STRACHAN
PARTICIPATION
AND FARMOUT
AGREEMENT
made
as
of September 23, 2005
BETWEEN:
ODIN
CAPITAL INC.,
a body
corporate having an office at
Calgary,
Alberta ("Farmor")
-
and
-
TV
OIL
AND GAS
CANADA
LIMITED,
a body
corporate having an
office
at
Vancouver, B.C. ("Farmee")
WHEREAS
Farmor
has the right to participate in a Leduc formation test well located
in
Section
9, Township 38, Range 9, West of the 5th
Meridian
("Section
9");
and
Whereas
Farmee
wishes to participate for three percent (3.000%) share of the costs
of
drilling
a test well into the Leduc formation under Section 9; and
Now
Therefore In Consideration of
the
premises hereto and the mutual covenants and
agreements
herein set forth, This
Agreement Witnesseth:
Definitions
1.1
In
this
Agreement the words and phrases which are defined terms in the Farmout
Procedure
shall, provided that they are not inconsistent with the definitions set forth
in
this
Agreement,
have the meanings ascribed to them in the Farmout Procedure and, in addition
thereto,
the following words and phrases shall have the meanings hereinafter ascribed
to
them:
"Area
of Mutual Interest"
means
section 8-38-9-W5M.
"Contract
Depth"
means a
depth sufficient to penetrate thirty (30) meters into the Leduc formation
or a depth of Four Thousand and fifty (4,050) meters subsurface,
whichever
shall
be
the lesser.
"Earning
Well"
means
the well to be drilled at 14 of 9-38-9-W5M.
"Farmin
Interest"
means
three percent (3.000%) farmin cost interest Farmee has agreed to
pay
with respect to the drilling of the Earning Well.
"Farmout
Lands"
means
the lands and leases more particularly described in Schedule "A"
attached hereto.
"Farmout
Procedure"
means
those portions of the 1997 CAPL Farmout and Royalty Procedure
which are adopted by this Agreement, the elections for which are
more
particularly
set forth in Schedule "B" attached hereto.
"Operating
Procedure"
means a
standard 1990 CAPL operating procedure and 1988 PASWC
Accounting Procedure encompassing the rates and elections set forth in
the
attached
Schedule D
"Strachan
AFE"
means
the authority for expenditure generated by Farmor with respect to
the
drilling of the Earning Well, a copy of which is attached as Schedule
"C".
1.2
The
following Schedules are attached to and incorporated as part of this
Agreement:
Schedule
"A" - Farmout Lands
Schedule
"B" - Elections for Farmout Procedure
Schedule
"C" - Strachan AFE
Schedule "D"
- Elections for Operating Procedure
1.3
In
the
event of a conflict between a provision or term of the Agreement and a provision
or
term
of the Operating Procedure or a provision or term of a Schedule, the provision
or term of this
Agreement shall prevail.
ARTICLE
2
Application
of Farmout Procedure
2.1
The
following provisions of the Farmout Procedure shall apply:
Clauses
1.01 Definitions and 1.02 Incorporation of Provisions from 1990 CAPL
Operating
Procedure;
Article
2.00 - Title and Encumbrances;
Article
5.00 - Overriding Royalty;
Article
6.00 - Conversion of Overriding Royalty;
Article
8.00 - Area of Mutual Interest;
Article
11.00 - Land Maintenance Costs;
Article
12.00 - Assignment;
Article
15.00 - Dispute Resolution; and
Article
16.00 - Goods and Services Taxes.
ARTICLE
3
Farmout
Provisions
3.1
The
Farmor anticipates that the Earning Well will be Spudded on or before October
15, 2005
The
parties hereto acknowledge that the operator of the Earning Well is
Rosetta
Exploration
Inc. (hereinafter referred to as the "Operator").
3.2
The
Farmee acknowledges receipt of a copy of the Strachan AFE and approves the
drilling
and casing or Abandonment of the Earning Well based upon the Strachan AFE.
