EXPLORATION AGREEMENT
Texana Project
Xxxxxxx County, Texas
This Exploration Agreement (the "Agreement") is entered into as of July
15, 1997, by and between TAC Resources, Inc. ("TAC"), Parallel Petroleum
Corporation ("Parallel"), Unit Petroleum Company ("Unit"), Beta Oil & Gas, Inc.
("Beta") and Xxxxx Oil and Gas Company ("Xxxxx") all hereinafter collectively
referred to as (the "Parties").
WITNESSETH:
WHEREAS, TAC has acquired seismic and lease options, oil and gas leases
and seismic permits covering an area of approximately 25,000 acres located in
Xxxxxxx County, Texas, as depicted on the plat attached hereto as Exhibit "A".
WHEREAS, Parallel, Unit, Beta and Xxxxx propose to acquire undivided
interests in and to the rights granted by such agreements, and to participate in
conducting a 3-D seismic program upon the lands covered thereby.
NOW, THEREFORE, in consideration of the premises, the mutual agreements
and obligations set forth herein, and the mutual benefits to be received
hereunder, the Parties agree as follows:
ARTICLE 1. DEFINITIONS
For the purpose of this Agreement, the following terms shall have the
meanings designated below:
1.1 Area of Mutual Interest "AMI" means the lands outlined on the plat
attached hereto as Exhibit "A".
1.2 "AMI Interests" means any interest in the oil, gas or other
minerals in and under the AMI, including leasehold interests under oil and gas
leases, oil and gas lease options, interests of the farmee under farmout
agreement, and other such interests or rights similar or dissimilar to those
mentioned, including, but not limited to, seismic permits. AMI Interest does
not, however, include nonpossessory interests in the oil, gas and other minerals
in and under the AMI, such as royalty interests, overriding royalty interests,
net profits interests, or other such interests whether similar or dissimilar to
those mentioned.
1.3 "Existing AMI Interests" means the Seismic and Lease Options, Oil
and Gas Leases and Seismic Permits which have been acquired by TAC as of August
1, 1997.
1.4 "Subsequently Acquired AMI Interests" means all AMI Interests
acquired after August 1, 1997.
1.5 "Contract Lands" means lands located within the AMI which are
covered by AMI Interests.
1.6 "Initial Interest" means a Party's ownership in Existing AMI
Interests, and the amount of interest a party is entitled to acquire in
Subsequently Acquired AMI Interests, subject to the provisions hereof.
1.7 "Jointly Owned AMI Interest" means an AMI Interest in which the
Parties own an interest pursuant to the terms of this Agreement.
1.8 "Lease Burden" means any royalty, overriding royalty interest, net
profits interest, production payment, carried interest, reversionary working
interest or other charges upon a leasehold interest or the production therefrom.
1.9 "Losses" means any and all losses, liabilities, claims, demands,
penalties, fines, settlements, damages, actions, or suits of whatsoever kind and
nature (but expressly excluding consequential damages), whether or not subject
to litigation, including without limitation (i) claims or penalties arising from
products liability, negligence, statutory liability or violation of any
applicable law or in tort (strict, absolute or otherwise) and (ii) loss of or
damage to any property, and all reasonabl out-of-pocket costs, disbursements and
expenses (including, without limitation, legal, accounting, consulting and
investigation expenses and litigation costs) imposed on, incurred by or asserted
against an indemnified Party in connection therewith.
1.10 "Operator" shall have the meaning as it is given in the Operating
Agreement in the form attached hereto as Exhibit "B".
1.11 "Party" or "Parties" means TAC, Parallel, Unit, Beta and Xxxxx and any
other person or entity, singularly or as a group, which hereafter becomes a
party hereto or is otherwise subject to the terms hereof.
1.12 "Pre-Existing Data" means such data which includes, but is not limited
to: seismic records and related seismic data, electronic and mud logs, cores and
core analyses, field studies (less and except any proprietary methodology or
process used by any Party in such studies), production tests, engineering,
geological, geophysical, paleontological data, interpretive data and maps
prepared by any Party in existence as of the date of this Agreement.
