make payments under this
Agreement until the default is remedied; or
(ii) Terminate such separate Agreement whereupon the
Purchaser shall have no further liability to that
Producer hereunder and shall be entitled to recover
from that Producer as and by way of liquidated
damages the net present value (determined as
hereinafter provided) of the liquidated damages which
would be recoverable from that Producer pursuant to
clause 3.43 if that Producer made default in delivery
of that quantity of Obligation Gas required to be
delivered by that Producer from the date of
termination by the Purchaser as aforesaid to the date
on which this Agreement would otherwise have
terminated ("Date of Expiry"). The net present value
of such damages shall be determined by:
(A) ascertaining the amount of the liquidated
damages which would be recoverable from that
Producer in respect of the Month immediately
preceding the date of termination if that
Producer had made default in delivery of
133% of its Ownership Percentage of the
Monthly Minimum Quantity during that month;
(B) assuming that the same amount of liquidated
damages as in paragraph (A) above would
apply in respect of each Month from the date
of termination to the Date of Expiry;
(C) discounting the amounts referred to in
paragraph (B) above to present value at the
rate of 8 percent per annum.
Termination of this Agreement with respect to any
Producer shall be without prejudice to the rights of
any party accruing prior to termination, but subject
thereto and to the provisions of this clause, the
Purchaser shall not have and shall not make any
further or other claims upon the relevant Producer
arising out of or in any way in connection with any
default by the Producer or termination of this
Agreement as aforesaid. Upon the termination of this
Agreement as aforesaid no further liquidated damages
under clause 3.43 shall accrue.
10.30 Default by Purchaser
If the Purchaser in relation to any Producer is in default in the
observance or performance of any substantial covenant or obligation
under this Agreement and such default shall continue for a period of 90
days after written notice specifying the default shall have been given
to the Purchaser by such Producer then that Producer may by notice in
writing to the Purchaser (so far as the separate Agreement between the
Purchaser and that Producer is concerned):
(i) Suspend deliveries of Gas hereunder provided that the
Purchaser shall remain liable to pay that Producer the amount
due to it for Monthly Minimum Quantities which will not give
any entitlement to Make-up Gas; and/or
(ii) Terminate such separate Agreement.
In the event that a Producer terminates such separate Agreement as
aforesaid the Purchaser shall pay to that Producer as and by way of
liquidated damages its Ownership Percentage of the net present value of
the Base Price for the aggregate Annual Minimum Quantities remaining to
be delivered under this Agreement as at the date of termination. The
net present value as aforesaid shall be determined by:
(A) Ascertaining the Base Price which applied or would
have applied under this Agreement using the
assumptions set out in (B) below in each Quarter from
the start of the Contract Year in which termination
occurs until the aggregate Annual Minimum Quantities
remaining to be delivered under this Agreement would
have been delivered;
(B) The actual impact on the Base Price of CPI
Escalation, Mega CPI Escalation and Fuel Escalation
is to be averaged on an annual basis over whichever
of the following periods prior to termination is the
longer namely:
(I) three years; and
(II) the period since the Date of Initial Delivery.
(C) Assuming the Base Price ascertained in paragraph (A)
above for the four Quarters in each of the relevant
Contract Years and dividing the sum thereof by four
to derive the average Base Price applicable to the
respective Contract Years.
(D) Multiplying the Annual Minimum Quantities remaining
to be delivered under this Agreement from the date of
termination by the average Base Price for each
relevant Contract Year to derive the price payable by
the Purchaser in respect of each such Contract Year.
(E) Discounting each of the amounts referred to in
paragraph (D) above to present value as a mid year
stream at the rate of 7 percent per annum above the
CPI for the relevant Contract Year, and aggregating
the resulting amounts.
10.40 Waivers not to affect other defaults
No waivers by any party of any one or more defaults by any other in the
performance of any provisions shall operate or be construed as a waiver
of any other default whether of a like or of a different character, and
whether occurring before or after such waiver.
11.00 MISCELLANEOUS
11.10 Governing Law
This Agreement shall be governed by the law of the Territory.
11.20 Disputes
11.21 All disputes arising under this Agreement shall be decided by the
courts of the Territory and the parties hereby unconditionally submit
to the jurisdiction thereof.
11.22 In the event of disputes arising concerning matters of a technical
nature the parties may agree to engage such technical experts to
determine such matters but such experts shall be deemed to be acting as
experts and not as arbitrators.
11.23 Nothing herein contained shall restrict the ability of the parties to
have their disputes determined by arbitration should they so agree.
11.30 Headings and Notations
The headings and notations in this Agreement shall not be taken into
account in the construction thereof.
11.40 Severability of Clauses
If any provision of this Agreement shall be construed as illegal or
invalid or void the legality or validity or enforceability of any of
the other provisions hereof shall not be affected and the illegal or
invalid or void provisions shall be deemed deleted herefrom to the same
exent and effect as if they were never incorporated herein but all
other provisions herein shall continue in force unless such deletion
shall have substantially altered the commercial efficacy of this
Agreement.
11.50 Agreement Not to Constitute a Partnership
Nothing in or arising out of this Agreement shall constitute or be
deemed to constitute a partnership between the Producers for any
purpose.
11.60 Entire Agreement
This Agreement contains the entire Agreement between the parties. All
warranties and conditions implied by law or otherwise to the extent to
which they may lawfully be negatived are hereby negatived. Except for
the obligation to deliver natural gas meeting the quality
specifications stated in Schedule B each Producer gives no warranty or
undertaking as to the quality or fitness for any purpose of any natural
gas sold and delivered hereunder. No representations, warranties or
undertakings are made or given by any or all of the Producers save and
except for those expressly provided for herein.
12.00 ASSIGNMENT
12.10 When Consent Required
(a) No assignment by a Producer of this Agreement or of its rights
hereunder shall be of any effect whatsoever unless with the
written consent of the Purchaser which consent shall not be
unreasonably withheld in the case of a financially and
technically competent assignee PROVIDED ALWAYS that the
assignee shall covenant in writing with the Purchaser to be
bound by all the terms and conditions of this Agreement so far
as they apply to the assignor.
(b) No assignment by the Purchaser of this Agreement or of its
rights hereunder shall be of any effect whatsoever unless with
the written consent of each of the Producers which consent
shall not be unreasonably withheld in the case of a
financially and technically competent assignee PROVIDED ALWAYS
that the assignee shall covenant in writing with each
Purchaser to be bound by all the terms and conditions of this
Agreement so far as they apply to the assignor.
(c) The Purchaser's consent to any proposed assignment by a
Producer which is also a Palm Valley Producer shall not be
deemed unreasonably withheld where that Producer has failed to
satisfy the Purchaser that the resulting loss of the
Purchaser's right of set off under clause 7.50 hereof will not
adversely affect the Purchaser's interests to a material
degree, or unless that Producer's interests in the Gas Field
the subject of the Palm Valley Agreement and its rights under
the Palm Valley Agreement, are to be assigned to the same
assignee. The Purchaser's right of set off as aforesaid shall
not be deemed to have been adversely affected to a material
degree where a Producer who is a Palm Valley Producer provides
to the Purchaser a letter of credit or other acceptable
security in an amount equal to the net present value
(calculated using a discount rate of 12% per annum) of $2.7
million per annum for each unexpired year of this Agreement to
year 20.
