Exhibit 10.17
EXPLORATION AGREEMENT
THIS EXPLORATION AGREEMENT ("Agreement"), is made and entered
into this 14th day of November, 2000, by and between
McMoRan Oil & Gas LLC, a Delaware limited liability company
(hereinafter sometimes referred to as "McMoRan"), whose address
is 0000 Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx 00000 and Samedan
Oil Corporation, a Delaware corporation (hereinafter referred to
as "Samedan"), whose address is 000 Xxxxxxxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000. McMoRan and Samedan are sometimes
hereinafter referred to individually as "Party" and/or
collectively as "Parties".
RECITALS
A. Samedan intends to acquire an interest in certain specific
leasehold rights or other interests that McMoRan holds in
properties located in the Gulf of Mexico, Offshore Louisiana and
Texas.
B. Samedan has committed financial resources to assist
McMoRan's exploration and development operations in connection
with these leasehold rights and other interests and, in
particular, in connection with certain test xxxxx located
thereon.
X. XxXxXxx is willing to convey to Samedan an interest in these
leasehold rights and interests subject to the terms of this
Agreement and to any burdens, encumbrances, or other contracts or
agreements that affect these leasehold rights and interests.
NOW THEREFORE, for and in consideration of the mutual advantages
and benefits accruing to the Parties hereto, the sufficiency of
which is hereby acknowledged, the Parties agree that the
following shall constitute the agreement between McMoRan and
Samedan concerning (i) Samedan's acquisition of an interest in
these leasehold rights and other interests (the "Subject Leases,"
as defined below), (ii) the exploration costs that Samedan shall
bear in connection with this acquisition, particularly with
respect to the test
1
xxxxx contemplated herein and (iii) and
Samedan's rights and obligations with respect to the exploration
and development of certain other prospects, including the Crete
Prospect, the Marguarita Prospect, and other Option Properties,
all as described further below.
ARTICLE 1
Subject Leases
1.1 McMoRan shall, subject to the terms of this Agreement,
assign Samedan a twenty-five percent (25.0%) of 8/8ths working
interest in those leases listed in Exhibit A hereto (the "Subject
Leases"), within thirty (30) days from the execution of this
Agreement (the "Subject Leases Assignment"). The Subject Leases
Assignment is subject to any and all burdens, encumbrances,
contracts, and other agreements that affect the Subject Interests
(the "Subject Interests Existing Burdens"). The Subject Interests
Existing Burdens include, but are not limited to, those burdens,
encumbrances, contracts, and other agreements that are described
on Exhibit B. The Subject Interests Existing Burdens also
specifically include but are not limited to, that certain
overriding royalty interest in favor of CLK Company L.L.C., et al
which shall not be greater than 3.00000% and, in the case of
those Subject Leases acquired from Shell Offshore Inc., that
certain overriding royalty interest in favor of Shell Offshore
Inc. which shall not be greater than 8.33333%.
1.2 (a) As consideration for the Subject Leases Assignment,
Samedan irrevocably commits (i) to participate in the drilling
and evaluation of the initial test xxxxx on the Subject Leases
(the "Subject Xxxxx") by paying the costs of drilling and
evaluating each Subject Well *******************************
********* in the Subject Leases and (ii) to pay certain additional
costs associated with the Subject Leases and the Subject Xxxxx,
in an amount of $************ (the "Subject Well Payment"). The
Parties acknowledge that the Subject Well Payment is based on
reimbursement of a portion of McMoRan's allocated/sunk costs and
a promote fee on the drilling of the Subject Xxxxx to casing
point. While the Subject Well Payment shall be paid in
accordance with 1.2 (b), hereinbelow, the Parties further
acknowledge that the Subject Well Payment has been allocated to
insure that Samedan bears the cost of drilling the Subject Xxxxx
on the Xxxxxxxx, Intruder, Thunderbolt and Xxxxxxx prospects, as
well as the
2
test well on the Prowler prospect, to casing point on a promoted
basis of not less than a ****************************. With
respect to any particular Subject Lease and Subject Well, the
Subject Well Payment *****************************************
********************* the costs of drilling and evaluation, as
well as to the costs of conducting any other similar operations
in the wellbore prior to the release of the rig used to conduct
the initial drilling of such Subject Well (the "Subject Well
Costs").
