Document:

Exhibit 10.1 Stock Purchase Agreement

COMMON STOCK PURCHASE AGREEMENT

This Common Stock Purchase Agreement (the “Agreement”) made this 10th day of March, 2016, by and among, on the one hand, Michael Cothill (the “Buyer”) and, on the other hand, Luis Asdruval Gonzalez Rodriguez (“Mr. Rodriguez”) and Miguel Guillen Kunhardt (“Mr. Kunhardt”) (collectively, the “Sellers”), regarding the purchase of shares of common stock of Tanaris Power Holdings, Inc., a Nevada corporation (the “Company”) setting forth the terms and conditions upon which the Sellers will sell Forty Five Million (45,000,000) shares (the “Shares”) of common stock (the “Common Stock”) of the Company, individually owned by Sellers, to Buyer.

NOW THEREFORE, in consideration of the mutual promises, covenants and representations contained herein, the parties herewith agree as follows:

ARTICLE I

SALE OF SECURITIES

1.01

Sale. Subject to the terms and conditions of this Agreement, the Sellers agrees to sell the Shares of Common Stock for an aggregate purchase price of Twelve Thousand Five Hundred Dollars ($12,500.00) (the “Purchase Price”), Mr. Gonzalez beneficially owns 30,000,000 shares of Common Stock and Mr. Guillen beneficially owns 15,000,000 for an aggregate of 45,000,000 shares. This is a private transaction between the Sellers and Buyer.

1.02

Purchase Price. Buyer and/or his representatives shall have deposited the amount of $12,500.00 (the “Deposited Funds”), into the attorney-client trust account of Bauman & Associates Law Firm (“Bauman”), which is legal counsel for the Buyer, for payment of the Purchase Price. By executing this Agreement, Buyer and Sellers hereby authorize Bauman to release the Deposited Funds for any and all costs presently due and owing by the Company to third parties. Buyer and Sellers hereby release and discharge Bauman from any and all liability, duties, or further responsibilities with regard to these instructions, this Agreement, the Deposited Funds, and otherwise. 

ARTICLE II 

REPRESENTATIONS AND WARRANTIES

The Sellers hereby represents and warrant to the Buyer the following:

2.01 

Title. The Sellers have good and marketable title to all of the Shares being sold by them to the Buyer pursuant to this Agreement. The Shares will be, at the Closing, free and clear of all liens, security interests, pledges, charges, claims, encumbrances and restrictions of any kind, except for restrictions on transfer imposed by federal and state securities laws. None of the Shares are or will be subject to any voting trust or agreement. No person holds or has the right to receive any proxy or similar instrument with respect to such Shares. Except as provided in this Agreement, the Sellers is not a party to any agreement which offers or grants to any person the right to purchase or acquire any of the Shares. There is no applicable local, state or federal law, rule, regulation, or decree which would, as a result of the purchase of the Shares by Buyer (and/or assigns) impair, restrict or delay voting rights with respect to the Shares. 

2.02 

Transfer of Shares. The Sellers will have the responsibility for sending all certificates representing the Shares being purchased, along with the proper Stock Powers with Signature Guarantees acceptable to the Transfer Agent for delivery to the Buyer at Closing. 

ARTICLE III

CLOSING

3.01

Closing for the Purchase of Common Stock. The Closing (the “Closing”) of this Transaction for the Shares being purchased will occur when all of the documents and consideration described in Paragraph 3.02 below have been delivered. 

3.02

Documents and Payments to be Delivered at Closing. As part of the Closing the following documents, in form reasonably acceptable to counsel to the parties, and shall be delivered to Buyer:

(a)

By the Sellers:

(i)

stock certificate or certificates, along with stock powers with medallion signature guarantees acceptable to the transfer agent, representing the Shares, endorsed in favor of the name or names as designated by Buyer or left blank;

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(ii)

the resignation of all officers of the Company; 

(iii) 

the appointment of new directors of the Company as designated by the Buyer and the resignation of all its current directors; and Buyer will provide the Sellers the resolution of the new appointment before the Closing;

(iv)

true and correct copies of all of the business and corporate records of the Company, including but not limited to correspondence files, bank statements, checkbooks, savings account books, minutes of shareholder and directors meetings or consents, financial statements, a shareholder list from the Company’s transfer agent dated as of the Closing, stock transfer records, agreements and contracts that exist and

(v)

such other documents of the Company as may be reasonably required by Buyer, if available.

3.03 

Conditions Subsequent. After the Closing:

(a) 

After the Purchase, the Buyer of the Shares shall file the appropriate filings, if so required, disclosing the acquisition of the Shares by the Buyer (“Disclosure Document”).

(b)

 Upon the purchase of the Shares by the Buyer, Buyer will have the full responsibility for filing any and all documents required by the SEC and/or any other government agency that may be required. The Sellers will supply the Buyer with all information that is currently available for the Company. The Buyer understands that the Sellers will have no responsibility whatsoever for any filings made by the Company in the future, either with the SEC, FINRA or with the State of Nevada.

ARTICLE IV

INVESTMENT INTENT

4.01

Transfer Restrictions. Buyer (and/or assigns) agrees that the Shares being acquired pursuant to this Agreement may be sold, pledged, assigned, hypothecated or otherwise transferred, with or without consideration (“Transfer”) only pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”), or pursuant to an exemption from registration under the Act. 

4.02

Investment Intent. The Buyer is acquiring the Shares for his own account for investment, and not with a view toward distribution thereof.

4.03

No Advertisement. The Buyer acknowledges that the Shares have been offered to him in direct communication between him and Sellers, and not through any advertisement of any kind. 

4.04

Knowledge and Experience. The Buyer acknowledges that he has been encouraged to seek his own legal and financial counsel to assist him in evaluating this purchase. The Buyer acknowledges that Sellers has given him and his counsel access to all information relating to the Company’s business that he or any one of them has requested. The Buyer acknowledges that he has sufficient business and financial experience, and knowledge concerning the affairs and conditions of the Company so that he can make a reasoned decision as to this purchase of the Shares and is capable of evaluating the merits and risks of this purchase. 

4.05

Restrictions on Transferability. The Buyer is aware of the restrictions of transferability of the Shares and further understands the certificates shall bear the following legend.

(a) THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION PROVIDED IN SECTIONS 4(1) AND 4(2) AND REGULATION D UNDER THE ACT. AS SUCH, THE PURCHASE OF THIS SECURITY WAS MADE WITH THE INTENT OF INVESTMENT AND NOT WITH A VIEW FOR DISTRIBUTION. THEREFORE, ANY SUBSEQUENT TRANSFER OF THIS SECURITY OR ANY INTEREST THEREIN WILL BE UNLAWFUL UNLESS IT IS REGISTERED UNDER THE ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE. 

(b) The Buyer understands that the Shares may only be disposed of pursuant to either (i) an effective registration statement under the Act, or (ii) an exemption from the registration requirements of the Act. 

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ARTICLE V

REMEDIES

5.01

Arbitration. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Nevada, without regard to the principles of conflict of laws thereof. Any controversy of claim arising out of, or relating to, this Agreement, or the making, performance, or interpretation thereof, shall be settled by arbitration in Nevada in accordance with the Rules of the U.S. Arbitration Association then existing, and judgment on the arbitration award may be entered in any court having jurisdiction over the subject matter of the controversy.

5.02

Termination. The Buyer may terminate this Agreement, if at the Closing, the Sellers has failed to comply with all material terms of this Agreement and have failed to supply any documents required by this Agreement unless they do not exist, or have failed to disclose any material facts which could have a substantial effect on any part of this transaction. Sellers may terminate this Agreement, if at the Closing Buyer has failed to perform. Termination is the sole remedy.

5.03

Indemnification. From and after the Closing, the Parties, jointly and severally, agree to indemnify the other against all actual losses, damages and expenses caused by (i) any material breach of this Agreement by them or any material misrepresentation contained herein, or (ii) any misstatement of a material fact or omission to state a material fact required to be stated herein or necessary to make the statements herein not misleading.

5.04

Indemnification Non-Exclusive. The foregoing indemnification provision is in addition to, and not derogation of any statutory, equitable or common law remedy any party may have for breach of representation, warranty, covenant or agreement.

ARTICLE VI

MISCELLANEOUS

6.01

Captions and Headings. The article and paragraph headings throughout this Agreement are for convenience and reference only, and shall in no way be deemed to define, limit, or add to the meaning of any provision of this Agreement.

6.02

No Oral Change. This Agreement and any provision hereof, may not be waived, changed, modified, or discharged, orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, or discharge is sought.

6.03

Non Waiver. Except as otherwise expressly provided herein, no waiver of any covenant, condition, or provision of this Agreement shall be deemed to have been made unless expressly in writing and signed by the party against whom such waiver is charged; and (i) the failure of any party to insist in any one or more cases upon the performance of any of the provisions, covenants, or conditions of this Agreement or to exercise any option herein contained shall not be construed as a waiver or relinquishment for the future of any such provisions, covenants, or conditions, (ii) the acceptance of performance of anything required by this Agreement to be performed with knowledge of the breach or failure of a covenant, condition, or provision hereof shall not be deemed a waiver of such breach or failure, and (iii) no waiver by any party of one breach by another party shall be construed as a waiver with respect to any other or subsequent breach.

6.04

Time of Essence. Time is of the essence of this Agreement and of each and every provision hereof.

6.05

Entire Agreement. This Agreement, including any and all attachments hereto, if any, contain the entire Agreement and understanding between the parties hereto, and supersede all prior agreements and understandings.

