Exhibit 10.2

 

AGREEMENT

(Producing Wells)

 

This agreement is entered into this 31st day of March, 2006, by and between
Fulcrum Partners, Ltd. ("Fulcrum") and Parallel, L.P. ("Parallel").

 

1)            Fulcrum agrees to sell and assign to Parallel, and Parallel agrees
to purchase from Fulcrum, an undivided one-half (1/2) of all of Fulcrum's right,
title and interest (i) in and to the entities described in Exhibit "A" hereto
(the "Entities"), (ii) in and to the wells described in Exhibit "A" hereto,
together with all equipment and personal property associated therewith (the
"Wells"), (iii) in and to Fulcrum's interest in the leases and lands comprising
the spacing unit or proration unit for the Wells, as described in the
Assignments for such Wells in Exhibit "A" (the "Leasehold") and (iv) arising or
acquired by Fulcrum by virtue of the agreements, contracts, assignments and
other documents more particularly described in Exhibit "A" hereto (the
"Documents"), insofar as the Documents pertain to the Entities, the Wells and
the Leasehold. The undivided one-half (1/2) of Fulcrum's interest in the
Entities, the Wells, the Leasehold and the Documents being sold hereby are
hereinafter referred to as the "Subject Interests."

 

2)            To effectuate the assignment and sale contemplated herein, Fulcrum
agrees to execute and deliver to Parallel the assignment of the Subject
Interests in the form of assignment attached as Exhibit "B" hereto (the
"Assignment").

 

3)            The effective date of the sale and assignment contemplated herein
shall be March 1, 2006 (the "Effective Date").

 

4)            In consideration of Fulcrum's sale and assignment of the Subject
Interests to Parallel, upon Parallel's receipt of the Assignment, fully executed
and acknowledged by Fulcrum, Parallel shall tender to Fulcrum the sum of Three
Million Dollars ($3,000,000.00) via wire transfer pursuant to wire transfer
instructions furnished by Fulcrum to Parallel.

 

5)            From and after the Effective Date, Parallel shall be liable for
all costs, and shall be entitled to all of the oil and gas production, revenues
and other benefits, attributable to the Subject Interests.

 

6)            The parties hereto agree to execute such other assignments,
agreements or other instruments, and do and perform such other acts, which may
be reasonably necessary in order to effectuate the terms hereof.

 

 

 

 

 

 

 

DATED: March 31st, 2006.

 

 

 

PARALLEL, L.P.

By: Parallel Petroleum Corporation,

its general partner

 

 

 

By: /s/ John S. Rutherford                            

John S. Rutherford, Vice President

 

FULCRUM PARTNERS, LTD.

 

 

 

By: /s/ John C. Thompson                          

John C. Thompson, General Partner

 

 

 

 

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EXHIBIT "A"

 

attached to and made a part of that certain

Agreement dated March ___, 2006, by and between

Fulcrum Partners, Ltd. and Parallel, L.P.

 

WELLS:

 

Carter "A" Well #1-H

Gateway Park Well #1-H

Gateway Park Well #2-H

Gateway Park Well #3-H

Brentwood Well #1-H

Parrot Well #1-H

Parrot-Allied Well #2

 

EXISTING LEASES

 

WEST FORK PROSPECT

 

1)            That certain Amended and Restated Participation Agreement dated
May 18, 2004, as amended, between Dale Resources, L.L.C. and Parallel Petroleum
Corporation, et al, as Participants, pertaining to the lands comprising the Area
of Mutual Interest, described in the Exhibit "A" attached thereto, in Tarrant
and Dallas Counties, Texas, which amends and restates that certain Participation
Agreement dated May 1, 2003, entered into by and among the same parties.

 

2)            That certain Amendatory Agreement (Dale ( Four Sevens
Cross-Assignment Transaction) entered into by and among Dale Resources, L.L.C.,
Parallel Petroleum Corporation, et al, among other things, amending the Amended
and Restated Participation Agreement described in Paragraph 1, above, and other
agreements described herein.

 

3)            That certain Operating Agreement dated May 1, 2003, as amended,
between Dale Operating Company, as Operator, and Parallel Petroleum Corporation,
et al, as Non-Operators, pertaining to the same lands covered by the Amended and
Restated Participation Agreement described in Paragraph No. 1, above, a
Memorandum of which is recorded as Document No. D203319737 in the Real Property
Records of Tarrant County, Texas, as amended.

 

4)            That certain Lease Agreement dated May 3, 2003, as amended,
entered into by and among Dale Resources, L.L.C. and West Fork Partners, L.P.,
Tiggator, Inc. and Squaretop Partners, L.P., a Memorandum of which, dated May
16, 2003, is recorded in Volume 16858, page 0241 of the Real Property Records of
Tarrant County, Texas, as amended by that certain Amendatory Agreement dated May
18, 2004, entered into by and among such parties (the "Amendatory Agreement").

 

5)            That certain Settlement Agreement and Mutual Release effective as
of May 1, 2003, entered into by and among Dale Resources, L.L.C., Parallel
Petroleum Corporation,

 

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Premium Resources II, L.P., Endeavor Energy Resources, et al, among other
things, settling the "West Fork Lawsuit," the "Squaretop Lawsuit" and the" PR II
Lawsuit."

