UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2017
OR
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File No.: 1-35374
Mid-Con Energy Partners, LP
(Exact name of registrant as specified in its charter )
Delaware |
45-2842469 |
(State or other jurisdiction of
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(I.R.S. Employer
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2431 East 61st Street, Suite 850
Tulsa, Oklahoma 74136
(Address of principal executive offices and zip code)
(918) 743-7575
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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(Do not check if a smaller reporting company) |
Smaller reporting company |
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Emerging Growth Company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of November 14, 2017, the registrant had 30,091,463 common units.
2
This Quarterly Report on Form 10-Q (“Form 10-Q”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (each a “forward-looking statement”). These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which may include statements about our:
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volatility or continued low or further declining commodity prices; |
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revisions to oil and natural gas reserves estimates as a result of changes in commodity prices; |
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effectiveness of risk management activities; |
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business strategies; |
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future financial and operating results; |
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our ability to pay distributions; |
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ability to replace the reserves we produce through acquisitions and the development of our properties; |
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future capital requirements and availability of financing; |
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technology; |
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realized oil and natural gas prices; |
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production volumes; |
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lease operating expenses; |
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general and administrative expenses; |
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cash flow and liquidity; |
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availability of production equipment; |
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availability of oil field labor; |
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capital expenditures; |
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availability and terms of capital; |
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marketing of oil and natural gas; |
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general economic conditions; |
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competition in the oil and natural gas industry; |
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environmental liabilities; |
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counterparty credit risk; |
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governmental regulation and taxation; |
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developments in oil producing and natural gas producing countries; and |
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plans, objectives, expectations and intentions. |
All of these types of statements, other than statements of historical fact included in this Form 10-Q, are forward-looking statements. These forward-looking statements may be found in Item 1. “Financial Statements,” Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other items within this Form 10-Q. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursue,” “target,” “continue,” “goal,” “forecast,” “guidance,” “might,” “scheduled” and the negative of such terms or other comparable terminology.
3
The forward-looking statements contained in this Form 10-Q are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain a nd involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. All readers are cautioned that the forward-looking statements contained in this Form 10-Q are not guarantees of future performance and we cannot assure any reader that such statements will be realized or that the forward-looking events will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statemen ts due to factors described in the “Risk Factors” section included in Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 201 6 (“Annual Report”) and Part II - Item 1A. in this Form 10-Q. All forward-looking statements speak only as o f the date made, and other than as required by law, we do not intend to update or revise any forward-looking statements as a result of new information, future events or otherwise. These cautionary statements qualify all forward-looking statements attributa ble to us or persons acting on our behalf.
INFORMATION AVAILABLE ON OUR WEBSITE
We make available, free of charge on our website ( www.midconenergypartners.com ), copies of our Annual Reports, Form 10-Qs, Current Reports on Form 8-K, amendments to those reports filed or furnished to the Securities and Exchange Commission (“SEC”) pursuant to Section 13(a) or 15(d) of the Exchange Act and reports of holdings of our securities filed by our officers and directors under Section 16 of the Exchange Act as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC. Copies of our Code of Business Conduct and the written charter of our Audit Committee are also available on our website and we will provide copies of these documents upon request. Our website and any contents thereof are not incorporated by reference into this report. We also make available on our website the Interactive Data Files required to be submitted and posted pursuant to Rule 405 of Regulation S-T.
4
Mid-Con Energy Partners, LP and subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except number of units)
(Unaudited)
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September 30, 2017 |
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December 31, 2016 |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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$ |
2,588 |
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$ |
2,359 |
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Accounts receivable |
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|
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Oil and natural gas sales |
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4,605 |
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5,302 |
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Other |
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83 |
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233 |
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Derivative financial instruments |
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42 |
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— |
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Prepaids and other |
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149 |
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512 |
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Total current assets |
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7,467 |
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8,406 |
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Property and equipment |
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Proved oil and natural gas properties, successful efforts method |
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454,566 |
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441,479 |
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Other property and equipment |
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852 |
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289 |
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Accumulated depletion, depreciation, amortization and impairment |
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(212,922 |
) |
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(176,551 |
) |
Total property and equipment, net |
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242,496 |
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265,217 |
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Derivative financial instruments |
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187 |
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— |
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Other assets |
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1,640 |
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2,663 |
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Total assets |
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$ |
251,790 |
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$ |
276,286 |
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LIABILITIES, CONVERTIBLE PREFERRED UNITS AND EQUITY |
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Current liabilities |
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Accounts payable |
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Trade |
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$ |
532 |
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$ |
256 |
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Related parties |
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3,759 |
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3,431 |
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Derivative financial instruments |
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784 |
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5,314 |
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Accrued liabilities |
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897 |
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146 |
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Total current liabilities |
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5,972 |
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9,147 |
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Derivative financial instruments |
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— |
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2,495 |
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Long-term debt |
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122,000 |
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122,000 |
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Other long term liabilities |
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75 |
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93 |
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Asset retirement obligations |
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12,384 |
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11,331 |
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Commitments and contingencies |
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Class A convertible preferred units - 11,627,906 issued and outstanding, respectively |
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20,253 |
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19,570 |
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Equity, per accompanying statements |
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Partnership equity |
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General partner interest |
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(470 |
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(248 |
) |
Limited partners - 30,091,463 and 29,912,230 units issued and outstanding, respectively |
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91,576 |
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111,898 |
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Total equity |
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91,106 |
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111,650 |
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Total liabilities, convertible preferred units and equity |
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$ |
251,790 |
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$ |
276,286 |
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See accompanying notes to condensed consolidated financial statements
5
Mid-Con Energy Partners, LP and subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per unit data)
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2017 |
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2016 |
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2017 |
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2016 |
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Revenues |
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Oil sales |
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$ |
13,731 |
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$ |
14,012 |
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$ |
42,343 |
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$ |
39,565 |
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Natural gas sales |
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233 |
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398 |
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917 |
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|
891 |
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(Loss) gain on derivatives, net |
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(2,749 |
) |
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(444 |
) |
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2,916 |
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(7,964 |
) |
Total revenues |
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11,215 |
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13,966 |
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46,176 |
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32,492 |
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Operating costs and expenses |
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Lease operating expenses |
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6,122 |
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5,709 |
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16,695 |
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17,551 |
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Oil and natural gas production taxes |
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|
857 |
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753 |
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2,366 |
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2,077 |
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Impairment of proved oil and natural gas properties |
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4,850 |
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— |
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22,522 |
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|
895 |
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Impairment of proved oil and natural gas properties sold |
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— |
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— |
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— |
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3,578 |
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Depreciation, depletion and amortization |
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4,350 |
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5,665 |
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13,850 |
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|
|
17,550 |
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Accretion of discount on asset retirement obligations |
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142 |
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127 |
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|
386 |
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|
443 |
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General and administrative |
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1,188 |
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|
1,715 |
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|
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4,485 |
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|
|
5,281 |
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Total operating costs and expenses |
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17,509 |
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13,969 |
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|
|
60,304 |
|
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|
47,375 |
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Loss on sales of oil and natural gas properties, net |
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— |
|
|
|
(530 |
) |
|
|
— |
|
|
|
(517 |
) |
Loss from operations |
|
|
(6,294 |
) |
|
|
(533 |
) |
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|
(14,128 |
) |
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|
(15,400 |
) |
Other (expense) income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Interest income |
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3 |
|
|
|
4 |
|
|
|
8 |
|
|
|
9 |
|
Interest expense |
|
|
(1,626 |
) |
|
|
(1,728 |
) |
|
|
(4,615 |
) |
|
|
(5,981 |
) |
Other income (expense) |
|
|
4 |
|
|
|
(164 |
) |
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|
70 |
|
|
|
(131 |
) |
Loss on settlements of asset retirement obligations |
|
|
(8 |
) |
|
|
— |
|
|
|
(13 |
) |
|
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— |
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Total other expense |
|
|
(1,627 |
) |
|
|
(1,888 |
) |
|
|
(4,550 |
) |
|
|
(6,103 |
) |
Net loss |
|
|
(7,921 |
) |
|
|
(2,421 |
) |
|
|
(18,678 |
) |
|
|
(21,503 |
) |
Less: Distributions to preferred unitholders |
|
|
783 |
|
|
|
440 |
|
|
|
2,275 |
|
|
|
440 |
|
Less: General partner's interest in net loss |
|
|
(94 |
) |
|
|
(29 |
) |
|
|
(222 |
) |
|
|
(256 |
) |
Limited partners' interest in net loss |
|
$ |
(8,610 |
) |
|
$ |
(2,832 |
) |
|
$ |
(20,731 |
) |
|
$ |
(21,687 |
) |
Limited partners' interest in net loss per unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.29 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.69 |
) |
|
$ |
(0.73 |
) |
Weighted average limited partner units outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limited partner units (basic and diluted) |
|
|
30,042 |
|
|
|
29,868 |
|
|
|
29,972 |
|
|
|
29,807 |
|
See accompanying notes to condensed consolidated financial statements
6
Mid-Con Energy Partners, LP and subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
|
|
Nine Months Ended September 30, |
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|||||
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2017 |
|
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2016 |
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Cash Flows from Operating Activities |
|
|
|
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Net loss |
|
$ |
(18,678 |
) |
|
$ |
(21,503 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities |
|
|
|
|
|
|
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Depreciation, depletion and amortization |
|
|
13,850 |
|
|
|
17,550 |
|
Debt issuance costs amortization |
|
|
1,023 |
|
|
|
1,019 |
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Accretion of discount on asset retirement obligations |
|
|
386 |
|
|
|
443 |
|
Impairment of proved oil and natural gas properties |
|
|
22,522 |
|
|
|
895 |
|
Impairment of proved oil and natural gas properties sold |
|
|
— |
|
|
|
3,578 |
|
Loss on settlements of asset retirement obligations |
|
|
13 |
|
|
|
— |
|
Cash paid for settlements of asset retirement obligations |
|
|
(30 |
) |
|
|
— |
|
Mark to market on derivatives |
|
|
|
|
|
|
|
|
(Gain) loss on derivatives, net |
|
|
(2,916 |
) |
|
|
7,964 |
|
Cash settlements received for matured derivatives |
|
|
524 |
|
|
|
18,467 |
|
Cash settlements received from early termination of derivatives |
|
|
147 |
|
|
|
5,820 |
|
Cash premiums paid for derivatives |
|
|
(5,009 |
) |
|
|
(3,766 |
) |
Loss on sale of oil and natural gas properties |
|
|
— |
|
|
|
517 |
|
Non-cash equity-based compensation |
|
|
409 |
|
|
|
961 |
|
Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
697 |
|
|
|
(160 |
) |
Other receivables |
|
|
150 |
|
|
|
4,805 |
|
Prepaids and other |
|
|
363 |
|
|
|
326 |
|
Accounts payable - trade and accrued liabilities |
|
|
1,009 |
|
|
|
80 |
|
Accounts payable - related parties |
|
|
(557 |
) |
|
|
(1,368 |
) |
Net cash provided by operating activities |
|
|
13,903 |
|
|
|
35,628 |
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
Acquisitions of oil and natural gas properties |
|
|
(4,668 |
) |
|
|
(19,055 |
) |
Additions to oil and natural gas properties |
|
|
(7,281 |
) |
|
|
(5,111 |
) |
Additions to other property and equipment |
|
|
(133 |
) |
|
|
(124 |
) |
Proceeds from sale of oil and natural gas properties |
|
|
— |
|
|
|
17,312 |
|
Net cash used in investing activities |
|
|
(12,082 |
) |
|
|
(6,978 |
) |
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
Proceeds from line of credit |
|
|
6,000 |
|
|
|
— |
|
Payments on line of credit |
|
|
(6,000 |
) |
|
|
(52,100 |
) |
Offering costs |
|
|
(92 |
) |
|
|
(16 |
) |
Debt issuance costs |
|
|
— |
|
|
|
(9 |
) |
Proceeds from sale of convertible preferred units, net of offering costs |
|
|
— |
|
|
|
24,975 |
|
Distributions to Class A convertible preferred units |
|
|
(1,500 |
) |
|
|
— |
|
Net cash used in financing activities |
|
|
(1,592 |
) |
|
|
(27,150 |
) |
Net increase in cash and cash equivalents |
|
|
229 |
|
|
|
1,500 |
|
Beginning cash and cash equivalents |
|
|
2,359 |
|
|
|
615 |
|
Ending cash and cash equivalents |
|
$ |
2,588 |
|
|
$ |
2,115 |
|
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements
7
Mid-Con Energy Partners, LP and subsidiaries
Condensed Consolidated Statements of Changes in Equity
(in thousands)
(Unaudited)
|
|
General |
|
|
Limited Partners |
|
|
Total |
|
|||||||
|
|
Partner |
|
|
Units |
|
|
Amount |
|
|
Equity |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2016 |
|
$ |
(248 |
) |
|
|
29,912 |
|
|
$ |
111,898 |
|
|
$ |
111,650 |
|
Equity-based compensation |
|
|
— |
|
|
|
179 |
|
|
|
409 |
|
|
|
409 |
|
Distributions to Class A convertible preferred units |
|
|
— |
|
|
|
— |
|
|
|
(1,500 |
) |
|
|
(1,500 |
) |
Accretion of beneficial conversion feature of Class A convertible preferred units |
|
|
— |
|
|
|
— |
|
|
|
(775 |
) |
|
|
(775 |
) |
Net loss |
|
|
(222 |
) |
|
|
— |
|
|
|
(18,456 |
) |
|
|
(18,678 |
) |
Balance, September 30, 2017 |
|
$ |
(470 |
) |
|
|
30,091 |
|
|
$ |
91,576 |
|
|
$ |
91,106 |
|
See accompanying notes to condensed consolidated financial statements
8
Mid-Con Energy Partners, LP and subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
Note 1. Organization and Nature of Operations
Nature of Operations
Mid-Con Energy Partners, LP (“we,” “our,” “us,” the “Partnership,” or the “Company”) is a publicly held Delaware limited partnership formed in July 2011 that engages in the ownership, acquisition, exploitation and development of producing oil and natural gas properties in North America, with a focus on enhanced oil recovery (“EOR”). Our common units representing limited partner interests in us (“common units”) are listed on the National Association of Securities Dealers Automated Quotation System Global Select Market (“NASDAQ”) under the symbol “MCEP.” Our general partner is Mid-Con Energy GP, LLC, a Delaware limited liability company.
