UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 2015
CARDINAL ENERGY GROUP, INC.
(Exact name of registrant as specified in its charter)
| Nevada | 000-53923 | 26-0703223 | ||
| (State or other jurisdiction | (Commission | (IRS Employer | ||
| of incorporation) | File No.) | Identification No.) |
|
6037 Frantz Rd., Suite 103 Dublin, OH |
43017 | |
| (Address of principal executive offices) | (Zip Code) |
| (614) 459-4959 |
| Registrant’s telephone number, including area code |
Not applicable.
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On March 10, 2015 (the “Effective Date”), Cardinal Energy Group, Inc. (the “Company”) and CEGX of Texas, LLC (“CEGX”), a wholly owned subsidiary of the Company, entered into a joint settlement agreement and release of all claims (the “Settlement Agreement”) with Concho Oilfield Services, LLC (“Concho”) and Hudson Petroleum, Ltd. Co. (“Hudson”), pursuant to which the parties agreed to settle all asserted or assertable claims and controversies between them in the then pending litigation among the parties.
Pursuant to the terms of the Settlement Agreement, the Company agreed to pay Concho $100,000 and to allow Concho to retain a $25,000 deposit then held by Concho. Concho agreed (a) to provide a rig and related ancillary equipment for up to five days to repair the Dawson-Conway 195B #5 well at no cost to the Company, (b) in the event that Concho is unable to repair the Dawson-Conway 195B #5B well within five days, to pay a fee up to be not exceeding $25,000 to a specialized fishing company, and (c) at the option and direction of the Company, to plug the Dawson-Conway 195B #5 well at no cost to the Company, provided that the plugging work on the well does not exceed two additional days. The parties also mutually agreed to release each other against any and all claims.
The foregoing description of the Settlement Agreement is a summary only and is qualified in its entirety by reference to the full text of such document, filed herewith as Exhibit 10.1 and incorporated herein by reference. On June 30, 2015, the Company issued a press release announcing that Concho and Hudson requested that the court dismiss their claims against the Company with prejudice. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description of Exhibit | |
| 10.1 | Joint Settlement Agreement and Release of All Claims by and among Concho Oilfield Services, LLC, Hudson Petroleum Ltd. Co., Cardinal Energy Group, Inc. and CEGX of Texas, LLC, effective March 10, 2015. | |
| 99.1 | Press release of Cardinal Energy Group, Inc. dated June 30, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CARDINAL ENERGY GROUP, INC. | ||
| Date: July 1, 2015 | By: | /s/ Timothy W. Crawford |
| Timothy W. Crawford, Chief Executive Officer | ||
JOINT SETTLEMENT AGREEMENT and RELEASE OF ALL CLAIMS
| Re: | Hudson Petroleum Ltd. Co. v. Cardinal Energy Group, Inc. and CEGX of Texas, LLC; Cause No. 2014-038 in the 258 th Judicial District Court, Shackelford County, Texas; and | |
| Concho Oilfield Services, LLC v. Cardinal Energy Group, Inc., Cause No. 1:14-CV-00097-C in US District Court, Northern District of Texas. |
| 1. | Concho Oilfield Services, LLC (hereinafter “Concho”), Hudson Petroleum Ltd. Co. (hereinafter “Hudson”), Cardinal Energy Group, Inc. (hereinafter “Cardinal”) and CEGX of Texas, LLC (hereinafter “CEGX”) (collectively the “Parties”) hereby agree to settle all claims and controversies between them, asserted or assertable in the cases referenced above. | |
| 2. | The consideration to be given for this settlement is as follows: |
| a. | Cardinal shall pay a total of $125,000 to Concho as follows: |
| i) | Cardinal will pay the sum of $75,000 to Concho within 30 days after this agreement is executed; | |
| ii) | Cardinal will pay the sum of $25,000 to Concho within 60 days after this agreement is executed; and | |
| iii) | Cardinal will release all claims to the $25,000 deposit currently held by Concho. |
| b. | Concho will provide a rig and necessary ancillary equipment and will use commercially reasonable efforts to repair the Dawson-Conway 195B 5B well. Concho will work diligently until the well is repaired, although in no event will Concho be required to spend more than five (5) days working on said repairs. Concho’s repair efforts shall be made at no cost to Cardinal or CEGX. Concho will perform such work within 45 days after the execution of this agreement. | |
| c. | In the event that Concho is unable to repair the Dawson-Conway 195B 5B well within five (5) days, Concho agrees to pay a fee, not to exceed $25,000, to a specialized fishing company of Cardinal’s choice. | |
