SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): February 27,
1997
ROBERTS OIL & GAS, INC.
(Exact name of registrant as specified in its charter)
Texas 0-10056 74-2142545
(State or other jurisdiction (Commission IRS Employer
of incorporation or File Number) Identification No.)
organization)
P.O. Box 22658
Houston, TX 77227-2658
(Address of principal executive offices)
Registrant's telephone number, including area code: 713-621-8241
INFORMATION TO BE INCLUDED IN THIS REPORT
Item 1. Changes in Control of Registrant.
(a) On February 27, 1997, Roberts Oil and Gas, Inc. (the
"Company") entered into an agreement with Geopozos, S.A.
("Geopozos") pursuant to which it agreed to issue shares of its
common stock to Geopozos (the "Geopozos Agreement"), subject to
approval of the agreement by the Company's board of directors.
As part of the Geopozos Agreement the Company agreed to issue to
Geopozos two million (2,000,000) shares of its common stock and a
promissory note in the principal amount of six hundred thousand
dollars ($600,000) in exchange for certain assets. In connection
with the acquisition of those assets, on March 14, 1997, the
Company also entered into an agreement with ROGI International, a
company incorporated under the laws of Panama, (the "ROGI
International Agreement") pursuant to which the Company agreed to
issue, as required by the Geopozos Agreement, the two million
(2,000,000) shares of its common stock to persons or entities as
directed by Geopozos and four million (4,000,000) shares of its
common stock to persons or entities as directed by ROGI
International in exchange for the assets being acquired. Thus, a
total of six million (6,000,000) shares were issued in exchange
for the assets. The Geopozos Agreement also provides that
Geopozos may, at its election, nominate a person to serve on the
board of directors of the Company but has not yet done so.
The assets which were transferred to the Company in exchange
for the promissory note and the issuance of shares as directed by
ROGI International consist of a one hundred percent (100%)
working interest in the rights to explore, drill for and extract
hydrocarbons in specified locations in Colombia. For a
description of the assets acquired, see "Item 2. Acquisition or
Disposition of Assets" herein.
The shares issued pursuant to the Geopozos and ROGI
International Agreements were authorized but unissued shares of
the Company. On behalf of Geopozos the shares were issued to two
corporations and ROGI International directed that shares be
issued to seven corporations and one individual. The Company has
not been informed of the relationship or affiliation, if any,
among those entities. The following entities acquired as holders
of record five percent (5%) or more of the then-outstanding
shares of the Company's common stock in connection with the
Geopozos and ROGI Agreements:
Petroleum Exploration Services, Inc.-1,600,000 (16%)
Pardo Investors, Inc.-750,000 (7.5%)
Terra Group, Inc.-500,000 (5%)
Vigilant Investments, S.A.-750,000 (7.5%)
Kolina Trading, Inc.-650,000 (6.5%)
Carmina Panamericana, S.A.-500,000 (5%)
Sun-Shine Financing Development Corp.-650,000 (6.5%)
The ownership percentage of each of the foregoing was
reduced by one-half as a result of the transaction with Adair Oil
on June 16, 1997, as hereafter described.
On June 16, 1997, the Company entered into, and closed, an
agreement with Adair Oil International Canada, Inc. ("Adair
Oil"), a Bahamas corporation, pursuant to which the Company
agreed to transfer to Adair Oil a fifty-one percent (51%)
controlling interest in the outstanding common stock of the
Company in exchange for certain assets. As a result of that
agreement an aggregate of 10,200,000 shares of the Company's
common stock were issued to Adair Oil in exchange for a portion
of Adair Oil's rights with respect to certain contracts. The
shares issued to Adair Oil consisted of 10,000,000 shares of the
Company's authorized but unissued shares and, in order to
complete the transaction with Adair Oil, 200,000 shares which had
been loaned and returned to the Company by two of the entities
which received shares as part of the ROGI International
Agreement. The assets transferred to the Company by Adair Oil
consisted of a portion of the rights of Adair Oil with respect to
properties located in the countries of Yemen and Paraguay. For a
description of the assets acquired, see "Item 2. Acquisition or
Disposition of Assets" herein. Upon conclusion of the aforesaid
transaction Adair Oil owned an aggregate of fifty-one percent
(51%) of the Company's issued and outstanding shares of common
stock.
In connection with the Adair Oil transaction, all of the
former directors of the Company, except Earl Roberts, also agreed
to resign and Earl Roberts agreed to elect persons designated by
Adair Oil to the Company's board of directors. Immediately
following the closing of the Adair Oil transaction and the
resignation of members of the Company's board of directors, Earl
Roberts caused John Adair, Jalal Al Ghani and Abdul Aziz M.
Al-Abdulkader, the designees of Adair Oil, to be elected to the
Company's board of directors.
