EXHIBIT 10.11
XXXXX PROSPECT AREA
PECOS AND XXXXXXX COUNTIES, TEXAS
JOINT DEVELOPMENT AGREEMENT
BY AND BETWEEN
PURE RESOURCES, L.P.
AND
CHAPARRAL ROYALTY COMPANY, DDDF COMPANY, INC.
J. XXX XXXXXX, and XXXXXX X. XXXXXX
EFFECTIVE DATE: MARCH 10, 2000
JOINT DEVELOPMENT AGREEMENT
XXXXX PROSPECT AREA
PECOS AND XXXXXXX COUNTIES, TEXAS
THIS AGREEMENT is dated effective as of March 10, 2000 by and between PURE
RESOURCES, L.P., a Texas limited partnership, whose address is 000 Xxxx Xxxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000, hereinafter referred to as "PURE" and CHAPARRAL
ROYALTY COMPANY, whose address is X.X. Xxx 0000 Xxxxxxx, Xxxxx, 00000; DDDF
COMPANY, INC., whose address is X.X. Xxx 000, Xxxxxxx, Xxxxx, 00000; J. XXX
XXXXXX, whose address is X.X. Xxx 0000, Xxxxxxx, Xxxxx, 00000; and XXXXXX X.
XXXXXX, whose address is 000 Xxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx, 00000,
hereinafter collectively referred to as "CHAPARRAL, ET AL".
RECITALS
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WHEREAS, CHAPARRAL, ET AL represents, but does not warrant, that it owns various
Existing Properties in Pecos and Xxxxxxx Counties, Texas, which cover lands
located within the blue boundary shown on the plat attached hereto and
identified as Exhibit "A". Said Existing Properties owned by CHAPARRAL, ET AL
are specifically described on Exhibit "A-1" attached hereto; and
WHEREAS, PURE represents, but does not warrant, that it owns various Existing
Properties in Pecos and Xxxxxxx Counties, Texas, which cover lands located
within said blue boundary shown on the plat attached hereto and identified as
Exhibit "A". Said Existing Properties owned by PURE are specifically described
on Exhibit "A-2" attached hereto; and
WHEREAS, PURE and CHAPARRAL, ET AL intend by this Agreement to provide a means
to evaluate the lands subject to this Agreement and to determine the potential
for oil and/or gas production whereby such Parties i) establish an Area of
Mutual Interest ("AMI"), ii) jointly acquire oil and gas leases, and iii)
provide a means for the drilling of exploration and development xxxxx on
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the Existing Properties and such additional Properties as may be acquired under
the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth, it is hereby agreed as follows:
ARTICLE 1
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DEFINITIONS
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As used in this Agreement, the terms indicated below shall be construed as
follows:
1.1 "Agreement" means this Agreement, including all amendments, schedules,
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plats, maps, exhibits and annexes hereto, which are incorporated herein by
this reference.
1.2 "AMI" or "Area of Mutual Interest" means the lands lying in Pecos and
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Xxxxxxx Counties, Texas that are located within the blue outline indicated
on the plat attached hereto as Exhibit "A", and further described on
Exhibit "A-3" attached hereto.
1.3 "Development Well" means any well drilled on lands located within the
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AMI subsequent to the drilling of an Initial Exploratory Well and three (3)
Subsequent Exploratory Xxxxx on lands located within the AMI, and in
accordance with the Operating Agreement therefor.
1.4 "Existing Properties" means PURE'S and/or CHAPARRAL, ET AL's Properties
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existing as of the date of this Agreement, which are located within the
AMI.
1.5 "Exploration Expenditures" means all costs attributable to operations,
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accounted for in accordance with the terms and provisions of the Operating
Agreement, on or with respect to the Initial Exploratory Well and
Subsequent Exploratory Xxxxx, including, without limitation, drillsite
preparation, roads, surface damages, water xxxxx, drilling, coring and
drillstem testing, completion and equipping, and reworking until such xxxxx
have been drilled, completed and equipped and are capable of production,
including gathering lines, pipelines and facilities necessary to deliver
pipeline quality gas, along with the costs of plugging and abandoning such
xxxxx if no completion attempt is made thereon. Exploration Expenditures
shall not include Leasehold
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Costs as defined herein. In lieu thereof, PURE shall be entitled to include
the fixed sum of $92,000.00 as a fixed acreage cost.
