<PAGE> 1
Exhibit 10.4
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT made as of the 1st day of October, 2000
BETWEEN:
WESTLINKS RESOURCES LTD., a body corporate, having an office in
the City of Calgary, in the Province of Alberta ("Vendor")
- and -
899776 ALBERTA LTD., a body corporate, having in office in the
City of Calgary, in the Province of Alberta ("Purchaser")
WHEREAS Vendor desires to sell and convey the Assets to Purchaser and
Purchaser desires to purchase and receive the Assets from Vendor, in each case
upon the terms and conditions herein set forth;
NOW THEREFORE in consideration of the premises hereto and of the
covenants, warranties, representations, agreements and payments herein set forth
and contained, the Parties agree as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Agreement (including the recitals hereto, this Article and each
Schedule), the words and phrases set forth below shall have the meanings
ascribed thereto below, namely:
"A.F.E." means an authority for expenditure, mail ballot or cash
call or any other approval given by the holders of working
interests in the Lands or Tangibles to conduct an operation, create
or incur a financial obligation or accept a risk;
"ASSETS" means the Petroleum and Natural Gas Rights, Tangibles,
Proprietary Technical Information and Miscellaneous Interests;
"CLOSING" means the transfer of the Assets by Vendor to Purchaser
(or unaffected Assets, if a closing occurs in accordance with Clause
11.1(d)) and the payment by Purchaser to Vendor of the Purchase
Price (or portion thereof, if paid in accordance with Clause
11.1(d)) and the completion of all matters incidental thereto as
herein provided for;
"CLOSING TIME" means the time and day determined pursuant to
Clause 6.2;
"CONVEYANCE" means an agreement (or agreements, if a closing occurs
in accordance with Clause 11.1(d)) in the form or substantially in
the form of Schedule "B";
"DOLLAR" or "$" means a dollar of the lawful money of Canada;
"EFFECTIVE TIME" means 8.00 a.m., local time at Calgary, Alberta, on
the 1st day of October, 2000;
"FACILITIES" means the facility or facilities set out in Schedule
"E".
<PAGE> 2
- 2 -
"LANDS" means, in respect of the lands described in the Land
Schedule, the Petroleum Substances within, upon or under those
lands, together with the right to explore for and recover Petroleum
Substances insofar only as they are granted by the Leases;
"LAND SCHEDULE" means Schedule "A";
"LEASES" means, collectively, the leases, reservations, permits,
licences, or other documents of title set forth and described in the
Land Schedule (or any replacement thereof, renewal thereof or leases
derived therefrom) by virtue of which the holder thereof is entitled
to drill for, win, take, own and remove the Petroleum Substances
within, upon or under all or any part of the Lands;
"MISCELLANEOUS INTERESTS" means the entire right, title estate and
interest of the Vendor (whether legal, beneficial or otherwise) in
and to all property, assets and rights relating to the Petroleum and
Natural Gas Rights or the Tangibles (other than Petroleum and
Natural Gas Rights or the Tangibles) and to which Vendor is entitled
at the Effective Time including, but not in limitation of the
generality of the foregoing, such interests of Vendor in:
(i) all contracts, agreements, documents, Unit Agreements,
Production Sales Contracts, books and records and well files
relating to the interest of Vendor in the Petroleum and
Natural Gas Rights, or the Tangibles, and any and all rights
in relation thereto excluding tax and financial records;
(ii) all engineering and production data and information related
to the Petroleum and Natural Gas Rights and the Tangibles in
the custody of Vendor or to which it is entitled, excluding
interpretive data and economic forecasts;
(iii) all subsisting rights to enter upon, use and occupy the
surface above the Lands or any lands with which same have
been pooled or unitized or the sites of any Tangibles or any
lands which are used to gain access to any of the foregoing,
including any fee simple surface titles where owned by
Vendor; and
(iv) the Wells, including well bores and down-hole casing.
"PARTIES" means the parties to this Agreement and "PARTY" means any
one of them;
"PERMITTED ENCUMBRANCES" means:
(i) all royalty burdens, liens, adverse claims, penalties, net
profit interests and other encumbrances set out in the Land
Schedule;
(ii) easements, rights of way, servitudes or other similar rights
in land including, without limiting the generality of the
foregoing, rights of way and servitudes for railways,
sewers, drains, gas and oil pipelines, gas and water mains,
electric light, power, telephone, telegraph or cable
television conduits, poles, wires and cables;
(iii) the right reserved to or vested in any government or other
public authority by the term of any Lease or by any
statutory provision to terminate any Lease, to require
annual or other periodic payments as a condition of the
continuance thereof, to levy taxes on Petroleum Substances
or the income or revenue
<PAGE> 3
- 3 -
therefrom or to control or regulate the Assets or operations
thereon,including production rates on any property, and all
applicable laws, rules and orders of any governmental
authority;
(iv) the terms and conditions of the Leases or any agreements and
documents which relate to any of the Assets including,
without limitation, any Production Sales Contracts; except
to the extent that they create security interests, burdens
or encumbrances that would not be Permitted Encumbrances
under the provisions of this definition;
(v) undetermined or inchoate liens incurred or created as
security in favour of the person conducting the operation on
any of the Assets for Vendor's proportion of the costs and
expenses of such operations which costs and expenses are not
delinquent as of the Closing Time;
(vi) the reservations, limitations, provisos and conditions in
any original grants from the Crown of any of the Lands or
interests therein and statutory exceptions to title;
(vii) provisions for penalties and forfeitures under agreements as
a consequence of non-participation in operations;
(viii) liens granted in the ordinary course of business to a public
utility, municipality or governmental authority in
connection with operations conducted with respect to the
Assets;
(ix) mechanic's, builder's and material-men's liens in respect of
services rendered or goods supplied for which payment is not
at the time due; and
(x) liens for taxes, assessments and governmental charges which
are not due at such time or the validity of which is being
diligently contested in good faith by or on behalf of
Vendor.
"PETROLEUM AND NATURAL GAS RIGHTS" means all of the Vendor's right,
title estate and interest (whether legal, beneficial or otherwise)
in and to the Leases;
"PETROLEUM SUBSTANCES" means petroleum, natural gas, related
hydrocarbons and any other substances, whether liquid, solid or
gaseous, the rights to which accrue to the holder of the rights to
petroleum, natural gas or related hydrocarbons;
"PLACE OF CLOSING" means the offices of Vendor;
"PRODUCTION SALES CONTRACTS" means the production sales contracts
set forth in Schedule "F";
"PROPRIETARY TECHNICAL INFORMATION" means the Vendor's interest in
that information and data set forth and described in Schedule "G".
"PURCHASE PRICE" shall have the meaning subscribed thereto in Clause
3.1;
"TANGIBLES" means all of the right, title estate and interest of
Vendor (whether legal, beneficial or otherwise) in and to all
tangible depreciable property and assets situate in,
<PAGE> 4
- 4 -
on or about the Lands or appurtenant thereto and used solely in
connection with production, gathering, processing, transmission,
compression or treatment operations on the Lands and all of Vendor's
right, title and interest in the Facilities and all inventories of
tangible equipment, material and spare parts associated with the
Facilities;
"TITLE DEFECT" shall have the meaning ascribed thereto in Clause
11.1 hereof;
"WELLS" means all producing, shut-in, water source, observation,
disposal, injection, suspended, abandoned and similar wells located
on the Lands or directly relating to the operation of the Lands as
described and listed in Schedule "D".
1.2 INCORPORATION OF SCHEDULES
The following Schedules are attached to and incorporated as part of this
Agreement:
(a) Schedule "A" -- Land Schedule;
(b) Schedule "B" -- Conveyance;
(c) Schedule "C" -- Authorizations for Expenditures ("A.F.E.'s");
(d) Schedule "D" -- Wells;
(e) Schedule "E" -- Facilities;
(f) Schedule "F" -- Production Sales Contracts;
(g) Schedule "G" -- Proprietary Technical Information;
(h) Schedule "H" -- Processing Agreements, Marketing Agreements and
Transportation Agreements.
1.3 SCHEDULE REFERENCES
Wherever any provision of any Schedule to this Agreement conflicts with
any provision in the body of this Agreement, the provisions of the body of this
Agreement shall prevail.
1.4 HEADINGS
The headings of Articles and clauses herein and in the Schedules are
inserted for convenience of reference only and shall not affect or be considered
in the construction or interpretation of the provisions hereof.
1.5 GENDER
In this Agreement, words importing persons include companies and vice
versa and words importing the masculine gender include the feminine and neuter
gender and vice versa.
<PAGE> 5
- 5 -
1.6 REFERENCES
Except as otherwise provided for herein, "this Agreement", "hereto",
"herein", "hereof", "hereby", "hereunder" and similar expressions refer to this
agreement and not to any particular section, subsection, paragraph,
subparagraph, clause, subclause schedule or other portion thereof.
1.7 KNOWLEDGE
Where in this Agreement a representation or warranty is made on the basis
of the knowledge or awareness of a party, such knowledge or awareness consists
only of the actual knowledge or awareness, as the case maybe, of the current
senior officers of such party and does not include the knowledge or awareness of
any other person.
ARTICLE 2
SALE
2.1 SALE
Vendor agrees to sell and convey the Assets to Purchaser and Purchaser
agrees to purchase and receive the Assets from Vendor, all in accordance with
and subject to the terms and conditions set forth in this Agreement.
ARTICLE 3
CONSIDERATION
3.1 PRICE
The aggregate price to be paid by Purchaser to Vendor for the Assets shall
be Five Million and Fifty Thousand Dollars ($5,050,000.00) (hereinafter called
the "Purchase Price"), subject to adjustments as herein provided.
3.2 MANNER OF PAYMENT
The Purchase Price shall be payable by the Purchaser as follows:
(a) The Purchase Price shall be paid by certified cheque or bank draft
delivered to Vendor at Closing.
3.3 INTEREST ON PURCHASE PRICE
Purchaser shall pay to the Vendor interest on the Purchase Price from and
including the Effective Time to and including the day prior to the Closing Time
at the prime rate calculated daily and not compounded, as established by the
Bank of Montreal, Main Branch, Calgary.
<PAGE> 6
- 6 -
3.4 ALLOCATION OF PURCHASE PRICE
The Purchase Price shall be allocated among the Assets as follows:
<TABLE>
<C> <S> <C>
(a) To Petroleum and Natural Gas Rights $3,787,500.00
(b) To Tangibles $1,262,490.00
(c) To Miscellaneous Interests $10.00
-------------
TOTAL $5,050,000.00
=============
</TABLE>
The amount allocated to Petroleum and Natural Gas Rights shall be
increased or decreased, as applicable, by any adjustments provided for in
Article 4 hereof and the amount payable pursuant to Clause 3.3.