1.13 "Proportionate Share" except as otherwise provided for herein, shall
be calculated by dividing a Party's Initial Interest by the aggregate of the
Initial Interests of all Parties who are to share an interest or an obligation
pursuant to the terms hereof. In circumstances where one or more Parties do not
participate in such an interest or obligation, "Proportionate Share" shall be
determined by dividing a Party's Initial Interest by the total Initial Interests
of all Party's participating therein.
1.14 "Prospect" means an area within the AMI which is designated as a
Prospect pursuant to Article 4.1 hereof and within which there is expected to
occur, based on information developed as a result of 3-D Seismic Operations, a
commercial accumulation of oil and/or gas in a specific structural or
stratigraphic trap.
1.15 "Subsequently Created Burden" means a lease burden which is created by
a party subsequent to its acquisition of the interest which is subject to the
burden, except the overriding royalty interest provided for in Article 2.5
hereof.
1.16 "Costs Prior to Leasehold Acquisition" means all costs of any type
whatsoever which pertain to this project, covering lands located within or
outside the AMI, including, but not limited to costs of seismic permits, seismic
and lease options, oil and gas leases, and renewals thereof, land brokerage,
legal costs, surface damages, surveying, seismic acquisition and interpretation,
etc., which are incurred prior to Leasehold Acquisition conducted under the
provisions of Article 4 hereof.
1.17 Other terms are defined elsewhere in this Agreement.
ARTICLE 2. INTERESTS AND SHARE OF COSTS OF THE PARTIES
2.1 Area of Mutual Interest. The Parties hereby establish an Area of Mutual
Interest "AMI", same to be comprised of the area outlined on the attached
Exhibit "A", and which shall cover AMI Interests located therein. This AMI shall
continue for a term of three (3) years, or the expiration of the last Jointly
Owned AMI Interest, whichever is earlier. e 2.2 "Interests and Share of Costs of
the Parties" The Parties hereby agree to own, as their Initial Interest; and
agree to bear the costs set out below, as follows:
Party Initial Interest Share of Costs Share of Costs for
Prior to Leasehold Leasehold Acquisition
Acquisition and Subsequent Operations
TAC .2500000 .0625000 .2500000
Parallel .1750000 .21875 .1750000
Unit .2500000 .31250 .2500000
Beta .2000000 .2500000 .2000000
Xxxxx .1250000 .1562500 .1250000
TAC has acquired and now owns the Existing AMI Interests. Parallel, Unit, Beta
and Xxxxx agree that their costs in the Existing AMI Interests shall be based on
$75.00 per net mineral acre on seismic and lease options, and cost plus 25% on
oil and gas leases and seismic permits. The Existing AMI Interests are presently
comprised of approximately 23,183.908 net mineral acres covered by seismic and
lease option, and 300.5 net mineral acres covered by seismic permit where cost
was $25.00/net mineral acre. Based on the foregoing, the current total cost of
Existing AMI Interests is One million seven hundred forty-eight thousand one
hundred eighty-three and 73/100 Dollars ($1,748,183.73). Parallel, Unit, Beta
and Xxxxx agree to pay TAC their portion of such cost, as referenced above, in
the Existing AMI Interests upon execution of this Agreement. Parallel, Unit,
Beta and Xxxxx hereby agree that TAC shall have the exclusive right to acquire
AMI Interests through August 1, 1997, and that same shall be treated i all
respects as Existing AMI Interests. Parallel, Unit, Beta and Xxxxx agree that
they shall be obligated to accept such interests in the same percentages and pay
TAC for such interests at the same terms stated herein. Payment for such
interests shall be due within fifteen (15) days after receipt of written notice
as set out in Article 2.4. Interests available to TAC which costs exceed those
stated above shall be offered to the other Parties as per the procedure set
forth in Article 2.4 below.
