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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report. . . . . . . . . . . . . . . February 21, 1997
BLACK DOME ENERGY CORPORATION
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(Exact name of Registrant as specified in its charter)
Colorado 0-9394 84-0808397
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State or other jurisdiction Commission (I.R.S. Employer
of incorporation File Number Identification No.)
1536 Cole Blvd., Suite 325 Golden, Colorado 80401
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(Address of principal executive offices) (Zip Code)
(303) 231-9059
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Registrant's telephone number,
including area code
N/A
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On February 21, 1997 the Registrant sold substantially all of its oil
and gas assets to MBR Resources, Inc. (an unaffiliated, privately-held
oil and gas company located in Tulsa, Oklahoma) for the amount of
$921,250.00 in cash (subject to adjustment after consummation of the
transaction in accordance with the terms and provisions of the Purchase
and Sale Agreement between the parties). The perceived fair market value
of the properties was the overriding guiding principle utilized in
determining the amount of the purchase price for the properties.
The Registrant's preception of fair market value was based upon
management's evaluation of the subject properties and its analysis of
the amounts offered by other parties in recent negotiations with respect
to proposed sales of the same properties. Other than the transaction
which is the subject of this report , there is no known relationship
(material or otherwise) between MBR Resources, Inc. and the Registrant,
or any associate of any such director or officer.
The sale of the subject properties was conducted in accordance with the
plan to dissolve the Registrant which was approved by the Registrant's
shareholders on December 16, 1996.
Item 7. Financial Statements and Exhibits.
Exhibit 10.1 Purchase and Sale Agreement between the Registrant and
MBR Resources, Inc. dated February 5, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
(Registrant) BLACK DOME ENERGY CORPORATION
(Date) February 27, 1997
By(Signature) /s/ Edgar J. Huff
(Name and Title) Edgar J. Huff, President and
Chief Financial Officer
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PURCHASE AND SALE AGREEMENT
BETWEEN:
BLACK DOME ENERGY CORPORATION, as "Seller"
AND
MBR RESOURCES, INC., as "Buyer"
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TABLE OF CONTENTS
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PAGE NO.
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I.PURCHASE AND SALE 4
II.EFFECTIVENESS OF TITLE; PRODUCTION 5
III.REVIEW OF RECORDS; ENCUMBRANCES 6
IV.REPRESENTATIONS AND WARRANTIES OF SELLER 7
V.REPRESENTATIONS AND WARRANTIES OF BUYER 10
VI.PRE-CLOSING OBLIGATIONS OF SELLER 11
VII.PRE-CLOSING OBLIGATIONS OF BUYER 13
VIII.CONDITIONS TO CLOSING 13
IX.CLOSING 14
X.POST-CLOSING OBLIGATIONS 15
XI.TERMINATION 16
XII.ENVIRONMENTAL CONDITIONS 17
XIII.TAXES 18
XIV.DEFAULT 18
XV.MISCELLANEOUS 19
LIST OF EXHIBITS
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"A" DESCRIPTION OF SUBJECT PROPERTY
"B" EXCLUDED PROPERTIES
"C" ASSIGNMENT AND BILL OF SALE
"D" LIST OF WELLBORES
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PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made and entered into this ____ day of February,
1997, but effective for all purposes as of 11:59 p.m. local time on the
31st day of December, 1996 ("Effective Time"), by and between Black Dome
Energy Corporation, a Colorado corporation, whose address is 1536 Cole
Blvd., Suite 325, Golden, CO 80401 ("Seller"), and MBR Resources, Inc.,
an Oklahoma corporation, whose address is 525 South Main Street, Suite
1200, Tulsa, OK 74103-4525 ("Buyer"), Seller and Buyer are hereinafter
individually referred to as "Party" and collectively as "Parties".
W I T N E S S E T H
WHEREAS, Seller owns undivided interests in and to the oil and gas
leases described on Exhibit "A" attached hereto and made a part hereof
(hereinafter referred to as the "Leases"), insofar as the Leases cover
and relate to the lands described in Exhibit "A" (the "Lands"), together
with the Seller's undivided interests in and to all the property and
rights incident thereto, including without limitation, the wells and
wellbores, whether useable or not, as generally described on Exhibit
"A" (the "Wells"), the production therefrom, lands pooled or spaced
therewith, all rights in, to and under all agreements, production sales
contracts, leases, permits, easements, licenses, options and orders in
any way relating thereto, and in and to all data, personal property,
fixtures and improvements now or as of the Effective Time thereon,
appurtenant thereto or used or obtained in connection therewith or with
the production or treating of hydrocarbons, water or salt water produced
therefrom or attributable thereto, together with all other interests,
including surface or mineral rights, owned by Seller in and to the Leases
and Lands, all of such interests of Seller described in this paragraph
being hereinafter collectively referred to as the "Subject Property",
and;
WHEREAS, Seller desires to sell to Buyer and Buyer desires to acquire
from Seller all of Seller's right, title and interest in and to the
Subject Property for the consideration and upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the mutual and
dependent covenants hereinafter set forth, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
the Parties agree as follows:
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ARTICLE I
PURCHASE AND SALE
1.1 Agreement to Sell and Purchase. Subject to the terms and conditions
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of this Agreement, Buyer agrees to purchase and take, and Seller agrees
to sell, transfer and convey, as of the Effective Time, all of Seller's
right, title and interest in and to the Subject Property and such
interests sold, transferred and conveyed to Buyer pursuant to this
Agreement are hereinafter referred to as "the Subject Property".
1.2 Conveyed Interest Inclusions. The Subject Property shall include
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all of Seller's undivided interest in the following:
A. All existing oil and gas leases covering the Lands as described
on Exhibit "A" attached hereto;
B. All existing agreements including, but not limited to, operating
agreements, rights-of-way agreements and resolutions, releases,
assignments, oil or gas sale contracts, gas gathering and processing
contracts, and any and all other instruments and agreements pertaining
thereto;
C. All (i) wells (including productive wells, non-productive wells
capable or not capable of production and usable and non-usable
wellbores) tanks, pipelines, compressors, steam generators, fixtures,
equipment, improvements, field office and related equipment (including
any buildings or structures located on or in any equipment yards not
specifically excluded from this sale), and other property and (ii)
easements, rights-of-way, permits, licenses, servitudes, environmental
permits, orders, rights, authorizations and appurtenances, used or held
for use or related to the Leases, Lands and Wells or the development or
operation thereof or the production, treatment, storage, compression,
processing or transportation of hydrocarbons therefrom or thereon;
D. All rights and obligations arising from associated contracts
applicable to the Leases, Lands, and Wells;
E. Subject to Paragraph 2.1 below, all oil, gas or other minerals or
other substances produced from or attributable to the Leases, Lands, and
Wells from and after the Effective Time, together with all proceeds from
or attributable thereto; and
F. All goodwill associated with the Leases, Lands, and Wells and;
G. All oil and gas leases, working interests, overriding royalty
interests, mineral interests, royalty interests and all other interests
and property of every kind and character, insofar as the same cover or
relate to the Lands, and the physical property thereon or used or
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obtained for use in connection therewith, even though such rights,
titles and interests may be incorrectly or insufficiently described or
referred to in, or a description thereof be omitted from Exhibit "A".
1.3 Excluded Properties. The properties listed on Exhibit "B" are
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not being sold by Seller and are specifically excluded from this
Purchase and Sale Agreement.
l.4 The Purchase Price. The purchase price for the Subject Property
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hereunder shall be Nine Hundred Twenty-One Thousand Two Hundred Fifty
Dollars ($921,250) subject to adjustment at Closing as provided for
hereinbelow payable to Seller by wire transfer or certified funds at the
Closing; and the parties hereto agree to make adjustments to the
purchase price at Closing to insure that the estimated capital costs,
expenses and revenues which accrue to the Subject Property prior to
Effective Time are borne and owned by Seller, and that the estimated
capitalcosts, expenses and revenues which accrue to the Subject Property
after the Effective Time are borne by and owned by Buyer.
ARTICLE II
EFFECTIVENESS OF TIME; RECORDS
2.1 Effective Time. Ownership of Seller's right, title, and interest
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in and to the Subject Property shall be transferred from Seller to Buyer
at the Closing, but shall be effective as of the Effective Time which is
agreed to be 11:59 p.m. local time, on the 31st day of December 1996.
Seller shall be entitled to any amount attributable to the sale of
hydrocarbons from the Subject Property prior to the Effective Time,
even if received after the Effective Time, and shall be liable for the
payment of all expenses and fees including, but not limited to, capital
expenses, attributable to the Subject Property prior to the Effective
Time. In addition, any oil in lease tanks above pipeline connections at
the Effective Time shall remain the property of Seller. Buyer shall be
entitled to any amount attributable to the sale of hydrocarbons produced
from the Subject Property subsequent to the Effective Time, and Buyer
shall be liable for the payment of all expenses and fees, including, but
not limited to, capital expenses, attributable to the Subject Property
subsequent to the Effective Time.