Basis of Presentation
Our unaudited condensed consolidated financial statements are prepared pursuant to the rules and regulations of the SEC. These financial statements have not been audited by our independent registered public accounting firm, except that the condensed consolidated balance sheet at December 31, 2016, is derived from the audited financial statements. Accordingly, certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted in this Form 10-Q. We believe that the presentations and disclosures made are adequate to make the information not misleading.
The unaudited condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These interim financial statements should be read in conjunction with our Annual Report. All intercompany transactions and account balances have been eliminated.
Reclassifications
Certain amounts in the financial statements for the prior years have been reclassified to conform to the 2017 presentation. These reclassifications have no impact on previously reported total assets, total liabilities, net income (loss) or total operating cash flows.
Non-cash Investing, Financing and Supplemental Cash Flow Information
The following presents the non-cash investing, financing and supplemental cash flow information for the periods presented:
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2017 |
|
|
2016 |
|
||
|
|
(in thousands) |
|
|||||
Non-cash investing information |
|
|
|
|
|
|
|
|
Change in oil and natural gas properties - accrued |
|
$ |
885 |
|
|
$ |
(513 |
) |
Change in oil and natural gas properties - accrued receivable, acquisition post-close |
|
$ |
— |
|
|
$ |
(419 |
) |
Change in oil and natural gas properties - accrued receivable, divestiture post-close |
|
$ |
— |
|
|
$ |
(354 |
) |
Change in other property and equipment - accrued |
|
$ |
— |
|
|
$ |
14 |
|
Change in other property and equipment - tenant improvement allowance |
|
$ |
— |
|
|
$ |
124 |
|
Non-cash financing information |
|
|
|
|
|
|
|
|
Change in Class A Preferred Units - accrued offering costs |
|
$ |
— |
|
|
$ |
(302 |
) |
Supplemental cash flow information |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
3,566 |
|
|
$ |
5,063 |
|
9
Note 2. Acquisitions and Divestitures
Acquisitions
Acquisitions are accounted for under the acquisition method of accounting. The assets acquired and liabilities assumed in acquisitions are recorded in our unaudited condensed consolidated balance sheets at their estimated fair values as of the acquisition date using assumptions that represent Level 3 fair value measurement inputs. See Note 5 in this section for additional discussion of our fair value measurements. Results of operations attributable to the acquisition subsequent to the closing are included in our unaudited condensed consolidated statements of operations.
Permian Bolt-On
In August 2016, we acquired multiple oil and natural gas properties located in Nolan County, Texas (the “Permian Bolt-On”) for cash consideration of approximately $18.7 million, after post-closing purchase price adjustments. The transaction was funded by a private offering of $25.0 million Class A Convertible Preferred Units (“Class A Preferred Units”). See Note 9 in this section for additional information regarding the issuance of the Class A Preferred Units. For the three months and nine months ended September 30, 2017, our unaudited condensed consolidated statements of operations included revenues of approximately $2.0 million and approximately $6.2 million, respectively, and expenses of approximately $1.4 million and approximately $4.3 million, respectively, related to the oil and natural gas properties acquired. For the three and nine months ended September 30, 2016, our unaudited condensed consolidated statements of operations included revenues of approximately $0.8 million and expenses of approximately $0.7 million related to the oil and natural gas properties acquired. The recognized fair values of the assets acquired and liabilities assumed are as follows (in thousands):
Fair value of net assets acquired |
|
|
|
|
Oil and natural gas properties |
|
$ |
19,323 |
|
Total assets acquired |
|
|
19,323 |
|
Fair value of net liabilities assumed |
|
|
|
|
Asset retirement obligation |
|
|
622 |
|
Net assets acquired |
|
$ |
18,701 |
|
Wheatland
In June 2017, we acquired multiple oil and natural gas properties located in Oklahoma County and Cleveland County, Oklahoma (“Wheatland”) for cash consideration of approximately $4.2 million, prior to post-closing purchase price adjustments. For the three months ended September 30, 2017, our unaudited condensed consolidated statements of operations included revenues of approximately $0.6 million and expenses of approximately $0.4 million related to the oil and natural gas properties acquired. For the nine months ended September 30, 2017, our unaudited condensed consolidated statements of operations included revenues of approximately $0.7 million and expenses of approximately $0.5 million related to the oil and natural gas properties acquired. The recognized fair values of the assets acquired and liabilities assumed are as follows (in thousands):
Fair value of net assets acquired |
|
|
|
|
Oil and natural gas properties |
|
$ |
4,465 |
|
Other property and equipment |
|
|
127 |
|
Total assets acquired |
|
|
4,592 |
|
Fair value of net liabilities assumed |
|
|
|
|
Asset retirement obligation |
|
|
407 |
|
Net assets acquired |
|
$ |
4,185 |
|
Divestitures
Hugoton
In July 2016, we sold the properties located in our Hugoton core area for cash proceeds of approximately $17.6 million, including post-closing purchase price adjustments and recognized a loss of approximately $0.6 million. Additionally, we recorded impairment of proved oil and natural gas properties of approximately $3.6 million when these properties were originally reported as held for sale. For the three months ended September 30, 2016, our unaudited condensed consolidated statements of operations included revenues of approximately $0.6 million and expenses of approximately $0.6 million related to the oil and natural gas properties sold. For the nine months ended September 30, 2016, our unaudited condensed consolidated statements of operations included revenues of approximately $3.6 million and expenses of approximately $7.7
10
million related to the oil and natural gas properties sold. Effective at closing, the operations and cash flows of these properties were eliminated from the ongoing operations of the Partnership and the Partnership has no continuing involvement in these properties. This divestiture did not repr esent a strategic shift and did not have a major effect on the Partnership’s operations or financial results.
Note 3. Equity Awards
We have a long-term incentive program (the “Long-Term Incentive Program”) for employees, officers, consultants and directors of our general partner and its affiliates, including Mid-Con Energy Operating, LLC (“Mid-Con Energy Operating”) and ME3 Oilfield Service, LLC (“ME3 Oilfield Service”), who perform services for us. The Long-Term Incentive Program allows for the award of unit options, unit appreciation rights, unrestricted units, restricted units, phantom units, distribution equivalent rights granted with phantom units and other types of awards. The Long-Term Incentive Program is administered by Charles R. Olmstead, Executive Chairman of the Board, and Jeffrey R. Olmstead, President and Chief Executive Officer, and approved by the Board of Directors of our general partner (the “Board”). We account for unrestricted, restricted and equity-settled phantom unit awards as equity awards since they are settled by issuing common units. If an employee terminates employment prior to the restriction lapse date, the awarded units are forfeited and canceled and are no longer considered issued and outstanding.
On January 1, 2017, we adopted ASU 2016-09 Compensation - Stock Compensation (Topic 718) : Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”) and elected to recognize forfeitures of equity awards as they occur. The cumulative effect of adopting ASU 2016-09 was determined to be immaterial and no adjustment to retained earnings was made.
The following table shows the number of existing awards and awards available under the Long-Term Incentive Program at September 30, 2017:
|
|
Number of Common Units |
|
|
Approved and authorized awards |
|
|
3,514,000 |
|
Unrestricted units granted |
|
|
(1,212,706 |
) |
Restricted units granted, net of forfeitures |
|
|
(400,424 |
) |
Equity-settled phantom units granted, net of forfeitures |
|
|
(483,000 |
) |
Awards available for future grant |
|
|
1,417,870 |
|
We recognized approximately $0.1 million and $0.4 million of total equity-based compensation expense for the three and nine months ended September 30, 2017, respectively, and we recognized approximately $0.3 million and $1.0 million of total equity-based compensation expense for the three and nine months ended September 30, 2016, respectively. These costs are reported as a component of general and administrative expenses (“G&A”) in our unaudited condensed consolidated statements of operations.
Unrestricted Unit Awards
During the nine months ended September 30, 2017, we granted 25,400 unrestricted units with an average grant date fair value of $2.65 per unit. During the nine months ended September 30, 2016, we granted 73,932 unrestricted units with an average grant date fair value of $1.20 per unit.
