The Licence commences on the effective date and remains in force until
the first of the following occurs;
(a) the last day of the exploration period if there has been no development and production period;
(b) the last day of the last subsisting development and production period; and
(c) the day that is 30 years from the effective date.
CAMAC Energy A5 (Gambia) shall pay the Government a signature bonus of $1,000,000 within 30 days of the effective date. CAMAC Energy A5 (Gambia) shall pay the Government a development and petroleum plan bonus of $2,000,000 within 30 days of the date when the Commissioner approves the first proposed development and production Plan and after each date on which the Commissioner approves a subsequent and separate proposed development and production plan.
If an approved development and production plan is amended to incorporate a satellite development, then within 30 days thereafter CAMAC Energy A5 shall pay another $2,000,000 per 1,000,000 barrels reserves to a maximum $40,000,000.
CAMAC Energy A5 shall pay the Government production bonus in respect of each development and production Area and each satellite development within 60 days of first reaching each of the following production levels in that area:
Start of Production- 10 million US $
Production above 50,000 bopd- 10 million US $
Each production increase of 50,000 bopd over the last production threshold that trigged a production bonus payment - 10 million Dollars
The signature bonus, the development and production plan bonus and the production bonuses do not constitute a resource expense, direct operating cost or otherwise be deductible for the purposes of calculating the CAMAC Energy A5's net income from petroleum operations pursuant to the tax schedule
Income tax paid by Camac Energy A5 pursuant to the income tax act shall not constitute a resource expense, a direct operating cost or otherwise be deductible for the purposes of calculating net income from petroleum operations pursuant to the income tax act. Camac Energy A5's net income from petroleum operations shall be subject to income tax only under the tax schedule and not under the income tax act.
CAMAC Energy A5 (Gambia) shall pay the Government a royalty on all petroleum produced under the Licence. The liability is to be discharged as follows:
(a) in the case of natural gas, by paying to the Government the royalty at the rate calculated in the manner specified in an agreement entered into between the Minister of Petroleum and CAMAC Energy A5 (Gambia); and
(b) in the case of crude oil : by paying to the Government the royalty in respect of crude oil produced from the first development and production area, and from each subsequent development and production area that is not developed as a satellite development, shall be the value f.o.b. The Gambia of all crude oil produced by CAMAC Energy A5 (Gambia) in that development and production area during the month in which crude oil produced, multiplied by the highest applicable percentage set forth under this Agreement;
The royalty payable in respect of crude oil produced from a satellite development shall be the value f.o.b. The Gambia of crude oil produced by Camac from that satellite development during the relevant month multiplied by 25%.
The minimum royalty rate payable in respect of any crude oil produced from any development and production area is equal to the royalty rate paid in the previous month in respect of crude oil produced from that development and production area.
The royalty rate in respect of crude oil produced from each development and production area prior to the completion and commissioning of permanent production facilities in that development and production Area, is (20%).
The value of Crude Oil is calculated in accordance with this Agreement.
Royalty can also be taken kind and quantities produced in testing. The Commissioner may, by notice to Camac not later than 90 days prior to the commencement of any month, require delivery of a prescribed percentage of crude oil that is produced in that month.
Royalty can be taken partly in kind, through notice by the Commissioner specifying a percentage that is less than the prescribed percentage.
Royalty Statements. The royalty in respect of crude oil produced is payable within 30 days after that Crude Oil is sold or otherwise disposed of.
For its petroleum operations Camac Energy A5 (Gambia) should use goods and services produced or provided in Gambia, provided that they are
in accordance with accepted international standards, available on a timely basis in the quantity required; and available at prices that are not more than 10% greater than those offered by an international supplier that would otherwise have been selected pursuant to the tender procedures.
Camac Energy A5 (Gambia) should establish appropriate tender procedures, taking into account Gambian local market conditions and enabling Gambian contractors to bid for the supply of such goods and for the provision of such services.
Camac Energy A5 (Gambia) shall carry out the following exploration operations:
(a) Initial Exploration Period: Prior to the end of the Initial Exploration Period, Camac should complete at least:
(i) a regional geological study;
(ii) acquiring, processing and interpreting seven hundred and fifty 750square km 3D seismic data;
(iii) drilling 1 exploration well to the total depth of 5,000 meters below mean sea level; and
(iv) evaluating the drilling results.
The first 2 work obligations in the initial exploration period should be completed before the end of the second year of the initial exploration period.
(b) First extension exploration period:
Prior to the end of the first and second extension exploration Period, Camac should complete at least:
(i) preparation work for drilling;
(ii) drilling 1 exploration similar to the one in the initial exploration period.
Exploration Well Requirements
(a) The exploration wells drilled by Camac, shall not be treated as discharging any obligation unless it has been drilled to a producing interval above the depth above- mentioned; or before reaching such producing interval the geological basement is encountered.
If prior to discharging its obligation to drill an exploration well, Camac encounters insurmountable technical problems making further drilling unsafe or impractical, Camac should abandon that exploration well and comply with its obligations under the Act in respect thereof and drill a substitute exploration well in the License Area that meets the minimum requirements described above, unless otherwise agreed with the Commissioner.
Camac Energy cannot assign any privileges, duties or obligations under the licence without prior written consent of the Ministry of Petroleum. Any assignment made pursuant to the consent shall bind the assignee to all the terms and conditions and the assignee shall undertake to assume all the obligations of the assignor.
The parties shall maintain confidentiality of all data, interpretations and other information generated except to the extent such information is required in compliance with applicable laws or regulations or other legal proceedings or because of any order of any court binding upon a party. Confidential information may be disclosed to prospective or actual attorneys, consultants, shipping companies, subcontractors or agents engaged by a party where disclosure is essential to such person's work for such party. Confidential information may also be disclosed as required under the rules or requirements of a government or stock exchange having jurisdiction over such a party; to its employees for the purposes of implementation of this license; and any information which, through no fault of a party, becomes part of the public domain.
Disclosure should not be made unless the disclosing party has obtained a written undertaking from the recipient that provides for rights and obligations of the recipient party regarding the disclosed information.
If due to change of applicable laws, the Camac Energy A5 (Gambia) enjoys any economic benefits, the parties shall meet and act in good faith to negotiate revisions to the contract for the benefit of both parties.