JOINT VENTURE AGREEMENT
This JOINT VENTURE AGREEMENT ("Agreement") has been entered into this 6th
day of January 1997, by and between U.S. Crude Ltd. ("USCR") and Encore
Productions ("Encore"), hereinafter collectively referred to as "the Parties".
The purpose of this Agreement is to 1) Describe the working relationship
between the above mentioned parties with respect to an oil and gas venture
involving primary and secondary production in Kansas and Oklahoma, and also
properties in other states that may be acquired as part of this venture, 2) To
detail the responsibilities of each party, and 3) To describe the division of
equity that is produced. As a result of these operations, a Joint Venture shall
be formed for the express purpose of executing the goals and objectives of the
parties.
SECTION 1
THE RELATIONSHIP
1.1 The relationship between these parties is designed to create a united
effort to profitably identify, drill and produce crude oil from oil producing
properties in various oil producing states and to utilize each parties' talents,
expertise, and resources to build a strong business enterprise. Both parties
will participate in the organization and structure of the corporation that will
be formed. The parties will also participate in the management of this newly
formed Company.
SECTION 2
RESPONSIBILITIES OF ENCORE
2.1 Encore shall be responsible for providing the capital for the
acquisition and improvement of the initial oil leases, and shall share in the
management and administrative duties of the Company.
SECTION 3
RESPONSIBILITIES OF USCR
3.1 USCR shall be responsible for providing assistance with locating the
initial property, shall share in the management and administrative
responsibilities, and shall perform all work necessary to manage and operate the
oil leases. Such work, though not herein specifically defined, shall include
daily maintenance and operational activities to ensure that the leases are
functioning properly and producing oil, and running any enhanced oil recovery
operations deemed appropriate, including steaming.
SECTION 4
JOINT RESPONSIBILITIES
4.1 The parties will mutually agree upon the properties selected. The
parties will also equally share the cost of drilling any xxxxx, refurbishing
xxxxx, and major capital improvements associated with improving the properties
including, but not limited to, behind the pipe work, refracturing, etc.
SECTION 5
THE COMPANY
5.1 The Parties agree to form a Company for the express purpose of executing
the goals and aspirations of the parties. The name of the new company shall be
Crude Oil Recovery, and shall be owned by the parties according to the following
formula: 51% owned by Encore, 49% owned by USCR. Should either party decide to
sell any or all of their interest in the Company, they must first notify the
other party before offering it to the general public. Such other party shall
have five (5) business days to match any offer to purchase.
SECTION 6
DIVISION OF REVENUES
6.1 All revenue produced from the operation of Crude Oil Recovery shall be
divided according to ownership percentage, namely, 51% going to Encore and 49%
going to USCR. During the initial operations of the Company, all revenues
generated by the joint venture shall be reinvested back into oil production to
effect leasehold improvements, acquire additional leases, etc. No distributions
of revenues shall be made without the mutual written consent of both Parties.
This agreement constitutes the entire understanding between the parties
with respect to the subject mater hereof and supersedes all negotiations prior
to the execution hereof, and all preliminary agreements or understandings,
written or oral. No waiver or modification of this agreement shall be binding
unless it is in writing, signed by both parties.
In witness hereof, the Parties have caused this agreement to be executed as of
the date of this letter.
U.S. CRUDE LTD., by ENCORE PRODUCTIONS, by
/s/Xxxxxxx X. Xxxxxx /s/Xxxx Xxxxxxxxxx
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Xxxxxxx X. Xxxxxx Xxxx Xxxxxxxxxx
