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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
NOVEMBER 16, 1999
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Date of Report (Date of earliest event reported)
PRIMEENERGY CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
0-7406 84-0637348
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(Commission File Number) (IRS Employer Identification
Number)
ONE LANDMARK SQUARE, STAMFORD, CONNECTICUT 06901
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(Address of principal executive offices)
(203) 358-5700
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(Registrant's telephone number)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On November 16, 1999, PrimeEnergy Corporation, the Registrant
("PrimeEnergy"), through its subsidiary PrimeEnergy Management Corporation,
completed the purchase of certain oil and gas properties and related assets from
Southern Pacific Petroleum U.S.A. ("Southern Pacific"). Such acquisition was
made pursuant to that certain Purchase and Sale Agreement dated as of November
16, 1999, between PrimeEnergy Management Corporation and Southern Pacific, (the
"Agreement"), a copy of which is filed herewith as Exhibit 10.21.
PrimeEnergy paid $1,813,000 for the properties and assets purchased,
subject to, among other adjustments, oil and gas production from the properties
purchased from an effective date of October 1, 1999. The properties and assets
purchased include various producing oil and gas interests in about 131 oil and
gas wells located in Oklahoma and related operating assets and properties, which
are described in the Agreement. PrimeEnergy held various interests in most of
the wells purchased and is currently the operator of the majority of these
wells, and will not assume operation of any wells as a result of this purchase.
The consideration and terms for the acquisition of the interests and
assets purchased were reached by arms's length negotiations between PrimeEnergy
and Southern Pacific and were based upon an evaluation of the properties,
operational costs, analysis of future oil and gas production, development
obligations with respect to the properties and similar relevant factors. There
was, and is, no material relationship between Southern Pacific and PrimeEnergy
or any affiliate of PrimeEnergy, or any Director or officer of PrimeEnergy or
any associate of any such Director or officer.
The funds used by PrimeEnergy for this acquisition were provided under
the existing Credit Agreement between PrimeEnergy and Bank One, Texas.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired:
None
(b) Pro forma financial information:
The required pro forma financial information will be filed by
amendment to this Form 8-K under cover of Form 8, on or before January 31, 2000.
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Exhibit
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<S> <C>
10.21 Purchase and Sale Agreement dated as of November 16,
1999, between PrimeEnergy Corporation and Southern
Pacific Petroleum U.S.A.
</TABLE>
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.
PrimeEnergy Corporation
Date: November 24, 1999
By: /s/ Beverly A. Cummings
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Beverly A. Cummings
Executive Vice President
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Index to Exhibits
<TABLE>
<CAPTION>
Exhibit No. Exhibit
- ---------- -------
<S> <C>
10.21 Purchase and Sale Agreement dated as of November 16, 1999,
between PrimeEnergy Corporation and Southern Pacific Petroleum
U.S.A.
</TABLE>
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EXHIBIT 10.21
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (referred to as "this Agreement") is
made and entered into this 16th day of November, 1999, by and among Southern
Pacific Petroleum U.S.A., a Nevada corporation (referred to as "Seller"), and
PrimeEnergy Management Corporation, a New York corporation (referred to as
"Buyer").
Recitals
Seller desires to sell, and Buyer desires to purchase, all of Seller's
right, title, estate, and interest in and to the following rights, assets,
properties, and interests (collectively referred to as the "Assets:"
I. (a) the oil and/or gas wells described at Exhibit A attached hereto
(individually and collectively referred to as the "Wells");
(b) the oil, gas and minerals underlying (referred to as the
"Minerals"), and the oil, gas and mineral leases, and the pooling, unitization,
communitization and similar orders of governmental authorities covering, all or
any portion of the lands described at Exhibit A and/or lands, spaced, pooled
and/or unitized with such lands (individually and collectively referred to as
the "Leases");
(c) the lands described in the Leases and the lands spaced, pooled
and/or unitized therewith (individually and collectively referred to as the
"Lands");
(d) the salt water injection wells and water supply wells located at
the Lands (individually and collectively referred to as the "Disposal and Supply
Wells"), and the properties (real, personal or fixtures) situated at,
appurtenant to, and used in connection with, the operation of the Wells and/or
the Disposal and Supply Wells (individually and collectively referred to as the
"Properties"); and
(e) all agreements, contracts, licenses, files, records,
rights-of-way, and easements, but only insofar as same cover and pertain to the
Minerals, the Leases, the Wells, the Disposal and Supply Wells, the Lands and/or
the Properties (individually and collectively referred to as the "Agreements").
The foregoing rights, titles, estates, and interests in the Wells, the Minerals,
the Leases, the Lands, the Properties, and the Agreements are collectively
referred to as the "Working Interests."
II. Donahoo, L.L.C., an Oklahoma limited liability company, and any
and all rights and interests attributable to Seller's right, title, estate, and
interest therein (individually and collectively referred to as the "LLC
Interest").
III. The lands described at Exhibit B attached hereto, and any and all
personal property and fixtures located at or appurtenant thereto, including,
without limitation, any and all saltwater disposal and injection wells located
thereat (individually and collectively referred to as the "Marshall Yard
Assets").
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Agreement
In consideration of the foregoing premises and for the purpose of
prescribing the terms and conditions of the purchase and sale of the Assets,
Seller and Buyer, intending to be bound hereby, agree as follows:
Section 1. Sale of Assets; Purchase Price. Subject to the terms and
conditions of this Agreement, at the closing provided for at Section 4 of this
Agreement (hereinafter referred to as the "Closing"), Seller will sell, convey,
and deliver the Assets, free and clear of all "Adverse Encumbrances," as that
term is defined at Section 7(a), to Buyer, and Buyer will purchase and accept
delivery of the Assets from Seller, for $1,813,449.00 (U.S. Dollars) (the "Base
Price") calculated as follows: (i) $1,750,000.00 for the Working Interests, (ii)
$15,349.00 for the Marshall Yard Assets, and (iii) $48,100.00 for the LLC
Interest. The Base Price shall be increased by the payment, if required,
provided pursuant to Section 6 of this Agreement (referred to as the "Net
Profits Payment"). The sum of the Base Price and the Net Profits Payment, if
any, is referred to as the "Purchase Price."
Section 2. Allocations. (a) The purchase and sale of the Assets shall
be effective for all purposes as of October 1, 1999 (referred to as the
"Effective Date"). Except as otherwise provided in this Section 2, all revenues,
proceeds, and receipts (net of applicable production, severance, excise,
windfall profit, and similar taxes) attributable to Seller's interest in the
production of oil, gas, and other hydrocarbons (referred to as "Production
Revenues") obtained before the Effective Date from the Wells shall belong to
Seller. All revenues, proceeds, and receipts (net of applicable sales and
similar taxes) attributable to Seller's interest in the sale of any of the
Properties (referred to as "Properties Revenues") occurring before the Effective
Date shall belong to Seller. Conversely, all Production Revenues attributable to
production obtained on or after the Effective Date and all Properties Revenues
attributable to the sale of Properties on or after the Effective Date shall
belong to Buyer.
(b) The amount of marketable pre-Effective Date production from the
Wells operated by Buyer, which is commingled in the tanks with production
obtained from those Wells on or after the Effective Date (referred to as
"Pre-Effective Date Tank Oil"), shall be determined based upon a reliable
measurement method or calculation mutually acceptable to the parties. Buyer's
share of the Pre-Effective Date Tank Oil shall be calculated by multiplying
Seller's applicable net revenue interest in the Pre-Effective Date Tank Oil by
the amount of Pre-Effective Date Tank Oil, then multiplying that product by the
posted price in effect on the Effective Date for such Pre-Effective Date Tank
Oil, then subtracting from that product all applicable production, severance,
excise, windfall profit, and similar taxes thereon (referred to as "Seller's
Tank Payment"). All pre-Effective Date production from the Wells, which are not
operated by Buyer, that is commingled in tanks with production obtained on or
after the Effective Date, shall belong to Buyer.
(c) All obligations, liabilities, undertakings, and expenses,
including, without limitation, joint interest billings, gas balancing
obligations, overhead and management fees, royalty and lease rental obligations,
payments in lieu of production, net profits payments, contractual payments, and
operating costs (referred to as "Obligations"), which are in any manner related
to the ownership, drilling, operation, use or maintenance of the Assets or to
events prior to the Effective
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Date, but unsatisfied as of the Effective Date, and which are chargeable to
Seller's interest in the Assets, shall be the sole obligation and responsibility
of Seller. Conversely, all Obligations related to the ownership, drilling,
operation, use or maintenance of the Assets or to events initially commencing on
or after the Effective Date, and which are chargeable to the interests conveyed
by Seller to Buyer pursuant to this Agreement, shall be the sole obligation and
responsibility of Buyer.