2.2 Records. At or within 10 days after the Closing, Seller shall
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provide, to the extent it has in its possession, originals (or copies to
the extent Seller does not have originals in its possession) of all of
the applicable files, records and data relating to the items described
in Paragraph 1.2 subsections A, B C, D, E, F and G, including available
title records (including abstracts of title and title curative
documents), contracts, production records, electric logs, core data,
pressure data, decline curves and graphical production curves, and all
related matters in the possession of Seller, but excluding the internal
financial and accounting records of Seller, (hereinafter referred to as
"Records");
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related to the Subject Property to Buyer. Seller may retain copies, at
Seller's expense, of any Records. Seller shall have reasonable access
to all records regarding the Subject Property for a period of 6 years or
the length of any applicable statute of limitations, whichever is longer,
for the purpose of defending itself against any claims asserted by a
third party.
ARTICLE III
REVIEW OF RECORDS; ENCUMBRANCES
3.1 Access to Records and Leases. Until the Closing, Seller will
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provide Buyer access to the Records in Seller's possession relating to
the Subject Property and will use its best efforts to furnish to Buyer
all other information (including production, accounting and financial
information) with respect to the Subject Property as Buyer may from time
to time reasonably request, except for Seller's technical interpretive
data, and data and information as to which Seller is prohibited from
disclosing by law or agreement with a third party. Such access by Buyer
shall be limited to Seller's normal business hours, by appointment only,
and shall be without disruption of Seller's normal and usual operations.
Seller hereby grants to Buyer a license to enter upon the Subject
Property prior to the Closing, by appointment and accompanied by a Seller
representative, in order to conduct inspections and appraisals which
Buyer may desire at Buyer's sole cost, risk and expense to determine the
condition of the Subject Property, including, without limitation,
whether hazardous substances are present, or environmental problems
exist, in or under the Subject Property. Buyer shall indemnify and hold
harmless Seller, and Seller's Officers, Directors, Employees, Agents and
Representatives for any and all damages or injuries incurred or caused by
Buyer's property inspections, including damage or harm to Seller's
leases, equipment and facilities.
3.2 Title Matters. At any time before February 19, 1997 at 5:00 p.m.
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CDT, Buyer may notify Seller in writing of all or any portion of the
Subject Property that Buyer believes is affected by one or more Title
Defects, giving full particulars about each Title Defect. "Title Defect"
shall mean a deficiency in net revenue interests as to the wellbores
shown in attached Exhibit "D", working interests as to the wellbores
shown in attached Exhibit "D", rights-of-way, natural gas contracts, oil
contracts, joint operating agreements, lease operating statements,
accounts payable, well inventories, division orders, regulatory files,
gas imbalances, leases, preferential rights to purchase, consents to
assign, third party reversionary rights, any other contracts affecting
the Subject Property, or a deficiency resulting from a defect or uncured
event of default which adversely affects the value of the Subject
Property.
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Upon delivery of such notice by Buyer of a Title Defect, Seller may
elect to cure any such Title Defect to Buyer's reasonable satisfaction
prior to Closing. Failure of Buyer to notify Seller in writing prior to
February 19, 1997 at 5:00 p.m. CDT of any Title Defect shall be deemed
Buyer's acceptance of such condition. If prior to Closing all Title
Defects have not been cured to the reasonable satisfaction of Buyer,
then the following shall occur:
A. Buyer may nevertheless elect to assume such Title Defect and
proceed to Closing; or
B. Buyer may elect to terminate this Agreement without penalty or
other liability to the Seller and such termination shall not be
considered a default under this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents as follows:
4.1 Disclaimers. Prior to Closing Seller will give Buyer access to the
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officers and employees of Seller, and the books, records, and files of
Seller relating to the Subject Property. Buyer further acknowledges that
in making the decision to enter into this Agreement and consummate the
transactions contemplated hereby, Buyer has relied solely on the basis of
its own independent investigation of the assets, including a physical
inspection. Accordingly, except as specifically set forth in this
Article IV, Buyer acknowledges that Seller has not made, and Seller
hereby expressly makes no warranties or representations, express or
implied, in connection with the Subject Property, and expressly disclaims
any such representations or warranties. SELLER EXPRESSLY DISCLAIMS AND
NEGATES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT COMMON
LAW, BY STATUTE, OR OTHERWISE RELATING TO THE CONDITION OF ANY REAL OR
PERSONAL PROPERTY, FIXTURES AND ITEMS OF MOVABLE PROPERTY COMPRISING ANY
PART OF THE SUBJECT PROPERTY INCLUDING (i) ANY IMPLIED OR EXPRESS
WARRANTY OF MERCHANTABILITY; (ii) ANY IMPLIED OR EXPRESS WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE; (iii) ANY IMPLIED OR EXPRESS WARRANTY
OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS; (iv) ANY RIGHTS OF BUYER
UNDER APPLICABLE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION; (v)
ENVIRONMENTAL DAMAGES OR DEFECTS, INCLUDING POLLUTION, CONTAMINATION,
HAZARDOUS SUBSTANCES OR CONDITIONS, LEAKAGE, NATURALLY OCCURRING
RADIATION, WHETHER NOW KNOWN OR LATER DISCOVERED, AND WHICH OCCURRED
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BEFORE, ON, OR AFTER THE CLOSING DATE OF THIS AGREEMENT; (vi) ANY CLAIM
BY BUYER FOR DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN OR UNKNOWN, IT
BEING EXPRESSLY UNDERSTOOD BY BUYER THAT THE PERSONAL PROPERTY, FIXTURES
AND ITEMS, BOTH SURFACE AND SUBSURFACE ARE CONVEYED TO BUYER AS IS, WHERE
IS, WITH ALL FAULTS, AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR
AND THAT BUYER HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS BUYER
DEEMS APPROPRIATE.
4.2 Organization, Good Standing and Qualification. Seller is, and at
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the Closing Seller will be, duly organized, validly existing, and in good
standing under the laws of the State of Colorado, having all necessary
power to carry on its businesses as now owned and operated by it, or as
it will be owned and operated after the Closing, and is duly qualified to
do business and is in good standing in all jurisdictions in which the
Subject Property is located and all other jurisdictions in which the
nature of its business makes such qualification necessary.
4.3 Power. Seller has the power to enter into and perform this
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Agreement and the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by Seller and the transactions
contemplated by this Agreement will not violate (i) any provision of the
Certificate of Incorporation or Bylaws of Seller; (ii) any material
agreement or instrument to which Seller is a party or by which Seller is
bound; (iii) any judgment, order, ruling or decree applicable to Seller
as a party in interest; or (iv) any law, rule or regulation applicable to
Seller, other than, in all cases, a violation which would not have a
material adverse effect on Seller's ability to consummate the
transactions contemplated by this Agreement or on its financial
condition.
4.4 Authorization. The execution, delivery and performance of this
Agreement and the transactions contemplated by this Agreement have been
duly and validly authorized by all requisite action on the part of
Seller, and prior to the Closing, this Agreement will have been
specifically ratified by Seller's Board of Directors. This Agreement and
all other Closing documents have been duly executed and delivered by or
on behalf of Seller and, at the Closing, all documents and instruments
required to be executed and delivered by Seller shall have been duly
executed and delivered. This Agreement constitutes a legal, valid and
binding obligation of Seller enforceable in accordance with its terms,
subject, however, to the effect of bankruptcy, insolvency,
reorganization, fraudulent conveyance and similar laws from time to time
in effect relating to the rights and remedies of creditors, as well as
to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
<PAGE>
4.5 Brokers. Seller has not incurred any obligation or liability,
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contingent or otherwise, for brokers' or finders' fees relating to the
matters provided for in this Agreement which will be the responsibility
of Buyer; and any such obligation or liability that might exist shall be
the sole obligation of Seller.
4.6 Violation of Law. To the best of Seller's knowledge, Seller is
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not in violation, and at the Closing Seller will not be in violation, of
any applicable laws, rules, regulations or orders of any governmental
agency having jurisdiction over the Subject Property or operations
thereon which would result in a material impairment or loss of title to
any material part of the Subject Property or the value thereof or which
would materially hinder or impede the operation of the Subject Property.
4.7 Claims and Litigation. There is no suit, action, claim,
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investigation, or inquiry by any person or entity or any administration
agency or governmental body and no legal, administrative, or arbitration
proceeding now pending or, to the best of Seller's knowledge, threatened
before any court or administrative body against Seller which, upon
determination, would result in a material impairment, loss of title to
any material part or adversely affect the value of the Subject Property
or which has or will materially affect Seller's ability to consummate the
transactions contemplated by this Agreement.
4.8 Accuracy. The Records, including the maps, written production data
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and written financial information furnished or to be furnished to Buyer
in connection with this Agreement, have been or will be prepared without
intentional misrepresentation or intentional omission of material facts
or disclosures.
