Option Agreement Between Black Star 231 Corp. and Abby Inc. for Rose Dome Oil and Gas Program
This agreement, dated October 29, 2012, is between Black Star 231 Corp. and Abby Inc. It grants Abby the option to acquire a 75% working interest in the Rose Dome oil and gas drilling program in Nebraska, in exchange for a nonrefundable payment of $15,000, with an option to extend for an additional $80,000. Abby may also secure options on five adjoining leases for $5,000 each. Abby's participation is subject to further agreements and funding deadlines, and the payments are nonrefundable if Abby does not proceed.
OPTIO N AGREEMENT
This agreement is dated October 29th, 2012 is made by, and between Black Star
231 Corp., here after referred to as Black Star, and Abby Inc., hereafter referred to as
Abby. Black Star and Abby are herein collectively referred to as the Parties. The parties
make the following Recitals and Agreement.
RESITALS
Black Star has identified drilling prospects and holds oil and gas leases on the
prospects in Richardson County, Nebraska. The description of the prospect land
is included in the data previously provided to Abby. The subject two well drilling
program on the prospect acreage is known as the two well "Rose Dome
Program".
Abby intends to participate in the Rose Dome Program by purchasing and
owning working interest in the two well exploration projects to drill for oil/gas on
prospect leases.
Black Star has supplied Abby with maps, reports and support data for the Rose
Dome Program and held teleconference calls to answer questions regarding the
Rose Dome Program, and Abby has confirmed to Black Star tha t they, and their
funding partners wish to participate to a minimum percentage of 75% of the turn
key cost of the two well program and own 75% of the working interest in the
program, and 75% of the working interest revenues, if any, resulting from the two
initial wells in the Program. Abby agrees tha t the information provided them by
Black Star shall remain confidential. Abby's ownership in the Program will be
under the terms and conditions of the program's Participation Agreement.
The parties acknowledge tha t Abby has had unavoidable delays owing to the
time required for their investors to be contacted and for actual funding.
To secure Abby's optional reservation of 75% working interest in the Rose Dome
Program until funding delays are concluded, Black Star and Abby make the
following agreement.
AGREEMENT
All of the terms, conditions, and cash amounts of the Rose Dome Program are
contained and established in the Participation Agreement and Operating
Agreement.
The Parties agree tha t for and in consideration of a nonrefundable payment of
$15,000 USD, Black Star will grant to Abby a futur e option, as described below,
to participate in the two well Rose Dome Program. Black Star will hold and
reserve Abby's 75% working interest in and to the Rose Dome Program until
December 24th, 2012. This Option to participate for 75% of the working interest in
the two well Rose Dome Program may be extended, at Abby's option, until
February 24th 2013 for an additional non-refundable payment of $80,000. In the
event Abby elects to extend the option period until February 24th 2013, said
$80,000 non-refundable payment must be received by Black Star no later than
December 24th, 2012.
In the event Abby elects to exercise their option to extend the deadline date until
February 24th, 2013 as described above, Black Star will then use their best effor t
to extend the primary term of the oil and gas leases upon where the Rose Dome
Program wells will be drilled.
The option granted herein does not create an obligation for Abby to participate in
the Rose Dome Program or create any other obligation to Black Star as a result
of this agreement, except any obligations stated herein. Funds described above
shall be wire transferred to the account of Black Star at the UMB bank in Kansas
City, Missouri, USA, contemporaneously with the Parties signing this "Option
Agreement".
Abby's initial $15,000 USD non-refundable payment shall be consideration for
Black Star granting the optional futur e reservation to participate in said Program
by signing the program's documents and depositing with Black Star, funds in the
amount stated in the two well Rose Dome Program's Participation Agreement, no
later than December 24th 2012. The Parties both agree said funds are non
refundable in the event Abby does not exercise their option to fund and
participate for 75% of the Rose Dome Program by the dates set fort h herein.
In the event Abby does exercise their option to participate by funding 75% of the
Rose Dome Program by December 24th, 2012, the initial $15,000 paid to Black
Star as nonrefundable consideration shall not be applied to reduce Abby's firs t
call cash contribution for their 75% of the Rose Dome Program's initial firs t call
turn-key cost as described in the Participation Agreement.
In the event Abby elects to extend the deadline date for participation until
February 24th, 2013, as described above, the $80,000 consideration paid to
Black Star by Abby, shall not be applied to reduce any of Abby's cash
contribution requirements to participate for 75% in the two well Rose Dome
Program. The cash requirements for said Program are described in the
Program's Participation Agreement.
