Purchase and Sale Agreement
EX-10.15 19 h48324a1exv10w15.htm PURCHASE AND SALE AGREEMENT exv10w15
Exhibit 10.15
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) dated as of the 4th day of December, 2005, is entered into by and between Wallace Jordan, LLC and Daniel White Jordan, (“Seller”) and RIATA ENERGY, INC., Sierra Madera C02 Pipeline, LLC, RIATA PICEANCE, LLC, and ROC GAS COMPANY ( collectively “Riata” or “Purchaser”).
For and in consideration of the mutual covenants and agreements set forth herein, the parties hereby agree as follows:
Subject Interests and Incidental Rights
A. Seller (Wallace Jordan, LLC) acquired an interest in Riata’s Piceance Basin Project (Block 1, 2, and 3), purchased an interest in Sagebrush Pipeline, LLC, and purchased acreage in the Piceance Basin from Symbol Energy, Inc. (collectively “Piceance Properties”).
B. Seller (Wallace Jordan, LLC) has acquired working interest in Riata’s Prospects in Pecos and Terrell Counties, Texas (“Riata Operated Leases”). Seller has participated in the drilling of wells spudded prior to September 4, 2005 on Riata Operated Leases and acquired interests in other producing properties on the Riata Operated Leases (“Producing Wells”). The acreage outside of the wellbores of the Producing Wells and wells spudded after September 4, 2005 of the Producing Properties are collectively the “Undeveloped Acreage.”
C. Seller (Daniel White Jordan) owns shares in Lariat Compression Company (“Larco”) equal to 50% of the issued and outstanding shares of Larco, less one share (the “Larco Shares”).
D. Incidental Rights. (1) All rights with respect to the use and occupancy of the surface of and the subsurface depths under the Subject Interests; (2) All rights with respect to any pooled, communitized or unitized, acreage by virtue of any of the Subject Interests being a part thereof; (3) All rights in and to all agreements and contractual rights, easements, rights-of-way, servitudes and other estates related to or otherwise affecting the Subject Interests; and (4) all rights with respect to the Larco Shares (collectively “Incidental Rights”).
E. Seller desires to sell and Riata desires to purchase the Piceance Properties, the Undeveloped Acreage, and the Larco Shares (collectively “the Subject Interests”) and Incidental Rights on the terms and conditions, and subject to the limitations, exceptions, disclaimers and reservations, herein provided.
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Sale and Purchase.
(A) Included Assets. Subject to the terms and conditions of this Agreement, Seller agrees to sell and convey and Riata agrees to purchase and pay for the Subject Interests and Incidental Rights, effective as of 7:00 a.m. local time, on September 4, 2005 (the “Effective Time”):
(B) Excluded Assets. Seller is not conveying and Riata is not purchasing the Producing Wells of Seller, being the spuded before September 4, 2005 and mineral interests in the wellbores of the Producing Wells. Seller is not conveying and Riata is not purchasing the wells or acreage that is operated by by NEG, LLC, Berexco, Inc. or any third party, with the execution of the acreage operated by J Cleo Thompson in the Pinon Field. Seller is not conveying and Riata is not purchasing Seller’s interest in pipeline assets operated by ROC Gas, Seller’s interest in Integra Energy, LLC, or Seller’s interest in the surface and mineral estates of the lands known as the MD 50/50 (3,749.1 acres purchased from Jolesch Cerf Ranch Ltd. in December, 2003).
(C) Conditional Sale. Seller is aware that Riata is currently in the process of undertaking a 144A Private Placement offering (the “Private Placement”). Closing shall be conditioned upon the closing of the Private Placement. Should the Private Placement fail to close, for any reason, Riata shall be under no obligation to close. Seller is currently not paying cash calls or JIBs for the Subject Interests. Similarly, Seller is not receiving revenue from the Subject Interests. Therefore, if the Private Placement does not close, then within 15 days of Riata notifying the Seller, Seller shall reimburse Riata for all accrued costs and expenses paid by Riata attributable to the Properties, and Riata shall reimburse Seller for all arrived income attributable to the Subject Interests.
