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EXHIBIT 10.2
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, dated March 4, 1996, is made and entered into by and
between Fortune Petroleum Corporation ("Seller") and Seneca Resources
Corporation ("Buyer").
1. Seller is the owner of certain interests in (a) the oil, gas
and mineral leases (the "Leases") (b) all xxxxx, surface equipment, subsurface
equipment, pipelines and all other real, personal and mixed property located on
the lands covered by the Leases and used in the operation thereof, and (c) all
permits, licenses, easements, product sales contracts and similar rights
associated with operation of the Leases described in Exhibit "A" attached
hereto and in the lands covered thereby, as shown on the plat attached hereto
as Exhibit "A-1". Those interests are referred to herein as the "Properties".
Seller desires to sell the Properties to Buyer and Buyer desires to purchase
the Properties from Seller, all in accordance with and for the consideration
recited in the provisions hereof.
2. Seller shall sell, transfer and assign, to Buyer all of
Seller's rights, title and interest in and to the Properties. The Properties
do not include (a) any accounts receivable relating to operation of the Leases
prior to the Effective Date, or (b) liquid hydrocarbons in storage on the
Leases at the Effective Date. The transfer of the Properties from Seller to
Buyer shall be on the form of Assignment, Conveyance and Xxxx of Sale attached
hereto as Exhibit "B".
3. As consideration for the sale of the Properties, Buyer shall
pay Seller at Closing the sum of Three Hundred Forty Thousand Fifty-eight and
No/100 United States Dollars ($340,058.00).
4. The Effective Date of the transfer of the Properties shall be
December 1, 1995, at 7:00 a.m., PST.
5. Seller agrees to make available to Buyer its records relating
to the title of said properties, including, but not limited to abstracts, title
reports, title opinions, leases, lease purchase reports, operating agreements,
letter agreements, contracts, gas purchase contracts and any other informative
material relating to said Properties in its possession in order for Buyer to
make a determination of the correctness of Seller's interest in said
Properties. Buyer will pay for its own legal representation and title work
necessary. Seller agrees to pay for its own legal representation and any
curative title work requested by Buyer. Should Seller fail to cure title,
Buyer shall have the right but not the obligation to accept the title as is or
do its own curative work.
6. Seller shall also represent and warrant that at the time of
the transfer of its interest in the Properties there will be no liens,
encumbrances, reversions or reassignment obligations adverse to the interest to
be assigned hereunder, judgments, suits, actions or other proceedings existing
or threatened against its interest in the Properties.
7. The Emission Bank, if any, as referenced in Rule 26.4 of the
Rules and Regulations of the Ventura County Air Pollution Control District, and
elsewhere, on said Properties, if any, shall be included in the sale to Buyer.
8. Promptly, after execution of this Agreement by both parties,
Buyer shall have the right, but not the obligation, until March 25, 1996, at
its own risk and expense to conduct or have conducted an Environmental
Assessment of the Properties. The sale herein contemplated shall be contingent
upon a finding satisfactory to Buyer of no significant environmental liability.
Seller shall provide Buyer with reasonable access to the Property to conduct
the
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environmental assessment. Buyer shall provide Seller copies of all reports,
results and data, but not analysis, received by Buyer in connection with the
environment assessment. Buyer shall release, indemnify, defend and hold Seller
harmless from any liability, loss or damage to persons or property incurred
while, conducting the environmental assessment.
9. Contingent upon closing hereunder, Buyer shall defend,
indemnify and hold Seller harmless from any and all claims in favor of any
person for personal injury, death, or damage to property or to the environment,
or for any other claim or relief, arising directly or indirectly from, or
incident to, the use, occupation, operation, maintenance or abandonment of any
of the Properties, or condition of the property or premises, whether latent or
patent, and which are attributable to operations and activities conducted
subsequent to the Effective Date.
10. Seller shall defend, indemnify and hold Buyer harmless from
any and all claims in favor of any person for personal injury, death or damage
to property or to the environment, or for any other claim or relief, arising
directly or indirectly from, or incident to, (i) Seller's use, occupation,
operation, maintenance, or abandonment of any of the Properties attributable to
times prior to the Effective Date or (ii) any latent condition of the
Properties attributable to operations and activities conducted during which the
Properties were owned by or under the control of Seller.
11. Buyer agrees to accept full responsibility for and all costs
associated with plugging and abandoning all existing xxxxx listed on Exhibit
"A" and subsequently drilled xxxxx. Buyer is also responsible for abandoning
all production facilities on the Properties and restoring the surface. Buyer
shall complete the plugging and abandonment of xxxxx and surface restoration in
compliance with the rules and regulations of any governmental agency having
jurisdiction over the properties and with applicable provisions of the Leases.
12. The Closing of the transaction contemplated in this Agreement
and the transfer of the Properties shall occur on or before April 1, 1996, at
the offices of Xxxxxxxx & Associates, Inc., 0000 Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxx 00000 or such other date, time and place upon which Seller and Buyer may
agree in writing.
13. The purchase price shall be adjusted based on actual final
determined working interest and net revenue interest if they should vary from
the interest described in Exhibit "A", and expenditures incurred and revenues
received after the effective date referred to herein and prior to the date of
actual closing of the transaction. Seller shall be responsible for all
obligations incurred and be entitled to all revenues accrued prior to the
Effective Date herein, with respect to the interests conveyed pursuant hereto,
and Buyer shall be so responsible and entitled, respectively, for such
obligations incurred and revenues accrued thereafter. However, notwithstanding
the foregoing, it is recognized that Seller will continue to operate the
properties until the date of closing, and will be and remain responsible for
any and all costs, expenses, losses, liabilities and damages, other than
routine operating costs and expenses, attributable to the interests subject
hereto, such as, but not limited to, costs, expenses, damages, losses and
liabilities associated with blowouts, fires, or other unanticipated occurrences
of a non-routine nature.