4.9 Taxes and Assessments. To the best of Seller's knowledge, all ad
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valorem, production, severance, excise, and similar taxes and assessments
based upon or measured by the value of the Subject Property or the
ownership or value of the production of hydrocarbons from the Subject
Property which have become due and payable have been properly paid or are
being challenged in good faith, all applicable tax returns have been
filed, and Seller knows of no claim by any applicable taxing authority
in connection with the payment of these taxes.
4.10 Material Misstatements or Omissions. No representation or warranty
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by Seller in this Agreement contains or will contain any untrue statement
of a material fact, or omits or will omit to state any material fact
necessary to make the statements or facts contained herein not
misleading.
4.11 Contracts. Seller has not entered into any contract or agreement
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for the sale of any of the Subject Property to any third person or which
gives any person any right, title or interest (conditional or otherwise)
in the Subject Property, other than contracts for the sale of current
production.
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4.12 Gas Imbalances. Seller makes no representations or warranties of
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any kind with respect to any deficiency payments under gas contracts
covering or included within the Subject Property for which any party has
a right to take deficiency gas therefrom. The Buyer shall take the
Subject Property, subject to any gas imbalances, whether over or under,
that affect the Subject Property.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller the following:
5.1 Organization, Good Standing and Qualification. Buyer is a
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corporation duly organized, validly existing and in good standing under
the laws of Oklahoma, will have all necessary power at the Closing to own
its interest in the Subject Property and to carry on its business; is
duly qualified to do business, and is duly licensed and bonded to operate
wells, and is in good standing in all jurisdictions in which the Subject
Property is located and all other jurisdictions which the nature of
Buyer's business makes such qualification necessary.
5.2 Power. Buyer has the corporate power to enter into and perform
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this Agreement and the transactions contemplated by this Agreement. The
execution, delivery and performance of this Agreement by Buyer and the
transactions contemplated by this Agreement will not violate (i) any
provision of the Certificate of Incorporation or Bylaws of Buyer; (ii)
any material agreement or instrument to which Buyer is a party or by
which Buyer is bound; (iii) any judgment, order, ruling or decree
applicable to Buyer as a party in interest; or (iv) any law, rule or
regulation applicable to Buyer, other than, in all cases, a violation
which would not have a material adverse effect on Buyer's ability to
consummate the transactions contemplated by this Agreement or on its
financial condition or future business prospects.
5.3 Authorization. The execution, delivery and performance of this
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Agreement, and the transactions contemplated by this Agreement, have
been duly and validly authorized by all requisite corporate action on
the part of Buyer and, prior to the Closing, this Agreement will have
been specifically ratified by Buyer's Board on Directors. This Agreement
and all other Closing documents have been duly executed and delivered on
behalf of Buyer and at the Closing all documents and instruments
required by this Agreement to be executed and delivered by Buyer shall
have been duly executed and delivered. This Agreement constitutes a
legal, valid and binding obligation of Buyer enforceable in accordance
with its terms, subject, however, to the effect of bankruptcy,
insolvency, reorganization, fraudulent conveyance and similar laws from
time to time
<PAGE>
in effect relating to the rights and remedies of creditors, as well as to
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
5.4 Brokers. Buyer has incurred no obligation or liability, contingent
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or otherwise, for brokers' or finders' fees relating to the matters
provided for in this Agreement which will be the responsibility of
Seller.
5.5 Violation of Law. To the best of Buyer's knowledge, Buyer is not in
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violation of any applicable laws, rules, regulations or orders of any
governmental agency having jurisdiction over it or its operations which
would result in a material impairment of its ability to conduct its
business.
5.6 Claims and Litigation. There is no suit, action, claim,
----------------------
investigation or inquiry by any person or entity or any administrative
agency or governmental body and no legal, administrative or arbitration
proceeding pending or, to Buyer's best knowledge, threatened before any
court or administrative body against Buyer or any affiliate of Buyer
which has or will materially affect Buyer's ability to consummate the
transactions contemplated by this Agreement or its financial condition or
future business prospects.
5.7 Material Misstatements or Omissions. No representation or warranty
------------------------------------
by Buyer in this Agreement contains or will contain any untrue statement
of a material fact, or omits or will omit to state any material fact
necessary to make the statements or facts contained herein not
misleading.
ARTICLE VI
PRE-CLOSING OBLIGATIONS OF SELLER
6.1 Operations.
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A.) During the time between the Effective Time and the Closing,
Seller shall have all such access to the Subject Property as is necessary
to continue operations thereon on behalf of itself and Buyer. Seller
shall consult with Buyer with respect to all material decisions to be
made with respect to the Subject Property, and shall operate the Subject
Property (if and where applicable) as it has been operated prior to the
Effective Time. Seller shall act, with respect to the Subject Property,
in good faith and in accordance with its best business judgment. Seller
shall exercise reasonable diligence in safeguarding and maintaining
secure and confidential all geological and geophysical maps, confidential
reports, and similar data relating to the Subject Property in its
possession. Seller shall not transfer, sell, hypothecate, encumber,
<PAGE>
abandon or otherwise dispose of any material portion of the Subject
Property without the prior written consent of Buyer.
B.) Buyer acknowledges that Seller has and will incur certain
administrative costs associated with the operation of the Subject
Property during the time period between the Effective Time and Closing
which are not directly billed to the Subject Property. As reimbursement
for such costs, Buyer agrees to pay Seller at Closing an amount equal to
$150.00 per producing Well (operated by Seller) per month (reduced
proportionately if closing occurs before the end of a full month) for
each month Seller operates the Subject Property on behalf of Buyer. This
sum shall be in addition to the amount due Seller at Closing, as
described in Paragraph 1.4.
6.2 Permissions. Seller shall use reasonable efforts to obtain all
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permissions, approvals and consents by federal, state and local
governmental authorities and others as may be required to consummate the
transaction contemplated by this Agreement.
6.3 Defaults. Seller shall give prompt written notice to Buyer of any
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notice of default (or written threat of default, whether disputed or
denied by Seller) received or given by Seller subsequent to the Effective
Time under any instrument or agreement affecting the Subject Property or
by which the Subject Property is bound.
6.4 Conduct of Business in Normal Course. Seller will carry on its
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business and activities on the Subject Property diligently and in
substantially the same manner as they previously have been carried out,
and shall not make or institute any unusual or novel methods of purchase,
sale, lease, management, accounting or operation that will vary
materially from those methods used as of the Effective Time without the
prior written consent of Buyer.
6.5 Maintenance of Insurance. Seller will continue to carry all
-------------------------
existing insurance, subject to variations in amount required by the
ordinary operations of business until the Closing.
6.6 New Transactions. Except in the event of an emergency, Seller
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shall not, with respect to the Subject Property and without Buyer's prior
written consent, do or agree to do any of the following acts:
A. Enter into any contract, commitment or transaction (including any
contract for the sale of current production for a period in excess of 31
days) not in the usual and ordinary course of its business; or
B. Enter into any contract, commitment or transaction in the usual
and ordinary course of business involving an amount exceeding $15,000
individually or $30,000 in the aggregate; or
<PAGE>
C. Make any capital expenditures in excess of $15,000 for any single
item or $30,000 in the aggregate, or enter into any leases of capital
equipment or property under which the annual lease charge is in excess
of $15,000.
ARTICLE VII
PRE-CLOSING OBLIGATIONS OF BUYER
7.1 Confidentiality. Buyer shall cause the information and data
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furnished or made available by Seller to Buyer and its officers,
employees and representatives in connection with this Agreement or
Buyer's investigation of the Subject Property to be maintained in
confidence and not to be used for any purpose other than in connection
with this Agreement or Buyer's investigation of the Subject Property;
provided, however, that the foregoing obligation shall terminate when the
information or data in question becomes generally available to the oil
and gas industry other than through the breach of the foregoing
obligation.
7.2 Return of Data. Buyer agrees that if this Agreement is terminated
---------------
for any reason whatsoever, Buyer shall, at Seller's request, promptly
return to Seller all information and data furnished to Buyer, its
officers, employees and representatives in connection with this Agreement
or Buyer's investigation of the Subject Property, and Buyer agrees not to
retain any copies of any such information or data.
7.3 Cooperation. Buyer will cooperate with Seller to assist it in
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carrying out the Seller's obligations as set forth in Article VI above.
7.4 Defaults. Buyer shall give prompt written notice to Seller of any
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notice of default (or written threat of default, whether disputed or
denied by Buyer) received or given by Buyer subsequent to the date of
this Agreement which would materially impair Buyer's ability to conduct
its business affairs or consummate the transactions contemplated hereby.
ARTICLE VIII
CONDITIONS TO CLOSING
8.1 Seller's Conditions. The obligation of Seller to consummate the
--------------------
transaction contemplated by this Agreement is subject, at its option, to
the fulfillment on or prior to the Closing of each of the following
conditions:
A. Representations. The representations and warranties of Buyer
----------------
contained in this Agreement shall be true and correct in all material
respects on the Closing as though made on and as of such date.
<PAGE>
B. Performance. Buyer shall have performed all obligations, covenants
------------
and agreements hereunder and shall have complied with all covenants and
conditions contained in this Agreement to be performed or complied with
by it at or prior to the Closing.
