UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1998
Commission file Number 0-20193
AMERICOMM RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 73-1238709
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
15 E. 5th Street, Suite 4000, Tulsa, Oklahoma 74103-4346
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (918) 587-8093
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date:
Common Stock, $.001 Par Value - 13,879,589 shares as of June 30,
1998.
<TABLE>
PART I. - FINANCIAL INFORMATION
AMERICOMM RESOURCES CORPORATION
BALANCE SHEET
(Amounts in thousands, except per share data)
<CAPTION>
June 30, 1998
______________
<S> <C>
ASSETS
Current assets
Cash and cash equivalents $ 393,625
Prepaid expenses 0
Deposits 3,244
______________
Total current assets 396,869
Investments in prospects 1,029,217
______________
TOTAL ASSETS $ 1,426,086
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
<S> <C>
Current liabilities
Accounts payable 0
Accruals 1,352
______________
Total Current Liabilities $ 1,352
Stockholders' equity (deficiency)
Common stock, $.001 par value;
authorized 50,000,000 shares
13,879,589 shares issued, of which
132 shares are held in Treasury 13,879
Capital in excess of par value 1,968,862
Deficit accumulated during the
development stage (558,007)
______________
Total Stockholders' Equity $ 1,424,734
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIENCY) $ 1,426,086
<FN>
See accountants' report and accompanying notes to financial
statements </TABLE>
<TABLE>
AMERICOMM RESOURCES CORPORATION
STATEMENT OF INCOME
FOR THE SIX MONTHS
ENDED JUNE 30, 1998 AND 1997
(Amounts in thousands, except per share data)
<CAPTION>
Six Months Six Months
Ended Ended
June 30, June 30,
1998 1997
____________ ____________
<S> <C> <C>
Revenues
Income $ 0 $ 0
Interest income 1,966 407
____________ ____________
Total Income 1,966 407
____________ ____________
Costs and expenses
General and administrative
expenses 40,721 32,937
Abandoned prospects 0 0
Interest expense 984 0
____________ ____________
Total Costs and Expenses 41,705 32,937
____________ ____________
Net Income (Loss) $ (39,739) $ (32,530)
Net Income (Loss)
per common share $ 0 $ 0
Weighted average number of
common shares outstanding 13,879,589 11,204,592
<FN>
See accountants' report and accompanying notes to financial statements
</TABLE>
<TABLE>
AMERICOMM RESOURCES CORPORATION
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS
ENDED JUNE 30, 1998 AND 1997
(Amounts in thousands)
<CAPTION>
Six Months Six Months
Ended Ended
June 30, June 30,
1998 1997
____________ ___________
<S> <C> <C>
Cash Flow From Operating Activities
Operations
Net income (loss) $ (39,739) $ (32,530)
Plus adjustments to reconcile
net income to net cash flows
from operating activities
Abandoned prospects 0 0
Changes in operating assets
and liabilities
Increase(Decrease) in accounts
payable (11,492) (11,574)
Increase(Decrease) in prepaid
expenses (350) 350
Increase(Decrease) in deposits (3,244) 0
Accruals 1,352 (67)
Deferred payment proceeds 0 50,000
___________ ____________
Net cash provided (used)
by operating activities (53,473) 6,179
Cash Flows From Investing Activities
Cash payments for investments in
prospects (337,069) (8,202)
___________ ____________
Net cash provided (used) by
investing activities (337,069) (8,202)
___________ ____________
Cash Flows From Financing Activities
Proceeds from issuance of common
stock 680,999 0
Proceeds from note payable - related
party 0 0
Repayment of note payable - related
party 0 0
____________ ____________
Net cash provided (used) by
financing activities 680,999 0
Net Increase(Decrease) in Cash and
Cash Equivalents 290,457 (2,023)
Cash and Cash Equivalents,
beginning of quarter 103,168 29,311
____________ ____________
Cash and Cash Equivalents,
end of quarter $ 393,625 $ 27,288
<FN>
See accountants' report and accompanying notes to financial statements
</TABLE>
AMERICOMM RESOURCES CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
Note 1. Basis of Presentation
In the opinion of management the accompanying unaudited
financial
statements contain all adjustments, all of which were of a normal
recurring nature, necessary to summarize fairly the Registrant's
financial position and results of operations. The results of operations
for the three and six months ended June 30, 1998 may not be
indicative of the results that may be expected for the year ending December
31, 1998. These statements should be read in conjunction with the financial
statements and notes thereto included in the Registrant's Form 10-KSB for
its fiscal year ended December 31, 1997.
