Exhibit 10.7.3
PURCHASE AND EXPLORATION AGREEMENT
THIS PURCHASE AND EXPLORATION AGREEMENT (this "Agreement"), dated as of
March 10, 2003, is between AMERICAN NATURAL ENERGY CORPORATION, an Oklahoma
corporation ("Seller"), and TRANSATLANTIC PETROLEUM (USA) CORP., a Colorado
corporation ("Buyer").
In consideration of the mutual promises contained herein, the benefits
to be derived by each party hereunder and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Seller agrees to
sell and convey and Buyer agrees to purchase and pay for the Properties (as
defined in Paragraph 1 below), subject to the following terms and conditions:
1. Properties. The term "Properties" means:
(a) An undivided ten percent (10%) of 8/8ths interest in and
to those oil, gas and mineral leases described in Exhibit A-1 (the "Leases") and
in and to those ▇▇▇▇▇ located on the Leases which are described in Exhibit A-2
(the "▇▇▇▇▇") attached hereto and incorporated herein by reference for all
purposes, and all contingent, reversionary and carried interests relating to any
of the foregoing, and all other rights therein (such properties, rights and
interests being sold hereunder are hereinafter collectively called the "Oil and
Gas Interests"); and
(b) all of the properties, rights and interests incident to
the Oil and Gas Interests, including without limitation, (i) all presently
existing and valid unitization and pooling declarations, agreements, and/or
orders and the properties covered in the units created thereby (including all
units formed under orders, regulations, rules, or other official acts of any
federal, state or other governmental agency having jurisdiction) insofar as the
same relate to or affect the Oil and Gas Interests; (ii) all well and leasehold
equipment, gathering systems, processing plants, improvements, machinery,
equipment, supplies, goods, fixtures, and other personal property insofar as the
same are located on or used in connection with any of the Oil and Gas Interests;
(iii) all presently existing oil, gas sales, operating, pooling, unitization,
purchase, exchange and processing contracts, and all other contracts,
agreements, and instruments insofar as the same relate to any of the Oil and Gas
Interests; and (iv) all permits, franchises, licenses, options, servitudes,
leases, water leases, surface rights, easements, and rights-of-way insofar as
the same pertain to the Oil and Gas Interests,
but specifically excluding from the term "Properties" and the transactions
contemplated by this Agreement any and all ▇▇▇▇▇ located on the Leases which are
not enumerated in Exhibit A-2 (the "Excluded Interests").
2. Purchase Price. The purchase price for the Properties shall be Two
Hundred Thousand and No/100 Dollars ($200,000) (the "Purchase Price"). The
Purchase Price shall be payable by Buyer to Seller at Closing in readily
available funds.
3. Date and Location of Closing. Subject to the conditions stated in
this Agreement, the consummation of the transactions contemplated hereby
("Closing") shall take place on or before March 15, 2003, and shall be held at
the offices of Buyer in Dallas, Texas, or at such other place as Buyer and
Seller may agree in writing. The date Closing actually occurs is herein called
the "Closing Date."
4. Effective Date. The ownership of the Properties shall be transferred
from Seller to Buyer at the Closing Date, but effective as of February 1, 2003
at 7:00 a.m., at the location of the Properties (the "Effective Date").
5. Closing Obligations. At or before Closing the following events shall
occur, each being a condition precedent to the others and each being deemed to
have occurred simultaneously with the others:
(a) Seller shall cause the execution, acknowledgment and delivery to
Buyer of an assignment and conveyance (in sufficient counterparts to facilitate
recording), substantially in the form attached hereto as Exhibit B and
incorporated herein by reference for all purposes, conveying to Buyer the
Properties;
(b) Seller and Buyer shall execute, acknowledge and deliver transfer
orders or letters in lieu thereof and shall take such other action as may be
necessary to evidence the transfer of titles hereunder;
(c) Buyer shall deliver the Purchase Price to Seller in readily
available funds;
(d) Seller shall deliver to Buyer a partial release of liens, in
form and substance reasonably satisfactory to Buyer, executed by Seller's
existing lender(s), releasing the Properties from the liens and security
interests owned by such lender(s);
(e) Seller shall deliver to Buyer exclusive possession of the
Properties.