3.5 GOODS AND SERVICES TAX
The Parties hereby agree that Vendor and Purchaser shall comply with
federal legislation pertaining to the Goods and Services Tax ("GST"). The GST
Registration No. of Vendor is R892642893, and the GST Registration No. of
Purchaser is . Purchaser shall pay Vendor applicable GST with respect to
that portion of the Purchase Price allocated to the Tangibles pursuant to Clause
3.4 unless it satisfies Vendor that an exemption from the requirement to pay
such tax to Vendor is applicable, due to provisions under the legislation for
self-assessment or otherwise.
ARTICLE 4
ADJUSTMENTS
4.1 ADJUSTMENTS
(a) All benefits and obligations of every kind and nature incurred or
accruing in respect of the Assets prior to the Effective Time,
including without limitation operating costs, property taxes,
capital costs, lease rentals, royalty obligations, the proceeds from
the sale of production from the Lands, proceeds from third party
fees, including processing fees, and recoveries of overhead and
administration costs and expenses, are for Vendor's account.
(b) All benefits and obligations of every kind and nature incurred or
accruing in respect of the Assets, on or after the Effective Time
but prior to the Closing, including without limitation operating
costs, property taxes, lease rentals, royalty obligations, the
proceeds from the sale of production from the Lands, proceeds from
third party fees, including processing fees, and recoveries of
overhead and administration costs and expenses, are for the account
of the Purchaser and shall be adjusted for in the statement of
adjustments.
(c) Two (2) business days before Closing, Vendor shall prepare and
submit to Purchaser an interim statement of adjustments effective as
of the Effective Time. At Closing the parties shall, to the extent
practicable, adjust and settle accounts pertaining to the Assets.
The Purchase Price shall be adjusted to reflect the adjustments and
settlements shown on the interim statement of adjustments as agreed
to by the parties hereto.
<PAGE> 7
- 7 -
(d) Subject to Subclause (e), all accounting and adjustments not readily
ascertainable at Closing shall be settled between the parties on an
item-by-item basis as soon after Closing as they become
ascertainable. The adjustment and settlement of accounts will be
considered concluded at the time Vendor and Purchaser sign a
statement of adjustments that expressly states it is a final
statement of all adjustments, which shall be no later than six (6)
months after Closing. Payment for adjustments on the final statement
of adjustments shall be made within thirty (30) days of the date of
the final statement of adjustments. Vendor shall prepare the final
statement of adjustments. The records related to adjustments may be
audited by either party for two (2) years after the date of the
final statement of adjustments. Accounting or adjustments resulting
from the audit shall be settled between Vendor and Purchaser on an
item-by-item basis as they occur.
(e) Accounting or adjustments resulting from royalty audits or from
thirteenth month adjustments for gas plant throughput and gas cost
allowance for the Assets, relating to the period prior to Closing;
(i) for which audit queries or thirteenth month adjustments are
outstanding at Closing; or
(ii) that occur after Closing but not later than four years after
Closing;
shall be made as they occur and payment for them shall be made
within thirty (30) days of each adjustment and shall be made by
Purchaser to Vendor, or vice versa, as the case may be. Costs
associated with review, accounting and administration of any such
audits or adjustments that relate to a period prior to the Effective
Date shall be borne by the Vendor. Vendor may audit the records of
Purchaser relating to such accounting or adjustments for two years
from the date the adjustment is made and accounting or adjustments
resulting from the audit shall be settled between Vendor and
Purchaser on an item-by-item basis as they occur.
(f) For the purposes of determining the adjustments herein provided for,
the following provisions will apply to the apportionment of the
revenues, costs, expenses and other relevant charges in preparing
the interim and final statements of adjustments:
(i) Petroleum Substances produced from the Lands and at the
Effective Time beyond the wellhead shall not form part of
the Assets;
(ii) all prepaid rentals and property taxes whether paid before
or after the Effective Time, for the Assets shall be
apportioned between Vendor and Purchaser as of the Effective
Time;
(iii) capital costs and operating cost advances and similar
prepayments made by Vendor for the Assets for which it is
not operator prior to Closing and relating to benefits
accruing after the Effective Time are the responsibility of
Purchaser and an amount equal to those capital cost and
operating cost advances and similar prepayments shall be
credited to Vendor at Closing;
(iv) there will be no adjustments for Alberta Royalty Tax Credits
or similar incentives not specific to the Assets;
<PAGE> 8
- 8 -
(v) there will be an adjustment for the period from the
Effective Time up to but not including the closing by an
amount equal to:
(A) the proceeds from the sale of production from
the Lands, minus
(B) all royalties and operating expenses,
revenues received by Vendor from the sale of Petroleum
Substances, revenues from royalties attributable to the
Assets and revenues from third party processing from and
after the Effective Time shall be apportioned on the basis
of the date of production or of third party processing.
(vi) Taxes levied under the Freehold Mineral Rights Tax Act
(Alberta) for which the lessee is responsible under any
applicable lease, shall be apportioned between Vendor and
Purchaser as of the Effective Time. Purchaser shall provide
Vendor with copies of all statements and assessments
received under the Freehold Mineral Rights Tax Act
(Alberta), together with material from which Vendor may
assure itself that payments pursuant to such Act are made
on the lowest reasonable basis.
ARTICLE 5
TRANSFER OF ASSETS
5.1 TRANSFER OF ASSETS
The transfer and assignment of the Assets from the Vendor to Purchaser
shall be effective as of the Effective Time. Possession and risk of the Assets
shall transfer from Vendor to the Purchaser at the Closing Time.
ARTICLE 6
CLOSING TIME AND PLACE
6.1 PLACE
Closing shall take place at the offices of the Vendor.
6.2 TIME
Closing shall take place at the offices of the Vendor at 2:00 p.m. on the
15th day of November, 2000, or at such other time or upon such other day as may
be agreed by Purchaser and Vendor.
ARTICLE 7
INTERIM PERIOD
7.1 MAINTENANCE OF ASSETS
Until Closing Time, Vendor shall, to the extent that the nature of its
interest permits, and subject to all agreements applicable to the Assets:
(a) maintain the Assets in a proper and prudent manner in accordance
with generally accepted oil and gas industry practices;
<PAGE> 9
- 9 -
(b) pay or cause to be paid all costs and expenses relating to the
Assets; and
(c) perform and comply with all covenants and conditions contained in
the Leases and all other agreements relating to the Assets.
7.2 CONDUCT OF BUSINESS
Until the Closing Time, Vendor shall conduct or cause to be conducted, in
accordance with generally accepted industry practices, such activities relative
to the Assets as can reasonably be regarded as being in the ordinary course of
business for Vendor. Vendor shall not conduct any activities with respect to the
Assets which cannot reasonably be regarded as being in the ordinary course of
business of Vendor without the prior written consent of Purchaser. Vendor shall
not approve A.F.E. as submitted by an operator where Vendor's share of the costs
thereunder is expected to exceed twenty-five thousand Dollars ($25,000.00), or
renegotiate, amend, vary or alter any contract without Purchaser's prior written
consent.
7.3 INTERIM AGENCY, LIABILITY AND INDEMNITY
(a) Upon Closing, Vendor shall be deemed, for the period from the
Effective Time to Closing, to have been the agent of Purchaser with
respect to all operations and other activities with respect to the
Assets and Purchaser ratifies, adopts and confirms all actions
relative to the Assets which Vendor takes or refrains from taking as
agent for Purchaser in accordance with this Agreement with the
intent and purpose that all actions relative to the Assets taken or
refrained from being taken by Vendor during this period shall be
deemed for all purposes as having been taken or refrained from
having been taken by Purchaser.
(b) In the event that, upon Closing, Purchaser does not become
recognized as a party to any agreement relative to the Assets, then
Vendor shall serve as Purchaser's agent with respect to such
agreement until Purchaser is recognized as a party thereto, taking
or refraining from taking only such actions with respect to such
agreement as Purchaser shall direct in writing. Purchaser shall:
(i) be liable to Vendor for all or any liabilities, losses,
costs, penalties, fines, court costs, legal (on a solicitor
and client basis), accounting and other professional
expenses, claims or damages; and, in addition
(ii) indemnify and hold Vendor harmless against any and all
liabilities, costs, penalties, fines, court costs, legal (on
a solicitor and client basis), accounting and other
professional expenses, claims or damages;
incurred by Vendor as a result of Vendor acting as the agent of
Purchaser pursuant to this Article, except to the extent that the
loss or damage was caused by Vendor's gross negligence or wilful
misconduct.
ARTICLE 8
TITLE RECORDS
8.1 RECORDS
Subject to confidentiality requirements and fiduciary obligations the
Vendor shall:
<PAGE> 10
- 10 -
(a) prior to closing make all books, accounts and other financial data
of the Vendor relating to the Assets and which are in the possession
of the Vendor, available to the Purchaser and its authorized
representatives for such inspection as the Purchaser requires in
connection herewith; and
(b) make such Lease documents, correspondence and other documents
affecting the title of the Vendor to the Assets as are in the
possession of the Vendor, available to the Purchaser and its
authorized representatives for such inspection as the Purchaser
reasonably requires in connection herewith and the Vendor will
deliver such records to the Purchaser promptly after Closing.
ARTICLE 9
CONFIDENTIAL INFORMATION
9.1 GENERALLY
Purchaser shall consider as confidential, shall not communicate to others
(except as is required to be disclosed to directors, officers, representatives,
consultants, financial advisors and other parties who need to know and who are
participating in the due diligence, financing or otherwise assisting either
Party in respect of the transaction contemplated by this Agreement and who have
agreed to keep same confidential) prior to the Closing Time and, in the event
only that the transaction contemplated by this Agreement does not close for any
reason whatsoever, subsequent to the Closing Time, all information which
Purchaser receives from Vendor pursuant to this Agreement other than information
which:
(a) was in the possession of Purchaser prior to its receipt or
acquisition from Vendor;
(b) at the time of disclosure, is in the public domain;
(c) is required to be disclosed pursuant to the applicable legislation,
regulations or rules or by the direction of any court, tribunal or
administrative body having jurisdiction.
ARTICLE 10
CONSENTS AND APPROVALS
10.1 GENERALLY
Prior to Closing, each of the Parties shall use all reasonable efforts to
obtain and deliver to the other Party all necessary consents, permissions, and
approvals by shareholders, partners, third parties and governmental and
regulatory authorities applicable to it in connection with the transaction
herein provided for.