6.06

Partial Invalidity. In the event that any condition, covenant or other provision of this Agreement is held to be invalid or void by any court of competent jurisdiction, it shall be deemed severable from the remainder of this Agreement and shall in no way affect any other condition, covenant or other provision of this Agreement. If such condition, covenant or other provision is held to be invalid due to its scope or breadth, it is agreed that it shall be deemed to remain valid to the extent permitted by law. 

6.07

Significant Changes. The Sellers understands that significant changes may be made in the capitalization and/or stock ownership of the Company, which changes could involve a reverse stock split and/or the issuance of additional shares, thus possibly having a dramatic negative effect on the percentage of ownership and/or number of shares owned by present shareholders of the Company.

6.08

Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile signatures will be acceptable to all parties.

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6.09

Binding Effect. This Agreement shall inure to and be binding upon the heirs, executors, personals, successors and assigns of each of the parties to this Agreement.

6.10

Effect of Closing. All representations, warranties, covenants, and agreements of the parties contained in this Agreement, or in any instrument, certificate, opinion, or other writing provided for in it, shall be true and correct as of the Closing and shall survive the Closing of this Agreement.

6.11

Mutual Cooperation. The parties hereto shall cooperate with each other to achieve the purpose of this Agreement, and shall execute such other and further documents and take such other and further actions as may be necessary or convenient to effect the transaction described herein.

IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date first above written.

“SELLERS”

Luis Asdruval Gonzalez Rodriguez 

By: /s/ LuisAsdruval Gonzalez Rodriguez         

Miguel Guillen Kunhardt

By: /s/ Miguel Guillen Kunhardt                      

“BUYER”

Michael Cothill

By: /s/ Michael Cothill                                      

4Exhibit 10.1

 

 

 

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) dated March 31, 2016, is between Kerr-McGee Oil & Gas Onshore LP (“Seller”), a Delaware limited partnership, with offices at 1099 18th Street, Suite 1800, Denver, Colorado 80202, and PetroShare Corp. (“Purchaser”), a Colorado corporation, with offices at 7200 S. Alton Way, Suite B-220, Centennial, Colorado 80112.  Purchaser and Seller are sometimes referred to herein as the “Parties,” or individually as a “Party.”

RECITALS

Seller is the owner of certain interests in and to certain oil and gas Assets, rights and related assets as defined and described herein; and

Seller desires to sell to Purchaser and Purchaser desires to purchase from Seller the Assets and rights of Seller hereafter described in the manner and upon the terms and conditions set forth herein.

Now, therefore, in consideration of the premises and of the mutual promises, representations, warranties, covenants, conditions and agreements contained herein, the Parties covenant and agree as follows:

ARTICLE 1

 PURCHASE AND SALE

Section 1.1          Purchase and Sale.

At the Closing, but effective as of the Effective Date (as defined in Section 1.3 below), upon the terms and subject to the conditions of this Agreement, Seller agrees to sell and convey to Purchaser and Purchaser agrees to purchase, accept and pay for the Assets (as defined in Section 1.2 below) and to assume the obligations attributable to the Assets.

Section 1.2          Assets.

Subject to the exclusions set forth in this Agreement, all of the following shall herein be called the “Assets”:

(a)     All of Seller's right, title and interest in, to and under the oil and gas leases described on Exhibit A attached hereto (the “Leases”), insofar as the Leases cover the lands described on Exhibit A (the “Lands”) and the depths described on Exhibit A.

(b)     All of Seller’s right, title and interest in, to and under the well identified on Exhibit B attached hereto (the “Well”), including casing, tubing, pumps, motors, gauges, and valves associated with the Well.

(c)     All of Seller's right, title and interest in and to all oil, gas, natural gas liquids, petroleum, condensate, and associated hydrocarbon substances produced from and after the Effective Date from or attributable to the Well, and all proceeds or accounts receivable resulting from the sale of any such hydrocarbons produced after the Effective Date, specifically including all inventoried and/or stored hydrocarbon production, together with the products refined and manufactured therefrom (“Hydrocarbons”).

 

 

 

(d)     To the extent transferable, Seller's interests in and under all contracts, agreements and instruments by which the Assets are bound, to the extent applicable to the Well, Leases or Lands, including, without limitation, operating agreements, Hydrocarbon purchase, sales, balancing, processing, gathering, treatment, compression and transportation agreements, surface agreements, and all other executory contracts and agreements to the extent applicable to the Leases, Lands, Well or Hydrocarbons, including those contracts listed on Exhibit C attached hereto (the “Contracts”).

(e)     All of Seller’s undivided right, title and interest in and to all equipment, machinery, fixtures, heaters, treaters, gathering lines, flow lines, gas lines, water lines, vessels, tanks, boilers, flares or vapor recovery units, separators, platforms, machinery, tools, treating equipment, pipelines, power lines, telephone and communication lines, transportation and communication facilities, and other tangible personal property and improvements located on and used or held for use solely in connection with the operation of the interests described in Section 1.2(a) through (d) (the “Equipment”).

(f)     To the extent transferable, Seller's interest in all the easements, permits, licenses, approvals, servitudes, and rights of way listed on Exhibit D attached hereto (the “Easements”).

(g)     All of Seller's production payment and accounting records, regulatory and administrative records, title opinions, ownership decks, well files and other records related to or associated with the Lands, Leases, Well, and Contracts, but excluding (A) any records to the extent disclosure or transfer is restricted by any third party license agreement or other third party agreement or applicable law, (B) computer software, and (C) all Seller's legal records and legal files and all other work product or attorney-client communications with any of Seller's legal counsel (other than title opinions and Contracts) (subject to such exclusions, the foregoing shall be referred to as the “Records”).

Section 1.3          Effective Date.

The effective date of the conveyance of the Assets is January 1, 2016 (the “Effective Date”). Except as otherwise specifically provided herein, Purchaser shall be entitled to all production of Hydrocarbons from or attributable to the Assets from and after the Effective Date (and all products and proceeds attributable thereto), and to all other income, proceeds, receipts and credits earned with respect to the Assets from or after the Effective Date, and shall be responsible for all Property Costs incurred from and after the Effective Date.  Seller shall be entitled to all production of Hydrocarbons from or attributable to Assets prior to the Effective Date (and all products and proceeds attributable thereto), and to all other income, proceeds, receipts and credits earned with respect to the Assets prior to the Effective Date, and shall be responsible for all Property Costs incurred prior to the Effective Date.

For purposes of this Agreement, the term “Property Costs” means all operating expenses and capital expenditures incurred in the ownership and operation of the Assets in the ordinary course of business, including (i) costs incurred in the ordinary course of production, processing or other operations related to the Assets, (ii) royalty payments, (iii) costs for the maintenance of any Asset, and (iv) costs of any exploration or development activities on the Assets or related to drilling, completion, recompletion, or workover activities on wells located on the Assets.

 

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Section 1.5          Conveyance.

Seller shall convey the Assets to Purchaser at the Closing by an Assignment, Conveyance and Bill of Sale in the form of Exhibit E attached hereto (the “Conveyance”).

Section 1.6          Well Proposals.

Purchaser acknowledges that Seller has elected to participate in the Marcus LD 11-379 HN and Marcus LD 11-380 HN wells located in Section 11 of Township 1 South, Range 67 West proposed by Great Western Operating Company and that Seller has provided the well proposals to Purchaser.  Purchaser agrees to assume all obligations related to such wells.

ARTICLE 2

 PURCHASE PRICE

Section 2.1          Purchase Price.

The purchase price for the Assets shall be One Million One Hundred Eighty Thousand Five Hundred Forty Seven Dollars ($1,180,547) (the “Purchase Price”), subject to adjustment as set forth in this Agreement including, without limitation, Section 2.3 below, payable at Closing by wire transfer of immediately available funds.

Section 2.2          Closing.

Upon the terms and subject to the conditions of this Agreement, the closing of the transaction contemplated by this Agreement (the “Closing”) will take place at 4:00 p.m., at the offices of Seller on March 31, 2016, or at such other time or at such other place as shall be agreed upon by the Parties. The date on which the Closing occurs is hereinafter referred to as the “Closing Date.”

Section 2.3          Determination of Adjusted Purchase Price.

The Purchase Price shall be adjusted (without duplication) as follows and the resulting amount shall herein be called the “Adjusted Purchase Price”:

(a)     The Purchase Price shall be adjusted upward by the aggregate amount of all Property Costs accruing to the Assets and paid by Seller after the Effective Date.

(b)     The Purchase Price shall be adjusted upward by an amount equal to the value of Seller's interest in all merchantable oil or condensate produced from the Assets and in storage above the pipeline connection at the Effective Date (value to be actual contract price in effect as of the Effective Date net of any applicable royalties, gravity adjustments and production, severance or sales taxes).

(c)     The Purchase Price shall be adjusted upward by an amount equal to all pre-paid expenses paid by Seller with respect to the ownership or operation of the Assets and not yet applied as of the Closing Date.

(d)     The Purchase Price shall be adjusted downward by the aggregate amount of the following described proceeds received by Seller after the Effective Date: (i) proceeds from the sale of oil, gas or other associated minerals produced after the Effective Date from the Assets (net of any production royalties, transportation costs and of any production, severance or sales taxes not reimbursed to Seller by the purchaser of production); (ii) for the sale, salvage or other disposition after the Effective Date of any property, equipment or rights included in the Assets; and (iii) otherwise arising from the ownership of the Assets after the Effective Date.

 

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Section 2.5          Final Settlement Statement.

