JOINT DEVELOPMENT AGREEMENT
EXHIBIT 4.34
THIS JOINT DEVELOPMENT AGREEMENT (hereinafter, the “Agreement”) is made as of the 3rd day of December, 2013, by and between EAGLEFORD ENERGY INC., an Ontario, Canada corporation (“Eagleford”), its wholly-owned subsidiary, EAGLEFORD ENERGY, XXXXXX INC., a Nevada corporation (“Xxxxxx”) and STRATEX OIL AND GAS HOLDINGS, INC., a Colorado corporation (hereinafter, the “Stratex”).
WHEREAS, Xxxxxx is the Lessee under that certain Oil and Gas Lease (hereinafter, the “Xxxxxxxx Lease”) dated September 1, 2013 by and between Xxxxxxxx Family Mineral Account, L.P. (“Xxxxxxxx”) and Delta Star Holdings, L.L.C. (“Delta Star”) (together Xxxxxxxx and Delta Star, as lessor therein), Xxxxxx (as lessee therein) and OGR Energy Corporation (hereinafter, “OGR”), such Xxxxxxxx Lease covering approximately two thousand six hundred twenty nine (2,629) leasehold acres situated in Xxxxxx County, Texas; and
WHEREAS, pursuant to that certain Assignment of Overriding Royalty Interest (hereinafter, the “ORI Agreement”), dated effective September 1, 2013, Xxxxxx Inc. (as assignee therein) assigned unto (i) OGR, (ii) Texas Onshore Energy (“TOE”), and (iii) Xxxxx Xxxxxx, an individual (together, OGR, TOE and Xxxxx Xxxxxx as assignees therein) an undivided overriding royalty interest of five percent (5%) of 8/8ths of all the oil, gas and other minerals which may be produced, saved and sold from the lands covered under and by virtue of the Xxxxxxxx Lease, such assigned overriding royalty interest to be divided, as follows:
| (i) | OGR: | 3% of 8/8ths |
| (ii) | TOE: | 1% of 8/8ths |
| (iii) | Xxxxx Xxxxxx: | 1% of 8/8ths |
WHEREAS, as of the date of this Agreement, drilling has been commenced with respect to the Xxxxxxxx #1H well (hereinafter, “Xxxxxxxx #1H Well”), but such Xxxxxxxx #1H wellbore has not yet been completed; and
WHEREAS, subject to and on the terms and conditions herein specified, Eagleford, Xxxxxx and Stratex are desirous of entering into this Agreement for the purpose of facilitating (i) the completion of the Xxxxxxxx #1H wellbore and (ii) the exploration and development of the oil and gas reserves within and underlying the Xxxxxxxx Lease in accordance with the terms and conditions of the Xxxxxxxx Lease and this Agreement in all respects.
NOW THEREFORE, in consideration of the above premises, which are incorporated herein by reference and the mutual benefits inuring to the parties hereto, it is hereby agreed between the parties as follows:
| 1. | Designation of Stratex as Operator of Record. The parties hereto hereby designate Stratex as the sole operator of record for any and all completion and/or drilling activities to be undertaken on the Development Acreage (hereinafter defined), and the parties covenant and agree to do all things necessary to effectuate the designation of Stratex as the operator of record in a timely fashion including, without limitation, the filing of any necessary documents with the Texas Railroad Commission and the obtaining of any third party consents. For purposes of this Agreement, Development Acreage means the entirety of the two thousand six hundred twenty nine (2,629) leasehold acres under the Xxxxxxxx Lease, but excluding eighty (80) acres immediately surrounding the Xxxxxxxx #3 wellbore. |
| 2. | Fracturing of Xxxxxxxx #1H Well. As soon as practicable, but in no event no later than March 31, 2014, Stratex shall complete or cause to be completed, the hydraulic fracturing of the Xxxxxxxx #1H well (the “Initial Operation”). Stratex shall be responsible for all costs associated with the Initial Operation from this date forward including, but not limited to, any payments required to be made to the lessors pursuant to Paragraphs 2.B(2), 2.C and 2.D of the Xxxxxxxx Lease. In exchange for this commitment, Stratex is hereby granted an undivided working interest with respect to the Xxxxxxxx #1H well equal to (i) two-thirds (66.67%) of 8/8ths of all the oil, gas and other minerals which may be produced and sold therefrom until Payout (as hereinafter defined) and (ii) one-half (50%) of 8/8ths of all the oil, gas and other minerals which may be produced and sold therefrom after Payout. Solely for purposes of this Section 2, Payout shall mean the point in time when Stratex shall have recouped from the proceeds of oil and gas production from such Xxxxxxxx #1H Well, after deducting (a) severance, production, windfall profit and other taxes payable on such share of production, and (b) lessor's royalties, overriding royalties (including any overriding royalty interests) and like burdens which the Xxxxxxxx Lease is burdened as of the date hereof, an amount equal to the aggregate of all costs incurred by Stratex in performing the Initial Operation. |
| 3. | Grant of Working Interest and Exclusive Development Rights. Following the timely commencement of the Initial Operation, Stratex shall have earned and be entitled to receive, an assignment of an undivided working interest in the Development Acreage equal to fifty percent (50%) of 8/8ths of all the oil, gas and other minerals which may be produced and sold from the lands comprised therein. Not later than twenty (20) business days following the Initial Operation, Xxxxxx shall execute and deliver to Stratex, an assignment of working interest in form and substance satisfactory to Stratex, evidencing such assignment, which shall be in recordable form for filing in Xxxxxx County. Eagleford and Xxxxxx expressly agree that from and after the date of the Initial Operation, Stratex shall have the sole and exclusive right (but not obligation) to propose additional xxxxx to be drilled on the Development Acreage. |