(d) Any party hereto that receives any Revenues owing to the other
party hereto pursuant to the terms of this Agreement shall promptly deliver same
to the other party. Any party hereto that receives any demand, invoice, billing
or other evidence of an Obligation, which is the responsibility of the other
party hereto under the terms of this Agreement, shall promptly notify that party
of same for timely payment or satisfaction of the Obligation. Any party hereto
that satisfies any Obligation owing pursuant to the terms of this Agreement by
the other party hereto shall receive prompt reimbursement therefor by the other
party hereto. Seller and Buyer will attempt with the utmost good faith, fair
dealing and commercial reasonableness to agree upon all items and amounts of all
allocations of Revenues, Seller's Tank Payment, and Obligations in accordance
with the terms of this Agreement. If Seller and Buyer are unable to obtain such
an agreement, then Buyer and Seller may each seek to enforce such party's rights
as respects such allocation, all as determined in accordance with the terms of
this Agreement, in such manner as may be authorized by law or equity.
Section 3. Delivery of Purchase Price and Other Distributions. To the
extent determinable and agreed upon by the parties hereto at the Closing, the
amount of each allocation item provide for at Section 2 of this Agreement, which
has been received by a party hereto to whom the item does not belong under the
terms of this Agreement or which has been paid by a party hereto who does not
owe the item under the terms of this Agreement, shall be added to or subtracted
from, as applicable, the Base Price. The Base Price, as so adjusted, shall be
delivered on the Closing Date by Buyer to Seller in readily available funds
(U.S. Dollars) pursuant to Seller's reasonable wiring instructions. On December
20, 1999, each party hereto shall deliver to the other party hereto, a written
statement reflecting on an itemized basis (to the extent the information is then
available to the party) additional distributions, which that party believes are
required pursuant to Section 2 of this Agreement. Buyer and Seller shall have
until December 31, 1999 to reach an agreement upon all allocations theretofore
proposed or made. Except with respect to contested items or amounts (referred to
as the "Contested Items"), each item for which an allocation has not been made
in accordance with the terms of this Agreement before January 5, 2000, shall be
accounted for and paid by Seller or Buyer, as applicable, on an item-by-item
basis as and when due in accordance with this Agreement. Any party hereto may
seek judicial resolution of any Contested Item.
Section 4. Closing. The purchase and sale of the Assets shall be held
and consummated on or about November 15, 1999, at 9:00 a.m. at Seller's Oklahoma
City office, or at such other place and time, as Buyer and Seller shall mutually
agree (referred to as the "Closing Date").
Section 5. Participation and Operating Agreements. (a) Buyer and Seller
are parties to (i) a Participation Agreement dated March 18, 1993, as amended by
an Amended and Restated Participation Agreement dated May 27, 1994 (referred to
as the "Participation Agreement"), and (ii) a "Restated Operating Agreement," as
that term is defined in the
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Participation Agreement. But for the consummation of the Closing, Seller's
rights and interests in certain of the Assets (sometimes referred to as the
"Southwest Assets") would have been reduced under the terms of the Participation
Agreement upon the occurrence of "Payout," as that term is defined in
the Participation Agreement. For the purpose of calculating the "Net Profits
Payment," as that term is defined in Section 6 of this Agreement, the parties
hereto shall, as respects the Southwest Assets, determine if Payout would have
occurred under the terms of the Participation Agreement had the purchase and
sale contemplated by this Agreement not occurred. In calculating Payout, the sum
of $63,449 and Seller's Tank Payment shall be subtracted from the amount
remaining to be recovered by Seller under Section 1.2(c) of the Participation
Agreement to obtain Payout. If the parties hereto determine that Payout would
have occurred under the terms of the Participation Agreement had the purchase
and sale contemplated by this Agreement not occurred, then Seller's interest in
the Southwest Assets shall be reduced in accordance with Section 1.2(b) of the
Participation Agreement and, from and after the date Payout would have occurred,
such reduced interests shall be substituted for and used in place of the
applicable interests in the Southwest Assets theretofore used in such
calculation. Upon the consummation of the Closing, the Participation Agreement
and the Restated Operating Agreement shall terminate and be of no further force
or effect, except for obligations and rights theretofore accrued (e.g., payment
of amounts owing under the terms of the Restated Operating Agreement) and except
with respect to the Working Interests identified on Exhibit G attached hereto or
any other Working Interest so burdened or affected.
(b) The parties believe that each of the Working Interests identified
at Exhibit G ("Burdened WI") is affected or encumbered by a preferential right
or option to purchase. If any preferential right or option to purchase a
Burdened WI or any other Working Interest so burdened or affected is not
exercised within the period provided therefor, the Participation Agreement and
the Restated Agreement shall terminate and be of no further force or effect on
the day after the last day of such exercise period as respects each such Working
Interest, except for obligations and rights theretofore accrued. If any
preferential right or option to purchase a Burdened WI or any other Working
Interest is properly exercised, the purchase price paid by the exercising party
shall be added to or treated as, as applicable, Production Revenues for purposes
of the calculation of the Net Profits Payment and Payout, and the Restated
Operating Agreement and the Participation Agreement shall continue in accordance
with their respective terms with the exercising party substituted therein for
Seller.
Section 6. Calculation of Net Profits Payment. (a) If (i) the sum of
all Production Revenues attributable to production occurring from the Effective
Date through September 30, 2002 (referred to as the "Pertinent Period") from the
Wells, and the "Elected Development Wells" and the "Elected Farmout Wells," as
those terms are defined in Section 6(b), less (ii) the sum of all Obligations
incurred in connection with the ownership, drilling, use, operation or
maintenance of the Working Interests, the Elected Development Wells and the
Elected Farmout Wells during the Pertinent Period, including, without limitation
or duplication, all expenditures, fees and other charges authorized to be billed
and collected by Buyer pursuant to the Restated Operating Agreement had the
purchase and sale contemplated by this Agreement not occurred, including,
without limitation or duplication, the "Management Fee," as that term is defined
in the Participation Agreement, exceeds the "Target Amount," as defined in this
Section 6, then Buyer shall pay to Seller that excess amount (referred to as the
"Net Profits Payment"). The Net Profits Payment shall be made to Seller when
due, with the final payment, if any, due no later than December 31, 2002. If the
Target Amount has been reached prior to the end of the
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Pertinent Period, the Net Profits Payment shall be paid monthly, commencing in
the calendar month immediately succeeding the calendar month when the Target
Amount has been reached in accordance with this Section 6(a), and in each
calendar month thereafter that a Net Profits Payment is due in accordance with
this Section 6(a). On or before December 15, 2002, Buyer shall determine if the
Target Amount has been obtained for the entire Pertinent Period and promptly
following such determination provide Seller with a final accounting of same. If
it is determined that the sum of the Net Profits Payments made, if any, during
the Pertinent Period by Buyer to Seller, exceeds the total Net Profit Payment
which Seller was due, Seller shall remit that difference to Buyer no later than
December 31, 2002. The "Target Amount" means the sum of $1,792,299 [i.e., ($1.75
million) + 2/3 ($15,349 + $48,100)] and all sales taxes paid by Buyer in
connection with Buyer's purchase of the Assets from Seller.
(b) The term "Farmout Well" shall mean any oil or gas well drilled on
or after the Closing Date (by an entity other than Buyer or an affiliate of
Buyer) at the lands described at Exhibit C attached hereto pursuant to the terms
of any farmout, earnout or similar arrangement entered into before the Effective
Date by Buyer and that entity, or the farmout arrangement between Buyer and
Chesapeake Energy Corp., as more particularly described at Exhibit C, whereby,
in each instance, the entity drilling the oil or gas well "earns" or obtains an
assignment of an interest in the well being drilled. The term "Development Well"
shall mean any oil or gas well drilled or recompleted on or after the Effective
Date at the Lands by PrimeEnergy. The term "Development Well" shall not include
any operation with respect to any Well, Development Well or Farmout Well which
involves an estimated total expenditure by all cost-bearing participants in the
proposed operation of less than $15,000. The term "Elected Farmout Well" shall
mean a Farmout Well, which Seller has elected to include in the calculation of
Payout, if applicable, and the Net Profits Payment pursuant to Section 6(d) of
this Agreement. The term "Elected Development Well" shall mean a Development
Well that Seller has elected to include in the calculation of Payout, if
applicable, and the Net Profits Payment pursuant to Section 6(d) of this
Agreement.
(c) Within 15 days after the end of each calendar month during the
Pertinent Period, Buyer will provide to Seller a report itemizing all Production
Revenues and Obligations (to the extent then known by Buyer) used in the
calculation of the Net Profits Payment and showing the status of Payout, and
detailing all pertinent matters affecting the Working Interests. Seller shall
have the same audit rights as respects matters concerning Payout or the
calculation of the Net Profits Payment as provided in the Restated Operating
Agreement.
