EXHIBIT 10.7
NUCLA PROSPECT AGREEMENT
THIS AGREEMENT, made this 6th day of October, 1998, by and between NRG
Resources, Inc., of 000 00xx Xxxxxx, xxxxx 000, Xxxxxx, Xxxxxxxx 00000, and
Plateau Exploration, Inc. of 0000 Xxxxx Xxxxx, Xxx 000, Xxxxxx, Xxxxxxxx 00000
and X.X. Xxxxxx, of 000 00xx xxxxxx, Xxx 000, Xxxxxx, Xxxxxxxx 00000 and Amarado
Oil Company, Inc., 0000 Xxxxxxx xx Xxxxx Xxxxxxx X., Xxxxx 0000, Xxxxxx, Xxxxx
00000, (hereafter "Parties" and when singular, "Party").
WITNESSETH: That in consideration of the mutual covenants and agreements to be
kept and performed on the part of the Parties hereto, as herein stated:
1. Area of Mutual Interest - The Parties hereby establish an Area of Mutual
Interest ("AMI"), comprising of lands included within the black outline on
Exhibit 1; attached to and made a part hereof. This AMI shall remain in force
and effect as long as there are active oil and gas leases within the AMI. At any
time after the signing of this Agreement, the Parties or any individual Party
desires to acquire one or more oil and gas lease(s) within the AMI, desires to
acquire an option by farmout agreement or otherwise and/or desires to acquire an
interest in the mineral estate within the AMI, such acquisition shall be
accomplished by mutual agreement of the Parties, and the Parties shall be
responsible for the cost of said acquisition in accordance with the interests
set forth in section 2 of this Agreement.
If any Party or parties desires to acquire an interest in a mineral estate in
which not all parties wish to participate in said acquisition, then the Party or
Parties desiring to acquire the interest shall immediately notify all
non-acquiring Parties of any proposed mineral estate acquisition within the AMI.
The Non-acquiring Parties shall have fifteen (15) days from receipt of the
notice in which to elect to participate in the acquisition. Agreement by any
Party or Parties to participate in a mineral estate acquisition shall include a
check for it's proportionate share of costs payable the acquiring Party within
thirty (30) days of such Parties agreement to participate. If payment is not
received within this period then the acquiring Party or Parties shall have the
right to assume the interest of the non-paying Party in proportionate shares
subject to the following: the non-paying or non-participating Party or Parties
shall retain their proportionate share (as defined in Section 2) of a 1%
overriding royalty interest (ORI), in any mineral estate acquired within the
AMI.
If any Party or Parties acquires an interest in a mineral estate without prior
notice or consent from the other Parties, then the Party or Parties that
acquired said mineral interest shall immediately notify all non-acquiring
Parties of the mineral estate acquisition within the AMI. The non- acquiring
Parties shall have fifteen (15) days from receipt of the notice in which to
elect to participate in the acquisition. Agreement by any Party or Parties to
participate in the mineral estate acquisition shall include a payment for it's
proportionate of the costs payable to the acquiring Party within thirty (30)
days of such Parties agreement to participate.
If any acquisition applies to lands which fall Partly within and partly outside
the AMI, the entire acquisition shall be made available to all the Parties of
this Agreement. The AMI outline is not fixed and can be expanded or contracted
at any time for geological, land boundary, etc. by mutual agreement of the
parties.
2. Interest of the parties - All interests in the Nucla Prospect shall be shared
and divided among the Parties in accordance with the percentages set forth
below:
X.X. Xxxxxx 33.33333333%
Plateau Exploration, Inc. 33.33333333%
NRG Resources, Inc. 20.00000001%
Amarado Oil Company, Inc. 13.33333333%
Total 100.00000000%
3. Sale of the Prospect - To date, the Parties have acquired and various oil and
gas leases in the Nucla Prospect area in townships X00X X00X, X00X X00X, X00X
X00X, X00X X00X, X00X R15W, T48N R13W, T48N R14W, T48N R15W, Montrose County,
Colorado, said leases are described by the individual contribution of each Party
in Exhibit 2, 3, and 4; attached hereto and made a part hereof. At the point the
Parties have acquired sufficient leasehold within the prospect area, the Parties
shall attempt to obtain industry partners to further evaluate the Nucla Prospect
by geophysical surveying (seismic option) and/or by the drilling of one or more
oil and gas xxxxx sufficient to test the Pennsylvanian and Mississippian strata
within the AMI. It is anticipated that the prospect shall be sold for cash
subject to a retained overriding royalty interest and a possible carried or
back-in working interest. Subsequent to a seismic option or sale of the
prospect, the Parties shall be reimbursed for their individual lease costs and
any other reasonable cost incurred in the generation and sale of the Nucla
Prospect. A breakdown of current "hard costs" (land costs and expenses) that
have been incurred by each party to date is listed in Exhibit 5; attached hereto
and made a part hereof. After all Parties have been reimbursed for their land
costs and expenses, then any cash, overriding royalty, back-in working interest,
carried working interest, or any other form of compensation from the sale of the
Nucla Prospect shall thereafter be divided among the Parties according to the
interests set forth in section 2 above.