As soon as reasonably practical after the Closing, but no later than the 120th day following the Closing Date, Seller will prepare and deliver to Purchaser a statement (the “Final Settlement Statement”) setting forth the final calculation of the Adjusted Purchase Price including all of the adjustments made to the Purchase Price together with an explanation of how each adjustment was calculated. Seller will deliver to Purchaser reasonable documentation supporting the calculations set forth on the Final Settlement Statement. The Final Settlement Statement will become final and binding on Seller and Purchaser as to the Adjusted Purchase Price on the 30th day following the date the Final Settlement Statement is received by Purchaser, unless prior to such 30th day Purchaser delivers to Seller notice of its disagreement with the adjustments to the Purchase Price set forth in the Final Settlement Statement, together with proposed changes thereto. If Purchaser has delivered a notice of disagreement, then the Final Settlement Statement will become final and binding upon written agreement between Purchaser and Seller resolving all disagreements between Purchaser and Seller. If the Final Settlement Statement has not become final and binding by the 60th day following its receipt by Purchaser, then Purchaser's disagreement will be submitted to determination by the Accounting Expert.  For purposes of this Agreement, the “Accounting Expert” means a national accounting firm selected by mutual agreement of Purchaser and Seller.  If the Parties cannot agree on the Accounting Expert, they will request that the Institute for Conflict Prevention and Resolution select an Accounting Expert that does not represent, and has not recently represented, either Party.  The determination of the Final Settlement Statement by the Accounting Expert will be completed within 30 days and will be final and binding upon Purchaser and Seller as to the actual Adjusted Purchase Price.  Seller and Purchaser agree to provide all data, documents and information requested by the Accounting Expert in a timely manner. Within ten days after the date the Final Settlement Statement has become final and binding (the “Final Settlement Date”), Purchaser will pay to Seller the amount, if any, by which the Adjusted Purchase Price exceeds the Purchase Price, or Seller will pay to Purchaser the amount, if any, by which the Purchase Price exceeds the Adjusted Purchase Price.

Section 2.6          Deliveries at the Closing.

At the Closing, the following events shall occur, each being a condition precedent to the others and each being deemed to have occurred simultaneously with the others:

(a)     the Parties shall execute, acknowledge and deliver the Conveyance in sufficient counterparts for recording in Adams County, Colorado;

(b)     Purchaser shall deliver or cause to be delivered to Seller the Purchase Price by wire transfer of immediately available funds to an account specified by Seller;

(c)     Seller shall execute and deliver to Purchaser the statements described in Treasury Regulation 1.1445-2(b)(2) certifying that Seller is not a foreign person within the meaning of the Internal Revenue Code;

 

 

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(d)     Purchaser and Kerr-McGee Gathering LLC shall execute a Base Contract for Wellhead Gas Purchase;

(e)     Purchaser and Seller shall execute all documents necessary to transfer operations on Seller-operated Assets to Purchaser; and

(f)     Seller and Purchaser shall take such other actions and deliver such other documents as are contemplated by this Agreement.

Section 2.7          Suspended Revenues.

At the Final Settlement Date, Seller shall transfer, assign and deliver to Purchaser all funds held in suspense associated with the Assets and Purchaser’s records relating to such funds.  From and after the Final Settlement Date, Purchaser shall assume all responsibility for maintenance and distribution of such funds.

ARTICLE 3

 REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Purchaser as follows:

Section 3.1          Disclaimers.

EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN THIS ARTICLE 3 AND IN THE CONVEYANCE, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, ORAL OR WRITTEN, AS TO (I) THE CONTENTS, CHARACTER OR NATURE OF ANY DESCRIPTIVE MEMORANDUM, OR ANY REPORT OF ANY PETROLEUM ENGINEERING CONSULTANT, OR ANY GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO THE ASSETS, (II) THE QUANTITY, QUALITY OR RECOVERABILITY OF HYDROCARBONS IN OR FROM THE ASSETS, (III) ANY ESTIMATES OF THE VALUE OF THE ASSETS OR FUTURE REVENUES GENERATED BY THE ASSETS, OR (IV) THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF THE ASSETS, AND FURTHER DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY EQUIPMENT, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT PURCHASER SHALL BE DEEMED TO BE OBTAINING EQUIPMENT AND OTHER TANGIBLE PROPERTY IN ITS PRESENT STATUS, CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS” WITH ALL FAULTS AND THAT PURCHASER HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS PURCHASER DEEMS APPROPRIATE.

Section 3.2          Existence and Qualification.

Seller is a limited partnership duly organized, validly existing and in good standing under the laws of the state of Delaware, and Seller is duly qualified to do business in Colorado.

 

 

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Section 3.3          Power and Authorization.

Seller has the power to enter into and perform this Agreement and consummate the transactions contemplated by this Agreement. The execution, delivery and performance of this Agreement, and the performance of the transactions contemplated hereby, have been duly and validly authorized by all necessary corporate action on the part of Seller.

Section 3.4          Enforceability.

This Agreement has been duly executed and delivered by Seller (and all documents required hereunder to be executed and delivered by Seller at Closing will be duly executed and delivered by Seller) and this Agreement constitutes, and at the Closing such documents will constitute, the valid and binding obligations of Seller, enforceable in accordance with their terms except as such enforceability may be limited by applicable bankruptcy or other similar laws affecting the rights and remedies of creditors generally as well as by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

Section 3.5          Litigation.

As of the date of this Agreement, there are no actions, suits or proceedings pending or, to Seller's knowledge, threatened, before any court or other governmental, regulatory or administrative court, authority, agency, panel or commission (“Governmental Entity”) with respect to the Assets. There are no actions, suits or proceedings pending, or to Seller's knowledge, threatened, before any court or other Governmental Entity against Seller which are reasonably likely to impair Seller's ability to perform its obligations under this Agreement or any document required to be executed and delivered by Seller at Closing.

Section 3.6          Taxes and Assessments.

(a)     To Seller's knowledge, Seller has (giving effect to all extensions obtained) duly and timely filed (or there has been filed on its behalf) with the appropriate Governmental Entities all income and other material Tax Returns required to be filed by it with respect to the Assets, and all such Tax Returns are true, correct and complete in all material respects and timely paid or there has been paid on its behalf all material Taxes due and payable with respect to the Assets.

(b)     To Seller's knowledge, there are no liens for Taxes upon the Assets except for statutory liens for current Taxes not yet due or liens for Taxes being contested in good faith.

(c)     To the knowledge of Seller, no federal, state, local or foreign audits, reviews or other administrative proceedings or court proceedings exist or have been initiated with regard to any Taxes or Tax Returns relating to the Assets, and none of Seller or its subsidiaries has received any written notice of such an audit.

(d)     For purposes of this Agreement, the following terms shall have the meanings ascribed to them:

(i)     “Tax Return” means any report of Taxes due, any claims for refund of Taxes paid, any information return with respect to Taxes or any other similar report, statement, declaration, or document required to be filed under applicable Tax Law, including any attachments, exhibits or other materials submitted with any of the foregoing and including any amendments or supplements to any of the foregoing.

 

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(ii)     “Tax” or “Taxes” means all taxes, charges, levies, fees, or other assessments imposed by any federal, state, local or foreign Tax Authority, including, but not limited to, any income, gross income, gross receipts, profits, capital stock, franchise, business, withholding payroll, social security, workers’ compensation, unemployment, disability, property, ad valorem, stamp, excise, occupation, service, sales, use, license, lease, transfer, import, export, value added, goods and services, alternative minimum, estimated or other similar tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax), and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.

(iii)    “Tax Authority” means, with respect to any Tax, the Governmental Entity that imposes such Tax and the agency (if any) charged with the collection or administration of such Tax for such entity.

(iv)    “Tax Law” means the law (including any applicable regulations or any administrative pronouncement) of any Governmental Entity relating to any Tax.

Section 3.7          Compliance with Laws.

To Seller's knowledge, the Assets have been operated in material compliance with all applicable statutes, rules, regulations and ordinances of Governmental Entities, except such failures to comply as would not, individually or in the aggregate, have a material adverse effect.

Section 3.8          Consents and Preferential Purchase Rights.

To Seller’s knowledge, none of Assets are subject to any preferential rights to purchase which would become exercisable as a result of the transactions contemplated by this Agreement, and except as set forth on Schedule 3.8, to Seller’s knowledge, no third-party consents to assignment are required with respect to the transactions contemplated by this Agreement, except consents and approvals of assignments by Governmental Entities that are customarily obtained after Closing.

ARTICLE 4

 REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants as follows:

Section 4.1          Existence and Qualification.

Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the state of Colorado, and Purchaser is duly qualified to do business in Colorado.

Section 4.2          Power and Authorization.

Purchaser has the power to enter into and perform this Agreement and consummate the transactions contemplated by this Agreement. The execution, delivery and performance of this Agreement, and the performance of the transactions contemplated hereby, have been duly and validly authorized by all necessary corporate action on the part of Purchaser.

 

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Section 4.3          Enforceability.

This Agreement has been duly executed and delivered by Purchaser (and all documents required hereunder to be executed and delivered by Purchaser at Closing will be duly executed and delivered by Purchaser) and this Agreement constitutes, and at the Closing such documents will constitute, the valid and binding obligations of Purchaser, enforceable in accordance with their terms except as such enforceability may be limited by applicable bankruptcy or other similar laws affecting the rights and remedies of creditors generally as well as by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

Section 4.4           Litigation.

There are no actions, suits or proceedings pending, or to Purchaser's knowledge, threatened, before any court or other Governmental Entity against Purchaser which are reasonably likely to impair Purchaser's ability to perform its obligations under this Agreement or any document required to be executed and delivered by Purchaser at Closing.

