BANKS VENTURES LTD. SUITE 1320 – 925 WEST GEORGIA STREET VANCOUVER BC CANADA V6C 3L2
EXHIBIT 10.1
BANKS VENTURES LTD.
SUITE 1320 – 000 XXXX XXXXXXX XXXXXX
XXXXXXXXX XX XXXXXX X0X 0X0
June 01, 2003
Pacific Petroleum Inc.
Suite 283 – 0000 Xxxxxx Xx.
Xxxxxxxxx, XX X0X 0X0
Attention: D. Xxxxx Xxx
Sir:
Farmout Agreement Covering Prospects in the
East Corning Project, Tehama County, California
Whereas, Lario Oil and Gas Company (“Lario”) owns PNG Leases at East Corning, Tehama County, California (as more fully described in Clause 3) and;
Whereas, Lario entered into a Farmin Agreement dated September 15, 2000 between Lario and Olympic Resources (Arizona) Ltd. (“Olympic”) for certain earning rights on the PNG Leases and;
Whereas, Olympic entered into a Farmout Agreement on April 15, 2002 and amended on August 2, 2002 between Olympic and Banks Ventures Ltd. (Banks) for certain earning rights on the PNG Leases and;
The following sets out the specific terms and provisions for this Farmout Agreement between Banks and Pacific Petroleum Inc. covering the prospect area, controlled by Lario, with earning terms and conditions for the area, and more specifically for each well.
| 1. | Farmee: Pacific Petroleum Inc. |
| 2. | Farmor: Banks Ventures Ltd. |
| 3. | Farmout Lands:
The Farmout Lands shall comprise the following lands
with the right to explore for, work, win and recover petroleum and natural
gas in all P&NG rights which are granted by the PNG Leases as outlined
below: |
| Farmout Lands | Farmor’s Available WI |
| Township 24 North, Range 2 West | 12.75% |
| Section 31: Xxxx 0 xxx 0 xx Xxxxx 00 | |
| Xxxxxx Xxxxxx, XX |
| Farmor does not warrant title to the Farmout Lands. |
| 4. | Farmout Well:
|
| Xxxx Bottom Blues #1-36
|
|
| This earning well will be
drilled in the second or third quarter of 2003 subject to surface access,
rig availability and receipt of all necessary approvals. The Farmee agrees
to pay 100% of Farmor’s 12.75% in drilling, completing, equipping
and tie-in costs. The Farmee will have a 10.75% net revenue interest in
the drilling spacing unit subject to overriding and landowner royalties.
There is no payout in this well. |
|
|
Well Name: Xxxx
Bottom Blues #1-36 |
|
|
Working Interest Assigned:
12.75 % |
|
|
Net Revenue Interest Assigned:
10.75 % |
|
| 5. | Insurance |
| Unless notified by Farmee,
Farmee will be covered under Farmor’s Well Control and Blow-Out
Insurance. |
|
| 6. | Appointment of Operator
|
| Lario, or its assigns, is
hereby appointed the initial Operator and agrees to act as Operator to
conduct operations on the Farmout Lands for the Parties in accordance
with their working interests. |
|
| 7. | Formal Agreement
|
| This letter sets out the
basic terms and conditions of our proposal. If you are in agreement with
the foregoing, kindly indicate your acceptance by signing in the space
provided below and return one copy of this letter to the attention of
the undersigned. |
Sincerely,
Banks Ventures Ltd.
/S/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
Director
ACCEPTED AND AGREED TO THIS 3RD DAY OF JUNE 2003.
Pacific Petroleum Inc.
/S/ D. Xxxxx Xxx
D. Xxxxx Xxx
President
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