EXHIBIT 10.11
LETTER AGREEMENT WITH RANKEN ENERGY
DATED AUGUST 10, 2005
RANKEN
ENERGY
CORPORATION
000 X. 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000-0000
(000) 000-0000 * Fax (000) 000-0000
July 25, 2005
Mr. Xxx Kabianca, President
Brinx Resources, Ltd.
0000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX X0X 0X0
RE: LETTER AGREEMENT
Ranken Energy Corporation
Owl Creek Prospect
XxXxxxx and Garvin Counties, Oklahoma
Dear Xxx:
This LETTER AGREEMENT shall set forth the terms and conditions for your
participation in the RANKEN ENERGY CORPORATION ("REC") OWL CREEK PROSPECT
located in Garvin & XxXxxxx Counties, Oklahoma. Specifically, you agree to
participate with a 70% Working Interest, subject to the following:
1). You agree to purchase an undivided 70% Working Interest in the REC OWL
CREEK PROSPECT for a total Buy-In Cost of $211,750.00 ($302,500 x .70)
which is your proportionate share.
2). All future leasehold costs shall be billed to the Joint Account at
$350/acre at a 78% net revenue basis.
3). Your initial Buy-In Cost includes all current leasehold (820.42 + net
acres), whether force pooled or leased, in support of the two initial
re-entry test xxxxx, geologic expenses, brokerage costs, 3-D seismic
usage, geophysical interpretations, and overhead, etc.
4). You agree to pay your Buy-In Cost upon the execution of this LETTER
AGREEMENT, as well as your proportionate share of the estimated costs
to casing point for:
DRILLING: XXXXXXX #1 RE-ENTRY
DRILLING: XXXXXX #1 RE-ENTRY
5). You agree to participate in the Drilling Operations (to casing point)
in the xxxxx as specified in Item #3 above, with your interest, bearing
your proportionate share of a 20% carried Working Interest in all of
these operations. The carried working interest in these two initial
Re-Entry xxxxx shall be defined as those costs incurred for the
drilling and setting/cementing of production casing. All future costs
shall be billed to the Joint Account on a "heads up" basis. Your Before
Casing Point Interest "BCP" shall be 87.5% and your After Casing Point
Interest "ACP" shall be 70%. This carried Working Interest shall only
apply to the two initial re-entry test xxxxx listed in paragraph #4
above. However, should the primary objective (Xxxxx) in each of the
initial Re-Entry xxxxx not be reached due to any down hole problems,
then you agree to drill a replacement well or xxxxx, on the same terms
and obligations as set forth in this LETTER AGREEMENT.
6). Your Net Revenue Interest Lease "NRI" in the REC OWL CREEK PROSPECT
shall be 78%.
7). You acknowledge and understand that some of these Prospects were Forced
Pooled under Oklahoma law and as such, the various Respondents have the
right to participate in any well. Should any Respondents elect to
participate, then your participation interest shall be proportionately
reduced in the spacing unit. Your costs in the project will also be
proportionately reduced respectively.
8). Should you agree to participate in any completion attempt in any well
drilled in the REC OWL CREEK PROSPECT, you agree to immediately forward
your proportionate share of the Estimated Completion Costs, upon
receipt of invoice, to Ranken Energy Corporation.
9). You agree to become a signatory to a mutually agreeable Joint Operating
Agreement "JOA" consistent with industry standards (enclosed).
10). You acknowledge that you are a sophisticated & accredited investor and
fully understand the inherent risks associated with oil & gas
investing. Further, you acknowledge that no Return on Investment or
Rate of Return has been guaranteed or promised, and, in fact, accept
the possibility that you could lose 100% of your investment in this
program.
Should you agree with these terms and conditions expressed herein, please
execute this LETTER AGREEMENT in the space provided below.
Sincerely,
/s/ XXXXXXXX X. XXX
Xxxxxxxx X. Xxx
President
RLC/pak
Enclosure
Agreed to and accepted this ____ day of ____________, 2005.
WI OWNER: ____________________ SIGNATURE:______________________
Print Company/Individual Name
BY:____________________________ DATE:
Print Name and Title