14. For a period of three years after closing, Seller agrees not
to lease or cause to be leased any mineral property lying within one (1) mile
of the Properties.
15. The Assignment to be made in accordance with this Agreement
shall be made with warranty of title by, through and under Seller, but not
otherwise.
16. BUYER UNDERSTANDS AND AGREES THAT THE PROPERTIES ARE SOLD "AS
IS" AND "WHERE IS", WITH ALL FAULTS AND DEFECTS, WITHOUT RECOURSE BY BUYER, ITS
SUCCESSORS AND/OR ASSIGNS, AGAINST SELLER AND WITHOUT COVENANT, REPRESENTATION
OR WARRANTY, EXPRESS, IMPLIED OR STATUTORY; AND WITHOUT LIMITATION OF THE
GENERALITY OF THE IMMEDIATELY PRECEDING CLAUSE, SELLER EXPRESSLY DISCLAIMS AND
NEGATES (a) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE
AND (b) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY.
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17. THE PARTIES AGREE TO EXECUTE AND DELIVER, AFTER THE CLOSING,
ANY AND ALL OTHER INSTRUMENTS AND AGREEMENTS TO ACCOMPLISH THE TRANSACTION
CONTEMPLATED HEREBY AND, WITHIN SIXTY (60) DAYS AFTER CLOSING, SHALL MAKE ALL
ADJUSTMENTS CONTEMPLATED IN PARAGRAPH 13 ABOVE FOR WHICH THE NECESSARY
INFORMATION WAS NOT AVAILABLE AT CLOSING. SELLER SHALL DELIVER TO BUYER ALL OF
ITS FILES RELATING TO THE PROPERTIES
18. SUBJECT TO TIME CONSTRAINT PROVISION OF PARAGRAPH 8. BUYER
SHALL NOT BE OBLIGATED TO CONSUMMATE THE PURCHASE DESCRIBED IN THIS AGREEMENT
UNTIL BUYER, AT ITS SOLE OPTION AND EXPENSE HAS COMPLETED A PHASE I
ENVIRONMENTAL STUDY AND THE RESULTS THEREOF, IN BUYER'S OPINION, BEING
SUFFICIENT TO PROCEED WITH THE CLOSING.
19. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA, EXCLUDING, HOWEVER, ANY PROVISION OF
CALIFORNIA LAW THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF A DIFFERENT
JURISDICTION.
20. The exhibits to this Agreement are incorporated herein by
reference.
21. The terms, covenants and conditions hereof bind and inure to
the benefit of Buyer and Seller and their successors and assigns and are
covenants running with the lands, Leases, equipment and facilities and with
each transfer or assignment of all or any part thereof.
22. Except for the obligations created pursuant to the provisions
of paragraphs 9., 10., 14. and 17. above, the warranties, covenants,
obligations, and indemnities contained herein shall not survive the Closing.
EXECUTED on the date first written above, to be effective on the
Effective Date.
SELLER
FORTUNE PETROLEUM CORPORATION
By: Xxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxxx
President
BUYER
SENECA RESOURCES CORPORATION
By: Xxxxx X. Xxxx
--------------------------------
Xxxxx X. Xxxx
Executive Vice President
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EXHIBIT "A"
Leases:
1. That certain Oil and Gas Lease dated July 1, 1963, executed by Union
Oil Company of California, as Lessor in favor of Wainscoat & Xxxxxxx,
Inc., as Lessee, recorded July 31, 1963 in Book 2366, Page 39,
Official Records, Ventura County, California, INSOFAR AND ONLY INSOFAR
as such lease covers the following described lands:
Lot Nos. 43 and 44, Survey No. 3151 known as the Twilight Consolidated
Placer Mining Claim, consisting of the Ireland and Twilight Placer
Claims and embracing a portion of Xxxxxxxx 0 Xxxxx, Xxxxx 00 Xxxx,
X.X.X. & M., SAVE AND EXCEPT:
Parcel 1: Portions of Lots 43 and 44, all depths
NW/4, W/2 NE/4, W/2 SW/4 of Lot 43;
N/2, SW/4 of Lot 44.
Parcel 2: Portions of Lots 43 and 44 lying below a depth of
eight hundred and fifty feet (850') into the Sespe
Formation or below a depth of eight hundred thirteen
feet (813') above sea level, whichever is deeper.
SE/4 of Lot 44.
Parcel 3: Portion of Lot 43 lying below the base of the Sespe
Formation as encountered at 4,700' in the Xxxxxx
Exploration "Xxxxxxx" #129-21 Well located in the
Northwest Quarter (NW/4) of Section 00, Xxxxxxxx 0
Xxxxx, Xxxxx 00 Xxxx, X.X.X. & M.
E/2 NE/4; E/2 SW/4 and SE/4 of Lot 43.
