February 12, 2006
Xxxxxx Xxxxx
Dyhamic Resources Corporation
X.X. Xxx 000000
Xxx Xxxxx, Xxxxxx 00000
Xxxxx Robber Xxxxxx
Xxxxx Texas Operating Company
0000 Xxx Xxxxxx Xxxxx
XxXxxxxx, Xxxxx 00000
Gentlemen:
RE: D DUCK PROSPECT AREA/BOSSIER & CADDO PARISH, LOUISIANA
This Agreement has been made and entered into as the 12 day of February,
2006, by and between Sierra Pine Resources International, (hereinafter referred
to as SPRI), 000 Xxxxxxx Xxxxxxx Xxxxx, #000 Xxxxxxx, XX 00000, Dynamic
Resources Corporation, (hereinafter referred to as DYRF) X.X. Xxx 000000, Xxx
Xxxxx, Xxxxxx, 00000, and Xxxxx Texas Operating Company, (hereinafter referred
to as XXXXX), 0000 Xxx Xxxxxx Xxxxx, XxXxxxxx, Xxxxx 00000.
DYRF and XXXXX will each have a 50% ownership in the Prospect Area and
promote to SPRI further defined below. In the event either party defaults on
any payment the non defaulting party will assume the defaulting parties 50%
interest in and to the D Duck Prospect.
DYRF and XXXXX hereby agree to purchase the D Duck Prospect from SPRI for
the following terms and conditions. The Prospect Area for the D Duck is further
described on the attached Exhibit "A".
DYRF and XXXXX will pay an upfront prospect fee, immediately upon the
execution of this Agreement, an amount of $50,000.00 ($25,000.00 paid by
DYRF and $25,000.00 paid by XXXXX) to SPRI. DYRF and XXXXX will also pay
their 50% interest in and to an additional fee of $20.00/acre acquired
within the prospect area for all leasehold and or mineral interest
(including fee interests) or contractual rights to earn such an interest,
also within the prospect area, which is obtained or is earned by
purchase, assignment, leasehold, seismic option, extension, renewal,
famin, acreage contribution or by any other means by any party to this
agreement. This amount will be paid within ten (10) days after the end
of the calendar quarter within which the leasehold acquisition occurs.
1. DYRF and XXXXX will also assign its respective proportionately
reduced Overriding Royalty Interest (hereinafter referred to as
"ORI") of 4.0% on those leases having a royalty obligation of
less than or equal to 20%, an ORI of 3% on all those leases
having a royalty obligation greater than 20% and less than 25%,
and an ORI of 2% on all those leases having a royalty
obligation equal to 25% and an ORI of 1% on all those leases
having a royalty obligation greater than 25%.
2. SPRI shall have an option to be exercised within sixty (60) days
after notification in writing of payouts (plus 100%) of each
well drilled and successfully completed as a producer to
convert its respective ORI within each lease or portion thereof
in a producing unit to a proportionate 12.5% working interest
effective upon confirmation of payout (plus 100%) on all those
Page 2 March 28, 2006
leases with an ORI of 4%, a proportionate 9.375% working
interest upon confirmation of payout (plus 100%) on all those
leases with an ORI of 3%, a proportionate 6.25% working
interest upon confirmation of payout (plus 100%) on all those
leases with an ORI of 2%, and a proportionate 3.125% working
interest upon confirmation of payout (plus 100%) on all those
leases with an ORI of 1%.
3. Upon successful culmination of leasehold interests as so
stipulated hereinabove DYRF and XXXXX will promptly assign to
SPRI such agreed upon Overriding Royalty Interest or Working
Interest in and to such leasehold interest and shall compensate
SPRI additionally as hereinabove set forth.
4. Upon request by DYRF or XXXXX, SPRI will make available all data
within the prospect area.
5. This Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties hereto.
6. This Agreement will terminate by either the mutual agreement of
the parties subject hereto, or at the expiration of the last
lease subject to this agreement, whichever occurs first.
7. This Agreement will replace and supercede that certain Agreement
dated January 16, 2006 by and between DYRF and SPRI, upon the
execution by all Parties to this Agreement.
Sincerely yours,
Xxxxx Xxxxx
President
Sierra Pine Resources International
AGREED TO AND ACCEPTED THIS 12 DAY OF FEBRUARY, 2006
DYNAMIC RESOURCES CORPORATION
BY: /s/ XXXXXX XXXXX
_______________________
XXXXXX XXXXX, PRESIDENT
AGREED TO AND ACCEPTED THIS ________ DAY OF FEBRUARY, 0000
XXXXX XXXXX OPERATING COMPANY
BY: _______________________________________
XXXXX XXXXX XXXXXX, PRESIDENT
Page 3 March 28, 2006
EXHIBIT "A"
ATTACHED TO AND MADE A PART OF THAT CERTAIN AGREMENT DATED 2/12/06 BY AND
BETWEEN SPRI, DYRF AND XXXXX COVERING THE D DUCK PROSPECT, BOSSIER AND CADDO
PARISH, LOUISIANA.
THE LAND DEFINED BELOW ARE XXXXXX XXXXXXX XXX XXXXX XXXXXX XXXXXXXXX.
X00X-X00X
SECTIONS 31, 32, 33 AND 34.
T19N-R13W
SECTIONS 3, 4, 5, 6, 7, 9, 16, 17, 18, 19, 20, 29 AND 30.
its respective ORI within each lease or portion thereof in
producing unit to a proportionate 12.5% working interest
effective upon confirmation of payout (plus 100%) on all those
leases with an ORI of 4%, a proportionate 9.375% working interest
upon confirmation of payout (plus 100%) on all those leases with
an ORI of 3%, a proportionate 6.25% working interest upon
confirmation of payout (plus 100%) on all those leases with an
ORI of 2% and a proportionate3.125% working interest upon
confirmation of payout (plus 100%) on all those leases with anORI
of 1%
3. Upon successful culmination of leasehold interests as so
stipulated hereinabove DYRF and XXXXX will promptly assign to
SPRI such agreed upon Overriding Royalty Interest or Working
Interest in and to such leasehold interest and shall compensate
SPRI additionally as hereinabove set forth.
4. Upon request by DYRF or XXXXX, SPRI will make available all data
within the prospect area.
5. This Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties hereto.
6. This Agreement will terminate by either the mutual agreement of
the parties subject hereto, or at the expiration of the last
lease subject to this agreement, whichever occurs first.
7. The Parties agree that Xxxxx shall have the right to assigns its
interests in this agreement to an affiliated legal entity by
providing notice to the other parties.
8. This Agreement will replace and supercede that certain Agreement
dated January 16, 2006 by and between DYRF and SPRI, upon the
execution by all Parties to this Agreement.
Sincerely yours,
Xxxxx Xxxxx, President
Sierra Pine Resources International
AGREED TO AND ACCEPTED THIS __________ DAY OF FEBRUARY, 2006
DYNAMIC RESOURCES CORPORATION
BY:
________________________
XXXXXX XXXXX, PRESIDENT
AGREED TO AND ACCEPTED THIS 17 DAY OF FEBRUARY, 0000
XXXXX XXXXX OPERATING COMPANY
/s/ XXXXX XXXXX XXXXXX
________________________
XXXXX XXXXX XXXXXX, PRESIDENT
