Document:

ESCROW AGREEMENT

Exhibit 10.2

ESCROW AGREEMENT 

January 3rd, 2008

This Escrow Agreement is reached between the following parties: 

SUCCESS OIL CO., INC. of 8306 Wilshire Blvd. #566, Beverly Hills, California 90211 hereinafter called (collectively, "SUCCESS”),

EGPI FIRECREEK, INC./DENNIS ALEXANDER/CEO, AND FURTHER THROUGH ITS WHOLLY OWNED SUBSIDIARY FIRECREEK PETROLEUM, INC., of 6564 SMOKE TREE LANE, TOWN OF PARADISE VALLEY, AZ. 85253 hereinafter called (collectively, "FIRECREEK"), and 

CHARLES C. WRIGHT, Attorney at Law, of 201, S. LAUREL AVE., Luling, Texas 78648, hereinafter called ("WRIGHT"), 

WHEREAS, SUCCESS wishes to sell to FIRECREEK, and FIRECREEK wishes to purchase from SUCCESS, the J.B. TUBB NORTH 40 ACRES, WARD COUNTY TEXAS (RRC #08-33611), with exact legal description listed and set fourth in the “Assignment and Bill of Sale” attached hereto on Exhibit "A" (the “Assignment”), hereinafter called ”PROPERTY," so that FIRECREEK can purchase the 75% working interest, and corresponding 56.25% net revenue interest owned by “SUCCESS”; 

WHEREAS, SUCCESS and FIRECREEK have entered into a “Participation Agreement (for Turnkey Drilling, Multiple Wells)” attached hereto on Exhibit “B” (the “Participation-Turnkey Program Agreement”) which defines and sets forth the matters therein including Commencement of the development program for the prospect wells located on the Property.

WHEREAS, SUCCESS and FIRECREEK executed the Assignment which includes an assignment to Firecreek of and the property and granting of mineral rights & easements to the J.B. Tubb north 40 Acres, Ward County Texas described above, and with a copy being attached hereto again referencing Exhibit "A", and to deposit same in escrow with WRIGHT see the “Escrow Document” attached on Exhibit “C” hereto; 

WHEREAS, SUCCESS and FIRECREEK executed the Participation-Turnkey Program Agreement which defines and sets forth all of the matters listed therein including Commencement of the development program for the prospect wells located on the Property described above, and with a copy being attached hereto on Exhibit "B", and to deposit same in escrow with WRIGHT (the “Escrow Document/Purchase Notification Letter”); and

WHEREAS, pursuant to the Assignment, and Participation-Turnkey Program Agreement FIRECREEK is to pay SUCCESS One Million and four hundred thousand Dollars ($1,400,000.00) in accordance with the terms of this Escrow Agreement and further, the final confirmation and acceptance of all items therein listed in the Escrow Document/Purchase Notification Letter attached on Exhibit “C” hereto.

For consideration of Ten Dollars ($10.00) and the mutual provisions contained herein, the parties hereto agree as follows:

1. 

WRIGHT is to hold in escrow the Escrow Document and the Escrow Funds until one of the following events:

(a) WRIGHT is informed in writing signed by both SUCCESS and FIRECREEK that Wright shall pay to SUCCESS the entire Escrow Funds at which time WRIGHT shall record the Assignment in the WARD County, Texas, an affidavit describing such action; or 

(b) WRIGHT is informed in writing by FIRECREEK that FIRECREEK has elected not to continue the transaction. If such event is to occur, then any and all of the Escrow Funds stated herein and covered by this Escrow 

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Agreement shall be returned immediately to Firecreek by Bank Wire to the designated EGPI FIRECREEK, INC. bank account (“Originating Bank Account”) listed on attached Exhibit “D” hereto, less attorney’s fees of $500.00.

2.

 WRIGHT shall not be responsible for his actions unless such actions are in violation of this Escrow Agreement or WRIGHT acts with willful misconduct or gross negligence.

3. 

This agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the subject matter hereof, and no other agreement, statement, or promise relating to the subject matter of this agreement that is not contained herein shall be valid or binding unless in writing signed by all parties. 

4. 

If any action at law or in equity is brought to enforce or interpret the provisions of this agreement, the prevailing party shall be entitled to reasonable attorney's fees in addition to any other relief to which he may be entitled.

       

5. 

The validity of this agreement and of any of its terms or provisions, as well as the rights and duties of the parties hereunder, shall be governed by the laws of the State of Texas.

6. 

This agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

7. 

All notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if sent by hand-delivery, by facsimile (followed by first-class mail), by nationally recognized overnight courier service or by prepaid registered or certified mail, return receipt requested, to the addresses set forth below:

		
	 
	If to the Firecreek:

	 
	 

	 
	EGPI Firecreek, Inc.

