Jerry H. Clay September 30, 2003 LETTER AGREEMENT
Xxxxx X. Xxxx
000 X. Xxxxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
(903) 597 - 0289
September 30, 2003
LETTER AGREEMENT
TUSCANY MINERALS, LTD.
J. Xxxxxxx Xxxxxx, President
0000 Xxxxx Xxxxxx
Xxxx Xxxxxxxxx, X.X. X0X 0X0
Re: | Xxxxx-Xxxxxx No. 1 Re-entry: 527.23 acres, more or less, a part of the X.X. Xxxxxxxx Xxxxxx, X-0, the Xxxxxx Xxxx Survey, A-256, the X.X. Xxxxxxxxx Survey, A-695, the X. Xxxx Survey, A-194, and the X.X. Xxxxxxxx Survey, A-754, and being the same land described in deed dated November 20, 1943 from M.A. Davey to Xxxx XxXxxxxx and wife, recorded in Volume 331, at page 558 of the Deed Records of Xxxxxxxx County, Texas (the “Prospect Lands”). |
Dear Xx. Xxxxxx:
This letter, when executed by you in the space provided below, sets forth and confirms the understanding of our agreement concerning the abandonment of the re-entry of the well previously known as the Xxxxx Xxxx LNR Company Inc. No. 1 well (the “Well”) in the Tennessee Colony East (Rodessa) Field, Xxxxxxxx County, Texas, on the following terms and conditions (the “Letter Agreement”):
1. | Xxxxx X. Xxxx (“Clay”) agrees
to assume all liabilities associated with plugging and abandoning the
Well. In and for the consideration of Clay’s assumption of the plugging
obligation and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Tuscany Minerals Ltd. (“Tuscany”)
does hereby bargain, sell, transfer, assign and convey unto Clay all its
right, title and interest in the wellbore of the Well and any hydrocarbons
produced from the Well, together with a like interest in all well site
equipment used or obtained for the use in connection therewith. |
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2. | Tuscany agrees to release Clay from
any claims arising from that certain letter agreement dated June 19, 2003,
by and between Clay and Tuscany, the amendment to that letter agreement
dated September 8, 2003, by and between Clay, Tuscany and Arcadia Exploration
and Production Company (“Arcadia”), and the operating agreement
dated June 19, 2003. Said release shall not apply to Clay’s obligation
to pay Arcadia for Clay’s share of costs as described in the June
19, 2003, letter agreement. |
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3. | The above notwithstanding, Tuscany expressly
retains its right to participate in the drilling of a new well on the
Prospect Lands under the terms and conditions set forth in the June 19,
2003, letter agreement subject to the following terms. Upon receipt of
written notice of a proposed new well, Tuscany will have ten (10) business
days within which to notify the proposing party whether Tuscany elects
to participate in the new well. If Tuscany elects to go non-consent in
the new well or fails to reply within the above-specified timeframe, Tuscany
shall be deemed to have relinquished to the consenting parties in proportion
to their leasehold interests all its right, title and interest in and
to such new well and equipment thereon and to all leasehold rights, interest
and acreage on the Prospect Lands. Tuscany may not propose to drill a
new well on the Prospect Lands while the Well is producing commercially
or while the Well is being re-entered or re-worked. |
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4. | To the extent that the provisions of
this Letter Agreement conflict with the provisions of the operating agreement
dated June 19, 2003, and the letter agreements dated June 19, 2003, and
September 8, 2003, this Letter Agreement shall control. |
If the above outlined terms and conditions correctly set forth your understanding of our agreement, please so indicate by executing one original of this Letter Agreement and returning to the undersigned.
Yours truly, | ||
XXXXX X. XXXX | ||
By: | /s/ Xxxxx X. Xxxx | |
Xxxxx X. Xxxx |
Agreed and accepted this 30th day of September, 2003.
TUSCANY MINERALS, LTD.
By: | /s/ J. Xxxxxxx Xxxxxx | |
J. Xxxxxxx Xxxxxx President |