EXHIBIT 2(g)
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "AGREEMENT") is made and entered
into this 12th day of September, 1996, by and between MAYNARD OIL COMPANY, a
Delaware corporation, having its principal office at 8080 North Central
Expressway, Suite 660, Dallas, Texas 75206 ("SELLER") and ENRON OIL & GAS
COMPANY, a Delaware corporation, having its principal office at 1400 Smith
Street, Houston, Texas 77002 ("BUYER").
In consideration of the mutual promises contained herein, the benefits to
be derived by each party hereunder and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Buyer and Seller agree as follows:
ARTICLE I
PURCHASE AND SALE
1.01 Purchase and Sale. Seller agrees to sell and convey and Buyer agrees to
purchase and pay for the interests (as defined in Section 1.02) owned by
Seller, subject to the terms and conditions of this Agreement.
1.02 Interests. All of the following shall herein be called the "INTERESTS":
(a) All of Seller's right, title and interest in and to the leasehold
estate and mineral rights created by the leases described in Exhibit A
(the "LEASES") together with any and all interest of Seller in and to such
property and in and to any agreements, leases, rights-of-way, easements,
licenses and permits incident thereto;
(b) All of Seller's right, title and interest in and to the wells, and
production therefrom, located on the Leases or lands pooled therewith,
including but not limited to the wells described in Exhibit A together
with any and all buildings or other improvements constructed thereon
(collectively the "WELLS", together with any and all interest of Seller in
and to such property and in and to any agreements, including, without
limitation, gas purchase agreements, farmin and farmout agreements,
operating agreements and pooling agreements, leases, rights-of-way,
easements, licenses and permits incident thereto);
(c) All of Seller's right, title and interest in and to the real and
personal property, fixtures, improvements and buildings now or as of the
Effective Time (as defined in Section 1.03) located on the lands burdened
by the Leases or lands pooled therewith (the LANDS"), and all contract
rights, rights of substitution and subrogation in and to any rights and
actions of warranty which Seller has or may have with respect to the
Interests;
(d) All of the files, records and data related to the items described in
Subsections (a), (b) and (c) above, and all the seismic and geophysical
data of Seller appurtenant to or crossing the Leases, Wells and Lands; and
(e) Any and all other assets of Seller appurtenant or related to or used
in connection with the Leases and Wells.
1.03 Effective Time. The purchase and sale of the Interests shall be
effective as of August 1, 1996, at 7:00 A.M., local time (herein called the
"EFFECTIVE TIME ) in the county in which the Lands are located.
ARTICLE II
PURCHASE PRICE
2.01 Purchase Price. The purchase price for the Interests shall be Four
Million Two Hundred Seventy Seven Thousand One Hundred Thirty Eight DOLLARS
($4,277,138.00) (herein called the "PRELIMINARY PURCHASE PRICE"), subject to
adjustment as set forth in Section 2.02 and Section 2.03 below.
2.02 Performance Deposit. On or before 4:00 o'clock p.m., local time,
September 13, 1996, Buyer shall tender to Bank One, Texas, N.A. ("ESCROW
AGENT", as provided for in Exhibit D hereto), by wire transfer, a performance
deposit in the amount of Four Hundred Twenty Seven Thousand Seven Hundred
Fourteen DOLLARS ($427,714.00). The performance deposit is received solely to
assure the performance of Buyer pursuant to the terms and conditions hereof.
The performance deposit will be returned to Buyer at Closing, upon consummation
of the transaction, or at Buyer's election, may be credited to the Preliminary
Purchase Price. No interest shall be paid or credited to the performance
deposit. If Buyer fails, refuses, or is unable to close the sale in accordance
with the terms herein, Seller, except as otherwise herein specifically
provided, may, at its option, retain the performance deposit as agreed
liquidated damages and not as a penalty. If Seller, through no fault of Buyer,
refuses to close the sale in accordance with the terms herein, the performance
deposit shall be returned to Buyer.
2.03 Adjustments to Purchase Price. The Preliminary Purchase Price shall be
adjusted as follows and the resulting amount shall be herein called the "FINAL
PURCHASE PRICE".
(a) The Preliminary Purchase Price shall be increased by the following:
(1) The value of all merchantable, allowable oil attributable to the
Leases, in storage above the pipeline connection at the Effective
Time, and not previously sold by Seller, that is credited to the
Interests, such value to be the net price realized by Seller;
(2) The amount of all reasonable expenditures, including, without
limitation, royalties, rentals and other charges, ad valorem,
property, production, excise, severance, windfall profit and other
taxes based upon or measured by proceeds therefrom but not including
income or gross receipts taxes, expenses billed under applicable
operating agreements and, as compensation to Seller for its general
and administrative expenses as operator of interests operated by it,
in lieu of any other overhead charges in connection with such
particular Interests:
(i) that amount attributable to the Interests under any
existing joint operating agreement, or
(ii) in the absence of a joint operating agreement with respect
thereto, the applicable rate recommended in the 1995 Ernst
& Young, L.L.P. s Fixed Rate Overhead Survey in
connection with the operation of the Interests from the
Effective Time to the Closing Date (as defined in Section
9.01), as well as any expenditures approved by Buyer;
(3) An amount equal to all prepaid expenses attributable to the
interests that are paid by or on behalf of Seller prior to the
Closing Date and that are, in accordance with generally accepted
accounting principles, attributable to the period after the Effective
Time including, without limitation, prepaid insurance, prepaid ad
valorem, property, production, severance and similar taxes (but not
including income taxes) based upon or measured by the ownership of
property or the production of hydrocarbons or the receipt of proceeds
therefrom;
(4) An amount equal to seventy-five cents per mcf for a net
underproduced gas imbalance; and
(5) Any other amount agreed upon by Seller and Buyer.
(b) The Preliminary Purchase Price shall be decreased by the following:
(1) An amount equal to all proceeds of production received by Seller
prior to the Closing Date that are attributable to the Interests and
that are, in accordance with generally accepted accounting
principles, attributable to the period of time from the Effective
Time to the Closing Date;
(2) An amount equal to all unpaid ad valorem, property, production,
severance and similar taxes and assessments (but not including income
or gross receipts taxes) based upon or measured by the ownership of
property or the production of hydrocarbons or the receipt of proceeds
therefrom accruing with respect to the Interests prior to the
Effective Time, which amount shall be computed based upon such taxes
assessed against the applicable portion of the Interests for the
current tax fiscal year, or if the assessments for the current tax
fiscal year are unavailable, for the preceding such year;
(3) An amount equal to the sum of all Defect Adjustments and
Exclusion Adjustments (as those terms are defined in Section 7.03);
and
(4) Any environmental adjustment pursuant to ARTICLE V.(e);
(5) An amount equal to seventy-five cents ($0.75) per mcf for a net
overproduced gas imbalance; and
(6) Any other amount agreed upon by Seller and Buyer.
2.04 Actual Figures. When available, actual figures will be used for
adjustments at Closing. To the extent actual figures are not available,
estimates will be used subject to final adjustments as provided in Section
10.01 hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of Seller. Seller represents and warrants
to Buyer with respect to itself and, where applicable, with respect to the
Interests, that:
(a) Seller is a corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation, and has
all requisite power and authority to own and lease the properties and
assets it currently owns and leases and to carry on its business as such
business is currently conducted. Seller is duly licensed or qualified to
transact business and is in good standing in all jurisdictions where the
character of the properties and assets now owned or leased by it or the
nature of the business now conducted by it require it to be so licensed or
qualified if the failure to qualify might reasonably be expected to have a
material adverse effect on the business or financial prospects of Seller.
Seller is also duly licensed or qualified to do business and is in good
standing in each jurisdiction where the Interests are located;
(b) Seller has all requisite power and authority to execute and deliver
this agreement, to consummate the transactions contemplated hereby, and to
perform the terms and conditions hereof to be performed by it. This
Agreement constitutes, and each of the documents required to be delivered
by Seller hereunder, shall constitute Seller's legal, valid and binding
obligation, enforceable against Seller in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency, or
other laws relating to or affecting generally the enforcement of
creditors' rights and general principles of equity, regardless of whether
considered in proceeding in equity or at law;
(c) This Agreement and its execution and delivery by Seller do not, and
the fulfillment and compliance by Seller with the terms and conditions of
this Agreement, and the consummation by Seller of the transactions
contemplated hereby, will not (i) require any filing, consent,
authorization, or approval under, any law or administrative regulation or
any judicial, administrative, or arbitration order, aware, judgment, writ,
injunction, or decrees applicable to or binding upon Seller (assuming the
receipt of all routine governmental consents typically received after
consummation of transactions of the nature contemplated by this
Agreement); and (ii) conflict with, result in a breach of, constitute a
default under (without regard to any requirements of notice or the lapse
of time), accelerate, or permit the acceleration of the performance
required by, any mortgage, indenture, loan or credit agreement or other
agreement or instrument evidencing indebtedness for borrowed money to
which such Seller is a party or by which it is bound or to which any of
the Interests are subject;
(d) As of the execution date hereof, there are no currently outstanding
and effective authorities for expenditure or third party proposals for
subsequent operations with respect to the Interests other than as set
forth in Exhibit B;
(e) As of the execution date hereof (i) no action, suit, or proceeding is
pending or, has been threatened against Seller before any court,
administrative agency, or arbitral tribunal, which involves or may involve
the Interests, the production of oil and gas therefrom, or the use of and
enjoyment thereof, or any operation or activity being conducted therein or
thereon or which challenges Seller's rights to enter into this Agreement
or materially adversely affects its ability to perform its obligations
under this Agreement; (ii) Seller has not received written notice of nor
been charged with any violation of, any provision of any law or regulation
relating to the Interests, and to Seller's best knowledge, no third party
has been charged with any violation of any provision of any law or
regulation relating to the Interests;
(f) As of the execution date hereof Seller has not received written
notice that it is in default under (i) any applicable contract affecting
the Interests; (ii) any order, judgment, or decree of any federal or state
court or governmental authority relating to the Interests; or (iii) any
other agreement, contract, lease, license, or other instrument;
(g) Exhibit A contains a complete list of the Interests wherein Seller's
interest is currently subject to reversionary interests or non-consent
operations. In each case, such Exhibit reflects the interest of Seller
before and after adjustment for such reversionary interests or non-consent
operations for each Well effected. Exhibit A-1 reflects the remaining
amount to be recouped, or account status as appropriate, as of the date
reflected thereon with respect to each such well;
(h) As of the Effective Time, to the best of Seller s knowledge, except
as set forth in Exhibit A-1 hereto, there were no production imbalances or
transportation and processing imbalances affecting the Interests;
(i) All of the written and electronic data (including, without
limitation, information relating to gathering, processing, transportation
and sale of hydrocarbons from the Interests and other matters) at the time
furnished or to be furnished by Seller to Buyer in conjunction with
Buyer's evaluation of the Interests was contained in or derived from
Seller's records kept in the ordinary course of business; and no
representation or warranty is made with respect to the accuracy or
correctness of any estimates, analysis, or projections or any assumptions
or other matters stated therein;
(j) No broker or finder is entitled to any brokerage or finder's fee, or
to any commission, based in any way on agreements, arrangements or
understandings made by or on behalf of Seller for which Buyer has any
liability or obligation (whether contingent or otherwise);
(k) Seller is not a foreign person, foreign corporation, foreign
partnership, foreign trust or foreign estate (as those terms are defined
in the Internal Revenue Code of 1986, as amended, and regulations
promulgated thereunder);
(l) From the Effective Time to the execution date hereof there has
not been: (i) any material adverse change in the condition of the
Interests, other than changes caused by the sale, production, or
disposition of production and changes resulting from reservoir
conditions other than fire, blowout, or act of God (provided that any
change or revision in existing laws, regulations, or governmental
policies applicable to the Interests or the sale, production, or
disposition of production therefrom and the imposition of any new
laws, regulations or governmental policies with respect to the
Interests or the sale, production, or disposition of production
therefrom shall be deemed not to be an adverse change in the
condition of the Interests), (ii) any sale, lease, or other
disposition of the Interests, (iii) any condemnation or taking by
eminent domain of any portion of any of the Interests, or (iv) any
contract or commitment to do any of the foregoing;
(m) Seller or the Operator of any Interest has obtained or applied
for all governmental licenses, permits, certificates, approvals,
consents, authorizations and orders required for it to own or lease
the Interests and develop, construct, maintain, and operate them, and
to market the production therefrom, and no proceeding is pending or
threatened involving revocation of any such licenses, permits,
certificates, consents, authorizations or orders, provided that this
representation is limited to Seller's best knowledge;
(n) There are no taxes due or tax liens on any of the Interests;
(o) To the best of Seller's knowledge, Seller is not a party to any
joint venture, partnership, limited liability company, farmin,
farmout, joint operating agreement, or other arrangement or contract
with respect to any of the Interests that is reported as a
partnership for federal or state income tax purposes;
(p) As of the execution date hereof all of the wells and all of the
equipment used in the drilling, completion and operation of any such
wells, or in the production, treatment, storage, gathering and
transportation of hydrocarbons from such wells, is in good operating
condition, ordinary wear and tear excepted, provided that this
representation is limited to Seller's best knowledge with respect to
such matters which are the responsibility of the operator of any
interest not operated by seller;
(q) From the Effective Time to the execution date hereof, no personal
injuries or deaths have occurred in connection with any of the
Interests which should have been reported by Seller in accident or
incident reports in accordance with applicable law or in accordance
with Seller's usual operating procedures and policies;
(r) To the best of Seller's knowledge, all royalties (including
without limitation royalties with respect to take-or-pay payments or
settlements), minimum royalties, rentals, shut-in gas payments and
other payments due with respect to the Interests have been properly
and timely paid in full, except for payments held in suspense for
title or other reasons that are customary in the industry or which
are being contested in an appropriate forum. There are no amounts
claimed to be due to Seller in respect of the Interests that are
being held in suspense because of a dispute as to title to the
Interests or for any other reason, and Seller is entitled to be paid,
and is being paid, with respect to production from the Interests, its
net revenue interest without indemnity or guarantee other than those
customarily found in division orders and other similar agreements and
documents;
(s) Except as detailed on Exhibit A-2, this Agreement and its
execution and delivery by Seller does not, and the fulfillment and
compliance by Seller with the terms and conditions of this Agreement
and the consummation by Seller of the transactions contemplated
hereby will not permit the exercise of or give rise to (with the
giving of any required notice) any preferential purchase right,
option or right of first refusal;
(t) To the best of Seller's knowledge, all of the wells in which
such Seller has an interest by virtue of its ownership of the Leases
have been (i) drilled and completed within the boundaries of such
Lease or within the limits otherwise permitted by contract, pooling
or unit agreement, and/or by law and (ii) drilled and completed in
compliance with all applicable laws, rules and regulations; and
(u) Seller has reasonable surface access to each of the Interests
for purposes of oil and gas exploration, development and production.