2.3 Recording. TAC agrees to file for record in the office of the Xxxxxxx
County Clerk, all Memorandums of Seismic and Lease Options covering the Existing
AMI Interests within fifteen (15) days of the date this Agreement is executed by
all Parties.
2.4 Subsequently Acquired AMI Interests. Any Party acquiring a Subsequently
Acquired AMI Interest, directly or indirectly, shall notify the other Parties
hereto. Such notice shall set forth (i) a description of the interest acquired,
(ii) the total cost of the interest, including all land and legal costs
associated with the acquisition thereof, (iii) the Proportionate Share of the
notified Party and its cost therein, and (iv) any other pertinent terms of such
acquisition, including, but not limited to, copies of the instruments of
conveyance, copies of leases, assignments, subleases, farmout and other
contracts affecting the AMI Interests, copies of paid drafts or checks, itemized
invoices of actual costs incurred by the acquiring Party. Parties shall have
fifteen (15) days from the receipt of this notice to acquire their Proportionate
Share of the Subsequently Acquired AMI Interest. A Party's election to acquire
shall be given in writing and accompanied by Party's payment of its total cost
for such interest. If a Party's election and payment are not received within
such fifteen (15) day period, it shall be conclusively presumed that such Party
has elected not to acquire its Proportionate Share of the Subsequently Acquired
AMI Interest and has forfeited its right thereto. A Party's failure to exercise
its option as to any particular notice shall not constitute a waiver or release
of its right to acquire any interest described in any subsequent notice
delivered hereunder.
2.5 Existing Burdens. Each Party's interest under this agreement in the AMI
Interests, and oil and gas leases which may be acquired thereunder, shall be
subject to and burdened by its proportionate share of all existing operating
agreements, existing and pending pooling and spacing orders and all Lease
Burdens other than Subsequently Created Burdens. TAC represents that, except as
hereinafter provided, it has not burdened the Existing AMI Interests acquired or
to be acquired with any liens or Subsequently Created Burdens. Each Party agrees
to perform its Proportionate Share of the obligations under the AMI Interests
acquired pursuant to this Agreement and the other obligations described in this
Article, but only to the extent that such obligations arise after the
acquisition of such AMI Interests by such Party. Notwithstanding the foregoing,
the Parties agree that they shall bear, their Proportionate Share of an
overriding royalty interest to be owned by Bayou Black Royalty Company, Inc. on
all oil and gas leases acquired pursuant to this Agreement (including leases
acquired by exercising lease options in which the Parties own an interest, and
in extensions and renewals thereof ) equal to two percent (2%) of eight-eighths
(8/8ths), provided that such overriding royalty interest shall be reduced in the
proportion that the undivided mineral interest covered by any such lease bears
to the entire mineral interest in the lands covered by such lease.
2.6 Expiring Options. If any lease options covered hereby will expire prior
to completion of the Seismic Operations contemplated herein, Operator shall use
its best efforts to renew such option for a sufficient period of time to
complete the proposed 3-D Seismic Operations thereon and exercise the lease
option thereunder. The acquisition of such renewal shall be handled under the
acquisition, notice and election provisions of Article 2.4.
2.7 Assignments. Upon receipt of payment for AMI Interests, TAC shall
assign to the Parties hereto their Initial Interest in and to all right, title
and interest owned by TAC in such AMI Interests. Such assignment shall be
recordable in form, shall be subject to this agreement, shall provide for
warranty by, through and under TAC, but not otherwise, and shall be subject to
the terms and provisions of the AMI Interests assigned.
2.8 AMI Interests Located In and Out of Existing AMI. If an AMI Interest is
found to cover lands located both within and outside the existing AMI, the
entirety of such AMI Interest shall be offered to the other Parties under the
acquisition, notice and election provisions of Article 2.3 and Article 2.4, and
if the other Parties elect to participate in the acquisition thereof, the
description of the lands comprising the AMI shall be deemed to be amended to
extend and cover all of the lands covered by such interest. The option of the
Parties to participate in the acquisition of such interests shall be limited to
the entirety of the interest acquired.