The
Farmee
agrees to participate and pay for its Farmin Interest share of the costs
of
drilling the Earning
Well to Contract Depth and, subject to the provisions herein set forth, its
Farmin Interest share
of
the costs of the Completion, Capping or Abandonment of the Earning Well.
The
Farmee shall,
provided that it elects to participate in the Completion and Equipping of
the
Earning Well, be
responsible to pay its Farmin Interest share of all subsequent authorities
for
expenditure and costs
which relate to the Completion and Equipping of the Earning Well. The Operator
has arranged
blow out insurance with respect to the Earning Well and has included the
Farmor
and Farmee
in
the coverage. The cost of the blow out insurance is in addition to the costs
shown on the
Strachan AFE and the Farmee agrees to pay its Farmin Interest share of such
costs. Farmee will
pay
a cash call advance to Farmor of one hundred and ten percent (110%) of its
Farmin Interest
share of the costs shown on the Strachan AFE as well as the estimated costs
of
the blowout
insurance, both of which are to be received by Farmor six (6) days before
the
drilling rig begins
to
move. The anticipated commencement date for the drilling rig to move is
October
1, 2005.
The
Farmor will immediately advise the Farmee of any change in the date. If payment
of the
cash
call is not received by the Farmor within the time set forth above then,
at the
Farmor"s option,
this Agreement will be terminated and of no force and effect.
3.3
The
Farmor shall provide notice to the Farmee with respect to the Spudding of
the
Earning
Well.
3.4
If
the
Earning Well has been drilled to Contract Depth and if Petroleum Substances
are
not
reasonably anticipated to be present in Paying Quantities from any zone in
the
Earning Well, the
Farmor shall promptly comply with the provisions of Article 4.
3.5
If
the
Earning Well has been drilled to Contract Depth and if Petroleum Substances
from
any
zone
in the Earning Well are reasonably anticipated to be present in Paying
Quantities, the Farmor
will advise the Operator of the Farmor and Farmee's desire to set production
casing and participate
in Production Tests. However, if those Petroleum Substances are composed
predominantly
of natural gas and the Operator intends to Cap the well and to delay those
Production
Tests, the Farmor must give notice to the Farmee of that intention and the
reasons for that
proposed delay upon receipt of same from the Operator. Unless the Farmee
reasonably objects
to that proposed delay within three (3) days of the receipt of that notice,
the
Farmor may advise
the Operator that it may Cap the Earning Well, in which case the Operator
will
conduct those
tests on or before the later of the second (2nd) anniversary date of the
Earning
Well drilling rig
release or as soon as practicable after an economic market for the affected
Petroleum Substances
becomes available, provided that any dispute respecting the reasonableness
of
the
Farmee's
objection to that proposed delay or the availability of an economic market
will
be resolved
pursuant to Article 15 of the Farmout Procedure. If the Operator has not
conducted
those
Production Tests within two (2) years of the drilling rig release of the
Earning
Well, the Operator
will, at the end of that year and every two (2) years thereafter until the
Operator has conducted
those tests, give notice to the Farmee of an intention to delay further the
conduct of the
Production Tests and the reasons for that proposed delay, in which case the
preceding sentence
will apply mutatis
mutandis to
each
such notice. When the Operator has conducted those
Production Tests, the Operator will Complete or Abandon the Earning Well
as soon
as practicable.
