Document:

Exhibit 10.16

    Exhibit
      10.16
       

      CARTER
        CREEK PROJECT PURCHASE AGREEMENT 

       

       

      THIS
        AGREEMENT is made and entered into this 9th day of January, 2004, by and
        between
Thomasson
        Partner Associates, Inc., whose
        mailing address is 1410
        High
        Street, Denver, CO 80218 (hereinafter referred to as
"Thomasson")
        and
Fellows
        Energy Ltd., a Nevada Corporation, whose
        mailing address is 8716 Arapahoe Road, Boulder, CO 80303
        (hereinafter
        referred to as “Fellows”),
        regarding the purchase of an oil and gas exploration project and certain
        oil and
        gas leasehold interest associated therewith. Thomasson and Fellows shall
        herein
        be collectively referred to as the "Parties." 

       

      WHEREAS,
        Thomasson is an oil and gas exploration company engaged, among other activities,
        in the business of developing oil and natural gas plays, projects and prospects
        and selling such plays, projects and prospects to other oil and gas exploration
        companies; and 

       

      WHEREAS,
        Thomasson has developed an oil and gas exploration project located in Converse
        County, Wyoming, described as the Carter Creek Project (hereinafter referred
        to
        as "Project"), the area of which is more fully described herein; and

       

      WHEREAS,
        without expressing any warranty of title, either expressed or implied, Thomasson
        represents that it is the owner of certain oil and gas leasehold located
        in
        Converse County, Wyoming, as described on Exhibit "A" attached hereto and
        made a
        part hereof, (herein referred to as "Leases"): 

       

      WHEREAS,
        Fellows is an oil and gas exploration company and desires to purchase the
        Project and the Leases; and 

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      WHEREAS,
        Fellows and Thomasson desire to enter into this Project Purchase Agreement
        (hereinafter referred to as “Agreement”), whereby Fellows shall purchase the
Project
        and the Leases from Thomasson for certain considerations (as defined and
        provided for herein) in exchange for Thomasson providing Fellows with an
        assignment of the Leases and the right to participate in the exploration,
        development and production of oil and gas within the Project. 

       

      NOW,
        THEREFORE, for and in consideration of the mutual covenants herein contained,
        and other good and valuable considerations, the receipt and sufficiency of
        which
        are hereby acknowledged, the Parties agree as follows: 

       

      I.
        EXHIBITS
        TO THIS AGREEMENT. The
        Exhibits attached to this Agreement and by this reference incorporated herein
        are as follows: 

       

      Exhibit
        “A”-
        Description of Leases. 

      Exhibit
        “B”
        - Well
        Data and Notification Requirements. 

       

      II.
        EFFECTIVE
        DATE.
        The
        effective date for this Agreement shall be January 1, 2004 (hereinafter referred
        to as "Effective Date"). 

       

      III.CLOSING
        DATE.
        Closing
        of the transaction contemplated herein shall be in the offices of Thomasson
        on
        or before January 9, 2003, or on a date and at a location that is mutually
        acceptable to the Parties (hereinafter referred to as "Closing Date").

       

      IV.
        CONFLICT
        OF AGREEMENTS.
        This
        Agreement supersedes all other agreements, documents, writings and verbal
        understandings among the Parties with regard to the Project. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      V.
        REPRESENTATION
        OF OWNERSHIP.
        Thomasson, without expressing any warranty of title, either expressed or
        implied, represents that it owns and has the right to sell the Project and
        the
        Leases that cover approximately 10,678.69 net
        acres. 

       

      VI.
        PURCHASE
        PRICE FOR THE LEASES. Within
        thirty-five (35) days from the execution date of this Agreement and subject
        to
        the title examination provisions set forth herein, Fellows shall pay Thomasson
        an amount equal to Twenty and no/100 Dollars ($20.00) per net acre for the
        Leases or the sum of Two hundred thirteen thousand five hundred seventy-three
        and 80/100 Dollars ($213,573.80) (hereinafter referred to as "Purchase Price").
        

       

      VII.
        THOMASSON’S
        ASSIGNMENT OF THE LEASES.Upon
        payment of the Purchase Price by Fellows to Thomasson as provided for herein,
        and subject to the title examination provisions set forth herein, Thomasson
        shall immediately provide Fellows with an assignment of all of Thomasson’s
        right, title and interests in and to the Leases. Said assignments shall (i)
        be
        made without warranty of title, either expressed or implied, except by through
        and under Thomasson, (ii) be subject to an overriding royalty interest in
        favor
        of Thomasson, as described in Article XI hereof, and (iii) be made effective
        as
        of the Effective Date. All assignments made pursuant to this Agreement shall
        be
        made on assignment forms mutually agreed on by the Parties, which shall be
        recordable in the official record of Converse County, Wyoming. Thomasson
        further
        agrees to provide Fellows with any other documentation deemed necessary by
        Fellows to effectuate the transfer of all of Thomasson’s right, title and
        interest in and to the Leases. 