ARTICLE 11
TITLE OBJECTIONS
11.1 GENERALLY
From time to time and in any event no later than three (3) days prior to
the Closing Time, Purchaser shall give Vendor written notice of all defects of
which Purchaser is aware (other than any matters specified in the Land Schedule)
which materially and adversely affect the title of Vendor to the Assets and
which Purchaser does not waive (all of which are herein referred to as "Title
Defects") provided however, Title Defects shall not include Permitted
Encumbrances, preferential rights of purchase
<PAGE> 11
- 11 -
or similar rights. Prior to the Closing Time, Vendor shall diligently make all
reasonable efforts to cure or remove all Title Defects. If all Title Defects
are not cured or removed at or before the Closing Time, Purchaser may elect at
or before Closing Time to:
(a) with the agreement of Vendor, grant a further period of time within
which Vendor may cure or remove the uncured Title Defects; or
(b) subject to Clause 11.3, waive the uncured Title Defects and proceed
with Closing;
(c) if the value of all Title Defects is equal to or greater than
twenty-five (25.0%) percent of the Purchase Price, the Purchaser may
terminate this Agreement without any further obligation to the
Vendor (and the Deposit shall be returned to Purchaser); or
(d) proceed with the Closing of the sale of the Assets which are not
affected by Title Defects, which Closing shall be completed at the
Closing Time in accordance with this Agreement and the portion of
the Purchase Price payable for such portion of the Assets shall be
paid by Purchaser to Vendor at the Closing Time. Vendor shall make
all reasonable efforts to cure or remove the remaining Title Defects
within four (4) months following the Closing Time. Vendor shall give
written notice to Purchaser within this period identifying each of
the Assets which Vendor has cured or removed Title Defects from, if
any. Purchaser shall give written notice to Vendor identifying each
Asset in respect of which Title Defects have been waived by
Purchaser, or cured or removed to the reasonable satisfaction of
Purchaser within seven (7) days after receipt of Vendor's notice,
and the Closing of the sale of the cured Assets shall occur on the
fifth normal business day after receipt by Vendor of Purchaser's
notice. At such time, Purchaser shall pay to Vendor the portion of
the Purchase Price equal to the value of the cured Assets. If Vendor
is unable to cure or remove any of the remaining Title Defects
within four (4) months of the Closing Time, Vendor and Purchaser
shall be released from all obligations hereunder to buy and sell any
such portion of the Assets that are still subject to the remaining
Title Defects.
Failure by Purchaser to make such election at or before Closing Time shall
be irrefutably and conclusively deemed to be an election to waive all uncured
Title Defects. Upon Closing, Purchaser shall be irrefutably and conclusively
deemed to have waived all Title Defects for the purposes of this clause.
11.2 VALUE ALLOCATION
If it is necessary to allocate a value for the purposes of Clause 11.1 to
any particular portion of the Assets, the Parties shall allocate values as may
be agreed upon, acting reasonably.
In the event the Parties fail to reach such agreement, within three (3)
business days of notice given by either Party to the other:
(a) each Party shall provide to the other a written statement separately
setting forth its proposed value with respect to each of the Assets
affected by the Title Defects (hereinafter called the "Affected
Assets"); and
(b) each Party shall submit their determination of value with respect to
each of the Affected Assets to a mutually agreeable independent
engineering consultant firm (hereinafter called the "Evaluator"),
together with written instructions that:
(i) the Evaluator shall not propose a compromise settlement but
must, using good engineering and evaluation practice, select
as the value of each of the Affected
<PAGE> 12
- 12 -
Assets, either the value proposed by Vendor or the value
proposed by Purchaser, and
(ii) such evaluation must be completed within five (5) business
days from the date of submission.
The fees and other costs to be paid to the Evaluator shall be borne
equally by Vendor and Purchaser.
ARTICLE 12
CONVEYANCES
12.1 GENERALLY
At Closing, Vendor shall execute and deliver to Purchaser such transfers,
assignments, conveyances (including the Conveyance), novations, notices of
assignment and other documents with respect to the Assets as may be reasonably
required by Purchaser. After Closing, Vendor shall co-operate with Purchaser's
efforts to secure execution of such documents by the parties thereto other than
Vendor and Purchaser.
12.2 SUBORDINATE DOCUMENTS
All documents executed and delivered pursuant to the provision of this
Article or otherwise pursuant to this Agreement are subordinate to the
provisions of this Agreement and the provisions of this Agreement shall govern
and prevail in the event of a conflict between the provisions of any such
document and the provisions of this Agreement.
12.3 REGISTRATION
Purchaser shall bear all costs incurred in registering with the applicable
public authorities, boards or regulatory authorities, any conveyances of title
and other documents denoting the change in ownership hereunder. Purchaser shall
register all such conveyances and other documents within sixty (60) days after
Closing. Purchaser shall also within sixty (60) days of the Closing, circulate
for execution any assignments, novations and other documents requiring execution
by third parties.
12.4 DOCUMENTS AND FILES
The Vendor shall provide to Purchaser as soon as reasonably practical
after Closing, all Proprietary Technical Information files, documents, records
and similar materials to which it is entitled pursuant to this Agreement.
ARTICLE 13
VENDOR'S REPRESENTATIONS
13.1 GENERALLY
Vendor hereby represents, warrants and covenants to and with Purchaser
that:
(a) Corporate Standing
<PAGE> 13
- 13 -
Vendor is, and at the Closing Time shall continue to be, a
corporation duly organized, validly subsisting under the laws of the
jurisdiction of incorporation of Vendor and the laws of those
jurisdictions in which Vendor is required to be registered;
(b) Requisite Authority
Vendor has taken all necessary corporate action and has all
requisite corporate power and authority to enter into this Agreement
and to perform the obligations of Vendor under this Agreement;
(c) No Conflicts
To the Vendor's knowledge the consummation by Vendor of the
transaction contemplated herein will not violate, nor be in conflict
with, any provision of any agreement or instrument to which Vendor
is a party or by which Vendor is bound, or any judgement, degree,
order, law, statute, rule or regulation applicable to Vendor;
(d) Execution and Enforceability of Documents
This Agreement has been duly executed and delivered by Vendor
and all other documents (including the Conveyance) executed and
delivered by Vendor pursuant hereto shall have been duly executed
and delivered by Vendor. This Agreement does, and such documents
(including the Conveyance) will, constitute legal, valid and binding
obligations of Vendor enforceable in accordance with their
respective terms, subject to bankruptcy, insolvency, preference,
reorganization, moratorium and other similar laws affecting creditor
rights generally and the discretion of courts with respect to
equitable or discretionary remedies and defences;
(e) Finders' Fees or Consulting Fees
Vendor has not incurred any obligation or liability,
contingent or otherwise, for brokers', consulting, legal or finders'
fees in respect of this transaction for which Purchaser shall have
any obligation or liability;
(f) Title
The Vendor does not warrant title to the Assets but does
represent and warrant that it has done no act or thing whereby
Vendor's title to the Assets may be cancelled or terminated and the
Assets are now, and will be at the Closing Time and the Effective
Time, free and clear of all liens, charges, encumbrances, security
interests and adverse claims created by, through or under Vendor,
except such thereof as are set forth in the Land Schedule, the
Permitted Encumbrances and those Title Defects waived or deemed to
be waived by Purchaser;
(g) Quiet Enjoyment
Subject to the Permitted Encumbrances and to the rents,
covenants, conditions and stipulations in the said Leases and any
agreements pertaining to the Assets and on the lessees' or holders'
part thereunder to be paid, performed and observed, Purchaser may
enter into and upon, hold and enjoy the Assets for the residue of
their respective terms and all renewals or extensions thereof for
Purchaser's own use and benefit without any interruption of or by
Vendor or any other person whomsoever claiming or to claim
<PAGE> 14
- 14 -
by, through or under Vendor, and Vendor binds itself to warrant and
defend all and singular the Assets against all persons whomsoever
claiming or to claim the same or any part thereof or any interest
therein by, through or under Vendor;
(h) No Lawsuits or Claims
To the best of Vendor's knowledge, there are no claims,
proceedings, actions or lawsuits in existence, threatened or
asserted against or with respect to the Assets or the interests of
Vendor therein which would have material adverse effect on the
Assets or the value thereof;
(i) Good Standing Under Agreements
To the best of Vendor's knowledge, Vendor is not in material
default nor has it been informed of any material default under any
Lease or any agreements and instruments having application to the
Assets to which Vendor is a party or is bound;
(j) Tax Resident
Vendor is not a non-resident of Canada within the meaning of
Section 116 of the Income Tax Act (Canada);
(k) Taxes
To the best of Vendor's knowledge, all ad valorem, property,
production, severance and similar taxes and assessments based on or
measured by the ownership of the Assets or the production of
Petroleum Substances from the Lands or the receipt of proceeds
therefrom payable by it to the Closing Time and for all prior years
have been properly paid and discharged or will be paid by Vendor;
(l) Outstanding A.F.E.'s
Other than as set forth in Schedule "C", there are no A.F.E.'s
with respect to the Assets which have not been completely billed and
paid as at the date hereof and Schedule "C" hereto sets forth the
amount not yet billed or paid pursuant to each outstanding A.F.E.;
(m) Good Oil and Gas Field Practice
To the best of Vendor's knowledge, where the Vendor was
operator at the relevant time, the Wells have been drilled and, if
completed, completed and operated, and the Facilities have been
operated, in accordance with good oil and gas industry practices and
in compliance with all applicable rules and regulations;
(n) Independent Operations Penalties
Except as disclosed in Schedule "A" hereto, the interests of
Vendor in the Wells are not presently subject to independent
operations penalties due to the failure of Vendor to participate in
an independent operation;
<PAGE> 15
- 15 -
(o) Reduction of Interest
Except as disclosed in Schedule "A" hereto, the Assets are not
subject to reduction by virtue of the conversion or other alteration
of the interest of any third party under existing agreements created
by, through or under Vendor;
(p) Production Sales Contracts
There are no production sales agreements or other arrangements
under which Vendor, or any party acting on its behalf, is obligated
to sell or deliver to any party, any Petroleum Substances allocable
to the Petroleum and Natural Gas Rights except for the agreements
disclosed in Schedule "F" or which can be terminated without penalty
on less than 31 days notice;
(q) Processing Agreements
Except as disclosed in Schedule "H", there are no processing
agreements with third parties in respect of the processing of
Petroleum Substances at the Facilities;
(r) Offset Wells
To Vendor's knowledge, there are not in existence any
obligations arising under any of the Leases or otherwise with
respect to the said Lands to drill thereon a well located in a
spacing unit offsetting any other well, whether or not that other
well is located on the Lands;
(s) Abandonment of Wells
To Vendor's knowledge there are no wells located on the Lands
which have been abandoned or have been plugged and abandoned and the
well-site properly restored in accordance with good oil and gas
field practices and the material requirements of all applicable laws
or regulations;
(t) Condition of Tangibles
To Vendor's knowledge, the Tangibles have been constructed,
maintained and operated in accordance with good oil and gas field
practices and the material requirements of all applicable laws or
regulations;
(u) Area of Mutual Interest
To Vendor's knowledge, none of the Lands is subject to an
agreement which provides for an area of mutual interest;
(v) Rights of First Refusal
None of the Lands is subject to any preferential right of
purchase, right of first refusal or similar right;
(w) Compliance with Laws
To Vendor's knowledge, all laws, regulations and orders of any
governmental authority having application to the Assets, have been
complied with in all material
<PAGE> 16
- 16 -
respects and Vendor possesses valid well, pipeline and other
permits, licences, authorizations, approvals and certificates
required to own and operate the Assets as they are currently
operated;
(x) Tangibles Interest
The Vendor's interest in the Tangibles is not less than the
Vendor's interest in the Lands to which the Tangibles relate and all
Tangibles are beneficially owned by Vendor free and clear of all
mortgages, liens, charges and encumbrances, except for Permitted
Encumbrances;
(y) Material Loss or Damage
There has been no physical change in the Assets subsequent to
the Effective Time (other than in consequence of operation and
production in the ordinary course) which has or would have a
material adverse effect on the value, use or operation thereof which
Purchaser agrees shall exclude:
(i) any material adverse changes in the Assets due to changes in
the prices at which Petroleum Substances may be sold; or
(ii) changes in the value of the Assets; or
(iii) changes in reservoir performance.
