EXHIBIT 10.61
CLOSING AGREEMENT
THIS AGREEMENT ("Closing Agreement") made as of the 8th day of February,
2001
BETWEEN:
ROCKY MOUNTAIN GAS, INC., a body corporate incorporated under the laws
of the State of Wyoming (hereinafter referred to as "RMG")
- and -
QUANECO, L.L.C., a limited liability company organized under the laws
of the State of Oklahoma (hereinafter referred to as "Quaneco")
(RMG and Quaneco are hereinafter collectively referred to as "Farmor")
- and -
SUNCOR ENERGY (NATURAL GAS) AMERICA INC., a body corporate incorporated
under the laws of the State of Delaware (hereinafter referred to as
"Farmee")
WHEREAS, Farmor and Farmee are parties to that certain Option and Farmin
Agreement, made as of December 31, 2000 (the "Agreement"); and
WHEREAS, the parties hereto desire to confirm certain matters set out in
the Agreement regarding Closing and make revisions to the Agreement;
NOW, THEREFORE, in consideration of the premises hereto and the covenants
and agreements contained, the parties hereto covenant and agree as follows:
1.0 Definitions
Unless otherwise expressly indicated herein, the definitions of terms and words
set forth in the Agreement are adopted and incorporated herein by reference.
2.0 Closing
Farmor, in consideration for the Option Payment paid by Farmee as provided
for in the Agreement, the receipt and sufficiency of which is hereby
acknowledged by Farmor, hereby grants to Farmee the exclusive and irrevocable
right to conduct the Phase One Drilling Program on the Option Lands during the
Option Period. The parties hereto confirm and agree that Farmee will be the
operator of the Phase One Drilling Program and RMG will contribute Two Hundred
Fifty Thousand Dollars ($250,000.00) in cash to the cost of the Phase One
Drilling Program.
94
3.0 Revisions to Agreement
The parties hereto hereby agree to and accept the following revisions to
the Agreement.
a) Page 2, Subparagraph 1.1 i)(i): After "Petroleum Rights" add
"or Tangibles".
b) Page 3, Subparagraph 1.1 k): In the last line, replace "prior
to the Closing Date." with "within sixty (60) days after the
Closing Date."
c) Page 3, Subparagraph 1.1 n): In lines two and three, replace
"One Million Seven Hundred Six Thousand Eight Hundred Thirteen
Dollars and Forty cents ($1,706,813.40)" with "One Million
Seven Hundred Five Thousand Twelve Dollars and Seventy cents
($1,705,012.70)".
In lines four and five, replace "one hundred five thousand
one hundred seventy two decimal four (105,172.4)" with "one
hundred five thousand two hundred sixty five decimal six nine
(105,265.69)". In lines six and seven, replace "six thousand
four hundred sixty one decimal three seven (6,461.37)" with
"six thousand three hundred one decimal three seven
(6,301.37)".
d) Page 4, Subparagraph 1.1 v): In lines two and three, replace
"Three Million Six Hundred Eighty One Thousand Thirty Four
Dollars ($3,681,034.00)" with "Three Million Six Hundred
Eighty Four Thousand Two Hundred Ninety Nine Dollars and Ten
cents ($3,684,299.10". In lines four and five, replace "one
hundred five thousand one hundred seventy two decimal four
(105,172.4)" with "one hundred five thousand two hundred sixty
five decimal six nine (105,265.69)".
e) Page 4, Subparagraph 1.1 w): In lines two and three, replace
"Two Hundred Forty Five Thousand Five Hundred Thirty Two
Dollars and six cents ($245,532.06)" with "Two Hundred Thirty
Nine Thousand Four Hundred Fifty Two Dollars and Six cents
($239,452.06)". In lines four and five, replace "six thousand
four hundred sixty one decimal three seven (6,461.37)" with
"six thousand three hundred one decimal three seven
(6,301.37)".