11
Restricted units vest over a two- or three-year period. As of September 30, 2017, there were approximately $0.01 million of unrecognized compensation costs related to non-vested restricted units. These costs are expected to be recognized over a weighted average period of approximately four months.
A summary of our restricted unit awards for the nine months ended September 30, 2017, is presented below:
|
|
Number of Restricted Units |
|
|
Average Grant Date Fair Value per Unit |
|
||
Outstanding at December 31, 2016 |
|
|
76,922 |
|
|
$ |
5.67 |
|
Units granted |
|
|
— |
|
|
|
— |
|
Units vested |
|
|
(69,560 |
) |
|
|
5.76 |
|
Units forfeited |
|
|
— |
|
|
|
— |
|
Outstanding at September 30, 2017 |
|
|
7,362 |
|
|
$ |
4.88 |
|
Equity-Settled Phantom Unit Awards
Equity-settled phantom units vest over a two- or three-year period and do not have any rights or privileges of a common unitholder, including right to distributions, until vesting and the resulting conversion into common units. During the nine months ended September 30, 2017, we granted 27,000 equity-settled phantom units with a two-year vesting period and 14,500 equity-settled phantom units with a three-year vesting period. During the nine months ended September 30, 2016, we granted 347,500 equity-settled phantom units with one-third vesting immediately and the other two-thirds vesting over two years and 27,000 equity-settled phantom awards with a three-year vesting period . As of September 30, 2017, there were approximately $0.2 million of unrecognized compensation costs related to non-vested equity-settled phantom units. These costs are expected to be recognized over a weighted average period of approximately thirteen months.
A summary of our equity-settled phantom unit awards for the nine months ended September 30, 2017, is presented below:
|
|
Number of Equity- Settled Phantom Units |
|
|
Average Grant Date Fair Value per Unit |
|
||
Outstanding at December 31, 2016 |
|
|
287,659 |
|
|
$ |
1.64 |
|
Units granted |
|
|
41,500 |
|
|
|
1.60 |
|
Units vested |
|
|
(153,833 |
) |
|
|
1.70 |
|
Units forfeited |
|
|
(16,000 |
) |
|
|
2.83 |
|
Outstanding at September 30, 2017 |
|
|
159,326 |
|
|
$ |
1.48 |
|
Note 4. Derivative Financial Instruments
Our risk management program is intended to reduce our exposure to commodity price volatility and to assist with stabilizing cash flows. Accordingly, we utilize commodity derivative contracts (swaps, calls, puts and collars) to manage a portion of our exposure to commodity prices and specific delivery points. We enter into commodity derivative contracts or modify our portfolio of existing commodity derivative contracts when we believe market conditions or other circumstances suggest that it is prudent to do so, or as required by our lenders. These contracts are presented as derivative financial instruments on our unaudited condensed consolidated financial statements. We account for our commodity derivative contracts at fair value. See Note 5 in this section for a description of our fair value measurements.
We do not designate derivatives as hedges for accounting purposes; therefore, the mark-to-market adjustment reflecting the change in the fair value of our commodity derivative contracts is recorded in current period earnings. When prices for oil are volatile, a significant portion of the effect of our hedging activities consists of non-cash gains or losses due to changes in the fair value of our commodity derivative contracts. In addition to mark-to-market adjustments, gains or losses arise from net amounts paid or received on monthly settlements, proceeds from or payments for termination of contracts prior to their expiration and premiums paid or received for new contracts. Any deferred premiums are recorded as a liability and recognized in earnings as the related contracts mature. Gains and losses on derivatives are included in cash flows from operating activities. Pursuant to the accounting standard that permits netting of assets and liabilities where the right of offset exists, we present the fair value of commodity derivative contracts on a net basis.
12
At September 30, 2017 , our commodity derivative contracts were in a net liability position with a fair value of approximately $0.6 million and at December 31, 2016 , a net liability position with a fair value of approximately $7.8 million. All of our commodit y derivative contracts are with major financial institutions that are also lenders under our revolving credit facility. Should one of these financial counterparties not perform, we may not realize the benefit of some of our commodity derivative contracts u nder lower commodity prices and we could incur a loss. As of September 30, 2017 , all of our counterparties have performed pursuant to the terms of their commodity derivative contracts.
The following tables summarize the gross fair value by the appropriate balance sheet classification, even when the derivative financial instruments are subject to netting arrangements and qualify for net presentation, in our unaudited condensed consolidated balance sheets at September 30, 2017, and December 31, 2016:
|
|
Gross Amounts Recognized |
|
|
Gross Amounts Offset in the Unaudited Condensed Consolidated Balance Sheets |
|
|
Net Amounts Presented in the Unaudited Condensed Consolidated Balance Sheets |
|
|||
|
|
(in thousands) |
|
|||||||||
September 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments - current asset |
|
$ |
266 |
|
|
$ |
(224 |
) |
|
$ |
42 |
|
Derivative financial instruments - long-term asset |
|
|
627 |
|
|
|
(440 |
) |
|
|
187 |
|
Total |
|
|
893 |
|
|
|
(664 |
) |
|
|
229 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments - current liability |
|
|
(769 |
) |
|
|
(15 |
) |
|
|
(784 |
) |
Derivative deferred premium - current liability |
|
|
(239 |
) |
|
|
239 |
|
|
|
— |
|
Derivative financial instruments - long-term liability |
|
|
(239 |
) |
|
|
239 |
|
|
|
— |
|
Derivative deferred premium - long-term liability |
|
|
(201 |
) |
|
|
201 |
|
|
|
— |
|
Total |
|
|
(1,448 |
) |
|
|
664 |
|
|
|
(784 |
) |
Net Liability |
|
$ |
(555 |
) |
|
$ |
— |
|
|
$ |
(555 |
) |
|
|
Gross Amounts Recognized |
|
|
Gross Amounts Offset in the Unaudited Condensed Consolidated Balance Sheets |
|
|
Net Amounts Presented in the Unaudited Condensed Consolidated Balance Sheets |
|
|||
|
|
(in thousands) |
|
|||||||||
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments - current asset |
|
$ |
1,570 |
|
|
$ |
(1,570 |
) |
|
$ |
— |
|
Derivative financial instruments - long-term asset |
|
|
406 |
|
|
|
(406 |
) |
|
|
— |
|
Total |
|
|
1,976 |
|
|
|
(1,976 |
) |
|
|
— |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments - current liability |
|
|
(1,836 |
) |
|
|
(3,478 |
) |
|
|
(5,314 |
) |
Derivative deferred premium - current liability |
|
|
(5,048 |
) |
|
|
5,048 |
|
|
|
— |
|
Derivative financial instruments - long-term liability |
|
|
(2,500 |
) |
|
|
5 |
|
|
|
(2,495 |
) |
Derivative deferred premium - long-term liability |
|
|
(401 |
) |
|
|
401 |
|
|
|
— |
|
Total |
|
|
(9,785 |
) |
|
|
1,976 |
|
|
|
(7,809 |
) |
Net Liability |
|
$ |
(7,809 |
) |
|
$ |
— |
|
|
$ |
(7,809 |
) |
13
The following table presents the impact of derivative financial instruments and their location within the unaudited condensed consolidated statements of operations:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Net settlements on matured derivatives (1) |
|
$ |
323 |
|
|
$ |
1,182 |
|
|
$ |
524 |
|
|
$ |
18,467 |
|
Net settlements on early terminations of derivatives (1) |
|
|
147 |
|
|
|
5,820 |
|
|
|
147 |
|
|
|
5,820 |
|
Net change in fair value of derivatives |
|
|
(3,219 |
) |
|
|
(7,446 |
) |
|
|
2,245 |
|
|
|
(32,251 |
) |
Total (loss) gain on derivatives, net |
|
$ |
(2,749 |
) |
|
$ |
(444 |
) |
|
$ |
2,916 |
|
|
$ |
(7,964 |
) |
(1 ) The settlement amount does not include premiums paid attributable to contracts that matured or early terminated during the respective period.
At September 30, 2017, and December 31, 2016, our commodity derivative contracts had maturities at various dates through December 2019 and were comprised of commodity price swap, put and collar contracts. At September 30, 2017, we had the following oil derivatives net positions:
Period Covered |
|
Weighted Average Floor Price |
|
|
Weighted Average Ceiling Price |
|
|
Total Bbls Hedged/day |
|
|
NYMEX Index |
|||
Swaps - 2017 |
|
$ |
51.54 |
|
|
$ |
- |
|
|
|
1,957 |
|
|
WTI |
Collars - 2017 |
|
$ |
45.00 |
|
|
$ |
52.35 |
|
|
|
652 |
|
|
WTI |
Swaps - 2018 |
|
$ |
50.00 |
|
|
$ |
- |
|
|
|
164 |
|
|
WTI |
Collars - 2018 |
|
$ |
44.38 |
|
|
$ |
55.52 |
|
|
|
1,315 |
|
|
WTI |
Puts - 2018 |
|
$ |
45.00 |
|
|
$ |
- |
|
|
|
164 |
|
|
WTI |
Collars - 2019 |
|
$ |
50.00 |
|
|
$ |
60.52 |
|
|
|
427 |
|
|
WTI |
At December 31, 2016, we had the following oil derivatives net positions:
Period Covered |
|
Weighted Average Floor Price |
|
|
Weighted Average Ceiling Price |
|
|
Total Bbls Hedged/day |
|
|
NYMEX Index |
|||
Collars - 2017 |
|
$ |
43.75 |
|
|
$ |
50.68 |
|
|
|
658 |
|
|
WTI |
Puts - 2017 |
|
$ |
50.00 |
|
|
$ |
— |
|
|
|
1,932 |
|
|
WTI |
Collars - 2018 |
|
$ |
44.38 |
|
|
$ |
55.52 |
|
|
|
1,315 |
|
|
WTI |
Puts - 2018 |
|
$ |
45.00 |
|
|
$ |
— |
|
|
|
164 |
|
|
WTI |
Collars - 2019 |
|
$ |
50.00 |
|
|
$ |
60.52 |
|
|
|
427 |
|
|
WTI |
Note 5. Fair Value Disclosures
Fair Value of Financial Instruments
The carrying amounts reported in our unaudited condensed consolidated balance sheets for cash, accounts receivable and accounts payable approximate their fair values. The carrying amount of debt under our revolving credit facility approximates fair value because the revolving credit facility’s variable interest rate resets frequently and approximates current market rates available to us. We account for our commodity derivative contracts at fair value as discussed in “Assets and Liabilities Measured at Fair Value on a Recurring Basis” below.
14
Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Assets and liabilities recorded in the balance sheet are categorized based on the inputs to the valuation technique as follows:
Level 1 —Financial assets and liabilities for which values are based on unadjusted quoted prices for identical assets or liabilities in an active market that management has the ability to access. We consider active markets to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an on-going basis.
Level 2 —Financial assets and liabilities for which values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 instruments primarily include swap, call, put and collar contracts.
Level 3 —Financial assets and liabilities for which values are based on prices or valuation approaches that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.
When the inputs used to measure fair value fall within different levels of the hierarchy in a liquid environment, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. We had no transfers in or out of Levels 1, 2 or 3 at September 30, 2017, and December 31, 2016.