3.02 Representations and Warranties of Buyer. Buyer represents and warrants
to Seller that:
(a) Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation, and has
all requisite power and authority to own and lease the properties and
assets it currently owns and leases and to carry on its business as such
business is currently conducted. Buyer is duly licensed or qualified to
transact business and is in good standing in all jurisdictions where the
character of the properties and assets now owned or leased by it or the
nature of the business now conducted by it requires it to be so licensed
or qualified if the failure to qualify might reasonably be expected to
have a material adverse effect on the business or financial prospects of
Buyer. Buyer is also duly licensed or qualified to do business and is in
good standing in each jurisdiction where the Interests are located;
(b) Buyer has all requisite power and authority to execute and deliver
this Agreement, to consummate the transactions contemplated hereby, and to
perform the terms and conditions hereof to be performed by it. This
Agreement constitutes, and each of the documents required to be delivered
by Buyer hereunder, shall constitute Buyer's legal, valid, and binding
obligation, enforceable against Buyer in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, or other
laws relating to or affecting generally the enforcement of creditors'
rights and general principles of equity, regardless of whether considered
in a proceeding in equity or at law;
(c) This Agreement and its execution and delivery by Buyer does not, and
the fulfillment of and compliance by Buyer with the terms and conditions
of this Agreement, and the consummation by Buyer of the transactions
contemplated hereby, will not (i) require any filing, consent,
authorization, or approval under, any law or administrative regulation or
any judicial, administrative, or arbitration order, award, judgment, writ,
injunction or decree applicable to or binding upon Purchaser (assuming the
receipt of all routine governmental consents typically received after
consummation of transactions of the nature contemplated by this
Agreement), (ii) conflict with, result in a breach of, constitute a
default under (without regard to any requirements of notice or the lapse
of time), accelerate, or permit the acceleration of the performance
required by, any mortgage, indenture, loan or credit agreement or other
agreement or instrument evidencing indebtedness for borrowed money to
which Buyer is a party or by which it is bound;
(d) No broker or finder is entitled to any brokerage or finder's fee, or
to any commission, based in any way on agreements, arrangements or
understandings made by or on behalf of Buyer for which Seller has any
liability or obligation (whether contingent or otherwise);
(e) Buyer is not a foreign person, foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined
in the Internal Revenue Code of 1986, as amended, and regulations
promulgated thereunder); and
(f) In making the acquisition of the Interests hereunder, Buyer is acting
in the conduct of its own business in the ordinary course. The Interests
are not being acquired for distribution or transfer in violation of the
securities laws of the United States or of any state thereof.
ARTICLE IV
COVENANTS OF BUYER AND SELLER
4.01 Covenants of Seller. Seller covenants and agrees with Buyer that:
(a) After the execution of this Agreement, Seller will make available to
Buyer for examination at Seller's offices in Dallas, Texas, title and
other information relating to the Interests insofar as the same are in
Seller's possession and, subject to the consent and cooperation of third
parties, will cooperate with Buyer in Buyer's efforts to obtain, at
Buyer's expense, such additional information relating to the Interests as
Buyer may reasonably desire (to the extent that Seller may do so without
violating legal constraints or any obligation of confidence or other
contractual commitments of Seller to third parties), including without
limitation:
(1) Title opinions, title status reports and contracts or agreements
pertaining to the Interests;
(2) Copies of the leases, prior conveyances of Interests created thereby,
unitization, pooling and operating agreements, division and transfer
orders, mortgages, deeds of trust, security agreements, financing
statements, and other encumbrances not discharged and affecting the
title to or the value of the Interests;
(3) Accounting and other records relating to the payment of rentals,
royalties, joint interest billings and other payments due under the
Leases or the Wells;
(4) Records relating to the payment of ad valorem, property, production,
severance, excise 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;
(5) Ownership maps and surveys relating to the Interests;
(6) Copies of purchase, sale, processing and transportation agreements
relating to the production of gas from the Interests. Copies of all
gas balancing agreements and gas balancing statements;
(7) Copies of agreements, leases, permits, easements, licenses and orders
relating to the Interests;
(8) Production records relating to the Interests;
(9) Inventories of personal property and fixtures included in the
Interests; and
(10) Any and all other information contained in Seller's files that
relates to the Interests other than matters subject to attorney-
client or attorney work privilege or concerning Seller's economic
evaluation.
Seller shall permit Buyer to inspect and photocopy such information and records
at any reasonable time during the term of this Agreement. Seller shall
cooperate with Buyer in Buyer's efforts to obtain such additional title
information as Buyer may reasonably deem prudent.
(b) During the period from the date of this Agreement to the Date of
Closing, without the prior written consent of Buyer, Seller will not (i)
cause any of its portion of the Leases or other of the Interests to be
developed, maintained, or operated in a manner substantially inconsistent
with prior operations; (ii) abandon any material part of any of its
portion of the Interests; (iii) commence any material operation of any of
its portion of the Leases or the Interests anticipated to cost Seller in
excess of Fifteen Thousand Dollars ($15,000.00) per operation (except
emergency operations, operations required under presently existing
contractual obligations, the on-going commitments under the AFE's
described in Exhibit B hereto, and operations undertaken to avoid any
penalty provisions of any applicable agreement or order), or (iv) convey
or dispose of any material part of any of its portion of the Interests
(other than oil, gas and other liquid products produced from the Interests
in the regular course of business). Buyer acknowledges that Seller owns
undivided interests in certain of the Interests and Buyer agrees that the
acts or omissions of Seller's co-owners shall not constitute a violation
of the provision of this Section 4.01(b) nor shall any action required by
a vote of co-owners constitute such a violation so long as Seller has
voted its interest with Buyer's prior consent;
(c) Seller shall use all reasonable efforts to maintain its corporate
status from the date hereof until Closing and to assure that as of the
Closing Date it will not be under any corporate, legal or contractual
restriction that would prohibit or delay the timely consummation of such
transactions; and
(d) Seller shall promptly notify Buyer of any suit, action, claim,
threatened suit, action or claim, or other proceedings of the type
referred to in Section 3.01(e) or (f) that arises prior to the Closing
with respect to which Seller receives notice or otherwise obtains
knowledge following the execution of this Agreement.
4.02 Covenants of Buyer. Buyer covenants and agrees with Seller that:
(a) Buyer shall use all reasonable efforts to maintain its corporate
status and to assure that as of the Closing Date it will not be under any
corporate, legal or contractual restriction that would prohibit or delay
the timely consummation of such transactions;
(b) To the extent necessary to facilitate the consummation of the
transactions contemplated herein, Buyer agrees to enter into specific
agreements of assumption with respect to the obligations of Seller to
specific third parties or governmental authorities to the extent such
obligations are attributable to the Interests after the Effective Time.
Buyer also shall be obligated to obtain consents from all necessary
Federal authorities, including the Bureau of Indian Affairs, and State
authorities to the assignment of the Leases;
(c) For a period of ten (10) years after the Closing Date, Buyer shall
provide Seller with reasonable access to the Records so long as Buyer is
given reasonable notice prior to Seller's access; and
(d) Buyer represents that it has performed, or will perform prior to
Closing, 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 enable it to
make an informed decision to acquire the Interests under the terms of this
Agreement.
ARTICLE V
ASSUMPTION OF LIABILITIES
AND INDEMNITIES
As used in this ARTICLE V, and the paragraphs hereunder "CLAIMS" shall include
claims, demands, causes of action, liabilities, damages, penalties and
judgements of any kind or character and all costs and fees in connection
therewith.
(a) At the Closing, but effective as of the Effective Time, Buyer shall
(i) assume, and be responsible for and comply with all duties and
obligations of Seller, express or implied, with respect to the Interests,
including, without limitation, those arising under or by virtue of the
Seller's leases and contracts listed in Exhibit A, and the permits, the
applicable statutes or rules, regulations or orders of any governmental
authority (specifically including, without limitation, any governmental
request or requirement to plug, replug and/or abandon any well of
whatsoever type, status or classification, or to take any clean-up,
remediation or other action with respect to the Interests), and (ii)
except as otherwise provided herein, to defend, indemnify and hold
harmless Seller from any and all claims in connection therewith;
(b) Subject to the provisions of Paragraphs (c), (d) and (e) below Seller
shall defend, indemnify and hold harmless Buyer from any and all claims,
costs, expenses, liabilities or causes of action relating to or arising
out of Seller's ownership or operation of Seller's Interests prior to the
Effective Time and Buyer shall defend, indemnify and hold harmless Seller
from any and all claims, costs, expenses, liabilities or causes of action
relating to or arising out of Buyer's ownership and operation of the
Interests after the Effective Time. Each indemnified party hereunder
agrees that upon its discovery of facts giving rise to a claim for
indemnity under the provisions of this Agreement, including receipt by it
of any demand, assertion, claim, action or proceeding, judicial or
otherwise, by any third party (such third party actions being referred to
herein as a "THIRD PARTY CLAIM"), it will give prompt notice thereof in
writing to the indemnifying party together with a statement of such
information with respect to any of the foregoing as it shall then have.
Such notice shall include a formal demand for indemnification under this
Agreement. The indemnified party shall afford the indemnifying party a
reasonable opportunity to pay, settle, or contest any Third Party Claim at
its expense;
(c) Seller shall (i) be responsible for any and all claims, including but
not limited to claims for payment of royalties, arising out of the
production and sale of hydrocarbons by Seller from the Interests, and the
proper accounting and payment of expenses for the Interests, insofar as
such claims and payments relate to period of time prior to the Effective
Time, and (ii) defend, indemnify and hold harmless Buyer from any and all
of such claims and payments;
(d) Buyer shall (i) be responsible for any and all claims, including but
not limited to claims for payment of royalties, arising out of the
production and sale of hydrocarbons by Buyer from the Interests, and the
proper accounting and payment of expenses for the Interests, insofar as
such claims and payments relate to period of time beginning at the
Effective Time and thereafter, and (ii) defend, indemnify and hold
harmless Seller from any and all of such claims and payments; and
(e) After the execution of this Agreement, Buyer, at its option, and its
sole cost, risk and expense, may obtain an environmental audit of the
Interests at any time prior to September 20, 1996. Seller shall provide
the environmental auditors all information available to it which they may
reasonably request and shall grant said auditors physical access to the
Interests. For those Interests which are not operated by Seller, Buyer
shall obtain permission from the operator to conduct such inspections. If
the audit reveals any environmental conditions which are not satisfactory
to Buyer, Seller shall immediately be provided a copy of the audit
information and either party shall have the option to terminate this
Agreement as to the affected Interest(s) with a deduction from the
Preliminary Purchase Price of the allocated value attributable to that
Interest(s), without liability, unless Seller affirms in writing that it
will remediate such conditions to the satisfaction of the Buyer prior to
Closing. 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 contracts which may arise out of Buyer's inspections,
but only to the extent of Buyer's negligence. If such deductions exceed
ten percent (10%) of the Preliminary Purchase Price and the parties are
unable to mutually agree to proceed with closing, then either party shall
have the right to terminate this Agreement without liability.
After Closing, Buyer shall be deemed to have fully inspected and accepted the
Interests "AS IS" in their then current physical and environmental condition.
ARTICLE VI
DISCLAIMER OF WARRANTIES
Buyer acknowledges that in making the decision to enter into this Agreement and
consummate the transactions contemplated hereby, Buyer has relied only upon its
own independent investigation of the Lands. Accordingly, Buyer acknowledges
that Seller has not made and Seller hereby expressly disclaims and negates any
representation or warranty express or implied at common law, by statute or
otherwise relating to (i) condition of the Lands (including but not limited to
any implied or express warranty of merchantability or fitness for a particular
purpose or of conformity to models or samples of materials) and (ii) any
information, data or other materials (written or oral) furnished to Buyer by or
on behalf of Seller (including but not limited to information, data or other
materials regarding the existence or extent of oil, gas or other mineral
reserves, the recoverability of or the cost of recovering such reserves, the
value of such reserves, any producing pricing assumption, present or past
production rates, the environmental condition of the Lands, including but not
limited to the presence of naturally occurring radioactive material ("NORM"),
and the ability to sell oil or gas production after Closing); provided,
however, that the foregoing disclaimer and negation of representations and
warranties shall not affect or impair the representations and warranties of
Seller made in Section 3.01.
