DRILLING CONTRACT
Exhibit
10.3
This
drilling contract entered into this _7th__ day of October, 2008 by and
between:
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Xxxx
X. Oil and Gas Company
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Address:
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0000
Xxxxxxx Xx. Xxxxx 000, Xxxxxx, XX 00000
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Great
Plains Exploration, LLC
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Address:
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0000
Xxxxxxx Xx. Xxxxx 000, Xxxxxx, XX
00000
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In
consideration of mutual promises and agreements herein contained, OPERATOR
engages CONTRACTOR as an independent contractor to drill the hereinafter
designated well(s) in search of oil and/or gas, in conformity
herewith.
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A.
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NAME
AND LOCATION OF XXXXX Alpha Plaza Investments, Ltd.
Property-Highland Heights, Ohio
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| B. |
TIME
ELEMENT: CONTRACTOR agrees to commence operations for drilling
of
well(s) by November 1, 2008, and to diligently proceed with drilling
of
the well(s). It is agreed by both parties that time is of the essence
in
this contract.
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| C. |
Depth:
CONTRACTOR agrees to drill the well(s) with due diligence to a
depth
Of
3,000
+ or -
feet or to the Clinton
formation
as specified by the
OPERATOR. OPERATOR must be present at completion of well. Dayrates
will
apply until OPERATOR or his REPRESENTATIVE is available to complete
the
well.
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| D. |
OBLIGATIONS
OF CONTRACTOR
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1.
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To
drill the well or xxxxx on a fluid footage basis for the sum of
$18.00 per
foot
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2.
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To
do and perform any and all things necessary or incidental to the
proper
drilling of the well(s).
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3.
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To
comply with all rules and regulations of the State of Ohio and
other
agencies having jurisdiction.
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| 4. |
To
furnish, by telephone call, a detailed daily drilling report to
OPERATOR'S
office at 440-255-6325
before 11:00 AM.
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5.
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To
furnish OPERATOR a copy of CONTRACTOR'S daily time sheets and geolograph
copy upon completion of drilling
operation.
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6.
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To
furnish all equipment and labor for the drilling of the well(s)
including
bits, fuel, drill pipe, and other services and materials as may
be
specified within this contract.
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| 7. |
To
drill a proper diameter hole to set surface and other casing and
supply
drilling bits, as needed, for the
same.
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| 8. |
To
drill a 7-7/8" diameter hole to contract depth and supply drilling
bits,
as
needed, for the same.
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| 9. |
To
notify local inspector for the Ohio Department of Natural
Resources,
Division of Mineral Resources Management, when
needed.
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| 10. |
To
collect, wash and sack samples at intervals designated by
OPERATOR.
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| 11. |
To
furnish rig time of up to 24
hrsfor
running and cementing of 8-5/8" surface casing, logging and running
4-1/2"
production casing. If new or used surface or production casing
is supplied
by OPERATOR to CONTRACTOR, any problems arising from same, (i.e.
separation, "fishing", etc.), OPERATOR shall be responsible for
all
expenses thereof, including day work rates of CONTRACTOR unless
caused by
CONTRACTOR'S negligence.
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| A. |
All
other time will be billed at $450.00per
hour.
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| B. |
If
in the event that conductor pipe needs to be cemented, dayrates
will apply
from spud time until back out from under conductor with the footage
needed
to drill conductor hole deducted from the total depth of the
well.
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| 12. |
To
Drill the well(s) at the site designated by the
OPERATOR.
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| 13. |
If
for any reason air drilling cannot continue due to flare, gas in
hole,
water in hole, permit conditions, operator's instructions, etc.
then
dayrates will begin form the point that air drilling stopped. Dayrates
will apply as follows:
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With
Drill Pipe
Without
Drill Pipe $450.00
per hour
Stand-By Without Crew
| 14. |
To
carry at all times during the term of this Agreement at CONTRACTOR'S
expense, insurance of the type and in minimum amounts as
follows.