12.20 When Consent Not Required
Notwithstanding the foregoing any party may without any consent of any
other party charge, mortgage, or pledge or assign by way of charge,
mortgage, or pledge this Agreement or any of its rights hereunder if
such charge, mortgage or pledge or assignment is for the purpose of
securing the repayment of moneys borrowed or guaranteed or the payment
of moneys borrowed or guaranteed or the payment of moneys payment
whereof is deferred.
12.30 Merger or Reconstruction
The consent of the Purchaser shall not be unreasonably withheld in any
case where the proposed assignment is required as a result of any
amalgamation, merger or reconstruction of any Producer seeking such
consent.
12.40 Obligations
This Agreement shall bind and enure to the respective successors and
assigns of the parties hereto but no assignment shall release any party
from such party's obligations hereunder without written consent of each
other party which consent shall not be unreasonably withheld in case of
an assignment to a financially and technically competent assignee.
13.00 NOTICES
13.10 Notices
13.11 Subject to this clause any notice or advice required to be given or
sent pursuant to this Agreement shall be deemed to have been given if
delivered to the party to whom it is to be given or sent or sent by
prepaid certified post or telex or telegram or facsimile message to the
following addresses or such other address as may be notified from time
to time by a party to the other parties:
MAGELLAN PETROLEUM (N.T.) PTY LTD MOONIE OIL ▇.▇.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇. 4000
▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇
Telex: AA41040
Telex: AA40392
PETROMIN NO LIABILITY
UNITED OIL & GAS CO. (N.T.) PTY. LTD. ▇▇▇▇▇ ▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇ Telex: AA41040
Telex: AA40392 TRANSOIL NO LIABILITY
▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇/- ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇
Level 24,
CBA Building, Telex: AA41040
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ N.S.W. 2000 THE MOONIE OIL COMPANY LIMITED
▇▇▇▇▇ ▇▇,
Telex: A74943 ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇
CANSO RESOURCES LIMITED
C/- Latec Investments, Telex: AA41040
▇▇▇▇▇ ▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇.▇.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ N.S.W. 2000 ▇▇ ▇'▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ N.S.W. 2000
Telex: AA94598
Telex: 74943
MAGELLAN PETROLEUM AUSTRALIA LIMITED
8th Floor, GASGO PTY. LIMITED
National Bank Building, The Chairman,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇. 4000 ▇▇▇ ▇▇▇▇▇,
▇▇▇▇ House,
Telex: AA40392 ▇▇/▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ N.T. 5790
Telex: AA85395
13.12 Any notice given by a Producer pursuant to clause 10.30 shall be served
personally:
(a) during the hours of business of the Purchaser; and
(b) on any person apparently in the employ of the Purchaser who
shall sign a receipt therefor.
13.13 Any notice, request, demand, consent, approval or other communication
(hereinafter "a notice") required or permitted to be given to or served
on the Producers jointly by the Purchaser, may be given to or served on
the Representative and shall be deemed to have been thereby given or
served on each of the Producers.
13.14 Any notice required or permitted to be given to or served on the
Purchaser by the Producers jointly under this Agreement, shall be given
only by the Representative on behalf of the Producers. No Producer
shall itself give or purport to give a notice required or permitted by
this clause to be given by the Representative, and the Purchaser shall
disregard and treat as null and void any such purported notice.
13.15 The Purchaser shall disregard and treat as null and void any attempt by
any Producer to exercise his rights or powers or take any other step in
relation to this Agreement except in the manner specified in clause
13.14.
13.20 Receipt of Notice
If a notice is sent by prepaid post as aforesaid it shall be deemed to
have been given or sent upon actual delivery and if sent by telex or
telegram or facsimile message on the next business day after having
been transmitted.
13.30 Representative
13.31 For the purposes only of administrative convenience in respect of this
Agreement, and notwithstanding clause 2.10 hereof or any provisions of
the Mereenie Joint Operating Agreement or any other agreement between
the Producers, it is hereby acknowledged that Moonie Oil N.L. is at the
date hereof the Representative for the purposes of clause 13.10 and
shall remain as Representative for such purposes unless and until the
Purchaser is served with a notice under clause 13.32.
13.32 The Producers may appoint a replacement Representative for purposes of
this Agreement only by delivering to the Purchaser a notice signed by
two or more Producers having for the time being Ownership Percentages
aggregating in excess of 50%, which notice specifies as Representative
an alternative Producer and his address for service, and the change
specified in such notice shall take effect forthwith upon receipt.
13.33 Except as provided in Clause 13.32 the Purchaser shall disregard and
treat as null and void any purported revocation of the Representative's
authority by any Producer.
14.00 CONFIDENTIALITY
Each party will treat as confidential information disclosed by the
other party pursuant to this Agreement and which prior to such
disclosure is notified by the disclosing party as being confidential
and each party will not disclose such confidential information to third
parties without the prior written consent of the others and it will
take all reasonable precautions to ensure that its employees will
maintain the confidentiality of such confidential information PROVIDED
HOWEVER as follows:-
(a) that each party shall be entitled to disclose such
confidential information to any related corporation; and
(b) that the provisions of this Clause shall not apply to
information which is or becomes part of the public knowledge
or literature or which is lawfully obtained by one party from
sources other than this Agreement or another party; and
(c) that each party shall be entitled to make such disclosures as
are required by law or by the rules of any Stock Exchange or
regulatory agency having jurisdiction over such party or its
ultimate holding company; and
(d) that each party shall be entitled to disclose such
confidential information to any of the undermentioned persons
who have first executed an undertaking in substantially
identical terms to this clause:-
(i) any chargee or prospective chargee;
(ii) any professional adviser; or
(iii) any employee of the foregoing.
(iv) any assignee or prospective assignee.
(e) that the Purchaser shall be entitled to disclose such
confidential information to any department or agency of the
Territory.
15.00 APPROVALS AND CONSENTS
15.10 Approvals and Consents
(a) The respective obligations of the Producers hereunder are
subject always to the Producers obtaining not later than six
(6) months from the date hereof or such longer period as the
Purchaser may agree and thereafter from time to time all
consents leases and authorities (if any) which the Purchaser
and the Producers jointly regard as necessary to enable the
Producers to fulfil their obligations under this Agreement
including (without limiting in any way the generality of the
foregoing) all consents leases and authorities required by the
Minister for Mines and Energy of the Territory and by the
Petroleum Act and other relevant Acts in connection herewith.
(b) Each Producer covenants that it will within thirty (30) days
after the date hereof procure from the National Australia Bank
Limited in favour of the Purchaser an acknowledgement in terms
satisfactory to the Purchaser that the Purchaser's rights
under this Agreement, including without limiting the
generality thereof clause 7.50 hereof, are not and will not be
affected by the Bank's existing charge from the Producer dated
26th October, 1984. The Purchaser may at any time after expiry
of the said thirty (30) days terminate this Agreement by
notice to the Producers jointly where any Producer fails to
procure such an acknowledgement as aforesaid but subject
thereto shall no other rights arising out of this sub-clause.