(b) The Parties further agree as follows:
(i) Samedan shall pay the Subject Well Payments for
each of the Subject Xxxxx, all as provided on Exhibit A
*******************************************************
********************************************************
********************************************************
*****************************************************.
(ii) As to the Subject Well on the Snapshot (VR
144/145) Prospect (the OCS-G 3125 #3 Well, hereinafter
the "VR 144 Well"), Samedan shall reimburse McMoRan for
*******************************************************
*******************************************which costs
shall be recouped through Samedan's payment of
McMoRan's share of the cost of drilling and evaluating
the VR 144 Well prior to application of the Subject
Well Payment to the Subject Well Costs for the VR 144
Well.
(iii) In the event that the allocable Subject Well Payment is
not fully expended on Subject Well Costs for the Subject Xxxxx,
then, unless the Parties mutually agree otherwise, within *****
***** from the date that the last Subject Well is drilled,
********************************************************.
(iv) Anything to the contrary herein notwithstanding, with
respect to the Subject Well at Mound Point (also referred to as
State Lease 340), the difference between Samedan's working
interest share in the Subject Well, i.e.**************** shall
constitute a portion of the Subject Well Payment. Samedan's
participation and cost bearing share in any
0
Xxxxx Xxxxx xxxxx
after the initial test well, i.e. any Mound Point xxxxx after the
Subject Well, shall not be considered as part of the Subject Well
Payment, but shall be subject to all existing agreements and
burdens as herein provided.
ARTICLE 2
Crete Prospect
2.1 In the event that McMoRan proposes a test well for the
property described on Exhibit C (the "Crete Prospect"), then
Samedan shall have the right to participate in such test well
(the "Crete Well"). McMoRan shall issue Samedan a written
proposal for the Crete Well (the "Crete Election Proposal").
Samedan shall advise McMoRan, in writing, of its election to
participate in the Crete Well within two business days from the
day it receives the Crete Election Proposal. Within 30 days from
the date that it receives Samedan's written election to
participate in the Crete Well, McMoRan shall assign Samedan a
twenty-five percent (25%) of 8/8ths working interest in the Crete
Prospect, unless the Parties agree to some other percentage (the
"Crete Assignment"). The Crete Assignment shall be subject to
any and all burdens, encumbrances, contracts, and other
agreements that affect the Crete Prospect (the "Crete Existing
Burdens"). The Crete Existing Burdens include, but are not
limited to, those burdens, encumbrances, contracts, and other
agreements that are described on Exhibit B. The Crete Existing
Burdens also specifically include, but are not limited to, that
certain overriding royalty interest in favor of CLK Company
L.L.C., et al which shall not be greater than 3.00000% and, in
the case of those Crete Prospect leases acquired from Shell
Offshore Inc., that certain overriding royalty interest in favor
of Shell Offshore Inc. which shall not be greater than 8.33333%.
If Samedan declines to participate in the Crete Well or fails to
issue a timely response to the Crete Election Proposal, then
Samedan shall no longer have any rights with respect to the Crete
Prospect.
2.2 As consideration for the Crete Assignment, Samedan agrees to
participate in the Crete Well ********************************
*** all costs, risks and expenses associated with the drilling and
evaluation of such Crete Well. In addition, Samedan shall
reimburse McMoRan for Samedan's proportionate share of the total
of the allocated/sunk leasehold and seismic costs that McMoRan
4
has expended on the Crete Prospect (the "Sunk Costs/Crete").
Samedan shall reimburse the Sunk Costs/Crete ******************
***************************************** (a) ***************
*************** relating to the Crete Prospect and (b) the costs
of ************************************* in the wellbore prior
the release of the rig used to conduct the initial drilling on
the Crete Well, all up to the amount of the Sunk Costs/Crete. In
the event that the Sunk Costs/Crete are not fully expended on
such costs associated with the Crete Well, then,unless the
Parties mutually agree otherwise, within **************** from
the date that the Crete Well is drilled, ************************.