Our estimates of fair value have been determined at discrete points in time based on relevant market data. These estimates involve uncertainty and cannot be determined with precision. There were no material changes in valuation approach or related inputs for the nine months ended September 30, 2017, and for the year ended December 31, 2016.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
We account for commodity derivative contracts and their corresponding deferred premiums at fair value on a recurring basis utilizing certain pricing models. Inputs to the pricing models include publicly available prices from a compilation of data gathered from third parties and brokers. We validate the data provided by third parties by understanding the pricing models used, obtaining market values from other pricing sources, analyzing pricing data in certain situations and confirming that those securities trade in active markets. The Partnership’s deferred premiums associated with its commodity derivative contracts are categorized as Level 3, as the Partnership utilizes a net present value calculation to determine the valuation. See Note 4 in this section for a summary of our derivative financial instruments.
The following sets forth, by level within the hierarchy, the value of our assets and liabilities measured at fair value on a recurring basis as of September 30, 2017, and December 31, 2016:
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Fair Value |
|
||||
|
|
(in thousands) |
|
|||||||||||||
September 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments - asset |
|
$ |
— |
|
|
$ |
893 |
|
|
$ |
— |
|
|
$ |
893 |
|
Derivative financial instruments - liability |
|
$ |
— |
|
|
$ |
1,008 |
|
|
$ |
— |
|
|
$ |
1,008 |
|
Derivative deferred premiums - liability |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
440 |
|
|
$ |
440 |
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments - asset |
|
$ |
— |
|
|
$ |
1,976 |
|
|
$ |
— |
|
|
$ |
1,976 |
|
Derivative financial instruments - liability |
|
$ |
— |
|
|
$ |
4,336 |
|
|
$ |
— |
|
|
$ |
4,336 |
|
Derivative deferred premiums - liability |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
5,449 |
|
|
$ |
5,449 |
|
15
A summary of the changes in Level 3 fair value measurements for the periods presented are as follows:
|
|
Nine Months Ended |
|
|
Year Ended |
|
||
|
|
September 30, 2017 |
|
|
December 31, 2016 |
|
||
|
|
(in thousands) |
|
|||||
Balance of Level 3 at beginning of period |
|
$ |
(5,449 |
) |
|
$ |
(9,973 |
) |
Derivative deferred premiums - purchases |
|
|
— |
|
|
|
(516 |
) |
Derivative deferred premiums - settlements |
|
|
5,009 |
|
|
|
5,040 |
|
Balance of Level 3 at end of period |
|
$ |
(440 |
) |
|
$ |
(5,449 |
) |
Assets and Liabilities Measured at Fair Value on a Non-recurring Basis
Asset Retirement Obligations
We estimate the fair value of our asset retirement obligations (“ARO”) based on discounted cash flow projections using numerous estimates, assumptions and judgments regarding such factors as the existence of a legal obligation for ARO, amounts and timing of settlements, the credit-adjusted risk-free rate to be used and inflation rates. See Note 6 in this section for a summary of changes in ARO.
Acquisitions
The estimated fair values of proved oil and natural gas properties acquired in business combinations are based on a discounted cash flow model and market assumptions as to future commodity prices, projections of estimated quantities of oil and natural gas reserves, expectations for timing and amount of future development and operating costs, projections of future rates of production, expected recovery rates and risk-adjusted discount rates. Based on the unobservable nature of certain of the inputs, the estimated fair value of the oil and natural gas properties acquired is deemed to use Level 3 inputs. See Note 2 in this section for further discussion of the Partnership’s acquisitions.
Reserves
We calculate the estimated fair values of reserves and properties using valuation techniques consistent with the income approach, converting future cash flows to a single discounted amount. Significant inputs used to determine the fair values of proved properties include estimates of reserves, future operating and developmental costs, future commodity prices, a market-based weighted average cost of capital rate and the rate at which future cash flows are discounted to estimate present value. We discount future values by a per annum rate of 10%. We believe this rate approximates our long-term cost of capital and accordingly, is well aligned with our internal business decisions. The underlying commodity prices embedded in our estimated cash flows begin with Level 1 NYMEX-WTI forward curve pricing, less Level 3 assumptions that include location, pricing adjustments and quality differentials.
Impairment
The need to test an asset for impairment may result from significant declines in sales prices or downward revisions in estimated quantities of oil and natural gas reserves. If the carrying value of the long-lived assets exceeds the estimated undiscounted future net cash flows, an impairment loss is recognized for the difference between the estimated fair value and the carrying value of the assets. For the three months ended September 30, 2017, we recorded non-cash impairment expense of approximately $4.9 million primarily on one of our Permian projects where late-stage waterflood efforts in select wells in the field have longer than anticipated response times to injection. The majority of the non-cash impairment expense of approximately $22.5 million f or the nine months ended September 30, 2017, was due to margin compression over the reserve life caused by lower future oil pricing and a higher cost profile on one of our Northeastern Oklahoma projects. There were no impairment charges for the three months ended September 30, 2016. For the nine months ended September 30, 2016, we recorded non-cash impairment expense of approximately $0.9 million in our Permian core area due to a revision of reserve estimates at one property. These impairment expenses are included in “Impairment of proved oil and natural gas properties” in our unaudited condensed consolidated statements of operations.
There were no impairment charges related to assets held for sale for the three months ended September 30, 2016. For the nine months ended September 30, 2016, we recorded non-cash impairment expense of approximately $3.6 million related to the Hugoton divestiture to reduce the carrying amount of those assets to their fair value. These assets and liabilities were deemed to meet held for sale accounting criteria as of June 30, 2016, accordingly, the impairment is included in “Impairment of proved oil and natural gas properties sold” in our consolidated statements of operations.
16
Note 6. Asset Retirement Obligations
We have obligations under our lease agreements and federal regulations to remove equipment and restore land at the end of oil and natural gas operations. These ARO are primarily associated with plugging and abandoning wells. We typically incur this liability upon acquiring or successfully drilling a well and determine our ARO by calculating the present value of estimated cash flow related to the estimated future liability. Determining the removal and future restoration obligation requires management to make estimates and judgments, including the ultimate settlement amounts, inflation factors, credit adjusted risk-free rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. We are required to record the fair value of a liability for the ARO in the period in which it is incurred with a corresponding increase in the carrying amount of the related long-lived asset. We review our assumptions and estimates of future ARO on an annual basis, or more frequently, if an event or circumstances occur that would impact our assumptions. To the extent future revisions to these assumptions impact the present value of the abandonment liability, management will make corresponding adjustments to both the ARO and the related oil and natural gas property asset balance. The liability is accreted each period toward its future value and is recorded in our unaudited condensed consolidated statements of operations. The discounted capitalized cost is amortized to expense through the depreciation calculation over the life of the assets based on proved developed reserves. Upon settlement of the liability, a gain or loss is recognized to the extent the actual costs differ from the recorded liability.
As of September 30, 2017, and December 31, 2016, our ARO were reported as “Asset retirement obligations” in our unaudited condensed consolidated balance sheets. Changes in our ARO for the periods indicated are presented in the following table:
|
|
Nine Months Ended |
|
|
Year Ended |
|
||
|
|
September 30, 2017 |
|
|
December 31, 2016 |
|
||
|
|
(in thousands) |
|
|||||
Asset retirement obligations - beginning of period |
|
$ |
11,331 |
|
|
$ |
12,679 |
|
Liabilities incurred for new wells and interest |
|
|
759 |
|
|
|
747 |
|
Liabilities settled upon plugging and abandoning wells |
|
|
(17 |
) |
|
|
— |
|
Liabilities removed upon sale of wells |
|
|
— |
|
|
|
(2,827 |
) |
Revision of estimates |
|
|
(75 |
) |
|
|
155 |
|
Accretion expense |
|
|
386 |
|
|
|
577 |
|
Asset retirement obligations - end of period |
|
$ |
12,384 |
|
|
$ |
11,331 |
|
Note 7. Debt
We had outstanding borrowings under our revolving credit facility of $122.0 million at September 30, 2017, and December 31, 2016, respectively. Our current revolving credit facility matures in November 2018.
The borrowing base of our revolving credit facility is collectively determined by our lenders based on the value of our proved oil and natural gas reserves using assumptions regarding future prices, costs and other variables. The borrowing base is subject to scheduled redeterminations in the spring and fall of each year with an additional redetermination, either at our request or at the request of the lenders, during the period between each scheduled borrowing base redetermination. An additional borrowing base redetermination may be made at the request of the lenders in connection with a material disposition of our properties or a material liquidation of a hedge contract.
Borrowings under the revolving credit facility bear interest at a floating rate based on, at our election, the greater of the prime rate of Wells Fargo Bank, National Association, the federal funds effective rate plus 0.50% and the one month adjusted London Interbank Offered Rate (“LIBOR”) plus 1.0%, all of which are subject to a margin that varies from 1.00% to 2.75% per annum according to the borrowing base usage (which is the ratio of outstanding borrowings and letters of credit to the borrowing base then in effect), or the applicable LIBOR plus a margin that varies from 2.00% to 3.75% per annum according to the borrowing base usage. For the three months ended September 30, 2017, the average effective rate was approximately 4.02% . Any unused portion of the borrowing base will be subject to a commitment fee that varies from 0.375% to 0.50% per annum according to the borrowing base usage.
We may use borrowings under the facility for acquiring and developing oil and natural gas properties, for working capital purposes, for general partnership purposes and for funding distributions to our unitholders. The revolving credit facility includes customary affirmative and negative covenants, such as limitations on the creation of new indebtedness and on certain liens, leverage ratios and restrictions on certain transactions and payments, including distributions. If we fail to perform our obligations under these and other covenants, the revolving credit commitments may be terminated and any outstanding indebtedness under the credit agreement, together with accrued interest, could be declared immediately due and payable.
17
At the quarter ended September 30, 2017, we were not in compliance with our leverage calculation ratio. On November 10, 2017, the Partnership received a waiver from the Administrative Agent and the Lenders of our revolving credit facility waiving the noncompliance through the earlier of (a) December 15, 2017, or (b) the termination, for any reason, of the Purchase and Sale Agreement (the “Sale Agreement”), dated November 8, 2017, governing the sale of certain oil and gas properties located in Carter and Love Counties, Oklahoma ( the “Southern Oklahoma dive stiture”) . We believe it is probable that we will cure the violation of the leverage calculation ratio by the en d of the wavier period . Additionally , in conjunction with its f all 2017 borrowing base redetermination, the Partnership is in advance d discussions with its lenders to extend the credit facility subject to the satisfaction of certain conditions i ncluding the Southern Oklahoma d ivestiture (the “Extension”).
If the transactions contemplated by the Sale Agreement and the Extension are not timely completed, and we are unable to negotiate an additional waiver of the leverage calculation ratio with the Administrative Agent and the Lenders of our revolving credit facility, we may be deemed in default of the revolving credit facility. In that case, unless we are able to secure another form of financing, our lenders would be entitled to accelerate the amounts owed under the revolving credit facility or foreclose on our oil and natural gas properties, either of which would have a material effect on our business and financial condition.
During the spring 2016 semi-annual redetermination and amendment to the credit agreement completed in May 2016, the effective borrowing base as of June 1, 2016, was reduced to $163.0 million and was comprised of a $110.0 million conforming tranche and a permitted overadvance of $53.0 million. The permitted overadvance was scheduled to mature on November 1, 2016.