| 4. | Consideration. As further consideration for the rights granted herein, Stratex shall (i) upon the execution hereof, cause $150,000 to be delivered to the lessors under the Xxxxxxxx Lease, on behalf of Xxxxxx (ii) upon execution hereof, deliver $50,000 to Eagleford and (iii) deliver an additional $100,000 to Eagleford on or before December 31, 2013. |
| 5. | Participation Rights. Following the timely commencement of the Initial Operation, Xxxxxx shall have the option, but not the obligation, to participate on a well by well basis in any subsequent xxxxx (each a “Subsequent Well” and collectively, the “Subsequent Xxxxx”) proposed by Stratex on the Development Acreage for a working interest of fifty percent (50%) on the basis of Xxxxxx paying its proportionate share of actual drilling and completion costs. The operations and conduct of the parties as to such Subsequent Xxxxx in which Xxxxxx elects to participate shall be governed by a mutually acceptable AAPL Form 610 Model Joint Operating Agreement. Stratex shall propose, in writing, to Xxxxxx each Subsequent Well to be drilled pursuant to this Agreement. Such proposal shall include the well plat, authority for expenditure (“AFE”), election letter, and drilling prognosis, and such other information reasonably requested by Xxxxxx with respect to such well which Xxxxxx xxxxx to be material in making an informed determination as to whether to participate (collectively, the “Proposal”). Xxxxxx shall have thirty (30) days after receipt of the Proposal in order to elect in writing to participate in the subject well(s). |
| 6. | Information. Eagleford and Xxxxxx hereby agree to furnish Stratex with any and all drilling, completion and production data, including, but not limited to, daily drilling reports, electric and other logs, completion reports, pipeline activity, and other pertinent information possessed by Eagleford and Xxxxxx and related to all xxxxx on the Development Acreage (including the Xxxxxxxx #1H Well) as such information or data exists or was otherwise created prior to the execution of this Agreement or as such information may become available to Eagleford or Xxxxxx after the date of this Agreement. Likewise, upon being named as operator, Stratex hereby agrees to furnish Eagleford and Xxxxxx with any and all drilling, completion and production data, including, but not limited to, daily drilling reports, electric and other logs, completion reports, pipeline activity, and other pertinent information related to all xxxxx on the Development Acreage as such information becomes available. |
| 7. | Term. This Agreement shall remain in full force and effect until terminated by the mutual consent of the parties. |
| 8. | Representations of Xxxxxx and Eagleford. Each of Xxxxxx and Eagleford represent and warrant that (i) they are a corporation duly organized, validly existing and in good standing in their respective jurisdictions of incorporation, , (ii) have the corporate power and authority to own its properties and assets, to conduct its business as presently conducted and to execute, deliver and perform this Agreement, (iii) this Agreement has been duly and validly executed and delivered by each of them and constitutes legal, valid and binding obligations of Xxxxxx and Eagleford enforceable against each of them in accordance with its respective terms, (iv) the execution, delivery and performance by Xxxxxx and Eagleford of this Agreement does not and will not violate Xxxxxx’x or Eagelford’s charters or by-laws or breach or result in a default (or an event which, with the giving of notice or the passage of time, or both, would constitute a default) under, require any consent under or give to others any rights of termination, acceleration, suspension, revocation, cancellation or amendment of any agreement to which Eagleford or Xxxxxx is a party including, without limitation, the Xxxxxxxx Lease. |
| 9. | Notices. Any notices, documents, or information required to be given or furnished under the terms of this Agreement shall be in writing, unless otherwise provided, and mailed to the parties via registered or certified U.S. Mail to the respective addresses below, and shall not be deemed properly given until actually received: |
| Stratex | Eagleford and Xxxxxx |
| Stratex Oil and Gas Holdings, Inc. | Eagleford Energy Inc. |
| 00 Xxxx Xxxx Xx. | 1 King Street West, Ste. 1505 |
| Xxxxxxxxx, XX 00000 | Xxxxxxx, Xxxxxx M5H 1A1 |
| Attn: Xxxxxxx Xxxx | Attn: Xxxxx Xxxxxxx |
| 10. | Governing Law and Jurisdiction. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Agreement and all disputes arising hereunder shall be governed by, the laws of the State of Connecticut. The parties hereto expressly agree that all disputes arising hereunder shall be commenced or heard in the State or Federal courts sitting in Hartford, Connecticut and the parties hereto consent and submit to the jurisdiction and venue of those Courts. |
| 11. | Entire Agreement. This Agreement embodies the complete and full agreement of the parties and cancels and supersedes any and all previous agreements between the parties relating to the subject matter hereof. No alterations, modifications or changes hereto shall be deemed to be effective or binding upon the parties unless in writing and mutually accepted and acknowledged by the parties. |
| 12. | Binding Agreement. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. |
| 13. | Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. |
SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.
| EAGLEFORD ENERGY INC. | ||||
| By: | /s/ Xxxxx Xxxxxxx | |||
| Name: | Xxxxx Xxxxxxx | |||
| Title: | President | |||
| EAGLEFORD ENERGY XXXXXX INC. | ||||
| By: | /s/ Xxxxx Xxxxxxx | |||
| Name: | Xxxxx Xxxxxxx | |||
| Title: | President | |||
| STRATEX OIL & GAS HOLDINGS, INC. | ||||
| By: | /s/ Xxxxxxx X. Xxxx | |||
| Name: | Xxxxxxx X. Xxxx | |||
| Title: | CEO | |||
