MANAGEMENT AGREEMENT
THIS AGREEMENT, made and entered into this 4 day of Feb., 1997, by and
between Xxx Petroleum LLC (hereinafter referred to as "Owner") and Xxx
Management Company, LLC (hereinafter referred to as "Manager"), WITNESSETH:
I
Premises
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1.1 Owner either owns or controls certain producing oil and gas xxxxx
located in the States of Oklahoma, Texas, Louisiana, Michigan, New Mexico and
Wyoming, which xxxxx are more fully described in Exhibit A, attached hereto and
by this reference made a part hereof. For convenience of reference, such
producing oil and gas xxxxx shall hereinafter be referred to as the "Contract
Xxxxx".
1.2 Manager, upon the terms and provisions hereinafter set forth, has
agreed to supervise and manage the operation of the Contract Xxxxx and Owner
will cause Manager to be appointed as the Operator of such xxxxx on behalf of
Owner.
1.3 The consideration for this contract shall be good and valuable
consideration and the mutual promises and covenants set forth herein, the
receipt and sufficiency of which are hereby confessed and acknowledged.
II
Manager's Duties
----------------
2.1 On behalf of Owner, Manager shall assume and perform the entire general
management and supervision of the operation of the Contract Xxxxx and shall make
its staff available for such purposes. Manager's duties of managing and
supervising the operations of the Contract Xxxxx on behalf of Owner shall
include all responsibilities as the Operator of the Contract Xxxxx as conducted
by a prudent operator including the following:
(a) The general supervision and management of all personnel, including
well-pumpers and field roustabouts, which are assigned or employed in
connection with the field operation of the Contract Xxxxx;
(b) The securing of third party services for the purposes of maintaining
the Contract Xxxxx in a good operating condition;
(c) The preparation of Authorities For Expenditure (AFE's) for reworking,
recompleting and drilling of new xxxxx and the general supervision and
management of such operations;
(d) Manager shall keep and maintain the books of account and other records
which are necessary to the operation of the Contract Xxxxx including
performing the
1
joint interest billing and disbursement of revenues to other working
interest owners;
(e) Manager shall prepare and submit all reports relative to the Contract
Xxxxx which may be required by state regulatory bodies.
III
Manager's Compensation
----------------------
3.1 Owners shall pay to Manager monthly as compensation for the services
which Manager shall perform under the terms of this Agreement Twelve Thousand
Five Hundred Dollars ($12,500.00). Manager shall also receive all payments to
Operator for operations pursuant to the Operating Agreements for the Contract
Xxxxx.
3.2 The amount which is to be paid to Manager as set forth in Paragraph 3.1
may be amended from time to time by the parties hereto if they so mutually
agree.
IV
Miscellaneous
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4.1 The Manager shall not be liable for any losses sustained in or on each
well or on the property where each well is located, or for any damage to the
well or productive capacity thereof, caused by the act of God, fire, storm,
flood, explosion, strike, riots, theft or the act of any person not under
direction or supervision of Manager. Manager's liability shall be limited to any
loss or losses resulting from the bad faith, gross negligence, or willful
misconduct of the supervisory employees of Manager.
4.2 This Agreement shall remain in force and effect for the term of ten
(10) years or until terminated by either party hereto. Such termination shall be
effected by either party hereto giving the other party not less than 180 days'
written notice that the contract shall be terminated on a date certain. Notice
of termination shall be in writing sent by courier, to the other party at the
following address:
Owner: Xxx Petroleum LLC
One Houston Center
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Manager: Xxx Management Company LLC
One Houston Center
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
2
Such notice shall be deemed to have been given on the day following the date of
mailing. Upon termination hereof, Manager shall be entitled to payment of any
and all amounts owning to it pursuant to the terms and provisions hereof.
4.3 Neither party hereto shall execute any assignment or transfer of its
rights hereunder without the consent of the other party first obtained.
4.4 Manager shall comply with all laws and regulations of all governmental
bodies applicable to the operations of the Contract Xxxxx.