6564 Smoke Tree Lane

Scottsdale, AZ 85253

Attention:  Chairman of the Board and Chief Financial Officer 

Facsimile No.: (480) 443-1403

	 
	 

	 
	If to SUCCESS:

	 
	 

	 
	SUCCESS OIL CO., INC.

Attn:  Jeru Morgan, Pres.

8306 Wilshire Blvd. #566

Beverly Hills, Ca. 90211

FAX #:  (310) 861-0228

	 
	 

	 
	If to Wright:

	 
	 

	 
	Charles C. Wright Esq.

201 S. Laurel Ave.

Luling, Texas 78648

830-875-3492 FAX:830-875-9266

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EXECUTED this______day of_________ 2008, effective__________ 2008.

______________________

Charles C. Wright

SUCCESS OIL CO., INC.

                                                                                             

By___________________________ 

JERU MORGAN

President of  SUCCESS OIL CO.

Firecreek Petroleum, Inc., 

a wholly owned subsidiary of 

EGPI Firecreek, Inc.

By __________________________ 

Dennis R. Alexander

President, on behalf of EGPI Firecreek, Inc., 

sole shareholder of Firecreek Petroleum, Inc.

                                       

FUNDS WIRED TO:   Citizens State Bank

200 S. Magnolia P.O. Box 350

Luling, Texas 78648  PH. #830-875-2472

Routing Number: 114916488  Credit funds to:

Charles C. Wright Esq. (IOLTA Trust Account No. 09680950)

Charles C. Wright Esq.

201 S. Laurel Ave.

Luling, Texas 78648

830-875-3492

FAX:830-875-9266

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EXHIBIT “A”

TO AN ESCROW AGREEMENT 

DATED JANUARY 3RD, 2008

Legal Description

Description of Lands and Leases:

J.B. TUBB NORTH 40 ACRES:

J.B. TUBB "18-1", being the Wl/2 of the NW1/4 of Section 18, Block B-20, Public School Lands, Ward County, Texas, containing Eighty (40) acres more or less.      (Area of contract highlighted in yellow)

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EXHIBIT “A” CONTINUED

TO AN ESCROW AGREEMENT 

DATED JANUARY 3RD, 2008

“Assignment and Bill of Sale” Agreement which includes an assignment of the property and granting of mineral rights & easements to the J.B. Tubb north 40 Acres, Ward County Texas

SECOND AMENDMENT TO ESCROW AGREEMENT OF JANUARY 3, 2008

WHEREAS the Escrow Agreement dated January 3, 2008, by and between SUCCESS OIL CO., INC. (“SUCCESS”) and FIRECREEK PETROLEUM, INC. a wholly owned subsidiary of EGPI FIRECREEK, INC. (“FIRECREEK”) involving the purchase by FIRECREEK from SUCCESS of an interest in the J. B. Tubb North 40 acre Lease, located in Ward County, Texas, and CHARLES C. WRIGHT (“WRIGHT”) as escrow agent, did not deal with the release of existing liens and/or judgments existing against the subject property; and

WHEREAS an amendment to Escrow Agreement as to subparagraph 1(a) on page 2 was signed but is now necessary for certain funds to be released to SUCCESS earlier than first anticipated.

IT IS THEREFORE AGREED that subparagraph 1(a) on page 2 of the Escrow Agreement, as originally written and as first amended, is replaced by the following:

“(a)

WRIGHT is informed in writing signed by both SUCCESS and FIRECREEK that FIRECREEK has elected to complete the transaction. WRIGHT is to then record the Assignment in Ward County, Texas, retaining in trust what WRIGHT believes in good faith to be sufficient funds to obtain and record the release of all judgments involving the J. B. Tubb Lease and all recorded liens as to the J. B. Tubb Lease, as shown  by the title run sheet of December 21, 2007, from First Tex Star Title, while paying the balance of the Escrow Funds to SUCCESS prior to the obtaining of such releases. After the obtaining and recording of releases of judgments and liens, WRIGHT shall pay SUCCESS any remaining Escrow Funds in his possession.”

EXECUTED in multiple parts this _____ day of January, 2008, to be effective January 3, 2008.

					
	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	By:

	/s/ Charles C. Wright

	 

	 
	 
	 
	Charles C. Wright

	 

	 
	 
	 
	 
	 

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AMENDMENT TO ESCROW AGREEMENT OF JANUARY 3, 2008

WHEREAS the Escrow Agreement dated January 3, 2008, by and between SUCCESS OIL CO., INC (success) and FIRECREEK PETROLEUM, INC., a wholly owned subsidiary of EGPI FIRECREEK, INC. (“FIRECREEK”) involving the purchase by FIRECREEK from SUCCESS of an interest in the J.B. Tubb North 40 acre Lease, located in Ward County, Texas and CHARLES C. WRIGHT (“WRIGHT”) as escrow agent, did not deal with the release of existing liens and/or judgments existing against the subject property.

