EXHIBIT 10.2: Purchase Agreement - Mineral Acres
Nutek Oil, Inc. of 00000 Xxxxxxxxx Xxxx., Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxxxx
00000, as represented by its President and CEO, Xx. Xxxxxx Conradie, as
Purchaser, desires to purchase the herein described selected mineral acres and
equipment from Nutek Inc., as Sellers under the terms and agreements described
in this Purchase Agreement, to-wit:
1. Purchase of selected assets including, but not limited to, all office
equipment, field equipment, supplies, furniture, and lease operating
agreements.
2. Purchase of all leases, farm-outs, or mineral interests held by Sellers in
the Big Foot and Kyote fields of Frio and Atascosa Counties, Texas insofar as
they cover a seventy five percent (75%) net revenue interest (NRI). Said NRI
would then become a one-hundred percent (100%) working interest (WI) with all
other interests being either royalty interest (RI) or overriding royalty
interest (XXX). Said lands are described on Exhibit 'A' attached hereto and
made a part of this Agreement for all purposes. Sellers will give a limited
warranty to purchaser of title "by and through assignors, but not otherwise".
3. Purchase of all of the personal property associated with the oil and gas
xxxxx on the lands described on Exhibit 'A' hereto including, but not limited
to, all well equipment, spare equipment, tank batteries, lease winch truck,
chemical, and chemical storage tank. Equipment will be sold "as is and with
all faults".
4. Purchase of that certain four (4) inch gas pipeline which extends from the
Xxxxxx lease which is owned by the Sellers approx. four (4) miles west to the
sales point at the Virtex Petroleum Company, Inc. pipeline in the Big Foot West
field. Pipeline will be sold "as is and with all faults".
5. Purchase price:
A. Purchase of all mineral acreage will be at a price of one hundred dollars
($100.00) per acre as set forth in Exhibit 'A' hereto. Total price will be four
hundred fifty four thousand nine hundred fifty nine and no/100 dollars
($454,959).
B. Purchase of all equipment will be at market value as set forth in Exhibit
'B' hereto. Total price will be seven hundred eighty eight thousand two hundred
and seventeen and no/100 dollars ($788,217).
C. Purchase of pipeline will be at market value as set forth in Exhibit 'C'
hereto. Total price will be thirty six thousand seven hundred twenty and no/100
dollars ($36,720).
D. Payment for purchase of A, B and C above will be made to Sellers as set
forth herein.
6. Method of payment will be the issuance of Four Million Five Hundred
Thousand (4,500,000) shares of Nutek Oil, Inc restricted stock.
7. Date of closing shall be tentatively set as February 22, 2000. Said
closing may be delayed by mutual consent for a period not to exceed sixty (60)
days. It is agreed that the effective date of sale shall be the 22nd of
February, 2000.
8. Sellers will furnish Purchaser an independent geological report setting
forth the remaining reserves on the lands owned by Sellers.
9. Sellers shall also furnish a business plan setting forth the proposed
development of the acreage as has been discussed between the parties. This
will include, but not be limited to, the drilling of thirty new xxxxx,
reworking those existing xxxxx in which said reworking would enhance
production, and putting in a gas gathering system in order to connect casing
head gas from xxxxx in the Big Foot Field to the pipeline.
12. This Purchase Agreement may be terminated by written agreement between the
parties.
IN WITNESS WHEREOF, the parties have set their hands on the dates below with
the effective date of this Letter of Intent being the 22nd day of February,
2000.
Purchaser:
Nutek Oil, Inc.
By: /s/ Xxxxxx Xxxxxxxx
----------------------------
Xxxxxx Xxxxxxxx, President
Sellers:
Nutek Inc.
By: /s/ Xxxxxx Xxxxxxxx
----------------------------
Xxxxxx Xxxxxxxx, President
EXHIBIT 'A'
ACREAGE
NOTE: The Big Foot and Kyote fields are essentially the same field producing
from the Xxxxx sand with the Big Foot field being in Frio County, Texas and
producing from the Xxxxx B and X xxxxx and the Kyote field being in Atascosa
County joining the Big Foot field to the east and producing from the Xxxxx D
sand only.
BIG FOOT FIELD, FRIO COUNTY
Xxx Xxxxx 20 ac.
Xxx Xxxxx A 689.43 ac.
Xxxxx 637.25 ac. farmout (requires development)
Davidson 300 ac.
Xxxxxx 331.062ac
Xxxx Xxxxx 80 ac.
Xxxx Xxxxx 'A' 20 ac.
Xxxx Xxxxx 'B' 80 ac.
Xxxx Xxxxx 'C' 80 ac.
Xxxx Xxxxx 'X' 80 ac.
Xxxx Xxxxx 'E' 40 ac.
Xxxx Xxxxx 'F' 20 ac.
Xxxx Xxxxx 'G' 20 ac.
Shell - C. 80 ac.
Xxxxx, et. al. 327.48 ac.
Xxxxxx 800 ac.
Total acreage in Frio Co. = 3,605.222 ac.