(c) Flinders Petroleum N.L., Canso Resources Limited and Farmout
Drillers N.L. each covenant to the Purchaser that they will
procure within 30 days after the date hereof from Latec
Investments Limited a form of undertaking in form satisfactory
to the Purchaser relating to the exercise by Latec Investments
Limited of its controlling interests in each of Flinders
Petroleum N.L., Canso Resources Limited and Farmout Drillers
N.L. The Purchaser may at any time after expiry of the said 30
days terminate this Agreement (so far as the separate
Agreement with each of Canso Resources Limited and Farmout
Drillers N.L. is concerned) if the said Undertaking has not
been so procured but subject thereto shall have no other
rights arising out of this sub-clause.
15.20 Cancellation of the Petroleum Lease
Should the Producers be unable to fulfil their respective obligations
to deliver Gas under the terms of this agreement due to cancellation of
the Petroleum Lease by the Minister under the provisions of the
Petroleum Act, they hereby waive any right to dismantle and remove the
Gas Delivery System for a period of six (6) months following such
cancellation, during which time the Producers will negotiate in good
faith for the sale of such facilities to the Purchaser or to the future
operators of the area the subject of the Petroleum Lease. During this
period the Producers will permit the Purchaser or its agents access to
the Gas Field and the Gas Delivery System in order to maintain supply
of Gas to the Receiving Station.
IN WITNESS WHEREOF the parties hereto have executed this Agreement in Darwin,
Northern Territory the day and year first hereinbefore written.
Signed by MAGELLAN PETROLEUM )
(NT.) PTY. LTD. by ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
its duly appointed Attorney under )
Power of Attorney dated 26th June 1985 ) /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
who states that he has no notice )
of revocation of the said Power, )
in the presence of: )
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Signed by UNITED OIL & GAS CO. )
(N.T.) PTY. LTD. by ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
its duly appointed Attorney under )
Power of Attorney dated 26th June 1985 ) /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
who states that he has no notice )
of revocation of the said Power, )
in the presence of: )
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Signed by CANSO RESOURCES )
LIMITED by _____________________ )
its duly appointed Attorney under )
Power of Attorney dated 26th June 1985 ) /s/ _________________________
who states that he has no notice )
of revocation of the said Power, )
in the presence of: )
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Signed by MOONIE OIL N.L.
by ▇. ▇. ▇▇▇▇▇▇ )
its duly appointed Attorney under )
Power of Attorney dated 27th June 1985 ) /s/ ▇. ▇. ▇▇▇▇▇▇
who states that he has no notice )
of revocation of the said Power, )
in the presence of: )
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Signed by PETROMIN NO LIABILITY )
by ▇. ▇. ▇▇▇▇▇▇ )
its duly appointed Attorney under )
Power of Attorney dated 27th June 1985 ) /s/ ▇. ▇. ▇▇▇▇▇▇
who states that he has no notice )
of revocation of the said Power, )
in the presence of: )
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Signed by TRANSOIL NO LIABILITY )
by ▇. ▇. ▇▇▇▇▇▇ )
its duly appointed Attorney under )
Power of Attorney dated 27th June 1985 ) /s/ ▇. ▇. ▇▇▇▇▇▇
who states that he has no notice )
of revocation of the said Power, )
in the presence of: )
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Signed by FARMOUT DRILLERS N.L. )
by _____________________________ )
its duly appointed Attorney under )
Power of Attorney dated 26th June 1985 ) /s/ _________________________
who states that he has no notice )
of revocation of the said Power, )
in the presence of: )
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Signed by GASGO PTY. LIMITED )
by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Madden )
its duly appointed Attorney under )
Power of Attorney dated 27th June 1985 ) /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and states that he has no notice )
of revocation of the said Power, )
in the presence of: )
/s/ _________________________
Signed by MOONIE OIL COMPANY )
LIMITED by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ )
its duly appointed Attorney under )
Power of Attorney dated ) /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and states that he has no notice )
of revocation of the said Power, )
in the presence of: )
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Signed by MAGELLAN PETROLEUM )
AUSTRALIA LIMITED by ▇▇▇ ▇▇▇▇▇▇▇▇ )
▇▇▇▇▇▇▇ its duly appointed Attorney under )
Power of Attorney dated 26th June 1985 ) /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
and states that he has no notice )
of revocation of the said Power, )
in the presence of: )
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Signed by FLINDERS PETROLEUM N.L. )
by _____________________________ )
its duly appointed Attorney under )
Power of Attorney dated 28th June 1985 ) /s/ _________________________
and states that he has no notice )
of revocation of the said Power, )
in the presence of: )
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
SCHEDULE A
ANNUAL MINIMUM QUANTITIES
(MEREENIE)
Column 1 Column 2 Column 3
------------------------- ------------------------ ---------------------------
Anticipated Contract Year Years Annual Minimum Quantity
(PJ)
No. (commencing 1 July
and ending 1 July)
------------------------- ------------------------ ---------------------------
1 1986-1987 0.61
2 1987-1988 1.24
3 1988-1989 1.25
4 1989-1990 1.27
5 1990-1991 1.29
6 1991-1992 1.33
7 1992-1993 1.35
8 1993-1994 1.39
9 1994-1995 1.39
10 1995-1996 1.44
11 1996-1997 1.48
12 1997-1998 1.55
13 1998-1999 1.60
14 1999-2000 1.64
15 2000-2001 1.71
16 2001-2002 1.77
17 2002-2003 1.83
18 2003-2004 1.89
19 2004-2005 1.95
20 2005-2006 2.02
21 2006-2007 1.25
22 2007-2008 2.16
23 2008-2009 3.02
24 2009-2010 3.90
25 2010-2011 4.20
26 2011-2012 2.53
-----
47.06
=====
For the purpose of this Schedule and this Agreement:
(i) The first Contract Year shall be whichever of the years (1 July/1 July)
listed in Column 2 above is the year in which the Date of Initial
Delivery occurs and Column 1 shall be adjusted accordingly.
(ii) If the Date of Initial Delivery is other than 1st July in the first
Contract Year then the Annual Minimum Quantity for that first Contract
Year shall be the quantity specified in Column 3 in respect of the year
in which the Date of Initial Delivery occurs divided by 182 if the Date
of Initial Delivery is prior to 30 June 1987, and 365 in any other case
and then multiplied by the number of days from the Date of Initial
Delivery to the end of that first Contract Year.
(iii) The Daily Minimum Quantity for that first Contract Year shall be the
Annual Minimum Quantity for that first Contract Year determined as
aforesaid divided by the number of days from the date of Initial
Delivery to the end of that first Contract Year.
(iv) If the Date of Initial Delivery is later than 1 July 1986 then the
aggregate Annual Minimum Quantities shown in Column 3 remaining
undelivered on 1 July 2012 shall be taken by the Purchaser in the
Contract Years commencing 1 July 2012 and 1 July 2013 in such
respective Annual Minimum Quantities as the Purchaser may notify to the
Producers.
(v) The intent of the foregoing is that the nexus between the Annual
Minimum Quantities specified in Column 3 and the years specified in
Column 2, should not be broken except in the year in which the Date of
Initial Delivery occurs or in any preceding year (the Annual Minimum
Quantities for which shall be added to the last anticipated Contract
Years).
SCHEDULE B
GAS SPECIFICATION
The quality of gas supplied hereunder at the Field Delivery Station shall on
delivery conform to the following. These Specifications can be changed by
written agreement signed by all parties.