(z) Transportation Agreements
There are no agreements respecting transportation of Petroleum
Substances which relate to any of the Assets which cannot be
terminated on 30 days notice.
(aa) Marketing Agreements
The Vendor is not a party to or bound by any marketing
agreements in respect of any Petroleum Substances produced from the
Assets after the Closing time;
(bb) Worker's Compensation
Vendor is not in default of any amounts required to be paid to
any worker's compensation board under any applicable laws or
regulations.
(cc) Environmental Matters
Except with respect to Environmental Damages set forth in the
November 3, 2000 letter from Purchaser to Vendor:
(i) The Vendor is not aware of and has not received notice of any
orders or directives under applicable laws or regulations
which relate to environmental matters and which require any
work, repairs, construction or capital expenditures with
respect to the Assets, where such orders or directives have
not been complied with in all material respects;
<PAGE> 17
- 17 -
(ii) The Vendor is not aware of and has not received notice of any
demand or notice issued under applicable laws or regulations
with respect to the breach of any environmental, health or
safety law applicable to the Assets, including, without
limitation, any applicable laws or regulations respecting the
use, storage, treatment, transportation or disposition of
environmental contaminants, which demand or notice remains
outstanding on the Closing Time; and
(iii) Vendor has not entered into any agreements or made any
commitments or obligations to any third party in respect of
any environmental or reclamation liabilities associated with
the Assets or the third party's interest in the Lands.
(dd) Take or Pay Obligations
As of the Closing Time, the Assets and Petroleum Substances
produced therefrom are not subject to any take or pay or similar
provisions in any Production Sales contract whereby Vendor is
obligated to sell or deliver Petroleum Substances without being
entitled to receive full payment therefor or to pay any person for
Petroleum Substances not delivered under such Production Sales
Contract.
13.2 LIMITATION
Vendor makes no representation or warranty whatsoever except as and to the
extent expressly set forth in Clause 13.1. Vendor disclaims any liability and
responsibility for any representation or warranty which may have been made or
alleged to have been made and which is contained in any instrument or document
relative hereto or to the transactions herein provided for, or contained in any
statement or information made or communicated (orally or in writing) to
Purchaser including, without limitation, any opinion, information or advice
which may have been provided to Purchaser by any officer, shareholder, director,
employee, agent, consultant or representative of Vendor. Without limiting the
generality of the foregoing, Vendor makes no representations or warranties or
covenants as to:
(a) its title in or to the Assets except as, and only to the extent, set
forth in Clause 13.1;
(b) the amounts, quality, content, chemical composition, recoverability
or deliverability of reserves of Petroleum Substances attributable
to the Lands;
(c) the quality, fitness, condition or merchantability of all or any of
the Tangibles;
(d) any geological or other interpretations or economic evaluations of
the Assets; and
(e) estimates of prices or future cash flows arising from the sale of
Petroleum Substances attributable to the Lands or estimates of other
revenues attributable to the Assets or the availability or continued
availability of transportation to sell such Petroleum Substances.
In addition, Vendor does not make any representation, warranty or
covenant, either expressly or by implication herein or collateral hereto, with
respect to any other information provided to Purchaser relative to any of the
Assets. Purchaser acknowledges that it has made its own independent
investigation, analysis, evaluation and verification of Vendor's interests in
the Assets, including Purchaser's own estimate and appraisal of the extent,
suitability, chemical composition, content and value of the reserves of
Petroleum Substances attributable to the Lands and of the condition, content,
suitability, composition and capacity of the Tangibles.
<PAGE> 18
- 18 -
13.3 SUBROGATION
The representations, warranties and covenants of Vendor contained in this
Agreement or made or given pursuant or collateral hereto are made for the
exclusive benefit of Purchaser and are not transferable by Purchaser and may not
be made the subject of any right of subrogation by Purchaser in favour of any
other entity.
ARTICLE 14
PURCHASER'S REPRESENTATIONS
14.1 GENERALLY
Purchaser hereby represents, warrants and covenants to and with Vendor that:
(a) Corporate Standing
Purchaser is, and at the Closing Time shall continue to be, a
company duly organized, validly subsisting under the laws of the
jurisdiction of incorporation of Purchaser and the laws of those
jurisdictions in which Purchaser is required to be registered;
(b) Requisite Authority
Purchaser has taken all necessary corporate action and has all
requisite corporate power and authority to enter into this Agreement
and to purchase and pay for the Assets on the terms described herein
and to perform the other obligations of Purchaser under this
Agreement;
(c) No Conflicts
The consummation by Purchaser of the transactions contemplated
by this Agreement will not violate, nor be in conflict with, the
provisions of any agreement or instrument to which Purchaser is a
party or by which Purchaser is bound, or any judgement, decree,
order, law, statute, rule or regulation applicable to Purchaser;
(d) Execution and Enforceability of Documents
This Agreement has been duly executed and delivered by
Purchaser and all documents required hereunder to be executed and
delivered by Purchaser shall have been duly executed and delivered.
This Agreement does, and such documents will, constitute legal,
valid and binding obligations of Purchaser enforceable in accordance
with their respective terms, subject to bankruptcy, insolvency,
preference, reorganization, moratorium and other similar laws
affecting creditors' rights generally and the discretion of courts
with respect to equitable or discretionary remedies and defences;
(e) Finders' Fees or Consulting Fees
Purchaser has not incurred any liability, contingent or
otherwise, for broker's, consulting, legal or finders' fees in
respect of this transaction for which Vendor shall have any
obligation or liability;
<PAGE> 19
- 19 -
(f) Investment Canada
Purchaser is not a non-Canadian within the meaning and for the
purposes of the Investment Canada Act; and
(g) Qualification to Take Transfers
Purchaser meets all qualification requirements of all
governmental agencies to purchase, to take a transfer of and to hold
the Assets including without limitation, requirements of the Alberta
Energy and Utilities Board to have the licences to the Wells
transferred to it.
ARTICLE 15
ENFORCEMENT OF REPRESENTATIONS AND WARRANTIES
15.1 GENERALLY
The representations and warranties set forth in Clauses 13.1 and 14.1 are
true on the date hereof and will be true on the Closing Time and,
notwithstanding the closing or deliveries of representations and warranties in
any other agreements at Closing prior or subsequent thereto, the representations
and warranties set forth in Clauses 13.1 and 14.1 hereof shall survive Closing
for the benefit of the Purchaser and Vendor respectively, subject to Subclauses
15.3 and 15.4 of this clause.
15.2 NO MERGER
There shall not be any merger of any covenant, representation or warranty
in any assignment, conveyance, transfer or document delivered pursuant hereto
notwithstanding any rule of law, equity or statute to the contrary and all such
rules are hereby waived.
15.3 TIME LIMITATION
No claim or action commenced in respect of a breach of any representation
or warranty set forth in Clauses 13.1 or 14.1 shall be made unless the party
making the claim or prosecuting the action has given written notice of such
claim (including without reasonable particulars of the misrepresentation or
breach) to the other party hereto within the period of twelve (12) months from
the Closing Time.
15.4 VALUE LIMITATION
In no event shall the total of all liabilities and indemnities of the
Vendor to the Purchaser under this agreement, including without limitation, any
claims relating to its representations or warranties under Clause 13.1 and its
indemnity under Clause 16.1(a) exceed an amount equal to the Purchase Price.
ARTICLE 16
INDEMNITIES
16.1 INDEMNITY
(a) Subject to the limitations provided for in Clauses 15.3 and 15.4,
and except with respect to environmental liabilities as provided for
in Clause 16.2 and 16.3 the Vendor shall:
<PAGE> 20
- 20 -
(i) be solely liable and responsible for any and all losses,
costs, damages and expenses which the Purchaser may suffer,
sustain, pay or incur; and
(ii) indemnify and save the Purchaser and its directors, officers,
servants, agents, partners and employees harmless from any and
all claims, liabilities, actions, proceedings, demands,
losses, costs, damages and expenses whatsoever which may be
brought against or suffered by the Purchaser, its directors,
officers, servants, agents, partners or employees or which
they may sustain, pay or incur;
as a direct result of any matter or thing arising out of, resulting
from, attributable to or connected with a breach of the
representations or warranties of Vendor in Clause 13.1. The
indemnity granted by the Vendor herein, however, is not a title
warranty and does not provide an extension of any representation or
warranty contained in Clause 13.1.
(b) The Purchaser shall:
(i) be solely liable and responsible for any and all losses,
costs, damages and expenses which the Vendor may suffer,
sustain, pay or incur; and
(ii) indemnify and save the Vendor and its directors, officers,
servants, agents, partners and employees harmless from any and
all claims, liabilities, actions, proceedings, demands,
losses, costs, damages and expenses whatsoever which may be
brought against or suffered by the Vendor, its directors,
officers, servants, agents, partners or employees or which
they may sustain, pay or incur;
as a result of any matter or thing arising out of, resulting from,
attributable to or in connection with the Assets and occurring or
arising subsequent to the Effective Time; excepting, in each case,
to the extent that such liabilities are reimbursed by insurance or
are caused by the party claiming indemnity.
(c) The indemnities provided in Subclauses (a) and (b) of this Clause
16.1 shall be deemed to apply to all assignments, transfer,
conveyances, novations and other documents conveying the Assets to
the Purchaser notwithstanding the actual terms thereof. Such
indemnities shall extend to legal costs on a solicitor and client
basis.
(d) The Purchaser shall not be entitled to any indemnification in
respect of any matter or thing which is the subject of the
indemnity in Subclause 16.1(a) unless it shall have given written
notice of its claim for indemnification (including reasonable
particulars of the claim), within twelve (12) months of the Closing
Time.