f) Page 6, Paragraph 2.1: In line nine, add a period after
"Closing Date".
g) Page 11, Paragraph 4.2: In line one, after "the Option" add
"with respect to Block 1 of the Option Lands". In line one,
after "Purchase Price" add "1". In line two, replace "the
Option" with "said Option".
h) Page 15, Subparagraph 7.1 a): In line one, replace "any
leases, and" with "any lands which are subject to leases, or".
i) Page 16, Subparagraph 7.1 e): In line seven, replace "7.1(c)"
with "7.1(d)".
j) Page 19, Paragraph 9.7: At the end of the paragraph, add:
"The Parties agree that any costs of arbitration shall be
allocated in accordance with the participating interests
set out in Paragraph 3.5 hereof."
k) Schedule "A": Schedule "A" to the Agreement is replaced with
Schedule "A" attached to this Closing Agreement with the same
effect as if the Schedule "A" attached hereto had been
attached to the Agreement on the date of its execution.
l) Schedule "B": Schedule "B" to the Agreement is replaced with
Schedule "B" attached to this Closing Agreement with the same
effect as if the Schedule "B" attached hereto had been
attached to the Agreement on the date of its execution.
95
4.0 Conditions
All Closing conditions required by the Agreement to be satisfied at or
prior to the Closing Date have been satisfied or, if not satisfied, have been
waived by Farmee.
5.0 Drilling Permits
The Parties acknowledge and agree that sixty-one (61) of the seventy-nine
(79) drilling permits to be authorized by the Montana Board of Oil and Gas
Conservation ("MBOGC") within the Castle Rock area, pursuant to the Settlement
Agreement between the Northern Plains Resource Council and the MBOGC, will be
allocated for drilling under the Agreement. Further, the Parties acknowledge and
agree that fifty-six (56) drilling permits to be authorized by the Bureau of
Land Management within the Castle Rock area will be allocated for drilling under
the Agreement.
6.0 Non-Merger
This Closing Agreement is not intended to supersede the Agreement or to
vary or affect, or effect a merger of, any of the terms, conditions, covenants
representations or warranties thereof or contained therein, other than the
revisions to the Agreement contained in Paragraph 3.0 hereof, but is entered
into only for the purpose of making revisions to the Agreement, confirming the
status of the Closing conditions and effecting and confirming the payment of the
Option Payment and the grant by Farmor to Farmee of the right to conduct the
Phase One Drilling Program on the Option Lands in the manner and on the terms
set forth in the Agreement.
7.0 Enurement
This Closing Agreement shall be binding upon and shall enure to the benefit
of each of the parties hereto and their respective successors and permitted
assigns.
8.0 Further Assurances
Each party hereto will, from time to time, and at all times hereafter, at
the request of the other party hereto, but without further consideration, do all
such further acts and execute and deliver all such further documents as shall be
reasonably required in order to fully perform and carry out the terms hereof and
of the Agreement.
9.0 Effective Time
This Closing Agreement shall be effective as of the Closing Date.
96
IN WITNESS WHEREOF the parties hereto have executed this Closing Agreement as of
the date and year first above written, effective for all purposes as of the
Closing Date.
FARMOR
ROCKY MOUNTAIN GAS, INC. QUANECO, L.L.C.
Per: /s/ Peter G. Schoonmaker Per: /s/ Paul Mysyk
----------------------------------- -------------------------------
Name: Peter G. Schoonmaker Name: Paul Mysyk
---------------------------------- ------------------------------
Title: President Title: Managing Member
--------------------------------- -----------------------------
FARMEE
SUNCOR ENERGY (NATURAL GAS AMERICA INC.
Per: /s/ Stephen Kaufman Per: /s/ Frederick W. Obernolte, Jr.
----------------------------------- -------------------------------
Name: Stephen Kaufman Name: Frederick W. Obernolte, Jr.
---------------------------------- ------------------------------
Title: Vice President Title: Director
--------------------------------- -----------------------------
97