FOURTH
AMENDMENT TO PURCHASE AND SALE AGREEMENT
Trinity
Bay, Redfish Reef, Fishers Reef, North Point Bolivar
Fields
in
Galveston and chambers Counties, Texas
This
FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT
(the
“Fourth Amendment”) is dated effective as of March 22, 2007, and is made by and
between Masters
Resources, LLC,
and
Masters
Oil & Gas, LLC,
both
Texas limited liability companies having their respective principal places
of
business at 9801 Westheimer, Suite 1070, Houston, Texas 77042 (collectively,
“Masters”), and Tekoil
and Gas Gulf Coast, LLC,
a
Delaware limited liability company, having its principal place of business
at
5036 Dr. Phillips Blvd., Suite 232, Orlando, Florida 32819 (“Buyer”) (Masters
and Buyer are sometimes called collectively the “parties” and individually
“party”).
RECITALS
On
November 13, 2006, Masters and Tekoil and Gas Corporation, a Delaware
corporation (“Original Buyer”), executed and delivered Purchase and Sale
Agreement, dated effective as of October 1, 2006, covering the Assets. On
December 29, 2006, Masters and Original Buyer executed and delivered that
certain First Amendment to Purchase and Sale Agreement also covering the
Assets.
On February 8, 2007, the parties contemporaneously executed and delivered
that
certain Second Amendment and that certain Assignment and Assumption Agreement
(the “Assignment”) by and between Buyer and Original Buyer. On March 1, 2007,
Masters and Buyer executed and delivered that certain Third Amendment to
Purchase and Sale Agreement also covering the Assets (the Purchase and Sale
Agreement, the First Amendment to Purchase and Sale Agreement, the Second
Amendment to the Purchase and Sale Agreement and the Third Amendment to the
Purchase and Sale Agreement are herein collectively referred to as the “Original
Agreement”). The parties now desire to amend the Original Agreement in certain
respects. Accordingly, the parties agree as set out in this Fourth Amendment.
(Unless otherwise noted, defined terms used in this Fourth Amendment shall
have
the meanings set out in the Original Agreement.)
A. Section
8.1 of the Original Agreement is deleted and the following is inserted in
lieu
thereof:
| |
“8.1
|
Date,
Time and Place of Closing
|
Unless
the parties agree otherwise in writing and subject to the provisions in this
Agreement, the completion of the transaction contemplated by this Agreement
(the
“Closing”) will be held on or
before
April
12, 2007, at 10:00 a.m. Central Standard Time (or such earlier date or time
as
the parties may agree). The Closing will be held at the offices of Masters
as
set forth in the opening paragraph of this Agreement (or such other place
as the
parties may agree). In the event that the Closing does not occur before the
close of business at 5:00 p.m. on April 12, 2007, Masters shall have the
right
to terminate this Agreement and to retain the Deposit.”
B. With
respect to Section 4.1 (A) of the Original Agreement, the Examination Period
applies to any due diligence being performed or to be performed on behalf
of, or
at the request of Buyer’s financing sources, and “March 9, 2007” is deleted and
“March 30, 2007” is inserted in lieu thereof. Except for the change of dates set
forth herein, the amendment set forth in Article I.B. of the First Amendment
to
the Original Agreement is unchanged.
D.
Schedule
3.1 (H) to the Original Agreement is deleted and Schedule
3.1 (H)
attached
hereto is inserted in lieu thereof.
E.
Exhibit
C
to the Original Agreement is deleted and Exhibit
C
attached
hereto is inserted in lieu thereof.
A. To
the
extent any provision of the Original Agreement, conflicts with any provision
of
this Fourth Amendment, the provisions of this Fourth Amendment shall control
and
be used to determine the obligations of the Parties.
B. The
parties ratify confirm and adopt the Original Agreement as amended and
supplemented by this Fourth Amendment.
C. Facsimile
delivery of this Fourth Amendment signed by each party to the other shall
be
binding and effective the same as if an original signed copy has been delivered
by each party to the other. This Fourth Amendment may be executed in multiple
counterparts, each of which shall be considered an original and all of which
together shall constitute one and the same document.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF,
the
parties hereto have executed this Fourth Amendment as of March 22,
2007.
