Xxxxxxxxx Energy, Inc.
0000 Xxxxxxx
Xxxxx, Xxxxx 00000
000-000-0000
Saratoga Prospect Contract
Xxxxxx Xxxxxx, La.
This contract is being prepared in order to document and add clarity to the
verbal agreement entered into recently, Thursday, June 8, 2005 and is subject to
the letter of confidentiality signed previously with respect to the areas and
prospect heretofore referred to. It is the intent of the parties mentioned above
to enter into a contract with respect to the above mentioned prospect. This
quite naturally is subject to lease availability check on the areas and prospect
and the execution of this contract in which Xxxxxxxxx energy, Inc. shall sell to
Gulf Coast Oil & Gas, Inc., on a third for a quarter (1/3 for 1/4), 100% for a
75% Working Interest basis the aforementioned and above listed prospect. It is
also understood, as discussed and as Gulf Coast Oil & Gas, Inc. Xxxxxxxxx
Energy, or it's appointed company, shall serve as operator. Xxxxxxxxx Energy's
geologist as normal will retain a minimum 2% ORRI and a 2.5% ORRI on all leases
better than 1/5 royalty (landowner). Xxxxxxxxx Energy Inc., as agreed shall
retain a 25% contractually carried working interest, free of all capital and
maintenance dollars or investments.
Xxxxxxxxx Energy Inc. is to be responsible for all oil and gas operations,
geology, acquisition, drilling, completion, monthly operational funding. Leases
shall be taken in the name of Xxxxxxxxx Energy Inc., and held in trust for Gulf
Coast Energy, Inc. for a one (1) year period. Said shall being on the actual
date of filing. It is understood that where consulting to the project is normal,
(geology, company representation on all operations etc.) Xxxxxxxxx energy may
utilize, where appropriate, Xxxxx Xxxxxxxxx, at standard industry rates and
normally acceptable expenses. (As per AAPG JOA referred to above)
Xxxxxxxxx energy is not to be responsible for pipelines other than gathering
lines upon leases etc. Xxxxxxxxx Energy shall make net distribution to
purchaser, Gulf Coast Oil & Gas, Inc., of any and all of it's portion of the
proceeds.
As discussed initial commitment cost, i.e., acquisition with the specific
prospects are as follows.
Saratoga Prospect, Xxxxxx Xxxxxx, La.............$100,000 U.S. (said fee shall
cover all cost involved with lease and prospect acquisition. Should, in the
unlikely event and due to unforeseen circumstances, the leases be unavailable
Xxxxxxxxx Energy Inc. shall refund said commitment and acquisition costs,
($100,000) minus the actual costs of acquisition, (land man and expenses
involved therein).
It is further understood, as discussed, that after commitment purchaser shall
have one, (1) year maximum to submit remaining portion of total cost. This one
(1) year period shall begin as of the date of lease acquisition and filing. Gulf
Coast Oil & Gas shall receive copy of all leases and associated paperwork
related thereof. Joint Operating Agreement, including AFE shall be prepared, due
to rapidly rising service and materials shall be entered into, on an in or out
basis. This portion of the funding shall be accomplished on a 3 day cash call
which shall be issued at a maximum of thirty (30) days prior to the end of the
one year period. It is understood and agreed that, should funding not occur at
this time, any unused time, and prior to lease expiration shall revert fully and
completely to Xxxxxxxxx Energy, Inc.
While these companies shall be working together to accomplish this or these
prospects, it shall in no way establish a partnership of any kind. Should this
meet with your intent and the understanding of our previous discussions verbally
established, please sign and date below and submit payment of the correct amount
with respect to prospect or prospects selected, in order to more easily prepare
contracts necessary. Please call for Wiring instructions.
/s/ Xxxxx Xxxxxxxxx /s/ Xxxxx Xxxxxx
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Xxxxxxxxx Energy, Inc. Date Gulf Coast Energy, Inc. Date
Xxxxx Xxxxxxxxx Xxxxx Xxxxxx