ARTICLE 3. SEISMIC OPERATIONS
3.1 Existing Seismic, Geologic and Other Subsurface Data. Except as
prohibited by law or by agreements with third parties, upon request, each Party
owning existing seismic data pertaining to lands located within the AMI shall
furnish copies of all such data to the other Parties, together with any geologic
or other subsurface data that could be useful in the interpretation thereof. The
Party receiving such data shall bear the expense of copying it. The Party owning
any seismic or other data which may not be copied, due to legal prohibitions or
by agreements with third parties, shall, upon request, make such data available
to the Party requesting such data during normal business hours.
3.2 Ownership of Pre-Existing Data. Ownership of the Pre-Existing Data
and all reprocessed Pre-Existing Data shall at all times remain vested in the
Party who contributes the Pre-Existing Data for use by the Parties, and the
Parties agree to acknowledge such ownership, including, but not limited to, the
filing with any appropriate governmental authority of such acknowledgment. The
Parties expressly reserve the right to sell, license, or trade the Pre-Existing
Data which it contributes hereunder, to the extent that it has such right to
sell, license or trade the Pre-Existing Data, through its own efforts, or
through the efforts of others duly authorized by such Party and the benefits and
advantages, including monetary consideration, which such Party receives as a
result of such activities shall be the sole property of such Party.
3.3 Management of the 3-D Seismic Operations. Operator shall
exclusively manage and conduct the 3-D Seismic Operations contemplated hereunder
and all operations incident thereto, including, but not limited to, the
acquisition of all geoscientific data, the performance of all 3-D seismic
surveys and other geoscientific work incident thereto (other than analysis
and/or interpretation), and, subject to the Operating Agreements, the drilling
of all xxxxx on the Prospects. Operator shall perform all such work through
employees, representatives, and contractors of its selection, and Operator shall
and does hereby agree to utilize reasonable prudence and economic judgment in
contracting with third party contractors or subcontractors. As manager of 3-D
Seismic Operations, Operator shall devote such of its time, attention and
efforts to the conduct thereof as it shall in good faith determine reasonably
necessary, but shall otherwise be free to engage in and pursue all other current
and future business projects, programs, prospects, opportunities, investments
and activities without obligation of any kind to or right of participation
therein by the other Parties hereto. In performing its duties under this
Agreement, Operator shall serve as an independent contractor and not as an agent
or employee of the other Parties hereto. Operator shall utilize reasonable
prudence and economic judgment in incurring costs, and shall further conduct the
3-D Seismic Operations and perform all of its duties under this Agreement as a
reasonable, prudent operator, in a good and workmanlike manner with due
diligence and dispatch, in accordance with good oilfield and exploratory
practice, and in compliance with all applicable laws and regulations, BUT SHALL
HAVE NO LIABILITY TO THE OTHER PARTIES HERETO OR ANY OTHER OWNER OF RIGHTS OR
INTERESTS UNDER THIS AGREEMENT FOR ANY LOSSES SUSTAINED OR LIABILITIES INCURRED
IN CONNECTION WITH THE 3-D SEISMIC OPERATIONS AND/OR THE CONDUCT OF ANY
ACTIVITIES UNDER OR CONTEMPLATED BY THIS AGREEMENT, SAVE AND EXCEPT AS MAY BE
OCCASIONED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF OPERATOR. EACH OF
THE OTHER PARTIES HERETO ACKNOWLEDGES THAT (A) IT HAS READ AND AGREED TO THE
FOREGOING EXCULPATION OF OPERATOR AS A NEGOTIATED AND BARGAINED FOR ASPECT OF
THIS TRANSACTION, (B) THIS EXCULPATION PROVISION IS CONSPICUOUS.
