Execution Copy

 

MANAGEMENT AGREEMENT

THIS MANAGEMENT AGREEMENT (“Agreement”) is made and entered into as of December
18, 2007, (“Effective Time”) by and between Hoactzin Partners, LP and/or Assigns
(“Owner”) and Tengasco, Inc. (“Manager”).

WITNESSETH:

WHEREAS, Owner holds certain oil and gas interests pursuant to the terms of that
certain Purchase and Sale Agreement between Owner and Capco Energy, Inc. and
Capco Offshore, Inc., dated May 4, 2005, as amended from time to time (the
“Purchase and Sale Agreement”), and pursuant to assignments made thereunder;

WHEREAS, Owner desires to engage Manager to manage the oil and gas interests
owned by it;

WHEREAS, Manager desires to manage such oil and gas interests of Owner; and

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

1.         Manager’s Representations and Warranties. Manager represents and
warrants to Owner that:

(a)       Manager has full corporate power and authority to own its assets and
to carry on its business as it is now being conducted and to execute and deliver
this Agreement and each of the Additional Instruments and to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby.

(b)       The execution, delivery and performance by Manager of this Agreement
and the Additional Instruments to which Manager is a party and the consummation
by Manager of the transactions contemplated hereby and thereby have been duly
authorized by all requisite action of Manager.

(c)       This Agreement has been duly and validly executed and delivered by
Manager and constitutes the legal, valid and binding obligations of Manager,
enforceable against it in accordance with their respective terms.

(d)       The execution and delivery by Manager of this Agreement, the
performance by Manager of its obligations hereunder and the consummation by
Manager of the transactions contemplated hereby and thereby do not:

(i)        violate any provision of the certificate of incorporation or bylaws
(or comparable organizational documents) of Manager;

(ii)       result in a violation or breach of, or constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right of
termination, amendment,

 

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cancellation or acceleration) under any of the terms, conditions or provisions
of any oral or written agreement, instrument, contract, undertaking, mortgage,
indenture, lease, license or other understanding to which Manager is a party or
by which any of the properties or assets of Manager may be bound or otherwise
subject; or

(iii)      contravene or violate any law, rule, regulation, or order applicable
to Manager, Manager’s Associated Parties, or any of their respective properties
or assets.

(e)       Manager is experienced in the operation of offshore oil and gas
properties and has the requisite personnel resources, training and experience to
manage and operate the Interests (as such term is hereinafter defined).

2.         The Interests. Owner represents and acknowledges that it holds
certain oil and gas leasehold interests, appurtenant rights, and other economic
interests in the oil and gas leases and wells (the “Interests”) set forth in
Exhibit A hereto.

3.         Appointment of Manager. Manager is hereby designated as the manager
of the Interests, and, in such capacity, shall be the general manager of and
shall conduct, direct and have full control of all matters pertaining to the
Interests as permitted and required by this Agreement, subject to the rights of
Owner as owner. Manager shall be the sole manager of the Interests, and the
enumeration of the particular or specific powers in this Agreement shall not be
considered as in any way limiting or abridging the general power or discretion
intended to be conferred on or reserved to the Manager to authorize it to do any
and all things proper, necessary or expedient, in its discretion, to carry out
the purposes of this Agreement.

4.         Transition Services. Immediately upon the Effective Time, Manager
shall commence and pursue with diligence to conclusion the transition of
management of the Interests from Capco Energy, Inc. and affiliates to Manager.
Such transition services shall include but not be limited to (a) notifying third
party operators and joint interest owners, as necessary, (b) preparing and
delivering to purchasers of production and other payors necessary transfer
orders, letters-in-lieu of transfer order, division orders and the like, (c)
notifying governmental authorities with jurisdiction, as necessary, of Manager’s
assumption of management of the Interests, and (d) such other actions as are
reasonably necessary to effecting transition to Manager of management of the
Interests. Owner agrees to indemnify and hold harmless Manager from any and all
costs, liabilities, obligations, claims, attorney fees, or judgments arising
from any dispute between Capco Energy, Inc. or any principal or affiliate
thereof and Owner relating in any manner to the ownership or operation of any
property made subject to this agreement.

5.         Duties of Manager. Manager shall devote sufficient time to the duties
and responsibilities required for the prudent management of the Interests; and
will at all times, faithfully, industriously, and to the best of its ability,
experience and talents, perform all such duties and responsibilities in a good
and workmanlike manner. Management duties shall include, without limitation, the
following services:

(a)       Performing accounting and billing functions; receiving, distributing
and reporting income on at least a quarterly basis.

 

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(b)       In the case of Interests at to which Capco Energy, Inc. and/or its
affiliated companies previously served as operator under the applicable
operating agreement, as of the Effective Time, Manager shall represent the
interests of Owner pursuant to the terms of the operating agreement in effect as
to said operated Interests and in conformance with the covenants hereof.

(c)       Preparing and/or responding to authorizations for expenditure (“AFEs”)
relating to the Interests, and preparing, reviewing and responding to
correspondence relating to the Interests; provided, however, that Manager shall
not approve AFEs on behalf of Owner either (i) if such AFE relates to an
operation that has the objective of increasing production from a given Interest,
in which case the provisions of Section 8(a) hereof shall apply, or (ii) in any
event, in amounts greater than $50,000 to the interest of Owner.

(d)       Approving expenditures relating to the Interests, for the interest of
Owner, up to the gross amount of $50,000 for any one calendar-month period.
Manager agrees that it will not approve or incur expenditures in amounts in
excess of the aforesaid amount without the prior written approval of Owner;
provided, in case of explosion, fire, flood, blowout or other sudden emergency,
Manager may take such reasonable steps and incur such reasonable expenses as in
its opinion are required to deal with the emergency to safeguard life and
property and to comply with law and regulation, and shall report the emergency
to Owner as promptly as possible. Owner agrees to respond to Manager’s proposal
for expenditures in accordance with the time requirements of the applicable
operating agreement and any operating agreement under which Manager is not
operator and that Manager shall have no liability for damages or losses
resulting from Owner’s failure to respond timely so long as Manager has timely
provided such proposal to Owner.

(e)       Overseeing and supervising on behalf of Owner the overall operation of
the Interests.

(f)        Submitting to Owner as promptly as is practicable, but not more than
thirty (30) days after the end of each calendar quarter, a statement setting out
the revenues, costs and expenses incurred during such month for the Interests,
along with payment of Net Operating Cash Flow (as such term is hereinafter
defined) attributable to the Interests.

(g)       Marketing production from the Interests upon terms no less attractive
than Manager obtains for any of its owned production from the Interests;
provided that, at no time shall production from the Interests be sold to an
affiliate of Manager or Owner, and Manager shall not be permitted to enter into
any advance payment contracts or contracts providing directly or indirectly for
the pre-sale of production from the Interests (collectively, “Advance Payment
Contracts”) other than in the nomination and sale of natural gas for the month
next following, without the prior written consent of Owner, which consent shall
not be unreasonably withheld if such Advance Payment Contract will not have an
adverse tax or economic impact upon Owner.

(h)       Manager shall complete and submit on behalf of Owner such
incidental/and periodic reports and/or submissions as may be required by law, by
regulation, or by order of local, state, and federal regulatory agencies or
bodies with jurisdiction (a) over the

 

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Interests, (b) the use, ownership, operation or maintenance of the Interests,
(c) Owner as owner of and Manager as manager of the Interests, or (d) production
from the Interests.

(i)        In the case of Interests operated by third parties as of the
Effective Time, Manager shall represent the interests of Owner pursuant to the
terms of the operating agreement in effect as to said Interests and in
conformance with the covenants hereof.

 

6.

Management of the Interests; Payment of Costs.

(a)       At all times prior to the Termination Date (as such term is
hereinafter defined), Manager shall:

(i)        Cause the Interests to be maintained and operated for the production
of hydrocarbons in a good and workmanlike manner, as would a prudent operator,
all in accordance with generally accepted standards and all applicable federal,
state and local laws, rules and regulations.

