Document:

exv10w14

 

Exhibit
10.14

PURCHASE AND SALE AGREEMENT

     THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) dated as of the 4th day of December, 2005,
is entered into by and between Gillco Energy, LP, (“Seller”) and RIATA ENERGY, INC., RIATA
PICEANCE, LLC, MidContinent Resources, LLC, and ROC GAS COMPANY (collectively “Riata”).

Recitals:

     A. Seller acquired an interest in Riata’s Piceance Basin Project (Block 1, 2, and
3), purchased an interest in Sagebrush Pipeline, LLC, and purchased acreage in the
Piceance Basin from Symbol Energy, Inc.

     B. Seller acquired an interest in Riata’s Cottonwood Prospect, in Vernon County,
Missouri, and Riata’s Toano Draw Prospect, in Nevada.

     C. Seller owns 31,209 Units of PetroSource Energy Company, LP and 31,209
Units of PSE Management, LLC (Collectively “ Seller’s Units” and “PetroSource)

     D. Seller desires to sell and Riata desires to purchase the Subject Interests, being
the interests described in these recitals, and Incidental Rights and assets on the terms and
conditions, and subject to the limitations, exceptions, disclaimers and reservations, herein
provided.

Agreements:

     For and in consideration of the mutual covenants and agreements set forth herein, the parties
hereby agree as follows:

1. Sale and Purchase.

     (a) Included Assets. Subject to the terms and conditions of this Agreement, Seller
agrees to sell and convey and Riata agrees to purchase and pay for the following described
interests, rights and Subject Interests and Incidental Rights, effective as of 7:00 a.m. local
time, on September 30, 2005 (the “Effective Time”):

          (i) Subject Interests. The oil, gas or mineral leases (the “Leases”) covering the
lands (the “Lands”); all wells, wellbores, equipment and right to production from wells on the
Lands (“Wells”); all rights in the Exploration and Development Agreements between Seller and Riata
(“Contracts”); all interests of Seller in Sagebrush Pipeline, LLC (“Sagebrush”). The oil, gas or
mineral leases covering the Cottonwood and Toano Draw Prospects (the “Prospects”); all wells,
wellbores, equipment and right to production from wells on the Prospects; all of Seller’s 31,209
Units of PetroSource Energy Company, LP and 31,209 Units of PSE Management, LLC
(Collectively “ Seller’s Units” and “PetroSource”). The Leases, the Lands, the Wells, the
Contracts,

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Sagebrush, the Prospects, and Seller’s Units are the “Subject Interests,” which are described on
Exhibit “A.”

          (ii) Incidental Rights. (1) All rights with respect to the use and occupancy of the
surface of and the subsurface depths under the Lands covered by the Leases; (2) All rights with
respect to any pooled, communitized or unitized acreage by virtue of any of the Subject Interests
being a part thereof; (3) All rights in and to all agreements and contractual rights, easements,
rights-of-way, servitudes and other estates related to or otherwise affecting the Subject
Interests; and (4) all rights with respect to Seller’s Units.

     (b) Conditional Sale. Seller is aware that Riata is currently in the process of
undertaking a 144A Private Placement offering (the “Private Placement”). Closing shall be
conditioned upon the closing of the Private Placement. Should the Private Placement fail to close,
for any reason, Riata shall be under no obligation to close. Seller is currently not paying cash
calls or JIBs for the Subject Interests. Similarly, Seller is not receiving revenue from the
Subject Interests. Therefore, if the Private Placement does not close, then within 15 days of
Riata notifying the Seller, Seller shall reimburse Riata for all accrued costs and expenses paid
by Riata attributable to the Properties, and Riata shall reimburse Seller for all arrived income
attributable to the Subject Interests.

     2. Purchase Price and Payment.

	 	(a)	 	Purchase Price. The total consideration for the purchase, sale and
conveyance of the Subject Interests and Incidental Rights to Riata is 1,406,000
shares of common stock of Riata Energy, based on there being 58,687,500 shares
outstanding at the closing of the Private Placement, before considering the
12,500,000 shares expected to be issued for cash by Riata (the “Purchase Price”).
	 
	 	(b)	 	Allocation of Purchase Price. The Purchase Price shall be allocated
among the Subject Interests and Incidental Rights as follows:

	 	 	 
	Seller’s Units in PetroSource
	 	498,939 shares
	Seller’s interest in Piceance
	 	764,061 shares
	Sagebrush
	 	126,758 shares
	The Missouri/Nevada Prospects
	 	16,242 shares
	Total
	 	1,406,000 shares

	 	(c)	 	Seller anticipates taking Riata Stock as payment for the Purchase Price as
indicated above. Riata will provide Seller with an adequate disclosure document
concerning the stock. If Seller, after receiving the disclosure,

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fails to subscribe for the stock, then Seller agrees that the Purchase Price shall
be $23,199,000.

	 	3.	 	Seller’s Representations. Seller represents to Riata as of the date
hereof that:

     (a) Seller owns the Subject Interests.

     (b) Seller is either an individual or is duly organized, validly existing and in good
standing under the laws of the State of its formation. Seller has all requisite power and
authority to enter into this Agreement, and to perform its obligations hereunder. The consummation
of the transactions contemplated by this Agreement will not violate or be in conflict with any
provision, material agreement, or instrument to which Seller is a party or by which it is bound,
or any judgment, decree, order, statute, rule or regulation applicable to Seller.

     (c) The execution, delivery and performance of this Agreement and the transactions
contemplated hereunder have been duly and validly authorized by all requisite action on the part
of Seller.