ARTICLE VII
TITLE MATTERS
7.01 Defensible Title.
(a) As used herein, the term "DEFENSIBLE TITLE" shall mean, as to each of
the Interests, such title which, subject to and except for the Permitted
Encumbrances (as defined hereinafter): (i) entitles Seller to receive not
less than the "NET REVENUE INTEREST" set forth in Exhibit A of all oil,
gas and associated liquid and gaseous hydrocarbons produced, saved and
marketed from the presently producing formations in the presently
producing wells bottomed in the Lands; and (ii) obligates Seller to bear
costs and expenses relating to the maintenance, development and operation
of those portions of the presently producing wells bottomed in the Lands
in an amount not greater than the "WORKING INTEREST" set forth in Exhibit
A;
(b) The term "PERMITTED ENCUMBRANCES", as used herein, shall mean:
(1) Lessor's royalties, overriding royalties, reversionary interests and
similar burdens provided that the net cumulative effect of such
burdens does not operate to reduce the Net Revenue Interest of any
interest to less than the Net Revenue Interest therefor set forth in
Exhibit A;
(2) Preferential rights to purchase and required third party consents to
assignments and similar agreements with respect to which, prior to
Closing; (i) waivers or consents are obtained from the appropriate
parties, (ii) the appropriate time period for asserting such rights
has expired without an exercise of such rights, or (iii) with respect
to consents, such consents which need not be obtained prior to an
assignment, or the failure to obtain such consents will not have a
material adverse effect on the value of the Interests to Buyer;
(3) Liens for taxes or assessments not yet due or not yet delinquent, or
if delinquent, that are being contested in good faith in the ordinary
course of business;
(4) All rights to consent by, required notices to, filings with, or other
actions by governmental entities in connection with the sale or
conveyance of any of the Interests if the same are customarily
obtained subsequent to such sale or conveyance;
(5) Rights of reassignment;
(6) Easements, rights-of-way, servitudes, permits, surface leases and
other rights in respect of surface operations, pipelines, grazing,
logging, canals, ditches, reservoir or the like; conditions,
covenants or other restrictions; and easements for streets, alleys,
highways, pipelines, telephone lines, power lines, railways and other
easements and rights-of-way on, over or in respect of any of the
Interests;
(7) Such Title Defects or other defects as Buyer has waived pursuant to
the terms of this Agreement;
(8) Liens to be released at Closing;
(9) The terms and conditions of all leases, agreements, orders,
instruments, documents and other matters described in Exhibit A
hereto; and
(10) Rights reserved to or vested in any municipality or governmental,
statutory or public authority to control or regulate any of the
Interests in any manner, and all applicable laws, rules and orders of
governmental authority.
(c) The term "TITLE DEFECT" as used herein shall mean any encumbrance,
encroachment, irregularity, defect in or objection to Seller's title to
each Interest (expressly excluding Permitted Encumbrances), that alone or
in combination with other defects, renders Seller's title to that Interest
less than Defensible Title or which would adversely interfere with the
use, possession, ownership or value thereof, or any violation of
applicable laws, rules, regulations or orders of any governmental agency
having jurisdiction over the Interests which will likely result in an
impairment or loss of title to all or a portion of the Interests or
diminish the value thereof or likely will hinder or impede the operation
of such interest, or any matter constituting a breach of Seller's
representation and warranties as set forth in Section 3.01. Materialmen's
mechanics', repairmen's, employees', contractors', operators' or other
similar liens or charges arising in the ordinary course of business
incidental to construction, maintenance or operation of the Interests
shall not constitute a Title Defect: (i) if they have not been filed
pursuant to law, or (ii) if filed, they have not yet become due and
payable or payment is being withheld as provided by law, or (iii) if their
validity is being contested in good faith by appropriate action.
7.02. Casualty Loss. If, prior to the Closing, all or any portion of the
Interests be destroyed by fire or other casualty, is taken in condemnation or
under the right of eminent domain or proceedings for such purpose are pending
or threatened, Buyer may elect (i) to treat the Interests affected by such
destruction, taking or pending or threatened taking as Defective Interests in
accordance with Section 7.03; or (ii) to purchase such Interests
notwithstanding any such destruction, taking or pending or threatened taking
(without reduction of the Preliminary Purchase Price therefor), in which case,
Seller shall, at the Closing, pay to Buyer all sums paid to Seller by third
parties by reason of the destruction or taking of such Interests to be assigned
to Buyer (including sums which are in the nature of compensation for any lost
or foregone income or production attributable to the time period subsequent to
the Effective Time) and shall assign, transfer and set over unto Buyer all of
the right, title and interest of Seller in and to any unpaid claims, awards or
other payments from third parties arising out of the destruction, taking or
pending or threatened taking as to such Interests (including sums which are in
the nature of compensation for any lost or foregone income or production
attributable to the time period subsequent to the Effective Time). Seller
agrees that, prior to Closing, it shall not voluntarily compromise, settle or
adjust any amounts payable by reason of any destruction, taking or pending or
threatened taking as to such of its portion of the Interests to be assigned to
Buyer without first obtaining the written consent of Buyer.
7.03 Defect Adjustments.
(a) "DEFECTIVE INTEREST" shall mean that portion of the Interests (as
determined in accordance with Section 7.03(c)) affected by a Title Defect
or that Buyer is otherwise entitled under Sections 7.02 or 7.04 to treat
as a Defective Interest, and of which Seller has been given notice by
Buyer prior to September 23, 1996, (the "DEFECT NOTICE DATE"), except as
provided hereinafter in this Section 7.03(a). Any notice of any Defective
Interest shall be in writing and shall include: (i) a description of the
Defective Interest, (ii) the specific basis for the defect that Buyer
believes causes such Interest to be a Defective Interest, and (iii) the
amount by which Buyer has determined the value of the Defective Interest
has been reduced and the computations and information upon which Buyer's
determination is based.
Buyer shall be deemed to have waived all Title Defects and any other
defect to any Interest of which Seller has not been given such notice
prior to the Defect Notice Date. If Seller (i) disagrees that a Defect
Adjustment or Exclusion Adjustment is warranted; (ii) disagrees that the
matter giving rise to such claims is uncured, or (iii) disagrees with the
amount of the related Defect Adjustment claimed by Buyer in any notice
given in accordance with this Section 7.03(a), then Seller, at its option,
may remove the defective property from the sale, attempt to cure the
defect at Seller's sole cost and expense, agree to a mutually acceptable
purchase price reduction or terminate this Agreement without liability to
Buyer except for return of the Performance Deposit, without interest,
provided that Seller may not terminate this Agreement unless the aggregate
value of Title Defects exceeds twenty percent (20%) of the Preliminary
Purchase Price;
(b) Defective Interests shall be excluded from the Interests to be
purchased by Buyer hereunder and the Preliminary Purchase Price shall be
reduced in accordance with Section 2.03 by an amount equal to the value
thereof, as agreed to between Buyer and Seller (which reduction shall be
called an "EXCLUSION ADJUSTMENT") unless (i) prior to the Closing, the
basis for treating an Interest as a Defective Interest has been removed,
(ii) Buyer agrees to waive the relevant Title Defect or other defect and
purchase the Defective Interest, notwithstanding the defect, (iii) Seller
agrees to indemnify, defend and hold Buyer harmless and Buyer agrees to
accept such indemnification against all losses, costs, expenses and
liabilities with respect to such Defective Interest arising from the
defect or basis for such Interest being treated as a Defective Interest,
or (iv) Buyer and Seller agree to an amount by which the value of the
Defective Interest has been reduced and the Preliminary Purchase Price is
reduced by such amount in accordance with Section 2.03 (which reduction
shall be called a "DEFECT ADJUSTMENT"), in which event the Interest shall
be included in the Interests to be purchased by Buyer hereunder and,
except in the case of (iv), no adjustment shall be made to the Preliminary
Purchase Price; or (v) Buyer and Seller do not agree, on or before the
Scheduled Closing Date, as to the value of the Defective Interest that is
to be excluded from the Preliminary Purchase Price and none of Subsections
(i) through (iv) of Section 7.03(b) are applicable, in which event Buyer
may terminate this Agreement without further liability or obligation, by
giving written notice of termination on or before the Scheduled Closing
Date.
(c) The amount by which the Preliminary Purchase Price is to be reduced
in accordance with Section 7.03 as the result of any Interest being
treated as a Defective Interest shall be determined as follows:
(1) In the event that the cost of remedying any Title Defect exceeds the
amount allocated to the affected Interest as set forth in Exhibit A,
then such Interest shall be excluded from the transaction
contemplated hereby and the Preliminary Purchase Price shall be
reduced by the amount allocated to the Interest so excluded as set
forth in Exhibit A (which adjustment shall be called an EXCLUSION
ADJUSTMENT");
(2) In the event that the net revenue interest of Seller in any Interest
is less than that set forth in Exhibit A, that portion of the
Preliminary Purchase price allocated on Exhibit A-1 to such
particular Interest shall be reduced in the proportion that the net
revenue interest actually owned by Seller bears to that set forth in
Exhibit A;
(3) In the event that the working interest costs payable with respect to
a particular Interest is greater than the working interest set forth
in Exhibit A, the Preliminary Purchase Price allocated on Exhibit A-1
to such particular Interest shall be reduced in the proportion that
the working interest percentage attributable to such interest exceeds
that set forth in Exhibit A;
(4) In the event that (i) the record title interest of Seller to any
Interest is burdened by any lien, encumbrance, mortgage, pledge, or
security interest, or (ii) ad valorem, property or other similar
taxes and assessments for any years prior to the Effective Time have
not been paid, the Preliminary Purchase Price of such interest shall
be reduced by the sum necessary to discharge and obtain a full record
release of such burden or to pay such taxes; and
(5) In the event there exist other Title Defects which would materially
adversely affect or interfere with the use, possession, ownership or
value of any Interest, Buyer, at its option, may either, (i) exclude
the affected Interest from the transaction contemplated hereby and
the Preliminary Purchase Price shall be reduced by the amount
allocated to the affected Interest as set forth in Exhibit A, or (ii)
accept such Interest.
(d) In determining which portion of the Interests are Defective
Interests, it is the intent of the parties to include all portions of the
Interests affected by the defect or basis for such Interests being treated
as Defective Interests; and
(e) If the deductions in the Preliminary Purchase Price to be made
pursuant to this ARTICLE VII exceed twenty percent (20%) of the
Preliminary Purchase price, either party may terminate this agreement at
any time prior to Closing.
7.04 Identification of Additional Defective Interests.
(a) If, prior to the Closing, there has been non-compliance with the
laws, rules, regulations, ordinances or orders of any governmental agency
or authority having jurisdiction over the affected Interests, resulting in
risk of loss of the affected Interests or value thereof, then Buyer may
elect to treat such of the affected Interests as are adversely affected by
such noncompliance as Defective Interests by giving Seller notice thereof
in accordance with Section 7.03(a);
(b) If, prior to the Closing, any preferential right to purchase any of
the Interests is exercised, Buyer may elect to treat that portion of the
Interests affected by the exercise of such preferential right as Defective
Interests by giving Seller notice thereof in accordance with Section
7.03(a);
(c) If any necessary third party consent to assignment of any of the
Interests is not obtained prior to the Closing, Buyer may elect to treat
that portion of the Interests subject to such consent requirement as
Defective Interests by giving Seller notice thereof in accordance with
Section 7.03(a). For purposes hereof "NECESSARY THIRD-PARTY CONSENTS"
shall not include:
(1) consents customarily obtained subsequent to such assignment including
without limitation any consent of the State or the Bureau of Indian
Affairs or other Federal agencies or governmental offices;
(2) consents contractually permitted to be obtained subsequent to such
assignment; or
(3) consents that, if not obtained, will not affect the transferability,
without penalty, of, the operation of, or the receipt of income from,
the Interests subject thereto, or result in termination of the
interests subject thereto or a material decrease in the value
thereof.
(d) If, prior to the Closing, Buyer becomes aware of any suit, action or
other proceeding before any court or governmental agency that would result
in loss or impairment of Seller's title to any portion of the Interests or
a portion of the value thereof, Buyer may elect to treat the portion of
the Interests affected thereby as Defective Interests by giving Seller
notice thereof in accordance with Section 7.03(a); and
(e) If any inaccuracy in Exhibit A results in a loss of value of a
portion of the Interests, Buyer may elect to treat that portion of the
Interest subject to such reduction in value as Defective Interests by
giving Seller notice thereof in accordance with Section 7.03(a).