       

      VIII.
        TITLE
        REVIEW AND CURATIVE. Immediately
        after the Closing Date Thomasson shall provide Fellows with reasonable access
        to
        Thomasson’s land files and records, and other such information (including any
        contracts and agreements), concerning the Leases. Within thirty (30) days
        from
        the Closing Date Fellows shall notify Thomasson in writing of any title defects,
        which Fellows may have identified as pertaining to Leases. Fellows’ written
        notice shall identify any such defective Leases, the nature of the defect
        and
        the number of net acres affected thereby. Any Leases not identified in said
        written notice shall be used to calculate the Purchase Price as set in Article
        VI. Upon receipt of Fellows’written
        notice identifying any such defects, Thomasson shall have ninety (90) days
        to
        cure any such title defects. If Thomasson is unable to cure any such title
        defects to Fellows’ satisfaction within the time allowed, Fellows may elect to
        either waive such defects and pay Thomasson an amount equal to Twenty and
        no/100
        Dollars ($20.00) per net acre covered by any such defective Leases or reject
        such defective Leases and not pay Thomasson. If Thomasson is able to cure
        any
        such title defects to Fellows’ satisfaction within the time allowed, Fellows
        shall pay Thomasson the amount of Twenty and no/100 Dollars ($20.00) per
        net
        acre for the applicable Lease(s) within five (5) business days after receipt
        of
        the proper title curative. Failure or defect of title, as used in this Agreement
        shall relate to defensible title and provide Fellows with leasehold that
        is free
        and clear of any and all burdens, encumbrances, charges and liens, except
        as to
        the Thomasson’s ORRI set forth herein; provided, however, that no title defect
        may be asserted by Fellows in connection with matters that are customarily
        acceptable defects, including, without limitation, Federal and State Lease
        stipulations, defects that have been cured by possession under applicable
        statutes of limitation, defects in the early chain of title such as failure
        to
        recite marital status in documents, omission of heirship or succession
        proceedings, lack of survey, and failure to record releases of liens, production
        payments or mortgages that have expired by their own terms or the enforcement
        of
        which are barred by applicable statutes of limitation. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IX.PROJECT
        AREA OF MUTUAL INTEREST. The
        Parties hereby agree to form an Area of Mutual Interest (hereinafter referred
        to
        as the "AMI") defined to include all of the following lands in Converse County,
        Wyoming: 

       

      All
        of
        Townships 37 North, Ranges 68 and 69 West, 6th
        PM

                     
        All of Townships 38 North, Ranges 68 and 69 West, 6th
        PM

       

       

      X.
        TERM
        OF AMI.
        The AMI
        defined herein shall terminate upon the earlier of (i) five (5) years from
        the
        Effective Date, (ii) termination by the mutual written agreement of the
        Thomasson and Fellows, or (iii) abandonment of the Carter Creek County Project
        by Fellows as
        provided for in Article XIII of this Agreement. Any termination of this
        agreement will not affect obligations concerning leases acquired and wells
        drilled within the AMI prior to termination. 

       

       

      XI.
        THOMASSON’S
        OVERRIDING ROYALTY. In
        addition to its Purchase Price and other consideration defined herein, Thomasson
        shall also receive from Fellows an assignment of an overriding royalty interest
        (hereinafter referred to as “Thomasson’s ORRI”) on any oil and gas leasehold
        interest acquired, or caused to be acquired, by Fellows within the AMI during
        the term of such AMI, based on the following sliding scale: 

       

       

       

       

      
        	
                Fellows
                  Net Revenue Interest (NRI)** 

              	Thomasson’s ORRI 
	 	 
	
                NRI
                  85.0% to 87.5% 

              	
                Thomasson’s
                  ORRI = 5%

              
	
                NRI
                  83.0% to 84.99% 

              	
                Thomasson’s
                  ORRI = 4% 

              
	
                NRI
                  82.0% to 82.99%

              	
                Thomasson’s
                  ORRI = 3% 

              
	
                NRI
                  81.0% to 81.99%

              	
                Thomasson’s
                  ORRI = 2% 

              
	
                NRI
                  less than 81.0% 

              	
                Thomasson’s
                  ORRI = 1%

              

      

       

      
        **
          Fellow’s NRI shall be based on a Working Interest of 100%

      

       

      Any
        assignment of any overriding royalty interest made in favor of Thomasson
        under
        the Agreement shall (i) be reduced proportionately to the working interests
        acquired by Fellows and the mineral estates leased thereby (to the extent
        title
        has not failed in any of the underlying leasehold interests); (ii) be free
        of
        all drilling, development, production, operating and overhead costs and
        expenses; (iii) bear and pay its proportionate share of post-production costs
        up
        to the point of sale (including but not limited to transportation, dehydration
        and processing costs), gross production taxes, pipeline taxes, ad valorem
        taxes
        and other taxes assessed against the gross production attributable to said
        overriding royalty interests; (iv) be assigned to Thomasson within ninety
        (90)
        days of Fellows acquiring said working interests and/or leasehold interests;
        and
        (v) apply to any and all renewals and/or extensions of the working interests
        and/or leasehold interests in the AMI which are subject to said overriding
        royalty. 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      XII.
        FELLOWS’ EXPLORATION WORK OBLIGATIONS WITHIN THE
        AMI.
        Fellows agrees to perform the following exploration work obligations within
        the
        AMI: 

       

      A.
        Leasehold
        Acquisition.
        Fellows
        shall, within twenty-four (24) months from the Effective Date use its best
        efforts to acquire a minimum of five thousand (5,000.00) net leasehold acres
        either under oil and gas leases or under options to acquire oil and gas leases.
        

       

      B.
        3-D
        Seismic.
        Within
        twenty-four (24) months from the Effective Date, Fellows agrees to acquire
        an
        amount of 3-D seismic data, as agreed upon by Thomasson and Fellows, and
        have
        shall said 3-D seismic data interpreted so as to determine a minimum of one
        (1)
        potential well location. 