Note 2. Summary of Significant Accounting Policies
Mining and oil and gas properties - The Company uses the successful
efforts method of accounting for its mining activities. Costs incurred
are deferred until exploration and completion results are evaluated.
At such time, costs of activities with economically recoverable reserves
are capitalized as proven properties, and costs of unsuccessful or
uneconomical development work are expensed.
Cash and cash equivalents - The Company defines cash and cash
equivalents to be cash on hand, cash in checking accounts, certificates
of deposit, cash in money market accounts and certain investments with
maturities of three months or less from the date of purchase.
Note 3. Income Taxes
As of December 31, 1997, the Company has tax net operating loss
carryforwards totaling approximately $456,000. If not used, these
carryforwards will expire in the years 2000 to 2009.
AMERICOMM RESOURCES CORPORATION
PLAN OF OPERATION
All statements other than statements of historical fact contained
herein are forward-looking statements. The forward-looking statements
were prepared on the basis of certain assumptions which relate, among
other things, to costs expected to be incurred in the acquisition,
exploration and development of the Company's properties. Even if the
assumptions on which the projections are based prove accurate and
appropriate, the actual results of the Company's operations in the future
may vary widely from the financial projections due to unforeseen,
mechanical or technological difficulties in drilling wells, general
economic conditions, increased competition, changes in government
regulation or intervention in the oil and gas or mining industries, and
other risks described in the Company's filings with the Securities
and Exchange Commission. Accordingly, the actual results of the Company's
operations in the future may vary widely from the forward-looking
statements included herein.
As of June 30, 1998, the Registrant had approximately $393,625 in cash
to fund its operations. The Registrant expects to spend approximately
$26,800 on BLM fees on its mining properties and approximately $20,000
to fund its acquisition of oil and gas leases on its prospect in Wyoming.
The Registrant expects the remainder of its cash to fund its operations for
approximately 12 months, assuming no additional amounts are expended on the
acquisition or exploration of its oil and gas prospect or the exploration
of its mining properties. The Registrant expects the exploration and
development of its oil and gas prospect will require substantial amounts
of additional capital which may be raised through debt or equity offerings,
encumbering properties or entering into arrangements whereby certain costs
of exploration will be paid by others to earn an interest in the properties.
Additional capital will also be required to continue exploration of the
Registrant's mining prospects if the Registrant is unsuccessful in locating
an industry partner for such prospects. There can be no assurance that
additional capital will be available to the Registrant on economically
acceptable terms, if at all.
The Registrant funded its operations during 1997 through amounts
received from Echo Bay Exploration Inc. ("Echo Bay") a subsidiary of Echo
Bay Mines LTD., Denver, Colorado pursuant to a Heads of Agreement covering
exploration of its Churchill County, Nevada property (the "Jessup
Property") and by borrowing $20,000 from the Albert E. Whitehead Living
Trust pursuant to the terms of a 6% Convertible Note due September 23,
1998. In November 1997, Echo Bay elected to continue its work program
during 1998 and paid an additional $100,000 to the Registrant. In March
1998, the Registrant raised an additional $275,000 through the issuance of
1,375,000 to Mr. Whitehead and agreed to use substantially all of the
proceeds of this issuance to fund its acquisition of oil and gas leases on
a prospect located in the state of Wyoming. In April 1, 1998, the Albert
E. Whitehead Living Trust converted its note into shares of Common Stock of
the Registrant at a purchase price of $0.15 per share. In June 1998 Messrs.
