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Work Programs (Authority to Prospect) A guide to preparing a work program under the Petroleumand Gas (Production and Safety) Act 2004 and Petroleum

Act 1923



This publication has been compiled by Service Training and Regulatory Support of Mines andPetroleum Operations, Department of Natural Resources and Mines.

© State of Queensland, 2013.

The Queensland Government supports and encourages the dissemination and exchange of itsinformation. The copyright in this publication is licensed under a Creative Commons Attribution 3.0 Australia (CC BY) licence.

Under this licence you are free, without having to seek our permission, to use this publication inaccordance with the licence terms.

You must keep intact the copyright notice and attribute the State of Queensland as the source of thepublication.

For more information on this licence, visit http://creativecommons.org/licenses/by/3.0/au/deed.en

The information contained herein is subject to change without notice. The Queensland Governmentshall not be liable for technical or other errors or omissions contained herein. The reader/user acceptsall risks and responsibility for losses, damages, costs and other consequences resulting directly orndirectly from using this information.i



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Contents

Contents i Managing Queensland’s resources 2 The purpose of this guide 2 Before you apply 3 What is a work program? 3

Petroleum and Gas (Production and Safety) Act 2004................................................................... 4 Petroleum and Gas (Production and Safety) Regulation 2004 ...................................................... 8 Petroleum Act 1923 and Petroleum Regulation 2004 .................................................................... 8 Practice manual .............................................................................................................................. 8 Operational policies ........................................................................................................................ 9

Work program requirements 9 Overview of activities to be carried out during the term.................................................................. 9 Work program contents (extent and nature of the activities to be carried out during the year) ..... 9 Where the activities will be carried out ......................................................................................... 12 The estimated cost of activities..................................................................................................... 12 Other relevant information ............................................................................................................ 12 Reasons why the program is considered appropriate .................................................................. 12 Geological model .......................................................................................................................... 12 Exploration rationale ..................................................................................................................... 13

Later work programs 14 Complying with initial work program requirements....................................................................... 14 Complying with current work program.......................................................................................... 14 Amendment to work programs...................................................................................................... 15 Effect of any petroleum discovery.................................................................................................15 Work program criteria ................................................................................................................... 15 Special criteria .............................................................................................................................. 16

Later work programs under the Petroleum Act 1923 16 Application to amend a work program 17

Applying for approval to amend.................................................................................................... 17 Requirements for making an application to amend a work program............................................ 17 Restrictions on amending work program......................................................................................17 Deciding application...................................................................................................................... 18

Appendix 1: Financial Capability Statement 19 Appendix 2: Technical Capability Statement 20 Appendix 3: Technical Capability evidence – example of human resources 21



Managing Queensland’s resources

Petroleum resources in Queensland are owned by the State. Individuals or companies mayapply to explore or extract those resources for commercial purposes.

The Department of Natural Resources and Mines (the department) manages thoseresources on behalf of the state. We do this by applying a regulatory framework to administerthe legislation. The legislation provides a way to assess, develop and utilise the petroleumresources in Queensland for the benefit of all Queenslanders.

Petroleum resources are administered under the Petroleum and Gas (Production and Safety) Act 2004 (the P&G Act), the Petroleum and Gas (Production and Safety) Regulation 2004 (the Regulation) Petroleum Act 1923 (1923 Act) and the Petroleum Regulation 2004. Thelegislation:

outlines how the State’s petroleum resources can be managed in a way thatconsiders ecologically sustainable development and benefits for all Queenslanders;

enhances knowledge of the State’s petroleum resources; creates an effective and efficient regulatory system for the carrying out of petroleum

activities and the use of petroleum and fuel gas; encourages and maintains an appropriate level of competition in the carrying out of

petroleum activities; creates an effective and efficient regulatory system for the construction and operation

of transmission pipelines; ensures petroleum activities are carried out in a way that minimises conflict with other

land uses ; optimises coal seam gas production and coal or oil shale mining in a safe and

efficient way appropriately compensates owners or occupiers of land; encourages responsible land management in the carrying out of petroleum activities; facilitates constructive consultation with people affected by activities, and regulates and promotes the safety of persons in relation to operating plant.

These objectives are taken into account when we assess and grant an Authority to Prospect(ATP). It is done in such a way that ensures best practice, production-oriented, competentexploration and production.

Copies of Queensland Acts and Regulations are available online from the Office ofQueensland Parliamentary Counsel website.

The purpose of th is guide

The department is developing a series of guides to help existing and prospective permitholders understand the legislation and their responsibilities. The purpose of this guide is toassist applicants when lodging a work program with a new application for an ATP and for alater work program.

This guide provides information about the ATP work program requirements and how weassess a work program. You can use this guide to help you prepare for and complete anapplication for an ATP in respect of the work program requirements. It provides detail aboutwhat information you should provide to satisfy the work program requirements of the P&G Act in order that we can complete the assessment of your application.

Should this guide conflict with the statutory requirements of the P&G Act orthe Regulation, the Act or Regulation prevails to the extent of any inconsistency.

http://www.legislation.qld.gov.au/OQPChome.htm






Before you apply

To successfully submit an application for an ATP, the application must be in the approvedform and must be accompanied by the prescribed fee, and also be accompanied by thematerial required under the P&G Act.

