BAYSHORE EXPLORATION L.L.C.
00000 XXXX XXXXXXX, XXXXX 000
XXXX, XXXXX 00000
Phone (000) 000-0000
Fax (000) 000-0000
xxxxxxxxxxxx@xxxxxxxxx.xxx
PARTICIPATION AGREEMENT
Bayshore Exploration L.L.C.
00000 Xxxx Xxxxxxx, Xxxxx 000
Xxxx, Xxxxx 00000
RE: XXXXX NO. 3 WELL
XXXXX RANCH DEEP PROSPECT
LA SALLE COUNTY, TEXAS
Gentlemen:
Dynamic Resources Corp. ("Dynamic") desires to apply for the purchase of a
working interest in the Xxxxx Ranch Deep Prospect in La Salle County, Texas.
Dynamic ("Participant") hereby acknowledges that Bayshore Exploration L.L.C.
("Bayshore") will drill and put into production, if warranted, one test well
known as the Xxxxx No. 3 Well in the Xxxxx Ranch Field Area for Xxxxxxx,
Xxxxxxxx, Sligo, Hosston, Cotton Valley and/or Smackover oil/gas production.
Participant hereby applies for the purchase of Three (3.00) percentage
points at $117,000.00 per each percentage point (1.00% working interest) payable
upon application, and tender herewith a check in the amount of $351,000.00.
Participant hereby makes the following representations, warranties and
commitments:
INITIAL ONLY WHAT IS APPLICABLE:
a. By executing this Participation Agreement, Participant has, subject to
financing, committed itself to become a (3.00%) working interest owner in this
prospect.
b. The undersigned has such knowledge and experience in financial and
business matters that the undersigned is capable of evaluating the merits and
risks of an investment in this oil and gas prospect and of making an informed
investment decision.
DRILLING OPERATIONS: Upon acceptance of the above recited consideration, on or
before July 31, 2005, Bayshore, with Xxxxxxxxx Engineering L.P. as operator,
agrees to drill and test, and if warranted, complete and equip one oil and/or
gas well at a location of Bayshore's choice on the subject leases described on
Exhibit "A" attached hereto, with the following terms and conditions:
1. Bayshore shall permit said test well with the Railroad Commission of
Texas, survey and stake the drilling location, build a necessary lease road,
prepare the location, cure title to the drillsite, contract with third party
contractors and drill with due diligence one test well to a total depth of
21,000 feet, or a depth sufficient to test the Smackover formation, log and
test said well for the purpose of establishing commercial oil/gas production
or plugging and abandoning same. Bayshore shall have the right to cease
drilling operations if an impenetrable substance or formation is encountered
during the drilling of said well at any depth below 10,000 feet. Bayshore shall
deliver a 75% net revenue interest to Participant in the Xxxxx No. 3 Well.
Xxxxxxxx agrees that there shall be no back-in or carried working interest
attributable to Participant's working interest in said test well.
2. Xxxxxxxx agrees that, during drilling and completion operations,
Participant shall receive the following:
a. Daily drilling and completion reports on the subject well.
b. Copies of all logs, tests and samples gained from the drilling and
completion of the subject well.
c. Copies of all Railroad Commission of Texas filings on the subject
well.
3. In the event that an oil and/or gas well completion is attempted on the
subject test well, Participant agrees to pay its proportionate share of the
completion costs for the well per the Authority for Expenditure (AFE) for the
Xxxxx No. 3 Well which equals $19,820.00 per each percentage point upon written
and/or verbal notification from Bayshore.
4. In the event that commercial oil and/or gas production is established on
the subject leases with said test well, then both Participant and Bayshore shall
enter into a mutually acceptable Joint Operating Agreement Model Form 610-1989
for the operation of the subject well. All subsequent operations and subsequent
xxxxx drilled and completed on the prospect acreage shall be governed by the
Joint Operating Agreement.
Participant recognizes that an investment in oil and gas exploration
involves a high degree of risk of loss of its entire investment. Participant has
been advised to consult with its own financial advisors regarding this
investment. Its commitments to all investments bear a reasonable relationship
to its net worth and Participant is able to bear the risk of loss of its entire
investment in this prospect.
In the event that a dispute arises between Participant and Bayshore or its
affiliates, or any of their respective successors, representatives, agents,
officers or employees, in connection with this offering, the offer and sale of
working interest, or this Participation Agreement, the parties hereto hereby
expressly agree that any such dispute shall be resolved through Arbitration
rather than litigation, and to submit the dispute to the American Arbitration
Association within 15 days after receiving a written request to do so. If any
party hereto fails to submit the dispute to Arbitration with in the specified
time above, the requesting party may then file any papers necessary to commence
arbitration. The parties hereto agree that any hearing scheduled after an
Arbitration proceeding is initiated, by either party, shall take place in
Houston, Xxxxxx County, Texas.
This Participation Agreement, and all of its terms and conditions,
represent the entire agreement between Participant and Bayshore pertaining to
the Xxxxx Ranch Deep Prospect, and supersedes any and all prior agreements,
written or oral. Any changes to this agreement must be agreed to in writing by
both parties hereto.
This Participation Agreement, and all of its terms and conditions, shall
be binding upon the parties hereto and shall extend to and be binding upon their
respective heirs, successors and assigns. Participant shall provide Bayshore
with written notice prior to assigning any or all of Participant's working
interest herein to a third party.
AMOUNT OF WORKING INTEREST: Participant represents that it is delivering
herewith a check or certified funds on or before May 31, 2005 in the amount of
$117,000.00 per each percentage point. The total point(s) for which Participant
is offering to purchase and the total amount of the aforementioned check or
certified funds are as follows:
Total Point(s) Desired: Three (3.00)
Amount of Subscription: $351,000.00
**MAKE CHECK PAYABLE TO BAYSHORE EXPLORATION L.L.C.
IN WITNESS HEREOF, the undersigned has executed this Agreement on the date set
forth below:
________________________ ________________________
S.S. No./Federal I.D. No. Participant's Signature
00000 Xxxxx Xxxxx Place Dynamic Resources Corp.
Business Address - Street Participant's Name
Las Vegas, Nevada 89144 P.O. Box 370184
City, State & Zip Home Address
702/743-1343 Las Vegas, NV 89137
Business Telephone City, State & Zip
702/254-5594 ________________________
Fax Number Home Telephone
xxxxxxxxxxx@xxxxxxxxxxxxxxxxxxxx.xxx
E-Mail Address
**Please note where and how you would like to receive your reports.
ACCEPTANCE
Bayshore Exploration L.L.C. xxxxxx accepts the offer represented by the
foregoing Participation Agreement, subject to the terms and conditions thereof.
AGREED AND ACCEPTED ON THIS 12 DAY OF MAY, 2005.
By:/S/ Xxxxx Xxxxxxxx
------------------
Xxxxx Xxxxxxxx, President
JJS:jrs
Exhibits "A"