1.0 FUEL COMPONENTS
1.1 Methane and Ethane
The gas will contain more than seventy percentum (70%) by volume of
methane. In any case, the gas will contain not less than eighty-five
percentum (85%) by volume of methane and ethane.
Test method: ASTM D 1945 Chemical analysis of natural gas by gas
chromatography.
1.2 Propane
The gas will contain less than five percentum (5%) by volume of
propane.
Test method: ASTM D 1945 Chemical analysis of natural gas by gas
chromatography.
1.3 Butane
The gas will contain less than two percentum (2%) by volume of butane.
Test method: ASTM D 1945 Chemical analysis of natural gas by gas
chromatography.
1.4 Pentane plus
The gas will contain less than one half of one percentum (0.5%) by
volume of pentanes and other higher hydrocarbons.
Test method: ASTM D 1945 Chemical analysis of natural gas by gas
chromatography.
1.5 Hydrogen
The gas will contain less than one half of one percentum (0.5%) by
volume of hydrogen.
Test method: ASTM D 1945 Chemical analysis of natural gas by gas
chromatography.
1.6 Carbon Monoxide
The gas will contain less than one percentum (1%) by volume of carbon
monoxide.
Test method: ASTM D 1945 Chemical analysis of natural gas by gas
chromatography.
1.7 Oxygen
The gas will contain less than twenty-two one hundredth of one
percentum (0.22%) by volume of oxygen.
Test method: ASTM D 1945 Chemical analysis of natural gas by gas
chromatography.
1.8 Relaxation of Propane, Butane, Pentane and Pentane Plus
To allow the transportation of "rich" gas these limits may by agreement
between all parties be relaxed at the Field Delivery Station as
follows:-
Propane 2% - 8%
Butane 1% - 2.5%
Pentane and higher hydrocarbons 0.75%
2.0 GAS CONTAMINANTS
2.1 Total Sulphur
The gas will not contain total sulphur including hydrogen sulphide and
mercaptans in concentration greater than 50 milligrams per cubic metre
(50 mg/m3).
Test method: ASTM D 1072 Test method for total sulphur in fuel gases.
2.2 Hydrogen Sulphide
The gas will not contain hydrogen sulphide in concentration greater
than 10 milligrams per cubic metre (10mg/m3).
Test method: ASTM D 2725 Hydrogen sulphide content by methylene blue
method.
2.3 Mercaptans
The gas will not contain more than 5 milligrams per cubic metre
(5mg/m3) of mercaptans expressed as sulphur.
Test method: To be agreed between NTEC and the Transporter.
2.4 Water
The water content will not exceed 80 milligrams per cubic metre
(80mg/m3).
Test method: ASTM D 1142 Water vapour content of gas fuel by
measurement of dew point temperatures.
2.5 Trace Metals
The gas will not contain total trace metals (including sodium,
potassium, calcium, lead, vanadium, aluminium, copper, mercury etc.) in
concentration greater than two parts per million by weight (2mg/kg).
Test method: To be agreed between NTEC and the Transporter.
2.6 Carbon Dioxide
The gas will contain less than three percentum (3%) by volume of carbon
dioxide.
Teat method: ASTM D 1945 Chemical analysis of natural gas by gas
chromatography.
2.7 Solid Material
The gas will not contain solid material exceeding 10 microns in size
and in concentration greater than three parts per million by weight
(3mg/kg).
Test method: To be agreed between NTEC and the Transporter.
2.8 General
The gas will be free from sand, dust, gum, gum forming constituents,
free water, crude oil, other oils and lubricants including compressor
lubricant, impurities and any other substance which is injurious to
pipelines, control equipment, gas turbine or reciprocating engines and
associated auxiliaries and equipment.
3.0 ADDITIVES
3.1 Glycols
The gas will not contain glycols in concentration detectable by the
test method.
Test method: Thermal desorption ▇▇▇▇▇▇-▇▇▇▇▇ Model ATD-50.
3.2 Methanol
The gas will not contain methanol in concentration detectable by the
test method, unless agreed by NTEC.
Test method: Limits and test method to be agreed between parties where
use of methanol is agreed.
4.0 PROPERTIES
4.1 (a) Gross Heating Value
The gas will have a gross heating value of not less than
36.0MJ/m3.
Test method: GPA 2172 Calculation method of natural gas
parameters from compositional data using gas analysis obtained
by ASTM D 1945.
(b) Gross Heating Value Variation
The gross heating value of the gas shall not vary greater than
+ 10.0% of the value nominated in the Operating Manual.
-
Test method: GPA 2172 Calculation method of natural gas
parameters from compositional data using gas analysis obtained
by ASTM D 1945.
4.2 Net Heating Value
The gas will have a net heating value of not less than 33.0MJ/m3.
Test method: GPA 2172 Calculation method of natural gas parameters from
compositional data using gas analysis obtained by ASTM D 1945.
4.3 Temperature and Pressure
The gas will have a daily average temperature not exceeding 7(degree)C
above the mean daily ambient temperature at the Field Delivery Station.
The gas will have a maximum temperature of 60 degrees Celcius
(60(degree)C).
The pressure at the Field Delivery Station is to be in the range
9500kPa to 10,000kPa.
4.4 ▇▇▇▇▇ Index
The ▇▇▇▇▇ Index of the gas shall not vary greater than 10.0% of the
value agreed to by all parties and nominated in the Operating Manual.
The ▇▇▇▇▇ Index is defined as the gross heating value of the gas
(MJ/m3) divided by the square root of the specific gravity of the gas.
The specific gravity of the gas is relative to air and is to be
determined at a temperature of 15(degree)C and a pressure of 101.325
kPa absolute.
Test method: ASTM D 1070 Test methods for specific gravity. Gross
heating value is to be calculated using the method specified in Clause
4.1(a) of this Schedule.
4.5 Flammability Limit
The ratio of higher flammability limit to lower flammability limit
shall exceed 2.2:1 for the gas.
Flammability limits are the upper and lower extremes of fuel air ratio
that will permit ignition and sustain combustion of the fuel air
mixture at a temperature of 15(degree)C and a pressure of 101.325 kPa
absolute.
Test Method: GPA 2172 Calculation method of natural gas parameters from
compositional data using gas analysis obtained by ASTM D 1945.
4.6 Hydrocarbon Dewpoint
The gas will have a minimum hydrocarbon dewpoint lower than minus
30(degree)C at 10,000 kPa absolute. In any case the hydrocarbon
dewpoint of the gas shall be such that hydrocarbons will not condense
under pipeline operating conditions.
SCHEDULE C
OWNERSHIP PERCENTAGES OF THE PRODUCERS
THE MEREENIE JOINT VENTURE
The Producers Ownership Percentages
Magellan Petroleum (N.T.) Pty. Ltd. 20%)
United Oil & Gas Co. (N.T.) Pty. Ltd. 15%) 35%
Canso Resources Limited 15%
Moonie Oil N.L. 21%
Petromin No Liability 13.75%
Transoil No Liability 9%
Farmout Drillers NL 6.25%
SCHEDULE D
BASE PRICE
1. The Base Price for Gas delivered (or to be paid for pursuant to clause
3.21(c)) each Month in each of Contract Years 1 to 21 inclusive shall
be calculated on a different basis depending on whether such Gas
comprises part of the Probable Quantity for that Month ("Probable
Gas"), or is in excess of the Probable Quantity for that Month ("Excess
Gas").