3.4 Ongoing and Future Seismic Operations. The Parties agree to conduct
such operations on all or substantially all of the Contract Lands. The Parties
may, subject to the unanimous written consent of all Parties, agree to reduce or
increase the acreage on which such operations will be conducted when technical,
legal or operational considerations indicate that such reduction or increase is
warranted. In any event, the Parties agree to pay their respective shares of the
total costs of the 3-D Seismic Operations conducted on all land covered by AMI
Interests as set forth in Article 2.2 hereof. Operator shall furnish the other
Parties hereto with copies of all applicable contracts and other information
pertaining to all 3-D Seismic Operations conducted hereunder. The Parties shall
own their Proportionate Share of the geophysical data obtained by and resulting
from the 3-D Seismic Operations conducted on the Contract Lands, including, but
not limited to all tapes, seismic sections and any and all other data generated
by such 3-D Seismic Operations. Each Party shall have access to such data and
shall receive copies thereof. The Parties agree to work together in a spirit of
cooperation and in good faith in planning and causing the 3-D Seismic Operations
to be conducted as contemplated herein as well as in sharing the data collected
therefrom and the interpretations thereof. Such interpretations, by any Party,
shall in no way be deemed a representation to any other Party that such
interpretations are accurate or correct. Such interpretations shall be given
merely as a means of sharing such Party's analysis and ideas regarding such
data.
3.5 Confidentiality of Seismic Data. Except as provided below, each
Party agrees to keep all seismic data obtained pursuant to Article 3.3
confidential for a period of five (5) years from the date hereof. After the
expiration of five (5) years from the date hereof any Party may sell the data it
acquired pursuant to Article 3.2. Each Party owning an interest in such data
shall receive its Proportionate Share of the proceeds of any such sale. Any data
acquired from another Party pursuant to Article 3.1 shall forever be kept
confidential by the Parties; provided, however, that the Party who originally
contributed such data may share, sell or otherwise dispose of such data that
does not pertain to a Prospect to a third party after the expiration of one (1)
year from the date hereof, and the other Parties shall have no interest in the
proceeds from such sale. Notwithstanding the foregoing, a Party may disclose
seismic data to (A) a prospective purchaser or farmee of such Party's interest,
provided (i) such disclosure is limited to the Prospect under consideration for
sale or farmout, (ii) the prospective purchaser or farmee must review such data
in the affected Party's offices and may not copy such data until such time as it
has acquired or earned an interest in the Contract Lands, and (iii) such
prospective purchaser or farmee must execute a confidentiality agreement to
prevent further disclosure and unauthorized use of such data; or (B) a third
party who is entitled thereto pursuant to the terms of a lease, lease option or
seismic permit. Any Party may disclose such data to its agents, staff,
representatives and consultants in the normal conduct of its business.
3.6 Review of Seismic Data. The Parties agree to cooperate in good
faith in reviewing the seismic data acquired hereunder. Such data should be
reviewed by the Parties as soon as practicable after the data is available so
that the Parties can make decisions regarding the exercise of lease options.
ARTICLE 4. LEASEHOLD ACQUISITION
4.1 Designation of Prospects. As soon as practicable after the data has
been processed and interpreted, Operator shall establish Prospects within the
AMI. Operator shall designate such Prospects on a map which reflects the outline
of the lands to be included within each such Prospect. Promptly after
designating such Prospects, Operator shall furnish the other Parties with such
maps which reflect the designated Prospects, together with a description of the
seismic data, prospective feature and any interpretative data or other maps upon
which such Prospect is based. The other Parties shall have fifteen (15) days
after receipt of such notice in which to elect in writing whether or not they
will participate in the designated Prospects. If a Party fails to furnish
Operator with its written election to participate within such fifteen (15) day
period, it shall be conclusively presumed to have elected not to participate in
the Prospect or Prospects so designated. Any Party not participating in a
Prospect shall promptly assign all of its interest in the lands lying within
such Prospect to the Parties participating in such Prospect. A Party's election
hereunder may be on a Prospect by Prospect basis, and a Party's failure to
participate in any or all Prospects contained in any particular notice shall not
constitute a waiver or release of the right to participate in a Prospect or
Prospects described in any subsequent notice delivered hereunder.
