October 13, 1997
BETA OIL & GAS, INC.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
President
Re: Purchase and Sale Agreement
Lapeyrouse Area
Terrebonne Parish, Louisiana
Gentlemen:
This will evidence the "Purchase and Sale Agreement" provided for in
Article 5 of that certain Letter of Intent dated September 18, 1997 between Beta
Oil & Gas, Inc. ("Beta" herein) and Laurent Oil & Gas, Inc. ("Xxxxxxx" herein)
relative to Xxxxxxx's "Look-Back Interests", hereinafter defined.
1. Xxxxxxx represents that Xxxxxxx has the exclusive right to acquire the
following described undivided interests ("Look-Back Interests" herein) in and to
those oil, gas and mineral leases and geophysical options set out and described
in Exhibits "A" through "D" hereto ("Leases" herein) and made a part hereof for
all purposes:
(a)6.25% as to rights between the surface and the stratigraphic
equivalent depth of the base of the Xxxxx Sand,
(b)75.0% of 6.25% or 4.6875% as to rights between the stratigraphic
equivalent depth of the base of the Xxxxx Sand and one hundred
feet (100') below the stratigraphic equivalent depth of the
base of the Dularge Sand, and
(c)25.0% of 6.25% or 1.5625% as to rights below one hundred feet (100')
below the stratigraphic equivalent depth of the base of the
Dularge Sand,
in and to the Leases described in Exhibit A within the boundaries of the
"Contract Area", defined in that certain 3-D Seismic Participation Agreement
dated May 30, 1996 by Fina Oil and Chemical Company, et al (Group Leases),
(d)50.0% of 6.25%, or 3.125% between the surface and one hundred feet
(100.0') below the stratigraphic equivalent depth of the base
of the Dularge Sand, and
(e)25.0% of 6.25%, or 1.5625% below one hundred feet (100.0') below the
stratigraphic equivalent depth of the base of the Dularge
Sand,
in and to those Leases described in Exhibits B and C within the boundaries of
the Contract Area (AMI Leases),
(f)6.25% interest, all rights to all depths,
in and to those Leases described in Exhibit A, outside the boundaries of the
Contract Area, and Exhibit D (Starboard West and South Leases),
(g)50.0% of 6.25%, or 3.125% between the surface and one hundred feet
(100.0') below the stratigraphic equivalent depth of the base
of the Dularge Sand, and
(h)25.0% of 6.25%, or 1.5625% below one hundred feet (100.0') below the
stratigraphic equivalent depth of the base of the Dularge
Sand,
in and to any lease, geophysical option or other contract for the right to
explore for oil or gas or creating a mineral servitude within the boundaries of
the Contract Area, other than the Leases,
(i)6.25%, all rights to all depths,
in and to any lease, geophysical option and any other contract for the right to
explore for oil or gas or creating a mineral servitude outside the boundaries of
the Contract Area but within the boundaries of the "Area of Mutual Interest" for
Exploration Agreement - Starboard dated February 19, 1996 by Frontier Natural
Gas Corporation, et al, ("Exploration Agreement - Starboard"), and
(j)the 2-d and 3-d Data to be acquired by Xxxxxxx under the "Frontier
Agreement" hereinafter defined.
2. Xxxxxxx further represents that the Look-Back Interests are subject to the
following:
(a)That certain Letter Agreement dated April 27, 1995 between Frontier
Natural Gas Corporation, Polaris Exploration Corporation and
Laurent, as amended by Amendment of Letter Agreement dated
August 14, 1996 ("Frontier Agreement" herein).
(b)The lessors' royalties.
(c)An overriding royalty in favor of Xxxxxxx in the amount of 3.0%
on Leases with xxxxxx's royalty of 25.0% or less.
(d)An overriding royalty in favor of Xxxxxxx in the amount of 1.5%
on Leases with xxxxxx's royalty of more than 25.0%.
3. Now therefore, for and in consideration of the sum of Four Hundred Fifty-six
Thousand Two Hundred Fifty Dollars ($456,250), paid and payable as follows:
(a) $45,625.00 xxxxxxx money and "Down Payment" received by Xxxxxxx on
October 9, 1997, as provided in the Letter of Intent to extend the
closing date by 15 days.
(b) $ 33,935.56 to South Coast Exploration Company.
$ 33,935.56 to SOCO Exploration, L.P.