Section 4.5          Independent Investigation.

Purchaser acknowledges and affirms that (a) it has completed its independent investigation, verification, analysis and evaluation of the Assets and (b) it has made all such reviews and inspections of the Assets as it deems necessary or appropriate. Except for the representations and warranties expressly made by Seller in Article 3 of this Agreement and in the Conveyance, Purchaser acknowledges that there are no representations or warranties, express or implied, as to the Assets or prospects thereof, and that in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, Purchaser will rely solely upon its own independent investigation, verification, analysis and evaluation.

ARTICLE 5

 COVENANTS

Section 5.1          Post Closing Production Receipts.

Seller shall be entitled to all proceeds of Hydrocarbon production attributable to the Assets for the periods of time prior to the Effective Date, and Purchaser shall be entitled to all proceeds of Hydrocarbon production attributable to the Assets for periods of time from and after the Effective Date. Should either Party receive proceeds from Hydrocarbon production from the Assets to which the other Party is entitled (which proceeds have not previously been the subject of Purchase Price adjustments pursuant to Article 2 or otherwise), the receiving Party shall pay over such proceeds to the entitled Party not later than 30 days after its receipt of such proceeds.

Section 5.2          Records.

(a)     Within five business days of the Closing, Seller shall make the originals or copies of its Records in respect of the Assets available for pickup by Purchaser; provided that Seller shall have the right to keep copies of such Records.  Purchaser agrees that it shall preserve and keep all Records in respect of the Assets that relate to periods prior to the Closing, or to matters for which Seller may be required to provide indemnification hereunder, for a period of seven years from the Closing Date (or any longer period required by applicable law or until the final resolution of any matters for which Seller may be required to provide indemnification hereunder), and shall give Seller, at its sole cost, reasonable access to such Records during normal business hours.

 

8

 

(b)     Subject to applicable law and any applicable contractual restrictions, if following the Closing a Party (or its affiliates) is in possession of any information relating to the Assets which the other Party requires in order to prepare documents required to be filed with Governmental Entities or its financial statements, such Party shall furnish such information to the other Party as soon as reasonably practicable following a written request for such information.

Section 5.3          Crude Oil Purchase Agreement.

Purchaser agrees to negotiate in good faith an agreement with Anadarko Wattenberg Oil Complex LLC for the gathering and purchase of crude oil that incorporates the terms set forth on Exhibit F attached hereto and such mutually acceptable additional terms as may be required. 

ARTICLE 6

TAX MATTERS

Section 6.1          Cooperation.

Purchaser and the Seller covenant and agree that subsequent to the Closing, upon reasonable notice and during normal business hours, they will (a) give the other Party and its representatives information, books and records relevant to the Assets, to the extent necessary to enable the other party to prepare its Tax Returns or determine the amount of any Tax benefit the requesting Party may be entitled to receive pursuant to this Agreement, and (b) provide the other Party with such information, books and records as may reasonably be requested in connection with any Tax Return, inquiry, election, audit or other examination by any Tax Authority, or judicial or administrative proceedings relating to liability for Taxes with respect to the Assets.

Section 6.2          Sales Taxes and Assessments.

All sales, use, transfer and similar taxes or assessments (including duties, levies and other governmental charges incurred by or imposed on the Parties with respect to the property transfers or other transactions undertaken pursuant to this Agreement) arising from or payable by reason of the conveyance of the Assets to Purchaser (“Transfer Taxes”) will be borne by Purchaser. Seller will determine, and Purchaser will cooperate with Seller in determining the amount of any Transfer Taxes, if any, that is due in connection with the transactions contemplated by this Agreement and Purchaser agrees to pay any such Transfer Tax to Seller or to the appropriate Governmental Entity. If any of the transactions contemplated by this Agreement are exempt from any such Transfer Taxes upon the filing of an appropriate certificate or other evidence of exemption, Purchaser will timely furnish to Seller such certificate or evidence.

Section 6.3          Ad Valorem and Other Taxes.

Ad valorem, real property, personal property, severance, production, and similar Taxes attributable to the Properties (“Property Taxes”) shall be prorated as of the Effective Time (as determined pursuant to the following sentences), with the portion of Property Taxes attributable to the period ending immediately prior to the Effective Time being allocated to Seller, and the portion of Property Taxes attributable to the period beginning at the Effective Time being allocated to Purchaser.  The Parties understand and agree that Property Taxes based on production during a calendar year, including any severance Taxes, shall be prorated based upon production before and at and after the Effective Time.  Thus, for example, tax year 2015 taxes (based on 2014 production and paid in 2016) are solely the responsibility of Seller under this Section, and tax year 2016 taxes (based on 2015 production and paid in 2017) shall be prorated based upon production before the Effective Time (which shall be the responsibility of Seller) and at and after the Effective Time (which shall be the responsibility of Purchaser).  Seller shall file Tax Returns for tax year 2016 Property Taxes.

 

9

 

ARTICLE 7

ASSUMPTION OF LIABILITIES AND INDEMNIFICATION

Section 7.1          Purchaser's Assumption of Liability.

From and after the Closing, Purchaser shall assume and pay, perform, fulfill and discharge and release Seller from (a) all Damages relating to environmental conditions in, on or under the Assets, including without limitation any and all liability for (i) ground water contamination, (ii) Naturally Occurring Radioactive Materials, (iii) man-made material fibers, or (iv) the obligation to plug and abandon the Well and reclaim the Well site (collectively, the “Assumed Environmental Liabilities”) and (b) all obligations of Seller arising under the Leases, Contracts, Easements and applicable Law with respect to the Assets (the “Other Liabilities”), whether the Assumed Environmental Liabilities or Other Liabilities are attributable to the period of time, before, on and after the Effective Date.

Section 7.2          Indemnification.

(a)            From and after Closing, subject to Section 7.2(b) and the other provisions of this Article 7, Purchaser shall indemnify, defend and hold harmless Seller from and against all Damages incurred or suffered by Seller:

(i)     caused by or arising out of or resulting from Purchaser’s breach of any of Purchaser’s covenants or agreements contained in this Agreement, and

(ii)    caused by or arising out of or resulting from any breach of any representation or warranty made by Purchaser contained in Article 4 of this Agreement.

(b)            From and after Closing, subject to the other provisions of this Article 7, Seller shall indemnify, defend and hold harmless Purchaser from and against all Damages incurred or suffered by Purchaser:

(i)     caused by or arising out of or resulting from Seller’s breach of any of Seller’s covenants or agreements contained in this Agreement, and

(ii)    caused by or arising out of or resulting from any breach of any representation or warranty made by Seller contained in Article 3 of this Agreement.

(c)     The term “Damages” for purposes of this Agreement shall mean the amount of any actual liability, loss, cost, expense, claim, award or judgment incurred or suffered by any Indemnified Person arising out of or resulting from the indemnified matter, whether attributable to personal injury or death, property damage, contract claims, torts, or otherwise, including reasonable fees and expenses of attorneys, consultants, accountants or other agents and experts reasonably incident to matters indemnified against, and the costs of investigation and/or monitoring of such matters, and the costs of enforcement of the indemnity. In no event shall either Party be liable to the other Party for any exemplary, punitive, special, indirect consequential, remote or speculative damages; provided, however, that if any Indemnified Person is held liable to a third party for any of such damages and the Indemnifying Person is obligated to indemnify the Indemnified Person hereunder for the matter that gave rise to such damages, then the Indemnifying Person shall be liable for and obligated to reimburse the Indemnified Person for such damages.

 

10

 

Section 7.3          Indemnification Actions.

All claims for indemnification under Section 7.2 shall be asserted and resolved as follows:

(a)     For purposes of this, the term “Indemnifying Person” when used in connection with particular Damages shall mean the Person or Persons having an obligation to indemnify another Person or Persons with respect to such Damages pursuant to this Article 7, and the term "Indemnified Person" when used in connection with particular Damages shall mean the Person or Persons having the right to be indemnified with respect to such Damages by another Person or Persons pursuant to this Article 7.

(b)     To make claim for indemnification under Section 7.2, an Indemnified Person shall in good faith notify the Indemnifying Person of its claim under this Section 7.3, including the specific details and evidence of and specific basis under this Agreement for its claim (the “Claim Notice”).  In the event that the claim for indemnification is based upon a claim by a third party against the Indemnified Person (a “Claim”), the Indemnified Person shall provide its Claim Notice promptly after the Indemnified Person has actual knowledge of the Claim and shall enclose a copy of all papers (if any) served with respect to the Claim; provided that the failure of any Indemnified Person to give notice of a Claim as provided in this Section 7.3 shall not relieve the Indemnifying Person of its obligations under Section 7.2 except to the extent such failure results in insufficient time being available to permit the Indemnifying Person to effectively defend against the Claim or otherwise materially prejudices the Indemnifying Person’s ability to defend against the Claim. In the event that the claim for indemnification is based upon an inaccuracy or breach of a representation, warranty, covenant or agreement, the Claim Notice shall specify the representation, warranty, covenant or agreement that was inaccurate or breached.

(c)     In the case of a claim for indemnification based upon a Claim, the Indemnifying Person shall have 10 days from its receipt of the Claim Notice to notify the Indemnified Person whether it admits or denies its liability to defend the Indemnified Person against such Claim under this Article 7. If the Indemnifying Person does not notify the Indemnified Person within such 10-day period whether the Indemnifying Person admits or denies its obligation to defend the Indemnified Person, it shall be conclusively deemed obligated to provide such indemnification hereunder. The Indemnified Person is authorized, prior to and during such 10-day period, to file any motion, answer or other pleading that it shall deem necessary or appropriate to protect its interests or those of the Indemnifying Person and that is not prejudicial to the Indemnifying Person.