| d. | In the event that Dawson-Conway 195B 5B well remains inoperable after items “b” and “c” have been performed, Cardinal reserves the right to instruct Concho to plug the Dawson Conway 195B 5B well, and Concho agrees to perform such work at no cost to Cardinal; however, in no case shall Concho be required to spend more than two (2) additional days performing plugging work on the well. |
JOINT SETTLEMENT AGREEMENT and RELEASE OF ALL CLAIMS
| Page 1 of 4 |
| e. | Cardinal will assign to Hudson a 5% carried working interest in the Dawson Conway properties if they become cash flow positive. The carried working interest shall expire on the earlier of: (1) February 29, 2020; or (2) if the Dawson Conway properties are sold to a third-party, on the date of the closing of such sale; and | |
| f. | The terms of this settlement are strictly confidential and shall not be disclosed by any party unless required by law. |
| 3. | The referenced styled and numbered causes shall be resolved by mutual agreed orders of dismissal with prejudice with costs and attorneys’ fees taxed to party incurring the same. The mutually agreed orders of dismissal shall be filed no later than fifteen days after the signing of this agreement. | |
| 4. | Concho and Hudson hereby fully, finally, and forever release and discharge Cardinal and CEGX from any and all claims, causes of action, lawsuits, liabilities, debts, accounts, dues, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, variances, trespasses, extents, executions, sums of money, damages, judgments, and demands of any nature whatsoever, in law or in equity, both known and unknown, asserted or not asserted, foreseen or unforeseen, which it ever had or may presently have against Cardinal and CEGX. The time period for this release is from the beginning of time up to and including the date of this Agreement and includes claims under any federal, state, or local statute, regulation, ordinance, order, common law doctrine or rule, or any other legal basis whatsoever for asserting a claim. | |
| 5. | Cardinal and CEGX hereby fully, finally, and forever release and discharge Concho and Hudson from any and all claims, causes of action, lawsuits, liabilities, debts, accounts, dues, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, variances, trespasses, extents, executions, sums of money, damages, judgments, and demands of any nature whatsoever, in law or in equity, both known and unknown, asserted or not asserted, foreseen or unforeseen, which it ever had or may presently have against Concho and Hudson. The time period for this release is from the beginning of time up to and including the date of this Agreement and includes claims under any federal, state, or local statute, regulation, ordinance, order, common law doctrine or rule, or any other legal basis whatsoever for asserting a claim. | |
| 6. | Each signatory hereto warrants and represents the following: |
| a. | He or she has authority to bind the parties for whom this signatory acts; and |
JOINT SETTLEMENT AGREEMENT and RELEASE OF ALL CLAIMS
| Page 2 of 4 |
| b. | The claims, suits, rights and/or interests which are the subject matter hereto are owned by the patty asserting same, have not been assigned, transferred or sold and are free of encumbrances. |
| 7. | If any party fails to abide by this agreement and suit is brought to enforce the agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees and expenses. | |
| 8. | In addition to Paragraph 4 above, Cardinal and CEGX specifically agree to forever release and hold harmless Concho and Hudson, and Zurich American (hereinafter INSURER), Zurich Insurance Group, Zurich North America and each of their respective agents, servants, employees, successors, heirs, insurance carriers, attorneys and assigns, from any and all actions or causes of action, claims or demands, which in any way arose out of work performed by Concho and Hudson on behalf of Cardinal and/or CEGX, including, but not limited to, any liability associated with alleged damage caused to the Dawson Conway 195 B 5B well, and as to any and all claims asserted or which could have been asserted by Cardinal and/or CEGX in either case above and in particular, as set out in Defendant Cardinal Energy Group, Inc.’s First Amended Counterclaim in Cause No. 1:14-CV-00097-C in US District Court, Northern District of Texas. FURTHER, Cardinal and CEGX agree to indemnify and hold harmless Concho and Hudson, their agents and INSURER, from any and all claims, whether now known or unknown, made by third parties as to any such work performed, or claimed to should have been performed, by Concho and Hudson on behalf of Cardinal and/or CEGX. | |