(ii)       Cause the Interests to be developed, operated and maintained in
compliance with all applicable laws, rules and regulations.

(iii)      Pay or cause to be paid on behalf of Owner, promptly as and when due
and payable, all rentals and royalties payable with respect to the production of
hydrocarbons from the Interests (“Lease Burdens”) and all Costs (as such term is
hereinafter defined) incurred in or arising from the operation or development of
the Interests or the production, treating, gathering, marketing or transporting
of hydrocarbons from the Interests; provided that Manager shall not be required
to advance its own funds for payment of such sums attributable to Owner’s
Interests.

(iv)      Pay or cause to be paid all capital costs which are agreed to in
writing by Owner and Manager and are actually expended in the development and
operation of the Interests and all other Costs required for the prudent and
reasonable maintenance and operation of the Interests in accordance with
generally accepted oil and gas industry standards provided that Manager shall
not be required to advance its own funds for payment of such sums attributable
to Owner’s Interests.

(v)       Owner shall pay for ½ of such costs, as reasonably determined by
Manager, for upgrading or replacing Manager’s oil and gas accounting software as
necessary to effectively perform Manager’s duties under this Agreement (Owner’s
portion shall not exceed $12,500).

 

(b)

The term “Costs” shall mean, on a cash accounting basis, the sum of:

(i)        The following costs actually paid by or on behalf of Owner during any
calendar month insofar as they are attributable to the Interests, and whether
capital or non-capital in nature:

(A)      All costs, expenses and liabilities, including capital and non-capital
costs, paid by or on behalf of Owner pursuant to the applicable operating
agreement

 

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covering the Interests or otherwise for and in connection with the ownership,
operation or maintenance of the Interests (excluding any overhead of Manager)
and the lifting, handling, gathering, producing, treating, storing, marketing,
and transporting of production from the Interests and the disposal of produced
water therefrom; and

(B)      All federal, state and local taxes (except mortgage and income taxes)
paid by or for the account of the Interests, including without limitation
production, occupation, excise, severance, ad valorem or other production
related taxes, and any other taxes (except taxes on income) imposed on oil or
natural gas, attributable to the Interests or the ownership or sale of
production therefrom;

(C)      Capital costs shall be a part of Costs only if approved in accordance
with Section 5(d) hereof; and

(ii)       Excess Costs for the preceding month (including the Excess Costs
carried forward from any preceding month subsequent to the Effective Time).

(c)       The term “Excess Costs” shall mean, for each calendar month, the
excess, if any, of Costs (exclusive of capital costs) over revenue attributable
to the sale of production from the Interests and actually received during any
calendar month by or on behalf of Owner net of any Lease Burdens on production
which are borne by the Interests and were created prior to the Effective Time
for the respective Interests.

7.         Compensation. As consideration for the services to be rendered by
Manager under this Agreement, Owner shall pay Manager 50% of the cost of salary,
bonus and benefits (exclusive of any stock options or other forms of equity
interest or participation in Manager) of Charles Patrick McInturff (“McInturff”)
during the longer of (i) the term of this Agreement, and (ii) the initial term
of the Employment Agreement between Manager and McInturff of even date herewith.
In the event that McInturff or the Company terminates McInturff’s employment
with the Company for any reason, Manager may obtain or employ a person of
similar experience and competence to perform the duties performed by McInturff,
and Owner agrees to pay Manager 50% of the cost of salary, bonus and benefits
(exclusive of any stock options or other forms of equity interest or
participation in Manager) of such person during the longer of (i) the term of
this Agreement, and (ii) the remainder if any of the initial term of the
Employment Agreement between Manager and McInturff of even date herewith.
Notwithstanding the foregoing, in no event shall Owner’s obligation to Manager
under this paragraph exceed 50% of the cost of salary, bonus and benefits
(exclusive of any stock options or other forms of equity interest or
participation in Manager) set forth in the original Employment Agreement between
McInturff and the Company for any period. Owner’s obligations to Manager
pursuant to this paragraph shall cover all non-third party costs of operation,
and no additional amounts shall be owed therefor.

8.         Participation Option. In addition to payments by Owner as described
in the immediately preceding paragraph, Owner agrees and hereby grants to
Manager an option to participate (the “Option”) in certain operations and
interests as follows:

 

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(a)       With regard to the Interests, Manager may participate in operations
which are (i) conceived and commenced after the Effective Time, and (ii) the
primary objective of which is to increase production from a well located upon
the lands comprising the Interests, such as workovers and recompletions. Manager
may participate for up to 15% of Owner’s interest by paying in advance its share
of the cost of such operation which shall entitle Manager to receive 15% of the
incremental production realized from the subject operation that is in excess of
the Baseline Average. For purposes of this Section 8(a), the term “Baseline
Average” shall mean the simple average of monthly volumetric production for the
most recent 24 calendar month period, during which period continuous production
was had from the subject well, preceding the date on which the AFE is issued for
the subject operation. To the extent Manager desires so to participate, Manager
shall notify Owner in writing simultaneous with tender of the applicable AFE
from Manager to Owner. Manager’s entitlement to incremental production from a
given operation shall terminate upon the return of production to a volume less
than the Baseline Average for a period of three consecutive calendar months.
Manager shall have no right to receive a conveyance of a leasehold or other
property interest in the relevant Interests as a result of its participation in
an operation pursuant to this Section 8(a). With regard to any such incremental
production, Manager shall be responsible for bearing its share of Costs
attributable to such production and for paying all royalties and other burdens
on production.

(b)       With regard to the drilling of new wells upon the lands comprising the
Interests, Manager may participate for up to 15% of Owner’s interest
(proportionately reduced). Manager shall pay for its share of the costs of
drilling, completing, deepening, sidetracking, and plugging and abandonment in
accordance with AFEs and/or joint interest billings relating thereto. In the
event of the successful drilling of a new well, Manager shall receive from Owner
a wellbore-only assignment of its 15% share of Owner’s interest in such well
pursuant to a mutually acceptable form of assignment; provided, however, that
such interest shall be conveyed without warranty of title and on an “as is,
where is” basis, and such conveyance shall be subject to any preferential rights
to purchase and consents to assignment, whether of record or not, and Manager
shall bear its proportionate share of all obligations and liabilities associated
with any such interest. Manager shall not have the right to participate in any
future acquisition by Owner from third parties of oil and gas leasehold or
mineral interests by virtue of this Agreement.

(c)       In the event any of the Interests so acquired by Manager pursuant to
Section 8(b) hereof is not subject to an operating agreement, Owner and Manager
shall enter a mutually acceptable operating agreement based upon AAPL Form 610
Model Form Operating Agreement – 1989.

(d)       Manager’s rights and title to any interests acquired during the term
of this Agreement pursuant to paragraphs 8(a) or 8(b), above, shall be
unaffected by any subsequent termination of this Agreement.

 

9.

Intentionally omitted.

10.       Exculpation. Neither Manager nor any parent, subsidiary, affiliate,
officer or employee or any of them shall be liable to Owner for any losses
sustained or liabilities incurred as a result of any act or omission of Manager
or any agent or employee of it except as may result from bad faith, negligence,
willful misconduct or breach of this Agreement by such an agent or

 

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employee. Manager shall never be liable to Owner as a fiduciary and in all its
dealings shall perform its obligation hereunder as a reasonable prudent manager.

11.       Accounting and Disbursements. Manager will maintain general accounting
records relating the operation of the Interests in accordance with generally
accepted accounting principles. Manager shall collect funds generated by the
Interests; shall promptly pay and discharge all costs and expenses incurred in
the operation of the Interests pursuant to this Agreement; and shall provide
quarterly reports to Owner relating to the Interests. All records maintained by
Manager pursuant to the provisions of this Section 11 shall be made available
for inspection and copying by Owner, upon request by Owner, at Manager’s offices
during normal business hours.