(d)     If the Indemnifying Person admits its obligation, it shall have the right and obligation to diligently defend, at its sole cost and expense, the Claim. The Indemnifying Person shall have full control of such defense and proceedings, including any compromise or settlement thereof. If requested by the Indemnifying Person, the Indemnified Person agrees to cooperate in a commercially reasonable manner in contesting any Claim which the Indemnifying Person elects to contest and in determining whether to assert any counterclaim or cross-complaint against any Person. The Indemnified Person may at its own expense participate in, but not control, any defense or settlement of any Claim controlled by the Indemnifying Person pursuant to this Section 7.3(d). An Indemnifying Person shall not, without the written consent of the Indemnified Person, settle any Claim or consent to the entry of any judgment with respect thereto which (i) does not result in a final resolution of the Indemnified Person’s liability with respect to the Claim (including, in the case of a settlement, an unconditional written release of the Indemnified Person) or (ii) may materially and adversely affect the Indemnified Person (other than as a result of money damages covered by the indemnity).

 

11

 

(e)     If the Indemnifying Person does not admit its obligation or admits its obligation but fails to diligently defend or settle the Claim, then the Indemnified Person shall have the right to defend against the Claim (at the sole cost and expense of the Indemnifying Person, if the Indemnified Person is entitled to indemnification hereunder), with counsel of the Indemnified Person’s choosing, subject to the right of the Indemnifying Person to admit its obligation and assume the defense of the Claim at any time prior to settlement or final determination thereof.  If the Indemnifying Person has not yet admitted its obligation to provide indemnification with respect to a Claim, the Indemnified Person shall send written notice to the Indemnifying Person of any proposed settlement and the Indemnifying Person shall have the option for 10 days following receipt of such notice to (i) admit in writing its obligation to provide indemnification with respect to the Claim and (ii) if its obligation is so admitted, reject, in its reasonable judgment, the proposed settlement. If the Indemnified Person settles any Claim over the objection of the Indemnifying Person after the Indemnifying Person has timely admitted its obligation in writing and assumed the defense of the Claim, the Indemnified Person shall be deemed to have waived any right to indemnity therefor.

(f)     In the case of a claim for indemnification not based upon a Claim, the Indemnifying Person shall have 30 days from its receipt of the Claim Notice to (i) cure the Damages complained of, (ii) admit its obligation to provide indemnification with respect to such Damages or (iii) dispute the claim for such Damages. If the Indemnifying Person does not notify the Indemnified Person within such 30-day period that it has cured the Damages or that it disputes the claim for such Damages, the Indemnifying Person shall be conclusively deemed obligated to provide such indemnification hereunder.

Section 7.4          Limitation on Actions.

(a)     The representations and warranties of the Parties in Article 3 and Article 4 and the covenants and agreements of the parties contained in Article 5, shall survive the Closing for a period of six months after the Closing Date, at which time they will expire, except as otherwise provided below. Representations and warranties of either party regarding Tax matters shall survive until the expiration of the applicable statute of limitations period.  The remainder of this Agreement shall survive the Closing without time limit, except as may otherwise be expressly provided herein. Representations, warranties, covenants and agreements shall be of no further force and effect after the date of their expiration, provided that there shall be no termination of any bona fide claim asserted pursuant to this Agreement with respect to a breach of a representation, warranty, covenant or agreement prior to its expiration date.

 

12

 

(b)     The indemnities in Sections 7.2(a)(i), 7.2(a)(ii), and 7.2(b)(ii) shall terminate as of the expiration date of each respective representation, warranty, covenant or agreement, that is subject to indemnification thereunder, except in each case as to matters for which a specific written claim for indemnity has been delivered to the Indemnifying Person on or before such termination date.  The indemnities in Section 7.2(a)(i) shall continue without time limit, subject to the applicable statute of limitations for filing an action.

(c)     The amount of any Damages for which an Indemnified Person is entitled to indemnity under this Article 7 shall be reduced by the amount of insurance proceeds actually received by the Indemnified Person or its Affiliates with respect to such Damages (net of any collection costs).

ARTICLE 8

 MISCELLANEOUS

Section 8.1          Notices.

All notices and other communications hereunder must be in writing and will be effective upon receipt. Notice must be given (i) by personal delivery to the appropriate address as set forth below (or at such other address for the Party as specified by like notice), (ii) by reliable overnight courier service to the appropriate address as set forth below (or at such other address for the Party as specified by like notice), or(iii) by email with read receipt, with follow-up copy by reliable overnight courier service the next business day:

if to Seller, to:

Kerr-McGee Oil & Gas Onshore LP

1099 18th Street, Suite 1800

Denver, Colorado 80202

Attn: Wattenberg Land Manager

Telephone:  720.929.6178

Email: patrick.mcgraw@anadarko.com

if to Purchaser, to:

PetroShare Corp.

200 S. Alton Way, Suite B-220

Centennial, Colorado 80112

Attn: Frederick J. Witsell

Telephone:  303.500.1160

Email: fwitsell@PetroShareCorp.com

 

 

 

13

  

Section 8.2          Counterparts.

This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument.  This Agreement must be manually executed, but the exchange of copies of this Agreement and of manually executed signature pages by electronic mail as an attachment in portable document format shall constitute effective delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement for all purposes.  This Agreement shall not be effective until both Parties have executed and delivered a counterpart.

Section 8.3          Entire Agreement; Assignment.

(a)            This Agreement, the exhibits hereto and the documents and certificates delivered in connection herewith constitute the entire agreement among the Parties with respect to the subject matter hereof, and supersedes all prior agreements and understandings, both written and oral, between the Parties with respect to the subject matter hereof.

(b)            This Agreement shall not be assigned by a Party by operation of law or otherwise.

 

Section 8.4          Governing Law.

 

This Agreement shall be governed and construed in accordance with the laws of the State of Colorado, without regard to any applicable conflicts of law principles.  The Parties expressly and irrevocably (a) consent to the exclusive jurisdiction of the federal or state courts sitting in the City and County of Denver, (b) agree not to bring any action related to this Agreement or the transactions contemplated hereby in any other court (except to enforce the judgment of such courts), and (c) agree not to object to venue in such courts or to claim that such forum is inconvenient. Final judgment by such courts shall be conclusive and may be enforced in any manner permitted by law.

Section 8.5          Waiver of Jury Trial.

EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT.

Section 8.6          No Merger.

None of the provisions of this Agreement shall be deemed to have merged with any assignment or other instrument hereafter executed.

Section 8.7           Publicity.

Neither Party shall issue any press release or other announcement with respect to the transactions contemplated by this Agreement without prior written notice to the other Party, and any press release or other announcement may be issued only after giving the other Party a reasonable opportunity to consult with respect to the content thereof.

 

 

14

 

Section 8.8          Binding Nature; No Third Party Beneficiaries.

This Agreement shall be binding upon and inure solely to the benefit of each Party and its permitted successors and assigns, and except as otherwise expressly set forth herein, nothing in this Agreement, express or implied, is intended to or shall confer upon any other person or persons any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.

Section 8.9          Severability.

If a court of competent jurisdiction determines that any term, condition or provision of this Agreement is void, illegal, unenforceable or unconscionable under any present or future law (or interpretation thereof), the remainder of this Agreement shall remain in full force and effect, and the terms, conditions and provisions that are determined to be void, illegal, unenforceable or unconscionable shall be deemed severed from this Agreement as if this Agreement had been executed with the invalid provisions eliminated; provided, however, that notwithstanding the foregoing, if the removal of such provisions destroys the material purpose of this Agreement, this Agreement shall no longer be of any force or effect.

Section 8.10          Interpretation.

For purposes of interpreting the provisions of this Agreement, the Parties acknowledge and agree that: (i) this Agreement is the result of negotiations between the Parties, and their respective counsel; (ii) the Parties are deemed to have equal bargaining power and position; (iii) the Parties are deemed to have drafted this Agreement jointly; and (iv) the rule of construction that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation or construction of this Agreement.

Section 8.1          Construction.

As used in this Agreement, “including” (or similar terms) shall be deemed followed by “without limitation” and shall not be deemed to be limited to matters of a similar nature to those enumerated. Pronouns in masculine, feminine and neuter gender shall be construed to include any other gender.

Signature Page Follows

 

 

15

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

	
PETROSHARE CORP.

 

By: /s/ Frederick J. Witsell                   

Name: Frederick J. Witsell

Title:   President

	
KERR-MCGEE OIL & GAS ONSHORE LP

 

By: /s/ Michael A. Nixson                 

Name:  Michael A. Nixson

Title:     Attorney-in-Fact

	 	 

 

 

 

16

 

 

	 	
EXHIBIT A

	 	
LEASE SCHEDULE

	 	 	 	 	 	 	 	 	 	 
	 	
Attached to that certain Purchase and Sales Agreement dated March 31st, 2016 by and between Kerr McGee Onshore O&G LP and PetroShare Corp.

 

	 	 	 	 	 	 	 	 	 	 

 

	
KMG FILE #

	
LESSOR

	
LESSEE

	
TWP

	
RANGE

	
SECTION - DESCRIPTION

	
COUNTY

	
STATE

	
EFFECTIVE DATE

	

BK/PG

 REC. NO.