(D) Purchase Price. In consideration of the conveyance and transfer of the Subject Interests and Incidental Rights, Riata shall, on the Closing Date, deliver the number of shares of common stock in Riata Energy, Inc. equal to $23,400,000 divided by the per share sales price of Riata Common Stock in the Private Placement (the “Purchase Price”).
| • | Allocation of Purchase Price. The Purchase Price shall be allocated among the Subject Interests and Incidental Rights as follows: |
Seller’s Piceance Properties | $ | 5,900,000 in shares | |
Seller’s Undeveloped Acreage | $ | 10,000,000 in shares | |
Seller’s Larco Shares | $ | 7,500,000 in shares | |
Total | $ | 23,400,000 in shares |
| • | Seller anticipates taking Riata Stock as payment for the Purchase Price as indicated above. Riata will provide Seller with an adequate disclosure document concerning the stock. If Seller, after receiving the disclosure, fails to subscribe for the stock, then Seller agrees that the Purchase Price shall be $23,400,000 in cash. |
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Paragraphs number 1 and 2 intentionally omitted.
| 3. | Seller’s Representations. Seller represents to Riata as of the date hereof that: |
(a) Seller owns the Subject Interests.
(b) Seller is either an individual or is duly organized, validly existing and in good standing under the laws of the State of its formation. Seller has all requisite power and authority to enter into this Agreement, and to perform its obligations hereunder. The consummation of the transactions contemplated by this Agreement will not violate or be in conflict with any provision, material agreement, or instrument to which Seller is a party or by which it is bound, or any judgment, decree, order, statute, rule or regulation applicable to Seller.
(c) The execution, delivery and performance of this Agreement and the transactions contemplated hereunder have been duly and validly authorized by all requisite action on the part of Seller.
(d) This Agreement constitutes, and all documents and instruments required hereunder to be executed and delivered by Seller at Closing will constitute, valid, legal and binding obligations of Seller in accordance with its respective terms, subject to applicable bankruptcy and other similar laws of general application with respect to creditors.
4. Riata’s Representations. Riata represents to Seller as of the date hereof that:
(a) Riata is a corporation duly organized, validly existing and in good standing under the laws of the States of Texas and Colorado. It has all requisite power and authority to carry on its business as presently conducted, to enter into this Agreement, to purchase the Subject Interests and Incidental Rights on the terms described in this Agreement, and to perform its other obligations under this Agreement. The consummation of the transactions contemplated by this Agreement will not violate, or be in conflict with, any provision of Riata’s charter, by-laws or governing documents, or any material agreement or instrument to which Riata is a party or by which Riata is bound, or any judgment, decree, order, statute, rule or regulation applicable to Riata.
(b) The execution, delivery and performance of this Agreement and the transactions contemplated hereunder have been duly and validly authorized by all requisite action on the part of Riata.
(c) This Agreement constitutes, and all documents and instruments required hereunder to be executed and delivered by Riata at Closing will constitute, legal, valid and binding obligations of Riata in accordance with their respective terms, subject to
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applicable bankruptcy and other similar laws of general application with respect to creditors.
| 5. | Title Matters. |
(a) Representation and Warranty. Seller shall convey to Riata all of its right, title and interest in and to the Subject Interests. Such conveyance shall be subject to the Existing Encumbrances (hereafter defined) and be with special warranties only. Sale and purchase of the Subject Interests and Incidental Rights are made subject to the Litigation Agreement between Seller and Riata. The term “Existing Encumbrances” shall mean any of the following matters:
(i) any liens for taxes and assessments not yet delinquent;
(ii) easements, rights-of-way, servitudes, permits, surface or use leases and other rights in respect of surface operations, canals, ditches, highways, pipelines, telephone lines, power lines, railways and other similar rights-of-way, on, over or in respect to the Lands; and
(iii) all defects and irregularities affecting the Subject Interests and Incidental Rights which individually or in the aggregate are not such as to interfere materially with the operation, value or use of the Subject Interests and Incidental Rights, taken as a whole, and do not prevent Riata from receiving the proceeds of production from the Subject Interests.