3.6
If
the
Operator encounters mechanical difficulties or impenetrable formations that,
in
the Operator's
reasonable opinion, make further drilling of the Earning Well impractical
prior
to
attaining
the Contract Depth, the Operator will immediately give notice to the Farmor
of
those circumstances
and the Operator's intention to Abandon the Earning Well. The Farmor shall
immediately
provide such notice to the Farmee. The Operator will Abandon that well subject
to Article
4, provided that the first sentence of Clause 4.1 will not apply if the Farmor
and Farmee earn
an
interest in the Farmout Lands by virtue of a substitute well. If the Operator
elects to Spud
a
substitute Earning Well on the Farmout Lands it shall provide notice of its
intention, which
notice shall include a description of the proposed location, the proposed
date
of Spudding, and
an
updated authority for expenditure with respect to the costs of drilling and
setting of casing
or
abandonment of the Earning Well. This notice will be immediately provided
to the
Farmee by the
Farmor. The Farmee shall have fifteen (15) days from receipt of the Operator's
notice to drill the
substitute well to elect whether or not it wishes to participate in the
substitute well as to its Farmin
Interest. If it does not advise the Farmor that it elects to participate
within
fifteen (15) days
of
the receipt of the notice of drilling the substitute well then it will be
deemed
to have elected
not to participate in the substitute well and no earning shall have occurred
and
this Agreement
shall be terminated and of no force and effect. If it elects to participate
all
rights and obligations
applicable to the Earning Well will apply in the same manner to the substitute
well.
3.7
If
the
Earning Well has been drilled to Contract Depth and Completed, Capped or
Abandoned
and the Farmee is not in default of any of its obligations with respect to
the
Earning
Well,
it
will have earned:
(a)
in
the Spacing Unit for the Earning Well:
i)
a
1.500% interest in the petroleum and natural gas below the base of the
Mannville
excluding natural gas in the Leduc formation; and
ii)
a
3.000% interest in the natural gas in the Leduc formation before payout
subject
to payment of the Overriding Royalty which is convertible upon payout
at
royalty owners option to 50% of the Farmee's Interest; and
(b)
a
1.200% interest in the rights below the base of the Shunda formation in Section
10,
Township 38, Range 9W5M.
(c)
a
0.966% interest in the rights below the base of the Shunda formation in Sections
15
and
16, Township 38, Range 9W5M. down to the base of the deepest
formation
penetrated.
The
Operator shall pay all royalties with respect to the Farmin Interest which
attach to the interest
earned by the Farmee on the Spacing Unit for the Earning Well as shown in
Schedule
"A"
hereto.
3.8
If
the
Earning Well is Capped and the Farmee participates in the Capping then the
Farmee
shall pay its Farmin Interest share of all costs and expenses required to
finish
Completing
or Abandoning the well.
3.9
If
the
Farmee participates in the completion of the Earning Well then the Farmee
shall
also
pay
its Farmin Interest share of the costs and expenses to Equip the Earning
Well to
place the
well
on production.
3.10
If
transportation, compression, processing or other facilities are required
to
produce Petroleum
Substances from the Earning Well, then, after consultation with the Farmee,
the
Farmor
shall provide to the Farmee an authority for expenditure and a cash call
with
respect to its
Farmin Interest. If the Farmee does not pay a cash call in full at least
ten
(10) days prior to the
start
of construction operations relating to the operation set forth in the applicable
authority for
expenditure, Farmee will be deemed to have elected to not participate in
the
operation described
in the authority for expenditure. If the Farmee elects or is deemed to have
elected not to
participate in the construction of a facility, then the owner of the facility
will charge the Farmee
a
fee for the use of the facility.
3.11
Prior
to
December 31, 2006 no party shall be entitled to propose any independent
operation
pursuant to Article X of under the Operating Procedure which applies between
the
parties
with respect to any of the Farmout Lands in which the Farmee has earned an
interest ("Joint
Lands").
Provided however that if, after consultation with the other party, one but
not
both
parties wishes to drill a well ("Drilling
Party")
on the
Joint Lands, then it shall provide a written
notice ("Drilling
Notice")
to the
other party ("Receiving
Party")
which
shall set forth:
the
location
and target depth of the well,
the
estimated
costs to drill and case or Abandon the well,
the
anticipated Spud date for the well, and
a
copy of the
proposed drilling and completion program for the well.
