Document:

EXHIBIT
      10.1

    

    

    
      	
                      

                  

               

              March
                20, 2007 

            	
              BP
                America Production Company

              Onshore
                Business Unit 

              Onshore
                Gulf Coast Asset Area

              501
                Westlake Park Boulevard

              Houston,
                Texas 77079

               

              Michael
                J. Walcher

              Senior
                Land Negotiator

              Phone: 281.366.0316

              Fax: 281.366.4519

            

    

    FAX
      AT (832) 553-7244

    

    Mr.
      John
      I. Folnovic

    True
      North Energy Corp.

    1200
      Smith Street, 16th
      Floor

    Houston,
      Texas 77002

    

    
      	
              RE:

            	
              Development
                Agreement, dated effective January 1, 2007,

            
	 	
              By
                and between BP America Production Company and 

            
	 	
              True
                North Energy Corp. (the “Agreement”)

            
	 	
              Badger
                Prospect, Pointe Coupee Parish,
                Louisiana

            

    

    

    Dear
      John:

    

    BP
      America Production Company (“BP”) has drilled the BP America Production Company;
      A. Major Heirs #1 well (the “Well”) to 18,250’ MD, and BP believes that the Well
      has been drilled to the base of the Tuscaloosa B-3 sand. BP halted the drilling
      at a bit change point and ran the following logs in the Well and provided them
      to True North Energy Corp. (“True North”): HRI/FWS/NGR/RWCH/JARS and Dipmeter
      Imager/Jars. In addition, BP has run a VSP and the results of that survey will
      be delivered shortly. 

    

    BP
      has
      not reached the “Objective Depth” as defined in the Agreement (18,500’ or
      stratigraphic equivalent of the base of the Tuscaloosa C-1 sand, whichever
      occurs first). It is too early to say with certainty, but the zones encountered
      to date appear to be wet, with no commercial hydrocarbons. It is BP’s
      recommendation that drilling be continued in an attempt to encounter deeper
      sands encountered in the Amerex - Major Heirs #1, but BP cannot correlate those
      sands to this well at this time. BP hereby proposes to continue drilling the
      Well to a depth of 18,600’ MD and amend the definition of “Objective Zone” to
      allow BP and True North the opportunity to drill the Well to 18,600’ MD under
      the same terms and conditions set forth in the Agreement.

    

    When
      and
      if this letter (the “Letter Agreement”) is executed by an authorized
      representative of both BP and True North having the express authority to amend
      the Agreement, BP and True North hereby agree to delete Section 1.24 of the
      Agreement in its entirety and replace Section 1.24 of the Agreement with the
      following:

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    1.24 “Objective
      Zone”,
      with
      respect to the Initial Well, means the stratigraphic equivalent of the base
      of
      the deepest Zone penetrated in the Initial Well, or eighteen thousand six
      hundred feet measured depth (18,600’ MD), whichever occurs first in the Initial
      Well. The term “Objective
      Zone”,
      with
      respect to any Substitute Well or Additional Well, means the deepest Zone to
      which the Substitute Well or Additional Well is proposed to be drilled as
      provided in the relevant AFE for such well.

    

    Please
      execute in the designated space below and return it to the attention of the
      undersigned by fax and by overnight delivery prior to 5:00 pm Central Time
      on
      March 21, 2007. If BP does not receive a copy of this Letter Agreement, executed
      by an authorized representative of True North, prior to 5:00 pm Central Time
      on
      March 21, 2007, this Letter Agreement shall automatically be deemed withdrawn
      and terminated at that time and shall be of no further force or
      effect.

    

    Respectfully,

    

    /s/
      Michael J. Walcher

    Michael
      J. Walcher

    BP
      America Production Company

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Mr.
      John
      I. Folnovic

    True
      North Energy Corp.

    March
      20,
      2007

    Page
      2 of
      2

    

     

    

    ACCEPTED
      AND AGREED TO ON MARCH 20, 2007, BY:

    

    BP
      AMERICA PRODUCTION COMPANY

    
 

    
      	
              By:
                

            	
              /s/
                Stacey J. Garvin

            
	 	
              Stacey
                J. Garvin

            
	 	
              Attorney-in-Fact

            

    

    

    

    

    ACCEPTED
      AND AGREED TO ON MARCH 20, 2007, BY:

    

    TRUE
      NORTH ENERGY CORP.

    
 

    
      
        	
                By:
                  

              	
                /s/
                  John Folnovic

              
	 	
                John
                  Folnovic

              
	 	
                President
                  & CEOEXHIBIT
      10.2

    

    

    
      	
                  

               

              March
                28, 2007 

            	
              BP
                America Production Company

              Onshore
                Business Unit 

              Onshore
                Gulf Coast Asset Area

              501
                Westlake Park Boulevard

              Houston,
                Texas 77079

               

              Peter
                W. Foster

              Senior
                Land Negotiator

              Phone: 281.366.3574

              Fax: 281.366.4519

            

    

    FAX
      AT (832) 553-7244

    

    

    Mr.
      John
      I. Folnovic

    True
      North Energy Corp.

