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EXHIBIT 18
ANADARKO BASIN JOINT PARTICIPATION AGREEMENT
This Anadarko Basin Joint Participation Agreement (this "Agreement")
is dated effective as of the 1st day of May, 1996, and is by and among XXXXXXXX
PRODUCTION COMPANY ("Participant") and XXXXXXX OIL & GAS, L.P. ("BOG")
(Participant and BOG are sometimes referred to herein individually as "Party"
and collectively as "Parties");
WITNESSETH:
WHEREAS, the Parties desire to create an area of mutual interest
("AMI") for oil and/or gas exploration and development purposes; and
WHEREAS, the Parties have reached an agreement with respect to the
evaluation by them of areas that have been identified by BOG within the AMI and
areas which may in the future be identified by BOG within the AMI (hereinafter
referred to as "Project Areas"); and
WHEREAS, the Parties have also reached an agreement with respect to
certain matters concerning the ownership of seismic permits (hereinafter
referred to as "Seismic Permits"), oil and/or gas lease option agreements
(hereinafter referred to as "Options"), oil and/or gas leases (hereinafter
referred to as "Leases") and other agreements to obtain interests in oil and/or
gas leases, mineral interests or royalty interests (hereinafter referred to as
"Farm-Ins") covering portions of the AMI and the Parties' future oil and/or gas
exploration and development operations within the AMI;
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
ARTICLE I.
RELATIONSHIP OF PARTIES
Section 1.1. No Partnership. The liabilities of the Parties
hereunder shall be several, not joint or collective. It is not the intention
of the Parties to create, nor shall this Agreement be deemed as creating, a
mining, tax or other partnership or association or to render the Parties liable
as partners. However, if for federal income tax purposes, this Agreement and
the operations hereunder are regarded as a partnership, each Party thereby
affected elects to be excluded from the application of all of the provisions of
Subchapter "K," Chapter 1, Subtitle "A," of the Internal Revenue Code of 1986,
as amended (hereinafter referred to as the "Code"), as permitted and authorized
by Section 761 of the Code and the regulations promulgated thereunder. Should
there be any requirement that each Party hereby affected give further evidence
of this election, each such Party shall execute such documents and furnish such
other evidence as may be required by the Federal Internal Revenue Service or as
may be necessary to evidence this election. No Party shall give any notice or
take any other action inconsistent with the election made hereby. In making
the foregoing election, each Party states that the income derived by such Party
from operations hereunder can be adequately determined without the computation
of partnership taxable income.
Section 1.2. Definition of Affiliate. For purposes of this
Agreement "Affiliate" means any parent or subsidiary of a Party and any
individual, corporation, joint venture, partnership, trust or other entity
controlling, controlled by or under common control with the Party. For
purposes of this Section 1.2, the concept of control meaning the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of another, whether through ownership of voting
securities, by contract or otherwise.
ARTICLE II.
AREA OF MUTUAL INTEREST
Section 2.1. Creation of Area of Mutual Interest. Subject to the
other terms which are set forth in this Article II, the Parties hereto agree to
establish the AMI encompassing all of the lands described in Exhibit A which is
attached hereto and incorporated herein for all purposes. The AMI established
hereunder shall remain in force and effect from the effective date hereof
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and continue until the earlier to occur of: (i) two (2) years from the
effective date hereof; (ii) such time as BOG has designated Project Areas (in
accordance with the provisions of Section 3.1 below) hereunder within which BOG
reasonably estimates that the Parties will conduct three-dimensional seismic
operations (hereinafter referred to as "3-D Operations") meeting the commitment
set forth in Article II of that certain Anadarko Basin Seismic Operations
Agreement dated effective as of February 15, 1996 with Veritas Geophysical,
Ltd. ("Veritas"), as amended, a copy of which is attached hereto as Exhibit D
(hereinafter referred to as the "Veritas Agreement"), after taking into
consideration any 3-D Operations which BOG may have conducted under the Veritas
Agreement within Excluded Existing BOG Project Areas, Excluded Exempt Lands
Project Areas, Excluded Future Third-Party Project Areas, Excluded Xxxxxxxx
Existing Property Project Areas, or Excluded BOG Producing Property Project
Areas. Without the mutual agreement of both of the Parties hereto, no
additional Project Areas will be established under the terms of this Agreement
following the termination of the AMI as aforesaid. The Parties recognize that
the termination of the AMI hereunder will not act to terminate the Geophysical
Exploration Agreements executed by the Parties for previously designated
Project Areas as set forth in Section 3.2 below or the separate areas of mutual
interest established under such Geophysical Exploration Agreements.
Section 2.2. Excluded Existing BOG Project Areas. The Parties
agree that all of the lands described in Exhibit B which is attached hereto and
incorporated herein (hereinafter referred to as the "Exhibit B Lands") shall be
deemed to be excluded from the AMI hereunder and all of the terms and
provisions of this Agreement (hereinafter referred to as "Excluded Existing BOG
Project Areas").
Section 2.3. Project Areas Which BOG Elects to Treat as Exempt
Lands Under Veritas Agreement. The Parties recognize and acknowledge that
under the terms of Section 3.3 of the Veritas Agreement BOG has the right to
designate to Veritas in writing all or part of a Project Area for which BOG
shall pay one hundred five percent of the Turnkey Charge (as such term is
defined in the Veritas Agreement) and one hundred percent of all of the other
Seismic Acquisition Costs (as such term is defined in the Veritas Agreement) in
order to receive immediate ownership of all interests in the seismic data
covering such lands (the lands so designated being referred to in the Veritas
Agreement as "Excluded Lands," but being herein referred to as "Exempt Lands").
