EXHIBIT 10.1
FARMOUT AGREEMENT
WHEREAS: Bedrock Energy, Inc. wishes to enter into a FARMOUT agreement
for certain leases with Sun River Energy, Inc. ("Farmor") dated November 10,
2007.
NOW THEREFORE:
The purposes of this letter agreement is to consolidate and merge in
writing all of the terms and conditions of prior agreements reached between Sun
River Energy, Inc. as "Farmor" and Bedrock Energy, Inc. hereinafter referred to
as "Farmee," whereby Farmee will commit and be obligated to drill one well to
earn interests in the leases described on Exhibit A, according to the terms and
conditions as outlined below:
For and in consideration of mutual benefits, detriments, and promises,
the adequacy of which is hereby acknowledged, Farmor hereby grant Farmee the
right to explore the subject leases under the terms hereof as follows:
1. DEFINITIONS
(A) "Contract Depth" means a depth sufficient to penetrate into
the Sussex formations or to a final depth of 4,000 feet
subsurface, whichever depth first occurs.
(B) "Effective Date" will mean November 10, 2007.
(C) "Farmout Lands" means the Farmor leaseholding net interest in
and to the mineral leases set forth in Exhibit A attached
hereto and made a part hereof.
2. EXHIBITS
The following Schedules and Exhibits are attached hereto and made part
of this Agreement:
(A) Exhibit A is a map which provides a general description of the
Farmout Lands known also as the "subject leases," also
described as Lease Xx. 00-00000, Xxxxxxx Xxxxx, Xxxxxxx 00,
X00X, X00X.
(B) The AAPL Joint Operating Agreement will be executed between
the Farmor and Farmee, which agreement governs operations on
the subject leases and the various amendments thereto, all of
which are incorporated herein by reference
3. CONSIDERATION AND COMMITMENT
(A) Farmee hereby commits to drill one obligation well to contract
depth; and
(B) Farmor and Farmee agree to all other terms and conditions of
this Agreement.
4. OBLIGATION WELL
(A) Farmee shall be the operator of all Exploration Xxxxx and
development xxxxx;
(B) Farmee on or before November 1, 2008, or as soon thereafter as
field, weather, and regulations permit, shall commence to
drill the initial Test Well at a location prescribed by Farmee
on the Farmout Lands to the test depth, and Farmee shall
continuously drill and test any and all zones which by
engineering, log, and/or geological analysis suggest the
presence of hydrocarbons and shall complete the well and fully
equip with all necessary facilities and secure and acquire all
necessary regulatory permits for production and water disposal
required to test and produce any economic hydrocarbons from
such test well and, if non-producible, shall abandon the well
all at the sole cost, risk, and expense of Farmee in
accordance with the provisions of the Joint Operating
Agreement attached hereto as Exhibit B; and
5. INTEREST EARNED
(A) Farmor represent to Farmees that Farmor own an 80%% NRI in the
subject leases.
(B) Provided Farmee is not in default hereunder, Farmee shall earn
in the Farmout Lands an undivided 100% of the Farmor's working
interest in, to, and of the hydrocarbons, subject to a
non-convertible Overriding Royalty (XXX) reserved to the
Farmor of 2%, such XXX to be free and clear of any and all
exploration, development, drilling, completion, production,
processing, water disposal, and gas gathering costs.
6. RENTALS
Farmee shall be responsible for payment of 100% of the leaseholding
rentals for the Farmin Lands from the date of execution of this
Agreement, provided that the Farmee shall not pay rentals on any
leaseholds Farmee holds by production.
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7. ADDITIONAL PROVISIONS
(A) Backin for Farmor: Farmor, shall receive, after payout of all
costs of drilling, completion pipeline, production facilities,
and fees, a backin interest of twenty five percent of the
working interest in the xxxxx drilled on the subject leases,
on a well by well basis.
(B) Farmee shall be responsible for providing all accounting
records to Farmor to support a determination by a qualified
account of all costs of exploration, drilling, completion,
pipeline, production facilities, and fees.
