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EXHIBIT 10.49
WA-199-P
FARMIN AGREEMENT
DATED 26 March 1998
BORAL ENERGY RESOURCES LIMITED
(ACN 007 845 338)
AND
INDO-PACIFIC ENERGY PTY LIMITED
AND
INDO-PACIFIC ENERGY LIMITED
CONTENTS
RECITALS 1
1. INTERPRETATION 1
1.1 Definitions 2
1.2 Interpretation Rules 3
1.3 Entire Agreement 3
1.4 Amendments 3
1.5 Headings 3
1.6 Recitals 3
2. APPROVALS 3
3. ASSIGNMENT 4
4. CONSIDERATION 4
5. VOTING 4
6. DEFAULT 4
7. BORAL ENERGY'S REPRESENTATIONS WARRANTIES AND INDEMNITY 5
8. INDO-PACIFIC'S REPRESENTATIONS, WARRANTIES AND INDEMNITY 5
9. FURTHER ASSURANCES 5
10. GUARANTEE 6
11. TAX CONSIDERATIONS 6
12. COSTS AND STAMP DUTY 6
13. GOVERNING LAW 6
14. NOTICES 7
15. WAIVER 8
16. REMEDIES 8
17. SEVERANCE 8
18. EXECUTION 8
19. CONFIDENTIALITY 8
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Agreement dated 26 March 1998.
Between:
BORAL ENERGY RESOURCES LIMITED (ACN 007 845 338) of 60 Hindmarsh
Square, Adelaide South Australia ("Boral Energy")
AND
INDO-PACIFIC ENERGY PTY LIMITED of 1 King William Street,
Adelaide ("Indo- Pacific")
AND
INDO-PACIFIC ENERGY LTD of 1200-1090 West Pender Street,
Vancouver, British Columbia V6E 2N7 ("Guarantor")
(together the "Parties" and separately "Party")
RECITALS
A. Boral Energy together with Petroz NL and Santos (BOL) Pty
Ltd are the registered holders of the Permit issued pursuant to
the Act and are parties to the WA-199-P Joint Venture.
B. Pursuant to a letter agreement dated 15 September 1997 Boral
Energy agreed to assign to Indo-Pacific the Assigned Interest,
which Indo-Pacific agreed to acquire and the Parties have set out
the terms and conditions of the assignment in this Agreement.
C. The Guarantor is the ultimate parent company of Indo-Pacific
and has agreed to guarantee the obligations of Indo-Pacific under
this Agreement and the WA-199-P JOA.
OPERATIVE PART
1 DEFINITIONS AND INTERPRETATIONS
1.1 Definitions
In this Agreement (including the Recitals), unless the
context otherwise requires:
1.1.1 Act means the Petroleum (Submerged Lands) Act 1967
(Cwth).
1.1.2 "Affiliate" has the meaning ascribed to the term under
the Corporations Law.
1.1.3 "Agreement" means this agreement between Boral Energy
and Indo-Pacific.
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1.1.4 "Assigned Interest" means a 5% Participating Interest
in the Permit.
1.1.5 "Authority" means, as the context requires, the Joint
Authority or the Designated Authority.
1.1.6 "Deed of Assumption" means the deed referred to in
clause 9.
1.1.7 "Designated Authority" has the meaning ascribed to that
term in the Act.
1.1.8 "Effective Date" means 15 September 1997.
1.1.9 "Joint Authority" has the meaning ascribed to that term
in the Act.
1.1.10 "Permit" means petroleum exploration license WA-199-P
or any renewal or extension thereof and any production license or
title or other license granted pursuant thereto.
1.1.11 "Operator" means the operator of the WA-199-P Joint
Venture appointed pursuant to the WA-199-P JOA.
1.1.12 "Participating Interest" means a participating interest
of a party under the WA-199-P JOA.
1.1.13 "Transfer" means the transfer refereed to in clause 9.
1.1.14 "WA-199-P Joint Venture" means the joint venture
constituted by the parties referred to in Recital A.
