Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Strategic American Oil Corporation - Exhibit 10.6

EXHIBIT 10.6

 

ASSIGNMENT

	
STATE OF TEXAS
	
§ 

	
COUNTY OF KARNES
	
§ 

          This Assignment ("Assignment") is dated December 20, 2006, but is effective as of the date set forth below (the Effective Date), is made by ETG Energy Resources, whose address is 300 West Mountain View Dr., Hot Springs, AR 71913, as ("Assignor"), to Penasco Petroleum, Inc. whose address is 9801 Anderson Mill Road, Suite 230, Austin, TX 78750 as ("Assignee").

          Assignor for good and valuable consideration, the receipt and sufficiency of which are acknowledged, grants, assigns, transfers and delivers to Assignee, subject to the terms and conditions hereof, and undivided three percent (3%) working interest (2.4375 percent net revenue interest) with respect to the following described properties and rights (herein collectively referred to as the "Properties"):
(i)           The oil, gas and mineral lease described in Exhibit "A" (the Lease), which Exhibit "A" and the Lease is incorporated by reference.

(ii)          All petroleum and hydrocarbons stored upon or produced from the Lease from and after the Effective Date, which are attributable to the Lease;

(iii)         All easements, permits, licenses, servitudes, rights-of-way, pipelines, power lines, telephone and telegraph lines, communications facilities and all other rights and appurtenances situated on or used in connection with the Lease;

(iv)          All tangible personal property, equipment, fixtures and improvements including, but not by way of limitation, the Janssen #1A well, together with any salt water disposal facilities, well heads, casing, tubing, pumps, motors, gauges, valves, heaters, treaters, gathering lines, flow lines, gas lines, water lines, vessels, tanks, boilers, separators, buildings, fixtures, platforms, machinery, tools, treating equipment, compressors, and other equipment, pipelines, power lines, telephone and telegraph lines, transportation and communication facilities, and other appurtenances situated upon the lands covered by the Lease conveyed herein, or used or obtained in connection with, the production, treating, storing or transportation of oil, gas and other hydrocarbons or minerals therefrom.

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TO HAVE AND TO HOLD all and singular the Properties, together with all rights, titles, interests, estates, remedies, powers and privileges thereunto appertaining, unto Assignee and Assignee's re successors and assigns forever; subject, however, to the following matters to the extent valid and effective:
(i)           all of lessor's royalty of 18.75 percent of production as reserved in the Leases;

(ii)          all liens for taxes or assessments not yet due; and

(iii)        all easements, rights-of-way, servitudes, permits, surface leases and other rights in respect of surface operations.

This Assignment is made without warranty of title to the Properties, either express or implied.

          The Properties are assigned and delivered AS IS, WHERE IS and WITH ALL FAULTS. Assignees acknowledge that Assignor has not made, and Assignor expressly disclaims and negates, any implied or express warranty of merchantability, fitness for a particular purpose, or conformity to models or samples or materials, environmental status and condition, and any other representation or warranty, express or implied, relating to the Properties.

          The Effective Date of this Assignment is the last day of the calendar month during which Payout occurs. "Payout" is defined as the date there is accrued from the sale of 81.25% of production from all the Properties produced and sold from and after July 17, 2006, whether owned by Assignor or others, a sum of money equal to the actual drilling and/or recompletion costs incurred by Assignor to re-enter or re-drill the Janssen #IA well located on the Properties. Assignor will furnish monthly reports to Assignee stating the quantity and price of all production sold from the Properties and will promptly advise Assignee when Payout has occurred. Following Payout, Assignor and Assignee will execute a recordable document confirming the Effective Date of this Assignment.

          This Assignment, the Leases and Properties are subject to (a) any valid and effective rights-of-way and encumbrances created by Assignor's predecessors in title and not by Assignor and evidenced by instruments filed with the County Clerk of Karnes County, Texas, (b) taxes and assessments becoming due and payable after the date of the Effective Date of this Assignment, (c) all ordinances, regulations and laws of any municipalities or other governmental authority having jurisdiction, (d) the terms, covenants, conditions and limitations contained in the Lease and any amendments thereto.