During August 2016, we completed a non-scheduled redetermination and amendment to the credit agreement in conjunction with our Permian Bolt-On acquisition. Among other changes, this amendment to the credit agreement increased the conforming borrowing base of the Partnership’s revolving credit facility to $140.0 million as of August 11, 2016, modified the definition of “Indebtedness” to exclude the Class A Preferred Units and modified the limitations on restricted payments to specifically provide for the payment of cash distributions on the Class A Preferred Units. The amendment also required that by August 18, 2016, we enter into commodity derivative contracts of not less than 75% of our 2017 projected monthly production and not less than 50% of our 2018 projected monthly production, calculated based on proved developed producing reserves at the time of the agreement. These requirements were satisfied with the execution of additional commodity derivative contracts maturing in 2018. The amendment also required that within 30 days we extend our collateral coverage to include the reserves acquired in the Permian Bolt-On acquisition.
During the fall 2016 semi-annual borrowing base redetermination of our revolving credit facility completed in October 2016, the lender group reaffirmed the existing conforming borrowing base of $140.0 million effective October 28, 2016. There were no changes to the terms or conditions of the credit agreement.
During the spring 2017 semi-annual borrowing base redetermination of our revolving credit facility completed in May 2017, the lender group reaffirmed the Partnership’s $140.0 million conforming borrowing base effective May 24, 2017. There were no changes to the terms or conditions of the credit agreement.
Note 8. Commitments and Contingencies
Leases
We lease corporate office space in Tulsa, Oklahoma and Abilene, Texas. We were also allocated office rent from Mid-Con Energy Operating through August 2016 for office space in Dallas, Texas. Total lease expenses were approximately $0.1 million each for the three months ended September 30, 2017, and 2016, and approximately $0.2 million and $0.3 million each for the nine months ended September 30, 2017, and 2016, respectively. These expenses are included in G&A in our unaudited condensed consolidated statements of operations.
Future minimum lease payments under the non-cancellable operating leases are presented in the following table (in thousands):
Remaining 2017 |
|
$ |
122 |
|
2018 |
|
|
490 |
|
2019 |
|
|
413 |
|
2020 |
|
|
418 |
|
2021 |
|
|
423 |
|
Total |
|
$ |
1,866 |
|
18
We are party to a services agreement with Mid-Con Energy Operating pursuant to which Mid-Con Energy Operating provides certain services to us including management, administrative and operational services. Under the services agreement, we reimburse Mid-Con Energy Operating, on a monthly basis, for the allocable expenses it incurs in its performance under the services agreement. See Note 10 in this section for additional information.
Employment Agreements
Our general partner has entered into employment agreements with Charles R. Olmstead, Executive Chairman of the Board and Jeffrey R. Olmstead, President and Chief Executive Officer. The employment agreements automatically renew for one-year terms on August 1st of each year unless either we or the employee gives written notice of termination by at least the preceding February. Pursuant to the employment agreements, each employee will serve in his respective position with our general partner, as set forth above, and has duties, responsibilities and authority as the Board may specify from time to time, in roles consistent with such positions that are assigned to them. The agreement stipulates that if there is a change of control, termination of employment, with cause or without cause, or death of the executive certain payments will be made to the executive officer. These payments, depending on the reason for termination, currently range from $0.3 million to $0.6 million, including the value of vesting of any outstanding units.
Legal
We are party to various claims, legal actions and complaints arising in the ordinary course of business. In the opinion of management and our General Counsel, the ultimate resolution of all claims, legal actions and complaints after consideration of amounts accrued, insurance coverage or other indemnification arrangements will not have a material adverse effect on our financial position, results of operations or cash flows.
Note 9. Equity
Common Units
At September 30, 2017, and December 31, 2016, the Partnership’s equity consisted of 30,091,463 and 29,912,230 common units, respectively, representing approximately a 98.8% limited partnership interest in us.
On May 5, 2015, we entered into an Equity Distribution Agreement to sell, from time to time through or to the Managers (as defined in the agreement), up to $50.0 million in common units representing limited partner interests. In connection with the Class A Preferred Units purchase agreement described below, the Partnership suspended sales of common units pursuant to the Equity Distribution Agreement effective as of the closing date of the issuance of the Class A Preferred Units until the fifth anniversary thereof, unless the Partnership obtains the consent of a majority of the holders of the outstanding Class A Preferred Units.
Our partnership agreement requires us to distribute all of our available cash on a quarterly basis. Our available cash is our cash on hand at the end of a quarter after the payment of our expenses and the establishment of reserves for future capital expenditures and operational needs, including cash from working capital borrowings. There is no assurance as to future cash distributions since they are dependent upon our projections for future earnings, cash flows, capital requirements, financial conditions and other factors.
As of September 30, 2017, cash distributions to our common units continued to be indefinitely suspended. Our credit agreement stipulates written consent from our lenders is required in order to reinstate common unit distributions and also prohibits us from making common unit cash distributions if any potential default or event of default, as defined in the credit agreement, occurs or would result from the cash distribution. Management and the Board will continue to evaluate, on a quarterly basis, the appropriate level of cash reserves in determining future distributions. The suspension of common unit cash distributions is designed to preserve liquidity and reallocate excess cash flow towards capital expenditure projects and debt reduction to maximize long-term value for our unitholders.
Class A Preferred Units
On August 11, 2016, we completed a private placement of 11,627,906 Class A Preferred Units for an aggregate offering price of $25.0 million. The Class A Preferred Units were issued at a price of $2.15 per Class A Preferred Unit (the “Class A Unit Purchase Price”). Proceeds from this issuance were used to fund the Permian Bolt-On acquisition and for general partnership
19
purposes, including the reduction of borrowings under our revolving credit facility. We received net proceeds of approximately $24.6 million (net of issuance costs of approximately $0.4 million) in connection with the issuance of these Class A Preferred Units. We allocated these net proceeds, on a relative fair value basis, to the Class A Preferred Units (approximately $18.6 million) and the beneficial conversion feature (approximately $6.0 million). A beneficial conversion feature is defined as a non-detachable conversion feature that is in the money at the commitment date. Per accounting guidance, we are required to allocate a portion of the proceeds from the Class A Preferred Units to the beneficial conversion feature based on the intrinsic value of the beneficial conversion feature. The intrinsic value is calculated at the commitment date based on the d ifference between the fair value of the common units at the issuance date (number of common units issuable at conversion multiplied by the per-share value of our common units at the issuance date) and the proceeds attributed to the Class A Preferred Units. We record the accretion attributed to the beneficial conversion feature as a deemed distribution using the effective interest method over the five year period prior to the effective date of the holders conversion right. Accretion of the beneficial convers ion feature was approximately $0. 3 million and approximately $0.8 million for the three and nine months ended September 30, 2017 , respectively . Accretion of the beneficial conversion feature was approximately $0. 2 million for the three and nine months ende d September 30, 2016 .
The holders of our Class A Preferred Units are entitled to certain rights that are senior to the rights of holders of common units, such as rights to distributions and rights upon liquidation of the Partnership. We pay holders of the Class A Preferred Units a cumulative, quarterly cash distribution on all Class A Preferred Units then outstanding at an annual rate of 8.0%, or in the event that the Partnership’s existing secured indebtedness prevents the payment of a cash distribution to all holders of the Class A Preferred Units, in kind (additional Class A Preferred Units), at an annual rate of 10.0%. Such distributions will be paid for each such quarter within 45 days after such quarter end, or as otherwise permitted to accumulate pursuant to the Partnership Agreement. As of September 30, 2017, all Class A Preferred Unit distributions have been paid in cash. No payment or distribution on common units for any quarter is permitted prior to the payment in full of the Class A Preferred Units distribution (including any outstanding arrearages). At September 30, 2017, the Partnership had accrued approximately $0.5 million for the third quarter 2017 distributions that will be paid in cash in December 2017, subsequent to the close of the Southern Oklahoma divestiture.
The following table summarizes cash distributions paid on our Class A Preferred Units during the nine months ended September 30, 2017:
Date Paid |
|
Period Covered |
|
Distribution per Unit |
|
|
Total Distributions (in thousands) |
|
||
February 14, 2017 |
|
October 1, 2016 - December 31, 2016 |
|
$ |
0.043 |
|
|
$ |
500 |
|
May 15, 2017 |
|
January 1, 2017 - March 31, 2017 |
|
$ |
0.043 |
|
|
$ |
500 |
|
August 14, 2017 |
|
April 1, 2017 - June 30, 2017 |
|
$ |
0.043 |
|
|
$ |
500 |
|
Prior to the five year anniversary of the closing date, each holder of the Class A Preferred Units has the right, subject to certain conditions, to convert all or a portion of their Class A Preferred Units into common units representing limited partner interests in the Partnership on a one-for-one basis, subject to adjustment for splits, subdivisions, combinations and reclassifications of the common units. Upon conversion of the Class A Preferred Units, the Partnership will pay any distributions (to the extent accrued and unpaid as of the then most recent Class A Preferred Units distribution date) on the converted units in cash.
Under the registration rights agreements entered into in connection with the Class A Preferred Units issuance, we were required to use reasonable best efforts to file, within 90 days of the closing date, a registration statement registering resales of common units issued or to be issued upon conversion of the Class A Preferred Units and have the registration statement declared effective within 180 days after the closing date. On June 14, 2017, the previously filed shelf registration statement on Form S-3 was declared effective by the SEC.
Allocation of Net Income (Loss)
Net income (loss), net of distributions on the Class A Preferred Units and amortization of the Class A Preferred Unit’s beneficial conversion feature (see Class A Preferred Units section), is allocated between our general partner and the limited partner unitholders in proportion to their pro rata ownership (exclusive of the Class A Preferred Units limited partnership interest) during the period. The allocation of net income (loss) is presented in our unaudited condensed consolidated statements of operations. In the event of net income, diluted net income per partner unit reflects the potential dilution of non-vested restricted stock awards and the conversion of Class A Preferred Units.
20
Note 10. Related Party Transactions
Agreements with Affiliates
The following agreements were negotiated among affiliated parties and, consequently, are not the result of arm’s length negotiations. The following is a description of those agreements that have been entered into with the affiliates of our general partner and with our general partner.
Services Agreement
We are party to a services agreement with our affiliate, Mid-Con Energy Operating, pursuant to which Mid-Con Energy Operating provides certain services to us, including management, administrative and operational services. The operational services include marketing, geological and engineering services. Under the services agreement, we reimburse Mid-Con Energy Operating, on a monthly basis, for the allocable expenses it incurs in its performance under the services agreement. These expenses include, among other things, salary, bonus, incentive compensation and other amounts paid to persons who perform services for us or on our behalf and other expenses allocated by Mid-Con Energy Operating to us. These expenses are included in G&A in our unaudited condensed consolidated statements of operations.
Operating Agreements
We, various third parties with an ownership interest in the same property and our affiliate, Mid-Con Energy Operating, are parties to standard oil and natural gas joint operating agreements, pursuant to which we and those third parties pay Mid-Con Energy Operating overhead associated with operating our properties. We and those third parties also pay Mid-Con Energy Operating for its direct and indirect expenses that are chargeable to the wells under their respective operating agreements. The majority of these expenses are included in lease operating expenses (“LOE”) in our unaudited condensed consolidated statements of operations.