IT IS THEREFORE AGREED that subparagraph 1 (a) on page 2 of the said Escrow Agreement is replaced by the following:

“(a) WRIGHT is informed in writing signed by both SUCCESS and FIRECREEK that FIRECREEK has elected to complete the transaction.  WRIGHT is to then record the Assignment in Ward County, Texas, proceed to use part of the Escrow Funds to obtain and record the release of all judgments involving the J. B. Tubb Lease and all recorded liens as to the J. B. Tubb Lease, as shown by title run sheet of December 21, 2007, from First Tex Star Title, after which WRIGHT shall pay to SUCCESS the balance of the Escrow Funds after deducting WRIGHT’s fees and expenses.”

EXECUTED in multiple parts this 7th day of January, 2008, to be effective January 3, 2008.

					
	 
	 
	 
	 
	 

	 
	 
	By:

	/s/ Charles C. Wright

	 

	 
	 
	 
	CHARLES C. WRIGHT

	 

	 
	 
	 
	 
	 

	 
	 
	 
	SUCCESS OIL CO., INC.

	 

	 
	 
	 
	 
	 

	 
	 
	By:

	/s/ Jeru Morgan

	 

	 
	 
	 
	JERU MORGAN, President

	 

	 
	 
	 
	 
	 

	 
	 
	 
	FIRECREEK PETROLEUM, INC.

	 

	 
	 
	 
	a wholly owned subsidiary of

	 

	 
	 
	 
	EGPI FIRECREEK, INC.

	 

	 
	 
	 
	 
	 

	 
	 
	By:

	/s/ Dennis R. Alexander

	 

	 
	 
	 
	DENNIS R. ALEXANDER

	 

	 
	 
	 
	President, on behalf of EGPI Firecreek, Inc.,

	 

	 
	 
	 
	sole shareholder of Firecreek Petroleum, Inc.

	 

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To: Charles C. Wright

You are hereby notified that FIRECREEK has elected to proceed with the purchase from SUCCESS of the interest in the J. B. Tubb North 40 acre Lease, Ward County, Texas (RRC# 08-33611) and you are instructed to record the Assignment and use and dispense the $1,400,000.00 escrow funds as per the Escrow Agreement of January 3, 2008, as amended by Second Amendment thereto.

SIGNED this 8th day of January, 2008.

					
	 
	 
	 
	SUCCESS OIL CO., INC.

	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	By:

	/s/ Jeru Morgan

	 

	 
	 
	 
	Jeru Morgan

	 

	 
	 
	 
	President

	 

	

	 
	 
	 
	 

	 
	 
	 
	FIRECREEK PETROLEUM, INC.,

	 
	 
	 
	a wholly owned subsiary of EGPI FIRECREEK, INC

	 
	 
	 
	 
	 

	 
	 
	By:

	/s/ Dennis Alexander

	 

	 
	 
	 
	Dennis Alexander

	 

	 
	 
	 
	President, on behalf of EGPI Firecreek, Inc.,

 sole shareholder of Firecreek Petroleum, Inc.

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EXHIBIT “B”

TO AN ESCROW AGREEMENT 

DATED JANUARY 3, 2007

PARTICIPATION AGREEMENT (Turnkey Drilling, Re Entry, and Multiple Wells) By and Between Success Oil Co., Inc. and Firecreek Petroleum, Inc., a wholly owned subsidiary of EGPI Firecreek, Inc.

[TO BE ATTACHED ON FOLLOWING PAGE OR PAGES WHEN COMPLETED, AS REQUIRED]

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EXHIBIT “C”

[Escrow Document/Purchase Notification Letter]

TO AN ESCROW AGREEMENT 

DATED JANUARY 3RD, 2007

[TO BE ATTACHED ON FOLLOWING PAGE OR PAGES WHEN COMPLETED, AS REQUIRED]

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January __, 2008

PRIVATE & CONFIDENTIAL

Mr. Charles C. Wright Esq.