       

      C.
        Exploratory
        Wells.
        Within
        thirty-six (36) months from the Effective Date, Fellows agrees to commence,
        or
        caused to be commenced, one (1) vertical test well with a minimum of two
        laterals within the bore hole of said well and that such well shall be drilled
        to a depth sufficient to test the Dakota Formation. If Fellows fails to
        commence, or causes to be commenced, said test well in the aforementioned
        time
        period, then Fellows shall pay Thomasson the sum of Fifty thousand and no/100
        Dollars ($50,000.00). 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      XIII.
        ABANDONMENT OF THE CARTER CREEK PROJECT.
        Fellows
        shall have the right to elect in writing to abandon the Carter Creek Project
        during the term of the AMI. If Fellows should elect in writing to abandon
        the
        Carter Creek Project during the AMI, Fellows shall provide Thomasson a cost
        free
        assignment of any and all leasehold acquired by Fellows within the AMI. Such
        assignment shall be made to Thomasson within sixty (60) days of the date
        of
        Fellows’ election. This Agreement shall terminate upon receipt of such
        assignment. Any such assignments of leasehold made to Thomasson from
        Fellows’

       

      abandonment
        of the Carter Creek Project shall be free and clear of any and all burdens
        except those of record at the time of Fellows’ acquisition of said leasehold.
        The applicable drill site spacing units of any wells drilled by Fellows,
        or
        caused to be drill by Fellows, which are producing, or capable of producing,
        shall be exempted from such assignments. In the event Fellows elects to sell
        the
        Project or any of the leasehold acquired under this Agreement, Fellows agrees
        to
        notify Thomasson in writing of such election, and may also provide, at Fellow’s
        sole discretion, Thomasson with the preferential right to market the Project
        and
        such leasehold on behalf of Fellows. In such event, and in the event Thomasson
        is thereafter successful in marketing the Project, any proceeds received
        by
        Fellows from Thomasson’s marketing of the Project, associated leasehold and/or
        geophysical data, which is greater than the actual costs incurred by Fellows
        for
        such items, shall be allocated seventy five percent (75.0%) to Fellows and
        twenty five percent (25.0%) to Thomasson. 

       

      XIV. REASSIGNMENT
        RIDER.
        Any
        assignment of leasehold acquired by Fellows pursuant to this Agreement shall
        be
        subject to a reassignment rider in favor of Thomasson. Said reassignment
        rider
        shall provide that Thomasson receives a forty-five (45) day written notice
        prior
        to the rental anniversary date of any lease on which Fellows elects not to
        pay
        delay rentals. Said reassignment rider shall also provide that Thomasson
        shall
        respond in writing within fifteen (15) days of receipt of such written notice
        and give its election as to whether or not Thomasson shall pay such rentals
        and
        take a reassignment of any such lease. Thomasson’s failure to respond in writing
        within the aforementioned fifteen (15) day period shall be deemed as Thomasson’s
        election not to pay rentals and not to take assignment of said lease. Fellows
        shall have no liability for inadvertent failures or omissions to provide
        the
        foregoing notices to Thomasson. 

       

      XV. THOMASSON’S
        OPTION TO PARTICIPATE. Thomasson
        shall have the right to elect in writing to acquire up to a non-promoted
        ten
        percent (10%) working interest in the second well drilled, or caused to be
        drilled, by Fellows within the AMI. Should Thomasson elect to participate
        in the
        second well drilled by Fellows, it will also have an on-going right to
        participate at cost up to a ten percent (10%) working interest in all additional
        wells subsequently drilled, or caused to be drilled, by Fellows in the AMI.
        Should Thomasson 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      elect
        not
        to participate in the second well or any additional wells within the AMI,
        then
        it shall be deemed to have relinquished any further participation rights
        in the
        AMI. Thomasson shall notify Fellows of its election in writing within thirty
        (30) days after receipt of notice of the proposal for the initial well or
        subsequent wells proposed by Fellows in the AMI. Failure to respond within
        such
        thirty (30) day period shall be deemed an election by Thomasson not to
        participate in the proposed well or any subsequent wells proposed by Fellows
        in
        the AMI. 

       

      XVI. JOINT
        OPERATING AGREEMENT.
        Upon
        Thomasson’s election to participate as a working interest owner in the AMI under
        terms of this Agreement, the Parties shall promptly enter into a mutually
        agreed
        Joint Operating Agreement (hereinafter referred to as “JOA”). If a JOA already
        exists covering the AMI or any leasehold acquired by Fellows with the AMI,
        then
        Thomasson’s working interest will be subject to said existing JOA. 

       