C. Pending Matters. No suit, action or other proceeding, public or
----------------
private, shall be pending which (i) seeks to restrain, enjoin or
otherwise prohibit the consummation of the transactions contemplated by
this Agreement; (ii) challenges the transactions contemplated by this
Agreement under any federal, state or municipal law, rule or regulation;
or (iii) seeks either monetary or injunctive relief from the transactions
contemplated hereunder.
8.2 Buyer's Conditions. The obligation of Buyer to consummate the
-------------------
transaction provided for in this Agreement is subject, at the option of
Buyer, to the fulfillment at or prior to Closing of each of the following
conditions:
A. Representations. The representations and warranties of Seller
----------------
contained in this Agreement shall be true and correct in all material
respects as of Closing as though made on and as of such date.
<PAGE>
B. Performance. Seller shall have performed all obligations,
------------
covenants and agreements hereunder and shall have complied with all
covenants and conditions contained in this Agreement to be performed or
complied with by it at or prior to the Closing.
C. Pending Matters. No suit, action or other proceeding, public or
----------------
private, is pending, which (i) seeks to restrain, enjoin or otherwise
prohibit, the consummation of the transactions contemplated by this
Agreement; (ii) challenges the transactions contemplated by this
Agreement under any federal, state or municipal law, rule or regulation;
or (iii) seeks either monetary or injunctive relief from the transactions
contemplated hereunder.
D. Material Change. Except as permitted hereunder, Seller shall
----------------
not have transferred, sold, hypothecated, encumbered, abandoned or
otherwise disposed of any material portion of the Subject Property.
ARTICLE IX
CLOSING
9.1 Time and Place of Closing. If the conditions to Closing have been
satisfied or waived, as appropriate, the Closing shall be held at the
offices of the Seller, and the transfer of the purchase price per the
terms of Paragraph 1.4 shall be accomplished on or before the 21st day of
<PAGE>
February, 1997, or by such other method and at such other date and time
as may be mutually agreed upon by the Parties.
9.2 Closing Obligations. At the Closing:
--------------------
A. Seller shall execute, acknowledge and deliver the deeds,
assignments, bills of sale, letters-in-lieu, and other transfer
documents provided for in this Agreement in substantially the form
described in Exhibit "C" which will convey all of Seller's right, title
and interest in and to the Subject Property, and shall execute and
deliver to Buyer such other instruments and take such other actions as
may be necessary to carry out its obligations under this Agreement;
B. Seller shall deliver, or make provision for delivery, to Buyer
the Records pertaining to the Subject Property.
C. Buyer shall deliver to Seller the purchase price as set forth in
Paragraphs 1.4 and 6.1B above;
D. Seller and Buyer shall execute, acknowledge, and deliver transfer
orders or letters in lieu thereof directing all purchasers of production
to make payment to Buyer of proceeds attributable to its share of the
production from the Subject Property;
E. The Parties shall execute such other instruments and take such
other action as may be necessary to carry out their obligations under
this Agreement.
ARTICLE X
POST-CLOSING OBLIGATIONS
10.1 Receipts and Credits. All monies, proceeds, receipts, credits
---------------------
and income attributable to the Subject Property for all periods of time
subsequent to the Effective Time shall be the sole property and
entitlement of Buyer, and to the extent received by Seller, Seller shall
fully disclose, account for and transmit the same promptly to Buyer. All
monies, proceeds, receipts and income attributable to the Subject
Property, for all periods of time prior to the Effective Time, shall be
the sole property and entitlement of Seller and, to the extent received
by Buyer, Buyer shall fully disclose, account for and transmit the same
promptly to Seller. All costs, expenses, disbursements, obligations and
<PAGE>
liabilities, except as set forth in Paragraph 4.1, attributable to the
Subject Property for any time prior to the Effective Time, regardless of
when due or payable, shall be the sole obligation of Seller and Seller
shall promptly pay, or if paid by Buyer, promptly reimburse Buyer for and
hold Buyer harmless from and against same. All costs, expenses,
disbursements, obligations and liabilities attributable to the Subject
Property for periods of time from and after the Effective Time,
regardless of when due or payable, shall be the sole obligation of Buyer
and Buyer shall promptly pay, or if paid by Seller, promptly reimburse
Seller for and hold Seller harmless from and against same.
10.2 Post-closing Adjustments. The Parties agree that they shall
-------------------------
conduct an adjustment between the Parties, after Closing, of any further
amounts owed between the Parties as a result of the transactions
hereunder. On the 15th day of March, 1997, or such later date or dates as
may be mutually agreed between the Parties, the Parties shall review the
records of Seller and Buyer as to the monies, proceeds, credits,
receipts, income, costs, expenses, disbursements, obligations and
liabilities attributable to the Subject Property. Within 7 business
days hereafter such sums as may be found due by such determination; per
the terms of paragraph 10.1, shall be paid by the Party owing the same to
the other Party.
10.3 Recording. As soon as practicable after the Closing, Buyer shall
----------
record all deeds, conveyances and assignments of the Subject Property and
provide Seller with copies of such recorded documents.
10.4 Further Assurances. After the Closing, Seller and Buyer agree to
-------------------
take such further actions and to execute, acknowledge and deliver all
such further documents that are necessary or useful in carrying out the
purposes of this Agreement or of any document delivered pursuant to this
Agreement. Until May 1, 1997, upon request, Seller shall provide to Buyer
reasonable access to all accounting and financial information regarding
the Subject Property.
ARTICLE XI
TERMINATION
11.1 Right of Termination. This Agreement may be terminated:
---------------------
A. By mutual consent of the Parties; or
B. At the option of the non-breaching Party if the other Party
is in material default of its obligations under this Agreement, ten (10)
days after delivery of notice of such default to the breaching Party if a
cure of the default is not effected; or
C. By either Party if the Subject Property is substantially damaged
or destroyed by fire or other casualty; or
D. By Buyer pursuant to paragraph 3.2 or 12.2.
<PAGE>
11.2 Effect of Termination. If this Agreement is terminated pursuant
----------------------
to Paragraph 11.1 above, this Agreement shall become void ab initio and
of no further force or effect, except for the provisions of Paragraphs
7.1 and 7.2 above, which shall remain in force. In the event this
Agreement is terminated pursuant to Paragraph 11.1B, above, each Party
shall retain all rights which it may have against the other in law and
at equity.
ARTICLE XII
ENVIRONMENTAL CONDITIONS
12.1 Adverse Condition. For purposes of this Article XII "Adverse
------------------
Environmental Condition" shall mean any contamination or condition
resulting from any discharge, release, disposal, production, storage or
treatment on or in the Subject Property or from the Subject Property or
migration to or from the Subject Property to any other land, air or body
of water, wherever located, of any wastes, pollutants, contaminants,
hazardous materials or other materials or substances that are subject
to regulation relating to the protection of the environment under present
laws in effect as of the Effective Time (the "Environmental Laws").
12.2 Notice. Buyer shall notify Seller in writing of any Adverse
-------
Environmental Conditions relating to the Subject Property and provide
evidence thereof not later than February 14, 1997 at 5:00 p.m. CDT.
After receipt of such notice and prior to Closing, Seller shall either
agree at its sole cost and expense to remedy such Adverse Environmental
Conditions, individually or in the aggregate, prior to Closing, to the
reasonable satisfaction of Buyer and in accordance with applicable
Environment Laws or decline to undertake such remediation. Failure of
Buyer to notify Seller in writing of any Adverse Environmental Conditions
prior to February 19, 1997 at 5:00 p.m. CDT shall be deemed Buyers
acceptance of such condition. If Seller does not agree to remedy, or
agrees to remedy but does not remedy, to satisfaction of Buyer all or
any Adverse Environmental Conditions, then under such circumstances the
following shall occur:
A. Buyer may nevertheless elect to assume such Adverse
Environmental Conditions and proceed to Closing; or
B. Buyer may terminate this Agreement without penalty or other
liability to Seller and such termination shall not be considered a
default as described under this Agreement.
<PAGE>
ARTICLE XIII
TAXES
13.1 Apportionment of Ad Valorem and Property Tax. All ad valorem
---------------------------------------------
taxes, real property taxes, personal property taxes and similar
obligations relating to the Subject Property ("Property Taxes"),
assessed prior to the Effective Date of this Agreement and yet to be paid
by Seller, but payable after the Effective Time of this Agreement shall
be allocated between the Parties based on the actual assessment of the
taxing period in effect on the Effective Time. Seller agrees to prepare
an estimate of said taxes prior to Closing. Said estimated amount shall
be deducted from the portion of the purchase price payable to Seller at
Closing, and Buyer shall pay such property taxes at such time as they
become due and payable. No further adjustments for ad valorem taxes or
similar taxes shall be made.
13.2 Other Taxes. All production, severance, excise, windfall profit
------------
and other taxes relating to production of oil, gas and condensate
attributable to the Subject Property prior to the Effective Time shall be
paid by Seller, and all such taxes relating to such production from and
after the Effective Time shall be paid by Buyer.