(C) Prior to the spudding of the Initial Well, Parties shall enter
into a mutually acceptable AAPL 610-1989 Operating Agreement
covering the subject leases. Said Operating Agreement shall
declare Farmee as Operator and shall include, but not be
limited to, among others, the following provisions:
(i) Preferential Right to Purchase will be deleted in its
entirety; and
(ii) Non-consent penalties will be 300% / 300%.
(D) Force Majeure provisions, Federal Lease Stipulations, and rig
availability shall apply to all drilling commitments
hereunder.
(E) Geological information and well data from any Test Well
drilled hereunder shall be provided to Farmor by Farmee in
confidence as trade secrets, not to be published.
(F) Farmee may assign all of the rights and obligations created
under this Agreement, subject to Farmor's written permission,
which permission shall not be unreasonably withheld.
(G) Farmor and Farmees shall enter into an "Area of Mutual
Interest" Agreement for a radius of three miles around the
subject leases on or before the drilling of the initial test
well.
(H) Farmor will provide an Abstract and Mineral Title Lawyer's
Opinion within thirty days hereafter on the subject leases.
Farmee shall pay any costs thereof. If any title defects are
noted, Farmor agree to take whatever action is appropriate to
correct the defects, promptly, to allow drilling to commence.
8. ADDRESS FOR SERVICE
The address for each of the Parties for service of notices shall be as
follows:
FARMOR: FARMEE:
Sun River Energy, Inc. Bedrock Energy, Inc.
00000 Xxxx 00xx Xxx., Xxxxx 000X 0000 X. Xxxxxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000 Xxxxxx, XX 00000
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9. EXECUTION
Execution of the signature page to this Agreement by your company will
constitute an Agreement between our companies.
If this reflects your understanding of the terms and conditions agreed upon
respecting this Agreement, please execute and return one signature page to my
attention.
10. ENTIRE AGREEMENT INCORPORATION
This Agreement and the documents and instruments and other agreements
among the parties hereto as contemplated by or referred to herein
contain every obligation and understanding between the parties relating
to the subject matter hereof and merges all prior discussions,
negotiations, agreements and understandings, both written and oral, if
any, between them, and none of the parties shall be bound by any
conditions, definitions, understandings, warranties or representations
other than as expressly provided or referred to herein. All schedules,
exhibits and other documents and agreements executed and delivered
pursuant hereto are incorporated herein as if set forth in their
entirety herein.
11. BINDING EFFECT
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, heirs, personal
representatives, legal representatives, and permitted assigns.
12. ASSIGNMENT
This Agreement may not be assigned by any party without the written
prior consent of the other parties hereto. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and
permitted assigns.
13. WAIVER AND AMENDMENT
Any representation, warranty, covenant, term or condition of this
Agreement which may legally be waived, may be waived, or the time of
performance thereof extended, at any time by the party hereto entitled
to the benefit thereof, and any term, condition or covenant hereof
(including, without limitation, the period during which any condition
is to be satisfied or any obligation performed) may be amended by the
parties thereto at any time. Any such waiver, extension or amendment
shall be evidenced by an instrument in writing executed on behalf of
the party against whom such waiver, extension or amendment is sought to
be charged. No waiver by any party hereto, whether express or implied,
of its rights under any provision of this Agreement shall constitute a
waiver of
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such party's rights under such provisions at any other time or a waiver
of such party's rights under any other provision of this Agreement. No
failure by any party thereof to take any action against any breach of
this Agreement or default by another party shall constitute a waiver of
the former party's right to enforce any provision of this Agreement or
to take action against such breach or default or any subsequent breach
or default by such other party.
14. NO THIRD PARTY BENEFICIARY
Nothing expressed or implied in this Agreement is intended, or shall be
construed, to confer upon or give any Person other than the parties
hereto and their respective heirs, personal representatives, legal
representatives, successors and permitted assigns, any rights or
remedies under or by reason of this Agreement, except as otherwise
provided herein.
