Exhibit 2.1
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into this
18th day of October, 2011, between, GRYPHON PRODUCTION COMPANY, LLC, a wholly
owned subsidiary of Chancellor Group, Inc., with offices at 216 South Price
Road, Pampa, Texas 79065 (herein "Seller"), and LCB RESOURCES, an Oklahoma
limited liability company with offices at 406 N. Main Street, Kingfisher,
Oklahoma 73750-2322 (herein "Buyer"),
RECITALS
A. The Seller is the owner of its undivided, pro rata share of interests in
and to the following:
(i) The oil and gas leases (and any and all amendments, corrections
and modifications thereto whether or not described on Exhibit "A-1") described
on Exhibit "A-1," insofar as the leases cover the lands described on Exhibit
"A-1" (the "Leases"); and the oil and gas wells on the leases described on
Exhibit "A-2" (the "Wells");
(ii) The personal property, equipment and fixtures, located on or
about the Leases and used in connection with operation of the Leases and Wells
described on Exhibit "A-2" (the "Equipment"), including the personal property
described in the attached Exhibit "B;"
(iii) The land (the "Land") described in the attached Exhibit "C;"
(iv) The rights and obligations existing under the instruments,
contracts and agreements that benefit or burden the Leases and Wells, including,
but not limited to, operating agreements, unitization agreements, pooling
agreements, pooling orders, spacing orders, declarations of pooling or
unitization, farm out agreements, rights of way, easements, surface agreements,
permits, licenses, assignments, gas sale contracts, and gas processing contracts
(collectively, the "Contracts");
(v) The oil, gas, casinghead gas, condensate, distillate, liquid
hydrocarbons, gaseous hydrocarbons, products refined and manufactured therefrom,
other minerals, and the accounts and proceeds from the sale of all of the
foregoing (the "Production") under the terms of the Leases and the Contracts;
and
(vi) The files, records, data, including geophysical and seismic data,
and other documentary information of Seller pertaining to the Wells, the Leases,
the Equipment, the Land, the Contracts, and the Production, (collectively, the
"Data").
The Leases, Wells, Equipment, Land, Contracts, Production, and Data are
collectively called the "Properties".
B. Buyer wishes to purchase and Seller wishes to sell, all of Seller's
right, title and interest in the Properties.
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C. The Properties sold and assigned under this Agreement do not include and
Seller hereby retains and reserves:
(i) Proprietary seismic, geological, geochemical, and geophysical data
or interpretations of data and other information relating to the Leases and
Wells that are restricted from transfer or distribution by any legal
constraints, obligations of confidence or prior agreements with third parties;
(ii) Trade credits, accounts, deposits with utilities, and notes
receivable and adjustments or refunds (including without limitation
transportation tariff refunds, take-or-pay claims, audit adjustments claims for
under-or-non-payment and over, inaccurate or excessive billings, and claims with
respect to breach of contract) arising under the Contracts and attributable to
the Properties with respect to any period before the Effective Time, including,
without limitation, any claim Seller may have for refunds or reimbursement of
money that may have been paid by Seller to any current or prior operator of the
Properties on account of over-billings, excessive billings and inaccurate
billings or otherwise made by such operator as a result of Seller's interest in
the Properties;
(iii) Oil, gas, casinghead gas, condensate, distillate, liquid
hydrocarbons, gaseous hydrocarbons, products refined and manufactured therefrom,
and other minerals produced from the Properties prior to the Effective Time; and
(iv) All claims and causes of action Seller may have as of the Closing
Date.
CONSIDERATION AND AGREEMENT
In consideration of the covenants and conditions contained in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Buyer agrees to purchase all of Seller's
right, title and interest in and to the Properties from Seller, and Seller
agrees to sell all of Seller's right, title and interest in and to the
Properties to Buyer on the terms set forth below.
TERMS
1. PURCHASE PRICE. The Purchase Price shall be Two Million Fifty Thousand
Dollars ($2,050,000.00), adjusted as provided herein. Immediately upon the
execution hereof, Buyer shall pay, by bank wire transfer into an escrow account
established by Midwest Energy Auction LLC, (the "Escrow Agent") at BancFirst
Oklahoma City, as earnest money ("Deposit") equal to One Hundred Thousand
Dollars, to be credited towards the Purchase Price. At closing, Buyer shall pay,
by bank wire transfer, the remaining net balance of the Purchase Price due to
the Seller, to the escrow agent. Escrow agent will disburse the net proceeds
from the sale to the Seller per a certain "Escrow Agreement" between Buyer,
Seller, and Escrow Agent. Seller is responsible for the four percent (4%) of the
sales price commission owed to Midwest Energy Auction (MEA) in accordance with
the service agreement between Seller and MEA. Escrow Agent shall prepare and
deliver to Buyer and Seller for approval no later than three (3) business days
prior to Closing, a Preliminary Settlement Statement reflecting the appropriate
adjustments for approval by Buyer and Seller, as follows:
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(A) UPWARD ADJUSTMENTS. The Purchase Price shall be adjusted upward by the
following:
(i) the amount of all direct costs and expenditures chargeable to the
Properties for periods on and after the Effective Time (as hereinafter defined)
and incurred and paid by or on behalf of Seller in accordance with the terms and
provisions of this Agreement, including:
(A) those that are attributable to the drilling, completion,
recompletion, reworking, operation, repair and maintenance of the Properties for
the period on and after the Effective Time, through and including the Closing
Date;
(B) bonuses, lease rentals and shut-in payments due and paid for
the period on and after the Effective Time through and including the Closing
Date;
(C) ad valorem, property and other taxes that are allocated to
the Buyer pursuant to Section 13 of this Agreement; and
(D) amounts relating to obligations arising under contracts with
respect to operations or production for the period on and after the Effective
Time through and including the Closing Date;
(ii) the actual value of the oil inventory in storage attributable to
the Properties as of the Effective Time, net of all taxes and burdens, which
value shall be determined based on the price of oil the day Buyer sells the oil;
and
(iii) any other amount agreed by Seller and Buyer.
(B) DOWNWARD ADJUSTMENTS. The Purchase Price shall be adjusted downward by
the following:
(i) the amount of all gross proceeds (net of burdens) for hydrocarbons
produced from and attributable to Seller's interest in the Properties on or
after the Effective Time through the Closing Date;
(ii) the amount of all other proceeds and/or revenue attributable to
Seller's interest in and to the Properties on or after the Effective Time
through the Closing Date;
(iii) any other amount agreed upon by Seller and Buyer.
(c) At the Effective Time, Seller shall gauge the oil in storage
attributable to the Properties unless Buyer and Seller agree otherwise. Buyer
shall have the right to have a representative present when Seller gauges the oil
in storage.