     (d) This Agreement constitutes, and all documents and instruments required hereunder to be
executed and delivered by Seller at Closing will constitute, valid, legal and binding obligations
of Seller in accordance with its respective terms, subject to applicable bankruptcy and other
similar laws of general application with respect to creditors.

     4. Riata’s Representations. Riata represents to Seller as of the date hereof
that:

     (a) Riata is a corporation duly organized, validly existing and in good standing under the
laws of the States of Texas, Missouri and Colorado. It has all requisite power and authority to
carry on its business as presently conducted, to enter into this Agreement, to purchase the
Subject Interests and Incidental Rights on the terms described in this Agreement, and to perform
its other obligations under this Agreement. The consummation of the transactions contemplated by
this Agreement will not violate, or be in conflict with, any provision of Riata’s charter, by-laws
or governing documents, or any material agreement or instrument to which Riata is a party or by
which Riata is bound, or any judgment, decree, order, statute, rule or regulation applicable to
Riata.

     (b) The execution, delivery and performance of this Agreement and the transactions
contemplated hereunder have been duly and validly authorized by all requisite action on the part
of Riata.

     (c) This Agreement constitutes, and all documents and instruments required hereunder to be
executed and delivered by Riata at Closing will constitute, legal, valid

3

 

and binding obligations of Riata in accordance with their respective terms, subject to applicable
bankruptcy and other similar laws of general application with respect to creditors.

     5. Title Matters.

     (a) Representation and Warranty. Seller shall convey to Riata all of its right, title
and interest in and to the Subject Interests. Such conveyance shall be subject to the Existing
Encumbrances (hereafter defined) and be with special warranties only. Sale and purchase of the
Subject Interests and Incidental Rights are made subject to the Litigation Agreement between
Seller and Riata. The term “Existing Encumbrances” shall mean any of the following matters:

          (i) any liens for taxes and assessments not yet delinquent;

          (ii) easements, rights-of-way, servitudes, permits, surface or use leases and other rights in
respect of surface operations, canals, ditches, highways, pipelines, telephone lines, power lines,
railways and other similar rights-of-way, on, over or in respect to the Lands; and

          (iii) all defects and irregularities affecting the Subject Interests and Incidental Rights
which individually or in the aggregate are not such as to interfere materially with the operation,
value or use of the Subject Interests and Incidental Rights, taken as a whole, and do not prevent
Riata from receiving the proceeds of production from the Subject Interests.

     6. Seller’s Closing Conditions. The obligations of Seller under this Agreement are
subject to Riata closing on its Private Placement.

     7. Riata’s Closing Conditions. The obligations of Riata under this Agreement are
subject, at the option of Riata, to the satisfaction at or prior to Closing of the following
conditions: (i) All representations and warranties of Seller contained in this Agreement shall be
true in all material respects at and as of Closing as if such representations were made at and as
of Closing, (ii) Seller shall receive the executed Assignment and Bill of Sale covering the
Subject Interests and Incidental Rights; and (iv) Riata shall have closed on its Private
Placement.

     8. Closing.

     (a) Time and Place. Unless otherwise agreed to by the parties, the closing of this
transaction (“Closing”) shall take place at the offices of Riata within two (2) days after the
closing of the 144A Private Placement, but no later than January 31, 2006 (the “Closing Date”).
Regardless of when Closing shall occur, Closing shall be deemed effective with respect to each
Property as of the Effective Time.

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     (b) Seller’s Closing Obligations. At Closing, Seller shall deliver to Riata the
executed Assignment and Bill of Sale, which will be provided to Seller in advance of
Closing:

	 	(c)	 	Riata’s Closing Obligations. At Closing, Riata shall deliver to
Seller the Purchase price.

     9. Indemnification.

          (a) Seller shall indemnify and hold harmless Riata from and against any and all claims,
damages, liabilities, costs, and expenses of any kind, including costs of defense, relating to the
Subject Interests and Incidental Rights arising from the events occurring on or before the
Effective Time.

          (b) Riata shall indemnify and hold Seller harmless from and against any and all claims,
damages, liabilities, costs, and expenses of any kind, including costs of defense, relating to the
undivided interest in the Subject Interests and Incidental Rights purchased by Riata arising after
the Effective Time.

     10. Survival Period. All representations, covenants or agreements made herein shall
survive Closing.

     11. Expenses and Commissions. Seller and Riata will be responsible for any expenses
and commissions due from them concerning the sale of the Subject Interests and Incidental Rights,
and shall hold each other harmless therefrom.

     12. Further Assurances. In connection with this Agreement, each party shall execute
and deliver any additional documents and instruments and perform any additional acts that may be
necessary or appropriate to effectuate and perform the provisions of the Agreement.

     13. Entire Agreement. This Agreement constitutes the entire agreement by and between
Seller and Riata with respect to the matters covered by this Agreement, and any all prior
agreements or representations, whether oral or in writing relating to the same matters, are of no
force or effect.

     14. Governing Law. This Agreement shall be governed by and construed, interpreted,
and enforced in accordance with the laws of the State of Texas.

     15. Waiver. Any of the terms, provisions, covenants, representations, conditions,
rights and remedies hereof may be waived, but only by a written instrument executed by the party
waiving compliance.

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     16. Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors, administrators, successors,
and assigns.

     17. Severability. If any provision of this Agreement shall be held to be invalid
under any applicable law, the invalidity shall not effect any other provision of this Agreement
that can be given effect without the invalid provision, and to this end, the provisions of this
Agreement are severable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their representatives
as of the date first written above.