Whitehead and Plewes, directors of the Registrant purchased an aggregate
of 533,332 shares of Common Stock upon exercise of previously issued stock
options at an exercise price of $0.6875 per share, which provided $362,499
in additional working capital to the Registrant.
Although Echo Bay stated that it was encouraged by the results of its
exploration of the Jessup Property, in May 1998, Echo Bay elected to
discontinue its exploration program and concentrate its exploration efforts
in the United States on a limited number of projects. As Echo Bay
terminated the joint venture agreement prior to earning its interest in the
property, under the terms of the joint venture agreement, the Registrant
retains its interest in the Jessup Property and the amounts previously paid
by Echo Bay. The Registrant intends to seek a new industry partner to
continue the exploration of the Jessup Property or may elect to sell such
property if a transaction may be consummated on advantageous terms.
Exploration for mineral resources, such as gold, and for oil and gas, is
highly speculative and involves greater risks than many other businesses.
Mineral exploration and oil and gas drilling and development is frequently
marked by unprofitable efforts, not only from unproductive prospects, but also
from producing prospects which do not produce sufficient amounts to return a
profit on the amount expended. Accordingly, there can be no assurance that
the Registrant will be able to discover, develop
or produce sufficient reserves to recover the expenses incurred
in connection with the exploration of its properties, to fund
additional exploration or to achieve profitability.
The Registrant does not expect any significant change in
the number of its employees during 1998. It will employ part-
time or temporary persons and consultants in situations where
special expertise is required.
Part II OTHER INFORMATION
The Registrant has acquired over 93,000 acres of oil and gas leases
in the Powder River Basin in Wyoming and is continuing to acquire
additional leases in that area. The Company's oil and gas prospect
is located in a mature producing area with established pipelines
and services, which has been inactive over the last 30 years
pending the development of new drilling technology. The Registrant
currently plans to utilize horizontal drilling techniques to drill
the first test well on the prospect in the fourth quarter of 1998,
subject to the availability of additional financing. Under the terms
of the agreement relating to the prospect, the Registrant is
required to drill the first test well within six months after it has
acquired 100,000 acres of oil and gas leases with respect to the
prospect or seek a buyer for the prospect. In such event, assuming
the parties are successful in locating a buyer for the prospect,
the Registrant would recover its costs in acquiring the prospect
and would receive 50% of any profits from the sale of the prospect
in excess of such costs.
Item #6 Exhibits and Reports on Form 8-K
a. Exhibits
(10)(j) Americomm Cheyenne River Prospect
Agreement by and among the Registrant,
Fred S. Jensen, Richard A. Bate,
A. R. Briggs and Thomas L. Thompson Filed herewith
b. Reports on Form 8-K - The Registrant has not filed, during
the quarter for which this report is filed, a Form 8-K.
c. 27-Financial Data Schedule
AMERICOMM RESOURCES CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
AMERICOMM RESOURCES CORPORATION
Registrant
August 12, 1998 Thomas R. Bradley
Date Thomas R. Bradley
President & CEO
August 12, 1998 Thomas R. Bradley
Date Thomas R. Bradley
Principal Financial and Accounting
Officer
AMERICOMM CHEYENNE RIVER PROSPECT AGREEMENT
This agreement (Agreement), made and entered into this 4th day of March, 1998,
by and between Fred S. Jensen, Richard H. Bate, A. R. Briggs and Thomas L.