201 S. Laurel Ave.

Luling, Texas 78648

Telephone (830) 875-3493, 

Facsimile: (830) 875-9266

Re:

 Pending J.B. Tubb Purchase Notification Letter from 

SUCCESS OIL CO., INC., Seller 

and 

Firecreek Petroleum, Inc., Buyer

Gentlemen, 

With reference to both an Escrow Agreement and an Assignment and Bill of Sale dated January 1, 2008, further with respect to EGPI Firecreek, Inc.’s, wholly owned subsidiary, Firecreek Petroleum, Inc.’s (“Firecreek”) pending purchase from SUCCESS Oil Co., Inc. (“SUCCESS”) of the J.B. Tubb north 40 Acres One located in Ward County, Texas (Texas RRC: 09-25860), (Tracts #1 through tract #12 all inclusive): 

Please be noticed that we the undersigned parties, Firecreek and SUCCESS, herewith are satisfied with the terms and conditions of the Escrow Agreement including referenced Section 1. (a), and said terms and conditions of the Assignment and Bill of Sale.

Therefore the undersigned herewith mutually approve the following actions to be taken in behalf of proceeding with release of funds totaling $1,400,000.00 held per the instructions listed below and following, thus commencing with and closing of said transaction.

1.

Mr. Charles C. Wright Esquire is herewith instructed to release to SUCCESS, upon or simultaneous with the closing in accordance with terms of the Escrow Agreement and determining effectiveness of the Assignment and Bill of Sale, the total sum/amount of $1,400,000.00 from your firms IOLTA Trust Account in behalf of the effective closing of the transaction.

Thank you for your professional courtesies and assistance in this matter.

Sincerely, 

SUCCESS OIL CO., INC.                                                 

By___________________________ 

Jeru Morgan

President of Success Oil Co.,Inc.

FIRECREEK PETROLEUM, INC.

a wholly owned subsidiary of 

EGPI Firecreek, Inc.

By __________________________ 

Dennis R. Alexander

President, on behalf of EGPI Firecreek, Inc., 

sole shareholder of Firecreek Petroleum, Inc.

- 10 -

Annex “A”

To The J.B. Tubb north 40 Acres Purchase Notification Letter

Dated January __, 2008

					
	SUCCESS OIL CO., INC.

A Licensed Bond Registered Operating Co.

Operator No. #828326

	 
	 
	 
	 
	 

	CLOSING STATEMENT

	 
	 
	 
	 
	 

	J.B. TUBB NORTH 40 ACRES

	WARD COUNTY, TEXAS

	 
	 
	 
	 
	 

	January __, 2008

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Item

	SUCCESS

	Firecreek

	 
	 

	 
	 
	 
	 
	 

	Purchase Price

	 
	$1,400,000.00

	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Actual 2007 Property Taxes                              

	 
	 
	 
	 

	 
	 
	 
	 
	 

	J.B. TUBB(North 40 Acres)

	($74.33)

	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Closing Totals

	 
	$1,400,000.00

	 
	 

	 
	 
	 
	 
	 

	TOTAL DUE -

	 
	$1,400,000.00

	 
	 

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EXHIBIT “D”

TO AN ESCROW AGREEMENT 

DATED JANUARY 3RD, 2008

In Accordance With Section 1 b. 

Bank Wire to the designated EGPI FIRECREEK, INC. bank account (“Originating Bank Account”)

Wire Instructions

ESCROW ACCOUNT WIRE INSTRUCTIONS 

 Wire Instructions for MASTER ATTORNEY TRUST Account:

Gersten Savage LLP

600 Lexington Avenue

New York, NY 10022

Signature Bank

565 Fifth Avenue

New York, NY 10017

ABA # 026013576

Account # 1500885978

FBO EGPI Firecreek, Inc.

- 12 -Exhibit 10.3 Participation Agreement

EXHIBIT 10.3

PARTICIPATION AGREEMENT

(Turnkey Drilling, Re Entry, and Multiple Wells)

This Participation Agreement (the “Agreement”) is made and entered into as of January 3rd, 2007, (the “Effective Date”), between Success Oil Co. (the “Operator”) and the Party or Parties whose names and addresses are set out on the signature page to this Agreement (sometimes referred to collectively as “Participants,” and/or individually as a “Participant”).

Operator is the owner of the leasehold interest in the oil and gas leases (the “Leases”), described in Exhibit “A” to this Agreement, in Ward County, Texas.

Participant desires to acquire an undivided interest in a portion of the Leases, in the manner provided for in this Agreement, and desires to enter into this Agreement for the purposes of joining Operator in the exploration of and development of the Leases.

For valuable consideration, and the covenants, conditions, and agreements set out in the Agreement, Operator and each Participant agree as follows:

I.

Definitions

When used in this Agreement, the following terms shall mean:

Acreage Cost:  Shall mean an amount paid to Operator by Participant representing Participant’s share of the cost charged by Operator for acquiring Leases on the lands comprising the Proration Units on which Prospect Wells will be drilled.  These costs do not include any costs for acreage that may be assessed or charged for lands on which Subsequent Wells may be drilled.

