Section 3: TERMS OF LICENCE

(1) The term of the Licence is for five (5) years from the date of issue. (2) The Licœnce shall confer on the Companies in addition to the rightsgranted by the Mining (Mineral Oil) Act and Regulations the exclusive right to carry out within the area specified in this Agreenent such operations as are provided for in this Agreement. (3) Not later than the end of six months after the coming into force of this Agreement the initial area shall be reduced by at least 30 per cent. Subsequently, not later than the end of 30months after the coming into force of this Agreement, the area shall be reduced again to.the extent necessary to ensure. that not more than 40 per cent of the initial area shall remain at the Companies' disposal. (4) The Companies shall designate the boundaries of the area to be relinquished on each occasion, and shall notify the Government accordingly not less than three months in advance of the due date. Such notice shall be accompanied by a map and a clear descrip tion of the plots to be relinquished the shape of plots of which shall be as determined by the Director of Mines. However, the Companies shall not be required to relinquish any area that is immediately adjacent toa proven area and which is yet untested. (5) The rent payable by the Companies in respect of the Exploration Areas shall be as stated in the Licence. (6) The Companies shall throughout the period of the licence be obliged to spend annually on bona fide exploration the sum specified in this Agreement, The-Companies shall submit to the Director of Mines at the end of each oil exploration year detailed returns of expenditure incurred in respect of th s sub-clause. Na 2 Exploration, Mining atd Processing Mineral 1982 5