2. CLOSING. Subject to the conditions and adjustments set forth herein, the
consummation of the transaction contemplated hereby (the "Closing") shall be
held on or before December 3, 2011 (the "Closing Date") at Seller's office in
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Pampa, Texas. At Closing, the following events shall occur, each being a
condition precedent to the others:
(a) Seller shall execute, acknowledge and deliver to Buyer one or more
assignments, bills of sale and conveyances (in sufficient multiple originals to
facilitate recording) in substantially the form of Exhibit D conveying Seller's
interests in the Properties to Buyer;
(b) Buyer shall deliver to Escrow Agent the Purchase Price, direct bank or
wire transfer in immediately available federal funds to the Escrow Account as
agreed upon in writing no less than five (5) business days prior to the Closing
Date;
(c) The parties shall execute such other documents, notices, waivers, and
agreements as are necessary in order to carry out the intent of this Agreement;
(d) Seller shall execute and deliver to Buyer, on forms prepared by Seller
and reasonably acceptable to Buyer, transfer orders or letters in lieu thereof
directing all purchasers of production to make payment to Buyer of proceeds
attributable to production from the Properties from and after the Effective
Time; and
(e) Seller shall provide Buyer with executed change of operator forms on
all wells (active or inactive) operated by Seller, as required by the applicable
state regulatory body, to effect a change of operator for the Properties,
subject to any applicable operating agreement, but only to the extent allowed or
permitted by such operating agreements.
3. EFFECTIVE TIME. The ownership of Seller's interest in the Properties shall be
transferred from Seller to Buyer on the Closing Date, effective as of 11:59 p.m.
in the time zone applicable to the location of the Properties on December 1,
2011 (the "Effective Time").
4. DATA. Seller makes no representations or warranties as to the accuracy or
completeness of the Data. Seller shall not allow Buyer access to geophysical or
seismic data if, by so doing, Seller would be in breach of any unaffiliated
third party contract or agreement. Buyer agrees to allow Seller access to the
Data upon reasonable notice. After Closing, Seller shall have the right from
time to time to make copies of any part of the Data during Buyer's regular
business hours. Buyer shall keep all of the Data for at least five (5) years
after Closing.
5. OTHER ASSURANCES. Seller shall reasonably cooperate with Buyer, and shall
provide all conveyances, agreements, consents, information, forms, and other
materials or acts reasonably necessary to vest Buyer with ownership of Seller's
interest in the Properties.
6. RISK OF LOSS. Risk of loss of the Properties shall pass from Seller to Buyer
as of 11:59 p.m. Central time on the Closing Date. Seller represents and
warrants to Buyer that the Properties are insured for amounts and risk coverages
that are standard and customary in the industry for properties of a similar
nature. In the event of the destruction or taking of all or any part of the
Properties during the period of time from the Effective Time through the Closing
Date, at the Closing Date, Seller shall pay to Buyer all sums paid to Seller by
third parties, if any, by reason of such destruction or taking of all or any
portion of the Properties, and shall assign, transfer and set over unto Buyer
all of the right, title and interest of Seller in and to any unpaid awards or
other payments from third parties arising out of the destruction, taking or
pending or threatened taking as to the Properties.
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7. CONTRACTS AND LEASES. Upon Closing, Buyer shall assume and agree to perform
the Contracts and the obligations of Seller under the Leases as of the Closing
Date and the payment obligations of Seller under the Leases, and the surface
agreements and other agreements described in Schedule 4. Buyer shall use
commercially reasonable efforts to obtain a release of Seller of all obligations
under the Leases and the surface agreements and other agreements described in
Schedule 4. Buyer shall indemnify, save and hold harmless Seller and Seller's
officers, directors, managers, agents, employees, successors and assigns from
and against any and all costs, losses, liabilities, damages, lawsuits, claims,
and expenses, including (without limitation) reasonable attorney's fees, arising
from and after the Closing Date from any of the Leases or the surface agreements
or other agreements described in Schedule 4.
8. SELLER'S WARRANTIES AND REPRESENTATIONS. Each Seller, severally and only to
the extent of such Seller's (i) individual entity, with respect to entity
related representations and warranties, or (ii) Ownership Share, with respect to
Property related representations and warranties, makes the following
representations and warranties.
(a) The assignment of Seller's interest in the Properties to Buyer shall be
made by special warranty of title as to only those claims, liens and
encumbrances arising by, through and under Seller, but not otherwise. Subject to
all of the terms and provisions of this Agreement and except with respect to
those matters that would result in a breach of the special warranty of title,
Buyer assumes the risk of condition of the Properties as set out in the
Assignment and Bill of Sale, including compliance with all laws, rules, orders
and regulations affecting the environment, whether existing before, on or after
the Closing Date. The Assignment and Bill of Sale from Seller to Buyer shall
disclaim any warranty of merchantability or fitness for particular purpose as to
the Properties, and Buyer shall accept the Properties AS IS, WHERE IS, and in
their present location and condition.
(b) Seller is duly qualified to carry on its business and is in good
standing in each state where the nature of its business requires qualification.
The consummation of the transactions contemplated by this Agreement will not
violate or be in conflict with (i) any provision of Seller's organizational
documents, and (ii) any provision of any agreement to which Seller is a party or
by which Seller is bound or any judgment, decree, order, statute, rule or
regulation applicable to Seller.
(c) Seller has the power to enter into and perform this Agreement and the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the transactions contemplated hereby have been duly and
validly authorized by all requisite limited liability company action on the part
of Seller. This Agreement has been duly executed and delivered on behalf of
Seller and, at Closing, all documents and instruments required hereunder to be
executed and delivered by Seller shall have been fully executed and delivered.
(d) This Agreement constitutes a legal, valid and binding obligation of
Seller enforceable in accordance with its terms, subject, however, to the
effects of bankruptcy, insolvency, reorganization, moratorium and similar laws,
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as well as to principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(e) Except as set forth in Schedule 1 hereto, there are no pending or, to
Seller's knowledge, threatened, suits, actions, or other proceedings naming
Seller as a party and affecting the Properties (including, without limitation,
any actions challenging or pertaining to Seller's title to any of the Properties
and/or the effect of any environmental laws on any of the Properties). There are
no suits, actions, or other proceedings pending or, to Seller's knowledge,
threatened, which relate to or affect the execution and delivery of this
Agreement by Seller or the consummation by Seller of the transactions
contemplated hereby.
(f) Except as set forth on Schedule 2 hereto, there are no outstanding
Authorizations for Expenditure ("AFE's") that will result in charges for
operations to be performed on the Properties on or after the Effective Time
costing $20,000 or more net to the interest transferred under this Agreement.
Seller currently intends to plug the East Pampa Unit 16W well and the Worley
Combs 406 well, and Seller shall be responsible for plugging the wells.
(g) All ad valorem, property, production, severance, excise and similar
taxes and assessments based on or measured by the ownership of the Properties or
the production of hydrocarbons or the receipt of proceeds therefrom that have
become due and payable have been properly paid.
