Document:

Exhibit 10.3

 

 

August 31, 2011

Michael P. Russon

SKYLINE OIL, LLC

1517 N. Grove Drive

Alpine, Utah 84004

Re:  Moroni Prospect, Sanpete County, Utah

Dear Mike:

This letter will serve to confirm our understanding and agreement between Richfield Oil & Gas Company (“Richfield”), and Skyline Oil, LLC (“Skyline”) as follows:

WHEREAS, Freedom Oil & Gas, Inc. (“Freedom”) entered into an agreement with Skyline on January 26, 2011 (the “Freedom Agreement”) to acquire a 20.0% working interest (WI) in an area of mutual interest covering all of T-15-S, R-3-E, Sanpete County, Utah, and rights to acquire and retain a 50.0% WI in the well known as the Cimarron Energy #1-AXZH, API #43-039-30007 (the “Moroni Well”) and in the surrounding 320-acre spacing unit; and

WHEREAS, Freedom was acquired by Hewitt Petroleum, Inc. (“HPI”) on March 31, 2011, HPI merged into Richfield Oil & Gas Company (“Richfield”) on April 8, 2011, and Freedom was merged into Richfield on June 20, 2011; and

WHEREAS, Richfield entered into a ROFR agreement with Skyline on April 15, 2011 (the “Richfield Agreement”), whereby in exchange for $25,000 Skyline granted Richfield the option to acquire an additional 30.0% WI in approximately 5,000 gross acres — later identified as the nine (9) square miles surrounding the Moroni Well consisting of sections 10, 11, 12, 13, 14, 15, 22, 23, and 24, T-15-S, R-3-E, Sanpete County, Utah, deemed to be “Phase I Leasing,” with a larger area of mutual interest (AMI) generally defined in such agreement as T14-15S, R3-4E, SLM, Sanpete County, Utah (as specifically set forth on Exhibit “A” attached to the Richfield Agreement), in exchange for an obligation to pay $250,000 and meet certain additional financing conditions on or before November 1, 2011; and

WHEREAS, Freedom (Richfield) has paid its 20.0% share of all Phase I Leasing costs billed by Skyline; and

WHEREAS, Freedom (on behalf of Richfield) entered into an agreement with Oxbow Properties, Inc. (“Oxbow”) on May 20, 2011 to acquire the Moroni Well and associated tubular goods, equipment and oil in the tank, on behalf of Skyline and Richfield on a 50-50 cost basis, which closed on August 15, 2011, with Hewitt Operating, Inc. as Utah Operator of the well; and

  

1

 

WHEREAS, on or about July 19, 2011, Skyline gave notice to Richfield of its intent to acquire approximately 25,000 – 30,000 acres within the AMI outside of Phase I Leasing, deemed to be “Phase II Leasing,” at an estimated cost of $300,000 to Richfield’s 50.0% WI; and

WHEREAS, as a result, Richfield would be required to pay both the $250,000 under the Richfield Agreement for its 30.0% share of Phase I Leasing and an additional $300,000 for its 50.0% share of the proposed Phase II Leasing; and

WHEREAS, on or about July 19 or 20, 2011, the management of Richfield analyzed the situation and determined that: (a) the company could not afford to participate in Phase II Leasing due to lack of funds, and (b) assuming that the company could obtain the $300,000 required to participate in Phase II Leasing, nevertheless, it would be in the best interests of the company to spend any extra funds to acquire available leases within its Fountain Green project, and verbally waived Richfield’s rights to participate in the proposed Phase II Leasing, committed; and

WHEREAS, Skyline relied on such representations and decisions as conveyed by Richfield’s management and moved ahead with other sources to pay for Phase II Leasing; and

NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the parties hereby amend the Freedom Agreement and the Richfield Agreement as follows:

1.  Leasing.  Richfield and Skyline confirm their acceptance of the facts, agreements and understandings as set forth above, and effective as of July 19, 2011, Richfield hereby waives its rights to participate with Skyline in Phase II Leasing equal to approximately 25,000 - 30,000 acres.

