Bayshore Exploration L.L.C. 00000 Xxxx Xxxxxxx, Xxxxx 000
Xxxx, Xxxxx 00000
Phone (000) 000-0000
Fax (000) 000-0000
xxxxxxxxxxxx@xxxxxxxxx.xxx
March 8, 2006
Xxxxxx Energy, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxxxxx 00000
RE: Lease Acquisition Agreement
3,200 acres, more or less
La Salle County, Texas
Gentlemen:
This letter is written to evidence the agreement between Bayshore Exploration
L.L.C. ("Bayshore") and Xxxxxx Energy, Inc., ("Xxxxxx") pertaining to the
acquisition and development of certain oil and gas leases and oil and gas lease
options located in La Salle County, Texas.
Bayshore is in the process of acquiring certain oil and gas leases and/or oil
and gas lease options on 3,200 acres ("the subject acreage"), more or less, for
the purpose of oil and gas exploration and production. The subject acreage is
outlined on the attached land plat and described as follows, to wit:
Tract One - 640 acres, more or less, being all of the H. & G.N.R.R. Survey No.
121, A-260, La Salle County, Texas.
Tract Two - 640 acres, more or less, being all of the X. Xxxxxxxx Survey No.
140, A-1084, La Salle County, Texas.
Tract Three- 640 acres, more or less, being all of X. Xxxxxxxx Survey No. 150,
A-1042, La Salle County, Texas.
Tract Four- 640 acres, more or less, being all of the H. & G.N.R.R. Survey No.
139, A-267, La Salle County, Texas.
Tract Five - 640 acres, more or less, being all of the X. Xxxxxxxx Survey 122,
A-1082, La Salle County, Texas.
Xxxxxx desires to participate for a 50% working interest ownership in the
acquisition and development of the subject acreage and hereby agrees to the
following terms and conditions:
Page 2 March 16, 2006
1. Xxxxxx agrees to pay to Bayshore, on or before March 20, 2006, the
sum of $305,000.00 U.S. dollars which represents Xxxxxx'x share (50%)
of the lease and lease option acquisition costs. In the event Xxxxxx
does not pay Bayshore the sum of $305,000.00 U.S. dollars on or before
March 20, 2006, then this letter agreement and all of its terms and
conditions will become null and void.
2. Bayshore agrees to make its best effort to acquire said leases and
lease options on the subject acreage within 90 days of the date of this
letter agreement.
3. In the event that Bayshore is unable to acquire all the subject
tracts Xxxxxx'x deposit shall be applied at the pro-rata cost base and
the balance returned to Xxxxxx.
4. Bayshore also agrees, upon acquisition of said leases and lease
options on the subject acreage, to assign Xxxxxx a 50% working interest
ownership in the acquired leases and lease options.
5. Within ninety days of this agreement, Xxxxxx shall have an option to
increase its leasehold working interest in the subject acreage to
seventy-five percent on the same costs, terms and conditions as
provided herein.
6. Bayshore and Xxxxxx agree to enter into a mutually acceptable Joint
Operating Agreement to cover oil and gas exploration and production
operations on the subject acreage naming Bayshore as operator.
7. This agreement is the entire agreement between Bayshore and Xxxxxx
pertaining to the lease acquisition and options of the subject acreage.
Any changes to this agreement must be agreed to in writing by both
parties.
If the foregoing is your understanding of our agreement, please acknowledge your
acceptance by signing in the space provided below and returning one fully
executed agreement to Bayshore along with your check in the amount of
$305,000.00 U.S. dollars on or before March 20, 2006.
Sincerely,
BAYSHORE EXPLORATION L.L.C.
/s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
President
Attachment: Land Plat
AGREED to and ACCEPTED this
16th day of March, 2006.
XXXXXX ENERGY, INC.
By: /s/Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx, CEO