      XVII. ACCESS
        TO LAND, GEOLOGICAL AND SEISMIC INFORMATION. Thomasson,
        its agents, representatives and employees, at Thomasson’s sole risk and expense,
        shall have reasonable access at all times to the rig floor of any well drilled,
        or caused to be drilled by Fellows or its designee, within the AMI, and shall
        at
        all times be subject to the operator’s safety requirements. Further, during the
        term of the AMI or according to the terms of any applicable operating agreement,
        Thomasson shall be supplied, as soon as is practicable, with copies of all
        tests, logs and drilling reports that are taken in any well drilled, or caused
        to be drilled, by Fellows within the AMI. Such information shall be provided
        to
        Thomasson without regard as to whether Thomasson owns a working interest
        under
        such well or wells and shall be provided according to the data and notification
        requirements set out in Exhibit “B” attached hereto. Thomasson shall be allowed
        access to land data within the AMI and shall be allowed to use any and all
        seismic data, whether trade or proprietary, that
        Fellows may acquire within the AMI, subject to the terms of any agreements
        governing the use of such data. Such data shall include, without limitation,
        title reports, title opinions, well reports, logs or other pertinent well
        data,
        proprietary seismic data, areo-mag surveys and the final processed formats
        of
        any such data. Thomasson’s use and/or working of such data shall be as a
        consultant for Fellows. Thomasson agrees that it will hold any such well
        and
        seismic data in confidence, and agrees to use such well and seismic data
        only
        for its own internal purposes or for the benefit of assisting Fellows in
        the
        development of AMI, subject to the period of confidentiality described in
        Article XXIII hereof. All seismic data, whether trade or proprietary, acquired
        by Fellows and furnished to Thomasson shall remain the property of Fellows
        and
        shall be returned to Fellows upon the termination of this Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      XVIII. NOTICES.
        All
        notices and other communications required or permitted by the terms of the
        Agreement or any notices that one party may desire to give to the other party
        shall be in writing, unless otherwise specifically provided, and shall be
        deemed
        to have been properly delivered if personally handed to an authorized
        representative of the party for whom intended, or sent by overnight delivery
        service, or facsimile (with written confirmation of a successful transmission),
        and addressed to the Parties to whom the notice is given at the address listed
        below or such other addresses as any party may from time to time designate
        by
        notice in writing to the other party. The originating notice to be given
        under
        any provision hereof shall be deemed to be given only when received by the
        party
        to whom such notice is directed, and the time for such party to give any
        notice
        in response thereto shall run from the date that said originating notice
        is
        received. A response shall be deemed returned when deposited in the mail
        or with
        overnight delivery service or facsimile (with written confirmation of a
        successful transmission), with postage or charges prepaid. Each party shall
        have
        the right to change its address at any time or from time to time by giving
        written notice thereof to all other Parties. Notices by Parties hereto shall
        be
        promptly given in writing and shall be delivered as follows: 

       

       

      Thomasson
        Partner Associates, Inc. 

       

      Attn:
        Mr.
        M. Ray Thomasson 

      1410
        High
        Street 

      Denver,
        CO 80218 

      Phone:
        303-436-1930 

      Fax:
        303-322-2288 

       

      Fellows
        Energy Ltd. 

      Attn:
        Mr.
        George Young 

      8716
        Arapahoe Road 

      Boulder,
        CO 80303 

      Phone:
        303-799-9015 

      Fax:
        303799-9017 

       

       

      XIX. RELATIONSHIP
        OF THE PARTIES.
        The
        duties, obligations, and liabilities of the Parties hereto are intended to
        be
        several and not joint or collective. This Agreement is not intended to create,
        and shall not be construed to create an association or trust, or to impose
        a
        partnership, duty, obligation, or liability with regard to any one or more
        of
        the Parties hereto. Each party hereto shall be individually responsible for
        its
        own obligations as herein provided. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      XX. LAWS
        AND REGULATIONS.
        The
        Parties, in conducting all operations under this Agreement, shall comply
        with
        all applicable state and federal laws, rules and regulations. 

       

      XXI. MODIFICATIONS.
        No
        change, modification or alteration of this Agreement shall be valid unless
        the
        same is made in writing, signed by the Parties hereto, and no course of dealing
        between the Parties shall be construed to alter the terms hereof. 

       

      
         

