AGREEMENT
THIS
AGREEMENT (this “Agreement”) is entered into on the first day of November, 2006,
by and between Xxxxxxx Oil Company, a general partnership whose address is
801
Cherry Street, Unit #9, Xxxxxxx Plaza, Suite 1500, Xxxx Xxxxx, Xxxxx 00000-0000
(hereinafter referred to as “Xxxxxxx”) and Standard Drilling, Inc., a Nevada
corporation whose address is 0000 Xxxxx Xxxxxxx Xx., Xxxxx 000, Xxxxxxx, Xxxxx
00000 (hereinafter referred to as “Standard”). Standard and Xxxxxxx are
sometimes collectively referred to herein as the “Parties” and individually as a
“Party.”
WHEREAS,
Xxxxxxx is the owner of the oil and gas leases described in Exhibit A
(collectively the “Leases”); and
WHEREAS,
the Parties desire to set forth the terms pursuant to which Standard can earn
an
interest in the Leases by making a cash payment and drilling and completing
a
well into the Xxxxxxx Shale;
NOW,
THEREFORE, in consideration of the mutual benefits and obligations hereunder,
the Parties agree as follows:
1. Definitions.
The
following terms shall have the designated meanings:
“Assigned
Interests” means an undivided 60% of 8/8ths interest which yields a net revenue
interest of 48% in and to the following assets:
(a)
the
Leases (whose leasehold burdens cannot exceed 20%), including without limitation
all overriding royalty interests and working interests therein;
(b) the
oil
and gas xxxxx located upon the lands covered by the Leases or pooled or unitized
therewith including the Earning Well (collectively, the “Xxxxx”);
(c) all
platforms, water source xxxxx, injection xxxxx, tubular goods, well equipment,
lease equipment, production equipment, pipelines and all other personal
property, fixtures and facilities appurtenant to or used in connection with
the
Leases or the Xxxxx (collectively the “Facilities”);
(d) all
oil,
gas, distillate, condensate, casinghead gas or other liquid or vaporous
hydrocarbons, or other minerals (collectively, the “Hydrocarbons”), produced
from or attributable to the Leases from and after the Effective Time, and all
Hydrocarbons produced prior to the Effective Time and in storage as of the
date
of the Assignment;
(e) all
production sales contracts, transportation agreements, pooling agreements,
unitization agreements, operating agreements, processing agreements, surface
leases, office or building leases, easements, permits, licenses and
rights-of-way, orders of governmental authorities, and all other contracts,
agreements and instruments related to or utilized in connection with the Leases,
Xxxxx, Facilities, or the production, storage, treatment, transportation, sale
or disposal of Hydrocarbons or other substances therefrom (the “Contracts”);
and
(f) copies
of
all of Assignor’s files, records and data regarding the Leases, Xxxxx and
Facilities including without limitation, all abstracts of title, title opinions,
title curative documents, title records, leases, assignments, contracts,
correspondence, geologic, geophysical and seismic records, data and information,
and production records, logs, core data, pressure data and decline curves,
production curves accounting records and all related items (the “Files”).
“Assignment”
means an assignment substantially in the form of Exhibit B.
“Xxxxxxx
Group” shall mean, individually or in any combination, Xxxxxxx, its affiliates,
and each of their respective directors, officers, members and
employees.
“Defend”
shall mean the obligation of the indemnitor at the indemnitees’ election
(i) to defend the indemnitees at its sole expense or (ii) to reimburse
the indemnitees for the indemnitees’ reasonable expenses incurred in defending
themselves. Notwithstanding the indemnitee’s election of option (i) above, the
indemnitee shall be entitled to participate in its defense at its sole
cost.
“Drilling
Operations” means any and all operations related to or arising out of drilling
or completing the Earning Well or any replacement well therefore.
“Drilling
Rig” means a drilling rig substantially meeting the specifications set forth in
Exhibit C which is to be supplied by Standard and which is capable of reaching
the total depth of the lateral in the Xxxxxxx Shale formation. If Standard
is
unable to supply such drilling rig but elects to go forward, as provided for
in
Section 2.2 below, with a third party drilling rig secured by either Standard
or
Xxxxxxx that is capable of reaching the total depth of the lateral in the
Xxxxxxx Shale formation, then the term "Drilling Rig” shall mean such third
party drilling rig.
“Earning
Well” shall have the meaning given that term in Section 3.1.