4.5 This Agreement shall be binding upon the parties hereto and upon their
successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
OWNER:
XXX PETROLEUM LLC
By: /S/ X. XXXX / XXXXXX XXXXX
------------------------------------
Title:
---------------------------------
Date: 2/4/97 / 2/4/97
---------------------------------
MANAGER:
XXX MANAGEMENT COMPANY LLC
By:
-----------------------------------
Title:
--------------------------------
Date: 2/4/97
--------------------------------
3
EXHIBIT A
Farmers Acquisition - Average Expenses
Lease Name County/Parish Operator WI NRI
Louisiana
XXXXXX NO. 1 Bossier Xxxxxxx 0.25000000 0.17500000
XXXXXX NO. 2 Bossier Xxxxxxx 0.25000000 0.17500000
XXXXXX NO. 3 Bossier Xxxxxxx 0.25000000 0.17500000
XXXXXX NO. 6 Bossier Xxxxxxx 0.25000000 0.17500000
Michigan
XXXXXX NO. 1-25A Manistee WW Energy 0.12500000 0.09296900
New Mexico
XXXXXX FEDERAL NO. 1 Eddy Anadarko 0.25000000 0.17750000
Xxxxxxxx
XXXX XXXX XX. 0 Caddo MW Petroleum 0.00000000 0.00146500
XXXXXXXX XXXXX XX. 00 Xxxxxx Xxxxx 0.01327700 0.01033600
XXXXXXXX L UNT/2 Garfield Farmers 0.25000000 0.21533200
XXXXXXXX NO. 1 Garfield Farmers 0.25000000 0.21533200
XXXXXX-A NO. 1 Xxxxxxxx Xxx 0.37191900 0.31186900
XXXXXX NO. 1 Xxxxxxxx Xxx 0.75490700 0.61729100
XXXXXX-XXXXXX Garfield Continental 0.00000000 0.01702500
XXXXXXX EST NO. 1 Xxxxxxx Xxx 0.78125000 0.67557800
XXXXXX NO. 1 Xxxxxxx Xxx 1.00000000 0.85403600
XXXXXXX NO. 1 Xxxxxxx Xxx 1.00000000 0.87500000
XXXXXX NO. 1 Xxxxxxx Xxx 1.00000000 0.87500000
WHITE NO. 1 Xxxxxxx Xxx 1.00000000 0.86458400
WHITE NO. 2 Xxxxxxx Xxx 1.00000000 0.87500000
XXXXXXXX NO. 19-1 Grant Echo 0.40500000 0.42875000
XXXXX A NO. 1-32 Coal Xxxxx XX 0.08668400 0.07068000
XXXXXXX NO. 1&2 Alfalfa Xxxx Energy 0.00000000 0.02734300
XXXXXXXX NO. 1 Alfalfa Xxxx Energy 0.00000000 0.02734400
XXXXXXX NO. 4 Alfalfa Xxxx Energy 0.00000000 0.02734400
GIFT A Xxxxxxxx Xxxxxx & Parley 0.00000000 0.02734400
XXXXX #2 Xxxxxxxx Xxx 1.00000000 0.82031000
XXXXXX #1 Xxxxxxxx Xxx 1.00000000 0.82031000
XXXXXX XXX XXXX XX. 0 Xxxxxxxx Xxxxxx & Parley 0.24752500 0.18952500
XXXXXXXX NO. 2-21 XxXxxx Xxxxxxx 0.37500000 0.28875000
Texas
DENTON NO. 1 Xxxxxx Xxx 0.75000000 0.58187500
DENTON NO. 2 Xxxxxx Xxx 0.75000000 0.58187500
4
EXHIBIT A (Continued)
Farmers Acquisition - Average Expenses
GROSS (8/8th) NET
Lease Name XXX* Overhead Total XXX Overhead Total
Xxx Expenses*** Xxx Expenses
Operator** Operator
Louisiana
XXXXXX NO. 1 $2,148 $0 $2,148 $537 $0 $537
XXXXXX NO. 2 $2,112 $0 $2,112 $528 $0 $528
XXXXXX NO. 3 $1,868 $0 $1,868 $467 $0 $467
XXXXXX NO. 6 $1,732 $0 $1,732 $433 $0 $433
Michigan
XXXXXX NO. 1-25A $4,264 $0 $4,264 $533 $0 $533
New Mexico
XXXXXX FEDERAL NO. 1 $980 $0 $980 $245 $0 $245