The Parties agree that in the event that BOG elects to designate an entire
Project Area as Exempt Lands under the Veritas Agreement (hereinafter referred
to as an "Exempt Lands Project Area"), Participant shall have the option to
participate, or not participate, in such Exempt Lands Project Area. However,
BOG agrees that it will not designate an entire Project Area as an Exempt Lands
Project Area unless BOG has entered into an agreement with a third party that
owns substantial mineral and/or leasehold interests within the Project Area and
such agreement provides that the third party is to have some ownership in
seismic data or contains confidentiality restrictions with respect to the
seismic data which are inconsistent with the confidentiality provisions set
forth in the Veritas Agreement. In the event that BOG designates, or intends
to designate, an entire Project Area as an Exempt Lands Project Area under the
Veritas Agreement, BOG shall notify Participant in writing of such designation,
or intended designation. Participant must then make its election in writing
within fifteen (15) days whether to participate, or not participate, in such
Exempt Lands Project Area; provided, however, that in the event that
Participant fails to notify BOG in writing of its election prior to the
expiration of such fifteen (15) day period, Participant shall be deemed to have
elected not to participate in the Exempt Lands Project Area. In the event that
Participant either elects, or is deemed to have elected, not to participate in
the Exempt Lands Project Area, such Exempt Lands Project Area shall be deemed
to be excluded from the AMI and all of the terms of this Agreement (hereinafter
referred to as an "Excluded Exempt Lands Project Area"). In the event that
Participant elects to participate in an Exempt Lands Project Area as provided
herein, anything to the contrary contained elsewhere herein or in the form
Geophysical Exploration Agreement which is attached hereto as Exhibit C
notwithstanding, Participant shall pay for fifty percent (50%) of all of the
costs, charges and expenses which are required to be paid by BOG to Veritas
under Section 3.3 of the Veritas Agreement for the conduct of the 3-D
Operations within such Exempt Lands Project Area.
Section 2.4. Project Areas Which are Treated as Terrain Excluded
Project Areas Under Veritas Agreement. The Parties recognize and acknowledge
that under the terms of Section 2.6
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of the Veritas Agreement certain project areas may be excluded from the Veritas
Agreement in the event that Veritas has notified BOG that there are problems
with the terrain conditions for such project area and BOG and Veritas fail to
reach agreement on a Turnkey Charge (as such term is defined in the Veritas
Agreement) for the project area (such project area being referred to in the
Veritas Agreement and hereinafter in this Agreement as a "Terrain Excluded
Project Area"). The Parties agree that all Terrain Excluded Project Areas
shall be deemed to be excluded from the AMI and all of the terms of this
Agreement.
Section 2.5. Future Third-Party Generated Project Areas.
(a) If during the term of this Agreement a third-party offers BOG
the opportunity to participate in an oil and gas exploration project within the
AMI which (i) was not previously identified or generated by BOG, (ii) includes
the conduct of 3-D Operations and (iii) either (x) includes terms under which
BOG will acquire the interest in the project subject to a promote or carry of
any kind (in whole or in part and whether temporary or permanent) or (y)
includes terms under which BOG will acquire less than all of the working
interest and/or ownership interest (other than royalties or retained overriding
royalties) in the lands covered by the project (each such project which meets
all of (i), (ii) and (iii) above to be hereinafter referred to as "Future
Third-Party Project Areas") and BOG desires to participate in such Future
Third-Party Project Area, then BOG shall notify Participant of the terms of
such offer. Participant must notify BOG in writing within fifteen (15) days of
its receipt of such notice as to whether Participant shall participate in the
Future Third-Party Project Area; provided, however, that in the event that
Participant fails to notify BOG in writing of its election prior to the
expiration of such fifteen (15) day period, Participant shall be deemed to have
elected not to participate in the Future Third-Party Project Area. In the
event that Participant either elects, or is deemed to have elected, not to
participate in the Future Third-Party Project Area, such Future Third- Party
Project Area shall be deemed to be excluded from the AMI and all of the terms
of this Agreement (hereinafter referred to as an "Excluded Future Third-Party
Project Area") and BOG shall not be obligated to include Participant in any
exploration and/or development operations conducted within such Excluded Future
Third-Party Project Area.
(b) In the event that Participant elects to participate in a
Future Third-Party Project Area and BOG is not required to provide geophysical
expertise or support for the 3-D Operations to be conducted within the Future
Third- Party Project Area, Participant shall pay its heads-up share (being
31.25%) of all costs, expenses or consideration that BOG is required to pay
pursuant to the terms under which such Third-Party Project Area is offered. In
such event, Participant shall pay its heads-up share of all of such costs,
expenses and consideration on or before the date on which such payment is due
pursuant to the terms of participation which are set forth for the Future
Third-Party Project Area with the third-party.
(c) In the event that Participant elects to participate in a
Future Third-Party Project Area and BOG is to provide to such third-party
geophysical expertise or support for the 3-D Operations to be conducted within
the Future Third-Party Project Area, Participant shall pay (i) fifty percent
(50%) of all of the Geophysical Program Costs (as such term is defined in
Section 2.4 of the form Geophysical Exploration Agreement which is attached
hereto as Exhibit C) incurred within the Future Third-Party Project Area, (ii)
fifty percent (50%) of all of the land costs incurred prior to the completion
of final processing of the Program Data (as defined in Section 3.3 of the form
Geophysical Exploration Agreement which is attached hereto as Exhibit C), (iii)
in the event that BOG is required to pay in excess of fifty percent (50%) of
all Geophysical Program Costs and/or land costs incurred prior to the
completion of final processing of the Program Data pursuant to the terms under
which such Third-Party Project Area is offered, Participant shall pay its
heads-up share (being 31.25%) of such excess above fifty percent (50%), and
(iv) its heads-up share (being 31.25%) of all other costs, expenses or
consideration that BOG is required to pay (other than any costs and expenses
that Participant must pay under (i), (ii) or (iii) above) pursuant to the terms
under which such Third-Party Project Area is offered. However, in the event
that under the terms of the third-party offer BOG is to be assigned less than
all of the ownership interest (save and except any overriding royalties and
lessors' royalties) in the Future Third-Party Project Area, then the amounts
that Participant shall be required to pay under (i) and (ii) above shall be
reduced in the proportion that the ownership interest being assigned to BOG
bears to the total ownership interest in the Future Third- Party Project Area.
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the event that Participant elects to participate in a Future Third-Party
Project Area, the consideration set forth in (i) and (ii) above shall be paid
by Participant to BOG in accordance with the terms that are set forth in the
form Geophysical Exploration Agreement which is attached hereto as Exhibit C
and the consideration due under (iii) above shall be paid by Participant to BOG
before such payment is due to the third-party or any other party pursuant to
the terms of participation which are set forth for the Future Third-Party
Project Area with the third-party.
(d) In the event that Participant elects to participate in a
Future Third-Party Project Area under the terms set forth herein, BOG shall
assign Participant thirty-one and one-quarter percent (31.25%) of all of the
interest in the Third-Party Project Area which is assigned to BOG by the
third-party.