ARTICLE VIII
CONDITIONS TO CLOSING
8.01 Seller's Conditions. The obligations of Seller at the Closing are
subject, at the option of Seller, to the satisfaction, at or prior to the
Closing, of the following conditions:
(a) All representations and warranties of Buyer contained in this
Agreement shall be true, correct and not misleading in all material
respects at and as of the Closing as if such representations and
warranties were made at and as of the Closing, 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
at or prior to the Closing;
(b) No suit or other proceeding shall be pending before any court or
governmental agency seeking to restrain, prohibit or declare illegal, or
seeking substantial damages in connection with, the purchase and sale
contemplated by this Agreement, except (i) matters with respect to which
Seller has been adequately indemnified by Buyer, or (ii) any suit or
proceeding affecting only a portion of the Interests, which portion of the
Interests could be treated as a Defective Interest in accordance with
Section 7.04(d);
(c) The aggregate sum of Defect Adjustments and Exclusion Adjustments
shall not exceed thirty percent (30%) of the Preliminary Purchase Price;
and
(d) All necessary and material permissions, approvals and consents
required which are obtainable prior to Closing shall be in full force and
effect.
8.02 Buyer's Conditions. The obligations of Buyer at the Closing are subject,
at the option of Buyer, to the satisfaction, at or prior to the Closing, of the
following conditions:
(a) All representations and warranties of Seller contained in this
Agreement shall be true, correct and not misleading in all material
respects at and as of the Closing as if such representations and
warranties were made at and as of the Closing, 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 at or prior to the Closing;
(b) No suit or other proceeding shall be pending before any court or
governmental agency seeking to restrain, prohibit or declare illegal, or
seeking substantial damages in connection with, the purchase and sale
contemplated by this Agreement, except (i) matters with respect to which
Buyer has been adequately indemnified by Seller, or (ii) any suit or
proceeding affecting only a portion of the Interests, which portion of the
Interests could be treated as a Defective Interest in accordance with
Section 7.04(d);
(c) The aggregate sum of Defect Adjustments and Exclusion Adjustments
shall not exceed thirty percent (30%) of the Preliminary Purchase Price;
(d) All necessary and material permissions, approvals and consents
required which are obtainable prior to Closing shall be in full force and
effect; and
(e) The provisions of ARTICLE V.(e) have been satisfied.
8.03 Satisfaction or Waiver. If Seller and Buyer proceed with the Closing as
specified in ARTICLE IX, all conditions of Closing shall be deemed to have been
satisfied or waived and neither of the parties shall have any liability
whatsoever to the other arising out of, resulting from, or attributable to any
such condition of Closing, irrespective of whether such conditions of Closing
were in fact satisfied or waived. Nothing contained in this Section 8.03 shall
be a waiver or release of any breach of a representation or warranty contained
in this Agreement.
ARTICLE IX
CLOSING
9.01 Date of Closing. Unless the parties hereto mutually agree otherwise and
subject to the conditions stated in this Agreement, the consummation of the
transactions contemplated hereby (herein called the "CLOSING") shall be held on
September 30, 1996, at 10:00 A.M. (the "SCHEDULED CLOSING DATE"). The date
Closing actually occurs is herein called the "CLOSING DATE".
9.02 Place of Closing. The Closing shall be held at Seller's office in
Dallas, Texas, in accordance with the Closing Instructions to be mutually given
in writing by Seller and Buyer.
9.03 Closing Obligations. At the Closing the following events shall occur,
each being a condition concurrent to the others and each being deemed to have
occurred simultaneously with the others:
(a) Seller shall execute, acknowledge and deliver to Buyer assignment,
bill of sale and conveyance documents (in sufficient counterparts to
facilitate recording), in form and substance as set forth in Exhibit C
hereto, conveying its portion of the Interests (other than those portions
of the Interests excluded under Sections 7.03(b) and 7.04) to Buyer.
(b) Seller and Buyer shall execute and deliver a settlement statement
(herein called the "PRELIMINARY SETTLEMENT STATEMENT") prepared by Seller
and furnished to Buyer no less than seven (7) days prior to the Scheduled
Closing Date) that shall set forth the Closing Amount (as hereinafter
defined) and each adjustment and the calculation of such adjustments used
to determine such amount. The term "CLOSING AMOUNT" shall mean the
Preliminary Purchase Price adjusted as provided in Section 2.03, using for
such adjustments the best information then available. Seller and Buyer
further agree that Seller shall be entitled to receive all proceeds
attributable to ownership of the Interests prior to the Effective Time and
Buyer shall be entitled to receive all proceeds attributable to the
Interests after the Effective Time.
(c) Buyer shall deliver the Closing Amount in the form of immediately
available U.S. funds, by wire transfer in accordance with instructions to
be provided by Seller.
(d) Seller shall deliver to Buyer exclusive possession of its portion of
the Interests (other than Interests excluded under Section 7.03(b) or
Section 7.04)
(e) Seller and Buyer shall execute, acknowledge and deliver transfer
orders or letters in lieu thereof directing all purchasers of production
to make payment to Buyer of proceeds attributable to production after the
Effective Time from the Interests assigned to Buyer under Section 9.03(a),
but not theretofore paid to Seller.
ARTICLE X
OBLIGATIONS AFTER CLOSING
10.01 Post-Closing Adjustments. Within one hundred thirty (130) days after
the Closing, Seller shall prepare and deliver to Buyer, in accordance with this
Agreement and generally accepted accounting principles, a statement (herein
called the "POST CLOSING SETTLEMENT STATEMENT") setting forth each adjustment
or payment that was not included or correctly included in the Preliminary
Settlement Statement and showing the calculation of such adjustments. Within
thirty (30) days after receipt of the Post Closing Settlement, Buyer shall
deliver to Seller a written report containing any changes that Buyer proposes
to be made to the Post Closing Settlement Statement. The parties shall
undertake to agree with respect to the amounts due pursuant to such Post
Closing adjustment no later than one hundred sixty (160) days after the Closing
Date. The date upon which such agreement is reached or upon which the Final
Purchase Price is established, shall be herein called the "SETTLEMENT DATE".
In the event that (i) the Final Purchase Price is more than the Closing Amount,
Buyer shall pay to Seller, in certified U.S. Funds, the amount of such
difference (ii) the Final Purchase Price is less than the Closing Amount,
Seller shall pay to Buyer, in certified U.S. funds, the amount of such
difference. Payment by Buyer or Seller shall be made within ten (10) days of
the Final Settlement Date. After the Settlement Date, additional proceeds
received by 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. The gas imbalances of the Interests
shall be considered final and neither party thereafter shall make claim upon
the other concerning same.
10.02 Files and Records. Seller shall have the right to make and retain
copies of the Records prior to delivery thereof to Buyer. Within thirty (30)
days after the Closing Date, Seller shall deliver to Buyer all original files
and Records relating to the Interests conveyed to Buyer.
10.03 Taxes and
Recording Fees. Buyer shall pay all sales taxes occasioned by
the sale of the Interests, all ad valorem, property, production, excise,
severance, windfall profit and other taxes, except income taxes, based upon or
measured by the ownership of the property, the production of hydrocarbons or
the receipt of proceeds therefrom which apply to or arise from and after the
Effective Time together with all documentary, filing and recording fees
required in connection with the filing and recording of any assignments or
other documents recorded in connection with the sale of the Interests.
10.04 Further Assurances. After Closing, Seller and Buyer shall each execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such instruments, and shall each take such other action, as may be necessary or
advisable to carry out their respective obligations under this Agreement and
under any document, certificate or other instrument delivered pursuant hereto.
10.05 Survival. The warranties or representations herein made by Seller are
conditions to the obligations of Buyer hereunder and no warranty or
representation herein made by Seller (other than those contained in 3.01(a),
(b), (c), (d), (e), (f), (i), (j), (k), (o) and (q) shall survive the Closing.
The agreements set forth in ARTICLE X and the matters set forth in ARTICLES V
and VI and Section 13.12 shall survive the Closing for a period of one (1) year
from the Closing Date.
ARTICLE XI
TERMINATION OF AGREEMENT
11.01 Termination. This Agreement and the transactions contemplated hereby may
be terminated in the following instances:
(a) By Seller if the conditions set forth in Section 8.01(a) through
8.01(d) are not satisfied in all material respects or waived as of
the Scheduled Closing Date;
(b) By Buyer if the conditions set forth in Section 8.02(a) through
8.02(e) are not satisfied in all material respects or waived as of
the Scheduled Closing Date;
(c) By Buyer pursuant to Section 7.03(b);
(d) Pursuant to Article V.(e); or
(e) At any time by the mutual written agreement of Buyer and Seller.
11.02 Liabilities Upon Termination. If this Agreement is breached by either
party, nothing contained herein shall be construed to limit Seller's or Buyer's
legal or equitable remedies, including, without limitation, damages for the
breach or failure of any representation, warranty, covenant or agreement
contained herein (whether or not the non-defaulting party has terminated the
Agreement) or the right to enforce specific performance of this Agreement;
provided, however, that a party terminating this Agreement shall have no right
to specific performance thereof, and provided, further, that neither party
shall have a right to specific performance thereof if this Agreement is
terminated pursuant to Section 11.01 hereof.
ARTICLE XII
TAX-FREE EXCHANGE
12.0 Tax-Free Exchange. Seller has elected to effect a like-kind exchange
pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder, with respect to the Interests (a "Like-
Kind Exchange"). In order to effect a Like-Kind Exchange, Buyer shall
cooperate and do all acts as may be reasonably required or requested by Seller
with regard to effecting the Like-Kind Exchange, including, but not limited to,
executing an Exchange Escrow Agreement, a form of which is attached hereto as
Exhibit D, in accordance with Treasury Regulation Section 1.1031(k)-1(g)(3);
provided, however, Buyer shall incur no expense in connection with such Like-
Kind Exchange and Buyer shall not be required to take title to any property
other than the Interests in connection with the Like-Kind Exchange, and Buyer's
possession of the Interests will not be delayed by reason of any such Like-Kind
Exchange.
ARTICLE XIII
MISCELLANEOUS
13.01 Exhibits and Schedules. Exhibits A through D are attached hereto and
incorporated herein by this reference.
13.02 Expenses. Except as otherwise specifically provided, all fees, costs
and expenses incurred by Buyer or Seller in negotiating this Agreement or in
consummating the transactions contemplated by this Agreement shall be paid by
the party incurring the same, including, without limitation, legal and
accounting fees, costs and expenses.
13.03 Notices. All notices and communications required or permitted under
this Agreement shall be in writing, delivered to or sent by U. S. Mail or
Express Delivery, postage prepaid, or by facsimile transmission, addressed as
follows:
Maynard Oil Company
Attention Cassondra Foster
8080 North Central Expressway, Suite 660
Dallas, TX 75206
Phone: (214) 891-8461
Fax: (214) 891-8827
Enron Oil & Gas Company
Attention Lee McVay, Vice President and General Manager
20 North Broadway, Suite 800
Oklahoma City, OK 73102
Phone: (405) 239-7880
Fax: (405) 239-7858
Any party may, by written notice so delivered to the others, change the address
or individual to which delivery shall thereafter be made.
13.04 Amendments. Except as otherwise expressly provided herein, this
Agreement may not be amended nor any rights hereunder waived except by an
instrument in writing signed by the party to be charged with such amendment or
waiver and delivered by such party to the party claiming the benefit of such
amendment or waiver.
13.05 Assignment. Neither Seller nor Buyer shall assign all or any portion of
its rights or delegate all or any portion of its duties hereunder without the
prior written consent of the other to such assignment; provided, however, that
Buyer or Seller or both may assign all or part of this Agreement to a qualified
intermediary to facilitate a deferred like-kind exchange for federal tax
purposes. Subject to the foregoing, this Agreement shall inure to the benefit
of and be binding upon Seller, Buyer and their respective successors and
assigns.
13.06 Announcements. Seller and Buyer shall consult with each other with
regard to all press releases and other announcements issued at or prior to the
Closing concerning this Agreement or the transactions contemplated hereby and,
except as may be required by applicable laws or the applicable rules, and
regulations of any governmental agency or stock exchange, neither Buyer nor
Seller shall issue any such press release or other publicity without the prior
written consent of the other party.
13.07 Headings. The headings of the articles and sections of this Agreement
are for guidance and convenience of reference only and shall not limit or
otherwise affect any of the terms or provisions of this Agreement.
13.08 Counterparts. This Agreement, and any document or instrument entered
into, given or made pursuant to this Agreement or authorized hereby, and any
amendment or supplement thereto, may be executed in any number of counterparts,
and, when so executed, each of which shall be deemed an original instrument,
and shall have the same force and effect as though all signatures appeared on a
single document, and all of which together shall constitute but one and the
same instrument. Any signature page of this Agreement or of such an amendment,
supplement, document or instrument may be detached from any counterpart thereof
and attached to another counterpart without impairing the legal effect of any
signatures identical in form thereto but having attached to it one or more
additional signature pages.
13.09 References. References made in this Agreement, including the use of a
pronoun, shall be deemed to include where applicable, masculine, feminine,
singular or plural, individuals, partnerships or corporations. As used in this
Agreement, "person" shall mean any natural person, corporation, partnership,
trust, estate or other entity.
13.10 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas, without regard to its choice
of law principles provided, however, that issues in connection with title to
the Interests shall be governed by the applicable laws of the State of
Oklahoma.
13.11 Entire Agreement. This Agreement (including the Exhibits hereto)
constitutes the entire understanding among the parties with respect to the
subject matter hereof, superseding all negotiations, prior discussions and
prior agreements and understandings relating to such subject matter.
