May 5, 2002 Trek Resources, Inc.
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EXHIBIT 10.17 |
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May 5, 2002 |
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Trek Resources, Inc. |
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0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000 |
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Dallas, Texas 75206 |
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Attn: Board of Directors |
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Re: |
Option to Purchase Interests in |
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Oil and Natural Gas Properties |
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This letter confirms our understanding regarding my recent purchase of certain oil and natural gas interests located in King and Lipscomb Counties, Texas and Xxxxxx, Xxxxx, Major, Pottawatomie, and Xxxxxxxx Counties, Oklahoma, which are more specifically described on Exhibit A attached hereto (the "Properties"). The Properties were initially offered for sale to Trek Resources, Inc. (the "Company"). However, the Company did not have adequate capital resources to purchase the Properties. |
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In light of the Company's financial condition, the Company's Board of Directors (the "Board") authorized me to personally proceed with the acquisition of the Properties at a meeting duly held on March 28, 2002. The Board's approval of my personal acquisition of the Properties was made with the understanding that I would sell the Properties to the Company at the same net price I paid for the Properties (plus my out-of-pocket expenses incurred in connection with such purchase) if the Company was able to arrange adequate capital resources within 120 days from the date that I purchased the Properties. I completed the acquisition of the Properties on April 11, 2002. I have previously provided you with copies of the documentation evidencing my purchase of the Properties, including evidence of my payment of any post-closing purchase price adjustments and my out-of-pocket expenses associated with the purchase. |
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Accordingly, I hereby grant the Company an option to purchase the Properties from me at any time before August 9, 2002 (the "Termination Date") for $1,025,000, less the gross proceeds of production from the Properties, net to my interest, plus interest on the $1,025,000 at the prime rate of interest (as quoted in the "Money Rates" section of the Wall Street Journal) + 1%, for the period of April 1, 2002 through the effective date of the Company's purchase of the Properties from me (as adjusted, the "Consideration"). In order to exercise this option, the Company must deliver a written election to purchase the Properties to me on or before the Termination Date. |
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The Consideration may be paid in cash, shares of the Company's capital stock, or a combination of both. In the event that the Company elects to issue its common stock as Consideration, it would be valued at the average trading price per share for the Company's common stock as quoted on the over-the-counter bulletin board system maintained by the National Association of Securities Dealers for the twenty trading days immediately before the date of this letter. If the Company issues shares of preferred stock as Consideration, it would be valued at a price per share established in good faith by the Board. |
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Please sign this letter in the space indicated below to evidence your agreement to the matters set forth herein. This letter agreement shall be governed by the substantive laws of the State of Texas, and may be executed in counterparts, each of which shall be deemed an original. |
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Very truly yours, |
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Xxxxxxx X. Xxxxxxxxxx |
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AGREED AND ACCEPTED: |
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TREK RESOURCES, INC. |
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By: , |
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on behalf of the Board of Directors |
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Printed Name: |
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Date: |
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Exhibit A |
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Description of Properties |
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Attached hereto and made a part of that certain Purchase Option Agreement dated effective May 5, 2002, by and between Trek Resources, Inc (grantee) and Xxxxxxx X. Xxxxxxxxxx (grantor). |
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Xxxxxxxx County, Texas |
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Hamker #1-591 |
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Xxxxxx: |
Xxxxxxx Xxxx Xxxxxx and Xxxxx Xxx Xxxxxx |
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Lessee: |
Xxxxxx X. Xxxxxxxx |
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Date: |
December 31, 1976 |
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Recorded: |
Volume 177, Page 148 |
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Description: |