1.6 "Initial Exploratory Well" means the first well drilled on lands located
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within the AMI in accordance with this Agreement which well shall be
drilled free of cost to CHAPARRAL, ET AL.
1.7 "Leasehold Costs" means those direct charges incurred for acquisition
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of Properties, including, without limitation, records examination and title
costs, mineral and leasehold ownership reports, broker fees and expenses,
travel costs, the purchase price, option costs, rentals, recording costs
and any other costs associated with the acquisition of Properties.
1.8 "Operating Agreement" shall mean the Operating Agreement dated effective
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March 10, 2000, between the Parties hereto. In the event of a conflict
between this Agreement and the Operating Agreement, the provisions of this
Agreement shall prevail.
1.9 "Operating Costs" shall mean all costs incurred by PURE in operating the
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IEW or SEW pursuant to this Agreement and the Operating Agreement, and the
disposition of hydrocarbons produced therefrom, including but not limited
to:
(a) Labor and other services necessary for maintenance and operations of
such xxxxx;
(b) Insurance, materials, supplies, transportation, repairs and
replacements used in the maintenance and operations of such xxxxx,
including replacements for all parts of machinery, equipment tanks or
other equipment to replace and/or repair original well and/or lease
equipment;
(c) Reworking, deepening, sidetracking, recompleting or re-equipping such
xxxxx plus plugging and abandonment costs applicable to previously
producing xxxxx, less salvage;
(d) Gathering, treating, processing, transporting and marketing of
hydrocarbons produced from such xxxxx, and all ad valorem, severance,
gathering, windfall profits or other applicable taxes; and
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(e) Overhead costs as defined in the Xxxxx accounting procedure attached
as Exhibit "C" to the Operating Agreement.
1.10 "Operator" shall mean the Party designated as Operator pursuant to Article
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V of the Operating Agreement.
1.11 "Participate" means to agree to bear and pay a Party's proportionate
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share of the cost and expense of the operations and also to undertake the
obligations and be accorded the rights and privileges associated therewith
which are specified herein with respect to the particular activity.
1.12 "Party or Parties" means PURE and/or CHAPARRAL, ET AL, their assigns or
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successors, subject to the limitations set forth in Paragraph 6.9 hereof.
1.13 "Proceeds" means the sum of all payments realized by PURE, directly or
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indirectly, as prepayments, advances, payments in kind, and the revenue
realized from the sale of production from the three Subsequent Exploratory
Xxxxx, after excluding the existing burdens attributable thereto; provided,
however, Proceeds shall not mean the sale of all or part of PURE's
undivided working interest in a leasehold estate.
1.14 "Project Payout" means that point in time when the cumulative Proceeds
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received by PURE from the three Subsequent Exploratory Xxxxx and any
replacement or substitute xxxxx therefore, shall equal the Exploration
Expenditures and Operating Costs for these xxxxx. In calculating Project
Payout, as to the Exploration Expenditures expended for drilling and
completing, PURE shall be limited to the costs set out in the Authority for
Expenditures provided to the Parties prior to drilling the Subsequent
Exploratory Xxxxx. Notwithstanding the foregoing, it is anticipated that
Project Payout could occur at some point in time before all three SEW have
been drilled. As an example, should Project Payout occur prior to PURE
drilling the third SEW, CHAPARRAL, ET AL would be vested with a working
interest in the two SEW that had been previously drilled to that point. If
and when the third SEW were later drilled, CHAPARRAL, ET AL would
relinquish their working interest in the SEW to PURE until Project Payout
is achieved after drilling the final SEW. All revenues earned or accrued
prior to relinquishing the working interest shall accrue to and remain the
property of CHAPARRAL, ET AL. At any
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time and at their option, CHAPARRAL ET AL may buy and discharge the pay out
obligation by paying PURE the accrued sum of the payout amount and
thereafter be subject to the terms and provisions hereof and of the
Operating Agreement in an after payout position.