Xxxxxxxx
XXXX XXXX XX. 0 $0 $0 $0 $0 $0 $0
XXXXXXXX XXXXX XX. 00 $5,423 $0 $5,423 $72 $0 $72
XXXXXXXX L UNT/2 $720 $0 $720 $180 $0 $180
XXXXXXXX NO. 1 $720 $0 $720 $180 $0 $180
XXXXXX-A NO. 1 $262 $428 $690 $97 $159 $257
XXXXXX NO. 1 $211 $431 $642 $159 $325 $485
XXXXXX-XXXXXX $0 $0 $0 $0 $0 $0
XXXXXXX EST NO. 1 $395 $593 $988 $309 $463 $772
XXXXXX NO. 1 $336 $593 $929 $336 $593 $929
XXXXXXX NO. 1 $491 $593 $1,084 $491 $593 $1,084
XXXXXX NO. 1 $455 $593 $1,048 $455 $593 $1,048
WHITE NO. 1 $178 $593 $771 $178 $593 $771
WHITE NO. 2 $232 $593 $825 $232 $593 $825
XXXXXXXX NO. 19-1 $2,629 $0 $2,629 $1,065 $0 $1,085
XXXXX A NO. 1-32 $3,333 $0 $3,333 $289 $0 $289
XXXXXXX NO. 1&2 $0 $0 $0 $0 $0 $0
XXXXXXXX NO. 1 $0 $0 $0 $0 $0 $0
XXXXXXX NO. 4 $0 $0 $0 $0 $0 $0
GIFT A $0 $0 $0 $0 $0 $0
XXXXX #2 $178 $593 $771 $178 $593 $771
XXXXXX #1 $178 $593 $771 $178 $593 $771
XXXXXX GAS UNIT NO. 2 $723 $0 $723 $179 $0 $179
XXXXXXXX NO. 2-21 $3,629 $0 $3,629 $1,361 $0 $1,361
Texas
DENTON NO. 1 $602 $501 $1,103 $452 $376 $827
DENTON NO. 2 $4,000 $501 $4,501 $3,000 $376 $3,376
5
EXHIBIT A (Continued)
Farmers Acquisition - Average Expenses
Lease Name County/Parish Operator WI NRI
GLASS NO. 1 Xxxxxx Xxx 0.75000000 0.56250000
XXXXXXX A NO. 1 Xxxxxxxx Xxxxxxxx 0.39875000 0.27710000
XXXXX Bee Bee 0.25000000 0.20312500
XXXXXXXX B NO. 1 Xxxx Xxx 1.00000000 0.80000000
XXXXXXXXXXX NO. 1-4 Xxxx Xxx 1.00000000 0.81250000
CHERRY D/4/5/7/9 Xxxx Xxx 1.00000000 0.75000000
XXXXXXXXXXX M/2/3/4 Xxxx Xxx 1.00000000 0.81250000
XXXXXXXXXXX B NO. 1 Xxxx Xxx 1.00000000 0.81250000
XXXXXXXXXX Xxxxx Boyd&McWilliams 0.18750000 0.13500000
XXXXX CREEK 1-5 Xxxxx Boyd&McWilliams 0.18750000 0.11812500
FRYSAK NO. 1 Xxxxxxxxx Boyd&McWilliams 0.25000000 0.16958300
XXXXXXXX NO. 1 Xxxx Xxx 1.00000000 0.81250000
XXXXX CREEK 3/6 Xxxxx Boyd&McWilliams 0.18750000 0.11812500
Wyoming
FLAT TOP FED #32-10 Converse Equitable 0.20250000 0.17218800
Farmers Acquisition - Average Expenses
GROSS (8/8th) NET
Lease Name XXX* Overhead Total XXX Overhead Total
Xxx Expenses*** Xxx Expenses
Operator** Operator
GLASS NO. 1 $285 $501 $786 $214 $376 $590
XXXXXXX A NO. 1 $449 $867 $1,316 $179 $346 $525
XXXXX $1,080 $0 $1,080 $270 $0 $270
XXXXXXXX B NO. 1 $164 $598 $762 $164 $598 $762
XXXXXXXXXXX NO. 1-4 $819 $1,105 $1,924 $819 $1,105 $1,924
CHERRY D/4/5/7/9 $1,053 $886 $1,939 $1,053 $886 $1,939
XXXXXXXXXXX M/2/3/4 $5,293 $3,900 $9,193 $5,293 $3,900 $9,193
XXXXXXXXXXX B NO. 1 $258 $571 $829 $258 $571 $829
XXXXXXXXXX $1,845 $0 $1,845 $346 $0 $346
XXXXX CREEK 1-5 $2,550 $0 $2,550 $478 $0 $478
FRYSAK NO. 1 $2,162 $0 $2,162 $541 $0 $541
XXXXXXXX XX. 0 $282 $593 $875 $282 $593 $875
XXXXX CREEK 3/6 $1,020 $0 $1,020 $191 $0 $191
