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EXHIBIT 10.21
AGREEMENT AND ASSIGNMENT OF
INTEREST IN XXXX XXXXXXX PROJECT
XXXXX COUNTY, OKLAHOMA
This Agreement and Assignment of Interest in the Xxxx Xxxxxxx Project,
Xxxxx County, Oklahoma (hereinafter referred to as the "Assignment") is made
and entered into effective as of the 1st day of September, 1995, by and between
ASPECT RESOURCES LIMITED LIABILITY COMPANY ("Aspect") and XXXXXXX OIL & GAS,
L.P. ("BOG") (Aspect and BOG are sometimes individually referred to herein as a
"Party" and collectively referred to herein as the "Parties").
W I T N E S S E T H:
WHEREAS, OXY USA Inc. ("OXY"), XXXX PETROLEUM CORPORATION ("Xxxx") and
Aspect entered into that certain Geophysical Agreement, Xxxx Xxxxxxx Project,
dated as of September 1, 1994, a copy of which is attached hereto as Exhibit B
(hereinafter referred to as the "Geophysical Agreement"), regarding the joint
conduct of a 3-D seismic geophysical program (hereinafter referred to as the
"Geophysical Program") across the lands in Xxxxx County, Oklahoma, described in
Exhibit 1 to the Geophysical Agreement; and
WHEREAS, Xxxx, Quest Energy Corporation ("Quest") and Aspect entered
into that certain letter agreement dated September 1, 1994, a copy of which is
attached hereto as Exhibit C (hereinafter referred to as the "Xxxx Agreement"),
providing for Xxxx'x assignment of an undivided thirty percent (30%) of its
interest in certain oil and gas leases covering the lands that are described in
Exhibit 2 to the Xxxx Agreement (hereinafter referred to as the "Xxxx Leases");
and
WHEREAS, Aspect and Quest entered into that certain 3-D Exploration
Agreement, Xxxx Xxxxxxx Project, Xxxxx County, Oklahoma, dated September 9,
1994, a copy of which is attached hereto as Exhibit D (hereinafter referred to
as the "Quest 3-D Exploration Agreement"), providing for Aspect's payment of
certain consideration to Quest and the grant of an overriding royalty to Quest
burdening Aspect's interest in oil and gas interests covering the lands which
are described in Exhibit A which is attached hereto and incorporated herein for
all purposes (the lands described in Exhibit A which is attached hereto being
hereinafter referred to as the "West Xxxxxxx XXX"); and
WHEREAS, Aspect is interested in assigning one-third (1/3rd) of its
interest in the Geophysical Agreement, the Xxxx Agreement and the Quest 3-D
Exploration Agreement (the Geophysical Agreement, the Xxxx Agreement and the
Quest 3-D Exploration Agreement being sometimes collectively referred to herein
as the "Agreements") and all rights and property interests related thereto
(including without limitation the Xxxx Leases and all other property interests
acquired pursuant to the Agreements) to BOG pursuant to the terms, provisions
and reservations which are set forth in this Assignment; and
WHEREAS, Aspect and BOG are interested in creating an area of mutual
interest covering the West Xxxxxxx XXX as provided in this Assignment;
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
ARTICLE I.
TERMS OF ASSIGNMENT
Section 1.1. Assignment of Conveyed Interests. Aspect hereby grants,
bargains, sells, assigns and conveys to BOG one-third of (i) all of Aspect's
right, title and interest in, to and under the Agreements, (ii) all of Aspect's
right, title and interest in, to and under the Xxxx Leases, (iii) all of
Aspect's right, title and interest in, to and under any Subsequently Acquired
Interests (as such term is defined in the Geophysical Agreement) and (iv) all
of Aspect's other property rights of every kind (whether legal or equitable,
vested or contingent) obtained under or in any way related to the Agreements or
otherwise covering or related to the West Xxxxxxx XXX, whether same be now
owned or hereafter acquired by Aspect; provided, however, that Aspect is
reserving hereunder the Back-In
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Interest, as such term is defined in Section 2.2 below (the properties, rights
and interests described in (i), (ii), (iii) and (iv) above, subject to the
Back-In Interest reserved to Aspect hereunder, are herein collectively called
the "Conveyed Interests"). As part of the Conveyed Interests, BOG hereby owns
one-third of all of Aspect's rights, title and interests in and to the Xxxx
Leases, being one-third of the thirty percent (30%) interest in the Xxxx Leases
that is to be assigned (or which has been assigned) to Aspect in accordance
with the terms of the Xxxx Agreement, subject to the Back-In Interest.