13.3 Cooperation. Each Party shall provide the other with reasonable
------------
information which may be required by the other for the purpose of
preparing tax returns and responding to any audit by any taxing
jurisdiction. Each shall cooperate with all reasonable requests of the
other made in connection with contesting the imposition of taxes.
Notwithstanding anything to the contrary in this Agreement, neither shall
be required at any time to disclose to the other any tax returns or other
confidential tax information.
ARTICLE XIV
DEFAULT
14.1 Default by Buyer. If Buyer shall default in the performance of
-----------------
its obligations under this Agreement in any material respect or if, as a
result of Buyer's breach of its obligations pursuant to this Agreement,
the conditions precedent to Seller's obligation to close are not
satisfied, and Seller shall not then be in default in the performance of
its obligations hereunder in any material respect, Seller shall be
entitled, as its sole remedy, to terminate this Agreement by written
notice to Buyer and to recover its actual out-of-pocket costs and
expenses (including reasonable attorneys and other professional fees)
incurred in connection with the execution of this Agreement and the
satisfaction of its obligations hereunder, but not including
consequential, punitive or exemplary damages, or any other damages.
Seller agrees that in no event shall its damages exceed $10,000.
<PAGE>
14.2 Default by Seller. If Seller shall default in the performance
of its obligations under this Agreement in any material respect or if, as
a result of Seller's breach of its obligations pursuant to this
Agreement, the conditions precedent to Buyer's obligation to close are
not satisfied, and Buyer shall not then be in default in the performance
of its obligations hereunder in any material respect, Buyer shall be
entitled, as its sole remedy, to terminate this Agreement by written
notice to Seller and to recover its actual out-of-pocket costs and
expenses (including reasonable attorneys and other professional fees
incurred in connection with the execution of this Agreement and the
satisfaction of its obligations hereunder, but not including
consequential, punitive or exemplary damages, or any other damages.
Buyer agrees that in no event shall its damages exceed $10,000.
ARTICLE XV
MISCELLANEOUS
15.1 Entire Agreement. This Agreement, the documents to be executed
-----------------
pursuant to this Agreement, and the attached Exhibits constitute the
entire agreement between Buyer and Seller pertaining to the subject
matter of this Agreement and supersede all prior agreements,
understandings, negotiations and discussions of Buyer and Seller, whether
oral or written. There are no warranties, representations or other
agreements between Buyer and Seller in connection with the subject matter
of this Agreement except as specifically set forth herein or in documents
delivered pursuant hereto. No supplement, amendment, alteration,
modification or waiver of this Agreement shall be binding unless
executed in writing by the Parties.
15.2 Waiver. No waiver of any of the provisions of this Agreement shall
-------
be deemed or shall constitute a waiver of any other provisions of this
Agreement (whether or not similar), nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
15.3 Headings. The headings of articles and paragraphs used in this
---------
Agreement are for convenience only and shall not be considered a part of
or affect the construction or interpretation of any provision of this
Agreement.
15.4 Assignment. No Party shall assign all or any part of this
-----------
Agreement, nor shall any Party assign or delegate any of its rights or
duties hereunder, without the prior written consent of the other Party
and any assignment made without such consent shall be void. Except as
otherwise provided in this Paragraph 14.4, this Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
permitted successors, assigns and legal representatives.
<PAGE>
15.5 No Third Party Beneficiaries. Nothing in this Agreement shall
-----------------------------
entitle any party other than Buyer or Seller to any claim, cause of
action, remedy or right of any kind.
15.6 Governing Law. This Agreement, other documents delivered
---------------
pursuant hereto, and the legal relations between the Parties shall be
governed by and construed in accordance with the laws of the State of
Colorado, excluding the body of law relating to conflicts of law and
except to the extent mandatorily governed by the laws of any jurisdiction
in which the Subject Property is located.
15.7 Arbitration. Any claim or controversy arising out of the
------------
provisions of this Agreement shall be resolved by arbitration in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association. All hearings in any such arbitration shall be
held in Denver, State of Colorado. Any judgment upon the award rendered
by the arbitrator in such arbitration may be entered in any court
having jurisdiction thereover.
15.8 Attorney's Fees. In the event legal action is instituted in
----------------
order to enforce or interpret the provisions of this Agreement, the
prevailing party in such action shall be entitled to recover, as an item
of its costs, its reasonable attorney's fees incurred in such action. In
no event, however, shall the aggregate amount of all damages (except for
adjustments and post-closing adjustments to the purchase price), exceed
$10,000, including attorney's fees.
15.9 Notices. Any notice, communication, request, instruction or
--------
other document required or permitted by this Agreement shall be given in
writing by certified mail, return receipt requested, postage prepaid, or
by prepaid air express, transmitted by facsimile (receipt verified) or
delivered, as follows:
If to Buyer:
MBR Resources, Inc.
525 South Main Street
Suite 1200
Tulsa, OK 74103-4525
Phone: (918) 583-0933
FAX: (918) 582-4143
If to Seller:
Black Dome Energy Corporation
1536 Cole Blvd., Suite 325
Golden, CO 80401
Phone: (303) 231-9059
Fax: (303) 231-9098
<PAGE>
15.10 Expenses. Except as otherwise provided in this Agreement, each
---------
Party shall be solely responsible for all expenses incurred by it in
connection with this transaction (including, without limitation, fees and
expenses of its own counsel, accountants, and consultants) and shall not
be entitled to reimbursement therefor from the other.
15.11 Exhibits. All references in this Agreement to Exhibits shall be
---------
deemed to be references to such Exhibits as the same may be amended and
supplemented by mutual agreement of the Parties through and as of the
Closing.
15.12 Publicity. The Parties agree that, prior to making any public
----------
announcement or statement with respect to the transactions contemplated
by this Agreement, the Party desiring to make such public announcement or
statement shall consult with the other Party and exercise its best
efforts to (i) agree upon the text of a joint public announcement or
statement to be made by both Parties or (ii) obtain approval of the
other Party to the text of a public announcement or statement to be made
solely by Seller or Buyer, as the case may be. Nothing contained herein
shall be construed to require any Party to obtain approval of the other
Party to disclose information with respect to the transactions
contemplated by this Agreement to any state or federal governmental
authority or agency to the extent required by applicable law or by any
applicable rules, regulations or orders of any governmental authority or
agency having jurisdiction or necessary to comply with disclosure
requirements of any stock exchange and applicable securities laws.
15.13 Severability. If any term or other provision of this Agreement
-------------
is invalid, illegal, or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect.
15.14 Counterparts. This Agreement may be executed in any number of
-------------
counterparts, and each counterpart shall be deemed to be an original
instrument, but all such counterparts shall constitute but one Agreement.
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed and delivered this
Agreement as of the day and year first above written.
(Registrant) ATTEST:Black Dome Energy Corporation,
a Colorado Corporation
(Date) February 21,1997
By(Signature) /s/Edgar J. Huff
(Name and Title) President
ATTEST:MBR Resources, Inc., an Oklahoma
Corporation
By:
Title:
<PAGE>
EXHIBIT "A"
DESCRIPTION OF SUBJECT PROPERTY AND LANDS
Lessor Lessee Dated/Recorded Legal Description
Pfeifer #1, #2, #3, #4, #5 Wells, located in Sections 30 and 31 of
Township 33 South, Range 21 West, and Sections 25 and 36 of Township 33
South, Range 22 West, Clark County, Kansas
Aplonia Pfeifer, etal M.O. Henry 2/3/51
Book 15 Page 176 Township 33
South, Range
21 West
Section 30:
E2, S2SW
Section 31:
NW
Township 33
South, Range
22 West
Section 25:
SE
Section 36:
N2, SW
Clark County,
Kansas
Randall #2 SWD Well and Randall #3 Well, located in Section 36,
Township 34 South, Range 22 West, Clark County, Kansas
Grace E. Randall, etal M.O. Henry 2/1/51
Book 15 Page 173 Township 34
South, Range
22 West
Section 36:
S2
Clark County,
Kansas
Grace E. Randall, etal
M.O. Henry
2/1/51
Book 14 Page 216
Township 34 South, Range 22 West
Section 36: N2
Clark County, Kansas
Theis #J-2 Well, located in Sections 34 and 35, Township 34 South, Range
25 West, Clark County, Kansas
Jennie E. Theis The Atlantic 4/10/57
Refining Book 21 Page 469 Township 34 South,
Company Range 25 West
Section 34: SE
Clark County, KS
Edna Ella Cox and 8/5/50
Leonard S Cox Lindsey G.
Morgan Book 12 Page 109 Township 34 South,
Range 25 West
Section 35: NW
Clark County,
Kansas
And:
All of Seller's right, title and interest, if any, under that certain
Operating Agreement dated 8/5/57, between The Atlantic Refining Company
and Delhi-Taylor Oil Corporation, covering the S2 of Section 34 and W2 of
Section 35, Township 34 South, Range 25 West, Clark County, Kansas.