(d) At least 45 days before the commencement of each Development Well
or Farmout Well in which Buyer elects to be a cost-bearing participant in such
operation, Buyer will notify Seller in writing of Seller's opportunity to elect
to include all Production Revenues and Obligations attributable to such
Development Well or Farmout Well in the calculation of Payout, if applicable,
and the Net Profits Payment. Included with such notification shall be copies of
all pertinent information concerning the proposed operation, which shall be kept
strictly confidential by Seller, except as for disclosure authorized by Buyer.
Within 30 days after Seller's receipt of such notification, Seller shall provide
Buyer with written notification whether or not Seller elects to include the
proposed operation in the calculation of Payout, if applicable, and the Net
Profits Payment.
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Section 7. Representations and Warranties of Seller. Seller represents
and warrants to Buyer as of the date hereof, and Seller will represent and
warrant to Buyer as of the Closing Date, as follows:
(a) Title to the Working Interests. Seller has defensible title to the
Working Interests, by, through, and under Seller, but not otherwise, free and
clear of any and all liens, security interests, mortgages, deeds of trust,
reversionary or "back-in" interests (except those terminating at the Closing),
adverse claims, adverse litigation, rights vested in third parties to take
production from the Wells without payment in full thereof (except the gas
balancing obligations set forth at Exhibit F attached hereto), rights of refund
for production heretofore taken and paid for, and assignments of production,
such that, with respect to each Well, upon conveyance of the Working Interests
to Buyer, (i) Buyer, by virtue of the Working Interests, will be entitled to
receive from and after the Effective Date, a decimal share of the oil, gas and
other hydrocarbons produced from, or allocated to, such Well, which is not less
than the decimal interest set forth in the column titled "Net Revenue Interest"
adjacent to the description of such Well at Exhibit A, (ii) Buyer, by virtue of
the Working Interests, will be obligated from and after the Effective Date to
bear a share of all costs relating to the operation of such Well, which is not
more than the decimal interest set forth at the column titled "Working Interest"
adjacent to the description of such Well at Exhibit A, and (iii) Buyer's
ownership of the Properties from and after the Effective Date by virtue of the
Working Interests will be at least that decimal interest set forth in the column
titled "Working Interest" adjacent to the description of such Well at Exhibit A.
Seller makes no representation or warranty with respect to the existence of any
preferential right or option to purchase affecting or encumbering the Working
Interests, except that Seller represents and warrants to Buyer that Seller,
subsequent to Seller's acquisition of the Working Interest, has not granted or
created and will not grant or create any preferential right or option to
purchase affecting or encumbering any of the Working Interests.
(b) Title to LLC Interest and Marshall Yard Assets. Seller has good and
marketable title to an undivided 65% membership interest in Donahoo, L.L.C.
Seller's rights, interests, and equitable ownership in an undivided 76.774% of
the Marshall Yard Assets are free and clear of any and all liens, security
interests, mortgages, deeds of trust, preferential rights and options to
purchase, reversionary or "back-in" interests created or granted by, through or
under Seller, and to Seller's actual knowledge there is no adverse claim or
adverse litigation affecting the Marshall Yard Assets.
(c) Authorization. This Agreement has been duly authorized, executed
and delivered by Seller, and all instruments required hereunder to be delivered
by Seller to Buyer at the Closing or thereafter shall be duly authorized,
executed and delivered by Seller. This Agreement constitutes the valid and
binding agreement of Seller enforceable against Seller in accordance with its
terms, except as enforceability may be limited by general principles of equity
and by bankruptcy, insolvency, reorganization or similar laws and judicial
decisions affecting the rights of creditors generally.
(d) Sale of Production. Proceeds from the sale of oil and gas from each
Well attributable to Seller's applicable Net Revenue Interest identified at
Exhibit A for such Well are being received by Seller in a timely manner and in
accordance with the terms of the applicable purchase and sale agreement, if any,
covering same.
(e) Production and Ad Valorem Taxes. Seller is not in default in the
payment of any ad valorem, property, production, severance or similar tax or
assessment based upon or
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measured by the ownership of property comprising the Assets or the production or
removal of hydrocarbons or the receipt of proceeds therefrom.
(f) Brokers and Finders. Seller has not incurred any liability,
contingent or otherwise, for brokers' or finders' fees in respect of this
transaction for which Buyer shall have any responsibility whatsoever.
(g) Consents. To Seller's actual knowledge, no consent, approval,
permit or authorization of, notification to, or registration, declaration or
filing with, any governmental body or authority, or any other person or entity
is required to be obtained or made by Seller in connection with the execution,
delivery, performance, validity or enforceability of this Agreement, except for
such consents, approvals, permits, authorizations, registrations, notifications,
declarations and filings customarily obtained in the oil and gas industry after
the consummation of the sale of interests in oil and gas properties. Seller will
make a good faith attempt to obtain all requisite consents, authorization and
approvals in a timely manner.
(h) Litigation. To Seller's knowledge, there is no suit, administrative
proceeding, action, claim, investigation or inquiry or other similar proceeding
pending or threatened against Seller concerning any of the Assets.
Section 8. Representations and Warranties of Buyer. Buyer represents
and warrants to Seller as of the date hereof, and Buyer will represent and
warrant to Seller on the Closing Date, as follows:
(a) Organization; Qualification; Agreement Authorized and Valid. This
Agreement has been duly authorized, executed and delivered by Buyer, and all
instruments required hereunder to be delivered by Buyer at the Closing or
thereafter shall be duly authorized, executed and delivered by Buyer. This
Agreement constitutes the valid and binding agreement of Buyer enforceable
against Buyer in accordance with its terms, except as enforceability may be
limited by general principles of equity and by bankruptcy, insolvency,
reorganization or similar laws and judicial decisions affecting the rights of
creditors generally.
(b) Brokers and Finders. Buyer has incurred no liability, contingent or
otherwise, for broker's or finder's fees with respect to this transaction for
which Seller shall have any responsibility whatsoever.
Section 9. Duration of Representations and Warranties; Environmental
Limitation. The representations, warranties, and covenants set forth in Sections
7 and 8 of this Agreement shall survive the Closing for a period of three (3)
years, and thereafter be of no force or effect. Notwithstanding any provision of
this Agreement to the contrary, from and after the consummation of the Closing,
Buyer will not assert any claim (whether arising on, before or after the
Closing) against Seller, which arises from or is related to any injury or damage
to the environment caused in any manner by or in connection with the drilling,
reworking or operation of any of the Wells operated by Buyer, or the
transportation, storage or sale of production therefrom ("Environmental
Injury"). However, all amounts paid by Buyer in connection with an Environmental
Injury, which would have been chargeable to the Working Interests under the
terms of the applicable joint operating agreement or the Restated Operating
Agreement covering such Working Interests, shall be included as Obligations for
the purpose of determining Payout and the calculation of the Net Profits
Payment.
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Section 10. Further Assurances. Concurrent with Buyer's satisfaction of
Buyer's obligations to be performed by Buyer at the Closing, Seller shall convey
all of Seller's right, title and interest in the Assets to Buyer at the Closing
by delivering to Buyer fully and properly executed and acknowledged Assignments,
Conveyances and Bills of Sale in the form attached hereto as Exhibit D
(hereinafter referred to as the "Assignments"). In addition and from time to
time (whether at or after Closing), as and when reasonably requested by Buyer or
its successors or assigns, Seller will execute, acknowledge and deliver all such
additional assignments, division orders, transfer orders, letters in lieu of
transfer orders, bills of sale, instruments, files, records, documents and books
in Seller's possession or under Seller's control, and take such other action as
Buyer may reasonably deem necessary or desirable in order to more effectively
convey and transfer to Buyer the Assets.
Section 11. Records. From and after the Closing, Buyer shall permit
Seller (and Seller's successors) reasonable access to inspect, examine and copy
all Records delivered by Seller to Buyer, but such right of access shall not
constitute an obligation of Buyer to maintain such Records in the same form as
maintained by Seller prior to delivery thereof.
Section 12. Conditions to Obligations of Buyer. The obligation of Buyer
to consummate the transactions provided for in this Agreement for Buyer's
consummation shall be subject to the satisfaction of each of the following
conditions as of the Closing Date, subject to the right of Buyer to waive any
one or more of such conditions:
(a) Performance of This Agreement. Seller shall have duly performed or
complied with all material obligations to be performed or complied with by
Seller under the terms of this Agreement on and prior to the Closing Date,
including the delivery of the Assignments to Buyer upon Buyer's delivery of the
Purchase Price to Seller.