The
Receiving Party shall have twenty (20) days after receipt of the Drilling
Notice
to advise the Drilling
Party whether or not it wishes to participate in the drilling of the well.
Failure to advise
the
Drilling Party of its election within the twenty (20) day period will be
deemed
to be an election
not to participate in the well. If the Receiving Party elects or is deemed
to
have elected not
to
participate, then the Receiving Party will be deemed to have farmed out its
interest to the Drilling
Party and the Drilling Party will upon the drilling of the well at the location
and to the depth
set
forth in the Drilling Notice have earned one hundred percent (100%) of the
Receiving
Party's
interest in the drilling Spacing Unit for the well subject to the reservation
of
the Overriding
Royalty. If the well is not spudded within ninety (90) days of the receipt
of
the
Drilling
Notice by the Receiving Party, then the well shall not be spudded unless
another
Drilling Notice
is
delivered to the Receiving Party.
3.12
The
parties acknowledge that the Farmor has also executed a Farmout and
Participation Agreement
with the Operator relating to the Farmout Lands. The parties further acknowledge
that
the
Operator has entered into a joint venture and farmout agreements with third
party entities ("Third
Party Entities") whereby Third Party Entities have agreed to participate
in the
drilling of the
Earning Well and accordingly the Farmor and the Operator are obligated to
provide notice to Third
Party Entities if it wishes to set casing in the well and conduct Production
Tests or if it wishes
to
Abandon the Earning Well. If the Operator wants to Abandon the Earning Well
but
any
or
all of Farmor, Farmee, and Third Party Entities wish to take over the Earning
Well then each
of
the Farmor, Farmee, and the Third Party Entities shall be entitled to acquire
the interest owned
by
the Operator in the Earning Well which shall be shared proportionally between
or
among
the
Third Party Entities who elect to take over the well, on the basis that their
participating
interests relate to one another.
3.13
If
the
Operator decides to Abandon the Earning Well and none of the Farmor, Farmee
or
Third
Party Entities elect to take over the Earning Well, then the well will be
Abandoned and the Farmee
shall pay its Farmin Interest share of the Abandonment costs.
3.14
The
Area
of Mutual Interest will apply until December 31, 2007, the provisions of
Article
8
in the
Farmout Procedure shall apply and the Farmee shall be entitled to participate
in
the Area of
Mutual
Interest as to an undivided 1.848% interest. If the Farmee does not earn
an
interest in the
Farmout Lands then the Area of Mutual Interest will terminate as of the date
that the Farmee's
right to earn an interest terminates.
3.15
In
the
event that the Operator serves a supplemental Authorization for Expenditure
covering
cost overruns on the Earning Well, the supplemental AFE shall be
immediately
forwarded
to the Farmee with a cash call. If payment of the cash call is not received
in
full by the Farmor
on
or within twenty (20) days from receipt by Farmee, the Farmee shall be deemed
to
have
elected to not participate in the operation and any interest to be earned
or
rights granted hereunder
shall be forfeited and this Agreement shall be terminated and of no force
and
effect.
ARTICLE
4
Abandonment
of Wells
4.1
If
the
Earning Well has been drilled to Contract Depth, but the Earning Well is
not
Completed
and no Operating Agreement applies between the Farmor and the Farmee
with
respect
to the Earning Well, the Farmor shall give notice to the Farmee if the Farmor
intends to Abandon
that Earning Well. If, within twelve (12) hours following the Farmee's receipt
of that notice
and information from the Farmor when a rig is located on the wellsite, or
within
ten (10) days
of
the Farmee's receipt of that notice and information in any other
case:
(a)
the
Farmee fails to reply to the Farmor or gives notice to the Farmor that it
consents
to the Abandonment of that well, the Farmor will promptly advise
the
Operator
to abandon the wellbore of that well and conduct its reclamation work in
a
timely
manner;
(b)
the
Farmee gives notice to the Farmor that it wishes to take over that well,
the
Farmor
will, effective as of the date of the Farmee's election to take over that
well
and
subject to the provisions of Clause 3.12 of this Agreement, assign that well
(including
the material equipment and surface access rights relating solely
thereto
that
the
Farmee wishes to use) to the Farmee, without warranty. The Farmor will
be
released from all obligations and liabilities accruing for the property
assigned
to
the
Farmee pursuant to this Clause following that assignment. However, that
assignment
will not release the Farmor from any liability that may have
accrued
to
it
prior to that assignment.
