Exhibit 10.3

 

AMERICAN ASSOCIATION OF PROFESSIONAL LANDMEN

APPROVED FORM A.A.P.L. NO. 635

 

AAPL FORM 635

FARMOUT

AGREEMENT

 

DATE: 20 September, 2007

TO:

GD Conference Center, Inc.

 

430 Loma Media Road

 

Santa Barbara, California 93103

RE:

Section 10

 

Township 11 North

 

Range 10 East

 

Okfuskee County, Oklahoma

 

In consideration of the benefits to accrue to the parties hereto and the
covenants and obligations to be kept by you, it is hereby mutually agreed as
follows:

 

I

ACREAGE:

 

We represent without Warranty of Title of any kind or character that we hold Oil
and Gas Leases or Mineral Interests described as follows:

 

 

SEE EXHIBIT A

 

We agree to deliver to you such abstracts and other title papers as we have in
our files at this time, and at your sole cost, risk and expense you agree to
conduct such Title Examinations and secure such curative matter as is necessary
to satisfy yourselves that Title is acceptable to you.

 

II

OBLIGATIONS:

 

(A) TEST WELL: On or before the 31st day of March 2008, you agree to commence,
or cause to be commenced the actual drilling of a well for oil and/or gas at the
following location:

 

ANY LEGAL LOCATION WITHIN ANY DRILLING AND SPACING UNIT ESTABLISHED BY THE
OKLAHOMA CORPORATION COMMISSION WHICH INCLUDES ALL OR A PART OF THE LEASEHOLD
ACREAGE SUBJECT TO THIS AGREEMENT.

 

and you further agree to drill said Test Well with due diligence in a
workmanlike manner to a depth sufficient to thoroughly test the following:

 

THOSE COMMON SOURCES OF SUPPLY WITHIN ANY DRILLING AND SPACING

 

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UNIT ESTABLISHED BY THE OKLAHOMA CORPORATION COMMISSION WHICH INCLUDES ALL OR
PART OF THE LEASEHOLD ACREAGE SUBJECT TO THIS AGREEMENT

 

(B) COMPLETION OR ABANDONMENT: When the Test Well has reached its total depth,
you agree:

(1) That if the Well can be completed as a producer of oil and/or gas to
diligently prosecute the completion of said Well without unreasonable delays;
or,

(2) If you determine to abandon the Well you will promptly furnish us with an
appropriate electrical log acceptable to us and you further agree that you will
not abandon the Well as a dry hole until you have furnished said electrical log
to us and thereafter given us at lease 48 hours notice of your intention to
abandon, unless we consent to an earlier abandonment thereof. After consent has
been given, you agree to promptly plug and abandon the Test Well in accordance
with all the requirements of any governmental body having jurisdiction.

 

III

FAILURE TO DRILL:

 

The only consequence of your failure to drill the proposed Test Well hereinabove
provided for shall be the ipso facto cancellation of this Agreement in its
entirety.

 

IV

COMMITMENT:

 

UPON WRITTEN REQUEST, and after completion of the Test Well provided for
hereinabove in accordance with all the terms and provisions of this Agreement to
our satisfaction, we agree:

 

TO EXECUTE AN ASSIGNMENT OF THE LEASEHOLD ACREAGE SUBJECT TO THIS AGREEMENT FOR
THE PORTION OF THE LEASE(S) INCLUDED WITHIN THE DRILLING AND SPACING UNIT,
RETAINING THE DIFFERENCE BETWEEN THE BASE ROYALTY OF 81.25% AND 75%, DELIVERING
TO YOU A 75% NET REVENUE INTEREST

 

V

INFORMATION AND REPORTS:

 

As a further express Consideration for this Agreement, and not as a covenant
only, you agree to furnish to:

the following:

1. (a) DAILY DRILLING REPORTS on the progress of the well which shall include
drilling depth, information on all tests including character, thickness, name of
any formation penetrated, shows of oil, gas or water, and detailed reports on
all drillstem tests.

(b) 2 Certified Copies of all forms furnished to any governmental authority.

(c) 2 Copies of all electrical logging surveys.

(d) 2 Certified Copies of the well log upon completion.

(e) 2 Certified Copies of the plugging record, if any.

(f) Samples of all cores and cuttings, if so requested.

2. Other Information Required:

 

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VI

PRODUCTION TESTS:

 

You agree to properly drillstem test any and all formations in which shows of
oil and/or gas are encountered after notifying us of the proposed test and if we
desire to be present during testing, you will delay such testing a reasonable
amount of time in order to allow our representative to reach the well and
witness the test, and you also agree to notify us immediately by telephone or
telegraph as to the results of any such test. Notification shall be given to:

Name:

Address:

Telephone:

Night telephone No.:

It is understood that our representatives shall have access to the rig floor at
all times and to any and all information concerning the Test Well.