6. Warranties in Conveyance Instruments. All assignments, bills of sale
and other conveyances of the Properties shall contain a special warranty of
title (i.e., warranty by, through and under Seller, but not otherwise).
7. Taxes. All ad valorem, property and other similar taxes applicable
to the Properties will be prorated as of the Effective Date (based upon the
amount of the prior year's taxes) and the amount of such taxes attributable to
the period of time prior to the Effective Date shall be paid in accordance with
the provisions of Paragraph 12.
8. Seller's Representations. Seller represents and warrants to Buyer
that
(a) Seller has the requisite power and authority to enter into and
perform this Agreement and the transactions contemplated by this Agreement.
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(b) Seller is not in default under or in violation of any law,
order, writ, injunction, rule, regulation or decree of any governmental body,
agency or court or of any commission or other administrative agency which in any
way could substantially impact the Properties or the consummation of the
transactions contemplated by this Agreement or any material agreement or
obligation relating to the Properties.
(c) Seller is duly qualified to own the Properties as presently
owned.
(d) Seller has not burdened the Properties with any lien or
encumbrance, except for Permitted Encumbrances (as hereinafter defined).
(e) All of the Leases are in full force and effect.
(f) All contracts and other instruments and agreements burdening or
relating to the Properties are described in Exhibit A-3 ("Material Agreements").
(g) Seller has complied with all laws, rules, regulations,
ordinances, codes and orders affecting or relating to any of the Properties.
(h) Except as specified in Exhibit A-3, there are no obligations to
engage in drilling and/or development operations in order to earn or maintain an
interest in the Properties ("Development Obligations").
(i) Seller has fulfilled all requirements for filings, licenses,
permits, certificates, disclosures of parties in interest and other similar
matters required by law, rule, regulation or contract, and is fully qualified,
to own and operate all Properties as presently owned and operated and no
material violations exist or have been recorded with respect to same.
(j) No party is entitled to a right of first refusal or preferential
right to purchase any of the Properties.
(k) There is no consent, waiver or other prior action of any third
party required in connection with the consummation of the transactions
contemplated by this Agreement.
(l) Except as set forth in Exhibit A-3, Seller has not received or
circulated any Authority For Expenditure for or approved any expenditures
relating to the Properties that have not been fully paid by Seller.
(m) All ad valorem, property and similar taxes and assessments based
on or measured by the ownership of the Properties for all years prior to 2003
have been properly paid unless the same are not yet due and payable.
(n) No suit, action or other proceeding (including, without
limitation, tax, environmental or development demands proceedings) is pending,
or to the best of Seller's
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knowledge threatened, which might result in impairment or loss of title to
any of the Properties or the value thereof.
(o) There are no unpaid bills or charges for any labor or materials
incurred by or on behalf of any Seller incident to the Properties which are
attributable to the period before the Effective Date.
(p) Seller has not filed any federal or state income tax returns
identifying any Properties as held by any tax partnership.
(q) There are no operations involving any of the Properties with
respect to which Seller has become a non-consenting party.
(r) There are no gas purchase and sale agreements to which the
Properties, or any portion of the Properties, are dedicated.
(s) No person has any call upon, option to purchase, or similar
rights with respect to any portion of the production from the Properties.
(t) After Closing, the interest of Buyer in the Properties will not
be reduced, burdened or otherwise adversely affected by the Development
Agreement (as defined in Section 13(a) below), the ORI Conveyance or the NPI
Conveyance (as such terms are defined in Exhibit A-1). Seller hereby agrees to
protect, indemnify and hold Buyer harmless from any against any and all damages
arising out of or resulting from a breach of the foregoing representation. In
addition, if the foregoing representation is breached, Seller hereby agrees
that, upon request of Buyer, Seller will execute one or more assignments (in
form and substance satisfactory to Buyer) conveying to Buyer such additional
interests in the Leases as may be necessary to fully offset any reduction in
Buyer's interest in the Properties arising out of or resulting from a breach of
the foregoing representation.