1.1.15 "WA-199-P JOA" means the joint venture operating
agreement dated 22 May 1986 which governs the joint venture
relationship between the WA-199-P Joint Venture parties in
relation to the Permit.
1.1.16 "Kittiwake-1 Well" means the well to be drilled by the
Southern Cross rig in or around March 1998. The well is to
penetrate potential reservoirs in the Plover Formation.
1.1.17 "Kittwake-1 Well Costs" means in respect of the
Kittiwake-1 Well, all direct and indirect costs incurred in the
planning and drilling of the Kittiwake-1 Well, including but not
limited to the following operations and costs:
(a) site surveys;
(b) mobilization and demobilization of the drilling unit and
associated vessels;
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(c) running and setting surface and intermediate casing,
cementing, wireline logging, coring and repeat formation testing;
(d) the remedying of any blow out or mechanical failure of the
well including redrilling the well;
(e) plugging and abandoning or suspending; and
(f) analysis of results required for the preparation of
completion reports.
1.2 Interpretation Rules
In this Agreement, unless a contrary intention appears:
1.2.1 a reference to this Agreement is a reference to this
Agreement as amended, varied, novated or substituted from time to
time;
1.2.2 a reference to any legislation or any provision of any
legislation includes:
(a) all regulations, orders or instruments issued under the
legislation or provision; and
(b) any modification, consolidation, amendment, re-enactment,
replacement or codification of such legislation or provision.
1.2.3 a word:
(a) importing the singular includes the plural and vice versa;
and
(b) denoting an individual includes corporations, firms,
unincorporated bodies, authorities and instrumentalities;
1.2.4 a reference to a Party to this Agreement or any other
instrument includes that Party's executors, administrators,
successors and permitted assigns;
1.2.5 where a word or phrase is given meaning, any other part
of speech or grammatical form has a corresponding meaning; and
1.2.6 a reference to a clause number, schedule number or
annexure number (or letter) is a reference to a clause, schedule
or annexure of this Agreement;
1.2.7 words and expressions used in this Agreement which are
used in the Act shall where the context admits have the same
meaning as they have in the Act.
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1.3 Entire Agreement
This Agreement is the entire agreement between the Parties
as to its subject matter and supersedes all prior agreements,
representations and understandings.
1.4 Amendments
No amendment of, or addition to this Agreement is binding
unless it is in writing and executed by the Parties
1.5 Headings
Any heading, index, table of contents or marginal note is
for convenience only and does not affect the interpretation of
this Agreement.
1.6 The Recitals of this Agreement form part of the Agreement
and have effect as if set out in full in this Agreement.
2. APPROVALS
2.1 This Agreement (other than this clause 2 and clauses
4,5,6.1,9,10,13,14,15,16,17,18 and 19) is conditional upon;
2.1.1 this Agreement being approved and registered by
the Authority; and
2.1.2 each of the Transfer and Deed of Assumption being
approved and registered by the Authority.
2.2 The Parties must use their best endeavours to ensure that
the conditions referred to in clause 2.1 are satisfied as soon as
practicable after the execution of this Agreement.
2.3 If the conditions set out in clause 2.1 are not satisfied on
the date of being 12 months after the date of this Agreement then
either Party may terminate this Agreement at any time after that
date by giving notice to that effect to the other party and this
Agreement (except for this clause 2.3 and clause 2.4) will
terminate upon receipt of that notice.
2.4 On the termination of this Agreement under clause 2.3;
2.4.1 Boral energy must indemnify Indo-Pacific for all
amounts which Indo-Pacific has paid pursuant to
clause 4; and
2.4.2 the Parties must execute all documents and do all
things necessary or desirable to place each other
in the same position as they would have been in
had this Agreement not been executed or acted
upon.
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3. ASSIGNMENT
With effect on and from the Effective Date and subject to
Indo-Pacific complying with its obligations under this Agreement,
Boral Energy assigns to Indo-Pacific the Assigned interest free
and clear of all liens, encumbrances, rights and interests other
than those arising under the WA-199-P JOA, the Permit or the Act
and Indo-Pacific accepts the assignment of the Assigned Interest.