| 9. | In addition to Paragraph 5 above, Concho and Hudson specifically agree to forever release and hold harmless Cardinal and CEGX, and each of their respective agents, servants, employees, successors, heirs, insurance carriers, attorneys and assigns, from any and all actions or causes of action, claims or demands, which in any way arose out of Concho and Hudson’s claims for non-payment of invoices for services rendered by Concho and Hudson, and as to any and all claims asserted or which could have been asserted by Concho and/or Hudson in either case above and in particular, as set out in Plaintiff’s Original Petition in each of the referenced causes of action. FURTHER, Concho and Hudson agree to indemnify and hold harmless Cardinal and CEGX, their agents and INSURER, from any and all claims, whether now known or unknown, made by third parties as to any claims for non-payment of invoices for services rendered by Concho and Hudson on behalf of Cardinal and/or CEGX. | |
| 10. | This agreement is made and performable in Shackelford County, Texas. The sole and exclusive venue and jurisdiction to enforce or adjudicate disputes concerning this agreement shall be ONLY in Shackleford County District Court. Suit may be filed in no other venue or jurisdiction. | |
| 11. | Each signatory to this settlement has entered into same freely and without duress after having consulted with attorneys and professionals of his or her choice. |
JOINT SETTLEMENT AGREEMENT and RELEASE OF ALL CLAIMS
| Page 3 of 4 |
| 12. | The parties intend to be immediately bound by this settlement agreement. The parties stipulate to all facts necessary for the Courts to render judgment on this settlement agreement for which the parties waive all requirements of pleadings and summary judgment motion procedure and stipulate to the entry of judgments hereon. Only modifications in writing, signed by all parties and their counsel, if any, shall be enforceable. Disputes about this agreement shall by submitted to mediation prior to any lawsuit being filed. |
Signed this 9 day of March 2015 by:
| /s/ Randy D. Hudson | ||
| Randy Hudson, on behalf of Concho Oilfield Services, LLC and Hudson Petroleum, Ltd. | ||
Signed this __ day of March 2015 by:
| /s/ Timothy W. Crawford | ||
| Timothy Crawford, on behalf of Cardinal Energy Group, Inc. and CEGX of Texas, LLC | ||
JOINT SETTLEMENT AGREEMENT and RELEASE OF ALL CLAIMS
| Page 4 of 4 |
Exhibit 99.1
Cardinal Energy Group (CEGX) Settles Dispute With Concho Oilfield Services, LLC
Concho to Repair Cardinal’s Prolific Well on Its Dawson-Conway Lease
Abilene, TX, June 30, 2015—Cardinal Energy Group, Inc. (OTCQB: CEGX) (“Company”) is pleased to announce that the attorneys for Concho Oilfield Services, LLC and Hudson Petroleum, Ltd., Co., have asked the court to dismiss their claims against the Company with prejudice. The motions filed with the Texas District Court for Shackelford County discharges Cardinal of its obligations pursuant to the March 10, 2015 Joint Settlement Agreement. The amicable settlement of the suit requires Concho Oilfield Services to repair CEGX’s No. 5B well on the Dawson-Conway 195B lease.
Timothy Crawford, CEO of the Company, comments, “This is good news on several fronts. First, the $100,000 payment cleans up our balance sheet by removing the obligation we accrued at December 31, 2014 in keeping with generally accepted accounting principles. Second, our payment and the motion filed with the court set the stage for Concho to begin the work necessary to repair the #5B well and get it producing again on our Dawson-Conway lease. That 195B #5B well was one of our best producers on the Dawson-Conway Lease, before Concho performed work on the well in February of 2014. Returning it to production is a critical first step in the Company’s efforts to fully monetize this property.”
More information on CEGX is available at www.cegx.us.
About Cardinal Energy Group, Inc.
Cardinal Energy Group, Inc. is an environmentally responsible energy company principally engaged in the acquisition, development and production of crude oil and natural gas. Cardinal’s strategy is to increase reserves and production through the exploitation of oil and natural gas properties with high emphasis on known formations with significant proven reserves remaining that can be produced economically. The company’s properties and development efforts are located in Central Texas. More information on Cardinal Energy Group, Inc. is available at www.cegx.us.
Forward Looking Statements
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Cardinal Energy Group, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intends,” “plans,” “believes” and “projects”) may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our beliefs concerning our ability to increase the rate of oil and gas production, and the expected demand, pricing and operating results for our oil and gas operations.
Contact:
JP Fortune Group
949-218-4020