    1200
      Smith Street, 16th
      Floor

    Houston,
      Texas 77002

    

    
      	
              RE:

            	
              Development
                Agreement, dated effective January 1, 2007,

            
	 	
              By
                and between BP America Production Company and 

            
	 	
              True
                North Energy Corp. (the “Agreement”)

            
	 	
              Badger
                Prospect, Pointe Coupee Parish,
                Louisiana

            

    

    

    Dear
      John:

    

    BP
      America Production Company (“BP”) has drilled the BP America Production Company;
      A. Major Heirs #1 well (the “Well”) to the Objective Zone (as defined in the
      Agreement and further modified in that certain letter agreement, dated March
      20,
      2007, amending the Agreement). BP has run all logs and tests covering this
      additional drilling since the initial logging runs in the Well and provided
      same
      to True North Energy Corp. (“True North”).

    

    As
      per
      Section 2.2(B) of the Agreement, Casing Point has been reached. In BP’s opinion,
      the Well is a dry hole with no commercial hydrocarbon accumulations, and BP
      hereby elects to plug and abandon the Well, as currently drilled, pursuant
      to
      Section 2.6 of the Agreement.

    

    BP
      is
      planning to sidetrack the Well from a measured depth in the current wellbore
      of
      17,420’ and attempt to drill the Well to a new bottom hole approximately 200’ to
      300’ west of the current bottom hole location of the Well to a depth sufficient
      to test the stratigraphic equivalent of the Tuscaloosa B-1 through C-1 sands,
      as
      seen between 18,070’ and 18,485’ (electrical log measurement) in the Amarex -
      Major Heirs No. 1 well, located in Section 47, Township 4 South, Range 10 East,
      Pointe Coupee Parish, Louisiana, or to a measured depth of approximately
      18,600’, whichever is shallower. At that point, if BP should determine those
      sands are commercially productive, in BP’s sole opinion, then BP will set a
      liner in the sidetrack hole of the Well and drill out to test the Tuscaloosa
      C-2
      sand, which is expected to be seen in the next 200’ to 400’ of the
      sidetrack.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Although
      the Well was drilled to the Objective Zone, True North has not earned an
      interest in the prospect. True North has no right under the Agreement to
      participate in a Substitute Well, because the Well was successfully drilled
      to
      the Objective Zone. Further, the sidetrack proposal set forth herein is not
      a
      Substitute Well, as defined in Section 1.34 of the Agreement, because the rig
      drilling the Well has not been released. Nonetheless,
      BP would like to offer True North the same opportunity to earn an interest
      in
      the prospect as if the sidetrack operations were part of the original drilling
      operations for the Initial Well (including, but not limited to, True North’s
      obligation to pay its promoted share of the drilling
      costs).

    

    When
      and
      if this letter (the “Letter Agreement”) is executed by an authorized
      representative of both BP and True North having the express authority to enter
      into an agreement of the size and nature contemplated herein, BP and True North
      hereby agree to amend the Agreement as follows:

    

    
      	
              1.

            	
              Section
                1.21 of the Agreement is hereby deleted in its entirety and replaced
                with
                the following:

            

    

    

    1.21     “Initial
      Well”
has
      the
      meaning given to it in the recitals, including any sidetracks to the original
      wellbore.

    

    
      	
              2.

            	
              Section
                1.24 of the Agreement is hereby deleted in its entirety and replaced
                with
                the following:

            

    

    

    1.24     “Objective
      Zone”,
      with
      respect to the Initial Well and except as provided in Section 2.2(C), means
      the
      base of the Tuscaloosa C-1 sand, being the stratigraphic equivalent of the
      base
      of the Tuscaloosa C-1 sand as seen at 18,485 feet (electrical log measurement)
      for the Amarex - Major Heirs No. 1 well, located in Section 47, Township 4
      South, Range 10 East, Pointe Coupee Parish, Louisiana, or eighteen thousand,
      six
      hundred feet measured depth (18,600’ MD), whichever occurs first in the
      sidetrack of the original wellbore in the Initial Well. The term “Objective
      Zone”,
      with
      respect to any Substitute Well or Additional Well, means the deepest Zone to
      which the Substitute Well or Additional Well is proposed to be drilled as
      provided in the relevant AFE for such well.

    

    
      	
              3.

            	
              A
                new Section 1.39 is added to the Agreement as
                follows:

            

    

    

    1.39     “Deep
      Objective Zone”
means
      the base of the Tuscaloosa C-2 sand, being the base of the next Zone to be
      encountered directly below the Objective Zone, or four hundred feet measured
      depth (400’ MD) below the Objective Zone, whichever occurs first in the
      sidetrack of the original wellbore in the Initial Well. 

    

    
      	
              4.