ARTICLE 3
Marguarita
3.1 In the event that McMoRan proposes a test well for the
property described in Exhibit D (the "Marguarita Prospect"), then
Samedan shall have the right to participate in such test well
(the "Marguarita Well"). McMoRan shall issue Samedan a written
proposal for the Marguarita Well (the "Marguarita Election
Proposal"). Samedan shall advise McMoRan, in writing, of its
election to participate in the Marguarita Well within 10 days
from the day it receives the Marguarita Election Proposal (or
within two business days if there is a rig on location or if a
lease covering the Marguarita Prospect is scheduled to expire in
less than three weeks). Within 30 days from the date that it
receives Samedan's written election to participate in the
Marguarita Well, McMoRan shall assign Samedan a twenty-five
percent (25%) of 8/8ths working interest in Marguarita Prospect,
unless the Parties agree to some other percentage (the
"Marguarita Assignment"). The Marguarita Assignment shall be
subject to any and all burdens, encumbrances, contracts, and
other agreements that affect the Marguarita Prospect (the
"Marguarita Existing Burdens"). The Marguarita Existing Burdens
include, but are not limited to, those burdens, encumbrances,
contracts, and other agreements that are described on Exhibit B.
The Marguarita Existing Burdens also specifically include, but
are not limited to, that certain overriding royalty interest in
favor of CLK Company L.L.C., et al which shall not be greater
than 3.00000% and, that certain overriding royalty interest in
favor of Shell Offshore Inc. which shall not be greater than
8.33333%. If Samedan
5
declines to participate in the Marguarita
Well or fails to issue a timely response to the Marguarita
Election Proposal, then Samedan shall no longer have any rights
with respect to the Marguarita Prospect.
3.2 As consideration for the Marguarita Assignment, Samedan
agrees to participate in the Marguarita Well, *****************
******************************************** as may be provided
for in the Marguarita Assignment of all costs, risks and expenses
associated with the drilling and evaluation of such Marguarita
Well. In addition, Samedan shall reimburse McMoRan for Samedan's
proportionate share of the total of the allocated/sunk leasehold
and seismic costs that McMoRan has expended on the Marguarita
Prospect (the "Sunk Costs/Marguarita"). Samedan shall reimburse
the Sunk Costs/Marguarita *************************************
********************** (a) ************************** relating
to the Marguarita prospect and (b)the costs of********************
********************** in the wellbore prior to the release of
the rig used to conduct the initial drilling on the Marguarita
Well, all up to the amount of the Sunk Costs/Marguarita. In the
event that the Sunk Costs/Marguarita are not fully expended on
such costs associated with the Marguarita Well, then, unless the
Parties mutually agree otherwise, within **************** from
the date that the Marguarita Well is drilled, ****************
**********************.
3.3 As further consideration for the right to participate in the
Marguarita Well, Samedan hereby agrees to waive any preferential
right, AMI right or consent to assign (or any such similar right)
it may have with regard to McMoRan's acquisition of interest in
OCS-G 15437.
ARTICLE 4
Option Properties
4.1 Samedan shall have the right to participate in the initial
exploratory xxxxx ("Option Xxxxx") that McMoRan proposes on
certain of those properties and prospects that are covered by the
Shell/McMoRan Asset Purchase Agreement (dated effective December
1, 1999) and the Texaco/McMoRan Exploration Agreement (dated
6
effective January 1, 2000) (collectively, the "Option
Prospects"). The Option Prospects are described further on
Exhibit E. The Parties recognize that McMoRan may not be the
operator of certain of the Option Prospects and, further, that
there may be parties other than McMoRan having the right to
propose an Option Well on certain Option Prospects. In those
situations where McMoRan proposes an Option Well, then McMoRan
shall issue a written proposal to participate in the Option Well
(the "Option Well Proposal") to Samedan. Similarly, in the event
that a working interest owner of any Option Prospect (other than
McMoRan) proposes an Option Well in which McMoRan elects to
participate, then McMoRan shall issue Samedan an Option Well
Proposal. In either case, Samedan shall advise McMoRan, in
writing, of its election to participate in the Option Well within
10 days from the date it receives the Option Well Proposal (or
within two business days if there is a rig on location or if a
lease covering the Option Prospect is scheduled to expire in less
than fifteen business days from the date Samedan receives the
Option Well Proposal). Within 30 days from the date it receives
Samedan's written election to participate in the Option Well,
McMoRan shall assign Samedan a twenty-five percent (25%) of
8/8ths working interest in the Option Prospect (subject to
reduction for any back-in rights pursuant to the aforementioned
Texaco/McMoRan Exploration Agreement or other back-in rights
pursuant to any farmin or other similar type agreements);
provided, however, that in no event shall McMoRan be required to
assign Samedan an interest that exceeds 25/65ths of the interest
that McMoRan acquires in the Option Prospect prior to any such
reversions (the "Option Assignment"). (Except, however, in the
event McMoRan has not, as of the time McMoRan receives Samedan's
election, received an assignment of all of the interest in the
Option Prospect to which it is entitled, McMoRan shall make the
Option Assignment to Samedan within 30 days from the date that
McMoRan receives its assignment(s).) Any Option Assignment shall
be subject to any and all burdens, encumbrances, contracts, and
other agreements that affect the particular Option Prospect (the
"Option Prospect Existing Burdens"). At the time McMoRan makes
an Option Well Proposal, it shall provide Samedan with a list,
similar in form to Exhibit B, of the burdens, encumbrances,
contracts, and other agreements that it believes affect the
particular Option Prospect. The Option Prospect Existing Burdens
include, but are not limited to, those burdens, encumbrances,
contracts, and other agreements that are to be described on such
list. The Option Prospect Existing
7
Burdens also specifically include, but are not limited to, that
certain overriding royalty interest in favor of CLK Company
L.L.C., et al which shall not be greater than 3.00000% and, in
the case of those Option Prospect leases acquired from Shell
Offshore Inc., that certain overriding royalty interest in favor
of Shell Offshore Inc. which shall not be greater than 8.33333%.