KYOTE FIELD, ATASCOSA COUNTY
Xxxxxxxx 197.42 ac.
Hill 87.41 ac.
Rizik 180 ac.
Xxxxxxx 129.24 ac.
Xxxxxx 350.293 ac.
Total acreage in Atascosa Co. = 944.363 ac.
Total acreage in Big Foot/Kyote fields = 4,549.585
Total Cost of acreage = $ 454,959
EXHIBIT 'B'
Market value of equipment for average well in field on pump or capable of
pumping (symbol P)
$ 3,920 3200' of 2 3/8's 8R upset tubing ($l.225 avg/ft)
$ 895 3200' of 5/8" sucker rods ($7/rod = 0.28/ft)
$ 275 downhole pump and seating nipple
$ 250 well head
$ 50 polish rod
$ 90 pumping tee and stuffing box
$ 65 misc. wellhead equip. (valves, checks, bull plugs, etc.)
$ 2,750 pumpjack (incl. base or skid)
$ 990 1800' (avg.) of line pipe per well at $0.55/fl.
$ 150 elec. motor (low rpm)
$ 375 Electrical (sw. box, time clock, starter, coils, etc.)
$ 9,810 Total
Market value of equipment for average well in field for injection/flowing
(symbol F):
$ 3,920 3200' of 2 3/8's 8R upset tubing
$ 800 packer (tension)
$ 250 wellhead
$ 75 master valve
$ 65 misc. wellhead equip.
$ 15 seating nipple
$ 990 line pipe
$ 85 electrical (sw. box and master disconnect only)
$ 6,200 Total
Additional equipment for injection xxxxx (symbol I):
$ 750 injection pump (small high pressure duplex) with skid
$ 50 elec. motor
$ 290 electrical (time clock, starter, coils. sws, etc.)
$ 1,190 Total
Xxxxx which are not completed (worked over) which are on the Xxxxxx and
Xxxxxxxx leases:
$ 2,750 Pump xxxx (symbol PJ)
$ 250 Wellhead (symbol WH)
$ 375 Electrical (symbol elec.)
$ 3,375 Total
VALUES, XXXXX, AND DESCRIPTIONS (BY LEASE)
Big Foot Field, Frio Co.
Xxx Xxxxx
$ 9,810 no.1 well (P)
Xxx Xxxxx 'A'
$ 78,480 nos. lA through 8A xxxxx (P)
Davidson
$ 29,430 nos. 3, 13 and 17 (P)
$ 8,125 nos. 1, 4 through 12, 14, 15 and 16 (WH + elec)
Xxxxxx
$ 19,620 nos. 3 and 3A (P)
$ 6,200 no.12 (F)
$ 13,500 nos. 1, lA, 2 and 4 (PJ + WH + elec)
$ 1,875 nos. 2A, 5 and 11 (WH + elec)
Xxxx Xxxxx
$ 9,810 no.3 (P)
Xxxx Xxxxx 'A'
$ 6,200 no. lA (F)
Xxxx Xxxxx 'B'
$ 19,620 nos. 3 and 4 (P)
$ 7,390 no.2 (F + I)
Xxxx Xxxxx 'C'
$ 19,620 nos. 2 and 3 (P)
Xxxx Xxxxx 'X'
$ 9,810 no.1 (P)
Xxxx Xxxxx 'E'
$ 19,620 nos. 1 and 2 (P)
Xxxx Xxxxx 'F'
$ 9,810 no. 1 (P)
Xxxx Xxxxx 'G'
$ 6,200 no. lB (F)
Shell - C
$ 9,810 no.2 (P)
$ 18,600 nos. 1, 3 and 4 (F)
Xxxxx, et al
$ 9,810 no. 1 (P)
Xxxxxx
$186,390 nos. 1, 3, 4, 5, 7 through 13, 15, 17 through 22 and 24 (P)
$ 24,800 nos. 2, 14, 16 and 23 (F)
Total for xxxxx in the Big Foot Field = $ 524,530
Kyote Field, Atascosa Co.