Gillco Energy, LP:

	 	 	 	 	 	 	 	 	 
	12/12/05

	 	 	 	By:	 	/s/ Bill Gilliland	 	 
	 

Date

	 	 	 	 	 	 

Bill Gilliland
	 	 
	 
	 	 	 	 	 	 	 	 
	BUYER:	 	 	 	RIATA ENERGY, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Matthew McCann	 	 
	 

	 	 	 	 	 	 	 	 
	Date

	 	 	 	 	 	Matthew McCann, Vice President, Legal	 	 
	 
	 	 	 	 	 	 	 	 
	BUYER:	 	 	 	SAGEBRUSH PIPELINE, LLC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Matthew McCann	 	 
	 

	 	 	 	 	 	 	 	 
	Date

	 	 	 	 	 	Matthew McCann, Vice President, Legal	 	 

6

 

	 	 	 	 	 	 	 	 	 
	BUYER:	 	 	 	RIATA PICEANCE, LLC.	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Matthew McCann	 	 
	 

	 	 	 	 	 	 	 	 
	Date

	 	 	 	 	 	Matthew McCann, Vice President, Legal	 	 
	 
	 	 	 	 	 	 	 	 
	BUYER:	 	 	 	MIDCONTINENT RESOURCES, LLC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Matthew McCann	 	 
	 

	 	 	 	 	 	 	 	 
	Date

	 	 	 	 	 	Matthew McCann, Vice President, Legal	 	 

7

 

EXHIBIT A

Attached to and made part of the Piceance Basin Project Purchase Agreement. Gillco

Energy, LP is conveying to Buyer all interests it has in the Piceance Basin, Rio Blanco

County, Colorado, which includes all rights under the Exploration and Development

Agreements for Blocks 1, 2, and 3, all rights in the Lands, the Leases, the Wells, the

Prospects and Sagebrush. Gillco is also conveying 31,209 Units of PetroSource

Energy Company, LP and 31,209 Units of PSE Management, LLC.

The “Lands,” all of which are in Rio Blanco County, Colorado

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BLOCK 1 AMI	 	BLOCK 2 AMI	 	 
	       Townshi	 	 	 	 	 	Townshi	 	 	 	 	 	 	 	 	 	BLOCK 3 AMI
	P	 	Range	 	Section	 	P	 	Range	 	Section	 	Township	 	Range	 	section
	2S
	 	 	99W	 	 	 	12	 	 	 	2S	 	 	 	99W	 	 	 	35	 	 	 	3S	 	 	 	99W	 	 	 	13	 
	2S
	 	 	99W	 	 	 	13	 	 	 	2S	 	 	 	99W	 	 	 	36	 	 	 	3S	 	 	 	99W	 	 	 	14	 
	2S
	 	 	99W	 	 	 	22	 	 	 	2S	 	 	 	98W	 	 	 	31	 	 	 	3S	 	 	 	99W	 	 	 	15	 
	2S
	 	 	99W	 	 	 	23	 	 	 	3S	 	 	 	99W	 	 	 	32	 	 	 	3S	 	 	 	99W	 	 	 	22	 
	2S
	 	 	99W	 	 	 	24	 	 	 	3S	 	 	 	99W	 	 	 	1	 	 	 	3S	 	 	 	99W	 	 	 	23	 
	2S
	 	 	99W	 	 	 	25	 	 	 	3S	 	 	 	99W	 	 	 	2	 	 	 	3S	 	 	 	99W	 	 	 	24	 
	2S
	 	 	99W	 	 	 	26	 	 	 	3S	 	 	 	99W	 	 	 	3	 	 	 	3S	 	 	 	99W	 	 	 	25	 
	2S
	 	 	99W	 	 	 	27	 	 	 	3S	 	 	 	99W	 	 	 	10	 	 	 	3S	 	 	 	99W	 	 	 	26	 
	2S
	 	 	99W	 	 	 	34	 	 	 	3S	 	 	 	99W	 	 	 	11	 	 	 	3S	 	 	 	99W	 	 	 	27	 
	2S
	 	 	98W	 	 	 	7	 	 	 	3S	 	 	 	99W	 	 	 	12	 	 	 	 	 	 	 	 	 	 	 	 	 
	2S
	 	 	98W	 	 	 	8	 	 	 	3S	 	 	 	98W	 	 	 	5	 	 	 	 	 	 	 	 	 	 	 	 	 
	2S
	 	 	98W	 	 	 	17	 	 	 	3S	 	 	 	98W	 	 	 	6	 	 	 	 	 	 	 	 	 	 	 	 	 
	2S
	 	 	98W	 	 	 	18	 	 	 	3S	 	 	 	98W	 	 	 	7	 	 	 	 	 	 	 	 	 	 	 	 	 
	2S
	 	 	98W	 	 	 	19	 	 	 	3S	 	 	 	98W	 	 	 	8	 	 	 	 	 	 	 	 	 	 	 	 	 
	2S
	 	 	98W	 	 	 	20	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2S
	 	 	98W	 	 	 	29	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2S
	 	 	98W	 	 	 	30	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

The
“Leases,” all of which are in Rio Blanco County, Colorado

	 	 	 	 	 	 	 	 	 
	BLOCK 1 LEASEHOLD	 	Gross	 	 
	COC-68810 T2S-R98W	 	Acres	 	Wl
	Sec. 22: NE4SE4
	 	 	40.00	 	 	 	5	%
	Sec. 23: N2SW4
	 	 	80.00	 	 	 	5	%
	Sec. 27: NW4NE4, NW4, W2SW4
	 	 	280.00	 	 	 	5	%
	COC-60755 T2S-R99W
	 	 	 	 	 	 	 	 