Thompson, First Parties, (JBB&T) and Americomm Resources Corporation, a
Delaware corporation, Second Party (Americomm);
WITNESSETH:
Whereas JBB&T have identified the Cheyenne River Prospect, consisting of as
much as 400,000 acres located in Campbell, Converse, Niobrara and Weston
Counties, Wyoming, and including lands in Townships 37, 38, 39, 40, 41, and
42 North, Ranges 64, 65, 66, 67, 68, and 69 West, 6th P.M. (Entire Prospect)
which, based on the studies prepared by JBB&T, appear to have potential for
development of oil and gas production from the Newcastle and Mowry formations
through horizontal boreholes; and
Whereas JBB&T have heretofore entered into an agreement with United Utilities
Corporation concerning the following lands:
T 42N, R 66W - Sections 6, 7, 18, 19, 30, 31
T 42N, R 67W - All
T 42N, R 68W - Sections 1, 12, 13, 24, 25, 36
T 41N, R 66W - Section 6
T 41N, R 67W -Sections 1-6
T 41N, R 68W - Section 1
Containing about 35,840 acres (United Block); and
Whereas JBB&T and Americomm wish to enter into an agreement with
respect to all of the entire Prospect, except the United Block, which lands
are hereafter referred to as the "Prospect"; and
Whereas the lands in the Prospect consist of unleased federal and state lands,
unleased fee lands and some lands leased to others, including JBB&T, and the
unleased federal lands consist mostly of lands available for leasing by over-
the-counter filing, the balance being lands available by competitive bidding;
and
Whereas Americomm wishes to retain JBB&T to obtain the maximum
practicable oil and gas leasehold position for the benefit of
Americomm (but to be held temporarily by Richard H. Bate as
trustee for Americomm) so that Americomm, as Operator, can drill
one or more horizontal boreholes in the Newcastle formation
according to specifications required by JBB&T;
NOW THEREFORE, in consideration of the mutal promises herein
contained, the parties agree as follows:
1. JBB&T will each use their best efforts to obtain, on behalf
of Americomm but in the name of Richard H. Bate, oil and gas
leases covering lands in the Prospect beginning with federal and
State of Wyoming leases available over-the-counter and
competitively, when available for sale. Without further
authority than this Agreement, each of JBB&T are authorized to
obtain such leases at costs to Americomm not exceeding the
following:
A. As to leases available over-the-counter, currently
applicable filing fees ($75 per lease for federal leases and $25
per lease for state leases) and first year rentals ($1.50 per
acre and fees payable to third parties (such as Norma Rose).
B. As to leases abvailable competitively, currently
applicable filing, sale costs and fees payable to third parties,
first year rentals and bonus consideration in each case to be
authorized by Americomm prior to each competitive lease sale.
C. As to leases now held or controlled by any of JBB&T,
$2.50 per acre plus currently applicable filing and administrative
fees.
D. As to leases held by others and fee leases, upon terms
to be approved in advance by Americomm.
E. In addition, as to categories of leases, A, B and D listed
above in subparagraphs A-D, a prospect fee of $1.00 per net acre
of all leases obtained shall be payable to Fred Jensen and each of
JBB&T shall be entitled to an assignment or reservation of one
quarter of 3.75% of 8/8ths overriding royalty from each lease
obtained and all extensions and renewals thereof, proportionately
reduced in the case of partial interest leases. In the case of
leases which are burdened with royalties and/or overriding
royalties totaling more than 12.5% when acquired, the 3.75%
overriding royalty shall be decreased in the proportion that the
burdens exceeding 12.5% bear to 87.5%. In consideration of
services performed and to be performed under this Agreement, and
assuming Americomm receives an executed copy of the Representation
Letter attached hereto as Exhibit A, each of JBB&T shall be
entitled to receive, within ten days from the date of this
Agreement, certificates representing 125,000 shares of restricted
common voting stock of Americomm. None of JBB&T shall be entitled
to any other compensation for work done or services rendered prior
to the date of this Agreement, but shall be entitled to
compensation for services renered hereafter as specified in
paragraphs numbered 4 and 6 below.
2. Because United Utilities Corporation has orally indicated
its willingness to sell the leases which it owns in the United
Block to Americomm the Entire Prospect shall be deemed an area of
mutual interest (AMI) as more specifically defined by the map
attached hereto as Exhibit B, to the end that all oil and gas
leasehold interests acquired by any party to this Agreement, its
officers, directors, employees, subsidiaries, contractors, agents,
successors, heirs, personal representatives or assigns, or any
person or entity controlling, controlled by, or under common
control with, any party to this agreement, in any land within the
AMI, within five years from the date of this Agreement, shall be
subject to this Agreement and Americomm shall be entitled to
receive, at cost, assignment of the leasehold estate, subject to
the overriding royalty interests and prospect fee provided for
JBB&T hereunder.