4.2 Acquisition of Leases Within Prospects. The Parties participating
in a Prospect will acquire and pay their Proportionate Share for leases covering
each Prospect upon the terms provided in the applicable lease options or upon
such other terms as the Parties may mutually agree upon if some lands within the
Prospect are unleased and not covered by a lease option. As soon as possible
after designating Prospects, Operator shall provide written notice to the
Parties participating in such Prospects of the leases to be acquired therein,
which notice shall set forth (i) a description of the lands and interests to be
acquired, (ii) the total cost of such interests, including all land and legal
costs associated with the acquisition thereof, (iii) the Proportionate Share of
the notified Party and its cost therein, and (iv) any other pertinent terms of
such acquisition, including, but not limited to, copies of the instruments and
other contracts affecting same. Payment for such leases shall be due within
fifteen (15) days after receipt of the above notice.
4.3 Minimum Acreage Obligation. In the event the lease options covering
a Prospect require minimum acreage selection in excess of the acreage included
within the boundaries of the Prospect, then each Party participating in such
Prospect must acquire and pay its Proportionate Share of the cost of the acreage
necessary to fulfill such minimum acreage selection requirements.
ARTICLE 5. SALE, FARMOUT OR OTHER DISPOSITION OF AMI INTERESTS TO A THIRD PARTY
Any Party may sell, assign, farmout or otherwise dispose of all or any
portion of its interest acquired pursuant to or in connection with this
Agreement without consent of any other Party.
ARTICLE 6. SUBSEQUENT OPERATIONS
6.1 Operator. Operator shall have the right, subject to the terms and
provisions of the attached Operating Agreement, to be the Operator for all
operations conducted within the AMI, and the Parties hereby agree to execute
separate Operating Agreements designating Operator, as Operator, as required.
6.2 Operating Agreement. Except as provided herein, all operations
conducted within the AMI shall be conducted in accordance with the terms of an
Operating Agreement substantially in the form attached hereto as Exhibit "B". A
separate Operating Agreement shall be executed for each Prospect, with the first
well drilled in such Prospect to be designated as the "Initial Well". The share
of costs which each Party must bear and the interest of each Party in the
production from each well drilled under the Prospect Operating Agreement will be
determined on a well-by-well basis in accordance with the terms hereof as
modified by the terms of the Operating Agreement. In the event of conflict
between the terms and provisions hereof and those contained in the Operating
Agreement, the terms and provisions hereof shall prevail.
6.3 Limitation on Number of Xxxxx Drilling. Not more than three (3) xxxxx
shall be drilling on the Contract Lands at any time unless it is necessary to
commence a well in order to perpetuate a lease or otherwise satisfy the terms of
a continuous drilling obligation.
6.4 Non-Consent Election on Initial Well. If a Party elects not to
participate in the drilling of the Initial Well in a Prospect established under
Article 4.1 hereof, such Party shall relinquish all of its rights and interests
in that Prospect to the Parties participating in the drilling of such well. A
Party so relinquishing its interest shall promptly execute a recordable
assignment of its relinquished interest to the Parties entitled thereto. The
interest so assigned shall be free of any Subsequently Created Burdens.
ARTICLE 7. MISCELLANEOUS
7.1 Indemnification with Regard to Existing Matters. TAC agrees to
fully indemnify, defend and hold harmless all other Parties to this Agreement
against all Losses arising out of, in connection with, or relating to TAC's sole
ownership or operation of the Existing AMI prior to the date of this Agreement,
including, but not limited to, breach of contract or monetary damage, regardless
of fault or strict liability imposed by statute, rule or regulation, so long and
only in the event that all actions, activities and/or conduct giving rise to the
claim for such Losses relate to activities of TAC which occurred in the period
prior to the date of this Agreement.