1.15 "Property or Properties" means those certain existing oil and gas leases
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and mineral interests made subject to this Agreement and described on
Exhibits "A-1" and "A-2" attached hereto (Existing Properties) plus any
additional oil and gas leasehold interests hereafter acquired within the
AMI and made subject to the terms and conditions of this Agreement, or
rights to acquire such interests through option, purchase, extension,
pooling, unitization, top lease, renewal, farm-in, farm-in option, acreage
contribution or other agreement with third parties to earn an interest.
1.16 "Proposing Party" means the Party who proposes one or more of the proposals
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provided for herein.
1.17 "Proration and/or Spacing Unit" means the drilling or production unit
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prescribed or permitted for a particular well for full allowable purposes
by or in accordance with the regulation of the Texas Railroad Commission or
any governmental authority having jurisdiction thereof. As between the
Parties hereto, in the absence of Special Field Rules, and until Special
Field Rules are established, a Proration or Spacing Unit shall be
considered to contain 80 acres for an oil well and 160 acres for a gas well
of 10,000 feet or shallower, and 640 acres for a gas well of 10,001 feet or
deeper.
1.18 "Subsequent Exploratory Xxxxx" means the second, third and fourth xxxxx
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drilled on lands located within the AMI in accordance with this Agreement.
ARTICLE II
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AREA OF MUTUAL INTEREST (AMI)
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2.1 Lands. The Area of Mutual Interest (AMI) means the lands lying in Pecos
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and Xxxxxxx Counties, Texas that are located within the blue outline on the
plat attached hereto as Exhibit "A and further described on Exhibit "A-3"
attached hereto.
2.2 Acquisitions. PURE shall be the only Party responsible for the
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acquisition of Properties within the AMI from March 10, 2000 forward and
shall negotiate for and acquire Properties exercising its judgment as a
reasonable and prudent operator to determine which Properties to acquire
and the terms and provisions applicable to same. PURE agrees to pay for all
of the Leasehold Costs associated with the acquisition of oil and gas
leases or lease options acquired by or on behalf of PURE covering land
within the AMI after March 10, 2000 and until the spud date of the IEW,
including any acquisition of oil and gas leases or lease options in Xxxxxxx
00, Xxxxx 0, XXXX&XXXX, Xxxxxxx Xxxxxx, Xxxxx and in the N/2 of Section 19,
and the N/2 of Section 21, both in Block 102, Xxxx X. Xxxxxx Survey, Pecos
County, Texas. Within sixty (60) days of acquisition, PURE shall assign the
oil and gas leases or options acquired by or on behalf of PURE to the other
Parties hereto in the following percentages:
DDDF Company Inc. 10%
Xxxxxx X. Xxxxxx 10%
Chaparral Royalty 10%
J. Xxx Xxxxxx 10%
With respect to any oil and gas leases or options which PURE acquires, and
except for any royalties, overriding royalties and burdens then in
existence, PURE shall not further burden same prior to assignment of the
proportionate interest to the other Parties.
After the spud date of the IEW, if a Party acquires a Property or a mineral
or royalty interest within the AMI, the acquiring Party shall, within
thirty (30) days of such acquisition, provide written notice thereof to the
other Parties, together with full details of the acquisition, including,
without limitation, the lands and minerals acquired, a copy of the
assignment and/or deed and all title information obtained, and a list of
the acquisition costs thereof. The acquiring party shall have the option,
but not the obligation to obtain a title opinion for the acquisition of the
mineral interest or royalty interest and shall provide the non-acquiring
Party a copy of all title information it obtains as associated with the
acquisition of the interest. For a period of fifteen (15) days following
receipt of such notice, the non-acquiring Party shall have the right and
option to purchase its proportionate percentage as stated in this
paragraph, of the acquiring Party's interest. Failure of the non-acquiring
Party to advise the acquiring Party in writing within said fifteen (15)
days of
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its election, shall be deemed as an election not to acquire the interest.