(e) The Parties expressly acknowledge and agree that in the event
that BOG identifies a potential Project Area and subsequently enters into an
agreement with a third-party to acquire all or part of such third-party's
interests within the Project Area (e.g. a "shoot to earn" type of arrangement),
despite the fact that BOG may be earning or acquiring less than all of such
third-party's interests in such Project Area or that BOG may have agreed to pay
a carry or promote to acquire all or part of such third-party's interest in the
Project Area, such Project Area shall not be deemed to be a Future Third-Party
Project Area for purposes of this Section 2.5, but rather shall be deemed to be
a normal Project Area for purposes of this Agreement.
Section 2.6. Excluded Xxxxxxxx Existing Property Project Areas.
In the event that Participant or any of its Affiliates own or hereafter acquire
an interest in (i) oil and/or gas leases, (ii) oil, gas or related hydrocarbon
mineral interests, or (iii) other interests of any kind in oil, gas or their
related hydrocarbons, other than Participant Acquired Interests (as defined in
Section 5.3 below) in which BOG has elected to participate (the interests
described in (i), (ii) and (iii) above, save and except Participant Acquired
Interests in which BOG has elected to participate, being herein referred to as
"Existing Properties") and BOG subsequently intends to include such Existing
Properties within a Project Area (such Project Area being hereinafter referred
to as a "Xxxxxxxx Existing Property Project Area"), BOG shall notify
Participant in writing of BOG's intent to designate such Xxxxxxxx Existing
Property Project Area as a Project Area hereunder. However, unless the
Parties mutually agree in writing upon the terms for BOG's participation in the
Existing Properties owned by Participant or its Affiliates within such Xxxxxxxx
Existing Property Project Area within thirty (30) days of Participant's receipt
of BOG's notice, such Xxxxxxxx Existing Property Project Area shall be deemed
to be excluded from the AMI and all of the terms and provisions of this
Agreement (hereinafter referred to as an "Excluded Xxxxxxxx Existing Property
Project Area"). The Parties recognize and agree that under the terms of this
Agreement neither Party shall have any responsibility of any kind to the other
Party hereto with respect to any Excluded Xxxxxxxx Existing Property Project
Area. The Parties recognize and agree that in the event a Project Area has
already been designated pursuant to the provisions of Section 3.1 and the
Parties have executed a Geophysical Exploration Agreement for such Project Area
as provided in Section 3.2 below, the terms and provisions of such Geophysical
Exploration Agreement shall govern any subsequent acquisition of Existing
Properties within that Project Area.
Section 2.7. Excluded BOG Producing Property Project Areas. In
the event that after the effective date hereof BOG acquires or intends to
acquire an interest in producing xxxxx together with their associated oil
and/or gas leases or mineral interests (herein referred to as "Producing
Properties") and intends to conduct 3-D Operations across such Producing
Properties, Participant shall have the election to participate or not
participate in such acquisition of Producing Properties and the Project Area
which includes such Producing Properties (hereinafter referred to as a "BOG
Producing Property Project Area"). Participant's election must be made with
respect to all of the Producing Properties acquired by BOG in a transaction, it
being understood and agreed that in the event that BOG enters into an agreement
to purchase Producing Properties which are made up of a number of different
xxxxx and land interests, Participant shall not have the option to participate
in less than all of the properties that are the subject of the agreement. In
addition, the Parties recognize and agree that if Participant elects to
participate in Producing Properties, Participant must also participate in the
BOG Producing Property Project Area which covers those Producing Properties.
Participant shall make its
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election to participate or not participate in the acquisition of such a
Producing Property and its associated BOG Producing Property Project Area by
delivering its written election to BOG within thirty (30) days of its receipt
of a written notice from BOG setting forth the terms upon which BOG intends to
acquire the Producing Property. In the event that Participant fails to deliver
its written election to BOG's offices prior to the expiration of such thirty
(30) day period, Participant shall be deemed to have elected not to participate
in the acquisition of the Producing Property and the associated BOG Producing
Property Project Area. In the event that Participant elects to participate in
a BOG Producing Property, Participant shall only be required to pay its
thirty-one and one-quarter percent (31.25%) ownership interest share of the
costs that are paid directly to the sellers of such Producing Property;
however, Participant shall still be responsible for fifty percent (50%) of all
Land Costs (as such term is defined in Section 5.1 below) related to such
Producing Property other than the costs that are paid directly to the seller
and fifty percent (50%) of all Geophysical Program Costs (as such term is
defined in Section 2.4 of the form Geophysical Exploration Agreement which is
attached hereto as Exhibit C) incurred by the Parties within such BOG Producing
Property Project Area. In the event that the Participant elects, or is deemed
to have elected, not to participate in the acquisition of a Producing Property
and its associated BOG Producing Property Project Area (the Producing Property
Project Areas in which Participant elects or is deemed to have elected not to
participate being hereinafter referred to as the "Excluded BOG Producing
Property Project Areas") as aforesaid, the Excluded BOG Producing Property
Project Area shall be deemed to be excluded from the AMI hereunder. The
Parties recognize and agree that in the event a Project Area has already been
designated pursuant to the provisions of Section 3.1 and the Parties have
executed a Geophysical Exploration Agreement for such Project Area as provided
in Section 3.2 below, the terms and provisions of such Geophysical Exploration
Agreement shall govern any subsequent acquisition of Producing Properties
within that Project Area.
Section 2.8. Other Acquisitions of Producing Properties. The
Parties recognize and agree that in the event that either Party acquires or
intends to acquire any Producing Properties which are not located within a
Project Area which has been designated hereunder and such Party does not intend
to subsequently participate in the conduct of 3-D Operations across such
Producing Properties prior to the termination of the AMI hereunder, anything to
the contrary contained in this Agreement notwithstanding, such Party shall not
be required to offer to allow the other Party hereto to participate in such
Producing Properties and the Producing Properties shall not be subject to the
terms of this Agreement.
ARTICLE III.
