EXHIBIT 10.1
XXXXXX CREEK ENERGY CORP.
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
November 30, 2009
BONANZA RESOURCES CORPORATION
0000-000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx Xxxxxxxx X0X 0X0
ATTENTION: XXXXX XXXXXXXXX, PRESIDENT
RE: AMENDMENT OF THE OPTION AGREEMENT BETWEEN XXXXXX CREEK AND BONANZA
This letter ("LETTER AMENDING AGREEMENT") sets out the terms of the amendments
to the Option Agreement (as defined below) between Xxxxxx Creek Energy Corp.
("XXXXXX CREEK") and Bonanza Resources Corporation ("BONANZA"). Pursuant to the
terms of an agreement dated May 28, 2009 (the "OPTION AGREEMENT"), as amended by
agreements dated August 7, 2009, October 16, 2009 and October 28, 2009, Bonanza
granted to Xxxxxx Creek an option, exercisable up to October 28, 2010, to
acquire an interest in the North Fork 3-D Prospect.
The Option Agreement as previously amended is hereby further amended and the
parties make the representations set out below and the parties agree as follows:
1. Bonanza represents that the Option Agreement, as amended, is in full force
and effect and that Xxxxxx Creek is not in breach of any term of the Option
Agreement.
2. Bonanza grants to Xxxxxx Creek an option to acquire a 70% interest of
Bonanza's 85% interest (a 59.50% working interest) in the North Fork 3-D
Prospect (the "PROSPECT") by incurring the full costs of drilling one well
(the "INITIAL DRILLING Program") to completion on the Prospect, Xxxxxx
Creek will have exercised the option to earn its interest in (a) that well
and (b) the balance of the Prospect.
3. Notwithstanding 2 above, if Xxxxxx Creek incurs the full cost of drilling
the first well which results in a dry hole (as that term is commonly used
in the industry), then Xxxxxx Creek will have the exclusive right and
option to participate in any and all further drilling programs on the
Prospect and to incur the full costs of drilling a second well to
completion on the Prospect, in which case Xxxxxx Creek will have exercised
its option to acquire a 70% interest of Bonanza's 85% interest (a 59.50%
working interest) in both (a) that well and (b) the balance of the
Prospect.
4. Bonanza represents that it acquired its 85% interest in the Prospect
pursuant to an agreement dated February 25, 2008 (the "UNDERLYING OPTION
AGREEMENT") with Xxxx Petroleum, LLC and Radiant Energy, LLC (the
"UNDERLYING OPTIONORS").
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5. Bonanza represents that the Underlying Option Agreement is in full force
and effect and that:
(a) The Underlying Optionors have not advised Bonanza, either orally or in
writing that Bonanza is in breach of the terms of the Underlying
Option Agreement; and
(b) Bonanza is not in default of any term of the Underlying Option
Agreement.
6. Bonanza represents that it has not exercised its option contained in the
Underlying Option Agreement.
7. In the event that Bonanza is about to breach any of the terms of the
Underlying Option Agreement then Bonanza will give Xxxxxx Creek immediate
notice of such and if Bonanza fails to do so, then Xxxxxx Creek will give
notice to Bonanza of such breach, but in any case, and without doing
anything further, including executing any further documents, all of
Bonanza's right, title and interest in the Underlying Option Agreement will
be automatically assigned to Xxxxxx Creek for no additional consideration.
8. Bonanza represents that:
(a) the operator of the Prospect (the "OPERATOR") allowed some leases
which originally comprised the Prospect, to expire prior to the date
of the Option Agreement without first advising Bonanza, either orally
or in writing, of the Operator's intention to allow those leases to
expire; and
(b) Bonanza discovered the facts set out in Section 8(a) on or about
November 26, 2009.
9. Bonanza represents that as of the date of this Letter Amending Agreement,
the Prospect is comprised of approximately 5,600 acres.
10. Bonanza covenants that it will provide to Xxxxxx Creek as soon as possible,
a full listing of all leases which comprise the Prospect, such listing to
include the acreage of each lease and the expiry date of each lease, the
names of the parties to each lease and a total, exact as reasonably
possible, of the number of acres comprising the Prospect.
11. Bonanza will as soon as possible, provide Xxxxxx Creek full and clearly
legible copies of all leases now comprising the Prospect.
12. Xxxxxx Creek will cause the production of a drill order title opinion on
the spacing unit for the first drill location (the "INITIAL TITLE OPINION")
and the expense of the Initial Title Opinion will be credited as an expense
paid by Xxxxxx Creek under the Authorization For Expenditure relating to
the first drill hole.
13. Bonanza will use its best efforts to ensure that, no leases comprising the
Prospect will be allowed to expire without first giving Xxxxxx Creek 60
days advance written notice of such intention to allow such leases to
expire and, if Xxxxxx Creek so elects in writing within 30 days of receipt
of such notice, to transfer to Xxxxxx Creek, at no cost to Xxxxxx Creek,
those leases which are intended to expire.
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14. Bonanza and Xxxxxx Creek agree to use their best efforts to negotiate and
execute a more formal agreement (an "AMENDED AND RESTATED AGREEMENT") to
supersede and replace the Option Agreement, as previously amended and as
further amended by this Letter Amending Agreement and until such more
AMENDED AND RESTATED AGREEMENT is entered into, this Letter Amending
Agreement and the Option Agreement as previously amended and further
amended by this Letter Amending Agreement will remain in full force and
effect and binding upon the parties.
15. This Letter Amending Agreement is to be governed by construed in accordance
with the laws of the Province of British Columbia.
16. This Letter Amending Agreement may be executed in counterpart and by fax.
Please sign this Letter Agreement below to indicate your agreement to the terms
herein.
XXXXXX CREEK ENERGY CORP.
Per: _______________________
Xxxxx Xxxxxx, President
BONANAZA RESOURCES CORPORATION hereby agrees to the terms herein.
Per: __________________________
Xxxxx Xxxxxxxxx, President
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