2. That certain Oil and Gas Lease dated June 29, 1962 executed by The Los
Angeles Oil Company, as Lessor, in favor of Union Oil Company of
California, as Lessee, recorded December 29, 1965 in Book 2919, Page
446, Official Records, Ventura County, California, INSOFAR AND ONLY
INSOFAR as such lease covers the following described lands:
Parcel 1: That certain parcel of land known as Xxx 00, Xxxxxxxx
0 Xxxxx, Xxxxx 00 Xxxx, X.X.X. & M., known as and
called Xxxxxxx Oil Mine, as designated and delineated
on the official plat of the survey of said land
returned to the General Land Office by the Surveyor
General, as set forth in that certain assignment of
Oil and Gas Lease, recorded August 29, 1966 in Book
3085, Page 585, Official Records, excepting therefrom
that portion lying within Parcel 2 below and the
following described lands:
A. Portions of Xxx Xx. 00, Xxxxxxxx 0 Xxxxx, Xxxxx 00
Xxxx, X.X.X. & M., known as and called Xxxxxxx Oil
Mine, as designated and delineated on the official
plat of the survey of said land referred to the
General Land Office by the Surveyor General, more
particularly described as follows:
Parcel A-1, all depths:
Beginning at the corner common to Sections 20, 21, 28
and 00, Xxxxxxxx 0 Xxxxx, Xxxxx 00 Xxxx, X.X.X. & M.;
thence, North 0 degrees 30' 38" East 791.71 feet to a
point; thence, South 89 degrees 32' 54" East 553.61
feet to a point; thence, South 0 degrees 22' 53"
East 154.03 feet to the true point of beginning;
thence:
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1st: South 88 degrees 54'20" East 1,280.23 feet,
to a point; thence,
2nd: North 0 degrees 39'29" East 1,358.25 feet, to
a point; thence,
3rd: North 88 degrees 54'20" West 1,283.02 feet,
to a point; thence,
4th: South 0 degrees 39'29" West 1,204.27 feet, to
a point; thence,
5th: South 0 degrees 33'53" East 154.03 feet, more
or less, to the true point of beginning,
EXCEPTING therefrom the West 20 acres.
containing 20 acres, more or less.
Parcel A-2, all depths:
The East 750' of the North 2100' of Lot 40,
containing 36.00 acres, more or less.
Parcel 2: A portion of Xxx 00, Xxxxxxxx 0 Xxxxx, Xxxxx 190
West, S.B.B.& M., known as and called Xxxxxxx Oil
Mine, as designated and delineated on the official
plat of the survey of said land returned to the
General Land Office by the Surveyor General, from a
depth of one thousand one hundred fifteen (1,115')
feet below the surface thereof down to the base of
the Lower Sespe Formation as defined by four thousand
three hundred sixty seven (4,367') feet measured
depth in the initial test well, as set forth in that
certain document recorded October 26, 1992 as
Instrument No. 92-189156, described as follows:
Parcel A:
Beginning at the corner common to Sections 20, 21, 28
and 00, Xxxxxxxx 0 Xxxxx, Xxxxx 00 Xxxx, X.X.X. & M.,
thence North 0 degrees 30'38" East 791.71 feet to a
point; thence South 89 degrees 32'54" East 553.61
feet to a point; thence South 0 degrees 22'53" East
1,528.88 feet to the true point of beginning; thence
1st: South 88 degrees 54'20" East 1,255.29 feet to
a point; thence
2nd: North 0 degrees 39'29" East 1,374.43 feet to
a point; thence
3rd: North 88 degrees 54'20" West 1,280.23 feet,
more or less, to a point, thence
4th: South 0 degrees 22'53" East 1,374.85 feet,
more or less, to the true point of beginning.
Parcel B:
Beginning at the corner common to Sections 20, 21, 28
and 00, Xxxxxxxx 0 Xxxxx, Xxxxx 00 Xxxx, X.X.X. & M.,
thence North 0 degrees 30'38" East 791.71 feet to a
point; thence South 89 degrees 32'54" East 553.61
feet to a point; thence South 0 degrees 22'53" East
154.03 feet to the true point of beginning; thence
1st: South 88 degrees 54'20" East 1,280.23 feet to
a point; thence
2nd: North 0 degrees 39'29" East 1,358.25 feet to
a point; thence
3rd: North 88 degrees 54'20" West 1,283.02 feet to
a point; thence
4th: South 0 degrees 39'29" West 1,204.27 feet to
a point; thence
5th: South 0 degrees 22'53" East 154.03 feet, more
or less, to the true point of beginning,
EXCEPTING THEREFROM the East 20 acres, and
containing 20 acres more or less.
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Well Name Working Interest Net Revenue Interest
(No Less Than)
(1) Xxxxxxx 2 100% 70.0%
(5) Xxxxxxx 11X-28 100% 70.0%
(5) Xxxxxxx 12-28 100% 70.0%
(2)(5) Xxxxxxx U76-28 100% 70.0%
(5) Xxxxxxx 000-00 000% 70.0%
(5) Ireland 000-00 000% 70.0%
(5) Ireland 000-00 000% 70.0%
(3) Twilight 2 100% --
(4) Twilight 3 100% 70.0%
(1) Shut-in in Vaqueros formation (Possible backup water disposal well)
(2) Horizontal Completion
(3) Active waste water disposal well
(4) Shut-in in Vaqueros formation
(5) Active producing well in Basal Sespe formation
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[MAP]
Assessor's Map Bk.16-Pg.
County of Ventura, Calif.
