Exhibit 10.02
WYOMING
VENTURE AGREEMENT OF
MID-POWER RESOURCE CORPORATION
AND XXXXXX XXXX XXXXX AND/OR HIS DESIGNEES
This Venture Agreement ("Agreement") is entered into this 24th day of September
2002, by and between Mid-Power Resource Corporation ("Mid-Power") and Xxxxxx
Xxxx Xxxxx and/or his designees ("Xxxxx"), collectively the Parties.
The parties hereto agree that this Venture Agreement shall cover all of Township
14 North, Ranges 61 and 62 West, Township 15 North, Ranges 61 and 62 West,
Laramie County, Wyoming, being acquired from Kachina Energy of Denver, Colorado.
Mid-Power hereby agrees to advance to Xxxxx $800,000.00 (as the initial advance)
upon the signing of this Venture Agreement, and to pay for all costs needed to
drill and complete the initial well, shoot and interpret seismic, geology,
acquiring lands and leases covering approximately 20,000 acres and any and all
other expenses incurred for Xxxxx to identify drilling prospects in the above
described Townships and Ranges. The $800,000.00 initial advance to Xxxxx shall
be made as follows: $550,000.00 from the Colusa County Escrow Account and
$250,000.00 from the SE Colorado Exploration Account. Further, any and all costs
above the initial advance of $800,000.00 needed to accomplish the above, shall
be immediately advanced to Xxxxx by Mid-Power upon Xxxxx' request. Mid-Power
shall only earn a 35% working interest based on an 80% net revenue interest
equating to a 28% net revenue interest in the spacing unit of any well drilled
and completed, ready to sell oil and/or gas as designated by Xxxxx and approved
by the State of Wyoming Oil and Gas Conservation Commission on the above
described Townships an Ranges. Xxxxx does not warrant title either expressed or
implied on any of the lands mentioned above except by and through and under
Xxxxx.
The monies that are being transferred from the Colusa County Escrow Account and
the SE Colorado Exploration Account will be replenished if Mid-Power wants to
pursue those ventures further than the money left in these two accounts will
allow.
After all items as referred to above are accomplished and the initial well is
drilled and completed, Mid-Power shall have the continuing right to earn the
above stated interest in designated spacing units within the Townships and
Ranges described above by electing to drill as mentioned above when notified by
Xxxxx immediately and by Mid-Power paying 100% of all cost to drill and complete
a well ready to see oil and/or gas. Further, should Mid-Power not elect to
continue the right to earn, at any point, then in that event, Mid-Power shall
earn only the designated spacing unit or units previously earned and shall no
longer have any further rights in the Township and Ranges described above.
The Parties shall enter into an AAPL 610-1989 Operating Agreement, like the one
used by the Parties on the Xxxxxx 2A-14 well in Colusa County, California,
naming Xxxxx or his designee as Operator.
This Operating Agreement shall provide for a One Hundred Percent (100%)
Non-Consent Penalty and any other modifications to be mutually agreed upon by
the Parties hereto. There will also be attached to the Operating Agreement, a
XXXXX 1984 Onshore Accounting Procedure providing for a $1,250.00 per month
producing well change for the Xxxxx drilled pursuant to this Agreement. In the
event there is a conflict between the terms of the Operating Agreement and this
Agreement, the Provisions of this Agreement shall prevail.
All operations on the above Lands shall be conducted in accordance with the
Terms and Conditions of the underlying Oil and Gas Leases and all related
Agreements and in accordance with the rules and regulations of the State of
Wyoming Oil and Gas Conservation Commission and any and all governmental bodies.
Mid-Power and Xxxxx hereby agree to treat this Letter Agreement as a Tax
Partnership and further agree that all allowable tax deductions generated by
this Venture shall be allocated to the party whose funds have been used to pay
such costs.
A Wyoming Venture Agreement account between Mid-Power and Xxxxx shall be opened
at the Bank of America in Las Vegas, Nevada.
It is agreed by the Parties hereto that a fully executed fax copy of this
Agreement shall be deemed the same as a fully executed Original Agreement.
This agreement shall be binding upon and inure to the benefit of each Party,
their respective Legal Representatives, Heirs and Assigns.
IN WITNESS WHEREOF, the Parties have signed this Agreement effective as of the
date set forth above.
PARTIES:
Mid-Power Resource Corporation
/s/ Xxxxx X. Xxxxx
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By: Xxxxx X. Xxxxx, President
/s/ Xxxxxx X Xxxxx
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Xxxxxx Xxxx Xxxxx