7.2 Legal Relationship. This agreement is not intended to create, and
shall not be construed to create, a partnership or other relationship whereby
one party is liable for the actions or debts of another party; it being
understood and agreed that the rights and liabilities of all parties are several
and not joint or collective.
7.3 Entire Agreement. This agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof, superseding
any and all prior agreements, understandings, discussions, negotiations and
commitments of any kind.
7.4 Amendment. The provisions of this agreement may be amended,
supplemented, or waived only if in writing signed by all parties hereto.
7.5 Construction. The parties to this agreement all acknowledge and
agree that this agreement was drafted jointly by them, and that in the event of
any ambiguity, this agreement shall not be construed against any of them on the
basis of the fact or presumption that one party had a greater or lesser hand in
the drafting of the agreement than another party, but rather the terms shall be
given a reasonable interpretation.
7.6 Governing Law. Except to the extent preempted by federal law, this
agreement is to be construed and interpreted in accordance with, and governed
by, the laws of the State of Texas.
7.7 Binding Agreement. This agreement shall bind and inure to the
benefit of the parties hereto and their respective heirs, successors, legal
representatives and assigns.
7.8 Section and Subsection Headings. The article, section and
subsection headings contained in this agreement are for the purpose of
convenience only and are not intended to define or limit the contents hereof or
otherwise be considered in construing and enforcing this agreement.
7.9 Waivers. Any failure by any party hereto to comply with any of its
obligations, agreements or conditions herein contained may be waived in writing,
but not in any other manner, by the party to whom such compliance is owed. No
waiver of, or consent to a change in, any provision of this agreement shall be
deemed to be, or shall constitute, a waiver of or consent to a change in the
provisions hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver unless expressly provided.
7.10 Further Assurances. The parties hereto agree to deliver or cause
to be delivered to each other at all such times as shall be reasonably required,
all such additional instruments, agreements, and other documents, and to perform
all such actions, as any of them may reasonably request for the purpose of
performing any provision of this agreement or evidencing the transactions
contemplated by this agreement.
7.11 Severability. If any term or provision of this agreement or any
application of this agreement is held invalid or unenforceable, the remainder of
this agreement and any other application of the terms and provisions of this
agreement shall not be affected by that holding, but shall be valid and
enforceable.
7.12 Exhibits. All exhibits attached hereto or referred to in this
agreement are incorporated herein and made a part of this agreement.
7.13 Term. The term of this agreement shall be three (3) years from the
date hereof or until the last expiration of the last Jointly Owned AMI Interest
acquired hereunder, whichever is earlier, with the exception of the
confidentiality requirements of Article 3.5 which shall survive and extend past
that period.
7.14 Notices. All notices, consents and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given (a)
when delivered by hand, (b) when sent by facsimile (with receipt confirmed),
provided that a copy is promptly mailed thereafter by first class postage
prepaid registered or certified mail, return receipt requested, (c) when
received by the addressee, if sent by Express Mail, Federal Express, other
express delivery service (receipt requested) or by such other means as the
Parties named below may agree from time to time or (d) five (5) days after being
mailed in the USA, by first class postage prepaid registered or certified mail,
return receipt requested; in each case to the appropriate address and telecopier
number set forth below (or to such other address or telecopier number as a Party
may designate as to itself by notice to the other Parties).
TAC Resources, Inc.
P. O. Xxx 000
Xxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
Telephone Number: (000)000-0000
Telecopier Number: (000)000-0000
Parallel Petroleum Corporation
000 X. Xxxxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Telephone Number: (000)000-0000
Telecopier Number: (000)000-0000
Unit Petroleum Company
00 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxx Xxxxxxx
Telephone Number: (000)000-0000
Telecopier Number: (000)000-0000
Beta Oil & Gas, Inc.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxx
Telephone Number: (000)000-0000
Telecopier Number: (000)000-0000
Xxxxx Oil and Gas Company
000 Xxxxxxx Xxxxx, Xxxxx 000
P. O. Xxx 00000
Xxxxx Xxxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxx, Xx.