(b) In connection with the Adair Oil transaction, certain
stockholders of the Company also entered into a voting agreement,
effective until December 31, 1997, with each other with respect
to certain matters which might be voted upon by the shareholders
of the Company. Certain shareholders also each individually
granted to John Adair, the president of Adair Oil, irrevocable
proxies until December 31, 1997, to vote on their behalf shares
of the Company's common stock owned by the grantors of the
proxies with respect to those same matters. The matters covered
by the voting agreement and the proxies include the increase in
the number of shares which the Company is authorized to issue and
the determination of the rights and privileges of each class of
the Company's stock. The shareholders entering into the voting
trust agreement included Adair Oil and those entities which
acquired shares pursuant to the Geopozos and ROGI International
Agreements. Thus, at the time the voting agreement was entered
into the parties to the voting agreement controlled sixteen
million (16,000,000) shares of the Company's outstanding common
stock. The entities which executed the proxies held four million
(4,000,000) shares of the Company's common stock.
Item 2. Acquisition or Disposition of Assets.
In 1997, the Company acquired, subject to certain consents
as hereafter described, rights with respect to a contract
relating to the exploration, drilling and development of oil and
gas property in Colombia. The Company issued an aggregate of
6,000,000 shares of its authorized but unissued shares of common
stock and a promissory note in the face amount of six hundred
thousand dollars ($600,000) in exchange for the rights. In
connection with the transaction, the shares of stock which were
issued were assigned, for purposes of the contract but not
necessarily for accounting purposes, a value by the board of
directors of the Company of $.55 per share. In determining the
number of shares to be issued, members of the board of directors
of the Company reviewed the contracts to be acquired, obtained a
report from an independent petroleum engineer and discussed the
properties with representatives of Geopozos and ROGI
International. Prior to entering into the contracts with
Geopozos and ROGI International, there was no affiliation between
the Company and either of those entities.
The asset being acquired by the Company consists of the
rights and obligations of Geopozos with respect to a contract,
known as the Chimichagua Association contract (the "Association
Contract"). The Association Contract grants the right to
explore, drill and extract hydrocarbons from a specified area in
Colombia. The Association Contract relates to an area of
approximately 164,900 hectares (a hectare is 2.47 acres) in the
Magdalena valley of Colombia, approximately 500 miles north of
Bogota. The Association Contract was originally acquired by Esso
Colombia in 1988 and, following an intervening assignment, was
acquired by Geopozos on September 14, 1996.
The Association Contract, between Ecopetrol and the holder,
provides that the parties shall share equally the hydrocarbons
produced from the relevant properties, subject to an overriding
royalty interest of twenty percent (20%) which is reserved for
Ecopetrol, and the expenses of development of the properties.
The holder is responsible for the exploration of the properties
but has the right to receive reimbursement of those costs with
respect to fields which are commercially developed by the
parties. The effective date of the Association Contract was
January 20, 1989, and the contract terminates for all purposes
twenty-eight (28) years thereafter. The contract provides for an
exploration period of six (6) years, subject to certain
extensions, and an exploitation period of twenty-two (22) years.
Under the terms of the contract a portion of the property which
has not been commercially developed is reduced over a period of
years, beginning in the sixth year.
In connection with the agreement between Geopozos and the
Company, Geopozos retained a two percent (2%) overriding royalty
interest in hydrocarbons produced from the properties developed
under the Association Contract. Geopozos also agreed to act as
the operator under the Association Contract for a period of up to
twelve (12) months until the Company or its assignee has been
approved by Ecopetrol and the Ministry of Mines and Energy of
Colombia. The parties also agreed to enter into joint operating
agreement covering those operations. The agreement is to
provide, among other things, that Geopozos will be allowed to
mark up expenditures which it incurs, and which have been agreed
to in advance, by ten percent (10%).
The Company is currently reviewing the Association Contract
and the subsequent assignments to determine the interest which it
holds. The review thus far conducted by the Company indicates,
among other things, that Geopozos was required to perform certain
exploration of the properties prior by December 18, 1996, and
that the consents of Ecopetrol, the national oil company of
Colombia, and the Colombian Ministry of Mines and Energy are
required in order for the assignment to the Company from Geopozos
to be effective. The Company has thus far been unable to confirm
that either of those has been accomplished and is therefore in
the process of submitting documentation to Ecopetrol in order to
obtain the required consents in order to be able to complete the
assignment from Geopozos. The Company is also attempting to
finalize the terms of the joint operating agreement with
Geopozos. Because those matters have not yet been accomplished,
the Company is unable at this time to determine the extent of its
interests in the Association Contract or its obligations
thereunder.
On June 16, 1997, the Company acquired a portion of the
rights of Adair Oil to two contracts in Yemen and two contracts
in Paraguay respecting certain oil and gas rights. To acquire
the interests in the Yemen and Paraguay contracts, the Company
issued an aggregate of 10,200,000 shares of the Company's common
stock to Adair Oil. In determining the number of shares to be
issued, members of the board of directors of the Company reviewed
the contracts to be acquired, reviewed financial information
regarding Adair Oil which included an analysis of the value of
the properties in which an interest was being acquired and
discussed the properties with representatives of Adair Oil. Prior
to entering into the contracts with Adair Oil, there was no
affiliation between the Company and Adair Oil.
In exchange for the issuance of shares of its stock to Adair
Oil, the Company acquired five percent (5%) of the net profits in
Adair Oil's interest in each of the contracts. The Company did
not acquire the right or obligation to participate in the
management or operation of any of the properties.