All of Section 591, Xxxxx 43, H&TC Ry. Co. Survey, below the base of the Tonkawa formation, and as to the Tonkawa formation in and under the W/2, SE/4, SW/4 NE/4 of said Section 591 |
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Hamker #1-644 |
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Lessor: |
Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx |
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Lessee: |
Xxxxxx X. Xxxxxxxx |
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Date: |
June 21, 1977 |
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Recorded: |
Volume 181, Page 242 |
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Description: |
All of Section 644, Block 43, H&TC Ry. Co. Survey, except the Tonkawa formation |
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Xxxxxxxx County, Oklahoma |
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Chance #1-7 |
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Lessor: |
Xxxxxx X. Xxxxxx and Xxxxxx Xxxxxx, husband and wife |
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Lessee: |
Xxx Xxxxxxx |
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Date: |
August 30, 1978 |
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Recorded: |
Volume 527, Page 99 |
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Description: |
Lots 1, 2, 3 and E/2 NW/4 and NE/4 SW/4 and N/2 SE/4 and SE/4 SW/4 and SW/4 SE/4 Section 7-T24N-R18W |
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Xxxxxx: |
Xxxxxx X. Xxxxxx and Xxxxx Xxx Xxxxxx, husband and wife |
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Lessee: |
Xxx Xxxxxxx |
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Date: |
August 30, 1978 |
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Recorded: |
Volume 527, Page 101 |
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Description: |
Lots 1, 2, 3 and E/2 NW/4 and NE/4 SW/4 and N/2 SE/4 Section 7-T24N-R18W |
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Lessor: |
Xxxx Chance Xxxxxxxx and Xxxxxx X. Xxxxxxxx, wife and husband |
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Lessee: |
Xxx Xxxxxxx |
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Date: |
August 30, 1978 |
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Recorded: |
Volume 527, Page 102 |
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Description: |
Lots 1, 2, 3 and E/2 NW/4 and NE/4 SW/4 and N/2 SE/4 Section 7-T24N-18W |
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Lessor: |
Amroy Co. |
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Lessee: |
Xxx Xxxxxxx |
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Date: |
October 20, 1978 |
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Recorded: |
Volume 527, Page 106 |
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Description: |
Lots 1, 2, 3 and E/2 NW/4 and NE/4 SW/4 and N/2 SE/4 and NE/4 Section 7-T24N-R18W |
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Xxxxxx: |
Xxxxx X. Xxxxx, a widow |
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Lessee: |
Xxx Xxxxxxx |
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Date: |
January 22, 1979 |
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Recorded: |
Volume 537, Page 474 |
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Description: |
Lots 1, 2, 3 and E/2 NW/4 and NE/4 SW/4 and N/2 SE/4 and NE/4 Section 7-T24N-R18W |
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Lessor: |
Xxxxx X. Xxxxxxx, a widow |
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Lessee: |
Xxx Xxxxxxx |
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Date: |
November 3, 1978 |
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Recorded: |
Volume 527, Page 110 |
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Description: |
NE/4 Section 7-T24N-R18W |
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Lessor: |
Xxxxx X. Xxxxxxx Living Trust dated November 11, 1975 |
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Lessee: |
Xxx Xxxxxxx |
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Date: |
November 3, 1978 |
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Recorded: |
Volume 527, Page 108 |
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Description: |
NE/4 Section 7-T24N-R18W |
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Xxxxxx: |
Xxxxxxx Xxxx Xxx and Xxxxxxx Xxxxx Xxx, husband and wife |
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Lessee: |
Xxx Xxxxxxx |
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Date: |
October 6, 1978 |
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Recorded: |
Volume 537, Page 476 |
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Description: |
NE/4 Section 7-T24N-R18W |
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Lessor: |
United States of America |
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Lessee: |
Xxxxxx Xxxxxx, Inc. |
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Date: |
October 1, 1979 |
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Recorded: |
Volume 557, Page 363 |
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Description: |
Lot 4 and SE/4 SE/4 Section 7-T24N-R18W |
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Lessor: |
County Commissioners of Xxxxxxxx County |
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Lessee: |
Xxx Xxxxxxx |
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Date: |
October 9, 1978 |
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Recorded: |
Volume 527, Page 104 |