	Sec. 22: S2
	 	 	320.00	 	 	 	5	%
	Sec. 23: S2
	 	 	320.00	 	 	 	5	%
	COC-60756 T2S-R99W
	 	 	 	 	 	 	 	 
	Sec. 25:
S2NW4, NW4SW4, S2S2, NE4SE4, SE4NE4
	 	 	            360.00	 	 	 	5	%
	Sec. 26: NW4NE4, S2NE4, W2, SE4
	 	 	600.00	 	 	 	5	%

8

 

	 	 	 	 	 	 	 	 	 
	COC-60757 T2S-R99W	 	 	 	 	 	 	 	 
	Sec. 27: ALL
	 	 	640.00	 	 	 	5	%
	Sec. 34: ALL
	 	 	640.00	 	 	 	5	%
	COC-55203 T2S-R98W
	 	 	 	 	 	 	 	 
	Sec. 18: Lots 1-4, E2, E2W2
	 	 	640.00	 	 	 	5	%
	Sec. 19: Lots1&2, E2NW4, SE4SW4
	 	 	200.00	 	 	 	5	%
	Sec. 30: Lots 2,3,& 4, E2, E2W2
	 	 	600.00	 	 	 	5	%
	COC-872 T2S-R98W
	 	 	 	 	 	 	 	 
	Sec 19: SW4NE4
	 	 	40.00	 	 	 	5	%
	Sec 19: NW4NE4, NE4NE4
	 	 	80.00	 	 	 	5	%
	Sec 19: SE4
	 	 	160.00	 	 	 	5	%
	Sec 19: SE4NE4
	 	 	40.00	 	 	 	5	%
	COC-1491 T2S-R98W
	 	 	 	 	 	 	 	 
	Sec 29: Lots 1-16
	 	 	599.22	 	 	 	5	%

	 	 	 	 	 	 	 	 	 
	BLOCK 2 LEASEHOLD	 	 	 	 	 	 
	COC-60743 T3S-R98W	 	Gross Acres	 	 	 	 
	Sec. 6: Lots 1, 8-16, S2NE4, W2SE4
	 	 	524.30	 	 	 	5	%
	Sec. 7: Lots 1-4, W2NE4, SE4NE4, E2W2, SE4
	 	 	600.00	 	 	 	5	%
	COC-60758 T3S-R99W
	 	 	 	 	 	 	 	 
	Sec. 1: Lots 1-4, S2N2
	 	 	319.72	 	 	 	5	%
	COC-60759 T3S-R99W
	 	 	 	 	 	 	 	 
	Sec. 2: S2NE, E2SE
	 	 	160.00	 	 	 	5	%
	Sec. 3: E2SE
	 	 	80.00	 	 	 	5	%
	COC-68811 T2S-R99W
	 	 	 	 	 	 	 	 
	Sec. 31: Lot 7-10, 12-20
	 	 	457.71	 	 	 	5	%
	Sec. 32: Lot 1-4, NE4
	 	 	320.00	 	 	 	5	%
	COC-45368 T2S-R98W
	 	 	 	 	 	 	 	 
	Sec 32: Lots 5-8
	 	 	143.36	 	 	 	1.755	%
	COC-45369 T2S-R98W
	 	 	 	 	 	 	 	 
	Sec 32: NW4SE4
	 	 	40.00	 	 	 	1.755	%
	COC-45377
T3S-R98W
	 	 	 	 	 	 	 	 
	Sec 5: Lots 3&4
	 	 	79.96	 	 	 	2.155	%

	 	 	 	 	 	 	 	 	 
	BLOCK 3 LEASEHOLD	 	 	 	 
	COC-60758 T3S-R99W	 	Gross Acres	 	Wl
	Sec. 13: W2
	 	 	320.00	 	 	 	5	%
	Sec. 14: ALL
	 	 	640.00	 	 	 	5	%
	COC-60760 T3S-R99W
	 	 	 	 	 	 	 	 
	Sec. 15: ALL
	 	 	640.00	 	 	 	5	%
	Sec. 22: ALL
	 	 	640.00	 	 	 	5	%
	COC-1398 T3S-R99W
	 	 	 	 	 	 	 	 
	Sec 23: ALL
	 	 	640.00	 	 	 	2.375	%
	Sec 25: N2
	 	 	320.00	 	 	 	2.375	%
	Sec 26: N2N2
	 	 	160.00	 	 	 	2.375	%
	COC-14406 T3S-R99W
	 	 	 	 	 	 	 	 
	Sec 27: N2
	 	 	320.00	 	 	 	1.175	%

9

 

	 	 	 	 	 
	The “Wells”	 	WI
	Federal 298 18-1

	 	 	5.00	%
	Federal 299 23-1

	 	 	5.00	%
	Federal 299 23-2

	 	 	5.00	%
	Federal 299 26-1

	 	 	5.00	%
	Federal 299 26-2

	 	 	5.00	%
	Federal 299 27-1

	 	 	5.00	%
	Federal 299 27-2

	 	 	5.00	%

Sagebrush Pipeline,

LLC

700 Class A Units

The Prospects

All right, title and interest in Riata’s

Cottonwood Prospect and Toano

Draw Prospect.

PetroSource

31,209 Units of PetroSource 

Energy Company, LP

31,209 Units of PSE Management,

LLC

10exv10w15

 

Exhibit
10.15

PURCHASE AND SALE AGREEMENT

     THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) dated as of the 4th day of
December, 2005, is entered into by and between Wallace Jordan, LLC and Daniel White Jordan,
(“Seller”) and RIATA ENERGY, INC., Sierra Madera
C02 Pipeline, LLC, RIATA PICEANCE, LLC, and
ROC GAS COMPANY ( collectively “Riata” or “Purchaser”).