Before submitting your application for an ATP, you should familiarise yourself with therelevant application form and the statutory requirements for a work program by referring tothe relevant provisions in the P&G Act 1.

Important note: The information you provide with your application must meet the

statutory requirements and provide the appropriate level of information for assessment.Incomplete applications may be refused.

What is a work program?

A work program is a detailed description of the exploration activities that you will performunder an ATP each year. It is a way of providing detailed information about the nature andextent of activities to be carried out under the permit and is the way the department ensuresyou are achieving the objectives of the petroleum legislation.

The principal objectives of the work program are to: provide an understanding of the nature and extent of the proposed minimum

authorised activities to be conducted on an ATP by the permit holder; allow an assessment of the proposed authorised activities and whether these

activities are appropriate for the geology of the permit area;

allow decisions to be made when assessing competing ATP applications submitted inresponse to a call for tenders, and identify, at the time of renewal, if the current work program has been complied with

and exploration potential of the permit area has been met, and whether or not an ATPshould be renewed based on exploration activities in the work program.

Important note: A work program needs to outline the activities that will be undertaken

each year of the program period. The first program period, or initial work program period, isoutlined in the call for tender, published by the Minister.

Initial work program You need to develop an initial work program (IWP)2, to be submitted with your ATPapplication. Your IWP will more than likely be assessed as part of a competitive tenderprocess and you will need to consider the criteria set out in the tender document.

It is important to note that where the work program assessment was part of a competitiveassessment process, the department will expect a higher standard of compliance with thework program from the holder in order to maintain the integrity of the tender process.Later work program

1 See Chapter 2 Part 1 “Authorities to Prospect” of the Petroleum and Gas (Production and Safety) Act 2004 2 See ss45-49 of the Petroleum and Gas (Production and Safety) Act 2004

Work Programs (Authorities to Prospect) A guide to preparing a work program under the Petroleum and Gas (Production and Safety) Act 2004 and Petroleum Act 1923

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Once an ATP is granted, you will be required to submit a later work program 3 (LWP). TheLWP must be lodged between 40 and 100 business days before expiry of a work programperiod (generally every 4 years), or upon renewal of your permit.

The LWP is an opportunity for you to refine your initial work program to take into account thefindings of the first work period. Generally the department expects the LWP activi ties to bepro-rata to the area of permit . If they are not proportional to the area, you must provide

sufficient reasons to justify why.

Where the LWP is submitted within the term of the ATP (for example for year 5-8 of theterm), the holder must still be able to demonstrate compliance or substantial compliance withthe initial work program. The department may consider submissions where the holderundertakes the remaining work from the initial term in the first year of the next work period,only where that work is in addition to the work considered appropriate for the later workprogram period.

When submitting a later work program at renewal, you will need to demonstrate complianceor substantial compliance with your current work program. (Please refer to the 3/2012 Strict

compliance and substantial compliance policy).

The work program is a key mandatory condition of the permit4. When deciding to renew an ATP, the Minister must be satisfied that the permit holder has substantially complied with the ATP. If, at renewal, you have not met the work program condition and are not able to satisfythe Minister that you have substantially complied with the work program condition, theMinister must not approve the renewal.

Petroleum and Gas (Production and Safety) Act 2004

The P&G Act is what is known as the ‘head of power’ for the regulation of ATPs, and

describes what needs to be done. It includes general provisions about ATPs in addition tospecific requirements for work programs. Both the applicant or holder and the departmenthave responsibilities relating to the work program provisions. The below table is notexhaustive, but provides a high level overview of key requirements. It is the obligation ofthe holder of, or an applicant for an ATP, to understand the obligations as prescribedby the legislation.

Your responsibilities and the department’s responsibilities are summarised in the tablebelow:

Sectionof Act

Appl icant responsib il it ies Department responsibi li ties

Initial work programs

s47 Ensure that the initial work program states theprogram period.

The program period must be the same as therequired period under the relevant call for tenders.

Assess that the work program is relevant to theadvertised program period.

s48 ands49

Provide the following general requirements for aninitial work program:

an overview of the activities to be carried outunder the authority for the entire term.

For each year of the program period:

The extent and nature of petroleumexploration and production testing proposed

d out during the year

Assess the appropriateness of the initial workprogram in relation to the work program criteria below:

potential and likeliness of petroleum discovery

extent and nature of the exploration – forexample, proposed surveys, number of wells,etc.

when and where the exploration program willto be carrie 3 See ss50-58 of the Petroleum and Gas (Production and Safety) Act 2004 4 See s78 of the Petroleum and Gas (Production and Safety) Act 2004


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Sectionof Act


the general location of where the activities arelikely to be carried out

the estimated costs of the activities.

Maps that show where the activities are proposedto be carried out.

Any other information relevant to the assessmentcriteria.

Reasons why the program is consideredappropriate.

You may be required to follow a set format for theinitial work program, if it is prescribed in theregulation.

take place.

Later work programs

s51 ands57

Provide the following general requirements for alater work program:

comply with the initial work programrequirements (except program period)

state the extent you have complied with thecurrent work program

If amendments have been made to thecurrent work program, state if the changeshave been incorporated in the proposedprogram and the effect the changes have onthe proposed program

State the effect that any petroleum discoveryhas had on the work program.