If Samedan declines to participate in an Option Well or fails to
issue a timely response to an Option Well Proposal, then Samedan
shall no longer have any rights with respect to that particular
Option Prospect.
4.2 As consideration for an Option Assignment, Samedan agrees to
participate in the Option Well *****************************
*************** costs, risks, and expenses associated with the
acquisition and evaluation of the Option Prospect and with the
drilling, operating, and plugging and abandoning of such Option
Well, taking into account any adjustments in the cost bearing
interest of McMoRan relative to any applicable farmins,
assignment or other similar type agreements. In addition,
Samedan shall reimburse McMoRan for Samedan's proportionate share
of the total of the allocated/sunk leasehold and seismic costs
that McMoRan has expended on the Option Prospect (the "Sunk
Costs/Option Prospect"). Samedan shall reimburse the Sunk
Costs/Option Prospect *************************************
************************* (a) ************************ relating
to the Option prospect and (b) the costs of ********************
**********************in the wellbore prior to the release of the
rig used to conduct the initial drilling on the Option Well, all
up to the amount of the Sunk Costs/Option Prospect. In the event
that the Sunk Costs/Option Prospect for any individual Option
Prospect are not fully expended on such costs associated with the
Option Well for that Option Prospect, then, unless the Parties
mutually agree otherwise, within ***************** from the date
that such Option Well is drilled, *****************************
************************.
ARTICLE 5
General Provisions
5.1 Any assignments that McMoRan makes hereunder are
specifically subject to the terms of this Agreement and to any
and all Subject Interests Existing Burdens,
8
Crete Existing Burdens, Marguarita Existing Burdens and Option
Prospect Existing Burdens (collectively the "Existing Burdens"),
as applicable. In this connection, Samedan agrees to honor and
perform, as to the interest assigned, all of the conditions,
obligations, and covenants included in the Existing Burdens
affecting the properties and prospects that McMoRan assigns
hereunder. Samedan acknowledges that a) the Subject Interests,
the Crete Prospect, the Marguarita Prospect, and the Option
Prospects may be subject to certain preferential rights and
consents in favor of third parties and b) McMoRan's ability to
assign the interests described herein may be subject to the
exercise of these preferential rights and consents. In the event
that a third party exercises such a preferential right or fails
to give a required consent, McMoRan shall have no further
obligation to Samedan with respect to such interest.
5.2 Any assignment made pursuant hereto shall be made and
accepted without warranty of title, either express or implied,
except against every person whomsoever lawfully claiming or to
claim the Interests or a part thereof, by, through or under the
assignor only, but is made with full substitution and subrogation
of all rights and actions of warranty the assignor may have
against all others as to the Interests assigned. To the extent
the interests conveyed thereby constitute personal property or
fixtures, MCMORAN EXPRESSLY DISCLAIMS AND NEGATES (I) ANY IMPLIED
OR EXPRESS WARRANTY OF MERCHANTABILITY; (ii) ANY IMPLIED OR
EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE; AND, (iii)
ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR
SAMPLES OF MATERIALS. Samedan agrees to expressly assume all of
McMoRan's obligations as to the interests assigned, including but
not limited to the obligation to plug and abandon any well or
xxxxx or platforms or facilities relative to the assigned
interests and the lands covered thereby in accordance with
applicable governmental regulations.
