FARMOUT AGREEMENT
THIS FARMOUT AGREEMENT made and entered into this 3rd day of September, 1999,
by and between TENGASCO, INC. of 000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxxx 00000, hereafter referred to as TI, party of the first part, and
Xxxxxx Petroleum, Inc. of 0000 Xxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000,
hereafter referred to as Xxxxxx, party of the second part. Xxxxxx, party of
the second part is desirous of obtaining a Farmout from party of the first
part, TI, in the Swan Creek Field area, Xxxxxxx County, Tennessee.
WITNESSETH: That the said party of the first part for and in consideration of
the sum of Ten Dollars ($10.00) and other good and valuable consideration to
and in hand paid by the said party of the second part, the receipt of which is
hereby acknowledged, has granted this Farmout under the following terms and
conditions:
1. This Farmout agreement is for ten (10) xxxxx with Tengasco having the
option to award and additional ten (10) well farmout (if Xxxxxx seeks an
additional farmout). All locations will be mutually agreed upon by Xxxxxx and
Tengasco and shall exclude the outlined area of the attached map.
2. Net Revenue will be 81.25% to Xxxxxx.
3. TI will transport Xxxxxx'x gas for .40 cents per MCF.
4. Xxxxxx will have the option of drilling to earn. For each well drilled,
Xxxxxx will earn one additional location up to a total of ten (10) locations
as per Item 1. of this agreement and has to select said location within 30
days of completion of the previous well. Tengasco shall have the option to
retain all offset locations to xxxxx drilled by Xxxxxx. Tengasco shall have 30
days to exercise its option to retain the offset locations.
5. TI will assign or cause to be assigned each drilled location upon Xxxxxx
tendering the electric log.
6. TI will have access to the rig floor and all information obtained by
Xxxxxx in drilling of each location.
7. Xxxxxx agrees to split 50-50 with Tengasco any lease currently held by
Xxxxxx in the Swan Creek Field area, upon which Tengasco holds top leases.
8. Both parties agree that this agreement does not create a partnership of
any kind.
9. This agreement is binding upon both parties and their assigns.
/s/ /s/Xxxxx Xxxxxx
TENGASCO, INC. XXXXXX PETROLEUM, INC.
Agent Agent CEO