For purposes hereof, the term "Permitted Encumbrances" means: (1) the Material
Agreements, the Permitted Burdens (as hereinafter defined) and all other
lessor's royalties, overriding royalties, division orders and sales contracts
covering oil, gas or associated liquid or gaseous hydrocarbons, reversionary
interests and similar burdens, if the net cumulative effect of such burdens does
not operate to reduce the Net Revenue Interests of the Oil and Gas Interests to
less than the Net Revenue Interests set forth in Exhibit A-1 or increase the
Working Interests of the Oil and Gas Interests to more than the Working
Interests set forth in Exhibit A-1 (unless there is a corresponding increase in
the Net Revenue Interests); (2) all federal and state regulatory orders and
rules to which the Properties are presently subject; (3) preferential rights to
purchase and required third-party consents to assignments and similar agreements
with respect to which (A) waivers or consents have been obtained from the
appropriate parties, or (B) notice has been given to the holders of such rights
and the appropriate time period for asserting such rights has expired without an
exercise of such rights; (4) liens for taxes or assessments not due or not
delinquent at the time of Closing; (5) all rights to consent by, required
notices to, filings with, or other actions by governmental entities in
connection with the sale or conveyance of oil and gas leases or interests
therein if the same are customarily obtained after such sale or conveyance; (6)
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easements, rights-of-way, servitudes, permits, surface leases and other rights
in respect of surface operations, pipelines, grazing, logging, canals, ditches,
reservoirs or the like; and easements for streets, alleys, highways, pipelines,
telephone lines, power lines, railways and other easements and rights-of-way,
on, over or in respect of any of the Properties; (7) liens of operators relating
to obligations not yet due or pursuant to which Seller is not delinquent; and
(8) title problems commonly encountered in the oil and gas business which are
not deemed to be material and which would not be considered material by a
reasonable and prudent person engaged in the business of the ownership,
development and operation of oil and gas properties with knowledge of all the
facts and appreciation of their legal significance. In addition, the term
"Permitted Burdens" means those royalties, overriding royalties, net profits
interests and other non-expense bearing burdens against production more
particularly identified in Exhibit A-1 attached hereto and incorporated by
reference for all purposes, to the extent and only to the extent that the same
burden the Properties as described in Exhibit A-1.
9. Buyer's Representations. Buyer represents and warrants to Seller
that
(a) Buyer has the requisite power and authority to enter into and
perform this Agreement and the transactions contemplated by this Agreement;
(b) Buyer is not in default under or in violation of any law, order,
writ, injunction, rule, regulation or decree of any governmental body, agency,
or court or of any commission or other administrative agency which in any way
could substantially impact Buyer or the consummation of the transactions
contemplated by this Agreement or any material agreement or obligation relating
to Buyer; and
(c) the Properties to be acquired by Buyer hereunder are being
acquired by Buyer for its own account and not for distribution in violation of
applicable securities laws.
10. Property Records. Within thirty (30) days after Closing, Seller
shall deliver to Buyer a copy of all title and other information relating to the
Oil and Gas Interests, including without limitation lease files, maps, records,
land records, division orders, production files, deeds and documents of title,
all other property records, all financial, accounting, geological, geophysical
and other files, records and associated information and all other contracts,
agreements and documents relating to the Oil and Gas Interests.
11. Ownership of Properties. Except as specifically provided to the
contrary herein, the parties agree that Seller, with respect to the rights and
obligations attributable to ownership of the Properties prior to the Effective
Date, and Buyer, with respect to the rights and obligations attributable to
ownership of the Properties from and after the Effective Date, each,
respectively, shall be entitled to all of the rights incidental to such
ownership, and shall be subject to the duties and obligations of such ownership
attributable to the Properties and attributable to the periods of time ownership
of the Properties shall have been vested in each of the parties. In this regard,
the parties agree that appropriate adjustments and/or payments shall be made at
the Closing or as promptly as possible thereafter (i) to reflect the revenues
received between the Effective Date and the Closing and the reasonable and
prudent expenditures incurred by Seller in the operation of the Properties
between the Effective Date and the date of the Closing, (ii) for all oil,
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condensate or liquid hydrocarbons above the pipeline connection in storage on
the Effective Date, and (iii) to reflect the proration of taxes as described in
Paragraph 7.