3. It is the intent of this Agreement that Americomm shall
not be obligated to drill a well on the Prospect unless and until
oil and gas leases covering at least 100,000 acres of land within
the Prospect have been obtained for the benefit of Americomm.
Futhermore, even if 100,000 acres are obtained, Americomm shall
have no drilling obligation if it is unable, using its best
efforts, to obtain financing for a well, but if, within six months
following the acquisition of 100,000 acres, or within such shorter
time required by the Initial Unit Agreement (hereafter defined)
Americomm has been unable to finance the drilling of an initial
well, the parties agree that they will attempt to sell the Prospect
to someone willing and able to drill a well according to JBB&T's
specifications and the proceeds of such a sale, including all
overriding royalty owned by all parties, shall be shared equally
between Americomm (50%) and JBB&T (collectively 50%) after
Americomm has recovered all of its costs.
4. As soon as practicable, JBB&T will file over-the-counter
lease offers for the federal and state lands in the Prospect so
available and Americomm will deposit $234,500 in a special trust
account to be opened by Richard H. Bate for the purposes of this
Agreement, to permit such acquisition and payment of the prospect
fee (estimated to be about 87,000 acres at $2.50 per acre for
federal lands and $2.00 per acre for state lands plus filing and
administrative fees of $4,000 plus a contingency about of $10,000 =
$234,500). Thereafter, from time to time as necessary, Americomm
may deposit additional funds in said account to permit additional
lease acquisitions under the terms of this Agreement. Other than
the prospect fee payable to Fred Jensen, travel expenses,
administrative fees actually paid, The issuance of shares of common
stock set forth in pragraph 1 (E) and payments resulting from the
overriding royalty interest set forth in paragraph 1 (E) above, no
further payments will be made to any of JBB&T for acquiring newly
issued federal and state leases in the Prospect. Reasonable fees
for acquiring leases covering privately owned lands and leases held
by others will be negotiated when such acquisitions are authorized
by Americomm.
5. At such time as JBB&T has selected a location for the
initial well and has selected a logical unit boundary for a federal
exploratory unit encompassing such drillsite, and JBB&T has acquired
sufficient leases for Americomm so that Americomm will effectively
control such a proposed unit, JBB&T will initiate and diligently
pursue with the Bureau of Land Management the approval of a federal
exploratory unit (Initial Unit Agreement) for the
initial well on the Prospect. When approval of such a unit has
been obtained, the parties will use their best efforts to cause a
well to be drilled in such unit within the time allowed by the
Initial Unit Agreement which shall be subject to the approval of
Americomm.
6. Americomm will be designated as Unit Operator of all units
formed in the Prospect, but JBB&T will carry out the functions of
the Unit Operator and all operations shall be carried out in
accordance with specifications prescribed by JBB&T and a unit
operating agreement to be entered into by all working interest
owners who commit their interests to a unit. If a well is to be
drilled which is not in a unit, the working interest owners in the
spacing unit will enter into a joint operating agreement and will
be force pooled, if necessary. During the period that JBB&T are
carrying out the functions of the Unit Operator, JBB&T will receive
for their services reimbursement of their actual expenses plus an
overhead fee of $800 per month for each producing well, except
that, during any period of time when a well is being drilled,
completed or equiped for production, the overhead fee shall be the
customary amount for a horizontal well per month for that well. In
addition to the overhead fee, JBB&T shall be reimbursed by
Americomm for all travel expenses and outside
services, labor and materials they incur to carry out their duties.
