Attached files
| file | filename |
|---|---|
| 8-K - Imperial Resources, Inc. | v190703_8k.htm |
| EX-99.2 - Imperial Resources, Inc. | v190703_ex99-2.htm |
| EX-99.1 - Imperial Resources, Inc. | v190703_ex99-1.htm |
Letter
Agreement
July 10,
2010
Charles
V. Long, Jr.
Husky
Ventures, Inc.
201 North
Robinson, Suite 1800
Oklahoma
City, OK 73102
Dear Mr.
Long,
Based
upon our analysis of the geologic data covering the area of your Chisolm Trail
Project, a Hunton Limestone Horizontal Development Drilling Project located in
Kingfisher County, Oklahoma, more specifically that area known as the Area of
Mutual Interest or AMI and more completely described as all of the sections in
the following Townships in Kingfisher County, Oklahoma:
18N-7W,
18N-8W. 19N-7W, 19N-8W
We
understand the main target of the Chisolm Trail Project is the Hunton Limestone
formation with an estimated depth expected to encounter the top of the Hunton
Limestone at approximately 8,000 feet subsurface. We understand the development
of this formation is to be through horizontal drilling.
We would
like to participate for a 50% Working Interest Participation in the Project. We
will enter into a separate AMI agreement with Husky Ventures, Inc. attached
hereto as Schedule "A"
We agree
that Husky Ventures, Inc. will be the Operator for the drilling and management
of all wells in the project. We understand that a Joint Operating Agreement
(JOA) has been negotiated to the satisfaction of both parties for each well in
the AMI and said JOA will be in the form of the JOA attached hereto as Schedule
"B". Each well within the AMI will have a separate JOA in the form of that
attached hereto as Schedule "B." We understand that the drilling, completion and
operations of all wells will be conducted under the terms and conditions of the
Operating Agreement except when a conflict exists between the Operating
Agreement and this Letter Agreement. If such a conflict exists, then the terms
of this Letter Agreement shall apply.
We
understand for each new well we will be provided a copy of the survey in which
the surface location is to be staked and that a Title Opinion will be completed
prior to commencing operations on any new well.
We
understand that Husky and or assigns will receive a 2% ORRI on all leases taken.
The leases will be acquired at 81.25% NRI or higher. We understand that the Net
Revenue Interest being delivered to us will be 2% less, proportionately reduced,
than the actual leased or contracted NRI and within 30 days of acquiring any
lease within the AMI we will be provided a recordable assignment of our 50%
undivided interest in said lease.
We
understand the scope of drilling operations in the first well to include the
following work:
The
initial well will be drilled to sufficient true vertical depth (TVD) to
encounter the Hunton Limestone formation and be drilled horizontally, to a
predetermined total measured depth, cased, tested and put into production. We
are to be provided an updated AFE within 30 days of drilling the first well in
the AMI and to be provided actual costs of drilling within 60 days after
releasing the rig (less completion costs) and within 60 days after completion
(all costs).
During
the drilling and completion process on all wells, we will receive daily reports
via email, we will have full access to the rig floor and all data obtained from
the drilling and testing of the open hole. We understand that once the well is
drilled you will send us a copy of the Mud Logs and Open Hole Logs along with a
geologic analysis.
According
to the AFE the estimated amount for participation for each 1% of the Working
Interest for the drilling and completion of the first well is $30,064.05
including Husky's carry. We understand the AFE is an Estimate of the drilling
and completion costs for this work. We agree to pay our proportionate share of
the Actual Drilling and Completion Expenses to include a 18.5% Carried Working
Interests on the initial wells and 18.5% Carried Working Interest on all
remaining production wells in the project, within 30 days prior to spud. The
Canied Working Interest will include all stages of completion in each horizontal
bore. We understand that if there is a cost underage, the savings will he
refunded to us. If there is a cost overage, we agree to pay our portion within
30 days of receipt of invoice.
All
leases taken in the Area of Mutual Interest will be billed to the participants
at cost which includes lease costs, land man costs and any associated legal
costs including 18.5% Carried Interest and $15.00 per acre as a management fee.
The total cost is estimated to be $130.00 per acre.
In the
event that existing production is encountered in the Area of Mutual Interest, we
will be offered the option to purchase our portion of that interest at cost with
no carried interest.