     For and in consideration of the mutual covenants and agreements set forth herein, the
parties hereby agree as follows:

Subject Interests and Incidental Rights

     A. Seller (Wallace Jordan, LLC) acquired an interest in Riata’s Piceance Basin Project
(Block 1, 2, and 3), purchased an interest in Sagebrush Pipeline, LLC, and purchased acreage
in the Piceance Basin from Symbol Energy, Inc. (collectively “Piceance Properties”).

     B. Seller (Wallace Jordan, LLC) has acquired working interest in Riata’s Prospects in
Pecos and Terrell Counties, Texas (“Riata Operated Leases”). Seller has participated in the
drilling of wells spudded prior to September 4, 2005 on Riata Operated Leases and acquired
interests in other producing properties on the Riata Operated Leases (“Producing Wells”). The
acreage outside of the wellbores of the Producing Wells and wells spudded after September 4,
2005 of the Producing Properties are collectively the “Undeveloped Acreage.”

     C. Seller (Daniel White Jordan) owns shares in Lariat Compression Company (“Larco”) equal
to 50% of the issued and outstanding shares of Larco, less one share (the “Larco Shares”).

     D. Incidental Rights. (1) All rights with respect to the use and occupancy of the
surface of and the subsurface depths under the Subject Interests; (2) All rights with respect
to any pooled, communitized or unitized, acreage by virtue of any of the Subject Interests
being a part thereof; (3) All rights in and to all agreements and contractual rights,
easements, rights-of-way, servitudes and other estates related to or otherwise affecting the
Subject Interests; and (4) all rights with respect to the Larco Shares (collectively
“Incidental Rights”).

     E. Seller desires to sell and Riata desires to purchase the Piceance Properties, the
Undeveloped Acreage, and the Larco Shares (collectively “the Subject Interests”) and
Incidental Rights on the terms and conditions, and subject to the limitations, exceptions,
disclaimers and reservations, herein provided.

1

 

Sale and Purchase.

     (A) Included
Assets. Subject to the terms and conditions of this Agreement, Seller
agrees to sell and convey and Riata agrees to purchase and pay for the Subject Interests and
Incidental Rights, effective as of 7:00 a.m. local time, on September 4, 2005 (the “Effective
Time”):

     (B) Excluded Assets. Seller is not conveying and Riata is not purchasing the
Producing Wells of Seller, being the spuded before September 4, 2005 and mineral interests in the
wellbores of the Producing Wells. Seller is not conveying and Riata is not purchasing the wells or
acreage that is operated by by NEG, LLC, Berexco, Inc. or any third party, with the execution of
the acreage operated by J Cleo Thompson in the Pinon Field. Seller is
not conveying and
Riata is not purchasing Seller’s interest in pipeline
assets operated by ROC Gas, Seller’s interest in Integra Energy, LLC, or Seller’s interest in the
surface and mineral estates of the lands known as the MD 50/50 (3,749.1 acres purchased from
Jolesch Cerf Ranch Ltd. in December, 2003).

     (C) Conditional Sale. Seller is aware that Riata is currently in the process of
undertaking a 144A Private Placement offering (the “Private Placement”). Closing shall be
conditioned upon the closing of the Private Placement. Should the Private Placement fail to close,
for any reason, Riata shall be under no obligation to close. Seller is currently not paying cash
calls or JIBs for the Subject Interests. Similarly, Seller is not receiving revenue from the
Subject Interests. Therefore, if the Private Placement does not close, then within 15 days of
Riata notifying the Seller, Seller shall reimburse Riata for all accrued costs and expenses paid
by Riata attributable to the Properties, and Riata shall reimburse Seller for all arrived income
attributable to the Subject Interests.

     (D) Purchase Price. In consideration of the conveyance and transfer of the Subject
Interests and Incidental Rights, Riata shall, on the Closing Date, deliver the number of shares of
common stock in Riata Energy, Inc. equal to $23,400,000 divided by the per share sales price of
Riata Common Stock in the Private Placement (the “Purchase Price”).

	 	•	 	Allocation of Purchase Price. The Purchase Price shall be allocated
among the Subject Interests and Incidental Rights as follows:

	 	 	 	 
	Seller’s Piceance Properties

	 	$	5,900,000 in shares
	Seller’s Undeveloped Acreage

	 	$	10,000,000 in shares
	Seller’s Larco Shares

	 	$	7,500,000 in shares
	Total

	 	$	23,400,000 in shares

	 	•	 	Seller anticipates taking Riata Stock as payment for the
Purchase Price as indicated above. Riata will provide Seller with an adequate
disclosure document concerning the stock. If Seller, after receiving the
disclosure, fails to subscribe for the stock, then Seller agrees that the
Purchase Price shall be $23,400,000 in cash.

2

 

Paragraphs number 1 and 2 intentionally omitted.

	 	3.	 	Seller’s Representations. Seller represents to Riata as of the date hereof
that:

     (a) Seller owns the Subject Interests.

     (b) Seller is either an individual or is duly organized, validly existing and in good
standing under the laws of the State of its formation. Seller has all requisite power and
authority to enter into this Agreement, and to perform its obligations hereunder. The consummation
of the transactions contemplated by this Agreement will not violate or be in conflict with any
provision, material agreement, or instrument to which Seller is a party or by which it is bound,
or any judgment, decree, order, statute, rule or regulation applicable to Seller.

