PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, dated as of November 12, 1998, is between ST. MARY LAND
& EXPLORATION COMPANY ("St. Mary"), a Delaware corporation, 1776 Lincoln Street,
Suite 1100, Denver, Colorado 80203, ST. MARY OPERATING COMPANY ("SMOC"), a
Colorado corporation, 1776 Lincoln Street, Suite 1100, Denver, Colorado 80203,
KENT J. HARRELL, d/b/a Harrell Energy Co., 15 West 6th Street, Suite 2510,
Tulsa, Oklahoma 74119-5433, RALPH H. SMITH, individually and as Trustees for the
Ralph H. Smith Restated Revocable Trust dated August 14, 1997, 15 West 6th
Street, Suite 1702, Tulsa, Oklahoma 74119-5411, RONALD D. BOONE, 3585 E. Long
Road, Littleton, Colorado 80121, RONALD E. HORNIG, 8201 South Park Lane, Suite
100, Littleton, Colorado 80120, and ENGLAND RESOURCES CORPORATION, a Wyoming
corporation, 8201 South Park Lane, Suite 100, Littleton, Colorado 80120
(hereinafter collectively referred to as the "Seller") and ONEOK RESOURCES
COMPANY, a Delaware corporation, whose address is 100 West Fifth Street, Suite
1100, Tulsa, Oklahoma 74103-4298 ("Buyer").
WHEREAS, Seller desires to sell, and Buyer desires to purchase, upon
and subject to the terms and conditions hereinafter set forth, Seller's interest
in and to the following:
(i) All rights, titles and interests of Seller, of whatever
kind or character, whether legal or equitable, and whether vested or contingent,
in and to the oil, gas and other minerals in and under or that may be produced
from the lands described in (or described by reference to another instrument in)
Exhibit A hereto (herein called the "Lands") including, without limitation,
interests in oil, gas and/or mineral leases (the "Leases") covering such Lands,
overriding royalties (other than any overriding royalty interests owned by Kent
J. Harrell, d/b/a Harrell Energy Co. or Ralph H. Smith, individually, or as
Trustee of the Ralph H. Smith Restated Revocable Trust dated August 14, 1997,
which overriding royalty interests are set forth on the attached Exhibit A-1
which overriding royalty interests are specifically excluded from this
transaction), production payments and net profits interests in such Lands or
such Leases, and fee mineral interests, fee royalty interests and other
interests in such oil, gas and other minerals, whether such Lands are described
in a description set forth in Exhibit A or are described in Exhibit A by
reference to another instrument;
(ii) All rights, titles and interests of Seller in and to, or
otherwise derived from, all presently existing and valid oil, gas and/or mineral
unitization, pooling, and/or communitization agreements, declarations and/or
orders and in and to the properties covered and the units created thereby,
including, without limitation, all units formed under orders, rules,
regulations, or other official acts of any federal, state, or other authority
having jurisdiction, voluntary unitization agreements, designations and/or
declarations, relating to the Lands;
(iii) all of Seller's right, title and interest in all wells
identified on Exhibit B (the "Wells") and the equipment, materials, fixtures and
facilities and other personal property used or useful in connection with the
production, gathering, storing, measuring, treating, operating, maintaining,
marketing or transportation of production from the Lands or Leases or lands
pooled or unitized therewith (the "Equipment"),
1
(iv) all of Seller's right, title and interest in all
contracts and contractual rights insofar and only insofar as they relate to the
Lands, Leases, Wells, and Equipment including without limitation, unit
agreements, surface leases, oil and gas leases and/or subleases and assignments,
mineral deeds, royalty deeds, operating agreements, easements, right of ways,
farmout and farmin agreements, and all similar rights leased or owned by Seller,
and oil and gas sales, purchase, exchange and processing contracts and
agreements, whether of record or not (the "Contracts"). All of Seller's interest
as set forth above in the Lands, Leases, Wells, Equipment and Contracts shall
hereinafter together be called the "Interests".
THEREFORE, in consideration of the above recitals and of the covenants
and agreements herein contained, Seller and Buyer agree as follows:
1. Sale and Purchase. Subject to and upon all of the terms and
conditions hereinafter set forth, Seller shall sell, transfer, assign, convey
and deliver the Interests to Buyer, and Buyer shall purchase, receive, pay for
and accept the Interests from Seller, effective September 1, 1998, at 7 a.m.,
local time, said time to be determined for each locality in which the Interests
are located in accordance with the time generally observed in said locality (the
"Effective Time").
2. Purchase Price.
(a) The Purchase Price for the Interests shall be
$25,500,000.00 ("Purchase Price"), subject only to any applicable price
adjustment as provided for hereinbelow.
(b) Upon execution of this Agreement, Buyer shall make an
earnest money deposit ("Earnest Money") in the amount of $2,550,000.00. This
deposit together with the interest earned thereon in an interest bearing or
dividend account at Norwest Bank Colorado, National Association shall be
referred to herein as the "Earnest Money". In the event that the Closing (as
hereinafter defined) does not occur as a result of Seller's material breach of
this Agreement, then the Earnest Money shall be promptly returned to Buyer.
Otherwise, the Earnest Money shall be credited against the Purchase Price at
Closing.
(c) The Purchase Price including the deposit referred to in
Section 2(b) hereof shall be paid to St. Mary in accordance with its specific
instructions given to Buyer. If these monies are paid to St. Mary in accordance
with its instructions, St. Mary shall assume full responsibility for
distributing these monies to the parties that constitute Seller, and St. Mary
will indemnify and hold Buyer harmless from any claims, costs (including any
reasonable attorneys' fees and court costs) and liabilities resulting from any
improper payment of these monies to the parties constituting Seller.
3. Allocated Values. Buyer and Seller hereby agree upon the allocation
(the "Allocated Value(s)") of the Purchase Price among the Interests. Such
Allocated Values are made a part of this Agreement and are shown on Exhibit C
which is attached hereto.
