GEOLOGIST/TECHNICAL ADVISOR CONSULTING AGREEMENT
PETROL OIL AND GAS INC.
This Consulting Agreement is entered into by and between Petrol Oil and
Gas Inc. ("Company") a Nevada Corporation and Xxxxxxx Xxxxxxxxxxx
("Consultant") for the purpose of contracting Consultant to provide Geologic,
Geophysical and Engineering Consulting Services as specified by this
Agreement in support of the Company Coal Bed Methane Project ("Project").
The parties hereto agree as follows:
1. POSITION. Company shall make use of the Consulting Services of
Consultant including but not limited to Areas of Geology, Geophysical and
Formation Evaluation, Drilling and Completion, Regulatory and Lease
Evaluation matters and other Technical concerns related to the Exploration
and Production of Hydrocarbons during the course of the Company's Project.
2. TERM. The Company shall retain Consultant as a Project geologist, and
technical advisor for a period of one year commencing December 1, 2002 and
ending December 1, 2003.
2.1. Term Extension. At any time prior to the expiration of the Term, as
stated in section 2, Company and Consultant may, by mutual written agreement,
extend Consultant's Consulting Services under the terms of this Agreement for
such additional periods as they may agree.
3. CONSULTANT DUTIES. Consultant will provide the Company with his Oil and
Gas Technical and Business Expertise, Advise and Reports from his office in
Bartlesville, OK and other locations of his choice as well as at Field and
Company Well-Site locations in support of the Company's Project as follows:
3.1. Preliminary Project Duties Consultant will undertake on behalf of the
Company a Task to Develop and Create a Series of Maps to Include but Not
Limited to Coal Distribution, and Structure of the Subsurface in the Company
Project areas. As part of this Map Development the Consultant shall:
3.1.1. Gather relevant Information and Data from Libraries in Wichita and
Lawrence, KS as well as Drillers Logs and Base Maps from other sources;
3.1.2. Develop Coal Distribution Maps for the Dawson, Mulky, Riverton and
other Coal Beds that are of significance to the Company Project Leases;
3.1.3. Incorporate New Well and Log Data into existing data to produce
Coal Thickness maps for the Company Project Area;
3.1.4. Develop Subsurface Log Correlation Diagrams for the Company Project
Area;
3.1.5. Develop Structure maps on One or Two Horizons to assess the Best
Producing Areas for the Development of Gas Production.
3.2. Primary Duties at Consultants Office: During the Course of this
Agreement Consultant will operate from his office in Bartlesville, OK and
other locations of his choosing wherein he shall provide the Company with the
following:
3.2.1. Updates of County-Wide Coal Distribution and Structural maps for
the Company Project Areas;
3.2.2. Ongoing Drilling and Completion Advise and Consultation for the
Planning and Execution of Project xxxxx;
3.2.3. Consulting and Advise regarding the Acquisition of Lease Acreage
and Preferred Well Locations;
3.2.4. Consulting and Advise regarding Surface Facilities including but
not limited to Gas Gathering Systems, Compressor Requirements and
Installations, and Water Disposal Systems;
3.2.5. Consulting and Advise regarding Local, State and Federal Regulatory
Issues for Project Xxxxx and the Production and Disposal of Hydrocarbons
and Water from the Project Xxxxx.
3.3. Primary Duties at Project Field Locations: During the Course of this
Agreement Consultant will travel to Project Field locations in Eastern Kansas
and other Areas as Necessary to Acquire relevant Data and Information
regarding the Geology, Drilling, Formation Evaluation, Completion and
Production of the Project Xxxxx, and Assist in Various Operational Aspects of
Producing Project xxxxx. Consultants Field Duties include but not limited to
the following:
3.3.1. Provide Well-Site Geology, a Description of the Formations and
Rocks from Drilling logs, Drill Cuttings and Core and Assess the
Locations of Oil and Gas Shows;
3.3.2. Define the Geophysical Log Suite to be used and then Supervise
and Evaluate of the Acquired Logs for the Locations of Oil and Gas;
3.3.3. Advise on Size and Type of Casing to be Employed in the Project
Well;
3.3.4. Prepare a Cementing Program that will conform with State and
Local Regulations while Minimizing the Adverse effects of Potentially
Productive Gas Intervals;
3.3.5. Recommend Zones to Perforate, Stimulate and Complete and Assist
in the Execution of those Processes for some of the Initial Well
Completions;
3.3.6. Collect, Catalog and provide Reports of Coal Chips, Cuttings
and Cores to be used in a Gas-In-Place Assessment;
4. COMPENSATION. Company shall Compensate the Consultant with the following
Amounts and on the following terms:
4.1. Consulting Pay Rate and Reimbursements for Preliminary Project Duties.
4.1.1. For Services rendered by Consultant during the Preliminary Project
Duties as Defined in Section 3.1 of this Agreement, Company shall pay
Consultant a Daily Rate of Five Hundred Dollars, ($500.00).
4.1.2. Company will Reimburse Consultant for Travel Expenses incurred
during the course of Acquiring the Data and Information necessary to
fulfill the Preliminary Project Duties as defined in Section 3.1
4.1.3. Company will Reimburse Consultant for Outside Services and
Supplies including, Printing, Drafting and Map development Services that
are necessary to fulfill the Preliminary Project Duties as defined in
Section 3.1.