     (c) The execution, delivery and performance of this Agreement and the transactions
contemplated hereunder have been duly and validly authorized by all requisite action on the part
of Seller.

     (d) This Agreement constitutes, and all documents and instruments required hereunder to be
executed and delivered by Seller at Closing will constitute, valid, legal and binding obligations
of Seller in accordance with its respective terms, subject to applicable bankruptcy and other
similar laws of general application with respect to creditors.

     4. Riata’s Representations. Riata represents to Seller as of the date hereof
that:

     (a) Riata is a corporation duly organized, validly existing and in good standing under the
laws of the States of Texas and Colorado. It has all requisite power and authority to carry on its
business as presently conducted, to enter into this Agreement, to purchase the Subject Interests
and Incidental Rights on the terms described in this Agreement, and to perform its other
obligations under this Agreement. The consummation of the transactions contemplated by this
Agreement will not violate, or be in conflict with, any provision of Riata’s charter, by-laws or
governing documents, or any material agreement or instrument to which Riata is a party or by which
Riata is bound, or any judgment, decree, order, statute, rule or regulation applicable to Riata.

     (b) The execution, delivery and performance of this Agreement and the transactions
contemplated hereunder have been duly and validly authorized by all requisite action on the part
of Riata.

     (c) This Agreement constitutes, and all documents and instruments required hereunder to be
executed and delivered by Riata at Closing will constitute, legal, valid and binding obligations
of Riata in accordance with their respective terms, subject to

3

 

applicable bankruptcy and other similar laws of general application with respect to
creditors.

	 	5.	 	Title Matters.

     (a) Representation and Warranty. Seller shall convey to Riata all of its right, title
and interest in and to the Subject Interests. Such conveyance shall be subject to the Existing
Encumbrances (hereafter defined) and be with special warranties only. Sale and purchase of the
Subject Interests and Incidental Rights are made subject to the Litigation Agreement between
Seller and Riata. The term “Existing Encumbrances” shall mean any of the following matters:

          (i) any liens for taxes and assessments not yet delinquent;

          (ii) easements, rights-of-way, servitudes, permits, surface or use leases and other rights in
respect of surface operations, canals, ditches, highways, pipelines, telephone lines, power lines,
railways and other similar rights-of-way, on, over or in respect to the Lands; and

          (iii) all defects and irregularities affecting the Subject Interests and Incidental Rights
which individually or in the aggregate are not such as to interfere materially with the operation,
value or use of the Subject Interests and Incidental Rights, taken as a whole, and do not prevent
Riata from receiving the proceeds of production from the Subject Interests.

     6. Seller’s Closing Conditions. The obligations of Seller under this Agreement are
subject to Riata closing on its Private Placement.

     7. Riata’s Closing Conditions. The obligations of Riata under this Agreement are
subject, at the option of Riata, to the satisfaction at or prior to Closing of the following
conditions: (i) All representations and warranties of Seller contained in this Agreement shall be
true in all material respects at and as of Closing as if such representations were made at and as
of Closing, (ii) Seller shall receive the executed Assignment and Bill of Sale covering the Subject
Interests and Incidental Rights; and (iv) Riata shall have closed on its Private Placement.

     8.
Closing.

     (a) Time and Place. Unless otherwise agreed to by the parties, the closing of this
transaction (“Closing”) shall take place at the offices of Riata within two (2) days after the
closing of the 144A Private Placement, but no later than January 31, 2006 (the “Closing Date”).
Regardless of when Closing shall occur, Closing shall be deemed effective with respect to each
Property as of the Effective Time.

4

 

     (b) Seller’s Closing Obligations. At Closing, Seller shall deliver to
Riata executed Assignment and Bill of Sale, which will be provided to Seller in advance of Closing,
and which will be in a form mutually acceptable to Seller and Riata

     (c) Riata’s Closing Obligations. At Closing, Riata shall deliver to Seller the
Purchase price.

     9. Indemnification.

          (a) Seller shall indemnify and hold harmless Riata from and against any and all claims,
damages, liabilities, costs, and expenses of any kind, including costs of defense, relating to the
Subject Interests and Incidental Rights arising from the events occurring on or before the
Effective Time.

          (b) Riata shall indemnify and hold Seller harmless from and against any and all claims,
damages, liabilities, costs, and expenses of any kind, including costs of defense, relating to the
undivided interest in the Subject Interests and Incidental Rights purchased by Riata arising after
the Effective Time.

     10. Survival Period. All representations, covenants or agreements made herein shall
survive Closing,

     11. Expenses and Commissions. Seller and Riata will be responsible for their own
expenses and commissions, if any, due from them concerning the sale of the Subject Interests and
Incidental Rights, and shall hold each other harmless therefrom.

     12. Further Assurances. In connection with this Agreement, each party shall execute
and deliver any additional documents: and instruments and perform any additional acts that may be
necessary or appropriate to effectuate and perform the provisions of the Agreement.

     13. Entire Agreement. This Agreement constitutes the entire agreement by and between
Seller and Riata with respect to the matters covered by this Agreement, and any all prior
agreements or representations, whether oral or in writing relating to the same matters, are of no
force or effect.

     14. Governing Law. This Agreement shall be governed by and construed, interpreted,
and enforced in accordance with the laws of the State of Texas.

     15. Waiver. Any of the terms, provisions, covenants, representations, conditions,
rights and remedies hereof may be waived, but only by a written instrument executed by the party
waiving compliance.

5

 

     16. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, executors, administrators, successors, and assigns.