4. Seller's Representations. Seller represents and warrants to Buyer
that as of the Closing Date:
(a) St. Mary is a duly organized corporation validly existing
and in good standing under the laws of the State of Delaware. SMOC is a duly
2
organized corporation validly existing and in good standing under the laws of
the State of Colorado. England Resources Corporation is a duly organized
corporation validly existing and in good standing under the laws of the State of
Wyoming. Ralph H. Smith acting as the Trustee for the Ralph H. Smith Restated
Revocable Trust dated August 14, 1997, has all requisite power to own and sell
this Trust's interest in the Interests and he has taken all requisite action
necessary to authorize sale of the Trust's interest in the Interests. Each party
constituting Seller is duly qualified to carry on its business in the state in
which the Interests are located, has full power and authority to enter into and
perform under this Agreement according to its terms, and this Agreement has been
duly executed and delivered by Seller and constitutes a legal, valid, and
binding obligation on it, enforceable against it in accordance with its terms;
(b) Seller, St. Mary's and SMOC's, execution, delivery and
performance of this Agreement has been duly authorized by any necessary
corporate action and will not violate or conflict with any agreement, law, rule,
regulation, charter, or other instruments governing either Seller's
organization, management, business affairs or instrument to which Seller is a
party or is bound;
(c) There are no known third party claims or demands
("Claims") with regard to the Interests; (d) Seller shall have "Marketable
Title," as defined in paragraph 7 below, with respect to the Interests;
(e) The Leases are in full force and effect in accordance with
their terms and Seller has not been advised directly or indirectly by any lessor
under any lease of a default under any lease;
(f) All royalties, rentals and other payments due under the
Leases have been properly and timely paid, and all conditions necessary to keep
the Leases in force have been fully performed;
(g) Seller is not obligated, by virtue of a prepayment
arrangement under any contract for the sale of hydrocarbons containing a "take
or pay" or similar provision, or by virtue of a production payment or any other
arrangement to deliver hydrocarbons produced from the Interests at some future
time without then or thereafter receiving full payment therefor;
(h) All ad valorem, property, production, severance and
similar taxes and assessments based on or measured by the ownership of property
or the production of hydrocarbons or the receipt of proceeds therefrom on the
Interests for all years prior to the year in which this Agreement is executed
have been properly paid, and all such taxes and assessments which become due and
payable prior to the Closing shall be properly paid by Seller;
(i) All valid laws, regulations and orders of all governmental
agencies having jurisdiction over the Interests have been and shall continue to
be complied with until the Closing and Seller has not received any notice from
any governmental agency that it is in violation of any law, regulation or order;
and
(j) To the best of Seller's knowledge, the material terms of
all leases, operating agreements, production sales contracts, farmout agreements
and other contracts or agreements respecting the Interests can be found either
of record in the counties in which the Interests are located or are reflected or
referenced in Seller's files.
3
(k) Seller has not executed any authority for expenditure in
excess of $10,000.00 for operations affecting the Interests since the Effective
Time except as disclosed to Buyer on the attached Schedule 4(k), and Seller will
not do so prior to Closing without Buyer's express written consent except when
required by emergency or as required to preserve any rights created by any
agreement, lease, contract, or instrument pertaining to the Interests.
(l) To the best of Seller's knowledge, but without any
warranty whatsoever, the Equipment is suitable for its intended purposes
regarding the Interests taking into consideration all circumstances surrounding
the Interests and customary industry standards regarding properties such as
these.
(m) There are no judicial or administrative actions,
proceedings or investigations pending or, to the best of Seller's knowledge,
threatened that (i) challenge the validity of this Agreement; (ii) seek to
restrain or prevent any action taken or to be taken by Seller in connection with
this Agreement; or, (iii) if adversely determined, would have a material adverse
effect upon Seller's ability to perform its obligations under this Agreement.
5. Buyer's Representations. Buyer represents and warrants to Seller
that as of the Closing Date:
(a) Buyer is a currently effective corporation and is or will
be by Closing duly qualified to carry on its business in the state in which the
Interests are located, has full power and authority to enter into and perform
under this Agreement according to its terms, and this Agreement has been duly
executed and delivered by Buyer and constitutes a legal, valid, and binding
obligation on it, enforceable against it in accordance with its terms.
(b) Buyer's execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporation action and will
not conflict with or violate any agreement, law, rule, regulation, ordinance,
charter or other instruments governing either Buyer's organization, management,
business affairs or instrument to which Buyer is a party or by which Buyer is
bound.
(c) Buyer represents that by reason of its knowledge and
experience in the evaluation, acquisition, and operation of oil and gas
properties, Buyer has evaluated the merits and risks of purchasing the Interests
from Seller, and if Closing occurs, Buyer will have performed sufficient review
and due diligence with respect to the Interests to enable it to consummate the
transaction contemplated hereby based solely on Buyer's knowledge and experience
and not on any representations or warranties of Seller.
6. Access to Records. After execution of this Agreement, Seller shall
give Buyer and its authorized representatives, during regular business hours, at
Buyer's sole risk, cost and expense, access, with copying privileges, to all
geological, geophysical, production, engineering and other technical data and
4
records, and to all contract, land, title and lease records, to the extent such
data and records are in Seller's possession and relate to the Interests and such
other information relating to the Interests as Buyer may reasonably request;
provided, however, Seller shall have no obligation to provide Buyer such access
to any data or information which access Seller cannot legally provide Buyer
because of third-party restrictions on Seller, but Seller agrees to use its best
efforts to obtain the consent of any such third-party to furnish such
information to Buyer. Buyer shall keep all materials and data obtained
confidential and shall return any and all materials and data including Buyer's
notes and work papers as to any properties not purchased at Closing.
7. Marketable Title. As used herein, the term "Marketable Title"
shall mean, as to the Interests set forth on Exhibit C, that title which:
(a) Entitles Seller to receive not less than the percentage
set forth in Exhibit C as the "Net Revenue Interest" of all hydrocarbons
produced, saved and marketed from the portion of the Interests specified in
Exhibit C throughout the productive life thereof;
(b) Obligates Seller to bear a percentage of the costs and
expenses relating to the maintenance and development of and operation of the
portion of the Interests specified in Exhibit C, not greater than the "Working
Interest" set forth in Exhibit C throughout the productive life thereof; and
The Working Interest and Net Revenue Interest as set forth in Exhibit C
are intended to represent only Seller's ownership within the currently producing
horizons in the Wells and the proved undeveloped, proved developed
non-producing, probable, and possible locations and attendant formations
specifically identified in Exhibit C. Seller's ownership in all non-producing
horizons affected by the Interests which are not specifically identified in
Exhibit C may vary from the Working Interest and Net Revenue Interest depicted
in Exhibit C for any individual well based on individual wellbore interests, and
no representation or warranty whatsoever is made by virtue of this instrument as
to Seller's Working Interest or Net Revenue Interest outside the wellbores for
the Wells and the non-producing locations and attendant formations not
specifically listed on Exhibit C.
(c) Is free and clear of liens, claims, encumbrances, charges,
contracts or other burdens or defects, except for Permitted Encumbrances (as
hereinafter defined). As used herein the term "Permitted Encumbrances" means:
(i) preferential rights to purchase and required
third party consents to assignment with respect to which waivers or
consents are obtained from appropriate parties prior to Closing or the
applicable response period after notice has passed without the party
holding the preferential right having exercised such right or are
otherwise deemed waived;
(ii) Unit or unitization agreements, communitization
agreements or pooling agreements, and polling or unitization orders of
any federal or state governmental agency having jurisdiction;
(iii) Operating agreements, farmout agreements,
assignments, agreement for the sale or purchase of oil, gas, casinghead
5
gas or other hydrocarbon substances, processing agreements, salt water
or other disposal agreements, seismic or geophysical permits or
agreements, and other contracts or agreements which are customary in
the oil and gas industry.
