EXHIBIT 10.1
PETROLEUM AND NATURAL GAS RIGHTS
AND RELATED INTEREST CONVEYANCE
THIS AGREEMENT MADE as of this 19th day of June, 2008.
BETWEEN:
1390705 ALBERTA LTD., a body corporate having offices at the City of
Calgary, in the Province of Alberta (the "Vendor")
- and -
DISCOVERY RIDGE CAPITAL CORP., a body corporate having offices at the City
of Calgary, in the Province of Alberta (the "Purchaser").
WHEREAS the Vendor is the owner of a working interest in all petroleum and
natural gas found below the base of the Fish Scale-Westgate under Xxxxxxx 00,
Xxxxxxxx 00, Xxxxx 00, Xxxx of the Fourth Meridian, as well as to the base of
the Sawtooth Formation, all as more particularly described in the Alberta
Petroleum and Natural Gas Lease No. 0408050305 dated as May 15, 2008 (the
"Lease") in respect of the lands (the "Lands"), all as more particularly
described in Schedule "A" attached thereto; and
WHEREAS the Vendor has agreed to the sale of all of its interest in and to the
said Lease, the said Lands and any of the Vendor's interest in the production of
any leased substances therefrom to the Purchaser on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises hereto and of the sum of One
Hundred Thousand ($100,000) Dollars (the receipt whereof is hereby
acknowledged), this Agreement Witnesseth:
1. The Vendor does hereby sell, assign, set over, transfer and convey unto
the Purchaser all of its right, title, estate and interest in and to the
said Lands, the said Leases and the petroleum and natural gas rights
relating thereto (the "Petroleum and Natural Gas Rights") and all of the
Vendor's interest in and to all xxxxx, depreciable property and assets,
including lease and well equipment appertaining or relating in ay way to
the said Lands (collectively referred to as the "Sold Assets").
2. Notwithstanding the date of execution of and delivery of this Agreement,
it shall be effective as of the hour of 7:00 a.m. on June 1, 2008 (the
"Effective Time").
3. The Vendor covenants and represents to the Purchaser that:
(a) Notwithstanding anything herein contained or any act of the Vendor, it
now has good right, full power and absolute authority to assign its
interest in the Petroleum and Natural Gas Rights and the Sold Assets
for the purposes and in the manner aforesaid according to the true
intent and meaning of these presents.
(b) Subject to the rents and royalties reserved in the said Lands, the
covenants and conditions and stipulations in the said Lands reserved
and contained, and henceforth on the Vendor's of holders part
thereunder to be paid, performed and observed, the purchaser may enter
into and upon and hold and enjoy the said Lands for the residue of the
terms granted by the Lands and all renewals or extensions thereof and
thereto for its own use and benefit without any lawful interruption of
or by the Vendor or any person whomsoever lawfully claiming or to
claim by, through or under the Vendor.
(c) Subject to the rents, covenants, conditions and stipulations in any
agreements relating to the Sold Assets "reserved" and contain ed, and
henceforth on the Lands or holders part to be paid, performed and
observed, the Purchaser may enter into and upon and hold and enjoy the
Sold Assets for the residue of this respective terms, if any, granted
by any such agreements and all renewals or extensions thereof for its
own use and benefit without any lawful interruption of or by the
Vendor, of any other person whomsoever lawfully claiming or to claim
by, through or under the Vendor.
(d) The Vendor shall and will, from time to time and at all times
hereafter, at the request and cost of the Purchaser but without
further consideration, do and perform all such acts and things and
execute all such deeds, documents and writings and give all such
further assurances of the said interest in the Petroleum and Natural
Gas Rights and the Sold Assets hereby transferred and assigned as the
Purchaser shall reasonably require.
(e) To the best of the knowledge of the Vendor, subject to the
encumbrances noted in Schedule "A" hereto annexed, the said Lands are
free and clear of all liens, charges, encumbrances and burdens
whatsoever and, in particular, without limiting the generality of the
foregoing, any obligations with respect to or in the nature of
royalty, overriding royalty, net profits interest and other payments
chargeable to or to be borne by the Lessees of the said Lands.
4. The Vendor hereby assumes and agrees to indemnify and save harmless the
Purchaser from and against all valid and binding obligations and
liabilities of the Vendor to the extent that the said obligations and
liabilities are attributable to a period prior to the effective time and
the Purchaser hereby assumes and agrees to indemnify and save harmless the
Vendor from and against all valid and binding obligations and liabilities
of the Purchaser to the extent that the said obligations and liabilities
are attributable to a period commencing on or after the effective time.
5. These presents shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
0390705 ALBERTA LTD. DISCOVERY RIDGE CAPITAL CORP.
/s/ Xxxx Xxxxx /s/ Xxxxxxx Xxxxxx
--------------------------- --------------------------------
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EXHIBIT A
ALBERTA
Energy
PETROLEUM AND NATURAL GAS LEASE
NO. 0408050305
Term Commencement Date: May 15, 2008
Lessee: 390705 ALBERTA LTD. 100.0000000%
WHEREAS Her Majesty is the owner of the minerals in respect of which rights
are granted under this Lease;
THEREFORE, subject to the terms and conditions of this Lease, Her Majesty
grants to the Lessee, insofar as Her Majesty has the right to grant the same,
the exclusive right to drill for and recover the Leased Substances within the
Location, together with the right to remove from the Location any Lease
Substances recovered, for the term of five years computed from the Term
Commencement Date and, subject to the Mines and Minerals Act, for so long after
the expiration of that term as this Lease is permitted to continue under that
Act.
