EXHIBIT 10.1
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AMENDMENT NO. 6
TO PARTICIPATION AGREEMENT
This Amendment No. 6 ("Amendment") is executed the date as of each
signature below, but shall be effective as of January 1, 2006, ("Amendment
Effective Date") by and between Penn Virginia Oil & Gas, L.P. successor to Penn
Virginia Oil & Gas Corporation, ("PVOG") and GMX RESOURCES INC. and its wholly
owned subsidiary, Expedition Natural Resources Inc. (Expedition Natural
Resources Inc. having merged with and into GMX RESOURCES INC.) and Endeavor
Pipeline Inc. (collectively, "GMX") for purposes of amending the Participation
Agreement, as previously amended, ("Agreement") between the parties with
reference to the following circumstances:
A. PVOG and GMX (collectively, "Parties" and, individually, a "Party")
previously entered into Amendment #5 which permitted the use and sharing of
multiple rigs.
B. PVOG and GMX now wish to further amend the Agreement by revising
Amendment #5, Sections 2.3; 2.3.1 and 2.3.4 in order to provide for a third
and fourth rig.
In consideration of the mutual covenants, promises, rights and obligations
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
1 CAPITALIZED TERMS. Capitalized terms not otherwise defined in this
Amendment shall have the same meaning as set forth in the Agreement.
"2.3 USE OF MULTIPLE RIGS AFTER JANUARY 1, 2006.
Notwithstanding the provisions of Section
2.1 that prohibit the drilling of more than one well at
the same time in Phase I, Part B and Phase II, Part B,
collectively, the Parties agree that after the Amendment
Effective Date, drilling operations with no more than
four rigs may be used in either Phase I, Phase II or
both subject to the following provisions:
2.3.1 SHARING WITH GMX. If PVOG
engages additional rigs for
drilling in Part B with the
concurrence of GMX, PVOG shall:
(1) declare one of the drilling
rigs to be the "Shared Rig"
under the terms of the
Agreement, as amended, and (2)
make the Shared Rig available
for use by GMX for drilling
operations in Phase III on a
three for three basis, i.e. for
every 3 xxxxx that PVOG uses the
Shared Rig for drilling
operations under the terms of
the Agreement, if GMX is ready,
able and willing to use the
Shared Rig, it may make use of
the Shared Rig for the drilling
of three xxxxx in Phase III.
Five (5) days prior to reaching
total depth on the well
preceding GMX's option to use
the Shared Rig, GMX shall: (1)
give
PVOG written notice of its
election to use the Shared Rig
and (2) enter into a single well
or a multiple well drilling
contract with the rig contractor
on terms acceptable to both GMX
and the rig contractor, which
terms shall be no less favorable
to GMX than the terms available
to PVOG, save and except any
financial requirements
prescribed by the rig
contractor. During the time a
rig is used by GMX, PVOG will
have no financial or other
responsibility to the rig
contractor for such utilization.
2.3.2 PAYMENTS OF COSTS. If GMX elects to
participate in any well drilled in Part B of
either Phase I or Phase II while multiple
rigs are being used, it will be responsible
for payment of its share of costs in
accordance with the terms of the Agreement
based on the size of the election it makes.
2.3.3 AFES. As long as multiple drilling
rigs are being used in Phase I and II, PVOG
shall not present to GMX more than two AFEs
per drilling rig utilized in either Phase I
or Phase II within any fifteen (15) day
period for any operations conducted under
this Section 2.3.
2.3.4 TERMINATION OF THE USE OF MULTIPLE
RIGS. Either Party may terminate the
multiple rig provisions of this Section 2.3,
subject to the terms of the drilling
contract currently in effect for the "Shared
Rig", at any time by giving at least sixty
(60) days notice of such termination to the
other party in which event the provisions of
Section 2.1 will be reinstated to prohibit
the drilling of more than one well at the
same time."
Except as set forth above, the Agreement as previously amended will remain
in full force and effect.
Executed effective as of the date set forth above.
GMX RESOURCES INC.
ENDEAVOR PIPELINE INC.
By: /s/ Xxx X. Xxxxxxxxx, Xx.
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Xxx X. Xxxxxxxxx, Xx.
Executive Vice President of GMX Resources Inc.
President of Endeavor Pipeline Inc.
Date: 1-16-06
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PENN VIRGINIA OIL & GAS, L.P.
By: Penn Virginia Oil & Gas GP LLC
its General Partner
/s/ Xxxxxx X. Xxxxxxx
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By: Xxxxxx X. Xxxxxxx
Its: Land Manager
Date: 1/3/06
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