(iv) division orders;
(v) such other defects or irregularities of
title or liens, charges or encumbrances as Buyer may have waived in
writing;
(vi) notwithstanding anything to the contrary in this
Section 7, all rights to consent by, required notices to, filings with
or other actions by governmental entities in connection with the sale
or conveyance of federal, state, Indian or other governmental oil and
gas leases or interest therein or related thereto where the same are
customarily obtained subsequent to assignment of such Leases and
Interests; and
(vii) lessors' royalties, overriding royalties,
production payments, net profits interest, reversionary interests, and
similar burdens which do not operate to reduce any Net Revenue Interest
set forth on Exhibit C to less than such amount.
(viii) All other liens, charges, encumbrances,
defects and irregularities which do not materially impair the
operation, or use of the Interests.
8. Preferential Rights. If any of the Interests are subject to
preferential purchase rights, rights of first refusal, consents to assign,
lessor's approvals, or similar rights (collectively, "preferential rights"),
Seller shall promptly upon the execution of this Agreement by the parties hereto
notify all holders of preferential rights of its intention to sell the Interests
affected thereby, and of the corresponding Allocated Value(s). Seller shall
promptly notify Buyer if the preferential rights are exercised, or if the
requisite period has elapsed without said rights having been exercised.
9. Title Examination and Physical Inspection.
(a) After the execution of this Agreement, Buyer and its
authorized representatives shall have physical access to the Interests at
Buyer's sole cost, risk and expense for the purpose of inspecting the Interests,
conducting such tests, examination, investigations and assessments as may be
reasonable and necessary or appropriate to evaluate the environmental and
physical conditions of the Interests. For those Interests which are not operated
by Seller, Buyer or Seller shall obtain permission from the operator for Buyer
to conduct such inspections. Buyer shall defend and indemnify Seller from any
and all liability, claims, causes of action, injury to Buyer's employees, agents
or contractors or to Buyer's property, and/or injury to Seller's property,
employees, agents or contractors which may arise out of Buyer's inspections. In
the event this Agreement fails to close, Buyer shall keep any and all data or
information acquired by all such examinations including the Independent
Environmental Review described in Section 10 and results of all analysis of such
data and information strictly confidential and not disclose same to any person
or agency without the prior written approval of Seller, unless required to do so
by court order or applicable law. Upon Closing, Seller shall keep all matters
pertaining to the Interests confidential unless disclosure is required by law.
6
(b) Buyer will conclude its title review and give notice to
Seller of asserted title defects ("Title Defects") which would cause title to
any Interest not to be Marketable Title as defined in paragraph 7, on or before
December 9, 1998. All Environmental Defects shall be dealt with in accordance
with Section 10. To be effective, Buyer's written notice of a Title Defect must
include (i) a brief description of the matter constituting the asserted Title
Defect and (ii) supporting documents or briefs thereof reasonably necessary for
Seller (or a title attorney or examiner hired by Seller) to verify the existence
of such asserted Title Defect, and (iii) the value for any individual Title
Defect must exceed $10,000.00 and the value of all Title Defects must exceed
$250,000.00 in the aggregate. No individual Title Defect having a value of less
than $10,000.00 shall be considered a Title Defect even if the aggregate amount
is otherwise reached. This $250,000.00 aggregate number shall be considered a
threshold and not a deductible. The term "Title Defect" will not include
reductions in any Net Revenue Interest or increase in any Working Interest
without a corresponding increase in the attendant Net Revenue Interest from
those set forth in Exhibit C caused by any computational error committed by
Seller or as a result of the failure of Seller to properly calculate the effect
of any overriding royalty interest or other non-cost bearing interest created by
Seller. Any item described in the preceding sentence shall be referred to herein
as a "Computational Error".
(c) After Buyer delivers to Seller written notice of any
matters which constitute a Title Defect to the Interests, Seller, at Seller's
sole cost and expense, may attempt to cure such matters. In the event Seller is
unable to cure such matters within 60 days after receipt of notice in accordance
with this Section 9, Buyer, at Buyer's option, may elect either of the
following:
(i) the Interest(s) or portion thereof affected by
such Title Defect may be excluded from the Interests to be purchased
and sold hereunder, and the Purchase Price shall be adjusted downward
by the Allocated Value(s) attributable to such Interest(s) or portion
thereof; or
(ii) the Interest(s) affected by such Title Defect
may be included at a reduced value and the Purchase Price shall be
adjusted downward by a value mutually agreed to by Buyer and Seller.
If Closing has occurred prior to the running of this cure period and Buyer
chooses to elect remedy (i) or (ii) above, Seller will refund to Buyer the
corresponding portion of the Purchase Price to accommodate the downward
adjustment.
10. Environmental Matters. After the execution of this Agreement,
Buyer and its authorized representatives shall have physical access to the
Interests at Buyer's sole cost, risk and expense for the purpose of inspecting
the Interests, conducting such tests, examination, investigations and
assessments as may be reasonable and necessary or appropriate to evaluate the
7
environmental and physical conditions of the Interests. For those Interests
which are not operated by Seller, Buyer shall obtain permission from the
operator to conduct such inspections. Seller shall provide all reasonable
assistance in obtaining this permission for Buyer. Buyer shall defend and
indemnify Seller from any and all liability, claims, causes of action, injury to
Buyer's employees, agents or contractors or to Buyer's property, and/or injury
to Seller's property, employees, agents or contractors which may arise out of
Buyer's inspections, but only to the extent of Buyer's negligence. Buyer agrees
to provide to Seller, upon request, a copy of any environmental assessments,
including any reports, data, and conclusions. Likewise, Seller shall furnish to
Buyer a copy of any environmental assessments, including any reports, data, and
conclusions pertaining to the Interests in the possession of Seller. Buyer and
Seller shall keep any and all data or information acquired by all such
examinations and results of all analysis of such data and information strictly
confidential and not disclose same to any person or agency without the prior
written approval of both Buyer and Seller, unless required to do so by court
order or applicable law. The foregoing obligation of confidentiality shall
survive Closing or termination of this Agreement without Closing. Buyer shall
have until December 9, 1998, to complete this environmental inspection and
analysis of the Interests.