Theis #J-1 Well, located in Section 27, Township 34 South, Range 25 West,
Clark County, Kansas
Jennie E. Theis The Atlantic 4/10/57
Refining Book 21 Page 461 Township 34
Corporation South, Range
25 West
Section 27: SW
Clark County,
Kansas
<PAGE>
Sternberger #1& #2 Wells, located in Sections 1 and 12, Township 35
South, Range 14 West, and Section 6, Township 35 South, Range 13 West,
Barber County, Kansas
Leon Sternberger and Black Dome
Chonita Sternberger, h/w Energy 2/15/94
Corporation Book 264 Page 85 Township 35
South, Range
14 West
Section 1:
Lot 3, S2NW,
SW
Barber County,
KS
Ellis Rudy Black Dome 3/1/94
Energy Book 264
Corporation Page 143 Township 35 South, Range 14 West
Section 1: Lot 3, S2NW, SW
Section 12: North 748' of the NW
Barber County, KS
Louis Sternberger, 3/12/56
a single person L.E. Roberts Book 78
Page 279 Township 35 South, Range
14 West Section 1: Lot 3,
S2NW, SW
Barber County, KS
Martha Sternberger, etal Oil Fields, Inc. 8/1/65
Book 122
Page 377 Township 35 South,
Range 14 West
Section 1: Lot 4,
S2NE, N2SE
Township 35 South,
Range 13 West
Section 6: Lots
3,5,6, W 1/4 of
Lot 4
Barber County, KS
James D. Walsh Township 35 South,
and Ann K. Walsh, h/w W.J. Coppinger 3/24/54 Range 14 West
Book 64 Section 1: Lots 3,
Page 407 4, S2NE, S2NW, SW
and re-recorded N2SE
in Book 64 Page Township 35 South,
501 Range 13 West
Section 6: Lots 3,
5,6, W 1/4 of Lot
4
Barber County, KS
Nora Sterling #1 Well, located in Section 31, Township 34 South, Range 12
West, Barber County, Kansas
Nora E. Sterling, etal W.J. Coppinger 12/4/46
Book 42 Page 379 Township 34
South, Range
12 West
Section 31: NE
Barber County,
KS
Sterling #1-B Well, located in Section 29, Township 34 South, Range 12
West, Barber County, Kansas
Christian Olson and
Cliffie E. Olson, h/w W.J. Coppinger 12/2/46
Book 42
Page 367 Township 34 South,
Range 12 West
Section 29: N2NW
Barber County, KS
Edd Sterling and
Helena Sterling, h/w W.J. Coppinger 12/3/46
Book 42
Page 195 Township 34 South,
Range 12 West
Section 29: S2NW
Barber County, KS
<PAGE>
Welch #1-34, Major #1-34 Wells, located in Section 34, Township 19 North,
Range 17 West, Dewey County, Oklahoma
William R. Krows and
Wrintha M. Krows, h/w Scarth Oil & Gas 1/18/82
Company Book 515
Page 310 Township 19 North,
Range 17 West
Section 34: S2SW
Dewey County, OK
Wiley W. Major Scarth Oil & Gas
Company 1/19/82
Book 515
Page 312 Township 19 North, Range
17 West Section 34: NE, SE
Dewey County, OK
And:
All Seller's interest, if any, under that certain Pooling Order #221487,
Cause #97211, issued by the Oklahoma Corporation Commission, dated
7/26/82.
All Seller's interest acquired by virtue of that certain Joint Operating
Agreement dated 8/1/82 covering all of Section 34, Township 19 North,
Range 17 West, Dewey County, Oklahoma, between Edwin L. Cox &
Berry R. Cox, as Operator and Black Dome Energy Corporation, etal.
Rosa Lee Kuhn #2 & #3, Miller 1-7, R.R. Rohrer #1 & #2, Shupe #5-1, H.E.
Rohrer #1 Wells, located in Sections 5, 6 and 7, Township 28 North, Range
22 West, and Section 20, Township 29 North, Range 22 West, Harper County,
Oklahoma
Oliver P. Shupe and
Patricia C. Shupe, h/w Black Dome
Energy
Corporation 8/21/95
Book 508
Page 760 Township 28 North, Range
22 West Section 5: E2SW
Harper County, Oklahoma
Rosa Lee Kuhn and
Henry W. Kuhn E.J. Harmon 7/10/56
Book 96
Page 647 Township 28 North, Range 22
West Section 6: Lots 4,5,6,
7, E2SW, W2SE
Harper County, Oklahoma
Jeff Hawks Carl S. Ford 7/10/56
Book 97
Page 517 Township 28 North, Range 22 West
Section 6: Lots 4,5,6,7, E2SW,
W2SE Harper County, Oklahoma
H.M. Fowler Carl S. Ford 8/6/56
Book 97
Page 520 Township 28 North, Range 22 West
Section 6: Lots 4,5,6,7, E2SW,
W2SE Harper County, Oklahoma
C.W. Smith Carl S. Ford 7/10/56
Book 97
Page 512 Township 28 North, Range 22 West
Section 6: Lots 4,5,6,7, E2SW,
W2SE Harper County, Oklahoma
Carl S. Ford Sinclair Oil &
Gas Company 7/10/56
Book 97
Page 515 Township 28 North, Range 22 West
Section 6: Lots 4,5,6,7, E2SW,
W2SE Harper County, Oklahoma
Roy S. Shupe and
Martha E. Shupe Paul H. Albright 4/4/50
Book 15
Page 547 Township 28 North, Range
22 West Section 6: E2SE,
less 1 acre out of
the SESE (limited to the
Morrow Sand Formation
only, gas and gas products
only)
Harper County, Oklahoma
<PAGE>
Dependent School
District #7 of Harper
County, Oklahoma Superior Oil
Company 2/21/59
Book 122
Page 202 Township 28 North,
Range 22 West
Section 6: 1 acre
in the SESE
(limited to the Morrow
Sand Formation only,
gas only)
Harper County,
Oklahoma
Socony Mobil
Oil Co. Inc. Sinclair Oil &
Gas Company 9/22/60
Book 135
Page 320 Township 28 North, Range 22
West Section 6: SESE, less
1 acre out of the SESE
(limited to the Morrow Sand
Formation only, gas and gas
products only)
Harper County, Oklahoma
Roy S. Shupe and
Martha E. Shupe M.O. Henry 4/4/51
Book 69
Page 646 Township 28 North, Range 22
West Section 6: Lot 1, SENE
(less & except the Lansing,
Oswego, Arbuckle & Basal
Kansas City Formations)
Harper County, Oklahoma
Robert R Rohrer and
Helen Rohrer, h/w M.O. Henry 5/2/50
Book 6
Page 613 Township 28 North, Range 22
West Section 6: Lots 2,3,
SENW (less & except the
Lansing, Oswego, Arbuckle
& Kansas City Formations)
Section 6: SWNE (less &
except the Lansing, Oswego
& Arbuckle Formations)
Harper County, Oklahoma
J.H. Miller and
Myrtle L. Miller,
h/w Paul H Albright 3/14/50
Book 15
Page 215 Township 28 North, Range 22
West Section 7: NE
Harper County, Oklahoma
Edith J. Stookey Cranfill Fowler 4/17/50
Book 15
Page 333 Township 28 North, Range 22
West Section 7: NE (limited
to the Chester Formation
between 5680' to 5960')
Harper County, Oklahoma
Bonnie Audene Smith Hondo Oil & Gas
Company 5/26/89
Book 432
Page 378 Township 28 North, Range
22 West Section 7: NE
Harper County, Oklahoma
Ula Mae Mills Hondo Oil & Gas
Company 5/26/89
Book 433
Page 522 Township 28 North, Range
22 West Section 7: NE
Harper County, Oklahoma
<PAGE>
Bev B. Miller Hondo Oil & Gas
Company 5/26/89
Book 432
Page 315 Township 28 North, Range 22
West Section 7: NE
Harper County, Oklahoma
Russell Miller Hondo Oil & Gas
Company 5/26/89
Book 433
Page 38 Township 28 North, Range 22
West Section 7: NE
Harper County, Oklahoma
W.S. Neff Hondo Oil & Gas
Company 5/26/89
Book 434
Page 106 Township 28 North, Range 22 West
Section 7: NE
Harper County, Oklahoma
Wangensteen Family Oil
Properties Hondo Oil & Gas
Company 5/26/89
Book 435
Page 405 Township 28 North,
Range 22 West
Section 7: NE
Harper County,
Oklahoma
Estate of Charles Thomas
Wangensteen, Jr. Hondo Oil & Gas
Company 5/26/89
Book 440
Page 345 Township 28 North,
Range 22 West
Section 7: NE
Harper County,
Oklahoma
Murray A. Holcomb, et
ux Paul H. Albright 3/6/50
Book 16
Page 10 Township 28 North,
Range 22 West
Section 7: Lots 1,2,
E2NW Harper County,
Oklahoma
Myrtle Miller Sinclair Oil &
Gas Company 7/11/82
Book 150
Page 611 Township 28 North, Range
22 West Section 7: A tract
of land lying in NENE
beginning at a point 30'
south and 900' west of the
NE corner of the NENE of
said Section 7, thence
south 300' to a point,
thence west 300' to a
point, thence north 300'
to a point, thence east
300' to the point of
beginning, containing
2.066 acres, m/l
(surface lease only)
Harper County, Oklahoma
Russell Miller Atlantic Richfield
Company 5/2/79 Township 28 North, Range
22 West Section 7: A
