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EXHIBIT 6.9
BMNW RESOURCES, LLC
0000 XXXXXXXXXX XXXXXX
XXXXX 0000
XXXXXX, XXXXX 00000
(000) 000-0000
(000) 000-0000 fax
January 1, 2001
Xxxx Xxxxxxxxxx
Trek Resources, Inc.
000 Xxx Xxxxxx Xxxxxx
0000 Xxxxxxxxxx Xxx.
Xxxxxx, Xxxxx 00000
Re: West Minden Prospect
Xxxx County, Texas
Dear Xxxx:
This Letter Agreement will set forth the agreement regarding the participation
of Trek Resources, Inc., ("Trek") in BMNW Resources, LLC's., ("BMNW") West
Minden Prospect, in Xxxx County, Texas, as shown on the attached Exhibit A,
hereinafter "Prospect Area", which is made a part of this agreement. BMNW
proposes the drilling of a 8,000' well sufficient to test the upper 250 feet of
the Xxxxxx Peak formation in the Xxxxx-Xxxxxxx Gas Unit and the acquisition of
offsetting leasehold acreage.
BMNW owns a 52.68222% working interest and 39.51166% net revenue interest in the
664.39 Acre Xxxxx-Xxxxxxx Gas Unit, less and except the borehole of the Xxxxxx
No 1 well, currently producing out of the Xxxxxx formation. BMNW's proposed
well, the "Test Well" will be drilled to a depth of 8000' or a depth sufficient
to test the upper 250 feet of the Xxxxxx Peak formation at a legal location in
the Xxxxxxx Xxxx Survey, A-642, Xxxx County, Texas. Trek agrees to be the
Operator, and will operate the Test Well and subsequent xxxxx drilled in the
Xxxxx-Xxxxxxx Gas Unit subject to the terms and conditions of the Joint
Operating Agreement dated March 21, 1983, the "3/21/83 JOA", on file in BMNW'S
office. Operations on the offset leasehold acreage to be acquired, will be
governed by a mutually agreeable Operating Agreement.
In consideration of $68,752.00 paid herewith, BMNW does hereby sell and convey
unto Trek a 52.68222% working interest and 39.51166% net revenue interest in the
unit acreage in the 664.39 Acre Xxxxx-Xxxxxxx Gas Unit, less and except the
borehole of the Xxxxxx No 1 well, subject to BMNW's carried interest discussed
below. The actual assignment will be held by BMNW until such time as the initial
well has been completed.
Trek understands and agrees to carry BMNW through the drilling and completion to
the tanks and or pipeline facilities in the Test Well drilled in the
Xxxxx-Xxxxxxx Unit, for a twenty percent (20%) working interest proportionately
reduced to Trek's working interest. Completion to the tanks and or pipeline
facilities, as used herein, is defined as the point in which the Test Well has
penetrated the upper 250 feet of the Xxxxxx Peak formation and the Operator has
performed customary and reasonable testing of the Test Well (ie: logging,
drill-stem testing, etc.) and conducted completion operations including setting
production casing, perforating, any necessary artificial stimulation and
production
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testing and complete equipping said well for production including installation
of wellhead, flow-lines, tank battery and all necessary production facilities
including pipelines and pipeline connections. BMNW will bear no costs of any
kind including land, lease bonuses, title opinions (drilling and division
order), surface damages, seismic, site preparation, or in the drilling, testing
or completing of the Test Well. BMNW, as to its interest, will then pay its
share of drilling and completion costs on any additional xxxxx drilled or
recompleted within the boundary of the 664.39 Acre Xxxxx-Xxxxxxx Unit.
In the event one or more parties to the 3/21/83 JOA elects to be a
non-consenting party in the Test Well, BMNW will have the option to absorb up to
its proportionate share (20%) of the non-consent interest acquired by Trek on an
unpromoted basis. BMNW will notify Trek of its election to absorb its
proportionate share of the non-consent interest within 10 days following
notification by Trek of the parties electing not to participate in the Test
Well. Failure of BMNW to respond within the above 10 day period will be deemed
an election by BMNW not to absorb its proportionate share of the non-consent
interest.
In the event either Trek or BMNW acquires an additional interest in the Xxxxx
Xxxxxxx Unit or an interest in the offsetting Xxxxxxxx-Xxxxxxx Unit, either
party will have the option to share such interest in the following proportions:
Trek - 81.25%, BMNW - 18.75%.
Furthermore, Trek agrees to fund all costs of the acquisition of an additional
1,200 leasehold acres, more or less, for the formation of two 640 acre units.
Funding of the additional leasehold acreage will include all associated land
brokerage (lease acquisition, title and curative) costs and expenses and lease
bonuses. Said additional leasehold acreage will be acquired within the area
outlined on the attached Exhibit "A". Trek agrees to carry BMNW for 3/16th
interest in the additional leasehold acreage. BMNW will pay its 3/16th of any
and all drilling and completion costs as to xxxxx drilled on said additional
leasehold acreage.
Please execute and return one copy of this letter with your check payable to
BMNW Resources, L.L.C., in the amount of $68,752.00 to this office.
Sincerely,
/s/ Xxxxx XxXxxxxxx
Xxxxx XxXxxxxxx
AGREED AND ACCEPTED this 3 day of January, 2001
Trek Resources, Inc.
By: /s/ Xxxx Xxxxxxxxxx
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Xxxx Xxxxxxxxxx
President
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