ESTABLISHMENT OF PROJECT AREAS
Section 3.1. Project Area Development. The Parties recognize that
during the term of the AMI BOG will, utilizing reasonable criteria under the
circumstances as they exist at such time, delineate Project Areas over which
BOG is interested in conducting 3-D Operations in order to evaluate such
Project Areas. Each Project Area shall be a separate and discrete geographical
area. Once BOG has decided to pursue potential 3-D Operations within a Project
Area, BOG shall notify Participant in writing of the Project Area, designating
the Project Area by describing the geographical area included in the Project
Area, providing an estimate of the time frame for the conduct of 3-D Operations
within the Project Area and providing an estimate of the cost of such 3-D
Operations within the Project Area. However, at any time prior to the
commencement of the 3-D Operations within a Project Area BOG shall have the
right to amend the geographical area covered by the Project Area by giving
Participant written notice of the amended description of the geographical area
covered by such Project Area. In addition, the Parties recognize that in
accordance with the terms of the form Geophysical Exploration Agreement which
is attached hereto as Exhibit C, following the conduct of a Geophysical Program
within a Project Area, the size of such Project Area may be reduced as set
forth in the form Geophysical Exploration Agreement. During the term of the
AMI hereunder, BOG shall not have the right to conduct 3-D Operations within
the AMI without Participant's participation as set forth in this Agreement,
other than within Excluded Existing BOG Project Areas, Excluded Exempt Lands
Project Areas, Terrain Excluded Project Areas, Excluded Future Third-Party
Project Areas, Excluded Xxxxxxxx Producing Property Project Areas, and Excluded
BOG Producing Property Project Areas.
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Section 3.2. Execution of Geophysical Exploration Agreement for
Each Project Area. Within fifteen (15) days of Participant's receipt of BOG's
notice of the designation of each Project Area as set forth in Section 3.1
above, the Parties shall execute a separate Geophysical Exploration Agreement
for each such Project Area in the form attached hereto as Exhibit C, being
completed to reflect the geographical area of the Project Area and any
additional burdens that may have been established in accordance with the terms
and provisions of Article IV below. The effective date of each Geophysical
Exploration Agreement to be executed by the Parties shall be the date that BOG
sends the notice of the designation of such Project Area to Participant.
Following the execution of a Geophysical Exploration Agreement for a Project
Area, such Project Area shall no longer be subject to the terms and conditions
of this Agreement but shall, from and after such date, be governed solely by
the terms and conditions of the executed Geophysical Exploration Agreement;
provided, however, that nothing contained herein shall be construed to relieve
any Party from liabilities or obligations (whether monetary or otherwise) that
accrued prior to such date with respect to the subject Project Area. Anything
to the contrary contained herein notwithstanding, Participant recognizes that
it does not have the right to participate in any Project Areas established by
BOG which cover any part of either the Excluded Existing BOG Project Areas,
Excluded Exempt Lands Project Areas, Terrain Excluded Project Areas, Excluded
Future Third-Party Project Areas, Excluded Xxxxxxxx Existing Property Project
Areas or Excluded BOG Producing Property Project Areas.
ARTICLE IV.
PROJECT AREA BURDENS
Section 4.1. BOG Override. Participant agrees that its interest
in all Options, Leases and Farm-Ins that are currently owned or hereafter
acquired within the Project Areas shall be burdened with an overriding royalty
in all oil, gas and other minerals in, under and that may be produced, saved
and marketed pursuant to such Leases, Options and Farm-ins, in favor of BOG
(hereinafter referred to as the "BOG Override"), in an amount equal to the
lesser of: (i) two percent (2% of 8/8ths); or (ii) the positive difference, if
any, between 25% and all existing royalty and overriding royalty burdens, it
being understood that the BOG Override is not to reduce the net revenue
interest in any Option, Lease or Farm-In below 75%. All permitted third-party
burdens and lease burdens identified in Sections 4.2 and 4.3 below shall be
calculated and applied to all Options, Leases and Farm-Ins prior to the
calculation and assessment of the BOG Override.
Section 4.2. Other Third-Party Burdens. Participant expressly
recognizes and agrees that its interests (whether now owned or hereafter
acquired pursuant hereto) in portions of the AMI shall be burdened with
overriding royalties in favor of (i) MXC Exploration Company (hereinafter
referred to as "MXC") under and pursuant to the terms of that certain MXC
Exploration Company Consulting Agreement dated February 28, 1994 (a copy of
which is attached hereto as Exhibit F-1), by and between MXC and BOG (such
overriding royalty being hereinafter referred to as the "MXC Override"), (ii)
overriding royalties in favor of Xxxxxxx pursuant to the terms of that certain
Area of Mutual Interest Agreement dated August 1, 1994 (a copy of which is
attached hereto as Exhibit F-2), by and between BOG and Xxxxxxx (such
overriding royalty being hereinafter referred to as the "Xxxxxxx I Override"),
(iii) overriding royalties in favor of Xxxxxxx pursuant to the terms of that
certain Area of Mutual Interest Agreement dated April 1, 1996 (a copy of which
is attached hereto as Exhibit F-3), by and between BOG and Xxxxxxx (such
overriding royalty being hereinafter referred to as the "Xxxxxxx XX Override")
and/or (iv) overriding royalties in favor of Xxxxx X. Xxxxxx (hereinafter
referred to as "Xxxxxx") pursuant to the terms of that certain Area of Mutual
Interest Agreement dated October 1, 1994 (a copy of which is attached hereto as
Exhibit F-4), by and between BOG and Xxxxxx (such overriding royalty being
hereinafter referred to as the "Xxxxxx Override"). Participant also recognizes
and agrees that in its efforts to delineate Project Areas and obtain geological
consulting services within Project Areas, BOG may enter into agreements with
other third-party geologists and/or companies under which such third-parties
are due overriding royalties (hereinafter referred to as "Third-Party
Overrides") which shall proportionately burden both BOG's and Participant's
interests in all or parts of the AMI. Participant agrees that to the extent
that the MXC Override, the Xxxxxxx I Override, the Xxxxxxx XX Override, the
Xxxxxx Override or any other Third-Party Override burdens the applicable
Project Area, the Geophysical
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Exploration Agreement executed for such Project Area shall provide that such
Overrides proportionately burden the Parties' Ownership Interests in the
Project Area.
Section 4.3. Lease Burdens. Neither Party hereto shall burden or
encumber the other Party's legal or equitable interest in any Option, Lease or
Farm-In located within the AMI with any overriding royalty, production payment,
mortgage, security interest, or other burden except as provided in Sections 4.1
and 4.2 above, without the consent of the other Party hereto; provided,
however, that in its efforts to obtain an Option, Lease or Farm-In (as such
terms are defined in the form Geophysical Exploration Agreement which is
attached hereto as Exhibit C), a Party may grant or otherwise burden an Option,
Lease or Farm-In with a royalty, overriding royalty, production payment or
other similar burden in favor of a third party owning the rights to the
minerals underlying such Option, Lease or Farm-In or owning the rights to oil
and/or gas leases which are the subject to an Option or Farm-In (farmor,
mineral owner, assignor, lessee or lessor) in such Party's reasonable efforts
to obtain the Option, Lease or Farm-In.