	
1235133000

	
Loretta W. Moore

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: E2NE

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
2/25/1975

	
1972/465

	
1234978000

	
Jess Paul Haller and Georgia Haller

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the North One-Half (N/2) described as follows:  Beginning at the North quarter corner of said Section 10; thence East along the North line of said Section 10 a distance of 232.0 feet; thence South and parallel to the North-South Center Line of said Section 10 a distance of 950.0 feet; thence West parallel to said North line of said Section 10 a distance of 232.0 feet to a point on the North-South centerline of said Section 10; thence North along said centerline a distance of 713.0 feet; thence West and parallel to the North line of said Section 10 a distance of 53.0 feet; thence North and parallel to said centerline to Section 10 a distance of 237.0 feet to a point on said North line of Section 10; thence East along said North line a distance of 53.0 feet to the point of beginning:

As to that portion of the above tract in the NWNE of Section 10 (5.0597 acres):

Limited to those depths and formations below the base of the Shannon formation.

As to that portion of the above tract in the NENW of Section 10 (.2884 acres):

 Limited to those depths and formations below the base of the Sussex formation.

	
Adams

	
CO

	
7/29/1975

	
2019/872

	
1234377000

	
John H. Ehler

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: W2NESE, W2SE, SESE

 Limited to those depths and formations below the base of the Shannon formation

	
Adams

	
CO

	
2/21/1975

	
1972/467

 

 

Page 1 of 8

 

 

	 

KMG FILE #

	 

 

LESSOR

 

	 

LESSEE

	 

TWP

	 

RANGE

	 

SECTION - DESCRIPTION

	 

COUNTY

	 

STATE

	 

EFFECTIVE DATE

	 BK/PG

REC. NO.
	
1234939000

	
The Federal Land Bank of Wichita

	
THE ANSCHUTZ CORPORATION INC

	
T1S

	
R67W

	
Sec. 10: W2NE

 Limited to the "J" Sandstone formation

	
Adams

	
CO

	
11/18/1970

	
1650/107

	
1234948000

	
Faires S. Weinant and Kay Weinant

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lot 2, Block 14.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2013/431

	
1234949000

	
Virgil L. Kuskie and Erna L. Kuskie

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lot 2, Block 8.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2013/436

	
1234950000

	
Gayle D. Fortin and Elna F. Fortin

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lots 4 & 5, Block 10 less vacant street adjacent on East to Lot 5; and the North 100' of Lot 4, Block 11 less vacant street adjacent on the East.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2013/438

	
1234951000

	
Curtis B. Griebel and Lois I. Griebel

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lot 7, Block 14.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2013/440

	
1234952000

	
Emil Mariucci and Florence M. Mariucci

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 4, Block 7.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2013/442

	
1234953000

	
Robert D. Willox and Jeanette K. Willox

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lots 2 & 3, Block 7.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2013/444

	
1234940000

	
Calvin W. Caywood and Joan E. Caywood

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lots 5-8, Block 4, and Lots 1-4, Block 9.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2013/448

	
1234941000

	
John F. Hartner and Linda D. Hartner

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lots 4 & 5, including vacant street adjacent to Lot 5 to the South, Block 13.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2013/450

 

 

Page 2 of 8

 

	
 

KMG FILE #

	 

 

LESSOR

 

	 

LESSEE

	 

TWP

	 

RANGE

	 

SECTION - DESCRIPTION

	
COUNTY

 

	 

STATE

	 

EFFECTIVE DATE

	 BK/PG

REC. NO.
	
1234942000

	
W. Fred Wilder and Mabel T. Wilder

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 7, Block 6.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2013/452

	
1234943000

	
Kenneth W. Walker and Lawanna D. Walker

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 1, Block 5.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2013/454

	
1234944000

	
Otto A. Bode and Clara A. Bode

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lot 6, Block 14.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2013/456

	
1234945000

	
Margaret M. Janich

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lot 6, Block 5.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2013/458

	
1234946000

	
Robert C. Yale and Joan G. Yale

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lot 5, Block 5.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2013/460

	
1234947000

	
William Duran and Mary C. Duran

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lots 2 & 7, Block 13, including vacant street adjacent to Lot 7 to the South.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2013/462

	
1234958000

	
Don A. Jones and Marjorie J. Jones

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as: Lots 1-4, Block 6; Lot 5, Block 7; and in Hi-Land Acres Third Filing described as: Lot 2 and the South 340' of Lots 3 and 4 together with all vacant West Half of Elmira Street adjacent to Lot 4 on the East, Block 11; And the vacant street between Blocks 10 and 13 except the West 25' of the North 150'.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2014/798

	
1234959000

	
David Donald Moore and 

Sarah C. Moore

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lot 8, Block 9.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2014/800

 

 

Page 3 of 8

 

 

 

	
KMG FILE #

	LESSOR	LESSEE	
TWP

	
RANGE

	
SECTION - DESCRIPTION

	COUNTY	STATE	
EFFECTIVE DATE

	BK/PG

REC. NO.
	
1234960000

	
George Z. Janich and Dorothy J. Zanich (Janich)

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lots 3 & 6, Block 10, and the North 100' of Lot 3, Block 11.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2014/802

	
1234961000

	
Guy M. Smith and Grace E. Smith

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lot 8, Block 5.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2014/804

	
1234962000

	
Herbert and Loetta B. Taylor

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 1, Block 1, and Lots 4-6, Block 2.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2014/806

	
1234963000

	
Tom S. Yamamoto and Elizabeth T. Yamomoto

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 5, Block 8.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2014/808

	
1234954000

	
William P. Renner, Jr. and Sandra S. Renner

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 3, Block 3.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2014/810

	
1234955000

	
Walter L. Smith and Jacqueline Smith

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lots 3 & 6 and vacant street adjacent to Lot 6 to the South, Block 13.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2014/812

	
1234956000

	
Don D. Hazard and Dorothy L. Hazard

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 7, Block 3.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2014/814

	
1234957000

	
Eugene J. Day and Joan M. Day

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 1, Block 3.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2014/816

	
1234964000

	
Esequio W. and Annette J. Carillo

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 3, Block 1.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2016/585

 

 

 

Page 4 of 8

 

	KMG FILE #	 LESSOR	 LESSEE	 TWP	
RANGE

	
SECTION - DESCRIPTION

	 COUNTY	 STATE	 EFFECTIVE DATE	 BK/PG

REC. NO.
	
1234965000

	
Harold F. Zinn and Donna D. Zinn

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lots 5 & 6, Block 9.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2016/587

	
1234966000

	
Jackie M. Crawford and Barbara A. Crawford

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lot 5, Block 14.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2016/589

	
1234967000

	
Herman J. and Eula F. Reigenborn

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 1, Block 2.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2016/591

	
1234968000

	
William L. Galey, Jr. and Bonita A. Galey

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lot 7, Block 9.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2016/593

	
1234969000

	
Baysinger Brothers Construction Co.

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 5, Block 3.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2016/595

	
1234970000

	
Bernice C. Reid

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lot 3, Block 14.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2016/597

	
1234971000

	
Emilio L. Brito and Corine Brito

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 4, Block 4.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2019/858

	
1234972000

	
Donald R. Ward and Vagola B. Ward

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lots 6-8, Block 7.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2019/860

	
1234973000

	
Carl H. Rolfsmeyer and Lois J. Rolfsmeyer

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 2, Block 3.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2019/862

 

 

 

Page 5 of 8

 

	KMG FILE #	  LESSOR	  LESSEE	 TWP	 RANGE	
SECTION - DESCRIPTION

	 COUNTY	  STATE	 EFFECTIVE DATE	 BK/PG

REC. NO.
	
1234974000

	
George H. Douglas and Barbara E. Douglas

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 8, Block 6.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2019/864

	
1234975000

	
Lynn C. Nick and Wilma J. Nick

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lots 1 & 8, Block 10, and Lot 1, Block 11.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2019/866

	
1234976000

	
Howard G. Herbeck

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 2, Block 1.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2019/868

	
1234977000

	
Maurice L. Wakefield and Linda F. Wakefield

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 4, Block 1.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2019/870

	
1234979000

	
Carroll A. Kaatz and June L. Kaatz

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lots 3 & 4, Block 5.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2023/916

	
1234980000

	
Jerome L. Jarmin and Catherine Sue Jarmin

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 1, Block 4.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2023/918

	
1234981000

	
Tom S. Yamamoto and George K. Yamomoto

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 1, Block 7.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2023/920

	
1234982000

	
Francis A. Petty and Rosemary E. Petty

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lots 2 & 3, Block 4.

 Limited to those depths and formations below the base of the Sussex formation.

	
Adams

	
CO

	
7/29/1975

	
2029/530

	
1234984000

	
Vincint L. Langfield and Mary L. Langfield

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lot 4, Block 14.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2029/532

 

 

Page 6 of 8

 

 

	KMG FILE #	   LESSOR	   LESSEE	TWP	  RANGE	 SECTION - DESCRIPTION	 COUNTY	  STATE	 EFFECTIVE DATE	 BK/PG

REC. NO.
	
1234985000

	
Leon J. Dlug and Patricia L. Dlug

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lot 7, Block 5.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2029/534

	
1234986000

	
Pleasant D. Vickrey and Karen J. Vickrey

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 4, Block 3.

 Limited to those depths and formations below the base of the Sussex formation.

	
Adams

	
CO

	
7/29/1975

	
2029/536

	
1234987000

	
Ronald V. Baker and Margaret S. Baker

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lots 1 and 8, Block 13, except vacant street on West, and including vacant street on the South side of Lot 8, Block 13.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2029/538

	
1234988000

	
Teruaki Yamamoto

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 4, Block 8.