The Yemen contracts (the "Yemen Contracts") were initially
acquired in 1993 by Adair Oil International, Inc. ("AOI"), a
Bahamas corporation, from the Republic of Yemen and relate to two
different areas, one of which is off the coast of Yemen. The
Yemen Contracts grant to AOI the right to explore for oil, gas
and/or related extractable resources and to develop the areas
covered by the contracts if AOI deems the areas to be worthy of
commercial development. The contracts reserve a royalty interest
of ten percent (10%) to the Republic of Yemen, after which AOI
and its assignees have the right, after payment of specified
production costs, to share in the revenues with the Ministry of
Oil and Mineral Resources of Yemen. This revenue sharing
arrangement provides that AOI shall receive revenues ranging from
ten percent (10%) to thirty percent (30%), depending upon the
amount of production. AOI assigned its rights to the Yemen
Contracts to Adair Oil on June 16, 1997.
Under the Yemen Contracts AOI was required to expend at
least eighteen million dollars ($18,000,000) on the exploration
of one of the areas within thirty (30) months, and fifteen
million dollars ($15,000,000) on the exploration of the other
area within thirty-six (36) months, after the effective date of
the contracts. The effective date of each of the contracts was
June 20, 1993. AOI has indicated that, in accordance with the
terms of the contracts, it provided evidence of financial
capability with respect to its exploration obligations. Under
its exploration obligations AOI was required to acquire and
process seismic data and mobilize, drill and evaluate two
exploration wells during the relevant exploration time. AOI did
not perform each of the obligations with respect to the
exploration of the areas. However, under the terms of the
contracts, if AOI is prevented from doing so because of "force
majeure", the time for compliance with that portion of each of
the contracts is extended for such period of time as the force
majeure continues. One of the conditions defined as being force
majeure is the order, regulation or direction of the government
of Yemen which prevents AOI from performing its obligations under
the contract. During a portion of the time since AOI executed
the Yemen Contracts the government of Yemen was in civil war and
political upheaval. AOI believes that the political upheaval of
the government of Yemen prevented it from performing under the
Yemen Contracts and that such prevention constitutes force
majeure as that term is defined in the Yemen Contracts. AOI
therefore believes that, it continues to have rights with respect
to the Yemen Contracts. AOI's representative in Yemen has
discussed these issues with the Minister of Oil of Yemen and has
indicated to AOI that he believes that AOI has the right to
renegotiate the terms of its Yemen Contracts and that it may be
possible to obtain terms which are more favorable to AOI. AOI
has indicated that it intends to pursue such negotiation but no
assurances can be given that such negotiations will be
successful.
Adair Oil International Co. Canada, Inc., a Canadian
corporation ("Adair-Canada") acquired from Guarani Petroleum
Exploration, S.A. ("Guapex"), a Paraguay corporation, on May 31,
1997, a portion of Guapex's interests in a concession contract
respecting 2,400,000 hectares located in Paraguay (the "San Pedro
Contract"). A second concession contract was obtained by
Adair-Canada on May 30, 1997, from Guapex as representative of a
consortium of entities, including Guapex, relating to 3,292,900
hectares located in Paraguay (the "Alto Parana Contract").
Adair-Canada assigned all of its interests in the San Pedro
Contract and the Alto Parana Contract to Adair Oil on June 16,
1997, and Adair Oil succeeded to the rights and obligations of
Adair-Canada. Thus, in describing the aforesaid contracts, Adair
Oil is used hereafter to describe the rights and obligations
initially held by Adair-Canada.
Adair Oil acquired ninety nine percent (99%) of Guapex's
interest in the concession (the "San Pedro Concession") which is
the subject of the San Pedro Contract, with Guapex retaining the
remaining one percent (1%). The expenses and revenues of the
wells, after payment by Adair Oil of certain expense obligations
as hereafter described, are shared pro rata by Adair Oil and
Guapex in those same ratios. Guapex also retained a ten percent
(10%) overriding royalty interest in the hydrocarbons which are
recovered from any wells drilled on the San Pedro Concession.
Under the terms of the San Pedro Contract, the interests being
acquired by Adair Oil are being held in escrow until Adair Oil
has met certain conditions, referred to as "Earning Obligations."
After complying with those Earning Obligations Adair Oil will be
entitled to receive the assignment of 99% of Guapex's interests
in the San Pedro Concession contract.
The Earning Obligations of Adair Oil with respect to the San
Pedro Contract require that (i) Adair Oil pay an aggregate of
three million dollars ($3,000,000) to Guapex for the San Pedro
Concession and the Alto Parana Concession on or before July 31,
1997, (ii) Adair Oil drill and complete, at Adair Oil's expense,
two wells on the San Pedro Concession no later than December 1,
1998, and (iii) Adair Oil pay all of the costs, up to a maximum
of $2,272,000, of the seismic work required with respect to the
exploration of the San Pedro Concession. The seismic work must
begin before October 1, 1997. If Adair Oil fails to meet any of
its Earning Obligations under the San Pedro Contract in a timely
manner, the interests in the San Pedro Concession will not be
assigned by Guapex. If Adair Oil meets its Earning Obligations,
Adair Oil and Guapex have agreed to enter into a Joint Operating
Agreement with respect to the development of the San Pedro
Concession. The terms of such operating agreement are to be
determined through negotiations between the parties.