     17. Severability. If any provision of this Agreement shall be held to
be invalid under any applicable law, the invalidity shall not effect any other
provision of this Agreement that can be given effect without the invalid
provision, and to this end, the provisions of this Agreement are severable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
representatives as of the date first written above.

	 	 	 	 	 	 	 
	Seller	 	Wallace Jordan, LLC	 	 
	 
	 	 	 	 	 	 
	12/5/05
	 	 	 	 	 	 
	Date

	 	By:	 	/s/ Daniel White Jordan	 	 
	 

	 	 	 	 

	 	 
	 	 	Daniel White Jordan, Managing Member	 	 
	 
	 	 	 	 	 	 
	12/5/05
	 	 	 	 	 	 
	Date

	 	By:	 	/s/ Daniel White Jordan	 	 
	 

	 	 	 	 

Daniel White Jordan, individually
	 	 
	 
	 	 	 	 	 	 
	BUYER:	 	RIATA ENERGY, INC.	 	 
	 
	 	 	 	 	 	 
	                                        
	 	 	 	 	 	 
	Date

	 	By:	 	/s/ Matthew McCann	 	 
	 

	 	 	 	 

Matthew McCann, Vice President, Legal
	 	 

6

 

	 	 	 	 	 	 	 
	BUYER:	 	SAGEBRUSH PIPELINE, LLC.	 	 
	 
	 	 	 	 	 	 
	                                        
	 	 	 	 	 	 
	Date

	 	By:	 	/s/ Matthew McCann	 	 
	 

	 	 	 	 

Matthew McCann, Vice President, Legal
	 	 
	 
	 	 	 	 	 	 
	BUYER:	 	RIATA PICEANCE, LLC.	 	 
	 
	 	 	 	 	 	 
	                                        
	 	 	 	 	 	 
	Date

	 	By:	 	/s/ Matthew McCann	 	 
	 

	 	 	 	 

Matthew McCann, Vice President, Legal
	 	 

7

 

Wallace Jordan and Daniel White Jordan

EXHIBIT A

Attached to and made part of the Purchase and Sale Agreement. Wallace
Jordan, LLC is

conveying to Buyer all interests it has in the Piceance Basin, Rio Blanco County,

Colorado, which includes all rights under the Exploration and Development Agreements

for Blocks 1,2, and 3, all rights in-the Lands, including the leasehold interest acquired

from Symbol Energy, Inc., the Leases, the Wells, and Sagebrush. Wallace Jordan is also

conveying all undeveloped acreage in Pecos and Terrell Counties, Texas on Riata

Operated, and J. Cleo Thompson Operated Properties, being approximately 7,407 net

leasehold acres. Dan Jordan, individually, all shares he owns in Lariat Compression

Company.

The “Lands,” all of which are in Rio Blanco County, Colorado

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BLOCK 1 AMI	 	BLOCK 2 AMI	 	 
	Townshi 	 	 	 	 	 	Townshi	 	 	 	 	 	BLOCK 3 AMI
	p	 	Range	 	Section	 	p	 	Range	 	Section	 	Township	 	Range	 	Section
	2S
	 	99W	 	12	 	2S	 	99W	 	35	 	3S	 	99W	 	13
	2S
	 	99W	 	13	 	2S	 	99W	 	36	 	3S	 	99W	 	14
	2S
	 	99W	 	22	 	2S	 	98W	 	31	 	3S	 	99W	 	15
	2S
	 	99W	 	23	 	3S	 	99W	 	32	 	3S	 	99W	 	22
	2S
	 	99W	 	24	 	3S	 	99W	 	1	 	3S	 	99W	 	23
	2S
	 	99W	 	25	 	3S	 	99W	 	2	 	3S	 	99W	 	24
	2S
	 	99W	 	26	 	3S	 	99W	 	3	 	3S	 	99W	 	25
	2S
	 	99W	 	27	 	3S	 	99W	 	10	 	3S	 	99W	 	26
	2S
	 	99W	 	34	 	3S	 	99W	 	11	 	3S	 	99W	 	27
	2S
	 	98W	 	7	 	3S	 	99W	 	12	 	 	 	 	 	 
	2S
	 	98W	 	8	 	3S	 	98W	 	5	 	 	 	 	 	 
	2S
	 	98W	 	17	 	3S	 	98W	 	6	 	 	 	 	 	 
	2S
	 	98W	 	18	 	3S	 	98W	 	7	 	 	 	 	 	 
	2S
	 	98W	 	19	 	3S	 	98W	 	8	 	 	 	 	 	 
	2S
	 	98W	 	20	 	 	 	 	 	 	 	 	 	 	 	 
	2S
	 	98W	 	29	 	 	 	 	 	 	 	 	 	 	 	 
	2S
	 	98W	 	30	 	 	 	 	 	 	 	 	 	 	 	 

The
“Leases,” all of which are in Rio Blanco County, Colorado

	 	 	 	 	 	 	 	 	 
	 	 	Gross	 	 
	BLOCK 1 LEASEHOLD	 	Acres	 	Wl
	COC-68810 T2S-R98W
	 	 	 	 	 	 	 	 
	Sec. 22: NE4SE4
	 	 	40.00	 	 	 	10.00	%
	Sec. 23: N2SW4
	 	 	80.00	 	 	 	10.00	%
	Sec. 27: NW4NE4, NW4, W2SW4
	 	 	280.00	 	 	 	10.00	%
	COC-60755 T2S-R99W
	 	 	 	 	 	 	 	 
	Sec. 22: S2
	 	 	320.00	 	 	 	10.00	%
	Sec. 23: S2
	 	 	320.00	 	 	 	10.00	%

8

 