“Effective
Time” shall have the meaning given that term in the Assignment.
“Force
Majeure” means acts of God, acts of government or any agency, subdivision or
instrumentality thereof, acts of civil disorder, acts of industrial disorder,
failures of facilities or vessels, shortages, any inability to obtain or
acquire, at reasonable cost, necessary authorizations or equipment, and any
other occurrence, condition, or situation not within the control of the Party
and that could not have been prevented by the exercise of reasonable
diligence.
“Losses”
shall mean claims, demands, causes of action, losses, liabilities, indemnity
obligations, costs, damages or expenses of any kind and character (including
attorney’s fees and other legal expenses and punitive, exemplary and the
multiplied portion of multiplied damages).
“JOA”
means a joint operating agreement substantially in the form of Exhibit D
governing the operation of the Leases.
“Standard
Group” shall mean, individually or in any combination, Standard, its affiliates,
and each of their respective directors, officers and employees.
“Well
Costs” shall mean all costs associated with the Earning Well incurred up to the
date when Standard has completed the on-lease tie-in point to a gathering
pipeline that will transport gas from the Leases to a third party gathering
or
sales pipeline, including, but not limited to, costs of permitting, surveying,
title opinions, roads, location, drilling, completion and equipping.
2.
Cash
Consideration.
2.1 Payment.
Standard shall pay to Xxxxxxx the sum of $250,000 (the “Cash Consideration”) on
or before November 1, 2006 in partial consideration for the Assigned Interests,
subject to the terms hereof.
2.2 Mobilization
and Forfeiture.
Standard shall promptly notify Xxxxxxx when the Drilling Rig is in a condition
to permit mobilization to location (the “Rig Completion Notice”). If Standard
fails to provide such notice on or before November 30, 2006, it shall forfeit
the Cash Consideration (subject to Section 2.3) and this Agreement shall
terminate. If, prior to November 30, 2006, Standard learns that it will be
unable to mobilize the Drilling Rig to location by such date, it will give
Xxxxxxx immediate notice thereof and either party will be free to locate and
secure another drilling rig in order to save the Leases prior to the end of
their primary terms. In that event, if either Standard or Xxxxxxx locates and
secures another drilling rig for the Earning Well, Standard must elect within
forty eight (48) hours of receipt of an executed drilling rig contract to either
go forward with the drilling of the Earning Well or, if it elects not to do
so
or fails to respond within the forty eight (48) hour notice period (which shall
be deemed an election not to go forward), Standard shall forfeit the Cash
Consideration (subject to Section 2.3 below) and this agreement shall terminate.
If Standard pays the Well Costs associated with the Drilling Operations,
Standard shall be deemed to have satisfied its obligation to drill and complete
the Earning Well. Provided (i) Xxxxxxx has obtained all necessary consents
and
authorizations for Standard to drill the Earning Well and receive the
Assignment, including those required under Section 3.1, (ii) the drillsite
location for the Earning Well is completed as necessary to support the Drilling
Operations by the Drilling Rig, and (iii) Xxxxxxx is not in breach of this
Agreement, Xxxxxxx shall notify Standard,
or the
other agreed to drilling contractor, when
it
is ready for Standard to mobilize the Drilling Rig to location (the
“Mobilization Notice”). If, following receipt of a Mobilization Notice in
compliance with the foregoing, and
if
Standard has provided Xxxxxxx the Rig Completion Notice, Standard
fails to commence actual drilling with the Drilling Rig on location within
fourteen (14) days after the later to occur of the Rig Completion Notice or
such
Mobilization Notice (such 14 day period being referred to herein as the
“Mobilization Period”), Standard shall forfeit the Cash Consideration (subject
to Section 2.3) and this Agreement shall terminate. If
Standard has given Xxxxxxx the Rig Completion Notice and
Xxxxxxx
fails to give Standard a Mobilization Notice in compliance with the foregoing
or
fails to obtain the consents, permits and authorizations in accordance with
Section 3.1, in either case at least fourteen (14) days prior to Lease
termination, or if this Agreement terminates prior to Xxxxxxx assigning the
Assigned Interests to Standard, Xxxxxxx shall promptly reimburse Standard for
all actual, out of pocket Well Costs.
2.3 Return
of Cash Consideration.