Black Star and Abby agree tha t five of Black Star's oil/gas leases which adjoin
the two well Rose Dome Program leases, as described in the two well Rose
Dome Participation Agreement are not a part of this agreement. Abby may
secure the preferential firs t option to participate in the five adjoining oil/gas
leases tha t Black Star holds. Participation in the five oil/gas leases by Abby shall
be on the same terms and conditions as the two well Rose Dome Program,
unless a different basis of participation is agreed upon by the Parties. Abby may
elect to secure an option on the five leases listed below by paying the sums
below on or before the dates shown below and returning the Participation
Agreements for each lease sign by a duly authorized officer of Abby. Attached
hereto, as Exhibits one through five, are the Participation Agreements for the
subject five leases.
Assuming Abby elects to secure their option to participate in drilling on the five
leases below, Abby will return the futur e proposed program documents signed by
a duly authorized officer of Abby, and deposit the futur e program's funds for their
proportionate 75% of the working interest withi n 35 days of their election to
secure the options for leases #1 through #5 below. For and in consideration of a
payment to Black Star of $5,000 USD for each lease listed below, Black Star will
grant said futur e option to participate under the terms herein and the Participation
agreement attached hereto as Exhibits.
THE FIV E ADJOININ G LEASES
All Rose Dom e and Adjoinin g Leases are in Townshi p 1 North . Rang e 14
East in Richardson County. Nebraska .
Lease #1, a payment to Black Star of $5,000 USD by November 13/ 2012
Lease #1, Stalder Cattle Company-Part of SE/4 of the NE/4 and the E/2 of the
SE/4 of section 26, containing 87 acres m/l.
Lease #2, a payment to Black Star of $5,000 USD by November 20/ 2012
Lease #2, R.J. Stalder et al-N/2 and the SE/4 section 25, and parts of the e/2 of
the SW/4 and the N/2 of the NE/4 of section 26, and the E/2, and the S/2 of the
SW/4 of section 36, in all containing 1,057 acres m/l.
by November 27/ 2012Lease #3, a payment to Black Star of $5,000 USD
Lease #3, Stalder Cattle Company-SW/4 of section 35, containing 156 acres m/l.
Lease #4 a payment to Black Star of $5,000 USD by December 4/ 2012
Lease #4, Thompson-Parts of the NW/4 of section 13, containing 117 acres m/l.
Lease #5, a payment to Black Star of $5,000 USD by December 11/ 2012
Lease #5, Phillips, SW/4 of section 13, containing 160 acres m/l.
When any of the development wells subject to this Option Agreement are
proposed by Black Star, Black Star will notif y Abby of the proposed development
program, and Abby will have 35 days to sign the development program's
Participation agreement and forward funding to Black Star. Black Star will use its
best efforts to commence drilling wells then included in the futur e development
program withi n 45 days of their receipt of the development program's documents,
being signed by a duly authorized officer of Abby, and Black Star's receipt of
Abby's percentage share of the futur e development programs funds.
In accordance with Abby's preferential firs t righ t to participate in futur e wells on
the Program oil and gas leases, Abby may also propose wells on leases
adjoining the leases on which the two well Rose Dome Program wells will be
drilled. In the event Abby proposes wells to be drilled, and delivers to Black Star
the signed program documents and funds, Black Star agrees to obtain Nebraska
drilling permits and commence drilling the Abby proposed wells as soon as is
practical. Any futur e wells proposed by Abby will be under the same terms and
conditions as stated in the two well Rose Dome Program's Participation
Agreement.
Black Star acknowledges tha t Abby is a publicly traded Company, and as such,
is subject to exchange regulation and restrictions on information and results
released regarding projects which Abby is an interest owner. Black Star agrees
that they will not make public news releases regarding results of activities
described herein withou t Abby's writte n authorization. Abby agrees to mention
Black Star as an interest owner in said activities in their public news releases.
The Parties agree tha t this "Option Agreement" represents the entire agreement
between the Parties.
This agreement shall become effective upon Black Star's receipt of the funds
stated above, however this agreement shall become null and void and of no force
or affect if said signed documents and funds are not received by Black Star no
later than November 1st, 2012.
This agreement can be signed by each of the Parties, and delivered
electronically withou t reduction in its authority.
Abby, Inc.
Black Star 231 Corp.
By
Thomas Forzani
President