(h) Except as set forth in Schedule 3 hereto, to Seller's knowledge, Seller
has complied, or has remedied any noncompliance, with the material provisions
and requirements of all orders, regulations and rules issued or promulgated by
all federal, tribal, state or local governmental authorities having jurisdiction
in respect of the Properties (excluding, however, compliance with applicable
Environmental Laws (as hereinafter defined) which is exclusively dealt with in
Section 11 hereof).
(i) None of the Properties is subject to penalties on allowables after the
Effective Date because of overproduction or any violation of applicable laws,
rules or regulations of any governmental authority which would prevent such
Property from being entitled to its full and regular allowable from and after
the Effective Date, and Seller has not produced a share of gas greater than its
ownership percentage and Seller is under no obligation to reduce its share of
production under any gas balancing agreement or similar contract to allow
under-produced parties to come back into balance.
9. REPRESENTATIONS OF BUYER.
(a) Buyer is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Oklahoma, and is duly
qualified to carry on its business and is in good standing in each state where
the nature of its business requires qualification. The consummation of the
transactions contemplated by this Agreement will not violate or be in conflict
with (i) any provision of Buyer's organizational documents, and (ii) any
provision of any agreement to which Buyer is a party or by which Buyer is bound
or any judgment, decree, order, statute, rule or regulation applicable to Buyer.
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(b) Buyer has the limited liability company power to enter into and perform
this Agreement and the transactions contemplated hereby. The execution, delivery
and performance of this Agreement and the transactions contemplated hereby have
been duly and validly authorized by all requisite limited liability company
action on the part of Buyer. This Agreement has been duly executed and delivered
on behalf of Buyer and, at Closing, all documents and instruments required
hereunder to be executed and delivered by Buyer shall have been fully executed
and delivered.
(c) This Agreement constitutes a legal, valid and binding obligation of
Buyer enforceable in accordance with its terms, subject, however, to the effects
of bankruptcy, insolvency, reorganization, moratorium and similar laws, as well
as to principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(d) Buyer is experienced and knowledgeable in the oil and gas business and
is aware of its risks. Buyer acknowledges that Seller has made no
representations or warranties whatsoever, express or implied, as to the reserves
attributable to the Properties or the value thereof, except as otherwise
specifically set forth herein, as to the condition or state of repair of any of
the Properties or as to the legal, tax or other consequences of the transaction
contemplated by this Agreement. In entering into this Agreement, Buyer has
relied solely upon its independent investigation of, and judgment with respect
to, such matters. Buyer understands and accepts the risks and absence of
liquidity inherent in ownership of the Properties. Buyer acknowledges that,
except as otherwise specifically set forth herein, no representations have been
made by Seller regarding any environmental conditions or physical conditions of
the Properties, past or present.
(e) Buyer has all authority necessary to enter into this Agreement and to
perform all of its obligations hereunder.
10. LIABILITIES AND INDEMNITIES. AS USED IN THIS SECTION 10, THE WORD "CLAIMS"
MEANS CLAIMS, DEMANDS, CAUSES OF ACTION, LIABILITIES, DAMAGES, PENALTIES AND
JUDGMENTS OF ANY KIND OR CHARACTER AND ALL COSTS AND EXPENSES, INCLUDING
REASONABLE ATTORNEY'S FEES AND COURT COSTS INCURRED IN DEFENDING AGAINST SAME OR
TO ENFORCE A PARTY'S OBLIGATION TO INDEMNIFY AGAINST SAME, IN CONNECTION
THEREWITH.
(A) EXCEPT AS PROVIDED IN SECTION 10(C), FROM AND AFTER THE CLOSING DATE,
BUYER SHALL ASSUME, BE RESPONSIBLE FOR AND COMPLY WITH ALL DUTIES AND
OBLIGATIONS OF SELLER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTIES
INCLUDING, WITHOUT LIMITATION, THOSE ARISING UNDER OR BY VIRTUE OF ANY LEASE,
ASSIGNMENT OF LEASE, CONTRACT, AGREEMENT, DOCUMENT, PERMIT, APPLICABLE STATUTE
OR RULE, REGULATION OR ORDER OF ANY GOVERNMENTAL AUTHORITY, SPECIFICALLY
INCLUDING, WITHOUT LIMITATION, ANY GOVERNMENTAL REQUEST OR REQUIREMENT TO PLUG,
RE-PLUG AND/OR ABANDON ANY WELL OF WHATSOEVER TYPE, STATUS OR CLASSIFICATION, OR
TO TAKE ANY CLEAN-UP, POLLUTION, ENVIRONMENTAL, OR OTHER ACTION WITH RESPECT TO
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THE PROPERTIES, AND SHALL DEFEND, INDEMNIFY AND HOLD SELLER AND ITS MEMBERS,
MANAGERS, AFFILIATES, SUBSIDIARIES, MANAGERS, OFFICERS, AGENTS, EMPLOYEES AND
CONTRACTORS HARMLESS FROM ANY AND ALL CLAIMS IN FAVOR OF ANY PERSON OR ENTITY
(INCLUDING WITHOUT LIMITATION EMPLOYEES OF BUYER) IN CONNECTION THEREWITH
REGARDLESS OF WHEN THE DUTY OR OBLIGATION AROSE, EXCEPT AS IS PROVIDED IN
SECTION 10(C).
(B) EXCEPT AS PROVIDED IN SECTION 10(C), BUYER SHALL BE RESPONSIBLE FOR AND
SHALL DEFEND, INDEMNIFY AND HOLD SELLER AND ITS MEMBERS, AFFILIATES,
SUBSIDIARIES, MANAGERS, OFFICERS, AGENTS, EMPLOYEES AND CONTRACTORS HARMLESS
FROM ANY AND ALL CLAIMS ARISING, DIRECTLY OR INDIRECTLY IN FAVOR OF ANY PERSON
OR ENTITY (INCLUDING WITHOUT LIMITATION EMPLOYEES OF BUYER AND GOVERNMENTAL
ENTITIES) ARISING OUT OF OR IN CONNECTION WITH THE OPERATIONS ON OR PERTAINING
TO THE PROPERTIES ON AND AFTER THE CLOSING DATE FOR PERSONAL INJURY OR DEATH OR
DAMAGE TO PROPERTY, OR FOR ANY OTHER RELIEF (INCLUDING CLAIMS RELATED TO
POLLUTION OR ENVIRONMENTAL HAZARDS AND LIABILITIES ARISING PRIOR TO ON, OR AFTER
THE CLOSING DATE), ARISING DIRECTLY OR INDIRECTLY FROM, OR INCIDENT TO, THE USE,
OCCUPATION, OPERATION, MAINTENANCE OR ABANDONMENT OF ANY PART OR ALL OF THE
PROPERTIES, WHETHER LATENT OR PATENT, AND WHETHER ARISING FROM OR CONTRIBUTED TO
BY THE SOLE OR CONCURRENT NEGLIGENCE, FAULT BY STATUTE, RULE OR REGULATION,
STRICT LIABILITY, OR OTHER FAULT OF SELLER OR ITS MEMBERS, AFFILIATES,
SUBSIDIARIES, MANAGERS, OFFICERS, AGENTS, EMPLOYEES OR CONTRACTORS AND ASSERTED
AGAINST BUYER AND/OR SELLER.