12.       Term. The term of this Agreement shall commence as of the Effective
Time and shall automatically terminate on the Termination Date. The “Termination
Date” shall be the earliest of (a) the sale, transfer or other disposition of
all of the Interests by Owner to a third party, (b) the termination of this
Agreement by Owner by service of written notice of termination on Manager, (c)
any insolvency of, or commencement of bankruptcy proceedings by or against,
Manager, and (d) five years following the Effective Time.

13.       Remedies Upon Default. If, prior to the Termination Date, Manager
shall fail to perform or observe any of the covenants, agreements or obligations
herein provided to be performed or observed by Manager, Owner, in addition to
Owner’s right to recover damages and all other remedies available to Owner
hereunder or at law or in equity, may, if such failure shall continue unremedied
after ten (10) days from delivery to Manager of written notice thereof (unless
within such ten (10) days, Manager has begun to cure such noncompliance in a
manner satisfactory to Owner and Manager continues to diligently pursue such
curative actions until such failure is remedied to the satisfaction of Owner),
perform or cause to be performed such act at Manager's expense, in which event
Owner may expend funds for such purpose. To secure the obligations owed by
Manager to Owner pursuant to this Agreement, Manager hereby grants, bargains,
sells and assigns to Owner a first and prior lien and security interest upon the
oil and gas production attributable to the Interests, the proceeds from the sale
of oil and gas, and all accounts relating thereto. To perfect the lien and
security interest granted hereby, Manager agrees to execute and acknowledge a
recording supplement and/or financing statement prepared and submitted by Owner
in connection herewith or at any time following execution hereof. Further,
Manager hereby authorizes Owner to file this Agreement or any recording
supplement executed in connection herewith as Manager’s agent and attorney in
fact as a lien or mortgage in the applicable real estate records and as a
financing statement with the proper officer under the Uniform Commercial Code in
the state in which the Interests are located, to perfect the lien and security
interests granted hereby.

14.       No Partnership. This Agreement is not intended to create, and shall
not be construed to create, a relationship of partnership, mining partnership,
joint venture or an association for profit between the parties hereto.

15.       Force Majeure. If any party is rendered unable, wholly or in part, by
force majeure to carry out its obligations under this Agreement, other than the
obligation to make money payments, that party shall give to the other party
prompt written notice of the force

 

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majeure with reasonably full particulars concerning it; thereupon, the
obligations of the party giving the notice, so far as they are affected by the
force majeure, shall be suspended during the continuance of the force majeure.
The affected party shall use all reasonable diligence to remove the force
majeure situation as quickly as practicable. The term “force majeure” shall mean
act of God, strike, lockout or other industrial disturbance, act of the public
enemy, war, blockade, public riot, lightning, fire, storm, flood, explosion,
governmental action, governmental delay, restraint or inaction, unavailability
of equipment, and any other cause, whether of the kinds specifically enumerated
above or otherwise, which is not reasonably within the control of the party
claiming suspension. Nothing herein shall require the settlement of labor
difficulties by any party contrary to its wishes.

16.       Independent Contractor. In all things hereunder, Manager shall be an
independent contractor not subject to the control or direction of Owner except
as to the type of operations to be undertaken in accordance with the terms of
this Agreement. Manager shall not be deemed, or hold itself out as, the agent of
Owner with authority to bind it to any obligation or liability assumed or
incurred by Manager as to any third party.

17.       Assignment and Binding Effect. This Agreement shall be binding upon
the parties hereto, their successors and assigns, except that this Agreement
shall not be assigned by Manager, without the express written consent of Owner,
which consent shall be within Owner’s sole discretion, but this Agreement may be
assigned in whole or in part by Owner.

18.       Notices. Notices authorized or required hereunder shall be given by
governmental mail, telegram or other telegraphic means, postage or charges
prepaid, or confirmed telecopy, addressed to the party to whom the notice is
given at its address set out in the Purchase and Sale Agreement. All notices are
deemed given when received. Each party may change its address by giving written
notice to the other.

19.       Applicable Law. This Agreement shall be construed under and governed
by the laws of the State of New York, without regard, however, to the conflicts
of laws provisions thereof.

20.       Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall be in force when one or more counterparts have been signed by each of the
parties.

21.       Rule Against Perpetuities Savings. This Agreement shall be construed
so as not to violate the Rule Against Perpetuities (“RAP”). If Sections 8(a) or
8(b) hereof should be determined to violate the RAP, the time for exercising the
Option shall be deemed to be twenty-one (21) years, less one day, from the date
hereof.

 

22.

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Additional Properties. From time to time Manager and Owner may by mutual consent
agree to add properties to this Management Agreement. The addition of such
properties to this Management Agreement shall be evidenced in writing executed
by all the parties hereto.

IN WITNESS WHEREOF, the parties have executed this Management Agreement as of
the date first above written.

 

TENGASCO, INC.

By: s/Jeffrey R. Bailey        

 

Name: Jeffrey R. Bailey

Title: Chief Executive Officer

 

 

 

HOACTZIN PARTNERS, L.P.

 

 

 

 

By:

DOLPHIN ADVISORS, LLC

 

 

 

 

Its General Partner

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

___________________

 

 

 

 

 

 

 

 

Name:

Carlos P. Salas

 

 

 

Title

Member

 

 

 

Date:

December 18, 2007

 

 

 

 

 

 

 

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EXHIBIT “A”

To Management Agreement between

TENGASCO, INC. and HOACTZIN PARTNERS, L.P.

 

DESCRIPTION OF INTERESTS

 

THE BRAZOS INTERESTS

 

30% of 8/8ths Working interest, and a proportionate net revenue interest, as of
the Effective Time, in and to the following LEASES, INSOFAR ONLY AS SAID LEASES
COVER and include THE wellbores of the WELLS LISTED BELOW and only to the extent
that such leass are necessary to produce oil and/or gas from the wellbores of
said wells, TOGETHER WITH A LIKE INTEREST IN THE EASEMENTS DESCRIBED BELOW:

Brazos 440L/441L/406L/407L

State Lease 57646, Oil and Gas Lease between the State of Texas, General Land
Office, as Lessor, and Shell Oil Company, as Lessee, effective February 2, 1965,
and covering SE/4 of State Tract 441L, Gulf of Mexico, Matagorda County, Texas
recorded in Volume 430 at Page 581.

 

State Lease 57645, Oil and Gas Lease between the State of Texas, General Land
Office, as Lessor, and Shell Oil Company, as Lessee, effective February 2, 1965,
and covering NE/4 of State Tract 441L, Gulf of Mexico, Matagorda County, Texas
recorded in Volume 430 at Page 577.

 

State Lease 57644, Oil and Gas Lease between the State of Texas, General Land
Office, as Lessor, and Shell Oil Company, as Lessee, effective February 2, 1965,
and covering SW/4 of State Tract 440L, Gulf of Mexico, Matagorda County, Texas
recorded in Volume 430 at Page 573.

 

State Lease 57642, Oil and Gas Lease between the State of Texas, General Land
Office, as Lessor, and Shell Oil Company, as Lessee, effective February 2, 1965,
and covering NW/4 of State Tract 440L, Gulf of Mexico, Matagorda County, Texas
recorded in Volume 430 at Page 569.

 

State Lease 57641, Oil and Gas Lease between the State of Texas, General Land
Office, as Lessor, and Shell Oil Company, as Lessee, effective February 2, 1965,
and covering NE/4 of State Tract 440L, Gulf of Mexico, Matagorda County, Texas
recorded in Volume 430 at Page 565.

 

State Lease 60732, Oil and Gas Lease between the State of Texas, General Land
Office, as Lessor, and Shell Oil Company, as Lessee, effective April 4, 1967,
and covering SE/4 of State Tract 406L, Gulf of Mexico, Matagorda County, Texas
recorded in Volume 453 at Page 245.

 

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State Lease 57633, Oil and Gas Lease between the State of Texas, General Land
Office, as Lessor, and Shell Oil Company, as Lessee, effective February 2, 1965,
and covering SE/4 of State Tract 407L, Gulf of Mexico, Matagorda County, Texas
recorded in Volume 430 at Page 544.