TEKOIL
AND GAS GULF COAST, LLC
| By: |
Tekoil
& Gas Corporation,
|
| MASTERS
RESOURCES, LLC: |
|
MASTERS
OIL & GAS, LLC: |
| |
|
|
| |
|
|
| By: |
/s/ Cris
Garcia |
|
By: |
/s/ Cris
Garcia |
| |
Name: Cris
Garcia |
|
|
Name:
Cris Garcia |
| |
Title:
Vice President |
|
|
Title:
Vice
President |
Schedule
3.1(H)
Attached
to and made a part of Purchase and Sale Agreement dated effective October
1,
2006 by and between Masters Resources LLC and Masters Oil & Gas, LLC, as
Seller, and Tekoil & Gas Corporation, as Buyer.
N
Point Bolivar
| |
|
|
|
LC-103-0005
|
|
Exploration
Agrmt & JOA dtd 2/1/06 btwn
Masters
Resources LLC & Erskine Energy LLC
|
|
|
|
|
| |
|
|
|
LC-103-0014
|
|
Barge
Dock & Surface Use Agrmt dtd eff 9/22/06 btwn
Masters
Resources LLC, St. Mary Land & Expl Co. &
Erskine
Energy Partners II LP LLC covering barge dock facility at Goat
Island,
ST 342 (Expires 9/22/2011)
|
| |
|
|
|
GC-103-0008
|
|
Land
& Expl Co & Masters Resources LLC (ST 342)
|
| |
|
|
|
Dorado
|
|
|
| |
|
|
|
LC-110-0001
|
|
E/A
& JOA dtd 4/21/05 btwn Davis Petroleum Corp. &
Masters
Resources LLC covering ST 113/132/133/203
|
| |
|
|
|
LC-110-0004
|
|
JOA
dtd 6/1/06 btwn Davis Petroleum Corp & Masters
Resources
LLC covering ST 204 Unit
|
| |
|
|
|
Fishers
Reef
|
|
|
| |
|
|
|
LC-101-0016
|
|
Exploration
Agreement & JOA dtd 1/31/05 btwn Masters
Resources
LLC & Erskine Energy Partners LP & Erskine
Energy
LLC covering State Tract 2-3A Unit (M-96828 &
M-96829)
|
| |
|
|
|
LC-101-0023
|
|
Exploration
Agreement dtd 2/23/05 btwn Masters Resources
LLC
& Erskine Energy Partners, LP & Erskine Energy LLC
Covering
State Tract 6-7A
|
| |
|
|
|
LC-101-0024
|
|
Exploration
Agreement & O/A dtd 2/27/06 btwn Masters Resources
LLC
& Masters Oil & Gas LLC & Erskine Energy Partners LP, Erskine
Energy
LLC covering State Tract 5-8A
Letter
Agreement dtd 6/20/05 btwn Masters Resources LLC &
Palace
Exploration Co. etal
Letter
Agreement dtd 7/11/05 btwn Masters Resources LLC, Erskine
Energy
Partners etal & Palace Exploration
Co.
|
|
|
|
|
|
GC-101-0003
|
|
Gas
Transportation Contract dated 5/22/06 between
|
| |
|
Masters
Resources LLC and Erskine Energy Partners II LP
|
| |
|
(ST
5-8A #1, #2, ST 6-7A #1 wells)
|
| |
|
|
|
GC-101-0004
|
|
Crude
Oil Gathering Contract dated 5/22/06 between
|
| |
|
Masters
Resources LLC and Erskine Energy Partners II LP
|
| |
|
(ST
5-8A #1, #2, ST 6-7A #1 wells)
|
| |
|
|
|
Red
Fish Reef
|
|
|
| |
|
|
|
LC-102-0002
|
|
Term
Acreage Agreement dtd 4/19/01 btwn Masters
|
| |
|
Resources
LLC & Alcorn-Texana Resources et.
al.
|
Subject
to Participation and Farmout Agreement dated 3/6/00 between Vintage Petroleum
Inc. and Davis Petroleum Corp.
Subject
to JOA dated 6/20/00 between Vintage Petroleum Inc., Palace Exploration Co.,
Davis Petroleum Corp., Andex Resources LLC covering land within Pooled Unit
for
State Tract 1-4A No. 1 well (State Tract 1-4A No. 1 well).
Subject
to JOA dated 3/6/00 between Vintage Petroleum Inc., Palace Exploration Co.,
Davis Petroleum Corp., and Andex Resources LLC covering lands within the
Pooled
Unit for State Tract 46 No. 1 (State Tract 46 No. 1 well).
