EXHIBIT 10.8
LEXINGTON RESOURCES, INC.
November 8, 0000
Xxx Xxxxx Drilling and Operating,LLC
000 Xxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
LETTER AGREEMENT - DRILLING RIG CONTRACT
WHEREAS OAK HILLS DRILLING AND OPERATING, LLC, an Oklahoma limited liability
corporation ("Oak Hills Drilling") is the wholly owned operating subsidiary of
OAK HILLS DRILLING & Operating International, Inc., a Nevada corporation and Oak
Hills Drilling has been incorporated to provided services in the oil and gas
industry as provided herein;
WHEREAS Oak Hills Drilling is in business to provide preparations for drilling,
drilling of xxxxx, and a range of completion services including pipeline
installation, ground infrastructure deployment and real time reporting
machinery, well de watering equipment and services, hookup and installation of
water separation systems, and in addition can provide ongoing well monitoring
and service;
WHEREAS Lexington Oil & Gas Ltd. Co. ("Lexington") requires the services of a
full service drilling, completion, and company to provide ongoing operation of
xxxxx and has had difficulty obtaining consistent access to drilling services in
the past on the basis that is required by Lexington.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants, agreements, representations and warranties contained herein and other
good and valuable consideration (the receipt and sufficiency of which is hereby
acknowledged) the parties covenant and agree as follows:
This letter provides agreement by the parties and confirms that Oak Hills
Drilling of Oklahoma agrees to contract with Lexington for the drilling of ten
xxxxx with such first well commitment to be performed on Lexington's Calleigh
well to be located on its Xxxxxx Lease as soon as final rig preparation are made
by Oak Hills Drilling to supply the services required.
The intent of Lexington is to drill ten xxxxx on a continuous basis, however the
parties hereto agree that advance notice of Lexington's drilling schedule is
required to arrange for the orderly and cost effective operation of the drilling
rig by Oak Hills Drilling and that Oak Hills Drilling reserves the right to
schedule to operate and drill and provide their services to other companies to
the exclusion of Lexington if Lexington fails to provide adequate advance notice
of the schedule and location of drilling services to perform or provide adequate
funding for drilling to be conducted.
________________________________________________________________________________
US Offices: 0000 Xxxx Xxxx Xxxx Xx Xxx Xxxxx, XX 00000
Toll Free: (000) 000-0000, (000) 000-0000 Fax: (000) 000-0000
Internet: xxx.xxxxxxxxxxxxxxxxxx.xxx E-Mail: xxxxxxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
Lexington shall provide the next well location to be drilled after the Calleigh
well on or before the date that the well is spudded. Subsequent well drilling
scheduling shall be provided to Oak Hills Drilling on an ongoing basis and
updated as required in the circumstances so not to affect the orderly and cost
effective operation of the drilling rig by Oak Hills Drilling.
Lexington will be charged industry standards rates for drilling services to be
provided by Oak Hills Drilling, such charge out rates and costs are subject to
change with market conditions. Drilling services charge out rates will be
compared at least quarterly with prevailing industry rates, and rates charged to
Lexington will be no greater than the average of such prevailing rates then
charged.
The standard form of drilling agreements used in the industry as produced by the
International Association of Drilling Contractors with standard covenants shall
be utilized between parties.
The current officers and directors of Oak Hills Drilling are in common with
Lexington and or its parent company, Lexington Resources, Inc. and such
companies shall work to the best common interest of each party in a fair and
equitable manner in all respects according to industry standard conventions and
costs.
Agreed this 8th day of November, 2004.
_____________________________________
Lexington Oil & Gas Ltd. Co.
by Xxxxx Xxxxxx
_____________________________________
Oak Hills Drilling and Operating, LLC
by Xxxxxx Xxxxxx