2. The quantity of Probable Gas for each Month in each Contract Year may
be ascertained by:
(a) Multiplying the relevant Annual Minimum Quantity for that
Contract Year by 1.25.
(b) Multiplying the resultant quantity by the factor specified in
the table below:
July .068
August .077
Sept .083
Oct .095
Nov .096
Dec .087
Jan .083
Feb .080
March .087
April .082
May .088
June .074
PROVIDED that the Purchaser may from time to time prior to the
commencement of any Contract Year by notice in writing to the Producers
jointly vary the factors shown for each Month in such manner as it
shall see fit having regard to anticipated fluctuations in demand for
Gas PROVIDED FURTHER that the aggregate of such factors over a Contract
Year shall always be 1.000.
3. For Probable Gas the Base Price means:
A. For Contract Years 1 - 5:
$0.20 per GJ based on Gross Heating Value as at the
Development Date escalated or de-escalated on a Quarterly
basis thereafter as follows:
(a) As to 5 cents thereof in accordance with CPI
Escalation;
(b) As to 15 cents thereof in accordance with Mega CPI
Escalation;
(c) As to the whole thereof (as CPI Escalated and Mega
CPI Escalated) in accordance with Fuel Escalation.
B. For Contract Years 6 - 21:
35 cents per GJ based on Gross Heating Value as at the
Development Date escalated or de-escalated on a Quarterly
basis thereafter as follows:
(a) As to 8.75 cents thereof in accordance with CPI
Escalation;
(b) As to 26.25 cents thereof in accordance with Mega CPI
Escalation;
(c) As to the whole thereof (as CPI Escalated and Mega
CPI Escalated) in accordance with Fuel Escalation.
4. For Excess Gas and for all Gas delivered after the expiry of Contract
Year 21 the Base Price means $1.50 per GJ bases on Gross Heating Value
as at the Development Date escalated or de-escalated on a Quarterly
basis thereafter as follows:
(a) As to 37.5 cents thereof in accordance with CPI
Escalation;
(b) As to $1.125 thereof in accordance with Mega CPI
Escalation;
(c) As to the whole thereof (as CPI Escalated and Mega
CPI Escalated) in accordance with Fuel Escalation.
ESCALATION AND PRICE DETERMINATION
(Note: The following tables illustrate the method by which the
price for excess Gas is calculated. In the case of Probable
Gas the same method is applied with the appropriate amendments
to the base price as outlined above. The number of decimal
places used in this example should not be construed as
indicating the appropriate level of accuracy at any time).
SCHEDULE D (continued)
PRICE ESCALATION AND PRICE DETERMINATION
THIS PART SCHEDULE D PROVIDES AN EXAMPLE OF THE CALCULATION OF THE
QUARTERLY GAS PRICE. THE NUMBER OF DECIMAL PLACES USED IN THE EXAMPLE
SHOULD NOT BE CONSTRUED AS INDICATING THE APPROPRIATE LEVEL OF ACCURACY
AT ANY TIME.
TABLE I
CPI AND MEGA ESCALATORS
--------------------------------------------------------------------------------
(1) (2) (3) (4)1 (5)2 (6)3
YEAR QUARTER INDICATIVE ANNUAL QUARTERLY MEGA
ENDING CPI CPI CPI ESCALATION
ESCALATION ESCALATION
[FABRICATED
FOR ILLUSTRATIVE % % %
PURPOSES]
--------------------------------------------------------------------------------
1984 1 JUNE 132.0
2 SEPT 134.0
3 DEC 135.9
4 MARCH 137.8
1985 5 JUNE 139.9 6.0 1.5
6 SEPT 141.8 5.8 1.4
7 DEC 143.0 5.2 0.8
8 MARCH 142.2 3.2 (0.5)
1986 9 JUNE 140.1 0.1 0.0
10 SEPT 139.0 (2.0) (0.8)
11 DEC 138.5 (3.1) (0.4)
12 MARCH 138.9 (2.3) 0.3
1987 13 JUNE 140.1 0.0 0.0
14 SEPT 142.2 2.3 1.5
15 DEC 145.6 4.8 2.4
16 MARCH 151.5 9.1 4.0
1988 17 JUNE 158.4 13.1 4.6 3.1
18 SEPT 164.0 15.3 3.5 5.3
19 DEC 165.6 13.7 1.0 3.7
20 MARCH 166.8 10.1 0.7 0.1
1989 21 JUNE 167.9 6.0 0.7
NOTES
TABLE I
1. EXAMPLE:
ROW 5 = [139.9 - 132.0] / 132.0 = 6.0
(i.e. The CPI at the end of the current June quarter less
the CPI at the end of the preceeding June quarter.
The result being divided by the CPI for the said
preceeding June quarter and expressed as a
percentage).
2. EXAMPLE:
ROW 5 = [139.9 - 137.8] / 137.8 = 1.5
(i.e. The CPI at the end of the current June quarter less
the CPI at the end of the preceeding March quarter.
The result being divided by the CPI for the said
March quarter and expressed as a percentage).
N.B. If Coln (4) is less than 2 and greater than -2 then Coln (5)
is set to zero regardless of the result of the calculation set
out above.
3. EXAMPLE:
ROW 17 = Coln (4) - 10 = 3.1
N.B. If Coln (4) is less than 10 and greater than -10, Coln (6) is
set to zero.
TABLE II
FUEL: ESCALATOR: FABRICATED FOR ILLUSTRATIVE PURPOSES
--------------------------------------------------------------------------------
(1) (2) (3)1 (4)2
ESAA ESAA DATA INDICATIVE QUARTERLY
DATA APPLIED TO ANNUAL PERCENTAGE
FOR YEAR ENDING PERCENTAGE MOVEMENT
YEAR ENDING 30 JUNE MOVEMENT APPLICABLE TO
30 JUNE WHOLE YEAR
--------------------------------------------------------------------------------
1984 1986 4.370 1.075
1985 1987 2.501 0.620
1986 1988 (1.802) -
1987 1989 3.419 0.844
1988 1990 (2.352) -
NOTES:
1. Coln 3: Derived pursuant to Schedule E.
2. Coln 4: The fourth root of (Coln 3 + 100) x 106 less (after
the fourth root has been taken) 100 = Coln 4.
eg. The fourth root of (4.37 + 100) x 106 less (after the
fourth root has been taken) 100 = 1.075.