Gross Working Interest:  Shall mean that interest, expressed as a decimal, percentage, or fractional interest, relative to 100% on which Participant shall pay (his/her/its) share of operating expenses.

Leases:  Shall mean the oil, gas and mineral lease or leases, described in Exhibit “A,” by reference to their recording in the records of the Ward County Courthouse of Ward_ County, Texas, covering those lands described in Exhibit “A.”

Net Revenue Interest:  Shall mean that interest, expressed as a decimal, percentage, or fractional interest, relative to 100% on which Participant shall receive income attributable to Participant’s Gross Working Interest, for proceeds from the sale of oil and/or gas from wells.  A Participant’s Net Revenue Interest shall have deducted from it, its proportionate part of all royalty, overriding royalty, and other interests burdening the Leases and provided for in this Participation Agreement.

Non-Operator:  Shall mean a Participant.

Objective Depth:  Shall mean a depth adequate to test the Upper Clearfork & Lower Clearfork formations, anticipated to be encountered at a depth of approximately 4400’ feet, but in no event a depth greater than 5100 feet.

Operating Agreement:  Shall mean that form of Operating Agreement attached to this Agreement as Exhibit “B,” naming Success Oil Co. as Operator, together with the Operating Agreement’s accompanying accounting procedures and exhibits.

Operator:  Shall mean: Responsible for paying from production expenses incurred through the operation of producing properties and overall day to day supervision, and report to state, and federal legal authorities (Railroad Commission of Texas, E.P.A.), and responsible for all compliance of environmental issues prescribed by law.

Participant:  Shall mean each and every Party to this Participation Agreement other than Operator.

Payout:  Shall mean that point in time in which Participant has received, out of net proceeds (after severance and/or any other applicable taxes) to the Participant’s Net Revenue Interest, from the sale of oil and/or gas, an amount equal to all Acreage Costs, Turnkey Cost to Casing Point, Turnkey Completion Costs, and operating costs attributable to a Participant’s Gross Working Interest in the Prospect Wells.  Payout shall not be calculated on a well-by-well basis, but the cost and revenue allocable to all Prospect Wells shall be considered in computing Payout.

Proration Unit:  As to Prospect Wells, shall mean J.B. Tubb north forty acres only (40) acres surrounding each well, the J.B. Tubb (north 40) acres to be as nearly in the form of a square as is practical; however, the shape is to be determined by Survey Map, and Operator in its sole discretion, giving due regard to Participant’s interest in the Prospect Well and the owners of the remainder of the leased lands on which the Proration Unit is located.  In any event, the Proration Unit shall be of a configuration so as to be in compliance with all spacing rules and orders established for the field in which the Wells are located.

Prospect Wells:  Shall mean the initial J.B Tubb 18-1 & 18-2 (2) wells re-completed under the terms of this Agreement on the Leases, to an adequate depth to evaluate/test the Objective Depth.

Subsequent Wells:  Shall mean any and all wells re-completed (including substitute wells if needed Crawar San Andres well on north forty) after the re-completion of the #18-1 & #18-2 (2) Prospect Wells, on the Leases, at locations outside the Proration Units surrounding each Prospect Well.

Turnkey Completion Costs:  Shall mean an amount paid to Operator by Participant representing Participant’s total share of the cost to run/set production casing, and completely equip, through the tanks or pipeline connection, each Prospect Well.

Turnkey Cost to Casing Point:  Shall mean an amount paid Operator, by Participant, representing Participant’s total share of the cost to drill to total depth and test the Prospect Wells.

II.

Consideration

With execution of this Agreement, Participant shall deliver to Operator the sum of $1,400,000.00 which shall be deemed Participant’s share of the Acreage Cost.  In addition, Participant shall deliver to Operator $0.00, which represents Participant’s share of the Turnkey Cost to Casing Point for drilling the Prospect Wells as provided for in this Agreement.  The execution of this Agreement and payment of the sums provided for shall entitle Participant to an Assignment of an undivided 75% Working Interest and 56.25% Net Revenue Interest in each Prospect Well completed as a well capable of producing oil and/or gas in paying quantities, which Assignment shall be delivered to Participant on payment in full of Participant’s share of the Turnkey Completion Costs as to Prospect Wells completed under the terms of this Agreement.

III.