Xxxxxxx
shall promptly return the Cash Consideration to Standard if Xxxxxxx breaches
this Agreement, including without limitation failing to obtain all necessary
consents, permits and authorizations in accordance with Section 3.1, failing
to
deliver the Assignment upon completion of the Earning Well in accordance with
Section 8, or breaching at any time during this Agreement its warranty of title
set forth in Section 5.3 and the Assignment.
3.
Earning
Well.
3.1 Consents
and Authorizations.
Xxxxxxx
shall obtain, in form and substance satisfactory to Standard, acting reasonably,
the consents and authorizations described below that are necessary to permit
Standard to have the right to, at its sole cost through the on-lease tie-in
point to a gathering pipeline that will transport the gas from the Leases to
a
third party gathering or sales pipeline, drill, complete, and equip one (1)
well
substantially at the location and in accordance with the drilling program and
the specifications set forth in Exhibit E (the “Earning Well”), to receive the
Assignment, and to further assign all or part of its interest to Calibre Energy,
Inc. (“Calibre”), as follows:
(a) drilling
permit or any other necessary permit, any consent to build the drillsite
location, clear title for drilling purposes, proof of surface damage payment,
proof of drilling water payment and proof of permission from Xxxxxxx County
to
access county roads; and
(b) all
necessary consents to the Assignment (and further assignment to Calibre)
including any consents by the lessors under the Leases.
3.2 Costs
for the Earning Well.
If any
Well Costs are incurred with respect to any matter (including but not limited
to
facilities, equipment, improvements, roads, permits, surveys, or opinions)
that
is subsequently used in connection with any well or operation on the Leases
other than the Earning Well, Xxxxxxx shall promptly reimburse Standard for
its
appropriate working interest percentage
of the
Well Costs attributable to such matter.
3.3 Drilling
Well as Consideration/No Obligation.
Nothing
in this Agreement shall be construed as obligating Standard to drill or complete
the Earning Well, or any well, it being acknowledged and agreed that drilling
and completion of the Earning Well constitutes performance consideration from
Standard (in addition to the Cash Consideration) for the Assigned Interests
and
Standard shall have no liability, and Xxxxxxx shall release and indemnify
Standard from any such liability, for failing to drill and complete the Earning
Well, or any well. If Standard elects to drill and complete the Earning Well,
Standard shall consult with Xxxxxxx regarding the technical aspects of drilling
and completing the Earning Well.
4.
Standard’s
Representations and Warranties.
Standard hereby represents and warrants as follows:
4.1 Standard
is a corporation duly organized and validly existing under the laws of Nevada.
Standard is qualified to conduct business in each jurisdiction where necessary
to perform this Agreement.
4.2 Standard
has full power and authority to execute and perform this Agreement and the
Assignment.
4.3 Standard
has the financial assets and capability to meet its financial obligations under
this agreement.
5.
Xxxxxxx’x
Representations and Warranties.
Xxxxxxx
hereby represents and warrants as follows:
5.1 Xxxxxxx
is a general partnership duly organized and validly existing under the laws
of
Texas. Xxxxxxx is qualified to conduct business in each jurisdiction where
necessary to perform this Agreement.
5.2 Xxxxxxx
has full power and authority to execute and perform this Agreement and to
execute and deliver the Assignment.
5.3 The
Leases are in full force and effect, and neither Xxxxxxx nor any other person
is
in breach or default thereunder (or with the giving of notice or lapse of time
or both, would be in breach or default). Xxxxxxx owns the Leases free and clear
of any liens, mortgages, security interests, charges, pledges, restrictions,
ownership rights of third persons, or other defects or encumbrances of any
kind
or character except for the terms and conditions of the Leases. Xxxxxxx is
(i)
entitled to receive not less than 80% of all Hydrocarbons produced, saved and
marketed from the Leases or any Xxxxx thereon or lands covered thereby, all
without reduction, suspension or termination of such interest throughout the
duration of the life of such Leases and Xxxxx, and (ii) obligated to bear not
more than 100% of the costs and expenses relating to the maintenance,
development and operation of such Leases and any Xxxxx, without increase
throughout the duration of the life of such Leases or Xxxxx.
6.
Indemnification.
6.1 Standard’s
Personnel.