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          Prior to any attempt on the part of Assignor or Assignor's successors and assigns to any additional drilling, offsetting the existing Janssen #1A well with respect to any tract of land or formation located in whole or in part within the boundaries of the Area of Interest defined below, Assignor will offer to Assignee a 5% Non-Promoted Working (leasehold) Interest (4.0625 percent net revenue interest) attributable thereto with respect to the current Lease If at any time during the Acquisition Period (as defined below) Assignor or Assignor's successors and assigns acquires any interest in an oil and gas lease (including any well and related equipment located thereon) with respect to any tract of land located in whole or in part within the boundaries of the Area of Interest defined below. The conveyance and assignment will be without warranty of title by Assignor and will convey and assign to Assignee such 5% working interest free and clear of any reservations, liens and encumbrances. Assignor will execute a recordable document confirming the effective date of Assignee's working interest. The Acquisition Period begins July 17,2006 and ends one year following the date of expiration or termination of all oil and gas leases now or hereafter owned in whole or in part by Assignor within the Area of Interest.. The covenants of Assignor set forth in this paragraph are binding upon Assignor and Assignor's successors and assigns and inure to the benefit of Assignee and Assignee's successors and assigns. The Area of Interest is the 138.0 acres of land located in the Charles A. Labazon Division of the Victor Blanco Four League Grant, Abstract 3 in Karnes County, Texas as described in that certain oil and gas lease dated October 18, 1972 between Erna L. Janssen, et al, as Lessors, and F. Earl Scheig, as Lessee, said lease being recorded in Volume 417, Page 337 of the Deed Records of Karnes County, Texas (which lease is incorporated by reference for a description of the land comprising the Area of Interest). The covenants of Assignor set forth in this paragraph are binding upon Assignor and Assignor's successors and assigns and inure to the benefit of Assignee and Assignee's successors and assigns.

	
ASSIGNOR:
	
ASSIGNEE:

	 	 
	
ETG ENERGY RESOURCES
	
PENASCO PETROLEUM, INC.

	 	 
	
By:  /s/ Tom L. Feimster

        Tom L. Feimster

Title:  President
	
By:  /s/ Randall R. Reneau

        Randall R. Reneau

Title:  President

	 	 

 

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ACKNOWLEDGEMENT

	
STATE OF TEXAS
	
§ 

	
COUNTY OF TRAVIS
	
§ 

 

          This instrument was acknowledged before me on this the 8th day of February 2007 by Tom L. Feimster, President of ETG ENERGY RESOURCES, on behalf of said ETG ENERGY RESOURCES.

	
LEONARD G. GARCIA

Notary Public, State of Texas

My Commission Expires

May 08, 2008
	

/s/ Leonard G. Garcia

Notary Public State of Texas

 

 

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ACKNOWLEDGEMENT

	
STATE OF TEXAS
	
§ 

	
COUNTY OF TRAVIS
	
§ 

 

          This instrument was acknowledged before me on this the 8th day of February 2007 by Randall R. Reneau, President of PENASCO PETROLEUM, INC., on behalf of said PENASCO PETROLEUM, INC.

	
LEONARD G. GARCIA

Notary Public, State of Texas

My Commission Expires

May 08, 2008
	

/s/ Leonard G. Garcia

Notary Public State of Texas

 

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EXHIBIT "A" 

Attached to and made a part of a certain Assignment of Working Interest dated December 20,2006, between ETG ENERGY RESOURCES, whose address is 300 West Mountain View Dr., Hot Springs, AR 71913, as Assignor and PENASCO PETROLEUM, INC, whose address is 9801 Anderson Mill Rd, Suite 230, Austin, TX 78750.

JANSSEN #IA, KARNES COUNTY, TEXAS OIL

& GAS PROPERTY DESCRIPTION

Being 138 acres of land, more or less, located in the Charles A. Labazon Division of the Victor Blanco Four League Grant, Abstract 3 in Karnes County, Texas as described in the oil and gas lease dated October 18, 1972 between Erna L. Janssen, et al, as Lessors, and F. Earl Scheig, as Lessee, said lease being recorded in Volume 417, Page 337 of the Deed Records of Karnes County, Texas.

 

 

 

5Filed by Automated Filing Services Inc. (604) 609-0244 - Strategic American Oil Corporation - Exhibit 10.7

EXHIBIT 10.7

MARMIK OIL COMPANY

200 NORTH JEFFERSON. sUITe 600 

EL DORADO, ARKANSAS 71730 (670) 

882~S46 

FAX (870) SS2-9931 

October 24, 2007

Penasco Petroleum, Inc. 

9302 Mystic Oaks Trail 

Austin, Texas 78750 

Attn: Mr. Randy Reneau 

Re: Ratification Letter to the 

       Little Mule Creek Prospect Participation Agreement 

       Dated June 19, 2007 

       Alfalfa and Woods Counties, Oklahoma 

Gentlemen: 

Marmik Oil Company and Savoy Energy, L.P., as Operator, have entered into the Little Mule Creek Prospect Participation Agreement dated Junets, 2007, a copy of which is enclosed with this Ratification Letter. 

Penasco Petroleum, Inc. (hereinafter referred to as "Penasco") desires to participate in the Little Mule Creek Prospect and agrees to the terms of the Participation Agreement with the following amendments: 

I. DEFINITIONS

1.9      "Payout".

Where "Savoy" is shown, "Penasco" is replaced therein. 

