EXHIBIT 10.5
PEL 112 FARMIN
COMMITMENT AGREEMENT
This Farmin Commitment Agreement ("Agreement") is entered into this 7th
day of March, 2008 between ▇▇▇▇▇▇▇▇ Energy Corporation, a Nevada Corporation
("HEC"), ▇▇▇▇▇▇▇▇ Petroleum Pty Ltd, ACN 126 728 498 ("HPPL") and ▇▇▇▇▇▇▇▇ Oil
and Gas Limited ACN 120 314 007 ("HOG").
WHEREAS, HEC is the parent corporation of HPPL; and
WHEREAS, HEC, through HPPL, is the owner of a 66.667% working interest in
PEL 112, located within the ▇▇▇▇▇▇/Eromanga Basin in South Australia; and
WHEREAS, HOG desires to enter into a Farmin Agreement ("Farmin") with HEC
with regard to PEL 112 and HEC desires to commit to ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ to HOG on the
terms and conditions set forth below:
NOW THEREFORE, in order to document the commitment and obligations of the
parties to enter into the Farmin and for good and valuable consideration the
receipt of which is hereby acknowledged, the parties agree as follows:
1. Working Interest Conveyance. HEC, covenants and agrees that, subject
to the conditions set forth in Section 3 below, it will convey to HOG
all of its 66.667% Working Interest in PEL 112.
2. Conditions.
(a) The assignment of the working interest in PEL 112 as set forth
in Section 1 above is expressly conditioned upon the
negotiation and execution of the Farmin between HOG and HEC
containing the following terms and conditions:
(i) HOG shall fund 100% of the costs required to drill and,
if commercial quantities of hydrocarbons are found, to
complete three (3) exploratory ▇▇▇▇▇ on PEL 112 within
the parameter of the guaranteed work program in place
for PEL 112.
(ii) HOG shall pay to HEC a two percent (2%) overriding
royalty on gross well revenues on the 66.667% working
interest transferred to HOG.
(iii) HOG shall grant to HEC the unrestricted right to
participate in any future ▇▇▇▇▇ drilled on PEL 112
(over and above the HOG initial three (3) exploratory
well commitment set forth in (i) above) up to a maximum
of fifty percent (50%) of the working interest
transferred to HOG (i.e. 33.3335%).
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(iv) HOG shall grant to HEC the right to participate in
HOG's three (3) initial exploratory ▇▇▇▇▇ on PEL 112,
as set forth in (i) above, up to a maximum of fifty
percent (50%) of the working interest transferred to
HOG (i.e. 33.3335%); provided, however, that HEC must
provide the funding for this participation prior to
such time as the well being drilled reaches fifty
percent (50%) of the expected depth; but further
provided that if drilling has exceeded fifty percent
(50%) of the expected depth HEC may still participate,
with the written consent of HOG.
(b) HEC shall have received title to PEL 112 and the transfer of
such title shall have been duly approved by all appropriate
governmental action in Australia.
(c) The transactions contemplated herein shall have been completed
on or before January 1, 2009, unless agreed to in writing by
the parties.
3. Modifications and Amendments. No change in the provisions of this
commitment shall be binding unless in writing and executed in the name of
and by an officer of HOG and HEC.
4. Miscellaneous Provisions.
(a) Texas Law to Apply. This Agreement, and all documents executed
pursuant to it, shall be construed in accordance with the laws
of the State of Texas, and all obligations of the parties are
performable in ▇▇▇▇▇▇ County, Texas.
(b) Parties Bound. This Agreement shall be binding on and inure to
the benefit of the parties to it and their respective legal
representatives, successors, and assigns, except as otherwise
expressly provided in this commitment.
(c) Legal Construction. In case any one or more of the provisions
contained in this Agreement shall, for any reason, be held to
be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect
any other provision, and this Agreement shall be construed as
if such invalid, illegal, or unenforceable provision had never
been a part of it.
(d) Prior Agreements Superseded. This Agreement constitutes the
sole and only agreement of the parties to it and supersedes any
prior understandings or written or oral agreements between the
parties respecting this subject matter.
(e) Attorney's Fees. If any action at law or in equity, including
an action for declaratory relief, is brought to enforce or
interpret the provisions of this Agreement, the prevailing
party shall be entitled to recover reasonable attorney's fees
from the other party.
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(f) Notice. Unless otherwise provided by this Agreement, any
notice, tender, or delivery to be given under it by either
party to the other may be effected by personal delivery in
writing or by registered or certified mail, postage prepaid,
return receipt requested, and shall be deemed received as of
the date of actual receipt.
5. Voidability of Commitment. This commitment shall be voidable at the
option of HEC if any of the following events occur:
(a) A proceeding is commenced by or against HOG under any
bankruptcy or insolvency law.
(b) HOG's business is discontinued or suspended for any reason.
(c) There is any material adverse change in HOG's business or
financial condition.
(d) The transaction contemplated herein is not consummated on or
before January 1, 2009.
Executed and entered into the day and date set forth above.
▇▇▇▇▇▇▇▇ Energy Corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇▇ Petroleum Pty Ltd
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇▇ Oil and Gas Limited
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
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