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Description: |
A tract of land in the NE/4 of Section 7-T24N-R18W described as follows: |
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Beginning at a point 1 chain and 50 links west of the northeast corner of Section 7 on section line between Section 6 and 7; thence south 13 degrees west 5 chains and 50 links; thence south 17 degrees east 3 chains and 50 links to a point of section line between Section 7 and 8, south of said northeast corner of Section 7 a distance of 8 chains and 25 links; said above line described in Section 7 to be in the west line of public highway 50 feet in width. |
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Pottawatomie County, Oklahoma |
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Baird #1 |
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Lessor: |
X. Xxxxx Xxxxx |
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Lessee: |
Xxxxxxx X. Xxxxxx |
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Date: |
December 10, 1976 |
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Recorded: |
Volume 547, Page 180 |
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Description: |
N/2 SE/4 Section 4-T8N-R2E |
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Lessor: |
Xxx X. Xxxxx |
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Lessee: |
Xxxxxxx X. Xxxxxx |
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Date: |
December 15, 1976 |
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Recorded: |
Volume 547, Page 184 |
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Description: |
N/2 SE/4 Section 4-T8N-R2E |
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Lessor: |
Xxxxx X. Xxxxxx |
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Lessee: |
Xxxxxxx X. Xxxxxx |
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Date: |
February 14, 1977 |
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Recorded: |
Volume 547, Page 192 |
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Description: |
N/2 SE/4 Section 4-T8N-R2E |
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Lessor: |
Xxxxxx Xxxxxx Xxxxx |
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Lessee: |
Xxxxxxx X. Xxxxxx |
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Date: |
February 14, 1977 |
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Recorded: |
Volume 547, Page 190 |
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Description: |
N/2 SE/4 Section 4-T8N-R2E |
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Lessor: |
Xxxxxx X. Xxxxxxx |
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Lessee: |
Xxxxxxx X. Xxxxxx |
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Date: |
February 14, 1977 |
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Recorded: |
Volume 547, Page 188 |
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Description: |
N/2 SE/4 Section 4-T8N-R2E |
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Xxxxx County, Oklahoma |
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Brown #1-4 |
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Lessor: |
Singer Bros. |
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Date: |
April 21, 1976 |
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Recorded: |
Volume 387, Page 842 |
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Description: |
SE/4 Section 4-T18N-R19W |
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Lessor: |
Xxxxxxx X. Xxxxxxxxx |
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Date: |
June 3, 1976 |
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Recorded: |
Volume 391, Page 340 |
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Description: |
SE/4 Section 4-T18N-R19W |
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Lessor: |
Xxxxx X. Xxxxxxx |
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Date: |
March 20, 1979 |
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Recorded: |
Volume 437, Page 374 |
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Description: |
SE/4 Section 4-T18N-R |
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Lessor: |
Xxxx X. Xxxxxxx |
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Date: |
March 20, 1979 |
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Recorded: |
Volume 437, Page 386 |
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Description: |
SE/4 Section 4-T18N-R19W |
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Lessor: |
Xxxxxxxx Xxxxxxxxx |
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Date: |
March 20, 1979 |
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Recorded: |
Volume 437, Page 376 |
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Description: |
SE/4 Section 4-T18N-R19W |
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Lessor: |
Xxxxx X. Xxxxx, Co-Trustee, Xxxxxxxx X. Xxxxxx, Co-Trustee and The Fourth National Bank & Trust Company of Wichita, Co-Trustee under the Will of Xxxxxxx X. Xxxxx |
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Date: |
March 27, 1979 |
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Recorded: |
Volume 437, Page 388 |
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Description: |
SE/4 Section 4-T18N-R19W |
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Lessor: |
Xxxxxxx X. Xxxxxxxxx |
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Date: |
June 3, 1976 |
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Recorded: |
Volume 391, Page 334 |