(e) Nothing contained in this Article 16 shall:
(i) impose any liability on either Party for damages for
consequential business loss or loss of value suffered by the
other Party or its successors and assigns; or
(ii) impose any liability on any Party for the income tax
liabilities of any other Party.
16.2 ABANDONMENT AND RECLAMATION
Purchaser shall be liable for all Well abandonment and reclamation costs
attributable to the Assets and Purchaser shall be liable to Vendor and, in
addition, shall indemnify Vendor from and against
<PAGE> 21
- 21 -
any liabilities, losses, costs, penalties, fines, court costs, legal (on a
solicitor and client basis), accountant and other professional expenses, claims
or damages, including consequential damages arising out of or relating to such
abandonment and reclamation or the failure by Purchaser to carry out such
abandonment and reclamation.
16.3 LIABILITY FOR ENVIRONMENTAL LIABILITY
Except as provided in the representations and warranties of the Vendor
contained in Clause 13.1 of this Agreement, the Purchaser acknowledges that it
is acquiring the Assets on an "as is" basis, as of the Effective Time. The
Purchaser acknowledges that it is familiar with the condition of the Assets,
including the past and present use of the Lands and the Tangibles, that the
Vendor has provided the Purchaser with a reasonable opportunity to inspect the
Assets at the sole cost, risk and expense of the Purchaser (insofar as the
Vendor could reasonably provide such access) and that the Purchaser is not
relying upon any representation or warranty of the Vendor as to the condition,
environmental or otherwise, of the Assets, except as contained in this
Agreement. Provided that Closing has occurred, the Purchaser further agrees that
it shall:
(a) be solely liable and responsible for any and all losses (both direct
and indirect), costs (including legal costs payable on a
solicitor/client basis), damages and expenses which the Vendor may
suffer, sustain, pay or incur; and
(b) indemnify and save the Vendor and its directors, officers, servants,
agents and employees harmless from any and all claims, liabilities,
actions, proceedings, demands, losses (both direct and indirect),
costs (including legal costs payable on a solicitor/client basis),
damages and expenses whatsoever which may be brought against or
suffered by the Vendor, its directors, officers, servants, agents or
employees or which they may sustain, pay or incur;
as a result of any matter or thing arising (whether prior to or subsequent to
the Effective Time) out of, resulting from, attributable to or connected with
any environmental liabilities pertaining to the acquired Assets, or any of them,
including, without limitation, damage from or removal of hazardous or toxic
substances, cleanup, well abandonment and reclamation. Once Closing has
occurred, the Purchaser shall be solely responsible for all environmental
liabilities respecting the Lands, the abandonment of all Wells and the
reclamation of the Lands as between the Vendor and the Purchaser, and hereby
releases the Vendor from any claims the Purchaser may have against the Vendor
with respect to all such liabilities and responsibilities, except for any claims
which the Purchaser may have for the breach of a representation or warranty made
by the Vendor contained in Clause 13.1 of this Agreement.
16.4 SUBROGATION REGARDING THIRD PARTIES
Each Party shall have the full right of substitution and subrogation in
and to all covenants and warranties by others heretofore given in respect of the
Assets or any part thereof.
ARTICLE 17
REMEDIES CUMULATIVE
17.1 GENERALLY
No reference to or exercise of any specific right or remedy by a Party
hereunder shall prejudice or preclude such party from exercising or invoking any
other right or remedy in respect thereof whether allowed at law or in equity or
expressly provided for herein. No such remedy shall be exclusive or
<PAGE> 22
- 22 -
dependent on any other such remedy but each party may exercise any one or more
of such remedies independently or in combination.
ARTICLE 18
VENDOR'S CLOSING CONDITIONS
18.1 GENERALLY
The obligation of Vendor to complete the sale of the Assets to Purchaser
pursuant to this Agreement is subject to the satisfaction at or prior to the
time hereinafter specified or, if not specified, at or prior to the Closing Time
of the following conditions precedent:
(a) Representations True
All representations and warranties of Purchaser contained in
this Agreement shall be true in all material respects at and as of
the Effective Time and Closing Time and Purchaser shall have
performed and satisfied all agreements required by this Agreement to
be performed and satisfied by Purchaser at or prior to the Closing
Time and at Closing Purchaser shall have delivered an officer's
certificate to that effect;
(b) Payment
Purchaser shall have tendered to Vendor the total amount
payable by Purchaser to Vendor pursuant hereto at the Closing Time;
(c) Conveyance
Purchaser shall have executed and delivered the Conveyance and
shall have executed and delivered all other documents required to be
executed and delivered hereunder;
The foregoing conditions shall be for the benefit of Vendor and may,
without prejudice to any of the rights of Vendor hereunder (including reliance
upon or enforcement of the representations, warranties or covenants which are
preserved dealing with or similar to the condition waived), be waived by Vendor
in writing, in whole or in part, at any time. In case any of the conditions
precedent shall not be complied with, or waived by Vendor, at or before the
Closing Time, Vendor may rescind or terminate this Agreement by written notice
to Purchaser.
ARTICLE 19
PURCHASER'S CLOSING CONDITIONS
19.1 GENERALLY
The obligation of Purchaser to complete the purchase of the Assets from
Vendor pursuant to this Agreement is subject to the satisfaction at or prior to
the time hereinafter specified, or if not specified, at or prior to the Closing
Time of the following conditions precedent:
(a) Representations True
All representations and warranties of Vendor contained in this
Agreement shall be true in all material respects at and as of the
Effective Time and Closing Time and
<PAGE> 23
- 23 -
Vendor shall have performed and satisfied all agreements required by
this Agreement to be performed and satisfied by Vendor at or prior
to the Closing Time and at Closing Vendor shall have delivered an
officer's certificate to that effect;
(b) Conveyance
Vendor shall have executed and delivered the documents
required by clause 12.1 including the Conveyance;
(c) Material Adverse Change
Purchaser shall be satisfied that there has not been a
material adverse change in the physical condition of the Assets from
the Effective Time to the Closing Time which Purchaser agrees shall
exclude:
(i) any material adverse changes in the Assets due to changes in
the prices at which Petroleum Substances may be sold; or
(ii) changes in the value of the Assets; or
(iii) changes in reservoir performance.
(d) Interim Operations
From the date hereof to and including the Closing Date, Vendor
shall have conducted all operations in relation to the Assets in the
ordinary course and in accordance with good oil and gas industry
practices;
(e) Approvals and Consents
All requisite approvals of working interest partners and
regulatory bodies relative to the transactions herein provided for
and such other consents or approvals relating to the transaction as
may be required pursuant to the terms of any agreement affecting the
Assets shall have been obtained;
(f) Discharge of Security
Vendor shall have tendered to Purchaser fully executed
releases and registrable discharges or no interest letters of any
security interests or encumbrances, except those set forth in
Schedule "A" hereto and Permitted Encumbrances;
The foregoing conditions shall be for the benefit of Purchaser and may,
without prejudice to any of the rights of Purchaser hereunder (including
reliance upon or enforcement of warranties or covenants which are preserved
dealing with or similar to the condition or conditions waived), be waived by
Purchaser in writing, in whole or in part, at any time, provided Purchaser may
not waive the existence and operation of any preferential right to purchase any
of the Assets. In case any of the conditions precedent shall not be complied
with, or waived by Purchaser, at or before the Closing Time, Purchaser may
rescind and terminate this Agreement by written notice to Vendor.
<PAGE> 24
- 24 -
ARTICLE 20
OTHER COVENANTS, AGREEMENTS AND ACKNOWLEDGMENTS
20.1 GENERALLY
Each of the Parties covenants and agrees with the other Party to use all
reasonable efforts until Closing, to take or refrain from taking all actions
with the intent that the Closing conditions herein shall be satisfied, the
representations and warranties herein made by it shall be true and correct, and
all covenants and agreements herein made by it shall have been performed.
ARTICLE 21
MISCELLANEOUS
21.1 OPERATORSHIP
Vendor shall assist and co-operate with Purchaser to transfer to Purchaser
Operatorship of any of the Assets which Vendor operates at the Closing Time
provided that nothing herein shall be interpreted as any assurance by the Vendor
that Purchaser will be entitled to serve as Operator of any such Assets.
21.2 SIGNS AND NOTIFICATIONS
As soon as reasonably practical after Closing, the Vendor may remove any
signs which indicate the Vendor's ownership or operation of the Assets. It shall
be the responsibility of the Purchaser, where necessary, to erect or install any
signs that may be required by governmental agencies indicating the Purchaser to
be the operator of the Assets and to notify other working interest owners, gas
purchasers, suppliers, contractors, governmental agencies and any other person
of the Purchaser's interest in the Assets.
21.3 FURTHER ASSURANCES
At Closing and thereafter as may be necessary or desirable, and without
further consideration, the Parties shall execute, acknowledge and deliver such
other documents and shall take or refrain from taking such action as may be
necessary to carry out their respective obligations under this Agreement.
21.4 ASSIGNMENT
Prior to Closing, Purchaser shall not assign all or any part of this
Agreement or any of the rights or obligations of Purchaser under this Agreement,
without the prior written consent of Vendor, which consent shall not be
unreasonably withheld.
21.5 CONSTRUCTION AND ATTORNMENT
This Agreement shall, in all respects, be subject to and be interpreted,
construed and enforced in accordance with the laws in effect in the Province of
Alberta. Each Party accepts the jurisdiction of the Courts of the Province of
Alberta and all courts of appeal therefrom.
21.6 TIME
Time shall be of the essence of this Agreement.
<PAGE> 25
- 25 -
21.7 PUBLIC ANNOUNCEMENT
Each of the Parties shall co-operate with the other in relaying
information concerning this Agreement and the transactions herein provided for,
and shall furnish to, discuss with, and obtain approval from the other Party of
drafts of all press and other releases prior to publication, which approval
shall not be unreasonably withheld; provided that nothing contained herein shall
prevent either Party, at any time, from furnishing any information to any
governmental agency or regulatory authority or to the public if required by
applicable law.
21.8 PRIOR AGREEMENTS AND AMENDMENTS
This Agreement states and comprises the entire agreement between the
Parties and shall supersede and replace any and all prior agreements between the
Parties relating to the sale and purchase of the Assets and may be amended only
by written instrument signed by all Parties.
21.9 ENUREMENT
This Agreement shall be binding upon and shall enure to the benefit of the
Parties and their respective successors, receivers, receiver-managers, trustees
and permitted assigns, as set out herein.
21.10 ADDRESSES
The address for notices of each of the Parties shall be as follows:
(a) Vendor
WESTLINKS RESOURCES LTD.
700, 703 - 6th Avenue S.W.