The Alto Parana Concession was initially acquired from the
government of Paraguay in 1989 by Texaco Exploration Paraguay and
subsequently assigned to Guapex, which assignment was approved by
the government of Paraguay. Adair Oil is acquiring sixty percent
(60%) of Guapex's interest in the Alto Parana Concession. The
assignment to Adair Oil has been made by Guapex and been placed
in escrow. Adair Oil has the right to receive the interest
assigned upon timely completion of the Earning Obligations
imposed on Adair Oil in the Alto Parana Contract.
The Earning Obligations of Adair Oil with respect to the
Alto Parana Contract require that (i) Adair Oil pay an aggregate
of three million dollars ($3,000,000) to Guapex for the San Pedro
Concession and the Alto Parana Concession, with one million
dollars ($1,000,000) attributable to the Alto Parana Concession
to be paid on or before May 31, 1997, (ii) Adair Oil drill and
complete, at Adair Oil's expense, two wells on the Alto Parana
Concession no later than January 1, 1999, with the first well to
be completed no later than March 31, 1997, and (iii) Adair Oil
pay all of the costs, up to a maximum of $2,272,000, of the
seismic work required with respect to the exploration of the Alto
Parana Concession. The seismic work must begin before July 31,
1997. If Adair Oil fails to meet any of its Earning Obligations
under the Alto Parana Contract in a timely manner, the interests
in the Alto Parana Concession will not be assigned by Guapex. If
Adair Oil meets its Earning Obligations, Adair Oil and Guapex
have agreed to share the revenues and expenses of the Alto Parana
Concession on a pro rata basis. Adair Oil did not make the one
million dollar ($1,000,000) payment due on May 31 but believes
that Guapex will give it an extension to make such payment.
Adair Oil also believes that the contract provision which
required the drilling of a well by March 31, 1997, was one of
mutual mistake and will not be considered as a default.
Item 5. Other Events.
Amendments to Articles of Incorporation and by laws.
On July 25, 1997, following a vote of the shareholders of
the Company, the Company amended its articles of incorporation to
change the name of the Company to "Adair International Oil and
Gas, Inc.", to increase the number of authorized shares of common
stock to one hundred million (100,000,000) and to change the par
value of the Company's common stock to no par value. In July the
board of directors voted to amend its by laws to increase the
size of its board of directors to six. The board is considering
candidates for the newly-created positions.
Stock dividend.
The board of directors declared a stock dividend on the
Company's common stock which was distributed on May 23, 1997, to
the holders of record on May 12, 1997. The dividend was in the
amount of one share for each share owned as of the record date.
The Company issued 2,000,000 shares in connection with the
dividend.
Change of transfer agent.
The Company determined to change transfer agents for its
stock and appointed ChaseMellon Shareholder Services as its new
transfer agent on July 18, 1997.
Item 7. Financial Statements and Exhibits.
(b) Pro forma financial information.
The financial statements required to be filed in connection
with the acquisition of assets as described in Item 2 of this
Form 8-K are not currently available. The Company anticipates
that such financial statements will be filed prior to August 15,
1997.
(c) Exhibits.
The following documents are being filed as Exhibits hereto:
2.1. Purchase and Sales Agreement dated February 27, 1997,
between the Company and Geopozos, S.A. relating to the
acquisition of assets by the Company.
2.2. Letter of Agreement dated March 14, 1997, between the
Company and ROGI International, S.A. relating to the issuance of
shares of stock by the Company and the acquisition of assets by
the Company.
2.3. Agreement dated May 30, 1997, between the Company and Adair
Oil International Canada, Inc. pertaining to the acquisition of
assets and the issuance of shares by the Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Roberts Oil & Gas, Inc.
(Registrant)
/s/Earl Roberts
Date: August 1, 1997 Earl Roberts
President
EXHIBIT INDEX
2.1. Purchase and Sales Agreement dated February 27, 1997,
between the Company and Geopozos, S.A. relating to the
acquisition of assets by the Company.
2.2. Letter of Agreement dated March 14, 1997, between the
Company and ROGI International, S.A. relating to the issuance of
shares of stock by the Company and the acquisition of assets by
the Company.
2.3. Agreement dated May 30, 1997, between the Company and Adair
Oil International Canada, Inc. pertaining to the acquisition of
assets by the Company and the issuance of shares by the Company.
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement is entered into this 27th
day of February, 1997 ("Effective Date"), by and among:
Geopozos S.A., a company incorporated under the laws of Colombia,
represented by Mr. Luis Clavijo Pedromo, who is acting with full
capacity and legal authority as its President, with principal
offices at Carrera 14 No. 87-39 of 201 of Santafe de Bogota D.C.,
Colombia ("Geo") and
Roberts Oil and Gas, Inc., incorporated under the laws of the
state of Texas, U.S.A., represented by Earl K. Roberts, who is
acting with full capacity and legal authority as its President
with principal office at 8556 Katy Freeway, Suite 106, Houston,
Texas 77024 ("Buyer")
ROGI International Inc., S.A., incorporated under the laws of the
Republic of Panama, represented by Harold T. Crum who is acting
with full capacity and legal authority as its authorized Agent,
with principal offices at Frederico Boyd No. 7, Panama, Panama.