(C) SUBJECT TO THE PROVISIONS OF SECTION 10(D) HEREOF, SELLER SHALL BE
RESPONSIBLE FOR AND SHALL DEFEND, INDEMNIFY AND HOLD BUYER AND ITS AFFILIATES,
SUBSIDIARIES, OFFICERS, PARTNERS, AGENTS, EMPLOYEES, AND CONTRACTORS HARMLESS
FROM ANY AND ALL CLAIMS ARISING DIRECTLY OR INDIRECTLY IN FAVOR OF ANY PERSON OR
ENTITY (INCLUDING, WITHOUT LIMITATION, EMPLOYEES OF SELLER AND GOVERNMENTAL
ENTITIES) OUT OF OR IN CONNECTION WITH (i) THE OPERATIONS ON OR PERTAINING TO
THE PROPERTIES FOR THE PERIOD FROM THE DATE SELLER ACQUIRED TITLE TO THE
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PROPERTIES TO THE CLOSING DATE FOR PERSONAL INJURY OR DEATH OR DAMAGE TO
PROPERTY (EXCLUDING CLAIMS RELATED TO PLUGGING OF WELLS, POLLUTION OR
ENVIRONMENTAL HAZARDS AND LIABILITIES WHICH ARE COVERED BY THE PROVISIONS OF
SECTIONS 10(A) AND (B) HEREOF), ARISING DIRECTLY OR INDIRECTLY FROM, OR INCIDENT
TO, THE USE, OCCUPATION, OPERATION, MAINTENANCE OR ABANDONMENT OF ANY PART OR
ALL OF THE PROPERTIES, WHETHER LATENT OR PATENT, AND WHETHER ARISING FROM OR
CONTRIBUTED TO BY THE SOLE OR CONCURRENT NEGLIGENCE, FAULT BY STATUTE, RULE OR
REGULATION, STRICT LIABILITY, OR OTHER FAULT OF SELLER OR ITS MEMBERS,
AFFILIATES, SUBSIDIARIES, MANAGERS, OFFICERS, AGENTS, EMPLOYEES OR CONTRACTORS
AND ASSERTED AGAINST BUYER AND/OR SELLER (OR BUYER'S AFFILIATES, SUBSIDIARIES,
PARTNERS, OFFICERS, AGENTS, EMPLOYEES OR CONTRACTORS), AND (ii) THE PRODUCTION
OR SALE OF HYDROCARBONS FROM THE PROPERTIES AND INVOLVING THE PROPER ACCOUNTING
OR PAYMENT (x) TO PARTIES FOR THEIR INTEREST THEREIN, INCLUDING, WITHOUT
LIMITATION, ROYALTY AND OTHER WORKING INTEREST OWNERS, (y) TAXES ATTRIBUTABLE TO
THE PROPERTIES AND PRODUCTION FROM OR ATTRIBUTABLE THERETO, AND (z) LEASE
OPERATING EXPENSES ATTRIBUTABLE TO SELLER'S INTEREST IN AND TO THE PROPERTIES,
INSOFAR AS SUCH CLAIMS RELATE TO PERIOD OF TIME FROM THE DATE THAT SELLER
ACQUIRED TITLE TO THE PROPERTIES TO THE CLOSING DATE. BUYER SHALL BE RESPONSIBLE
FOR ALL OF SAID TYPES OF CLAIMS UNDER CLAUSE (ii) INSOFAR AS THEY RELATE TO
PERIODS OF TIME PRIOR TO THE DATE THAT SELLER ACQUIRED TITLE TO THE PROPERTIES
AND FROM AND AFTER THE CLOSING DATE, AND BUYER SHALL DEFEND, INDEMNIFY AND HOLD
SELLER HARMLESS FROM ANY AND ALL OF SUCH CLAIMS.
(D) ALL AGREEMENTS AND INDEMNITIES SET FORTH IN THIS SECTION 10 SHALL
SURVIVE THE EXECUTION AND DELIVERY OF THE ASSIGNMENTS AND BILLS OF SALE
CONTEMPLATED HEREBY AND THE CLOSING AS OTHERWISE SET FORTH IN SECTION 26 HEREOF.
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11. REVIEW PERIOD AND DEFECTS.
(a) Upon the execution of this Agreement, Buyer, or Buyer's representative,
shall have the right to examine and photocopy, but not take, the Data in
Seller's offices during normal business hours. All such information is furnished
to Buyer solely as a courtesy, and, except as otherwise set forth herein, Seller
makes no representations or warranties concerning its accuracy or completeness,
and assumes no liability for any use by Buyer whatsoever. Buyer shall have until
November 1, 2011 as of 5:00 pm (C.D.T.) where the Properties are located (the
"Defect Date") to review and inspect the Properties and to notify Seller of any
Defect (as defined below). Such notice shall be in writing and shall
sufficiently describe the Defect and the Properties affected. During the review
period, upon not less than two business days prior notice to Seller, Buyer may
review all the Data, inspect all of the Equipment, and may go upon the Leases at
its own risk to do so. Buyer agrees to hold harmless and indemnify Seller for
any damages or injury of any kind incurred by any party as the result of such
inspection regardless of whether such damage or injury results, in whole or in
part, from the sole or concurrent negligence, fault by statute, rule or
regulation, strict liability or other fault of Seller. Buyer shall have access
to and copies of standard financial information relating to the Properties
including joint interest billing reports, lease operating expenses, production
volumes and other similar information normally available in connection with the
physical operation of the Properties (including, but not limited to, division
orders, checks and, in the event of an audit, other Property related documents,
as necessary).
(b) The term "Defect" as used herein shall mean the following:
(i) Seller's ownership of the Properties is such that, with respect to
a property listed on Exhibit "A-1" hereto, it clearly (A) entitles Seller to
receive a decimal share of the oil, gas and other hydrocarbons produced from, or
allocated to, such property which is less than the net revenue interest decimal
share set forth on Exhibit "A-1", (B) causes Seller to be obligated to bear a
working interest decimal share of the cost of operation of such property greater
than the decimal share set forth on Exhibit "A-1" (without a proportionate
increase in the share of production to which Seller is entitled to receive from
such property);
(ii) Seller's ownership of the Properties is subject to a lien other
than (A) liens which will be released at or before Closing, (B) a lien for taxes
not yet delinquent, or (C) a lien under an operating agreement or similar
agreement which relates to expenses incurred which but not yet due;
(iii) Seller's ownership of the Properties is subject to a
preferential right to purchase, unless an appropriate tender of the applicable
interest has been made by Seller to the party holding such right and the period
of time required for such party to exercise such right has expired without such
party exercising such right;
(iv) A Property is affected by any suit, action or other proceeding
before any court or government agency that would result in a material loss or
impairment of Seller's title to any portion of the Property, or a portion of the
value thereof; and
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(v) The Properties are, or one or more Property is, in violation of
Environmental Laws.