Oilfield Services
We are party to operating agreements, pursuant to which our affiliate, Mid-Con Energy Operating, bills us for oilfield services performed by our affiliates, ME3 Oilfield Service and ME2 Well Services, LLC. These amounts are either included in LOE in our unaudited condensed consolidated statements of operations or are capitalized as part of oil and natural gas properties in our unaudited condensed consolidated balance sheets.
The following table summarizes the affiliates’ transactions for the periods indicated:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Amounts paid for |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services agreement |
|
$ |
610 |
|
|
$ |
914 |
|
|
$ |
1,903 |
|
|
$ |
2,440 |
|
Operating agreements |
|
|
1,678 |
|
|
|
1,509 |
|
|
|
4,694 |
|
|
|
4,790 |
|
Oilfield services |
|
|
809 |
|
|
|
778 |
|
|
|
2,476 |
|
|
|
2,274 |
|
|
|
$ |
3,097 |
|
|
$ |
3,201 |
|
|
$ |
9,073 |
|
|
$ |
9,504 |
|
At September 30, 2017, we had a payable to our affiliate, Mid-Con Energy Operating, of approximately $3.8 million, comprised of a joint interest billing payable of approximately $3.6 million and a payable for operating services of approximately $0.2 million. At December 31, 2016, we had a payable to our affiliate, Mid-Con Energy Operating, of approximately $3.4 million, comprised of a joint interest billing payable of approximately $2.8 million and a payable for operating services of approximately $0.6 million. These amounts were included in accounts payable-related parties in our unaudited condensed consolidated balance sheets.
Note 11. New Accounting Standards
In May 2014, the Financial Accounting Standards Board (“FASB”) issued a comprehensive new revenue recognition standard that supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and industry-specific guidance in Subtopic 932-605, Extractive Activities-Oil and Gas-Revenue Recognition . The core principle of the new guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that
21
reflects the consideration to which the company expects to be entitled in exchange for transferring those goods or services. The new standard also requires significantly expanded disclosure regarding the qualitative and quantitative i nformation of an entity’s nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The standard creates a five-step model that requires companies to exercise judgment when considering the terms of a contract a nd all relevant facts and circumstances. The standard allows for several transition methods: (a) a full retrospective adoption in which the standard is applied to all of the periods presented, or (b) a modified retrospective adoption in which the standard is applied only to the most current period presented in the financial statements, including additional disclosures of the standard’s application impact to individual financial statement line items. In March, April, May and December 2016, the FASB issued ne w guidance in Topic 606, Revenue from Contracts with Customers , to address the following potential implementation issues of the new revenue standard: (a) to clarify the implementation guidance on principal versus agent considerations, (b) to clarify the id entification of performance obligations and the licensing implementation guidance and (c) to address certain issues in the guidance on assessing collectability, presentation of sales taxes, non-cash consideration and completed contract modifications at tra nsition. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. We plan to adopt this standard effective January 1, 2018, using the modified retrospective approach whereby we will record the cumulative effect of applying the new standard to all outstanding contracts as of January 1, 2018, as an adjustment to opening retained earnings. We have completed our initial assessment and concluded that our revenue recognition under the new guidance will not materially differ from our current revenue recognition practice. Therefore, we do not expect a cumulative effect adjustment to opening retained earnings. We are still evaluating the impact this guidance will have on our pro cesses and internal controls.
In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842),” which supersedes current lease guidance. The new lease standard requires all leases with a term greater than one year to be recognized on the balance sheet while maintaining substantially similar classifications for finance and operating leases. Lease expense recognition on the income statement will be effectively unchanged. This guidance is effective for reporting periods beginning after December 15, 2018, and early adoption is permitted. We plan to adopt this standard on January 1, 2019 and believe the primary impact of adoption will be the recognition of assets and liabilities on our balance sheet for current operating leases. We are still evaluating the impact of this standard.
In August, 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under FASB Accounting Standards Codification (FASB ASC) 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period. We plan to adopt this standard on January 1, 2018. Based on our initial evaluation, we do not anticipate a material impact to our consolidated financial statements upon adoption of this standard.
In January 2017, the FASB issued ASU No. 2017-01, “ Business Combinations (Topic 805),” with the objective of adding guidance to assist in evaluating whether transactions should be accounted for as asset acquisitions or as business combinations. The amendments in this update provide a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the acquired assets is concentrated in a single asset or a group of similar assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. If the screen is not met, to be considered a business, the set must include an input and a substantive process that together significantly contribute to the ability to create output and remove the evaluation of whether a market participant could replace missing elements. This new guidance is effective for annual periods beginning after December 15, 2017, and early adoption is allowed. We are evaluating the impact it will have on our consolidated financial statements.
Note 12. Subsequent Events
Distributions
The Board declared a Class A Preferred Unit distribution for the third quarter of 2017, according to terms outlined in the Partnership Agreement. A cash distribution of $0.043 per Class A Preferred Unit, or approximately $0.5 million in aggregate, will be paid in December 2017 to holders of record subsequent to the close of the Southern Oklahoma divestiture.
22
On November 6, 2017, Mr. Matthew R. Lewis informed the Board of his resignation as Vice President and Chief Financial Officer of the General Partner to pursue other opportunities. Subsequent to Mr. Lewis’ departure, his duties and responsibilities will be assumed by other members of the management team. Mr. Lewis did not resign due to any disagreement with the Partnership or any matter relating to the Company’s operations, policies or practices. The Partnership did not enter into any agreement with Mr. Lewis as a result of his resignation. Mr. Lewis’ resignation was effective immediately but he will continue to serve in an advisory role until November 30, 2017.
Southern Oklahoma Divestiture
On November 8, 2017, we entered into a definitive purchase and sale agreement to sell oil and natural gas assets within our Southern Oklahoma core area for an aggregate sale price of approximately $25.0 million, subject to customary post-closing sale price adjustments. Per the agreement, the effective date of the sale is October 1, 2017, and the closing date of the divestiture is November 30, 2017. Proceeds from the divestiture will be used to reduce borrowings outstanding under the Partnership’s revolving credit facility.
Class B Convertible Preferred Units
On November 14, 2017, we entered into a definitive agreement to offer up to $15.0 million of Class B Convertible Preferred Units (“Class B Preferred Units”) in a private offering subject to customary closing conditions. The Partnership will use the net proceeds from the offering for general partnership purposes, including but not limited to, future acquisitions and reduction of borrowings outstanding under the Partnership’s revolving credit facility. The Class B Preferred Units will be issued at a price of $1.36 per preferred unit (the “Class B Unit Purchase Price”). The Partnership will pay holders of the Class B Preferred Units a cumulative, quarterly distribution in cash at an annual rate of 8.0%, or under certain circumstances, in additional preferred units, at an annual rate of 10.0%. At any time after the six month anniversary and prior to August 11, 2021, each holder of the preferred units may elect to convert all or any portion of their Class B Preferred Units into common units representing limited partner interests in the Partnership on a one-for-one basis. On August 11, 2021, each holder may elect to cause the Partnership to redeem all or any portion of their Class B Preferred Units for cash at the Class B Unit Purchase Price, and any remaining Class B Preferred Units will thereafter be converted to common units on a one-for-one basis.
23
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS O F FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto, as well as our Annual Report.
Overview
Mid-Con Energy Partners, LP is a publicly held Delaware limited partnership formed in July 2011 that engages in the ownership, acquisition, exploitation and development of producing oil and natural gas properties in North America, with a focus on EOR. Our general partner is Mid-Con Energy GP, LLC, a Delaware limited liability company. Our common units are traded on the NASDAQ under the symbol “MCEP.”
Our properties are located primarily in the Mid-Continent and Permian Basin regions of the United States in three core areas: Southern Oklahoma, Northeastern Oklahoma and Texas within the Eastern Shelf of the Permian Basin (“Permian”). Our properties primarily consist of mature, legacy onshore oil reservoirs with long-lived, relatively predictable production profiles and low production decline rates.
Executive Summary - Third Quarter 2017
Operating Performance
|
• |
In the third quarter, the Partnership drilled nine producing wells, drilled two injection wells, returned eight wells to production, performed five recompletions and two capital workovers, converted six producing wells to injection and returned two wells to injection. |
|
• |
In the Wheatland properties acquired in Cleveland and Oklahoma counties during the second quarter of 2017, the Partnership returned wells to production and injection, resulting in increased production in the third quarter. |
|
• |
Positive initial waterflood response was observed in the second quarter of 2017 at two Permian properties as a result of new injection. The waterflood developments were expanded in the third quarter of 2017. |
Distributions
|
• |
On August 14, 2017, we paid a cash distribution on the Class A Preferred Units of approximately $0.5 million, for the second quarter of 2017. |
Business Environment
The markets for oil, natural gas and natural gas liquids have been volatile and may continue to be volatile in the future, which means that the price of oil and natural gas may fluctuate widely. Sustained periods of low prices for oil and natural gas could materially and adversely affect our financial position, our results of operations, the quantities of oil and natural gas reserves that we can economically produce and our access to capital. In general, the average oil and natural gas prices were higher during the comparable periods of 2017 measured against 2016. Our average sales price per barrel of oil (“Bbl”), excluding commodity derivative contracts, was $46.28 per Bbl and $37.43 per Bbl for the nine months ended September 30, 2017, and 2016, respectively. The volatility in commodity prices has impacted our unit price. During the nine months ended September 30, 2017, our common unit price fluctuated between a closing low of $0.94 per unit to a closing high of $3.22 per unit.
Our risk management program is intended to reduce our exposure to commodity price volatility and to assist with stabilizing cash flows. Accordingly, we utilize commodity derivative contracts (swaps, calls, puts and collars) to manage a portion of our exposure to commodity prices and specific delivery points. We enter into commodity derivative contracts or modify our portfolio of existing commodity derivative contracts when we believe market conditions or other circumstances suggest that it is prudent to do so, or as required by our lenders. We conduct our risk management activities exclusively with participant lenders in our revolving credit facility.
Our business faces the challenge of natural production declines. As initial reservoir pressures are depleted, production from a given well or formation decreases. Although our waterflood operations tend to restore reservoir pressure and production, once a waterflood is fully effected, production, once again, begins to decline. Our future growth will depend on our ability to continue to add reserves in excess of our production. Our focus on adding reserves is primarily through improving the
24
economics of producing oil from our existing fields and, secondarily, through acquisitions of additional proved reserves. Our ability to ad d reserves through exploitation projects and acquisitions is dependent upon many factors, including our ability to raise capital, obtain regulatory approvals, procure contract drilling rigs and personnel and successfully identify and close acquisitions.
We focus our efforts on increasing oil and natural gas reserves and production while controlling costs at a level that is appropriate for long-term operations. Our future cash flows from operations are impacted by our ability to manage our overall cost structure.