The Parties shall come to an agreement on the terms and conditions under which
the prospect shall be sold prior to any formal presentation. Sale terms shall be
those agreed upon by at least three or more Parties to this Agreement.
Once an offer to purchase the Nucla prospect has been received from a
prospective buyer, the Parties shall be delivered a copy of the offer in
writing. Each Party shall have forty eight (48) hours to determine whether or
not they will agree to accept any given offer. Immediately following to the 48
hour period, each Party shall be polled by the Party that received the offer, as
to whether or not that Party gives its consent to sell the prospect, under the
proposed terms and conditions of that offer, or whether that party recommends
that a counter offer be proposed to a prospective buyer. If three (3) or more of
the Parties to this agreement consent to sell the prospect; then the prospect
shall be sold. Failure by any Party to respond to an offer that has been
presented to them in writing within the allotted time period shall be deemed a
vote to consent to sell the prospect. The Parties consent to sell the prospect
shall not be unreasonably withheld.
If there is any Party or Parties that does not agree to the Proposed terms of
the sale or disposition of the Prospect, then that Party or Parties shall have
the right to either a) exercise their Preferential right to Purchase within
forty eight (48) hours from their receipt of a proposed offer for sale or
disposition of the Prospect, or b) commit to participating in the proposed
operations under the same terms and conditions of the proposed sale.
4. Assignment - Any assignment or sale of any interest of the Nucla Prospect
under this agreement by and among the Parties shall be made without warranty of
title. Further, any assignment hereafter executed shall specifically refer to,
and be made subject to the terms and conditions of this Agreement.
5. Preferential Right To Purchase - should any Party desire to sell all or any
part of its interests under this Agreement, that Party shall promptly give
notice to the other Parties, with full information concerning its proposed
disposition, which shall include the name and address of the proposed transferee
(who must be ready willing and able to purchase), the purchase price, a legal
description sufficient to identify the property, and all other terms of the
offer. The other Parties shall then have an optional prior right, for a period
of thirty (30) days after the notice is delivered, to purchase for the stated
consideration on the same terms and conditions the interest which the other
Party proposes to sell; and if this optional right is exercised, the purchasing
Parties shall share the purchased interests in the proportions that the interest
of each bears to the total interest of all the purchasing Parties.
6. Rentals - It is the Parties intention to sell the Nucla prospect before the
first rentals are due in February 1999. In the event that the Parties are not
able to sell the Nucla prospect before the rentals become due, then each party
shall be responsible for their portion of rentals in accordance with their
interest as set forth in section 2; of this Agreement.
If any Party elects to allow a lease to lapse by non-payment of rentals, it
shall give notice of it's desire sixty (60) days prior to the rental due date.
If all parties concur then the acreage shall be released. If less than all
parties desire to let the subject lease lapse, the Party or Parties desiring the
interest to lapse shall assign it's interest proportionally therein to the other
parties hereto.
7. Information - The Parties hereby agree to share land information,
non-licensed geological and geophysical data, and/or other pertinent information
needed to sell and maintain the Nucla prospect. The Parties agree not to
withhold any information regarding the Nucla prospect or the progress in the
option/sale of the Nucla prospect from any individual Party. Certain geological
information and other supporting information concerning the Nucla Prospect are
considered to be proprietary and therefore will not be disclosed to a
prospective buyer or outside entity without a signed "Confidentiality and
Nondisclosure Agreement".
8. Governing Law - The validity, interpretation and performance of this
Agreement shall be governed by the laws of the state of Colorado. Forum and
venue shall be Denver Colorado.