tract of land in NWNE
described as beginning
at a point 36' east of
the center line of said
Section 7, and 244' south
of the north line of
said Section 7, thence
south 416', thence east
208', thence north 416',
thence west 208' to the
point of beginning,
containing 1.9864 acres,
m/l
(Surface lease only)
Harper County, Oklahoma
<PAGE>
Henry E. Rohrer, Jr. W. Neal Searcy 6/20/50
Book 65
Page 130 Township 29 North,
Range 22 West
Section 20: SW, S2NW
Harper County,
Oklahoma
A.L. Buzzard, a widow W. Neal Searcy 6/20/50
Book 65
Page 133 Township 29 North,
Range 22 West
Section 20: SW, S2NW
Harper County,
Oklahoma
N.A.J. Reed W. Neal Searcy 6/20/50
Book 65
Page 264 Township 29 North, Range 22 West
Section 20: SW, S2NW
Harper County, Oklahoma
Charley Currier, etal W. Neal Searcy 6/19/50
Book 66
Page 576 Township 29 North,
Range 22 West
Section 20: SE
Harper County,
Oklahoma
C.E. German J.F. Fielder 6/25/57
Book 109
Page 84 Township 29 North, Range 22 West
Section 20: NENW, NE
(from the surface to 5861')
Section 20: NWNW
Harper County, Oklahoma
Levina Hauth #2 Well, located in Section 21, Township 3 North, Range 26
ECM, Beaver County, Oklahoma
Frank A. Reimann, The Ohio Oil 2/20/57
Guardian of the person Company Book 176
and estate of John T. Page 294
Reimann, an Incompetent
Person Township 3 North,
Range 26 ECM
Section 21: SW
(From the surface to
the base of the
Tonkawa Formation)
Beaver County,
Oklahoma
Willie A. Wilkerson, aka The Ohio Oil
W.A. Wilkerson, a single Company
man 3/17/55
Book 150
Page 146 Township 3 North,
Range 26 ECM
Section 21: W2NW
(From the surface to
the base of the
Tonkawa Formation)
Beaver County,
Oklahoma
W.A. Wilkerson, The Ohio Oil
Administrator of the Company
Estate of George
Wilkerson, aka George
Wilson 6/28/57
Book 179
Page 419 Township 3 North,
Range 26 ECM
Section 21: W2NW
(From the surface to
the base of the
Tonkawa Formation)
Beaver County,
Oklahoma
Levina Hauth, a widow The Ohio Oil
Company 1/22/55
Book 148
Page 95 Township 3 North, Range
26 ECM Section 21:
W2NE, E2NW (From the
surface to the base of
the Tonkawa Formation)
Beaver County, Oklahoma
Everet Ray Davis Thomas E. Nix 5/16/55
Book 151
Page 122 Township 3 North, Range 26
ECM Section 21: S2SE
(From the surface to the base
of the Tonkawa Formation)
Beaver County, Oklahoma
<PAGE>
Blanche Ward JD Ferguson 1/28/50
Book 24
Page 293 Township 3 North, Range 26 ECM
Section 21: E2NE, N2SE
(From the surface to the base
of the Tonkawa Formation)
Beaver County, Oklahoma
Remlig Oil Company J.M. Huber
Corporation 5/11/82
Book 585
Page 234 Township 3 North, Range
26 ECM Section 21: E2NE,
N2SE (From the surface
to the base of the
Tonkawa Formation)
Beaver County, Oklahoma
And:
All right, title and interest acquired through that certain Declaration
of Pooling dated 3/9/59 and recorded 4/8/59 in Book 194 Pages 302-303 of
the records of Beaver County, Oklahoma
Taylor #1-13 Well, located in Section 13, Township 3 North, Range 24 ECM,
Beaver County, Oklahoma
Chloe R. Taylor and Silas
N. Taylor, w/h M.C. Bluhm 3/22/50
Book 29
Page 353 Township 3 North
Range 24 ECM
Section 13: E2W2
(as to the Tonkawa
Formation from
5400' to 5497')
Beaver County, Oklahoma
Chloe R. Taylor, a
widow J.D. Ferguson 10/13/55
Book 156
Page 624 Township 3 North
Range 24 ECM
Section 13: W2E2
(as to the Tonkawa
Formation from
5400' to 5497')
Beaver County,
Oklahoma
W.E. Bass, a widower Harper Oil
Company 4/26/56
Book 163
Page 371 Township 3 North Range
24 ECM Section 13: W2W2
(as to the Tonkawa
Formation from
5400' to 5497')
Beaver County, Oklahoma
Kathryn H. Chandler and
Robert E. Humphreys The Headington
Company 2/1/68
Book 321
Page 24 Township 3 North
Range 24 ECM
Section 13: E2E2
(from surface to
base of Douglas
Sand @
approximately 5500')
Beaver County,
Oklahoma
Sam K. Viersen, Same K.
Viersen, Jr. and
Episcopal Royalty
Company The Headington
Company 1/23/68
Book 321
Page 21 Township 3 North
Range 24 ECM
Section 13: E2E2
(from surface to
base of Douglas
Sand @
approximately 5500')
Beaver County,
Oklahoma
Elizabeth N. Horkey Sabine Oil
Industries, Inc. 1/30/68
Book 321
Page 27 Township 3 North
Range 24 ECM
Section 13: E2E2
(from surface to
base of Douglas
Sand @ approximately
5500')
Beaver County,
Oklahoma
James J. Taylor and
Alma L. Taylor Harper Oil
Company 4/26/56
Book 163
Page 369 Township 3 North Range 24 ECM
Section 13: E2E2
(as to the Tonkawa Formation
from 5400' to 5497')
Beaver County, Oklahoma
Melvin #1 Well, located in the Jesse Barker Survey A-32, Lee County,
Texas
Willie Melvin, Jr. and
Delores M. Melvin Don Bisett,
Trustee 8/12/80
Volume 358
Page 750 of Deeds 108.493 acres,
more or less out
of the Jesse
Barker Survey
A-32, as
described in a
Deed from Alfred
Palmer, etal to
Willie Melvin,
Jr., and dated
5/3/68, as
recorded in
Volume 179 Page
65 Deed Records.
Lee County, Texas
<PAGE>
EXHIBIT "B"
EXCLUDED PROPERTIES
1. Operations yard under lease by Seller, which is located in
Medicine Lodge, Kansas, including all equipment and inventory located
therein.
2. One Happy 80 pumping unit with Ajax engine, which is currently
located in Jack's Engine and Supply Yard in Medicine Lodge, Kansas.
<PAGE>
EXHIBIT "C"
ASSIGNMENT, BILL OF SALE AND CONVEYANCE
This Assignment, Bill of Sale and Conveyance ("Assignment"), dated
effective as of 11:59 p.m. on December 31, 1996, local time where the
Leases (as defined below) are located (the "Effective Time"), is from
BLACK DOME ENERGY CORPORATION, a Colorado corporation, whose address is
1536 Cole Boulevard, Suite 325, Golden, CO 80401, ("Grantor") to MBR
RESOURCES, INC., whose address is 525 South Main Street, Suite 1200,
Tulsa, OK 74103-4525, ("Grantee").
WHEREAS, Grantor owns undivided interests in and to the oil and gas
leases described in Exhibit "A" attached hereto and made a part hereof
(hereinafter referred to as the "Leases"), insofar as the Leases
cover and relate to the lands described in Exhibit "A" (the "Lands"),
together with the Grantor's undivided interests in and to all the
property and rights incident thereto, including without limitation, the
wells and wellbores, whether useable or not, as generally described on
Exhibit "A" (the "Wells"), the production therefrom, lands pooled or
spaced therewith, all rights, in, to and under all agreements, production
sales contracts, leases, permits, easements, licenses, options and orders
in any way relating thereto, and in and to all data, personal property,
fixtures and improvements now or as of the Effective Time thereon,
appurtenant thereto or used or obtained in connection therewith or with
the production or treating of hydrocarbons, water or salt water produced
therefrom or attributable thereto, together with all other interests,
including surface or mineral rights, owned by Grantor in and to the
Leases and Lands, all of such interests of Grantor described in this
paragraph being hereinafter collectively referred to as the "Subject
Property",
NOW, THEREFORE, in consideration of the foregoing and the mutual and
dependent covenants hereinafter set forth, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Grantor has granted, bargained, sold, conveyed, assigned and delivered,
and by these presents does hereby grant, bargain, sell, convey, assign
and deliver, to Grantee all of Grantor's right, title and interest in the
Subject Property.