Assess that the work program :

complies with the initial work programrequirements (except program period)

complies with the initial work program to the

extent that the applicant states, by reviewinglodged notices and reports

still meets the requirements if amendmentshave been made to the current work programand measure the effects the changes have onthe proposed program to determine the effectthat any petroleum discovery has had on thework program.

and also assess:

the work program criteria and capabilitycriteria and any special criteria that applied fordeciding the application for the authority toprospect

any amendments made to the authority or itscurrent work program, and the reasons for thechanges

any notice under section 544, commercialviability report or independent viabilityassessment for the authority

if the authority was granted in response to atender, any other work program proposed byother tenders for the authority must be takeninto account to the extent the other programincludes the period of the proposed plan.

s52 Program must state the duration of the program

period, which would be: Four years or less—the remainder of the

renewed term

Four years or longer—four years from thestart of the renewal period or longer if Ministerapproves (not longer than the duration of thepermit term).

Determine a renewal period based on the initial

work program achievements and later workprogram strategy.

s53 Evaluation programs for potential commercialareas:

If your later work program includes an evaluationprogram for a potential commercial area (PCA),you must also include in the work program thework necessary to implement this evaluation

program.

Assess the later work program to ensure that itincludes the necessary work to achieve theoutcomes of the evaluation program for a potentialcommercial area.

s54 If an applicant wants to divide an existing ATP intotwo or more ATP (under Division 8, Subdivision 2of the P&G Act) the combined effect of the work

Assess that the work program for an ATP (that isthe product of a previous ATP having beendivided) achieves no less than the goals of the


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Sectionof Act


programs needs to have the same effect (no less)than the work program for the original ATP.

work program of the original ATP.

s56 Until either an approval or rejection decision hasbeen made, the proposed work program applies tothe permit and you can carry out an authorisedactivity for the permit.

Despite the approval timeframes for a later workprogram, there is an expectation by thedepartment that in accordance with this provisionthe holder will carry out the activities in theproposed later work program they have lodged forapproval.

When assessing your application, we will notifyyou in writing if your work program has beenapproved or rejected.

s79 Permit holders are obliged to lodge a later workprogram:

at the office for the department that ismentioned in the gazetted notice (or if nonementioned, the office of the ChiefExecutive).

that complies with the later work programrequirements

accompanied by the relevant fee.

at least 40 business days (but no more than100 business days) before the end of thecurrent program period.

If a decision to not approve the later work programis made before the end of the work programperiod, you are able to submit another workprogram also before the end of the current workperiod.

If you submit an application after the set time (thatis not a submission of a work program previouslynot approved) you will be required to pay ten timesthe application fee.

Assess your later work program and notify beforethe end of the current work program period if i t hasbeen accepted or not.

If your work program is not approved and you donot submit an alternative work program before theend of the current program period, you will benotified in writing and required to submit an

alternative work program within 40 business daysfrom the notice date.

If you fail to submit a work program at all, you willbe notified in writing and required to submit analternative work program within 40 business daysfrom the notice date.

s80 If a permit holder does not comply with theconditions of s79 (5)(a), the authority is cancelled,effective from the date that you are issued withwritten notice from the department.

We will provide you with written notice that theauthority is cancelled.

Amending work programs

s59 and

s62

Permit holders can only amend work programs if

an application to approve an amendment hasbeen made, and the application has beenapproved.

The permit holder must comply with therestrictions on amending a work program.

Assess the application to amend a work program

against the restrictions: Later work programs-that the amendment

activity is of at least equivalent value

Initial work programs – the Minister must besatisfied that the program needs to beamended for a reason beyond the holder’scontrol and does not relate to financial ortechnical resources or exploration results

The period for the work program must notpreviously have been extended

The extension can not be for a period of morethan 1 year after the end of the currentprogram period or 12 years after the authority

originally took effect The work program will be completed in the

extension.


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Sectionof Act


Within 3 months before making theapplication the person became the holder ofthe authority and the holder has applied forapproval of a share or that transfer has beenapproved

The share is at least 50 per cent

The designated person is not an entityconnected with another person who is aholder of the authority

The designated person is likely to provideadditional financial or technical resources forthe authority.

Notify the permit holder in writing if theamendment has been approved or refused.

s60 Permit holders must make the application no lessthan 20 business days before the end of theperiod stated in the work program for carrying out

work under the program unless they can satisfythe Minister that the work program must beamended for reasons beyond the holder’s control.

Confirm that the application has been submittedwithin the prescribed time frame and if not that theholder has provided grounds that the work

program must be amended for a reason orreasons beyond the holder’s control that wouldsatisfy the Minister that they are exempt from theprescribed time frame.

s61 Permit holders must lodge the application toamend at the prescribed place for lodging workprogram amendment applications.The application must be accompanied by theprescribed fee.

Receive the application and provide a receipt forthe application fee.

Renewal (Later Work Program Requirements)

s81 The application to renew can not be made more

than 60 business days before the end of the termof the authority; or after the authority has ended.

The application to renew must include a later workprogram.

