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 Checklist 3.

Joint Venture Operating Agreement

Definitions Management Committee
 “Affiliates” test is 50+ percent of control  Establishment of Operating Committee
 “Gross Negligence” test for Operator liability  Powers & Duties of Operating Committee
 “Senior Supervisory Personnel” for imputing  Authority to Vote
Gross Negligence  Sub-Committees
Effective Date & Term  Notice of Meeting
 Commencement of JVOA.  Contents of Meeting Notice
 Duration equal to term of Resource  Location of Meetings
Agreement  Operator's Duties for Meetings
 Procedure for extension.  Voting Procedure
Participating Interests  Record of Votes
 Participating Interest  Minutes
 Ownership, Obligations & Liabilities  Voting by Notice
 Government Participation as part of  Effect of Vote
Management Committee Work Programmes and Budgets
Operator  Exploration and Appraisal whether by drilling,
 Designation of Operator deepening, or sidetracking, shall include
 Rights & Duties of Operator, where English Casing Point Election (drilling & open hole
law applies contracts with independent testing) or all expenditures necessary for
contractors can only enforce their contracts drilling, testing and completing exploration
against Operator well.
 Employees of Operator  Development
 Information Supplied by Operator  Production
 Settlement of Claims & Lawsuits with specific  Itemisation of Expenditures
limitations on financial authority  Contract Awards best qualified Contractor as
 Liability determined by cost and ability to perform the
Unlimited - All costs, expenses and liabilities, Contract without Management Committee
Joint Property -Only the actual cost, expense approval except for awards to Affiliates, or
Operator provides a list of potential
and liability to repair, replace and/or remove
contractors and will add any entity at request
joint property, or
of Management Committee.
Complete Limitation - No costs, expenses and
 Authorisation for Expenditure (AFE) either for
solely for informational purposes or further
 Insurance Obtained by Operator
approval is necessary
 Commingling of Funds may/ may not
 Over expenditures of Work Programmes &
commingle funds
 Resignation of Operator
 Removal of Operator Operation by Less Than All Parties
 If Operator together with Affiliate holds less  Limitation on Applicability
than a minimum participating interest, or if  Procedure to Propose Exclusive Operations
there is a direct or indirect change in control of  Responsibility for Exclusive Operations
Operator  Consequences of Exclusive Operations
 Appointment of Successor  Premium to Participate in Exclusive
 Order of Preference of Operations
 Stand-by Costs
 Special Considerations Regarding Deepening
& Sidetracking

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Checklist 3. Continued

Default Relationship of Parties & Taxation

 Default & Notice  Relationship of Parties
 Operating Committee Meetings & Data  Tax
 Allocation of Defaulted Account  United States Tax Election
 Transfer of Interest Continued Confidential Information & Proprietary
 Continuation of Interest
 Abandonment
 Confidential Information
 Sale of Hydrocarbons
 Continuing Obligations
 No Right of Set Off
 Proprietary Technology
Disposal of Production  Trades
 Right & Obligation to Take in Kind
Force Majeure
 Offtake Agreement for Crude Oil
 Obligations
 Separate Agreement for Natural Gas
 Definition of Force Majeure
 Abandonment of Wells Drilled as Joint
Operations Applicable Law & Dispute Resolution
 Abandonment of Exclusive Operations  Applicable Law
 Dispute Resolution
Surrender, Extension & Renewal
 Surrender Allocation of Cost Recovery Rights
 Extension of the Term  Allocation of Total Production
 Allocation of Cost Oil
Transfer of Interest or Rights
 Allocation of Profit Oil
 Obligations – Notice, Consent, Pre-emptive
 Allocation of Excess Cost Oil
 Rights – Affiliates, Financing, Third parties. General Provisions
 Conflicts of Interest
 Public Announcements
 Right of Withdrawal
 Successors & Assigns
 Partial or Complete Withdrawal
 Waiver
 Voting
 Severance of Invalid Provisions
 Obligations & Liabilities
 Modifications
 Emergency
 Headings
 Assignment
 Singular and Plural
 Approvals
 Gender
 Abandonment Security
 Counterpart Execution
 Withdrawal or Abandonment
 Entirety
Exhibit A: Accounting Procedure
Exhibit B: Audit Procedure
Exhibit C: Contract Area

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