How We Evaluate Our Operations
Our primary business objective is to manage our oil and natural gas properties for the purpose of generating stable cash flows, which will provide distributions to our unitholders. The amount of cash that we may distribute to our unitholders in the future depends principally on the cash we generate from our operations, which will fluctuate from quarter to quarter based on, among other factors:
|
• |
the amount of oil and natural gas we produce; |
|
• |
the prices at which we sell our oil and natural gas production; |
|
• |
our ability to hedge commodity prices; and |
|
• |
the level of our operating and administrative costs. |
We use a variety of financial and operational metrics to assess the performance of our oil and natural gas properties, including:
|
• |
oil and natural gas production volumes; |
|
• |
realized prices on the sale of oil and natural gas, including the effect of our commodity derivative contracts; |
|
• |
LOE; and |
|
• |
Adjusted EBITDA. |
Adjusted EBITDA is used as a supplemental financial measure by our management and by external users of our financial statements, such as industry analysts, investors, lenders, rating agencies and others, to assess the cash flow generated by our assets, without regard to financing methods, capital structure or historical cost basis and our ability to incur and service debt and fund capital expenditures.
In addition, management uses Adjusted EBITDA to evaluate actual potential cash flow available to reduce debt, develop existing reserves or acquire additional properties and pay distributions to our unitholders. Adjusted EBITDA is a non-U.S. GAAP measure and should not be considered an alternative to net income (loss), net cash provided by operating activities or any other performance or liquidity measure determined in accordance with U.S. GAAP. Our calculations of Adjusted EBITDA are not necessarily comparable to EBITDA or Adjusted EBITDA as calculated by other companies.
25
The table below summarizes certain of the results of operations and period-to-period comparisons for the periods indicated (dollars in thousands, except price per unit data):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil sales |
|
$ |
13,731 |
|
|
$ |
14,012 |
|
|
$ |
42,343 |
|
|
$ |
39,565 |
|
Natural gas sales |
|
$ |
233 |
|
|
$ |
398 |
|
|
$ |
917 |
|
|
$ |
891 |
|
(Loss) gain on derivatives, net |
|
$ |
(2,749 |
) |
|
$ |
(444 |
) |
|
$ |
2,916 |
|
|
$ |
(7,964 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
$ |
6,122 |
|
|
$ |
5,709 |
|
|
$ |
16,695 |
|
|
$ |
17,551 |
|
Oil and natural gas production taxes |
|
$ |
857 |
|
|
$ |
753 |
|
|
$ |
2,366 |
|
|
$ |
2,077 |
|
Impairment of oil and natural gas properties |
|
$ |
4,850 |
|
|
$ |
— |
|
|
$ |
22,522 |
|
|
$ |
895 |
|
Impairment of oil and natural gas properties sold |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3,578 |
|
Depreciation, depletion and amortization |
|
$ |
4,350 |
|
|
$ |
5,665 |
|
|
$ |
13,850 |
|
|
$ |
17,550 |
|
General and administrative (1) |
|
$ |
1,188 |
|
|
$ |
1,715 |
|
|
$ |
4,485 |
|
|
$ |
5,281 |
|
Interest expense |
|
$ |
1,626 |
|
|
$ |
1,728 |
|
|
$ |
4,615 |
|
|
$ |
5,981 |
|
Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls) |
|
|
304 |
|
|
|
339 |
|
|
|
915 |
|
|
|
1,057 |
|
Natural gas (MMcf) |
|
|
105 |
|
|
|
149 |
|
|
|
339 |
|
|
|
409 |
|
Total (MBoe) |
|
|
322 |
|
|
|
364 |
|
|
|
972 |
|
|
|
1,125 |
|
Average net production (Boe/d) |
|
|
3,500 |
|
|
|
3,957 |
|
|
|
3,560 |
|
|
|
4,106 |
|
Average sales price |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (per Bbl) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales price |
|
$ |
45.17 |
|
|
$ |
41.33 |
|
|
$ |
46.28 |
|
|
$ |
37.43 |
|
Effect of net settlements on matured derivative instruments |
|
$ |
(3.33 |
) |
|
$ |
3.49 |
|
|
$ |
(3.74 |
) |
|
$ |
10.29 |
|
Realized oil price after derivatives |
|
$ |
41.84 |
|
|
$ |
44.82 |
|
|
$ |
42.54 |
|
|
$ |
47.72 |
|
Natural gas (per Mcf) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales price |
|
$ |
2.22 |
|
|
$ |
2.67 |
|
|
$ |
2.71 |
|
|
$ |
2.18 |
|
Average unit costs per Boe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
$ |
19.01 |
|
|
$ |
15.68 |
|
|
$ |
17.18 |
|
|
$ |
15.60 |
|
Oil and natural gas production taxes |
|
$ |
2.66 |
|
|
$ |
2.07 |
|
|
$ |
2.43 |
|
|
$ |
1.85 |
|
Depreciation, depletion and amortization |
|
$ |
13.51 |
|
|
$ |
15.56 |
|
|
$ |
14.25 |
|
|
$ |
15.60 |
|
General and administrative expenses |
|
$ |
3.69 |
|
|
$ |
4.71 |
|
|
$ |
4.61 |
|
|
$ |
4.69 |
|
(1) G&A included non-cash equity-based compensation of approximately $0.1 million and approximately $0.4 million for the three and nine months ended September 30, 2017, and $0.3 million and $1.0 million for the three and nine months ended September 30, 2016.
Three Months Ended September 30, 2017 Compared with the Three Months Ended September 30, 2016
We reported net loss of approximately $7.9 million for the three months ended September 30, 2017, compared to a net loss of approximately $2.4 million for the three months ended September 30, 2016. Lower oil and natural gas production, the unfavorable net impact of derivatives, higher LOE and impairment expense, partially offset by lower depreciation, depletion and amortization (“DD&A”) and G&A expense were the primary factors attributable to the $5.5 million change.
Sales Revenues. Revenues from oil and natural gas sales for the three months ended September 30, 2017, were approximately $14.0 million compared to approximately $14.4 million for the three months ended September 30, 2016. The decrease in revenues was primarily due to lower production volumes, partially offset by higher oil prices. Our average sales price per Bbl, excluding commodity derivative contracts, for the three months ended September 30, 2017, was approximately $45.17 per Bbl compared to approximately $41.33 per Bbl for the three months ended September 30, 2016.
26
On average, production volumes for the three months ended September 30, 2017 , were approximately 322 MBoe, or approximately 3,500 Boe per day. In comparison, total production volumes for the three months ended September 30, 2016 , were approximately 364 MBoe, or approximately 3,957 Boe per day. The decrease in production volumes was due to the sale of our Hugoton propertie s, primary production declines at select properties in the Permia n core area and increasing water cuts at selec t maturing waterflood properties in our Southern Oklahoma core area. Lower production volumes were partially offset by production from the Permian Bolt-On and Wheatland acquisition properties, successful new drill results at a Permian Bolt-On property and positive waterflood responses at key properties in our Permian and Northeastern Oklahoma core areas.
Effects of Commodity Derivative Contracts. For the three months ended September 30, 2017, we recorded a net loss on derivatives of approximately $2.8 million which was comprised of approximately $3.2 million of non-cash loss on changes in fair value of our commodity derivative contracts, approximately $0.3 million of gain on net cash settlements of our commodity derivative contracts and approximately $0.1 million of gain on net cash settlements for the early termination of commodity derivative contracts in September 2017. For the three months ended September 30, 2016, we recorded a net loss on derivatives of approximately $0.4 million which was comprised of approximately $7.4 million of non-cash loss on changes in fair value of commodity derivative contracts, approximately $1.2 million of gain on net cash settlements of derivative contracts and approximately $5.8 million of gain on net cash settlements for the early termination of commodity derivative contracts in July 2016.
Lease Operating Expenses. For the three months ended September 30, 2017, LOE was approximately $6.1 million, or approximately $19.01 per Boe, compared to approximately $5.7 million, or approximately $15.68 per Boe, for the three months ended September 30, 2016. The increase in total and per BOE LOE was due to increased ad valorem expense in the Permian core area and incremental costs from properties acquired, partially offset by the Hugoton divestiture. Additionally, the increase in per Boe LOE was due to lower production volumes.
Production Taxes. Production taxes are calculated as a percentage of our oil and natural gas revenues and exclude the effects of our commodity derivative contracts. Production taxes for the three months ended September 30, 2017, were approximately $0.9 million, or approximately $2.66 per Boe (effective tax rate of approximately 6.1%), compared to approximately $0.8 million, or approximately $2.07 per Boe (effective tax rate of approximately 5.2%) for the three months ended September 30, 2016. The increase in both production taxes, as a percentage of total sales and per Boe, was due to legislation that discontinued the EOR tax credit at one of our Northeastern Oklahoma units effective July 1, 2017.
Impairment Expense. For the three months ended September 30, 2017, we recorded approximately $4.9 million of non-cash impairment expense primarily on one of our Permian projects where late-stage waterflood efforts in select wells in the field have longer than anticipated response times to injection. For the three months ended September 30, 2016, we recorded no impairment charges.
Depreciation, Depletion and Amortization Expenses. DD&A for the three months ended September 30, 2017, was approximately $4.4 million, or approximately $13.51 per Boe, compared to approximately $5.7 million, or approximately $15.56 per Boe, for the three months ended September 30, 2016. The decrease in total and per Boe DD&A was due to decreases in depletion rates and production volumes. Depletion rate decreases were due to increased reserves and asset impairment recorded in the second quarter of 2017 which reduced the carrying value of our oil and natural gas properties.
General and Administrative Expenses. G&A was approximately $1.2 million, or approximately $3.69 per Boe, for the three months ended September 30, 2017, compared to approximately $1.7 million, or approximately $4.71 per Boe, for three months ended September 30, 2016. The decrease in G&A was partly due to lower compensation expense. G&A expenses included non-cash equity-based compensation of approximately $0.1 million and approximately $0.3 million for the three months ended September 30, 2017, and 2016, respectively. Additionally, there was a reduction in salaries and rent expense as the result of the relocation of our Dallas, Texas, headquarters to Tulsa, Oklahoma, in an effort to consolidate office space.
Interest Expense. Interest expense for the three months ended September 30, 2017, was approximately $1.6 million compared to approximately $1.7 million for the three months ended September 30, 2016. The decrease in interest expense was due to lower outstanding borrowings, partially offset by a higher effective interest rate based on an increase in the underlying market rate.
27
Nine Months Ended September 30, 2017 Compared with the Nine Months Ended September 30, 2016
We reported a net loss of approximately $18.7 million for the nine months ended September 30, 2017, compared to a net loss of approximately $21.5 million for the nine months ended September 30, 2016. A favorable net impact of derivatives, lower expenses (DD&A, interest, LOE and G&A) and higher oil and natural gas prices, partially offset by higher impairment expense and lower oil and natural gas production, were the primary factors attributable to the $2.8 million change.
Sales Revenues. Revenues from oil and natural gas sales for the nine months ended September 30, 2017, were approximately $43.3 million compared to approximately $40.5 million for the nine months ended September 30, 2016. The increase in revenues were primarily due to higher oil and natural gas prices. Our average sales price per Bbl, excluding commodity derivative contracts, for the nine months ended September 30, 2017, was $46.28 per Bbl, compared to approximately $37.43 per Bbl for the nine months ended September 30, 2016. The price increase was partially offset by lower production volumes.