If, on or before December 9, 1998, Buyer discovers a material adverse
environmental condition which would adversely affect the value of the Interests
by $25,000 per occurrence and the value of all Environmental Defects must exceed
$250,000 in the aggregate net to Seller's interest in the affected property, and
Seller is not in compliance with Environmental Laws (as hereinafter defined)
with respect to such property ("Environmental Defect"), Buyer shall give Seller
written notice thereof not later than December 9, 1998, together with the basis
for such assertion and data in support thereof, and shall furnish Seller with
any proposed reduction in the Purchase Price attributable to each such matter.
For purposes of this Agreement, Environmental Laws shall mean any statute, rule,
order, or regulation of any federal, state, or local governmental authority
relating to pollution or protection of the environment to the extent in effect
before the Effective Time. No individual Environmental Defect having a value
less than $25,000 shall be considered an Environmental Defect even if the
aggregate amount is otherwise reached. This $250,000 aggregate number shall be
considered a threshold and not a deductible.
Upon timely delivery of a notice by Buyer of an Environmental Defect,
Seller, at Seller's option, shall either (i) remove the defective property from
the sale and reduce the Purchase Price by the Allocated Value attributable to
the defective property, (ii) attempt to cure the defect at Seller's sole cost
and expense within 120 days after the notice, or (iii) agree with Buyer to a
mutually acceptable Purchase Price reduction with regard to an Environmental
Defect which shall be equal to the cost reasonably associated with curing such
defect. If Seller attempts to cure the Environmental Defect and is not able to
do so in accordance with item (ii) above, the property affected by such uncured
Environmental Defect shall be withdrawn unless a mutually acceptable Purchase
Price reduction is agreed to by Buyer and Seller. If withdrawn, the portion of
the Purchase Price attributable to such property shall be promptly refunded to
Buyer.
11. Purchase Price Adjustments. The Buyer and Seller have agreed to an
Allocated Value for each Interest (and the Lands, Leases and other property
8
related thereto) as set forth on Exhibit C hereto. The Purchase Price is based
upon Seller having the Net Revenue Interests specified on Exhibit C. If Seller
is unable to deliver, at Closing, the Net Revenue Interest shown on Exhibit C as
a result of a Computational Error and the Buyer has not previously excluded the
affected portion of the Interests pursuant to paragraph 9(c), the Purchase Price
shall be reduced by an amount equal to a proportionate amount of the Allocated
Value for such Well. Likewise, if Seller shall have a greater Net Revenue
Interest in an interest set forth in Exhibit C, the Purchase Price shall be
increased proportionately. In the event that the aggregate reduction in the
Purchase Price on account of any adjustments contemplated by paragraphs 9 or 10,
equals or exceeds twenty percent (20%) of the Purchase Price, either Seller or
Buyer shall have the right to terminate this Agreement by written notice to the
other party, in which event all rights, duties and obligations of either party
hereunder shall cease and the Earnest Money shall immediately be returned to
Buyer. The parties acknowledge that Closing may occur prior to the finalization
of the Purchase Price adjustments contemplated by this Section 11. If this
occurs, Seller and Buyer shall nevertheless adjust the Purchase Price in
accordance with this Section 11 at an intermediate post-Closing adjustment to be
held on January 15, 1999, if necessary.
12. Assignment and Warranty of Title. The conveyance of the Interests
shall be on the form of assignment attached hereto as Exhibit D and shall
contain a warranty of title by, through and under Seller, as to their respective
percentage ownership only, but not otherwise.
13. Conditions of Closing by Buyer. The obligation of Buyer to close
is subject to the satisfaction of the following conditions:
(a) Buyer shall have had reasonable access during normal
business hours to all data and records obligated to be provided Buyer as
provided herein;
(b) Buyer shall have had reasonable access to the Lands,
Leases, Wells, and Equipment included in the Interests to conduct an inspection
for all purposes, including environmental condition;
(c) All representations and warranties of Seller contained in
this Agreement shall be true, correct, and not misleading in any material
respects, and Seller shall have performed and satisfied all agreements and
covenants in all material respects required by this Agreement to be performed
and satisfied by Seller;
(d) Seller shall have obtained and delivered to Buyer (i) all
prerequisite waivers of preferential rights of purchase or the expiration
thereof shall have occurred, and (ii) all necessary consents for transfer of the
Interests, except those which by their nature cannot be requested or obtained
until after Closing, or Buyer and Seller shall have adjusted the Purchase Price
in accordance with the provisions of this Agreement;
(e) No suit or other proceeding shall be pending or threatened
before any court or governmental agency seeking to restrain, prohibit, or
declare illegal, or seeking substantial damages in connection with the
transaction contemplated hereby;
9
14. Conditions of Closing by Seller. The obligation of Seller to close
is subject to the satisfaction of the following conditions:
(a) All representations and warranties of Buyer contained in
this Agreement shall be true, correct, and not misleading in any material
respect, and Buyer shall have performed and satisfied all agreements and
covenants in all material respects required by this Agreement to be performed
and satisfied by Buyer.
(b) No suit or other proceeding shall be pending or threatened
before any court or governmental agency seeking to restrain, prohibit, or
declare illegal, or seeking substantial damages in connection with the
transaction contemplated hereby.
15. Preliminary Closing Statement. Seller shall prepare and furnish to
Buyer at least five (5) days prior to Closing a preliminary closing statement
setting forth the adjustments to the Purchase Price to be paid by Buyer at
Closing. Such statement shall reflect each adjustment and the calculation used
to determine such amount. The preliminary adjusted Purchase Price shall mean the
Purchase Price adjusted as provided herein, including but not limited to Earnest
Money, Title Defects, interest variances, gas imbalances, proration of ad
valorem and other applicable taxes and allocation of operating expenses and
revenues attributable to the Interests. Insofar as concerns operating expenses
and revenues attributable to the Interests subject to Closing for the period
from the Effective Time through Closing, for purposes of the preliminary closing
statement, Buyer shall receive a net adjustment for estimated operating expenses
and revenues for those periods which the actual amounts cannot be determined at
Closing. Final adjustments to the actual gas balancing, expenses incurred and
revenues received shall be taken into account on the Final Settlement Statement.