Upon the non-acquiring Party electing to participate and accepting title to
the interest, it shall reimburse the acquiring Party for the acquisition
costs applicable to same and shall tender payment to the acquiring Party
pursuant to the provisions of this Agreement. In the event that the non-
acquiring Party shall reject title to any of the interest, the acquiring
Party shall have a period of thirty (30) days to cure the applicable title
defect to the reasonable satisfaction of the non-acquiring Party. If the
acquiring Party does not so cure such title defect or if the non-acquiring
Party does not accept title to the interest within such time period, then
such interest shall not be subject to any of the terms of this Agreement.
With respect to interests which the non-acquiring Party elects to acquire,
the acquiring Party shall, within thirty (30) days of timely receipt of
payment, assign to the non-acquiring Party its proportionate percentage as
stated in Paragraph 2.3, of the acquiring Party's interest, free of any
additional burdens by acquiring Party.
2.3 Prior Acquisitions. The Properties within the AMI acquired by CHAPARRAL, ET
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AL, prior to March 10, 2000, as described on Exhibit A-1, shall be owned by
the Parties in the following percentages:
DDDF Company Inc. 10%
Xxxxxx X. Xxxxxx 10%
Chaparral Royalty 10%
J. Xxx Xxxxxx 10%
Pure Resources, L.P. 60%
The Parties agree to effectuate this ownership by delivering whatever
assignments are required, which shall be delivered to the Parties
contemporaneously with the execution of this Agreement. The difference
between the lease burdens on these Properties and the 80% net revenue
interest delivered to the Parties, shall be owned as an overriding royalty
by Xxxxxx XxXxxxxx dba JSM Oil & Gas Inc., X.X. Xxx 0000, Xxxxxxx, XX
00000.
2.4 Assignment. Any assignment made pursuant to Paragraph 2.2 or 2.3 shall
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be in substantially the same form as Exhibit B attached hereto.
2.5 Title Loss. Should any Property, mineral interest or royalty interest be
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lost through failure of title, such loss shall for all purposes
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whatsoever be considered a joint loss and shall be borne by the Parties in
proportion to their respective interest therein.
2.6 Outside Properties. Where less than all of the acquired Properties lie
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within the AMI, the acquiring Parties shall have the right only to acquire
its proportionate interest in that part of the Properties lying within
the AMI.
2.7 Term of AML. Unless earlier terminated as herein provided, the AMI shall
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expire three (3) years from the effective date of this Agreement.
ARTICLE III
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EXPLORATORY DRILLING
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3.1 Initial Exploratory Well. On or before March 10, 2001, PURE has the right
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but not the obligation to drill an Initial Exploratory Well ("IEW") at its
choice of location within the AMI, which well shall be drilled to a depth
sufficient to test the Devonian formation, but at PURE'S discretion may be
drilled deeper. The IEW may be drilled as a horizontal well at PURE'S
discretion. PURE shall pay 100% of the Exploration Expenditures for the
IEW. At such time as the IEW is completed, equipped and ready to produce,
CHAPPERAL, ET AL shall be vested with a working interest in the IEW for
their respective AMI percentages as set out in Paragraph 2.3, as reflected
in the Operating Agreement. Subsequent operations for the IEW will be
subject to said Operating Agreement. Failure to drill the IEW as herein
provided, as either a well capable of production or a plugged and abandoned
well, shall result in PURE'S reassigning to CHAPARRAL, ET AL any interest
PURE acquired pursuant to Paragraph 2.3 above. PURE shall retain its
proportionate interest of any interest acquired pursuant to Paragraph 2.2,
above.
3.2 Subsequent Exploratory Xxxxx. After the drilling of the IEW, PURE has the
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right but not the obligation to drill three (3) Subsequent Exploratory
Xxxxx ("SEW") at its choice of location within the AMI area, which xxxxx
may be drilled to any depth and may be drilled as horizontal xxxxx. PURE
shall pay 100% of the Exploration Expenditures for the SEW. When Project
Payout has been reached, the other Parties shall be vested with a working
interest in the SEW for their respective AMI percentages as set out in
Paragraph 2.3, as reflected in the Operating Agreement.