WITNESSETH
WHEREAS, Geo currently holds 100% of the rights, interests and
obligations under the Chimichagua Association Contract.
WHEREAS, Buyer wishes to acquire from Geo, One hundred percent
(100%) of rights, interests and obligations in the Chimichagua
Association Contract subject to and upon the terms provided
herein.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions herein contained, the parties agree as follows:
1. Subject to the provisions hereof and the considerations
described in Section 2 below:
1.1 Geo shall assign and transfer to Buyer or its assignee,
One hundred percent (100%) of all of its rights,
interests and obligations in the Chimichagua
Association Contract, and in the same percentages of
its rights, interests and obligations in the Movable
Property and Real Property that belongs to Geo in such
above mentioned contract.
1.2 This assignment of interest in name to Roberts Oil and
Gas, Inc., or its assignee, is subject to the final
approval of Ecopetrol and the Ministry of Mines and
Energy. The Parties shall take all such steps as may
be reasonable and necessary to expedite such approvals,
supplying for such entities, for such purposes all such
information and documents as required. Should this
approval be withheld, then a transfer of ownership to
another buyer associated company will be undertaken
until transfer is approved by Ecopetrol.
1.3 Buyer shall assume one hundred percent (100%) of all
obligations and responsibilities in regards to the
Chimichagua Association Contract.
1.4 Geo or its designated entity shall be the Operator for
the Chimichagua Association Contract (scheduled not to
exceed 12 months using pre-approved AFE procedures)
until such time Roberts Oil and Gas, Inc. and/or its
assignee has been approved by Ecopetrol to assume
operatorship.
1.5 A detailed Joint Operating Agreement and Accounting
Procedure will be executed between the Parties before
March 14, 1997. This procedure to allow for a Geopozos
mark-up of 10% for expenditures approved and agreed to
in advance.
2. In consideration of the assignment of the mentioned One
hundred percent (100%) interest referred above, Buyer shall
pay to Geo or its designated entity the following sums and
undertake the following obligations:
2.1 The purchase price for the aforementioned assignment of
interest shall be paid and accomplished as follows:
A. Roberts Oil and Gas, Inc. agrees to raise funds
through a public stock market or private placement
of debt or equity to completely develop the proven
and probable reserves of the Chimichagua
Association contract.
B. Roberts Oil and Gas, Inc. will execute a
promissory note in favor of Geo in the amount of
$600,000 to be paid from the first funds received
from the money raising effort. Roberts Oil and
Gas, Inc. shall be due the like amount from
recovered expenses if Ecopetrol grants
commercialization on the Arjona-1 well. The
remainder of the recovery funds will be paid to
Geo.
C. Geo or its assignee will receive from ROGI
International Inc., S.A 2,000,000 shares of
Roberts Oil and Gas, Inc. common stock free of any
pledges or encumbrances as soon as they are issued
by the authorized transfer agent.
D. Geo will be invited to nominate an individual to
serve of the Board of Directors of Roberts Oil and
Gas, Inc.
E. Geo or its assignee will receive from Roberts Oil
and Gas, Inc. a 2% overriding royalty for all
hydrocarbons produced from the Chimichagua
Association Contract within fifteen (15) calendar
days from receipt of funds from purchaser of
hydrocarbons.
2.2 Payment of all stamp taxes and Notary fees associated
with the execution of this Agreement shall be borne by
the Parties.
3. Geo declares that the rights, interests and obligations of
this transfer have not been previously assigned either
totally or partially to either a natural person or a legal
entity, nor has it been mortgaged or encumbered in any form.
4. This Agreement is subject to the laws and jurisdiction of
the State of Texas, U.S.A., and it is executed under full
confidential basis. Buyer or Geo shall not disclose it
without the written approval of the other party, as well as
any of the technical information and data delivered by Geo
to Buyer.
5. The validity of this Agreement is subject to the Board of
Directors approval of each of the parties that must take
place before March 5, 1997. If any of the Boards deny such
approval, this Agreement shall be terminated and without any
legal effect.
6. In the event that Roberts Oil and Gas, Inc. desires to
transfer all or part of its interest, rights and obligations
in the Chimichagua Association Contract, Roberts Oil and
Gas, Inc. shall properly protect all the rights granted by
this Agreement to Geo, especially those related to the
Royalty payments rights mentioned in Section 2.1.E above.
7. Roberts Oil and Gas, Inc. will have the right of first
refusal to participate or promote Geopozos' Las Quinches and
Cucuana Association Contract for a period of ninety (90)
days after Geo notifies Buyer they are ready to proceed on
such project.
IN WITNESS of that the Parties hereto executed this Agreement on
the date first above written
Geopozos, S.A. Roberts Oil and Gas, Inc.
_____________________ ____________________________
Represented by: Represented by:
Luis Clavijo Earl K. Roberts
President President, CEO
ROGI International Inc., S.A.
______________________________
Represented by:
Harold T. Crum
Agent
ROBERTS OIL AND GAS, INC. LETTERHEAD
March 14, 1997
ROGI International Inc., S.A.