Permit holders who wish to renew must ensurethat none of the following are outstanding:

annual rent for the authority; a civil penalty under section 76 for non

payment of annual rent; interest payable under section 588 on annual

rent or a civil penalty; petroleum royalty for petroleum produced

under the authority, any unpaid royalty

interest on it, or any civil penalty payableunder a regulation made under section 604A;

security required for the authority, asrequired under section 488.

Confirm that the application has been submitted

within the prescribed time frame.

Assess the application including the proposedlater work program.

Confirm that the permit holder does not have anyoutstanding obligations.

s82 ands84

Permit holders must ensure that they meet allrequirements for making an application to renew.

The application must be accompanied by theprescribed fee. If the application is made less than20 business days before end of the term of thepermit the permit holder must accompany theapplication with an amount that is 10 times theapplication fee.

Permits holders are required to:

state whether or not the work program for theauthority to prospect has been complied with if the work program has not been complied

with—state details of, and the reasons for,

Assess the application to determine it has met therequirements for making an application to renew.

Assess the permit holders proposed later workprogram.

Assess whether the applicant:

satisfies the capability criteria continues to satisfy any special criteria that

applied for deciding the application for theauthority to prospect being renewed

has substantially complied with the authorityto prospect being renewed

has a relevant environmental authority for therenewed authority to prospect


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Sectionof Act


each noncompliance include a proposed later work program for

the renewed authority include a statement about how and when the

applicant proposes to consult with, and keepinformed, each owner and occupier of private

or public land on which authorised activitiesfor the renewed authority are, or are likely tobe, carried out

address the capability criteria include information about the matters that,

under sections 84 and 86, must or may beconsidered in deciding the application; and

state whether or not the applicant hascomplied with chapter 5, part 7, for reportsrequired to be lodged in relation to theauthority

The proposed work program must comply with thelater work program requirements.

has been given a notice under s 96 to applyfor a petroleum lease

Notify the permit holder in writing if the renewalhas been approved or refused

Petroleum and Gas (Production and Safety) Regulation 2004The Regulation is supporting documentation for the P&G Act. The Regulation describeshow the requirements in the P&G Act are to be carried out. The requirements in theRegulation may change depending on circumstances (for example, the Regulation includesinformation about fees, which may be revised each financial year).

The content of the Regulation as it relates to an ATP is summarised in this table. The tablebelow is not exhaustive, but provides a high level overview of key requirements. It is theoo

bligation of the holder of, or an applicant for, an exploration permit to understand thebligations as prescribed in the Regulation.

Sectionof Reg Provision Context

s13 Applicants need to provide for the proposed permitarea:

a description of the geological model for theproposed permit area

an assessment of the potential for petroleumdiscovery in the area

the rationale, in relation to the geologicalmodel for the area, for the activitiesproposed.

Petroleum Act 1923 and Petroleum Regulation 2004

While the majority of the requirements of the 1923 Act and the Petroleum Regulation 2004reflect the requirements of the P&G Act, you will need to refer the 1923 Act and supportingRegulation to ensure that you meet all the work program requirements for permitsadministered under this legislation.

Practice manual

Section 858A of the P&G Act allows for the Chief Executive to keep a practice manual aboutpetroleum tenement administration practices to guide and inform persons dealing with thedepartment. The manual includes practice directions about what information, documents or

instruments (material) a person may or must give, how or when requested material must begiven, the format of requested material, and practices to ensure there is consistency andefficiency in tenement administration processes. The practice manual is maintained on the


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department’s website at http://mines.industry.qld.gov.au/mining/practice-manual-for-queensland-resources-legislation.htm

Operational policies

Operational policies are not required to be legislated by parliament. They describe how thedepartment will interpret aspects of the legislation it administers and set out rules the

department will apply in a uniform manner. Operational policies include transparentguidelines for staff to follow to ensure consistency and efficiency in permit administrationprocesses. A detailed list of operational policies may be found on the department website atwww.mines.industry.qld.gov.au/mining/operational-policies.htm

This guideline also references particular policies where applicable.

Important note: Your work program must meet the statutory requirements, however

the statutory provisions in some cases require similar information that could be provided inthe same form or in one response. In this case, information can be provided to address

several requirements as long as the response is cross referenced back to each legislativerequirement.

Work program requirements

Overview of activities to be carried out during the term

You are required to provide a written summary covering all proposed activities for the termof the ATP. This needs to detail the proposed timing of key activities and the general locationwhere the activities will take place. A typical overview may include: the size of the area; the perceived prospectivity of the area (i.e. considering the geology of the area and

comparing exploration activities and work programs for ATPs with similar geologicaltargets), and

the exploration maturity of the area (i.e. the amount of previous petroleum explorationand development activities on the area).

Work program contents (extent and nature of the activities to be carried out duringthe year)

The extent and nature of the proposed activities should be developed for effectivelydetermining the resource potential of the area and progressing the resource status of thearea. The proposed work program should be consistent with the rationale and the geological

model developed.

The work must be divided into annual components, with a program of work for each year inthe application. Each proposed discipline/activity in the work program must be costed, basedon current market rates.

For each year of the program period, a work program might include (but not limited to):

data reviews (geological reviews and assessments - review of available data,including any on-ground scoping and site identification and preparatory mapping);

target selection;

technical and geophysical surveys including their type (2D seismic, 3D seismic,airborne geophysical, geochemical) and maps showing proposed extent ofoperations;

seismic data reprocessing;


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drilling of delineated targets - wells (drilled on a dry hole basis) or water bores and thedrilling method, estimated depth and stratigraphic targets;

any production testing proposed as a result of petroleum discoveries made, and any monitoring activities, especially location of water observation bores.

