1. MERCPA 2014 – An Overview Oil and gas

2. Outline Introduction to the new Act Preliminary Dealings, caveats and associated agreements Land Access Overlapping tenement regime

3. Introduction to MERCPA 2014 Modernising Queensland’s Resources Acts (MQRA) program –5 Acts into 1 over 3 to 4 years –Rationale is a cutting ‘red-tape’ and compliance costs (consistent with Newman 20% election pledge) *Mineral and Energy (Common Provisions) Act 2014 –Passed by Parliament on Sept 9 after consultation process –Comes into force on “proclamation” (when Gov’t decides), mirroring repeal of Resources Acts –Creates the ‘shell’ for the final Act into which provisions will be incrementally transferred from the Resources Acts –First step in MQRA process creates many common ‘processes’ (dealings, caveats and registers / tenure applications) but there are also substantive changes to law relating to land access (private and public land), overlapping tenure (coal/CSG) and public notification and objection rights for mining lease applicants

4. Preliminary Section 3: Sets out the “main purposes” of Act – consolidate provisions; provide for common processes; new coal/CSG overlap regime; achieve purposes of Resources Acts. Section 6: Sets out the relationship between this Act and the other resources Acts. This Act has primacy. Section 6(5): The key where there is inconsistency is whether it is “possible” or “impossible” to comply with both provisions. Section 10: New concept of the “resource authority”, referring to all exploration and production tenures under the 5 Acts.

5. Dealings, caveats and associated agreements Different processes and requirements for notification and registration of ‘dealings’ across the five Acts Lengthy and complicated when compared with equivalent legislation in other Australian jurisdictions Largely harmonised under the Mines Legislation (Streamlining) Amendment Act 2012 (Qld) (intro’d online processing via DNRM’s MinesOnline) Further streamlining under MERCPA by introducing one set of administrative processes that focuses on outcomes, leaving prescriptive processes to be covered off by Regulations Purports to reduce Government processing times, costs + indirect savings to industry

6. Chapter 2 - Dealings, caveats and associated agreements Source: Modernising Queensland’s Resources Acts Program – Dealings, caveats and associated agreements February 2014

7. Dealings What is a dealing? Broad “catch-all” with ability to prescribe other transactions. ‘Prescribed dealings’ require registration and Minister’s approval to have effect (generic provisions regarding “applications” will apply – see Chapter 5, Part 1) Will be prescribed by Regulation, however expect: –Transfer of RA (or share thereof) –Mortgage over RA (or share thereof) –Release, transfer or surrender of mortgage –Change of name of holder of RA (even if same person) –If RA is a lease, sublease of the lease, transfer of sublease (or share thereof) and ending of sublease ‘ Prohibited dealings’ have no effect –Transfer of divided part of authorised area for RA excluding Sublease or transfer of a sublease –Per Regulations

8. Dealings Indicative approval system retained –Still includes ‘preconditions’ for IA that may prevent registration of dealing where not satisfied –IA valid for a prescribed period, but what if lapses before RA holder is able to lodge transfer application due to circumstances outside of its control (e.g. delays in regulatory approval or due to transfer duty assessments)

9. Caveats and associated agreements As before

10. Something to consider... Changes to the mining lease notification and objections process under the Mineral Resources Act 1989 and the EP Act: –only “affected persons” and certain other individuals such as occupiers, owners of adjoining land and infrastructure owners will receive notification of the mining lease application –only certain affected persons can object on limited grounds –should consider these changes if you are a landholder, occupier or adjoining landholder where there is a mining lease overlap to preserve your rights to object (if you can)

11. Land Access: Overview Good news! Regime generally the same What has changed? –Opt-out agreements (OOAs) –Title notations –Restricted land –Public Land

12. Land Access: opt-out agreements Landowner elects to “opt-out” of requirements for CCA, deferral agreement and NOEs Must meet “prescribed requirements” 10 business day “cooling-off” period Does not negate compensation liability

13. Land Access: title notations CCA or OOA must be noted on property land title Full agreements not recorded or searchable Condition of the RA RA holders must notify land titles registrar within 28 days after entering CCA or OOA and when it ends Existing CCAs must be registered – 6 month period for compliance

14. Land Access: restricted land Old regime under P&G Act: “600m rule” New regime under Act: “must not enter restricted land…to carry out a prescribed activity…unless each relevant owner or occupier for the restricted land has given written consent…”

15. Land Access: restricted land No surface activities, or activities impacting the surface, without owner or occupier written consent within “prescribed distance” (200m) of listed buildings or areas: ResidencePlace of worshipChildcare centreHospital LibrarySchoolCemeteryPig farm Poultry farmIntensive feedlotAquacultureOther business

16. Land Access: restricted land Surface activities Activities below the surface of the land which are likely to cause an impact on the surface of the land

