Exhibit - Georgia Exploration, Inc. Form 10-QSB
Exhibit
- Georgia Exploration, Inc. Form 10-QSB
10.3
Agreement
between Xxxxxxx Resources LP and Orbit Energy, LLC effective September 1, 2006
for the development of the Mound Branch Prospect in Elk County, Kansas.
MOUND
BRANCH PROSPECT
ELK
COUNTY, KANSAS
|
STATE
OF: KANSAS
|
§
|
RE:
MOUND BRANCH PROSPECT
|
||
|
§
|
||||
|
COUNTY
OF: ELKk
|
§
|
THIS
AGREEMENT (the “Agreement”) is made and entered into effective the 1st
day of
September 2006 (the “Effective Date”), by and between Xxxxxxx
Resources LP, a
Texas
Limited Partnership, hereinafter called “Xxxxxxx”,
and
Orbit
Energy, LLC,
a
Nevada Limited Liability Company, hereinafter called the “Orbit”.
Xxxxxxx and Orbit are
collectively referred herein as the “Parties”,
and
singularly, a “Party”.
WHEREAS:
(a) Orbit
and/or its principals hold certain oil and gas leases in Elk County, Kansas
totaling approximately 8,800+- acres as described in Exhibit “A” attached
hereto;
(b) The
lands
associated with the leases described in Exhibit “A”, any additional leases
acquired that expands or extents the lease acreage under the oil and gas leases
described in Exhibit “A”, and any acreage acquired or contiguous to the proposed
Mound Branch Gathering System, all which are hereinafter referred to as the
“Area of Mutual Interest” (the “AMI”), all as presented in Exhibit
“B”;
(c) Based
on
results to date, Orbit has determined that additional testing and evaluation
of
the AMI is warranted;
(d) Xxxxxxx
desires to participate in the further evaluation and assessment of the AMI,
and
based on the outcome from such evaluations, may have an interest to participate
in the Mound Branch Infrastructure and Reserve Development Program;
(e) Xxxxxxx
is willing to contribute funding necessary to effect and progress additional
testing and evaluation of the AMI; and
1
/ 9
(f) Based
on
the conclusions reach from such testing and evaluation, Parties desire to enter
into good faith negotiations to develop a definitive purchase and sale agreement
for:
|
(i)
|
the
oil and gas leases identified in Exhibit “A”,
|
|
(ii)
|
any
additional acres that may be acquired in the AMI (including acreage
associated with the proposed Mound Branch Gathering Line) as identified
in
Exhibit “B”; and
|
|
(iii)
|
existing
well bores that have been drilled to date (8 xxxxx) on the AMI lease
acreage including a quantification of the fair value of the Mound
Branch
leases and existing well bores that would be subject to the purchase
and
sale agreement.
|
PARTIES
NOW THEREFORE AGREE:
|
1.
|
Xxxxxxx
will remit payment to Orbit totaling one hundred thousand dollars
($100,000) (the “Initial Payment”) on the Effective Date of this
Agreement, for Orbit’s use in conducting additional testing and
evaluations of the AMI;
|
|
2.
|
The
Initial Payment made by Xxxxxxx to Orbit shall be applied against
the
purchase and sale price for the AMI negotiated pursuant to a definitive
purchase and sale agreement;
|
|
3.
|
Orbit
shall conduct all testing and evaluations of the AMI within ninety
days
(90) of the Effective Date of this
Agreement;
|
|
4.
|
Orbit
shall give Xxxxxxx a minimum of twenty-four hour (24) notice of any
tests
to be performed on the AMI, and Xxxxxxx shall have the right to witness
and observe the testing procedures, if it so
elects;
|
|
5.
|
Whether
witnessed or not, Orbit shall provide Xxxxxxx with the results and
conclusions of all evaluations and tests performed with twenty-four
hours
(24) of Orbit’s receipt of such
materials;
|
|
6.
|
Parties
agree to use best efforts in the development of a definitive purchase
and
sale agreement for all lease acreage within the AMI, and for existing
xxxxx bores drilled to date in the
AMI;
|
|
7.