Research of existing data and desk-top studies are given a lower priority and are consideredby the department as a minor part of a work program. The work proposed is expected to

include a significant ‘on-ground’ direct data collection component. Emphasis should be onsubstantial exploration activities that will significantly advance the petroleum resourceknowledge of the area.

Drilling is expected to be included as a part of each proposed work program. Permitapplicants should provide detailed descriptions of proposed work program drilling activities(e.g. type, metres, number of holes and stratigraphic targets). Ideally applicants will, for eachdrilling activity, complete both the proposed number of metres and the proposed number ofholes in the work program. It is understood that these are estimates as the departmentrecognises that unforeseen geologic variables may require drilling activities to change duringthe work program period.

When assessing compliance with the approved work program, where the total number ofmetres and/or the total number of holes in the approved work program have not beencompleted, regard will be had to:

the total number of metres drilled; the total number of wells drilled; the number of wells that drilled the stratigraphic target or drilled to a depth to indicate

the target was not present. any explanation given for the potential noncompliance, and the extent to which relevant drilling activities completed were:

- consistent with the rationale given for the exploration program; and- were effective in achieving the objectives of the exploration program.

You need to provide a sufficient amount of information to demonstrate that the statutoryrequirements have been met, but we understand that the activities may change asexploration progresses. In certain parts of the work program submission we will acceptestimates if definitive information can’t be provided, but it needs to be consistent with thegeological model, geological concepts and rationale.

When submitting the details of the proposed work programs, you must submit them in tableformat using the template table below.

E xample of work program table that is to be submitted with an ATP application.

Permityear

Discipline Activi ty Totalquantity(min)

No. of units(estimate)

Scale Totalcost (min)

1Desktopstudies

Geological andgeophysical review

N/A N/A $20,000

2 Seismic Re-processing 100 line km 1 surveyGround-basedexploration

$200,000

2 Seismic 2D New acquisition 150 line km 1 surveyGround-basedexploration

$1,500,000

3Drilling –Shale gas

Total (cuttings +core)

4000 m 2 wellsGround-basedexploration

$7,000,000

3Drilling –Shale gas

Hydraulicfracturing

30 stages 2 wellsGround baseexploration

$200,000

4Productiontesting Production testing 100 metres 1 well

Ground baseexploration $150,000


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Below is a list of the disciplines and activities that you may select for your work programablet

Discipline Activi ty Quantity Unit (cost)Units(no.)

Units(description)

Desktop studies Geological and geophysicalreview

N/A N/A Number ofreports

Report

Technical study N/A N/A Number ofreports

Report

Interpretation study N/A Number ofreports

Report

Other studies N/A Number ofreports

Report

Drilling

Coal seam gas Total (cuttings + core) # Metres Number ofwells

Wells

Core # Metres Wells

Hydraulic fracturing # Stages WellsFracture monitoring # Arrays Wells

Pilot wells (eg 5-spot) # Metres Wells

Production testing # Days Wells

Conventionalpetroleum

Total (cuttings + core) # Metres Number ofwells

Wells

Core # Metres Wells

Shale gas/oil Total (cuttings + core) # Metres Number ofwells

Wells

Core # Metres Wells

Hydraulic fracturing # Stages Wells

Fracture monitoring # Arrays Wells

Tight gas Total (cuttings + core) # Metres Number ofwells

Wells

Core # Metres Wells

Hydraulic fracturing # Stages Wells

Fracture monitoring # Arrays Wells

Stratigraphic Total (cuttings + core) # Metres Number ofwells

Wells

Core # Metres Wells

Vertical Total (core + cuttings) # Metres Wells

Horizontal Total (core + cuttings) # Metres Wells

Deviated Total (core + cuttings) # Metres Wells

Surface-to-

inseam

Total (core + cuttings) # Metres Wells

Geochemistry

Gas analysis # Samples Wells

Oil analysis Samples Wells

Water analysis # Samples Wells

Geophysics Seismic 2D New acquisition # Line kilometres Number of

surveysSurveys

Seismic 3D New acquisition # Square kilometres Number ofsurveys

Surveys

Seismic Re-processing # Line kilometres Lines

Production testing

Production testing # Metres Wells


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interpretation. Explain what high-priority areas to be explored for during the permit term(include where possible, the methodology, preferred techniques, definitive parameters to beused).

An assessment of the petroleum discovery in the area should include: a summary of the covering research; a summary of the previous work undertaken and the geological model developed to

support the proposed work program, and a rationale of how the work program will then advance the geological model.

Where little or no research is currently available, work programs should contain a statementto the effect that there is no known research to reference but explain why they have chosenthat particular geological model.

The applicant is required to provide sufficient justification as to why this model is appropriate.

Exploration rationale

The rationale should provide details of the interpretations made and models developed whichthe applicant proposes to test during the work program period. This should include (wherepracticable or necessary) the regional geological settings, such as basin models, thatspecifically address the geological aspects of the area.

