FARMOUT ACKNOWLEDGEMENT AGREEMENT
Exhibit
10.23
WHEREAS
Deep
Well Oil and Gas, Inc. (herein “Deep Well”), Northern Alberta Oil Ltd. (herein
“Northern”) (herein Deep Well and Northern collectively referred to as the
“Farmors”), Surge Global Energy, Inc. (“Surge U.S.”) and Surge Global Energy
(Canada), Ltd. (the “Farmee”) have entered into a farmout agreement dated
February 25, 2005, as amended effective November 1, 2005 (the “Farmout
Agreement”) with respect to those leases and lands described in Schedule “A” to
the Farmout Agreement (known as the Sawn Lake oil sands property);
AND
WHEREAS
the
Farmee is currently negotiating a brokered private placement of secured
convertible debentures (the “Debentures”) in the principal amount of up to
$10,000,000 CAD (the “Private Placement”);
AND
WHEREAS
MGI
Securities Ltd. (the “Agent”) will act as the Farmee’s exclusive agent in
offering the Debentures to subscribers;
AND
WHEREAS
the
Agent, as a condition of the Private Placement, requires the Farmors to confirm
and validate the enforceability of the Farmout Agreement;
NOW
THEREFORE
in
consideration for $10.00 paid by the Farmee to each of Surge U.S. and the
Farmors and the promises, covenants and agreements contained herein, the
validity and sufficiency of such consideration being hereby confirmed, the
parties hereby agree as follows:
Deep
Well, Northern, Surge U.S., the Farmee and Deep Well Oil & Gas (Alberta)
Ltd. (“Deep Well Alberta”) confirm and agree that all of the terms, provisions,
rights and obligations set out in the Farmout Agreement remain in full force
and
effect and the Farmee and Surge U.S. are in good standing and not in default
under the agreement. In particular, Deep Well, Deep Well Alberta and Northern
confirm, acknowledge and agree that Surge U.S. and the Farmee, as applicable,
have complied with Section 3.1 (as amended by valid extension notices), Section
13.1(a) and Section 14.1 of the Farmout Agreement and are not in default under
any of those sections or any other provision of the Farmout Agreement. The
parties to the Farmout Agreement agree that the “Test Well” (as defined in the
Farmout Agreement) has been Spud in accordance with the Farmout Agreement,
the
Test Well was drilled to the Contract Depth and the Farmee has fully performed
all its obligations and undertaking under the Farmout Agreement in respect
of
the Test Well and Article 3 whereby the Farmee did earn the working interest
in
the section of land on which the Test Well is situated as provided for in
Section 3.2 of the Farmout Agreement, together with the Farmor’s Pre-Farmout
Working Interest in 5 additional sections of the Farmout Lands provided they
are
selected by Farmee by January 31, 2006. Furthermore, Deep Well, Northern, Deep
Well Alberta, Surge U.S. and the Farmee represent and warrant to the Agent
that
all of the conditions precedent set out in Section 2.1 of the Farmout Agreement
have been completed. Deep Well, Northern, Deep Well Alberta, Surge U.S. and
the
Farmee acknowledge that the Agent is relying on the foregoing representations
in
completing the Private Placement. The Farmors acknowledge and confirm that
the
Farmee is entitled to rely on the foregoing and this Farmout Acknowledgement
Agreement is in order to drill Option Xxxxx under Articles 4 and 5 of the
Farmout Agreement.
This
Agreement may be executed in any number of separate counterparts with the same
effect as if all Parties had signed the same copy of this Agreement. All
counterparts shall be construed together and constitute one
agreement.
The
terms
of this Acknowledgement Agreement are agreed to this 15th
day of
November, 2005.
DEEP
WELL OIL AND GAS, INC,
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SURGE
GLOBAL ENERGY, INC.
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Per:
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/s/
Xxxxx X. Xxxxxx
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Per:
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/s/
Xxxxx Xxxxx
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Name:
Xxxxx X. Xxxxxx
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Name:
Xxxxx Xxxxx
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Title:
President and CEO
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Title:
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NORTHERN
ALBERTA OIL LTD.
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SURGE
GLOBAL ENERGY (CANADA), LTD.
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Per:
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/s/
Xxxxxx X. Xxxxxxx
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Per:
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/s/
Xxxx X. Xxxxx
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Name:
Xxxxxx X. Xxxxxxx
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Name:
Xxxx X. Xxxxx
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Title:
President
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Title:
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DEEP
WELL OIL AND GAS (ALBERTA) LTD.
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MGI
SECURITIES LTD.
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Per:
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/s/
Xxxxx X. Xxxxxx
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Per:
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/s/
Xxxx X. Xxxxx
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Name:
Xxxxx X. Xxxxxx
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Name:Xxxx
X. Xxxxx
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|||||
Title:
President and CEO
|
Title:
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