12. Indemnification. Buyer shall protect, defend, indemnify and hold
Seller harmless from the payment of any judgments (including interest), claims,
costs, expenses and liabilities, direct, contingent or otherwise ("Damages"),
assessed against Seller which are attributable to the ownership of the
Properties during the period of time from and after the Effective Date. Seller
shall protect, defend, indemnify and hold Buyer harmless from the payment of any
Damages assessed against Buyer which are attributable to the ownership of the
Properties during the period of time prior to the Effective Date.
13. Additional Agreements.
(a) Area of Mutual Interest.
(i) The parties hereto hereby establish an area of mutual
interest (the "AMI") consisting of the lands in the 23.138 square mile area in
St. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Louisiana covered by that certain 3D seismic survey
conducted owned by Seller, which lands are outlined in the plat attached as
Exhibit C hereto. This AMI shall remain in force and effect for a period equal
to the longer of (A) four (4) years from the Closing Date or (B) ending on the
date on which the Development Agreement (as defined below) expires or is
terminated, unless sooner terminated by mutual agreement of the parties.
(ii) During the term of this AMI, if any party ("Acquiring
Party") acquires any oil and gas leases or any interest therein, any mineral
interest or other contracts with respect thereto which affect lands and minerals
lying within the AMI (a "Subject Interest"), the Acquiring Party shall promptly
advise the other party hereto ("Offeree") of such acquisition. In such event,
Offeree shall have the right to acquire an undivided percentage of the Subject
Interest equal to its Applicable Percentage. For purposes hereof, the
"Applicable Percentage" of each party is as follows: Seller - 90% and Buyer -
10%. Promptly upon acquiring Subject Interest, the Acquiring Party shall advise
Offeree in writing of such acquisition. Such written notice shall include full
particulars of such acquisition. Offeree shall have a period of thirty (30) days
after receipt of the notice within which to notify the Acquiring Party of its
election to acquire its Applicable Percentage of the Subject Interest. Failure
by the Offeree to give the notice of its election within such 30-day time period
shall be deemed to constitute an election by Offeree not to acquire its
Applicable Percentage of the Subject Interest.
(iii) Within ten (10) days after Offeree notifies the
Acquiring Party that it has elected to acquire its Applicable Percentage of the
Subject Interest, the Acquiring Party shall execute and deliver an appropriate
assignment to Offeree. Any assignment shall be made free and clear of any
burdens placed thereon by the Acquiring Party, but otherwise shall be made
without warranty of title, either express or implied.
(iv) To the extent that Seller acquires a Subject Interest
that is located within the Exxon AMI, the following additional provisions shall
apply:
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(1) If the Subject Interest is a lease covering a mineral
interest owned by Exxon in the Exxon AMI, Buyer shall be entitled to acquire an
undivided ten percent (10%) of 8/8ths in and to such Subject Interest.
(2) In addition, if the Subject Interest is created because
of Exxon's election to take less than its full share of a Drilling Prospect
(with such Subject Interest being the share of the Drilling Prospect that Exxon
elected not to take), then the portion of the Subject Interest that Buyer is
entitled to acquire hereunder shall be in the same proportion that (A) Buyer's
interest in the Drilling Prospect bears to (B) the aggregate interest of Buyer
and Seller in the Drilling Prospect (excluding the Subject Interest).
(v) For purposes of Paragraph 13(a), the following definitions
apply:
"Development Agreement" means that certain Development
Agreement dated as of November 22, 2002 between Seller and Exxon, as it may be
amended, supplemented, modified, restated and in effect from time to time.
"Drilling Prospect" shall have the meaning assigned to that
term in the Development Agreement.
"Exxon" means ExxonMobil Corporation.
"Exxon AMI" means the AMI established pursuant to the
Development Agreement.
(b) Carried Interest.
(i) Until such time as Payout occurs, Seller hereby agrees to
pay all Applicable Costs for the Subject ▇▇▇▇▇ which are attributable to Buyer
as a result of its ownership of the Properties.
(ii) For purposes of Paragraph 13(b), the following definitions
apply:
"Applicable Costs" means, with respect to each Subject
Well, the actual costs and expense of drilling, completing,
equipping and operating such well.
"Payout" means that point in time when the Production
Payment has been fully discharged and has terminated.
"Production Payment" means that certain production payment
created pursuant to the PP Conveyance.