Wyoming
FLAT TOP FED #32-10 $1,283 $0 $1,283 $260 $0 $260
$56,342 $15,626 $71,968 $22,481 $14,225 $36,706
6
EXHIBIT A (Continued)
Xxxxxx Acquisition - Average Expense
Lease Name County/Parish Operator WI NRI
Louisiana
ST XXXX XXXXXX (SN) St. Xxxx Parker&Parsley 0.3623470 0.2572660
KG XXX 1,2,3,5 (SN) Concordia Xxxx Production 0.5463750 0.3961210
XXXXXX NO. 1 (SN) Iberia An-Son 0.0946800 0.0736690
XXXXXX XX CP 1 (SN) Iberia Parker&Parsley 0.0138990 0.0107880
HERO Plaqumine Parker&Parsley 0.3675290 0.2613530
Texas
XXX XXXXX W 1-L (SN) Xxxxxx Sonora Petroleum 0.2500000 0.1682270
XXXXXX B.E NO.1 (SN) Xxxxxxxxx Xxxxxx (Xxx) 0.8127520 0.6502070
XXXXXXXXXX B-1 (SN) Xxxxxx Xxxxxx (Xxx) 0.3129520 0.2465220
Wyoming
BCU-1ST CODY (SN) Fremont Amoco 0.0025870
BCU-2ND CODY (SN) Xxxxxxx Xxxxx 0.0000000
XXX-XXXX XXXXX (XX) Fremont Amoco 0.0010000
XXX-XXXXXX/XXX (XX) Xxxxxxx Xxxxx 0.0000000
XXX-XXXXXXX (XX) Fremont Amoco 0.0025200
XXX-XXXXXXXXX (XX) Xxxxxxx Xxxxx 0.0000000
XXX-XXXXXXXX (XX) Fremont Amoco 0.0025710
OFF-RK 1-14&5-14 (SN) Xxxxxxxx Wellstar 0.0977600 0.0806520
OFF-XXXXX 2-14 (SN) Xxxxxxxx Wellstar 0.0977600 0.0806520
XXXXXX XXX #1 (SN) Xxxxxxxx Lep Operating 0.2500000 0.1725000
ARMSTRNG FED 1D (SN) Xxxxxxxx Presidio 0.1497500 0.1323800
ARMSTRNG FED 1F (SN) Xxxxxxxx Presidio 0.1497500 0.1323800
ARMSTRNG FED 2-23 (SN) Xxxxxxxx Presidio 0.1955180 0.1535940
GROSS (8/8th) NET
Lease Name XXX* Overhead Total XXX Overhead Total
Xxx Expenses** Xxx Expenses
Operator** Operator
Louisiana
ST XXXX XXXXXX (SN) $5,671 $0 $5,671 $2,055 $0 $2,055
KG XXX 1,2,3,5 (SN) $9,776 $0 $9,776 $5,341 $0 $5,341
XXXXXX NO. 1 (SN) $7,955 $0 $7,955 $753 $0 $753
XXXXXX XX CP 1 (SN) $7,512 $0 $7,512 $104 $0 $104
HERO $7,821 $0 $7,821 $2,874 $0 $2,874
Texas
XXX XXXXX W 1-L (SN) $4,881 $0 $4,881 $1,220 $0 $1,220
XXXXXX B.E NO.1 (SN) $1,339 $947 $2,286 $1,088 $770 $1,858
XXXXXXXXXX B-1 (SN) $3,299 $687 $3,986 $1,032 $215 $1,247
Wyoming
BCU-1ST CODY (SN) $0 $0 $0 $0 $0 $0
BCU-2ND CODY (SN) $0 $0 $0 $0 $0 $0
BCU-FORT UNION (SN) $0 $0 $0 $0 $0 $0
BCU-FRONTR/DAK (SN) $0 $0 $0 $0 $0 $0
BCU-MADISON (SN) $0 $0 $0 $0 $0 $0
BCU-PHOSPORIA (SN) $0 $0 $0 $0 $0 $0
BCU-TENSLEEP (SN) $0 $0 $0 $0 $0 $0
OFF-RK 1-14&5-14 (SN) $6,212 $0 $6,212 $607 $0 $607
OFF-XXXXX 2-14 (SN) $3,106 $0 $3,106 $304 $0 $304
XXXXXX XXX #1 (SN) $1,565 $0 $1,565 $391 $0 $391
ARMSTRNG FED 1D (SN) $2,194 $0 $2,194 $329 $0 $329
ARMSTRNG FED 1F (SN) $1,907 $0 $1,907 $286 $0 $286
ARMSTRNG FED 2-23 (SN) $4,526 $0 $4,526 $885 $0 $885
$67,764 $1,634 $69,398 $17,270 $985 $18,255
XXX* Lease Operating Expenses
Overhead** Overhead charged to working interest owners on xxxxx operated by Xxx.
Total Expenses *** Gross Expenses - XXX plus Overhead
7