|
In
the development of a purchase and sale agreement, Parties agree to
use
good faith in the formulation of a fair value for the acreage, xxxxx
and
any associated reserves to be acquired by Xxxxxxx from Orbit pursuant
to a
definitive purchase and sale agreement;
|
2
/ 9
|
8.
|
Shall
Parties be unable to mutually agree on the fair value of the purchase
and
sale transaction, Parties agree to engage an independent third party,
acceptable to both Parties, to make a fair market value appraisal
of the
assets subject to the purchase and sale
agreement;
|
|
9.
|
Parties
agree to use the fair value developed in the appraisal by the independent
third party for the definitive purchase and sale agreement to be
formulated between Parties;
|
|
10.
|
Xxxxxxx’x
rights under this Agreement shall be exclusive, and for one-hundred
fifty
days (150) after the Effective Date of this Agreement, Orbit agrees
not to
initiate, solicit or consider any other offers associated with the
AMI and
any/or other tangible or intangible assets covered by or included
in the
AMI, and Orbit agrees to provide written notification to Xxxxxxx
of any
such solicitations or offers within twenty-four (24) hours of its
receipt
of such;
|
|
11.
|
Orbit
may not assign this Agreement, without Xxxxxxx’x consent which may not be
unreasonably withheld. Xxxxxxx may assign this Agreement without
Orbit’s
consent, in so much as the assignment is related to a merger or other
transaction entered into by Xxxxxxx to effect
financing;
|
|
12.
|
Orbit
shall indemnify Xxxxxxx and its representatives, officers, directors,
agents, employees harmless from any and all third party claims, liens,
and
demands arising out of Orbit’s operations in the
AMI;
|
|
13.
|
Orbit
shall maintain insurance to cover all its activities in and on the
AMI
that would be reasonable and customary in the U.S. oil and gas
industry;
|
|
14.
|
This
Agreement shall be construed under and in accordance with the laws
of the
State of Texas;
|
|
15.
|
All
Parties duties, obligations and liabilities hereto intended under
this
Agreement shall be severable, and not joint or
collective;
|
|
16.
|
This
Agreement may be executed in multiple counterparts, each of which
constitute one and the same legal
instrument;
|
|
17.
|
This
Agreement is the entire agreement between Parties with respect to
the
subject matter hereof, and replaces or supersedes any and all previous
agreement with oral or written between
Parties.
|
3
/ 9
IN
WITNESS WHEREOF,
the
Parties hereto have executed this Agreement effective as of the above Effective
Date written.
|
ORBIT
ENERGY, LLC
|
||
|
By:
|
/
s
/ Xxxx X. Xxxxxxxx
|
|
|
Title:
|
President
/ Manager
|
|
|
XXXXXXX
RESOURCES LP
|
||
|
By:
|
/
s
/ Xxx Xxxxxx
|
|
|
Title:
|
Director
& CFO
|
|
4
/ 9
Exhibit
A
Mound
Branch Lease
Calender
|
Lessor
|
Lease
Date /
|
Royalty
|
HBP
|
Number
of Acres
|
Legal
Discription
|
County
|
State
|
|||||||||
|
Lease
Exp. Date
|
||||||||||||||||
|
Xxxxxx
Family Farm, LLC
|
||||||||||||||||
|
Lease
Date-
|
12/10/2005
|
3
years
|
1/8
|
no
|
Total
Acres 125
|
Township
30 South , Range 11 East
|
Elk
|
KS
|
||||||||
|
Lease
Exp. Date
|
12/10/2008
|
Section
29: E/2NE/4,
NE/4SE/4, N/2SE/4SE/4
Lying
North of County Rd
|
||||||||||||||
|
|
||||||||||||||||
|
Xxxxxx
X. & Xxxxxxxxx X. Xxxxxxx
|
Total
Acres 320
|
|||||||||||||||
|
Lease
Date-
|
2/11/2006
|
3
years
|
1/8
|
Lease
(1) 160
|
Township
30 South , Range 11 East
|
Elk
|
KS
|
|||||||||
|
Lease
Exp. Date
|
2/11/2009
|
|
Section
18: NE/4
|
|||||||||||||
|
Lease
Date-
|
2/11/2006
|
3
years
|
1/8
|
Lease
(2) 160
|
Township
30 South, Range 00 Xxxx
|
Xxx
|
XX
|
|||||||||
|
Lease
Exp. Date
|
2/11/2009
|
Section
18: E/2SW/4,
W/2SE/4
|
||||||||||||||
|
|
||||||||||||||||
|
Xxx
&
Xxxxxx
Xxxxxxx,
Xxxxxxx
&
Xxxxxxxxx
Xxxxx
|
Total
Acres 563
|
|||||||||||||||
|
Lease
Date-
|
2/25/2006
|
3
years
|
1/8
|
Lease
(1) 280
|
Township
30 South , Range 11 East
|
Elk
|
KS
|
|||||||||
|
Lease
Exp. Date
|
2/25/2009
|
Section
21: NE/4NW/4,
lying East of County RD, NE/4 Section
22: W/2SW/4, SW/4NW/4
|
||||||||||||||
|
Lease
Date-
|
2/25/2006
|
3
years
|
1/8
|
Lease
(2) 283
|
Township
30 South, Range 00 Xxxx
|
Xxx
|
XX
|
|||||||||
|
Lease
Exp. Date
|
2/25/2009
|
Section
15: SW/4
|
||||||||||||||
|
Section
22: N/2NW/4, SE/4NW/4
|
||||||||||||||||
|
Xxxxxx
X. & Xxxxxx X. Xxxxx
|
|
|||||||||||||||
|
Lease
Date-
|
2/25/2006
|
3
years
|
1/8
|
Total
Acres 200
|
Township
30 South, Range 11 East of 6th P.M.
|
Elk
|
KS
|
|||||||||
|
Lease
Exp. Date
|
2/25/2009
|
Section
21: SE/4, NE/4SW/4, SE/4SW/4
|
||||||||||||||
|
Xxxxx
X. Xxxxxxxxxxxx
|
no
|
Total
Acres 400
|
||||||||||||||
|
Lease
Date-
|
10/1/2005
|
3
years
|
1/8
|
Lease
(1)
-
240 Acres
|
Township
30 South, Range 11 East
|
Elk
|
KS
|
|||||||||
|
Lease
Exp. Date-
|
10/1/2008
|
|
Section
12: SE/4, E/2SW/4
|
|||||||||||||
|
Lease
Date-
|
10/1/2005
|
3
years
|
1/8
|
n/a
|
Lease
(2) - 160 Acres
|
Township
30 South, Range 12 East
|
Elk
|
KS
|
||||||||
|
Lease
Exp. Date-
|
10/1/2008
|
Section
7: SW/4
|
||||||||||||||
|
Xxxxx
Xxxxxx
|
Total
Acres 640
|
|||||||||||||||
|
Lease
Date-
|
10/13/2005
|
3
years
|
1/8
|
n/a
|
Lease
(1)
-
320 Acres
|
Township
30 South, Range 11 East
|
Elk
|
KS
|
||||||||
|
Lease
Exp. Date-
|
10/13/2008
|
Section
16: N/2
|
||||||||||||||
|
Lease
Date-
|
10/13/2005
