Mr. Douglas Bolen, Chairman Delta Oil & Gas Inc. Vancouver, BC V6C 1G8 Re: Letter Agreement, Ranken Energy Corporation. 2009 – 3 Drilling Program – Garvin County, OK Dear Doug,
Ranken
Energy Corporation
Suite 000
- 000 X. 00xx
Xxxxxx
Edmond,
Oklahoma
73013 –
3663
August 7,
2009
Xx.
Xxxxxxx Xxxxx, Chairman
Delta Oil
& Gas Inc.
000 – 000
Xxxx Xxxxxx Xxxxxx
Vancouver,
BC
V6C
1G8
Re:
Letter Agreement, Ranken Energy Corporation. 2009 – 3 Drilling Program – Xxxxxx
County, OK
Dear
Xxxx,
This
LETTER AGREEMENT shall set forth the terms and conditions for your participation
in the Ranken Energy Corporation (“REC”) 2009-3 Drilling Program, located in
Xxxxxx County, Oklahoma. Specifically, you agree to participate with
a 5.00% Working Interest, subject to the following:
1.
|
You
agree to purchase an undivided 5.00% Working Interest in the 2009-3
Drilling Program for a total Buy-in Cost of $37,775.00 ($755,500.00 x
5.00%) which is your proportionate share.
|
2.
|
Your
initial Buy-in Cost includes all leasehold, whether force pooled or leased
in support of the initial test well as referred to in the trade summary
sections in the 2009-3 Drilling Program technical brochure, geolgic
expenses, brokerage costs, 3-D seismic usage, geophysical interpretations,
and overhead.
|
3.
|
You
agree to pay your Buy-in Cost upon execution of this LETTER
AGREEMENT. In addition, you agree to pay your share of the
Estimated Costs to Casing Point within Three (3) business days of the
receipt of an invoice, to be sent at a date prior to the SPUD date of each
well for the following:
|
Drilling: Xxxxxx
Prospect Xxxxxx
#1-18
Xxxxxx County, OK
Xxxxxxx
Prospect Xxxxxx
#1-20 Xxxxxx
County, OK
Xxxxxx
Prospect
DeeAlli
#1-18
Xxxxxx County, OK
West XxXxxxx
Pros. Waunice
#1-36 Xxxxxx
County, OK
4.
|
You
agree to participate in the Drilling Operations to casing point in the
initial test well of each prospect as specified in Item #3 above, with
your interest, bearing your proportionate share of a 20% carried Working
Interest to casing point. Your Before Casing Point Interest,
“BCP”, shall be 6.25% and your After Casing Point Interest, “ACP”, shall
be 5.00%. This carried Working Interest shall only apply to the
initial test well in each prospect in the 2009-3 DRILLING
PROGRAM.
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5.
|
Your
NET Revenue Interest Lease, “NRI”, in the 2009-3 DRILLING PROGRAM shall
be:
|
75% -
Xxxxxx Prospect
78% -
Xxxxxxx Prospect
75% -
Xxxxxx Prospect
78% -
West XxXxxxx Prospect
6.
|
You
acknowledge and understand that the 2009-3 DRILLING PROGRAM required
Forced Pooling 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 may be
proportionately reduced in the spacing unit. Your drilling
costs in the project will also be proportionately reduced
respectively. Such reduction, if applicable, does not affect
your buy-in costs in the 2009-3 DRILLING PROGRAM.
|
7.
|
Should
you agree to participate in any completion attempt in any well drilled in
the 2009-3 DRILLING PROGRAM, you agree to immediately forward your
proportionate share of the Estimated Completion Costs, upon receipt of an
invoice from Ranken Energy Corporation.
|
8.
|
You
agree to become a signatory to the a mutually agreeable Joint Operating
Agreement, “JOA”, consistent with industry standards
(enclosed).
|
9.
|
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.
|
10.
|
You
further agree to complete the subscription agreement required by the
Oklahoma Securities Commission (Enclosed), if applicable.
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Should
you agree with the terms and conditions expressed herein, please execute this
LETTER AGREEMENT in the space provided below.
Sincerely,
/s/
“Xxxxxxxx X
Xxx”
Xxxxxxxx
X. Xxx
President
Xxxxxx to
and accepted this 10th day
of August, 2009.
WI
Owner: Delta Oil & Gas
Inc Signature: /s/ “X
Xxxxx”
By:
Xxxxxxx Xxxxx,
President
Date: 10 August 2009
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