Xxxxxxxx
$ 29,430 nos. 1, 2 and 3 (P)
Hill
$ 9,664 no. 1 (P)
Rizik
$ 6,080 no. 1 (F)
$ 9,690 no.2 (P)
Xxxxxxx
$ 19,620 no.1 and 2 (P)
Xxxxxx
$ 58,124 nos. 1, 3, 4, 6, 9 and 10 (P)
$ 12,214 nos. 5 and 8 (F)
Total for xxxxx in the Kyote Field = $ 144,822
Total for all xxxxx in Big Foot and Kyote Fields = $ 669,352
TANK BATTERIES (BY LEASE)
Market value and Description of equipment in tank batteries:
$ 1,150 Steel tank 210 bbl welded (symbol 210T)
$ 1,500 Steel tank 300 bbl welded (symbol 300T)
$ 1,900 Steel tank 400 bbl welded (symbol 400T)
$ 1,000 Fiberglass tank avg. both open and closed top (symbol f/g)
$ 1,850 Avg. for steel Gunbarrel welded (symbol g/b)
$ 900 Steel tank 250 bbl bolted (symbol 250T)
$ 650 Steel tank 100 bbl welded for water use (symbol 100T)
$ 2,250 Steel heater/treater (symbol h/t)
Note: all tanks include stairs, landings, valves, and connections
Big Foot Field
Xxx Xxxxx
$ 4,000 (210T + g/b + f/g)
Xxx Xxxxx 'A'
$ 7,000 (2x210T + 2xg/b + f/g)
Davidson
$ 7,200 (2x400T + 210T + h/t)
Xxxxxx
$ 5,150 (2x210T + g/b + f/g)
Xxxx Xxxxx
$ 3,650 (210T + g/b + l00T)
Xxxx Xxxxx 'A' - split with Xxxx Xxxxx 'G'
$ 3,350 (300T + g/b)
Xxxx Xxxxx 'B'
$ 3,050 (210T + 250T + f/g)
Xxxx Xxxxx 'C'
$ 4,000 (210T + g/b+ f/g)
Xxxx Xxxxx 'X'
$ 3,650 (210T + g/b + l00T)
Xxxx Xxxxx 'E'
$ 3,050 (210T + 250T + f/g)
Xxxx Xxxxx 'F'
$ 4,000 (210T + g/b + f/g)
Xxxx Xxxxx 'G'
$ 1,500 (300T) - split with Xxxx Xxxxx 'A'
Shell - C.
$ 4,850 (2x300T + g/b)
Xxxxx, et al
$ 3,000 (210T + g/b)
Xxxxxx
$ 10,700 (4x300T + 2xg/b + f/g)
Total for Big Foot tanks = $ 68,150
Kyote Field
Xxxxxxxx
$ 4,000 (210T + g/b + f/g)
Hill
$ 4,350 (300T +g/b + f/g)
Rizik
$ 3,000 (2x300T)
Xxxxxxx
$ 4,000 (210T + g/b + f/g)
Xxxxxx - Tank battery no. 1
$ 5,850 (2x300T + g/b + f/g)
Xxxxxx - Tank battery no. 2
$ 9,200 (3x300T + 2xg/b + f/g)
Total for Kyote tanks = $ 30,400
Total for all tanks Big foot and Kyote Fields = $ 98,550
ELECTRICAL DISTRIBUTION (OVERALL)
Note that the electrical distribution system on the leases is owned and
maintained by the operator. It consists of approx. ten (10) miles of three wire
(3 phase) heavy gauge line.
Value is as follows:
$ 3,510 52,000' x 3 = 156,000' x $0.0225/ft
$ 1,300 130 elec. poles at $10 ea.
$ 350 approx. 390 insulator/connectors at $0.90 ca.
Total for electrical distribution = $ 5,160
MAIN FLOW LINE ON XXXXXX LEASE (NOT ACCOUNTED FOR BY WELL)
Note that there is a main flow line on the Xxxxxx lease as there is only one
tank battery on this lease which is on Hwy. 472. There is therefore a main flow
line which most of the xxxxx on this lease are connected into. The value is as
follows:
$ 2,250 approx. 3000 of 2 7/8's at $0.75/ft.
MISC. YARD EQUIPMENT (XXXXX 'C' LEASE)
Clipper Operating Co., inc. maintains an equipment yard in the Big Foot Field
on the Xxxxx 'C' lease. This is for storage of spare pans, chemical, pipe,
pumpjacks, etc. The value of this equipment is as follows:
$ 250 Steel storage bldg. (convened tank)
$ 1,000 tank trailer (1000 gal.) for chemical storage
$ 905 approx. 500 gal. of paraffin chemical at $1.81/gal.
$ 1,500 one ton flatbed truck for lease use only (unlicensed)
$ 3,750 large stock of pipe, rods, valves, parts and pipe racks.
$ 5,500 two pumpjacks (80,000 lb. gearboxes) - skidded
$12,905 Total
Total for misc. yard equipment = $ 12,905
TOTALS
$ 669,352 well equipment
$ 98,550 tanks
$ 5,160 electrical distribution
$ 2,250 main flowline on Xxxxxx
$ 12,905 equipment in yard
Total value of equipment, Exhibit `B' = $ 788,217
EXHIBIT 'C'
PIPELINE AND ASSOCIATED EQUIPMENT
The gas pipeline is a four inch (4") low pressure gas pipeline which runs from
the Clipper Operating Co., Inc. Xxxxxx lease to the main Virtex line approx.
four (4) miles west. It is on our leases except where it crosses underneath
State Hwy 472. Market value of line and associated equipment is as follows:
$ 34,320 20,800' at $1.65/ft.
$ 800 low pressure separator
$ 250 meter run
$ 350 meter
$ 300 hill opening 4" valves ($150 ea)
$ 700 separator controls and misc. equipment
$ 36,720 Total
Total value of pipeline and associated equipment, Exhibit`C' = $ 36,720