Prospect Wells For Re Entry

Subject to examination and approval of title, on or before January. 9th, 2008, Operator shall use its best efforts to commence or cause to be commenced the actual recompleting operations of one or more of the Prospect Wells at locations on the lands covered by the Leases described in Exhibit “A,” which locations are to be selected by Operator, in its sole and absolute discretion, and to then recomplete each of the Prospect Wells in a prudent manner, without unreasonable delay, in accordance with field practices prevailing in the area where the Leases are located, to the Objective Depth and Formation.  After each Well has reached Objective Depth and Formation, Operator, in its sole discretion, shall make such attempts to complete each Well, as would be made by a reasonable and prudent Operator, pursuant to practices prevailing in the area and for the Objective Depth.

The Turnkey Cost to Casing Point, and beyond to full production status, paid by Participant to Operator, is in payment of Participant’s share of the costs to Re Enter and Recomplete each Prospect Well to casing point and thereafter to full production status. Upon reaching formation entry objective a decision will be made, at the sole discretion of Operator, to test and complete each Prospect Well.  Upon each Well having reached Objective Depth and formation entry, Operator shall notify each Participant of its election to test and to complete each Prospect/Re Entry Well to bring on full production, or of Operator’s election to plug and abandon any Prospect Well.  .

IV.

Assignments

Prior to the re-completion or drilling and completion of the Prospect Wells, Operator shall deliver an Assignment to each Participant who has elected to and has paid its share of all costs in each Prospect Well completed as a producer of oil and/or gas, such Assignment to be delivered subject to the terms of this Agreement, the Operating Agreement and burdens existing on the Leases, which Assignment shall be in the form attached to this Agreement as Exhibit “C”.  Operator shall deliver Participant an Assignment including each of the Leases as to the lands comprising the Proration Unit surrounding each of the Prospect Wells drilled and completed in which Participant is entitled to an Assignment.

The Assignment from Operator to Participant shall be of Participant’s before payout Gross Working Interest and Net Revenue Interest as identified on the signature page to this Agreement and shall be specifically subject to the “after payout” interest of Operator, as providing for in this Agreement.

V.

Reports to Participants

At all times while Operator is engaged in drilling the Prospect Wells in which Participant has elected to participate, Operator shall furnish to each Participant a (Daily/Weekly) written report summarizing drilling activities and results relating to the Prospect Well or Wells in which Participant is participating, and Operator is then engaged in drilling, completing and/or testing.  Each report shall contain sufficient information to apprise Participant of the activities in which Operator is then engaged.  Operator agrees to furnish Participant such other information as Participant may reasonably require.

VI.

Operating Agreement

All portions of Leases and the interests assigned to Participant shall be subject to this Agreement and the Operating Agreement.  In the event of any conflict between the terms of the Operating Agreement and the terms of this Agreement, the terms of this Agreement shall control as between Operator and Participant.  The terms of the Operating Agreement shall govern all subsequent activities on the Lease as they relate to the interests assigned to or to be owned by Participant.

VII.

Participants Payment of Operating Expenses

On any well drilled under the terms of this Agreement and in which Participant receives an Assignment from Operator for an undivided interest, Participant agrees that Operator may elect to receive 100% of the income attributable to Participants interest in each producing well, directly from the purchaser of production, and account to each Participant for its share of the income after deducing all operating expenses, taxes, and other charges attributable to or assessed against Participant’s interest; that is, Operator may receive Participants share of income, deduct Participant’s share of operating expenses and other costs and make settlement with Participant on a “net” basis.  To the extent necessary to give effect to the provisions of this paragraph, Participant appoints and designates Operator, as its Agent and Attorney-in-Fact for the purposes of executing Division Orders, and authorizing delivery of Participant’s share of income directly to Operator.

VIII.

Additional Development

As part consideration for entering into and acquiring rights under the terms of this Agreement, with legal description Operator grants Participant the right of first refusal (on the same, or other negotiated terms that are not lesser than the terms of this Agreement), to participate in any additional wells (“Subsequent Wells”) which Operator may elect to drill or re-complete on the South 40 Leases described herewith as the J.B. TUBB "18-1", being the Wl/2 of the NW1/4 of Section 18, Block B-20, Public School Lands, Ward County, Texas, containing Forty (South 40) acres only more or less  (see also Exhibit “A”, Section B, Description of Lands hereto for further reference).