(vi) As used in this Agreement, the term "Environmental Laws" means
any and all applicable laws pertaining to human health or conservation or
protection of the environment, wildlife, or natural resources in effect in any
and all jurisdictions in which the Properties are located, including, without
limitation, the Clean Air Act, as amended, the Federal Water Pollution Control
Act, as amended, the Safe Drinking Water Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended ("CERCLA"),
the Superfund Amendments and Reauthorization Act of 1986, as amended ("SARA"),
the Resource Conservation and Recovery Act, as amended ("RCRA"), the Hazardous
and Solid Waste Amendments Act of 1984, as amended, the Toxic Substances Control
Act, as amended, and the Occupational Safety and Health Act, as amended
("OSHA"), and any applicable state, tribal, or local counterparts. The terms
"hazardous substance", "release", and "threatened release" shall have the
meanings specified in CERCLA; the terms "solid waste," "hazardous waste," and
"disposal" shall have the meanings set out in RCRA; provided, however, that to
the extent the laws of the state in which the Properties are located are
applicable and have established a meaning for "hazardous substance", "release",
"threatened release", "solid waste", "hazardous waste", and "disposal" that is
broader than that specified in CERCLA or RCRA, such broader meaning shall apply
with respect to the matters covered by such laws.
(c) If Buyer fails to notify Seller in writing by the Defect Date of any
such Defect, the Defect will be deemed waived, Seller shall be released from any
liability therefor, the parties shall proceed with Closing, Seller shall be
under no obligation to correct the Defect, and Buyer shall assume the risks,
liability and obligations associated with such Defect. Seller may, but is not
obligated, to cure any Defect within ten (10) days after Seller receives timely
written notice of the Defect. If Seller fails to cure the Defect by the time
required, Buyer may terminate this Agreement by providing written notice to
Seller within five (5) days after the time by which Seller must cure the Defect.
If Buyer terminates this Agreement for Seller's failure to cure a Defect, the
Deposit shall be refunded to Buyer.
12. SELLER'S DISCLAIMERS. EXCEPT FOR SELLER'S SPECIAL WARRANTY OF TITLE TO THE
PROPERTIES AND AS OTHERWISE SPECIFICALLY SET FORTH IN THIS AGREEMENT, SELLER
SELLS AND TRANSFERS THE PROPERTIES TO BUYER WITHOUT ANY EXPRESS, STATUTORY OR
IMPLIED WARRANTY OR REPRESENTATION OF ANY KIND, INCLUDING WARRANTIES RELATING TO
(i) THE CONDITION OR MERCHANTABILITY OF THE PROPERTIES, OR (ii) THE FITNESS OF
THE PROPERTY FOR A PARTICULAR PURPOSE. BUYER HAS INSPECTED, OR BEFORE CLOSING
WILL HAVE INSPECTED OR BEEN GIVEN THE OPPORTUNITY TO INSPECT, THE PROPERTIES AND
IS SATISFIED AS TO THE PHYSICAL AND ENVIRONMENTAL CONDITION (BOTH SURFACE AND
SUBSURFACE) OF THE PROPERTY AND OFFSITE LOCATIONS AND ACCEPTS THE PROPERTY "AS
IS", "WHERE IS", AND "WITH ALL FAULTS." EXCEPT AS OTHERWISE SET FORTH IN THIS
AGREEMENT, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS, STATUTORY OR
IMPLIED, AS TO (i) THE ACCURACY, COMPLETENESS, OR MATERIALITY OF ANY DATA,
INFORMATION OR RECORDS FURNISHED TO BUYER IN CONNECTION WITH THE PROPERTIES;
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(ii) THE QUALITY AND QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO
THE PROPERTIES; (iii) THE ABILITY OF THE PROPERTY TO PRODUCE HYDROCARBONS,
INCLUDING WITHOUT LIMITATION PRODUCTION RATES, DECLINE RATES AND RECOMPLETION
OPPORTUNITIES; (iv) THE PRESENT OR FUTURE VALUE OF THE ANTICIPATED INCOME, COSTS
OR PROFITS, IF ANY, TO BE DERIVED FROM THE PROPERTIES, OR (v) THE ENVIRONMENTAL
CONDITION OF THE PROPERTY. SELLER DISCLAIMS ANY LIABILITY ARISING IN CONNECTION
WITH ANY ENVIRONMENTALLY HAZARDOUS SUBSTANCES OR CONDITIONS OR NATURALLY
OCCURRING RADIOACTIVE MATERIALS ON OR RELATED TO THE PROPERTIES OR OFFSITE
LOCATIONS. ANY AND ALL DATA, INFORMATION OR OTHER RECORDS FURNISHED BY SELLER
ARE PROVIDED TO BUYER AS A CONVENIENCE AND BUYER'S RELIANCE ON OR USE OF THE
SAME IS AT BUYER'S SOLE RISK.
13. TAXES. Severance and other taxes on production attributable to the
Properties shall be the obligation of the party entitled to such production. All
ad valorem taxes assessed against the Properties shall be prorated between
Seller and Buyer as of the Closing Date. Any refund of tax attributable to
periods prior to the Closing Date received by Buyer shall be paid to Seller
within 30 days of receiving such refund. Buyer agrees that it will not take, for
income tax purposes or otherwise, any position inconsistent with Seller's
allocation of the Purchase Price between real and personal property.
14. POST CLOSING ADJUSTMENTS. If necessary, not later than 60 days after the
Closing, Seller shall prepare and deliver to Buyer, in accordance with this
Agreement and generally accepted accounting principles, a statement ("Final
Settlement Statement") setting forth each adjustment or payment that was not
finally determined as of the Closing and showing the calculation of such
adjustments. As soon as practicable after receipt of the Final Settlement
Statement but not later than 15 days after such receipt, Buyer shall deliver to
Seller a written report containing any changes that Buyer proposes be made to
the Final Settlement Statement. The parties shall undertake to agree with
respect to the amounts due pursuant to such Final Settlement Statement no later
than 90 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 "Final Settlement Date." Payment by Buyer or Seller, as appropriate,
shall be made within 10 days after the Final Settlement Date.