Subject
to JOA dated 9/1/00 between Vintage Petroleum Inc., Davis Petroleum Corp.,
Andex
Resources LLC covering 250 acres within that portion of State Tract 9-12B,
limited from the surface of the ground down to the stratigraphic equivalent
of
the total depth drilled in the Initial Test, except the Unitized formations
established by Unit Agreement for the Fishers Reef Field Unit No. 1 but
including any wellbore interest earned therein, as more specifically identified
and defined in those certain Participation Farmout Agreements, as amended,
between Vintage and each of the other parties (State Tract 9-12B #1
well).
Subject
to call on oil and gas production in Assignment and Bill of Sale dated 5/1/91
and recorded under File No. 91 146 152 from Exxon Corporation to Vintage
Petroleum Inc. whereby Exxon Corporation reserves a preferential right to
purchase oil and gas for a term of 21 years from assignment date.
CEDAR
POINT/HEMATITE FIELD
Subject
to the certain Operating Agreement dated 2/15/99 by and between Vintage
Petroleum Inc. and MCNIC O & G Properties, Inc., Carrizo O&G Inc.,
Century Offshore Management Corp. and Yuma Exploration and Production Company,
Inc.
Subject
to that certain Participation Agreement by and between Yuma Exploration and
Production Company, Inc., Vintage Petroleum Inc., Carrizo Oil & Gas Inc. and
MCNIC Oil
&
Gas Properties, Inc. dated 4/6/98.
POINT
BARROW FACILITY
Subject
to Saltwater Disposal Agreement dated 10/01/01 between Vintage Petroleum
Inc.
and Masters Resources LLC whereby Vintage will accept Masters’ water produced
from Masters’ wells located in the Trinity Bay Field, Chambers Co., TX for
disposal in its Point Barrow saltwater disposal facility located on the Point
Barrow Facility so long as excess capacity in the Facility exists over and
above
that required by Vintage’s operations.
Subject
to all easements, rights of way, surface leases and all similar grants of
surface use affecting this land whether recorded or unrecorded in addition
to
those specifically described in Deed and Bill of Sale dated 5/31/91 between
Exxon Corporation, Grantor and Vintage Petroleum Inc., Grantee recorded under
File No. 91 146 205, Chambers Co., TX.
Crude
Oil
Purchase Contract Nos. 05-10247, 05-10248 and 06-55239 dated 08/08/05, 08/09/05
and 12/29/06 by and between Masters Resources LLC, as Seller, and Pacific
Marketing and Transportation LLC, as Buyer and as assigned to Plains Marketing
LP due to merger on 11/15/06.
Base
Contract for Sale and Purchase of Natural Gas, as amended, dated 02/27/07
by and
between Masters Resources, LLC, Seller and Petrocom Ventures Ltd., as
Buyer.
Gas
Purchase Agreement, as amended, dated 03/01/07 by and between Masters Resources
LLC, as Seller, and Kinder Morgan Tejas Pipeline L.P., as Buyer.
Gas
Gathering Agreement dated 07/01/98, as amended, between Masters Resources
LLC
and Gateway Offshore Pipeline Company for Galveston Bay State Tract 343
Lease.
Exhibit
“C”
Attached
to and made a part of Purchase and Sale Agreement dated effective October
1,
2006 by and between Masters Resources LLC and Masters Oil & Gas, LLC, as
Seller, and Tekoil & Gas Corporation, as Buyer.