At any time after the Prospect Wells have been drilled and completed or plugged and abandoned, as the case may be, upon election by Operator to drill an additional Subsequent Well or Wells on the South 40 Leases described herein this section, Operator shall submit a written notice to Participant setting forth the anticipated drilling date of the proposed Subsequent Well(s), or Well re-completion locations (which will be no sooner than sixty (60) days from the date of the written notice), its location, objective formation, total depth, and the estimated cost of drilling, completing, and equipping the well.  This notice shall be sent by first-class mail, or other means intended to effect actual delivery, to the address of Participant.  Unless waived or extended in a writing approved and signed by the Operator, the Participant shall have forty five (45) days from the date of the deposit of the notice in a post office or official depository under the care and custody of the United States Postal Service within which to forward to Operator the total amount of the Participant’s proportionate share of the estimated costs of drilling, completing, and equipping the proposed well, as set forth in the estimated costs of drilling, completing, and equipping of the well, accompanying the notice. Failure of the Participant to have the entire amount of its proportionate share of costs in the depository account designated by Operator in the written notice by 5:00 o’clock p.m. on the forty sixth (46th) day (unless set aside by a waiver or extension granted, approved, and signed in writing by the Operator) following the deposit of the notice shall be deemed to constitute an election by the Participant to not participate to the drilling of the proposed Subsequent Well.  In the event a Participant elects not to participate in the drilling of a Subsequent Well, the Participant’s rights in the Leases shall be forfeited, save and except as to the Proration Units allocated to the Prospect and any Subsequent Wells in which the Participant has participated.

Any additional drilling/re-entry activity to take place on the Leases, as proposed by Operator, subsequent of wells, shall not be subject to the payout provisions provided for in this Agreement, shall not be drilled under the terms of turnkey arrangements, unless the same shall be proposed by Operator to Participant.  Operator shall not maintain a “carried interest” in Subsequent Wells and each Participant shall pay and be responsible for their proportionate share of any and all costs, to the extent of their after payout interests, for the drilling of the Subsequent Wells.

IX.

Relationship of the Parties

Neither this Agreement or the Operating Agreement entered into by Operator and Participant is intended to create, nor shall the same be construed as creating a mining partnership, commercial partnership, or any other partnership or joint venture relationship.  Rather, it is the intent and purpose of this Agreement to create a relationship which is limited to the exploration, development, and extraction of oil and/or gas for division in kind, or for sale for the account of the Participant’s to this Agreement, individually, and in which the liability of each of the Participant’s shall be several and not joint or collective.  If, for Federal Income Tax purposes, this Agreement and the operations are regarded as a partnership, each Participant hereby affected elects to be excluded from the application from all of the provisions of Sub-Chapter K, Chapter 1, Subtitle A of the Internal Revenue Code of 1986, as amended, as permitted and authorized by Section 761 of the Code, and the regulations promulgated thereunder.  Operator is authorizes and directed to execute on behalf of each Participant, any evidence of this election as may be required.

X.

Notices

All notices or other communications required or permitted to be given pursuant to this Agreement shall be in writing or verbally, by mutual consent, provided that written notice shall follow any verbal notice within twenty-four (24) hours, and shall be considered as properly given or made when forwarded to the other Party at the address set out on the signature page of this Agreement.

Any Participant or Operator may change its address by giving notice in writing stating the new address to the other party, and on the 10th day following delivery of the notice.  The new address shall be the applicable address for all notices or other communications required or permitted by this Agreement.

XI.

Miscellaneous

A.

This Agreement embodies the entire understanding and agreement between the Participant and Operator and supersedes any and all prior understandings and agreements, verbal or written, if any, between them regarding the Leases and matters that are the subject of this Agreement.

B.

The titles to the Sections of this Agreement are used only for convenience purposes only and shall have no affect on the construction or interpretation of any part of this Agreement.

C.

The rights and obligations created by this Agreement shall be governed by and interpreted under the laws of the State of Nevada, without regard to any conflicts of law considerations.

XII

Rights Run with the Land and Survival of Representatives

This Agreement shall constitute a real right and covenant running with the lands it covers and shall be binding on and inure to the benefit of the Parties and their respective heirs, successors and assigns.  Covenants, obligations, representations, and conditions of this Agreement shall survive the close of this transaction and the delivery of Assignments to Participant, by Operator.

XIII.

Time is of the Essence

Time is of the essence with respect to all matters governed by the terms of this Agreement and the Operating Agreement.

XIV.

Effective Date

The effective date of this Agreement shall be that date on which Operator has received notice of the election to participate by an adequate number of Participants to engage in the drilling and exploration activities provided for in this Agreement, and the Participants have executed a counterpart of this Agreement, and delivered the cash payments to Operator as provided for in this Agreement.

This Agreement may be executed in multiple counterparts, each of which shall be deemed an original for all purposes and all of which together shall constitute one and the same Agreement as of the specified effective date.

		
	Operator

	 

	 
	 

	By:    Jeru Morgan

	 

	Title: President

	 

	 
	 

	 
	 

	Names:    Success Oil Co.