TABLE III
BASE PRICE CALCULATION
(1) (2) (3)2 (4)3 (5)2 (6)3 (7)3 (8)4 (9)2 (10)5
------------------------------------------------------------------------------------------------------------------------------------
YEAR QUARTER ANNUAL CUMULATIVE ANNUAL CUMULATIVE CUMULATIVE SUM BASE PRICE FUEL BASE PRICE
ENDING CPI CPI ESCALATION MEGA MEGA OF PREVIOUS EXCLUDING ESCALATION INCL. CURRENT
ESCALATION ON BASE PRICE ESCALATION ESCALATION QUARTER FUEL CURRENT QUARTER CURRENT QUARTER FUEL
INCREMENT INCREMENT ON BASE PRICE ESCALATION FUEL ESCALATION QUARTERLY ESCALATION
INCREMENTS INCREMENT INCREMENT INCREMENT
$ $ $ $ $ $ $ $
------------------------------------------------------------------------------------------------------------------------------------
1984 1 JUNE
2 SEPT
3 DEC
4 MARCH
1985 5 JUNE NA 0.375 - 1.125 NA 1.500 NA 1.500
6 SEPT 0.0056 0.381 - 1.125 NA 1.506 0.016 1.522
7 DEC 0.0049 0.386 - 1.125 0.016 1.527 0.016 1.543
8 MARCH 0.0031 0.389 - 1.125 0.032 1.546 0.017 1.563
1986 9 JUNE (0.0023) 0.387 - 1.125 0.049 1.561 0.017 1.578
10 SEPT 0.0000 0.387 - 1.125 0.066 1.578 0.010 1.588
11 DEC (0.0031) 0.384 - 1.125 0.076 1.585 0.010 1.595
12 MARCH (0.0015) 0.382 - 1.125 0.086 1.593 0.010 1.603
1987 13 JUNE 0.0011 0.384 - 1.125 0.096 1.605 0.010 1.615
14 SEPT 0.0000 0.384 - 1.125 0.106 1.615 - 1.615
15 DEC 0.0057 0.389 - 1.125 0.106 1.620 - 1.620
16 MARCH 0.0093 0.399 - 1.125 0.106 1.630 - 1.630
1988 17 JUNE 0.0159 0.415 - 1.125 0.106 1.646 - 1.646
18 SEPT 0.0191 0.434 0.035 1.160 0.106 1.700 0.014 1.714
19 DEC 0.0152 0.449 0.061 1.221 0.120 1.790 0.015 1.805
20 MARCH 0.0045 0.453 0.045 1.266 0.135 1.854 0.015 1.869
1989 21 JUNE 0.0032 0.457 0.001 1.267 0.150 1.874 0.016 1.890
22 SEPT 0.0032 0.480 - 1.267 0.166 1.893 - 1.893
------------------------------------------------------------------------------------------------------------------------------------
TABLE III
NOTES
1. This table is derived in the case of:
(a) Coln 3 to Coln 6 from Table I; and
(b) Coln's 7 and 9 from Table II.
2. Coln's 3, 5 and 9, respectively, are derived by applying the
Quarterly CPI (Coln 5 Table I), MEGA (Coln 6 Table I) and Fuel
(Coln 4 Table II) escalators to that portion of the Base Price
(including any previous such escalations) as apply to that
escalator. The result being the annual increment in the Base
Price attributable to that escalator. For the purpose of this
calculation the respective portions are:
(a) in the June Quarter 1985:
(i) $0.375 for CPI Escalation
(ii) $1.125 for Mega Escalation
(iii) $1.500 for Fuel Escalation
(b) In latter quarters the June 1985 Base plus escalation
to the quarter of concern.
3. Coln's 4, 6 and 7 are derived for any quarter by adding the
respective cummulative total in the previous quarter to the
increment in the current quarter.
Example
Coln 4, Row 17 = [0.395 + 0.0158] = 0.411
4. Coln 8 = sum of Coln's 4, 6 and 7.
5. Coln 10 = sum of Coln's 8 and 9.
SCHEDULE E
1. DATA SOURCE
The following data can be obtained from the Electricity Supply
Association of Australia (ESAA) publication "The Electricity Supply
Industry in Australia" issued in about April each year with data
relating to the previous financial year. This data is available to all
ESAA members, of which NTEC is one, and will be made available to the
producers when it becomes available to NTEC. In the event of the
intended source of data becoming unavailable or any of the bases
therefor being materially altered then in the absence of agreement
between the Purchaser and the Producers jointly the matter shall be
referred to an Independent Expert for determination.
2. EXTENT OF DATA
Data is required to be totalled for each Utility (as the term is used
by ESAA) for each of:
(1) NSW;
(2) QUEENSLAND; and
(3) WESTERN AUSTRALIA
provided that should complete data sets become available for Victora,
and or, South Australia these States should also be incorporated.
3. DATA REQUIRED
The following data is required:-
(a) Income from all sales for each Utility for the relevant
financial year in $M (Table 7, Item 7.7 of ESAA document).
(b) Consumption of electricity for each Utility for the relevant
financial year in million of kWh (Table 6, Item 6.7, of ESAA
document).
(c) The CPI (as herein defined) for the relevant financial year
expressed as a percentage.
4. DERIVATIONS FROM DATA
Step 1: Aggregation
Add each of (a) and (b) in 3 above to produce a three State total
(hereinafter A and B respectively).
Step 2: Fuel Cost Ratio
The Fuel Cost Ratio (F) for the purpose of calculating the fuel price
escalator shall be 0.24.
Step 3: Average Sale Price
Derive the average sale price of electricity during the year in
cents/kWh by dividing total income from all sales (See 3(a) above) by
consumption (see 3(b) above).
G = A
-
B
Step 4: Annual Percentage Sales Price Movement
Derive the annual percentage change in the sale price of (H)
electricity.
(Gt -G t-1)
H = __________ x 100
Gt-1
where subscript: t refers to the present year
t-1 refers to the previous year
Step 5: CPI - Sale Price Differential
Derive the difference in the annual percentage movement in the sale
price of electricity (see Step 4 above) and the CPI (K) (see 3(c)
above).
K = H - J
where J is the Annual Percentage Movement in the CPI
CPIt - CPIt-1
J = ____________ x 100
CPIt-1
Step 6: Fuel Escalation
Fuel Escalation (X) can now be derived in annual percentage terms as
follows:-
X = K x F
Step 7: Quarterly Application
Take the 4th root of X (as outlined in Schedule D Table II) to obtain
the quarterly Fuel Escalation - and apply to each quarter of the whole
Contract Year following the date of publication.
THIS GUARANTEE made the 28th day of June 1985
BETWEEN: NORTHERN TERRITORY OF AUSTRALIA (hereinafter called "the
Territory") of the first part MAGELLAN PETROLEUM (N.T.) PTY.
LTD. of the second part UNITED OIL & GAS CO. (N.T.) PTY. LTD.
of the third part CANSO RESOURCES LIMITED of the fourth part
MOONIE OIL N.L. of the fifth part PETROMIN NO LIABILITY of the
sixth part TRANSOIL NO LIABILITY of the seventh part AND
FARMOUT DRILLERS N.L. of the eighth part (the parties of the
second to eighth parts inclusive hereto are hereinafter
collectively referred to as "the Producers")
WHEREAS:
A. Each Producer and Gasgo Pty. Limited have contemporaneously herewith
entered into an agreement of even date herewith entitled "Mereenie Gas
Purchase Agreement". Pursuant to the said Agreement Gasgo Pty. Limited
has agreed to purchase natural gas from each Producer upon and subject
to the terms and conditions therein contained.
B. Each Producer has entered into the said Agreement at the request of the
Territory (which request is testified by the Territory's execution of
this Guarantee) but subject to and in reliance on the Territory's
execution of this Guarantee.