|
N
Point Bolivar
|
|
|
| |
|
|
|
LC-103-0005
|
|
Exploration
Agrmt & JOA dtd 2/1/06 btwn
|
| |
|
Masters
Resources LLC & Erskine Energy LLC
|
| |
|
|
|
LC-103-0014
|
|
Barge
Dock & Surface Use Agrmt dtd eff 9/22/06 btwn
|
| |
|
Masters
Resources LLC, St. Mary Land & Expl Co. &
|
| |
|
Erskine
Energy Partners II LP LLC covering barge dock facility at
Goat
|
| |
|
Island,
ST 342 (Expires 9/22/2011)
|
| |
|
|
|
GC-103-0008
|
|
|
| |
|
Land
& Expl Co & Masters Resources LLC (ST 342)
|
| |
|
|
|
Dorado
|
|
|
| |
|
|
|
LC-110-0001
|
|
E/A
& JOA dtd 4/21/05 btwn Davis Petroleum Corp. &
|
| |
|
Masters
Resources LLC covering ST 113/132/133/203
|
| |
|
|
|
LC-110-0004
|
|
JOA
dtd 6/1/06 btwn Davis Petroleum Corp & Masters
|
| |
|
Resources
LLC covering ST 204 Unit
|
|
Fishers
Reef
|
|
|
| |
|
|
|
LC-101-0016
|
|
Exploration
Agreement & JOA dtd 1/31/05 btwn Masters
|
| |
|
Resources
LLC & Erskine Energy Partners LP & Erskine
|
| |
|
Energy
LLC covering State Tract 2-3A Unit (M-96828 &
M-96829)
|
| |
|
|
|
LC-101-0023
|
|
Exploration
Agreement dtd 2/23/05 btwn Masters Resources
|
| |
|
LLC
& Erskine Energy Partners, LP & Erskine Energy
LLC
|
| |
|
Covering
State Tract 6-7A
|
| |
|
|
|
LC-101-0024
|
|
Exploration
Agreement & O/A dtd 2/27/06 btwn Masters Resources
|
| |
|
LLC
& Masters Oil & Gas LLC & Erskine Energy Partners LP,
Erskine
|
| |
|
Energy
LLC covering State Tract 5-8A
|
| |
|
Letter
Agreement dtd 6/20/05 btwn Masters Resources LLC &
|
| |
|
Palace
Exploration Co. etal
|
| |
|
Letter
Agreement dtd 7/11/05 btwn Masters Resources LLC,
Erskine
|
| |
|
Energy
Partners etal & Palace Exploration Co.
|
| |
|
|
|
GC-101-0003
|
|
Gas
Transportation Contract dated 5/22/06 between
|
| |
|
Masters
Resources LLC and Erskine Energy Partners II LP
|
| |
|
(ST
5-8A #1, #2, ST 6-7A #1 wells)
|
| |
|
|
|
GC-101-0004
|
|
Crude
Oil Gathering Contract dated 5/22/06 between
|
| |
|
Masters
Resources LLC and Erskine Energy Partners II LP
|
| |
|
(ST
5-8A #1, #2, ST 6-7A #1 wells)
|
| |
|
|
|
Red
Fish Reef
|
|
|
| |
|
|
|
LC-102-0002
|
|
Term
Acreage Agreement dtd 4/19/01 btwn Masters
|
| |
|
Resources
LLC & Alcorn-Texana Resources et.
al.
|
Subject
to one or more Amendments to Lease of varying dates providing for the addition
to the lease of rework and/or shut-in gas well clauses.
Subject
to Pooling Agreement dated 10/6/98 covering 320 acres of State Tract 2-3A
- 3A
(State Tract 2-3A Unit #1) recorded under File No. 98 395 730, Chambers Co.,
TX
Subject
to Pooling Agreement dated 9/15/98 covering 320 acres being 110 acres of
State
Tract 2-3A -3A, 75 acres of State Tract 46 and 135 acres of State Tract 47
(State Tract 46 No. 1) recorded under File No. 00 453 686.
Subject
to Pooling Agreement dated 12/11/01 covering 320 acres being 76 acres out
of
State Tract 1-4A, 152 acres out of State Tract 5-8A, 80 acres out of State
Tract
2-3A, 90 acres out of State Tract 2-3A, 40 acres out of State Tract 6-7A
(State
Tract 1-4A Unit).
Subject
to Participation and Farmout Agreement dated 3/6/00 between Vintage Petroleum
Inc. and Davis Petroleum Corp.
Subject
to JOA dated 6/20/00 between Vintage Petroleum Inc., Palace Exploration Co.,
Davis Petroleum Corp., Andex Resources LLC covering land within Pooled Unit
for
State Tract 1-4A No. 1 well (State Tract 1-4A No. 1 well).
Subject
to JOA dated 3/6/00 between Vintage Petroleum Inc., Palace Exploration Co.,
Davis Petroleum Corp., and Andex Resources LLC covering lands within the
Pooled
Unit for State Tract 46 No. 1 (State Tract 46 No. 1 well).
Subject
to JOA dated 9/1/00 between Vintage Petroleum Inc., Davis Petroleum Corp.,
Andex
Resources LLC covering 250 acres within that portion of State Tract 9-12B,
limited from the surface of the ground down to the stratigraphic equivalent
of
the total depth drilled in the Initial Test, except the Unitized formations
established by Unit Agreement for the Fishers Reef Field Unit No. 1 but
including any wellbore interest earned therein, as more specifically identified
and defined in those certain Participation Farmout Agreements, as amended,
between Vintage and each of the other parties (State Tract 9-12B #1
well).
