SCHEDULE 2MODEL CLAUSES FOR PRODUCTION LICENCES RELATING TO FRONTIER AREAS—NO BREAK CLAUSE

Option to Continue Licence into a Third Term

5.—(1) This clause 5 shall apply subject to the requirements of clause 9.

(2) At any time not later than one month before expiry of the Second Term the Licensee may—

(a)subject to payment of those sums hereinafter provided for and to performance of the terms and conditions herein contained including, without limitation, those set forth in paragraph (3) of this clause; and

(b)conditional upon due performance by the Licensee of the Work Programme on or before expiry of the Second Term

give notice in writing to the Minister in the manner hereinafter provided that he desires this licence to continue in force in relation to part of the Licensed Area (hereinafter called “the Second Continuing Part”).

(3) Where the Licensee gives notice to the Minister in accordance with paragraph (2) of this clause such notice must indicate that he will determine this licence in relation to such part of the Licensed Area as shall be described by the Licensee in the notice (hereinafter called “the Second Surrendered Part”) in accordance with the requirements of paragraph (4) of this clause.

(4) Subject to paragraph (5) of this clause the Second Surrendered Part must consist in an area which, when taken together with any one or more areas previously surrendered in accordance with clauses 4 or 8 hereof, constitutes no less than seven-eighths of the Initial Licensed Area.

(5) The Licensee shall not be obliged to surrender so much of the Licensed Area that following such surrender the Licensed Area comprises less than thirty Sections.

(6) Any notice served in accordance with paragraph (2) of this clause shall specify a date not later than expiry of the Second Term on which the Second Surrendered Part is to be surrendered.

(7) This licence shall upon the option conferred by this clause being duly exercised but subject to the provisions of clause 3 of this licence continue in respect of the Second Continuing Part for the Third Term.