Standard shall release, Defend, indemnify, and hold harmless Xxxxxxx Group
from
and against any and all Losses arising out of the bodily injury or death, or
property damage or loss, of any of Standard’s contractors (but in no event
including Xxxxxxx), representatives, employees, agents or invitees (or the
representatives, employees, agents or invitees of such contractors), arising
out
of, related to or in connection with Drilling Operations, REGARDLESS
OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE,
STRICT LIABILITY OR OTHER FAULT OF ANY MEMBER OF XXXXXXX GROUP, OR A PREEXISTING
CONDITION.
6.2 Xxxxxxx’x
Personnel.
Xxxxxxx
shall release, Defend, indemnify, and hold harmless Standard Group from and
against any and all Losses arising out of the bodily injury or death, or
property damage or loss, of any of Xxxxxxx’x contractors (but in no event
including Standard), representatives, employees, agents or invitees (or the
representatives, employees, agents or invitees of such contractors), arising
out
of, related to or in connection with Drilling Operations, REGARDLESS
OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE,
STRICT LIABILITY OR OTHER FAULT OF ANY MEMBER OF STANDARD GROUP, OR A
PREEXISTING CONDITION.
6.3 Insurance
Support/Limitation.
The
mutual indemnity obligations in Sections 6.1 and 6.2 above shall be
supported by insurance provided by the Parties in equal amounts, of the types
described in Exhibit F. Notwithstanding anything in this Agreement to the
contrary, (i) in the event enforcement of Sections 6.1 and/or 6.2
above is governed by the Texas Anti-Indemnity Statute (Tex. Civ. Prac. &
Rem. Code Xxx. §§127.001-127.007 (1986 & Supp. 1996) as amended) or similar
statute in another jurisdiction, and (ii) to the extent the indemnified
losses under such Section 6.1 or 6.2, as applicable, result from the
indemnitee’s negligence, then the obligations of the indemnitor under such
Section 6.1 or 6.2, as applicable, shall be limited to the extent of
insurance required pursuant to this Section 6.3 (or any such greater amount
allowed by law).
6.4 Standard’s
Property.
Standard shall release, Defend, indemnify, and hold harmless Xxxxxxx Group
from
and against any and all Losses arising out of the damage or loss of (or patent
or license infringement resulting from the use of) Standard Group’s property,
including the Drilling Rig (collectively, “Standard’s Property”) arising out of,
related to or in connection with Drilling Operations, REGARDLESS
OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE,
STRICT LIABILITY OR OTHER FAULT OF ANY MEMBER OF XXXXXXX GROUP, OR A PREEXISTING
CONDITION.
6.5 Xxxxxxx’x
Property.
Xxxxxxx
shall release, Defend, indemnify, and hold harmless Standard Group from and
against any and all Losses arising out of the damage or loss of (or patent
or
license infringement resulting from the use of) Xxxxxxx Group’s property arising
out of, related to or in connection with Drilling Operations, REGARDLESS
OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT OR CON-CUR-RENT
NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT OF ANY MEMBER OF STANDARD GROUP,
OR
A PREEXISTING CONDITION.
6.6 Indirect
or Consequential Damages.
The
Parties waive and release all claims against the other Party for indirect or
consequential damages arising out of this Agreement or Drilling Operations,
REGARDLESS
OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE
OR STRICT LIABILITY OF THE OTHER PARTY, OR A PREEXISTING
CONDITION.
As used
herein, “indirect
or consequential damages”
shall
include, but not be limited to, loss of revenue, profit or use of capital,
production delays, loss of product, reservoir loss or damage, losses resulting
from failure to meet other contractual commitments or deadlines and downtime
of
facilities.
6.7 No
Limit.
Except
as otherwise provided herein, the foregoing indemnity obligations shall not
be
limited to the amount of insurance carried by the Parties.
6.8 Ownership
Indemnity.
Upon
execution and delivery of the Assignment, but subject to Xxxxxxx’x indemnity
obligation below and the JOA, Standard agrees to indemnify, release, Defend
and
hold harmless Xxxxxxx Group from and against any and all Losses caused by,
arising from, attributable to, or alleged to be caused by, arising from or
attributable to the ownership or operation of the Assigned Interests and arising
from and after the Effective Time. Upon execution and delivery of the
Assignment, Xxxxxxx agrees to indemnify, release, Defend and hold harmless
Standard Group from and against any and all Losses caused by, arising from,
attributable to, or alleged to be caused by, arising from or attributable to
the
ownership or operation of the Assigned Interests and arising prior to the
Effective Time.
6.9 Indemnified
Groups.