13.12 Securities Laws. Buyer has advised Seller that the interests are not
being acquired for distribution or transfer in violation of the securities laws
of the United States or of any state thereof. Buyer hereby agrees to protect,
indemnify and hold harmless Seller from and against any and all claims, costs
(including, without limitation, court costs and reasonable attorney's fees),
expenses, damages and liabilities which arise under applicable state or federal
securities laws as a result of acts or omissions of Buyer or its affiliates
which are contrary to such laws and which are in connection with the
transactions contemplated hereby or the sale or other disposition of the
Interests by Buyer or its affiliates.
Seller hereby agrees to protect, indemnify and hold harmless Buyer from and
against any and all claims, costs (including, without limitation, court costs
and reasonable attorney's fees), expenses, damages and liabilities which arise
under applicable state or federal securities laws as a result of acts or
omissions of Seller or its affiliates which are contrary to such laws and which
are in connection with the transactions contemplated hereby.
Executed as of the date first above written.
SELLER
MAYNARD OIL COMPANY
By: /s/ Glenn R. Moore
------------------------------
Glenn R. Moore
President
BUYER
ENRON OIL & GAS COMPANY
By: /s/ Leland J. McVay
-------------------------------
Leland J. McVay
Vice President
EXHIBIT "A"
Attached to and made a part of Purchase and Sale Agreement dated
September 12, 1996, by and between Maynard Oil Company, Seller, and
Enron Oil & Gas Company, Buyer
ELLIS COUNTY, OKLAHOMA
PN 440401 (UT-424)
BROWN NO. 1-28
EXPENSE INTEREST 0.6406250
REVENUE INTEREST 0.5600586
Oil and Gas Lease dated August 3, 1956, by and between Elsie Nuttall, as
Lessor, and George L. Aycock, as Lessee, recorded in Volume 83, page 321 of the
Records of Ellis County, Oklahoma, covering the N/2 N/2 of Section 28, Township
17 North, Range 22 West, Ellis County, Oklahoma, LIMITED to rights from the
surface to the base of the Tonkawa formation. (LF-04954-AA-01)
Oil and Gas Lease dated April 12, 1966, by and between James W. McMahan,
et al, as Lessor, and L. C. Neeley, as Lessee, recorded in Volume 163, page 163
of the Records of Ellis County, Oklahoma, covering the N/2 NW/4 of Section 28,
Township 17 North, Range 22 West, Ellis County, Oklahoma. (LF-04954-AB-01)
Oil and Gas Lease dated August 3, 1956, by and between Roy P. Nuttall and
Eulah P. Nuttall, as Lessors, and George L. Aycock, as Lessee, recorded in
Volume 83, page 323 of the Records of Ellis County, Oklahoma, covering the SW/4
SW/4 of Section 28, Township 17 North, Range 22 West, Ellis County, Oklahoma.
(LF-04960-AA-01)
Oil and Gas Lease dated June 18, 1962, by and between Arnold W. Brown, et
ux, as Lessor, and Mike Rainbolt, as Lessee, recorded in Volume 129, page 464
of the Records of Ellis County, Oklahoma, covering the S/2 NE/4, SE/4 SW/4 and
the SE/4 of Section 28, Township 17 North, Range 22 West, Ellis County,
Oklahoma (LF-05076-00)
Leases numbered 04954-AA&AB-01 and 04960-AA-01 are subject to Operating
Agreement dated December 29, 1966, by and between Shell Oil Company, as
Operator, and Continental Oil Company, et al, as Non-Operators, Purchase and
Sale Agreement dated December 19, 1985, as amended, by and between Shell
Western E&P Inc. and Maynard Oil Company; Assignment, Conveyance and Bill of
Sale effective December 1, 1985, by and between Shell Western E&P Inc. and
Maynard Oil Company recorded in Volume 459, page 381 of the Records of Ellis
County, Oklahoma; lease numbered 05076-00 is subject to Purchase and Sale
Agreement dated June 1, 1989, and Partial Assignment dated May 31, 1989, by and
between Conoco, Inc. and Maynard Oil Company; leases numbered 04954-AB-01 &
04960-AA-01 are subject to Assignment and Bill of Sale effective May 1, 1986,
from Sabine Corporation to Maynard Oil Company.
PN 440501 (UT-445)
DEAL STATE NO. 1-13
EXPENSE INTEREST 0.8515625
REVENUE INTEREST 0.7391357
Oil and Gas Lease dated September 25, 1956, by and between State of
Oklahoma bearing serial number 23-EI-980, as Lessor, and Shell Oil Company, as
Lessee, recorded in Volume 86, page 152 of the Records of Ellis County,
Oklahoma, covering the NW/4 of Section 13, Township 24 North, Range 25 West,
Ellis County, Oklahoma, LIMITED to rights from the surface to the base of the
Morrow formation. (LF-04897-00)
Oil and Gas Lease dated September 25, 1956, by and between State of
Oklahoma bearing serial number 23-EI-981, as Lessor, and Shell Oil Company, as
Lessee, recorded in Volume 86, page 306 of the Records of Ellis County,
Oklahoma, covering the SE/4 of Section 13, Township 24 North, Range 25 West,
Ellis County, Oklahoma, LIMITED to rights from the surface to the base of the
Morrow formation. (LF-04898-00)
Oil and Gas Lease dated September 25, 1956, by and between State of
Oklahoma bearing serial number 23-EI-982, as Lessor, and Shell Oil Company, as
Lessee, recorded in Volume 86, page 309 of the Records of Ellis County,
Oklahoma, covering the SW/4 of Section 13, Township 24 North, Range 25 West,
Ellis County, Oklahoma, LIMITED to rights from the surface to the base of the
Morrow formation. (LF-04899-00)
Oil and Gas Lease dated August 9, 1956, by and between D. L. Berry, as
Lessor, and Carter Oil Company, as Lessee, recorded in Volume 83, Page 111 of
the Records of Ellis County, Oklahoma. (LF-04900-AA)
Oil and Gas Lease dated August 9, 1956, by and between W. W. Warner, as
Lessor, and Carter Oil Company, as Lessee, recorded in Volume 83, page 113 of
the Records of Ellis County, Oklahoma. (LF-04900-AB)
Oil and Gas Lease dated October 10, 1956, by and between Wood Oil
Company, as Lessor, and Shell Oil Company, as Lessee, recorded in Volume 85,
page 116 of the Records of Ellis County, Oklahoma. (LF-04900-AC)
Oil and Gas Lease dated October 24, 1956, by and between Charles A. Neal
& Company, as Lessor, and Shell Oil Company, as Lessee, recorded in Volume 85,
page 291 of the Records of Ellis County, Oklahoma. (LF-04900-AD)
Oil and Gas Lease dated December 16, 1957, by and between Wilbur J.
Holleman, as Lessor, and Keener Oil Company, as Lessee, recorded in Volume 95,
page 546 of the Records of Ellis County, Oklahoma. (LF-04900-AE)
Oil and Gas Lease dated June 21, 1961, by and between Keener Oil Company,
as Lessor, and Shell Oil Company, as Lessee, recorded in Volume 124, page 112
of the Records of Ellis County, Oklahoma. (LF-04900-AF)
The hereinabove referenced leases cover the NE/4 of Section 13,
Township 24 North, Range 25 West, Ellis County, Oklahoma, LIMITED to
rights from the surface to the base of the Morrow formation, as to
all leases numbered AC through AF and from the surface to the base of
the Chester formation as to leases numbered AA and AB, Ellis County,
Oklahoma.
The hereinabove referenced leases are subject to Operating Agreement dated
August 15, 1961, by and between Shell Oil Company, as Operator, and Amoco
Production Company, as Non-Operator; Purchase and Sale Agreement dated
December 19, 1985, by and between Shell Western E&P Inc. and Maynard Oil
Company; Assignment, Conveyance and Bill of Sale effective December 1, 1985, by
and between Shell Western E&P Inc. and Maynard Oil Company recorded in Volume
459, page 381 of the Records of Ellis County, Oklahoma; and Gas Purchase
Contract dated January 17, 1996, by and between GPM Gas Contract, as Buyer, and
Maynard Oil Company, as Seller. Leases numbered LF-04900-AA and AB are subject
to Farmout Agreement dated June 6, 1961, by and between Humble Oil and Refining
Company and Shell Oil Company and Assignment dated November 3, 1961 by and
between Humble Oil and Refining Company and Shell Oil Company. Lease numbered
LF-04900-AE is subject to Farmout Agreement dated June 6, 1961, by and between
Keener Oil Company, a co-partnership and Shell Oil Company and Assignment dated
October 6, 1961, by and between Keener Oil Company, a co-partnership and Shell
Oil Company recorded in Volume 126, page 272 of the Records of Ellis County,
Oklahoma.
PN 440701 (UT-433)
FEERER NO. 1-33
EXPENSE INTEREST 0.7500000
REVENUE INTEREST 0.6289062
Oil and Gas Lease dated March 27, 1956, by and between Leslie Feerer and
Edna Feerer, as Lessors, and J. B. Roberts, as Lessee, recorded in Volume 80,
page 333, of the Records of Ellis County, Oklahoma, covering SW/4 of Section
33, Township 23 North, Range 23 West, Ellis County, Oklahoma, LIMITED to rights
from the surface to the Base of the Chester (Mississippian) formation. (LF-
04886-AA)
Oil and Gas Lease dated April 5, l956, by and between Keith Sullivan and
Elzalene Sullivan, as Lessors, and Sinclair Oil and Gas Company, as Lessee,
recorded in Volume 80, page 319 of the Records of Ellis County, Oklahoma,
covering SW/4 of Section 33, Township 23 North, Range 23 West, Ellis County,
Oklahoma, LIMITED to rights from the surface to the base of the Chester
(Mississippian) formation. (LF-04886-AB)
The hereinabove referenced leases are subject to Farmout Agreement dated
September 13, 1962, by and between Sinclair Oil and Gas Company and Shell Oil
Company; Assignment dated January 17, 1963, recorded in Volume 134, page 510 of
the Records of Ellis County, Oklahoma, from Sinclair Oil and Gas Company to
Shell Oil Company.
Oil and Gas Lease dated July 23, 1958, by and between State of Oklahoma
bearing serial number 23-PB-277, as Lessor, and Shell Oil Company, as Lessee,
recorded in Volume 103, page 603 of the Records of Ellis County, Oklahoma,
covering NE/4 of Section 33, Township 23 North, Range 23 West, Ellis County,
Oklahoma. (LF-04932-00)
Oil and Gas Lease dated July 23, l958, by and between State of Oklahoma
bearing serial number 23-PB-278, as Lessor, and Shell Oil Company, as Lessee,
recorded in Volume 103, page 609 of the Records of Ellis County, Oklahoma,
covering NW/4 of Section 33, Township 23 North, Range 23 West, Ellis County,
Oklahoma. (LF-04933-00)
The hereinabove referenced leases are subject to Joint Operating Agreement
dated December 6, 1962, by and between Shell Oil Company, as Operator and Gulf
Oil Corporation, as Non-Operator; Salt Water Disposal Agreement dated December
18, 1967, by and between Pan American Petroleum Corporation and Shell Oil
Company; Purchase and Sale Agreement dated December 19, 1985, by and between
Shell Western E&P Inc. and Maynard Oil Company; Assignment, Conveyance and Bill
of Sale effective December 1, 1985, by and between Shell Western E&P Inc. and
Maynard Oil Company recorded in Volume 459, page 381 of the Records of Ellis
County, Oklahoma.
PN 440510 (UT-416)
McCLURE NO. 1-13
EXPENSE INTEREST 1.0000000
REVENUE INTEREST 0.8613281
Oil and Gas Lease dated September 25, 1956, by and between State of
Oklahoma bearing serial number 23-EI-983, as Lessor, and Shell Oil Company, as
Lessee, recorded in Volume 86, Page 318 of the Records of Ellis County,
Oklahoma, covering NE/4 of Section 13, Township 24 North, Range 26 West, Ellis
County, Oklahoma, LIMITED to rights from the surface to the base of the Morrow
formation. (LF-04919-00)
Oil and Gas Lease dated September 25, 1956, by and between State of
Oklahoma bearing serial number 23-EI-984, as Lessor, and Shell Oil Company, as
Lessee, recorded in Volume 86, page 173 of the Records of Ellis County,
Oklahoma, covering SE/4 of Section 13, Township 24 North, Range 26 West, Ellis
County, Oklahoma, LIMITED to rights from the surface to the base of the Morrow
formation. (LF-04920-00)
Oil and Gas Lease dated September 25, 1956, by and between State of
Oklahoma bearing serial number 23-EI-985, as Lessor, and Shell Oil Company, as
Lessee, recorded in Volume 86, page 176 of the Records of Ellis County,
Oklahoma, covering SW/4 of Section 13, Township 24 North, Range 26 West, Ellis
County, Oklahoma, LIMITED to rights from the surface to the base of the Morrow
formation. (LF-04921-00)
Oil and Gas Lease dated April 26, 1955, by and between J. R. McClure and
Reba Ruth McClure, as Lessor, and John Briggs, as Lessee, recorded in Volume
74, page 143 of the Records of Ellis County, Oklahoma, covering NW/4 of Section
13, Township 24 North, Range 26 West, Ellis County, Oklahoma, LIMITED to rights
from the surface to the base of the Chester formation, as to gas rights only.
