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EXHIBIT 2.1
SOUTHERN MINERAL CORPORATION
000 XXXXXX, XXXXX 0000
XXXXXXX, XXXXX 00000-4708
(000) 000-0000
November 11, 1997
Xx. Xxxx X. Xxxxxxx
GPI Energy, Inc.
0000 Xxxxxxx, Xxxxx 00
Xxxxxxx, Xxxxx 00000
Re: Acquisition of Oil and Gas Properties
Lake Raccourci Field, LaFourche Parish, Louisiana
Dear Xx. Xxxxxxx:
Southern Mineral Corporation ("Buyer"), hereby agrees to buy the oil and gas
properties described in Exhibit A attached hereto (the "Properties"), from GPI
Energy, Inc. ("Seller"), who agrees to sell and assign the Properties subject
to the following term and conditions:
1. Purchase Price. The purchase price shall be $5,400,000.00.
2. Effective Date: The effective date shall be November 1, 1997.
3. Closing. Unless otherwise agreed, closing of this sale shall take
place at Buyer's offices on or before November 24, 1997. At closing the
following shall occur:
(a) Seller shall deliver to Buyer an assignment and shall further
deliver to Buyer such other state and federal assignments as are necessary to
accomplish the intent of this agreement;
(b) Seller shall deliver to Buyer a settlement statement at
closing that shall set forth the parties' best estimate of the adjustments
described in Section 5 hereafter;
(c) Seller shall deliver letters in lieu of transfer orders in
form satisfactory to Buyer;
(d) Buyer shall deliver to Seller, by cashier's check or wire
transfer an amount equal to the purchase price, as adjusted in accordance with
the settlement statement described in Section 3.(b) above;
(e) Xxxxx and Seller agree to deliver, each to the other, any
other documents, instruments or writings necessary to accomplish the intent of
this agreement.
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Xx. Xxxx X. Xxxxxxx
November 11, 1997
Page 2
4. Seller's Representations and Buyer Due Diligence. Seller represents
that the working interests and net revenue interests for the Properties are as
set forth on Exhibit A. After execution hereof, Seller shall make available to
Buyer all of its files and records relating to the Properties. Buyer may
conduct such title and due diligence with respect to the Properties as it deems
necessary. On or before the closing of business on the third business day
prior to closing, Buyer shall submit to Seller a list of title defects, if any.
In the event that Buyer submits such a list or in the event any of the above
representations are false, then Seller and Buyer shall meet and in good faith
attempt to cure such defects or misrepresentations. If Seller determines that
it is unable to cure any of such defects, then Seller and Buyer shall meet and
in good faith attempt to agree on a reasonable purchase price adjustment. If
Buyer and Seller cannot reach such agreement, then either Buyer or Seller may
elect to terminate this agreement, in which event this agreement shall be of no
further force or effect. The representations set forth above shall not survive
closing.
5. Purchase Price Adjustments. All monies received from production sold
prior to the effective date will belong to Seller and all monies received from
production sold after the effective date will belong to Buyer. All expenses,
excise, severance, ad valorem and production taxes incurred prior to the
effective date will be the responsibility of Seller. Buyer will be responsible
for such items incurred after the effective date. If necessary, Seller shall
prepare and deliver to Buyer as soon as possible following closing, but in any
event before ninety (90) days after the closing, a statement setting forth the
adjustments described.
6. Buyer and Seller agree that there are no gas or condensate imbalances
as of the Effective Date, and should any be found, the Purchase Price shall be
adjusted accordingly.
7. Miscellaneous.
(a) Investment Knowledge. Buyer is an experienced and
knowledgeable investor in the oil and gas business. Xxxxx acknowledges that
Xxxxx was provided opportunity to review Seller's records and information and
conduct visits to the Properties prior to offering to purchase the Properties.
Buyer is purchasing the Properties solely on Xxxxx's own independent
evaluation, investigation, analysis, verification and judgment, without relying
on statements of Seller, its employees, agents, officers, directors or
representatives.
(b) Confidentiality. Seller acknowledges that Buyer is a publicly
held company and has certain responsibilities and duties as to disclosure.
However, Xxxxx agrees to keep terms of this agreement confidential and not to
disclose the Purchase Price or the name of Seller if Xxxxx chooses to announce
that it has acquired an interest in the Properties. Furthermore, Xxxxx agrees
not to disclose the terms of this agreement to any other working interest
owners in the Properties or to anyone else which Buyer is not obligated to do
so by nature of being a public company. Xxxxxx agrees to keep the terms of
this agreement confidential and not to disclose to anyone, including, but not
limited to, any working interest owners in the Properties, the terms of this
agreement.
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Xx. Xxxx X. Xxxxxxx
November 11, 1997
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(c) Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without regard to
its principles of conflicts of laws.
(d) Entire agreement. This agreement supersedes all prior
agreements between the parties (written and oral) and is intended as a complete
and exclusive statement of the terms of the agreement between the parties.
This agreement may be amended only by a written instrument duly executed by the
parties.
If this letter sets forth our understanding, please execute below no later than
5:00 p.m. CST on Wednesday, November 12, 1997, whereupon this letter shall
become a binding contract between us.
Very truly yours,
Southern Mineral Corporation
By: Xxxxxx X. Xxxxx
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Title: President
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ACCEPTED AND AGREED TO this
12th day of November 1997.
GPI Energy, Inc.
By: Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
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Title: President
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EXHIBIT A
LAKE RACCOURCI FIELD
LAFOURCHE PARISH, LOUISIANA
Expense and Net Revenue Interest
Expense Int. Net Revenue Int.
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State Lease 14284 Well No. 1 22.5% 15.430875%
State Lease 14589 Well No. 1 22.5% 15.750000%
Area of Mutual Interest 16.0323%