        XXII. MEDIATION
          AND ARBITRATION.
          Any
          controversy or claim (“claim”), whether based on contract, tort, statute or
          other legal or equitable theory (including but not limited to any claim
          of
          fraud, misrepresentation or fraudulent inducement or any question of validity
          or
          effect of this Agreement, including this clause) arising out of or related
          to
          this Agreement (including amendments or extensions), or the breach or
          termination thereof shall be first submitted to a mutually agreed neutral
          third
          party for mediation. If mediation is not successful, then such controversy
          or
          claim shall be settled by arbitration in accordance with the then current
          CPR
          Institute for Dispute Resolution Rules for Non-Administered Arbitration
          of
          Business Disputes, and this provision. The arbitration shall be governed
          by the
          United States Arbitration Act, 9 U.S.C. Sections 1 through 16 to the exclusion
          of any provision of state law inconsistent therewith or which would produce
          a
          different result, and the judgment upon the award rendered by the arbitrator
          may
          be entered by any court having jurisdiction. The arbitration shall be held
          in
          Denver, Colorado, or such other location as agreed to by the parties, and
          there
          shall be one arbitrator who must be knowledgeable in oil and gas exploration
          matters. Such arbitrator shall be chosen subject to the rules and procedures
          as
          provided by the CPR Institute for Dispute Resolution. The arbitrator shall
          determine the claims of the parties and render a final award in accordance
          with
          the substantive law of the State of Colorado, excluding the conflicts provisions
          of such law. The arbitrator shall set forth the reasons for the award in
          writing. Except as required by law (and then only after prior notice to
          the
          other party), no party shall disclose the facts of the underlying dispute
          or the
          contents or results of the arbitration without the prior consent of all
          parties.
          Any claim by either party shall be time-barred if the asserting party does
          not
          give written notice to the other party or commence mediation with respect
          to
          such claim within two years after the cause of action accrues. All statutes
          of
          limitations and defenses based upon passage of time applicable to any claim
          of a
          defending party (including any counterclaim or claim of setoff) shall be
          tolled
          while the mediation and/or arbitration is pending. The obligation to arbitrate
          any claim shall extend to the successors, assigns and third party beneficiaries
          of the parties. The terms hereof shall not limit any obligations of a
party
          to
          defend, indemnify or hold harmless another party against court proceedings
          or
          other claims, losses, damages or expenses. The arbitrator shall order the
          parties to promptly exchange copies of all exhibits and witness lists,
          and, if
          requested by a party, to produce other relevant documents, to answer up
          to ten
          interrogatories (including subparts), to respond to up to ten requests
          for
          admissions (which shall be deemed admitted if not denied) and to produce
          for
          deposition and, if requested, at the hearing, all witnesses that such party
          has
          listed and up to four other persons within such party’s control. Any additional
          discovery shall only occur by agreement of the parties or as ordered by
          the
          arbitrator upon a finding of good cause. Each party shall bear its own
          costs,
          expenses and attorney’s fees; provided that if court proceedings to stay
          litigation or compel arbitration are necessary, the party who unsuccessfully
          opposes such proceedings shall pay all reasonable associated costs, expenses
          and
          attorney’s fees in connection with such court proceeding. In order to prevent
          irreparable harm, the arbitrator shall have the power to grant temporary
          or
          permanent injunctive or other equitable relief. Prior to the appointment
          of an
          arbitrator a party may, notwithstanding any other provision of this agreement,
          seek temporary injunctive relief from any court of competent jurisdiction;
          provided that the party seeking such relief shall (if arbitration has not
          already been commenced) simultaneously commence arbitration. Such court
          ordered
          relief shall not continue more than ten (10) days after the appointment
          of the
          arbitrator (or in any event for longer than sixty (60) days). If any part
          of
          this arbitration provision is held to be unenforceable, it shall be severed
          and
          shall not affect either the duty to arbitrate or any other part of this
          provision.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      XXIII. CONFIDENTIALITY.
        Fellows
        and Thomasson agree that all data and information generated as a result of
        this
        Agreement (hereinafter referred to as “Confidential Information”) will be
        considered the Confidential Information of both of them. Provided, however,
        Confidential Information shall not include data or information that is generally
        available to the public other than through acts by either Party in violation
        of
        this Agreement or was in possession of a Party prior to Effective Date of
        this
        Agreement, subject to the following,
        or that Fellows reasonably believes must be disclosed in order to comply
        with
        securities laws or regulations or any other laws or regulations to which
        Fellows
        is subject: 

       

      A.
        During
        the term of this Agreement each Party may disclose Confidential Information
        only
        to its direct employees, and to its subsidiaries or affiliates, agents, advisors
        or representatives who have agreed, prior to being given access to the
        Confidential Information, to be bound by the terms herein. After the effective
        termination date of this 

      Agreement
        and the AMI any geological or geophysical data gathered by the Parties, which
        is
        relevant to a Carter Creek Project, may be used by either Party and divulged
        to
        third parties for the purpose of selling or promoting geological or geophysical
        ideas or concepts. Provided, however, the use of any licensed geophysical
        data
        will be strictly limited to the terms to any agreements governing the use
        of
        such data. 

       

      B.
        Neither party shall use said Confidential Information for any purpose other
        than
        the uses contemplated by this Agreement. 

       

      C.
        The
        Parties shall maintain the confidentiality of the Confidential Information
        (including the terms and conditions of this Agreement) and shall not disclose
        the Confidential   Information to any person, firm, corporation
        or
        association, except as mutually agreed, and specified in A. above. 

       

      D.
        The
        Parties shall, subject to mediation and arbitration as provided under this
        Agreement: 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      1.
        Be
        liable to one another and to each of its directors, servants, agents and
        employees for all losses, damages, costs (including reasonable legal costs
        as
        between legal counsel and their own client) and expenses which each Party
        and
        each of its directors, servants, agents and employees may suffer sustain,
        pay or
        incur as a direct result of a breach of the confidentiality obligations set
        out
        in this Agreement by the other Party; and, 

       

      2.
        Indemnify each other and each of its respective directors, servants, agents
        and
        employees against all actions proceedings, claims, demands and costs
(including
        reasonable legal costs as between legal counsel and their own client) which
        may
        be brought against or suffered by each Party and each of its directors,
        servants, agents and employees that they may suffer, sustain, pay or incur
        that
        result directly from any breach of the confidentiality obligations set out
        in
        this Agreement by the other Party, its directors, officers and employees.
        Each
        Party shall be entitled to injunctive relief to prevent a breach or breaches
        of
        the confidentiality obligations of this Agreement. 

       

      E.
        In the
        event either Party or its representatives are required by any court or
        legislative or administrative body (by oral questions, interrogatories, requests
        for information or documents, subpoena, civil investigation, demand or similar
        process) to disclose any Confidential Information, the disclosing Party shall
        provide the other Party with prompt notice of such requirement in order to
        afford the other Party an opportunity to seek an appropriate protective order.
        However, if the other Party is unable to obtain or does not seek such protective
        order and the disclosing Party or its representatives are, in the opinion
        of
        their counsel, required to disclose Confidential Information, disclosure
        of such
        information may be made without liability. 

       

       

      XXIV. JURISDICTION.
        The
        terms and conditions of this Agreement shall be interpreted and construed
        in
        accordance with the laws of the State of Colorado. This Agreement shall,
        in
        every regard, be treated as a contract made in the State of Colorado. To
        the
        extent any such matters are not subject to arbitration under Article XXII,
        the
        Parties irrevocably submit to the jurisdiction of the courts of the State
        of
        Colorado and the courts of appeal there from in respect to the interpretation
        and construction of the terms and conditions of this Agreement. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      XXV. ENTIRE
        AGREEMENT.
        No
        amendments shall be made to this Agreement unless in writing and executed
        by the
        parties. This Agreement supersedes all other prior agreements, documents,
        writings and verbal understandings among the Parties, regarding the Project
        and
        the Leases. 

