Acquisition & Participation Agreement
Acquisition
& Participation Agreement
1. On
May
31, 2006, Texhoma
Energy, Inc.
entered
into a participation agreement to purchase a certain oil and gas lease (“the
Lease”) from Sunray
Operating Company LLC (“Sunray”
or the “Operator”).
2. Matrixx
Resource Holdings, Inc.,
a
company incorporated in Delaware, USA (“Buyer” or “Participant”) agrees to
purchase from Texhoma Energy, Inc. (“Seller” or “Texhoma”), individually or
jointly referred to as the Party or Parties, a specific interest in the Lease
and secure participation in the further development of the Lease as detailed
in
Section 5 and Exhibit “A” (“the Property”).
3. The
agreed total consideration payable by Buyer to Seller for the Property is one
hundred fifty thousand US dollars ($150,000) (the “Purchase Price”). The
Purchase Price is compensation to Sunray and Texhoma for past investments in
the
property and promotion. The Buyer is further obliged to pay the Operator
directly for its share of anticipated future investment in the Lease. The Buyer
hereby agrees to tender to the Seller the Purchase Price as follows:
| (i) |
On
August 29, 2006 fifty thousand US dollars
($150,000);
|
4. The
“Effective Date” shall be August 29, 2006 and the “Closing Date” of the sale and
purchase shall be August 29, 2006. Closing shall occur at a mutually agreed
location on the Closing Date. At Closing the Buyer shall tender, as hereinafter
set forth, the part-Purchase Price detailed in Section 2 (ii). Simultaneously,
Seller, as Assignor, shall execute and deliver to the Buyer two counterpart
originals of an assignment or assignments conveying the Property to the Buyer
as
of the Effective Date. Buyer agrees to execute the assignment as Assignee
therein. One set of the original and fully executed assignment shall be sent
for
recording in the relevant county in Texas immediately following Closing. Buyer
shall retain the other set of the original executed assignment. Seller shall
prepare and submit to Buyer for its review the proposed form of assignment
at
least 5 days prior to the Closing Date.
5. Buyer
will acquire and participate in a forty-two and a half percent (42.5%) Working
Interest (“WI”) in the Buck Snag Field (the “Property”), (See “Exhibit A”), for
$150,000;
6. Buyer
will acquire the Property on the following conditions:
| (i) |
Texhoma
will be given the right to back-in for a 12.5% WI after Payout of
the
Investment. Payout is defined as the receipt by the Buyer of the
equivalent of the Purchase Price and the Investment out of revenue
distribution from the Operator;
|
| (ii) |
Sunray
will remain the Operator of record for the Lease. As the Operator,
Sunray
will provide monthly Lease Operating Reports detailing expenditure,
investment, sales revenue and royalties paid on behalf of the Lease
owners
(Sunray, Texhoma and the Participant), accompanied by either a cash-call
or a revenue distribution cheque, whichever the case may be; Buyer
acknowledges that Sunray has the right to a one-eighth of eight-eights
(12.5% of 8/8) at payout.
|
| (iii) |
The
Parties will enter into negotiations leading to the execution of
a
mutually agreeable Joint Operating Agreement (JOA) based on standard
industry terms within 30 days of completion and closing of this Agreement.
|
7. Buyer,
and its representatives, shall be entitled to conduct a due-diligence review
of
the Property at the sole risk and expense of Buyer. Such due-diligence review
must be completed by Buyer not less than five days prior to Closing. Seller
shall provide Buyer and its representatives access to all data pertaining to
the
Property. Buyer shall satisfy itself as to title and physical condition of
the
Property including environmental condition.
8. All
expenses incurred by Buyer in connection with or related to the submission
of
this offer, the contemplated transaction, and all other matters relevant to
Closing, including without limitation, all fees and expenses of counsel,
accountants and financial advisors employed by the Buyer shall be borne solely
and entirely by Buyer.
9. Buyer
and
Seller agree that the terms and conditions of this Agreement as well as all
data
and information provided to Buyer by Seller shall be treated as confidential
and
shall not be disclosed to any third party without the prior written consent
of
the parties hereto, except as may be required by law. In the event Closing
does
NOT occur or this Agreement otherwise becomes null and void Buyer agrees to
return to Seller any and all information regarding the Property that were
provided to Buyer by Seller.
10. The
Buyer
of the Property shall be based solely on the Buyer’s evaluation of the Property
within the agreed period and Seller warrants no other disclosure. The election
to complete the acquisition and funding of the Property shall reside in the
sole
election of the Buyer.
11. This
Agreement shall be interpreted under the Laws of the State of
Texas.
12. This
Agreement and the exhibits hereto constitute the full and entire understanding
and agreement between the Parties and no Party shall be liable or bound to
any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein.
13. The
parties hereto agree to comply with any and all applicable laws, rules and
regulations affecting the Properties and the contemplated
transaction.
Agreed
to
and accepted this 29th day of August, 2006
for
Buyer:
By:
____________________________________________
Xxxxxxxxx
Xxxxxxxx, President
Agreed
to
and accepted this 29th day of August, 2006
for
Seller:
Texhoma
Energy, Inc.
By:
____________________________________________
Xxx
Xxxxxxx, President & CEO
Exhibit
“A”
Attached
to and made a part of that certain Agreement between Matrixx Resources Holding,
Inc., as Buyer, and Texhoma Energy, Inc., as Seller, regarding the purchase
and
sale of the hereinafter described “Property.”
The
Property:
1 Buck
Snag Field.
Leases
covering approximately 280 acres of land in Colorado County, Texas for a total
consideration of $150,000. Buyer will acquire an undivided 42.5% interest in
the
leases, subject to existing overriding royalty interests equal of 28% of
8/8.
The
proposed well dry hole cost is estimated to cost $170,000 gross (8/8ths) of
which Buyer’s obligation is $47,750 on or before August 21, 2006 and $24,500 on
or before August 29, 2006. Anticipated completion cost is $90,000 gross (8/8ths)
of which Buyer’s obligation is $37,800. Buyer’s fully paid interest shall
entitle Buyer to 42.5% of production revenues after royalty interests and
expenses are paid.
