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EXHIBIT 10.2
BROTHERS OIL AND GAS INC.
CASH CALL #2
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EXHIBIT 10.2
May 1, 2001
BROTHERS OIL AND GAS INC.
BOX 31
SATURNA ISLAND, B.C., V0N 2Y0
TEL: 250-539-5680 FAX: 250-539-5683
Talal Yassin or Assignee
C/O #1208- 1030 West Georgia St.
Vancouver, B.C. V6E 2Y3
Dear Sirs: Cash Call
THE COALINGA NOSE PROSPECT
Production Specialties Co. and Brothers Oil and Gas Inc. have completed the due
diligence on the above prospect. We attach for your information:
a) Report of Mark Andersen
b) Lease Schedule
c) Land Platt
d) Joint Operating Agreement
e) Greka/Production Specialties Co. agreement dated January 1, 2001
f) Production Specialties Co., Brothers Oil and Gas Inc. and Olympic
Resources agreement
In carrying out our examination of Leases, a number of curative issues arose,
which we are addressing; none materially affect the land block.
In our original proposal, we were informed that the leases carried a 20%
landowner royalty to which we added a 5% royalty for Production Specialties Co.
and Brothers Oil and Gas Inc.. On examination, some leases have less than a 20%
Landowner Royalty and some slightly more; we will therefore express the farmout
to you as Landowner Royalty plus 5% royalty.
A) On the initial test well on Block 1, the farmees earn 74% net revenue
before payout and 56.25% after payout. On development wells on block 1, the
farmees earn 56.25% before and after payout (assuming Greka et al
participate as to a 25% working interest.)
B) On Block 2 leases, farmees pay 50% working interest to earn 37.5% net
revenue interest (assuming Greka et al participate as to a 50% working
interest)
(A) and (B) assume a 20% Landowner Royalty. If the Landowner Royalty is more or
less, the net revenue interest will vary accordingly.
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We require your payment of $US 22,500 wired to BROTHERS OIL AND GAS INC. no
later than May 2, 2001:
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WIRE TO:
Bank of America, University Branch(7161)
4795 South Maryland Parkway
Las Vegas, Nevada, 89119
(702) 654-4120
Transit # 122400724
Account #000081822066
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We have commenced title work on Well #1 and expect to commence drilling June
1-15. Funds for this well will be required NO LATER THAN MAY 24, 2001.
Please acknowledge by signing below that you are aware that we are acquiring
additional acreage in the area of Mutual Interest, as well as modifying to our
benefit some currently held leases. Therefore until:
a) we have completed final documentation
b) you have been notified in writing that we have completed modification
of the leases and/or completed additional lease agreements
any premature public announcements will cause financial loss to all parties and
the overall return on this project.
Please acknowledge receipt of and acceptance of this agreement and fax a
signature page to Brothers Oil and Gas at 250-539-5683
Brothers Oil and Gas Inc.
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Talal Yassin acknowledges receipt of Cash Call May 1, 2001 and the accompanying
cash call conditions and disclosure and elects to proceed with the option to
participate.
/s/ Talal Yassin Date May 1, 2001
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TALAL YASSIN
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