UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 26, 2006
COMPUPRINT, INC.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 333-90272 56-1940918
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
99 Park Avenue, 16th Floor, New York, New York 10016
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 286-0747
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.313e-4(c))
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Davidson Leasehold Transaction
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On January 26, 2006, TexTerra Exploration Partners, LP, a newly formed limited
partnership of which Terra Resources, Inc. (a first tier subsidiary of Terra
Insight Corporation, a wholly-owned subsidiary of CompuPrint, Inc.) is the
general partner, entered into agreements in furtherance of transactions pursuant
to a Farmout Agreement with Davidson Energy, L.L.C. and Johnson Children's Trust
No. 1, dated January 10, 2006. The Farmout Agreement regards the development of
the Richard Bellows 1280-acre oil and gas lease, covering two 640 acre tracts in
La Salle County, Texas. Davidson Energy, L.L.C. and Johnson Children's Trust No.
1 obtained the Bellows Lease by assignment from the original lessees, Darrel
Canion and Marian Canion and from other prior estate holders (Main Plaza
Corporation, Jarret B. Meuth and William R. Meuth, Jr who had reserved a mineral
fee estate). TexTerra's leasehold interest is subject to an approximate 25%
royalty interest to the assignors to Davidson and the Johnson Children's Trust,
leaving an approximately 75% net revenue interest to be split between Davidson
Energy and the Johnson Children's Trust, on the one hand, and TexTerra, on the
other hand.
Subject to the conditions set forth in the Farmout Agreement, Davidson Energy
and Johnson Children's Trust is to assign to TexTerra a 70% working interest
(70% of the 75% net revenue interest) in and to the Railroad Commission spacing
unit (a defined area around a well hole under Texas law). The purchase price for
TexTerra's 70% working interest is TexTerra's agreement to pay up to the
budgeted amount of $1,417,150 for drilling, testing, stimulating, completing and
equipping the initial well. Any additional costs are to be paid 70% by TexTerra
and 30% by Davidson Energy. The remaining 30% working interest (30% of the 75%
net revenue interest) shall be retained by Davidson Energy and Johnson
Children's Trust.
TexTerra's initial well interest and TexTerra's interest in the remaining
acreage under the leases shall, subject to the leases, be considered to be
earned at the later to occur of (a) deposit by TexTerra of the costs of drilling
the initial well, or (b) the deposit by TexTerra of the initial well dry hole
costs with the operator, at which time Davidson Energy and Johnson Children's
Trust shall deliver a fully executed and recordable assignment covering the
leases which conveys to TexTerra a 70% working interest in the initial well
spacing unit and a 50% working interest in all other acreage covered by the
leases.
After the initial well, Davidson Energy and Johnson Children's Trust shall have
the right, but not the obligation, to participate in a 50% interest in future
wells on the lease. The rights of the parties pursuant to the Farmout Agreement
will be subject to the terms of a joint operating agreement. In the event
Davidson Energy and Johnson Children's Trust elect not to participate in future
wells on the lease, they shall receive the carried interest discussed below.
In the event Davidson Energy and Johnson Children's Trust together decide not to
participate in a future well or wells on the lease, Davidson Energy and Johnson
Children's Trust shall promptly deliver a recordable assignment of their working
interest in and to the leases and the spacing unit assigned to the proposed
well, reserving therefrom a carried interest of a back-in 10% working interest.
Such back-in interest shall become effective if and when TexTerra reaches payout
on the lease. Payout shall be deemed to have occurred as of the first day of the
month following the month in which the result of the following formula is equal
to or greater than one: (a) TexTerra cumulative net production revenue (from
initial well plus wells subject to backin interest), divided by (b) TexTerra
cumulative cost (from initial well plus wells subject to backin interest).
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Funding for Drilling the Initial Well on the Davidson Leasehold
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In January 2006, to fund its obligations under the Farmout Agreement with
Davidson Energy and Johnson Children's Trust (the "Davidson Project"), TexTerra
entered into The Limited Partnership Agreement of TexTerra, dated as of January
22, 2006, between TexTerra, Terra Resources, Inc., the general partner, and
Enficon Establishment, a limited partner, which sets forth the rights and duties
of the partners. Pursuant to the Limited Partnership Agreement, Enficon is
responsible for $1,133,720, which is 80% of the budgeted costs ($1,417,150) for
the initial well on the Davidson Project, and 80% of the expenditures for
professional fees, including TexTerra'a oil and gas consultant, legal costs,
title review fees, the costs of the Company's technical studies, and additional
cash calls made by Terra Resources to cover the direct costs from third parties
directly related to the Davidson Project.
If additional funding is required for the initial well, Terra Resources and
Enficon are to be responsible for such additional costs in the ratio of 20% to
80%, respectively. Enficon's interest in TexTerra is limited to the initial well
to be drilled in the Davidson Project, to the extent of 65% of the net revenue
interest received by TexTerra after payment of a 5% overriding royalty to Terra
Insight Corporation and after repayment of the budgeted costs paid by Enficon
and Terra Resources. Until such budgeted costs are paid back in full to Enficon
and Terra Resources, TexTerra will pay revenue it receives 80% to Enficon and
20% to Terra Resources after payment of the 5% overriding royalty to Terra
Insight Corporation.
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS
Exhibit Description
Number of Exhibit
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10.1* Farmout Agreement between Davidson Energy, L.L.C., Johnson
Children's Trust No. 1, and TexTerra Exploration Partners LP, dated
January 10, 2006.
10.2* Limited Partnership Agreement of TexTerra Exploration Partners, LP,
dated as of January 22, 2006
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* Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COMPUPRINT, INC.
Date: February 3, 2006
By: /s/ Roman Rozenberg
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Roman Rozenberg
Chief Executive Officer
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