Subject
to call on oil and gas production in Assignment and Bill of Sale dated 5/1/91
and recorded under File No. 91 146 152 from Exxon Corporation to Vintage
Petroleum Inc. whereby Exxon Corporation reserves a preferential right to
purchase oil and gas for a term of 21 years from assignment date.
Possibly
subject to two final judgments which are as follows: 1) Final Judgment dated
7/24/74 in the case of State of Texas et al, Plaintiff vs. Exxon Corporation,
Defendant in the District Court of Travis County, Texas, the 53rd
Judicial
District, Case No. 207789 and 2) Final Judgment dated 2/23/76 in the case
of the
State of Texas et al, Plaintiff vs. Exxon Corporation and Sun Oil Company
(Delaware), Defendants, in the District Court of Travis County, Texas,
53rd
Judicial
District, Case No. 238904.
CEDAR
POINT/HEMATITE FIELD
Subject
to the certain Operating Agreement dated 2/15/99 by and between Vintage
Petroleum Inc. and MCNIC O & G Properties, Inc., Carrizo O&G Inc.,
Century Offshore Management Corp. and Yuma Exploration and Production Company,
Inc.
Subject
to that certain Participation Agreement by and between Yuma Exploration and
Production Company, Inc., Vintage Petroleum Inc., Carrizo Oil & Gas Inc. and
MCNIC Oil
&
Gas Properties, Inc. dated 4/6/98.
POINT
BARROW FACILITY
Subject
to Saltwater Disposal Agreement dated 10/01/01 between Vintage Petroleum
Inc.
and Masters Resources LLC whereby Vintage will accept Masters’ water produced
from Masters’ wells located in the Trinity Bay Field, Chambers Co., TX for
disposal in its Point Barrow saltwater disposal facility located on the Point
Barrow Facility so long as excess capacity in the Facility exists over and
above
that required by Vintage’s operations. The term of this Agreement has expired,
but both parties continue to perform.
Subject
to Surface Lease and Easement dated 12/19/02 between Vintage Petroleum Inc.,
Lessor, and Masters Resources LLC., Lessee wherein Lessor grants to Lessee
a
non-exclusive easement on and overt the Point Barrow Facility to Lessee for
the
purpose of operating and maintaining and constructing pipelines, facilities,
power line or roads to and from the leased premises. Lessee owns equipment
currently located on the leased premises, including 1) TB #1 - 1500 BBL -
Bottled Gun Barrel; 2) TB #2 - 500 BBL - Settling Tank; 3)TB #3 - 1000 BBL
-
Sales Tank; 4) TB Heater; 5) Associated Flow lines.
Subject
to all easements, rights of way, surface leases and all similar grants of
surface use affecting this land whether recorded or unrecorded in addition
to
those specifically described in Deed and Bill of Sale dated 5/31/91 between
Exxon Corporation, Grantor and Vintage Petroleum Inc., Grantee recorded under
File No. 91 146 205, Chambers Co., TX.
Subject
to reservation of a 1/16th
of
8/8ths Non-participating Royalty Interest in favor of Estelle Ervine and
J. E.
Bishop, Individually and as Independent Executors of the Estate of J. E.
Ervine,
and their predecessors in interest.
Crude
Oil
Purchase Contract Nos. 05-10247, 05-10248 and 06-55239 dated 08/08/05, 08/09/05
and 12/29/06 by and between Masters Resources LLC, as Seller, and Pacific
Marketing and Transportation LLC, as Buyer and as assigned to Plains Marketing
LP due to merger on 11/15/06.
Base
Contract for Sale and Purchase of Natural Gas, as amended, dated 02/27/07
by and
between Masters Resources, LLC, Seller and Petrocom Ventures Ltd., as
Buyer.
Gas
Purchase Agreement, as amended, dated 03/01/07 by and between Masters Resources
LLC, as Seller, and Kinder Morgan Tejas Pipeline L.P., as Buyer.
Gas
Gathering Agreement dated 07/01/98, as amended, between Masters Resources
LLC
and Gateway Offshore Pipeline Company for Galveston Bay State Tract 343
Lease.