16. Closing. The Closing shall occur on or before December 15, 1998,
at 10:00 a.m., at the offices of St. Mary Land & Exploration Company in Tulsa,
Oklahoma, or at such other time and place as Seller and Buyer may mutually agree
in writing. In the event the transaction contemplated under this Agreement fails
to close on or before December 31, 1998, and Seller is otherwise ready, able,
and willing to consummate the transaction contemplated hereby, the Earnest Money
shall be forfeited to Seller as liquidated damages, and this Agreement shall be
terminated and of no further force or effect. If however, Buyer is ready,
willing, and able to close the transaction contemplated by this Agreement, and
Closing has not occurred on or before December 31, 1998, through no fault of
Buyer, Buyer shall be entitled either to declare this Agreement terminated and
the immediate return of the Earnest Money, or to seek specific performance of
this transaction. At Closing the following will occur:
(a) Seller shall execute, acknowledge and deliver to Buyer an
Assignment and Bill of Sale substantially in the form and substance of Exhibit D
attached hereto, covering all of the Interests to be sold pursuant hereto;
10
(b) Buyer shall in accordance with Section 2(c) hereof deliver
to St. Mary by wire transfer the total Purchase Price as adjusted hereunder,
subject to further adjustment after Closing as provided for herein;
(c) On or before Closing, Seller and Buyer shall execute all
necessary forms to be filed with the appropriate regulatory authorities
concerning the change of ownership of the Interests, and Buyer shall submit same
for approval to such regulatory authorities at Buyer's expense, and Buyer shall
deliver to Seller evidence of the appropriate state and federal plugging bond,
surety letter, or letter of credit acceptable to such authority to authorize
Buyer's right to conduct operations, if applicable;
(d) Seller shall, subject to the terms of any applicable
operating agreements, deliver to Buyer exclusive possession of the Interests,
effective as of the Effective Time;
(e) Seller shall execute and deliver appropriate transfer
orders or letters in lieu of transfer orders with respect to each of the Wells;
(f) Seller shall transfer all suspense accounts maintained by
it that relate to the Interests to Buyer, and Buyer shall assume all
responsibility for the administration and distribution of such accounts
thereafter;
(g) Seller shall promptly after Closing provide Buyer any
maps, reports, and other written material relating to the Interests, including
without limitation, lease files, division order and revenue files, accounting
files, property records, contract files, operations files, well files,
geological maps and geophysical data (provided such is not prohibited from being
transferred by operation of any third party agreement), core analyses and
hydrocarbon analyses, well logs, mud logs, core data and field studies
("Records"); however, Seller shall have no obligation to furnish Buyer any data
or information which Seller cannot provide Buyer because of third party
restrictions. Seller agrees to request that any such third party furnish such
information to Buyer. Buyer agrees to maintain the Records and allow Seller, at
its sole cost and expense, reasonable access thereto for a period of six (6)
years after Closing; and
(h) Seller shall, as appropriate, resign as operator of the
Interests and Seller agrees not to support any third party as successor operator
to Seller with regard to the Interests.
17. Reservations and Exceptions. Sale and purchase of the Interests is
made subject to all reservations, exceptions, limitations, contracts and other
burdens or instruments which are of record or are listed on Exhibits A, A-1, or
B hereto.
18. Indemnification.
(a) Buyer agrees to indemnify, defend, and hold Seller, their
successors, and assigns, harmless from and against any and all claims, demands,
liabilities, judgments, penalties, causes of action, lawsuits, damages, costs,
and expenses, including reasonable attorney's fees, expert fees, and court costs
of every kind and character arising out of or attributable to Buyer's ownership
or operation of the Interests, including, but not limited to environmental
matters, arising from matters occurring on or after the Effective Time and
11
further this indemnity shall extend to any environmental matter which has been
dealt with in accordance with Section 10 hereof.
(b) Seller agrees to indemnify, defend, and hold Buyer, its
successors, and assigns, harmless from and against any and all claims, demands,
liabilities, judgments, penalties, causes of action, lawsuits, damages, costs,
and expenses, including reasonable attorney's fees, expert fees, and court costs
of every kind and character arising out of or attributable to Seller's ownership
or operation of the Interests, including, but not limited to environmental
matters (except as to those dealt with under Sections 10 and 28 hereof), arising
from matters occurring prior to the Effective Time.
(c) Notwithstanding the foregoing, the indemnification
obligation of Seller as set forth in Section 18 (b) hereof shall terminate one
year after Closing regarding all matters except liability for personal injuries
that are covered by Section 18(b) hereof which indemnification obligation of
Seller shall terminate two years after Closing, and respectively thereafter,
Buyer shall defend and indemnify Seller against all claims, demands,
liabilities, judgments, penalties, causes of action, lawsuits, damages, costs,
and expenses (including reasonable attorney's fees, expert fees, and court
costs) of every kind or character arising out of or attributable to the
ownership or operation of the Interests and asserted after the one-year or
two-year anniversary of Closing, even though caused by, arising out of, or
attributable to, in whole or in part, the sole or concurrent negligence, fault,
or strict liability of Seller.
19. Casualty Loss. Notwithstanding anything that may be contained
herein to the contrary, if, prior to the Closing, a Casualty Loss occurs, Buyer
may elect (i) to delete the property that is subject to the Casualty Loss from
the Interests and the Purchase Price shall be reduced by the value allocated to
the deleted interest based on the value reflected on Exhibit C, (ii) to proceed
with the purchase of the Interests without reduction of the Purchase Price,
notwithstanding any such destruction or taking, in which case at Closing, Seller
shall pay to Buyer all sums paid to Seller by third parties by reason of the
destruction or taking of that portion of the Interests that is subject to the
Casualty Loss and shall assign, transfer and set over unto Buyer all of the
right, title and interest of Seller in and to any claims, causes of action,
unpaid proceeds or other payments, from third parties arising out of such
destruction or taking. Seller shall not voluntarily compromise, settle or adjust
any amounts payable by reason of a Casualty Loss without first obtaining the
written consent of Buyer. For the purposes hereof the term "Casualty Loss" means
the destruction of all or any portion of the Interests by fire or other casualty
or taking thereof by condemnation or under the right of eminent domain.
20. Taxes. All Ad valorem taxes, real property taxes, and similar
obligations with respect to the tax period in which the Effective Time occurs
(the "current tax period") shall be apportioned between Seller and Buyer as of
the Effective Time.
21. Accounting.
(a) All proceeds (including proceeds held in suspense or
escrow) from the sale of production actually sold and delivered by Seller prior
to the Effective Time attributable to the Interests shall belong to Seller and
12
all proceeds from the sale of production actually sold and delivered after the
Effective Time attributable to the Interests shall belong to Buyer.
(b) All oil, condensate or liquid hydrocarbons and any
products (liquid, gas or solid) separated or processed therefrom (hereinafter in
this paragraph called "oil") in storage shall be measured or gauged and all gas
meter charts shall be replaced at the Effective Time. Buyer shall pay Seller for
such oil at the actual price received for the sale of such oil. If not known,
this Purchase Price shall be estimated at Closing and paid to Seller with the
actual final settlement of this matter to occur at the post-Closing accounting,
provided that Buyer shall not pay Seller for oil in storage below the level of
the tank cut off valve (tank bottoms).