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Description: |
SW/4 Section 4-T18N-R19W |
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Lessor: |
Xxxxxxxx Xxxxxxxxx |
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Date: |
March 20, 1979 |
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Recorded: |
Volume 437, Page 378 |
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Description: |
SW/4 Section 4-T18N-R19W |
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Lessor: |
Xxxxx X. Xxxxxx |
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Date: |
February 28, 1974 |
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Recorded: |
Volume 350, Page 356 |
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Description: |
SE/4 and SW/4 Section 4-T18N-R19W |
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Lessor: |
The First National Bank and Trust Company of Oklahoma City, Trustee, Xxxx Xxxxxxxxx Xxxxxxx Trust |
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Date: |
July 3, 1979 |
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Recorded: |
Volume 442, Page 368 |
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Description: |
SE/4 and SW/4 Section 4-T18N-R19W |
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Xxxxxx: |
Xxxxx X. Xxxxx and Xxxxx Xxxxx, husband and wife |
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Date: |
April 5, 1979 |
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Recorded: |
Volume 434, Page 827 |
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Description: |
SE/4 and SW/4 Section 4-T18N-R19W |
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Lessor: |
Fordom, Inc. |
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Date: |
March 27, 1979 |
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Recorded: |
Volume 437, Page 372 |
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Description: |
SE/4 and SW/4 Section 4-T18N-R19W |
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Lessor: |
Xxxxx Company |
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Date: |
April 16, 1979 |
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Recorded: |
Volume 437, Page 384 |
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Description: |
SE/4 and SW/4 Section 4-T18N-R19W |
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Lessor: |
X.X. Xxxxxxxxx Co. |
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Date: |
July 9, 1979 |
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Recorded: |
Volume 442, Page 370 |
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Description: |
SE/4 and SW/4 Section 4-T18N-R19W |
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Lessor: |
Xxxxx X. Xxxxx |
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Date: |
October 25, 1978 |
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Recorded: |
Volume 432, Page 809 |
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Description: |
Lots 1 and 2 and the S/2 NE/4 Section 4-T18N-R19W |
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Lessor: |
Xxxx X. Xxxxx |
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Date: |
December 18, 1979 |
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Recorded: |
Volume 432, Page 807 |
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Description: |
Lots 1 and 2 and the S/2 NE/4 Section 4-T18N-R19W |
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Major County, Oklahoma |
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Xxxxxxxxx #1-12 |
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Lessor: |
Xxxxxx X. Xxxxxxx & Xxxxxxx Xxxxxxx, husband and wife |
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Lessee: |
Continental Resources Corporation |
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Date: |
May 22, 1981 |
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Recorded: |
Volume 567, Page 231 |
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Description: |
E/2 NW/4 Section 12-T22N-R15W |
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Lessor: |
The Reserve Petroleum Company |
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Lessee: |
Continental Resources Corporation |
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Date: |
May 6, 1981 |
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Recorded: |
Volume 567, Page 226 |
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Description: |
E/2 NW/4 Section 12-T22N-R15W |
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Lessor: |
Sun Oil Company (Delaware) |
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Lessee: |
Continental Resources Corporation |
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Date: |
September 23, 1980 |
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Recorded: |
Volume 543, Page 531 |
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Description: |
W/2 NW/4 Section 12-T22N-R15W, from the surface of the ground to the stratigraphic equivalent of the depth penetrated in the first well drilled on said premises under this lease |
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Lessor: |
X.X. Xxxxx, Inc. |
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Lessee: |
X.X. Xxxxxx, Inc. |
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Date: |
June 15, 1978 |
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Recorded: |
Volume 488, Page 247 |
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Description: |
W/2 NE/4 and NW/4 SE/4 Section 12-T22N-R15W |
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Lessor: |