At any time following the drilling and completion of the first well
under this agreement, Americomm may, at its option, assume
complete control of the Entire Prospect and of all functions of
JBB&T with respect thereto. None of JBB&T shall be entitled to any
compensation for any services performed prior to the date of this
agreement, except the prospect fee and overriding royalty interest
provided for in Paragraph 1 (E) above; however, if, after the date
of this Agreement, and with the advance approval of Americomm, any
of JBB&T (which include two geologists, an oil and gas lawyer and a
petroleum engineer) perform services which would normally be
contracted by a unit operator to professionals, consultants or
contractors, such individual shall be compensated by Americomm for
such services at such individual's usual fees plus expenses.
Included in this category of services will be all professional
services rendered in connection with the formation and approval of
units and obtaining of appropriate orders and permits from the BLM
and Wyoming Oil and Gas conservation Commission, Wyoming Department
of Environmental quality and local land use authorities, as well
as professional geological, engineering, land and legal services
rendered in preparation for and during the drilling, completion and
equipping of a well, and all title work, including work done to
prepare the unit agreement and drilling, division order and security
title opinions.
7. Americomm will promptly obtain authority to do business in
Wyoming and will, at appropriate times, provide surety or cash bonds
and insurance coverage required of a unit operator. Initially,
Americomm's bills will be paid by Richard H. Bate out of the special
trust account described above and monthly accountings will be
rendered to Americomm. As soon as convenient, however, and before
the intitial well is spudded, Americomm will
take over such functions, including joint interest billing, if any,
and distribution of proceeds of production if not handled by
production purchasers. Prior to incurring any substantial costs for
the initial well and any other operation, JBB&T will prepare and
submit for approval to Americomm, and to other working interest
owners in a Unit, if any, as required by the unit operating
agreement, an AFE.
8. Unless and until Americomm decides to take title to leases in
its own name, all leases obtained under this agreement shall be held
nominally by Richard H. Bate, who, nevertheless, shall hold them in
trust for Americomm. Within five days of obtaining a lease on behalf
of Americomm under this Agreement, Richard H. Bate shall deliver to
Americomm (reserving, however, the JBB&T overriding royalty interest
provided for herein), which assignment shall be duly executed and in
proper form for filing. Americomm may file such assignments at any
time, in its sole discretion. Americomm agrees to pay all filing and
recording fees and rentals at least to the first anniversary of all
leases obtained hereunder. If Americomm decides to surrender any
leases obtained hereunder or permit any lease to expire, Americomm
shall notify JBB&T of that decision at least sixty days before the
anniversary or surrender date of the lease and offer to assign the
lease to JBB&T without charge. any such assignment shall be free of
all burdens other than the JBB&T overriding royalty interest provided
for herein and other burdens which may have existed prior to the
acquisition of the lease by Americomm or which may have been
authorized in writing by any of JBB&T. In the case of the first
anniversary date of any
lease, the notice period shall be at least 30 days rather than 60
days.
9. Each of the parties represents that it has employed no
brokers in connection with this transaction who can claim a
commission or finders fee from the other party, and each party
represents and warrants that it will pay all commissions owed to
any broker or finder employed by it and indemify the other party
against any liability therefor. It is agreed that services
performed by Lawton Clark were performed for Americomm and not
for
any of JBB&T.
10. All benefits accruing to JBB&T hereunder after the date of
the agreement shall be divided as follows:
A. All prospect fees shall be paid to Fred S. Jensen.
B. The JBB&T overriding royalty interest and the 500,000
shares of Americomm stock shall be owned equally and assigned
separately to Fred S. Jensen, Richard H. Bate, A. R. Briggs and
Thomas L. Thompson.
C. All payments for professional services and expenses
rendered or incurred by any of JBB&T which are approved by
Americomm as provided in Paragraph 6 above shall be payable to
the individual who performs the services or incurs the expenses;
provided, however, that Americomm may pay the same to Richard H.
Bate, as trustee, for further distribution to the person
entitled.
11. All future services to be rendered by Thomas L. Thompson
under this agreement may be deemed rendered by Thompson' Geo
Discovery, Inc. a Colorado corporation, of which Thomas L.
Thompson is President.
12. The courts of the State of Wyoming and the United States
District Court for the District of Wyoming shall have exclusive
jurisdiction of any disputes which may arise under this Agreement
and all such disputes shall be governed by Wyoming law (without
regard to its choice of law rules).