 

6)            Agreement dated May 18, 2004, entered into by and among Dale
Resources, L.L.C., Parallel Petroleum Corporation, et al, wherein such parties
agree to pay to Premium Resources II, L.P., their pro rata share of the sum of
$743,740.00.

 

7)            Escrow Agreement dated May 18, 2004 (among other dates), entered
into by and among Dale Resources, L.L.C. and "the West Fork entities," as
described therein, pertaining to the settlement of the lawsuits described in No.
5, above.

 

8)            Transportation and Acquisition Agreement, West Fork Prospect Area,
Tarrant County, Texas, dated May 18, 2004, entered into by and among Dale
Resources, L.L.C., West Fork Pipeline Company, L.P., Parallel Petroleum
Corporation and Premium Resources II, L.P.

 

9)            Agreement of Limited Partnership for West Fork Pipeline Company,
L.P. dated as of May 9, 2003.

 

10)         West Fork Pipeline Company, GP, LLC, a Texas Limited Liability
Company, including the regulations therefor dated as of May 29, 2003.

 

11)         That certain Well Operation and Subsurface Easement effective May
10, 2003, as amended, entered into by and among West Fork Partners, L.P.,
Tiggator, Inc., Squaretop Partners, L.P., as Grantors, and Dale Resources,
L.L.C., as Grantee, a Memorandum of which, dated May 16, 2003, is recorded in
Volume 16858, page 0099 of the Real Property Records of Tarrant County, Texas,
as amended by the Amendatory Agreement.

 

12)         That certain Central Facilities Easement dated May 10, 2003, from
West Fork Partners, L.P., Tiggator, Inc., Squaretop Partners, L.P., as Grantors,
to Dale Resources, L.L.C., as Grantee, a Memorandum of which, dated May 16,
2003, is recorded in Volume 16858, page 0098 of the Real Property Records of
Tarrant County, Texas, as amended by Amendment to Central Facilities Agreement
dated May 18, 2004, entered into by and among such parties.

 

13)         Agreement dated November 18, 2004, by and between Four Sevens Oil
Co., Ltd., Parrot Gas Co., Ltd. and Dale Resources, L.L.C. and the Operating
Agreement attached as Exhibit "A" thereto, dated November 18, 2004, wherein Four
Sevens Operating Co., Ltd. is Operator and Parrot Gas Co., Ltd. and Dale
Resources, L.L.C. are Non-Operators.

 

14)         That certain Partial Assignment and Bill of Sale (Carter "A" Well #
1H) effective August 1, 2005, recorded as Document No. D206044605 in the Real
Property Records of Tarrant County, Texas, from Dale Resources, L.L.C., as
Assignor, to Parallel, L.P., et al, as Assignees, as amended by Amendment
thereto, effective August 1, 2005, to include in the matters included in
"Permitted Encumbrances" therein a .3% overriding royalty interest assigned by
that certain Assignment of Overriding Royalty Interest dated as of August 1,
2005, from Dale Resources, L.L.C. to Dale Employee Royalty Pool, L.P.

 

 

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15)         That certain Partial Assignment and Bill of Sale (Gateway Park Well
# 1H) effective August 1, 2005, recorded as Document No. D206044608 in the Real
Property Records of Tarrant County, Texas, from Dale Resources, L.L.C., as
Assignor, to Parallel, L.P., et al, as Assignees, as amended by Amendment
thereto, effective August 1, 2005, to include in the matters included in
"Permitted Encumbrances" therein a .3% overriding royalty interest assigned by
that certain Assignment of Overriding Royalty Interest dated as of August 1,
2005, from Dale Resources, L.L.C. to Dale Employee Royalty Pool, L.P.

 

16)         That certain Partial Assignment and Bill of Sale (Gateway Park Well
# 2H) effective ________ 1, 2005, recorded as Document No. D206044607 in the
Real Property Records of Tarrant County, Texas, from Dale Resources, L.L.C., as
Assignor, to Parallel, L.P., et al, as Assignees, as amended by Amendment
thereto, effective February 9, 2006, to include in the matters included in
"Permitted Encumbrances" therein a .3% overriding royalty interest assigned by
that certain Assignment of Overriding Royalty Interest dated as of August 1,
2005, from Dale Resources, L.L.C. to Dale Employee Royalty Pool, L.P.

 

17)         That certain Partial Assignment and Bill of Sale (Brentwood Well A #
1H) effective July 1, 2005, recorded as Document No. D206044606 in the Real
Property Records of Tarrant County, Texas, from Dale Resources, L.L.C., as
Assignor, to Parallel, L.P., et al, as Assignees, as amended by Amendment
thereto, effective July 1, 2005, to include in the matters included in
"Permitted Encumbrances" therein a .3% overriding royalty interest assigned by
that certain Assignment of Overriding Royalty Interest dated as of August 1,
2005, from Dale Resources, L.L.C. to Dale Employee Royalty Pool, L.P.