4. CONSIDERATION
4.1 In consideration of Boral Energy agreeing to assign the
Assigned Interest to Indo-Pacific, Indo-Pacific shall bear and
pay ten percent (10%) of the Kittiwake-1 Well costs.
4.2 The obligation under clause 4.1 shall have been met on the
first to occur of any of the following;
(a) the WA-199-P Joint Venture decides in accordance with the
WA-199-P JOA to run production casing in the Kittiwake-1 Well; or
(b) the WA-199-P Joint Venture decides in accordance with the
WA-199-P JOA to plug and abandon the Kittiwake-1 Well; or
(c) the Kittiwake-1 Well costs reach A$8.5 million,
and when the obligation under clause 4.1 has been met
Indo-Pacific shall be liable for the Assigned Interest share of
any
other costs in relation to the Kittiwake-1 Well.
4.3 Other than its liability under clause 4.1, Indo-Pacific
shall be liable on and from the Effective Date for all other
costs and expenses of the Assigned Interest in accordance with
the WA-199-P JOA.
5 VOTING
During the period from the date of this Agreement to the
Date upon which the conditions in clause 2 are satisfied, Boral
Energy shall vote the Assigned Interest in a manner which is
consistent with this Agreement.
6 DEFAULT
6.1 If Indo-Pacific fails to pay any of the costs as required
under clause 4.1 of this Agreement then Boral Energy may after
giving Indo-Pacific 5 days notice to remedy the default, pay such
costs and recover the sum (if applicable) not so paid as a
liquidated debt, together with interest on the amount outstanding
at the rate charged from time to time by Boral Energy's Bankers
on overdrafts in excess of $100,000 such interest being
calculated on a daily basis from the date of payment by Boral
Energy until the date of recovery from Indo-Pacific, capitalized
on the last day of each month.
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6.2 In the event that Indo-Pacific fails to remedy the default
in clause 6.1 after a further 5 days then Boral Energy may
require Indo-Pacific to forthwith assign to Boral energy the
Assigned Interest assigned to Indo-Pacific under this Agreement
for no consideration other than the complete discharge of all
liability of Indo-Pacific under, and in respect of, this
Agreement.
6.3 The Parties acknowledge and agree that the provisions of
clause 6.1 and 6.2 arise out of a genuine attempt to compensate
Boral energy for any loss and damage estimated by the Parties to
be suffered by Boral Energy as a result of an unremedied default
of Indo-Pacific.
7. BORAL ENERGY'S REPRESENTATIONS, WARRANTIES AND INDEMNITY
7.1 Boral Energy represents and warrants to Indo-Pacific that:
7.1.1 it has the necessary power and authority, and all
necessary corporate and other action has or will be taken, to
enable it to enter into and perform its obligations under this
Agreement;
7.1.2 the Assigned Interest is free of all liens,
encumbrances, rights and interests other than the interests
imposed under the Act, the WA-199P JOA or the Permit;
7.1.3 it is not engaged in any litigation or arbitration
proceeding in respect of the Permit, and to the best of its
knowledge and belief there are no actions, suits or other
proceedings pending or threatened against it in relation to the
Permit or which affects or may affect the validity of the Permit
or this Agreement;
7.1.4 to the best of its knowledge and belief the Permit is
valid, subsisting and in good standing and all obligations
imposed by the Act in relation thereto have been duly performed
and complied with.
7.2 Boral Energy shall indemnify Indo-Pacific and keep
Indo-Pacific indemnified against all liability, cost, loss and
damage
which Indo-Pacific suffers or incurs as a result of a breach of
any representation and warranty contained in clause 7.1 provided
however that Boral Energy shall not be liable for any indirect or
consequential damages and Boral Energy's total liability for any
and all breaches will not exceed the consideration referred to in
clause 4.