The department realises that the results of the work in the first 2 years can effect the work insubsequent years; for this reason when assessing applications the work programs proposedforthe first 2 years will carry more weight. Therefore the exploration rationale should primarilyfocus on years1 and 2 of the work program. However activities proposed after year 2 will stillbe assessed and considered by the department for inclusion in the approved work program.

Available data about the proposed area

The department requires a detailed outline and technical assessment on the available dataresearched or captured in relation to the proposed land the subject of the ATP application.This should be included or referenced in the rationale submitted to support the geologicalmodel and proposed initial work program.

When you provide details of any previous exploration work carried out in and around the ATParea, the department’s preference is that you use the format below.

Date Reference

(open file number,internal report etc)

Companyname

Commodity Work done

(mapping, streamsediments, drilling,etc)

Highlights

(Drillintersections ,etc)

Comments

Maps and plans

Work programs must include a map in the rationale that shows the geological aspects of theapplication area with an outline of the permit area applied for. For example, include mapsand plans showing the extent of the stratigraphic units included in the geological model.

Capability criteria We need to be satisfied that you have the financial and technical capacity to meet thecomponents of the work program. You are required to include with your application:

Details that address the financial and technical capacity of the applicant, or the financialand technical resources readily available to the applicant, such as:

- The adequacy of financial resources available to the applicant and proof of access tothese funds. For example, a letter of consent to access funds, a company report, oraccountant’s statement.


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- A demonstrated ability to actively promote acreage to access exploration funds.- Whether the applicant will continue to have access to sufficient resources to meet the

requirements of the proposed work program, as well as other commitmentspreviously entered into in other petroleum tenure areas or otherwise.

- Technical qualifications/expertise or experience of the applicant and of keyemployees and their suitability in carrying out the activities proposed in the workprogram.

- Technical advice available to the applicant. (Note: This could be via the applicant’sown resources or consultants, contractors or joint venture partners).

The applicant's exploration history (within Queensland or elsewhere), and their ability toaccess or raise funds to meet work program and development plan commitments. If theapplicant has not previously held a petroleum permit in Queensland or elsewhere, detailsmust include:- (if the applicant is a company) details of the directors and their experience in running

companies previously under their directorships, or- (if the applicant is an adult individual) attach a general summary containing details of

the applicant’s previous work history.

P lease see Appendix 1, 2 and 3 for financial and technical capability templates.

Important note: Applicants for an ATP, in response to a call for tenders, should be

aware that the call for tender may contain special criteria that apply to the call. For example,it may be that the special criteria detail the nature and timing of authorised activity/activitiesto be conducted under the ATP. Special criteria will be detailed in the call for tenders andmust be addressed by the applicant.

Later work programs

Later work programs should reflect the knowledge gained from the prior work program. Thedepartment expects that in the later work program the exploration program will become moreintensive and focused as the permit area reduces and the holder endeavours to confirm thecommerciality of the resource.

Complying with initial work program requirements The later work program must address the requirements of an initial work program including:

overview of activities to be carried out during the term;

the extent and nature of the activities to be carried out during each year; where the activities will be carried out; the estimated cost of the activities; maps that show where the activities are to be carried out; any other relevant information; reasons why the program is considered appropriate, and the requirements of s13 of the regulation.

Complying with current work program

The later work program must provide a statement addressing compliance with the currentwork program. The statement should address the following:

previously approved work program (in particular the actual work performed); relinquishment requirements;


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reporting requirements, and other provisions and conditions of the 1923 Act relating to ATPs..

Amendment to work programs

If there have been any amendments to the ATP or its current work program, the workprogram must include:

Whether the changes have been incorporated in the proposed program. For example,the substitution of an activity (s62 of the Act) or extending the period of the workprogram / deferring the relinquishment (s62(2) and 62(4) and (5) of the Act), and

Any effect the changes have on the proposed program. For example, the proposedlater work program may contain activities for acquiring the information that shouldhave been obtained prior to any amendments to the authority or the current workprogram.

Effect of any petroleum discovery

The work program must include a statement that addresses the effect of any petroleumdiscovery on the proposed work program. For example, the later work program may requireadditional activities to confirm the commercial potential of the petroleum discovery, or detailsof new exploration concepts brought about by the discovery.

Work program criteria

When deciding whether or not to approve the proposed work program the department willconsider the work program criteria and capability criteria that applied for deciding theapplication for the ATP.

The work program criteria include: the potential of the proposed area of the authority to prospect for petroleum

discovery; the extent and nature of the proposed petroleum exploration, and when and where the exploration is proposed to be carried out.

The extent to which each holder is capable of carrying out authorised activities for the ATP,(that is, their access to financial and technical resources and ability to manage petroleumexploration and production), is called the capability criteria.

For capability criteria each holder, should address: the adequacy of financial resources available to each holder and proof of access to

funds; a demonstrated ability to actively promote acreage to access exploration funds;

whether each holder will continue to have access to sufficient resources to meet therequirements of the proposed later work program, as well as other commitmentspreviously entered into in other petroleum permit areas, either within Queensland orelsewhere;

technical qualifications/expertise or experience of each holder and of key employees,and

technical advice available to the holder.

Please see Appendix 1, 2 and 3 for financial and technical capability templates.

