Re: Letter Agreement / Ranken Energy Corporation Garvin County, OK
RANKEN
ENERGY
CORPORATION
000
X. 00xx Xxxxxx, Xxxxx 000
Xxxxxx,
Xxxxxxxx 00000-0000
(000)
000-0000 · Fax
(000) 000-0000
September
10, 2007
|
Xx.
Xxxxxxx Xxxxx, President
Delta
Oil & Gas, Inc.
0000
X. Xxxxxxxx Xxxxxx, #000
Xxxxxxxxx,
XX X0X 0X0
|
Re: Letter
Agreement / Ranken Energy Corporation
2007-1
Drilling
Program
Xxxxxx
County, OK
Dear
Xxxxxxx:
This
LETTER AGREEMENT shall set forth the terms and conditions for your
participation in the Ranken Energy Corporation (“REC”) 2007-1 DRILLING
PROGRAM located in Xxxxxx County, Oklahoma. Specifically,
you agree to participate with a 20.000% Working Interest,
subject to the following:
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1.
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You
agree to purchase an undivided 20.0000% Working Interest
in the 2007-1 DRILLING PROGRAM for a total Buy-In
Cost of $77,100.00 ($385,500.00 x .20000000) which is
your proportionate share.
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|
2.
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Your
initial Buy-In Cost includes all leasehold, whether force pooled
or leased
in support of the initial test well as referred to in the trade summary
sections in the 2007-1 Drilling Program technical brochure, geologic
expenses, brokerage costs, 3-D seismic usage, geophysical interpretations,
and overhead.
|
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3.
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You
agree to pay your Buy-In Cost upon the execution of the LETTER
AGREEMENT. In addition, you agree to pay your share of
the Estimated Costs to Casing Point within three (3) business days
of
receipt of an invoice, to be sent at a date prior to the Spud Date
of each
well for the following:
|
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Drilling:
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NE
Antioch Prospect
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Xxxxxxx
#1-35
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Xxxxxx
County, OK
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|
Washington
Creek Prospect
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Xxxxxx
#1-8 Re-entry
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Xxxxxx
County, OK
|
|
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West
Riverbend Prospect
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River
#1-28
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Xxxxxx
County, OK
|
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4.
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You
agree to participate in the Drilling Operations to casing point in
the
initial test well of each prospect as specified in Item #3 above,
with
your interest, bearing your proportionate share of a 20% carried
Working
Interest in all of these operations. Your Before Casing point
Interest “BCP” shall be 25.000% and your After Casing Point Interest “ACP”
shall be 20.000%. This carried Working Interest shall only
apply to the initial test well in each prospect of the 2007-1 Drilling
Program.
|
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5.
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Your
Net Revenue Interest Lease “NRI” in the 2007-1 Drilling Program shall
be:
|
78%
- NE
Antioch Prospect
78%
-
Washington Creek Prospect
75%
-
West Riverbend Prospect
September
10, 2007
Page
2
|
6.
|
You
acknowledge and understand that the 2007-1 DRILLING
PROGRAM required Forced Pooling 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 may be proportionately reduced in the spacing
unit. Your costs in the project will also be proportionately
reduced respectively.
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7.
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Should
you agree to participate in any completion attempt in any well drilled
in
the REC 2007-1 DRILLING PROGRAM, you agree to immediately
forward your proportionate share of the Estimated Completion costs,
upon
receipt of invoice, to Ranken Energy
Corporation.
|
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8.
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You
agree to become a signatory to a mutually agreeable Joint Operating
Agreement “JOA” consistent with industry standards
(enclosed).
|
|
9.
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You
acknowledge that you are a sophisticated and accredited investor
and fully
understand the inherent risks associated with oil and 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.
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RISK
FACTORS
|
10.
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The
undersigned understands and agrees that the Working Interests described
in
the Brochure are not offered on a “Turn-Key” or similar fixed cost
basis. Purchasers of Working Interests will be required to pay
for their proportionate share of all costs of drilling, completion,
and
operation of the Xxxxx described in the Brochure on the financial
basis as
described in the Brochure. The undersigned confirms that he/she
has the financial capability of paying for his/her share costs of
drilling, completing and operating the Xxxxx and that such costs
may
exceed the initial estimated costs set forth
herein.
|
Should
you agree with these terms and conditions expressed herein, please execute
this
Letter Agreement in the space provided below.
Sincerely,
Xxxxxxxx
X. Xxx, President
Agreed
to
and accepted this ___ day of _________, 2007
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WI
OWNER: ________________________________
Print
Company/Individual
Name
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Signature:
____________________________________
|
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By:
________________________________________
Print
Name and
Title
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Date:
________________________________________
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