Exhibit "A-l"
Outline of a portion of Xxxx Xx. 00, 00 & 00, Xxxxxxxx 0
Xxxxx, Xxxxx 19 West, S.B.B. & M., known as and called
Xxxxxxx Oil Mine, Ireland Placer Claim and Twilight Placer
Claim, more particularly described in Exhibit "A" hereto.
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Recording Requested By and Return To:
Seneca Resources Corporation
0000 Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
EXHIBIT "B"
ASSIGNMENT, CONVEYANCE AND XXXX OF SALE
STATE OF CALIFORNIA )
) KNOW ALL MEN BY THESE PRESENTS
COUNTY OF VENTURE )
THIS ASSIGNMENT, CONVEYANCE AND XXXX OF SALE entered into this 1st day
of April, 1996, by and between FORTUNE PETROLEUM CORPORATION, 00000 Xxxxxx
Xxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx 00000 ("ASSIGNOR") and SENECA
RESOURCES CORPORATION, a Pennsylvania corporation, whose address is 0000
Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, ("ASSIGNEE");
WITNESSETH:
THAT ASSIGNOR for and in consideration of the sum of Ten Dollars
($10.00), and other good and valuable consideration, in hand paid, the receipt
and sufficiency of which is hereby acknowledged, does hereby effective as of
7:00 a.m., Pacific Standard Time, December 1, 1995 ("Effective Date"), grant,
bargain, sell, assign, transfer, set over, and convey unto ASSIGNEE, it
successors and assigns:
1. All of ASSIGNOR's undivided interest in and to the oil and gas leases
described in Exhibit "A" attached hereto (the "Leases), insofar as the
Leases cover and relate to the land described in Exhibit "A" (the
"Lands"), together with all of ASSIGNOR's interests in and to all the
property and rights incident thereto, including all rights of ASSIGNOR
in, to and under all operating agreements, exploration agreements,
pooling or unitization agreements, farmout agreements, product
purchase and sale contracts, leases, permits, right-of-ways,
easements, licenses, options, orders, contracts and instruments in any
way relating to the Leases and the Lands.
2. All of ASSIGNOR's undivided interest in and to all of the xxxxx
situated on the Lands or on land spaced, pooled or unitized therewith
together with the personal property, fixtures and improvements on,
appurtenant to, or used or obtained by ASSIGNOR in connection with the
Lands or xxxxx or with the production, treatment, sale or disposal of
hydrocarbons or water produced therefrom or attributable thereto,
including without limitation well equipment, casing, tubing, tanks,
crude oil, condensate and products placed into storage or into
pipelines after December 1, 1995, at 7:00 a.m., Pacific Standard Time,
boilers, buildings, pumps, motors, machinery, pipelines, gathering
systems, power lines, roads, and field processing plants, and all
other appurtenances thereunto belonging.
3. At ASSIGNEE's sole cost, risk and expense ASSIGNOR also hereby grants
and transfers to ASSIGNEE, its successors and assigns, to the extent
so transferable, the benefit of and the right to enforce the covenants
and warranties, if any, which ASSIGNOR is entitled to enforce with
respect to the Leases, Lands, and xxxxx against ASSIGNOR's
predecessors in title to same.
4. All other leasehold interest, overriding royalty interests, mineral
and royalty interest and other interests, if any, owned by ASSIGNOR,
in and to the Land and the Leases and in or attributable to production
therefrom.
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THERE IS SAVED AND EXCEPTED FROM THIS ASSIGNMENT, CONVEYANCE AND XXXX
OF SALE, THE FOLLOWING:
A. A reservation by ASSIGNOR of any accounts receivable relating
to operations on the Leases prior to the Effective Date.
B. A reservation by ASSIGNOR of all liquid hydrocarbons in
storage on the Leases on the Effective Date.
TO HAVE AND TO HOLD UNTO ASSIGNEE, its successors and assigns, forever
subject to the following:
A. The provisions of paragraphs 9., 10., 14., and 17. of the
Purchase and Sale Agreement between the parties hereto dated
March 4, 1996. The terms of those paragraphs shall prevail in
the event of a conflict between their provisions and the terms
of this Assignment.
B. A post closing adjustment within sixty (60) days of closing to
account for all costs, expenses and income attributable to the
Properties after the Effective Date and borne or enjoyed by
ASSIGNOR and for all costs, expenses and income attributable
to the properties, before the Effective Date and borne or
enjoyed by ASSIGNEE and not included on the Closing Statement
executed at Closing by ASSIGNOR and ASSIGNEE.
C. ASSIGNEE shall accept full responsibility for any and all
costs associated with plugging and abandoning of all existing
xxxxx listed on Exhibit "A" and subsequently drilled xxxxx.
Buyer is also responsible for abandoning all production
facilities on the Properties and the restoration of the
surface in compliance with the provisions of the Leases and
all rules and regulations of the governmental agency having
jurisdiction over the Properties.
D. This instrument is made upon the understanding and agreement
that, all personal property and equipment conveyed hereby is
sold, assigned and accepted by ASSIGNEE in its "where is, as
is" condition without any warranties whatsoever, express or
implied or statutory, of marketability, quality condition,
merchantability and/or fitness for a particular purpose or
use, all of which is expressly disclaimed.
IN WITNESS WHEREOF, this instrument is executed as of the day and year
first written above.
ASSIGNOR
FORTUNE PETROLEUM CORPORATION
By:
--------------------------------
Xxxxxx X. Xxxxxxxxx
President
ASSIGNEE
SENECA RESOURCES CORPORATION
By:
--------------------------------
Xxxxx X. Xxxx
Executive Vice President
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PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, dated March 4, 1996, is made and entered into by and
between Fortune Petroleum Corporation ("Seller") and Seneca Resources
Corporation ("Buyer").