7.3 No claim for breach of any representation or warranty set
out in Clause 7.1 shall be made more than one (1) year after the
date of registration of this Agreement unless prior to the expiry
of such period written notice of the matter complained of (with
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such details of the matter as shall then be reasonably
practicable) shall have been given by Indo-Pacific to Boral
Energy.
7.4 Subject to any law to the contrary and except as provided in
clause 7.1, all terms, conditions, warranties, statements,
representations, estimates or opinions whether express, implied,
written or oral are excluded and Boral Energy disclaims all
liability in relation to them to the maximum extent permitted by
the law and Indo-Pacific has independently verified all
information made available by Boral Energy.
8. INDO-PACIFIC'S REPRESENTATIONS, WARRANTIES AND INDEMNITY
8.1 Indo-Pacific represents and warrants to Boral Energy that it
has the necessary power and authority, and all necessary
corporate and other action has been taken, to enable it to enter
into and perform its obligations under this Agreement and each
further document and assurance required under clause 9 hereof.
8.2 Indo-Pacific shall indemnify Boral Energy and keep Boral
Energy indemnified against all liability, cost, loss and damage
which Boral Energy suffers or incurs as a result of any breach of
the representation and warranty contained in clause 8.1 provided
however that Indo-Pacific shall not be liable for any indirect or
consequential damages.
9. FURTHER ASSURANCES
Indo-Pacific and Boral Energy each agree that they will
sign, execute and complete all further documents and assurances
(which includes a Deed of Assumption and Transfer), and do all
further acts and things as may be reasonably required to confirm
or give effect to the intent and object of this Agreement.
10. GUARANTEE
10.1 Execution of Guarantee
In consideration of the respective covenants of Boral Energy
and Indo-Pacific the Guarantor, at the request of Indo-Pacific,
agrees to execute and deliver the Deed of Guarantee immediately
upon the execution of this Agreement.
10.2 Default by Guarantor
If the Guarantor fails to execute the Deed of Guarantee as
required by Clause 10.1 or defaults in the performance of any of
its obligations under the Deed of Guarantee Boral Energy shall
forthwith give notice of the default to the Guarantor and
Indo-Pacific and request the Guarantor to remedy forthwith the
same.
For so long as the Guarantor continues to be in default, the
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amount in default shall bear interest (as defined in the WA-199P
JOA) calculated on a daily basis from but not including the due
date for payment, until such time as the Guarantor shall have
paid the total amount in default together with all interest
accrued in respect thereof.
11. TAX CONSIDERATIONS
11.1 Resource Rent Tax
Boral Energy agrees to provide to Indo-Pacific relevant
information required to enable Indo-Pacific to assume and obtain
the benefit of allowable deductions in respect of the Assigned
interest pursuant to the Petroleum Resource Rent Tax Assessment
Act 1987.
11.2 Value of Assigned Interest
For the purposes of Part 111A of the Income Tax Assessment
Act 1936 of the Commonwealth of Australia, the Parties
acknowledge and agree that the Permit is a wildcat exploration
area with no proven economic reserves of petroleum and that the
value of the rights and interest assigned is nil.
12 COSTS AND STAMP DUTY
12.1 Each of the Parties shall bear its own costs and expenses
(including, without limitation, all legal costs and expenses) in
relation to the preparation, negotiation and execution of this
Agreement and each of the documents which this Agreement requires
any of the Parties to execute.
12.2 Indo-Pacific shall bear all stamp duty and registration fees
payable under the Act on this Agreement and each of the documents
which this Agreement requires any of the Parties to execute.
13. GOVERNING LAW
This Agreement shall be deemed to be a contract under, and
shall be governed by and interpreted in accordance with, the laws
of South Australia.
14. NOTICES
14.1 How notices may be given
A notice approval, direction, consent, offer, demand or
other communication in connection with this Agreement must be:
14.1.1 in writing;
14.1.2 signed by an authorised officer of the relevant Party;
and
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14.1.3 given to the recipient Party;
(a) by hand delivery;
(b) by pre-paid mail or courier sent to that Party; or
(c) by facsimile transmission to that Party.