(c) Any gas imbalance shall be accounted for between Buyer and
Seller as follows: Buyer and Seller agree for the purposes of this Agreement
that the net gas imbalance attributable to the Interests as of the Effective
Time is as set forth on Exhibit E (the "Agreed Imbalance"), notwithstanding that
the actual imbalance may be lesser or greater. The Agreed Imbalance has been
used by Buyer and Seller in negotiating the Purchase Price under this Agreement.
Buyer and Seller shall verify the actual net gas imbalance in the post-Closing
accounting and any imbalance shall be accounted for between the parties at the
price of $1.00 per MCF but only as to those volumes which exceed or are less
than the Agreed Imbalance; provided that if an applicable operating or gas
balancing agreement requires cash balancing upon conveyance of the Interests,
the adjustment price shall equal the greater of $1.00 per MCF or the price
received with respect to such cash balancing. Such settlement shall be final and
neither party thereafter shall make claim upon the other concerning the gas
balances of the Interests. Buyer assumes all rights and liabilities relating to
gas imbalances discovered after the post-Closing settlement including any
revenue adjustment caused by such subsequently discovered imbalance.
(d) Except as otherwise specifically provided in this
Agreement, all normal and routine costs, expenses and contractual obligations
and benefits, including accounts receivable, relating to the Interests which
accrue prior to the Effective Time shall be paid and discharged or received by
Seller regardless of when invoices for such costs, expenses and obligations are
received and all normal and routine costs, expenses and contractual obligations
and benefits relating to the Interests which accrue after the Effective Time
shall be paid and discharged or received by Buyer.
(e) The foregoing adjustments shall be made by debits and
credits between the parties at Closing or post-Closing as provided for herein.
(f) To the extent necessary to comply with requirements of the
Securities and Exchange Commission (the "SEC"), Buyer shall have the right to
audit Seller's business and financial records, including without limitation
property detail, standardized measure data and independently prepared reserve
information, maintained in connection with the Interests (except for income tax
records) for all periods for which audited financials are required by the SEC to
be prepared and filed by Buyer.
13
22. Sales Tax. The Purchase Price provided for hereunder excludes any
sales taxes or other taxes in connection with the sale of property pursuant to
this Agreement. If a determination is ever made that a sales tax or other
transfer tax applies, Buyer shall be liable for such tax as well as any
applicable conveyance, transfer and recording fees, and real estate transfer
stamps or taxes imposed on any transfer of property pursuant to this Agreement.
Buyer shall defend and hold Seller harmless with respect to the payment of all
such taxes, if any, including any interest or penalties assessed thereon.
23. Post-Closing Adjustments. As soon as practicable after Closing,
but in any event within one hundred twenty (120) days thereafter, Seller shall
prepare, in accordance with this Agreement and (where applicable) in accordance
with generally accepted accounting principles consistently applied, a final
settlement statement (herein called the "Final Statement") setting forth each
adjustment or payment which was not finally determined as of the Closing Date,
and showing the calculation of the final settlement price based on such Final
Statement (the "final settlement price"). Seller shall submit the Final
Statement to Buyer and shall afford Buyer access to Seller's records pertaining
to the computations contained in the Final Statement. As soon as practicable
after receipt of the statement, Buyer shall deliver to Seller a written report
containing any changes which Buyer proposes be made to the Final Statement. The
parties shall agree with respect to the amounts due pursuant to such
post-Closing adjustment not later than sixty (60) days after Buyer's receipt of
Seller's Final Statement. The date upon which such agreement is reached shall be
herein called the "Settlement Date". In the event that (i) the final settlement
price is more than the amount previously paid to Seller, Buyer shall pay to
Seller in immediately available funds the amount of such difference; or (ii) the
final settlement price is less than the amount previously paid to Seller, Seller
shall pay to Buyer in immediately available funds the amount of such difference.
24. Brokers' Fee. Each of Seller and Buyer represents and warrants to
the other that it has not incurred liability, contingent or otherwise, for
brokers' or finders' fees in respect of this Agreement or the transactions
contemplated hereby.
25. Notices. All communications required or permitted under this
Agreement shall be in writing and any communication or delivery hereunder shall
be deemed to have been duly given and received when actually delivered to the
addressee or received via facsimile at the number(s) set forth below of the
party to be notified.
SELLER:
St. Mary Operating Company
7060 South Yale, Suite 800
Tulsa, Oklahoma 74136-5741
Attention: Julian C. Pope
Vice President
Telephone: (918) 488-7600
Fax: (918) 488-0105
14
WITH A COPY TO:
St. Mary Land & Exploration Company
1776 Lincoln Street, Suite 1100
Denver, Colorado 80203
Attention: Milam Randolph Pharo
Vice President - Land & Legal
Telephone: (303) 861-8140
Fax: (303) 863-1040
BUYER:
ONEOK Resources Company
100 West Fifth Street, Suite 1100
Tulsa, Oklahoma 74103-4298
Attention: J.D. Holbird, Vice President
Telephone: 918-588-7934
Fax: 918-588-7773
WITH A COPY TO:
Donald A. Kihle
Gable and Gotwals
100 West Fifth Street, Suite 1000
Tulsa, Oklahoma 74103-4219
Telephone: 918-585-8141
Fax: 918-588-7873
26. Interim Operations. Seller covenants that from the date hereof to
the Closing Date, except (A) as provided herein, or (B) as otherwise consented
to in writing by Buyer, Seller will:
(a) Not (A) operate or in any manner deal with, incur obligations with
respect to, or undertake any transactions relating to, the Interests other than
transactions (i) in the normal, usual and customary manner, (ii) of a nature and
in an amount consistent with prior practice, (iii) in the ordinary and regular
course of business of owning and operating the Interests, and (iv) subject to
the terms and conditions of this Agreement; (B) dispose of, encumber or
relinquish any of the Interests (other than relinquishments resulting from the
expiration of leases that Seller has no right or option to renew); or (C) waive,
compromise or settle any right or claim that would have a material adverse
15
effect on the ownership, operation or value of any of the Interests after the
Effective Time.
(b) Use all reasonable efforts to preserve in full force and effect all
oil and gas leases, operating agreements, easements, rights of way, permits,
licenses, and agreements which relate to the Interests and shall perform all
obligations of Seller in or under all such agreements relating to the Interests.
Seller shall, except for emergency action taken in the face of serious risk to
life, property, or the environment, consult with, inform and advise Buyer, to
the extent Seller has such knowledge, regarding all material matters concerning
the operating, management, and administration of the Interests, and not approve
or elect to go non-consent as to any proposed well or plug and abandon or agree
to plug and abandon any well without Buyer's prior written approval. On any
matter requiring Buyer's approval under this Section 26, Buyer shall respond
within five (5) days to Seller's request for approval; failure of Buyer to
respond to Seller's request for approval within such time shall release Seller
from the obligation to obtain Buyer's approval before proceeding on such matter.
