Pulled from the EGO report 01/11 page 2.Empire retains the right...

Pulled from the EGO report 01/11 page 2.

Empire retains the right under the EP 104/R1 Joint Operating Agreement to its 14.8% in this
Nullara Formation by “backing in” and paying the penalty out of production. The Company
considers that if the Nullara is gas charged (with the potential for an oil leg) any penalty will pay
out very quickly at production stage should hydrocarbons be present and in commercial
quantities. Upon Empire “backing in”, it will retain its 14.8% equity.

Its assumed they're only paying the penalty out of production from the range 2585mMD to 2777mMD. The cost I believe wouldn't be significant for that short range and as stated above it IF it is commercial it would pay out "very quickly". I don't think its a big problem only that ARQ will potentially lose some of the share of this brilliant discovery. Doesn't seem fair to get back in to cheap but thats business.