6. Seller’s Closing Conditions. The obligations of Seller under this Agreement are subject to Riata closing on its Private Placement.
7. Riata’s Closing Conditions. The obligations of Riata under this Agreement are subject, at the option of Riata, to the satisfaction at or prior to Closing of the following conditions: (i) All representations and warranties of Seller contained in this Agreement shall be true in all material respects at and as of Closing as if such representations were made at and as of Closing, (ii) Seller shall receive the executed Assignment and Bill of Sale covering the Subject Interests and Incidental Rights; and (iv) Riata shall have closed on its Private Placement.
8. Closing.
(a) Time and Place. Unless otherwise agreed to by the parties, the closing of this transaction (“Closing”) shall take place at the offices of Riata within two (2) days after the closing of the 144A Private Placement, but no later than January 31, 2006 (the “Closing Date”). Regardless of when Closing shall occur, Closing shall be deemed effective with respect to each Property as of the Effective Time.
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(b) Seller’s Closing Obligations. At Closing, Seller shall deliver to Riata executed Assignment and Bill of Sale, which will be provided to Seller in advance of Closing, and which will be in a form mutually acceptable to Seller and Riata
(c) Riata’s Closing Obligations. At Closing, Riata shall deliver to Seller the Purchase price.
9. Indemnification.
(a) Seller shall indemnify and hold harmless Riata from and against any and all claims, damages, liabilities, costs, and expenses of any kind, including costs of defense, relating to the Subject Interests and Incidental Rights arising from the events occurring on or before the Effective Time.
(b) Riata shall indemnify and hold Seller harmless from and against any and all claims, damages, liabilities, costs, and expenses of any kind, including costs of defense, relating to the undivided interest in the Subject Interests and Incidental Rights purchased by Riata arising after the Effective Time.
10. Survival Period. All representations, covenants or agreements made herein shall survive Closing,
11. Expenses and Commissions. Seller and Riata will be responsible for their own expenses and commissions, if any, due from them concerning the sale of the Subject Interests and Incidental Rights, and shall hold each other harmless therefrom.
12. Further Assurances. In connection with this Agreement, each party shall execute and deliver any additional documents: and instruments and perform any additional acts that may be necessary or appropriate to effectuate and perform the provisions of the Agreement.
13. Entire Agreement. This Agreement constitutes the entire agreement by and between Seller and Riata with respect to the matters covered by this Agreement, and any all prior agreements or representations, whether oral or in writing relating to the same matters, are of no force or effect.
14. Governing Law. This Agreement shall be governed by and construed, interpreted, and enforced in accordance with the laws of the State of Texas.
15. Waiver. Any of the terms, provisions, covenants, representations, conditions, rights and remedies hereof may be waived, but only by a written instrument executed by the party waiving compliance.
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16. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors, and assigns.
17. Severability. If any provision of this Agreement shall be held to be invalid under any applicable law, the invalidity shall not effect any other provision of this Agreement that can be given effect without the invalid provision, and to this end, the provisions of this Agreement are severable.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their representatives as of the date first written above.
| Seller | Wallace Jordan, LLC | |||||
12/5/05 | ||||||
Date | By: | /s/ Daniel White Jordan | ||||
| Daniel White Jordan, Managing Member | ||||||
12/5/05 | ||||||
Date | By: | /s/ Daniel White Jordan | ||||
| BUYER: | RIATA ENERGY, INC. | |||||
Date | By: | /s/ Matthew McCann | ||||
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| BUYER: | SAGEBRUSH PIPELINE, LLC. | |||||
Date | By: | /s/ Matthew McCann | ||||
| BUYER: | RIATA PICEANCE, LLC. | |||||
Date | By: | /s/ Matthew McCann | ||||
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Wallace Jordan and Daniel White Jordan
EXHIBIT A
EXHIBIT A
Attached to and made part of the Purchase and Sale Agreement. Wallace Jordan, LLC is
conveying to Buyer all interests it has in the Piceance Basin, Rio Blanco County,
Colorado, which includes all rights under the Exploration and Development Agreements
for Blocks 1,2, and 3, all rights in-the Lands, including the leasehold interest acquired
from Symbol Energy, Inc., the Leases, the Wells, and Sagebrush. Wallace Jordan is also
conveying all undeveloped acreage in Pecos and Terrell Counties, Texas on Riata
Operated, and J. Cleo Thompson Operated Properties, being approximately 7,407 net
leasehold acres. Dan Jordan, individually, all shares he owns in Lariat Compression
Company.