(LF-04922-00)
The hereinabove referenced leases are subject to Agreement dated February 12,
1969, by and between Shell Oil Company and Cities Service Oil Company; Gas
Purchase Agreement dated October 1, 1989, as amended, by and between Production
Gathering Company, as Buyer, and Maynard Oil Company, as Seller; Purchase and
Sale Agreement dated December 19, 1985, by and between Shell Western E&P Inc.
and Maynard Oil Company; Assignment, Conveyance and Bill of Sale effective
December 1, 1985, by and between Shell Western E&P Inc. and Maynard Oil Company
recorded in Volume 459, page 381 of the Records of Ellis County, Oklahoma.
PN 440512 (UT-413)
O'HERN NO. 1-32
EXPENSE INTEREST 0.5067300
REVENUE INTEREST 0.4160450
Oil and Gas Lease dated September 9, 1947, by and between Carrie Lee
O'Hern, as Lessor, and W. G. Mouser, as Lessee, recorded in Volume 36, page 364
of the Records of Ellis County, Oklahoma, INSOFAR AND ONLY INSOFAR as said
lease covers all of Section 32, Township 24 North, Range 25 West, Ellis County,
Oklahoma, LIMITED to rights from the surface to the base of the Morrow
formation. (LF-04896-00)
The hereinabove referenced lease is subject to Gas Purchase Agreement dated
October 1, 1989, by and between Production Gathering Company, as Buyer, and
Maynard Oil Company, as Seller; Assignment dated March 15, 1958, from The Texas
Company to Shell Oil Company; Agreement dated October 21, 1969, by and between
Shell Oil Company and Cities Service Oil Company; Declaration of Pool dated
June 9, 1958; Operating Agreement dated Jaunary 18, 1957, as amended, by and
between Shell Oil Company, as Operator, and The Texas Company, as Non-Operator;
Purchase and Sale Agreement dated December 19, 1985, by and between Shell
Western E&P Inc. and Maynard Oil Company; Assignment, Conveyance and Bill of
Sale effective December 1, 1985, by and between Shell Western E&P Inc. and
Maynard Oil Company recorded in Volume 459, page 381 of the Records of Ellis
County, Oklahoma.
PN 440514
PEARSON NO. 1-14 AND 2-14 (UT-410)
EXPENSE INTEREST 0.6875000
REVENUE INTEREST 0.6015625
Oil and Gas Lease dated October 17, 1956, by and between Lulu Jane Davis
Hamby, et al, as Lessor, and James B. Franklin, as Lessee, recorded in Volume
85, page 535 of the Records of Ellis County, Oklahoma, INSOFAR AND ONLY INSOFAR
as said lease covers the NW/4, N/2 NE/4, N/2 SW/4 and SE/4 SW/4 of Section 14,
Township 23 North, Range 26 West, Ellis County, Oklahoma, LIMITED to rights
from the surface to the base of the Morrow formation. (LF-04905-AA-01)
The hereinabove referenced lease is subject to Purchase and Sale Agreement
dated December 19, 1985, by and between Shell Western E&P Inc. and Maynard Oil
Company; Assignment, Conveyance and Bill of Sale effective December 1, 1985, by
and between Shell Western E&P Inc. and Maynard Oil Company recorded in Volume
459, page 381 of the Records of Ellis County, Oklahoma.
Oil and Gas Lease dated September 20, 1949, by and between Sid Brown, et
ux, as Lessor, and John Briggs, as Lessee, recorded in Volume 43, page 196 of
the Records of Ellis County, Oklahoma, INSOFAR AND ONLY INSOFAR as said lease
covers the NW/4, N/2 NE/4, N/2 SW/4 and the SE/4 SW/4 of Section 14, Township
23 North, Range 26 West, Ellis County, Oklahoma. (LF-04905-AB)
Oil and Gas Lease dated August 24, 1959, by and between Anson J. Woods,
et ux, as Lessor, to Robert C. Green, as Lessee, recorded in Volume 113, page
370 of the Records of Ellis County, Oklahoma, covering the NW/4, N/2 NE/4, N/2
SW/4 and the SE/4 SW/4 of Section 14, Township 23 North, Range 26 West, Ellis
County, Oklahoma. (LF-04905-AC)
Oil and Gas Lease dated January 12, 1952, by and between T. O. Piersall,
et ux, as Lessor, and V. B. West, as Lessee, recorded in Volume 57, page 261 of
the Records of Ellis County, Oklahoma, INSOFAR AND ONLY INSOFAR as said lease
covers the S/2 SE/4 of Section 14, Township 23 North, Range 26 West, Ellis
County, Oklahoma (LF-05080-00)
The hereinabove referenced leases are subject to Operating Agreement dated
March 15, 1961, by and between Sinclair Oil and Gas Company, as Operator, and
Shell Oil Company, et al, as Non-Operators. The Pearson 1-14 is subject to
Natural Gas Purchase and Sale Contract dated November 16, 1993, October 1,
1989, as amended, by and between Production Gathering Company, as Buyer, and
Maynard Oil Company, as Seller. The Pearson 2-14 is subject to Gas Purchase
Contract dated January 17, 1996, by and between GPM Gas Corporation, as Buyer
and Maynard Oil Company, as Seller. Lease numbered LF-05080-00 is subject to
Sales Agreement dated January 4, 1989, by and between Deminex U.S. Oil Company
and Maynard Oil Company and Assignment, Bill of Sale and Agreement by and
between Deminex U.S. Oil Company and Maynard Oil Company dated January 10,
1989, effective January 1, 1989, recorded in Volume 508, page 258 of the
Records of Ellis County, Oklahoma. Leases numbered LF-04905-AB and AC are
subject to Purchase and Sale Agreement dated January 28, 1987, by and between
Atlantic Richfield Company and Maynard Oil Company, and Assignment dated
February 17, 1987, effective January 1, 1987, by and between Atlantic Richfield
Company and Maynard Oil Company, recorded in Volume 478, page 711 of the
Records of Ellis County, Oklahoma.
PN 440517 (UT-415)
SHEPHERD NO. 1-12
EXPENSE INTEREST 0.5000000
REVENUE INTEREST 0.4101562
Oil and Gas Lease dated March 12, 1952, by and between Stephen M. Dale
and Edna Walton Dale, as Lessors, and Roy W. Reed, as Lessee, recorded in
Volume 58, page 355 of the Records of Ellis County, Oklahoma, covering NE/4 of
Section 12, Township 23 North, Range 26 West, Ellis County, Oklahoma, LIMITED
to rights from the surface to the base of the Morrow formation. (LF-04915-00)
Oil and Gas Lease dated February 17, 1950, by and between Edith M.
Shepherd and Ferman C. Shepherd, as Lessors, and R. T. Bennett, as Lessee,
recorded in Volume 47, page 428 of the Records of Ellis County, Oklahoma,
covering the NW/4 of Section 12, Township 23 North, Range 26 West, Ellis
County, Oklahoma, LIMITED to rights from the surface to a depth of 8,724 feet
below the surface, as to gas rights only. (LF-04916-00)
Oil and Gas Lease dated March 24, 1959, by and between Anna Ehrlich, as
Lessor, and Vaughn S. Bryan, as Lessee, recorded in Volume 109, page 151 of the
Records of Ellis County, Oklahoma, covering the SW/4 of Section 12, Township 23
North, Range 26 West, Ellis County, Oklahoma, LIMITED to rights from the
surface to a depth of 8,724 feet below the surface, as to gas rights only.
(LF-04917-00)
The hereinabove referenced leases are subject to Agreement dated February 12,
1969, by and between Shell Oil Company and Cities Service Oil Company;
Operating Agreement dated January 8, 1960, by and between Shell Oil Company, as
Operator, and Sinclair Oil and Gas Company, et al, as Non-Operators; Farmout
Agreement dated March 3, 1960, from Sinclair Oil and Gas Company to Shell Oil
Company and Cities Service Oil Company; Natural Gas Purchase Contract dated
November 16, 1993, by and between Production Gathering Company, as Buyer, and
Maynard Oil Company, as Seller; Purchase and Sale Agreement dated December 19,
1985, by and between Shell Western E&P Inc. and Maynard Oil Company;
Assignment, Conveyance and Bill of Sale effective December 1, 1985, by and
between Shell Western E&P Inc. and Maynard Oil Company recorded in Volume 459,
page 381 of the Records of Ellis County, Oklahoma.
PN 440519
WHITE NO. 1-31 and NO. 2-31 (UT-406)
EXPENSE INTEREST 1.0000000
REVENUE INTEREST 0.8166254
Oil and Gas Lease dated May 1, 1948, by and between Investors Royalty
Company, Inc., as Lessor, and D. C. Matthews, as Lessee, recorded in Volume 37,
page 388 of the Records of Ellis County, Oklahoma. (LF-04906-AA)
Oil and Gas Lease dated May 18, 1948, by and between John M. McFadden and
Elizabeth B. McFadden, as Lessor, and D. C. Matthews, as Lessee, recorded in
Volume 37, page 488 of the Records of Ellis County, Oklahoma. (LF-04906-AB)
Oil and Gas Lease dated April 24, 1957, by and between Frederick William
Schuette, as Lessor, and Gene Goff, as Lessee, recorded in Volume 90, page 121
of the Records of Ellis County, Oklahoma. (LF-04906-AC)
Oil and Gas Lease dated August 24, 1957, by and between Manon M. White
and Charles J. White, as Lessor, and Shell Oil Company, as Lessee, recorded in
Volume 92, page 143 of the Records of Ellis County, Oklahoma. (LF-04906-AD)
The hereinabove referenced leases cover the NE/4 of Section 31,
Township 24 North, Range 25 West, LIMITED to rights from the surface
to the base of the Morrow formation, Ellis County, Oklahoma.
Oil and Gas Lease dated August 26, 1957, by and between Willis E. Case
and Martha M. Case, as Lessor, and Shell Oil Company, as Lessee, recorded in
Volume 92, page 416 of the Records of Ellis County, Oklahoma. (LF-04907-AA)
Oil and Gas Lease dated August 24, 1957, by and between Manon M. White
and Charles J. White, as Lessor, and Shell Oil Company, as Lessee, recorded in
Volume 92, page 145 of the Records of Ellis County, Oklahoma. (LF-04907-AB)
The hereinabove referenced leases cover Lots 3 and 4, E/2 SW/4 and
SE/4 of Section 31, Township 24 North, Range 25 West, LIMITED to
rights from the surface to the base of the Morrow formation, Ellis
County, Oklahoma.
The hereinabove referenced leases are subject to Assignment dated August 19,
1957, by and between Shell Oil Company to Gene Goff; Assignment dated October
22, 1957, by and between Shell Oil Company to James B. Franklin.
Oil and Gas Lease dated June 10, 1948, by and between Alberta C. Lloyd,
Individually and as Administratrix of the Estate of Lemuel E. Lloyd, deceased,
as Lessor, and W. G. Mouser, as Lessee, recorded in Volume 43, page 33 of the
Records of Ellis County, Oklahoma, INSOFAR AND ONLY INSOFAR as said lease
covers Lots l and 2 and the E/2 NW/4 of Section 31, Township 24 North, Range 25
West, Ellis County, Oklahoma, LIMITED to rights from the surface to the base of
the Morrow formation. (LF-04908-AA)
Oil and Gas Lease dated October 2, 1947, by and between Federal Farm
Mortgage Corporation, as Lessor, and W. G. Mouser, as Lessee, recorded in
Volume 39, page 137 of the Records of Ellis County, Oklahoma, as amended by
instruments entitled Amendment of Oil and Gas Lease dated July 22, 1957 and
August 29, 1957, recorded respectively in Volume 91, page 482 and Volume 94,
page 199 of the Records of Ellis County, Oklahoma, covering the NW/4 of Section
31, Township 24 North, Range 25 West, Ellis County, Oklahoma, Ellis County,
Oklahoma, LIMITED to rights from the surface to the base of the Morrow
formation. (LF-04908-AB)
The hereinabove referenced leases are subject to Assignment dated September 13,
1957, from The Texas Company to Shell Oil Company; Agreement dated February 12,
1969, by and between Shell Oil Company and Cities Service Oil & Gas Company;
Gas Purchase Agreement dated October 1, 1989, as amended, by and between
Production Gathering Company and Maynard Oil Company; Purchase and Sale
Agreement dated December 19, 1985, by and between Shell Western E&P Inc. and
Maynard Oil Company; Assignment, Conveyance and Bill of Sale effective December
1, 1985, by and between Shell Western E&P Inc. and Maynard Oil Company recorded
in Volume 459, page 381 of the Records of Ellis County, Oklahoma.