14.2 Where notices must be sent
For the purposes of clause 14.1:
14.2.1 deliveries must be delivered to the address of the
recipient Party set out below;
14.2.2 mail must be sent to the address of the recipient party
set out below;
14.2.3 facsimile messages must be transmitted to the facsimile
number of the recipient Party set out below; and in each case
14.2.4 must be marked for the attention of the person
specified below in relation to the recipient Party:
Name: Boral Energy Resources Limited
Address: Level 3
60 Hindmarsh Square
ADELAIDE SOUTH AUSTRALIA 5000
Attention: Dr. R. Willink
Facsimile: (+618)8223 1851
Name: Indo-Pacific Energy Ltd.
Address: 284 Karori Road
Wellington, New Zealand
Attention: Mr. D. Bennett
Facsimile: 64 4476 0120
14.3 Change of Details
14.3.1 A Party may from time to time change any of the details
specified in clause 14.2.4 by giving not less than 5 business
days notice to each other party.
14.3.2 If details are changed in accordance with clause
14.3.1, clause 14.2.4 applies as it those changed details were
set out in clause 14.2.4.
14.4 Proof of Notices
14.4.1 Proof of posting by pre-paid mail is proof of receipt
on the fifth clear business day after courier delivery or the
eighth clear business day in the case of posting.
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14.4.2 Proof of transmission of a facsimile message is proof
of receipt on the date of transmission, but it a transmission is
not made on a business day or not made before 4:00, then it will
be deemed to have been received at 10:00am on the next business
day in the time zone of the recipient after transmission.
15. WAIVER
A Party's failure to exercise or delay in exercising a power
or right is not a waiver of that power or right, and the exercise
of a power or right does not preclude the future exercise of that
or any other power or right.
16. REMEDIES
16.1 All remedies, rights, undertakings, obligations or
agreements of the Parties under this Agreement arising by law in
respect of this Agreement shall be cumulative and none thereof
shall be in limitation of any other rights, remedies,
undertakings, obligations or agreements of the Parties.
16.2 Each of the Parties may follow any such remedy to which it
is entitled by law or otherwise, either concurrently or
successively at its option.
17. SEVERANCE
Each provision of this Agreement shall be deemed to be
separate and severable from the others of them. If any provision
of this Agreement is determined to be invalid or unenforceable in
any jurisdiction, it shall be severed from this Agreement and not
invalidate the rest of this Agreement which shall remain of full
force and effect as it such provision had not been made a part
thereof. Such a determination of invalidity or enforceability
shall not affect the validity or enforceability of that provision
in any other jurisdiction.
18. EXECUTION
This Agreement may be executed by the separate execution and
delivery of counterparts and proof of execution and delivery of
those counterparts may be achievable by the transmission of
executed copies by facsimile.
19. CONFIDENTIALITY
The Parties agree and undertake to keep the terms of this
Agreement confidential subject to their respective obligations
and rights to disclose to Affiliates and as may be required by
law or rule of stock exchange.
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EXECUTED as an Agreement.
THE COMMON SEAL of )
BORAL ENERGY RESOURCES LIMITED )
was affixed in accordance with )
its articles of association: )
/s/ W. Fowler /s/ Robbert Willinck
Signature of Authorised Person Signature of Authorised Person
Secretary Director
Office Held Office Held
W. Fowler Robbery Willinck
Name of authorised person Name of authorised person
THE COMMON SEAL of )
INDO-PACIFIC ENERGY PTY LIMITED )
was affixed in accordance with )
its articles of association: )
Jeffery Phillip Lean
Name of Authorised Person
/s/ J.P. Lean
I confirm that I have witnessed the affixing of
The Seal in the capacity of sole Director and
Sole Secretary of the company.
SIGNED for and on behalf of )
INDO-PACIFIC ENERGY LIMITED )
by its duly authorised attorney under )
power in the presence of: )
/s/ Jenni Lean /s/ D.J. Bennett
Witness Director