13. This Agreement is not intended to create, or to imply
that there exists, a joint venture or a partnership between any
of the four individuals defined herein as JBB&T or between any
such individuals and Americomm.
14. This Agreement shall be deemed to have been drafted by
all of the parties hereto. Rights under this Agreement are
freely assignable but duties are not. If any of JBB&T shall die
or become disabled before this Agreement is fully performed, the
surviving individuals shall assume the duties of such person and
may employ, at the expense of Americomm, such professional
assistance as is necessary to perform such duties.
15. This agreement may be executed in counterparts with the
same effect as if all parties had executed a single agreement.
In witness whereof the parties have hereunto set their hands
the day and year first above written.
AMERICOMM RESOURCES CORPORATION
Thomas R. Bradley
President
March 5, 1998
Fred S. Jensen
Richard H. Bate, individually and
as Trustee for Americomm Resources
Corporation
A. R. Briggs
Thomas L. Thompson
EXHIBIT A
Americomm Resources Corporation
Suite 305
9 E. 4th Street
Tulsa, Oklahoma 74103-5109
Gentlemen:
In consideration of Americomm's agreement to issue an
aggregate of 125,000 shares of restricted common stock, par
value $.001 per share (the "Share") to the undersigned in
accordance with the terms and provisions of the Americomm
Cheyenne River Prospect Agreement dated as of March 4, 1998,
the undersigned hereby represents, warrants and convenants to
Americomm as follows:
1. The undersigned is acquiring the Shares solely for
their own account, for investment purposes only and not with a
view to resale or distribution, or for the account, in whole or
in part, of others. The undersigned understands that the
Shares are not registered under the Securities Act of 1933, as
amended (the "Securities Act") or applicable state securities
laws, the Company has not undertaken to register the Shares
thereunder and such securities must be held indefinitely,
unless the subsequent disposition thereof is registered under
the Securities Act and applicable state securities laws or an
exemption from such registration is available. The undersigned
understands that the exemption from registration afforded by
certain rules and regulations under the Securities Act depends
upon the satisfaction of various conditions and that, if
applicable, such rules and regulations may afford the basis for
sales of the Shares only in limited amounts. The undersigned
is able to bear the substantial economic risk of an investment
in the Shares, including a complete loss thereof, for an
indefinite period of time. The undersigned has no need for
liquidity in this investment and has no reason to anticipate
any change in circumstances, financial or otherwise, or other
particular occasion or event which might cause or require the
undersigned to attempt to sell or transfer any of the Shares.
2. The undersigned acknowledges that the certificates
representing the Shares, and any substitutions or replacements
thereof, shall bear a legend in substantially the following
form:
("The Shares represented by this certificate have not
been registered under the Securities Act of 1933, as amended,
or state securities laws, and may not be sold, hypothecated or
otherwise transferred or disposed of in the abscence of such
registration, unless an exemption from the requirement of such
registration is available under the circumstances at the time
obtaining and demonstrated by opinion of counsel satisfactory
to the Company."
3. The undersigned further represents and warrants
that in order to make an informed decision in connection with
the purchase of the Share:
(i) the undersigned has received a copy of
Americomm's Annual Report on Form 10-KSB for the
year ended December 31, 1996, the Quarterly Reports
on Form 10-QSB for the quarters ended March 31, June
30 and September 30, 1997, press releases since
January 1, 1997, a description of Americomm's
business and the Shares (collectively, the
"Disclosure Documents");
(ii) the undersigned or his agent or attorney, (A)
has been provided with sufficient information with
respect to the business of Americomm and has
carefully reviewed the same including, without
limitation, the Disclosure Documents; (B) has been
provided with such additional information with
respect to Americomm, including any exhibits to the
Disclosure Documents, as he or his agent or attorney
has requested; (C) has had the opportunity to discuss
such information with members of the management of
Americomm and any questions that he had with respect
thereto have been answered to his full satisfaction;
and (D) has reviewed the merits and risks of an
investment in the Shares with tax and legal counsel
and with an investment advisor to the extent he has
deemed advisable, and with respect to such
considerations, the undersigned has relied solely on
the advice of his own qualified advisors, to the
extent the undersigned has deemed appropriate; and
(iii) the undersigned recognizes that an investment
in the Shares involves a number of significant risks,
including, without limitation, those set forth in the
Disclosure Documents previously delivered to the
undersigned; the undersigned, or his agent or attorney,
has such knowledge and experience in financial and
business matters as to be capable of evaluating the
merits and risks of an investment in the Shares.