ARTICLE V.
OBTAINMENT OF SEISMIC PERMITS, OPTIONS, LEASES
AND FARM-INS PRIOR TO DESIGNATION OF PROJECT AREAS
Section 5.1. BOG's Acquisition of Seismic Permits, Options, Leases
and Farm-Ins Prior to Designation of Project Areas. The Parties recognize that
BOG, in its efforts to target potential Project Areas, may have obtained and
may in the future obtain Seismic Permits, Options, Leases or Farm-Ins within
the AMI prior to designating a Project Area covering the acreage which is the
subject of such Seismic Permits, Options, Leases and/or Farm-Ins. Participant
agrees to pay its thirty-one and one-quarter percent (31.25%) ownership
interest share of all of the costs incurred prior to the effective date of this
Agreement in acquiring and maintaining Seismic Permits, Options, Leases and/or
Farm-Ins, including, without limitation, all brokerage costs and expenses,
option fees, permit fees, surface damage pre-payments, lease bonus payments,
delay rental payments, mineral or royalty acquisition payments, attorneys fees,
recording costs, abstract company fees and reproduction charges (hereinafter
referred to as "Land Costs"). Participant agrees to pay fifty percent (50%) of
all Land Costs reasonably and prudently incurred (in light of the circumstances
then in existence) after the effective date of this Agreement in acquiring and
maintaining Seismic Permits, Options, Leases and/or Farm-Ins prior to the
Parties execution of a Geophysical Exploration Agreement for a Project Area
within which the lands covered by such Seismic Permits, Options, Leases and/or
Farm-Ins are located. Anything to the contrary contained above
notwithstanding, the Parties agree that in the event that a Producing Property
is acquired by BOG prior to the designation of the Project Area covering same
and Participant elects to participate in such Producing Property as set forth
in Section 2.7 above, Participant shall only be required to pay its thirty-one
and one-quarter percent (31.25%) ownership interest share of the costs that are
paid directly to the sellers of such Producing Property; however, Participant
shall still be responsible for fifty percent (50%) of all Land Costs related to
such Producing Property other than the costs that are paid directly to the
seller and fifty percent (50%) of all Geophysical Program Costs (as such term
is defined in Section 2.4 of the form Geophysical Exploration Agreement which
is attached hereto as Exhibit C) incurred by the Parties within such Project
Area.
Section 5.2. Ownership and Assignment of Seismic Permits, Options,
Leases and Farm-Ins Acquired by BOG but Not Included Within Designated Project
Areas at the Termination of the AMI. The Parties agree that in the event that
any Seismic Permits, Options, Leases or Farm-Ins have been acquired by BOG
within the AMI (as modified as provided in Sections 2.2, 2.3, 2.4, 2.5, 2.6,
2.7 and 2.8) prior to the effective date hereof or are acquired by BOG within
the AMI during the term hereof, BOG shall own an undivided sixty-eight and
three-quarters percent (68.75%) and Participant shall own an undivided
thirty-one and one-quarter percent (31.25%) interest in such Seismic Permits,
Options, Leases or Farm-Ins; provided, however, that, except as provided below
in this Section 5.2, legal title to such Seismic Permits, Options, Leases and
Farm-Ins shall not be assigned to Participant until after the applicable
Seismic Permit, Option, Lease or Farm-In has been included within a designated
Project Area and the Geophysical Exploration Agreement executed for such
Project Area shall then govern the terms of the assignment of legal title to
the Parties. Anything to the contrary contained above notwithstanding, the
Parties agree that in the event that any Seismic Permits, Options, Leases or
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Farm-Ins are not included within a designated Project Area prior to the
expiration of the term of this Agreement and Participant has paid its share of
all Land Costs associated with such Seismic Permits, Options, Leases or
Farm-Ins, promptly following the expiration of the term of this Agreement BOG
shall assign and convey to Participant it's undivided thirty-one and
one-quarter percent (31.25%) ownership interest in such Seismic Permits,
Options, Leases and/or Farm-Ins utilizing the general form of assignment which
is attached hereto as Exhibit E.
Section 5.3. Participant's Acquisition of Seismic Permits,
Options, Leases and Farm-Ins Prior to Designation of Project Areas. In the
event that at any time after the effective date of this Agreement Participant
acquires an interest in a Seismic Permit, Option, Lease or Farm-In within the
AMI prior to BOG's designation of a Project Area covering the acreage which is
the subject of such Seismic Permit, Option, Lease and/or Farm-In, BOG shall
have an election to participate, or not participate, in such Seismic Permit,
Option, Lease or Farm-In. As such, should Participant acquire a Seismic
Permit, Option, Lease or Farm-In prior to BOG's designation of a Project Area
covering the acreage which is the subject of such Seismic Permit, Option, Lease
or Farm-In, by purchase, exchange, gift or otherwise (such Seismic Permit,
Lease, Option or Farm-In acquired by Participant as set forth above being
herein called a "Participant Acquired Interest"), Participant shall promptly
(but in any event within 30 days of the acquisition) notify BOG, in writing, of
such acquisition together with the material terms of the Participant Acquired
Interest. BOG shall, within thirty (30) days after receipt of such a notice
from Participant, notify Participant, in writing, whether it wishes to
participate in such acquisition; provided that failure to respond within the
time and in the manner set forth above shall be deemed to be an election by BOG
to not participate in the Participant Acquired Interest. However, if BOG
reasonably desires additional information with respect to a Participant
Acquired Interest before it makes its election whether or not to participate in
the acquisition of the Participant Acquired Interest, BOG may notify
Participant in writing within fifteen (15) days of its receipt of Participant's
notice, detailing in such notice to Participant the additional information
reasonably desired by BOG, and BOG shall have fifteen (15) days from the date
of its receipt of the additional information it has reasonably requested from
Participant in which to make its election whether to participate in the
acquisition of the Participant Acquired Interest. Should BOG elect to
participate in a Participant Acquired Interest, Participant shall pay fifty
percent (50%) and BOG shall pay fifty percent (50%) of all Land Costs
reasonably and prudently incurred (in light of the circumstances then in
existence) in acquiring such Participant Acquired Interest. In the event that
BOG elects to participate in a Participant Acquired Interest, BOG shall
reimburse Participant for BOG's share of the Land Costs related to such
Participant Acquired Interest within thirty (30) days of its receipt of an
invoice from Participant indicating the amount due. In the event that BOG
elects not to participate in a Participant Acquired Interest, Participant shall
be responsible for all of the Land Costs related to such Participant Acquired
Interest. Anything to the contrary contained in this Section 5.3 or in Section
5.4 below notwithstanding, if Producing Properties are acquired by Participant
and Participant does not intend to subsequently participate in the conduct of
3-D Operations across such Producing Properties prior to the termination of the
AMI hereunder, such acquisition shall not be deemed to be a Participant
Acquired Interest for purposes of this Section 5.3, but rather shall be
governed by the terms and provisions of Section 2.8 above.