"PP Conveyance" means that Production Payment Conveyance of
even date herewith from Seller to Buyer, as the same may be amended,
supplemented, modified, restated and in effect from time to time.
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"Subject ▇▇▇▇▇" shall have the meaning assigned to that
term in the PP Conveyance.
14. Further Assurances. After Closing, Seller and Buyer shall timely
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such instruments and take such other action as reasonably may be
necessary or advisable to evidence and effectuate the transfer of titles
hereunder (including but not limited to the execution and delivery of any
instruments which may be required to effectively transfer any interests owned by
Seller in any state, federal or Indian oil and gas leases), and to carry out
their respective obligations under this Agreement and under any document,
certificate or other instrument delivered pursuant thereto.
15. Notices. All notices and 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 when personally delivered to, or when a
telecopy has been received at, the address indicated below; or if mailed, when
received by the party charged with such notice and addressed as follows:
If to Buyer: If to Seller:
TransAtlantic Petroleum (USA) Corp. American Natural Energy Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: 214/▇▇▇-▇▇▇▇ ▇ax: 918/▇▇▇-▇▇▇▇
Any party may, by written notice so delivered to the other, change the address
to which delivery to such party shall thereafter be made.
16. No Brokers. Each of the parties represents and warrants to the
other that it has not made any arrangement or in any way incurred any liability
for a finder's fee or any other remuneration to a broker, finder or agent
whereby the other party hereto might become liable for any such fee or other
remuneration, and if any such fee or any remuneration becomes payable by any
party hereto as a result of any arrangements made by the other party, the party
which has made such arrangement agrees to protect, defend, indemnify and hold
harmless the other party hereto to the full extent of such liability.
17. Amendments. This Agreement may not be amended nor any rights
hereunder waived except by an instrument in writing signed by the party to be
charged with such amendment or waiver and delivered by such party to the party
claiming the benefit of such amendment or waiver.
18. Assignment. Neither party may assign all or any portion of its
rights or delegate all or any portion of its duties under this Agreement without
the express written consent of the other party.
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19. Headings. The headings of the paragraphs of this Agreement are for
guidance and convenience of reference only and shall not limit or otherwise
affect any of the terms or provisions of this Agreement.
20. Counterparts. This Agreement may be executed by Buyer and Seller in
counterparts, each of which shall be deemed an original instrument but all of
which together shall constitute but one and the same instrument.
21. Governing Law. This Agreement and the transactions contemplated
hereby shall be construed in accordance with and governed by the laws of the
State of Texas, without regard to its conflict of laws rules.
22. Entire Agreement. This Agreement (including the exhibits hereto)
constitutes the entire understanding between the parties with respect to the
subject matter hereof, superseding all negotiations, prior discussions and prior
agreements and understandings relating to such subject matter, including without
limitation that certain letter agreement dated January 16, 2003 between Seller
and Buyer.
23. Parties in Interest. This Agreement and all its terms, provisions,
conditions, covenants and warranties shall be binding upon and shall inure to
the benefit of the parties hereto, and subject to Paragraph 18, their respective
successors and assigns. Nothing contained in this Agreement, express or implied,
is intended to confer upon any other person or entity any benefits, rights or
remedies.
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TRANSATLANTIC PETROLEUM (USA) CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
AMERICAN NATURAL ENERGY CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇, President
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Exhibit A-1
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LEASES
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"Bayou Couba Lease": Oil, Gas and Mineral Lease from Delta Securities
Company, Inc., as Lessor, to Gulf Refining Company, as Lessee, dated November
14, 1941, recorded in Entry No. 1458, Conveyance Book SS, Folio 382, of the
records of St. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Louisiana.
"State Lease": Lease Number 17353 from State Mineral Board of State of
Louisiana as Lessor to Taylex, Inc. as Lessee, dated February 18, 2002, recorded
at Entry No. 264342, Book 599, Folio 401 of the public records of St. ▇▇▇▇▇▇▇,
Louisiana comprising 1728 acres, more or less.