	 

	Address: 8306 Wilshire Bl. #566, Beverly Hills, ca. 90211

	Phone Number: 818-249-4040, 818-974-9623, 800-451-9865

	Fax Number:     310-861-0228

	 

	 
	 

	Participant

	 

	 
	 

	By: Dennis Alexander

	 

	Title: Chief Executive Officer

	 

	 
	 

	 
	 

	Names: Firecreek Petroleum Inc., a wholly owned subsidiary of

	EPGI Firecreek, Inc.

	 

	Address: 6564 Smoke Tree Lane, Scottsdale, AZ. 85253

	Phone Number: 480-948-926, 480-948-6581

	Fax Number:  623-321-1914

	 

	 
	 

	Participant’s Interest:

	 

	 
	 

	Before Payout:

	 

	 
	 

	Gross Working Interest: 75%

	 

	Net Revenue Interest:    56.25%

	 

	 
	 

	After Payout:

	 

	 
	 

	Gross Working Interest: 75%

	 

	Net Revenue Interest:    56.25%

	 

EXHIBIT A

TO

PARTICIPATION AGREEMENT

Description of Oil and Gas Leases and the Lands They Cover.

A.

Description of Leases.

(Include the date, names of Lessor and Lessee, recording reference for each Lease, and the lands covered by each Lease.  If the Agreement does not cover all the lands or depths that are covered by a Lease, the description of lands covered by the Lease should be limited to the lands and depths included in the Agreement by prefacing the description with the phrase:  “Limited to and only insofar as this Lease Covers,” or a similar phrase.)

B.

Description of Lands.

(Describe the lands that are subject to the Agreement, which are covered by the Leases described in A above.) 

J.B. TUBB "18-1", being the Wl/2 of the NW1/4 of Section 18, Block B-20, Public School Lands, Ward County, Texas, containing Forty (North 40) acres only more or less.

EXHIBIT B

TO

PARTICIPATION AGREEMENT

OPERATING AGREEMENT

This Exhibit is the Operating Agreement entered into by the Operator and Participants to the Participation Agreement, and all exhibits to the Operating Agreement.

While a Participant’s signing the Participation Agreement with Operating Agreement attached as an Exhibit, should be adequate to deem the Participant subject to the terms of the Operating Agreement, it is recommended that the Operating Agreement signature page be completed and all Participants sign the Operating Agreement as well as the Participation Agreement.

The Operating Agreement attached to the Participation Agreement should be completed, with all amendments, additions, and Exhibits, as it will be the Agreement governing operations of wells after all commitments provided for in the Participation Agreement are completed.

EXHIBIT C

TO

PARTICIPATION AGREEMENT

ASSIGNMENT

State: Texas

County: Ward

Assignor:  Success Oil Co., 8306 Wilshire Blvd. #566, Beverly Hills, Ca. 90211

Assignee:  Firecreek Petroleum Inc, 6564 Smoke Tree Lane, Scottsdale, AZ. 85253

Effective Date: 1-1-08

Assignor and Assignee named above have entered into a Participation Agreement (the “Agreement”) by which Assignee agreed to acquire an undivided interest from Assignor in oil and gas leases located in the county and state named above.

Assignee has fulfilled its obligations under the terms of that Agreement and is entitled to receive an Assignment from Assignor.

For the consideration provided for in the Agreement and subject to all of the terms, conditions, the provisions of that Agreement, and the Joint Operating Agreement (“JOA”) entered into by Assignee, naming Assignor as Operator, Assignor, assigns, sells and conveys to Assignee the undivided interest set out below in the oil and gas leases (the “Leases”), insofar as the Leases cover those specific lands (the “Lands”) which Leases and Lands are described in Exhibit “A” to this Assignment.

		
	The interest assigned to Assignee is:

	 

	 
	 

	Before Payout:

	Gross working Interest 75%

	 
	Net Revenue Interest   56.25%

	 
	 

	After Payout:

	Gross Working Interest 75%

	 
	Net Revenue Interest    56.25%

This Assignment shall also be deemed a Bill of Sale to Assignee of a like undivided interest in all equipment and fixtures, in, on, and used in connection with the well located on the Lands described in Exhibit “A.”

The event of Payout which results in a change in Assignee’s undivided interest in the Leases and Lands is described in the Agreement.  As evidence of when Payout occurs, Assignor may file a Notice in the records of the county where the Leases and Lands are located, stating the effective date of Payout, at which time, Assignee’s interest shall be reduced to the “After Payout” interest stated above.

The Assignment is delivered by Assignor to Assignee with warranty of title by, through and under Assignor, but not otherwise, and subject to the terms of the Agreement and JOA to which Assignor and Assignee are parties.

Assignor

Exhibit A:  Description of Leases and Lands that are the subject of this Assignment.

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