Frederico Boyd No. 7
Panama
Republic of Panama
Attn: Harold Crum, Agent
Reference: The purchase of the authorized and unissued shares
of Roberts Oil and Gas, Inc., ("ROGI")
Subject: Letter of Agreement
Dear Mr. Crum:
We wish to conform the acceptance of your offer to purchase
6,000,000 authorized and unissued shares of Roberts Oil and Gas,
Inc. We understand the offer is as follows:
1. CASH - None
2. ASSETS - A minimum of US $10,500,000.00 worth of hard
assets transferred to ROGI as additional paid capital,
beneficial ownership/stewardship of Colombian
Chimichuaga Association Contract.
a) The transfer is to start immediately.
b) A current audit or value opinion will be provided
to ROGI in a form acceptable to their auditors
and/or stock exchange that will verify or attest
to the value.
3. STOCK - Corporate shares will be issued in return for
assets paid to ROGI as follows:
a) Each share will be issued on an arbitrary value of
US $0.55 equals one (1) share.
b) Corporate shares of two million (2,000,000) of
authorized and unissued stock will be issued to
any entity or person as directed by Geopozos, S.A.
c) Corporate shares of four million (4,000,000) of
authorized and unissued stock will be issued to
any entity or person as directed by ROGI
International, Inc. S.A.
I hope the foregoing states the current
agreement as derived
from our meeting this day.
Agreed to and accepted by ROGI Board of Directors this date.
____________________________ ___________________
Earl Roberts Date
Chairman, CEO, President
Roberts Oil and Gas, Inc.
____________________________ ___________________
Harold T. Crum Date
Agent for:
ROGI International Inc., S.A.
AGREEMENT
THIS AGREEMENT made the day and year hereafter set forth by
and between ADAIR OIL INTERNATIONAL CANADA, INC., a corporation
organized and existing under the laws of the Commonwealth of the
Bahamas, ("Adair") and ROBERTS OIL AND GAS, INC. a corporation
organized and existing under the laws of the State of Texas,
("Roberts").
In consideration of the covenants set forth herein, the
parties hereto agree as follows:
ARTICLE I.
EXCHANGE OF ASSETS FOR CAPITAL STOCK
1.1. Assignment of Assets. At the closing of the
transactions contemplated hereunder, Adair will sell, convey and
assign an undivided interest in those certain contracts for the
exploration and production of oil and gas described in Exhibit A
and Exhibit B attached hereto and made a part hereof (the
"Contracts"). Such interest shall entitle Roberts to a five
percent (5%) share in the net profits earned from the exploration
and production of oil and gas from the properties referred to in
the Contracts (the "Properties"), but shall not entitle Roberts
to participate in the management and operation of the Properties.
1.2. Issuance of Capital Stock. At such closing, Roberts
will issue to Adair, 10,200,000 shares of its voting stock.
1.3. Closing. The closing of the above described exchange
shall take place at the offices of Roberts Oil and Gas, Inc.,
West Memorial Office park, 8556 Interstate Highway 10 West, Suite
106, Houston, Texas at 10:00 A.M. on Monday, June 16, 1997.
1.4 Officer's Certificates. At the closing, Earl K.
Roberts shall deliver to Adair his affidavit stating that to the
best of his knowledge and belief Roberts' warranties and
representations hereafter set forth are true on the closing date
as though made on such day. At the closing, John w. Adair, Jalal
Alghani and William A. Petty shall each deliver his affidavit
stating that to best of his knowledge and belief Adair's
warranties and representations hereafter set forth are true on
the closing date as though made on such day.
1.5 Purchase for Investment. The certificate evidencing
the shares delivered to Adair shall bear the following legend:
"The shares represented by this certificate have not been
registered under the securities Act of 1933 (the "Act") and are
"restricted securities" as that term is defined in Rule 144 under
the Act. The shares may not be offered for sale, sold or
otherwise transferred except pursuant to an effective
registration statement under the Act or pursuant to an exemption
from registration under the Act, the availability of which is to
be established to the satisfaction of the Company."
ARTICLE II
WARRANTIES AND REPRESENTATIONS
2.1 Adair's /Warranties and Representations. Adair
warrants and represents to Roberts as follows:
a. Contracts. To the best knowledge and belief of Adair's
officers, the Contracts are valid, existing and in full force and
effect.
b. Assignability. To the best knowledge and belief of
Adair's officers, there is no prohibition against the assignment
of an interest in the Contracts to Roberts by the terms of the
Contracts or the laws and regulations of the governments having
jurisdiction over the Contracts and Adair has the power and
authority to assign such Contracts
c. Extent of Adair's Interest. Adair intends to assign the
Contracts, subject to the interest to be assigned to Roberts
hereunder, to another entity in which Adair will own a fifty
percent (50%) interest for the purpose of securing funds for the
exploration and development of the Properties and of properties
owned by Roberts.
d. Organization. Adair is a corporation organized and
existing under the laws of the Commonwealth of the Bahamas and is
in good standing in such commonwealth.
e. Authority. John W. Adair, as the Chief Executive
Officer of Adair, Jalal Alghani, as its Chief Financial Officer,
and William A. Petty, as its President, have been duly authorized
by its Board of Directors and Shareholders to enter into this
Agreement on behalf of Adair.
f. Financial Statements. Adair has delivered to Roberts a
copy of its balance sheet compiled on March 18, 1997 by Rahimi,
Levy & Co., Certified Public Accountants, of Santa Monica,
California. To the best knowledge and belief of the officers of
Adair, such balance sheet fairly presents the financial condition
of Adair as of March 1, 1997 and was prepared on the basis of
generally acceptable accounting principles, except that the
values listed therein are based on market values and not on cost.
g. Geophysical and Geological Reports. Every fact set
forth in the documents listed below is true and correct to best
knowledge and belief of Adair's officers, such document being:
"Geophysical and Geological Report on the Alto Panama and
San Pedro Blocks in Paraguay, South America for Adair
International Oil Co.-Canada, Inc. by Byron R. Ayme, B.Sc.