Section 5.4. Ownership and Assignment of Seismic Permits, Options,
Leases and Farm-Ins Acquired by Participant Prior to Designation of a Project
Area. The Parties agree that in the event that BOG elects to participate in a
Participant Acquired Interest as set forth in Section 5.3 above, BOG shall own
an undivided sixty-eight and three- quarters percent (68.75%) and Participant
shall own an undivided thirty-one and one-quarter percent (31.25%) interest in
such Participant Acquired Interest; provided, however, that, except as provided
below in this Section 5.4, legal title to such Participant Acquired Interest
shall not be assigned to BOG until after the applicable Participant Acquired
Interest has been included within a designated Project Area and the Geophysical
Exploration Agreement executed for such Project Area shall then govern the
terms of the assignment of legal title to the Parties. Anything to the
contrary contained above notwithstanding, the Parties agree that in the event
that any Participant Acquired Interests are not included within a designated
Project Area prior to the expiration of the term of this Agreement and BOG has
elected to participate in such Participant Acquired Interest and has paid its
share of all Land Costs associated with such Participant Acquired Interest as
set forth in Section 5.3 above, promptly following the expiration of the term
of this Agreement Participant
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shall assign and convey to BOG it's undivided sixty-eight and three-quarters
percent (68.75%) ownership interest in such Participant Acquired Interest
utilizing the general form of assignment which is attached hereto as Exhibit E.
In the event that BOG elects not to participate in a Participant Acquired
Interest, such Participant Acquired Interest shall be owned solely by
Participant and anything to the contrary contained in this Agreement
notwithstanding, such Participant Acquired Interest shall not be subject to or
burdened by the BOG Override. The Parties recognize and acknowledge that in
the event that BOG elects not to participate in the acquisition of a
Participant Acquired Interest and BOG subsequently desires to designate a
Project Area which would include all or part of such Participant Acquired
Interest within its boundaries, such Participant Acquired Interest would be an
Existing Property for purposes of Section 2.6 above and the Project Area would
be a Xxxxxxxx Existing Property Project Area under the terms of Section 2.6
above.
ARTICLE VI.
3-D OPERATIONS WITHIN PROJECT AREAS
Section 6.1. Veritas Agreement. The Parties recognize that BOG
has entered into that certain Anadarko Basin Seismic Operations Agreement dated
effective as of February 15, 1996 with Veritas Geophysical, Ltd. ("Veritas"),
as amended, a copy of which is attached hereto as Exhibit D (hereinafter
referred to as the "Veritas Agreement"), providing for the conduct of 3-D
Operations within the AMI. Unless the Parties mutually agree otherwise, all
3-D Operations conducted by the Parties within the Project Areas designated
hereunder shall be conducted by Veritas, subject to the direction of BOG,
pursuant to the terms of the Veritas Agreement.
Section 6.2. Payments Due Under the Veritas Agreement.
Participant agrees to pay fifty percent (50%) of all of the payments that are
due under the terms of the Veritas Agreement, except with respect to the
payments that are due to Veritas pursuant to the terms of Sections 3.4 and 3.5
of the Veritas Agreement and payments which are related to 3-D Operations
conducted by Veritas for BOG within Excluded Existing BOG Project Areas,
Excluded Exempt Lands Project Areas, Excluded Future Third-Party Project Areas,
Excluded Xxxxxxxx Existing Property Project Areas, or Excluded BOG Producing
Property Project Areas. With respect to the payments which are due to Veritas
pursuant to the terms of Sections 3.4 and 3.5 of the Veritas Agreement, in the
event that Participant participates in the acquisition of the oil and gas lease
or drilling or completion operation which results in such payment to Veritas
under Section 3.4 or 3.5 of the Veritas Agreement, Participant shall pay its
thirty-one and one quarter percent (31.25%) heads-up share of such payments;
provided, however, that in the event that Participant is the only Party that
participates in the acquisition of the oil and gas lease or drilling or
completion operation which results in the payment to Veritas under Section 3.4
or 3.5 of the Veritas Agreement, Participant shall be responsible to Veritas
for the full amount of such payment. BOG agrees to utilize appropriate and
commercially reasonable efforts to avoid incurring liability to Veritas under
Section 3.9 of the Veritas Agreement.
Section 6.3. Contribution Toward Payout. In the event that prior
to the end of the Exclusivity Period (as such term is defined in the Veritas
Agreement) under the Veritas Agreement Final Payout (as such term is defined in
the Veritas Agreement) has not occurred and only one of the Parties hereto
desires to contribute the cash payment toward such Final Payout as provided in
Section 4.2 of the Veritas Agreement, if such Party contributes consideration
toward Final Payout as provided in the Veritas Agreement, such Party shall own
all of the interest in the Program Data and all rights to receive any proceeds
resulting from the sale or licensing of the Program Data, subject only to the
other Party's right to continue to utilize such Program Data in its exploration
and development efforts as if such Final Payout amount had not been met.
Section 6.4. BOG Cooperation Regarding Veritas Agreement. BOG
agrees to fully cooperate with Participant to permit Participant to obtain from
Veritas ownership interests in the Program Data earned by Participant by reason
of Participant's contributions under this Agreement, including without
limitation the execution of any assignments or other documents required by
Veritas.
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ARTICLE VII.
PARTICIPANT'S PAYMENT OF COSTS;
BOG RIGHT TO TERMINATION
Section 7.1. Participant's Reimbursement of Previously Incurred
Land Costs. Concurrent with its execution of this Agreement Participant shall
reimburse BOG for its thirty-one and one-quarter percent (31.25%) ownership
interest share of all Land Costs incurred prior to the effective date of this
Agreement.