Xxxxxxx X. Xxxxxxxxx and Xxxxx X. Xxxxxxxxx |
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Lessee: |
X.X. Xxxxxx, Inc. |
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Date: |
June 6, 1978 |
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Recorded: |
Volume 487, Page 384 |
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Description: |
W/2 NE/4 Section 12-T22N-R15W |
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Lessor: |
Xxxxxxx X. Xxxxxxxxx and Xxxxx X. Xxxxxxxxx |
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Lessee: |
X.X. Xxxxxx, Inc. |
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Date: |
June 6, 1978 |
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Recorded: |
Volume 495, Page 499 |
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Description: |
NW/4 SE/4 Section 12-T22N-R15W |
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Lessor: |
Xxx X. Xxxxxx and X.X. Xxxxxx |
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Lessee: |
JB Madhouse, Inc. |
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Date: |
July 10, 1978 |
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Recorded: |
Volume 490, Page 213 |
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Description: |
E/2 E/2 Section 12-T22N-R15W |
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Lessor: |
Xxxx X. Xxxxxxxx |
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Lessee: |
JB Madhouse, Inc. |
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Date: |
July 10, 1978 |
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Recorded: |
Volume 491, Page 597 |
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Description: |
E/2 E/2 Section 12-T22N-R15W |
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Xxxxxx: |
Xxxx Xxxxxx Xxxxxxx and Xxxx Xxxxxxx |
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Lessee: |
JB Madhouse, Inc. |
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Date: |
July 5, 1978 |
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Recorded: |
Volume 490, Page 539 |
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Description: |
SW/4 and SW/4 SE/4 Section 12-T22N-R15W |
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Lessor: |
X. Xxx Xxxxxxxx and Xxxxxxx Xxxxxxxx |
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Lessee: |
JB Madhouse, Inc. |
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Date: |
July 5, 1978 |
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Recorded: |
Volume 490, Page 537 |
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Description: |
SW/4 and SW/4 SE/4 Section 12-T22N-R15W |
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Lessor: |
Xxxxxx Xxxxx and Xxxxx Xxxxx |
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Lessee: |
X.X. Xxxxxx, Inc. |
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Date: |
July 5, 1978 |
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Recorded: |
Volume 490, Page 532 |
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Description: |
SW/4 and SW/4 SE/4 Section 12-T22N-R15W |
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Lessor: |
Xxxx X. Xxxxxxx and X.X. Xxxxxxx |
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Lessee: |
X.X. Xxxxxx, Inc. |
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Date: |
July 5, 1978 |
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Recorded: |
Volume 491, Page 599 |
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Description: |
SW/4 and SW/4 SE/4 Section 12-T22N-R15W |
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Lessor: |
Xxx X. Xxxxxxxx and Xxxxxx Xxxxxxxx |
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Lessee: |
X.X. Xxxxxx, Inc. |
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Date: |
July 5, 1978 |
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Recorded: |
Volume 493, Page 15 |
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Description: |
SW/4 and SW/4 SE/4 Section 12-T22N-R15W |
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Beaver County, Oklahoma |
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Xxxxxxxx #1 |
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Lessor: |
Xxxx X. Xxxxxx, et ux |
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Lessee: |
Kingwood Oil Company |
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Date: |
February 20, 1961 |
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Recorded: |
Volume 32, Page 323 |
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Description: |
Section 36-T2N-R27E |
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Lessor: |
Xxx Xxxxx, et ux |
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Lessee: |
Xxxx X. Xxxxx |
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Date: |
February 24, 1955 |
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Recorded: |
Volume 148, Page 612 |
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Description: |
Section 36-T2N-R27E |
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Lessor: |
X.X. Xxxxx, et ux |
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Lessee: |
Xxxx X. Xxxxx |
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Date: |
February 28, 1955 |
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Recorded: |
Volume 149, Page 340 |
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Description: |
Section 36-T2N-R27E |
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Xxxxxxxx A #1 |
