EXHIBIT 10.7
[XXXXXX EXPLORATION COMPANY - LETTERHEAD]
May 27, 1999
Mr. C.E. "Gene" Xxxxxx
Eagle Investment Inc.
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
RE: April 1, 1999 Purchase Letter Agreement
Bank of Montreal Credit Agreement
Dear Xxxx,
As per that certain Purchase Letter Agreement date April 1, 1999 Eagle
Investments, Inc. ("Eagle") agreed to acquire up to $6 million worth of Xxxxxx
Exploration Company "(MEXP") properties. As a result of the sale by MEXP of
certain non-operated properties, Eagle will be required to purchase $2.9 million
worth of MEXP properties. Exhibit "A" sets out Xxxxx's working interest in the
specific properties for which it will be acquiring. Eagle's acquisition is
subject to the terms and conditions of the April 1,1999 Purchase Letter
Agreement, a copy of which is attached.
Eagle and MEXP further agree that the following additional terms and
conditions will apply to Eagle's acquisition.
1. MEXP will retain all of its rights within the existing
producing wellbores at Dry Creek, Moselle, and
Centerville Domes. In the event a new well is proposed
(other than a substitute well due to, but not limited to
mechanical difficulties) in the existing units or the
existing well is redrilled to a new bottomhole location,
Eagle will have the right to participate for its working
interest share.
2. Eagle will have the option to participate for its
working interest share in all leasehold acquisitions on
the subject domes subsequent to June 1, 1999.
3. Eagle will pay its allocated share of operating and
processing expenses and necessary facility enhancement
expenses. It is expressly understood that MEXP is not
selling any interest in any existing facilities or
pipelines.
4. The applicable existing Joint Venture Agreements and
Joint Operating Agreements will govern all operations on
the subject domes.
5. Eagle will have a restricted license to the proprietary
3-D seismic data covering Richmond, Grange, and Arm
Domes. Eagle will have the right to review in MEXP's
office, but will not be granted a license on the 3-D
seismic data covering the Interdomal, Centerville,
Moselle, and Kola Domes and will be subject to the terms
and conditions under the applicable license agreements
owned by MEXP on these domes.
6. MEXP is currently discussing the sale of additional
interest in these prospects under the same terms and
conditions to the third parties. In the event MEXP sells
this program to a third party for less consideration,
Eagle will have the right to participate
proportionately for those same terms and condition.
Sincerely,
XXXXXX EXPLORATION COMPANY
AGREED TO AND ACCEPTED THIS 27th DAY OF MAY, 1999.
EAGLE INVESTMENTS INC.
BY:/s/ X.X. Xxxxxx
------------------------------
C.E. ("Xxxx") Xxxxxx-President
-2-
Exhibit "A"
attached to that certain Letter Agreement dated May 27, 1999
between Eagle Investment, Inc and Xxxxxx Exploration Company
WI% Eagle's Eagle's
Dome County Available Participation WI%
-------------------------------------------------------------------------------
Xxx Xxxxxxxx 28.33% 42.33% 11.99%
Xxxxxx Xxxxxxxx 28.33% 42.33% 11.99%
Xxxx Xxxxxxxxx 20.30% 42.33% 8.59%
Richmond Xxxxxxxxx 35.00% 42.33% 14.82%
Dry Creek Xxxxxxxxx 44.58% 42.33% 18.87%
Centerville Xxxxx 22.80% 42.33% 9.65%
Xxxxxxx Xxxxx 50.00% 42.33% 21.17%
Interdomal Xxxxx/Xxxxxxxxx 50.00% 42.33% 21.17%
Don't Xxxxxxxxx 25.00% 42.33% 10.58%
Eminence Xxxxxxxxx 10.00% 42.33% 4.23%
5/25/99
$2.9mm
