Option Exercise and Assignment Agreement between W.L. Addison Investment, L.L.C. and GulfWest Energy Inc. (February 24, 2005)

Summary

This agreement confirms that GulfWest Energy Inc. is exercising its option to purchase certain oil and gas leases and wells from W.L. Addison Investment, L.L.C., as originally outlined in their March 5, 2004 agreement. Upon payment of the agreed redemption price, Addison will transfer all its rights, title, and interest in the specified leases and wells to GulfWest. Addison also confirms it will not retain any working interest in these assets. The agreement is effective as of February 24, 2005, and is acknowledged by both parties.

EX-10.16 20 a4852153ex1016.txt EXHIBIT 10.16 EXHIBIT 10.16 1 February 24, 2005 W.L. Addison Investment, L.L.C. 16300 Addison Road, Suite 300 Addison, Texas 75001 Attn: Mr. John E. Loehr Re: Option Agreement for the Purchase of Oil & Gas Leases Dated March 5, 2004 Gentlemen: Reference is made to that certain "Option Agreement for the Purchase of Oil and Gas Leases" dated March 5, 2004, hereinafter referred to as the "Agreement", between W.L. Addison Investment, L.L.C. (herein referred to as "Addison"), GulfWest Energy Inc. ("herein referred to as GulfWest"), and Setex Oil and Gas Company ("herein referred to as "Setex"). Pursuant to the Agreement, Addison granted GulfWest the option to acquire certain oil and gas leases and wells located in the Iola Field, Grimes County, Texas. This letter agreement shall constitute notice pursuant to Article IV (A) of the Agreement that GulfWest has elected to exercise its rights to acquire the oil and gas leases and wells covered by the Agreement. Addison and GulfWest hereby acknowledge the Agreement remains in full force and effect and that upon payment of the Redemption Price set forth in the Agreement the Option Note will be cancelled and Addison will execute an appropriate instrument of "Assignment, Conveyance and Bill of Sale" conveying to GulfWest all right, title and interest held by Addison in such oil and gas leases and wells. Further, as evidenced by Addison execution of this letter agreement, Addison has elected not to retain a working interest in the oil and gas leases and wells covered by the Agreement pursuant to Article V of the Agreement. Sincerely, /S/ THOMAS R. KAETZER - ------------------------------- Thomas R. Kaetzer President 1 Agreed to and acknowledged this 24th day of February 2005. W.L. Addison Investment, L.L.C. /S/ JOHN E. LOEHR - ------------------------------- John E. Loehr President 2