 

VII

DELAY RENTALS:

 

NONE DUE. PAID UP LEASE(S)

It is agreed that from and after the date of this Agreement we will pay any
delay rentals which may become due on the Oil and Gas Leases subject to this
Agreement until such time as the Assignment provided for in Section IV above has
been executed, and thereafter bill you for

of the delay rental paid by us.

 

VIII

CONSENT REQUIREMENT:

 

This Agreement is personal in nature and may not be assigned without our written
consent being first obtained. When requesting consent to make an assignment of
all or a portion of this Agreement you will advise the parties to whom the
assignment will be made.

 

IX

STATUS OF PARTIES:

 

In the drilling of the Test Well and otherwise complying with the terms and
provisions of this Agreement, you are acting independently of us and not as a
partner in any capacity, mining or otherwise. We shall have no responsibility
whatsoever in connection with the drilling of said well and it shall be drilled
at your sole cost, risk and expense. You further agree to hold us harmless from
any and all debts, claims or damages incurred in connection with the performance
of this Agreement.

 

In regard to all provisions of this Agreement, it is understood and agreed that
Time is of the Essence.

 

X

OTHER PROVISIONS:

 

 

If the terms and provisions of this Agreement in its entirety are acceptable to
you, will you kindly indicate your approval by signing below in the space
provided and returning 2 executed copies of this Agreement to us within 3 days.
Failure to do so will result in the

 

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cancellation of this Agreement at our option.

 

 

/s/ James Fitzsimons

-----------------------------------------

 

James Fitzsimons

 

This Agreement is APPROVED

and ACCEPTED this 20th day

of September, 2007

GD Conference Center, Inc.

 

By:

/s/ Deborah Destler, V.P.

---------- -------------------------- -------

 

Deborah Destgler, Vice President

 

Copyright 1984 AAPL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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SECTION 10-11N-10E

 

 

 

 

 

 

 

 

 

 

 

 

9/20/2007

 

 

 

 

 

 

 

 

 

 

 

 

OKFUSKEE COUNTY, OK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sec/Township/Range

TRACT

DATE

TERM

ROYALTY

LESSOR

LESSEE

GROSS ACRES

NET ACRES

BOOK

PAGE

EXPIRES

SPECIAL PROVISIONS

SEC 10-11N-10E

N/2 NE/4 NE/4

2/23/2006

3 YEARS

3/16THS

Cornia Lou Cornell, now Brown

Sally Smyth

20.00

11.00

990

65

2/23/2009

NONE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL

 

 

11.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEC 10-11N-10E

N/2 SE/4 NE/4

3/14/2006

3 YEARS

3/16THS

Phyllis J. Cannavan Turner and/or Elizabeth A. Moore Sparks

Sally Smyth

20.00

20.00

993

464

3/14/2009

NONE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL

 

 

20.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEC 10-11N-10E

NE/4 SE/4

1/6/2006

3 YEARS

3/16THS

Vicky Pearl Been McKinney

Sally Smyth

40.00

10.00

990

69

1/6/2009

NONE

SEC 10-11N-10E

NE/4 SE/4

1/6/2006

3 YEARS

3/16THS

Patty B. Bledsoe, formerly Smith, now Boerstler

Sally Smyth

40.00

10.00

987

108

1/6/2009

NONE

SEC 10-11N-10E

NE/4 SE/4

1/6/2006

3 YEARS

3/16THS

Milton L. Armstrong

Sally Smyth

40.00

20.00

987

110

1/6/2009

NONE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL

 

 

40.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEC 10-11N-10E

S/2 SW/4 & W/2 NE/4

4/14/2006

3 YEARS

3/16THS

Carolyn S. Price

Sally Smyth

160.00

16.666

991

486

4/14/2009

NONE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL

 

 

16.666

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEC 10-11N-10E

W/2 SE/4 & S/2 SW/4

4/8/2006

3 YEARS

3/16THS

Jamie Thompson

Sally Smyth

160.00

8.889

993

460

4/8/2009

NONE

SEC 10-11N-10E

W/2 SE/4 & S/2 SW/4

4/8/2006

3 YEARS

3/16THS

Kara Parks

Sally Smyth

160.00

8.889

993

462

4/8/2009

NONE

SEC 10-11N-10E

W/2 SE/4 & S/2 SW/4

3/8/2006

3 YEARS

3/16THS

Benny M. Benson

Sally Smyth

160.00

26.666

990

67

3/8/2009

NONE

SEC 10-11N-10E

W/2 SE/4 & S/2 SW/4

4/8/2006

3 YEARS

3/16THS

Clarice Siniscalchi

Sally Smyth

160.00

26.666

991

488

4/8/2009

NONE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL

 

 

71.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GRAND TOTAL

 

 

158.776