9. Successors and Assigns - This Agreement shall be binding upon and shall inure
to the benefit of the Parties hereto and their respective heirs, devisees, legal
representatives, Successors and assigns, and the terms hereof shall be deemed to
run with the leases or interests included within the AMI.
NUCLA PROSPECT AGREEMENT
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AGREED AND ACCEPTED
THIS ____ DAY OF _______________, 1998
BY:
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NRG RESOURCES, INC., Xxxx X. Xxxxx, President
BY:
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AMARADO OIL COMPANY, INC., Xxxxx Xxxxxxx, President
BY:
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PLATEAU EXPLORATION INC., Xxxxxx X. Xxxxxxxxx, President
BY:
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X.X. XXXXXX, Geologist
NUCLA PROSPECT GROUP AGREEMENT
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AGREEMENT CONTINUED (PAGE 3 OF 3)
8. Information - The Parties hereby agree to share land information non-licensed
geological and geophysical data, and or other Pertinent information needed to
sell and maintain the Nucla Prospect. The Parties agree to not withhold any
information regarding the Nucla Prospect or the progress in the option/sale of
the Nucla Prospect from any from any individual Party. Certain geological
information and other supporting information concerning the Nucla Prospect are
considered to be proprietary and therefore will not be disclosed to a
prospective buyer or outside entity without a signed "Confidentiality and
Nondisclosure Agreement".
9. Governing Law - The validity, interpretation and performance of this
Agreement shall be governed by the laws of the state of Colorado. Forum and
venue shall be in Denver, Colorado.
10. Successors and Assign - This Agreement shall be binding upon and shall inure
to the benefit of the Parties hereto and their respective heirs, devisees, legal
representatives, successors and assigns, and the terms hereof shall be deemed to
run with the leases or interests included within the AMI.
AGREEMENT SIGNATURES
This Agreement is made and entered into effective this 6th day of October, 1998,
by the Parties given below:
AGREED TO AND ACCEPTED
BY: /s/ X.X. Xxxxxx
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X.X. XXXXXX, DBA X.X. Xxxxxx
THIS 6TH DAY OF OCTOBER, 1998
BY: /s/ Xxxxxx X. Xxxxxxxxx
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PLATEAU EXPLORATION, INC., Xxxxxx X. Xxxxxxxxx, President
THIS 6TH DAY OF OCTOBER, 1998
By: /s/ Xxxx X. Xxxxx
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NRG RESOURCES, INC., Xxxx X. Xxxxx, President
THIS 6TH DAY OF OCTOBER, 1998
By: /s/ Xxxxx X. Xxxxxxx
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AMARADO OIL COMPANY, INC., Xxxxx X. Xxxxxxx, President
THIS 8TH DAY OF OCTOBER, 1998
EXHIBIT 1
[GRAPHIC OF AMI OUTLINE]
NUCLA PROSPECT
MONTROSE COUNTY, COLORADO
NUCLA GROUP
23,834.04 ACRES
EXHIBIT 2
[GRAPHIC OF AMI OUTLINE]
NUCLA PROSPECT
MONTROSE COUNTY, COLORADO
X.X XXXXXX, DBA X.X. XXXXXX
6,403.56 ACRES
EXHIBIT 3
[GRAPHIC OF AMI OUTLINE]
NUCLA PROSPECT
MONTROSE COUNTY, COLORADO
PLATEAU EXPLORATION, INC.
6,951.32 ACRES
EXHIBIT 4
[GRAPHIC OF AMI OUTLINE]
NUCLA PROSPECT
MONTROSE COUNTY, COLORADO
NRG RESOURCES, INC. / AMARADO OIL COMPANY, INC.
10,480.16 ACRES
NUCLA PROSPECT GROUP AGREEMENT
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EXHIBIT 5
"Hard Costs" accumulated by members of the Nucla Prospect Group as of September
1, 1998.
X.X. Xxxxxx $11,500
Plateau Exploration, Inc. $14,000
NRG Resources, Inc. $19,000
Amarado Oil Company, Inc. $19,000
Total $63,500
These "Hard Costs" are preliminary and have been rounded upward to the nearest
$500. Actual costs to be provided by Parties at time of reimbursement as
discussed in Section 3 of this Agreement.