 Limited to those depths and formations below the base of the Sussex formation.

	
Adams

	
CO

	
7/29/1975

	
2029/540

	
1234989000

	
Alfred B. Federico and Mary S. Federico

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lots 5 & 6, Block 6.

 Limited to those depths and formations below the base of the Sussex formation.

	
Adams

	
CO

	
7/29/1975

	
2029/542

	
1234990000

	
Hi-Land Acres Water and Sanitation District

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as All of Block 12, being the South 440' of the East 635' of W2NE.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/28/1975

	
2029/544

	
1234992000

	
Darrell D. Carver and Jeanette L. Carver

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lots 2 & 7, Block 10.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
7/29/1975

	
2046/101

	
1234991000

	
Robert L. O'Toole and Linda J. O'Toole

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 2, Block 2.

 Limited to those depths and formations below the base of the Sussex formation.

	
Adams

	
CO

	
7/29/1975

	
2046/103

	
1234983000

	
Grover O. Kelly and Wilma J. Kelly

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 3, Block 2.

 Limited to those depths and formations below the base of the Sussex formation.

	
Adams

	
CO

	
7/29/1975

	
2056/69

 

 

 

Page 7 of 8

 

	KMG FILE #	  LESSOR	  LESSEE	 TWP	   RANGE	  SECTION - DESCRIPTION	 COUNTY	  STATE	 EFFECTIVE DATE	 BK/PG

REC. NO.
	
1234993000

	
Steven W. Piper and Janet C. Piper

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 3, Block 8.

 Limited to those depths and formations below the base of the Sussex formation.

	
Adams

	
CO

	
1/22/1976

	
2058/11

	
1234996000

	
Kenneth L. Kuhns and Elizabeth Booz Kuhns

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Third Filing described as Lots 1 & 8, Block 14.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
12/4/1983

	
2835/416

	
1234995000

	
Frederick H. Brinkerhoff and Ellen R. Brinkerhoff

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 6, Block 3.

 Limited to those depths and formations below the base of the Sussex formation.

	
Adams

	
CO

	
12/2/1983

	
2835/418

	
1234994000

	
Jerry Satriano and Marisa G. Satriano

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 1, Block 8.

 Limited to those depths and formations below the base of the Sussex formation.

	
Adams

	
CO

	
12/2/1983

	
2835/420

	
1234997000

	
Charles E. Auer and Mary F. Auer

	
Amoco Production Company

	
T1S

	
R67W

	
Sec. 10: That part of the W2NE in Hi-Land Acres Second Filing described as Lot 2, Block 5.

 Limited to those depths and formations below the base of the Sussex formation

	
Adams

	
CO

	
12/2/1983

	
2843/904

	
1235166000

	
Robert E. Korsa and Merna M. Korsa

	
Paul V. Hoover

	
T1S

	
R67W

	
Sec 10: E/2NE/4SE/4

 Limited, From the Top of the "D" Sandstone formation to the Base of the  "J" Sandstone formation

	
Adams

	
CO

	
03/26/1971

	
1692/211

	
1362025000

	
Anadarko Land Corp. and Anadarko E&P Onshore LLC

	
Kerr-McGee Oil & Gas Onshore LP

	
T1S

	
R67W

	
Sec 10: The East 40.00 feet of the NE1/4SE1/4

 All Depths from the Surface to the Top of the "D" Sand Formation and All depths below the Base of the "J" Sand Formation

	
Adams

	
CO

	
02/24/2016

	
2016000014318

 

 

Page 8 of 8

 

 

 

	
EXHIBIT B

	
WELL SCHEDULE

	 	 	 	 	 	 
	
Attached to that certain Purchase and Sales Agreement dated March 31st, 2016 by and between Kerr McGee Onshore O&G LP and PetroShare Corp.

	 
	 	 	 	 	 	 

 

	
API

	
Well Name

	
Unit

	
Section

	
TWN

	
RNG

	
05-001-07074

	
Moore LW GU 1

	
E2

	
10

	
1S

	
67W

 

 

 

 

Page 1 of 1

 

	
EXHIBIT C

	
CONTRACT SCHEDULE

	 	 	 	 	 	 	 
	
Attached to that certain Purchase and Sales Agreement dated March 31st, 2016 by and between Kerr McGee Onshore O&G LP and PetroShare Corp.

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

	
KMG CONTRACT #

	
AGREEMENT TYPE

	
DESCRIPTION

	
COUNTY

	
STATE

	
DATE

	
PARTY

	
629740

	
Declaration of Unitization

	
1S-R67W-10: E/2

	
Adams

	
CO

	
11/14/1975

	
Amoco Production Company

	
629740

	
Amendment to Declaration of Unitization

	
1S-R67W-10: E/2

	
Adams

	
CO

	
3/19/1984

	
Amoco Production Company

 

Page 1 

 

	
EXHIBIT D

	
EASEMENTS SCHEDULE

	 	 	 	 	 	 	 
	
Attached to that certain Purchase and Sales Agreement dated March 31st, 2016 by and between Kerr McGee Onshore O&G LP and PetroShare Corp.

	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

	
KMG FILE #

	
AGREEMENT TYPE

	
DESCRIPTION

	
COUNTY

	
STATE

	
DATE

	
PARTY

	
1121377000

	
Right of Way

	
1S-R67W-10: 

E2NE 4" well 

connect pipeline

	
Adams

	
CO

	
1/5/1976

	
Pandhandle Eastern Pipe Line Company

 

 

 

 

Page 1 of 1

EXHIBIT E

FORM OF

ASSIGNMENT, CONVEYANCE AND BILL OF SALE

THIS ASSIGNMENT, CONVEYANCE AND BILL OF SALE (this “Assignment”) is dated March 31, 2016, but effective as of 7:00 a.m. Mountain Standard Time January 1, 2016 (the "Effective Date"), and is between Kerr-McGee Oil & Gas Onshore LP, a Delaware limited partnership ("Assignor") with an office at 109918th Street, Suite 1800 Denver, Colorado 80202, and PetroShare Corp. (“Assignee”), a Colorado corporation, with offices at 7200 S. Alton Way, Suite B-220, Centennial, Colorado 80112.  Assignor and Assignee are each also referred to as a “Party.”

            For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby assigns, conveys, and transfers to Assignee all of Assignor’s right, title, and interest, in and to the following property, interests and rights (collectively, the “Assets”):

(a)      All of Assignor’s right, title and interest in, to and under the oil and gas leases described on Exhibit A attached hereto (the “Leases”), insofar as the Leases cover the lands described on Exhibit A (the “Lands”) and the depths described on Exhibit A.

(b)      All of Assignor’s right, title and interest in, to and under the well identified on Exhibit B attached hereto (the “Well”), including casing, tubing, pumps, motors, gauges, and valves associated with the Well.

(c)      All of Assignor’s right, title and interest in and to all oil, gas, natural gas liquids, petroleum, condensate, and associated hydrocarbon substances produced from and after the Effective Date from or attributable to the Well, and all proceeds or accounts receivable resulting from the sale of any such hydrocarbons produced after the Effective Date, specifically including all inventoried and/or stored hydrocarbon production, together with the products refined and manufactured therefrom (“Hydrocarbons”).

(d)      To the extent transferable, Assignor’s interests in and under all contracts, agreements and instruments by which the Assets are bound, to the extent applicable to the Well, Leases or Lands, including, without limitation, operating agreements, Hydrocarbon purchase, sales, balancing, processing, gathering, treatment, compression and transportation agreements, surface agreements, and all other executory contracts and agreements to the extent applicable to the Leases, Lands, Well or Hydrocarbons, including those contracts listed on Exhibit C attached hereto (the “Contracts”).

(e)      All of Assignor’s undivided right, title and interest in and to all equipment, machinery, fixtures, heaters, treaters, gathering lines, flow lines, gas lines, water lines, vessels, tanks, boilers, flares or vapor recovery units, separators, platforms, machinery, tools, treating equipment, pipelines, power lines, telephone and communication lines, transportation and communication facilities, and other tangible personal property and improvements located on and used or held for use solely in connection with the operation of the interests described in paragraphs (a) through (d) (the “Equipment”).

 

 

(f)      To the extent transferable, Assignor’s interest in all the easements, permits, licenses, approvals, servitudes, and rights of way listed on Exhibit D attached hereto.

(g)      All of Assignor’s production payment and accounting records, regulatory and administrative records, title opinions, ownership decks, well files and other records related to or associated with the Lands, Leases, Well, and Contracts, but excluding (A) any records to the extent disclosure or transfer is restricted by any third party license agreement or other third party agreement or applicable law, (B) computer software, and (C) all Assignor’s legal records and legal files and all other work product or attorney-client communications with any of Assignor’s legal counsel (other than title opinions and Contracts).

            SUBJECT TO ALL BURDENS OF RECORD AS OF THE DATE HEREOF.

            TO HAVE AND TO HOLD the Assets unto Assignee and its successors and assigns forever.

            This Assignment is made and accepted expressly subject to the following terms and conditions:

1.            Purchase and Sale Agreement Controls.  This Assignment is subject to that certain Purchase and Sale Agreement dated March 31, 2016 by and between Assignor and Assignee (as amended, restated, modified, or supplemented from time to time, the “Agreement”).  Assignor and Assignee intend that the terms of the Agreement remain separate and distinct from and not merge into this Assignment.  If there is a conflict between the terms of this Assignment and the terms of the Agreement, the terms of the Agreement will control to the extent of the conflict.