April 4, 1997", and "Exploration: Block 24 and Block 28,
Republic of Yemen, Adair Oil International, Inc., a
Subsidiary of Adair International, Inc."
h. Share Ownership. No person owns any of the issued and
outstanding shares of Adair except those persons listed on
Exhibit C, each of whom owns the number of shares set forth
opposite his respective name:
i. Binding Effect. The execution and delivery by Adair to
Roberts of a counterpart of this Agreement in consideration of
the execution and delivery by Roberts to Adair of a counterpart
of this Agreement constitutes a binding and enforceable
obligation of Adair, subject to the conditions set forth herein.
j. Purchase of Investment. Adair's acquisition of Robert's
shares is being made for its own account for investment and with
no present intention of resale.
k. Securities Violations. No officer, director or
shareholder of Adair has been convicted for the violations of the
securities laws of the United states or is now under
investigation for the violation of such securities laws,
2.2 Robert's Warranties and Representations. Roberts
warrants and represents to Adair as follows:
a. Organization. Roberts is a corporation organized and
existing under the laws of the State of Texas and is in good
standing in such and in all other states and countries in which
it engages in business. The only states or countries in which
the character of the properties it owns or the nature of its
business makes a licensing authority or qualification necessary
are Texas and Oklahoma.
b. Corporate Records. All of Roberts' Articles of
Incorporation and Bylaws, amendments thereto, Minutes of Meetings
of Roberts' Board of Directors, Unanimous Consents of its
Directors, Minutes of Meetings of its Shareholders, Unanimous
Consents of its Shareholders, Capital Stock Records, List of
Shareholders, Forms 10-K, and other Corporate Records have been
presented to Adair for inspection, are the originals or true and
correct copies of such and, where applicable, represent the
actions of its Directors and Shareholders. To the best knowledge
and belief of Robert's officers, the facts set forth in each Form
10-K are true and correct, except that the reserve information is
not current.
c. Subsidiaries. Roberts owns no interest in the capital
stock of another corporation.
d. Capitalization. Roberts is authorized to issue
20,000,000 shares of common stock of which 10,000,000 shares have
been issued and are outstanding and is authorized to issue
5,000,000 shares of preferred stock of which 600 shares have been
issued and are outstanding. All of such shares are validly
issued, fully paid and non-assessable. It is not authorized to
issue any other classes of shares. Roberts has no outstanding
subscriptions, contracts, options, warrants, or other obligations
to issue, sell, or otherwise dispose of, purchase, redeem or
otherwise acquire any of its shares.
e. Authority. Earl K. Roberts, as the President of Roberts
and Raymond Kerr, as its Secretary, have been duly authorized by
its Board of Directors to enter into this Agreement on behalf of
Roberts.
f. Share Ownership. No persons owns more than one percent
(1%) of the issued and outstanding common shares of Roberts
except those persons listed on Exhibit D, each of whom owns the
number of shares set forth opposite his respective name:
g. S.E.C. Reporting. Roberts is in compliance with the
reporting requirements of a "reporting company" pursuant to the
Securities Act of 1933, including, without limitation, forms 10-K
and 10-Q, except the financial statements included therein are
unaudited.
h. Financial Statements. Roberts has delivered to Adair
copies of the financial statements included in Forms 10-K filed
with the Securities and Exchanger Commission for the years ended
May 31, 1996, May 31, 1995, May 31, 1994, May 31, 19993, May 31,
1992, May 31, 1991, May 31, 1990 and May 31, 1989. Each balance
sheet fairly presents the financial condition of Roberts as of
the date of such balance sheet, each statement of income and
surplus fairly presents the results of its operations for the
period ending on the date of such statement, and all such
financial statements were prepared on the basis of generally
accepted accounting principles, consistently applied.
i. Undisclosed Liabilities. As of the date of each
balance sheet referred to above, Roberts has no liabilities or
obligations of any nature, whether accrued, absolute, contingent,
or other wise, not shown on such balance sheet, Roberts is not a
party to any contract not terminable by it at will. Roberts is
not a party to any litigation, and no such litigation is
threatened or contemplated.
j. Subsequent Changes. Since May 31, 1996, there has been
no change in Robert's financial condition, assets, liabilities or
business, except:
(i) changes occurring in the ordinary course of business,
none of which have a materially adverse effect on its
financial conditions or business; and
(ii) the issuance by Roberts of 6,000,000 shares of its
common stock in exchange for the acquisition of the
right to explore for and produce oil and gas on certain
properties in Columbia.
k. Binding Effect. The execution and delivery by Roberts
to Adair of a counterpart of this Agreement in consideration of
the execution and delivery by Adair to Roberts of a counterpart
of this Agreement shall constitute a binding and enforceable
obligation of Roberts, subject to the conditions set forth
herein.
l. Securities Violations. No officer or director of
Roberts or any of its shareholders owning one percent or more of
its common stock has been convicted for the violations of the
securities laws of the United States or is now under
investigation for the violation of such securities laws.