 

State Lease 57634, Oil and Gas Lease between the State of Texas, General Land
Office, as Lessor, and Shell Oil Company, as Lessee, effective February 2, 1965,
and covering SW/4 of State Tract 407L, Gulf of Mexico, Matagorda County, Texas
recorded in Volume 430 at Page 565.

 

INSOFAR AND ONLY INSOFAR as the above leases are included within the 440L Unit
more fully described as the following:

5,850.00 acres of land out of Tracts 407L, 406L, 441L, and 440L as shown on the
Texas Gulf Coast Map, Sheet 3, from the Sabine River to the Rio Grande River as
subdivided for Mineral Development by the General Land Office, dated January
1967, and the 5,850.00 acres of land being more particularly described as
follows:

1350 acres out of State Tract 407L, being all of the south half (S 1/2) of the
southeast quarter (SE 1/4) of Tract 407L, all of the southeast one-quarter (SE
1/4) of the southwest one-quarter (SW 1/4) of Tract 407L, all of the south
one-half (S 1/2) of the southwest one-quarter (SW 1/4) of the southwest
one-quarter (SW 1/4) of State Tract 407L, and all of the northeast one-quarter
(NE 1/4) of the southwest one-quarter (SW 1/4) of the southwest one-quarter (SW
1/4) of State Tract 407L.

90 acres out of State Tract 406L, and being all of the southeast one-quarter
(SE/4) of the southeast one-quarter (SE/4) of the southeast one-quarter (SE/4)
of State Tract 406L.

 

1620 acres out of State Tract 441L, and being all of the north one-half (N 1/2)
of the southeast one-quarter (SE 1/4) of State Tract 441L, all of the south
one-quarter (S 1/4) of the northeast one-quarter (NE 1/4) of State Tract 441L,
all the northeast one-quarter (NE1/4) of southwest one-quarter (SW 1/4) of the
northeast one-quarter (NE 1/4) of State Tract 441L, all of the north one-half (N
1/2) of the southeast one-quarter (SE 1/4) of the northeast one-quarter (NE 1/4)
of State Tract 441L, all of the south one-half (S 1/2) of the northeast
one-quarter (NE 1/4) of the northeast one-quarter (NE 1/4) of State Tract 441L,
and all of the northeast one-quarter (NE 1/4) of the northeast one-quarter
(NE1/4) of the northeast one-quarter (NE 1/4) of State Tract 441L.

 

2790.00 acres out of State Tract 440L, and being all of the north one-quarter (N
1/4) of State Tract 440L, all of the south one-half (S 1/2) of the northwest
one-quarter (NW 1/4) of State Tract 440L, all the north one-half (N 1/2) of the
southwest one-quarter (SW 1/4) of the

 

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northeast one-quarter (NE 1/4) of State Tract 440L, all of the northwest
one-quarter (NW 1/4) of the southeast one-quarter (SE 1/4) of the northeast
one-quarter (NE 1/4) of State Tract 440L, all of the southwest one-quarter (SW
1/4) of the southwest one-quarter (SW 1/4) of the northeast one-quarter (NE 1/4)
of State Tract 440L, all of the north one-half (N 1/2) of the northwest
one-quarter (NW 1/4) of the southwest one-quarter (SW 1/4) of State Tract 440L,
and all of the southwest one-quarter (SW 1/4) of the northwest one-quarter (NW
1/4) of the southwest one-quarter (SW 1/4) of State Tract 440L.

 

The above described unit is limited to all gas sands encountered in the interval
between 6,580 feet and 7,860 feet, as shown on the induction-electrical log run
in the Shell Oil Company’s well No. 2 located in the northwest one-quarter (NW
1/4) of State Tract 440L.

 

WELLS

 

 

Well Name

 

Working Interest

Net Revenue Interest

Brazos 440L

I-1

30.00%

24.6999%

Brazos 440L

4012

30.00%

24.6999%

 

State Easement ME 85-234, granted by the State of Texas, General Land Office,
unto Conquest Exploration Company to construct a 3 ½ inch pipeline.

State Easement ME 85-233, granted by the State of Texas, General Land Office,
unto Conquest Exploration Company to construct a 4 ½ inch pipeline.

State Easement ME 85-169, granted by the State of Texas, General Land Office,
unto Conquest Exploration Company to construct a 12.75” pipeline.

 

23.

Brazos 478L/479L

State Lease 96177, Oil and Gas Lease between the State of Texas, General Land
Office, as Lessor, and American Exploration Company, as Lessee, effective
October 4, 1994, and covering north of the three marine league line within State
Tract 478L, Gulf of Mexico, Matagorda County, Texas recorded in Volume 950452 at
Page 400941.

State Lease 97270, Oil and Gas Lease between the State of Texas, General Land
Office, as Lessor, and American Exploration Company, as Lessee, effective April
2, 1996, and covering S/2 of NE/4 of State Tract 479L, Gulf of Mexico, Matagorda
County, Texas recorded in Volume 963560 at Page 442494.

 

-12-

 

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

 

WELLS

 

Name

Working Interest

Net Revenue Interest

Brazos 478L #2

30.00%

22.950%

 

 

 

State Easement ME 970029, granted by the State of Texas, General Land Office,
unto American Exploration Company for a 30’ wide easement.

State Easement ME 970031, granted by the State of Texas, General Land Office,
for the 478L #2 well.

 

 

THE CHANDELEUR INTERESTS

Wells

Well Name

API

Operator

Working Interest

Net Revenue Interest

 

 

 

 

 

CA Blk. 30 #1 (Hustler)

1772840058

Capco

1.000

0.79833333

CA Blk. 30 #3 (Seamaster)

1772840060

Capco

1.000

0.79833333

CA Blk. 27 #2 (Fireball)

1772840062

Capco

1.000

0.77892924

Biloxi Marsh LC #1-2

1708720315

MERIDIAN

0.145357

0.106111

PXP SL 17656 #2 (Fiesta)

1708720327

PXP

0.4375

0.328125

PXP CA 30 #2 (Hustler West)

1772840059

PXP

0.4375

0.3764583

PXP SL 17812 #1 (Avenger)

1773020034

PXP

0.4375

0.328125

PXP SL 17389 #1 (Prowler)

1773020036

PXP

0.4375

0.338125

PXP SL 17388#1(Catalina)

1773020035

PXP

0.4375

0.338125

PXP SL 17387#1 (Skyraider Dp.)

1773020038

PXP

0.4375

0.338125

PXP SL 17390#1(Twin Otter)

1772720532

PXP

0.4375

0.338125

 

 

-13-

 

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

Schedule of Leases

LEASES

LESSOR

LESSEE

DATE

RECORDING INFO.

 

 

 

 

USA-Mineral Management Service-

OCS-G 24002***

Manti Resources, Inc.

5/1/2002

N/A

State of Louisiana - No. 17365

Kalar Corporation

3/18/2002

COB 717, Folio 339/MLB 116,Folio 6, Entry 397916, St. Bernard Parish, LA

USA-Mineral Management Service-

OCS-G 24001***

Manti Resources, Inc.

5/1/2002

N/A

Mabel Isabel Molero Quatroy, et al *

Manti Resources, Inc.

5/9/2001

COB 696, Folio 731/MLB 113, Entry #384834,

St. Bernard Parish, LA

LAC Real Estate Holdings, L.L.C.*

Louisiana Oil and Gas, Inc.

5/3/2001

COB 696, Folio 724/MLB 113, Entry #384833,

St. Bernard Parish, LA

Biloxi Marsh Lands Corporation*

White Mountain Royalty Corporation

10/26/2000

Memo-COB 694,MLB 112,Entry 383297,St. Bernard Parish, LA

State of Louisiana - No. 17656

WLB Investments, Inc.

11/18/2002

COB 730, Folio 182/MLB 118, Folio 98, Entry #406251, St. Bernard Parish, LA, NA
# 03-03420, Instrument # 251353, Orleans Parish, LA.