2.            Special Warranty of Title.  This Assignment is made without representation or warranty of any kind, express, implied, statutory or otherwise; except that Assignor represents and warrants to Assignee that the Assets are free and clear of all liens, claims, encumbrances  and demands of all persons lawfully claiming by, through or under Assignor, but not otherwise.  Assignor gives and grants to Assignee, its successors, and assigns, to the extent so transferable, full power and right of substitution and subrogation in and to all covenants and warranties by others heretofore given or made in respect of the Assets or any part thereof.

3.            Disclaimers.

            (a)      Disclaimers Conspicuous.  The Parties agree that, to the extent required by applicable law to be operative, the disclaimers contained in this Section 3 are “conspicuous” disclaimers for the purposes of any applicable law, rule or order.

            (b)      “As is, Where is” Purchase.  EXCEPT FOR THE SPECIAL WARRANTY OF TITLE IN THIS ASSIGNMENT, THE LEASES AND WELL ARE BEING CONVEYED WITHOUT WARRANTY OF ANY KIND, EXPRESS, IMPLIED, STATUTORY, COMMON LAW OR OTHERWISE, AND ASSIGNEE HEREBY EXPRESSLY DISCLAIMS, WAIVES AND RELEASES ANY EXPRESS WARRANTY OF MERCHANTABILITY, CONDITION OR SAFETY AND ANY EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE; AND ASSIGNEE ACCEPTS THE ASSETS, “AS IS, WHERE IS, WITH ALL FAULTS, WITHOUT RECOURSE.”  ALL DESCRIPTIONS OF THE WELL, EQUIPMENT, FACILITIES, PERSONAL PROPERTY, FIXTURES AND STRUCTURES HERETOFORE OR HEREAFTER FURNISHED TO ASSIGNEE BY ASSIGNOR HAVE BEEN AND SHALL BE FURNISHED SOLELY FOR ASSIGNEE’S CONVENIENCE, AND HAVE NOT CONSTITUTED AND SHALL NOT CONSTITUTE A REPRESENTATION OR WARRANTY OF ANY KIND BY ASSIGNOR.  ASSIGNEE EXPRESSLY WAIVES THE WARRANTY OF FITNESS AND THE WARRANTY AGAINST VICES AND DEFECTS, WHETHER APPARENT OR LATENT, IMPOSED BY ANY APPLICABLE STATE OR FEDERAL LAW.

 

2

 

            (c)      Inspection.   Assignee has inspected, or waived its right to inspect, the Assets for all purposes, and satisfied itself as to their physical and environmental condition, both surface and subsurface, including conditions specifically relating to the presence, release, or disposal of hazardous materials, solid wastes, asbestos, other man-made fibers, and naturally occurring radioactive materials.  Assignee is relying solely upon its own inspection of the Assets.

4.            Binding Effect.  This Assignment binds and inures to the benefit of the Parties and their permitted successors and assigns.  The covenants and agreements herein shall be covenants that run with the land.

5.            Construction.  In the event an ambiguity or question of intent or interpretation of this Assignment arises, this Assignment shall be construed as if jointly drafted by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring a Party as a result of authorship or drafting of any provision of this Assignment.

6.            Severability.  If any term or other provision of this Assignment is invalid, illegal, or incapable of being enforced under any rule of law, all other conditions and provisions of this Assignment shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in a materially adverse manner with respect to either Party.

7.             Execution.  This Assignment may be executed and delivered in one or more counterparts, each of which when executed and delivered shall be an original, and all of which when executed shall constitute one and the same instrument.  Separate assignments of the Leases may be executed on officially approved forms by Assignor to Assignee, in sufficient counterparts to satisfy applicable statutory and regulatory requirements, including assignments of “record” title or “operating rights” with respect to federal Leases.  Those assignments shall be deemed to contain all of the exceptions, reservations, warranties, rights, titles, power and privileges set forth herein as fully as though they were set forth in each such assignments.  The interests conveyed by such separate assignments are the same, and not in addition to, the Assets conveyed herein.

Signature Page Follows

 

 

3

Signature Page to Assignment, Conveyance and Bill of Sale

This Assignment is executed the date of the acknowledgment for each Party, but effective as of the Effective Date.

Assignor:

Kerr-McGee Oil & Gas Onshore LP

By____________________________

Name _________________________

Title___________________________

Assignee:

PetroShare Corp.

By____________________________

Name _________________________

Title___________________________

4

ACKNOWLEDGMENTS

	
STATE OF COLORADO

	
)

	 
	 	
)

	
ss.

	
CITY AND COUNTY OF DENVER

	
)

	 

The foregoing instrument was acknowledged before me this ___ day of March 2016, by _________________, as Agent and Attorney-in-Fact of Kerr-McGee Oil & Gas Onshore LP, a Delaware limited liability company, on behalf of such limited liability company.

 

Witness my hand and official seal.

	
(Seal/Stamp)

	 
	 	
Notary Public

 

	 	
My commission expires:

	 

	
STATE OF COLORADO

	
)

	 
	 	
)

	
ss.

	
CITY AND COUNTY OF DENVER

	
)

	 

The foregoing instrument was acknowledged before me this ___ day of March 2016, by _______________, as __________________ of PetroShare Corp., a Colorado corporation, on behalf of such corporation.

Witness my hand and official seal.

	
(Seal/Stamp)

	 
	 	
Notary Public

 

	 	
My commission expires:

	 

  

 

 

5

 

 

 

 

 

EXHIBIT F

AWOC/ PetroShare Corp.

Term Sheet

This non-binding term sheet ("Term Sheet") reflects certain terms of a potential transaction (as further defined below, the "Transaction") between Anadarko Wattenberg Oil Complex LLC ("AWOC") and PetroShare Corp. ("PetroShare") and does not contain all matters upon which agreement must be reached for the Transaction to be effectuated. AWOC and PetroShare are collectively referred to herein as the "Parties" or individually as a "Party."

This Term Sheet contains confidential trade proposals and is made solely for purposes of discussions between the Parties of the potential Transaction described herein and does not constitute an offer capable of being accepted and will not give rise to any legally binding obligations between the Parties. Moreover, except as may be expressly provided in any binding written agreement(s) the Parties may enter into in the future with respect to the Transaction, no past or future action, course of conduct, or failure to act relating to the Term Sheet will give rise to or serve as a basis for any obligation or other liability between or among the Parties.

	
Term

	
Details

 

	
Transaction

	
PetroShare will deliver their oil product to the Receipt Point. AWOC will purchase the oil product at the Receipt Point

 

PetroShare agrees to:

•  Deliver oil product from PetroShare's Dedicated Area to the Receipt Point 

o   At a pressure sufficient to enter the gathering system

o   At a reasonably uniform daily rate of flow

o   That meets Receipt Point Quality Specifications

•   Sell to AWOC, at the Receipt Point, 100% of PetroShare's allocated oil product produced from the Dedicated Area.

•   Provide a water tank and a reject tank.

•   Provide electricity for operation of the Lease Automatic Custody Transfer (LACT) unit.

•   Reimburse AWOC for the costs of the LACT units and the interconnect to AWOC's gathering system.

•   Provide monthly development plan schedules to AWOC

•   Provide monthly production forecasts to AWOC

 

AWOC agrees to:

•   Purchase PetroShare's oil product at the Receipt Point

•   Install, own and operate the AWOC LACT meter at each Receipt Point

 

	
Effective Date

	
January 1, 2016

 

	
Term

	
10 Years from the Effective Date, then year to year until terminated by either Party

 

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Fees and Other Considerations

	
•   AWOC will charge PetroShare a monthly Gathering & Stabilization fee based on a Monthly Average WTI Crude Oil Price ("Fee") as follows:

 

 

	 	
WTI Monthly Average Crude Oil

Price ($/bbl)

	
<= $40.00

	
between $40.00 &

$60.00

	
>= $60.00

	 	
Gathering &

Stabilization Fee Rate ($/bbl)

	
$2.00

	
$2.00 + $0.10 for every $1.00 over

$40.00 WTI Crude

Price

	
$4.00

 

	 	
•  AWOC will pay PetroShare a weighted average pipeline netback price for their oil, NGI.s and residue gas.

•  This Fee will be adjusted annually based on the change in the CPI-U index. Inno event shall the annual adjustment herein result in a reduction of the Fee in effect as of the Effective Date.

•  PetroShare will pay AWOC its pro rata share of all applicable electric and fuel costs on the gathering system and COSF

 

	
Line Fill and Tank Inventory

	
PetroShare will provide its proportionate share of line fill and tank inventory as required for operation of the gathering system, tankages, and COSF.

 

	
Dedication

	
PetroShare will dedicate to AWOC all oil produced from all depths within 1S67W Section 10, attributable to Producer's and third party's non-operated  Interests which PetroShare, in its capacity as operator of such Interest, has the right or obligation to market ("Dedicated Area").

 

	
Receipt Point

	
Custody transfer will take place at the inlet flange of the LACT meter where crude oil is delivered by PetroShare to AWOC, at a mutually agreed location.

 

	
Receipt Point Quality Specifications

	
Crude oil at the Receipt Points must meet the most stringent downstream pipeline specifications except for Reid vapor pressure (RVP) and API gravity

•   AWOC will accept the crude oil with RVP up to 250 psi

•   AWOC will accept the crude oil with gravity up to 65 API

 

	
Confidentiality

	
The provisions of the Confidentiality Agreement between KMGG and PetroShare dated August 25, 2015 are applicable to this Term Sheet. All terms proposed in this Term Sheet will be treated as Confidential Information.

 

 

 

 

 

 

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