ARTICLE III
CONDUCT OF BUSINESS UNTIL CLOSING
3.1 Adair. Until the closing of the transactions
contemplated hereunder, Adair will refrain from any action which
would cause its warranties and representations as set forth
herein to not be true on the closing date as though made on such
day. However, specifically, without limitation, Adair is
permitted to assign to persons other than Roberts undivided
interests in the Contracts so long as they retain at least a
five-percent (5%) undivided interest therein.
3.2 Roberts. Until the closing of the transactions
contemplated hereunder, Roberts will refrain from any action
which would cause its warranties and representations as set forth
to not be true on the closing date as though made on such day,
and will conduct its business only in the ordinary course.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Adair's Obligations. Adair shall be required to
perform its obligations at closing only if:
a. Roberts' warranties and representations were true on
the date of this Agreement and are true as of the closing date as
though made on such day.
b. Roberts shall have performed all of its obligations to
be performed by it before the closing and shall contemporarily
perform all obligations to be performed by it at the closing.
c. Roberts shall have delivered to Adair the irrevocable
proxies of its shareholders in form satisfactory to Adair, which
together with the shares to be acquired by Adair pursuant to this
agreement, shall entitle Adair to vote two-thirds of the common
stock of Roberts in favor of the amendment of its Articles of
Incorporation.
d. All members of the current Board of Directors of
Roberts, except Earl K. Roberts, shall have resigned, and there
have been elected new directors approved by Adair.
4.2 Roberts' Obligations. Roberts shall be required to
perform its obligations at closing only if:
a. Adair's warranties and representations were true on the
date of this Agreement and are true as of the closing date as
though made on such day.
b. Adair shall have performed all of its obligations to be
performed by it before the closing and shall contemporarily
perform all obligations to be performed by it at the closing.
c. Adair shall have furnished Roberts with evidence
reasonably satisfactory to it that Adair has strategic partners
with sufficient financial to develop the property described in
the Contracts.
d. Adair shall have furnished Roberts with the original
executed documents evidencing the Contracts and Roberts shall
have determined that such contracts are reasonable satisfactory
to it.
ARTICLE V
TRANSACTIONS AFTER CLOSING
5.1 Robert's Current Projects. After the closing, Adair
will furnish to Roberts funding for the purpose of developing the
projects approved by Robert's Board of Directors as constituted
after the Closing.
ARTICLE VI
OTHER
6.1 Effective Date. The effective date of the closing
shall be deemed to be May 31, 1997.
6.2 Survival of Representations. All warranties and
representations of either party hereto shall survive the closing
of the transactions contemplated hereby.
6.3 Benefits. This Agreement shall be binding on and inure
to the benefit of the successors and assigns of each of the
parties hereto.
6.4 Construction. This Agreement is to be delivered in the
State of Texas, is intended to be performed in the State of
Texas, and shall be construed and enforced in accordance with the
laws of such state.
6.5 Notices. All notices, demands and other communications
hereunder shall be in writing, and shall be deemed to have been
given if delivered or mailed, first class, postage prepaid,
certified, return receipt requested, and addressed to a
respective party at the address set forth below:
If to Adair:
Adair Oil International Canada, Inc.
Mr. John W. Adair
10810 East 45th Street
Tulsa, Oklahoma 74101
If to Roberts:
Roberts Oil and Gas, Inc.
Mr. Earl K. Roberts
P.O. Box 22659
Houston, Texas 77227-2658
IN WITNESS WHEREOF the parties hereto have signed this
Agreement on the 30th day of May, 1997.
ADAIR OIL INTERNATIONAL CANADA, INC.
By _____________________________
John W. Adair, Chairman and
Chief Executive Officer
By _____________________________
Jalal Alghani, Vice Chairman
and Chief Financial Officer
By _____________________________
William A. Petty, President
ROBERTS OIL AND GAS, INC.
By _____________________________
Earl K. Roberts, President
By _____________________________
Raymond Kerr, Secretary
ADAIR'S SHAREHOLDERS
John W. Adair 10,000,000 shares
Jalal Alghani 10,000,000 shares
William A. Petty 10,000,000 shares
Roberts' Shareholders
Robert M. Burr 216,000
Carmina Panamericana, S.A. 500,000
CEDE & Co. 335,666
Betty J. Crum 100,000
Inversiones Petroleras 400,000
Raymond C. Kerry 567,616
Key Paradise Designs, Inc. 100,000
Kolima Trading, Inc. 650,000
Pardo Investors, Inc. 750,000
Petroleum Exploration Services, Inc. 1,600,000
Earl K. Roberts 1,050,950
Sales Development Services, Inc. 128,744
James C. Shindler 484,658
Robert H. Steelhammer 736,018
Sun-Shine financing Development Corp. 650,000
Terra Group, Inc. 500,000
Vigilant Investments, S.A. 750,000
Total 9,519,652