Telephone Number: (000)000-0000
Telecopier Number: (000)000-0000
Each Party shall have the right upon giving thirty (30) days prior written
notice to the other Parties, in the manner herein provided, to change its
address and telecopier number for the purpose of notice.
7.15 Transfers Subject to this Agreement. Any sale, agreement, transfer
or other disposition of an interest in the Contract Lands, however accomplished,
either voluntarily or involuntarily, by operations of law or otherwise, shall be
subject to the terms of this Agreement. Any instruments which convey any
interest in the Contract Lands shall be made expressly subject to the Agreement.
7.16 Counterparts. This agreement may be executed in multiple
counterparts, all of which when taken together shall constitute one and the same
agreement.
7.17 Public Announcements. Each Party hereto agrees that prior to
making any public announcement or statement with respect to the transaction
contemplated in this Agreement, the Party desiring to make such public
announcement or statement shall consult with the other Parties hereto and
exercise their best efforts to (i) agree upon the text of a joint public
announcement or statement to be made by the Parties, (ii) obtain approval of the
other Parties hereto to the extent of a public announcement or statement to be
made solely by one of the Parties, as the case may be. Approval shall be
requested pursuant to Article 7.14 hereof, and any such announcement or
statement shall be deemed approved if no reply to the contrary is received
within twenty-four (24) hours (Saturdays, Sundays and federal legal holidays
excluded) after receipt of such request by the other Parties. Nothing contained
in this paragraph shall be construed to require any Party to obtain approval of
the other Parties hereto to disclose information with respect to the transaction
contemplated by this Agreement to any governmental body to the extent required
by applicable law or by any applicable rules.
7.18 Expenses. Except as specified herein and as the Parties may
otherwise agree, each Party shall be solely responsible for all expenses
incurred by it in connection with any and all transactions that are contemplated
by this Agreement.
7.19 Force Majeure. Should any Party be prevented, wholly or in part,
from complying with any express or implied obligation of this Agreement (other
than the obligation to make money payments), from conducting any operations
provided for under this Agreement, including by way of illustration but not
limitation, the conducting of the 3-D Seismic Operations by reason of scarcity
of or inability to obtain or to use labor, water, equipment or materials in the
open market or transportation thereof fro any cause (other than financial)
beyond the control of such Party, or operation of "Force Majeure, any State or
Federal law or any order, ruling or regulation of governmental authority, then
while so prevented, such Party's obligation to comply with such provision or
obligation shall be suspended, and such Party shall not be liable in damages or
otherwise to the other Parties for failure to comply therewith, provided that
the Party claiming suspension shall give written notice and full particulars of
the reason of such inability to perform its obligations to the other Parties
within thirty (30) days after the occurrence of the cause relied on by the Party
claiming suspension.
7.20 Arbitration. The Parties agree that any and all disputes arising
under or relating to this Agreement shall be referred to arbitration pursuant to
the commercial rules of arbitration of the American Arbitration Association.
Venue for such arbitration shall be Houston, Texas USA.
IN WITNESS WHEREOF, this agreement is executed on the date first above written.
TAC Resources, Inc.
By:________________________________
Xxxx Xxxxxx, President
Parallel Petroleum Corporation
By:_______________________________
Xxxxx X. Xxxxxx, President
Unit Petroleum Company
By:_______________________________
Xxxxxxx X. Xxxxxx, Xx., Sr. Vice-President
Beta Oil & Gas, Inc.
By:________________________________
Xxxxx Xxxxx, President
Xxxxx Oil and Gas Company
By:________________________________
Xxxxxxx Xxxxx, Xx., President