15. INTERIM OPERATIONS. Seller covenants that from the date hereof until the
Closing, except as expressly provided herein or otherwise consented to in
writing by Buyer, Seller will:
(a) not (i) operate or in any manner deal with, incur obligations with
respect to, or undertake any transactions relating to, the Properties except (1)
in the normal, usual and customary manner for a reasonable and prudent operator,
(2) of a nature and in an amount consistent with prior practice, (3) in the
ordinary and regular course of business of owning and operating the Properties;
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(b) not (i) sell, dispose of, encumber, relinquish or otherwise alienate
any of the Properties; (ii) waive, compromise or settle any right or claim that
would have a material adverse effect on the ownership, operation or value of any
of the Properties after the Effective Time; or (iii) commit to any operation,
services or related activities, which would or could reasonably be expected to
require future expenditures (capital, maintenance, expense or otherwise) of the
Properties in excess of $25,000 as to Seller's interest in any particular
Property, or terminate, materially amend or extend any agreements affecting the
Properties, or allow any of the Leases to lapse, terminate, or otherwise expire,
without the consent of Buyer, which consent shall not be unreasonably withheld;
and
16. CONDITIONS OF CLOSING.
(a) Seller's obligation to consummate the transactions provided for herein
is subject to the satisfaction or waiver of the following conditions:
(i) The representations by Buyer contained in Section 9 hereof shall
be true and correct in all material respects on the date of Closing as though
made on and as of the Closing.
(ii) Buyer shall have performed in all material respects the
obligations, covenants and agreements hereunder to be performed by Buyer at or
prior to the Closing.
(iii) No suit, action or other proceeding by a third party or a
governmental authority shall be pending as of the Closing which seeks
substantial damages, fines, penalties or other relief from either party in
connection with the Interests, or which seeks to restrain, enjoin or otherwise
prohibit the consummation of the transaction contemplated by this Agreement. In
particular, neither state nor federal statute, rule, regulation or action nor
judicial or administrative decision shall have been entered (whether on a
preliminary or final basis), that would prohibit, restrict or delay the
consummation of the transaction contemplated by this Agreement or make illegal
any payments due hereunder.
(iv) Closing shall have occurred by December 15, 2011.
(v) Seller shall have obtained shareholder and board of directors
approval from each corporation of this Agreement and the transaction
contemplated by this Agreement.
(b) Buyer's obligation to consummate the transactions provided for herein
is subject to the satisfaction or waiver of the following conditions:
(i) The representations by Seller contained in Section 8 hereof shall
be true and correct in all material respects on the date of Closing as though
made on and as of the Closing.
(ii) Seller shall have performed in all material respects the
obligations, covenants and agreements hereunder to be performed by Seller at or
prior to the Closing.
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(iii) No suit, action or other proceeding by a third party or a
governmental authority shall be pending as of the Closing which seeks
substantial damages, fines, penalties or other relief from either party in
connection with the Interests, or which seeks to restrain, enjoin or otherwise
prohibit the consummation of the transaction contemplated by this Agreement. In
particular, neither state nor federal statute, rule, regulation or action nor
judicial or administrative decision shall have been entered (whether on a
preliminary or final basis), that would prohibit, restrict or delay the
consummation of the transaction contemplated by this Agreement or make illegal
any payments due hereunder.
17. OPERATIONS LIABILITY. Buyer agrees to comply with all laws and governmental
regulations with respect to the ownership of and all operations on the
Properties, including abandonment of wells, the compliance with Applicable
Environmental Law and regarding inactive or unplugged wells including bonding
requirements (for which Buyer shall provide Seller copies of appropriate
documentation prior to Closing), and surface work as specified in the Leases or
applicable law or regulation.
18. DEFAULT AND REMEDIES.
(A) SELLER'S REMEDIES.
Upon failure of Buyer to comply herewith by the Closing Date, Seller, at
its sole option, may receive the Deposit and all interest accrued thereon from
the Escrow Agent as a liquidated damage and not as a penalty, and terminate this
Agreement, as Seller's sole and exclusive remedies for such default, all other
remedies being expressly waived by Seller. If the transaction contemplated by
this Agreement fails to close or is terminated for any other reason, the Deposit
together with all interest accrued thereon shall be returned to Buyer.
(B) BUYER'S REMEDIES.
Upon failure of Seller to comply herewith by the Closing Date, Buyer, at
its sole option, may enforce specific performance or terminate this Agreement.
In the event Buyer elects to terminate this Agreement as set forth above, Buyer
shall be entitled to receive from the Escrow Agent the Deposit together with all
interest accrued thereon.
(C) EFFECT OF TERMINATION.
In the event of termination of this Agreement under this Section 19, the
transaction shall not close and neither Buyer nor Seller shall have any further
obligations, remedies, liabilities, rights or duties to the other hereunder,
except as expressly provided herein.
GENERAL PROVISIONS
19. TERMINATION PERIOD. If the Closing has not occurred on or before December
15, 2011 this Agreement shall automatically terminate unless Seller and Buyer
agree in writing to an extension.
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20. AMENDMENT. This Agreement may be amended only by written instrument executed
by both Seller and Buyer.
21. DISPUTES. The parties agree to negotiate in good faith in an effort to
resolve any dispute related to this Agreement that may arise. If the dispute
cannot be resolved by negotiation, the parties will submit the dispute to
mediation in Amarillo, Texas before resorting to litigation and will equally
share the cost of a mutually acceptable mediator. .
22. BROKERS. Each party hereto indemnifies the other against any liability or
expense for brokerage fees, finder's fees, agent's commissions or other similar
forms of compensation incurred by the indemnifying party in connection with this
Agreement or any transaction contemplated hereby.
23. NOTICES. Any notice, request, demand, statement or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered in person, or by courier, or mailed by certified
mail, return receipt requested, when actually received, and may be given as
follows:
If to Seller:
Gryphon Production Company, LLC
216 South Price Road
Pampa, TX 79065
Attention: Mr. Max Grant
(806) 688-9697 - Telephone
(806) 688-9316 - Facsimile
pampatx08@yahoo.com - Email
If to Buyer:
LCB Resources
406 N. Main Street
Kingfisher, OK 73750-2322
Attention: Mr. Lenard Briscoe
(405) 375.3700 - Telephone
(___) ___.____ - Facsimile
____________________ - Email
Or to such other address as such party may designate by ten (10) days advance
written notice to the other party.
24. EXPENSES. Each party shall be solely responsible for expenses incurred in
connection with this Agreement and shall not be entitled to reimbursement by the
other party. Notwithstanding the foregoing, if arbitration is entered into
pursuant hereto, the prevailing party may be ordered to reimburse the
non-prevailing party its costs and expenses of arbitration.
15
25. SURVIVAL. The representations and warranties made by Seller in Sections
8(e)-(i) of this Agreement shall terminate at Closing. All other
representations, warranties, covenants and obligations of Seller under this
Agreement shall survive Closing for a period of six (6) months after the
Closing. The representations, warranties, covenants and obligations of Buyer
under this Agreement shall indefinitely survive the Closing.
26. ENTIRE AGREEMENT. This Agreement, and the Exhibits and Schedules hereto,
which are listed below, constitute the entire agreement between the parties
hereto and supersede all prior agreements, negotiations and understandings.