4.2
If
the
Farmee takes over a well pursuant to this Article, the Farmee will Complete
or
Abandon
the well at its own cost and expense and it will save harmless the Farmor
from
all costs
and
expenses relating to the Abandonment of the Well.
4.3
If
the
Farmee successfully Completes the well in a zone originally contained in
the
Farmout
Lands, the Farmor will assign to the Farmee, without warranty, the Farmor's
Working
Interest
in the Spacing Unit for that well in only the zone(s) Completed by the Farmee
and the Petroleum
Substances therein, effective as of the date of the Farmee's election to
take
over that well.
That assignment will not release the Farmor from any obligation that should
have
been performed
by it or any liability that may have accrued to it prior to that assignment.
If
the Farmee
does not Complete the well in a zone originally contained in the Farmout
Lands,
the Farmor
will not be required to make an assignment to the Farmee pursuant to this
Clause.
4.4
From
and
after the effective date referred to in Clause 4.3, the Operating Procedure
will
apply
mutatis
mutandis to
the
Farmee Parties respecting a well taken over pursuant to Clause 4.4 and
the
applicable zone(s) of the Spacing Unit, provided that the Overriding Royalty
will not be payable
for that well until such time as the production penalty prescribed by the
Operating Procedure
for that operation is recovered or ceases to apply. At that time, each Farmee
Party that elected
not to participate in the takeover of that well may elect to convert to a
Working Interest in
that
well on the same basis as is provided in Article 6.00 of the Farmout Procedure.
The Farmee
Parties will appoint one of them to be the initial Operator under the Operating
Procedure. If
no
Operating Procedure is included in the Agreement, the term "Operating Procedure"
in this Clause
means the standard form 1990 CAPL Operating Procedure and as an attachment
thereto the
standard form 1988 PASC Accounting Procedure, with those rates and elections
as
the Farmee
Parties taking over that well may negotiate at the required time.
4.5
The
provisions of this Article will apply in the same manner to any Royalty Well
on
the Royalty
Lands that is not an Earning Well, subject to the following
conditions:
(a)
the
Royalty Owner only has the right to take over that Royalty Well if it then
retains
a
right to convert its Overriding Royalty to a Working Interest in an Earning
Well under Article 6.00; and
(b)
the
Royalty Owner does not have the right to elect to take over that Royalty
Well
until
the
Parties holding Working Interests in that well have all elected to
Abandon
that well.
ARTICLE
5
Miscellaneous
5.1
This
Agreement shall, in all respects, be subject to and be interpreted, construed
and enforced
in accordance with the laws in effect in the Province of Alberta. Each party
hereto
irrevocably
accepts and submits to the exclusive jurisdiction of the courts of the Province
of Alberta
and all courts of appeal therefrom.
5.2
Time
shall be of the essence of this Agreement.
5.3
The
address for notices of each of the parties hereto shall be as
follows:.
Farmor:
Odin Capital Inc.
P.O
Box 36007
Lakeview
RPO – 6449 Crowchild Trail S.W.