	 	 	 	 	 	 	 	 	 
	 	 	Gross	 	 
	BLOCK 1 LEASEHOLD	 	Acres	 	Wl
	COC-60756 T2S-R99W
	 	 	 	 	 	 	 	 
	Sec. 25: S2NW4, NW4SW4, S2S2, NE4SE4, SE4NE4
	 	 	360.00	 	 	 	10.00	%
	Sec. 26:
NW4NE4, S2NE4, W2, SE4
	 	 	600.00	 	 	 	10.00	%
	COC-60757 T2S-R99W
	 	 	 	 	 	 	 	 
	Sec. 27: ALL
	 	 	640.00	 	 	 	10.00	%
	Sec. 34: ALL
	 	 	640.00	 	 	 	10.00	%
	COC-55203 T2S-R98W
	 	 	 	 	 	 	 	 
	Sec. 18:
Lots 1-4, E2, E2W2
	 	 	640.00	 	 	 	10.00	%
	Sec. 19:
Lots1&2, E2NW4, SE4SW4
	 	 	200.00	 	 	 	10.00	%
	Sec. 30: Lots 2,3,& 4, E2, E2W2
	 	 	600.00	 	 	 	10.00	%
	COC-872 T2S-R98W
	 	 	 	 	 	 	 	 
	Sec19:SW4NE4
	 	 	40.00	 	 	 	2.23	%
	Sec19:NW4NE4, NE4NE4
	 	 	80.00	 	 	 	2.23	%
	Sec 19: SE4
	 	 	160.00	 	 	 	1.85	%
	Sec 19: SE4NE4
	 	 	40.00	 	 	 	3.74	%
	COC-1491 T2S-R98W
	 	 	 	 	 	 	 	 
	Sec 29: Lots 1-16
	 	 	599.22	 	 	 	4.98	%

	 	 	 	 	 	 	 	 	 
	 	 	Gross	 	 
	BLOCK 2 LEASEHOLD	 	Acres	 	Wl
	COC-60743 T3S-R98W
	 	 	 	 	 	 	 	 
	Sec. 6: Lots 1, 8-16, S2NE4, W2SE4
	 	 	524.30	 	 	 	10.00	%
	Sec. 7: Lots 1-4, W2NE4, SE4NE4,
E2W2, SE4
	 	 	600.00	 	 	 	10.00	%
	COC-60758 T3S-R99W
	 	 	 	 	 	 	 	 
	Sec. 1: Lots 1-4,S2N2
	 	 	319.72	 	 	 	10.00	%
	COC-60759 T3S-R99W
	 	 	 	 	 	 	 	 
	Sec. 2: S2NE, E2SE
	 	 	160.00	 	 	 	10.00	%
	Sec. 3: E2SE
	 	 	80.00	 	 	 	10.00	%
	COC-68811 T2S-R99W
	 	 	 	 	 	 	 	 
	Sec. 31: Lot 7-10,12-20
	 	 	457.71	 	 	 	10.00	%
	Sec. 32: Lot 1-4, NE4
	 	 	320.00	 	 	 	10.00	%
	COC-45368 T2S-R98W
	 	 	 	 	 	 	 	 
	Sec 32: Lots 5-8
	 	 	143.36	 	 	 	3.51	%
	COC-45369 T2S-R98W
	 	 	 	 	 	 	 	 
	Sec 32: NW4SE4
	 	 	40.00	 	 	 	3.51	%
	COC-45377 T3S-R98W
	 	 	 	 	 	 	 	 
	Sec 5: Lots 3&4
	 	 	79.96	 	 	 	4.31	%

	 	 	 	 	 	 	 	 	 
	 	 	Gross	 	 
	BLOCK 3 LEASEHOLD	 	Acres	 	Wl
	COC-60758 T3S-R99W
	 	 	 	 	 	 	 	 
	Sec. 13:W2
	 	 	320.00	 	 	 	10.00	%
	Sec. 14: ALL
	 	 	640.00	 	 	 	10.00	%
	COC-60760 T3S-R99W
	 	 	 	 	 	 	 	 
	Sec. 15: ALL
	 	 	640.00	 	 	 	10.00	%

9

 

	 	 	 	 	 	 	 	 	 
	 	 	Gross	 	 
	BLOCK 3 LEASEHOLD	 	Acres	 	Wl
	Sec. 22: ALL
	 	 	640.00	 	 	 	10.00	%
	COC-1398 T3S-R99W
	 	 	 	 	 	 	 	 
	Sec 23: ALL
	 	 	640.00	 	 	 	4.75	%
	Sec 25: N2
	 	 	320.00	 	 	 	4.75	%
	Sec 26: N2N2
	 	 	160.00	 	 	 	4.75	%
	COC-14406 T3S-R99W
	 	 	 	 	 	 	 	 
	Sec 27: N2
	 	 	320.00	 	 	 	2.35	%

	 	 	 	 	 
	The “Wells”	 	Wl
	Federal 298 18-1
	 	 	10.00	%
	Federal 299 23-1
	 	 	10.00	%
	Federal 299 23-2
	 	 	10.00	%
	Federal 299 26-1
	 	 	10.00	%
	Federal 299 26-2
	 	 	10.00	%
	Federal 299 27-1
	 	 	10.00	%
	Federal 299 27-2
	 	 	10.00	%

Sagebrush Pipeline,

LLC

1400 Class A Units and 280 Class C

Units

The Undeveloped Acreage

As defined in the Purchase and Sale

Agreement

Larco Shares

All of Seller’s shares in Lariat

Compression Company

10

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