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3.3 Exploratory Substitute Xxxxx. If in the drilling of the IEW, impenetrable
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substances or mechanical difficulties are encountered which, in the opinion
of PURE would make further drilling impractical or inadvisable, PURE shall
have the right to plug and abandon the IEW. In that event, and within
ninety (90) days of plugging, PURE may commence the drilling of a
substitute well to be drilled in place of the IEW and then such substitute
well shall become the IEW for all intents and purposes of this Agreement.
ARTICLE IV
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DEVELOPMENT XXXXX
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4.1 Development Operations. All proposals and operations, subsequent to the
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completion of the IEW and SEW, shall be in accordance with the terms of the
Operating Agreement executed by the Parties pursuant to Article III.
4.2 Non-Participation Penalties. Should a Party elect not to Participate in the
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drilling of a Development Well, provided the well begins drilling within
sixty (60) days of an election not to Participate, a Non-Participating
Party shall be required to assign to the Participating Parties, all of its
undivided working interest in the Spacing Unit for the Development Well,
from the surface down to the base of the formation from which the
Development Well produces. Such assignment supersedes and replaces making
such interest subject to the non-consent penalties set forth in the
Operating Agreement. Provided, however, the Non-Participating Party shall
nevertheless retain an overriding royalty, proportionately reduced to its
interest, in an amount equal to the difference between twenty-five percent
(25%) and the existing lease burdens on the NonParticipating Party's
interest assigned to the Participating Parties.
Notwithstanding the foregoing, if the Development Well is completed in a
producing horizon different from the horizon set forth in the original
proposal, the Non-Participating Party shall have thirty (30) days from the
receipt of the proposal to complete in a different producing horizon in
which to elect to participate in the Development Well as completed. If the
Non-Participating Party elects to participate in said well, the Non-
Participating Party shall pay its share of the cost of drilling the
Development Well by multiplying the cost of drilling the Development Well
times a fraction based upon one of the following: (i) on a Development Well
completed above the original proposed depth of the Development Well, the
fraction shall be the Non-Participating Party's percentage ownership times
a fraction, the numerator of which is the completion depth of the
Development Well and the denominator of which is the original proposed
depth: or (ii) on a Development Well completed below the original proposed
depth of the Development Well, the fraction shall be the Non-Participating
Party's percentage ownership. Upon electing and
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paying its pro-rata share as provided herein, the Non-Participating Party
shall become a participant in the Development Well as if it were an
original participant.
ARTICLE V
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DUTIES OF THE PARTIES
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5.1 Delay Rentals and Releases. During the term of this Agreement and any
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Operating Agreement executed in connection herewith, PURE shall have the
responsibility for payment of any rentals, shut-in payments and minimum
royalty payments necessary to maintain in force and effect the leases and
agreements covering the Properties. PURE shall be reimbursed by the other
Parties for their proportionate share of these rentals, shut-in payments
and minimum royalty payments.
5.2 Insurance. At all times while operations are conducted hereunder, all
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Parties shall comply with all laws including the applicable xxxxxxx'x
compensation laws. Operator shall also carry or provide insurance for the
benefit of the joint account as outlined in Exhibit "D" attached to the
Operating Agreement. Both Parties shall require all contractors employed
by it to comply with the applicable xxxxxxx'x compensation laws and to
maintain such other insurance as both Parties may require. PURE may be a
self insurer for liability under the compensation and general liability
laws, provided however, in such event the only charge that shall be made by
Operator to the joint account shall be as provided in Article V.D.9 of the
Operating Agreement and in Exhibit "C" attached to the Operating Agreement.