conveying to Buyer all interests it has in the Piceance Basin, Rio Blanco County,
Colorado, which includes all rights under the Exploration and Development Agreements
for Blocks 1,2, and 3, all rights in-the Lands, including the leasehold interest acquired
from Symbol Energy, Inc., the Leases, the Wells, and Sagebrush. Wallace Jordan is also
conveying all undeveloped acreage in Pecos and Terrell Counties, Texas on Riata
Operated, and J. Cleo Thompson Operated Properties, being approximately 7,407 net
leasehold acres. Dan Jordan, individually, all shares he owns in Lariat Compression
Company.
The “Lands,” all of which are in Rio Blanco County, Colorado
| BLOCK 1 AMI | BLOCK 2 AMI | |||||||||||||||
| Townshi | Townshi | BLOCK 3 AMI | ||||||||||||||
| p | Range | Section | p | Range | Section | Township | Range | Section | ||||||||
2S | 99W | 12 | 2S | 99W | 35 | 3S | 99W | 13 | ||||||||
2S | 99W | 13 | 2S | 99W | 36 | 3S | 99W | 14 | ||||||||
2S | 99W | 22 | 2S | 98W | 31 | 3S | 99W | 15 | ||||||||
2S | 99W | 23 | 3S | 99W | 32 | 3S | 99W | 22 | ||||||||
2S | 99W | 24 | 3S | 99W | 1 | 3S | 99W | 23 | ||||||||
2S | 99W | 25 | 3S | 99W | 2 | 3S | 99W | 24 | ||||||||
2S | 99W | 26 | 3S | 99W | 3 | 3S | 99W | 25 | ||||||||
2S | 99W | 27 | 3S | 99W | 10 | 3S | 99W | 26 | ||||||||
2S | 99W | 34 | 3S | 99W | 11 | 3S | 99W | 27 | ||||||||
2S | 98W | 7 | 3S | 99W | 12 | |||||||||||
2S | 98W | 8 | 3S | 98W | 5 | |||||||||||
2S | 98W | 17 | 3S | 98W | 6 | |||||||||||
2S | 98W | 18 | 3S | 98W | 7 | |||||||||||
2S | 98W | 19 | 3S | 98W | 8 | |||||||||||
2S | 98W | 20 | ||||||||||||||
2S | 98W | 29 | ||||||||||||||
2S | 98W | 30 | ||||||||||||||
The “Leases,” all of which are in Rio Blanco County, Colorado
| Gross | ||||||||
| BLOCK 1 LEASEHOLD | Acres | Wl | ||||||
COC-68810 T2S-R98W | ||||||||
Sec. 22: NE4SE4 | 40.00 | 10.00 | % | |||||
Sec. 23: N2SW4 | 80.00 | 10.00 | % | |||||
Sec. 27: NW4NE4, NW4, W2SW4 | 280.00 | 10.00 | % | |||||
COC-60755 T2S-R99W | ||||||||
Sec. 22: S2 | 320.00 | 10.00 | % | |||||
Sec. 23: S2 | 320.00 | 10.00 | % | |||||
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| Gross | ||||||||
| BLOCK 1 LEASEHOLD | Acres | Wl | ||||||
COC-60756 T2S-R99W | ||||||||
Sec. 25: S2NW4, NW4SW4, S2S2, NE4SE4, SE4NE4 | 360.00 | 10.00 | % | |||||
Sec. 26: NW4NE4, S2NE4, W2, SE4 | 600.00 | 10.00 | % | |||||
COC-60757 T2S-R99W | ||||||||
Sec. 27: ALL | 640.00 | 10.00 | % | |||||
Sec. 34: ALL | 640.00 | 10.00 | % | |||||
COC-55203 T2S-R98W | ||||||||