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Lessor: |
Xxxx X. Xxxxxx, et al |
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Lessee: |
X.X. Xxxxx |
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Date: |
December 13, 1945 |
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Recorded: |
Volume 8, Page 248 |
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Description: |
Section 23-T5N-R23E |
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Lessor: |
The Federal Land Bank of Wichita, Wichita, Kansas |
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Lessee: |
X.X. Xxxxx |
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Date: |
December 11, 1950 |
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Recorded: |
Volume 24, Page 50 |
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Description: |
Section 23-T5N-R23E |
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Lessor: |
Xxxxxxx Xxxxxx and Xxxxxxx Xxxxxx |
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Lessee: |
X.X. Xxxxx |
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Date: |
December 11, 1945 |
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Recorded: |
Volume 8, Page 249 |
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Description: |
Section 23-T5N-R23E |
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Lessor: |
Beaver, Meade and Englewood Railroad Company |
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Lessee: |
City Service Oil Company |
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Date: |
January 19, 1956 |
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Recorded: |
Volume 161, Page 6 |
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Description: |
Section 23-T5N-R23E |
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Lessor: |
The First National Bank & Trust Company of Oklahoma City, Trustee under the Will of Xxxxxxx X. Xxxxxx |
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Lessee: |
Xxxxxxxx Industries, Inc. |
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Date: |
March 30, 1979 |
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Recorded: |
Volume 506, Page 103 |
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Description: |
Section 23-T5N-R23E |
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Lessor: |
The Federal Land Bank of Wichita, Wichita, Kansas |
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Lessee: |
Xxxxxx Petroleum Corporation |
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Date: |
February 15, 1979 |
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Recorded: |
Volume 503, Page 439 |
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Description: |
Section 23-T5N-R23E |
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Xxxxxx: |
Xxxxxx X. Xxxxx and wife, Xxxxxxx Xxxxx |
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Lessee: |
Ivanhoe Petroleum Company and Lobo Exploration Company |
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Date: |
July 27, 1980 |
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Recorded: |
Volume 490, Page 322 |
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Description: |
Section 23-T5N-R23E |
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Lessor: |
Xxxxxx X. Xxxxxxxx, et al |
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Lessee: |
Stanolind Oil and Gas Company |
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Date: |
October 7, 1948 |
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Recorded: |
Volume 28, Page 76 |
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Description: |
Section 23-T5N-R23E |
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King County, Texas |
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Xxxxxxxxx/Beadhead Xxxxx |
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Lessor: |
Bank One, Texas, N.A., Fort Worth, Successor Trustee under the Will of X.X. Xxxxxxxxx, Xx., Deceased, et al |
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Lessee: |
Xxxxx X. Xxxxxxxxx Oil & Gas, Inc. |
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Date: |
June 15, 1999, effective August 17, 1999 |
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Recorded: |
Memorandum of Oil and Gas Lease recorded at Volume 61, Page 628 |
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Description: |
INSOFAR AND ONLY INSOFAR as said lease covers the NW/4 of Section 66, A-441, Block A, Xxxx X. Xxxxxx Survey, from 5,550' down to 5,886'; the SW/4 of Section 66, A-441, Xxxxx A, Xxxx X. Xxxxxx Survey, from 5,550' down to 5,952' |
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Lessor: |
X.X. Xxxxxxxxx, Xx., et al |
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Lessee: |
The Ard Drilling Company |
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Date: |
November 28, 1949 |
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Recorded: |
Volume 1, Page 454, as amended |
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Description: |
E/2 Section 68, Block A, Xxxx X. Xxxxxx Survey, from the surface to 5,530 feet subsurface; E/2 Section 65, Block A, Xxxx X. Xxxxxx Survey from the surface to 5,920 feet subsurface; S/2 Section 53, Block 10, BS&F Survey, from the surface to 5,900 feet subsurface; N/2 Section 41, Block 10, AB&M Survey, from the surface to 5,823 feet subsurface; North 320 acres Section 76, Block A, X.X. Xxxxxxxxxx Survey, from the surface to 6,038 feet subsurface |
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END OF EXHIBIT "A" |