ARTICLE VI
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MISCELLANEOUS
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6.1 Relationship of the Parties. This Agreement and the rights and liabilities
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under this Agreement are several and not joint or collective, and are not
intended to create, and shall not be construed to create, an association
for profit, a trust, a joint venture, a mining partnership or other
relationship of partnership, or entity of any kind between or among the
Parties, except as provided in Paragraph 6.2 or in the Tax Partnership
Provisions attached as Exhibit "C" to this Agreement.
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6.2 Tax Partnership. Notwithstanding Paragraph 6.1 above, the Parties intend
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that the execution of this Agreement and the joint operations hereunder
shall be treated as the formation and operation of a partnership for
federal income tax purposes ("Tax Partnership"). In that regard, the
Parties understand and intend that the provisions of the Agreement shall be
interpreted and applied in a manner consistent with such treatment and that
Subchapter K of the Internal Revenue Code of 1986, as amended, shall apply
to all actions taken pursuant to the terms of this Agreement. Thus, without
limitation or exclusion of other provisions hereof, the Parties intend that
the following provisions of this Agreement shall be treated and interpreted
in the manner hereafter specified for federal income tax purposes:
a) The Parties will make capital contributions to the Tax Partnership as
follows:
i) Existing Properties, as described in Paragraphs 1.4 and 2.3; and
ii) Leasehold Costs, as described in Paragraphs 1.7 and 2.2; and
iii) Exploration Expenditures, as described in Paragraphs 1.5, 3.1
and 3.2; and
iv) Development Well costs, as described in Paragraphs 1.3 and 4.1;
and
v) Operating Costs, as described in Paragraphs 1.9 and 4.1.
All acquired Properties will be acquired on behalf of the Tax Partnership
and the Parties will hold title to all Properties as nominees of the Tax
Partnership;
b) The Tax Partnership shall allocate all costs, deductions and credits
described in Paragraph 6.2(a) above, to the Parties based on each
Party's contribution to such costs.
c) Except as provided in subparagraphs 6.2(b) above and 6.2(c) (iii)
below, the Tax Partnership shall allocate all income, gain, loss,
deduction, or credit, 40% to Chaparral, ET AL (based on the
percentages reflected in Paragraphs 2.2 and 2.3 and 60% to PURE. As
described in Articles III and IV, the Tax Partnership shall make all
cash distributions pursuant to subparagraphs 6.2(c)(i) and (ii) below
in the following percentages;
i) All cash distributions shall be made 40% to Chaparral, ET AL
and 60% to PURE except as provided in Paragraph 6.2(c)(ii)
below;
ii) During Project Payout, as described in Paragraph 1.4, with
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respect to only the three (3) Subsequent Exploratory Xxxxx,
cash distributions shall be made 100% to PURE; and
iii) During Project Payout, the Tax Partnership shall allocate
all income, deduction and credits resulting from the
Subsequent Exploratory Xxxxx 100% to PURE.
d) The Parties capital accounts will be charged for in-kind distributions
in accordance with the non-participating penalties provisions as
described in Paragraph 4.2. For example, in the event a Non-
Participating Party assigns all of it's right, title and interest in
the Spacing Unit for the Development Well, such Party's capital
account will be charged with its tax basis in the Spacing Unit and any
overriding royalty interest retained by such Party will be reported
outside of the Tax Partnership (i.e., the in-kind distribution of
partnership property).
Additional provisions relating to this Tax Partnership are contained in
Exhibit "C" to this Agreement. Notwithstanding anything to the contrary in
this Agreement, the terms of this Article VI and Exhibit "C" will survive
any termination of this Agreement.
6.3 Notices. Unless otherwise provided herein, all notices, advice or
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communications required or convenient to be given by any Party to the
other Party hereto, shall be deemed to have been properly given when
given in writing by registered, certified, U.S. mail, return receipt
requested, or by telegram, fax, telex or cable when addressed to the
Parties at the following address:
PURE RESOURCES, L. P.
000 Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Land Manager
Phone: (000) 000-0000
Fax: (000) 000-0000
CHAPARRAL ROYALTY COMPANY
P. O. Xxx 0000
Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
DDDF COMPANY, INC.