Sec. 18: Lots 1-4, E2, E2W2 | 640.00 | 10.00 | % | |||||
Sec. 19: Lots1&2, E2NW4, SE4SW4 | 200.00 | 10.00 | % | |||||
Sec. 30: Lots 2,3,& 4, E2, E2W2 | 600.00 | 10.00 | % | |||||
COC-872 T2S-R98W | ||||||||
Sec19:SW4NE4 | 40.00 | 2.23 | % | |||||
Sec19:NW4NE4, NE4NE4 | 80.00 | 2.23 | % | |||||
Sec 19: SE4 | 160.00 | 1.85 | % | |||||
Sec 19: SE4NE4 | 40.00 | 3.74 | % | |||||
COC-1491 T2S-R98W | ||||||||
Sec 29: Lots 1-16 | 599.22 | 4.98 | % | |||||
| Gross | ||||||||
| BLOCK 2 LEASEHOLD | Acres | Wl | ||||||
COC-60743 T3S-R98W | ||||||||
Sec. 6: Lots 1, 8-16, S2NE4, W2SE4 | 524.30 | 10.00 | % | |||||
Sec. 7: Lots 1-4, W2NE4, SE4NE4, E2W2, SE4 | 600.00 | 10.00 | % | |||||
COC-60758 T3S-R99W | ||||||||
Sec. 1: Lots 1-4,S2N2 | 319.72 | 10.00 | % | |||||
COC-60759 T3S-R99W | ||||||||
Sec. 2: S2NE, E2SE | 160.00 | 10.00 | % | |||||
Sec. 3: E2SE | 80.00 | 10.00 | % | |||||
COC-68811 T2S-R99W | ||||||||
Sec. 31: Lot 7-10,12-20 | 457.71 | 10.00 | % | |||||
Sec. 32: Lot 1-4, NE4 | 320.00 | 10.00 | % | |||||
COC-45368 T2S-R98W | ||||||||
Sec 32: Lots 5-8 | 143.36 | 3.51 | % | |||||
COC-45369 T2S-R98W | ||||||||
Sec 32: NW4SE4 | 40.00 | 3.51 | % | |||||
COC-45377 T3S-R98W | ||||||||
Sec 5: Lots 3&4 | 79.96 | 4.31 | % | |||||
| Gross | ||||||||
| BLOCK 3 LEASEHOLD | Acres | Wl | ||||||
COC-60758 T3S-R99W | ||||||||
Sec. 13:W2 | 320.00 | 10.00 | % | |||||
Sec. 14: ALL | 640.00 | 10.00 | % | |||||
COC-60760 T3S-R99W | ||||||||
Sec. 15: ALL | 640.00 | 10.00 | % | |||||
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| Gross | ||||||||
| BLOCK 3 LEASEHOLD | Acres | Wl | ||||||
Sec. 22: ALL | 640.00 | 10.00 | % | |||||
COC-1398 T3S-R99W | ||||||||
Sec 23: ALL | 640.00 | 4.75 | % | |||||
Sec 25: N2 | 320.00 | 4.75 | % | |||||
Sec 26: N2N2 | 160.00 | 4.75 | % | |||||
COC-14406 T3S-R99W | ||||||||
Sec 27: N2 | 320.00 | 2.35 | % | |||||
| The “Wells” | Wl | |||
Federal 298 18-1 | 10.00 | % | ||
Federal 299 23-1 | 10.00 | % | ||
Federal 299 23-2 | 10.00 | % | ||
Federal 299 26-1 | 10.00 | % | ||
Federal 299 26-2 | 10.00 | % | ||
Federal 299 27-1 | 10.00 | % | ||
Federal 299 27-2 | 10.00 | % | ||
Sagebrush Pipeline,
LLC
1400 Class A Units and 280 Class C
Units
LLC
1400 Class A Units and 280 Class C
Units
The Undeveloped Acreage
As defined in the Purchase and Sale
Agreement
As defined in the Purchase and Sale
Agreement
Larco Shares
All of Seller’s shares in Lariat
Compression Company
All of Seller’s shares in Lariat
Compression Company
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