WORKING INTEREST/NET REVENUE INTEREST
-------------------------------------
Working Interest = 10%
Net Revenue Interest = 7.5% (See Note 1)
Note 1: This interest is subject to the "Permitted Burdens," which consists of
(a) all valid lessor royalties, the effect of which has been included
in the above Net Revenue Interest, (b) an overriding royalty interest
in favor of B&C Oil Company created in Assignment recorded in Entry
No. 181002, COB 474, Folio 548 of the public records of St. ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Louisiana, the effect of which has been included in the above
Net Revenue Interest, (c) a term overriding royalty interest created
in the ORI Conveyance which reduces the net revenue interest to 7.2%
during the effectiveness of such overriding royalty interest, and (d)
a nets profits interest created in the NPI Conveyance, which reduces
revenues according to the following:
A. Net Revenues Before NPI = gross revenues attributable to
Buyer's interest in a Subject Well acquired hereunder less Direct
Costs (as such term is defined in the NPI Conveyance).
B. If Net Revenues Before NPI is a positive amount, then Net
Available Revenue equals 85% of Net Revenue Before NPI, and if Net
Revenue Before NPI is a negative amount, the Net Available Revenue
equals 100% of the Net Revenue Before NPI.
For purposes hereof, "ORI Conveyance" means that certain Conveyance of
Overriding Royalty Interest dated December 28, 2001 from Seller to the
Liquidation Agent for the benefit of the members of Class 7 appointed in the
Plan of Reorganization in the bankruptcy proceeding In Re Couba Operating
Company, Case No. 00-11837-WV (the "Liquidation Agent") recorded in Entry No.
263436, COB 598, Page 316 of the public records of St. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Louisiana, and "NPI Conveyance" means that certain Conveyance of Net Profits
Interest dated December 28, 2001 from Seller to the Liquidation Agent. recorded
in Entry No. 263437, COB 598, Page 322 of the public records of St. ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Louisiana.
Exhibit A-2
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▇▇▇▇▇
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1. Delta Sec Co., Inc. ▇▇. ▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
2. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
3. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
4. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
5. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
6. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
7. BCBA D3 RES SU ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
8. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
9. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
10. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
11. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
12. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
13. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
14. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
15. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
16. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
17. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
18. Delta Sec Co., Inc. ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
19. Delta Sec Co., Inc. A ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
20. BOBA 15E RZ SU ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
21. Delta Sec Co., Inc. A ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
22. Delta Sec Co., Inc. A ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
23. Delta Sec Co., Inc. A ▇▇. ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
24. Delta Sec Co., Inc. A ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
25. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
26. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
27. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
28. Delta Sec Co., Inc. No. 109D Well, bearing Serial No. 108647
29. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
30. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
31. Delta Sec Co., Inc. No. 111D Well, bearing Serial No. 109441
32. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
33. Delta Sec Co., Inc. No. 112D Well, bearing Serial No. 116629
34. Delta Sec Co., Inc. A ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
35. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
36. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
37. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
38. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
39. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
40. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
41. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
42. Delta Sec Co., Inc. No. 124 Well, bearing Serial No. 135648
1
43. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
44. Delta Sec Co., Inc. A ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
45. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
46. Delta Sec Co., Inc. A ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
47. Delta Sec Co., Inc. A ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
48. Delta Sec Co., Inc. A ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
49. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
50. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
51. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
52. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
53. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
54. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
55. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
56. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
57. Delta Sec Co., Inc. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
2
Exhibit A-3
-----------
MATERIAL AGREEMENTS
-------------------
1. Development Agreement
DEVELOPMENT OBLIGATIONS
-----------------------
1. All Development Obligations are described in the Development Agreement.
AFES
----
1. AFE dated January 9, 2003, covering DSCI Number 111 Side-Track (DSCI 111
ST), with a Total Completed Well Cost of $974,835.
2. AFE dated January 9, 2003, covering DSCI Number 112 Side-Track (DSCI 112
ST), with a Total Completed Well Cost of $969,282.
3. AFE dated January 9, 2003, covering DSCI Number 92 Side-Track (DSCI 92
ST), with a Total Completed Well Cost of $920,352.
4. AFE dated January 9, 2003, covering DSCI Number 109 Side-Track (DSCI 109
ST), with a Total Completed Well Cost of $927,524.