4.2. Consulting Pay Rate and Reimbursements for Primary Project Duties
4.2.1. For Services rendered by Consultant during the Primary Project
Duties as Defined in Sections 3.2 and 3.3 of this Agreement, Company
shall pay Consultant a Daily Rate of Four Hundred Dollars, ($400.00).
4.2.2. Company will Reimburse Consultant for Travel Expenses incurred
during the course of his Activities necessary to fulfill the Primary
Project Duties as defined in Section 3.2 and 3.3
4.2.3. Company will Reimburse Consultant for Outside Services and
Supplies including, Printing, Drafting and other Third Party Map
Services that are necessary to fulfill the Primary Project Duties as
defined in Section 3.2 and 3.3
4.3. Compensation with Company Stock. In Addition to the Cash Compensation
described in Section 4.2 of this Agreement the Company will provide the
Consultant with Company Common Stock and Stock Option as follows:
4.3.1. Twenty Thousand (20,000) Shares of the Company Common Stock
$0.001 par value for each Month the Consultant Fulfills his Duties as
Described in Section 3 of this Agreement. These Shares will be issued
in arrears Quarterly,
4.3.2. One Hundred Sixty Thousands (160,000) of the Company Common Stock
$0.001 par value as a signing bonus,
4.3.3. The right, privilege and Option ("Stock Option") to purchase One
Hundred Thousand (100,0000) shares of the common stock $0.001 par value,
of Company ("Option Shares"), which are to be fully vested and become
exercisable immediately. The exercise price per share of the Option
Shares shall be:
4.3.3.1. 50,000 shares at $0.50 per share
4.3.3.2. 50,000 shares at $1.00 per share.
4.3.4. The options shall be exercised by written notice directed to
Company, accompanied by a check payable to Company for the Option shares
being purchased. Company shall make immediate delivery of such purchased
shares, fully paid and non-assessable, registered in the name of
Consultant.
4.3.5. All share certificates issued to Consultant Executive shall bear
the following restrictive legend, unless and until such shares have been
registered in accordance with the Securities and Exchange Act of 1933,
as amended (the "Act"), THE SHARES OF STOCK
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT"), OR THE SECURITIES LAWS
OF ANY OTHER JURISDICTION, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED, OR OTHERWISE DISPOSED OF IN ANY MANNER UNLESS THEY ARE
REGISTERED UNDER SUCH ACT AND THE SECURITIES LAWS OR ANY APPLICABLE
JURISDICTIONS OR UNLESS PURSUANT TO ANY EXEMPTION THEREFROM.
4.3.6. Company shall use its best efforts to register the Shares under
the Act at the earlier of such time as it registers shares issuable
pursuant to a qualified employee stock option plan or such time as it
registers shares beneficially owned by or issued to others.
4.3.7. The Company currently has total authorized common stock of One
Hundred Million (100,000,000) shares. If, and to the extent that the
number of shares of common stock of the Company is increased beyond the
current 100,000,000 authorized or reduced by whatever action, including
but not limited to a change of par value, share split, reclassification,
or a dividend payable in stock, or the like, the number of shares
subject to the Stock Option and the option price per share shall be
proportionately adjusted. If, however, the Company is reorganized,
consolidated or merged with another corporation, Consultant shall be
entitled to receive options covering shares of such reorganized,
consolidated, or merged company in the same proportion, at an equivalent
price, and subject to the same conditions.
For purposes of the preceding sentence, the excess of the aggregate fair
market value of the shares subject to the option immediately after any
such reorganization, consolidation, or merger over the aggregate option
price of such shares shall not be more than the excess of the aggregate
fair market value of all shares subject to the Stock Option immediately
before such reorganization, consolidation, or merger over the aggregate
option price of such shares, and the new option or assumption of the old
Stock Option shall not give Consultant additional benefits which he did
not have under the old Stock Option, or deprive him of benefits which he
had under the old Stock Option.
4.3.8. Consultant shall have no rights as a stockholder with respect to
the Option Shares until exercise of the Stock Option and payment of the
Option Price as herein provided.
5. Exclusivity. The Company agrees that it shall not hold exclusive right
to Consultant services, however the Company expects that Consultant services
shall be available in a timely manner for each project new drilling.
6. Mergers and Acquisition of the Company. In the event that Company is
acquired by, or merged with, another company, the Company agrees that the
terms of this Agreement shall be binding on such other company and Consultant
shall continue to perform all duties, and receive compensation, as described
herein.
7. Confidentiality. Consultant shall sign and have any and all his
employees, sub-contractors, and other third parties contracted by Consultant
to perform service in the Project sign a confidentiality agreement regarding
theirs and others work on the Project and all the data and information
acquired in the Project whether in written, electronic or verbal form. Copies
of all confidentially agreements shall be provided to the Company in a timely
manner.
8. Informational Ownership. All the data, logs, maps, notes, drafts,
reports, documents and other information related to the Project gathered,
acquired, and developed whether in written or electronic form shall always be
and remain the property of the Company and must be surrendered to the Company
upon termination of this agreement.
IN WITNESS WHEREOF, the parties hereto set their hands as of the 19th day of
December 2002.
/s/ Xxxx Xxxxxxxx /s/ Xxxxxxx Soeckinger
Xxxx Xxxxxxxx Xxxxxxx Soeckinger,