Calgary,
Alberta T3E 7C6
Attention:
Matthew Philipchuk
Fax:
(403) 246-7935
Farmee:
TV Oil and Gas Canada Limited
6160
Genoa Bay Rd
Vancouver,
B.C. V9L 5Y5
Attention:
Christopher Paton-Gay
Fax:
Any
of
the parties hereto may from time to time change its address for service herein
by giving written
notice to the other parties hereto. Any notice may be served by personal
service
upon a party
hereto or by mailing the same by prepaid post in a property addressed envelope
addressed to
the
party hereto at its address for service hereunder. Any notice given by service
upon a party hereto
shall be deemed to be given on the date of such service and any notice given
by
mail shall be
received by the addressee when actually received. Any notice may be served
by
instantaneous
electronic means to the number for notice herein set forth. Any notice given
by
service
upon a party and any notice given by instantaneous electronic means shall
be
deemed to be
given
to and received by the addressee on the day (except Saturdays, Sundays,
statutory holidays
and days which the offices of the addressee are closed for business) of service
or after the
sending thereof with appropriate answerback acknowledgment, provided it was
sent
before 2:00
p.m.; otherwise it shall be deemed to be received the next following business
day.
5.4
This
Agreement may be amended only by written instrument signed by all parties
hereto.
5.5
The
Farmor shall be entitled to transfer and assign a portion of its interest
to a
third party provided
however that:
(a)
prior
to earning the Farmor will only look to the Farmee for performance;
and
(b)
after
earning the Farmee may assign its interest with the consent of the Farmor
which
consent will not be unreasonably withheld.
5.6
This
Agreement shall be binding upon and shall enure to the benefit of the parties
hereto and
their
respective successors.
IN
WITNESS WHEREOF the
parties hereto have executed this Agreement as of the date first
above
written.
ODIN
CAPITAL
INC.
Per:
TV
OIL
AND GAS
CANADA
LIMITED
Per:/s/C.
Patton
Gay
Per:C. Patton
Gay
This
is the signature page attached to and forming part of a Farmin Particiaption
Agreement dated September 23, 2005
between Odin Capital Inc. and TV Oil and Gas Canada Limited (Strachan Area,
Alberta)
Schedule
"A"
attached
to and forming part of the Strachan Participation and Farmout Agreement made
as
of September 23, 2005 between Odin Capital Inc. and TV Oil and Gas Canada
Limited
Farmout
Lands
(This
Schedule consists of 2 pages, including this page)
FARMOUT
LANDS
Title
Documents
|
Lands
|
Farmee's
Earned
WI*
and
Owned
WI
|
Encumbrances
|
Crown
P&NG Licence
No.
5596020176
|
Twp.
38 Rge. 9 W5M Sec 9
Natural
Gas in the Leduc
|
3.000%BPO
1.500%APO
|
1)
Crown S/S
2)
3.5% NCGORR to Calgary International
Energy
3)
*5.0% NCGORR to Northrock
and TKE
(APO
only)
4)
12% ORR to Rosetta convertible
at payout
|
Crown
P&NG Lease
No.
0604120298
|
Twp.
38 Rge. 9 W5M Sec 9
P&NG
below the base of the
Mannville
excluding natural gas in
the
Leduc
|
1.500% |
1)
Crown S/S
2)
3.5% NCGORR to Calgary International
Energy
3)
*5.0% NCGORR to Northrock
and TKE (APO only)
|
Crown
P&NG Licence
No.
5596020176
|
Twp. 38 Rge. 9 W5M Sec 10
P&NG
below base Shunda
|
1.200% |
1).200%
1) Crown S/S
2)
3.5% NCGORR to Calgary International
Energy
3)
*5.0% NCGORR to Northrock
and TKE (APO only)
|
Crown
P&NG Licence
No.
5596020176
|
Twp.
38 Rge. 9 W5M Sec 15 & 16
P&NG
below base Shunda
|
0.966%
|
1)
Crown S/S
2)
3.5% NCGORR to Calgary International
Energy
3)
*5.0% NCGORR to Northrock
and TKE (APO only)
|
*
Contingent on Farmor earning under the Northrock Farmout Agreement.