Exhibit "A" - Leases
Exhibit "A-2" - Wells/Proration Schedule
Exhibit "B" - Equipment
Exhibit "C" - Land
Exhibit "D" - Assignment and Bill of Sale
Schedule 1 - Lawsuits, Actions or Other Proceedings
Schedule 2 - Outstanding AFE's
Schedule 3 - Compliance Matters
Schedule 4 - Contracts and Surface Agreements
27. GOVERNING LAW. This Agreement shall be interpreted in accordance with the
laws of the State of Texas.
IN WITNESS WHEREOF, the Agreement has been executed as of the date first
above written.
[SIGNATURE PAGES FOLLOW]
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SELLER:
GRYPHON PRODUCTION COMPANY, LLC
By: /s/ Max Grant
------------------------------------
Max Grant
President
17
BUYER:
LCB RESOURCES
By: /s/ L. Charles Briscoe
-----------------------------------
L. Charles Briscoe
Member
18
EXHIBIT "A"
LEASES
1. MERTEN H.H.
Lease Date: June 26, 1924
Lessor: H. H. Merten, et al
Lessee: Farish, Watts, Collins and Crosby
Recording: Volume 26, Page 447, Deed Records of Gray County, Texas
Description: All of the South 240 acres of the N/2 of Section 87, Block
3, I&GN Ry. Co. Survey, Gray County, Texas
Note: Lease being subject to an amendment dated
January 26, 1940, by and between Clara H.
Hughes, et al, and Humble Oil & Refining
Company, being recorded in Volume 80, Page 370,
of the Deed Records, Gray County, Texas, and
further being amended September 23, 1957,
between Edna Merten, et al, and Humble Oil &
Refining Company, being recorded in Volume ___,
Page ___, Deed Records, Gray County, Texas, and
amended August 5, 1963, by Walter A. Snideman,
et al, and Humble Oil & Refining Company, being
recorded in Volume 264, Page 115, Deed Records,
Gray County, Texas.
2. FEE LAND #227
a. Lease Date: January 29, 1990
Lessor: Mobil Producing Texas & New Mexico, Inc.
Lessee: Caldwell Production Co., Inc.
Recording: Volume 603, Page 623, Deed Records, Gray County, Texas
Description: All of Section 10 in Block 3, I&GN Railroad Co. Survey,
Gray County, Texas
b. Lease Date: January 29, 1990
Lessor: Mobil Producing Texas & New Mexico, Inc.
Lessee: Caldwell Production Co., Inc.
Recording: Volume 603, Page 628, Deed Records, Gray County, Texas
Description: All of Section 11 in Block 3, I&GN Railroad Co. Survey,
Gray County, Texas
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c. Lease Date: January 29, 1990
Lessor: Mobil Producing Texas & New Mexico, Inc.
Lessee: Caldwell Production Co., Inc.
Recording: Volume 603, Page 633, Deed Records, Gray County, Texas
Description: All of Section 14 in Block 3, I&GN Railroad Co. Survey,
Gray County, Texas
d. Lease Date: January 29, 1990
Lessor: Mobil Producing Texas & New Mexico, Inc.
Lessee: Caldwell Production Co., Inc.
Recording: Volume 603, Page 638, Deed Records, Gray County, Texas
Description: All of Section 15 in Block 3, I&GN Railroad Co. Survey,
Gray County, Texas
3. EAST PAMPA UNIT
a. Lease Date: May 5, 1924
Lessor: Phebe A. Worley, a widow
Lessee: C. H. Clark
Recording: Volume 1, Page 455, Deed Records, Gray County, Texas
Description: Tract No. 5 - East Pampa Unit NE/4, Section 63, Block 3,
I&GN RR Co. Survey, Gray County, Texas
b. Lease Date: June 24, 1924
Lessor: W. W. Merten & wife, Abbie Merten, and P. P. Merten and
wife, Lena Merten
Lessee: F. N. Shriver
Recording: Volume 2, Page 218, Deed Records, Gray County, Texas
Description: Part of Tract No. 1 - East Pampa Unit NW/4, Section 82,
Block 3, I&GN RR Co. Survey, Gray County, Texas
INSOFAR AND ONLY INSOFAR as said lease covers the
above-described lands
c. Lease Date: January 2, 1926
Lessor: W. W. Merten & wife, Abbie Merten, and P. P. Merten and
wife, Lena Merten
Lessee: J. M. Baldridge
Recording: Volume 2, Page 232, Deed Records, Gray County, Texas
Description: Part of Tract No. 1 - East Pampa Unit SW/4, Section 81,
Block 3, I&GN RR Co. Survey, Gray County, Texas
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d. Lease Date: May 18, 1938
Lessor: Abbie E. Merten, Guardian
Lessee: Sinclair Prairie Oil Company
Recording: Volume 75, Page 106, Deed Records, Gray County, Texas
Description: Part of Tract 1 - East Pampa Unit SW/4, Section 81,
Block 3, I&GN RR Co. Survey, Gray County, Texas
e. Lease Date: December 28, 1923
Lessor: J. T. Benten and Margare A. Benton, husband and wife
Lessee: F. W. Dillard
Recording: Volume 2, Page 163, Deed Records, Gray County, Texas
Description: Tract No. 4 - East Pampa Unit E/2 NW/4, Section 63,
Block 3, I&GN RR Co. Survey, Gray County, Texas
f. Lease Date: June 24, 1924
Lessor: W. W. Merten & wife, Abbie Merten, and P. P. Merten and
wife, Lena Merten
Lessee: F. N. Shriver
Recording: Volume 2, Page 218, Deed Records, Gray County, Texas
Description: Part of Tract No. 1 - East Pampa Unit W/2 NE/4, Section
82, Block 3, I&GN RR Co. Survey, Gray County, Texas
INSOFAR AND ONLY INSOFAR as said lease covers the above-
described lands
g. Lease Date: June 24, 1924
Lessor: W. W. Merten & wife, Abbie Merten, and P. P. Merten and
wife, Lena Merten
Lessee: F. N. Shriver
Recording: Volume 2, Page 218, Deed Records, Gray County, Texas
Description: Tract Nos. 2 & 6 - East Pampa Unit E/2 NE/4 and S/2,
Section 82, Block 3, I&GN RR Co. Survey, Gray County, Texas
INSOFAR AND ONLY INSOFAR as said lease covers the
above-described lands and INSOFAR AND ONLY INSOFAR as said
lease covers the Brown Dolomite rights under said lands
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h. Lease Date: June 24, 1924
Lessor: J. T. Benton and wife, M. A. Benton
Lessee: T. H. Pyle
Recording: Volume 26, Page 459, Deed Records, Gray County, Texas
Description: Tract No. 3 - East Pampa Unit W/2 NW/4, Section 63,
Block 3, I&GN RR Co. Survey, Gray County, Texas
INSOFAR AND ONLY INSOFAR as said lease covers the Brown
Dolomite rights under said lease
i. Lease Date: June 23, 1917
Lessor: C. W. Turman
Lessee: Empire Gas and Fuel Company
Recording: Volume 1, Page 145, Deed Records, Gray County, Texas
Description: Tract No. 10 - East Pampa Unit SE/4, Section 63, Block 3,
I&GN RR Co. Survey, Gray County, Texas
INSOFAR AND ONLY INSOFAR as said lease covers the
above-described lands and INSOFAR AND ONLY INSOFAR as
said lease covers the Brown Dolomite rights under said
lands
j. Lease Date: June 21, 1923
Lessor: J. T. Benton and wife, M. A.