PN 440411
WOOD NO. 1-20 (UT-425)
EXPENSE INTEREST 0.6903717
REVENUE INTEREST 0.6024768
Oil and Gas Lease dated August 1, 1956, by and between Roy Wood, et al,
as Lessor, and Sidna Kruff, as Lessee, recorded in Volume 85, page 310 of the
Records of Ellis County, Oklahoma, INSOFAR AND ONLY INSOFAR as said lease
covers the NE/4 SE/4 of Section 20, Township 17 North, Range 22 West, Ellis
County, Oklahoma, LIMITED to rights from the surface to the base of the Tonkawa
formation. (LF-04875-AA-01)
Oil and Gas Lease dated April 20, 1966, by and between Harry Newman Oil
Company, as Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162,
page 645 of the Records of Ellis County, Oklahoma, INSOFAR AND ONLY INSOFAR as
said lease covers the NE/4 SE/4 of Section 20, Township 17 North, Range 22
West, Ellis County, Oklahoma, LIMITED to rights from the surface to the base of
the Tonkawa formation. (LF-04875-AB-01)
Oil and Gas Lease dated April 21, 1966, by and between Pearl Nolf, as
Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162, page 653 of
the Records of Ellis County, Oklahoma, INSOFAR AND ONLY INSOFAR as said lease
covers the NE/4 SE/4 of Section 20, Township 17 North, Range 22 West, Ellis
County, Oklahoma, LIMITED to rights from the surface to the base of the Tonkawa
Formation. (LF-04875-AC-01)
Oil and Gas Lease dated April 19, 1966, by and between Commercial
Minerals, Inc., as Lessor, and Shell Oil Company, as Lessee, recorded in Volume
162, page 651 of the Records of Ellis County, Oklahoma, INSOFAR AND ONLY
INSOFAR as said lease covers the NE/4 SE/4 of Section 20, Township 17 North,
Range 22 West, Ellis County, Oklahoma, LIMITED to rights from the surface to
the base of the Tonkawa formation. (LF-04875-AD-01)
Oil and Gas Lease dated April 29, 1966, by and between William Hiatt, as
Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162, page 657 of
the Records of Ellis County, Oklahoma, INSOFAR AND ONLY INSOFAR as said lease
covers the NE/4 SE/4 of Section 20, Township 17 North, Range 22 West, Ellis
County, Oklahoma, LIMITED to rights from the surface to the base of the Tonkawa
formation. (LF-04875-AE-01)
Oil and Gas Lease dated April 29, 1966, by and between J. P. Hannigan, as
Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162, page 655 of
the Records of Ellis County, Oklahoma, INSOFAR AND ONLY INSOFAR as said lease
covers the NE/4 SE/4 of Section 20, Township 17 North, Range 22 West, Ellis
County, Oklahoma, LIMITED to rights from the surface to the base of the Tonkawa
formation. (LF-04875-AF-01)
Oil and Gas Lease dated April 19, 1966, by and between Tulsa Royalties
Company, as Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162,
page 647 of the Records of Ellis County, Oklahoma, covering the NE/4 SE/4 of
Section 20, Township 17 North, Range 22 West, Ellis County, Oklahoma, LIMITED
to rights from the surface to the base of the Tonkawa formation. (LF-04875-AG-
01)
Oil and Gas Lease dated August 1, 1956, by and between Roy Wood, et al,
as Lessor, and Sidna Kruff, as Lessee, recorded in Volume 85, page 313 of the
Records of Ellis County, Oklahoma, covering the NE/4 of Section 20, Township 17
North, Range 22 West, Ellis County, Oklahoma, LIMITED to rights from the
surface to the base of the Tonkawa formation. (LF-04876-AA)
Oil and Gas Lease dated April 27, 1966, by and between G. L. Gallaspy, as
Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162, page 641 of
the Records of Ellis County, Oklahoma, covering the S/2 NE/4 of Section 20,
Township 17 North, Range 22 West, Ellis County, Oklahoma, LIMITED to rights
from the surface to the base of the Tonkawa formation. (LF-04876-AB)
Oil and Gas Lease dated April 21, 1966, by and between Farmers United
Coop. Pool, as Lessor, and Shell Oil Company, as Lessee, recorded in Volume
162, page 635 of the Records of Ellis County, Oklahoma, covering the S/2 NE/4
of Section 20, Township 17 North, Range 22 West, Ellis County, Oklahoma,
LIMITED to rights from the surface to the base of the Tonkawa formation. (LF-
04876-AC)
Oil and Gas Lease dated April 21, 1966, by and between Texas W. Allen, as
Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162, page 639 of
the Records of Ellis County, Oklahoma, covering the S/2 NE/4 of Section 20,
Township 17 North, Range 22 West, Ellis County, Oklahoma, LIMITED to rights
from the surface to the base of the Tonkawa formation. (LF-04876-AD)
Oil and Gas Lease dated April 20, 1966, by and between Walter A. Povenz,
as Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162, page 637
of the Records of Ellis County, Oklahoma, covering the S/2 NE/4 of Section 20,
Township 17 North, Range 22 West, Ellis County, Oklahoma, LIMITED to rights
from the surface to the base of the Tonkawa formation. (LF-04876-AE)
Oil and Gas Lease dated April 27, 1966, by and between George D.
Gallaspy, as Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162,
page 643 of the Records of Ellis County, Oklahoma, covering the S/2 NE/4 of
Section 20, Township 17 North, Range 22 West, Ellis County, Oklahoma, LIMITED
to rights from the surface to the base of the Tonkawa formation. (LF-04876-AF)
Oil and Gas Lease dated August 1, 1956, by and between Roy Wood, et al,
as Lessor, and Sidna Kruff, as Lessee, recorded in Volume 85, page 440 of the
Records of Ellis County, Oklahoma, covering the NW/4 of Section 20, Township 17
North, Range 22 West, Ellis County, Oklahoma, LIMITED to rights from the
surface to the base of the Tonkawa formation. (LF-04955-AA)
Oil and Gas Lease dated April 21, 1966, by and between Farmers United
Coop. Pool, as Lessor, and Shell Oil Company, as Lessee, recorded in Volume
162, page 615 of the Records of Ellis County, Oklahoma, covering the SE/4 NW/4
of Section 20, Township 17 North, Range 22 West, Ellis County, Oklahoma,
LIMITED to rights from the surface to the base of the Tonkawa formation. (LF-
04955-AB)
Oil and Gas Lease dated April 20, 1966, by and between Walter A. Povenz,
as Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162, page 617
of the Records of Ellis County, Oklahoma, covering the SE/4 NW/4 of Section 20,
Township 17 North, Range 22 West, Ellis County, Oklahoma, LIMITED to rights
from the surface to the base of the Tonkawa formation. (LF-04955-AC)
Oil and Gas Lease dated April 21, 1966, by and between Texas W. Allen, as
Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162, page 619 of
the Records of Ellis County, Oklahoma, covering the SE/4 NW/4 of Section 20,
Township 17 North, Range 22 West, Ellis County, Oklahoma, LIMITED to rights
from the surface to the base of the Tonkawa formation. (LF-04955-AD)
Oil and Gas Lease dated April 27, 1966, by and between G. L. Gallaspy, as
Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162, page 621 of
the Records of Ellis County, Oklahoma, covering the SE/4 NW/4 of Section 20,
Township 17 North, Range 22 West, Ellis County, Oklahoma, LIMITED to rights
from the surface to the base of the Tonkawa formation. (LF-04955-AE)
Oil and Gas Lease dated April 27, 1966, by and between George D.
Gallaspy, as Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162,
page 623 of the Records of Ellis County, Oklahoma, covering the SE/4 NW/4 of
Section 20, Township 17 North, Range 22 West, Ellis County, Oklahoma, LIMITED
to rights from the surface to the base of the Tonkawa formation. (LF-04955-AF)
Oil and Gas Lease dated August 1, 1956, by and between Roy Wood, et al,
as Lessor, and Sidna Kruff, as Lessee, recorded in Volume 86, page 133 of the
Records of Ellis County, Oklahoma, INSOFAR AND ONLY INSOFAR as said lease
covers the NW/4 SE/4 of Section 20, Township 17 North, Range 22 West, Ellis
County, Oklahoma, LIMITED to rights from the surface to the base of the Tonkawa
formation. (LF-04957-AA-01)
Oil and Gas Lease dated April 27, 1966, by and between G. L. Gallaspy, as
Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162, page 631 of
the Records of Ellis County, Oklahoma, covering the NW/4 SE/4 of Section 20,
Township 17 North, Range 22 West, Ellis County, Oklahoma, LIMITED to rights
from the surface to the base of the Tonkawa formation. (LF-04957-AB-01)
Oil and Gas Lease dated April 27, 1966, by and between George D.
Gallaspy, as Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162,
page 633 of the Records of Ellis County, Oklahoma, covering the NW/4 SE/4 of
Section 20, Township 17 North, Range 22 West, Ellis County, Oklahoma, LIMITED
to rights from the surface to the base of the Tonkawa formation. (LF-04957-AC-
01)
Oil and Gas Lease dated April 21, 1966, by and between Texas W. Allen, as
Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162, page 629 of
the Records of Ellis County, Oklahoma, covering the NW/4 SE/4 of Section 20,
Township 17 North, Range 22 West, Ellis County, Oklahoma, LIMITED to rights
from the surface to the base of the Tonkawa Formation. (LF-04957-AD-01)
Oil and Gas Lease dated April 21, 1966, by and between Farmers United
Coop. Pool, as Lessor, and Shell Oil Company, as Lessee, recorded in Volume
162, page 625 of the Records of Ellis County, Oklahoma, covering the NW/4 SE/4
of Section 20, Township 17 North, Range 22 West, Ellis County, Oklahoma,
LIMITED to rights from the surface to the base of the Tonkawa formation. (LF-
04957-AE-01)
Oil and Gas Lease dated April 20, 1966, by and between Walter A. Povenz,
as Lessor, and Shell Oil Company, as Lessee, recorded in Volume 162, page 627
of the Records of Ellis County, Oklahoma, covering the NW/4 SE/4 of Section 20,
Township 17 North, Range 22 West, Ellis County, Oklahoma, LIMITED to rights
from the surface to the base of the Tonkawa formation. (LF-04957-AF-01)
Rights pursuant to Force Pooling Election effective June 7, 1966, from
Charles O. Tilghman to Shell Oil Company recorded in Force Pooling Election,
Ellis County, Oklahoma, covering the S/2 SE/4 of Section 20, Township 17 North,
Range 22 West, Ellis County, Oklahoma, as to the Tonkawa formation, pursuant to
Oklahoma Corporation Commission Cause CD No. 24573, Order No. 62735. (LF-
04960-AB-02)
The hereinabove referenced leases are subject to Operating Agreement dated
July 5, 1966, by and between Shell Oil Company, as Operator, and Amerada
Petroleum Corporation, et al, as Non-Operators; Purchase and Sale Agreement
dated December 19, 1985, by and between Shell Western E&P Inc. and Maynard Oil
Company; Assignment, Conveyance and Bill of Sale effective December 1, 1985, by
and between Shell Western E&P Inc. and Maynard Oil Company recorded in Volume
459, page 381 of the Records of Ellis County, Oklahoma.
Oil and Gas Lease dated August 3, 1956, by and between Roy Nuttall, et ux,
as Lessor, and George R. Aycock, as Lessee, recorded in Volume 83, page 323 of
the Records of Ellis County, Oklahoma, covering the S/2 SE/4 of Section 20,
Township 17 North, Range 22 West, Ellis County, Oklahoma (LF-04960-AA-02)
Oil and Gas Lease dated June 20, 1956, by and between Alva T. Mitchell, et
ux, as Lessor, and George R. Aycock, as Lessee, recorded in Volume 82, page 522
of the Records of Ellis County, Oklahoma, covering the SW/4 of Section 20,
Township 17 North, Range 22 West, Ellis County, Oklahoma (LF-04987-00)
The hereinabove referenced leases are subject to Operating Agreement dated
July 5, 1966, by and between Shell Oil Company, as Operator, and Amerada
Petroleum Corporation, et al, as Non-Operators; Assignment and Bill of Sale
effective May 1, 1985, by and between Sabine Corporation and Maynard Oil
Company recorded in Volume 466, page 870 of the Records of Ellis County,
Oklahoma, and Assignment, of Oil, Gas and Mineral leases dated June 17, 1994
from Kerr McGee Corporation by and between Maynard Oil Company, recorded in
Volume 575, page 706 of the Records of Ellis County, Oklahoma.