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A.
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Statutory
workers' compensation and employer's liability insurance covering
all of
the contractor's employees.
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B.
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Comprehensive
general liability insurance with limits of $5,000,000 per occurrence
for
death or bodily injury or property damage, naming as additional
insureds
OPERATOR, Lucky Brothers, LLC, and Alpha Plaza Investments,
Ltd.
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2
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C.
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Automobile
liability insurance with limits of $1,000,000 per occurrence combined
limit for bodily injury and property
damage.
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D.
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CONTRACTOR
agrees to provide OPERATOR, Lucky Brothers, LLC, and Alpha Plaza
Investments, Ltd. with a certificate of insurance evidencing coverage's
upon request by OPERATOR, Lucky Brothers, LLC, or Alpha Plaza Investments,
Ltd.
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E.
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CONTRACTOR
shall indemnify, defend and save harmless OPERATOR, Lucky Brothers,
LLC,
and Alpha Plaza Investments, Ltd. in connection with any and all
claims
for injury to or damage of personal property and for injury or
death to
persons occasioned by the acts of CONTRACTOR, CONTRACTOR’S employees,
agents, and servants.
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| 15. |
CONTRACTOR
agrees to pay all claims for labor, material, services, and supplies
furnished by CONTRACTOR hereunder and agrees to allow no lien or
charge to
be fixed upon the lease, the well(s), the land on which the well(s)
is/are
to be drilled, or other property of OPERATOR. CONTRACTOR agrees
to
indemnify, protect and save OPERATOR harmless from and against
all such
claims and liens.
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| 16. |
Should
the hole, for any cause attributable to CONTRACTOR'S negligence
be lost or
damaged while CONTRACTOR is engaged in the performance of work
hereunder
on a footage basis, all such loss or damage to the hole shall be
borne by
CONTRACTOR. If the hole is not in condition to be carried to the
contract
depth, CONTRACTOR shall properly plug and abandon the hole and,
if
requested by OPERATOR, commence a new hole without delay at the
CONTRACTOR'S cost. The drilling of the new hole shall be conducted
under
the terms and conditions of this Contract and in the same manner
as though
it were the hole that had been lost or damaged. In such case, CONTRACTOR
shall not be entitled to any payment or compensation for expenditures
made
or incurred by CONTRACTOR or in connection with the abandoned hole.
If any
casing or material cannot be recovered from the lost hole or, if
recovered, is damaged beyond further use, and provided such loss
or damage
was the result of or caused by CONTRACTOR'S negligence, CONTRACTOR
shall
replace all such casing or materials at CONTRACTOR’S
cost.
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| 17. |
CONTRACTOR
shall be an independent contractor with respect to performance
of all work
hereunder and neither CONTRACTOR nor anyone employed by CONTRACTOR
shall
be deemed for any purpose to be the employee, agent, servant, or
representative of the OPERATOR in the performance of any work or
service
or any part thereof in any manner dealt with hereunder, OPERATOR
shall
have no direction or control of CONTRACTOR or of its employees
and agents
except in the results to be obtained. Work contemplated herein
shall meet
the approval of OPERATOR and shall be subject to the general right
of
inspection provided for the operator to secure the satisfactory
completion
thereof.
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3
CONTRACTOR
agrees not to sublet or assign any of the work required hereunder, except
for
the work normally performed by subcontractors, without the express written
consent of OPERATOR.
In
the
event of the failure or inability of CONTRACTOR to perform any of its
obligations hereunder in a timely manner, OPERATOR shall have all rights
remedies provided by law, including without limitation the right to immediately
terminate this agreement.
| 18. |
Other
duties and obligations of
CONTRACTOR:
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| A. |
Provide
1 (one) frac tank for cementing.
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| B. |
Provide
1 (one) Dozer to help with equipment and
trucks.
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| C. |
To
provide fresh water.