|
3
years
|
n/a
|
Lease
(2) - 320 Acres
|
Township
30 South, Range 11 East
|
Elk
|
KS
|
|||||||||
|
Lease
Exp. Date-
|
10/13/2008
|
Section
16: S/2
|
|
|||||||||||||
|
Xxxxxx
Xxxxx
|
||||||||||||||||
|
Lease
Date-
|
9/6/2005
|
3
years
|
1/8
|
n/a
|
Total
Acres 80
|
Township
30 South, Range 00 Xxxx
|
Xxx
|
XX
|
||||||||
|
Lease
Exp. Date-
|
9/6/2008
|
Section
19: E/2NE/4
|
5
/ 9
Exhibit
A
Mound
Branch Lease
Calender
|
Xxxxxx
Xxxxx
|
Total
Acres 920
|
|||||||||||||||
|
Lease
Date-
|
10/17/2005
|
3
years
|
1/8
|
n/a
|
Lease
(1) 160 Acres
|
E/2
NW/4, W/2 NE/4, Sec32
|
Elk
|
KS
|
||||||||
|
Lease
Exp. Date-
|
10/17/2008
|
T30S-R11E,
Elk County, Kansas
|
|
|||||||||||||
|
Lease
Date-
|
10/17/2005
|
3
years
|
1/8
|
Lease
(2) 000 Xxxxx
|
Xxxxxxxx
00 Xxxxx Xxxxx 11 East
|
Elk
|
KS
|
|||||||||
|
Lease
Exp. Date-
|
10/17/2008
|
Section
35: NE/4
|
|
|||||||||||||
|
Robert,
Lakin, Xxxxx Xxxxx
Xxxxx
X. & Xxxxxx Xxxxxxxx
|
||||||||||||||||
|
Lease
Date-
|
10/17/2005
|
3
years
|
Lease
(3)- 000 Xxxxx
|
Xxxxxxxx
00 Xxxxx, Xxxxx 11 East
|
Elk
|
KS
|
||||||||||
|
Lease
Exp. Date-
|
10/17/2008
|
Section
27: E/2SW/4, SE/4
|
||||||||||||||
|
|
||||||||||||||||
|
Robert,
Lakin, Xxxxx Xxxxx
Xxxxx
X. & Xxxxxx Xxxxxxxx
|
||||||||||||||||
|
Lease
Date-
|
10/17/2005
|
3
years
|
1/8
|
Lease
(4)- 00 Xxxxx
|
Xxxxxxxx
00 Xxxxx, Xxxxx 11 East
|
Elk
|
KS
|
|||||||||
|
Lease
Exp. Date-
|
10/17/2008
|
Section
35: W/2NW/4
|
||||||||||||||
|
Xxxxxx
X., Xxxxxx & Xxxxx X. Xxxxx
|
||||||||||||||||
|
Lease
Date-
|
10/17/2005
|
3
years
|
Lease
(5)- 000 Xxxxx
|
Xxxxxxxx
00 Xxxxx, Xxxxx 11 East
|
Elk
|
KS
|
||||||||||
|
Lease
Exp. Date-
|
10/17/2008
|
Section
23: SE/4SE/4
|
|
|||||||||||||
|
Xxxxxx
X., Xxxxxx & Xxxxx X. Xxxxx
|
||||||||||||||||
|
Lease
Date-
|
10/17/2005
|
3
years
|
Lease
(6) 000 Xxxxx
|
Xxxxxxxx
00 Xxxxx, Xxxxx 11 East
|
Elk
|
KS
|
||||||||||
|
Lease
Exp. Date-
|
10/17/2008
|
Section
25: N/2NW/4
|
||||||||||||||
|
Xxxxxxx
X. & Xxxx X. Xxxxxx Trustees of the
Xxxxxxx
X. Xxxxxx Trust
|
Total
Acres 640
|
|||||||||||||||
|
Lease
Date-
|
3/16/2006
|
3
years
|
1/8
|
Lease
(1) 000 Xxxxx
|
Xxxxxxxx
00 Xxxxx, Xxxxx 11 East
|
Elk
|
KS
|
|||||||||
|
Lease
Exp. Date-
|
3/16/2009
|
Section
15: W/2SE/4
|
|
|||||||||||||
|
Section
22: NE/4
|
||||||||||||||||
|
Lease
Date-
|
3/16/2006
|
3
years
|
1/8
|
Lease
(2) 000 Xxxxx
|
Xxxxxxxx
00 Xxxxx Xxxxx 11 East
|
Elk
|
KS
|
|||||||||
|
Lease
Exp Date-
|
3/16/2009
|
Section
27: NE/4
|
||||||||||||||
|
Lease
Date-
|
3/16/2006
|
3
years
|
1/8
|
Lease
(3) 000 Xxxxx
|
Xxxxxxxx
00 Xxxxx, Xxxxx 11 East
|
Elk
|
KS
|
|||||||||
|
Lease
Exp Date-
|
3/16/2009
|
Section
22: SE/4, E/2SW/4
|
||||||||||||||
|
M.