Similarly, as part of the Conveyed Interests, BOG hereby owns one-third of all
of Aspect's right to participate in Subsequently Acquired Interests under the
terms of the Geophysical Agreement, being one-third of the twenty-five percent
(25%) interest in the Subsequently Acquired Interests in which Aspect has the
right to participate in accordance with the terms of the Geophysical Agreement,
subject to the Back-In Interest. In the event that prior to the date of this
Assignment Aspect has already elected to participate in a Subsequently Acquired
Interest, as part of the Conveyed Interests, BOG hereby owns one-third of all
of Aspect's rights, titles and interests in such Subsequently Acquired
Interest. Except as expressly provided herein with respect to the Back-In
Interest, as part of the Conveyed Interests, Aspect also grants, bargains,
sells and conveys to BOG all rights and benefits under the Agreements which are
appurtenant to or related to the Agreements and the ownership of the Xxxx
Leases and Subsequently Acquired Interests relating to the West Xxxxxxx XXX.
In the event that Aspect has already been assigned legal or record title to any
part of the Xxxx Leases and/or Subsequently Acquired Interests, concurrent with
its execution of this Assignment, Aspect shall assign BOG record title to one-
third of Aspect's interest in such Xxxx Leases and/or Subsequently Acquired
Interests utilizing the form of assignment which is attached hereto as Exhibit
E.
Section 1.2. Conveyed Interests Subject to the Terms of the Agreements.
BOG hereby recognizes and agrees that it is subject to all of the terms and
provisions of the Agreements and the Conveyed Interests are subject to the
terms and provisions which are set forth in the Agreements.
Section 1.3. Aspect in Good Standing Under the Agreements. Aspect
represents and warrants to BOG that Aspect is currently in good standing under
the terms of the Agreements and has not lost any rights or interests under the
Agreements due to any default, election or non-payment by Aspect.
ARTICLE II.
CONSIDERATION FOR ASSIGNMENT
Section 2.1. Cash Payment. Concurrent with its execution of this
Assignment BOG shall pay Aspect sixteen thousand six hundred sixty-seven
dollars ($16,667.00).
Section 2.2. Aspect's Payout Back-In Interest. Upon the occurrence of
Payout (as such term is defined below in this Section 2.2) BOG shall assign and
convey to Aspect an undivided fifteen percent (15%) of all of BOG's right,
title and interest in and to the Agreements and all property interests (real,
personal, tangible or intangible) obtained or owned by BOG under the terms of
the Agreements and/or this Assignment, including without limitation, an
undivided fifteen percent (15%) of BOG's interest in the seismic data, Xxxx
Leases, Subsequently Acquired Interests, non-consent interests and/or non-
participation interests acquired pursuant to the terms of the Agreements and
any and all xxxxx that have been drilled or are drilling on the West Xxxxxxx
XXX as of the occurrence of Payout; provided, however, that Aspect's Back-In
shall be subject to proportionate reduction to account for any reductions
resulting from the reversion of non-consent or non-participation interests or
any back-ins resulting from the terms of farm-our or farm-in agreements. Upon
the occurrence of Payout, Aspect shall become responsible for all future costs,
expenses and liabilities which are incurred and allocated to the Back-In
Interest from and after the occurrence of Payout. For purposes of this
Assignment, "Payout" shall occur on the last day of the calendar month during
which the Net Revenues (as such term is defined below in this Section 2.2)
received by or otherwise allocable to BOG, from and after the effective date
hereof, equal or exceed one hundred percent (100%) of all of the Direct Costs
(as such term is defined below in this Section 2.2. As used in this Section
2.2, the term "Direct Costs" means and includes all costs (excluding any costs
for BOG's overhead, office administration, insurance, amortization or
depreciation) incurred and paid by BOG under the terms of the Agreements or
otherwise related to the West Xxxxxxx XXX, including
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without limitation, all services, costs and liabilities of the Geophysical