We
warrant that we are participating with full knowledge of the risks involved in
oil and gas exploration and drilling operations. We warrant that we are
financially responsible and able to withstand the entire loss of our investment in
this project and Hold Husky Ventures, Inc. Harmless for the results and for all
matters pertaining to the offering of this Private Agreement. We agree that this
Letter Agreement be binding on successors and assigns and is performable in
Oklahoma City, Oklahoma under the laws of the State of Oklahoma.
We
understand the terms are as follows for each 1% Working Interest
Participant:
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1)
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The
land, geologic, engineering and fee expenses per 1% Working Interest to
include the first 5,000 acres of leases is estimated to be
$7,975.00
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2)
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The
AFE Drilling and Completion Expense per 1% Working Interest in the first
well drilled and completed in the Hunton Limestone formation is estimated
to be $30,064.50.
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Subsequent
to our declarations:
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1)
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We
shall within thirty (30) days demonstrate our ability to pay for the
estimated land & associated project costs in the amount of $398,750.00
for the purchase of 50% Working Interest in the Chisoim Trail Prospect
acreage of approximately 5,000 initial acres, excluding drilling and completion
costs. It is our understanding that we will be billed our share of the
lease acreage and expenses upon the taking of a lease and will have 15
days to tender payment for said
acreage.
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2)
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Upon
notification from Husky, we agree to pay our drilling and completion
expenses for the first well 30 days prior to the commencement of drilling
operations but no sooner than August 15, 2010. No less than 90 days notice
will be given prior
to the drilling of any well within the AMI. Any party to this Agreement
that elects or is deemed to not consent to the drilling of a proposed well
will sell their interest in the acreage necessary for that well to the
Joint Account as that term is used in Schedule "B" at the same price as
that being charged by the other party to the AMI, Schedule "A" to this
Agreement. Any party to this Agreement who does not consent to the
drilling of a well must be offered to participate in all subsequent wells
within the AMI.
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3)
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Three
additional Areas of Mutual Interest located in Kingfisher and Major
Counties in Oklahoma have been disclosed to us. We understand they are the
property of Husky Ventures, Inc. We understand that we will be given an
option to participate for the same amount of Working Interest in these
additional areas at such time as they arc offered after the drilling of
the initial well on the Chisolna Trail
Project.
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If this
is acceptable, please signify your acceptance and return a copy of this letter
for our records.
Very
truly yours.
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Imperial
Oil & Gas, Inc.
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||||
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Signed:
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/s/
Robert R. Durbin
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Date:
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Robert
R.
Durbin, CEO
P.O.
Box 4675
Lago
Vista. 1 X 78645
(512)
422-2493
(512)
267-0223 facsimile
rdurbin(iiimperialoilandgas.com
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ACCEPTED
THIS 12Th
DAY OF JULY, 2010
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BY:
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/s/ Charles V. Long Jr.
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Charles
V. Long Jr., President, Husky Ventures,
Inc.
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Schedule
"A"
AREA OF
MUTUAL INTEREST AGREEMENT
The
Effective Date of this Agreement is 11 day of July. 2010. HuskyVentures,
Inc. and Imperial Oil & Gas, Inc., (sometimes collectively referred to as
the "Parties"), own or anticipate owning various leasehold interests created by
oil and gas leases (the "Leases") on lands located in the state and county named
above. To facilitate the coordinated acquisition of additional Leases and
exploration for and development of oil. gas, and other minerals from lands
located in the general area of the Parties' Leases, the Parties desire to enter
into this Agreement to create an Area of Mutual Interest (the
"AMI”).
In
consideration of the mutual benefits to be derived by each Party resulting from
the terms of this Agreement, the Parties agree as follows:
1.
The AMI shall encompass those lands encompassed within four (4) Oklahoma
Townships, namely. 18N-7W, 18N-8W, 19N-7W, 19N-8W in Kingfisher
County.
2. It
is anticipated that oil and gas leases on land within the AMI will be obtained
by either Husky Resources, Inc. and/or Imperial Oil & Gas, Inc., or by third
parties acting on behalf of either of the Parties. Husky Venture, Inc or its
designee will initially acquire the leases with the AMI. It is agreed that any
oil and gas leases or farm outs obtained on land within the AMI, shall be owned
in the following proportions:
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Husky
Ventures, Inc.
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50 | % | ||
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Imperial
Oil & Gas. Inc.
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50 | % |
3. Husky Ventures. Inc. agrees to use
their best efforts when obtaining oil and gas leases within the AMI to secure leases on
substantially the same form of lease as attached to this Agreement as Exhibit "A." In no event will Husky
Ventures, Inc. acquire a lease
which is burdened by more than 18.75%, . On all acreage acquired within the AMI
a 79.25%.NRI or greater shall be delivered to Imperial Oil & Gas.
