October 6, 2005
Xx. Xxxxx Xxxxxxxxx, President
Brinx Resources, Ltd.
000 Xxxxxx Xxxxx Xxxx, X.X.
Xxxxxxxxxxx, XX 00000-0000
RE: LETTER AGREEMENT
Vector Exploration, Inc.
Three Sands Prospect
Noble County, Oklahoma
Dear Xxx:
This LETTER AGREEMENT shall set forth the terms and conditions for your
participation in the Vector Exploration, Inc. ("VE") Three Sands Prospect
located in Noble, County, Oklahoma. Specifically, you agree to participate with
a 40% Working Interest, subject to the following:
1). You agree to purchase an undivided 40% Working Interest in the VE Three
Sands Prospect for a total Buy-In Cost of $88,000 ($220,000 x .40)
which is your proportionate share.
2). All future leasehold costs shall be billed to the Joint Account at
$250/acre at a 78% net revenue basis.
3). Your Buy-In Cost includes all leasehold acquired (880 net acres)
together with any limitations, whether force pooled or leased, and all
prospect fees, geologic fees and brokerage expenses associated with the
Three Sands Prospect. The purchase of any geophysical information, the
geophysical interpretation and associated expenses thereof; and the
normal administrative overhead for each well drilled in the Three Sands
Prospect area shall not be included in the Buy-In Cost.
4). You agree to pay your Buy-In Cost upon the execution of this LETTER
AGREEMENT, as well as your proportionate share of the estimated costs
to casing point for:
Drilling: Kodesh #1-3 Disposal Well
Drilling: Kodesh #2-3 Production Well
Re-Entry: Smithheisler (Flying Double SS Lease) Production Well
5). You agree to participate in the Drilling Operations (to casing point)
in the xxxxx as specified in Item #3, Kodesh #1, with your interest,
bearing your proportionate share of a 25% carried Working Interest in
all of these operations. The carried working interest in the Kodesh #1
disposal well shall be to casing point and the Smithheisler is to
include intangible workover/completion costs. All future costs shall be
billed to the Joint Account on a "heads up" basis. Your Before Casing
Point Interest "BCP" shall be 50% and your After Casing Point Interest
"ACP" shall be 40%. This carried Working Interest shall only apply to
the two xxxxx mentioned above and to the first new drill disposal or
production well or re-entry on each 160 acre tract of land. Xxxxx on
additional leases taken will not be subject to the carried interest but
will be subject to the $250 per acre acquisition cost. In any event the
carried interest shall not exceed five (5) total xxxxx.
6). Your Net Revenue Interest Lease "NRI" in the VE Three Sands Prospect
shall be 78%.
7). You acknowledge and understand that some of these Prospects maybe
Forced Pooled under Oklahoma law and as such, the various Respondents
have the right to participate in any well. Should any Respondents elect
to participate, then your participation interest shall be
proportionately reduced in the spacing unit. Your costs in the project
will also be proportionately reduced respectively.
8). Should you agree to participate in any completion attempt in any well
drilled in the VE Three Sands Prospect, you agree to immediately
forward your proportionate share of the Estimated Completion Costs,
upon receipt of invoice, to Vector Exploration, Inc.
9). You agree to become a signatory to a mutually agreeable Joint Operating
Agreement "JOA" consistent with industry standards (enclosed).
10). You acknowledge that you are a sophisticated & accredited investor and
fully understand the inherent risks associated with oil & gas
investing. Further, you acknowledge that no Return on Investment or
Rate of Return has been guaranteed or promised, and, in fact, accept
the possibility that you could lose 100% of your investment in this
program.
Should you agree with these terms and conditions expressed herein, please
execute this LETTER AGREEMENT in the space provided below.
Sincerely,
/s/ XXXXXXX XXXXXXX
Xxxxxxx Xxxxxxx
President
Enclosure
Agreed and accepted this 6th day of October, 2005
WI OWNER: BRINX RESOURCES LTD. Signature: /s/ XXXXX XXXXXXXXX
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By: Xxxxx Xxxxxxxxx Date: 10/6/05
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Name and Title
President