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| D. |
In
the event that OPERATOR provides a dozer to build location or dig
pits,
all dozer time will be billed at $85.00 per hour and operator travel
time
will be billed at $35.00 per hour.
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| E. |
In
the event that OPERATOR provides a skid steer broom/bucket for
roadway mud
cleaning, it will be billed at $45.00 per hour and operator travel
time
will be billed at $35.00 per hour.
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| E. |
OBLIGATIONS
OF OPERATOR:
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| 1. |
To
stake and provide state drilling permit and surety
bond.
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| 2. |
OPERATOR
will notify CONTRACTOR of any impending road regulations, including
Frost
Laws, which may restrict CONTRACTOR from moving or relocating his
equipment. OPERATOR is not responsible due to CONTRACTOR'S negligence
and
if negligent, CONTRACTOR will be held
liable.
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| 3. |
To
furnish right of way into and out of location and to be fully responsible
for land and crop damage, except as set forth as above. OPERATOR
is not
responsible for CONTRACTOR'S negligence, and if negligent, CONTRACTOR
will
be held liable.
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| 4. |
To
backfill pits and restore location.
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5.
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To
furnish all casing, float equipment, cement equipment, head equipment,
and
cement.
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4
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6.
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To
furnish all plugging material if well is dry. If well is to be
plugged,
OPERATOR will pay at day work rate after remainder of rig time
allowable
is used. (D-11).
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| 7. |
OPERATOR
shall pay in full within 30 days
of CONTRACTOR'S invoice date. A one percent (1%) interest charge
will be
added each month.
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| 8. |
UNDERGROUND
DAMAGE: OPERATOR agrees to defend and indemnify CONTRACTOR
for any and all
claims against CONTRACTOR
resulting from operations under this Agreement on account of
injury to,
destruction of or loss or impairment of any property right
in or to oil,
gas or other mineral substance or water, if at the time of
the act or
omission causing such injury, destruction, loss, or impairment,
said
substance had not been reduced to physical possession above
the surface of
the earth, and for any loss or damage to any formation, strata,
or
reservoir beneath the surface of the
earth.
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9.
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LIABILITY
FOR WILD WELL: CONTRACTOR shall be liable for the costs of regaining
control of any wild well, as well for the costs of removal of any
debris,
and shall indemnify OPERATOR in this
regard.
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| 10. |
JURISDICTION
AND VENUE: This Agreement shall be governed in all respects by
law of the
State of Ohio, without regard to conflict of laws or provisions
thereof
Any action filed by either party as a result of a dispute resulting
from
this Agreement shall only be filed in the Common Pleas Court of
Lake
County, Ohio, or in the United States District Court for the Northern
District of Ohio, Eastern Division it being expressly agreed by
the
parties that said forums shall have exclusive and sole jurisdiction
and
venue to hear disputes between the parties arising out of this
Agreement.
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| 11. |
Other
duties and obligations of OPERATOR:
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A. Necessary
County and/or local permits.
B. Furnish
access way, culvert and rock as necessary.
C. Provide
Trackhoe if needed.
D. Provide
mud or road scraper.
E. Provide
Porta-Xxx on location.
F. Provide
pit liners and/or reinforced pit liners.
G.
All soap, mud and chemicals needed to drill well.
H.
Fuel surcharge on anything over $1.00 per gallon times the depth of the
well.
I. Location
and pits of suitable size to drill well.
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IN
WITNESS WHEREOF, the parties hereto have set their signatures and executed
this
instrument as of the date and year first above written.
| CONTRACTOR: | OPERATOR: | |||
| Great Plains Exploration, LLC | Xxxx X. Oil and Gas Company | |||
| By: |
/XXXXXXX
X. XXXXXXX
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By: |
/XXXXXXX
X. XXXXXXX/
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| Its: PRESIDENT ___________________ | Its: PRESIDENT ________________________ | |||
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