Xxxx Xxxxx, Trustee of the M. Xxxx Xxxxx
|
|
Total
Acres 640
|
||||||||||||||
|
Lease
Date-
|
3/20/2006
|
3
years
|
1/8
|
Lease
(1) 000 Xxxxx
|
Xxxxxxxx
00 Xxxxx, Xxxxx 11 East
|
Elk
|
KS
|
|||||||||
|
Lease
Exp. Date-
|
3/20/2009
|
|
Section
10: W/2
|
|||||||||||||
|
Lease
Date-
|
3/20/2006
|
3
years
|
1/8
|
Lease
(2) 000 Xxxxx
|
Xxxxxxxx
00 Xxxxx, Xxxxx 11 East
|
Elk
|
KS
|
|||||||||
|
Lease
Exp. Date-
|
3/20/2009
|
Section
10: E/2
|
6
/ 9
Exhibit
A
Mound
Branch Lease
Calender
|
Xxxx
X. Xxxxxx & Xxxxx Under
|
Total
Acres 320
|
|||||||||||||||
|
Lease
Date-
|
1/21/2004
|
3
years
|
Lease
(1)- 000 Xxxxx
|
Xxxxxxxx
00 Xxxxx, Xxxxx 0 Xxxx
|
Xxx
|
XX
|
||||||||||
|
Lease
Exp. Date
|
1/21/2007
|
Section
32 SE/4
|
||||||||||||||
|
Lease
Date-
|
1/21/2004
|
3
years
|
Lease
(2)- 000 Xxxxx
|
Xxxxxxxx
00 Xxxxx, Xxxxx 0 Xxxx
|
Xxx
|
XX
|
||||||||||
|
Lease
Exp. Date
|
1/21/2007
|
Section
32: SW/4
|
||||||||||||||
|
|
||||||||||||||||
|
Xxxxxx
X.
& Xxxxx
X. Xxxxxx
|
Total
Acres 480
|
|||||||||||||||
|
Lease
Date-
|
12/24/2003
|
3
years
|
Lease
(1)- 000 Xxxxx
|
Xxxxxxxx
00 Xxxxx, Xxxxx 0 Xxxx
|
Xxx
|
XX
|
||||||||||
|
Lease
Exp. Date
|
12/24/2006
|
Section
30: SE/4NE/4, NE/4SE/4, S/2SE/4
|
||||||||||||||
|
Lease
Date-
|
12/24/2003
|
3
years
|
Lease
(2)- 000 Xxxxx
|
Xxxxxxxx
00 Xxxxx, Xxxxx 0 Xxxx
|
Xxx
|
XX
|
||||||||||
|
Lease
Exp. Date
|
12/24/2006
|
Section
29: X/0XX/0, XX/0XX/0, SW/4
Section
32: SE/4NW/4
|
||||||||||||||
|
|
|
|
||||||||||||||
|
Xxxx,
Xxxxxxx X., Xxxxxxx Xxxxxx & Xxx
Neucker
|
||||||||||||||||
|
Lease
Date-
|
1/30/2004
|
3
years
|
Total
Acres 80
|
Township
31 South, Range 9 East
|
Elk
|
KS
|
||||||||||
|
Lease
Exp. Date
|
1/30/2007
|
Section
29: NW/4NW/4
Section
30: NE/4NE/4
|
||||||||||||||
|
|
|
|||||||||||||||
|
Xxxxx
Family Limited Partnership
|
Total
Acres 2524.1
|
|||||||||||||||
|
Lease
Date-
|
10/22/2005
|
1
year
|
1/8
|
Lease
(1)
-
649.55 Acres
|
Township
30 South, Range 12 East
|
Elk
|
KS
|
|||||||||
|
Lease
Exp. Date
|
10/22/2006
|
Section
30: Xxxx 0,0,0,0 X0,x/x/x All lying
East County (12 Ac.)