State of Louisiana - No. 17812

Manti Jamba,Ltd.,et al

5/19/2003

COB 738, Folio 793/MLB 121, Folio 54, Entry #413799,St. Bernard Parish, LA

State of Louisiana - No. 17389

Kalar Corporation

3/18/2002

COB 717, Folio 387/MLB 116, Folio 10, Entry #397920,St. Bernard Parish, LA

State of Louisiana - No. 17388

Kalar Corporation

3/18/2002

COB 717, Folio 375/MLB 116, Folio 9, Entry #397919,St. Bernard Parish, LA

State of Louisiana - No. 17387**

Kalar Corporation

3/18/2002

COB 717, Folio 363/MLB 116, Folio 8, Entry #397918,St. Bernard Parish, LA

State of Louisiana - No. 17390

Kalar Corporation

3/18/2002

COB 717, Folio, 399,/MLB 116, Folio 11, Entry #397921,St. Bernard Parish, LA

 

* = INSOFAR AND ONLY INSOFAR as said leases fall within the confines of unit
tract numbers 1A and 1B within the CRIS 1 RA SUC, established by Office of
Conservation Order No. 960-A-2, effective April 9, 2002, and approved by the
Office of Conservation on November 4, 2003.

** = LESS AND EXCEPT measured depths from the surface of the earth down to the
stratigraphic equivalent of the bottom of the producing sand found between the
depths of 4,926' and 5,018' in the Manti Operating Company State Lease No. 17387
No. 1 Well situated thereon.

 

***Subject to a 3.5% overriding royalty interest, in favor of J. Michael Poole,
Sr., pursuant to Article 4.01 in that certain Exploration Joint Venture
Agreement between Manti Resources, Inc., and Sunbelt Energy, Ltd., et al, dated
May 1, 2001. 

 

-14-

 

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

[*] SAVE AND EXCEPT that certain royalty interest purchased from Biloxi Marsh
Lands Corporation in favor of Manti Operating Company, effective May 24, 2001,
recorded in COB 696, MLB 113, Entry No. 384864, in the official records of St.
Bernard Parish, Louisiana.

 

Rights of Ways/Easements

PIPELINE SEGMENT NO.

SIZE

(IN.)

LENGTH (FT.)

FROM

TO

 

 

 

 

 

14390

4

385

Well #2, Chandeleur Area,

Blk. 30 -OCS-G 24002

6-inch SSTI, Chandeleur

Area, Blk. 30 - OCS-G 24002

14391

4

529

Well #3, Chandeleur Area,

Blk. 30 -OCS-G 24002

6-inch SSTI, Chandeleur

Area, Blk. 30 - OCS-G 24002

14519

4

8,501

Caisson No. 3, Chandeleur Area, Blk.27 - OCS-G 24001

Caisson No. 2, Chandeleur

Area, Blk. 27 - OCS-G 24001

14388 - ROW No. G25321

6

18,225

Caisson #1, Chandeleur Area,

Blk. 30 - OCS-G 24002

Platform A, Chandeleur Area,

Blk. 29 - OCS-G 05740

14529 - ROW No. G25347

6.6

10,748

Chandeleur Blk. 27 Caisson

No. 2 - OCS-G 24001

Chandeleur Blk. 29 Platform

"B" - OCS-G 05740

14530 - ROW No. G25348

4

10,788

Caisson #2, Chandeleur Area,

Blk. 27 - OCS-G 24001

Platform B, Chandeleur Area,

Blk. 29 - OCS-G 05740

 

 

 

 

 

ALL OF THE ABOVE PIPELINE SEGMENTS AND RIGHT-OF-WAYS ARE TAKEN FROM THE UNITED

STATES OF AMERICA MINERAL MANAGEMENT SERVICE.

 

 

LEASE DATE

LESSOR

LESSEE

PARISH

ENTRY

BOOK

PAGE

12/19/03

State of Louisiana ROW 4428

PXP Gulf Coast Inc

St. Bernard

422745

751

404

01/09/04

State of Louisiana ROW 4444

PXP Gulf Coast Inc

St. Bernard

424062

753

55

04/27/04

State of Louisiana ROW 4469

PXP Gulf Coast Inc

St. Bernard

427803

758

39

6/22/2004

State of Louisiana ROW 4509

PXP Gulf Coast Inc

St. Bernard

429903

760

519

 

 

-15-

 

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

 

THE GALVESTON INTERESTS

 

LEASES

 

A.

Serial No.:

OCS-G 21324

 

Date:

December 1, 1999

 

Lessee:

Union Oil of California

 

Land Covered:

Galveston Area Block 297, OCS Leasing Map, Texas Map No. 6, containing
approximately 5760 acres.

 

 

•

Serial No.:

OGS-G 25534

 

Date:

November 1, 2003

 

Lessee:

Fidelity Exploration & Production Company, et al.

 

Land Covered:

Galveston Area Block 287, OCS Leasing Map, Texas Map No. 6, containing
approximately 5760 acres.

 

 

•

Serial No.:

OCS-G 25536

 

Date:

October 1, 2003

 

Lessee:

Gryphon Exploration Company

 

Land Covered:

Insofar only as to the E/2 NE/4 Galveston Area Block 298, OCS Leasing Map, Texas
Map No. 6,

 

containing approximately 720 acres.

 

WELLS

 

Hoactzin’s

Hoactzin’s

Name

Working Interest

Net Revenue Interest

GA 297 #1

30.00% WI – BPO

30% x 5/6 NRI – BPO*

 

25.50% WI – APO

25.5% x 5/6 NRI – APO*

 

*Subject to and bearing its proportionate part of all existing overriding
royalties, carried interests, and other burdens on production reflected of
record or disclosed in that certain Offshore Prospect Participation Agreement
dated December 30, 2004, Between Capco Offshore, Inc. and Fidelity Exploration
Company, Inc., et al.

 

SUBJECT TO THE FOLLOWING PRIOR AGREEMENT

That certain Offshore Prospect Participation Agreement dated August 18, 1999, by
and between Capco Offshore, Inc., Fidelity Exploration & Production Company,
Reef Partners, L.L.C., and Blue Dolphin Exploration Company, as amended Dec. 30,
2004, covering all of Galveston Area Blocks 287, 297, and the E/2NE of Galveston
Area Block 298.

 

SUBJECT TO THE FOLLOWING BURDENS

 

1.

Overriding Royalty Interest in favor of Gryphon Exploration Company as set forth
in that certain Letter Agreement dated October 1, 2004, by and between

 

-16-

 

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

Fidelity Exploration & Production Company and Gryphon Exploration Company equal
to 3.0% of 6/6th covering the NW/4 of Galveston Area Block 297 and the E/2NE of
Galveston Area Block 298.

 

2.

After Prospect Payout Overriding Royalty Interest in favor of Blue Dolphin
Petroleum Company as set forth in that certain Offshore Prospect Participation
Agreement dated December 30, 2004, by and between Capco Offshore, Inc., Fidelity
Exploration & Production Company, Reef Partners, L.L.C., and Blue Dolphin
Exploration Company equal to 2.0% of 6/6th covering all of Galveston Area Block
287, and 2.5% of 6/6ths covering all of Galveston Area Block 297.

 

3.

After Prospect Payout Reversionary Interest in favor of Fidelity Exploration &
Production Company and Blue Dolphin Petroleum Company as set forth in that
certain Offshore Prospect Participation Agreement dated December 30, 2004, by
and between Capco Offshore, Inc., Fidelity Exploration & Production Company,
Reef Partners, L.L.C., and Blue Dolphin Exploration Company equal to 7.50% of
6/6th each, covering all of Galveston Area Blocks 287, 297 and E/2NE of
Galveston Area Block 298.