1
Exhibit B
---------
ASSIGNMENT AND CONVEYANCE
-------------------------
THIS ASSIGNMENT AND CONVEYANCE (the "Assignment"), dated March 10,
2003, is from AMERICAN NATURAL ENERGY CORPORATION, an Oklahoma corporation
("Assignor"), with offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, to TRANSATLANTIC PETROLEUM (USA) CORP., a Colorado corporation
("Assignee"), with offices at ▇▇▇▇ ▇▇▇▇ ▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
upon and subject to the following terms and conditions:
W I T N E S S E T H:
1. Certain Definitions. Except as otherwise provided or unless the
context otherwise requires, the terms defined in this Paragraph 1 have the
meanings herein assigned to them and the capitalized terms defined in this
opening paragraph and subsequent paragraphs of this Assignment by inclusion in
quotation marks and parentheses have the meanings so ascribed to them.
"Effective Date" means 7:00 a.m., at the location of the Properties,
on February 1, 2003.
"Permitted Burdens" means those royalties, overriding royalties and
other non-expense bearing burdens against production more particularly described
in Exhibit A-1 to the Purchase Agreement, to the extent and only to the extent
that the same burden the Oil and Gas Interests as described in such Exhibit A-1
to the Purchase Agreement.
"Permitted Encumbrances" means (1) the Material Agreements (as defined
in the Purchase Agreement), the Permitted Burdens and all other lessor's
royalties, overriding royalties, division orders and sales contracts covering
oil, gas or associated liquid or gaseous hydrocarbons, reversionary interests
and similar burdens, if the net cumulative effect of such burdens does not
operate to reduce the Net Revenue Interests of the ▇▇▇▇▇ to less than the Net
Revenue Interests set forth in Exhibit A-1 to the Purchase Agreement or increase
the Working Interests of the Oil and Gas Interests to more than the Working
Interests set forth in Exhibit A-1 to the Purchase Agreement (unless there is a
corresponding increase in the Net Revenue Interests); (2) all federal and state
regulatory orders and rules to which the Properties are presently subject; (3)
preferential rights to purchase and required third-party consents to assignments
and similar agreements with respect to which (A) waivers or consents have been
obtained from the appropriate parties, or (B) notice has been given to the
holders of such rights and the appropriate time period for asserting such rights
has expired without an exercise of such rights; (4) liens for taxes or
assessments not due or not delinquent as of the date of this Assignment; (5) all
rights to consent by, required notices to, filings with, or other actions by
governmental entities in connection with the sale or conveyance of oil and gas
leases or interests therein if the same are customarily obtained after such sale
or conveyance; (6) easements, rights-of-way, servitudes, permits, surface leases
and other rights in respect of surface operations, pipelines, grazing, logging,
canals, ditches, reservoirs or the like; and easements for streets, alleys,
highways, pipelines, telephone lines, power lines, railways and other easements
and rights-of-way, on, over or in respect of any of the Properties; (7) liens of
operators relating to
1
obligations not yet due or pursuant to which Assignor is not delinquent; and (8)
title problems commonly encountered in the oil and gas business which are not
deemed to be material and which would not be considered material by a reasonable
and prudent person engaged in the business of the ownership, development and
operation of oil and gas properties with knowledge of all the facts and
appreciation of their legal significance.
"Properties" means:
(a) An undivided ten percent (10%) of 8/8ths interest in and
to those oil, gas and mineral leases described in Exhibit A-1 (the "Leases") and
in and to those ▇▇▇▇▇ located on the Leases which are described in Exhibit A-2
(the "▇▇▇▇▇") attached hereto and incorporated herein by reference for all
purposes, and all contingent, reversionary and carried interests relating to any
of the foregoing, and all other rights therein (such properties, rights and
interests being sold hereunder are hereinafter collectively called the "Oil and
Gas Interests");
(b) all of the properties, rights and interests incident to
the Oil and Gas Interests, including without limitation, (i) all presently
existing and valid unitization and pooling declarations, agreements, and/or
orders and the properties covered in the units created thereby (including all
units formed under orders, regulations, rules, or other official acts of any
federal, state or other governmental agency having jurisdiction) insofar as the
same relate to or affect the Oil and Gas Interests; (ii) all well and leasehold
equipment, gathering systems; processing plants, improvements, machinery,
equipment, supplies, goods, fixtures, and other personal property insofar as the
same are located on or used in connection with any of the Oil and Gas Interests;
(iii) all presently existing oil, gas sales, operating, pooling, unitization,
purchase, exchange and processing contracts, and all other contracts,
agreements, and instruments insofar as the same relate to any of the Oil and Gas
Interests; and (iv) all permits, franchises, licenses, options, servitudes,
leases, water leases, surface rights, easements, and rights-of-way insofar as
the same pertain to the Oil and Gas Interests,
but specifically excluding from the term "Properties" any and all ▇▇▇▇▇ located
on the Leases which are not enumerated in Exhibit A-2 (the "Excluded
Interests").
