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Enron Mail |
Gerald,
I am sending you the PSA and Escrow agreement for the acquisition of the Harley Dome Oil and Gas Leases. This lease contains mostly helium reserves, with little oil or gas value. We plan to execute this PSA with the Oil and Gas Owner next week, and put the downpayment in escrow at our bank here in Midland. We expect a due diligence period of 1-2 months, due to waiting on the outcome of the lawsuit involving the helium rights owner or agreement on a deal with the helium rights owner. There are no producing wells on the acreage (all P&A'd or TA'd). We would do some due diligence upon execution. Scott asked me to have you look at the agreement. We have worked with Bill Ward at Pruitt, Gushee, & Bachtel (PG&B) on this agreement (it is pretty much our standard PSA), and he looks at all our agreements. I believe PG&B has been approved by ENA. The strategy here is that if we obtain the oil and gas rights, then we believe we lock up the oil and gas leases covering the existing helium rights owned by another entity. We are using this as leverage to get a better deal from the helium rights owner. As listed in Article 7.7, the acquisition wouldn't close until final approval by members of Crescendo. We are prepared to risk (and its not really even at risk based on the termination provisions in Article 10) the $12,000 downpayment to work a deal with the helium rights owner. Let's discuss ASAP. Thanks, Ken - RMOC Purchase Sale Agrmnt PG&B.doc - RMOC Purchase.ExB PG&B.doc
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