 

THE HIGH ISLAND INTERESTS

 

 

 

 

Lease No.:

 

OCS-G 06168

Lessor:

 

The United States of America

Lessee:

 

Exxon Corporation

Effective Date:

 

October 1, 1983

Lands Covered:

 

All of Block 196, High Island Area, OCS Leasing Map, Texas Map No. 7, LESS AND
EXCEPT in the N/2, SW/4, and W/2SE/4 the Operating Rights in all depths below
the base of the stratigraphic equivalent of the MM5 sand found at 12,430' MD and
9,484 TVD in the OCS-G 06168, No. B-2 Well, (API 427084034900), and LESS AND
EXCEPT in the E/2SE/4 the Operating Rights as to all depths.

 

 

 

Interest:

 

Record Title Interest 100.00%,

 

 

Net Revenue Interest BPO 78.33333%; APO 83.33333%

 

 

-17-

 

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

 

 

 

The Before Payout (“BPO”) net revenue interest shown above reflects a 5.0% of
8/8ths overriding royalty retained by ExxonMobil as to which payout occurs once
an aggregate $1,500,000 has been paid; thus, the After Payout (“APO”) net
revenue interest is stated.

This Interest also is subject to the Retained Revenue Interest, in favor of
ExxonMobil, provided for by Section 3.04(b) of the ExxonMobil Agreement.

 

 

PIPELINE RIGHT-OF-WAY

 

 

 

 

 

 

 

Right-of-way No.:

 

1027360 - OCS-G 21466

 

 

Grantor:

 

The United States of America

 

 

Grantee:

 

Exxon Mobil Corporation

 

 

Effective Date:

 

February 22, 2001

 

 

Right-of-way Description:

 

OCS-G 21466, Segment No. 12379 Pipeline Right-of-way for 10-3/4 inch pipeline
from HI 176 "B" Platform to a side tap SSTI on Williams Field Services -
Offshore Gathering Company's Existing 12 inch Pipeline (OCS-G 12370 - Segment
13143, formerly 9208) in Block 177.

 

 

 

 

 

 

 

Interest:

 

100.00%

 

 

 

 

 

RIGHT-OF-USE AND EASEMENT PLATFORM "B" HIGH ISLAND BLOCK 176

 

 

 

 

 

 

 

Right-of-use and easement No.:

 

Formerly 1029764 - OCS-G 23586 – to be determined after Closing

 

 

Grantor:

 

The United States of America

 

 

Grantee:

 

Formerly Exxon Mobil Corporation - to be Capco Offshore after Closing

 

 

Effective Date:

 

Formerly March 10, 2003 - to be determined after Closing

 

 

Right-of-use and easement description:

 

OCS-G 23586 - Right-of-use and easement to maintain Platform B in High Island,
Block 176, expired lease, for the purposes of producing Wells B-1, B-2, B-3, and
B-2d (sidetrack), High Island, Block 196, OCS-G 06168.

 

 

 

 

 

2.

 

Interest:

 

100%

 

 

-18-

 

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

 

SUBJECT TO THE FOLLOWING CONTRACTS

 

 

 

 

 

1.

 

Contract No.:

 

1001917 - Operating Agreement

 

 

Parties:

 

Hall-Houston Oil Company and Exxon Corporation

 

 

Effective Date:

 

September 1, 1988

 

 

Lands Covered:

 

Covering High Island Block 176, Offshore Texas.

 

 

 

 

 

2.

 

Contract No.:

 

1001939 - Farmout Agreement

 

 

Parties:

 

Hall-Houston Oil Company and Exxon Corporation

 

 

Effective Date:

 

September 1, 1988

 

 

Lands Covered:

 

Covering High Island Block 195, Offshore Texas.

 

 

 

 

 

3.

 

Contract No.:

 

0408358-001 - Platform and Facilities Agreement

 

 

Parties:

 

Hall-Houston, Exxon Corporation et al

 

 

Effective Date:

 

September 1, 1988

 

 

Lands Covered:

 

Platform "A" (Platform ID No. 10468-1) located on High Island Block 176,
including but not limited to the compressors, the facilities and the 10" sales
line from Platform "A", High Island Block 176 to the subsea tap valve located in
High Island Block 140 on Transco's 24" pipeline.

 

 

 

 

 

4.

 

Contract No.:

 

1029891 - Farmout Agreement

 

 

Parties:

 

Exxon Mobil Corporation and Spinnaker Exploration Oil Company

 

 

Effective Date:

 

May 30, 2003

 

 

Lands Covered:

 

SE/4SE/4 High Island Block 196, OCS-G 06168

 

 

 

 

 

5.

 

Contract No.:

 

210466000 - Lateral Line Interconnect, Platform Use and Operation Agreement

 

 

Parties:

 

WFS - Offshore Gathering Company, Seller Production Company and Apache
Corporation

 

 

Effective Date:

 

March 1, 2001

 

 

-19-

 

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

 

 

 

Lands Covered:

 

The HI 176 B & C Gas Gathering System, being the pipeline from the base of the
HI 176 B and HI 176 C risers to the WFS underwater tie-in assembly located in HI
177.

 

 

 

 

 

6.

 

Contract No.:

 

210466000-1 - Letter Agreement - Construction and Operation of Gathering
Pipeline, High Island Block 176 and 177

 

 

Parties:

 

Seller Production Company, Apache Corporation, Forcenergy Inc. and Ridgewood
Energy Corporation

 

 

Effective Date:

 

October 10, 2000

 

 

Lands Covered:

 

The HI 176 B & C Gas Gathering System, being the pipeline from the base of the
HI 176 B and HI 176 C risers to the WFS underwater tie-in assembly located in HI
177.

 

 

 

 

 

SUBJECT TO THE FOLLOWING PIPELINE RIGHTS-OF-WAY

 

 

 

 

 

1.

 

Pipelines:

 

0404358-002

 

 

 

 

Pipeline Right-of-Way OCS-G 10515, Segment No. 8569

 

 

 

 

 

 

 

 

 

0408360-002

 

 

 

 

Pipeline Right-of-Way OCS-G 11186, Segment No. 8943

 

 

 

 

 

 

 

 

 

0408360-003

 

 

 

 

Pipeline Right-of-Way OCS-G 11156, Segment No. 8705

 

 

 

 

 

 

 

 

 

0408360-004

 

 

 

 

Pipeline Segment No. 11303

 

 

 

 

 

 

 

THE ORANGEFIELD INTERESTS (ORANGE COUNTY, TEXAS)

 

LEASES

 

 

 

Recorded

 

Lessor

Lessee

Date

Book

Page

 

 

 

 

 

Cora Granger et al

Gulf Production Company

10/26/1935

14

565

 

 

-20-

 

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

 