Calgary, Alberta
T2P 0T9
Attention: Land Manager
Telephone No.: (403) 261-2686
Facsimile No.: (403) 261-2704
(b) Purchaser:
899776 ALBERTA LTD.
3100, 150 - 6th Avenue S.W.
Calgary, Alberta
T2P 3Y7
Attention: Land Manager
Telephone No.: (403) 237-9400
Facsimile No.: (403) 237-9410
Each of the Parties may from time to time change its address for service
herein by giving written notice to the other Party. Any notice may be served by
mail, personal service upon a Party or by
<PAGE> 26
- 26 -
facsimile transmission to the number for notice hereunder. Any notice given by
service upon a Party and any notice given by facsimile transmission shall be
deemed to be given to and received by the addressee on the day (except
Saturdays, Sundays, and statutory holidays) of service or after the sending
thereof with appropriate answer-back acknowledgement. Any notice sent by mail
will be sent by first class (air mail if to or from a location outside Canada)
registered post, postage prepaid, directed to the party on which it is to be
served at that party's address for service. Notices so served shall be deemed to
be received by the addressee at noon, local time, on the earlier of the actual
date of receipt or the fourth (4th) day (excluding Saturdays, Sundays and
statutory holidays in Alberta) following the mailing thereof. However, if postal
service is (or is reasonably anticipated to be) interrupted or operating with
unusual delay, notice shall not be served by such means during such interruption
or period of delay.
21.11 COUNTERPARTS
This Agreement may be executed in counterpart and when each Party has
executed a counterpart as contemplated herein, all counterparts taken together
shall constitute one agreement. A facsimile copy of an executed counterpart
signature page will be as valid as an originally executed counterpart for
purposes of signing this Agreement.
IN WITNESS WHEREOF the Parties hereto have executed this Agreement as of
the date first above written.
WESTLINKS RESOURCES LTD.
Per: /s/ Edward C. McFeely
------------------------
Per:
------------------------
899776 ALBERTA LTD.
Per: /s/ Ernie Sapieha
------------------------
Per: /s/ Norm Knecht
------------------------
<PAGE> 27
SCHEDULE "A"
Attached to and forming part of a Purchase and Sale Agreement dated
October 1, 2000, between Westlinks Resources Ltd. ("Vendor") and 899776
Alberta Ltd. ("Purchaser").
--------------------------------------------------------------------------------
LAND SCHEDULE
WESTLINKS MINERAL PROPERTY LEASE REPORT DATED OCTOBER 12, 2000.
(4 PAGES)
<PAGE> 28
WESTLINKS RESOURCES LTD.
SCHEDULE OF LANDS BY LAND DESCRIPTION
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
WI Owner: ALL
File Number Prospect Doc Type Document No Expiry Date Continued To Lessor
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
M000027 BIGORAY CR PNG LSE 0500040519 APR-05-2005 PROVINCIAL TREASURER MINERAL
DISPOSITION DIVISION
</TABLE>
Split: 1 Split Status: ACTIVE Hectares: 64.0000
<TABLE>
<CAPTION>
Parcel: Land Description / Rights
-------------------------------------
<S> <C>
1 050-09-W5M NW 33;
ALL PNG
DOI Type: RENTAL (*)
</TABLE>
<TABLE>
<CAPTION>
WI Owner Interest
-------------------------------------
<S> <C> <C>
IV WESTLINKS 89.00000000
IV 74305 6.00000000
IV 825804 5.00000000
</TABLE>
<TABLE>
<CAPTION>
Royalty Type Conv Royalty Payor Product Type Royalty Details Unit Production %
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CSS N WESTLINKS 100.00000000
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
File Number Prospect Doc Type Document No Expiry Date Continued To Lessor
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
M000026 BIGORAY CR PNG LSE 0596050287 DEC-31-2004 PROVINCIAL TREASURER MINERAL
DISPOSITION DIVISION
</TABLE>
Split: 1 Split Status: ACTIVE Hectares: 192.0000
<TABLE>
<CAPTION>
Parcel: Land Description / Rights
-------------------------------------
<S> <C>
1 050-09-W5M S 34; NW 34;
PNG IN BELLY RIVER
DOI Type: RENTAL (*)
</TABLE>
<TABLE>
<CAPTION>
WI Owner Interest
-------------------------------------
<S> <C> <C>
W WESTLINKS 22.25000000
W 74305 1.50000000
W 825804 1.25000000
W DEFIANT 75.00000000
</TABLE>
<TABLE>
<CAPTION>
Unique Well Identifier Spud Date Rig Release Zone Status
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
100/10-34-050-09-W5/00 MAR-17-1980 MAR-29-1980 INJECTION
</TABLE>
<TABLE>
<CAPTION>
Royalty Type Conv Royalty Payor Product Type Royalty Details Unit Production %
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CSS N DEFIANT 100.00000000
</TABLE>
Contracts: C000015
<PAGE> 29
WESTLINKS RESOURCES LTD.
SCHEDULE OF LANDS BY LAND DESCRIPTION
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
WI Owner: ALL
File Number Prospect Doc Type Document No Expiry Date Continued To Lessor
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
M000003 BIGORAY CR PNG LSE 0578030214 MAR-21-1983 JAN-01-4712 PROVINCIAL TREASURER MINERAL
DISPOSITION DIVISION
</TABLE>
Split: 1 Split Status: ACTIVE Hectares: 64.0000
<TABLE>
<CAPTION>
Parcel: Land Description / Rights Extension Date Reason
--------------------------------------------------------------------------
<S> <C> <C> <C>
1 050-09-W5M NE 34; JAN-01-4712 15
PNG FROM SURFACE TO BASE OF
CARDIUM
Ref: C000001-1:WI
DOI Type: WI (*)
</TABLE>
<TABLE>
<CAPTION>
WI Owner Interest
-------------------------------------
<S> <C> <C>
P WESTLINKS 89.00000000
W 74305 6.00000000
W 825804 5.00000000
</TABLE>
<TABLE>
<CAPTION>
Unique Well Identifier Spud Date Rig Release Zone Status
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
100/10-34-050-09-W5/00 MAR-17-1980 MAR-29-1980 INJECTION
</TABLE>
<TABLE>
<CAPTION>
Royalty Type Conv Royalty Payor Product Type Royalty Details Unit Production %
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CSS N WESTLINKS 100.00000000
</TABLE>
<TABLE>
<CAPTION>
Ref: C000001-1:WI
Paid To Interest Paid By Interest
--------------------------------------------------------------------
<S> <C> <C> <C>
PROV. TREAS. 100.00000000 WESTLINKS 89.00000000
74305 6.00000000
825804 5.00000000
</TABLE>
Contracts: C000001 C000010 C000011
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
File Number Prospect Doc Type Document No Expiry Date Continued To Lessor
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
M000001 BIGORAY CR PNG LSE 0577120091 DEC-13-1982 JAN-01-4712 PROVINCIAL TREASURER MINERAL
DISPOSITION DIVISION
</TABLE>
Split: 1 Split Status: ACTIVE Hectares: 192.0000
<TABLE>
<CAPTION>
Parcel: Land Description / Rights Extension Date Reason
--------------------------------------------------------------------------
<S> <C> <C> <C>
1 051-09-W5M S&NW 3; JAN-01-4712 15
PNG FROM SURFACE TO BASE OF
CARDIUM
Ref: C000001-1:WI
DOI Type: WI (*)
</TABLE>
<TABLE>
<CAPTION>
WI Owner Interest
-------------------------------------
<S> <C> <C>
P WESTLINKS 89.00000000
W 74305 6.00000000
W 825804 5.0000000
</TABLE>
<TABLE>
<CAPTION>
Unique Well Identifier Spud Date Rig Release Zone Status
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
100/02-03-051-09-W5/00 FEB-01-1982 FEB-15-1982 INJECTION
100/02-03-051-09-W5/02 FEB-01-1982 FEB-15-1982 OIL P
100/05-03-051-09-W5/00 FEB-03-1980 FEB-18-1980 OIL P
102/12-03-051-09-W5/00 OCT-06-1987 OCT-27-1987 OIL P
</TABLE>
<TABLE>
<CAPTION>
Royalty Type Conv Royalty Payor Product Type Royalty Details Unit Production %
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CSS N WESTLINKS 100.00000000
</TABLE>
<TABLE>
<CAPTION>
Ref: C000001-1:WI
Paid To Interest Paid By Interest
--------------------------------------------------------------------
<S> <C> <C> <C>
PROV. TREAS. 100.00000000 WESTLINKS 89.00000000
74305 6.00000000
825804 5.00000000
</TABLE>
Contracts: C000001 C000010 C000011
<PAGE> 30
WESTLINKS RESOURCES LTD.
SCHEDULE OF LANDS BY LAND DESCRIPTION
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
WI Owner: ALL
File Number Prospect Doc Type Document No Expiry Date Continued To Lessor
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
M000028 BIGORAY CR PNG LSE 0500040520 APR-05-2005 PROVINCIAL TREASURER MINERAL
DISPOSITION DIVISION
</TABLE>
Split: 1 Split Status: ACTIVE Hectares: 64.0000
<TABLE>
<CAPTION>
Parcel: Land Description / Rights
-------------------------------------
<S> <C>
1 051-09-W5M NE 3;
ALL PNG
DOI Type: RENTAL (*)
</TABLE>
<TABLE>
<CAPTION>
WI Owner Interest
-------------------------------------
<S> <C> <C>
W WESTLINKS 89.00000000
W 74305 6.00000000
W 825804 5.00000000
</TABLE>
<TABLE>
<CAPTION>
Royalty Type Conv Royalty Payor Product Type Royalty Details Unit Production %
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CSS N WESTLINKS 100.00000000
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
File Number Prospect Doc Type Document No Expiry Date Continued To Lessor
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
M000002 BIGORAY CR PNG LSE 0577120092 DEC-13-1982 JAN-01-4712 PROVINCIAL TREASURER MINERAL
DISPOSITION DIVISION
</TABLE>
Split: 1 Split Status: ACTIVE Hectares: 256.0000
<TABLE>
<CAPTION>
Parcel: Land Description / Rights Extension Date Reason
----------------------------------------------------------------------------
<S> <C> <C> <C>
1 051-09-W5M 4; JAN-01-4712 15
PETROLEUM AND NATURAL GAS FROM
SURFACE TO BASE OF CARDIUM
Ref: C000001-1:WI
DOI Type: WI (*)
</TABLE>
<TABLE>
<CAPTION>
WI Owner Interest
-------------------------------------
<S> <C> <C>
P WESTLINKS 89.00000000
W 74305 6.00000000
W 825804 5.00000000
</TABLE>
<TABLE>
<CAPTION>
Unique Well Identifier Spud Date Rig Release Zone Status
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
100/08-04-051-09-W5/00 JAN-20-1984 JAN-29-1984 OIL P
100/13-04-051-09-W5/00 FEB-24-1982 MAR-14-1982 OIL P
100/15-04-051-09-W5/00 FEB-23-1980 MAR-12-1980 INJECTION
102/11-04-051-09-W5/00 LOCATION
103/11-04-051-09-W5/00 OIL P
</TABLE>
<TABLE>
<CAPTION>
Royalty Type Conv Royalty Payor Product Type Royalty Details Unit Production %
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CSS N WESTLINKS 100.00000000
</TABLE>
<TABLE>
<CAPTION>
Ref: C000001-1:WI
Paid To Interest Paid By Interest
--------------------------------------------------------------------
<S> <C> <C> <C>
PROV. TREAS. 100.00000000 WESTLINKS 89.00000000
74305 6.00000000
825804 5.00000000
</TABLE>
Contracts: C000001 C000010 C000011
<PAGE> 31
PROJECT SELECTION CRITERIA
NON-GEOGRAPHIC REFINEMENT
<TABLE>
<CAPTION>
Variable Operator Value(s)
-------- -------- --------
<S> <C> <C>
LEASE_STATUS = ACTIVE
PROSPECT = BIGORAY
SPLIT_STATUS = ACTIVE
PROSPECT_MIN_SPLIT = BIGORAY
</TABLE>
FILES QUALIFIED BY SELECTION
M000001
M000002
M000003
M000026
M000027
M000028
<PAGE> 32
SCHEDULE "B"