$ 90,494.83 to Frontier Natural Gas Corporation.
$ 22,623.71 to HarCor Energy, Inc.
$ 7,541.24 to Matagorda Production Company.
-----------
$188,530.90
upon receipt by Beta of assignments from such parties of the Look-Back
Interests.
(c) $222,094.10 to Xxxxxxx upon receipt by Beta of such assignments of
the Look-Back Interests.
The checks in payment under (b) above have been delivered in escrow with Polaris
Exploration Corporation to be distributed as provided in this Paragraph 3.
Xxxxxxx does hereby bargain, xxxxx, sell, assign and convey unto Beta, all
Xxxxxxx's rights, title and interest in and to the Look-Back Interests. The sums
specified are payable in cash, as consideration for Xxxxxxx's rights to the
Look-Back Interests under the Frontier Agreement and which sums of money are
non-refundable.
The assignments of the Look-Back Interests shall be considered "received" by
Beta when delivered to Beta at the address listed above, or to Beta's attorney,
Xx. Xxxxxx Xxxxxxxx, 0000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx Xxxxxx, Xxx
Xxxxxxx, Xxxxxxxxx 00000. Assignments need not be recorded in the Parish or
approved by the State Mineral Board to be considered received.
6. This Agreement and the rights herein conveyed are made without warranty,
express or implied, even to the return of the purchase price, except as against
the acts or omissions by, through or under Xxxxxxx, but such rights are conveyed
with complete transfer and subrogation of all rights and actions in warranty
against all other parties.
7. This Agreement is subject to the terms and provisions of the Letter of
Intent; provided, however, in the event of a conflict between this Purchase and
Sale Agreement and the Letter of Intent, the provisions of this Purchase and
Sale Agreement shall take precedence.
8. The assignments of the Look-Back Interests shall be on forms of assignment
substantially the same as the assignment attached hereto, marked Exhibit "E" and
made a part hereof for all purposes.
9. Beta expressly agrees to fully protect, defend, indemnify and hold Xxxxxxx
free and harmless from and against each and every claim, demand, liability or
cause of action, on account of personal injury or death, property damage or
lease maintenance matters (including the payment of royalties) arising after the
date of this Agreement related directly or indirectly to the interests herein
conveyed, operations related thereto or the agreements referenced herein,
including, but not limited to, any costs, expenses, damages, attorneys' fees or
losses in connection therewith which may be made or asserted by Beta, its
employees, agents or servants, or by Xxxxxxx, its employees, agents or servants,
or by third persons. Beta further agrees to fully protect, indemnify and hold
Xxxxxxx and its officers, executives, supervisors, employees, successors and
assigns free and harmless from and against each and every claim, demand,
liability or cause of action on account of environmental damage arising out of
or in connection with the interests herein conveyed, including, but not limited
to, any costs, attorneys' fees or losses in connection therewith which may be
made or asserted by any Federal, State or local agency. Xxxx agrees to fully
assume and bear all of the obligations of Xxxxxxx with respect to the Look-Back
Interests and the Leases, as provided for in the Frontier Agreement, Exploration
Agreement - Starboard and 3-D Seismic Participation Agreement, including, but
not limited to, the cost of acquiring Leases following the effective date of
this Agreement.
10. If Beta elects to surrender a Lease or interest therein or other oil, gas
and mineral lease or interest within the Area of Mutual Interest for the
Frontier Agreement, including oil, gas and mineral leases acquired outside the
definition of Look-Back Interest, Beta shall give Xxxxxxx written notice of such
election at least sixty (60) days before such surrender date, and if Xxxxxxx
elects to acquire such Lease, lease or interest therein, Beta shall assign all
interest to Xxxxxxx thirty (30) days in advance of the proposed surrender date,
free and clear of any burdens against the leasehold estate except those
described in Section 4 above.
11. This Agreement is effective as of May 19, 1997.
* * *
If the foregoing correctly reflects your understanding of our
Agreement, kindly sign one copy in the space provided below and return the same
to Xxxxxxx, on or before November 15, 1997.
Very truly yours,
LAURENT OIL & GAS, INC.
By:____________________________
X. Xxxxx Xxxxxxx
President
ACCEPTED AND AGREED TO this the _____ day of November, 1997.
BETA OIL & GAS, INC.
By:________________________
Xxxxx Xxxxx
President