The
provisions of this Section 6 shall extend to and be enforceable by and for
the
benefit of the members of Xxxxxxx Group and Standard Group.
7. Insurance.
During
Drilling Operations, Standard shall carry insurance in the amounts and of the
types set forth in Exhibit F.
8. Assignment. Promptly
upon installation of the Christmas tree for the Earning Well, Xxxxxxx shall
execute and deliver the Assignment to Standard (or its designee).
9. JOA
and Subsequent Drilling.
9.1 JOA.
Upon
execution and delivery of the Assignment, the Parties shall cause to be executed
and delivered the JOA and appoint Xxxxxxx as operator thereunder.
9.2 Subsequent
Drilling Operations.
Standard shall have the right to submit proposals for all future drilling
operations with respect to the Leases. Provided that Standard’s proposal
includes financial terms no less favorable than those offered by reputable
third parties using comparable equipment and crews, and provided that Xxxxxxx
is
satisfied with the quality and efficiency of Standard’s equipment and crews, in
its sole discretion, Xxxxxxx shall retain Standard to conduct such drilling
operations.
10. Miscellaneous.
10.1 Confidentiality.
The
Parties agree that this Agreement and any financial or technical information
furnished or disclosed to a Party hereunder shall not be disclosed or made
available to any other Person without the prior written consent of the other
Party; provided that nothing herein shall limit the disclosure of any such
information (i) to the extent required by statute, rule, regulation or judicial,
administrative or regulatory process, (ii) to counsel for the Parties, (iii)
to
auditors or accountants of the Parties, (iv) in connection with any litigation
to which the Party is a party, (v) to an affiliate of the Party, and (vi) to
a
bona fide potential purchaser from the Party. Notwithstanding the above
restrictions, neither Party shall have any obligation for any disclosure of
confidential information that is, or becomes, generally known to the public
without breach of the terms of this Agreement. The confidentiality obligations
in this section shall survive termination of this Agreement for one (1) year,
whereupon they shall likewise terminate.
10.2 Relationship
of Parties.
The
relationship of the Parties will be that of independent contractors and will
not
be that of lender-borrower, partners, joint venturers, principal and agent
or
employer and employee. Nothing herein shall be construed to create a
partnership. Accordingly, the Parties each herein disclaim and waive any
fiduciary duty that either of them may be argued to have to the other. Neither
Party has any authority whatsoever to, and neither Party shall: (i) make any
agreement, representation or warranty in the name of or on behalf of the other
Party; (ii) bind the other Party in any matter; (iii) act as the agent or
representative of the other Party; or (iv) assume, create or incur any
obligation or liability of any nature whatsoever, in the name of or on behalf
of
the other Party whether by contract or otherwise. Nothing herein shall be
construed to (A) limit the right of the Parties to independently pursue other
business opportunities, whether of a similar or dissimilar nature to those
involved in this agreement, or (B) create any right or option of either Party
to
participate in such independent business opportunities of the other
Party.
10.3 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Texas other than such laws that would apply the laws of another
jurisdiction.
10.4 Force
Majeure.
The
Parties shall be relieved of their respective obligations (other than their
obligations to pay or repay the Cash Consideration and Xxxxxxx’x obligation
under Section 3.1) under this Agreement to the extent that the performance
thereof is prevented by Force Majeure. The Party claiming it is prevented from
performing an obligation hereunder as a result of Force Majeure shall give
notice thereof to the other Party as soon as practicable after the commencement
thereof and shall exercise reasonable diligence to overcome such Force Majeure
and resume performance; provided, however, that the settlement of any labor
dispute to prevent or end any such Force Majeure shall be within the sole
discretion of the claiming Party.
10.5 Interpretation.
As used
herein, “include” or “including” shall be deemed to mean including without
limitation. Headers are inserted for convenience only and shall not be deemed
to
affect the meaning of this Agreement. This Agreement shall not be construed
for
or against any Party on the grounds that such Party was the drafter of this
Agreement, it being acknowledged and agreed that this Agreement was mutually
drafted by the Parties.
10.6 Entire
Agreement.
This
Agreement and all Exhibits hereto embody the final, entire agreement between
the
Parties hereto and supersedes any and all prior commitments, agreements,
representations, and understandings, whether written or oral, relating to the
subject matter hereof.