(b) No Litigation. No suit, action, proceeding, investigation,
injunction, inquiry or request for information by any governmental body or
authority, or private party shall have been instituted or threatened which
questions or reasonably appears to portend subsequent questioning of the
validity or legality of this Agreement or the transactions contemplated by this
Agreement.
(c) Representations and Warranties of Seller. The representations and
warranties of Seller contained in this Agreement shall be true and correct in
all material respects.
Section 13. Conditions to Obligations of Seller. The obligations of
Seller to consummate the transactions provided for in this Agreement for
Seller's consummation shall be subject to the satisfaction of each of the
following conditions as of the Closing Date, subject to the right of Seller to
waive any one or more of such conditions:
(a) Representations and Warranties of Buyer. The representations and
warranties of Buyer contained in this Agreement shall be true and correct in all
material respects.
(b) Performance of This Agreement. Buyer shall have duly performed or
complied with all material obligations to be performed or complied with by Buyer
under the terms of this Agreement on or prior to the Closing Date, including the
delivery of the Base Price, as adjusted, to Seller upon Seller's delivery of the
Assignments to Buyer.
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(c) No Litigation. No suit or action, investigation, inquiry or request
for information by any government body or authority, or private party shall have
been instituted or threatened which questions or reasonably appears to portend
subsequent questioning of the validity or legality of this Agreement or the
transactions contemplated by this Agreement.
Section 14. Termination. Anything in this Agreement to the contrary
notwithstanding, this Agreement may be terminated by Seller or Buyer on the
Closing Date if any of the conditions precedent to such party's obligations at
Closing have not been satisfied or waived on or prior to the Closing Date. Such
termination shall be without waiver of and shall not be construed to limit the
legal or equitable remedies of the terminating party.
Section 15. Expenses; Sales Taxes. Except as otherwise provided in this
Agreement, each party hereto will bear and pay its own expenses of negotiating
and consummating the transactions contemplated by this Agreement. Exhibit E
attached hereto sets forth the value of all Properties subject to sales taxes in
connection with the sale of the Assets to Buyer. Such taxes shall be borne by
Buyer. All ad valorem taxes attributable to the Assets shall be prorated based
upon the Effective Date. The Purchase Price is exclusive of all applicable sales
taxes and other similar taxes related to the transfer of the Assets to Buyer.
Section 16. Notices. All communications required or permitted under
this Agreement shall be in writing and any communication or delivery hereunder
shall be deemed to have been duly made if actually delivered, or if mailed by
registered or certified mail, postage prepaid, addressed as set forth below,
shall be deemed to have been duly made on the date received. Any party may, by
written notice so delivered to the other parties, change the address to which
delivery shall thereafter be made.
(a) Notices to Seller:
Southern Pacific Petroleum, U.S.A.
6182 South 2855 East
Odgen, Utah 84403
Attn: J. V. Browning, President
(b) Notices to Buyer:
PrimeEnergy Management Corporation
5400 N.W. Grand Blvd., Suite 450
Oklahoma City, Oklahoma 73112-5652
Attn: Charles E. Drimal, Jr.
Section 17. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of Buyer and Seller and their respective successors and
assigns.
Section 18. Counterparts. This Agreement may be executed in any number
of counterparts, which taken together shall constitute one and the same
instrument and each of which shall be considered an original for all purposes.
9
<PAGE> 10
Section 19. Expenses; Attorneys' Fees. Except as otherwise provided in
this Agreement, each party hereto will bear and pay its own expenses of
negotiating and consummating the transactions contemplated by this Agreement.
The prevailing party in any lawsuit or litigation concerning the construction or
interpretation of this Agreement or the breach by the party of any provision of
this Agreement shall be entitled to such prevailing party's reasonable
attorneys' fees and court costs.
Section 20. Headings. The headings contained in this Agreement are for
convenient reference only and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 21. Superseding Effect. This Agreement supersedes all prior
agreements and understandings between Buyer and Seller, but only with respect to
the matters addressed in this Agreement.
Section 22. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Oklahoma applicable to
contracts made and performed entirely therein.
Section 23. Waivers. No party's rights under this Agreement will be
deemed waived except by a writing signed by that party. Without limitation, the
occurrence of the Closing shall not be deemed a waiver of any party's rights
except its right to refuse to close.
Section 24. Exhibits. The exhibits referred to in this Agreement are
attached hereto and by this reference made a part hereof. Any reference in or
denomination of an exhibit attached to this Agreement as Exhibit "A-1" shall
mean the "Exhibit A" referred to in this Agreement.
Section 25. Announcements. Seller and Buyer shall consult with each
other with regard to all press releases and other announcements concerning this
Agreement or the transactions contemplated by this Agreement and, except as may
be required by applicable laws or the applicable rules and regulations of any
governmental body or stock exchange, neither Buyer nor Seller shall issue any
such press release or other publicity without the prior written consent of the
other party.
Section 26. Partial Invalidity. If any provision of this Agreement is
determined to be invalid or unenforceable, the remainder of this Agreement shall
not be affected thereby.
Section 27. Gas Imbalances. To Seller's knowledge the gas balancing
status of the Wells is as set forth at Exhibit F, as of the date reflected on
Exhibit F. All gas balancing rights of Seller and all gas balancing obligations
of Seller with respect to the Wells shall be assumed by Buyer, regardless of
when occurring. All pre-Effective Date gas balancing obligations of Seller
relating to the Wells, which Buyer pays during the Pertinent Period to under
produced third parties after rightful demand to pay same, shall be included as
Obligations for the purpose of calculating the Net Profits Payment. All
pre-Effective Date gas balancing rights of Seller relating to the Wells (for
which Seller receives payment during the Pertinent Period from overproduced
third parties after rightful demand to make same) shall be included as
Production Revenues for the purpose of calculating the Net Profits Payment.
10
<PAGE> 11
IN WITNESS WHEREOF, Buyer and Seller have executed or caused this
Agreement to be executed by an officer duly authorized as of the day and year
first above written.
"SELLER"
"SOUTHERN PACIFIC PETROLEUM U.S.A."
By: /s/ JOHN V. BROWNING
------------------------------------
Name: J. V. Browning
Title: President
"BUYER"
"PRIMEENERGY MANAGEMENT CORPORATION"
By: /s/ CHARLES E. DRIMAL, JR.
------------------------------------
Name: Charles E. Drimal, Jr.