RESERVING AND PAYING to Her Majesty,
(a) in respect of each year during which this Lease remains in effect, a
clear yearly rental computed at the rate prescribed by, and payable
in accordance with, the Mines and Minerals Act, and
(b) the royalty on all Leased Substances recovered pursuant to this
Lease, that is now or may hereafter from time to time be prescribed
by, and that is payable in accordance with the Mines and Minerals
Act, such royalty to be calculated free of any deductions except
those that are permitted under the Mines and Minerals Act.
1.(1) In this Lease, a reference to the Mines and Minerals Act, or to any other
Act of the Legislature of Alberta referred to in Section 2(2)(b) of this
Lease, shall be construed as a reference to:
(a) that Act, as amended from time to time,
(b) any replacement of all or part of that Act from time to time enacted
by the Legislature, as amended from time to time, and
(c) any regulations, orders, directives or other subordinate legislation
from time to time made under any enactment referred to in clause (a)
or (b), as amended from time to time.
(2) In this Lease:
(a) "Her Majesty" means Her Majesty in right of Alberta, as represented
by the Minister of Energy of the Province of Alberta;
(b) "Leased Substances" means the minerals described under the heading
"Description of Location and Leased Substances" in the Appendix to
this Lease;
(c) "Location" means the subsurface area or areas underlying the surface
area of the Tract and described in the Appendix to this Lease under
the heading "Description of Location and Leased Substances";
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(d) "Oils Sands Area" means an oil sands deposit designated by the
Alberta Energy and Utilities Board under Section 7 of the Oils Sands
Conservation Act, c. 0-5.5;
(e) "Term Commencement Date" means the date shown on the first page of
this Lease as the Term Commencement Date;
(f) "Tract" means the tract or tracts of land described under the
heading "Description of Location and Leased Substances" in the
Appendix to this Lease.
2. This Lease is granted upon the following conditions:
(1) The Lessee shall pay to Her Majesty the rental and royalty reserved under
this Lease.
(2) The Lessee shall comply with the provisions of:
(a) the Mines and Minerals Act, and
(b) any other Acts of the Legislature of Alberta that prescribe, apply
to or affect the rights and obligations of a lessee of petroleum and
natural gas rights that are the property of Her Majesty, or that
relate to, apply to, or affect the Lessee in the conduct of its
operations or activities under this Lease.
(3) The provisions of the Acts referred to in subsection (2) of this section
are deemed to be incorporated in this Lease.
(4) In the event of conflict between a provision of this Lease and a
provision referred to in subsection (2) of this section, the latter
provision prevails.
(5) The Lessee shall not claim or purport to exercise any rights,
prerogatives, privileges or immunities that would otherwise exempt the
Lessee from compliance with any of the provisions of the Mines and
Minerals Act or of any other Act of the Legislature of Alberta referred
to in subsection (2)(b) of this section.
(6) Natural gas produced pursuant to this Lease shall be used within Alberta
unless the consent of the Lieutenant Governor in Council to its use
elsewhere is previously obtained.
(7) The Lessee shall keep Her Majesty indemnified against:
(a) all actions, claims and demands brought or made against Her Majesty
by reason of anything done or omitted to be done, whether
negligently or otherwise, by the Lessee or any other person in the
exercise or purported exercise of the rights granted and duties
imposed under this Lease, and
(b) all losses, damages, costs, charges and expenses that Her Majesty
sustains or incurs in connection with any action, claim or demand
referred to in clause (a).
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(8) The use in this Lease of the word "Lessee", "Lease:, "Leased Substances"
or "rental", or of any other word or expression,
(a) does not create any implied covenant or implied liability on the
part of Her Majesty, and
(b) does not create the relationship of landlord or tenant between Her
Majesty and the Lessee for any purpose.
(9) This Lease is also subject to the special provisions, if any, contained
in the Appendix to this Lease.
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APPENDIX
TO
5 YEAR PLAINS PETROLEUM AND NATURAL GAS LEASE NO. 0408050305
TERM COMMENCEMENT DATE: May 15, 0000
XXXXXXXXX XXXX: 256 hectares
DESCRIPTION OF LOCATION AND LEASED SUBSTANCES: 4-12-010: 36
PETROLEUM AND NATURAL GAS BELOW THE BASE OF THE FISH SCALE-WESTGATE AS
DESIGNATED IN DRRZD 273
INTERVAL: 794.00 - 841.00 metres
KEY WELL: 02/06-13-011-20W4/0
LOG TYPE: Induction Electric
TO THE BASE OF THE SAWTOOTH FM AS DESIGNATED IN DRRZD 20
INTERVAL: 3 109.00 - 3 176.00 Feet
KEY WELL: 00/10-02-006-14W4/0
LOG TYPE: Dual Induction-Laterolog
SPECIAL PROVISIONS:
Nil
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