LETTER AGREEMENT
AMONG
ORIENTAL ENERGY RESOURCES LTD., CARLTON ENERGY GROUP, L.L.C., AND TRINITY GAS
CORPORATION.
On the 15th November, 98 in Maiduguri, Nigeria, Trinity Gas Corporation
(Trinity) Carlton Energy Group, L.L.C., (Carlton) and Oriental Energy Resources
Ltd., (Oriental) agreed to enter into a definite joint venture agreement (JVA)
to be executed within thirty days of the signing of a Convention Agreement
between the Government of Republic of Xxxx and the above three named companies.
The JVA shall incorporate the following relevant points:
1. Trinity shall have 100% working interest in the convention, subject to a
5% overriding royalty to Oriental Energy Resources Ltd. And a 2.5%
overriding royalty to Carlton Energy Group, L.L.C.
2. Oriental Energy Resources Ltd. shall remain the Lead Company in regard to
interfacing and developing further relationships with the Government
of Xxxx.
3. Trinity shall be the concession operator under the umbrella of Oriental
Energy Resources Ltd.
4. Oriental, Carlton and Trinity shall all have representation on the
Operating Committee but Trinity's vote shall control
5. Trinity shall bear 100% of the cost and expenses of the concession and
shall be entitled to 100% of the revenue from the sale of any
and all hydrocarbons subject to the overriding royalty interest stated
above.
6. Trinity shall reimburse Oriental Energy Resources Ltd. And Carlton for
services directly related to the Chad effort so long as such costs are
submitted to and pre-approved by Trinity, in writing, acquiring the
subject convention and permit.
7. Oriental and Carlton shall be reimbursed their "sunk costs" up to a total
maximum amount of $2 million ($2,000,000) dollars. "Sunk costs"
shall be defined as those costs expended and incurred that are directly
related to the acquiring of the subject Convention and Permit H. These
"sunk costs" shall be paid no later than thirty days after submitted to
Trinity. "Sunk costs" due and owing to Carlton and Oriental shall
be paid by Trinity directly to the owed party. "Sunk cost" shall be
considered "deemed" for the purpose of this Letter Agreement following
submittal and verification to the satisfaction of Trinity.
8. Within Thirty days of final approval by the Chad Government of the
subject Convention and granting of Permit H, the parties to this
agreement shall enter into a definite Joint Venture Agreement and a
Joint Operating Agreement (JOA). The JOA shall be modeled after the
Association of International Petroleum Negotiators model form.
9. The parties, shall, in good faith, and do in good faith, agree that the
concessions work schedule should be the following:
a. Establish a consortium general office in N'djamena as soon as
practicable following the approval of the convention and
granting of Permit H;
b. Commence geological and geophysical evaluation activities as
soon as practicable following the approval of the Convention and
granting of the Permit H;
c. Preparatory work for the air magnetic survey (air mag) shall
begin by April 1, 1999 and the air mag shall commence,
subject to availability of equipment and crews, on or before
August 1, 1999 or as soon as practicable thereafter.
The parties stated above hereby execute this letter agreement and agree to
perform the terms and conditions listed above to the best of their abilities.
/S/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Trinity Gas Corporation
President
/S/ T. C. O'Dell /S/ Alhaji (Dr.) M. Indimi
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T. C. O'Dell Alhaji (Dr.) M. Xxxxxx
Xxxxxxx Energy Group, L.L.C. Oriental Energy Resources Limited.
Chairman Chairman