Title: President
<PAGE> 12
BEAVER COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
BENJEGERDES OK BEAVER 0.043253408 0.037847530 0.037847530 0.005979130
BOND #1-19 OK BEAVER 0.057401389 0.049199700 0.049199700 0.005995641
JOSEY #1-21 OK BEAVER 0.013704163 0.011991250 0.011991250 0.001713080
STATE RICHMOND #1 OK BEAVER 0.191860000 0.167877500 0.167877500
HUNT #1 OK BEAVER 0.671510000 0.565760464 0.565760464
</TABLE>
<PAGE> 13
CADDO COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
ALLEN RANCH #1-2 OK CADDO 0.028895229 0.025283325 0.025283325
ALLEN RANCH #1-11 OK CADDO 0.027340050 0.022213791 0.022213791 0.002563130
ANITA SUE #1-2 OK CADDO 0.028895228 0.025283272 0.025283272
CATES #1 OK CADDO 0.068350141 0.055534494 0.055534494
CATES #11-B OK CADDO 0.004271878
CLIFT #1 OK CADDO 0.086483749 0.069827140 0.069827140
CLIFT #2-11 OK CADDO 0.034175063 0.027767240 0.027767240 0.002135940
HENRICKS #1-10 OK CADDO 0.012838000 0.010431080 0.010431080
HENRICKS #2-10 OK CADDO 0.019257602 0.015646620 0.015646620
HINTON, GERTIE OK CADDO 0.028895225 0.025283280 0.025283280
JACKSON-HENRICKS #1 OK CADDO 0.019257602 0.015646802 0.015646802
MONTGOMERY #3A OK CADDO 0.002854950
MOODY #1-10 OK CADDO 0.019257609 0.015646820 0.015646820
SANDERS #1 OK CADDO 0.034090683 0.028412420 0.028412420
SULLIVAN #1-10 OK CADDO 0.006419201 0.005215600 0.005215600 0.001203576
WEBER #1-2 OK CADDO 0.014447590 0.012646580 0.012646580 0.001806654
</TABLE>
<PAGE> 14
CANADIAN COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- -------- ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
JOHNSON #1-33 OK CANADIAN 0.013670041 0.011961319 0.011961319
KASTENS UNIT OK CANADIAN 0.182267000 0.149819791 0.149819791
BRODERSON #1 OK CANADIAN 0.414897200 0.349067245 0.343821000
O.A. DOW #1 OK CANADIAN 0.637934500 0.540749200 0.540749200
O.A. DOW #2 OK CANADIAN 0.641981560 0.544835600 0.544835600
SELECTMAN #1 OK CANADIAN 0.318967250 0.270374583 0.270374583
WALLACE #1 OK CANADIAN 0.478450870 0.405561900 0.405561900
WALLACE #2 OK CANADIAN 0.414897250 0.349067091 0.349067091
</TABLE>
<PAGE> 15
CARTER COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
STATE PARK #22-A OK CARTER 0.043168500 0.032376380 0.032376380
STATE PARK #23-A OK CARTER 0.043168500 0.032376380 0.032376380
</TABLE>
<PAGE> 16
COMANCHE COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
SOVO #1 OK COMANCHE 0.569225830 0.461794510 0.461794510
</TABLE>
<PAGE> 17
DEWEY COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
BLUMER #36-A OK DEWEY 0.047965000 0.040710323 0.040710323
GAMBLE #1-15 OK DEWEY 0.022483613 0.019673141 0.019673141
HURT, LEO #1 & #2 OK DEWEY 0.003231854 0.002625882 0.002625882
</TABLE>
<PAGE> 18
ELLIS COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
HAGEN #33-3 OK ELLIS 0.191860000 0.141796519 0.141796519
KATHY #1 OK ELLIS 0.025597860 0.022398130 0.022398130
KATHY #2-14 OK ELLIS 0.003953670
PIERSALL OK ELLIS 0.095930000 0.082627210 0.082627210
SHATTUCK UNIT #2 OK ELLIS 0.022593432 0.019768350 0.019768350
SHATTUCK UNIT #3 OK ELLIS 0.067777078 0.059304960 0.059304960
WALTON #34-1 OK ELLIS 0.095930000 0.070898243 0.070898243
</TABLE>
<PAGE> 19
GARFIELD COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
BENNETT UNIT OK GARFIELD 0.767440000 0.640812400 0.640812400
BRANSON #1 OK GARFIELD 0.767440000 0.623545000 0.623545000
BRANSON #2 OK GARFIELD 0.767440000 0.671510000 0.671510000
CASTEEL OK GARFIELD 0.767440000 0.669711313 0.669711313
CLINE "E" OK GARFIELD 0.767440000 0.671510000 0.671510000
HAFNER UNIT OK GARFIELD 0.767440000 0.653523130 0.653523130
ISBELL #1 OK GARFIELD 0.767440000 0.617789200 0.617789200
JET SALTWATER DISPOSAL OK GARFIELD 0.767440000 0.767440000 0.767440000
KOKOJAN OK GARFIELD 0.767440000 0.671510000 0.671510000
MEYER OK GARFIELD 0.767440000 0.640812400 0.640812400
PHARES "A" UNIT OK GARFIELD 0.767440000 0.644649600 0.644649600
SHORES OK GARFIELD 0.767440000 0.670031297 0.670031297
WUERFLEIN OK GARFIELD 0.767440000 0.671510000 0.671510000
BIBY #1 UNIT OK GARFIELD 0.719475000 0.584573440 0.584573440
CLINE OK GARFIELD 0.719475000 0.629540625 0.629540620
CLINE C OK GARFIELD 0.719475000 0.629540620 0.629540620
HOLT #1 OK GARFIELD 0.671510000 0.563588750 0.563588750
HONNOLD UNIT OK GARFIELD 0.719475000 0.629540620 0.629540620
HOUSTON #1 OK GARFIELD 0.719475000 0.629540700 0.629540700
IRENE UNIT OK GARFIELD 0.719475000 0.629540620 0.629540620
MURPHY UNIT OK GARFIELD 0.719475000 0.599562810 0.599562810
OTJEN UNIT OK GARFIELD 0.719475000 0.629540620 0.629540620
PHARES "C" #1 OK GARFIELD 0.623545000 0.545227130 0.545227130
STEINERT #2 OK GARFIELD 0.680931749 0.595815304 0.595815304
WAUKOMIS STATE #1 OK GARFIELD 0.719475000 0.585173000 0.585173000
WILSON UNIT OK GARFIELD 0.719475000 0.629540620 0.629540620
</TABLE>
<PAGE> 20
GARVIN COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REVENUE NET REVENUE OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
CORNELL #24-1 OK GARVIN 0.353333224 0.289054217 0.289054217
MELTON JORDAN #22-1 OK GARVIN 0.145813600 0.127586900 0.127586900
MELTON JORDAN #22-2 OK GARVIN 0.079410867 0.069316239 0.069316239
SHEPARD #1-22 OK GARVIN 0.022957597 0.018653089 0.018653089
STEWART #1-22 OK GARVIN 0.032796609 0.026647222 0.026647222
C. H. GREEN #2 OK GARVIN 0.304108280 0.239698900 0.239698900
GREEN #1 OK GARVIN 0.328650710 0.277699314 0.277322040
GREEN #2 UNIT OK GARVIN 0.323288510 0.273518610 0.273141110
JAMES-JORDAN #1 OK GARVIN 0.389894590 0.325871447 0.308972800
JORDAN #1 OK GARVIN 0.610807920 0.521778389 0.521587370
JORDAN-HACKLER OK GARVIN 0.592947970 0.503556524 0.503556520
STEPHENS-HATCHER OK GARVIN 0.666076440 0.562138749 0.562138749 0.003372520
STEPHENS-HATCHER A #1 OK GARVIN 0.694086220 0.581520201 0.581520200
</TABLE>
<PAGE> 21
GRADY COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
CLARK #1-16 OK GRADY 0.062654566 0.050408000 0.050408000
CLARK #2-16 OK GRADY 0.003417500 0.003417500
STATE #2-16 OK GRADY 0.062654566 0.050408000 0.050408000
</TABLE>
<PAGE> 22
HARPER COUNTY, OKLAHOMA
- -----------------------
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
HENNIGH#1 OK HARPER 0.767440000 0.671510000 0.671510000
LOTSPIECH#1 OK HARPER 0.500976950 0.438354831 0.438354831
LOTSPIECH#2 OK HARPER 0.680808190 0.595707164 0.595707164
</TABLE>
<PAGE> 23
KINGFISHER COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
BETTY LOU#15-A OK KINGFISHER 0.022783400
SEDLAK#12-1 OK KINGFISHER 0.255816534 0.223864617 0.223864617
SOONER TREND UNIT OK KINGFISHER 0.092674351 0.081090057 0.081090057
FOREMAN UNIT OK KINGFISHER 0.767440000 0.671510000 0.671510000
SEDLAK#11-1 OK KINGFISHER 0.729068000 0.603759438 0.603759438
</TABLE>
<PAGE> 24
LINCOLN COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
DONAHOO UNIT OK LINCOLN 0.767440000 0.671510000 0.671510000
MARATHON OK LINCOLN 0.767440000 0.607246110 0.607246110
OPAL GOODBERY SWD OK LINCOLN 0.767440000
LOWE OK LINCOLN 0.740780453 0.606213522 0.606213522
DONAHOO#4 OK LINCOLN 0.479650000 0.419693750 0.419693750
</TABLE>
<PAGE> 25
LOGAN COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
FAUST "A" OK LOGAN 0.067151000 0.050367085 0.050367085
HAKEN OK LOGAN 0.767440000 0.671510000 0.671510000
NIDA OK LOGAN 0.767440000 0.671510000 0.671510000
STROTHMAN OK LOGAN 0.767440000 0.671510000 0.671510000
BOWDEN "B" OK LOGAN 0.710319440 0.608392972 0.608393050
HILL #1 OK LOGAN 0.395711250 0.324606860 0.324606860
STAGNER OK LOGAN 0.719475000 0.629540620 0.629540620
WLBSU OK LOGAN 0.483014400 0.414771160 0.414771160 0.001288150
</TABLE>
<PAGE> 26
MAJOR COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
BIERIG, C.R. OK MAJOR 0.184650500 0.161569188 0.161569188
GARMAN #1-20 OK MAJOR 0.263807500 0.224835962 0.224835962
GILCHRIST 1-36 OK MAJOR 0.060852224 0.049442461 0.049442461
MEISTER #1-21 OK MAJOR 0.167877500 0.142302404 0.142302404
PICO #20-1 OK MAJOR 0.014162300
STAMBAUGH UNIT OK MAJOR 0.086969801 0.072204402 0.072204402
THOMPSON #1-18 OK MAJOR 0.093011048 0.081384643 0.081384643
