Letter Agreement
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March 19, 2001
Production Specialties Co. ("Production") has obtained from Greka Energy
("Greka") and Nahama Oil and Gas Inc. ("Nahama") a 100% working interest and
100% net revenue interest less applicable landowner royalties covering the
prospect referred to as the Coalinga Nose Prospect ("Coalinga") located in
Fresno County, California.
Production has agreed to farm out to Brothers Oil and Gas Inc. ("Brothers") and
Olympic Resources (Arizona) Ltd. ("Olympic") 100% of Production's interest on
the following basis.
a) Production retains a 2% overriding royalty interest on all revenue
earned by the working interest held by Brothers and Olympic
b) Brothers agrees to assume 50% of Production's interest less the 2%
overriding royalty
c) Olympic agrees to assume 50% of Production's interest less the 2%
overriding royalty
d) Brothers and Olympic agree that they will retain a further 3%
overriding royalty to be held equally by Brothers and Olympic
e) It is contemplated that Brothers and/or Olympic will farm out their
interests and agree that any farm out by Brothers or Olympic which
retains interests over and above the Production 2%, the Brothers 1.5%,
and Olympic's 1.5% will be retained by the farmor exclusively.
f) In Consideration of Production locating and introducing the prospect,
Brothers and Olympic agree to pay Production $US 16,666 each prior to
spudding of the initial test well.
g) Brothers agrees to hold Production harmless from claims originating
from farm outs entered into by Brothers or by actions caused by
Brothers
h) Olympic agrees to hold Production harmless from claims originating
from farm outs entered into by Olympic or by actions caused by Olympic
i) Brothers and Olympic agree to be bound by the Joint Operating
Agreement entered into by Production and Greka and Nahama
j) Brothers and Olympic acknowledge receipt of all information required
to enter into this agreement.
Brothers Oil and Gas Inc. Olympic Resources (Arizona) Ltd.
/s/ Xxxxx Xxxxxxx
___________________________ __________________________
Xxx 00, Xxxxxxx Xxxxxx X.X. X0X 0X0 0000-000 xxxx Xxxxxxxx Xx
Xxxxxxxxx, X.X. X0X 0X0
P: 000-000-0000 F: 000-000-0000 P. 000-000-0000 F. 000-000-0000
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Production Specialties Co.
/s/ Dero X. Xxxxxx, Xx.
_____________________________
000 Xxxxx Xx., #000
Xxxxxxxx, Xxxxxxxxxx 00000
P: 000-000-0000 F: 000-000-0000
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