"Purchase Agreement" means that certain Purchase and Exploration
Agreement of even date herewith executed into by Assignor and Assignee.
2. Assignment. For Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Assignor hereby transfers, grants, conveys, and assigns to Assignee, effective
as of the Effective Date, the Properties.
3. Excluded Interests. Assignor excludes from this Assignment and
reserves and retains unto itself the Excluded Interests.
4. Further Assurances. Assignor agrees to execute and deliver such
other and further instruments and will do such other and further acts as in the
reasonable opinion of Assignee may be necessary or desirable to carry out more
effectively the intents and purposes of this Assignment. Furthermore, in the
event that, under applicable federal or state statutes or
2
regulations or by virtue of contractual obligations, a separate assignment of
any of the Properties is required to be executed by Assignor on an approved form
or on a separately executed instrument, such separate assignment shall be so
executed on such approved forms or on such separate assignment in sufficient
counterparts to satisfy any such statutory, regulatory or contractual
requirements.
5. Substitution and Subrogation. This Assignment is made with full
substitution and subrogation of Assignee, its successors and assigns in and to
all covenants and warranties heretofore given or made in respect to any of the
Properties, and Assignor hereby assigns and conveys to Assignee all such
covenants and warranties and all of Assignor's rights thereunder which
correspond to the interests conveyed to Assignee hereunder.
6. Warranties. With respect to all persons who may claim by, through or
under Assignor, but not otherwise, Assignor warrants that (i) Assignor is the
lawful owner of the Properties, entitling Assignor to receive not less than the
interests set forth in Exhibit A-1 to the Purchase Agreement as Net Revenue
Interests of all hydrocarbons produced, saved and marketed from the Oil and Gas
Interests, and obligating Assignor to bear costs and expenses of the operation
and development of the Oil and Gas Interests no greater than the interests set
forth in Exhibit A-1 to the Purchase Agreement as Working Interests (unless
there is a corresponding increase in the Net Revenue Interests); and (ii) the
Properties are free and clear of all liens, encumbrances and defects, except for
Permitted Encumbrances. Additionally, to the extent that this Assignment
constitutes an assignment of personal property or fixtures, Assignor expressly
disclaims and negates (a) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY,
(b) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, and (c)
ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIAL.
7. Successors and Assigns. This Assignment shall bind and inure to the
benefit of Assignor and Assignee and their respective successors and assigns.
8. Purchase Agreement. This Assignment is expressly made subject to the
terms and provisions of the Purchase Agreement.
TO HAVE AND TO HOLD the Properties unto Assignee, its successors and
assigns forever.
ASSIGNOR:
WITNESSES:
AMERICAN NATURAL ENERGY
CORPORATION
-------------------------------
Name: By:
---------------------- ----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, President
-------------------------------
Name:
----------------------
3
STATE OF OKLAHOMA ss.
ss.
COUNTY OF TULSA ss.
On this _____ day of March, 2003, before me, the undersigned authority,
personally came and appeared ▇▇▇▇▇▇▇ ▇▇▇▇▇, to me personally known and known by
me to be the person whose genuine signature is affixed to the foregoing document
as President of AMERICAN NATURAL ENERGY CORPORATION, an Oklahoma corporation,
who signed said document before me in the presence of the two witnesses, whose
names are thereto subscribed as such, being competent witnesses, and who
acknowledged, in my presence and in the presence of said witnesses, that he
signed the above and foregoing document as his own free act and deed on behalf
of said corporation, voluntarily for and as the act of said corporation.
-------------------------------
Notary Public in and for
the State of Oklahoma
My commission expires: -------------------------------
Printed Name of Notary
---------------------------------
4