yawn fest, page-14

While the deal with OMV seems to be the focus
overlooked to some extent is the deal that Geoff did with Shell on the 3 blocks to the south.

Shell are also comming up to decisions as to drilling by August 2010 on two of these blocks and 2011 on the third. Else the acreage reverts to OXX.

Note that this deal was done when OCT and Strada were separate and each held 50% of these permits.
Since the merger you can read it as:

$5m US for each 'Discovery' up to 3 per permit.

$5m US for an appraisal well or application for a location, production licence or retention lease in respect of any Discovery

Octanex a 1% Overriding Royalty payable
on the basis of the gross assessable petroleum receipts recovered from a permit.
If at any time Shell wishes to exit from any permit a 50% interest in the relevant permit
then Shell.

If I remember rightly Shell paid OCT and Strada 15m US each up front for these blocks.

Shell has been spending money on surveys on these blocks.
Lots of 'ifs' but if Shell were to make commercial discoverys then the mind boggles.

Read on:

WA-384-P, WA-385-P and WA-394-P
COMPLETION OF COMMERCIAL ARRANGEMENTS WITH SHELL
Octanex NL (NSX Code : OCT) is pleased to announce that, following approvals by the
Foreign Investment Review Board (FIRB) and the Designated Authority pursuant to the
Petroleum (Submerged Lands) Act, it has received the monetary component, (US)$15
million, from Shell Development (Australia) Pty Ltd (Shell), of the overall commercial
arrangements with Shell for the disposition of the entire 50% working interest of Octanex in
each of Petroleum Exploration Permits WA-384-P, WA-385-P and WA-394-P, the locations
of which are shown on the map attached. Shell has also acquired from Strata Resources N.L.
(Strata) the remaining 50% interest in those permits on the same terms.
Under the agreements, first announced on 21 February 2008:
• Shell has agreed it must either commit to a well before the start of Permit Year 5 (21
August 2010 in the case of WA-384-P and WA-385-P and 21 February 2011 in the case
of WA-394-P) or reassign to Octanex for nil consideration a 50% interest in any permit
where no well commitment is made.
• Shell has agreed to make a “Discovery Payment” to Octanex for any Discovery made in
the permits but limited to a maximum of three Discovery Payments per permit. Within
six months of having made a discovery Shell must either:
(i) Pay US$2,500,000 to Octanex; or
(ii) Reassign to Octanex a 50% interest in the permit in which the discovery
was made.
• Following an initial Discovery Payment, if Shell:
(i) spuds an appraisal well in respect of the Discovery; or
(ii) applies for a location, production licence or retention lease in respect of any
Discovery;
then Shell must pay a further US$2,500,000 to Octanex.
2
• Shell has also granted in favour of Strata and Octanex a 1% Overriding Royalty payable
on the basis of the gross assessable petroleum receipts recovered from a permit.
• If at any time Shell wishes to exit from any permit a 50% interest in the relevant permit
must be offered back to Octanex.
Shell is a world class operator and is committed to the conduct of a thorough assessment of
the exploration potential of the three permits. While Octanex no longer has any direct equity
interest in the permits it retains significant access to the upside exploration potential in the
permits through the mechanism of the Discovery Payments described above and the
Overriding Royalty.
MAP OF PERMITS
By Order of the Board
D.B.