Attached to and forming part of a Purchase and Sale Agreement dated the
1st day of October, 2000, between Westlinks Resources Ltd. ("Vendor") and
899776 Alberta Ltd. ("Purchaser").
--------------------------------------------------------------------------------
GENERAL CONVEYANCE
This Conveyance made this ______ day of ____________, 2000.
BETWEEN:
WESTLINKS RESOURCES LTD.
(hereinafter called "Vendor")
OF THE FIRST PART
- and -
899776 ALBERTA LTD.
(hereinafter called the "Transferee")
OF THE SECOND PART
WHEREAS the Vendor has agreed to dispose and convey the Vendor's entire
right, title, estate and interest in the Assets to the Transferee, and the
Transferee has agreed to acquire and accept all of the Vendor's right, title,
estate and interest in and to the Assets;
THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS
In this Conveyance, "Agreement" means the Purchase and Sale Agreement
dated as of the 1st day of October, 2000, between the Vendor and the Transferee.
In addition, the definitions provided for in the Agreement are adopted in this
Conveyance.
2. CONVEYANCE
The Vendor, for the consideration provided for in the Agreement, the
receipt and sufficiency of which is acknowledged by the Vendor, disposes,
assigns, transfers, and conveys the Vendor's entire right, title, estate, and
interest in the Assets to the Transferee, and the Transferee acquires and
accepts such interests from the Vendor, TO HAVE AND TO HOLD the same absolutely,
subject to the terms of the Agreement.
3. EFFECTIVE TIME
This Conveyance is effective as of the Effective Time.
<PAGE> 33
- 2 -
4. SUBORDINATE DOCUMENT
This Conveyance is executed and delivered by the Parties pursuant to the
Agreement for the purposes of the provisions of the Agreement, and the terms
hereof shall be read in conjunction with the terms of the Agreement. The
Agreement shall prevail if there is a conflict between the provisions of the
Agreement and this Conveyance.
5. ENUREMENT
This Conveyance enures to the benefit of, and is binding upon, the Parties
and their respective successors and permitted assigns.
6. FURTHER ASSURANCES
Each Party shall, after the date of this Conveyance, at the request of the
other Party and without further consideration, do all further acts, and execute
and deliver all further documents which are reasonably required to perform and
carry out the terms of this Conveyance.
IN WITNESS WHEREOF the Parties have duly executed this Conveyance.
WESTLINKS RESOURCES LTD.
Per:
------------------------------------
Per:
------------------------------------
899776 ALBERTA LTD.
PER: /s/ o
------------------------------------
PER: /s/ o
------------------------------------
<PAGE> 34
SCHEDULE "C"
Attached to and forming part of a Purchase and Sale Agreement dated the
1st day of October, 2000, between Westlinks Resources Ltd. ("Vendor") and
899776 Alberta Ltd. ("Purchaser").
--------------------------------------------------------------------------------
AUTHORIZATIONS FOR EXPENDITURES (AFE'S)
1) AFE #30050 RECEIVED FROM CHEVRON CANADA RESOURCES IN THE AMOUNT OF
APPROXIMATELY $85,000.00 TO TIE IN THE 8-4-51-9-W5 TO THE CHEVRON PLANT. -
EXECUTED BY WESTLINKS ON OCTOBER 10, 2000 (COPY ATTACHED - 5 PAGES)
<PAGE> 35
REQUEST FOR APPROPRIATION
PARTNERS
CHEVRON CANADA RESOURCES 0395
<TABLE>
<S> <C> <C>
Project Number RWMDV-R0014 Description Bigoray Westlinks Tie-in
--------------------------------------------------------------------------------------------------------------
Cost Center RC2757516 Responsible Person 79000125 BOSCH, NEIL HPBO
WESTLINKS FLUID PROC Project Start Date 2000/10/01 Finish Date 2000/12/31
--------------------------------------------------------------------------------------------------------------
Project Profile REFEXP CCR Facility Expense Project - Non EOR
Program
--------------------------------------------------------------------------------------------------------------
Joint Venture S07516 WESTLINKS - BIGORAY PROCESSING
Recovery Indicator BL Billable Expenditures
Equity Type ET1 Equity Type Date Pointer
Applicant Number 79000001 CCR - JV AFE
Chevron Working Interest 0.00000
Equity Group S07516 11/01/99 WESTLINKS PROCESSIN
--------------------------------------------------------------------------------------------------------------
Approved /s/ Thomas J. Jacobsen Date OCT. 10, 2000
-------------------------------------- ----------------------------
</TABLE>
<TABLE>
<CAPTION>
Project Object Description Plan Ver. R02
Gross Approved
-------------------------------------------------------------------------------------------
<S> <C> <C>
RWMDV-40014-100 Total Bigoray Westlinks Tie-in 85,663
RWMDV-40014-200 Total Cost Bigoray Westlinks Tie-in 85,663
Cost Element 0071900200 Pipes, Valves & Fittings 20,959
Cost Element 0071900510 Instrumentation Equipment 23,000
Cost Element 0074500014 Electrical Services 2,300
Cost Element 0074500015 Instrumentation Services 6,900
Cost Element 0074500016 Mechanical Services 20,700
Cost Element 0075100500 X-Ray Inspection Services 1,725
Cost Element 0075101000 Inspection Services Other 4,313
Cost Element 0075109000 CCR - Engineering Services Onsite 1,150
Cost Element 0075909001 CCR - Drafting & Reproduction Services 1,150
Cost Element 0082309999 Plan: JV Overhead 3,466
-------------------------------------------------------------------------------------------
RWMDV-R0014 Bigoray Westlinks Tie-in 85,663
===========================================================================================
</TABLE>
<TABLE>
<CAPTION>
Partner % Share $ Share Approved Date
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
395 CHEVRON CANADA RESOURCES 0.000000 0
---------------------------------------------------------------------------------------------------------
310007145 WESTLINKS RESOURCES LTD. 100.000000 85,663 /s/ Thomas J. Jacobsen 10/10/2000
---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 36
Ppt: 279POW106 Date: 2000/10/10
Page: 1
REQUEST FOR APPROPRIATION
CHEVRON CANADA RESOURCES 0395
<TABLE>
<S> <C> <C>
Project Number RWMDV-R0014 Description Bigoray Westlinks Tie-in
--------------------------------------------------------------------------------------------------------------------
Cost Center RC2757516 Responsible Person 79000125 BOSCH, NEIL HPBO
WESTLINKS FLUID PROC Project Start Date 2000/10/01 Finish Date 2000/12/31
--------------------------------------------------------------------------------------------------------------------
Project Profile REFEXP CCR Facility Expense Project - Non EOR
Program
Job Type
G&G Job Type
--------------------------------------------------------------------------------------------------------------------
Strategic Intent
--------------------------------------------------------------------------------------------------------------------
Joint Venture S07516 WESTLINKS - BIGORAY PROCESSING Investment Program
Recovery Indicator BL Billable Expenditures Position ID
Equity Type ET1 Equity Type Date Pointer Approval Year 0000
Applicant Number 79000001 CCR - JV AFE
Chevron Working Interest 0.00000
Equity Group S07516 11/01/99 WESTLINKS PROCESSIN
--------------------------------------------------------------------------------------------------------------------
Budget Not Approved 0
--------------------------------------------------------------------------------------------------------------------
EWPV @ 10% ($M) 0.000 DPI @ 10% 0.000 ROR % 0.00 BV Eos (MBORG) 0.00 Payout (Years)
--------------------------------------------------------------------------------------------------------------------
Approved Date
-------------------------------------- ----------------------------
</TABLE>
<TABLE>
<CAPTION>
Project Object Description Plan Ver. R02 Budget
Gross Approved Net Approved
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RWMDV-R0014-100 Total Bigoray Westlinks Tie-in 85,663
RWMDV-R0014-200 Total Cost Bigoray Westlinks Tie-in 85,663
Cost Element 0071900200 Pipes, Valves & Fittings 20,959
Cost Element 0071900510 Instrumentation Equipment 23,000
Cost Element 0074500014 Electrical Services 2,300
Cost Element 0074500015 Instrumentation Services 6,900
Cost Element 0074500016 Mechanical Services 20,700
Cost Element 0075100500 X-Ray Inspection Services 1,725
Cost Element 0075101000 Inspection Services Other 4,313
Cost Element 0075109000 CCR - Engineering Services Onsite 1,150
Cost Element 0075909001 CCR - Drafting & Reproduction Services 1,150
Cost Element 0082309999 Plan: JV Overhead 3,466
-------------------------------------------------------------------------------------------------------------
RWMDV-R0014 Bigoray Westlinks Tie-in 85,663
