Newton Properties, Inc Trust Company Complex Ajeltake Road Ajeltake Island, Majuro, Marshall Islands MH96960 RE: Barnett Crossroads Prospect Area, Escambia County, Alabama Gentlemen:
Xxxxxx
Properties, Inc
Trust
Company Complex
Ajeltake
Road
Ajeltake
Island,
Majuro,
Xxxxxxxx Islands MH96960
RE:
Xxxxxxx Crossroads Prospect Area, Escambia County, Alabama
Gentlemen:
This
letter, when accepted by you in the manner hereinafter provided, will constitute
an agreement (“ Agreement”) by and between Xxxxxx Properties, Inc. (“Xxxxxx”)
and Ignis Petroleum Corporation (“Ignis”) relating to the lands, leases and
proposed operations thereon covering the Xxxxxxx Crossroads Prospect Area,
Escambia County, Alabama as more fully described on Exhibit “A” attached hereto
(“Subject Leases”). With regard to the foregoing, we have agreed as
follows:
1.
Xxxxxx
represents and warrants that it has acquired or owns the right to acquire
an
undivided seventy-five percent of eight-eighths interest (75% x 8/8ths) in
and
to the Subject Leases and to conduct operations for the drilling of a well
or
xxxxx thereon, all in accordance with the Subject Leases, assignments and
written agreements currently affecting the Subject Leases. Ignis shall carry
100% of all costs to drill, test and complete each well drilled on the Subject
Leases. For all purposes herein, one hundred percent of the working interest
shall be equal to a seventy percent of one hundred percent (70%x100%) net
revenue interest in and to the Subject Leases.
2.
Xxxxxx
represents and warrants that Blue Ridge Energy, Inc. (“Blue Ridge”) has acquired
or has access to certain geological and geophysical data and information
and
that Blue Ridge, for so long as this agreement is in effect and upon written
notice from Ignis, will conduct seismic, geological and geophysical evaluations
and other services on the lands and mineral estate of the Subject Leases
at the
sole cost and expense of Ignis . Such services when required by Ignis shall
be
performed by Blue Ridge with the understanding and agreement on a non-exclusive
basis.
3.
The
purchase price for the acquisition of the interests herein described shall
be $
375,000.00, evidenced by a promissory note (“ Note”), the form of which is
attached hereto as Exhibit “B”. The Note shall be delivered to Xxxxxx by Ignis
on before April 22, 2005 at the offices of Xxxxxx or such other location
as
Xxxxxx and Ignis shall agree (“Closing”). At Closing, Xxxxxx shall deliver
Assignments and other instruments transferring title to the Subject Leases,
such
Assignments to be in the form attached hereto as Exhibit “C”. In the event of a
conflict in the terms and conditions of the Note and this Agreement, this
Agreement shall govern.
4.
In the
event that Xxxxx does not commence actual drilling operations on the first
well
on or before September 30, 2005, Ignis shall, without notice from Xxxxxx,
deliver assignments of the interests acquired by Ignis hereunder to Xxxxxx,
whereupon this Agreement shall terminate and be of no further force or effect
on
Xxxxxx and Ignis.
5.
The
form of operating agreement attached hereto as Exhibit “D” shall govern all
operations on the lands and interests covered by the Subject
Leases.
If
this
letter correctly describes your understanding and agreements with respect
to the
matters contained herein, please sign two (2) originals of this letter in
the
manner provided below and return one (1) to the undersigned, whereupon it
will
become binding upon our respective successors and assigns.
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Very
truly yours,
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|
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/s/
Xxxxxxx Xxxxxxxxx
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|
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Xxxxxxx
Xxxxxxxxx, CEO
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AGREED
TO
AND ACCEPTED this the 22 day of April, 2005.
Xxxxxx
Properties, Inc.
/s/
Xxxxx
Xxxxxx
By:
Xxxxx
Xxxxxx
Its:
CEO/Director
