Exploration Licence Template

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Table of Contents


Exploration Licence # _________________

THIS LICENCE is effective as of the ___________________________________

ISSUED BY THE MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT (hereinafter called the "Minister"),

TO THE INTEREST OWNER, ______________________________________

WHEREAS the Minister is empowered pursuant to the Act to issue an Exploration Licence (hereinafter called the "Licence") relating to the Lands;

AND WHEREAS the Minister has selected the bid submitted by _______________ as the winning bid in respect of parcel No. ___ posted in the ______________Call for Bids;

AND WHEREAS, in submitting such a bid, _______________ has agreed to the terms and conditions of this Licence;

NOW THEREFORE this Licence is issued upon the following terms and conditions:

1. Interpretation

(a) In this Licence, including all Schedules annexed hereto, unless the context requires otherwise:

i."Act" means the Canada Petroleum Resources Act;

ii."Operations Act" means the Canada Oil and Gas Operations Act;

iii."Lands" means the frontier lands described in Schedule I or such portion thereof that remains subject to this Licence from time to time;

iv."Period" means a segment or portion of the term described in Schedule III or, if no period is described therein, means the entire term of this Licence;

v."Regulations" means any and all regulations now made or that may be made at any time under the authority of the Act or the Operations Act, and any Acts passed in substitution therefor.

(b) All words and phrases used in this Licence have the meaning given by the Act, the Operations Act, or the Regulations

(c) This Licence is issued under and subject to the Act, the Operations Act, and any Act passed in substitution therefor, the Regulations and the provisions of any other Act of Canada and regulations made thereunder that relate to or affect this Licence and the Act. The Regulations and such other Act and other regulations shall be deemed to be incorporated into this Licence as though specifically enumerated herein.

(d) The following Schedules are attached and made part of this Licence: Schedule I -Lands Schedule II -Ownership Schedule III -Term and Conditions Schedule IV -Representative(s) and Addresses for Service

2. Rights

(a) Subject to the Act and the Operations Act, this Licence confers, with respect to the frontier lands to which this Licence applies, i.the right to explore for, and the exclusive right to drill and test for, petroleum; ii.the exclusive right to develop those frontier lands in order to produce petroleum; and iii.the exclusive right, subject to compliance with the other provisions of the Act, to obtain a production licence.

(b) This Licence shall be held by the interest holders as to the Lands, in the shares as set forth and described in Schedule II, or as amended from time to time.

(c) The rights under this Licence are subject to the right of any other licence holder to enter on and use the area subject to this Licence to the extent necessary to enable that other licence holder to exercice the rights under that other licence.

3. Term

Subject to the Act, the term of this Licence is as set out in Schedule III.

4. Annual Rentals

(a) Rentals, if any, shall be levied annually at the rate set forth in Schedule III.

(b) Rentals, if levied, shall be paid in advance, in respect of the Lands. The payment of rentals may be secured by cheque, promissory note, letter of credit or other negotiable financial instrument in a form satisfactory to the Minister.

(c) Rentals paid shall be refunded annually at the rate set forth in Schedule III.

5. Indemnity

(a) It is a condition of this Licence that the interest holders shall, in respect of that portion of the Lands to which such interest holder's share relates, at all times, jointly and severally, indemnify and save harmless Canada from and against all claims, demands, loss, costs, damages, actions, suits or other proceedings by whomsoever made, sustained, brought or prosecuted, in any manner based upon, occasioned by, or attributable to, anything done or omitted to be done by, through, or under, or with the consent of the interest owner, or an interest holder, notwithstanding any agreement or arrangement entered into by an interest owner or interest holder which does or may result in the transfer, assignment or other disposition of the interest or share therein, in the fulfilment of the terms and conditions made herein or in the exercise of the rights or obligations contained herein.

(b) For greater certainty, interest holders in this Licence who do not hold shares with respect to that portion of the lands in relation to which a claim, demand, loss, cost, damage, action,suit or other proceeding arises are not liable to indemnify Canada under subparagraph(1).

(c) For the purposes of subparagraphs (1) and (2), "Canada" shall not include a Crown corporation.

(d) This clause shall survive this Exploration Licence and will be incorporated into any Significant Discovery Licence and Production Licence that arises therefrom.

6. Liability

(a) An interest holder shall be liable under the provisions of this Licence, the Act, the Operations Act and the Regulations for all claims, demands, loss, costs, damages, actions, suits or other proceedings in respect of any work or activity conducted, or caused to be conducted, by, through, or under, or with the consent of such interest holder. Any transfer, assignment, or other disposition of the interest, or of a share therein, shall not have the effect of discontinuing such liability in respect of such work or activity, related to the interest, or share therein, so disposed, that was conducted before that transfer, assignment, or other disposition was registered pursuant to the Act and Regulations. For greater certainty, liability, as aforesaid, does not relate to any work or activity conducted after such party ceases to be an interest holder in this Licence.

(b) This clause shall survive this Exploration Licence and will be incorporated into any Significant Discovery Licence and Production Licence that arises therefrom.

7. Successors and Assigns

Subject to paragraph 6, this Licence enures to the benefit of and is binding on the Minister and the interest owner and their respective heirs, administrators, successors and assigns.

8. Notice

Any notice, communication or statement required under the Act or the Operations Act shall be served on the designated person, on behalf of the Minister or on the interest owner, as the case may be, by personal delivery, or by fax at that address specified in Schedule IV here of, or such other addresses as may be designated from time to time by the Minister or the interest owner, as the case may be.

9. Waiver and Relief

Where the Minister is satisfied that the Licence requirements as described under clause 2 of Schedule III cannot be executed within the time periods or to the extent provided therein, the Minister may, subject to the Act, grant an extension or extensions thereof in writing, provided always that the Minister is also satisfied that the failure to execute the above requirements is for reasons beyond the reasonable control of the interest owner, and that the interest owner continues to diligently pursue a remedy for such situation.

10. Representative

Unless otherwise designated in the prescribed manner, for the purpose of this Licence the representative or representatives, as the case may be, of the interest owner shall be as specified in Schedule IV.

11. Agreement

The issuance of this Licence by the Minister and acceptance thereof by the interest owner constitutes agreement between the interest owner and the Minister as to the terms and conditions contained herein.

ISSUED at Ottawa, this __________ day of ________________, _______.


_______________________________
WITNESS

_______________________________
MINISTER of Indian Affairs and Northern Development




Schedules for the Exploration Licence

Schedule I

Lands

LATITUDE-LONGITUDE PORTION

AREA: HECTARES

Schedule II

Ownership

LATITUDE\LONGITUDE PORTION INTEREST HOLDER(S) SHARE (%)

Canada Petroleum Resources Act (section 85)
Where an interest holder of an interest or any share therein enters into an agreement or arrangement that is or may result in a transfer, assignment or other disposition of the interest or any share therein, the interest holder shall give notice of the agreement or arrangement to the Minister, together with a copy of the agreement or arrangement or, if the Minister approves, a summary of its terms and conditions or, on the request of the Minister, a copy of the agreement or arrangement.

To comply with this requirement please use Summary Form 15-Notification of an Agreement/Arrangement that is or m ay result in a Transfer.

Schedule III

Terms and Conditions

1.TERM - as per the call for bids.

2.WORK PROGRAM - as per the call for bids.

3.TERMINATION AND EXPIRY - as per the call for bids

4.WORK DEPOSIT - as per the call for bids

5.RENTALS - as per the call for bids

6.ALLOWABLE EXPENDITURES - as per the call for bids

Schedule IV

Representative(s) and Addresses for Service