Important note: The capability criteria will have to be addressed in the later work

program if the program is not lodged as an attachment to an ATP renewal application


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Special criteria

The special criteria may have to be addressed in the later work program if the program isnot lodged as an attachment to an ATP renewal application and the call for tenders detailedany special criteria as a condition of the ATP’s grant or to decide the ATP’s provisions.

If this was the case, and the special criteria still needs to be satisfied, the ATP holder must

provide a statement which provides details about how they continue to satisfy this criteria.

Important note: If an ATP was initially granted under the 1923 Act and was converted

to an ATP under the P&G Act, the conditions of the ATP in relation to work or expenditure aretaken to be the approved later work program for the ATP. The period for which theseconditions apply is taken to be the program period for this approved work program. Therefore,a proposed later work program for a converted ATP must be submitted at least 40, but nomore than 100 business days prior to the end of the approved work program’s period.

Later work programs under the Petroleum Act 1923

Under the 1923 Act, the proposed LWP that you submit need to meet the requirements of the1923 Act and Petroleum Regulation 2004.

The requirements of the LWP are the same as the P&G Act, therefore, you should refer tothe requirements for IWP and LWP when submitting the following material for an LWP undera 1923 Act permit:

overview of activities to be carried out during the term;

for each year of the program period:- the extent and nature of the activities to be carried out during each year of theprogram period

- where the activities will be carried out- the estimated cost of activities

maps that show where the activities are to be carried out; any other relevant information; reasons why the program is considered appropriate; if there have been any amendments to the work program a statement about:

- whether the changes have been incorporated in the proposed program- any effect the changes have on the proposed program

a statement about the effect of any petroleum discovery; the requirements of s.6 of the regulation, and the capability criteria.

Important note: If an ATP continues to be administered under the 1923 Act, the

conditions of the ATP in relation to work or expenditure are taken to be the approved laterwork program for the ATP. The period for which these conditions apply is taken to be theprogram period for this approved work program. Therefore, a proposed later work program fora continuing ATP must be submitted at least 40, but no more than 100 business days prior tothe end of the approved work program’s period.


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Application to amend a work program

Under subdivision 6 of the P&G Act you can make an application to amend a work programin a situation where a work program needs to change so that the holder can ensure effectiveand competent exploration and production petroleum resources. For example, if the timing ofan operation is impacted by exceptional circumstances or a work program needs to be

extended.

Applying for approval to amend

When applying to amend a work program, you must ensure that an application to amend aork program is not made less than 20 business days before the end of the period stated in

he work program for carrying out the work under the program.wt

Important note: When making an application for approval to amend, the requirements

regarding the 20 business day restriction does not apply if the department is satisfied that thework program needs to be amended for a reason beyond the holders control.

The application is to be made on the published form available on the department’s website.The amendment to work program need to be lodged at the offices of the Department ofNatural Resources and Mines Sales Cente, Level 10, 119 Charlotte Street, Brisbane Qld4000.

Requirements for making an application to amend a work program

You need to ensure that you provide comprehensive information about the amendment youare seeking, taking into account the amending work program restrictions in the P&G Act as

outlined within this guideline to allow the decision-maker to conduct a proper assessment onthe application. You need to provide substantial and compelling documentation (e.g. letters,emails, technical data, and plans) to satisfy the requirements when applying for anamendment to a work program, this includes but is not limited to:

If amending a LWP—ensuring you explain how the proposed amendment willimprove the overall work program strategy, and progress the assessment of thepetroleum potential. Or otherwise indicate the amendment activity highlighting at leastof an equivalent value to the original activity.

If amending an IWP—ensuring you outline the reasons why the current work programcannot be carried out and an amendment is requested. Make sure to include anexplanation of any exceptional circumstances that justify the amendment of the

work program, and If extending the work program - the requirements of the P&G Act have been complied

with and, the designated person is likely to provide the additional financial or technicalresources for the authority, and the work program will be completed within theextension.

Failure to provide this material with the application may result in the application beingrejected.

Restrict ions on amending work program

There are a number of restrictions/requirements that apply to amending a work program

these include:


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Ensuring that the application for approval of the amendment has been made underChapter 2, Division 3, Subdivision 6 of the P&G Act and approved under Subdivision6.

Where the Minister has declared the area subject to the ATP a potential commercialarea -an evaluation program is taken to be an additional part of the existing workprogram for the ATP and must be included with the application to amend the work

program.

If an amendment to an initial work program is required – you must satisfy that thework program needs to be amended for a reason beyond your control.

An application to amend a work program will not be considered if an amendment towork program has been previously received within the current period of the workprogram.

Amendments to work programs to extend the term of the work program will end afterone year of the current period of the work program or within twelve years after the

permit originally took effect.

Restrictions apply to designated persons if that person became the holder of theauthority within three months of applying to amend and/or the designated personsapplied for approval of a transfer of a share in the authority. A designated personmust be at least a 50% shareholder to be eligible to make amendments to workprograms and the designated person is not, under the Corporations Act, an entityconnected with another person who is a holder of the authority.