ELLIS AND ROGER MILLS COUNTIES, OKLAHOMA
PN 440402 (UT-404)
BROWN NO. 1A-27
EXPENSE INTEREST 1.0000000
REVENUE INTEREST 0.8746330
Oil and Gas Lease dated June 18, 1962, by and between Arnold W. Brown and
Faye Brown, as Lessors, and Mike Rainbolt, as Lessee, recorded in Volume 129,
page 464 of the Records of Ellis County, Oklahoma, covering the SW/4 NW/4 and
the NW/4 SW/4 of Section 27, Township 17 North, Range 22 West, Ellis County,
Oklahoma, LIMITED to rights from the surface to the base of the Tonkawa
formation. (LF-04949-00)
Oil and Gas Lease dated April 1, 1963, by and between the Department of
the Interior, Bureau of Land Management, bearing serial number NM-0140971, as
Lessor, and Merchants Petroleum Company, as Lessee, covering that portion of
Tract 7 as described in said lease, lying within the S/2 of Section 27,
Township 17 North, Range 22 West, being a portion of the Canadian River
Riparian to Lot 1 of Section 35 and Lot 2 of Section 34, Township 17 North,
Range 22 West, Roger Mills County, Oklahoma, LIMITED to rights from the surface
to the base of the Tonkawa formation. (LF-04950-00-01)
Oil and Gas Lease dated February 3, 1966, by and between J. I. Kirbie and
Emma F. Kirbie, as Lessor, and El Paso Products Company, as Lessee, recorded in
Volume 69, page 424 of the Records of Roger Mills County, Oklahoma, covering a
part of the SE/4 of Section 27, being accretions to Lot 5 of Section 26,
Township 17 North, Range 22 West, containing 6.89 acres, more or less, as
described in Communitization Agreement dated February 10, 1967, covering all of
Section 27, Township 17 North, Range 22 West, Roger Mills County, Oklahoma, the
afore tract being one and the same as referred to in previous assignments as a
tract containing 2.45 acres in the SE/4 of Section 27, Township 17 North, Range
22 West, constituting accretions to Lot 5 of Section 26, Township 17 North,
Range 22 West, Roger Mills County, Oklahoma, LIMITED to rights from the surface
to the base of the Tonkawa formation. (LF-04951-AA)
Oil and Gas Lease dated February 3, 1966, by and between Federal Land
Bank of Wichita, as Lessor, and El Paso Products Company, as Lessee, recorded
in Volume 69, page 428 of the Records of Roger Mills County, Oklahoma, covering
a part of the SE/4 of Section 27, being accretions to Lot 5 of Section 26,
Township 17 North, Range 22 West, containing 6.89 acres, more or less, as
described in Communitization Agreement dated February 10, 1967, covering all of
Section 27, Township 17 North, Range 22 West, Roger Mills County, Oklahoma, the
afore tract being one and the same as referred to in previous assignments as a
tract containing 2.45 acres in the SE/4 of Section 27, Township 17 North, Range
22 West, constituting accretions to Lot 5 of Section 26, Township 17 North,
Range 22 West, Roger Mills County, Oklahoma, LIMITED to rights from the surface
to the base of the Tonkawa formation. (LF-04951-AB)
Oil and Gas Lease dated August 8, 1956, by and between Arnold W. Brown
and Faye Brown, as Lessor, and George L. Aycock, as Lessee, recorded in Volume
83, page 229 of the Records of Ellis County, Oklahoma, covering Lots 2, 3, 4,
5, 6, 7 and the SE/4 NW/4 of Section 27, Township 17 North, Range 22 West, and
accretion and riparian thereto, Ellis County, Oklahoma, LIMITED to rights from
the surface to the base of the Tonkawa formation. (LF-04953-AA-01)
Oil and Gas Lease dated June 20, 1966, by and between Arthur M. Green and
Nellie Jane Green, as Lessors, and Shell Oil Company, as Lessee, recorded in
Volume 167, page 163 of the Records of Ellis County, Oklahoma,covering Lots 2,
3, 4, 5, 6, 7 and the SE/4 NW/4 of Section 27, Township 17 North, Range 22
West, and accretion and riparian thereto, Ellis County, Oklahoma, LIMITED to
rights from the surface to the base of the Tonkawa formation. (LF-04953-AB-01)
Oil and Gas Lease dated June 20, 1966, by and between Bennie Harmon and
Jenseni Harmon, as Lessor, and Shell Oil Company, as Lessee, recorded in Volume
167, page 165 of the Records of Ellis County, Oklahoma, covering Lots 2, 3, 4,
5, 6, 7 and the SE/4 NW/4 of Section 27, Township 17 North, Range 22 West, and
accretion and riparian thereto, Ellis County, Oklahoma, LIMITED to rights from
the surface to the base of the Tonkawa formation. (LF-04953-AD-01)
Oil and Gas Lease dated May 2, 1966, by and between Ruby M. Steinfelt, as
Lessor, and Shell Oil Company, as Lessee, recorded in Volume 167, page 161 of
the Records of Ellis County, Oklahoma, covering Lots 2, 3, 4, 5, 6, 7 and the
SE/4 NW/4 of Section 27, Township 17 North, Range 22 West, and accretion and
riparian thereto, Ellis County, Oklahoma, LIMITED to rights from the surface to
the base of the Tonkawa formation. (LF-04953-AE-01)
Oil and Gas Lease dated June 20, 1966, by and between Raymond Kinaman, as
Lessor, and Shell Oil Company, as Lessee, recorded in Volume 167, page 167 of
the Records of Roger Mills County, Oklahoma, covering Lots 2, 3, 4, 5, 6, 7 and
the SE/4 NW/4 of Section 27, Township 17 North, Range 22 West, and accretion
and riparian thereto, Ellis County, Oklahoma, LIMITED to rights from the
surface to the base of the Tonkawa formation. (LF-04953-AF-01)
Oil and Gas Lease dated August 3, 1956, by and between Elsie Nuttall, as
Lessor, and George L. Aycock, as Lessee, recorded in Volume 83, page 321 of the
Records of Ellis County, Oklahoma, covering Lot 1, NW/4 NE/4 and the N/2 NW/4
of Section 27, Township 17 North, Range 22 West, Ellis County, Oklahoma,
LIMITED to rights from the surface to the base of the Tonkawa formation. (LF-
04954-AA-04)
The hereinabove referenced leases are subject to Communitization Agreement
dated February 10, 1967, by and between Shell Oil Company and Royalty Owners,
effective August 1, 1966; Oklahoma Corporation Commission Cause No. 24144,
Order No. 62086; Purchase and Sale Agreement dated December 19, 1985, by and
between Shell Western E&P Inc. and Maynard Oil Company; Assignment, Conveyance
and Bill of Sale effective December 1, 1985, recorded in Volume 782, page 1 of
the Records of Roger Mills County, Oklahoma, and in Volume 459, page 381 of the
Records of Ellis County, Oklahoma and Natural Gas Purchase and Sale Contract
dated November 16, 1993, by and between Production Gathering Company and
Maynard Oil Company.
ROGER MILLS COUNTY, OKLAHOMA
PN 440413
HILL NO. 1-24 (UT-448)
EXPENSE INTEREST 0.0000000
REVENUE INTEREST 0.0507813
PN 440410
WILSON NO. 1-24 (UT-423)
EXPENSE INTEREST 1.0000000
REVENUE INTEREST 0.8095703
Oil and Gas Lease dated September 13, 1966, by and between Etola Snell,
as Lessor, and Humble Oil & Refining Company, as Lessee, recorded in Volume 75,
page 9 of the Records of Roger Mills, Oklahoma, covering the SE/4 SW/4 and SW/4
SE/4 AND E/2 SE/4 of Section 24, Township 17 North, Range 22 West, Roger Mills
County, Oklahoma, LIMITED to rights from the surface to the base of the Tonkawa
formation. (LF-04946-AA)
Oil and Gas Lease dated September 12, 1966, by and between Jessie
Carpenter, as Lessor, and Humble Oil & Refining Company, recorded in Volume 74,
page 626, of the Records of Roger Mills County, Oklahoma, covering SE/4 SW/4
and SW/4 SE/4 and E/2 SE/4 of Section 24, Township 17 North, Range 22 West,
Roger Mills County, Oklahoma, LIMITED to rights from the surface to the base of
the Tonkawa formation. (LF-04946-AB)
Oil and Gas Lease dated September 12, 1966, by and between Zelma Dukes, a
widow, as Lessor, and Humble Oil & Refining Company, as Lessee, recorded in
Volume 74, page 624 of the Records of Roger Mills, Oklahoma, covering SE/4 SW/4
and SW/4 SE/4 and E/2 SE/4 of Section 24 ,Township 17 North, Range 22 West,
Roger Mills County, Oklahoma, LIMITED to rights from the surface to the base of
the Tonkawa formation. (LF-04946-AC)
Oil and Gas Lease dated September 13, 1966, by and between Willie Bailey,
as Lessor, and Humble Oil & Refining Company, as Lessee, recorded in Volume 74,
page 622 of the Records of Roger Mills, Oklahoma, covering SE/4 SW/4 and SW/4
SE/4 and E/2 SE/4 of Section 24, Township 17 North, Range 22 West, Roger Mills
County, Oklahoma, LIMITED to rights from the surface to the base of the Tonkawa
formation. (LF-04946-AD)
Oil and Gas Lease dated September 12, 1966, by and between L. B. Barker,
a single man, as Lessor, and Humble Oil & Refining Company, as Lessee, recorded
in Volume 74, page 599 of the Records of Roger Mills, Oklahoma, covering the
SE/4 SW/4 and SW/4 SE/4 and E/2 SE/4 of Section 24, Township 17 North, Range 22
West, Roger Mills, Oklahoma, LIMITED to rights from the surface to the base of
the Tonkawa formation. (LF-04946-AE)
Oil and Gas Lease dated April 11, 1957, by and between Elton Everett
Hill, Trustee for Edward Everett Hill Estate Farms, as Lessor, and J. D.
Wesner, as Lessee, recorded in Volume 19, page 94 of the Records of Roger
Mills, Oklahoma, covering E/2 NW/4 of Section 24, Township 17 North, Range 22
West, Roger Mills County, Oklahoma. (LF-04947-00)
Oil and Gas Lease dated September 2, 1966, by and between R. C. Green, et
ux, as Lessor, and Shell Oil Company, as Lessee, recorded in Volume 74, page
630 of the Records of Roger Mills County, Oklahoma, covering the NW/4 SE/4,
NE/4 SW/4 and the W/2 SW/4 of Section 24, Township 17 North, Range 22 West,
Roger Mills County, Oklahoma, LIMITED to rights from the surface to the base of
the Cherokee Formation. (LF-04880-AA)
Oil and Gas Lease dated September 2, 1966, by and between Jimmy Wilson,
et ux, as Lessor, and Shell Oil Company, as Lessee, recorded in Volume 74, page
628 of the Records of Rogers Mills County, Oklahoma, covering the NW/4 SE/4,
NE/4 SW/4 and the W/2 SW/4 of Section 24, Township 17 North, Range 22 West,
Roger Mills County, Oklahoma, LIMITED to rights from the surface to the base of
the Cherokee Formation. (LF-04880-AB)
Oil and Gas Lease dated September 10, 1966, by and between C. G. Theis,
et al, as Lessor, and Shell Oil Company, as Lessee, recorded in Volume 75, page
122 of the Records of Rogers Mills County, Oklahoma, covering Lots 5, 6, 7 and
8, and the SE/4 SE/4 Section 23, and 10.59 acres in the bed of the Canadian
River in Section 23 riparian to the NW/4 of Section 24 and the W/2 NW/4 of
Section 24, Township 17 North, Range 22 West, Roger Mills County, Oklahoma,
LIMITED to rights from the surface to the base of the Cherokee Formation in
Section 24 only and from the surface to the base of the Tonkawa Formation in
the balance of the acreage. (LF-04945-00)
Oil and Gas Lease dated April 11, 1957, by and between E. E. Hill,
Trustee, as Lessor, and J. D. Wesner, as Lessee, recorded in Volume 19, page 92
of the Records of Roger Mills County, Oklahoma, covering the NE/4 of Section
24, Township 17 North, Range 22 West, Roger Mills County, Oklahoma, LIMITED to
rights from the surface to the base of the Cherokee Formation. (LF-04948-AA)
Oil and Gas Lease dated May 25, 1966, by and between M. H. Fariss, as
Lessor, and J. Cooper West, as Lessee, recorded in Volume 73, page 163 of the
Records of Roger Mills County, Oklahoma, covering the NE/4 of Section 24,
Township 17 North, Range 22 West, Roger Mills County, Oklahoma, LIMITED to
rights from the surface to the base of the Cherokee Formation. (LF-04948-AB)
Oil and Gas Lease dated June 14, 1966, by and between R. W. Slemaker, et
ux, as Lessor, and J. Cooper West, as Lessee, recorded in Volume 73, page 203
of the Records of Roger Mills County, Oklahoma, covering the NE/4 of Section
24, Township 17 North, Range 22 West, Roger Mills County, Oklahoma, LIMITED to
rights from the surface to the base of the Cherokee Formation. (LF-04948-AC)
Oil and Gas Lease dated June 14, 1966, by and between L. D. Chilton, as
Lessor, and J. Cooper West, as Lessee, recorded in Volume 73, page 205 of the
Records of Roger Mills County, Oklahoma, covering the NE/4 of Section 24,
Township 17 North, Range 22 West, Roger Mills County, Oklahoma, LIMITED to
rights from the surface to the base of the Cherokee Formation. (LF-04948-AD)
Oil and Gas Lease dated September 2, 1966, by and between Floyd Blaine,
et ux, as Lessor, and J. Cooper West, as Lessee, recorded in Volume 75, page
271 of the Records of Roger Mills County, Oklahoma, covering the NE/4 of
Section 24, Township 17 North, Range 22 West, Roger Mills County, Oklahoma,
LIMITED to rights from the surface to the base of the Cherokee Formation. (LF-
04948-AE)
Oil and Gas Lease dated July 14, 1966, by and between Earl Sneed, as
Lessor, and J. Cooper West, as Lessee, recorded in Volume 74, page 35 of the
Records of Roger Mills County, Oklahoma, covering the NE/4 of Section 24,
Township 17 North, Range 22 West, Roger Mills County, Oklahoma, LIMITED to
rights from the surface to the base of the Cherokee Formation. (LF-04948-AF)
Oil and Gas Lease dated June 9, 1966, by and between W. E. Spaid, et ux,
as Lessor, and J. Cooper West, as Lessee, recorded in Volume 73, page 161 of
the Records of Roger Mills County, Oklahoma, covering the NE/4 of Section 24,
Township 17 North, Range 22 West, Roger Mills County, Oklahoma, LIMITED to
rights from the surface to the base of the Cherokee Formation. (LF-04948-AG)
The hereinabove referenced leases are subject to Purchase and Sale
Agreement and Assignment, Conveyance and Bill of Sale effective December 1,
1985, by and between Shell Western E&P Inc., and Maynard Oil Company.