THOMPSON #2-21 OK MAJOR 0.167877500 0.142302404 0.142302404
WHITE #1 OK MAJOR 0.067659030 0.059201614 0.059201614
WOODRING UNIT OK MAJOR 0.017399399 0.014665476 0.014665476
RYEL OK MAJOR 0.767440000 0.651364700 0.651364700
DICKSON, ARCHIE OK MAJOR 0.178519210 0.156203970 0.156203970
SANDER #1 UNIT OK MAJOR 0.182740890 0.154874300 0.154874300
SANDER #2-20 OK MAJOR 0.219373490 0.185949000 0.185949000
THOMPSON #1 OK MAJOR 0.159483625 0.135187436 0.135187436
WESTPHAL #1-27 OK MAJOR 0.178519210 0.156203970 0.156203970
</TABLE>
<PAGE> 27
NOBLE COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
PERRY OKLAHOMA #1 OK NOBLE 0.191860000 0.155886250 0.155886250
BOOTEN #5 OK NOBLE 0.767440000 0.671510000 0.671510000
BOOTEN #8 OK NOBLE 0.767440000 0.671510000 0.671510000
</TABLE>
<PAGE> 28
OKLAHOMA COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- -------- ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
CANDY #1-5 OK OKLAHOMA 0.091133500 0.074045981
ZIEGELGRUBER #1 OK OKLAHOMA 0.182267000 0.148091929
</TABLE>
<PAGE> 29
PAYNE COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REVENUE NET REVENUE OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ----------- ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
PERRY OKLAHOMA #1 OK NOBLE/PAYNE 0.191860000 0.155886250 0.155886250
BOOTEN #8 OK NOBLE/PAYNE 0.767440000 0.671510000 0.671510000
BOOTEN #5 OK NOBLE/PAYNE 0.767440000 0.671510000 0.671510000
</TABLE>
<PAGE> 30
POTTAWATOMIE COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
STATE "P" UNIT OK POTTAWATOMIE 0.767440000 0.639533310 0.639533310
</TABLE>
<PAGE> 31
TEXAS COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REVENUE NET REVENUE OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ----------- ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
BASEY #2-22 OK TEXAS 0.347746250 0.276808050 0.276808050 0.011991250
BASEY #3-33 OK TEXAS 0.011991250
</TABLE>
<PAGE> 32
WOODWARD COUNTY, OKLAHOMA
EXHIBIT "A-1"
<TABLE>
<CAPTION>
WORKING NET REV NET REV OVERRIDING
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS ROYALTY INTEREST
- -------------------- ----- ------ ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
BRANKEL OK WOODWARD 0.097261047 0.085104568 0.085104568
HOPKINS "B" OK WOODWARD 0.140002240 0.122501840 0.122501840
HOPKINS "G"1 OK WOODWARD 0.174214787 0.152438380 0.152438380
MILLER#1 OK WOODWARD 0.191860000 0.167877500 0.167877500
MILLER#1-33 OK WOODWARD 0.023982500
HENDERSON OK WOODWARD 0.305776870 0.267554761 0.267554761 0.001648460
PENICK OK WOODWARD 0.620378290 0.535182940 0.535182940
</TABLE>
<PAGE> 33
Exhibit "B"
MARSHALL YARD AND
JET #1 SWD WELL
-----------------
The surface and surface estate only in and to the following described
real property in Garfield County, Oklahoma:
A tract of land in the northeast corner of the Southeast Quarter of
the Northeast Quarter (SE/4 NE/4) of Section Twenty-six (26), Township
Twenty (20) North, Range Four (4) West, described as follows:
Beginning at the point of intersection of the westerly edge of the
right of way for Oklahoma State Highway No. 74 and the north line of
the SE/4 of the NE/4 of said Section 26; thence westerly along the
north line of said SE/4 of NE/4 a distance of 466.69 feet to a point;
thence southerly 466.69 feet to a point 466.69 feet west of the
westerly edge of said right of way; thence easterly and parallel to
the north line of said SE/4 of NE/4 466.69 feet to a point on the west
edge of said right of way and 466.69 feet south of the point of
beginning; and thence northerly along the westerly edge of said right
of way 466.69 feet more or less, to the point of beginning, containing
five (5) acres, more or less.
SUBJECT TO AND SAVE AND EXCEPT: All mineral grants and reservations,
easements, rights-of-way, restrictions, and ordinances burdening or
affecting the above-described property and of public record in
Garfield County, Oklahoma or visible or apparent on the ground.
<PAGE> 34
EXHIBIT "C"
Farmout Wells
1. Weber #1-2 Well located in the West Half (W/2) of Section 2, Township
6 North, Range 9 West of Caddo County, Texas is subject to that certain
Farmout Agreement dated August 10, 1995, by and between Southern
Pacific Petroleum, USA, as Farmor, and Key Production Company, Inc., as
Farmee.
2. Hendericks #1-10 Well located in Section 10, Township 6 North, Range 9
West of Caddo County, Texas is subject to that certain Letter Agreement
dated October 23, 1995, by and between Gas Development Corporation and
Southern Pacific Petroleum, USA.
3. Clift #2-11 Well located in Section 11, Township 6 North, Range 9 West
of Caddo County, Texas is subject to that certain Farmout Agreement
dated August 12, 1996, by and between Southern Pacific Petroleum, USA,
Farmor, and PrimeEnergy Management Corporation, Farmee.
4. Allen Ranch #1-11 Well located in Section 11, Township 6 North, Range
9 West of Caddo County, Texas is subject to that certain Farmout
Agreement dated July 8, 1997, by and between Southern Pacific
Petroleum, USA, Farmor, and PrimeEnergy Management Corporation, Farmee.
5. Allen Ranch #2-11 Well located in Section 11, Township 6 North, Range 9
West of Caddo County, Texas is subject to that certain Farmout
Agreement dated December 22, 1998, by and between Southern Pacific
Petroleum, USA, Farmor, and Gas Development Corporation, Farmee.
6. Betty Lou #15-A Well located in Section 15, Township 16 North, Range 9
West of Kingfisher County, Texas is subject to that certain Farmout
Agreement dated August 19, 1993, by and between PrimeEnergy Management
Corporation and Southern Pacific Petroleum, USA, Farmor, and Ricks
Exploration, Inc. Farmee.
7. Pico #20-1 Well located in the North East Quarter (NE/4) of Section 20,
Township 20 North, Range 15 West of Major County, Oklahoma is subject
to that certain Farmout Agreement dated June 18, 1998, by and between
PrimeEnergy Corporation and Southern Pacific Petroleum, USA, Farmor,
and Comanche Resources Company, Farmee.
8. Hennigh Lease covering Lots 2, 3, 4, 5 & 6, N/2 SE/4 and NE/4 of
Section 22 and Section 15, Township 29 North, Range 25 West, Harper
County, Oklahoma, dated October 1, 1999, by and between PrimeEnergy
Management Corporation and Southern Pacific Petroleum, USA, Farmor, and
Chesapeake Exploration Limited Partnership, Farmee.
9. Montgomery 3A Well located in the Northeast Quarter of the Southwest
Quarter of the Northeast Quarter (NE/4 SW/4 NE/4) of Section 3,
Township 6 North, Range 9 West, Caddo County, Oklahoma is subject to
that certain Farmout Agreement dated January 1, 1994, by and between
Excelco Energy, Inc., as Farmor, and Ricks Exploration, Inc., as
Farmee.
10. Harold Sanders #1-3 Well located in the Southeast Quarter (SE/4) of
Section 3, Township 6 North, Range 9 West, of Section 3, Township 6
North, Range 9 West, Caddo County, Oklahoma is subject to that certain
Farmout Agreement dated October 1, 1999, by and between PrimeEnergy
Management Corporation and Southern Pacific Petroleum, USA, as Farmor,
and Barrett Resources Corporation, as Farmee.
11. Phillips #2-33 Well located in the Southeast Quarter (SE/4) of Section
33, Township 25 North, Range 18 West, Woodward County, Oklahoma is
subject to that certain Farmout Agreement dated February 12, 1999, by
and between Southern Pacific Petroleum, USA, as Farmor, and ONEOK
Resources Company, as Farmee.
12. Phillips #3-33 Well located in the Southeast Quarter (SE/4) of Section
33, Township 25 North, Range 18 West, Woodward County, Oklahoma is
subject to that certain Farmout Agreement dated August 3, 1999, by and
between Southern Pacific Petroleum, USA, as Farmor, and ONEOK Resources
Company, as Farmee.
13. Wheeler Gas Unit Development Well to be located in the Northeast
Quarter (NE/4) of Section 3, Township 24 North, Range 18 West, Woodward
County, Oklahoma is subject to that certain Letter Agreement dated June
23, 1999, by and between PrimeEnergy Management Corporation and
Southern Pacific Petroleum USA, as Farmors, and Apache Corporation, as
Farmee.