Benton Lessee: Carl L. Mayer
Recording: Volume 1, Page 417, Deed Records, Gray County, Texas
Description: Tract Nos. 7, 8 & 9 - East Pampa Unit SW/4, Section 63,
Block 3, I&GN RR Co. Survey, Gray County, Texas
INSOFAR AND ONLY INSOFAR as said lease covers the
Brown Dolomite rights under said lease
4. WORLEY COMBS
a. Lease Date: April 18, 1974
Lessor: Frank M. Carter
Lessee: Gulf Oil Corporation
Recording: Volume 362, Page 46, Deed Records, Gray County, Texas
Description: SW/4, Section 58, Block 3, I&GN RR Co. Survey,
Gray County, Texas
b. Lease Date: April 23, 1974
Lessor: Mabel Dee Reynolds
Lessee: Gulf Oil Corporation
Recording: Volume 362, Page 42, Deed Records, Gray County, Texas
22
c. Lease Date: April 18, 1974
Lessor: Inez Carter
Lessee: Gulf Oil Corporation
Recording: Volume 362, Page 44, Deed Records, Gray County, Texas
Description: SW/4, Section 58, Block 3, I&GN RR Co. Survey, Gray County,
Texas
d. Lease Date: April 23, 1974
Lessor: Wiley Reynolds, Jr., et al
Lessee: Gulf Oil Corporation
Recording: Volume 366, Page 582, and Volume 406, Page 670, Deed
Records, Gray County, Texas
Description: SW/4, Section 58, Block 3, I&GN RR Co. Survey, Gray County,
Texas
e. Lease Date: April 23, 1974
Lessor: Hope Reynolds, H. M. Reynolds and Henry C. Reynolds
Lessee: Gulf Oil Corporation
Recording: Volume 366, Page 584; Volume 366, Page 589; and Volume 366,
Page 580; Deed Records, Gray County, Texas
Description: SW/4, Section 58, Block 3, I&GN RR Co. Survey, Gray County,
Texas
f. Lease Date: April 23, 1974
Lessor: Ruth Osborne
Lessee: Gulf Oil Corporation
Recording: Volume 366, Page 587, Deed Records, Gray County, Texas
Description: SW/4, Section 58, Block 3, I&GN RR Co. Survey, Gray County,
Texas
g. Lease Date: April 23, 1974
Lessor: Albert Reynolds
Lessee: Gulf Oil Corporation
Recording: Volume 366, Page 591, Deed Records, Gray County, Texas
Description: SW/4, Section 58, Block 3, I&GN RR Co. Survey, Gray County,
Texas
h. Lease Date: April 23, 1974
Lessor: Wiley Reynolds
Lessee: Gulf Oil Corporation
Recording: Volume 366, Page 593, Deed Records, Gray County, Texas
Description: SW/4, Section 58, Block 3, I&GN RR Co. Survey, Gray County,
Texas
23
i. Lease Date: April 23, 1974
Lessor: David Earnest Reynolds
Lessee: Gulf Oil Corporation
Recording: Volume 367, Page 183, and Volume 406, Page 667, Deed
Records, Gray County, Texas
Description: SW/4, Section 58, Block 3, I&GN RR Co. Survey, Gray County,
Texas
j. Lease Date: April 23, 1974
Lessor: Jennifer Lynne Reed
Lessee: Gulf Oil Corporation
Recording: Volume 367, Page 380, and Volume 406, Page 679, Deed
Records, Gray County, Texas
Description: SW/4, Section 58, Block 3, I&GN RR Co. Survey, Gray County,
Texas
k. Lease Date: April 23, 1974
Lessor: Julia K. Reynolds (Humburg)
Lessee: Gulf Oil Corporation
Recording: Volume 367, Page 377, and Volume 406, Page 673, Deed
Records, Gray County, Texas
Description: SW/4, Section 58, Block 3, I&GN RR Co. Survey, Gray County,
Texas
l. Lease Date: April 23, 1974
Lessor: Burton Dan Reynolds
Lessee: Gulf Oil Corporation
Recording: Volume 367, Page 375, and Volume 406, Page 676, Deed
Records, Gray County, Texas
Description: SW/4, Section 58, Block 3, I&GN RR Co. Survey, Gray County,
Texas
m. Lease Date: April 23, 1974
Lessor: Noel Reynolds
Lessee: Gulf Oil Corporation
Recording: Volume 373, Page 140, Deed Records, Gray County, Texas
Description: SW/4, Section 58, Block 3, I&GN RR Co. Survey, Gray County,
Texas
5. T. D. LEWIS "A"
a. Lease Date: March 29, 1921
Lessor: T. D. Lewis
Lessee: J. B. Martin
Recording: Volume 21, Page 27
Description: INSOFAR as the lease covers the NW/4 of the NE/4 of
Section 6, Block 23, Cert. #1727, BS&F Railway Survey,
Hutchinson County, Texas
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b. Lease Date: March 29, 1921
Lessor: T. D. Lewis and Vida Lewis
Lessee: J. B. Martin Recording: Volume 21, Page 37
Description: INSOFAR as the lease covers the NW/4 of the NE/4 of
Section 6, Block 23, Cert. #1727, BS&F Railway Survey,
Hutchinson County, Texas
6. MOORE
Lease Date: April 12, 1935
Lessor: E. J. Moore
Lessee: L. W. Timms
Recording: Volume 68, Page 168
Description: NW/80, in form of a square, Section 21, Block M-21, T C Ry.
Co. Hutchinson County, Texas
7. TIMMS
a. Lease Date: March 29, 1921
Lessor: T. D. Lewis
Lessee: J. B. Martin
Recording: Volume 21, Page 27
Description: INSOFAR as the lease covers the W/2 of the NE/4 of
Section 5, Block 23, BS&F Railway Survey, Hutchinson
County, Texas
b. Lease Date: March 29, 1921
Lessor: T. D. Lewis and Vida Lewis
Lessee: J. B. Martin
Recording: Volume 21, Page 37
Description: INSOFAR as the lease covers the W/2 of the NE/4 of
Section 5, Block 23, BS&F Railway Survey, Hutchinson
County, Texas
c. Lease Date: March 29, 1921
Lessor: T. D. Lewis and Vida Lewis
Lessee: J. B. Martin
Recording: Volume 22, Page 393
Description: INSOFAR as the lease covers the W/2 of the NE/4 of
Section 5, Block 23, BS&F Railway Survey, Hutchinson
County, Texas (Correcting NW/4 to NE/4)
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