The Subject Property shall include all of Grantor's undivided interest
in the following:
A. All existing oil and gas leases covering the Lands as described
on Exhibit "A" attached hereto;
B. All existing agreements including, but not limited to, operating
agreements, rights-of-way agreements and resolutions, releases,
assignments, oil or gas sale contracts, gas gathering and processing
contracts, and any and all other instruments and agreements pertaining
thereto;
C. All (i) wells (including productive wells, non-productive wells
capable or not capable of production and useable and non-useable
wellbores), tanks, pipelines, compressors, steam generators, fixtures,
equipment, improvements, field office and related equipment (including
any buildings or structures located on or in any equipment yards not
specifically excluded from this sale), and other property and (ii)
easements, rights-of-way, permits, licenses, servitudes, environmental
permits, orders, rights, authorizations and appurtenances, used or held
for use or related to the Leases, Lands and Wells or the development or
operation thereof or the production, treatment, storage compression,
processing or transportation of hydrocarbons therefrom or thereon;
D. All rights and obligations arising from associated contracts
applicable to the Leases, Lands, and Wells;
E. All oil, gas or other minerals or other substances produced from
or attributable to the Leases, Lands and Wells from and after the
Effective Time, together with all proceeds from or attributable thereto
<PAGE>
(with the exception that any oil in lease tanks above pipeline
connections at the Effective Time shall remain the property of Grantor);
F. All goodwill associated with the Leases, Lands and Wells; and
G. All oil and gas leases, working interests, overriding royalty
interests, mineral interests, royalty interests and all other interests
and property of every kind and character, insofar as the same cover or
relate to the Lands, and the physical property thereon or used or
obtained for use in connection therewith, even though such rights,
titles and interests may be incorrectly or insufficiently described or
referred to in, or a description thereof be omitted from Exhibit "A".
TO HAVE AND TO HOLD the Subject Property unto Grantee, its
successors and assigns, forever, subject to the following:
1.This Assignment is made and accepted subject to the following (the
"Existing Burdens"):
a. All local, state and federal statutes, ordinances, rules and
regulations applicable to the Subject Property;
b. The terms and provisions of the oil, gas and mineral leases and
assignments thereof to which this Assignment relates;
c. Landowner royalties, overriding royalties, net profit interests,
production payments or other burdens and encumbrances affecting the
Subject Property;
d. That certain Purchase and Sale Agreement ("Agreement") between
Grantor and Grantee dated effective December 31, 1996.
e. All matters and conditions of the items described in subparagraph
(B) above;
insofar and only to the extent that the Existing Burdens are validly
existing, enforceable and applicable to the Subject Property. References
herein to the Existing Burdens shall not create or constitute a
recognition of any rights in third parties, or constitute any
ratification or revival of rights or agreements that are no longer
enforceable.
2. All costs, expenses, disbursements, obligations and liabilities
attributable to the Subject Property for any time prior to the Effective
Time, regardless of when due or payable, shall be the sole obligation of
Grantor and Grantor shall promptly pay, or if paid by Grantee, promptly
reimburse Grantee for and hold Grantee harmless from and against same.
All costs, expenses, disbursements, obligations and liabilities
attributable to the Subject Property for periods of time from and after
the Effective Time, regardless or when due or payable (including any and
all liability arising from the plugging and abandonment of wells in
accordance with applicable rules and regulations and the restoration of
the surface), shall be the sole obligation of Grantee and Grantee shall
promptly pay, or if paid by Grantor, promptly reimburse Grantor for
and hold Grantor harmless from and against same. Notwithstanding
anything herein to the contrary, all liabilities related to Environmental
Matters (as defined in Paragraph 4 below) as to the Subject Property
shall be the sole obligation of Grantee, regardless of when such
liabilities occurred or arose.
3. This Assignment is made and accepted without warranty of title,
either express or implied, even to the return of the purchase price.
This Assignment is made with full substitution and subrogation in and to
all of the rights and actions of warranty that Grantor has or may
have against predecessors in title.
<PAGE>
4. GRANTOR EXPRESSLY DISCLAIMS AND NEGATES ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT COMMON
LAW, BY STATUTE, OR OTHERWISE RELATING TO THE CONDITION OF
ANY REAL OR PERSONAL PROPERTY, FIXTURES AND ITEMS OF
MOVABLE PROPERTY COMPRISING ANY PART OF THE SUBJECT
PROPERTY INCLUDING (i) ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY; (ii) ANY IMPLIED OR EXPRESS WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE; (iii) ANY IMPLIED OR EXPRESS
WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF
MATERIALS; (iv) ANY RIGHTS OF GRANTEE UNDER APPLICABLE
STATUTES TO CLAIM DIMINUTION OF CONSIDERATION; (v)
ENVIRONMENTAL DAMAGES OR DEFECTS, INCLUDING POLLUTION,
CONTAMINATION, HAZARDOUS SUBSTANCES OR CONDITIONS,
LEAKAGE, NATURALLY OCCURRING RADIATION, WHETHER NOW
KNOWN OR LATER DISCOVERED, AND WHICH OCCURRED BEFORE, ON,
OR AFTER THE CLOSING DATE OF THIS ASSIGNMENT; (vi) ANY CLAIM
BY GRANTEE FOR DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN
OR UNKNOWN, IT BEING EXPRESSLY UNDERSTOOD BY GRANTEE THAT
THE PERSONAL PROPERTY, FIXTURES AND ITEMS, BOTH SURFACE AND
SUBSURFACE ARE CONVEYED TO GRANTEE AS IS, WHERE IS, WITH ALL
FAULTS, AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR
AND THAT GRANTEE HAS MADE OR CAUSED TO BE MADE SUCH
INSPECTIONS AS GRANTEE DEEMS APPROPRIATE.
5. Grantor makes no representations or warranties of any kind with
respect to deficiency payments under gas contracts covering or included
with the Subject Property for which any party has a right to take
deficiency gas therefrom. Grantee takes the Subject Property subject
to any gas imbalances, whether over or under, that affect the Subject
Property.
6. This Assignment shall extend to, be binding upon and inure to
the benefit of Grantor and Grantee and their respective successors and
assigns.
<PAGE>
Witness the execution hereof this ____ day of February, 1997, but
effective for all purposes as of the Effective Time.
GRANTOR:
ATTEST:BLACK DOME ENERGY CORPORATION,
a Colorado Corporation
_________________________________________________________________
Title:Edgar J. Huff, President
GRANTEE:
ATTEST:MBR RESOURCES, INC., an
Oklahoma Corporation
__________________________________________________________________
TitleBy: Clark Millspaugh, President
ACKNOWLEDGMENTS
STATE OF _________________________ )
) SS
COUNTY OF _______________________ )
The foregoing instrument was acknowledged before me by Edgar
J. Huff, President of Black Dome Energy Corporation, a Colorado
Corporation, on behalf of said corporation, this ____ day of
________________, 1997.
Witness my hand and official seal.
My Commission expires:____________________________________
Notary Public
___________ Notary address:
STATE OF _________________________ )
) SS
COUNTY OF _______________________ )
The foregoing instrument was acknowledged before me by Clark
Millspaugh, President of MBR Resources, Inc., an Oklahoma Corporation,
on behalf of said corporation, this ____ day of ________________, 1997.
Witness my hand and official seal.
My Commission expires:____________________________________
Notary Public
______________ Notary address:
<PAGE>
EXHIBIT "D"
LIST OF WELLBORES
WELL NAME COUNTY/STATE WORKING NET REVENUE
INTEREST INTEREST
Sternberger #1 Barber County, KS 1.000000 .812500
Sternberger #2 Barber County, KS 1.000000 .805664
Kuhn, Rosa Lee #2 Harper County, OK 1.000000 .847635
Kuhn, Rosa Lee #3 Harper County, OK 1.000000 .875000
Miller #1-7 Harper County, OK 0.000000 .026091
Rohrer, HE #1 Harper County, OK 1.000000 .861328
Rohrer, RR #1 Harper County, OK 1.000000 .853852
Rohrer, RR #2 Harper County, OK .196319 .171779
Shupe Unit #1-5 Harper County, OK .490797 .429447
Melvin #1 Lee County, TX .405000 .212625
Sterling, Nora #1 Barber County, KS 1.000000 .875000
Sterling #1-B Barber County, KS 1.000000 .875000
Theis J-1 Clark County, KS 1.000000 .847656
Theis J-2 Clark County, KS 1.000000 .838320
Hauth #2 Beaver County, OK 1.000000 .875000
Taylor #1-13 Beaver County, OK 1.000000 .757568
Major #1-34 Dewey County, OK .051594 .041481
Welch #1-34 Dewey County, OK BPO .052500 BPO.042190
APO .051594 APO.041481
Pfeifer #1 Clark County, KS 0.000000 .071247
Pfeifer #2,3,4,5 Clark County, KS .654258 .559391
Randall #2 SWD, #3 Clark County, KS .666667 .583333