K. W. Stephenson et al

W. V. Bowles and Company

4/17/1946

28

116

Lillie Bland et al

W. V. Bowles and Company

4/9/1946

28

219

W. D. Gordon et al

W. V. Bowles and Company

4/19/1946

28

222

Mrs. U. A. Bell et al

W. V. Bowles and Company

4/27/1946

28

227

R. Leon Coleman et al

W. V. Bowles and Company

5/2/1946

28

229

Albert F. Frazer et al

W. V. Bowles and Company

5/2/1946

28

233

Don Champagne et al

W. V. Bowles and Company

5/3/1946

28

235

H. E. Dishman et al

W. V. Bowles and Company

5/11/1946

28

239

Estate of Hollis M. Kinard

W. V. Bowles and Company

6/6/1946

28

242

Mrs. Marion J. Alford et vir

W. V. Bowles and Company

8/27/1946

28

245

Estate of W. E. Lea

W. V. Bowles and Company

8/30/1946

28

247

Estate of C. W. Howth

W. V. Bowles and Company

10/1/1946

28

250

Chas. R. Cline et al

W. V. Bowles and Company

10/2/1946

28

253

Estate of J. B. Langham

W. V. Bowles and Company

10/4/1946

28

256

Sun Oil Company

W. V. Bowles and Company

10/10/1946

28

260

William R. Ross, Jr. et al

W. V. Bowles and Company

10/14/1946

28

265

T. R. Hannon, Guardian

W. V. Bowles and Company

10/30/1946

28

267

Louis Blanda

W. V. Bowles and Company

11/7/1946

28

270

Mrs. Ida Jarvis Smith et al

W. V. Bowles and Company

11/14/1946

29

312

Sarah Jane Granger

R. E. Burton

5/25/1946

30

499

Violet Kibodeaux et vir

R. E. Burton

5/24/1946

30

502

C. T. Grubbs et al

W. V. Bowles and Company

10/15/1946

31

149

D. L. Windham

W. V. Bowles and Company

4/29/1946

32

27

Trezemon Corbello et al

W. V. Bowles and Company

7/29/1947

32

30

First National Bank in Orange, TX et al

Paul Cormier

10/29/1947

32

126

F. T. Peveto et ux

R. E. Burton

11/1/1947

33

47

R. E. Burton et al

W. V. Bowles and Company

8/25/1948

35

79

F. T. Peveto et ux

R. E. Burton

1/6/1949

36

29

Harry Lucas et al

Paul Cormier

11/10/1947

36

320

Sun Oil Company

W. V. Bowles and Company

10/10/1949

37

146

Knox Kinard et al

R. E. Burton

11/28/1949

37

153

Albert F. Frazer, Individually & AIF

R. E. Burton

9/1/1949

37

156

Charles R. Kline

R. E. Burton

10/7/1949

37

159

J. P. (Pete) Peveto et al

R. E. Burton

11/9/1949

37

162

Oswald Parker Ross et vir

R. E. Burton

12/19/1949

37

165

Louis Blanda

R. E. Burton

12/31/1949

37

168

Mrs. Maud D. Parker et al

R. E. Burton

12/8/1949

37

171

Mrs. Frances Jane Stumpf et al

R. E. Burton

10/8/1949

37

176

K. W. Stephenson et al

R. E. Burton

9/9/1949

37

180

Martha Bell

R. E. Burton

10/23/1949

38

306

Gulf Oil Corporation

W. V. Bowles and Company

4/27/1950

39

358

Elizabeth B. Lea et al

R. E. Burton

7/18/1950

40

31

C. T. Grubbs et al

W. V. Bowles and Company

12/29/1949

40

83

Mrs. Ethel B. Hannah et al

R. E. Burton

10/20/1949

41

198

Bertha McGill et al

Charles H. Williams

1/26/1952

46

26

Audrey Scarborough et vir

Charles H. Williams

1/26/1952

46

29

Jessie M. Harmon et al

Charles H. Williams

1/28/1952

46

32

Mrs. Betty K. Cochran

R. E. Burton

1/26/1951

46

605

 

 

-21-

 

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

 

Gulf Oil Corporation

Ed R. Bennett

8/11/1953

53

60

Nancy Jane Granger Adams et vir

R. E. Burton

4/23/1952

58

209

Mrs. Angelina Champagne et al

R. E. Burton

10/25/1951

65

69

William B. Coleman et al

R. E. Burton

8/29/1955

65

74

Bessie Harman et al

Paul Cormier

10/16/1966

101

491

Charley D. Buckner et al

Paul Cormier

10/__/66

101

636

S. Raymond Dowdy et ux

Paul Cormier

12/8/1966

102

169

Atlantic Richfield Company

Paul Cormier

5/2/1969

105

559

Ruby L. Granger et al

Kilmarnock Oil Co.

7/24/1970

106

63

Marion B. Ford et vir

James V. Carroll, Jr.

6/27/1972

107

725

Anne Moore Judd et al

James V. Carroll, Jr.

6/27/1972

107

728

Hugh R. Goodrich

James V. Carroll, Jr.

6/28/1972

107

732

H. Fort Flowers Foundation

James V. Carroll, Jr.

6/26/1972

107

735

Ethel Gallier Williamson et al

Paul Cormier

8/1/1972

107

877

Mildred G. Means et al

Paul Cormier

8/1/1972

107

880

Geneva G. Carter et al

Paul Cormier

8/1/1972

107

885

Urla Land Clemmons Trust

Paul Cormier

1/5/1973

108

151

Roland S. Bond, Sr.

Paul Cormier

12/15/1972

108

155

Raymond S. Mothner

Paul Cormier

1/4/1973

108

158

Frost National Bank, Trustee

Paul Cormier

12/1/1972

108

161

Mrs. Elyse Viterbo

Paul Cormier

1/17/1973

108

177

American National Bank, Trustee

Paul Cormier

1/5/1973

108

180

Raymond E. Josey, AIF

Paul Cormier

1/19/1973

108

184

Blanche J. Hunt et vir

Paul Cormier

1/4/1973

108

187

Octavia G. Walles

Paul Cormier

8/1/1972

108

190

Boise Southern Company

Paul Cormier

11/27/1973

108

921

Mrs. Nannie Smith

Paul Cormier

5/20/1974

109

655

Mrs. Martha Lee Jackson et al

Paul Cormier

7/12/1976

111

915

Mrs. Eula Hart et al

Paul Cormier

7/7/1976

111

918

Cecil R. Coale, Jr.

Paul Cormier

7/9/1976

111

921

Mrs. Martha Lee Jackson et al

Paul Cormier

7/12/1976

111

924

Ernest L. Brown et al

Paul Cormier

7/7/1976

111

941

H. L. Woodworth et al

Paul Cormier

7/7/1976

111

945

John D. Doehring et al

Paul Cormier

7/7/1976

112

87

E. W. Brown, III et al

Paul Cormier

11/3/1976

112

299

The Jaydan Company

Paul Cormier

7/7/1976

112

421

Boise Southern Company

Paul J. Cormier

8/13/1979

116

333

Ruth Lang et al

Paul J. Cormier

8/15/1979

117

431

John B. Gordon

TXO Production Corp.

10/22/1985

604

34

Rosa Lee Barnett

TXO Production Corp.

11/7/1985

607

148

Henrietta Mayer Bach

TXO Production Corp.

10/24/1985

607

150

Stanley Pendeleton Toland

TXO Production Corp.

11/13/1985

607

363

Jess Eugene Watson

TXO Production Corp.

11/5/1985

607

374

Betty Siros Burns

TXO Production Corp.

11/20/1985

608

710

Larry Barnett

TXO Production Corp.

11/6/1985

616

407

Aaron B. Littman, Executor

TXO Production Corp.

12/2/1985

617

328

Paul J. Cormier et ux

TXO Production Corp.

3/1/1986

624

690

Paul J. Cormier et ux

TXO Production Corporation

3/1/1986

627

454

 

 

-22-

 

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

 

Paul J. Cormier et al

TXO Production Corporation

3/1/1986

627

457

Marvin Wolff

DESCO Oil Company

8/11/1988

698

952

Robert Blieden

DESCO Oil Company

8/1/1988

698

954

Iris Wynne

DESCO Oil Company

8/11/1988

698

970

Nita Warshaver

DESCO Oil Company

8/11/1988

700

322

Kilmarnock Oil Co.