1. Seller is the owner of certain interests in (a) the oil, gas
and mineral leases (the "Leases") (b) all xxxxx, surface equipment, subsurface
equipment, pipelines and all other real, personal and mixed property located on
the lands covered by the Leases and used in the operation thereof, and (c) all
permits, licenses, easements, product sales contracts and similar rights
associated with operation of the Leases described in Exhibit "A" attached
hereto and in the lands covered thereby, as shown on the plat attached hereto
as Exhibit "A-1". Those interests are referred to herein as the "Properties".
Seller desires to sell the Properties to Buyer and Buyer desires to purchase
the Properties from Seller, all in accordance with and for the consideration
recited in the provisions hereof.
2. Seller shall sell, transfer and assign, to Buyer all of
Seller's rights, title and interest in and to the Properties. The Properties do
not include (a) any accounts receivable relating to operation of the Leases
prior to the Effective Date, or (b) liquid hydrocarbons in storage on the
Leases at the Effective Date. The transfer of the Properties from Seller to
Buyer shall be on the form of Assignment, Conveyance and Xxxx of Sale attached
hereto as Exhibit "B".
3. As consideration for the sale of the Properties, Buyer shall
pay Seller at Closing the sum of Three Hundred Forty Thousand Fifty-eight and
No/100 United States Dollars ($340,058.00).
4. The Effective Date of the transfer of the Properties shall be
December 1, 1995, at 7:00 a.m., PST.
5. Seller agrees to make available to Buyer its records relating
to the title of said properties, including, but not limited to abstracts, title
reports, title opinions, leases, lease purchase reports, operating agreements,
letter agreements, contracts, gas purchase contracts and any other informative
material relating to said Properties in its possession in order for Buyer to
make a determination of the correctness of Seller's interest in said
Properties. Buyer will pay for its own legal representation and title work,
necessary. Seller agrees to pay for its own legal representation and any
curative title work requested by Buyer. Should Seller fall to cure title,
Buyer shall have the right but not the obligation to accept the title as is or
do its own curative work.
6. Seller shall also represent and warrant that at the time of
the transfer of its interest in the Properties there will be no liens,
encumbrances, reversions or reassignment obligations adverse to the interest to
be assigned hereunder, judgments, suits, actions or other proceedings existing
or threatened against its interest in the Properties.
7. The Emission Bank, if any, as referenced in Rule 26.4 of the
Rules and Regulations of the Ventura County Air Pollution Control District, and
elsewhere, on said Properties, if any, shall be included in the sale to Buyer.
8. Promptly, after execution of this Agreement by both parties,
Buyer shall have the right, but not the obligation, until March 25, 1996, at
its own risk and expense to conduct or have conducted an Environmental
Assessment of the Properties. The sale herein contemplated shall be contingent
upon a finding satisfactory to Buyer of no significant environmental liability.
Seller shall provide Buyer with reasonable access to the Property to conduct
the
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environmental assessment. Buyer shall provide Seller copies of all reports,
results and data, but not analysis, received by Buyer in connection with the
environment assessment. Buyer shall release, indemnify, defend and hold Seller
harmless from any liability, loss or damage to persons or property incurred
while, conducting the environmental assessment.
9. Contingent upon closing hereunder, Buyer shall defend,
indemnify and hold Seller harmless from any and all claims in favor of any
person for personal injury, death, or damage to property or to the environment,
or for any other claim or relief, arising directly or indirectly from, or
incident to, the use, occupation, operation, maintenance or abandonment of any
of the Properties, or condition of the property or promises, whether latent or
patent, and which are attributable to operations and activities conducted
subsequent to the Effective Date.
10. Seller shall defend, indemnify and hold Buyer harmless from
any and all claims in favor of any person for personal injury, death or damage
to property or to the environment, or for any other claim or relief, arising
directly or indirectly from, or incident to, (i) Seller's use, occupation,
operation, maintenance, or abandonment of any of the Properties attributable to
times prior to the Effective Date or (ii) any latent condition of the
Properties attributable to operations and activities conducted during which the
Properties were owned by or under the control of Seller.
11. Buyer agrees to accept full responsibility for and all costs
associated with plugging and abandoning all existing xxxxx listed on Exhibit
"A" and subsequently drilled xxxxx. Buyer is also responsible for abandoning
all production facilities on the Properties and restoring the surface. Buyer
shall complete the plugging and abandonment of xxxxx and surface restoration in
compliance with the rules and regulations of any governmental agency having
jurisdiction over the properties and with applicable provisions of the Leases.
12. The Closing of the transaction contemplated in this Agreement
and the transfer of the Properties shall occur on or before April 1, 1996, at
the office's of Xxxxxxxx & Associates, Inc., 0000 Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxx 00000 or such other date, time and place upon which Seller and Buyer may
agree in writing.
13. The purchase price shall be adjusted based on actual final
determined working interest and net revenue interest if they should vary from
the interest described in Exhibit "A", and expenditures incurred and revenues
received after the effective date referred to herein and prior to the date of
actual closing of the transaction. Seller shall be responsible for all
obligations incurred and be entitled to all revenues accrued prior to the
Effective Date herein, with respect to the interests conveyed pursuant hereto,
and Buyer shall be so responsible and entitled, respectively, for such
obligations incurred and revenues accrued thereafter. However, notwithstanding
the foregoing, it is recognized that Seller will continue to operate the
properties until the date of closing, and will be and remain responsible for
any and all costs, expenses, losses, liabilities and damages, other than
routine operating costs and expenses, attributable to the interests subject
hereto, such as, but not limited to, costs, expenses, damages, losses and
liabilities associated with blowouts, fires, or other unanticipated occurrences
of a non-routine nature.
