July 9, 2009 Mr. Douglas Bolen, President Delta Oil & Gas, Inc. #604 - 700 W. Pender Street Vancouver, BC C6C 1G8 RE: Letter Agreement Ranken Energy Corporation Garvin County, OK
Ranken
Energy Corporation
000 X.
00xx Xxxxxx, Xxxxx 000
Xxxxxx,
Xxxxxxxx 00000-0000
(000) 000-0000 Fax
(000)000-0000
July 9,
2009
Xx.
Xxxxxxx Xxxxx, President
Delta Oil
& Gas, Inc.
#000 -
000 X. Xxxxxx Xxxxxx
Xxxxxxxxx,
XX X0X 0X0
RE: Letter
Agreement
Ranken Energy Corporation
2009-1 Drilling Program
Xxxxxx County, OK
Dear
Xxxx:
This
Letter Agreement shall set forth the terms and conditions for your participation
in the Ranken Energy
Corporation (“REC”) 2009-1 Drilling Program located in Xxxxxx County,
Oklahoma. Specifically, you agree to participate with a 5.00% Working Interest,
subject to the following:
|
|
1). You
agree to purchase an undivided 5.00% Working Interest
in the 2009-1
Drilling
Program for a total Buy-In Cost of $13,125.00 ($262,500.00
x 5.00%) which is
your proportionate share. The Buy-In Cost shall be invoiced on
a unit by unit basis as each unit becomes ready to drill after all
leasing/pooling takes place. The Buy-In Cost shall be
$52,500/unit.
|
|
|
2). Your
initial Buy-In Cost includes all leasehold, whether force pooled or leased
in support of the initial test well as referred to in the trade summary
sections in the 2009-1Drilling Program
technical brochure, geologic expenses, brokerage costs, seismic usage (if
applicable), geophysical interpretations (if applicable), and
overhead.
|
|
|
3). You
agree to pay your Buy-In Cost, as well as your drilling cost, for the 1st
well/unit upon the execution of this Letter
Agreement. In
addition, you agree to pay your share of the Estimate Costs to Casting
Point, along with subsequent Unit Buy-In Cost, within three (3) business
days of receipt of an invoice, to be sent at a date prior to the SPUD Date
of each well for the following:
|
|
Drilling: Saddle
Prospect
|
Saddle
#1-28*
|
Xxxxxx
County, OK
|
|
Saddle
#2-28*
|
Xxxxxx
County, OK
|
|
|
Saddle
#3-28*
|
Xxxxxx
County, OK
|
|
|
Saddle
#1-27*
|
Xxxxxx
County, OK
|
|
|
Saddle
#2-27*
|
Xxxxxx
County, OK
|
|
|
*Well
names may change.
|
|
4).
|
You
agree to participate in the Drilling Operations to casing point in the
five xxxxx as specified in Item #3 above, with your interest, bearing your
proportionate share of a 12.5% carried Working
Interest in all five xxxxx. Your Before Casing Point Interest
“BCP” shall be 5.714286% and your After
Casing Point Interest “ACP” shall be 5.00%.
|
|
5).
|
Your
Net Revenue Interest Lease “NRI” in the 2009-1 Drilling
Program shall be at 75%.
|
|
6).
|
You
understand that one of the 40 acre spacing units is Held By Production
(HBP). Ranken Energy Corporation is currently in negotiations
with the operator of this unit. It is possible that this
particular unit cannot be drilled.
|
Letter
Agreement - Page 2
July 9,
2009
RED
2009-1 Drilling Program
|
7).
|
You
acknowledge and understand that the 2009-1 Drilling
Program required Forced Pooling under Oklahoma law and as such, the
various Respondents have the right to participate in any
well. Should any Respondents elect to participate, then your
participation interest may be proportionately reduced in the various
spacing units. Your drilling costs in the project will also be
proportionately reduced
respectively.
|
|
8).
|
Should
you agree to participate in any completion attempt in any well drilled in
the 2009-1 Drilling
Program, you agree to immediately forward your proportionate share
of the Estimated Completion Costs, upon receipt of invoice, to Ranken
Energy Corporation.
|
|
9).
|
You
agree to become a signatory to a mutually agreeable Joint Operating
Agreement “JOA” consistent with industry standards
(enclosed).
|
|
10).
|
You
acknowledge that you are a sophisticated & accredited investor and
fully understand the inherent risks associated with oil & gas
investing. Further, you acknowledge that no return on
Investment or Rate of Return has been guaranteed or promised, and, in
fact, accept the possibility that you could lost 100% of your investment
in this program.
|
|
11).
|
You
further agree to complete the subscription agreement required by the
Oklahoma Securities Commission (enclosed), if
applicable.
|
|
12).
|
RISK FACTORS - The
undersigned understands and agrees that the Working Interest described in
the Brochure are not offered on a “Turn-Key” or similar fixed cost
basis. Purchasers of Working Interests will be required to pay
for their proportionate share of all costs of drilling, completion, and
operation of the Xxxxx described in the Brochure on the financial basis as
described in the Brochure. The undersigned confirms that he/she
has the financial capability of paying for his/her share of such costs of
drilling, completing and operating the Xxxxx and that such costs my exceed
the initial estimated costs set forth
herein.
|
Should
you agree with these terms and conditions expressed herein, please execute
this
Letter Agreement in the space provided below.
Sincerely,
/s/ Xxxxxxxx X.
Xxx
Xxxxxxxx
X. Xxx
President
RLC/dks
Agreed to
and accepted this 27th day of July
2009.
|
WI
Owner: Delta Oil & Gas,
Inc.
|
Signature: /s/
Xxxxxxx
Xxxxx
|
|
By: Xxxxxxx
Xxxxx
|
Date:
27 July
2009
|