=============================================================================================================
</TABLE>
<PAGE> 37
WESTLINKS SALES GAS BLENDING TIE-IN TO BIGORAY
<TABLE>
<CAPTION>
NO CONTINGENCY CONTI/
SAP AFE CATEGORIES GST BUILT-IN % OF TOTAL
<S> <C> <C> <C>
1 Plan, Payroll, Burden + Bonuses (Regulatory, Drill Planning) -
2 Contract Engineering Services -
3 Safety Services -
4 X-Ray Inspection Services $ 1,500 $ 1,725 1.75
5 Inspection Services Other $ 3,750 $ 4,313 4.37
6 CCR - Engineering Services On-Site $ 1,000 $ 1,150 1.17
7 CCR - Engineering Services Off-Site -
8 Plan: Engineering & Technical (Onsite - Operations) -
9 CCR: Drafting & Reproduction $ 1,000 $ 1,150 1.17
10 Plan: Chemicals -
11 Pipes, Valves & Fittings $18,225 $20,959 21.24
12 Line Pipe -
13 Materials, Supply, Repair Parts -
14 Instrumentation Equipment $20,000 $23,000 23.31
15 Electrical Equipment -
16 Processing Equipment (Dehy, Lineheater, etc) -
17 Storage Tanks/Vessels -
18 Pumps and Pumping Systems -
19 Compression Systems -
20 Boilers & Heaters -
21 Structural Material -
22 Piling Material -
23 Buildings -
24 Plan: Other Material & Supplies -
25 Air Transportation - Chevron -
26 Transportation Services - Other -
27 Plan: Truck & Other Transportation -
28 Plan: Communications -
29 Construction Services - Other -
30 Pipeline Installation -
31 Structural Construction -
32 Electrical Services $ 2,000 $ 2,300 2.33
33 Instrumentation Services $ 6,000 $ 6,900 6.99
34 Mechanical Services $18,000 $20,700 20.98
35 Pile Driving Services -
36 Road & Location Building -
37 Commissioning Services -
38 Camp Costs -
39 CCR - Land Services -
40 Surveys, Maps & Air Photos -
41 Other: Other Service Fees (Courier/Sustenance) -
42 Other Taxes & Licenses -
43 Plan G&A Allocation $ 0 $ 0 -
44 Plan JV Overhead $ 3,144 $ 3,616 3.66
---------------------------------------------------------------------------------------------------------
Subtotal: $74,619 $85,812
Contingency (15%) $11,193 $ 0 13.04
=======================================
Total: $85,812 $85,812 100.00
</TABLE>
Last Revised: October 6, 2000
Developed By: Neil Bosch (234-5081)
<PAGE> 38
WESTLINKS RESOURCES LTD. DRILLING and COMPLETION AFE and DAILY REPORT FORM
DRILLING (Days 1-8)
AREA: BIGORAY WELL: 8-4-51-9-W5
AFE #: 30050
<TABLE>
<CAPTION>
CODE AFE ACTUAL DIF
<S> <C> <C> <C> <C>
Landman 1,000 0 -1,000
Survey and Well license 3,500 0 -3,500
Sfc Lease & access road Aqn. 0 0
Lease & road Construction 19,000 0 -19,000
Construction supervision 3,000 0 -3,000
Drilling supervision 3,500 0 -3,500
Geological supervision 2,100 0 -2,100
Conductor & rathole 4,200 0 -4,200
Rig & Camp move 30,000 0 -30,000
Stuck & towing 0 0
Drilling daywork 45,000 0 -45,000
Crew travel 4,400 0 -4,400
Safety bonus 225 0 -225
Boiler and fuel 0 0
Water hauling 3,300 0 -3,300
Vacuum truck 3,000 0 -3,000
Bits and Reamers 11,700 0 -11,700
Pipe & collar inspection 0 0
Mud & Chemicals 3,000 0 -3,000
Rentals 10,850 0 -10,850
Surface Csg & Accessories 9,514 0 -9,514
Cementing: Surface Casing 4,500 0 -4,500
Casing bowl & welder 1,300 0 -1,300
Camp Water 1,000 0 -1,000
Power Tongs 2,800 0 -2,800
Directional Services 0 0
Rentals 0 0
Trucking & hauling 2,000 0 -2,000
Coring 0 0
Open Hole logging 0 0
Drill stem testing 0 0
Production Csg & Accessories 20,421 0 -20,421
Cementing: Production Casing 8,000 0 -8,000
Cement: Abandonment 0 0
Waste disposal 0 0
Lease Restoration 3,000 0 -3,000
Insurance 5,200 0 -5,200
Administration/Overhead 0 0
Contingency 19,750 0 -19,750
------- --- --------
DRILLING TOTAL 225,260 0 -225,260
======= === ========
</TABLE>
<PAGE> 39
SCHEDULE "D"
Attached to and forming part of a Purchase and Sale Agreement dated
October 1, 2000, between Westlinks Resources Ltd. ("Vendor") and 899776
Alberta Ltd. ("Purchaser").
--------------------------------------------------------------------------------
WELL LIST
<TABLE>
<CAPTION>
WELL IDENTIFIER POOL / TOTAL DEPTH FLUID / MODE
--------------- ------------------ ------------
<S> <C> <C>
00/10-34-050-09-W5/00 BRC / 1501.00 Gas / Susp.
00/02-03-051-09-W5/00 Card B / 1490.00 Water / Inj.
00/02-03-051-09-W5/02 Card B / 1490.00 CR-Oil / Pump
00/04-03-051-09-W5/00 Card B / 1522.00 / STDG
00/05-03-051-09-W5/00 Card B / 1506.50 CR-Oil / AB Zone
00/05-03-051-09-W5/02 BRC / 1506.50 CR-Oil / Pump
02/12-03-051-09-W5/00 Card B / 1504.00 CR-Oil / Pump
00/07-04-051-09-W5/00 Card B / 1575.00 CR-Oil / Pump
00/08-04-051-09-W5/00 Card B / 1489.00 CR-Oil / Pump
03/11-04-051-09-W5/00 Card B / 1486.00 CR-Oil / Pump
00/13-04-051-09-W5/00 Card B / 1494.00 CR-Oil / Pump
00/15-04-051-09-W5/00 Card B / 1498.00 Water
02/08-04-051-09-W5/00 BRC / CR-Gas
</TABLE>
<PAGE> 40
SCHEDULE "E"
Attached to and forming part of a Purchase and Sale Agreement dated
October 1, 2000, between Westlinks Resources Ltd. ("Vendor") and 899776
Alberta Ltd. ("Purchaser").
--------------------------------------------------------------------------------
Facilities
AS PER THE ATTACHED FACILITY DESCRIPTION SHEET (1 PAGE)
<PAGE> 41
PIPELINES:
<TABLE>
<CAPTION>
Approval No. Line No. From Location Facility To Location Facility Status
------------ -------- ------------- -------- ----------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
14331 9* 9-15-4-51-9W5 Satellite 15-4-51-9 Pipeline Operating
14331 10* 10-13-51-9 Pipeline 15-4-51-9 Satellite Operating
14331 11* 11-13-51-9 Well 13-4-51-9 Pipeline Operating
14331 12* 12-15-51-9 Well 15-4-51-9 Pipeline Operating
14331 13* 2-3-51-9 Well 2-3-51-9 Pipeline Discontinued
14331 15* 15-5-51-9 Well 15-4-51-9 Satellite Operating
14331 17* 15-4-51-9 Pipeline 15-4-51-9 Satellite Operating
14331 18* 2-3-51-9 Pipeline 5-3-51-9 Pipeline Discontinued
14331 19* 5-3-51-9 Pipeline 12-3-51-9 Pipeline Discontinued
14331 20* 9-4-51-9 Pipeline 15-4-51-9 Satellite Operating
14331 25* 8-4-51-9 Well 15-4-51-9 Satellite Operating
14331 33* 12-3-51-9 Well 12-3-51-9 Pipeline Operating
14331 34* 12-3-51-9 Pipeline 9-4-51-9 Pipeline Operating
14331 46* 15-4-51-9 Pipeline 10-4-51-9 Pipeline Operating
22121 1 1-10-34-50-9 Injection Plant 2-3-51-9 Well Operating
19667 1 10-7-51-9 Battery 15-4-51-9 Satellite Operating
19667 2 13-4-51-9 Pipeline 13-4-51-9 Well Operating
19667 3 15-4-51-9 Satellite 15-4-51-9 Well Operating
19667 4 15-4-51-9 Satellite 2-3-51-9 Well Operating
19667 5 5-3-51-9 Pipeline 5-3-51-9 Well Operating
19667 6 9-4-51-9 Pipeline 8-4-51-9 Pipeline Operating
19667 7 12-3-51-9 Pipeline 12-3-51-9 Pipeline Operating
34082 1 15-4-51-9-W5 Pipeline 2-3-51-9-W5 Pipeline
34082 2 2-15-51-9-W5 Pipeline 15-4-51-9-W5 Pipeline
</TABLE>
*NEW APPROVAL #33622
<PAGE> 42
SCHEDULE "F"
Attached to and forming part of a Purchase and Sale Agreement dated
October 1, 2000, between Westlinks Resources Ltd. ("Vendor") and 899776
Alberta Ltd. ("Purchaser").
--------------------------------------------------------------------------------
PRODUCTION SALES CONTRACTS
NIL
(No Agreements in place that cannot be terminated on 30 days notice)
<PAGE> 43
"SCHEDULE G"
Attached to and forming part of a Purchase and Sale Agreement dated
October 1, 2000, between Westlinks Resources Ltd. ("Vendor") and 899776
Alberta Ltd. ("Purchaser").
--------------------------------------------------------------------------------
PROPRIETARY TECHNICAL INFORMATION
NIL
<PAGE> 44
SCHEDULE "H"
Attached to and forming part of a Purchase and Sale Agreement dated
October 1, 2000, between Westlinks Resources Ltd. ("Vendor") and 899776
Alberta Ltd. ("Purchaser").
--------------------------------------------------------------------------------
PROCESSING AGREEMENTS, MARKETING AGREEMENTS AND TRANSPORTATION AGREEMENTS
1) Bigoray 15-4 to 10-7 Gathering System Fluid Transportation Agreement
between Chevron Canada Resources (Operator) and Westlinks Resources Ltd.
(Producer), effective July 1, 1999 -- UNEXECUTED.
2) Bigoray 10-7 Battery Facility Fluid Processing Agreement between Chevron
Canada Resources (Operator) and Westlinks Resources Ltd. (Producer),
effective July 1, 1999 -- UNEXECUTED.
3) Water Transportation and Disposal Agreement between Chevron Canada
Resources (Operator) and Westlinks Resources Ltd. (Producer), effective
July 1, 1999 -- UNEXECUTED.
4) Production Reporting between Chevron Canada Resources (Administrator) and
Westlinks Resources Ltd. (Owner), effective July 1, 1999 -- UNEXECUTED.
5) Westlinks 15-4 Water Plant, Water Handling Agreement between Westlinks
Resources Ltd. (Operator) and Chevron Canada Resources (Producer),
effective March 15, 2000 -- UNEXECUTED.
6) Crude Oil Marketing Agreement between Westlinks Resources Ltd. and EOTT
Resources -- TERMINATED.
7) Crude Oil Marketing Agreement between Westlinks Resources Ltd. and Husky
Oil Marketing -- 30 DAY CONTRACT.
