A Binding Agreement
A
Binding Agreement
Mogul
Energy Ltd. (“Mogul”), a company incorporated and existing under the laws of the
Province of British Columbia-Canada and TransPacific Petroleum Corp.
(“TransPacific”), a company incorporated and existing under the laws of the
Province of British Columbia-Canada, hereby acknowledge and agree to the
following:
1.
TransPacific was instrumental in arranging an Option by Mogul to acquire
the
rights to Avir Enterprises Ltd.’s Saskatchewan P&NG Lease PN 46794,
designated as “Walpole Prospect” and described as:
Lease
Date: June 06, 2000 Effective Date: Xxxxx 00, 0000 Xxxx: 5
years
Land
Description: W ½ Sec.2, SE ¼ Sec.11, W ½ Sec.12 Township 11 Range 32
WIM.
2.
Mogul shall exercise, within 60 days from Avir’s acceptance date of the
attached Option Agreement, its option to pay Avir a lump sum of $25,000 (twenty
five thousand Canadian dollars) to acquire its entire rights to Saskatchewan
P&NG Lease PN 46794.
3.
Based on TransPacific’s evaluation, the partners will acquire additional crown
and free- hold land in the general area whereby, Mogul will pay all costs
of
lands and seismic acquisition and will have 75% (seventy five percent) interest
wheras, TransPacific will be assigned 25% (twenty five percent) interest
and
carried at no cost, other than the value of its technical evaluation and
seismic
interpretation of the project.
4.
Mogul is committed to drill, test, complete, equip or abandon an exploratory
well to penetrate all potential oil and gas intervals down to approximately
2,000 meters or the Basement, whichever comes first, in a location designated
as
Xxxxxxx 0-0-00-00 X0X for an estimated budget of approximately $500,000 for
a
dry hole and $700,000 for a successful, completed and equipped well, to earn
75%
and TransPacific will earn 25% interest in the prospect.
5.
In consideration of TransPacific’s efforts and past expenses incurred to develop
this project, secure the option agreement with Avir and its technical
contribution to the project, its 25% share of the costs to drill, complete,
test, equip or abandon such well will be borne entirely by Mogul, and will
not
be subject to cost recovery.
6.
TransPacific will be the Operator of the project and all operating expenses
to
explore, produce, process and sell the oil as well as its Vancouver office
and
field base expenses will be charged to the project, commencing with the
production and sale of petroleum or natural gas and as long as the project
continues the production and TransPacific does not dispose of its interest
in
the property to a third party.
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7.
TransPacific will be represented by one member of a four member Operating
Committee whereby, under no circumstances, any actions concerning the running
of
operations, any expenditures, dilution, divesture of interests or acquisition
will be valid or legal without the unanimous approval of the Operating Committee
members.
8.
Upon the completion and equipping or abandonment of the Walpole exploratory
well, the acquisition of the crown and freehold lands and seismic, TransPacific
and Mogul will each be responsible for any further investments in accordance
with their respective share.
9.
The rights and obligations of the Parties to this agreement shall be governed
and construed according with the laws of the provinces of British Columbia,
Alberta and Saskatchewan and in accordance with the CAPL (Canadian Association
of Petroleum Landmen) Model Agreement.
10.
All disputes between TransPacific and Mogul will be resolved and arbitrated
under the rules of the Province of Alberta-Canada by three arbitrators, one
arbitrator to be selected by each party and the two arbitrators should agree
on
the third one, unless the parties mutually agree to a single
arbitrator..
11.
This Agreement shall ensure to the benefit of, and binding on the Parties
hereto, and respective successors and permitted assigns, and upon their heirs,
executors, administrators and assigns of persons how are, or become, Parties
hereto.
Accepted
and Agreed to this on the 14th
day of
April, 2005
/s/
Xxxxxx Xxxx
Xx.
Xxxxxx Xxxx - President, Mogul Energy Ltd.
/s/
Ghareeb X.
Xxxx
Xx.
Xxxxxxx X. Xxxx - President, TransPacific Petroleum Corp.
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