5.3 (a) The Parties agree that the Blocks shown on Exhibits A,
C, and D shall constitute an Area of Mutual Interest (an "AMI")
with respect to the Subject Leases, the Crete Prospect, and the
Marguarita Prospect, respectively. The Parties further agree
that, with respect to the Option Prospects, McMoRan will present
Samedan with an AMI and a proposed prospect within the AMI (the
"Proposed Prospect") prior to proposing an Option Well. If
Samedan agrees with the AMI and the
9
Proposed Prospect, then
McMoRan will present Samedan with the Option Well Proposal and
all data related to that proposal. If Samedan fails to agree
with the AMI and the Proposed Prospect within two business days
of Samedan's receipt of such Option Prospect AMI and Proposed
Prospect, then Samedan shall forfeit all rights in such Option
Prospect.
(b) As to any AMI described above (other than an AMI to
which Samedan has forfeited its rights and interests), the
Parties agree that if, during the term of this Agreement,
either McMoRan or Samedan (the "Acquiring Party"), acting
solely or jointly with any other party, acquires any
interest or acquires the right to acquire any interest,
other than from the other Party (the "Non-Acquiring Party"),
within the AMI, the Acquiring Party shall within fifteen
(15) days after such acquisition give written notice of such
acquisition to Non-Acquiring Party giving full details of
the obligations and payments required in connection
therewith. The Non-Acquiring Party shall have thirty (30)
days from receipt of such written notice, or thirty (30)
days from ascertaining the circumstances of such acquisition
if notice is not provided by Acquiring Party, to elect, by
notice in writing to Acquiring Party, to participate in such
acquisition, ***********************************************
******************************************** in the property
or prospect. If Non-Acquiring Party elects to so
participate, it shall reimburse Acquiring Party ********
************************************************************
************************************************************
********************************, including but not limited
to any overriding royalty interest in favor of CLK Company,
L.L.C., et al or Texaco Exploration and Production Inc.
Simultaneously with such payment and/or assumption of such
obligations, the Acquiring Party shall provide Non-Acquiring
Party an assignment of the Non-Acquiring Party's share in
such acquisition.
(c) In the event Samedan elects not to participate in the
Crete Well, the Marguarita Well or an Option Well, the terms
and conditions of Section 5.3 (b) hereof shall be changed,
as to the affected Prospect for such non-participation well,
so that only McMoRan shall be entitled to participate in an
acquisition on the basis provided for therein in the event
Samedan acting solely or jointly with any other party,
acquires any interest or acquires the right to acquire any
interest, other than from McMoRan within the AMI.
10
(d) The Parties further agree that, with respect to the Subject
Well at Mound Point, the AMI shall include the Tiger Shoal and
the Lighthouse Point Fields, as shown on Exhibit F.
(e) The provisions of this Section 5.3 shall terminate 12 months
after the termination of this Agreement.
5.4 If any Subject Well, Crete Well, Marguarita Well or Option
Well, or any Substitute Well(s) therefor, prior to reaching its
contract depth, encounters impenetrable substances, e.g, heaving
shale, domal material, salt, excessive salt water flow, or any
other formation or condition or develops mechanical difficulties
which under ordinary engineering and drilling practices would
render further drilling unwarranted, impracticable or
unreasonably hazardous; then, in such event, McMoRan shall have
the continuing option (but not the obligation), at its election,
to commence operations for the drilling of a substitute well or
xxxxx (a "Substitute Well(s)"). If McMoRan elects to drill a
Substitute Well hereunder, such Substitute Well may be drilled to
a bottomhole location of McMoRan's choice on the Subject Leases,
the Crete Prospect, Marguarita Prospect or Option Prospect, as
the case may be, and such Substitute Well shall be commenced
within one hundred twenty (120) days from the date operations on
the well for which it is being substituted (the "Initial Well")
were completed or abandoned, and operations on such Substitute
Well shall thereafter be conducted in accordance with the
provisions hereof with respect to the drilling of the Initial
Well, it being understood that all provisions of this Agreement
relating to the Initial Well, unless clearly inappropriate, shall
be applicable to any Substitute Well and that any Substitute Well
shall be considered for all purposes as though it were the well
for which it is a substitute. In a like manner and for a like
cause, any number of Substitute Xxxxx may be drilled. Should
Samedan decline to participate in a Substitute Well, Samedan
shall forfeit any and all rights and interests with respect to
the affected prospect. In the event that McMoRan has already
assigned Samedan an interest in the prospect on which the
affected well is located, Samedan shall reassign that interest to
McMoRan within ten (10) days from the date that it communicates
its decision not to participate in the Substitute Well free and
clear of any burdens Samedan may have created thereon.