14. Kathy #2-14 Well located in the Northwest Quarter (NW/4) of Section 14,
Township 22 North, Range 25 West, Ellis County, Oklahoma, is subject to
that certain Farmout Agreement dated November 25, 1996 between
PrimeEnergy Management Corporation and Southern Pacific Petroleum USA,
as Farmors, and Strat Land Exploration Company, as Farmee.
<PAGE> 35
EXHIBIT D
MASTER
ASSIGNMENT, CONVEYANCE AND BILL OF SALE
For and in consideration of Ten Dollars ($10.00) and other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, Southern Pacific Petroleum U.S.A., a Nevada corporation
("Seller"), does hereby sell, assign, convey, and transfer unto PrimeEnergy
Management Corporation, a New York corporation, 5400 N.W. Grand Boulevard, Suite
450, Oklahoma City, Oklahoma 73112-5652 ("Buyer"), all of the right, title, and
interest of Seller in and to the following assets and properties (collectively
referred to as the "Assets"):
I. (a) the oil and/or gas wells described at Exhibit A attached;
(b) the oil, gas and minerals underlying (the "Minerals"), and the
oil, gas and mineral leases, and the pooling, unitization, communitization and
similar orders of governmental authorities covering, all or any portion of the
lands described at Exhibit A and/or lands, spaced, pooled and/or unitized with
such lands (the "Leases");
(c) the lands described in the Leases and the lands spaced, pooled
and/or unitized therewith (the "Lands");
(d) the salt water injection wells and water supply wells located at
the Lands (the "Disposal and Supply Wells"), and the properties (real, personal
or fixtures) situated at, appurtenant to, and used in connection with, the
operation of any of the Wells and/or the Disposal and Supply Wells (the
"Properties"); and
(e) all agreements, contracts, licenses, files, records, rights-of-way,
and easements, but only insofar as same cover and pertain to any of the
Minerals, the Leases, the Wells, the Disposal and Supply Wells, the Lands and/or
the Properties (the "Agreements"). The foregoing rights, titles, estates, and
interests in the Wells, the Minerals, the Leases, the Lands, the Properties, and
the Agreements are collectively referred to as the "Working Interests."
II. Donahoo, L.L.C., an Oklahoma limited liability company, and any and
all rights and interests attributable to Seller's right, title, estate, and
interest therein (individually and collectively referred to as the "LLC
Interest").
III. The lands described at Exhibit B attached hereto, and any and all
personal property and fixtures located at or appurtenant thereto, including,
without limitation, any and all saltwater disposal and injection wells located
thereat (individually and collectively referred to as the "Marshall Yard
Assets").
THAT PORTION OF THE WORKING INTERESTS WHICH CONSISTS OF PERSONAL
PROPERTY, MACHINERY, FIXTURES, CASING, EQUIPMENT, PIPES, TUBING, AND MATERIALS
IS HEREBY SOLD, ASSIGNED, AND ACCEPTED
<PAGE> 36
BY BUYER IN THEIR "WHERE IS, AS IS" CONDITION, WITHOUT ANY WARRANTIES
WHATSOEVER, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION,
WARRANTIES OF MARKETABILITY, QUALITY, CONDITION, MERCHANTABILITY AND/OR FITNESS
FOR A PARTICULAR PURPOSE OR USE, ALL OF WHICH ARE EXPRESSLY DISCLAIMED. TO THE
EXTENT REQUIRED TO BE OPERATIVE, THE DISCLAIMERS OF CERTAIN WARRANTIES CONTAINED
IN THIS PORTION OF THIS ASSIGNMENT ARE "CONSPICUOUS" DISCLAIMERS FOR THE PURPOSE
OF ANY APPLICABLE LAW, RULE OR ORDER.
To the extent transferable, the Seller conveys to Buyer the benefit
of, and the right to enforce, all covenants and warranties that the Seller is
entitled to enforce with respect to the Assets, including full substitution and
subrogation of all prior rights in warranty, and the benefit of and the right to
enforce all rights accruing under statutes of limitation or prescription, but
reserving unto the Seller any and all choses in action and causes of action
related to any matter, event or circumstance occurring prior to October 1, 1999,
except rights associated with gas imbalances.
TO HAVE AND TO HOLD the Assets unto Buyer, Buyer's successors and
assigns, forever.
This Assignment, Conveyance and Bill of Sale may be executed in any
number of counterparts, each of which shall be considered an original for all
purposes. Seller and Buyer shall also execute assignments, conveyances and bills
of sale of the Assets on a county-by-county basis (the "County Assignments").
The County Assignments will not include all the terms of this Assignment,
Conveyance and Bill of Sale. If there are any inconsistencies between the County
Assignments and this Assignment, Conveyance and Bill of Sale, the terms of this
Assignment, Conveyance and Bill of Sale shall govern and control. This
Assignment, Conveyance and Bill of Sale is made subject in all respects to a
Purchase and Sale Agreement dated November __,1999 (the "Agreement"), between
Seller and Buyer. The Agreement and all the terms thereof shall survive the
delivery of this Assignment, Conveyance and Bill of Sale to Buyer. If there are
any inconsistencies between this Assignment, Conveyance and Bill of Sale and the
Agreement, the terms of the Agreement shall govern and control.
This Assignment, Conveyance and Bill of Sale is executed and delivered
this ___ day of November, 1999, but shall be effective for all purposes as of
the 1st day of October, 1999.
"SELLER"
"SOUTHERN PACIFIC PETROLEUM U.S.A."
By:
----------------------------------
Name: J. V. Browning
Title: President
2
<PAGE> 37
"BUYER"
"PRIMEENERGY MANAGEMENT CORPORATION"
By:
----------------------------------
Name: Charles E. Drimal, Jr.
Title: President
STATE OF OKLAHOMA )
) ss:
COUNTY OF OKLAHOMA )
This instrument was acknowledged before me on November __ 1999, by
J. V. Browning, as President of Southern Pacific Petroleum U.S.A., a Nevada
corporation, on behalf of the corporation.
(Seal)
--------------------------------------
Notary Public
My Commission Expires:
--------------
STATE OF OKLAHOMA )
) ss:
COUNTY OF OKLAHOMA )
This instrument was acknowledged before me on November __, 1999, by
Charles E. Drimal, Jr., as President of PrimeEnergy Management Corporation, a
New York corporation, on behalf of the corporation.
(Seal)
--------------------------------------
Notary Public
My Commission Expires:
-------------
3
<PAGE> 38
EXHIBIT D
COUNTY
-----------------
ASSIGNMENT, CONVEYANCE AND BILL OF SALE
For and in consideration of Ten Dollars ($10.00) and other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, Southern Pacific Petroleum U.S.A., a Nevada corporation
("Seller"), does hereby sell, assign, convey, and transfer unto PrimeEnergy
Management Corporation, Inc., a New York corporation, 5400 N.W. Grand Boulevard,
Suite 450, Oklahoma City, Oklahoma 73112-5652 ("Buyer"), all of the right,
title, and interest of Seller in and to the following assets and properties
(collectively referred to as the "Assets"):
I. (a) the oil and/or gas wells described at Exhibit A attached hereto
(the "Wells");
(b) the oil, gas and minerals underlying (referred to as the
"Minerals"), and the oil, gas and mineral leases, and the pooling, unitization,
communitization and similar orders of governmental authorities covering, all or
any portion of the lands described at Exhibit A and/or lands, spaced, pooled
and/or unitized with such lands (the "Leases");
(c) the lands described in the Leases and the lands spaced, pooled
and/or unitized therewith (the "Lands");
(d) the salt water injection wells and water supply wells located at
the Lands (individually and collectively referred to as the "Disposal and Supply
Wells"), and the properties (real, personal or fixtures) situated at,
appurtenant to, and used in connection with, the operation of any of the Wells
and/or the Disposal and Supply Wells (the "Properties"); and
(e) all agreements, contracts, licenses, files, records,
rights-of-way, and easements, but only insofar as same cover and pertain to any
of the Minerals, the Leases, the Wells, the Disposal and Supply Wells, the Lands
and/or the Properties (individually and collectively referred to as the
"Agreements").
The foregoing rights, titles, estates, and interests in the Wells, the
Minerals, the Leases, the Lands, the Properties, and the Agreements are
collectively referred to as the "Working Interests."
TO HAVE AND TO HOLD the Assets unto Buyer, Buyer's successors and
assigns, forever.
<PAGE> 39
This Assignment, Conveyance and Bill of Sale is executed and delivered
this ____ day of November, 1999, but shall be effective for all purposes as of
the 1st day of October, 1999.
"SELLER"
"SOUTHERN PACIFIC PETROLEUM U.S.A."
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
"BUYER"
"PRIMEENERGY MANAGEMENT CORPORATION,
INC."