2.   AMI.  Richfield and Skyline do not waive any obligations or rights to participate in any additional leasing within the AMI, as set forth in paragraphs 2 and 6 of the Richfield Agreement, which is hereby deemed to be “Phase III Leasing.”

3.   Farmout.  Richfield and Skyline shall continue to cooperate in efforts to farmout the project for the mutual benefit of both companies.

4.  Assignment. Richfield hereby assigns and conveys to Skyline title to 50.0% of the Moroni Well, tubular goods, equipment and oil in the tank as set forth on the attached Bill of Sale.

5.   No Other Changes.  Except as modified and amended hereby, the Freedom Agreement and the Richfield Agreement shall remain unchanged and in full force and effect.

	
ACCEPTED & AGREED:

	 	  
	  	 	  
	
SKYLINE OIL & GAS, LLC

	 	  
	  	  	 	  
	
By:

	
/s/ Michael P. Russon

	 	
Dated: August 31, 2011

	  	
 Michael P. Russon, Managing Member

	 	  
	  	  	 	  
	
RICHFIELD OIL & GAS COMPANY,

	 	  
	  	  	 	  
	
By:

	
/s/ J. David Gowdy

	 	
Dated: August 31, 2011

	  	
 J. David Gowdy, President/CEO

	 	  

  

2Unassociated Document

Exhibit 10.4

	
Glenn MacNeil

1554 Jarvie Crescent

Milton, Ontario

Canada L9T 5Z3

	
December 16, 2010

	
Re:

	
Purchase of Working Interest in the Liberty #1 Well and Nephi Prospect

Dear Glenn:

This letter will serve to confirm our understanding and agreement for the purchase by you from Hewitt Petroleum, Inc. (“HPI”) of a 0.50% working interest (“WI”), carried in the Liberty #1 Well only to the tanks, and “head’s up” as to all costs thereafter under the JOA in the Nephi Prospect (the “CWI”), as follows:

Sale of Interest.  You hereby agree to purchase, and HPI hereby agrees to sell, assign and convey to you, a 0.50% CWI as described above in the Liberty #1 Well, and 0.50% WI in the leases described below, subject to the conditions of the subscription agreement, original term sheet, and the joint operating agreement (JOA) to which you are already a signatory as non-operator. The purchase price of the interest shall be $30,000, payable to HPI by wire transfer on Monday, December 20, 2010.

Winn leases, N/2 Section 34, T12S, R1E, SLB&M, Juab County, Utah, comprising approximately 320 acres; 75.0% NRI

Freedom Oil & Gas lease, W/2 SW/4, T12S, R1E, SLB&M, Juab County, Utah, comprising approximately  127 acres; 75.0% NRI

Should this meet your understanding and agreement, please sign and date below.  We appreciate your continued support on this project.

	  	
Very truly yours,

	  	  	  
	  	
By:

	
/s/ Douglas C. Hewitt

	  	  	
Douglas C. Hewitt, President/CEO

ACCEPTED & AGREED:

	
By:

	
/s/ Glenn MacNeil

	  	
Dated: December 16, 2010

	  	
Glenn MacNeil

	  	  

15 W. South Temple, Suite 1050, Salt Lake City, Utah 84101 • Office 801.519.8500Unassociated Document

Exhibit 10.5

	
Glenn MacNeil

1554 Jarvie Crescent

Milton, Ontario

Canada L9T 5Z3

	
March 4, 2011

	
Re:

	
Purchase of Working Interest

Dear Glenn:

This letter will serve to confirm our understanding and agreement for the purchase by you from Hewitt Petroleum, Inc. (“HPI”) of a 0.50% working interest (“WI”) in the Utah Overthrust Project, as follows:

Sale of Interest.  You hereby agree to purchase, and HPI hereby agrees to sell, assign and convey to you, a 0.50% working interest in the Utah Overthrust Project comprising approximately 16,000 net acres under lease, located in T13S to T14S, R2E and the western half of T14S, R3E, SLM, Sanpete County, Utah (the “Subject Lands”).