       

      XXVI. MISCELLANEOUS.
        This
        Agreement may be executed in one document, signed by all Parties, or in a
        number
        of counterparts; and when executed in counterpart, all such counterparts
        shall
        constitute one document. This Agreement and Exhibits, attached hereto and
        made a
        part hereof, shall inure to the benefit of and be binding upon the Parties,
        their successors and assigns. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the Parties hereto have executed this Agreement this 9th
        day of
        January, 2004. 

       

       

      
        	THOMASSON PARTNER ASSOCIATES,
                INC. 
	 
	By:
                /s/
                Terry J. Mather 
	
                

                Terry
                  J. Mather, as
                  attorney-in-fact

              

      

       

      
         

        
          	FELLOWS ENERGY
                  LTD. 
	 
	
                  By: /s/
                    George Young 

                
	
                  
George
                  Young, President 

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
 

    
      EXHIBIT
        "A"

       

      attached
        to and made a part of the Carter
        Creek Project Purchase Agreement
        dated
        January
        9, 2004
        by and
        between

      Thomasson
        Partner Associates, Inc.
        and
Fellows
        Energy Ltd.

    

     

     

     

     

    
      	
              LSE

              No. 

            	
              LSE
                DATE

              EXP
                DATE 

            	LESSOR
              NAME 	LESSEE
              NAME  	
              LEGAL
                DESCRIPTION
 	
              GROSS

              
                ACRES

              

            	
              BOOK
 	
              PAGE
 	
              COUNTY
 	STATE 
	
              001A-013

            	
              November
                1, 1994

              October
                31, 2004

            	
              WYW134155
                United States of America, Wyoming State BLM Office

            	
              Norma
                Rose

            	
              Township
                37 North, Range 68 West, 6th P.M.

              Section
                13: N/2SE/4

            	
              80.00

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-019

            	
              June
                1, 1997

              May
                31, 2007

            	
              WYW141529
                United States of America, Wyoming State BLM Office

            	
              James
                E. Sullivan

            	
              Township
                37 North, Range 68 West, 6th P.M.

              Section
                24: W/2NW/4, W/2NE/4

            	
              160.00

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-020

            	
              June
                1, 1997

              May
                31, 2007

            	
              WYW141530
                United States of America, Wyoming State BLM Office

            	
              James
                E. Sullivan

            	
              Township
                38 North, Range 68 West, 6th P.M.

              Section
                20: S/2SE/4

              Section
                29: NE/4, E/2SE/4

              Section
                31: Lot 2(39.09), E/2NW/4, NE/4, NE/4SE/4

            	
              639.09

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-034

            	
              December
                1, 1997

              November
                30, 2007

            	
              WYW143709
                United States of America, Wyoming State BLM Office

            	
              James
                E. Sullivan

            	
              Township
                37 North, Range 68 West, 6th P.M.

              Section
                23: S/2NE/4, SE/4NW/4

              Section
                24: S/2SW/4

              Section
                25: All

              Section
                26: NW/4, SE/4

              Section
                34: NW/4, SE/4SW/4

            	
              1,360.00

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-039

            	
              February
                1, 1998

              January
                31, 2008

            	
              WYW143904
                United States of America, Wyoming State BLM Office

            	
              Swift
                Energy Company

            	
              Township
                37 North, Range 68 West, 6th P.M.

              Section
                6: SE/4NE/4

              Section
                7: Lot 2(39.29), S/2NE/4, SE/4NW/4

              Section
                8: S/2

              Section
                17: S/2

              Section
                18: Lots 1(39.54), 2(39.43), 3(39.31), 4(39.20), E/2W/2, SE/4

              Section
                19: Lots 1(39.20), 3(39.46), 4(39.60), E/2SW/4, SE/4

              Section
                20: S/2

              Section
                30: SE/4SE/4

            	
              2,035.03

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-040

            	
              February
                1, 1998

              January
                31, 2008

            	
              WYW143905
                United States of America, Wyoming State BLM Office

            	
              Swift
                Energy Company

            	
              Township
                37 North, Range 68 West, 6th P.M.

              Section
                10: N/2SE/4

              Section
                13: S/2SW/4

              Section
                14: W/2NW/4, W/2SE/4

              Section
                15: NW/4

              Section
                27: SE/4

              Section
                35: SE/4SW/4

            	
              680.00

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-041

            	
              February
                1, 1998

              January
                31, 2008

            	
              WYW143906
                United States of America, Wyoming State BLM Office

            	
              Swift
                Energy Company

            	
              Township
                37 North, Range 68 West, 6th P.M.

              Section
                15: SE/4

              Section
                23: NW/4NE/4

            	
              200.00

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-042

            	
              February
                1, 1998

              January
                31, 2008

            	
              WYW143907
                United States of America, Wyoming State BLM Office

            	
              Swift
                Energy Company

            	
              Township
                38 North, Range 68 West, 6th P.M.

              Section
                1: S/2

              Section
                2: S/2

              Section
                9: E/2

              Section
                10: N/2

              Section
                12: N/2N/2

            	
              1,440.00

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-043

            	
              February
                1, 1998

              January
                31, 2008

            	
              WYW143908
                United States of America, Wyoming State BLM Office

            	
              Swift
                Energy Company

            	
              Township
                38 North, Range 68 West, 6th P.M.