Program, land acquisition and maintenance costs, and drilling, completion and
workover costs; however, such Direct Costs do not include any lease operating
expenses or taxes that are deducted in calculating Net Revenues as described
below. As used herein, the term "Net Revenues" shall mean all of the gross
revenues received by or otherwise allocable to BOG, from and after the
effective date hereof, to the extent same are from or attributable to the
Subject Hydrocarbons (as such term is defined below in this Section 2.2), less
all lease operating expenses attributable to production of Subject Hydrocarbons
and all production, severance, ad valorem, excise and other taxes (other than
income taxes) attributable to or measured by production of Subject
Hydrocarbons. As used herein, the term "Subject Hydrocarbons" shall mean all
of BOG's right, title and interest (whether legal or equitable, vested or
contingent, and whether now owned or hereafter acquired, by operation of law or
otherwise) in and to (i) any oil, gas or other minerals in, under or that may
be produced from the West Xxxxxxx XXX, and/or (ii) any oil, gas or other
minerals (or the proceeds thereof) that may otherwise be allocated to BOG under
or pursuant to the Agreements.
ARTICLE III.
RESPONSIBILITIES AND LIABILITIES
UNDER THE AGREEMENTS
Section 3.1. BOG Responsibility for Costs and Liabilities Related to
the Agreements and the Conveyed Interests after the Effective Date. Subject to
the terms and provisions of Section 3.2 below, BOG hereby agrees to assume and
be responsible for, and indemnify and hold Aspect harmless from, all costs,
expenses and liabilities that accrue under the Agreements after the effective
date of this Assignment and which are allocable on a heads-up basis to the
Conveyed Interests. BOG shall pay all costs and expenses which are incurred
after the effective date of this Assignment that are related to the Agreements
and allocated to the Conveyed Interests in accordance with the terms set forth
in the Agreements. Aspect shall remain responsible for the thirty thousand
dollar ($30,000.00) payment that is to be made to Quest following the
completion of the initial interpretation of the seismic data pursuant to the
terms of the Quest 3-D Exploration Agreement.
Section 3.2. Aspect Responsibility for Costs and Liabilities Allocable
to the Back-In Interest After Payout. Anything to the contrary contained in
Section 3.1 notwithstanding, Aspect shall be responsible for, and indemnify and
hold BOG harmless from, all costs, expenses and liabilities that accrue under
the Agreements after the occurrence of Payout which are allocable on a heads-up
basis to the Back-In Interest.
Section 3.3. Aspect Responsibility for Costs and Liabilities Incurred
Prior to the Effective Date. Aspect shall remain responsible for, and
indemnify and hold BOG harmless from, all costs, expenses and liabilities that
were incurred or which accrued under the Agreements prior to the effective date
of this Assignment.
ARTICLE IV.
SEISMIC DATA AND INTERPRETATIONS
Section 4.1. Program Data and Interpretations. BOG shall interpret the
seismic data resulting from the Geophysical Program for Aspect, Quest and Xxxx
pursuant to the terms set forth in the Xxxx Agreement; however, ASPECT
UNDERSTANDS AND AGREES THAT BOG MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY
KIND AS TO THE PROGRAM DATA OR INTERPRETATIONS THAT ARE PROVIDED TO ASPECT,
XXXX OR QUEST, INCLUDING WITHOUT LIMITATION, THEIR FITNESS FOR A PARTICULAR
PURPOSE, MERCHANTABILITY OR ACCURACY, AND BOG HEREBY DISCLAIMS ANY AND ALL SUCH
REPRESENTATIONS OR WARRANTIES, AND ANY USE OF THE SEISMIC DATA OR
INTERPRETATIONS BY ASPECT, QUEST OR XXXX, OR ANY ACTION TAKEN BY ANY OF SUCH
PARTIES SHALL BE BASED SOLELY ON SUCH PARTY'S OWN JUDGMENT, AND BOG AND ITS,
OFFICERS, EMPLOYEES, SUCCESSORS AND ASSIGNS, SHALL NOT BE LIABLE OR RESPONSIBLE
TO ASPECT, XXXX OR QUEST FOR ANY LOSS, COST, DAMAGES, OR EXPENSE WHATSOEVER,
INCLUDING INCIDENTAL OR
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CONSEQUENTIAL DAMAGES, INCURRED OR SUSTAINED AS A RESULT OF THE USE OF OR
RELIANCE UPON THE PROGRAM DATA OR INTERPRETATIONS, REGARDLESS OF WHETHER OR NOT
SUCH LOSS, COST, DAMAGE OR EXPENSE IS FOUND TO RESULT IN WHOLE OR IN PART FROM
THE SOLE OR CONCURRENT NEGLIGENCE OR OTHER FAULT OF BOG OR ITS OFFICERS, AGENTS
OR EMPLOYEES.