            	
              Section
                2.2 of the Agreement is hereby deleted in its entirety and replaced
                with
                the following:

            

    

    

    2.2     When
      and if Casing Point is reached in the Initial Well, BP shall give written notice
      to Company of such occurrence, and such notice shall state whether BP proposes
      to attempt to Complete the Initial Well as a producer, whether in the Objective
      Zone or in a shallower Zone, to deepen the Initial Well to the Deep Objective
      Zone, or to abandon the Initial Well as a dry hole. The notice shall be
      accompanied by all well information and data set forth in Exhibit “D” (the “Well
      Information”), unless such information has been previously furnished to
      Company.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              (A)

            	
              If
                BP reaches Casing Point and proposes to Complete the Initial Well
                as a
                producer, whether in the Objective Zone or in a shallower Zone, such
                notice shall also include a completion AFE. The completion AFE shall
                include, at a minimum, an estimate of Completion Costs for the Initial
                Well. Company shall have forty-eight (48) hours (exclusive of Saturday,
                Sunday and holidays) from receipt of the notice to elect, by written
                notice, whether it will participate in accordance with Section 2.3.
                BP
                shall not Complete the Initial Well until Company has notified BP
                in
                writing whether or not it will participate or until forty-eight (48)
                hours
                (exclusive of Saturday, Sunday and holidays) have elapsed since Company’s
                receipt of BP’s notice. Failure to respond within the time period allowed
                shall be deemed to be an election not to participate in the Completion
                of
                the Initial Well.

            
	 	 
	
              (B)

            	
              If
                BP reaches Casing Point and proposes to abandon the Initial Well
                as a dry
                hole, (i) BP shall plug and abandon the Initial Well in accordance
                with
                Section 2.6, and (ii) Company shall have no right or option to takeover
                the Initial Well.

            
	 	 
	
              (C)

            	
              If
                BP reaches Casing Point and elects (at BP’s sole option) to deepen the
                Initial Well to the Deep Objective Zone, (i) the Objective Zone for
                the
                Initial Well shall be the Deep Objective Zone, and (ii) there will
                be a
                new Casing Point when and if BP reaches the Objective Zone (as redefined
                in this Section 2.2(C)).

            

    

    

    
      	
              5.

            	
              Capitalized
                terms set forth in this Letter Agreement have the meanings given
                to them
                in this Letter Agreement or in the Agreement.

            
	 	 
	
              6.

            	
              Except
                as set forth in this Letter Agreement, the Agreement remains in full
                force
                and effect as originally set forth
                therein.

            

    

    

    Enclosed
      herewith is an Authority for Expenditure for this sidetracking operation. The
      full cost of the first part of the sidetrack (Tuscaloosa B-1 through C-1 sands)
      will be approximately $4,500,000 with a cost of an additional $3,100,000 to
      complete through the Tuscaloosa C-1 sand. If BP elects to set the liner to
      drill
      to the Tuscaloosa C-2 sand, the additional cost would be approximately
      $1,500,000. The current estimated costs for the Well, including the estimated
      costs to plug the open hole portion of the original part of the Well (currently
      underway), is approximately $11,500,000 (vs. $14,862,000 in Estimated Drilling
      Costs). If True North elects to participate in accordance with this Letter
      Agreement, BP would apply the unused portion of True North’s original share of
      Estimated Drilling Costs to True North’s share of the sidetracking operations
      until that money has been used. Thereafter, BP would charge True North its
      proportionate share in accordance with Article II and Section 5.4 (i.e., BP
      will
      not cash call True North for the cost of additional operations).

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    As
      you
      know, BP has the drilling rig on location and is proceeding forward with the
      sidetracking operations set forth in this Letter Agreement. Therefore, time
      is
      of the essence, and in accordance with standard industry practice for operations
      in which a rig is on location, this offer will remain open for a period of
      forty
      eight (48) hours from True North’s receipt of this proposal by fax. If you wish
      to participate in the sidetrack of the Well as proposed herein and amend the
      Agreement in accordance with this Letter Agreement, have an authorized
      representative of True North sign this Letter Agreement in the space provided
      below and fax to Pete Foster at 281-366-4519 within the time provided.
If
      BP does not receive a signed copy of this Letter Agreement by fax within 48
      hours of True North’s receipt of this Letter Agreement, this offer shall be
      automatically withdrawn and shall be of no further force and
      effect.

    

    If
      True
      North does not timely elect to participate in the sidetrack operations, True
      North will remain liable for its proportionate share of costs to plug and
      abandon the original wellbore in the Well. Thereafter, BP will return any unused
      portion of True North’s share of Estimated Drilling Costs, and True North will
      have no further opportunity to earn an interest in the Badger
      Prospect.

    

    Thank
      you
      for your participation in the Well to this point. 

    

    Respectfully,

    

    /s/
      Peter
      W. Foster

    Peter
      W.
      Foster

    BP
      America Production Company

    

    

    ACCEPTED
      AND AGREED TO ON MARCH 28, 2007, BY:

    

    BP
      AMERICA PRODUCTION COMPANY

    

    
      	
              By:
                

            	
              /s/
                Stacey J. Garvin

            
	 	
              Stacey
                J. Garvin

            
	 	
              Attorney-in-Fact

            

    

    

    ACCEPTED
      AND AGREED TO ON MARCH 29, 2007, BY:

    

    TRUE
      NORTH ENERGY CORP.

    

    
      	
              By:
                

            	
              /s/
                John Folnovic

            
	 	
              John
                Folnovic

            
	 	
              President
                & CEO

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