 

18)         That certain Partial Assignment and Bill of Sale (Parrot Well # 1H)
effective July 1, 2005, recorded as Document No. D206044604 in the Real Property
Records of Tarrant County, Texas, from Dale Resources, L.L.C., as Lessor, to
Parallel, L.P., et al, as Assignees.

 

WEST GATEWAY PROSPECT

 

1)            Participation Agreement, West Gateway Prospect, dated November 1,
2005, entered into by and among Dale Resources, L.L.C., Parallel, L.P., et al.

 

2)            Operating Agreement dated November 1, 2005, for the West Gateway
area, between Dale Operating Company, as Operator, and Parallel, L.P., et al, as
Non-Operators, and the Memorandum of Operating Agreement effective November 1,
2005, currently unrecorded.

 

3)            Agreement of Limited Partnership for West Fork Pipeline Company V,
L.P., dated as of November 1, 2005.

 

4)            West Fork Pipeline Company V GP, LLC, a Texas Limited Liability
Company, the regulations therefor being dated as of November 1, 2005.

 

LONE STAR PROSPECT

 

1)            Area of Mutual Interest Agreement, Lone Star, effective March 1,
2005, entered into by and among Matador Energy Company, Ltd. and Dale Resources,
L.L.C., as ratified by all

 

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of the parties ratifying such Agreement by Ratification Agreement entered into
as of May 31, 2005, as acknowledged by Acknowledgment of Ratification Agreement
entered into as of May 31, 2005, by and between Dale Resources, L.L.C., Dale Gas
Partners, L.P., Dale Operating Company and Matador Energy Company, Ltd.

 

2)            Agreement of Limited Partnership for West Fork Pipeline Company
II, LP, dated as of June 3, 2005.

 

3)            West Fork Pipeline Company II GP, LLC, a Texas Limited Liability
Company, and the regulations therefor, dated as of June 3, 2005.

 

 

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EXHIBIT "B"

 

 

attached to and made a part of that certain

Agreement dated March ___, 2006, by and between

Fulcrum Partners, Ltd. and Parallel, L.P.

 

ASSIGNMENT

 

For valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Fulcrum Partners, Ltd. ("Assignor") hereby sells, assigns,
transfers and conveys unto Parallel, L.P. ("Assignee"), whose address is 1004 N.
Big Spring, Suite 400, Midland, Texas 79701, the following:

 

an undivided one-half (1/2) of all of Assignor's right, title and interest (i)
in and to the entities described in Exhibit "A" hereto (the "Entities"), (ii) in
and to the wells described in Exhibit "A" hereto together with all equipment and
personal property associated therewith (the "Wells"), (iii) in and to Assignor's
interest in the leases and lands comprising the spacing unit or proration unit
for the Wells, as described in the Assignments for such Wells in Exhibit "A"
(the "Leasehold") and (iv) arising or acquired by Assignor by virtue of the
agreements, contracts, assignments and other documents more particularly
described in Exhibit "A" hereto (the "Documents"), insofar as the Documents
pertain to the Entities, the Wells and the Leasehold. The undivided one-half
(1/2) of Assignor's interest in the Entities, the Wells, the Leasehold and the
Documents being sold hereby are hereinafter referred to as the "Subject
Interests."

 

Assignor hereby warrants that (i) Assignor has good and indefeasible title to
the Subject Interests, (ii) the Subject Interests are one-half (1/2) of the
interest acquired by Assignor in, under and by virtue of the Documents, (iii)
the Subject Interests are free and clear of liens and encumbrances, (iv) that no
interests have been created by Assignor which would increase the cost-bearing
interests attributable to the Subject Interests to more than, or reduce the
interest in the oil and gas production or other revenue attributable to the
Subject Interests to less than, one-half (1/2) of the revenue attributable to
the interest acquired by Assignor by virtue of the Documents, and (v) there is
no prohibition, consent or approval required for this Assignment.

 

THE INTEREST OF ASSIGNOR IN THE WELLS AND OTHER PERSONAL PROPERTY ASSIGNED
HEREBY IS WITHOUT WARRANTY OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

 

 

 

 

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Executed this _____ day of __________, 2006, but effective as of March 1, 2006.

 

 

 

ASSIGNOR:

 

FULCRUM PARTNERS, LTD.

 

 

 

By: ________________________________

John C. Thompson, General Partner

 

ASSIGNEE:

 

PARALLEL, L.P.

By Parallel Petroleum Corporation,

its general partner

 

 

 

By: _______________________________

John S. Rutherford, Vice President

 

 

 

STATE OF TEXAS

)

)

COUNTY OF ___________

)

 

This instrument was acknowledged before me this _____ day of _____________,
2006, by John C. Thompson, General Partner, on behalf of Fulcrum Partners, Ltd.,
a Texas limited partnership.

 

_______________________________________________

Notary Public, State of Texas

 

 

 

STATE OF TEXAS

)

)

COUNTY OF __________

)

 

This instrument was acknowledged before me this _____ day of ______________,
2006, by John S. Rutherford, Vice President of Parallel Petroleum Corporation,
general partner, on behalf of Parallel, L.P., a Texas limited partnership.

 

_______________________________________________

Notary Public, State of Texas

 

 

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