NOW THIS GUARANTEE WITNESSES that in consideration of each Producer entering
into the Gas Purchase Agreement at the request of the Territory and in
consideration of the premises the Territory hereby covenants with each Producer
and it is agreed and declared as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Guarantee, unless contrary intention appears:
(a) "Gas Purchase Agreement" means the Agreement referred to in
Recital A hereof, as the same may from time to time be
amended;
(b) "Purchaser" means Gasgo Pty. Limited and includes its
successors and assigns under the Gas Purchase Agreement;
(c) "Producers" means the parties of the second to tenth parts
inclusive hereto and includes their respective successors and
assigns;
(d) "Producer" means one Producer;
(e) "Territory" means the party of the first part hereto and
includes its successors and assigns;
(f) "Moneys Hereby Secured" includes any part thereof;
(g) the singular includes the plural and vice versa and a
reference to any gender includes each other gender.
2. GUARANTEE
2.1 The Territory hereby unconditionally and irrevocably guarantees to each
Producer the due and punctual payment of all moneys now or hereafter
owing or payable or to become owing or payable by the Purchaser to the
Producers or to any one or more of them on any account whatsoever under
or by reason of the Gas Purchase Agreement including any moneys that
may become owing or payable to the Producers or to any one or more of
them by the Purchaser by reason of any default on the part of the
Purchaser under the Gas Purchase Agreement, all of which moneys are
intended to be secured by these presents and are hereinafter referred
to as "the Moneys Hereby Secured".
2.2 As a separate and additional obligation hereunder, the Territory hereby
covenants with each Producer that it will at all times procure the due
and punctual performance observance and fulfilment by the Purchaser of
each and all of the duties and obligations of the Purchaser arising now
or hereafter under the Gas Purchase Agreement.
2.3 This Guarantee shall:
(a) be a continuing guarantee and shall not be considered as
discharged by the payment at any time hereafter of any of the
Moneys Hereby Secured or by any settlement of account or by
any other matter or thing whatsoever and shall apply to the
present and any future balance of the Moneys Hereby Secured;
(b) not be adversely affected in any way or discharged by:
(i) the granting to the Purchaser or any other person
of any time, credit, forbearance, indulgence,
consideration or other concession;
(ii) by reason of any transaction or arrangement that may
take place between the Producers or any one or more
of them and the Purchaser or any other person;
(iii) any act omission laches acquiescence delay or mistake
on the part of the Producers or any one or more of
them;
(iv) the liquidation of the Purchaser;
(v) the Producers or any one or more of them becoming a
party to or bound by any compromise, assignment of
property, scheme of arrangement, composition of debts
or scheme of reconstruction by or relating to the
Purchaser or any other person;
(vi) any default, failure or delay in the performance by
any party to the Gas Purchase Agreement of any of its
obligations under or arising out of the Gas Purchase
Agreement;
(vii) illegality of performance on the part of the
Purchaser;
(viii) any amendment modification or other variation of or
to the Gas Purchase Agreement;
(ix) the Producers or any one or more of them failing or
neglecting to recover by the realisation of any
collateral or other security or otherwise any of the
Moneys Hereby Secured;
(x) the release discharge abandonment or transfer
(whether wholly or partially and with or without
consideration) of any security or judgment now or
hereafter held or recovered by the Producers or any
one or more of them from or against the Purchaser or
any other person;
(xi) any other act event matter or thing whereby the
liability of either the Territory under this
Guarantee or the Purchaser under the Gas Purchase
Agreement would but for this provision have been
affected or discharged; and
(c) shall not be treated as ancillary or collateral to or with any
other obligation howsoever created or arising and in
particular shall not be affected by any other security or
right which the Producers or any one or more of them now
obtain or hold or may hereafter obtain or hold for any
obligation or liability (whether present or future direct or
contingent matured or unmatured joint or several) of the
Purchaser of the Territory to the intent that this Guarantee
shall be enforceable (unless the same shall have been
satisfied according to the terms hereof) notwithstanding that
any other obligation whatsoever arising under any other
security is in any way extinguished or unenforceable for any
reason whatsoever.
2.4 (a) All moneys received by the Producers or any one or more of
them in reduction or satisfaction of the Moneys Hereby Secured
from or on account of the Purchaser (including any dividends
upon the liquidation of the Purchaser) or from the Territory
or from any other person shall be deemed to be payments in
gross and until the whole of the Moneys Hereby Secured have
been satisfied in full, the Territory shall not be entitled on
any grounds whatsoever:
(i) to claim the benefit of any security now or hereafter
held by the Producers or any one or more of them for
the payment of the Moneys Hereby Secured;
(ii) either directly or indirectly to claim or receive the
benefit of any distribution dividend or payment
arising out of or relating to the liquidation (which
word where used in this Guarantee includes official
management, compromise, arrangement, amalgamation,
reconstruction, winding up and dissolution) of the
Purchaser or of any person liable jointly or
severally with the Purchaser to the Producers or any
one or more of them or liable under any security now
or hereafter held by the Producers or any one or more
of them as security for the Moneys Hereby Secured; or
(iii) in the event of the liquidation of the Purchaser or
any such other person whosoever, to prove or claim in
competition with the Producers or any one or more of
them so as to diminish any distribution dividend or
payment which but for such proof the Producers or any
one or more of them would be entitled to receive
arising out of or relating to such liquidation;
AND the receipt of any distribution dividend or other payment
which a Producer may receive out of or relating to such
liquidation shall not prejudice the rights of that Producer
against the Territory under this Guarantee.
(b) In the event of the liquidation of the Purchaser the Territory
authorises each Producer to prove for all moneys which the
Territory has paid hereunder and to retain and to carry into a
suspense account and appropriate at the discretion of the
Producer any dividends received until the Producer has with
the aid thereof been paid in full in respect of that part of
the Moneys Hereby Secured payable to it PROVIDED THAT any
amount so received by the Producer in excess of such part of
the Moneys Hereby Secured shall be repaid to the Territory.
2.5 Notwithstanding anything contained in this Guarantee and
notwithstanding that the whole or any part of the moneys hereinbefore
described as "the Moneys Hereby Secured" are or may be irrecoverable
from the Purchaser by any Producer (whether by reason of any legal
limitation disability or incapacity of or affecting the Purchaser or by
reason of any other fact or circumstance whatsoever and whether the
transactions or any of them relating to such moneys have been void ab
initio or have been subsequently avoided and whether or not any other
matters or facts relating thereto have been or ought to have been
within the knowledge Producer or any one or more of them) and thereby
such moneys or any part thereof are not recoverable from the Territory
as a surety, then in any such case the Territory hereby as a separate
and additional obligation under this Guarantee indemnifies each such
Producer in resect of such moneys and as a principal debtor agrees with
each such Producer to pay to it a sum equal to the amount of such
moneys as and when the same may become due and payable or would but for
their irrecoverability have become due and payable and the terms of
this Guarantee shall mutatis mutandis apply as far as possible to this
indemnity and the sum of money covered by this indemnity shall be
deemed to part of the Moneys Hereby Secured.
2.6 A certificate signed by or on behalf of any director or secretary for
the time being of a Producer stating the amount owing to that Producer
under this Guarantee at the date mentioned in such certificate shall
prima facie evidence thereof.
2.7 The Producers or any one or more of them may from time to time at the
request or with the consent of the Purchaser and without any consent by
or notice to the Territory being necessary:
(a) amend or vary or agree to any amendment or variation of the
Gas Purchase Agreement or any other contract or arrangement
now or from time to time hereafter in force between the
Producers or any one or more of them and the Purchaser; and
(b) transact any business with, for or on account of the Purchaser
at the absolute discretion of such Producers.