HUOP/JOA.   You agree to be bound by the terms and conditions of the Utah Overthrust Partners Agreement (HUOP) dated August 26, 2004, as amended, and the proposed Joint Operating Agreement among the working interest owners, including the Area of Mutual Interest (AMI), extending to a one-mile radius around the Subject Lands.  You understand that you will be responsible for your interest’s financial share of all joint interest billings and AFE’s for all leasing, geological, science, legal, operating, drilling and completion, etc. costs within the AMI.   You understand that your working interest in the Deep (all stratigraphic intervals located below the Jurassic Twin Creek Formation, including the Jurassic Twin Creek Formation) is 0.50%, and your working interest in the Shallow (all stratigraphic intervals located above the Jurassic Twin Creek Formation) is 0.25%, within the AMI.

 

The purchase price for the interest shall be $25,000 cash. The assignment of the interest shall be made and recorded by the operator in connection with all other assignments to other working interest owners.  This agreement shall be governed under the laws of the state of Utah, and the venue for any dispute shall be Salt Lake County, Utah.

 

	  	
Very truly yours,

	  	  
	  	
HEWITT PETROLEUM, INC.

	  	  	  
	  	
By:

	
/s/ Douglas C. Hewitt

	  	  	
Douglas C. Hewitt, President

ACCEPTED & AGREED:

	
By:

	
/s/ Glenn MacNeil

	  	
Dated: March 4, 2011

	  	
Glenn MacNeil

	  	  

15 W. South Temple, Suite 1050, Salt Lake City, Utah 84101 • Office 801.519.8500Unassociated Document

Exhibit 10.6

	
Glenn MacNeil

MacKov Investments Limited

1554 Jarvie Crescent

Milton, Ontario

Canada L9T 5Z3

	
March 28, 2011

	
Re:

	
Stock Reconciliation

Dear Glenn:

This letter will serve to confirm our understanding and agreement for the issuance of additional shares of Hewitt Petroleum, Inc. (“HPI”) to you as follows:

WHEREAS, you have purchased HPI common stock from Douglas C. Hewitt individually for a total of $121,550, and you have purchased HPI common stock from HPI directly for a total of $663,892.51 (an aggregate investment equal to  $785,442.51 in cash) for which you have been issued 3,945,250 shares; and

WHEREAS, there was an agreement and understanding between us that if HPI sold any stock for a price less than you had previously paid, that you could elect to have your total stock investment be re-priced on a one-time basis, and additional shares issued to reflect such lower stock price; and

WHEREAS, as of the date of this agreement HPI is selling its stock at $0.10 per share.

NOW THEREFORE, in consideration of the above recitals, in order to reconcile the total investment set forth above with such lower price on a one-time basis, the parties hereby agree to the  make the following transfer and issuance of an aggregate of 3,909,150 HPI shares, respectively:

1.  Douglas C. Hewitt shall transfer to you 672,500 shares of HPI common stock; and

2.  HPI shall issue to you an additional 3,236,650 shares of common stock.

	  	
HEWITT PETROLEUM, INC.

	  	  
	  	
By:

	/s/ Douglas C. Hewitt
	  	  	
Douglas C. Hewitt, President

	  	  
	  	/s/ Douglas C. Hewitt
	  	
Douglas C. Hewitt, Individually

ACCEPTED & AGREED:

MacKov Investments Limited

	
By:

	/s/ Glenn MacNeil	  	
Dated: March 28, 2011

	  	
Glenn MacNeil

	
  

	  

15 W. SOUTH TEMPLE, SUITE 1050, SALT LAKE CITY, UTAH 84101 • OFFICE 801.519.8500

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