(c) Promptly notify Buyer of any suit, lessor demand action, or other
proceeding before any court, arbitrator, or governmental agency and any cause of
action which relates to the Interests or which might result in impairment or
loss of any portion of the Interests or which might hinder or impede the
operation of the Interests.
(d) Make or give all notifications, filings, consents or approval from,
to or with all governmental authorities, and will cooperate with Buyer in
obtaining the issuance, assignment or transfer, as the case may be, by each such
authority of such permits as may be necessary for Buyer to own and operate the
Interests following the consummation of the transactions contemplated in this
Agreement; provided that Seller shall not be required to incur any unreasonable
expense in connection therewith.
(e) Through Closing, maintain in effect insurance providing the same
type coverage, in the same amounts with the same deductibles as the insurance
maintained in effect by Seller or its affiliates on the Effective Time.
(f) To the extent Seller is not the operator of any of the Interests,
the obligations of Seller in this Section 26, which have reference to the
operations or activities which normally or pursuant to existing contracts are
carried out or performed by the operator, shall be construed to require that
Seller use all reasonable efforts to cause the operator of such Interests to
take such actions or render such performance within the constraints of the
applicable operating agreements and other applicable agreements.
27. Further Assurance. After Closing each of the parties shall
execute, acknowledge and deliver to the other such further instruments, and take
such other actions as may be reasonably necessary to carry out the provisions of
this Agreement. However, Buyer shall assume all responsibility for notifying the
purchasers of oil and gas production from the Interests, and such other
designated persons who may be responsible for disbursing payments for the
purchase of such production, of the change of ownership of the Interests. Buyer
shall take all actions necessary to effect the transfer of such payments to
Buyer. After the final post-Closing settlement, additional proceeds received by
16
or expenses paid by either Buyer or Seller on behalf of the other shall be
settled by invoicing the other party for expenses paid or remitting to the other
party any proceeds received.
28. DISCLAIMER OF WARRANTIES. EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT (INCLUDING ANY EXHIBITS HERETO) OR DOCUMENTS EXECUTED AND DELIVERED
HEREUNDER, THIS AGREEMENT AND ANY INSTRUMENT OF CONVEYANCE OR SALE EXECUTED
PURSUANT HERETO SHALL BE EXECUTED WITHOUT ANY WARRANTY OF TITLE, EITHER EXPRESS,
IMPLIED, STATUTORY, OR OTHERWISE, WITHOUT ANY EXPRESS OR IMPLIED WARRANTY OR
REPRESENTATION AS TO THE MERCHANTABILITY OF ANY OF THE EQUIPMENT OR OTHER
PERSONAL PROPERTY INCLUDED IN THE INTERESTS OR ITS FITNESS FOR ANY PARTICULAR
PURPOSE, AND WITHOUT ANY OTHER EXPRESS OR IMPLIED WARRANTY OR REPRESENTATION
WHATSOEVER. IT IS UNDERSTOOD AND AGREED THAT BUYER SHALL HAVE INSPECTED THE
INTERESTS FOR ALL PURPOSES, INCLUDING WITHOUT LIMITATION FOR THE PURPOSE OF
DETECTING THE PRESENCE OF NATURALLY OCCURRING RADIOACTIVE MATERIAL (HEREINAFTER
REFERRED TO AS "NORM") AND MAN MADE MATERIAL FIBERS (HEREINAFTER REFERRED TO AS
"MMMF") AND SATISFIED ITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL CONDITION,
BOTH SURFACE AND SUBSURFACE, INCLUDING BUT NOT LIMITED TO CONDITIONS RELATED TO
THE PRESENCE, RELEASE, OR DISPOSAL OF HAZARDOUS SUBSTANCES, AND THAT BUYER IS
RELYING SOLELY UPON THE RESULTS OF SUCH INSPECTION OF THE INTERESTS AND SHALL
ACCEPT ALL OF THE SAME IN THEIR "AS IS, WHERE IS" CONDITION. AFTER CLOSING
SELLER DISCLAIMS ALL LIABILITY ARISING IN CONNECTION WITH THE PRESENCE OF NORM
ON THE INTERESTS AND IF TESTS HAVE BEEN CONDUCTED BY SELLER FOR THE PRESENCE OF
NORM, SELLER DISCLAIMS ANY WARRANTY RESPECTING THE ACCURACY OF SUCH TESTS OR
RESULTS. IN ADDITION, EXCEPT FOR REPRESENTATIONS SET FORTH IN THIS AGREEMENT
(INCLUDING ANY EXHIBITS HERETO) OR DOCUMENTS EXECUTED AND DELIVERED HEREUNDER,
SELLER SHALL MAKE NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE
ACCURACY OR COMPLETENESS OF ANY DATA, INFORMATION OR MATERIALS HERETOFORE OR
HEREAFTER FURNISHED BUYER IN CONNECTION WITH THE INTERESTS, OR AS TO THE QUALITY
OR QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO THE INTERESTS OR
THE ABILITY OF THE INTERESTS TO PRODUCE HYDROCARBONS. ANY AND ALL SUCH DATA,
INFORMATION AND OTHER MATERIALS FURNISHED BY SELLER IS PROVIDED TO BUYER AS A
CONVENIENCE AND ANY RELIANCE ON OR USE OF THE SAME SHALL BE AT BUYER'S SOLE
RISK.
29. Securities Laws. The solicitation of offers and the sale of the
Interests by Seller have not been registered under any securities laws. Buyer
represents that at no time has it been presented with or solicited by or through
any public promotion or any form of advertising in connection with this
17
transaction. Buyer represents that it intends to acquire the Interests for its
own benefit and account and that it is not acquiring the Interests with the
intent of distributing fractional, undivided interests that would be subject to
regulation by federal or state securities laws, and that if it sells, transfers,
or otherwise disposes of the Interests or fractional, undivided interests, it
will do so in compliance with applicable federal and state securities laws.
30. Due Diligence. Buyer represents that it has performed, or will
perform on or before December 9, 1998, sufficient review and due diligence with
respect to the Interests, which includes reviewing well data, title, and other
files, and performing necessary evaluations, assessments, and other tasks
involved in evaluating the Interests, to satisfy its requirements completely and
to enable it to make an informed decision to acquire the Interests under the
terms of this Agreement.
31. Press Release. Prior to Closing, there shall be no press release
or public communication concerning this purchase and sale by either party,
except as required by law or with the written consent of the party not
originating said release or communication. Prior to Closing, the parties will
endeavor to consult each other in a timely manner on all press releases required
by law.