2.8 As a separate and independent covenant, the Territory will upon demand
by any Producer pay to that Producer ("the Claimant"):
(a) all reasonable costs and expenses of or incidental to the
enforcement of this Guarantee by the Claimant (including legal
costs on a solicitor client basis and all fees charged by
counsel); and
(b) interest on so much of the amount payable hereunder to the
Claimant as becomes merged in any judgment or order at the
rate therein specified or at the Recovery Interest Rate (as
that term is defined in the Gas Purchase Agreement), whichever
shall be the higher.
2.9 The Territory acknowledges that it has not executed this Guarantee as a
result of or by reason of any promise, representation, statement or
information of any nature or kind whatsoever given or offered to it by
or on behalf of the Producers or any one or more of them.
2.10 Notwithstanding any other provision of this Guarantee, nothing herein
shall obligate or be deemed to obligate the Territory to do any act or
pay any monies beyond the extent to which the Purchaser is or may
become obligated under the Gas Purchase Agreement or would have been
obligated under the Gas Purchase Agreement if that Agreement had been
enforceable against the Purchaser in accordance with its terms.
3. FURTHER COVENANTS
3.1 The Territory hereby covenants with each Producer that:
(a) the Purchaser is a corporation duly incorporated and validly
existing under the laws of the Northern Territory of
Australia;
(b) as at the date of this Guarantee, the Purchaser is wholly
beneficially owned and controlled by the Northern Territory
Electricity Commission, a statutory corporation of the
Territory and or the Territory;
(c) this Guarantee constitutes legally valid and binding
obligations of the Territory enforceable in accordance with
its terms; and
(d) the Gas Purchase Agreement constitutes legally valid and
binding obligations of the Purchaser enforceable in accordance
with its terms.
4. MISCELLANEOUS
4.1 This Guarantee shall be governed by and construed in accordance with
the law for the time being in force in the Northern Territory of
Australia.
4.2 All moneys payable to a Producer under this Guarantee shall be paid to
that Producer at its address for service specified in Clause 4.4 of
this Guarantee or to such other person or corporation and/or at such
other address as the Producer may from time to time notify to the
Territory and shall be paid by bank cheque in the lawful currency of
the Commonwealth of Australia for the time being.
4.3 Any notice demand consent or other communication required to be served
or given in terms of or arising out of this Guarantee:
(a) shall, in order to be valid, be in writing or by telex and in
the case of any such notice demand consent or other
communication to be served on or given to the Territory be
marked "For the urgent attention of the Under-Treasurer,
Northern Territory Treasury" or to such other addressee as may
be notified in writing or by telex by the Territory to each
Producer from time to time;
(b) Shall be deemed to have been duly served on or given to a
party if it is:
(i) left at the address of that party mentioned in Clause
4.4 hereof (or at such other address as may be
notified in writing or by telex by that party to each
other party from time to time); or
(ii) posted by prepaid post in an envelope addressed to
that party at such address; or
(iii) sent by telex to the telex number of that party
mentioned in Clause 4.4 hereof (or such other number
as may be notified by that party as aforesaid);
(c) shall be sufficient if:
(i) executed under the common seal of the party giving or
serving the same; or
(ii) signed on behalf of the party giving or serving the
same by any attorney director secretary agent or
other duly authorised officer of such party;
(d) shall:
(i) if sent by prepaid post, be received on the date of
its actual receipt;
(ii) if sent by telex, be deemed to be received upon
receipt by the sender of the answerback code and
number of the recipient at the conclusion of the
transmission;
(iii) if delivered by hand, be deemed to be received on the
date of delivery.
4.4 The address of the Territory shall, until otherwise notified pursuant
to the preceding sub-clause, be:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇,
AMP Building,
▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇. ▇▇ ▇▇▇▇
Telex: AA85541 NTRES
The address of each Producer shall, until otherwise notified pursuant
to the preceding sub-clause be:
C/- The Moonie Oil Company Limited,
▇▇▇▇▇ ▇▇,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇. 4000
Telex: AA41040
4.5 The Territory shall be responsible for the payment of all stamp duty
payable on this Guarantee. Each party shall bear its own legal costs
in connection with the preparation of this Guarantee.
4.6 This Guarantee shall inure to the benefit of each Producer and its
successors and assigns and shall be binding upon the successors and
assigns of the Territory PROVIDED HOWEVER no assignment by the
Territory of its obligations hereunder or any assumption of such
obligations by another person shall be made without the prior written
consent of each Producer.
IN WITNESS WHEREOF the parties hereto have executed this Guarantee as a Deed on
the day first abovementioned.
SIGNED SEALED AND DELIVERED by )
THE HONOURABLE ▇▇▇ ▇▇▇▇▇▇▇ )
TUXWORTH Treasurer of the Northern )
Territory of Australia in the presence of: ) /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
.............................
/s/
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SIGNED SEALED AND DELIVERED by )
MAGELLAN PETROLEUM (N.T.) PTY. LTD. )
by ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
its duly appointed Attorney under )
Power of Attorney dated 26th June 1985 )
who states that he has no notice )
of revocation of the said power )
in the presence of: ) /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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SIGNED SEALED AND DELIVERED by )
UNITED OIL & GAS CO. (N.T.) PTY. )
LTD. by ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
its duly appointed Attorney under )
Power of Attorney dated 26th June 1985 )
who states that he has no notice )
of revocation of the said power )
in the presence of: ) /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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SIGNED SEALED AND DELIVERED by )
CANSO RESOURCES LIMITED )
by ___________________________ )
its duly appointed Attorney under )
Power of Attorney dated 26/6/85 )
who states that he has no notice )
of revocation of the said power )
in the presence of: ) /s/
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/s/
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SIGNED SEALED AND DELIVERED by )
MOONIE OIL N.L. )
by ▇. ▇. ▇▇▇▇▇▇ )
its duly appointed Attorney under )
Power of Attorney dated 27/6/85 )
who states that he has no notice )
of revocation of the said power )
in the presence of: ) /s/ ▇. ▇. ▇▇▇▇▇▇
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/s/
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SIGNED SEALED AND DELIVERED by )
PETROMIN NO LIABILITY )
by ▇. ▇. ▇▇▇▇▇▇ )
its duly appointed Attorney under )
Power of Attorney dated 27/6/85 )
who states that he has no notice )
of revocation of the said power )
in the presence of: ) /s/ ▇. ▇. ▇▇▇▇▇▇
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/s/
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SIGNED SEALED AND DELIVERED by )
TRANSOIL NO LIABILITY )
by ▇. ▇. ▇▇▇▇▇▇ )
its duly appointed Attorney under )
Power of Attorney dated 27/6/85 )
who states that he has no notice )
of revocation of the said power )
in the presence of: ) /s/ ▇. ▇. ▇▇▇▇▇▇
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/s/
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SIGNED SEALED AND DELIVERED by )
FARMOUT DRILLERS N.L. )
by ___________________________ )
its duly appointed Attorney under )
Power of Attorney dated 26/6/85 )
who states that he has no notice )
of revocation of the said power )
in the presence of: ) /s/
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/s/
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