Deciding application

In deciding your application, we will make an assessment to amend a work program based

on the following criteria:

the permit holder has complied with the relevant sections of the P&G Act;the permit holder has satisfied that the amendment to an LWP is of an equivalentvalue;the permit holder has satisfied that the amendment to an IWP is due to a reasonbeyond the holder control that does not relate to the applicants financial or technicalresources or ability to manage petroleum exploration and could not have beenprevented by the holder;the designated person mentioned is likely to provide additional financial or technicalresources for the authority, andthe work program will be completed within the period of the extension

The above criteria list is a summary of the main considerations when assessing to approvean amendment to work program. The decision-maker will give regard to whether the permitolder has met all the conditions of the permit relating to amending work programs and/oreen granted amendments to work programs previously.

hb Important note: Please note under section 52 of the P&G Act, initial work programs

cannot be amended unless it is an exceptional circumstance. For detail regardingexceptional circumstances (a circumstance beyond the permit holder’s control) please referto the Exceptional circumstances policy.


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A

ppendix 1: Financial Capabili ty Statement

Please note: This is an example only. The level of detail is relevant for a smallerinvestment. Larger investments would require a greater level of detail commensurate withthe size of the investment proposed.

123ABC Ltd10 Generic StBrisbane 4000

General Manager, Mining and Petroleum OperationsDepartment of Natural Resources and MinesPO Box 15216Brisbane QLD 4001

RE: 123ABC Ltd ACN 999 999 999 – Statement of financial resources

I, Mr John Smith, as the Chief Financial Officer of 123ABC Limited, have a full andcomprehensive understanding of the current financial obligations and liabilities before thecompany.

I understand 123ABC Limited is submitting a work program to the Queensland Governmentfor consideration that will require $200,000 in funding be available over the next 4 years tosupport the program and to meet 123ABC Limited obligations to the State of Queenslandshould this application be approved.

In my capacity as Chief Financial Officer, I confirm 123ABC Limited has sufficient funding inplace to meet approximately 60% of the funding required to deliver the proposed workprogram, and should this application be successful, 123ABC Limited will be able to raise theadditional prospective funding to meet the work program submitted.

In support of this application, I would ask the State to give regard to the company’s priorability to meet and fund its current work program obligations.

Detail must be sufficient to justify therisk and investment proposed

Regards,

John SmithChief Financial Officer1 23ABC Limited


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Appendix 2: Technical Capability Statement

123ABC Ltd10 Generic StBrisbane 4000

General Manager, Mining and Petroleum OperationsDepartment of Natural Resources and MinesPO Box 15216Brisbane QLD 4001

RE: 123ABC Ltd ACN 999 999 999 – Statement of capabili ty

123ABC Limited was formed in March 2010 to acquire all the securities on a privateQueensland petroleum exploration company called ABCJunior Pty Ltd in preparation in

preparation for an Initial Public Offer (IPO) in 2011.

ABCJunior Pty Ltd is a petroleum exploration and production company established in 2006.Since then, the company has tendered for and acquired an Authority to Prospect permit inthe Surat (Jurassic Walloon Coal measures) basin in Southern Queensland.

ABCJunior Pty Ltd permit is geologically well placed with many square kilometres ofexploration ground over the target formations in the Surat Basin,

Since the grant of the initial permit in 2008, ABCJunior Pty Ltd has drilled over 20 wellsbetween 200 to 800 metres deep and is now focusing on three key exploration areas in theformations that outcrop along the northern edge of the basin.

After 10 years of exploration, the company’s strategy is apply for a petroleum Lease andcommence production over the areas.

ABCJunior Pty Ltd’s management team has over 20 years experience in petroleum industryin Australia. It has proven management ability delivery on prior work programs as evidencedby ABCJunior Pty Ltd.

Signed

John Smith

Chief Financial Officer1 23ABC Limited


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Appendix 3: Technical Capability evidence –xample of human resourcese

Numbers and qualifications of staff:

Joe Bloggs (Senior Geologist)Joe has widespread geological expertise in Queensland and the Northern Territory. He haspublished research papers concerning geology in the northern part of Queensland and theNorthern Territory. He has undertaken compliant activities in petroleum projects to ensurethat guidelines and policies are followed.

Bobbie White (GIS Consultant)During her mapping career, Bobbie has worked in a number of Queensland governmentdepartments in mapping units and has seen the development of paper-based maps to online

solutions. She brings her extensive mapping industry experience to 123ABC Limited usingaerial photographs, satellite imagery and GIS databases.

Steele Golding (Business Development Manager)Steele has extensive business development experience across a number of industries. Mostrecently, he was BDM for one of Australia’s biggest petroleum companies XYZ456 Pty Ltd.He has liaised with property owners, business owners and has developed strong networkswith 123ABC Limited’s customer base.

Chuck Wagoner Jnr (Technical Manager) After completing honours in Engineering and Applied Sciences from Princeton University,New Jersey, USA, Chuck worked in the oil and gas exploration industry in Texas before

moving to Queensland five years ago to lead the technical development of gas fields inestern Queensland. Currently he is leading the technical team through exploration,

esource allocation, production feasibility and development.wr


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Call: 13 QGOV (13 74 68)

Visit: www.dnrm.qld.gov.au

Enquiries:

For help, information and technical support contact the MyMinesOnline helpdesk.8.30am – 4.30pm (AEST)Monday to Friday on Queensland business days.Telephone: +61 7 3199 8133Email: [email protected]

mailto:[email protected]



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