14. For a period of three years after closing, Seller agrees not
to lease or cause to be leased any mineral property lying within one (1) mile
of the Properties
15. The Assignment to be made in accordance with this Agreement
shall be made with warranty of title by, through and under Seller, but not
otherwise.
16. BUYER UNDERSTANDS AND AGREES THAT THE PROPERTIES ARE SOLD "AS
IS" AND "WHERE IS", WITH ALL FAULTS AND DEFECTS, WITHOUT RECOURSE BY BUYER, ITS
SUCCESSORS AND/OR ASSIGNS, AGAINST SELLER AND WITHOUT COVENANT, REPRESENTATION
OR WARRANTY, EXPRESS, IMPLIED OR STATUTORY; AND WITHOUT LIMITATION OF THE
GENERALITY OF THE IMMEDIATELY PRECEDING CLAUSE, SELLER EXPRESSLY DISCLAIMS AND
NEGATES (a) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE
AND (b) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY.
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17. THE PARTIES AGREE TO EXECUTE AND DELIVER, AFTER THE CLOSING,
ANY AND ALL OTHER INSTRUMENTS AND AGREEMENTS TO ACCOMPLISH THE TRANSACTION
CONTEMPLATED HEREBY AND, WITHIN SIXTY (60) DAYS AFTER CLOSING, SHALL MAKE ALL
ADJUSTMENTS CONTEMPLATED IN PARAGRAPH 13 ABOVE FOR WHICH THE NECESSARY
INFORMATION WAS NOT AVAILABLE AT CLOSING. SELLER SHALL DELIVER TO BUYER ALL OF
ITS FILES RELATING TO THE PROPERTIES
18. SUBJECT TO TIME CONSTRAINT PROVISION OF PARAGRAPH 8, BUYER
SHALL NOT BE OBLIGATED TO CONSUMMATE THE PURCHASE DESCRIBED IN THIS AGREEMENT
UNTIL BUYER, AT ITS SOLE OPTION AND EXPENSE HAS COMPLETED A PHASE I
ENVIRONMENTAL STUDY AND THE RESULTS THEREOF, IN BUYER'S OPINION, BEING
SUFFICIENT TO PROCEED WITH THE CLOSING.
19. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA, EXCLUDING, HOWEVER, ANY PROVISION OF
CALIFORNIA LAW THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF A DIFFERENT
JURISDICTION.
20. The exhibits to this Agreement are incorporated herein by
reference.
21. The terms, covenants and conditions hereof bind and inure to
the benefit of Buyer and Seller and their successors and assigns and are
covenants running with the lands, Leases, equipment and facilities and with
each transfer or assignment of all or any part thereof.
22. Except for the obligations created pursuant to the provisions
of paragraphs 9., 10., 14. and 17. above, the warranties, covenants,
obligations, and indemnities contained herein shall not survive the Closing.
EXECUTED on the date first written above, to be effective on the
Effective Date.
SELLER
FORTUNE PETROLEUM CORPORATION
By: Xxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxxx
President
BUYER
SENECA RESOURCES CORPORATION
By: Xxxxx X. Xxxx
--------------------------------
Xxxxx X. Xxxx
Executive Vice President
13
EXHIBIT "A"
Leases:
1. That certain Oil and Gas Lease dated July 1, 1963, executed by Union
Oil Company of California, as Lessor in favor of Wainscoat & Xxxxxxx,
Inc., as Lessee, recorded July 31, 1963 in Book 2366, Page 39,
Official Records, Venture County, California, INSOFAR AND ONLY INSOFAR
as such lease covers the following described lands:
Lot Nos. 43 and 44, Survey No. 3151 known as the Twilight Consolidated
Placer Mining Claim, consisting of the Ireland and Twilight Placer
Claims and embracing a portion of Xxxxxxxx 0 Xxxxx, Xxxxx 00 Xxxx,
X.X.X. & M., SAVE AND EXCEPT:
Parcel 1: Portions of Lots 43 and 44, all depths
NW/4, W/2 NE/4, W/2 SW/4 of Lot 43;
N/2, SW/4 of Lot 44.
Parcel 2: Portions of Lots 43 and 44 lying below a depth of
eight hundred and fifty feet (850') into the Sespe
Formation or below a depth of eight hundred thirteen
feet (813') above sea level, whichever is deeper.
SE/4 of Xxx 00
Xxxxxx 0: Portion of Lot 43 lying below the base of the Sespe
Formation as encountered at 4,700' in the Xxxxxx
Exploration "Xxxxxxx" #129-21 Well located in the
Northwest Quarter (NW/4) of Section 00, Xxxxxxxx 0
Xxxxx, Xxxxx 00 Xxxx, X.X.X. & M.
E/2 NE/4; E/2 SW/4 and SE/4 of Lot 43.