By:
-----------------------------------
Name: Charles E. Drimal, Jr.
Title: President
STATE OF OKLAHOMA )
) ss:
COUNTY OF OKLAHOMA )
This instrument was acknowledged before me on November ___, 1999,
by _________ , as _____ of Southern Pacific Petroleum U.S.A., a Nevada
corporation, on behalf of the corporation.
(Seal)
--------------------------------------
Notary Public
My Commission Expires:
----------------
STATE OF OKLAHOMA )
) ss:
COUNTY OF OKLAHOMA )
This instrument was acknowledged before me on November ___, 1999, by
Charles E. Drimal, Jr., as President of PrimeEnergy Management Corporation,
Inc., a New York corporation, on behalf of the corporation.
(Seal)
--------------------------------------
Notary Public
My Commission Expires:
----------------
2
<PAGE> 40
EXHIBIT "E"
SALES AND USE TAX DETAIL WORKSHEET
<TABLE>
<CAPTION>
WELLS/INVOICES TOTAL SALES STATE TAX CITY/COUNTY TAX CITY COUNTY TOTAL
TAX DUE TAX DUE
SALES TAX 4.5%
- -------------- ----------- --------- --------------- ----------- ---------
<S> <C> <C> <C> <C> <C>
No county/city tax $ 42,607.00 $ 1,917.32 $ 0.00 $ 1,917.32
Canadian Cnty (0988) $ 22,712.00 $ 1,022.04 0.350% $ 79.49 $ 1,101.53
Garvin Cnty Wells $ 22,109.00 $ 994.91 $ 0.00 $ 994.91
Kingfisher Co $ 37,415.00 $ 1,683.68 0.500% $ 187.08 $ 1,870.75
Co. tax (3788)
Beaver Co $ 5,846.00 $ 263.07 2.000% $ 116.92 $ 379.99
Co. tax (0488)
Harper Co $ 10,958.00 $ 493.11 2.000% $ 219.16 $ 712.27
Co. tax (3088)
Caddo Co $ 5,380.00 $ 242.10 0.500% $ 26.90 $ 269.00
Co. tax (0888)
Comanche Co $ 4,127.00 $ 185.72 0.250% $ 10.32 $ 196.03
Co. tax (1688)
Dewey Co $ 493.00 $ 22.19 0.500% $ 2.47 $ 24.65
Co. tax (2288)
Ellis Co $ 5,708.00 $ 256.86 1.000% $ 57.08 $ 313.94
Co. tax (2388)
Lincoln Co $ 40,807.00 $ 1,836.32 1.000% $ 408.07 $ 2,244.39
Co. tax (4188)
Noble Co $ 3,876.00 $ 174.42 0.250% $ 9.69 $ 184.11
Co. tax (5388)
Pottawatomie Co $ 11,427.00 $ 514.22 1.000% $ 114.27 $ 628.49
Co. tax (6388)
Marshall Wells $ 93,532.00 $ 4,208.94 1.000% $ 935.32 $ 5,144.26
Logan Cnty (4288)
Texas Co $ 1,947.00 $ 87.62 1.000% $ 19.47 $ 107.09
Co. tax (7088)
Marshall Wells $ 169,857.00 $ 7,643.57 0.250% $ 424.64 $ 8,068.21
Garfield Cnty (2488)
Woodward Co $ 10,308.00 $ 463.86 0.200% $ 20.62 $ 484.48
Co. tax (7788)
SALES TAX DUE $ 489,109.00 $ 22,009.91 $ 2,631.49 $24,641.39
DISCOUNT (2.250)% $ (554.43)
TOTAL SALES TAX DUE $24,086.96
</TABLE>
Page 1
<PAGE> 41
EXHIBIT F
<TABLE>
<CAPTION>
UNIT VOLUME MCF STATEMENT
NUMBER UNIT NAME OPERATOR OVER (UNDER) DATE COMMENTS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
JIP AND EXCLUDED
10263 Allen Ranch #1-2 Apache Corporation 507 10/1/99
10259 Allen Ranch #1-11 Apache Corporation (1,265) 10/1/99
10260 Anita Sue #1-2 Apache Corporation (174) 10/1/99
10258 Clift #2-11 Apache Corporation (512) 10/1/99
10257 Hendricks #1-10 Apache Corporation (953) 10/1/99
10262 Hendricks #2-10 Apache Corporation 92 10/1/99
10210 Miller Unit #1 Apache Corporation (4,292) 10/1/99 Balancing
10238 Sullivan #1-10 Apache Corporation (20,625) 10/1/99
10256 Weber #1-2 Apache Corporation 582 10/1/99
10246 Piersall Crescendo Res. 8,188 7/1/99 Balancing
10244 Brankel #1 Cross Timbers (69) 4/1/97 New Operator
10257 Hendricks #1-10 Gas Development (1,464) 6/1/97
10204 Kathy #1 Gothic Energy (1,384) 6/1/99
10219 Shattuck Unit #2 Gothic Energy (1,630) 6/1/99
10220 Shattuck Unit #3 Gothic Energy 9,212 6/1/99
10232 Thompson #1-18 Kaiser Francis 4,536 2/1/99
10245 Hopkins "B" #1 Marathon Oil Co. (7,036) 8/1/99 Balancing at double the interest since 1/95
10181 Basey #2-22 Plains Petroleum 826 6/1/99
10186 Cates #1 Ricks Exploration (352) 9/1/99
10195 Gertie Hinton Ricks Exploration 3,308 9/1/99
10215 Sanders #1 Ricks Exploration 139 9/1/99
10248 State Park #22-A Ricks Exploration 46,482 9/1/99
10249 State Park #23-A Ricks Exploration 38,056 9/1/99
10243 Bierig, C.R. Samson Resources (1,874) 6/1/99 Balancing
10187 Finis Clark #1-16 Seagull Midcon, Inc. (18,999) 5/1/99
10228 State of OK #2-16 Seagull Midcon, Inc. (19,533) 3/1/99
10211 Moody #1-10 Unit Petroleum (102) 7/1/99
</TABLE>
Prepared by Glinda Collins Page 1 of 2
<PAGE> 42
<TABLE>
<CAPTION>
UNIT VOLUME MCF STATEMENT
NUMBER UNIT NAME OPERATOR OVER (UNDER) DATE COMMENTS
------ --------- -------- ------------ --------- --------
<S> <C> <C> <C> <C> <C>
JIP AND EXCLUDED
10193 Gamble #1-15 Vastar Resources (33,548) 5/1/99 Balancing - at the rate of 9% to 10% per month. Gas
Balancing Agreement per JOA
10201 Johnson #1-33 Vintage Petroleum (110) 9/1/99
OPERATED PROPERTIES:
10151 Archie Dickson POC (46) 10/1/99 Balancing
10159 Henderson POC 3,604 10/1/99 Balancing
10152 Sanders #1 POC 14,432 10/1/99 Balancing
10153 Sanders #2 POC 7,762 10/1/99 Balancing
10154 Thompson #1 POC 39 10/1/99 Balancing
10155 Westphal #1 POC (245) 10/1/99 Balancing
TOTAL 23,552
</TABLE>
Prepared by Glinda Collins Page 2 of 2
<PAGE> 43
EXHIBIT "G"
WORKING INTERESTS SUBJECT TO PREFERENTIAL RIGHTS
<TABLE>
<CAPTION>
WORKING NET REVENUE NET REVENUE
WELL NAME AND NUMBER STATE COUNTY INTEREST OIL GAS
- -------------------- ----- ------ -------- ----------- -----------
<S> <C> <C> <C> <C> <C>
HURT, LEO #1 & #2 OK DEWEY 0.003231854 0.002625882 0.002625882
HAGEN #33-1 OK ELLIS 0.191860000 0.141796519 0.141796519
WALTON #34-1 OK ELLIS 0.095930000 0.070898243 0.070898243
CLARK #1-16 OK GRADY 0.062654566 0.050408000 0.050408000
SOONER TREND UNIT OK KINGFISHER 0.092674351 0.081090057 0.081090057
MEISTER #1-21 OK MAJOR 0.167877500 0.142302404 0.142302404
STAMBAUGH UNIT OK MAJOR 0.086969801 0.072204402 0.072204402
WOODRING UNIT OK MAJOR 0.017399399 0.014665476 0.014665476
PERRY OKLAHOMA #1 OK NOBLE/PAYNE 0.191860000 0.155886250 0.155886250
ZIEGELGRUBER #1 OK OKLAHOMA 0.182267000 0.148091929 0.148091929
BASEY #2-22 OK TEXAS 0.347746250 0.276808050 0.276808050
MILLER #1 OK WOODWARD 0.191860000 0.167877500 0.167877500
</TABLE>