Inc. after all lease
burdens. including but not limited to any overriding royalty interests to Husky
Ventures, Inc. or its
affiliates..
3.
Within 30 days of acquiring any lease under this AMI Husky Ventures, Inc or any
party designated to acquire leases within the AMI shall deliver to Imperial Oil
and Gas an assignment, in recordable form, assigning the percentage ownership in
the oil and gas lease for the lands under that well. The assignment of oil and
gas lease shall be on the same form of assignment as provided on Exhibit "A" to
this Agreement.
4. If
any leases is amended, extended, or renewed on land within the AMI, the oil and
gas lease shall be owned by Husky Ventures. Inc. and Imperial Oil & Gas,
Inc. in the same proportions set forth in paragraph 2. Any costs related to the
amendment, extension or renewal of leases within the AMI shall be agreed
upon in writing prior to the amendment, extension or renewal by all
parties hereto
and shall be apportioned as set forth in paragraph 2. Within 30 days of
the execution and purchase of any new or amended lease, Husky Ventures, Inc.
shall provide a copy of each oil and gas lease or farm out to Imperial Oil and
Gas.
6.
This Agreement shall continue in force for as long for five (5) years. Husky
Ventures, Inc. and Imperial
Oil & Gas, Inc, shall, however, have the right to terminate this Agreement
by giving the other Party 30 days advance written notice. If Husky Ventures,
Inc. or Imperial Oil & Gas, Inc. makes the election to terminate this
Agreement, the terminating Party shall not have the right to obtain oil and gas
leases on land in the AMI for ten (10) years from the date hereof..
All
Exhibits referred to are incorporated into this Agreement for all
purposes.
This
Agreement shall be binding on and will inure to the benefit of the Parties and
their respective heirs, personal representatives, successors, and/or
assigns.
This
Agreement is signed by the Parties as of the date of the acknowledgment below,
but effective for all purposes as of the Effective Date stated
above.
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HUSKY
VENTURES, INC.
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IMPERIAL
OIL & GAS, INC.
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/s/ Charles V. Long Jr.
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/s/ Robert R. Durbin
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Charles
V. Long Jr., President
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Robert
R. Durbin, CEO
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Exhibit
"A" — Form of Assignment
To
Schedule "A" Area of Mutual Agreement
ASSIGNMENT
OF INTEREST IN OIL AND GAS LEASE
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State:
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Oklahoma
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County:
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Kingfisher
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Assignor:
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Assignee:
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Imperial
Oil & Gas, Inc
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Effective
Date:
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For
adequate consideration, Assignor, named above, assigns, sells, and conveys to
Assignee, named above, an undivided 50% working interest in the Oil and Gas
Lease (the "Lease") on lands located in the county and state named above (the
"Lands"). The Lease and Lands are described in Exhibit "A" to this Assignment.
By this Assignment, Assignor also sells, transfers and conveys to Assignee a
like interest in all equipment, personal property and fixtures located on the
Lands and used in connection with the operations of the Lease.
The
interest in the Lease assigned to Assignee shall bear and be subject to its
proportionate share of all burdens affecting or against the undivided interest
assigned to Assignee. in the Lease, which are of record as of the Effective Date
of this Assignment. Furthermore, this assignment is made in accordance with and
subject to terms of an unrecorded Joint Operating Agreement and Area of Mutual
Interest Agreement between Imperial Oil & Gas, Inc. and Husky Resources,
Inc.
This
Agreement shall be binding on and will inure to the benefit of Assignor and
Assignee and their respective heirs, personal representatives, successors,
and/or assigns.
This
Assignment is made by Assignor and accepted by Assignee without warranty of
title, express or implied. It is signed as of the date of acknowledgment of the
signatures below, but shall be effective for all purposes as of the Effective
Date stated above.
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Assignor
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ACKNOWLEDGEMENT
STATE OF
OKLAHOMA
COUNTY
OF
This
instrument was acknowledged before me on (date) by (name of officer), (title of
officer of (name of corporation acknowledging), a (state of incorporation)
corporation, on behalf of said corporation.
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Notary
Public, State of
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Printed
Name:_______________________
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My
Commission Expires: ______________
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Exhibit
A
To that
assignment between________________ and Imperial Oil & Gas,
Inc.
dated______________ .
20___.