2. That certain Oil and Gas Lease dated June 29, 1962 executed by The Los
Angeles Oil Company, as Lessor, in favor of Union Oil Company of
California, as Lessee, recorded December 29, 1965 in Book 2919, Page
446, Official Records, Ventura County. California. INSOFAR AND ONLY
INSOFAR as such lease covers the following described lands:
Parcel 1: That certain parcel of land known as Xxx 00, Xxxxxxxx
0 Xxxxx, Xxxxx 00 Xxxx, X.X.X. & M., known as and
called Xxxxxxx Oil Mine, as designated and delineated
on the official plat of the survey of said land
returned to the General Land Office by the Surveyor
General, as set forth in that certain assignment of
Oil and Gas Lease, recorded August 29, 1966 in Book
3085, Page 585, Official Records, excepting therefrom
that portion lying within Parcel 2 below and the
following described lands:
A. Portions of Xxx Xx. 00, Xxxxxxxx 0 Xxxxx, Xxxxx 00
Xxxx, X.X.X. & M., known as and called Xxxxxxx Oil
Mine, as designated and delineated on the official
plat of the survey of said land referred to the
General Land Office by the Surveyor General, more
particularly described as follows:
Parcel A-1, all depths:
Beginning at the corner common to Sections 20, 21, 28
and 00, Xxxxxxxx 0 Xxxxx, Xxxxx 00 Xxxx, X.X.X. & M.;
thence, North 0 degrees 30' 38" East 791.71 feet to a
point; thence, South 89 degrees 32' 54" East 553.61
feet to a point; thence, South 0 degrees 22' 53"
East 154.03 feet to the true point of beginning;
thence:
14
1st: South 88 degrees 54'20" East 1,280.23 feet,
to a point; thence.
2nd: North 0 degrees 39'29" East 1,358.25 feet, to
a point; thence,
3rd: North 88 degrees 54'20" West 1,283.02 feet,
to a point; thence,
4th: South 0 degrees 39'29" West 1,204.27 feet, to
a point; thence,
5th: South 0 degrees 33'53" East 154.03 feet, more
or less, to the true point of beginning,
EXCEPTING therefrom the West 20 acres.
containing 20 acres, more or less.
Parcel A-2, all depths:
The East 750' of the North 2,100' of Lot 40,
containing 36.00 acres, more or less.
Parcel 2: A portion of Xxx 00, Xxxxxxxx 0 Xxxxx, Xxxxx 190
West, S.B.B.& M., known as and called Xxxxxxx Oil
Mine, as designated and delineated on the official
plat of the survey of said land returned to the
General Land Office by the Surveyor General, from a
depth of one thousand one hundred fifteen (1,115')
feet below the surface thereof down to the base of
the Lower Sespe Formation as defined by four thousand
three hundred sixty seven (4,367') feet measured
depth in the initial test well, as set forth in that
certain document recorded October 26, 1992 as
Instrument No. 92-189156, described as follows:
Parcel A:
Beginning at the corner common to Sections 20, 21, 28
and 00, Xxxxxxxx 0 Xxxxx, Xxxxx 00 Xxxx, X.X.X. & M.,
thence North 0 degrees 30'38" East 791.71 feet to a
point; thence South 89 degrees 32'54" East 553.61
feet to a point; thence South 0 degrees 22'53" East
1,528.88 feet to the true point of beginning; thence
1st: South 88 degrees 54'20" East 1,255.29 feet to
a point; thence
2nd: North 0 degrees 39'29" East 1,374.43 feet to
a point; thence
3rd: North 88 degrees 54'20" West 1,280.23 feet,
more or less, to a point, thence
4th: South 0 degrees 22'53" East 1,374.85 feet,
more or less, to the true point of beginning.
Parcel B:
Beginning at the corner common to Sections 20, 21, 28
and 00, Xxxxxxxx 0 Xxxxx, Xxxxx 00 Xxxx, X.X.X. & M.,
thence North 0 degrees 30'38" East 791.71 feet to a
point; thence South 89 degrees 32;54" East 553.61
feet to a point; thence South 0 degrees 22'53" East
154.03 feet to the true point of beginning; thence
1st: South 88 degrees 54'20" East 1,280.23 feet to
a point; thence
2nd: North 0 degrees 39'29" East 1,358.25 feet to
a point; thence
3rd: North 88 degrees 54'20" West 1,283.02 feet to
a point; thence
4th: South 0 degrees 39'29" West 1,204.27 feet to
a point; thence
5th: South 0 degrees 22'53" East 154.03 feet, more
or less, to the true point of beginning,
EXCEPTING THEREFROM the East 20 acres, and
containing 20 acres more or less.
15
Well Name Working Interest Net Revenue Interest
(No Less Than)
(1) Xxxxxxx 2 100% 70.0%
(5) Xxxxxxx 11X-28 100% 70.0%
(5) Xxxxxxx 12-28 100% 70.0%
(2)(5) Xxxxxxx U76-28 100% 70.0%
(5) Xxxxxxx 000-00 000% 70.0%
(5) Ireland 000-00 000% 70.0%
(5) Ireland 000-00 000% 70.0%
(3) Twilight 2 100% --
(4) Twilight 3 100% 70.0%
(1) Shut-in in Vaqueros formation (Possible backup water disposal well)
(2) Horizontal Completion
(3) Active waste water disposal well
(4) Shut-in in Vaqueros formation
(5) Active producing well in Basal Sespe formation
16
[MAP]
Assessor's Map Bk.16-Pg.
County of Ventura, Calif.
Exhibit "A-1"
Outline of a portion of Xxxx Xx. 00, 00 & 00, Xxxxxxxx 0
Xxxxx, Xxxxx 19 West, S.B.B. & M., known as and called
Xxxxxxx Oil Mine, Ireland Placer Claim and Twilight Placer
Claim, more particularly described in Exhibit "A" hereto.
