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EXHIBIT 10.21
August 31, 1998
Blue Ridge Group, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Dear Xx. Xxxx:
When executed by you, this letter shall serve as an agreement by and
between Blue Ridge Energy, Inc., (herein "Energy") and Blue Ridge Group, Inc.
(herein "Group") regarding the acquisition by Energy of a 25% Working Interest
in up to fifty (50) oil and gas xxxxx located in the Appalachian Basin as well
as the acquisition of drilling rigs and ancillary equipment to drill oil and gas
xxxxx. Our agreement with respect to these acquisitions is as follows:
1: Group intends to locate, drill and develop up to fifty (50) xxxxx in the
Appalachian Basin. Energy will purchase a 25% Working Interest resulting in
an 18.75% Net Revenue Interest in each well located, drilled and developed
for $55,000.
2: Energy intends to acquire drilling rigs and related equipment for ongoing
operations in the Appalachian Basin. Group may sell to Energy, at
historical cost any excess drilling rigs and equipment in its possession
that would suit Energy's ongoing needs.
3: In order to facilitate the foregoing, Energy agrees to extend a line of
credit of $1,500,000 to Group for a period of one year from which Group may
draw funds as required. Group will pay interest of 12% per annum on all
outstanding balances under this arrangement. Amounts due under this line of
credit will be repaid as funds generated by Group's operations become
available, by the sale of drilling rigs and equipment to Energy and/or by
the exchange of 25% Working Interest in oil and gas xxxxx located in the
Appalachian Basin at a rate of $55,000 per 25% Working Interest conveyed.
If the foregoing fully describes your understanding of the agreement between
Blue Ridge and Premier, please acknowledge your assent to the terms and
conditions hereof by signing in the space provided below.
Truly Yours,
/s/ XXXXX X. XXXX, XX.
Xxxxx X. Xxxx, Xx.
Sr. Vice President-Finance
Agreed and accepted this 31st day
August, 1998 by Blue Ridge Energy, Inc.
/s/ XXXXXX X. XXXX
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By: Xxxxxx X. Xxxx
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Its: President
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