              Section
                11: S/2

              Section
                13: E/2NE/4, NW/4

              Section
                14: All

              Section
                23: W/2, SE/4

            	
              1,680.00

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

       

       

    

    
      	
               

            	
              February
                1, 1998

              January
                31, 2008

            	
              WYW143908
                United States of America, Wyoming State BLM Office

            	
              Swift
                Energy Company

            	
              Township
                38 North, Range 68 West, 6th P.M.

              Section
                11: S/2

              Section
                13: E/2NE/4, NW/4

              Section
                14: All

              Section
                23: W/2, SE/4

            	
              1,680.00

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-044

            	
              February
                1, 1998

              January
                31, 2008

            	
              WYW143909
                United States of America, Wyoming State BLM Office

            	
              Swift
                Energy Company

            	
              Township
                38 North, Range 68 West, 6th P.M.

              Section
                22: SW/4

              Section
                26: W/2SW/4, SE/4SW/4

              Section
                29: NW/4

              Section
                32: NE/4

              Section
                33: N/2, N/2SW/4

            	
              1,000.00

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-046

            	
              April
                1, 1998

              March
                31, 2008

            	
              WYW144452
                United States of America, Wyoming State BLM Office

            	
              James
                E. Sullivan

            	
              Township
                37 North, Range 68 West, 6th P.M.

              Section
                4: S/2SE/4

              Section
                11: NE/4NE/4

              Section
                12: N/2NE/4, SE/4NE/4

            	
              240.00

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-047

            	
              April
                1, 1998

              March
                31, 2008

            	
              WYW144460
                United States of America, Wyoming State BLM Office

            	
              James
                E. Sullivan

            	
              Township
                37 North, Range 69 West, 6th P.M.

              Section
                1: Lots 3, 4, S/2N/2, SW/4

              Section
                2: Lot 3, E/2SW/4, SE/4

              Section
                3: Lots 2, 3, 4, S/2N/2, S/2

              Section
                4: Lots 1, 2, S/2N/2

              Section
                11: E/2

              Section
                12: N/2NE/4, SW/4NE/4, NW/4, SW/4SW/4, S/2SE/4

            	
              2,240.22

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-051

            	
              July
                1, 1998

              June
                30, 2008

            	
              WYW145488
                United States of America, Wyoming State BLM Office

            	
              James
                E. Sullivan

            	
              Township
                37 North, Range 68 West, 6th P.M.

              Section
                5: S/2SE/4

            	
              80.00

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-052

            	
              July
                1, 1998

              June
                30, 2008

            	
              WYW145489
                United States of America, Wyoming State BLM Office

            	
              James
                E. Sullivan

            	
              Township
                38 North, Range 68 West, 6th P.M.

              Section
                31: Lot 1(39.10)

            	
              39.10

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-069

            	
              November
                2, 1999

              November
                2, 2004

            	
              99-433
                State of Wyoming, acting by and through its Board of Land
                Commissioners

            	
              James
                E. Sullivan

            	
              Township
                38 North, Range 68 West, 6th P.M.

              Section
                36: All

            	
              640.00

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-073

            	
              February
                1, 2000

              January
                31, 2010

            	
              WYW149591
                United States of America, Wyoming State BLM Office

            	
              James
                E. Sullivan

            	
              Township
                38 North, Range 69 West, 6th P.M.

              Section
                27: S/2SW/4, SW/4SE/4

              Section
                33: SW/4NE/4, SW/4

              Section
                34: E/2E/2

            	
              480.00

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-075

            	
              February
                1, 2000

              January
                31, 2010

            	
              WYW149738
                United States of America, Wyoming State BLM Office

            	
              James
                E. Sullivan

            	
              Township
                38 North, Range 69 West, 6th P.M.

              Section
                33: N/2N/2, SE/4NE/4, NE/4SE/4, S/2SE/4

              Section
                34: W/2E/2, N/2NW/4, S/2SW/4

              Section
                35: NE/4, N/2NW/4

            	
              880.00

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            
	
              001A-077

            	
              November
                1, 2003

              October
                31, 2013

            	
              WYW156539
                United States of America, Wyoming State BLM Office

            	
              Energy
                West Services, LLC

            	
              Township
                37 North, Range 68 West, 6th P.M.

              Section
                4: Lots, 1, 2, 3, SE/4SW/4

              Section
                9: NW/4

            	
              322.76

            	
              N/A

            	
              N/A

            	
              Converse

            	
              Wyoming

            

    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      
        Exhibit
          “B”

         

        Attached
          to that certain Exploration Services Funding Agreement 

        dated
          effective January 1, 2004 between Thomasson
          Partner Associates, Inc.

        and
          Fellows
          Energy Ltd.