17
Recording Requested By and Return To:
Seneca Resources Corporation
0000 Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
EXHIBIT "B"
ASSIGNMENT, CONVEYANCE AND XXXX OF SALE
STATE OF CALIFORNIA )
) KNOW ALL MEN BY THESE PRESENTS
COUNTY OF VENTURA )
THIS ASSIGNMENT, CONVEYANCE AND XXXX OF SALE entered into this 1st day
of April, 1996, by and between FORTUNE PETROLEUM CORPORATION, 00000 Xxxxxx
Xxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx 00000 ("ASSIGNOR") and SENECA
RESOURCES CORPORATION, a Pennsylvania corporation, whose address is 0000
Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, ("ASSIGNEE");
WITNESSETH:
THAT ASSIGNOR for and in consideration of the sum of Ten Dollars
($10.00), and other good and valuable consideration, in hand paid, the receipt
and sufficiency of which is hereby acknowledged, does hereby, effective as of
7:00 a.m., Pacific Standard Time, December 1, 1995 ("Effective Date"), grant,
bargain, sell, assign, transfer, set over, and convey unto ASSIGNEE, it
successors and assigns:
1. All of ASSIGNOR's undivided interest in and to the oil and gas
leases described in Exhibit "A" attached hereto (the "Leases"),
insofar as the Leases cover and relate to the land described
in Exhibit "A" (the "Lands"), together with all of ASSIGNOR's
interests in and to all the property and rights incident
thereto, including all rights of ASSIGNOR in, to and under all
operating agreements, exploration agreements, pooling or
unitization agreements, farmout agreements, product purchase
and sale contracts, leases, permits, right-of-ways, easements,
licenses, options, orders, contracts and instruments in any
way relating to the Leases and the Lands.
2. All of ASSIGNOR's undivided interest in and to all of the
xxxxx situated on the Lands or on land spaced, pooled or
unitized therewith together with the personal property,
fixtures and improvements on, appurtenant to, or used or
obtained by ASSIGNOR in connection with the Lands or xxxxx or
with the production, treatment, sale or disposal of
hydrocarbons or water produced therefrom or attributable
thereto, including without limitation well equipment, casing,
tubing, tanks, crude oil, condensate and products placed into
storage or into pipelines after December 1, 1995, at 7:00
a.m., Pacific Standard Time, boilers, buildings, pumps,
motors, machinery, pipelines, gathering systems, power lines,
roads, and field processing plants, and all other
appurtenances thereunto belonging.
3. At ASSIGNEE's sole cost, risk and expense ASSIGNOR also hereby
grants and transfers to ASSIGNEE, its successors and assigns,
to the extent so transferable, the benefit of and the right to
enforce the covenants and warranties, if any, which ASSIGNOR
is entitled to enforce with respect to the Leases, Lands, and
xxxxx against ASSIGNOR's predecessors in title to same.
4. All other leasehold interest, overriding royalty interests,
mineral and royalty interest and other interests, if any,
owned by ASSIGNOR, in and to the Land and the Leases and in or
attributable to production therefrom.
18
THERE IS SAVED AND EXCEPTED FROM THIS ASSIGNMENT, CONVEYANCE AND XXXX
OF THE FOLLOWING:
A. A reservation by ASSIGNOR of any accounts receivable relating
to operations on the Leases prior to the Effective Date.
B. A reservation by ASSIGNOR of all liquid hydrocarbons in
storage on the Leases on the Effective Date.
TO HAVE AND TO HOLD UNTO ASSIGNEE, its successors and assigns, forever
subject to the following:
A. The provisions of paragraphs 9., 10., 14., and 17. of the
Purchase and Sale Agreement between the parties hereto dated
March 4, 1996. The terms of those paragraphs shall prevail in
the event of a conflict between their provisions and the terms
of this Assignment.
B. A post closing adjustment within sixty (60) days of closing to
account for all costs, expenses and income attributable to the
Properties after the Effective Date and borne or enjoyed by
ASSIGNOR and for all costs, expenses and income attributable
to the properties, before the Effective Date and borne or
enjoyed by ASSIGNEE and not included on the Closing Statement
executed at Closing by ASSIGNOR and ASSIGNEE.
C. ASSIGNEE shall accept full responsibility for any and all
costs associated with plugging and abandoning of all existing
xxxxx listed on Exhibit "A" and subsequently drilled xxxxx.
Buyer is also responsible for abandoning all production
facilities on the Properties and the restoration of the
surface in compliance with the provisions of the Leases and
all rules and regulations of the governmental agency having
jurisdiction over the Properties.
D. This instrument is made upon the understanding and agreement
that, all personal property and equipment conveyed hereby is
sold, assigned and accepted by ASSIGNEE in its "where is, as
is" condition without any warranties whatsoever, express or
implied or statutory, of marketability, quality condition,
merchantability and/or fitness for a particular purpose or
use, all of which is expressly disclaimed.
IN WITNESS WHEREOF, this instrument is executed as of the day and year
first written above.
ASSIGNOR
FORTUNE PETROLEUM CORPORATION
By:
--------------------------------
Xxxxxx X. Xxxxxxxxx
President
ASSIGNEE
SENECA RESOURCES CORPORATION
By:
--------------------------------
Xxxxx X. Xxxx
Executive Vice President