Schedule
"B"
attached
to and forming part of the Strachan Participation and Farmout Agreement made
as
of September 23, 2005 between Odin Capital Inc. and TV Oil and Gas Canada
Limited
Elections
for Farmout Procedure
(This
Schedule consists of 2 pages, including this page)
1997
CAPL FARMOUT & ROYALTY PROCEDURE ELECTION
SHEET
1.
Effective Date (Subclause 1.01(f)) - September
23, 2005
2.
Payout
(Subclause 1.01(t), if Article 6.00 applies) - Alternate
-
A
3.
Incorporation of Clauses from 1990 CAPL Operating Procedure (Clause
1.02)*
(i)
Insurance (311) Alternate
-
A
4.
Article 4.00 (Option Wells) will
apply
5.
Article 5.00 (Overriding Royalty) will
apply
6.
Quantification of Overriding Royalty (Subclause 5.01A, if
applicable)
(i)
Crude
Oil (a) - Alternate
1 - 12%
(ii)
Other (b) - Alternate
1 - 12%
7.
Permitted Deductions (Subclause 5.04B, if applicable) - Alternate
1
8.
Article 6.00 (Conversion of Overriding Royalty) will
apply
If
Article 6.00 applies, conversion will be to:
(a)
50%
of original interest
9.
Article 8.00 (Area of Mutual Interest) will
apply
10.
Reimbursement of Land Maintenance Costs (Clause 11.02) will
not apply
Schedule
"C"
attached
to and forming part of the Strachan Participation and Farmout Agreement made
as
of September 23, 2005 between Odin Capital Inc. and TV Oil and Gas Canada
Limited
Strachan
AFE
(This
Schedule consists of 2 pages, including this page)
Schedule
"D"
attached
to and forming part of the Strachan Participation and Farmout Agreement made
as
of September 23, 2005 between Odin Capital Inc. and TV Oil and Gas Canada
Limited
Operating
Procedure and Accounting Procedure Elections
(This
Schedule consists of 2 pages, including this page)
1990
C.A.P.L. OPERATING PROCEDURE
Clause
311: INSURANCE:
Alternate
A
Clause
604: MARKETING FEE:
Alternate
A
Clause
903: CASING POINT
ELECTION: Alternate
A
Clause
1007: PENALTY WHERE INDEPENDENT
WELL RESULTS IN PRODUCTION:
Development
Wells
300%
Exploratory
Wells
500%
Clause
1010(a)(iv): TITLE PRESERVING
PERIOD: 180
days
Clause
2401: DISPOSITION
OF INTERESTS:
Alternate
A
1988
P.A.S.C. ACCOUNTING PROCEDURE
Clause
105: OPERATING
FUND:
10%
Clause
110: APPROVALS:
2
or more totalling 65%
Clause
202(b): Not
Chargeable
Clause
203(b): Employee
Benefits: 25%
Clause
205(b): ENGINEERING
AND/OR DESIGN:
Delete
in its entirety.
Clause
217:
2.5%
for
tubular goods 50.8 mm and over and other items with new price over $5,000
5%
of
the
cost of all other material
Clause
302: OVERHEAD
RATES:
(A)
EXPLORATION
PROJECT (D)
OPERATIONS
AND MAINTENANCE
(1)
5%
of
first
$50,000 (1)
10%
of
Cost;
and
(2)
3%
of
next
$100,000
(2)
$100 for Producing Well per
month
(3)
1%
of
excess
(b)
Drilling
Well
(1)
3%
of
first
$50,000
(2)
2%
of
next
$100,000;
(3)
1%
Excess
(c)
Construction
(1)
5%
of
first
$50,000
(2)
3%
of
next
$100,000
(3)
1%
Excess
Subclauses
302(e)(2) or 302(e)(3): shall
not.
be
adjusted Pricing
of Joint Material Purchases, Transfers and Dispositions: $25,000
for
requiring approval
Inventories
by Operator at 5
year
intervals or upon the request of a Non Operator.