17. Land Access: public land Periodic entry notices are a new requirement Additional requirements for notifiable road uses

18. Land Access: transitioning Land Access Code continues until replaced by new Land Access Codes Agreements / arrangements in force when Act commences - continue –CCAs, deferral agreements and access agreements –Entry notices and waiver of entry notices Agreements “being negotiated” when the Act commences - completed under the provisions of the P&G Act –CCAs, deferral agreements and access agreements

19. Overlapping tenure context Galilee Basin – 39% of overlapped tenure Bowen Basin – 50% overlapped tenure Surat Basin 25% overlapped tenure

20. Coal/CSG Overlapping Tenure Regime Rationale for change Existing framework: Mineral Resources Act 1989 (Qld) and Petroleum and Gas (Production and Safety) Act 2004 (Qld) Maximising Utilisation of Queensland’s Coal and Coal Seam Gas Resources – A New Approach to Overlapping Tenure in Queensland May 2012 (White Paper) Industry response to Mines and Petroleum Legislation Amendment Bill 2011 April 2014 - draft legislative framework released for comment September 2014 – Mineral and Energy Resources (Common Provisions) Act 2014 (Qld) passed Commencement?

21. New Coal/CSG Overlapping Tenure Regime Direct path to grant for coal and CSG production tenure Right of way for coal, subject to: –Notice periods and confirmation requirements; and –Compensation Information exchange Dispute resolution process – referrals to arbitration (final decisions) Transitional arrangements - different provisions for the Surat Basin Flexibility for parties to enter into alternative arrangements outside the legislative framework

22. The ‘Rolling Abandonment Model’ Area for re-access by CSG party – SSM takes over

23. Example 1 MLA over ATP Year 0Year 1.5 Year 11 MLA lodged + Advance Notice (including proposed JDP) + 18 Months Notice IMA forms (where no PLA lodged) Mining can commence IMA forms (where PLA lodged) Mining can commence ML granted + Agreed JDP in place 3 mths6 mths ATP holder gives Concurrent Notice  If yes  If no ATP holder lodges PLA  If yes  If no Year 9 – 9.5 Confirmation Notice If JDP is not agreed either party can refer to arbitration Year 1 Compensation: ATP Major Gas Infrastructure (e.g. pilot well being used or held for future production as well as associated infrastructure).

24. Example 2 MLA over PL or PLA No acceleration and no exceptional circumstances Year 0Year 11Year 9 – 9.5Year 21 RMA Notice 1 ST RMA panel commences Duration of IMA (10 years) ML granted + Agreed JDP in place Year 19.5 IMA forms Mining can commence Confirmation Notice PL production (10 years) MLA lodged + Advance Notice (including proposed JDP) Compensation: Compensation payable by the Coal Party to the Gas Party for the cost of replacement of the PL connecting infrastructure and the PL major gas infrastructure.

25. Example 3 MLA over PL or PLA Acceleration and no exceptional circumstances Year 0Year 1.5Year 11Year 11.5 MLA lodged + Advance Notice (including proposed JDP) + Acceleration Notice + Confirmation Notice IMA forms Mining can commence RMA Notice1 ST RMA panel commences Duration of IMA (10 years) Compensation Payable for Lost Production + Compromised Infrastructure This would be the date the IMA forms and mining commences if acceleration did not occur i.e. 11 years after the Advance Notice is given ML granted + Agreed JDP in place Year 10

26. Diagram – Accelerated mining production

27. Contracting out, ‘sort of’ Note Co-dev Agts not ‘grandfathered’, so retrospective effect on agreements ‘soundly struck’ Transition plan? MandatoryNon-mandatory Advance Notice (incl. JDP)*Exceptional circumstances notice Agreement of JDP and approval by Minister *Acceleration notice Concurrent notice process (ATP) Subsequent petroleum production Information exchange Ministerial powers – e.g. amendment of JDP

28. Transitional provisions and concluding remarks Complex transitional provisions… –Will apply to production applications over exploration tenure –Will not apply to production applications over production tenure (dealt with under current regime) –Concurrent production applications overlaps (i.e. MLA/PLA and vice versa) not expressly dealt with but we think new regime will apply –Surat Basin Transitional Area: special arrangements ‘Whiteboard legislation’ – we are here to help!!!

29. Role play The following is a discussion between an overlapping MLA Holder and ATP Holder in months leading up to commencement of the new regime. The ATP Holder is sitting on a massive CSG reservoir that has been highly prospective during testing, however it is struggling financially and reluctant to brief external counsel. The coal strike containing the gas is also potentially very lucrative to the MLA Holder. It is a multinational mining house with a large, in-house legal team.

30. Questions ?

31. Thank you Resources and Energy www.hopgoodganim.com.au