AKNOWLEDGEMENT

 

 

KNOW ALL MEN BY THESE PRESENTS:

 

That, Sage Oil & Gas Co., whose address is 4319 Palisades Park, Billings, Montana 59106, herein called "Assignor," in consideration of Ten Dollars ($10.00) and other good and valuable consideration to it in hand paid, the receipt and sufficiency of which are hereby acknowledged, does hereby ASSIGN, TRANSFER, SELL, SET OVER and CONVEY unto Stratex Oil and Gas, Inc., with offices at 30 Echo Lake Road, Watertown, Connecticut 06795, its successors and assigns, hereinafter referred to as "Assignee', all of Assignor's right, title and interest in and to those certain Oil and Gas Leases located in Golden Valley County, North Dakota. (sometimes hereinafter the "Leases" or "Fee Leases" or "Federal Leases"), more particularly identified and described on attached Exhibit A.

 

Assignor reserves unto itself, its successors and assigns, an overriding royalty interest equal to the difference between existing burdens and 18.5% on the fee Leases and equal to the difference between existing burdens and 16.0% on the federal Leases, in and to all of the oil, gas and other hydrocarbons produced, saved and sold from the interests assigned hereunder in the Leases during the terms thereof including any extensions or renewals thereof. Any Leases acquired by Assignee its successors or assigns within two years of the termination of any of the Leases shall be deemed an extension or renewal lease for purposes under this provision insofar as the renewal or extension lease covers acreage transferred hereunder.

 

It is the intent of the parties that Assignee receive a proportionately reduced 81.5% net revenue interest on the Fee Leases and a proportionately reduced 84.0% net revenue interest on the Federal Leases.

 

Said overriding royaltv interests shall be inclusive or all existing royalties of record at the time of Closing and lessor's royalty, and shall be free of all development, production and operating expenses and shall be computed and valued in the same manner and shall be subject to the same allowable deductions and operating costs as would a federal royalty; except, however, said interest shall bear and pay currently its portion of gross production taxes, pipeline taxes, and all other taxes assessed against the gross production subject to said overriding royalty interest. It is agreed that nothing herein contained shall impose upon the Assignor, its successors or assigns, any duty or obligation to develop or operate the property covered by the Leases for oil, gas or other hydrocarbons, nor to maintain the Leases in effect by the payment of delay rentals or other means.