|
||||||||||||||
|
|
|
|
||||||||||||||
|
Xxxxx
Family Limited Partnership
|
||||||||||||||||
|
Lease
Date-
|
10/22/2005
|
1
year
|
1/8
|
Lease
(2) - 239.34 Acres
|
Township
30 South, Range 12 East
|
Elk
|
KS
|
|||||||||
|
Lease
Exp. Date
|
10/22/2006
|
Section
31: Xxx 0 (00.00), XX/0XX/0,
X/0XX/0,
a/d/aN/2N/2
Section
32: N/2NW/4
|
||||||||||||||
|
|
||||||||||||||||
|
Xxxxx
Family Limited Partnership
|
||||||||||||||||
|
Lease
Date-
|
10/22/2005
|
1
year
|
Lease
(3) - 626.60 Acres
|
Township
30 South, Range 12 East
|
Elk
|
KS
|
||||||||||
|
Lease
Exp. Date
|
10/22/2006
|
Section
18: Lots 1,2,3,4
|
||||||||||||||
|
E/2W/2,
E/2, a/d/a All
|
||||||||||||||||
|
Xxxxx
Family Limited Partnership
|
|
|||||||||||||||
|
Lease
Date-
|
10/22/2005
|
3
years
|
Lease
(4) - 320 Acres
|
Township
30 South, Range 12 East
|
Elk
|
KS
|
||||||||||
|
Lease
Exp. Date
|
10/22/2008
|
Section
29: W/2
|
||||||||||||||
|
Xxxxx
Family Limited Partnership
|
||||||||||||||||
|
Lease
Date-
|
10/22/2005
|
3
years
|
Lease
(5) - 688.61 Acres
|
Township
30 South, Range 12 East
|
Elk
|
KS
|
||||||||||
|
Lease
Exp. Date
|
10/22/2008
|
Section
19: Xxxx 0,0,0,0
X/0,
x,x,x All (632.11 Ac.)
Township
30 South, Range 00 Xxxx
Xxxxxxx
00: All that part of the SE/4NE/4,
E/2SE/4
lying East of County
Road ( 56.5 Ac )
|
||||||||||||||
|
Xxxxxxxx
X. Xxxxxxx
|
7/13/2005
|
1
year
|
Total
Acres 959
|
Section
29, 30 Various
|
Elk
|
KS
|
||||||||||
|
Lease
Date-
|
||||||||||||||||
|
Lease
Exp. Date
|
7
/
9
Exhibit
B
8
/
9
MOUND
BRANCH PROSPECT
ELK
COUNTY, KANSAS
First
Amendment
The
Mound
Branch Prospect Development Agreement between Xxxxxxx Resources LP and Orbit
Energy, LLC made effective the 1st
day of
September 2006 (the “Agreement”) is amended and modified as
follows:
Section
10 - is amended to provide:
During
the one-hundred fifty day (150) exclusive period beginning with the Effective
Date of this Agreement and continuing through February 1, 2007 (hereinafter
referred to as the “Lock-Up Period”), Xxxxxxx is responsible for any lease
renewal, minimum royalty, and other associated costs of drilling and testing
the
xxxxx, or other similar payment obligation(s) associated with and/or arising
from any lease acreage covered by the AMI under the Agreement. Such payments
made by Xxxxxxx during the Lock-Up Period will be applied against the purchase
and sale price for the AMI to be negotiated in connection with a definitive
purchase and sale agreement between Parties.
The
Agreement as amended and modified is in all other things confirmed, ratified
and
acknowledged by Parties to be in full force and effect.
This
First Amendment shall extend to and be binding upon the Parties hereto, their
heirs, successors, assigns and legal representatives as of the Effective Date
of
this Agreement.
|
ORBIT
ENERGY, LLC
|
|||
|
By:
|
/
s
/ Xxxx X. Xxxxxxxx
|
||
|
Title:
|
President
/ Manager
|
11/13/06
|
|
|
Date
|
|||
|
XXXXXXX
RESOURCES LP
|
|||
|
|
|||
|
By:
|
/
s
/ Xxx Xxxxxx
|
||
|
Title:
|
CFO
|
11/13/06
|
|
|
Date
|
|||
9
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