Section 7.2. Participant Payment to BOG to be Utilized by BOG for
BOG's Future Exploration and/or Development Costs. Concurrent with its
execution of this Agreement Participant shall pay BOG eighty-eight thousand
seven hundred thirty-seven dollars ($88,737.00) which shall be used by BOG for
the payment of future exploration and development costs and expenses which
would have otherwise been charged to BOG under the terms of this Agreement and
the Geophysical Exploration Agreements executed by the Parties in accordance
with Section 3.2 above for the properties located within the Project Areas that
are designated pursuant to the terms of Section 3.1 above; provided, however,
that in the event that BOG does not, in its sole discretion, incur exploration
and/or development costs for its own account under this Agreement or the
Geophysical Exploration Agreements equaling or exceeding the total amounts paid
to it by Participant hereunder, BOG shall nonetheless retain the full amount
paid by Participant and shall have the right to utilize same in BOG's other
exploration and/or development efforts, whether or not relating to the AMI.
Section 7.3. Participant's Pre-Payment of Estimated Pre-Seismic
Land Costs. Concurrent with its execution of this Agreement Participant shall
deposit six hundred twenty-five thousand three hundred sixty-eight dollars
($625,368.00) into a segregated interest bearing account established by BOG.
The Parties agree that BOG shall utilize the funds deposited in such account
and all interest earned thereunder to pay for Participant's share of the Land
Costs that are incurred after the effective date of this Agreement pursuant to
the terms of Section 5.1 above and any Land Costs that are incurred within each
designated Project Area in acquiring any Seismic Permits, Options, Leases or
Farm-Ins that are acquired prior to the completion of final processing of the
Program Data (as defined in Section 3.3 of the form Geophysical Exploration
Agreement attached hereto as Exhibit C) within such Project Area. In the event
that any costs are incurred over and above the amount deposited in the
segregated account together with the interest earned thereunder, Participant
shall pay its fifty percent (50%) share of such costs in accordance with the
terms set forth in the Geophysical Exploration Agreement executed for the
applicable Project Area within which the Land Costs are incurred. BOG agrees
to provide Participant with monthly statements indicating the amount of Land
Costs incurred to date and the balance remaining in the BOG account.
Section 7.4. Participant Deposit Into Escrow Account. Concurrent
with its execution of this Agreement, Participant shall deposit two hundred
thousand dollars ($200,000.00) into the escrow account (the "Escrow Account")
established with Merchants National Bank / Fort Xxxxx, Arkansas, pursuant to
the terms of that certain escrow agreement which is attached hereto as Exhibit
G (the "Escrow Agreement"). Participant shall pay all of the costs which are
incurred to Merchants National Bank / Fort Xxxxx, Arkansas to establish,
service and maintain the Escrow Account. The funds deposited in the Escrow
Account together with all interest earned thereunder being referred to herein
as the "Escrow Account Balance." Subject to BOG's right to set-off all or any
portion of the Escrow Account Balance against amounts otherwise owing by
Participant as provided in Section 7.5 below, upon Participant's payment of the
Geophysical Program Costs incurred for the last Project Area designated
hereunder, the entire Escrow Account Balance shall be released to Participant.
Section 7.5. BOG's Rights Upon Participant Failure to Pre-Pay
Geophysical Program Costs. Anything to the contrary contained in this Article
VI notwithstanding, the Parties agree that in the event that Participant fails
to pre-pay its share of the estimated Geophysical Program Costs (as defined in
the form Geophysical Exploration Agreement which is attached hereto as Exhibit
C) for any Project Area in accordance with the terms set forth in Section 2.4
of the form Geophysical Exploration Agreement which is attached hereto as
Exhibit C and fails to cure such default within the period set forth in Section
2.5 of the form Geophysical Exploration Agreement
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(hereinafter referred to as a "Pre-Payment Breach"), then BOG shall have the
right and option to receive and retain the Escrow Account Balance contained in
the Escrow Account created pursuant to the terms of Section 7.4 above to apply
such Escrow Account Balance toward any amounts for which Participant is in
default, and in addition to any other remedies which may be available to BOG at
law or in equity, BOG shall have the option, to be exercised in its sole
discretion, to terminate this Agreement as to any Project Areas not already
designated hereunder and as to the remainder of the AMI by giving Participant
written notice of such termination and upon such termination BOG; provided,
however that in the event of such a termination for a Pre-Payment Breach, the
provisions contained in Sections 8.1 and 8.2 and any other provisions that are
expressly stated to survive termination shall remain in full force and effect
and Participant shall continue to be subject to such terms and provisions for a
period of five (5) years from the effective date of this Agreement.
Section 7.6. Itemization of Expenditures In Xxxxxxxx. Each
invoice sent to Participant by BOG hereunder shall provide Participant with a
categorized listing of the items invoiced for payment. Such invoice will list
all Permits, Options, Leases and Farm-In costs, brokerage costs, and
Geophysical Program Costs (broken down into subcategories -- e.g. geophysical
acquisition charges, processing costs, workstation and plotter charges).
ARTICLE VIII.
PARTICIPANT'S ACTIVITY WITHIN THE AMI
Section 8.1. Participant Agreement Not to Conduct 3-D Operations
Within the AMI. Except as provided below in Section 8.2 with respect to
Third-Party 3-D Projects, Participant agrees that during the term of this
Agreement Participant shall not participate in any 3-D Operations within the
AMI other than its participation in the 3-D Operations which are contemplated
by the terms of this Agreement.
Section 8.2. Participant's Right to Participate in Third-Party 3-D
Operations. In the event that during the term of this Agreement Participant is
approached by a third-party with an opportunity to participate in a proposed
3-D operation to be conducted within the AMI, Participant shall have the right
to participate in such proposed 3-D operation; however, Participant hereby
agrees that BOG shall also have the right to participate in the 3-D operation
with sixty-eight and three-quarters percent (68.75%) of the interest in such
3-D operation which is offered to Participant upon the same terms which are
offered to Participant. Participant shall give BOG written notice of the terms
of the 3-D operation and BOG shall have fifteen (15) days from receipt of such
notice in which to make its election whether or not to participate in same.
The Parties recognize and agree that in the event that BOG elects to
participate in a third-party 3-D operation offered by Participant pursuant to
the terms of this Section 8.2, such 3-D operations shall not be conducted
pursuant to the terms of the Veritas Agreement.