        

        1.
          Well Data to be supplied by Operator during drilling.

         

        During
          the drilling of any Test Well drilled under the captioned Agreement, Operator
          shall provide to Thomasson, at no cost or expense to Thomasson, copies
          of all
          well data relating to said Test Well that would normally be supplied to
          a
          working interest participant in such well. Such information shall include,
          without limitation:

         

        A. Daily
          drilling reports including geological reports showing the nature of all
          work
          done and depth and formations penetrated;

        B. A
          copy of
          any mechanical or electrical survey that is run in the course of the
          well;

        C. One
          copy
          of the Lithologic log on a daily basis, if run;

        D. One
          set
          of ditch samples, washed and dried, if taken;

        E. A
          digital
          copy, if made, of all wireline surveys conducted;

        F. The
          results of any drill stem test carried out. .

        

        2.
          Well data to be supplied by Operator.

         

        As
          soon
          as practicable after completion of the drilling of said Test Well, Operator
          shall provide to Thomasson listed below, at no cost or expense to Thomasson,
          a
          copy of the final well completion report. Each copy of the well report
          shall
          include the following: 

         

         

        
          	A. 	
                  A
                    copy of all wireline surveys conducted;

                
	B. 	
                  A
                    copy of the mud logging survey; 

                
	C.	
                  A
                    copy of the velocity survey, if run; 

                
	D. 	
                  A
                    copy of the well site geologist's description of the ditch samples,
                    if
                    taken;

                
	E.	
                  A
                    copy of the well site geologist's description of the sidewall
                    cores or
                    conventional cores, if taken;

                
	E.	
                  A
                    copy of the well site geologist's description of the sidewall
                    cores or
                    conventional cores, if taken;

                
	F. 	
                  A
                    copy of the commercial core analyses (sidewall or conventional)
                    if cores
                    are  taken; 

                
	G. 	
                  A
                    copy of the commercial analyses of the water, gas or oil, if
                    test and
                    recovery that are made; 

                
	H. 	
                  A
                    copy of the analyses, if made, made in dating a sample radioactively
                    or
                    palaentologically, plus copy of core photographs, if
                    taken;

                
	I.	
                  A
                    copy of the geological reports;

                
	J. 	
                  A
                    copy of the well location map;

                
	K. 	
                  A
                    copy of the well history;

                
	L. 	
                  A
                    copy of the well records;

                
	M.	
                  A
                    copy of the drilling report;

                
	N.	
                  A
                    copy of the mud record;

                
	O. 	
                  A
                    copy of the bit record;

                
	P. 	
                  A
                    copy of the formation test data, if a test is made;

                
	Q.	
                  A
                    copy of all other data relative to the
                    well.

                

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        3.
          Parties to receive data.

        

        Thomasson
          Partner Associates, Inc. 

        1410
          High
          Street

        Denver,
          CO 80218

        Phone
          303-436-1930

        Fax
          303-322-2288Exhibit 10.17

    Exhibit
      10.17

     

    April
      14,
      2004

    

    Mr.
      George Young

    Fellows
      Energy Ltd.

    8716
      Arapahoe Road

    Boulder,
      CO 80303

    

    RE: Letter
      Agreement 

    Election
      to Purchase

    Bacaroo
      Project 

    Baca
      County, Colorado

    

    Dear
      George:

    

    Pursuant
      to our Exploration Services Funding Agreement dated January 26, 2004 (“EFSA”),
      this letter shall serve as Fellows Energy Ltd.’s (“Fellows”) election and
      agreement to purchase the Bacaroo Project. Thomasson Partners Associates, Inc.
      (“Thomasson”) and Fellows shall herein be collectively referred to as the
“Parties.” The Parties hereby agree as follows:

    

    
      	 	
              1.

            	
              Subject
                to the terms and conditions of the EFSA, the Bacaroo Project was
                shown to
                Fellows as a formal presentation on March 9,
                2004.

            

    

    

    
      	 	
              2.

            	
              Pursuant
                to Thomasson’s Exploration Service Funding Agreement with The Houston
                Exploration Company (“Houston”) dated January 13, 2003, the Circus Project
                was also shown to Houston. Houston has elected not to participate
                in this
                Project.

            

    

    

    
      	 	
              3.

            	
              Subject
                to the terms and conditions of the EFSA, Fellows hereby elects and
                agrees
                to purchase one hundred percent (100.00%) of the Bacaroo
                Project.

            

    

    

    
      	 	
              4.

            	
              Subject
                to the terms and conditions of the EFSA That the geographical definition
                of the Area of Mutual Interest for the Bacaroo Project, shall be
                as
                follows:

            

    

    

    All
      of
      Townships 32 South, Ranges 41 through 46 West, 6th
      PM.

    All
      of
      Townships 33 South, Ranges 41 through 46 West, 6th
      PM.

    All
      of
      Townships 34 South, Ranges 41 through 46 West, 6th
      PM.

    All
      of
      Townships 35 South, Ranges 41 through 46 West, 6th
      PM.,

    (all
      township are located in Baca County, Colorado)

    

    
      	 	
              5.

            	
              That
                Fellows’ election date to purchase the Bacaroo Project shall be April 14,
                2004 and that fifty percent (50%) of Thomasson’s Project Fee, as defined
                in the EFSA, shall be paid to Thomasson by Fellows no later that
                April 26,
                2004.

            

    

    

    
      	 	
              6.

            	
              That
                all of the terms and conditions contained in the EFSA shall govern
                Fellows’ operations on and in the Bacaroo
                Project.

            

    

    

    Please
      signify your acceptance and agreement to the foregoing by signing and returning
      one (1) copy of this letter to the undersigned. 

    

    Very
      truly yours,

    

    /s/
      JAMES E. SULLIVAN

    James
      E.
      Sullivan, as attorney-in-fact for

    Thomasson
      Partner Associates, Inc.

    

    AGREED
      TO
      AND ACCEPTED this _____ day of ____________, 2004:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

    January
      23, 2004

    Letter
      of
      Intent Agreement

    
      
        	 FELLOWS
                ENERGY LTD.

      

       

      
        	By /s/
                GEORGE S. YOUNG 
	George S. Young 
	President  

      

    

     

    

    

    
      2

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