II. OPERATIONS

2.1      Costs.

(a)      Land, Geological and Geophysical Fee: Upon execution of this Participation Agreement, Penasco agrees to pay Marmik a land, geological and geophysical fee in the amount of $41,108.98 (U.S.) plus $1,976.80 for Penasco's proportionate 4.0% of the cost of exercising certain options for leases, aggregating to a total consideration of $43,085.78 for the acquisition of Penasco's 4.0% interest as further provided herein. The Parties agree that this fee includes a promote on the actual costs paid by Marmik. The Parties however agree that Penasco will not be required to pay any promote on any existing Oil and Gas Leases within the AMI that are set to expire on or before December 31, 2008. Extension or renewals of these Oil and Gas Leases will be proportionately paid by Penasco and Marmik. 

(b)      Closing and Assignment of Property and Property Interest: 

Savoy Energy, L.P., as Operator, has up to thirty (30) days from June 19, 2007, to complete a full review of the Property and Property Interest to be conveyed pursuant to this Agreement. If Savoy and Marmik agree on any adjustments to the land, geological and geophysical fee because of lack of good title, Penasco will receive its proportionate share of the benefit of such adjustments. 

Upon payment by Penasco of the total consideration provided in Section 2.1 (a) above, Marmik agrees to execute and deliver to Penasco, subject to II. 2.1 (c) Reservation of Overriding Royalty Interest, an unrestricted Assignment covering 4.0% of the Property and Property Interest owned by Marmik within the AMI lands. The Assignment will be without warranty of title, either expressed or implied. The Assignment shall also be made subject to all the terms and conditions of the leasehold interest being assigned and also made subject to this Agreement. Such Assignment shall be in the form outlined on Exhibit "B" to the Agreement. On such Assignment wherever "Savoy Energy,L.P." is shown, "Penasco Petroleum, Inc." is replaced therein, and the "Fifty-Four percent (54%)" shown is replaced with "Four percent (4.0%)". It is understood by Marmik and Penasco that Marmik currently owns or controls approximately 10,000 leasehold acres. 

(c)      Reservation of Overriding Royalty Interest: 
Where "Savoy" is shown, "Penasco" is replaced therein. 

(d)      After Acquired Property or Property Interest: 
Wherever "Savoy" is shown, "Penasco" is replaced therein. 

2.3      Drilling Cost for the Initial Test Well. In addition to the land, geological and geophysical fee above, Penasco agrees to pay four percent (4.0%) of 8/8ths of actual cost in the Initial Test Well from the date of this Agreement to Payout. 

 

 

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2.4      Payout of the Initial Test Well. Once Payout on the Initial Test Well drilling and spacing unit has been reached, Penasco's proportionate share of the working interest and associated net revenue interest shall be reduced from 100% to 75% of the 4.0% of the Property and Property Interests acquired under the Agreement by Penasco and Marmik's working interest shall increase from 0% to 25% of such 4.0% interest. Therefore, at Payout, Penasco's working interest in the Initial Test Well drilling and spacing unit will be reduced from 4.0% to 3.00% and Marmik's working interest shall increase by 1.00%. At Payout, Penasco agrees to assign to Marmik this additional working and associated net revenue interest in the Property and Property Interests comprising the drilling and spacing unit of the Initial Test Well and the balance of the Property and Property Interests within the AMI lands assigned to Penasco pursuant to 2.1 (b). 

 

2.5      Subsequent Wells. In the event Penasco and Marmik elect to participate or consent to a drilling proposal for drilling a Subsequent Well, such Subsequent Well will be drilled on the ownership basis of 3.00% Penasco whether or not the Initial Test Well has reached Payout. In the event such Subsequent Well is to be located on lands covered by the initial Assignment of Oil and Gas leases described in 2.1 (b) and Payout of the Initial Test Well has not been reached with ensuing Assignment to Marmik, Penasco shall promptly, after the election by Marmik to participate in the drilling of such Subsequent Well, assign to Marmik 1.00% working interest in the Property and Property Interests comprising the drilling and spacing unit for such Subsequent Well. 

III. MISCELLANEOUS PROVISIONS 

3.8      Notices. Penasco's address is added for notice purposes as follows: 

	 	
If to Penasco:
	
Penasco Petroleum, Inc. 

9302 Mystic Oaks Trail 

Austin, Texas 78750 

Attn: Mr. Randy Reneau Ph.: 

512-828-6980 

Fax: 512-233-2531

3.9      NO WARRANTY OF TITLE. 

Where "SAVOY" is shown, "Penasco" is replaced therein. 

 

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3.12     Subsequent Agreements. 

Wherever "Savoy" is shown, "Penasco" is replaced therein. 

If you are in agreement with the terms of the Little Mule Creek Prospect Participation Agreement dated June 19, 2007, between Marmik Oil Company and Savoy Energy, L.P. and the above amendments to said Agreement, please sign in the space provided below, date your signature, and return one (1) copy of this Ratification Letter to Marmik within five (5) days of receipt. 

 
Yours very truly, 

MARMIK OIL COMPANY 

/s/ Margaret Spencer Pierce         

Margaret Spencer Pierce, CPL

Landman

 

AGREED TO and ACCEPTED this   30   day of October, 2007.

PENASCO OIL COMPANY

 

 

 

 

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