ARTICLE IX.
RIGHT TO SAME TERMS AS SUBSEQUENT PARTICIPATION AGREEMENTS
Section 9.1. Defined Terms. As used in this Article IX, the
following terms shall have the following meanings:
(a) "Completion of Field Acquisition" means the date that field
seismic acquisition operations are completed for the 3-D Operations conducted
under the Veritas Agreement for the last Project Area hereunder.
(b) "Subsequent Participation Agreement" means an agreement
executed after the date hereof by and between BOG and any third party that is
not an Affiliate of BOG concerning (i) the third party's participation in
substantially all of the same Project Areas which are to be designated under
the terms of this Agreement within the AMI, (ii) the participation of such
third party in the 3-D Operations to be conducted within substantially all of
the Project Areas designated hereunder, (iii) the participation by BOG and such
third party in the acquisition and ownership of Seismic Permits, Options,
Leases and Farm-Ins obtained covering lands located within substantially all of
the Project Areas designated hereunder, and (iii) the participation by
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BOG and such third party in the drilling of oil and gas xxxxx within
substantially all of the Project Areas designated hereunder.
Section 9.2. Participant's Right to Same Terms Contained in a
Subsequent Participation Agreement. In the event that at any time prior to the
Completion of Field Acquisition BOG enters into a Subsequent Participation
Agreement covering substantially the entire AMI, Participant shall have the
right, but not the obligation, to request that BOG enter into a new agreement
with Participant covering the subject matter hereof, which agreement shall
contain the terms and conditions substantially identical, apart from the
quantum of participation interests, to all of those contained in the Subsequent
Participation Agreement; such new agreement shall be made in lieu of, and in
full substitution for, this Agreement. Participant hereby recognizes that such
right to elect to substitute a new agreement for this Agreement may be
exercised only once by Participant. Promptly following BOG's execution of a
Subsequent Participation Agreement BOG shall notify Participant of the
execution of such Subsequent Participation Agreement and provide Participant
with a copy of the executed Participation Agreement. Participant shall make
its election whether or not to enter into a substantially identical agreement
as set forth above within ten (10) days after Participant's receipt from BOG of
the copy of the executed Subsequent Participation Agreement; provided,
however, that in the event that Xxxxxxxx fails to notify BOG of Xxxxxxxx'
election within such ten (10) day period, Xxxxxxxx shall be deemed to have
irrevocably elected not to enter into an agreement substantially identical to
the Subsequent Participation Agreement.
ARTICLE X.
MISCELLANEOUS
Section 10.1. Assignments. In the event that either Party hereto
assigns or conveys any of its rights or interests herein or in any properties
(whether real, personal, tangible or intangible, vested or contingent) that are
the subject of this Agreement, this Agreement shall be binding upon and run to
the benefit of such Party's assignee; provided, however, that the conveyance or
assignment instrument vesting such assignee with all or part of such interests
must expressly provide that the assignment or conveyance is made subject to the
terms and conditions contained in this Agreement. In addition, in any such
assignment or conveyance, the assignee shall expressly agree to assume and be
responsible for any liabilities, damages, obligations, covenants and agreements
arising from and after the date of such assignment or conveyance, in relation
to or otherwise out of the properties, rights and interests that are the
subject of this Agreement. Anything to the contrary contained in this Section
10.1 notwithstanding, for a period of five (5) years from the date of this
Agreement BOG cannot assign or convey its obligation to interpret the Program
Data resulting from the Geophysical Programs conducted within the Project
Areas; provided, however, that in the event of a merger involving BOG or the
acquisition of a substantial portion of BOG's assets, BOG may assign or convey
such obligations to the surviving or acquiring company.
Section 10.2. Notices. All notices and other communications
required or permitted under this Agreement shall be in writing, and unless
otherwise specifically provided, shall be delivered personally, or by mail,
facsimile, telecopier or delivery service, to the addresses set forth opposite
the signatures of the Parties below, and shall be considered delivered upon the
date of receipt. Each Party may specify its proper address or any other post
office address within the continental limits of the United States by giving
notice to other Parties, in the manner provided in this section, at least ten
(10) days prior to the effective date of such change of address.
Section 10.3. Merger. This Agreement supersedes any and all prior
and existing agreements, whether oral or in writing, between the Parties hereto
with respect to the subject matter hereof and contains all of the covenants and
agreements between the Parties with respect to the subject matter hereof. Each
Party acknowledges that no Party to this Agreement or anyone on their behalf
has made any representations, inducements, promises or agreements, orally or
otherwise, relating to the subject matter of this Agreement that are not
embodied herein.
Section 10.4. Governing Law. THIS AGREEMENT AND ALL MATTERS
PERTAINING THERETO, INCLUDING, BUT NOT LIMITED TO, MATTERS OF PERFORMANCE,
NON-PERFORMANCE, BREACH, REMEDIES, PROCEDURES,
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RIGHTS, DUTIES, AND INTERPRETATIONS OR CONSTRUCTION, SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Section 10.5. Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be binding upon the signing Party or
Parties thereto as fully as if all Parties had executed one instrument, and all
of such counterparts shall constitute one and the same instrument. If
counterparts of this Agreement are executed, the signatures of the Parties, as
affixed hereto, may be combined in and treated and given effect for all
purposes as a single instrument.
IN WITNESS WHEREOF this Agreement is executed by the Parties on the
dates set forth opposite their respective signatures below but is effective for
all purposes as of the date first set forth above.
Address: XXXXXXX OIL & GAS, L.P.,
0000 Xxxxxx Xxxx, Xxxxx 0000 by Xxxxxxx Exploration Company,
Xxxxxx, Xxxxx 00000 its Managing General Partner
(000) 000-0000
Fax: (000) 000-0000
Dated: 7/23/96 By: /s/ XXXX X. XXXXXXX
----------------- --------------------------------
Xxxx X. Xxxxxxx, Executive
Vice President
Address: XXXXXXXX PRODUCTION COMPANY
Xxxxxxxx Building
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxx Xxxxx, Xxxxxxxx 00000-0000
Phone (000) 000-0000
Fax (000) 000-0000 By: /s/ XXXXXXX X. XXXXXX
Dated: July 23, 1996 --------------------------------
--------------------- (name printed) Xxxxxxx X. Xxxxx
---------------------
Its: President
----------------------------
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