32. Entire Agreement. This instrument states the entire agreement
between the parties and may be supplemented, altered, amended, modified or
revoked by writing only, signed by all parties. This Agreement supersedes any
prior agreements between the parties concerning sale of the Interests, except
that any confidentiality agreement shall terminate at Closing. The headings are
for guidance only and shall have no significance in the interpretations of this
Agreement.
33. Tax Reporting. Seller and Buyer agree that if this transaction is
subject to the reporting requirement of Section 1060 of the Internal Revenue
Code of 1986, as amended, and, IRS Form 8594, Asset Acquisition Statement, is
required to be filed for this transaction, the parties will confer and cooperate
in the preparation and filing of their respective forms to reflect a consistent
reporting of the agreed upon allocation.
34. Assignability. Prior to Closing, this Agreement and the rights and
obligations hereunder shall not be assignable or delegable by any party hereto
without the prior written consent of the other parties unless such assignment
occurs by merger, reorganization or sale of all of a party's assets. Subsequent
to Closing, Buyer may assign its rights or obligations hereunder.
35. Survival. Except as expressly provided herein, all of the
representations and warranties of or by the parties hereto except those
contained in Sections 4.a. and 4.b. hereof shall not survive the execution and
delivery of the Assignment and Bill of Sale.
36. Tax Deferred Exchange Election. In the event Seller has not found
a suitable Exchange Property prior to the Closing, Seller may elect, by notice
to Buyer delivered on or before the Closing Date, to have all or a portion of
the Purchase Price paid to a qualified intermediary. If Seller makes a tax
deferred exchange election, Buyer shall not be obligated to pay any additional
costs or incur any additional obligations in the acquisition of the Interests.
37. Governing Laws. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF OKLAHOMA.
18
38. Counterpart Execution. This Agreement may be executed in
counterparts and each counterpart shall constitute a binding agreement as if the
parties had executed a single document. The parties agree that such counterpart
execution may be evidenced by a facsimile transmission of the execution and
acknowledgment page for each such party, and such facsimile execution shall
constitute a binding execution and acknowledgment by such party. At Closing, the
parties agree that a sufficient number of original counterpart executions and
acknowledgments will be obtained and affixed to this Agreement so that each
party will have an originally executed and acknowledged Agreement.
EXECUTED by each party hereto as of the date of their respective
acknowledgment, effective as of the Effective Time.
SELLER:
ST. MARY LAND & EXPLORATION COMPANY
By: /S/ MILAM RANDOLPH PHARO
-----------------------------------
Milam Randolph Pharo
Vice President - Land & Legal
ST. MARY OPERATING COMPANY
By: /S/ MILAM RANDOLPH PHARO
-----------------------------------
Milam Randolph Pharo
Vice President - Land & Legal
/S/ KENT J. HARRELL
-----------------------------------
Kent J. Harrell, d/b/a Harrell Energy Co.
RALPH H. SMITH RESTATED REVOCABLE TRUST
DATED AUGUST 14, 1997
By: /S/ RALPH H. SMITH
-----------------------------------
Ralph H. Smith, individually and as Trustee
/S/ RONALD D. BOONE
-----------------------------------
Ronald D. Boone
/S/ RONALD D. BOONE
-----------------------------------
Ronald D. Boone, Attorney-in-Fact for Ronald E. Hornig
19
ENGLAND RESOURCES CORPORATION
By: /S/ RONALD D. BOONE
-----------------------------------
Ronald D. Boone, Attorney-in-Fact
BUYER:
ONEOK RESOURCES COMPANY
By: /S/ J.D. HOLBIRD
------------------------------
Name: J.D. Holbird
Title: Vice President
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
This instrument was acknowledged before me on November 11, 1998, by
Milam Randolph Pharo, Vice President Land & Legal of ST. MARY LAND & EXPLORATION
COMPANY, a Delaware corporation, on behalf of said corporation.
Witness my hand and official seal.
(SEAL)
/S/ PATRTICIA FLANIGAN
--------------------------
Notary Public
My commission expires: May 15, 1999
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
This instrument was acknowledged before me on November 11, 1998, by
Milam Randolph Pharo, Vice President Land & Legal of ST. MARY OPERATING COMPANY,
a Colorado corporation, on behalf of said corporation.
Witness my hand and official seal.
(SEAL)
/S/ PATRTICIA FLANIGAN
--------------------------
Notary Public
My commission expires: May 15, 1999
20
STATE OF OKLAHOMA )
) ss.
CITY AND COUNTY OF TULSA )
This instrument was acknowledged before me on November 12, 1998, by KENT J.
HARRELL, d/b/a Harrell Energy Co.
Witness my hand and official seal.
(SEAL)
/S/ Sherry L. Askew
--------------------------
Notary Public
My commission expires: December 11, 2001
STATE OF OKLAHOMA )
) ss.
CITY AND COUNTY OF TULSA )
This instrument was acknowledged before me on November 12, 1998, by RALPH
H. SMITH, individually and as Trustee of the Ralph H. Smith Restated Revocable
Trust dated August 14, 1997.
Witness my hand and official seal.
(SEAL)
/S/ KAREN A. CHISM
--------------------------
Notary Public
My commission expires: 1-6-99
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
This instrument was acknowledged before me on November 11, 1998, by RONALD
D. BOONE.
Witness my hand and official seal.
(SEAL)
/S/ PATRTICIA FLANIGAN
--------------------------
Notary Public
My commission expires: May 15, 1999
21
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
This instrument was acknowledged before me on November 11, 1998, by Ronald
D. Boone, Attorney-in-Fact for RONALD E. HORNIG.
Witness my hand and official seal.
(SEAL)
/S/ PATRTICIA FLANIGAN
--------------------------
Notary Public
My commission expires: May 15, 1999
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
This instrument was acknowledged before me on November 11, 1998, by
Ronald D. Boone, Attorney-in-Fact for ENGLAND RESOURCES CORPORATION, a Wyoming
corporation, on behalf of said corporation.
Witness my hand and official seal.
(SEAL)
/S/ PATRTICIA FLANIGAN
--------------------------
Notary Public
My commission expires: May 15, 1999
STATE OF OKLAHOMA )
) ss.
CITY AND COUNTY OF TULSA )
This instrument was acknowledged before me on Nov. 12, 1998, by J.D.
Holbird, as Vice President of ONEOK RESOURCES COMPANY a Delaware corporation, on
behalf of said corporation.
Witness my hand and official seal.
(SEAL)
/S/ PAM BUSTAMANTE
--------------------------
Notary Public
My commission expires: 11/24/2001
22
Exhibit A - Leases and Lands
Exhibit A-1 - Harrell and Smith Retained Overriding Royalty Interests
Exhibit B - Wells and Net Revenue Interests
Exhibit C - Allocated Values
Exhibit D - Assignment
Exhibit E - Agreed Imbalance
Schedule 4(k)
23