4. No oral or written representations have been
made or oral or written information furnished to the
undersigned or the undersigned's advisors in
connection with the issuance of the Shares which were
in any way inconsistent with the information provided
to the undersigned in the Disclosure Documents. The
undersigned acknowledges that the Disclosure
Documents replace and supersede any and all
information delivered prior to delivery of the
Disclosure Documents.
5. The undersigned is not subscribing to purchase
the Shares as a result of or subsequent to any
advertisement, article, notice or other communication
published in any newspaper, magazine or similar media
or broadcast over television or radio, or presented
at any seminar or meeting, or any solicitation of a
subscription by a person not previously know to the
undersigned in connection with investments in
securities generally.
6. The undersigned is executing and delivering
this Agreement with full awareness of its
implications and in recognition of the fact that
Americomm is relying on the undersigned's
representations and warranties in selling the Shares
to the undersigned, and that Americomm and other
investors may be damaged if such representations or
warranties are incorrect.
7. If the undersigned is a resident of the State
of Texas, the undersigned's investment in the Shares
does not exceed 20% of either the undersigned's net
worth or the joint net worth of the undersigned and
his spouse.
IN WITNESS WHEREOF, the undersigned has executed this
document as of March 5, 1998.
EXHIBIT B
FIRST AMENDMENT TO AMERICOMM
CHEYENNE RIVER PROSPECT AGREEMENT
This Agreement (Amendment), made and entered into this 9th day
of April, 1998, amends the Americomm Cheyenne River Prospect
Agreement entered into March 4, 1998, by and between Fred S.
Jensen, Richard H. Bate, A. R. Briggs and Thomas L. Thompson, First
Parties, (JBB&T) and Americomm Resources Corporation, a Delaware
Corporation, Second Party (Americomm) (Agreement);
WITNESSETH:
WHEREAS, since the Agreement was entered into, certain changes
of circumstance have occurred which necessitate modification of the
Agreement;
NOW THEREFORE, the parties agree, in consideration of their
past performance of the Agreement, as follows:
In paragraph 2 of the Agreement, the Entire Prospect is deemed
an AMI and is outlined on Exhibit B to the Agreement. The parties
have agreed to enlarge the Entire Prospect by the inclusion of
additional acreage, as shown on Exhibit A to this amendment and
the parties agree that the Entire Prospect and the Area of Mutual
Interest (AMI) shall be enlarged to include all land covered by
Exhibit A to this Amendment; provided, however, that, because
United Utilities Corporation has elected to retain the acreage
which it owns within the United Block, the AMI established by this
Agreement shall be subject to the prior AMI covering the United
Block. Any acreage acquired by any party to this Amendment within
the United Block shall first be offered to United Utilities
Corporation. If United Utilities Corporation elects not to acquire
such tendered acreage, then such acreage shall be subject to the
AMI established by this Amendment and shall be offered to Americomm
in accordance with paragraph 2 of the Agreement. Nothing herein
shall have any application after the expiration of the respective
AMI's.
IN WITNESS WHEREOF, the parties have hereunto set their hands
the day and year first above written.
AMERICOMM RESOURCES CORPORATION
Thomas R. Bradley
Thomas R. Bradley, President
Fred S. Jensen
Richard H. Bate, individually and
as Trustee for Americomm Resources
Corporation
A. R. Briggs
Thomas L. Thompson
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<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Apr-01-1998
<PERIOD-END> Jun-30-1998
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0
0
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