10.7 Assignability.
No
Party shall assign, transfer or otherwise dispose of any of its rights or
obligations hereunder, without the consent of the other Party; provided,
however, that Standard may assign the right to acquire the Assigned Interest
hereunder to any of its affiliates designated for such purpose.
10.8 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original instrument, but all which shall constitute but one
Agreement.
IN
WITNESS WHEREOF the
Parties have executed this Agreement as of the date first indicated
above.
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XXXXXXX
OIL COMPANY
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By:
Xxxxxxx Oil Co., Inc., its Managing General Partner
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By:
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Name:
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Title:
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By:
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EXHIBIT
A
LEASES
EXHIBIT
B
FORM
OF ASSIGNMENT
ASSIGNMENT,
XXXX OF SALE AND CONVEYANCE
THIS
ASSIGNMENT, XXXX OF SALE AND CONVEYANCE (this “Assignment”), effective as of
7:00 a.m. local time on _______________, 2006 (the “Effective Time”), is made
from Xxxxxxx Oil Company, a Texas general partnership, whose address is 801
Cherry Street, Unit #9, Xxxxxxx Plaza, Suite 1500, Xxxx Xxxxx, Xxxxx 00000-0000
(hereinafter called “Assignor”) to [Standard Drilling, Inc. or its designee], a
Nevada corporation, whose address is 0000 Xxxxx Xxxxxxx Xx., Xxxxx 000, Xxxxxxx,
Xxxxx 00000 (hereinafter called “Assignee”).
ARTICLE
I
GRANTING
AND HABENDUM CLAUSES
For
good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Assignor does hereby grant, bargain, sell, transfer, convey,
set
over, assign and deliver unto Assignee an undivided 60% of 8/8 interest in
and
to the following assets (collectively, such interests in such assets are
referred to as the “Assigned Interests”):
(a)
the
oil
and gas leases described in Attachment A (collectively the “Leases”), including,
without limitation, all overriding royalty interests and working interests
therein;
(b) the
oil
and gas xxxxx located upon the lands covered by the Leases or pooled or unitized
therewith including the well described in Attachment A (collectively, the
“Xxxxx”);
(c) all
platforms, water source xxxxx, injection xxxxx, tubular goods, well equipment,
lease equipment, production equipment, pipelines and all other personal
property, fixtures and facilities appurtenant to or used in connection with
the
Leases or the Xxxxx (collectively the “Facilities”);
(d) all
oil,
gas, distillate, condensate, casinghead gas or other liquid or vaporous
hydrocarbons, or other minerals (collectively, the “Hydrocarbons”), produced
from or attributable to the Leases from and after the Effective Time, and all
Hydrocarbons produced prior to the Effective Time and in storage as of the
date
hereof;
(e) all
production sales contracts, transportation agreements, pooling agreements,
unitization agreements, operating agreements, processing agreements, surface
leases, office or building leases, easements, permits, licenses and
rights-of-way, orders of governmental authorities, and all other contracts,
agreements and instruments related to or utilized in connection with the Leases,
Xxxxx, Facilities, or the production, storage, treatment, transportation, sale
or disposal of Hydrocarbons or other substances therefrom (the “Contracts”);
and
(f) copies
of
all of Assignor’s files, records and data regarding the Leases, Xxxxx and
Facilities including without limitation, all abstracts of title, title opinions,
title curative documents, title records, leases, assignments, contracts,
correspondence, geologic, geophysical and seismic records, data and information,
and production records, logs, core data, pressure data and decline curves,
production curves accounting records and all related items (the
“Files”);
TO
HAVE
AND TO HOLD the Assigned Interests unto Assignee and its successors and assigns,
forever.
ARTICLE
II
WARRANTY
2.1 Warranty.
Assignor hereby binds itself, its successors and assigns, subject to the terms
of the Leases, to warrant and forever defend all and singular the Assigned
Interests unto Assignee against every person whosoever lawfully claiming or
to
claim the same by, through or under Assignor but not otherwise. Assignor does
further bind and obligate itself and its successors and assigns to warrant
and
forever defend unto Assignee, its successors and assigns, against all persons
lawfully claiming or to claim the same or any part thereof by, through or under
Assignor, but not otherwise, that, as a result of the conveyance of the Assigned
Interests pursuant to this Assignment and pursuant to the foregoing warranty,
Assignee is and will be (i) entitled to receive not less than 48% (being 60%
of
80% of 8/8) of all Hydrocarbons produced, saved and marketed from the Leases
or
any xxxxx thereon or lands covered thereby, all without reduction, suspension
or
termination of such interest throughout the duration of the life of such Leases
and Xxxxx; and (ii) obligated to bear not more than 60% of the costs and
expenses relating to the maintenance, development and operation of such Leases
or Xxxxx, without increase throughout the duration of the life of such Leases
or
Xxxxx.
