EXHIBIT 10.1
HUAYA LOTE 100 - AGREEMENT
JANUARY 31, 2007
THIS AGREEMENT, (hereinafter "January 2007 Agreement") is made as of the date
entered below among Compania Consultora de Petroleo, S.A. (hereinafter "CCP"), a
company incorporated in the Republic of Peru; Radial Energy, Inc., a company
incorporated in Nevada, United States of America (hereinafter referred to as
"Radial"); and Xxxxxxx-Peru, Inc., a company incorporated in Texas, United
States of America (hereinafter referred to as "ZPI"). The companies named above
may sometimes individually be referred to as "Party" and collectively as the
"Parties".
The Parties have entered into contracts and agreements for oil and gas
exploration, exploitation, development, and production as regards a License
Contract (hereinafter the "License Contract" or "Contract") with the Republic of
Peru, Ministry of Mines, and/or PeruPetro covering certain areas located in the
Loreto Department, Peru - Ucayali Basin called Block 100.
NOW, THEREFORE, in consideration of the agreements and obligations set
out below and to be performed, the Parties agree as follows:
1. No existing agreements among the parties are changed except as to the terms
in this January 2007 Agreement.
2. In consideration of four hundred fifty thousand U.S. dollars (US$ 450,000)
Radial will purchase a 3.0 % interest out of the 70.0 % interest of CCP in Lote
100, with Radial then having 23.0 % interest and CCP then having 67.0 % interest
in the Lote and License Contract. ZPI agrees to waive any preferential purchase
rights it holds under the JOA for this transaction, and will continue to own
10.0 % in the Lote and License Contract.
3. Radial will fund the US$ 450,000 within three (3) days of the day this
January 2007 Agreement is signed, funded directly to CCP by wire.
4. CCP will use in fact and in good faith the funds paid by Radial for the
increased interest in Lote 100 to the extent required for costs already incurred
or incurred in the future from vendors and contractors and similar costs for
drilling, logging and evaluating, and completion and testing of the Huaya 1X
well, which is currently in various stages of drilling.
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5. ZPI will pay costs of its Team for further operations on the Huaya 1X, 2X,
and 5X xxxxx, subject to potential repayment as set forth below.
6. The excess costs incurred by ZPI, defined as funds spent by ZPI on the Huaya
1X, 2X, and 5X xxxxx (called Obligation Xxxxx No. 1, 2, and 3 in the agreements
between CCP and ZPI) and for funds actually paid by ZPI over and above the sum
of US$ 1,050,000 allocated to the drilling rig and related equipment and drill
bits, fuel, and drilling labor in its agreements with CCP, will be paid to ZPI
by CCP and Radial, proportionate to their interests, out of 10 % of the Huaya
revenues net to their total interest once production begins. No excess costs
will be paid to ZPI except out of these future Huaya revenues, and ZPI will
document these costs as requested. The costs to be reimbursed will be direct
costs spent for the xxxxx or well operations that are reasonable and necessary
for the xxxxx to be drilled, completed, and tested.
7. The second funding to be paid by Radial if Radial determines to proceed with
the drilling of Obligation Xxxxx No. 2 and 3 (most likely called Huaya 2X and
5X), will be reduced by the advance made by Radial in the amount of US$ 100,000
several weeks before this Agreement. Radial and ZPI agree that the payments by
Radial to ZPI will be timed as required in the agreements between CCP and ZPI,
which payments from Radial to ZPI as reduced are now US$ 900,000 for Obligation
Well No. 2, and US$ 650,000 for Obligation Well No. 3. ZPI pays CCP US$ 900,000
and US$ 600,000, respectively, as reduced, and ZPI retains US$ 50,000 of the
payment amount based on a different sum in the two respective agreements as
originally written.
Agreed to as a binding and final agreement on these issues, this 31st day of
January, 2007.
/s/ XXXXX TOMAYLIA XXXXXXXX
_____________________________________
Compania Consultora de Petroleo, S.A.
/s/ G. XXXXX XXXXX
_____________________________________
Radial Energy, Inc.
/s/ XXXXXX X. XXXXXXX
_____________________________________
Xxxxxxx-Peru, Inc.
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