15. SEVERABILITY
In the event that any one or more of the provisions contained in this
Agreement, or the application thereof, shall be declared invalid, void
or unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall remain in full force and effect and the
application of such provision to other Persons or circumstances will be
interpreted so as reasonably to effect the intent of the parties
hereto. The parties further agree to replace such invalid, void or
unenforceable provision with a valid and enforceable provision that
will achieve, to the extent possible, the economic, business and other
purposes of such invalid, void or unenforceable provision.
16. EXPENSES
Except as otherwise provided herein, each party agrees to pay, without
right of reimbursement from the other party, the costs incurred by it
incident to the performance of its obligations under this Agreement and
the consummation of the transactions contemplated hereby, including,
without limitation, costs incident to the preparation of this
Agreement, and the fees and disbursements of counsel, accountants and
consultants employed by such party in connection herewith.
17. HEADINGS
The section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or
interpretation of any provisions of this Agreement.
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18. OTHER REMEDIES: INJUNCTIVE RELIEF
Except as otherwise provided herein, any and all remedies herein
expressly conferred upon a party will be deemed cumulative with and not
exclusive of any other remedy conferred hereby, or by law or equity
upon such party, and the exercise by a party of any one remedy will not
preclude the exercise of any other remedy. The parties hereto agree
that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to seek an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity. In any
action at law or suit in equity to enforce this Agreement or the rights
of the parties hereunder, the prevailing party in any such action or
suit shall be entitled to receive a reasonable sum for its attorneys'
fees and all other reasonable costs and expenses incurred in such
action or suit.
19. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument. Facsimile signatures shall be
deemed valid and binding.
20. GOVERNING LAW
This Agreement has been entered into and shall be construed and
enforced in accordance with the laws of the State of Colorado, without
reference to the choice of law principles thereof.
21. JURISDICTION AND VENUE
This Agreement shall be subject to the exclusive jurisdiction of the
courts of Jefferson County, Colorado. The parties to this Agreement
agree that any breach of any term or condition of this Agreement shall
be deemed to be a breach by virtue of a failure to perform an act
required to be performed and irrevocably and expressly agree to submit
to the jurisdiction of the courts of the State of Colorado for the
purpose of resolving any disputes among the parties relating to this
Agreement or the transactions contemplated hereby. The parties
irrevocably waive, to the fullest extent permitted by law, any
objection which they may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this
Agreement, or any judgment entered by any court in respect hereof
brought in Jefferson County, Colorado, and further irrevocably waive
any claim that any suit, action or proceeding brought in Jefferson
County, Colorado has been brought in an inconvenient forum.
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22. PARTICIPATION OF PARTIES
The parties hereby agree that they have had the opportunity to be
represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation,
holding, or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party
drafting such agreement or document.
23. FURTHER ASSURANCES
The parties hereto shall deliver any and all other instruments or
documents reasonably required to be delivered pursuant to, or necessary
or proper in order to give effect to, all of the terms and provisions
of this Agreement including, without limitation, all necessary
assignments, division orders, and such other instruments of transfer as
may be necessary or desirable to effectuate this Agreement.
SUN RIVER ENERGY, INC. BEDROCK ENERGY, INC.
By: By:
--------------------------------- ---------------------------
President President
STATE OF COLORADO )
) ss.
COUNTY OF JEFFERSON )
On this _________ day of __________, before me, the undersigned, a
Notary Public in and for said State, personally appeared Xxxxxx X. Xxxxxxx,
President of Sun River Energy, Inc., known to be the person whose name is
subscribed to this within instrument, and who upon oath swore that the
statements therein contained are true and correct.
WITNESS my hand and official seal.
My Commission expires: __________
----------------------------
Notary Public
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STATE OF________________ )
) ss.
COUNTY OF_______________ )
On this _______day of_________________, 2007, before me, the undersigned, a
Notary Public in and for said State, personally appeared
_______________________, President of______ _________________ known to me to be
the person whose name is subscribed to this within instrument, and who upon oath
swore that the statements therein contained are true and correct.
WITNESS my hand and official seal.
My Commission expires: __________
---------------------------
Notary Public
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