DESCO Oil Company

9/8/1988

700

324

Adrian Goodman, Ind. Executor

DESCO Oil Company

9/29/1988

705

398

Donald W. Heisig

DESCO Oil Company

3/14/1989

717

203

Dorothy Blieden

DESCO Oil Company

8/31/1988

721

814

Winifred Y. Junker

DESCO Oil Company

8/31/1988

721

816

Mary Pat Carlisi

DESCO Oil Company

3/14/1989

721

818

Bordages Lessors

DESCO Oil Company

3/15/1989

721

836

Broussard Lessors

DESCO Oil Company

3/15/1989

721

866

June Espinosa et al

DESCO Oil Company

8/31/1988

727

749

Sarah J. Granger

Gulf Production Company

8/27/1924

5

448

Thomas A. Edwards

C. T. Grubbs

11/18/1937

16

580

Angelina Champagne et al

R. E. Burton

5/3/1946

28

112

Sarah J. Granger et al

R. E. Burton

5/25/1946

28

121

R. Leon Coleman et al

R. E. Burton

5/7/1946

28

340

Albert Frazer et al

R. E. Burton

5/22/1946

28

343

A. J. Schnitzel et al

R. E. Burton

6/28/1946

28

345

Frank Granger et al

R. E. Burton

7/19/1946

28

348

Martha Bell et al

R. E. Burton

8/14/1946

28

352

Marion Alford et vir

R. E. Burton

8/27/1946

28

355

W. E. Lea Estate

R. E. Burton

8/30/1946

28

358

C. W. Howth Estate

R. E. Burton

10/1/1946

28

360

Charles P. Cline et al

R. E. Burton

10/2/1946

28

363

J. B. Langham Estate

R. E. Burton

10/4/1946

28

366

Ida J. Smith et al

R. E. Burton

11/14/1946

29

304

W. D. Gordon et al

R. E. Burton

10/11/1946

29

317

Gulf Oil Corporation

W. V. Bowles and Company

1/10/1947

29

322

Sun Oil Company

W. V. Bowles and Company

1/20/1947

29

476

William C. Ross, Jr. et al

R. E. Burton

10/14/1946

29

480

Hollis M. Kinard Estate

R. E. Burton

6/6/1946

29

483

Artemo Corbello et al

W. V. Bowles and Company

7/29/1947

32

33

T. R. Hannon, Guardian

W. V. Bowles and Company

11/6/1947

32

37

Otis Granger et al

W. V. Bowles and Company

3/9/1948

34

625

Marjorie Reynolds et al

W. V. Bowles and Company

9/4/1948

35

75

Gulf Oil Corporation

Wayside Oil Company et al

6/20/1950

39

547

Gulf Oil Corporation

Paul Cormier

11/26/1954

59

413

Harry Singletary et al

W. E. McQuire

4/2/1963

94

150

Kilmarnock Oil Company

W. E. McQuire

4/29/1963

94

154

Albert J. Holloway

W. E. McQuire

4/17/1963

94

156

Eloise L. Rhorer et al

W. E. McQuire

3/18/1963

94

258

Laura Lee Turner

W. E. McGuire

10/16/1963

94

336

Mrs. E. C. Anthony et al

W. E. McQuire

4/22/1964

96

308

Walter Parish

W. E. McQuire

7/28/1964

96

314

First Security National Bank, Trustee

Paul Cormier

7/23/1964

96

346

 

 

-23-

 

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

 

Mary Munson et vir

W. E. McQuire

7/28/1964

96

356

James H. Jackson

W. E. McQuire

8/11/1964

96

581

Eliza Meynig et vir

W. E. McQuire

7/28/1964

96

590

Jessie Michel Talley

W. E. McQuire

9/18/1964

96

637

Mary Michel Cormier

W. E. McQuire

9/18/1964

97

1

Gladys Archer et vir

W. E. McQuire

10/15/1963

97

140

H. J. Halliday et al

Maxwell C. Huffman

10/22/1964

97

347

Arthur Michel et al

Paul Cormier

2/1/1974

109

92

R. E. Carson et al

Paul Cormier

2/1/1974

109

156

The Stephenson Partnership, Ltd.

Paul Cormier

3/27/1974

109

552

Estate of Martin Dies, Sr.

Paul Cormier

3/27/1974

110

59

D. F. Sanders et al

Paul Cormier

11/1/1974

110

222

Robert Paul Cormier

Paul Cormier

12/12/1975

111

43

John Doehring

Robert Cormier

12/5/1978

115

533

Robert M. Doehring

Robert Cormier

12/5/1978

115

536

L. E. Barmore et al

Robert Cormier

12/5/1978

115

539

Carolyn Moore

Robert Cormier

12/5/1978

115

542

Charles G. Moore et al

Robert Cormier

12/5/1978

115

545

Frank Welch

Robert Cormier

12/5/1978

115

548

Karanaugh Petroleum Co. et al

Robert Cormier

12/5/1978

115

551

The Jaydan Co.

Robert Cormier

12/5/1978

115

617

Bank of the Southwest, N.A. et al

Robert Cormier

2/13/1979

115

765

The Minor Oil Company

Robert Cormier

7/15/1980

118

141

Paul J. Cormier et ux

TXO Production Corporation

7/1/1985

591

186

Paul J. Cormier et ux

TXO Production Corporation

3/1/1986

627

451

State of Texas No. M-06814

Paul Cormier

5/17/1992

822

942

 

WELLS

Lease Name

RRC No

WI

NRI / 100%

no of wells

Acres

 

 

 

 

 

 

Boise Lang

16479

0.85

0.75000

1

11.00

Boise et al

12299

0.85

0.75000

1

-

Burton Fee

03272

0.85

 

2

swd

Chandler B

19189

0.85

 

2

-

Cormier, Paul J

20609

0.85

0.75620

1

-

Cormier, Robert

06232

0.85

 

2

-

First National Bank

03263

0.85

0.75000

2

-

Gallier-Granger

03299

0.85

0.73038

4

6.88

Granger, Cora E.

03259

0.85

0.73687

2

25.50

Granger, Mose heirs

03227

0.85

0.76890

11

50.00

Gulf Fee

03228

0.85

0.77770

14

34.00

 

 

-24-

 

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

 

Harmon, JM

03291

0.85

0.75000

2

11.81

Harmon, Jessie A

08398

0.85

0.75000

6

28.78

Harmon, Jessie B

03290

0.85

0.75000

2

7.82

Harmon, L.H.

03222

0.85

0.72708

2

3.00

Keeble-Gulf

03223

0.85

0.73750

1

3.96

Michel Heirs

03238

0.85

 

2

-

Moore Unit

10329

0.85

0.74000

3

11.82

Peveto A

03231

0.85

0.75000

4

21.03

Peveto B

03230

0.85

0.75000

12

55.70

Peveto C

03294

0.85

0.73433

4

30.00

Smith, Nanie

11454

0.85

0.75000

3

8.25

Sun Fee

03232

0.85

0.75000

7

50.00

Cow Bayou State

05744

0.85

0.75000

3

8.00

Granger, Frank

03226

0.85

0.75000

2

29.00

Gulf, Wm Winfree

03260

0.85

0.75000

5

9.45

Hager, Gulf Lee

03261

0.85

0.75000

21

79.90

Leon

12172

0.85

0.75000

4

3.00

Michel "B"

11047

0.85

0.75224

3

4.25

Michel-Berwick

03303

0.85

0.74131

2

-

Minor

13130

0.85

0.75000

2

1.00

 

 

ST. BERNARD INTERESTS

 

Leases

 

State of Louisiana Lease No. 17387, dated effective March 18, 2002, by and
between the State Mineral Board on behalf of the State of Louisiana, as Lessor,
in favor of Kalar Corporation, as Lessee, recorded in COB 717, Folio 363, MLB
116, Folio 8 of the public records of St. Bernard Parish, Louisiana INSOFAR AND
ONLY INSOFAR AS said lease covers and affects the depths below the stratigraphic
equivalent of the bottom of the producing sand found between the depths of
4,926’ and 5,018’ in the Manti Operating Company - SL 17387 No. 1 Well (Serial
Number 227630).

 

-25-

 

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

 

State of Louisiana Lease No. 17390, dated effective March 18, 2002, by and
between the State Mineral Board on behalf of the State of Louisiana, as Lessor,
in favor of Kalar Corporation, as Lessee, recorded in COB 717, Folio 399, MLB
116, Folio 11 of the public records of St. Bernard Parish, Louisiana.

 

Wells

 

Lease Name

Well No

WI

NRI / 100%

 

 

 

 

State Lease 17390

(API 17727205190000)

#1

7% of 8/8ths

 

State Lease 17387

(API 17730200380000

#1

56.25% of 8/8ths

 

 

 

OTHER INTERESTS

 

1.     100% working interest in all of Blocks 112 and 113, Vermillion Area, OCS
Leasing Map, Louisiana Map Number 3

 

2.     100% working interest in the Simpton Lease, covering the McKinney &
Williams Survey – Abstract 157, Galveston County, Texas

 

3.     100% working interest in the Hughes Lease covering the SF Hughes Survey –
Abstract 90, Galveston County, Texas

 

 

 

-26-