Section 4.2. No Charge for BOG's Services. Aspect shall not be
required to reimburse BOG for any costs that are incurred by BOG in
interpreting the seismic data which has resulted from the Geophysical Program.
Section 4.3. BOG's Right to Disclose its Interpretations to OXY. In
addition to all other disclosures that may be permitted under the terms of the
Agreements, Aspect hereby authorizes BOG to disclose and provide copies of its
interpretations of the seismic data that has resulted from the Geophysical
Program to OXY.
V.
ELECTIONS UNDER THE AGREEMENTS
Section 5.1. BOG's Right to Make Separate Elections Under the
Agreements. The Parties recognize and agree that BOG has the right to make
separate and independent elections under the Agreements with respect to its
participation with the Conveyed Interests, including, without limitation,
participation in the acquisition of oil and gas interests, and drilling,
completion and workover operations.
VI.
MISCELLANEOUS
Section 6.1. Entirety of Agreement. This Assignment contains the
entire understanding and agreement of the Parties with respect to the subject
matter hereof and supersedes all prior agreements, understandings,
negotiations, and discussions among the Parties with respect to such subject
matter.
Section 6.2. Assignment. This Assignment shall be binding upon and
inure to the benefit of the Parties hereto and their respective successors and
their respective assigns of rights hereunder; provided, however, that the
conveyance or assignment instrument vesting such assignee with all or part of
such interests must expressly provide that the assignment or conveyance is made
subject to the terms and conditions contained in this Assignment.
Section 6.3. Notices. All notices and other communications required or
permitted under this Assignment shall be in writing, and unless otherwise
specifically provided, shall be delivered personally, or by mail, telecopier or
delivery service, to the addresses set forth opposite the signatures of the
Parties below, and shall be considered delivered upon the date of receipt.
Each Party may specify its proper address or any other post office address
within the continental limits of the United States by giving notice to other
Parties, in the manner provided in this Section, at least ten (10) days prior
to the effective date of such change of address.
Section 6.4. Counterparts. This Assignment may be executed in multiple
counterparts, each of which shall be binding upon the signing Party or Parties
thereto as fully as if all Parties had executed one instrument, and all of such
counterparts shall constitute one and the same instrument. If counterparts of
this Assignment are executed, the signatures of the Parties, as affixed hereto,
may be combined in and treated and given effect for all purposes as a single
instrument.
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IN WITNESS WHEREOF this Assignment is executed by the Parties on the
dates set forth opposite their respective signatures below but is effective for
all purposes as of the date first set forth above.
Address: XXXXXXX OIL & GAS, L.P.,
0000 Xxxxxx Xxxx, Xxxxx 0000 by Xxxxxxx Exploration Company,
Xxxxxx, Xxxxx 00000 its Managing General Partner
(000) 000-0000
Fax: (000) 000-0000
Dated:
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By:
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Xxx X. Xxxxxxx, President / CEO
Address: ASPECT RESOURCES LIMITED
LIABILITY COMPANY
000 00xx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
(000) 000-0000
Fax: (000) 000-0000 By:
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(name printed)
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Its:
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Agreement and Assignment
Xxxx Xxxxxxx Project
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