11
5.5 In no event shall McMoRan or Samedan be liable to the
other for special, incidental, indirect, punitive, or
consequential damages.
5.6 Samedan agrees that any data or information disclosed
by McMoRan relating to the Subject Interests, the Crete Prospect,
the Marguarita Prospect or the Option Properties, which includes,
but is not necessarily limited to, geological and geophysical
data, maps, models and interpretations and commercial,
contractual and financial information (hereinafter referred to as
"Confidential Information"), shall be kept strictly confidential
and shall not be sold, traded, published or otherwise disclosed
to anyone in any manner whatsoever, including by means of
photocopy or reproduction, without McMoRan's prior written
consent, except as provided for in parts (i) and (ii) of this
Section.
(i) Samedan may disclose the Confidential Information
without McMoRan's prior written consent only to the
extent such information is: (a) already known to
Samedan, (b) already in possession of the public, (c)
required to be disclosed under applicable law or by a
governmental or stock exchange order, decree,
regulation or rule, (d) acquired independently from a
third party that represents that it has the right to
disseminate such information, or (e) which Samedan
develops or derives without the aid, application or use
of the Confidential Information.
(ii) Samedan shall be entitled to disclose the Confidential
Information without McMoRan's prior consent to such of the
following persons who have a clear need to know in order to
evaluate the affected area: (a) employees, officers and directors
of Samedan, or its affiliates and (b) any professional consultant
retained by Samedan for the purpose of evaluating the
Confidential Information. Prior to making any such disclosures
to persons under this subparagraph (ii), however, Samedan shall
obtain an undertaking of confidentiality from such person whereby
such person agrees to observe and be bound by the terms and
conditions of this Agreement.
(iii) Certain of the Confidential Information is licensed
from third parties (hereinafter referred to as "Speculative
Data"), and may impose various restrictions and limitations on
McMoRan's ability to use, disclose and/or
12
display such
Speculative Data and which Speculative Data shall be so
identified upon disclosure of same to Samedan, its employees and
representatives. Anything to the contrary notwithstanding, in
the event any Confidential Information disclosed is Speculative
Data, Samedan agrees that it shall not remove from McMoRan's
offices, copy or reveal to any other party whomsoever, any such
Speculative Data, and Samedan agrees that Speculative Data shall
remain confidential until it receives a license to use the
Speculative Data.
5.7 This Agreement is not intended and shall not be construed to
create a partnership within the meaning of the federal common law
nor under the applicable laws of any state nor under the laws of
the state which any party hereto is incorporated, organized or
conducting business. The parties expressly agree that no party
hereto shall be responsible for the obligations of any other
party, each party being severally responsible only for its
obligations arising hereunder and liable only for its allocated
share of the costs and expenses incurred hereunder. It is not
the purpose or intention of this Agreement to create, and this
Agreement should never be construed as creating, a relationship
whereby any of the parties shall be held liable for acts, either
of omission or commission, of any other party hereto.
Notwithstanding the foregoing, each party hereto agrees that this
Agreement is subject to a partnership for federal and state
income tax purposes pursuant to the provisions of Exhibit "G"
attached hereto.
5.8 The form of Operating Agreement attached as Exhibit G shall
apply to those properties and prospects in which Samedan has
elected to participate except for (i) Vermilion Block 144, where
the Parties have adopted another form of operating agreement and
(ii) any property or prospect where another form of operating
agreement already applies.
5.9 This Agreement supersedes and replaces all prior agreements
and verbal conversations between the Parties with respect to the
subject matter hereof, except with respect to any existing
confidentiality agreement affecting properties or property
subject to this Agreement, which shall remain in effect.
5.10. This Agreement shall be binding upon the Parties'
successors and assigns. However, Samedan may not assign its
rights and obligations hereunder without
13
McMoRan's prior written
approval, which approval shall not be unreasonably withheld.