2.2 Subrogation. Assignor
hereby transfers and assigns unto Assignee, its successors and assigns, all
of
its right, title and interest under and by virtue of all covenants and
warranties pertaining to the Assigned Interests, express or implied (including,
without limitation, title warranties and manufacturers,’ suppliers’ and
contractors’ warranties), that have heretofore been made by any of Assignor’s
predecessors in title, or by any third party manufacturers, suppliers and
contractors. This Assignment is made with full substitution and subrogation
in
and to all of the covenants and warranties that Assignor has or may have against
predecessors in title and with full subrogation of all rights accruing under
the
applicable statutes of limitations and all rights and actions of warranty
against all former owners of the Assigned Interests.
2.3 Disclaimers. All
tangible equipment and personal property included in the Assigned Interest
is
sold “AS
IS, WHERE IS” AND ASSIGNOR MAKES NO, AND DISCLAIMS ANY, REPRESENTATION OR
WARRANTY, WHETHER EXPRESSED OR IMPLIED, AND WHETHER BY LAW, STATUTE OR
OTHERWISE, AS TO FITNESS FOR ANY PARTICULAR PURPOSE, MERCHANTABILITY, CONFORMITY
OF MODELS OR SAMPLES OF MATERIALS, AND PHYSICAL CONDITION.
Assignor and Assignee agree that to the extent required by applicable law to
be
operative, the disclaimers of certain warranties contained in this paragraph
are
conspicuous. Nothing in this Section 2.3 shall impair the warranty of title
given by Assignor in Section 2.1 hereof.
ARTICLE
III
MISCELLANEOUS
3.1 Further
Assurances. Assignor
covenants and agrees to execute and deliver to Assignee all such other and
additional conveyances, instruments and other documents and to do all such
other
acts and things as may be necessary to more fully vest in Assignee record title
to all of the Assigned Interests herein granted or intended to be granted,
and
to put Assignee in actual possession thereof.
3.2 Assumption. Assignee
expressly assumes all of Assignor's obligations relating to the Assigned
Interests but only insofar as same arise and are attributable to periods of
time
from and after the Effective Time.
3.3 Counterparts.
This
Assignment may be executed in any number of counterparts, and each counterpart
hereof shall be deemed to be an original instrument, but all such counterparts
together shall constitute but one conveyance.
3.4 Successors
and Assigns.
This
Assignment shall bind and inure to the benefit of Assignor and Assignee and
their respective successors and assigns.
Executed
this ___ day of _________________, 2006, but effective for all purposes as
of
the Effective Time.
|
ASSIGNOR:
|
|
|
Xxxxxxx
Oil Company
|
|
|
By:
Xxxxxxx Oil Co., Inc., its Managing General Partner
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
ASSIGNEE:
|
|
|
[Standard
Drilling, Inc. or its designee]
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
ACKNOWLEDGMENT
State
of
Texas
§
County
of
_________ §
This
instrument was acknowledged before me on ________(date) by __________(name
of
officer), ________ (title of officer), on behalf of Xxxxxxx Oil Co., Inc.,
as
Managing General Partner of Xxxxxxx Oil Company .
|
(SEAL)
|
|
|
|
(Signature
of Officer)
|
||
|
|
|
(Title
of Officer)
|
ACKNOWLEDGMENT
State
of
Texas §
County
of
_________ §
This
instrument was acknowledged before me on ________(date) by __________(name
of
officer), ____________(title of officer), of [Standard Drilling, Inc. or its
designee], a ________________ corporation, on behalf of said corporation.
|
(SEAL)
|
|
|
|
(Signature
of Officer)
|
||
|
|
|
(Title
of Officer)
|
ATTACHMENT
A TO ASSIGNMENT
LEASES/WELL
EXHIBIT
C
DRILLING
RIG
EXHIBIT
D
FORM
OF JOINT OPERATING AGREEMENT
[To
be attached]
EXHIBIT
E
DRILLING
PROGRAM AND WELL SPECIFICATIONS
EXHIBIT
F
INSURANCE