X.X. Xxx 000
Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
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J. XXX XXXXXX
% Xxxxxx XxXxxxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
XXXXXX X. XXXXXX
000 X. Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
The originating notice shall be deemed given when received and the
responsive notice shall be deemed given when mailed. Each Party shall have
the right to change its address from time to time by written notice to the
other Party as prescribed herein; provided, however, that nothing herein
shall supersede the notice provisions specified in the Operating Agreement.
6.4 Laws. This Agreement shall be conducted in conformity with all valid
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applicable federal, state and local laws, rules, orders and regulations of
any constituted federal, state or local regulatory body hereunder.
6.5 Operations. All operations or other activities conducted hereunder shall be
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conducted in a reasonable and prudent manner in accordance with good oil
field practices. Provided, however, that the Operator shall be liable to
the other Parties only for losses sustained or liabilities incurred which
result from Operator's gross negligence or willful misconduct.
6.6 Governing Law. This Agreement shall be construed and enforced in accordance
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with the laws of the State of Texas and shall bind and inure to the benefit
of the Parties hereto and their respective successors and assigns.
6.7 Waiver. The failure of a Party to insist on the strict performance of any
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provision of this Agreement or to exercise any right, power or remedy upon
a breach thereof shall not constitute a waiver of any provision of this
Agreement or limit the Party's right thereafter to enforce any provision or
exercise any right.
6.8 Waiver of Implied Obligations. There are no implied covenants contained in
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this Agreement.
6.9 Assignment. No Party shall assign any right or interest under this
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Agreement to other parties without the written consent of the other Parties
hereto. However, such consent shall not be unreasonably withheld. The
foregoing
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notwithstanding and subject to the other provisions of this Agreement, each
of the Parties may pledge or encumber the Properties provided that such
pledge or encumbrance is limited to that interest in the Properties owned
by such Party and that such pledge or encumbrance is expressly made subject
to the terms and conditions of this Agreement.
6.10 Ownership of Information. Subject to the limitations of Paragraph 6.9, any
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and all Information, whether completed or not shall be the joint property
of the Parties for their copying, use, modification, distribution or
disclosure without accounting to the other Parties in whatever way the
Party may determine notwithstanding copyright or other restrictive legends
placed thereon.
6.11 Covenants Running with Land. All covenants and obligations provided for
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herein shall be deemed to be covenants running with the land and the
leasehold estates therein and any transfer or other disposition of any of
the Properties shall be made subject to the terms of this Agreement.
6.12 Entire Understanding. The terms of this Agreement and the Schedules, Maps,
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Plats, Exhibits and Annexes, attached hereto constitute the entire contract
of the Parties hereto, and there are no Agreements, undertaking,
obligations, promises, assurances or conditions, whether precedent or
otherwise, except those specifically set forth herein. No modification of
this Agreement shall be valid unless made in writing and duly executed by
the Parties.
6.13 Media Release. No Party shall use any other Party's name in any promotional
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material or in any publicity release regarding the program conducted under
this Agreement without first obtaining the written permission of the Party
whose name is going to be used.
6.14 No Third Party Beneficiary. Except as expressly provided herein, this
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Agreement is not intended to create, nor shall it be construed to create,
any rights in any third party under doctrines concerning third party
beneficiaries.
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IN WITNESS WHEREOF the Parties have executed this Agreement on the dates shown
below, but effective as of the 10th day of March, 2000.
PURE RESOURCES, L.P. by and through
its General Partner PURE RESOURCES I, INC.
By: /s/ Xxx X. Xxxxxxx
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Title: Vice President
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Date: 8/31/00
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DDDF COMPANY INC. CHAPARRAL ROYALTY COMPANY
By: /s/ X. X. Xxxxx, Xx. By: /s/ Xxxx Xxxxxxx
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Title: President Title: President
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Date: 9/1/00 Date: 9/1/00
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/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxx X. XxXxxxxx
--------------------------------- --------------------------------
XXXXXX X. XXXXXX XXXXXX X. XXXXXXXX,
Attorney-in-Fact for J. XXX XXXXXX
Date: 9/1/00 Date: 9/1/00
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