5.11. This Agreement shall be governed by and interpreted
under Louisiana law, excluding, however, any provisions of
Louisiana law which might direct or refer such determinations to
the laws of any other jurisdiction.
5.12. McMoRan shall have the right to sell, trade, farm-out
or otherwise convey any of the properties or prospects covered
hereunder except as to the interests committed hereunder to
Samedan in the Subject Leases. McMoRan shall not be liable to
Samedan for the loss of rights to any of the properties or
prospects covered hereunder.
5.13. The termination of this Agreement shall not relieve
Samedan of any expense, liability or other obligation that has
accrued hereunder or pursuant to the Subject Interests
Assignment, the Crete Assignment, the Marguarita Assignment, or
any Option Assignment that may be made hereunder.
5.14. This Agreement shall be effective as of August 22, 2000
and shall terminate on December 31, 2003, unless the Parties
agree otherwise. However, anything to the contrary
notwithstanding, the provisions of Section 5.3, hereof, shall
survive the termination of this Agreement.
IN WITNESS WHEREOF, this Agreement is executed by the Parties
hereto on the date first hereinabove written, but effective as of
the Effective Date.
WITNESSES:
McMoRan Oil & Gas LLC
/s/ Witness
------------ By: /s/ Xxxxx X. Xxxxxxxx
-----------------------
Xxxxx X. Xxxxxxxx
/s/ Witness Senior Vice President
------------
/s/ Witness Samedan Oil Corporation
------------
By: /s/ Xxx X. Xxxxxx
/s/ Witness -----------------------
------------ Xxx X. Xxxxxx
Senior Vice President
Division General Manager
14
EXHIBIT A
Attached to and made a part of that certain
Exploration Agreement dated November 14,
2000, by and between McMoRan Oil & Gas LLC
and Samedan Oil Corporation.
SUBJECT INTERESTS
1. Prospects and Leases
Prospect Lease No. Area Block
------------------- --------------- ------------ --------
Xxxxxxxx OCS-G 19759 Vermilion 195
OCS-G 19760 Vermilion 196
OCS-G 19761 Vermilion 207
Intruder La. S.L. 16031 West Delta 0
Xx. X.X. 00000 Xxxx Xxxxx 12
La. S.L. 00000 Xxxx Xxxxx 00
Xxxxxxx Xx. S.L. 16225 Grand Isle 2
La. S.L. 16226 Grand Isle 2
Snapshot (VR 144/145) OCS-G 3125 Vermilion 144*
OCS-G 17901 Vermilion 145**
OCS-G 3128 Vermilion 159***
Thunderbolt/Xxxxxxx OCS-G 19788 Xxxxxx Island 96
OCS-G 17964 Xxxxxx Island 97
OCS-G 03811 Xxxxxx Island 108****
OCS-G 17967 Xxxxxx Island 000
Xxxxx Xxxxx Xx. S.L. 340 (see plat
attached as Exhibit "A-1")
* Insofar and only insofar as such lease covers the E/2,
the E/2 SW/4, the E/2 NW/4, and the NW/4 NW/4 of
Vermilion Block 144; and the SW/4 SW/4 and the W/2
SW/4, INSOFAR AND ONLY INSOFAR to the extent the SW/4
SW/4 and the W/2 SW/4 constitutes a part of the
Vermilion block 160 Co-development Area pursuant to
that certain May 29, 1992 agreement by and between
Shell, et al and Freeport-McMoRan, et al.
** Insofar and only insofar as such lease covers the SW/4
of Vermilion Block 145.
*** Insofar and only insofar as such lease covers the N/2
NE/4 of Block 159.
**** Less and except the S/2 SE/4. Subject to pending
acquisition from The Louisiana Land and Exploration
Company, Elf Exploration, Inc. and Case-Xxxxxxx Oil
Corporation.
A-1
2. Subject Well Payments
Subject Well
Prospect Subject Well Payment
------------- ---------------- -----------------
Xxxxxxxx OCS-G 19760 #2 $************
Intruder * La SL 16033 #1 $************
Snapshot OCS-G 3125 #3 $************
Thunderbolt OCS-G 17964 #1 $************
Xxxxxxx To be determined $************
Mound Point La SL 340 #1 $************
* Includes Subject Well Payment for the Prowler Well, but
is included and paid as part of the Subject Well
Payment for the Intruder Well, and is to be paid
regardless of whether the Prowler Well is drilled.
A-2