On average, production volumes for the nine months ended September 30, 2017, were approximately 972 MBoe, or approximately 3,560 Boe per day. In comparison, production volumes for the nine months ended September 30, 2016, were approximately 1,125 MBoe, or approximately 4,106 Boe per day. The decrease in production volumes was primarily due to the sale of our Hugoton properties, primary production declines at select properties in our Permian core area and increasing water cuts at select maturing waterflood properties in our Southern Oklahoma core area. Lower production volumes were partially offset by production from the Permian Bolt-On and Wheatland acquisition properties, successful new drill results at a Permian Bolt-On property and positive waterflood responses at key properties in our Permian and Northeastern Oklahoma core areas.
Effects of Commodity Derivative Contracts. For the nine months ended September 30, 2017, we recorded a net gain on derivatives of approximately $2.9 million which was composed of approximately $2.3 million of non-cash gain on changes in fair value of our commodity derivative contracts, approximately $0.5 million of gain on net cash settlements of our commodity derivative contracts and approximately $0.1 million of gain on net cash settlements for the early termination of commodity derivative contracts in September 2017. For the nine months ended September 30, 2016, we recorded a net loss on derivatives of approximately $8.0 million which was comprised of approximately $32.3 million of non-cash loss on changes in fair value of our commodity derivative contracts, approximately $18.5 million of gain on net cash settlements of our commodity derivative contracts and approximately $5.8 million of gain on net cash settlements for the early termination of commodity derivative contracts in July 2016.
Lease Operating Expenses. For the nine months ended September 30, 2017, LOE was approximately $16.7 million, or approximately $17.18 per Boe, compared to approximately $17.6 million, or approximately $15.60 per Boe, for the nine months ended September 30, 2016. The decrease in total LOE was due to the divestiture of Hugoton properties and reduced spending in our Texas Gulf Coast area, partially offset by incremental costs associated with properties acquired in the Permian Bolt-On and Wheatland acquisitions, increased non-routine costs in Northeastern Oklahoma related to storm damage and increased ad valorem taxes in the Permian core area. The increase in average costs per Boe was due to lower production.
Production Taxes. Production taxes are calculated as a percentage of our oil and natural gas sales revenues and exclude the effects of our commodity derivative contracts. Production taxes for the nine months ended September 30, 2017, were approximately $2.4 million, or approximately $2.43 per Boe (effective tax rate of approximately 5.5% ), compared to approximately $2.1 million, or approximately $1.85 per Boe (effective tax rate of approximately 5.1% ), for the nine months ended September 30, 2016. The increase in both production taxes, as a percentage of total sales and per Boe, was primarily attributable to tax rebates received during 2016 comparable periods and legislation that discontinued the EOR tax credit at one of our Northeastern Oklahoma units effective July 1, 2017.
Impairment Expense. For the nine months ended September 30, 2017, we recorded approximately $22.5 million of non-cash impairment expense primarily on one of our Northeastern Oklahoma projects due to margin compression over the reserve life caused by lower future oil pricing and a higher cost profile at quarter end and on one of our Permian projects where late-stage waterflood efforts in select wells in the field have longer than anticipated response times to injection. For the nine months ended September 30, 2016, we recorded approximately $0.9 million of non-cash impairment expense due to revisions in reserve estimates on one of our Permian properties.
Depreciation, Depletion and Amortization Expenses. DD&A for the nine months ended September 30, 2017, was approximately $13.9 million, or approximately $14.25 per Boe, compared to approximately $17.6 million, or approximately $15.60 per Boe, for the nine months ended September 30, 2016. The decrease in total and per Boe DD&A was primarily due to decreases in depletion rates and production volumes, offset by the net impact of the Hugoton divestiture and the Permian Bolt-
28
On and Wheatland acquisitions. Deplet ion rate decreases were due to increased reserves and asset impairment recorded in the second quarter of 2017 which reduced the carrying value of our oil and natural gas properties.
General and Administrative Expenses. G&A was approximately $4.5 million, or approximately $4.61 per Boe, for the for the nine months ended September 30, 2017, compared to approximately $5.3 million, or approximately $4.69 per Boe, for the for the nine months ended September 30, 2016. The decrease in G&A was primarily due to lower equity-based compensation resulting from the lower price of our common units and fewer units issued. G&A included non-cash equity-based compensation of approximately $0.4 million and approximately $1.0 million for the nine months ended September 30, 2017, and 2016, respectively. Additionally, there was a reduction in salaries and rent expense as the result of the relocation of our Dallas, Texas, headquarters to Tulsa, Oklahoma, in an effort to consolidate office space. These reductions in G&A were partially offset by sales taxes related to the Wheatland acquisition and increased professional fees.
Interest Expense. Interest expense for the nine months ended September 30, 2017, was approximately $4.6 million, compared to approximately $6.0 million for the nine months ended September 30, 2016. The decrease in interest expense was due to lower borrowings outstanding and a lower effective interest rate.
Liquidity and Capital Resources
Our ability to finance our operations, fund our capital expenditures and acquisitions, meet or refinance our debt obligations and meet our collateral requirements will depend on our future cash flows. Our ability to generate cash is subject to a number of factors, some of which are beyond our control, including weather, oil and natural gas prices, operating costs and maintenance capital expenditures, as well as general economic, financial, competitive, legislative, regulatory and other factors. Historically, our primary use of cash has been for debt reduction, capital spending, including acquisitions and distributions.
Since November 2014, oil prices have been extremely volatile, impacting the way we conduct business. In response, we have implemented a number of adjustments to strengthen our financial position. We have continued to hedge a portion of our production to limit downside and volatility in the prevailing commodity price environment. We have aggressively pursued cost reductions to improve profitability and maximize cash flows. We further reduced the Partnership’s weighted average cash operating break-even costs per Boe with the July 2016 divestiture of our higher cost Hugoton core area and the properties acquired through the August 2016 Permian Bolt-On acquisition, which carry a lower cost profile on a relative basis. Additionally, in the third quarter 2015, we indefinitely suspended our quarterly cash distributions on common units.
Our liquidity position at September 30, 2017, consisted of approximately $2.6 million of available cash. Our borrowing base is redetermined in the spring and fall of each year. Depending on a number of financial and operating factors that can materially influence the cash flow generation of our business, including but not limited to, future oil and natural gas prices, sales from produced oil and natural gas volumes, and cash operating expenses, we could breach certain financial covenants under the revolving credit facility, which would constitute a default under the revolving credit facility. Such default, if not cured, would require a waiver from our lenders to avoid an event of default and, subject to certain limitations, subsequent acceleration of all amounts outstanding under the revolving credit facility and potential foreclosure on our oil and natural gas properties.
At the quarter ended September 30, 2017, we were not in compliance with our leverage calculation ratio. On November 10, 2017, the Partnership received a waiver from the Administrative Agent and the Lenders of our revolving credit facility waiving the noncompliance through the earlier of (a) December 15, 2017, or (b) the termination of the Sale Agreement, dated November 8, 2017, governing the Southern Oklahoma divestiture. We believe it is probable that we will cure the violation of the leverage calculation ratio by the end of the wavier period as a result of the Southern Oklahoma divestiture. Additionally, in conjunction with its fall 2017 borrowing base redetermination, the Partnership is in advanced discussions with its lenders for the Extension of the credit facility subject to the satisfaction of certain conditions including the Southern Oklahoma divestiture.
If the transactions contemplated by the Sale Agreement and the Extension are not timely completed, and we are unable to negotiate an additional waiver of the leverage calculation ratio with the Administrative Agent and the Lenders of our revolving credit facility, we may be deemed in default of the revolving credit facility. In that case, unless we are able to secure another form of financing, our lenders would be entitled to accelerate the amounts owed under the revolving credit facility or foreclose on our oil and natural gas properties, either of which would have a material effect on our business and financial condition.
Based on our cash balance, forecasted cash flows from operating activities and availability under our revolving credit facility, we expect to be able to fund our planned capital expenditures budget, meet our debt service requirements and fund our other commitments and obligations. Although we currently expect our sources of cash to be sufficient to meet our near-term liquidity needs, there can be no assurance that our liquidity requirements will continue to be satisfied due to the discretion of
29
our lenders to potentially decrease our borrowing base. Due to t he volatility of commodity prices, we may not be able to obtain funding in the equity or debt capital markets on terms we find acceptable. The cost of obtaining debt capital from the credit markets generally has increased as many lenders and institutional investors have increased interest rates, enacted tighter lending standards, and reduced and, in some cases, ceased to provide any new funding.
Cash Flows
Cash flows provided by (used in) each type of activity was as follows:
|
|
Nine Months Ended |
|
|||||
|
|
September 30, |
|
|||||
|
|
2017 |
|
|
2016 |
|
||
|
|
(in thousands) |
|
|||||
Operating activities |
|
$ |
13,903 |
|
|
$ |
35,628 |
|
Investing activities |
|
$ |
(12,082 |
) |
|
$ |
(6,978 |
) |
Financing activities |
|
$ |
(1,592 |
) |
|
$ |
(27,150 |
) |
Operating Activities. Net cash provided by operating activities was approximately $13.9 million and approximately $35.6 million for the nine months ended September 30, 2017, and 2016, respectively. The $21.7 million change from 2016 to 2017 was primarily attributable to lower cash settlements received from matured derivatives.
Investing Activities. Net cash used in investing activities was approximately $12.1 million and approximately $7.0 million for the nine months ended September 30, 2017, and 2016, respectively. Cash used in investing activities during the nine months ended September 30, 2017, included approximately $7.3 million of capital expenditures for drilling and completion activities primarily in our Permian and Northeastern Oklahoma core areas and approximately $4.7 million for the acquisition of oil and natural gas properties in Central Oklahoma. Cash used in investing activities during the nine months ended September 30, 2016, included approximately $19.1 million for acquisitions of oil and natural gas properties in the Permian area and approximately $5.1 million of capital expenditures for drilling and completion activities primarily in our Permian and Northeastern Oklahoma core areas, partially offset by proceeds from the sale of our Hugoton oil and gas properties of approximately $17.3 million.
Financing Activities. Net cash used in financing activities was approximately $1.6 million and approximately $27.2 million for the nine months ended September 30, 2017, and 2016, respectively. Net cash used in financing activities during the nine months ended September 30, 2017, included distributions to preferred unitholders of approximately $1.5 million. Net cash used in financing activities during the nine months ended September 30, 2016, included payments on our revolving credit facility of approximately $52.1 million, partially offset by proceeds of approximately $25.0 million from the sale of Class A Preferred Units.
Capital Requirements
Our business requires continual investment to upgrade or enhance existing operations in order to increase and maintain our production and the size of our asset base. The primary purpose of growth capital is to acquire and develop producing assets that allow us to increase our production and asset base. To date, we have funded acquisition transactions through a combination of cash, available borrowing capacity under our revolving credit facility and through the issuance of equity, including convertible preferred units.
We currently expect capital spending for the remainder of 2017 for the development, growth and maintenance of our oil and natural gas properties to be approximately $1.7 million. We will consider adjustments to this capital program as business conditions and operating results warrant, in addition to our ongoing evaluation of additional development opportunities that are identified during the year.
Revolving Credit Facility
At September 30, 2017, our borrowing base was $140.0 million and outstanding borrowings under our revolving credit facility were $122.0 million. Our borrowing base is redetermined in the spring and fall of each year. As of November 14, 2017, in conjunction with our fall 2017 borrowing base redetermination, the Partnership is in advanced discussions with its lenders to extend the credit facility subject to the satisfaction of certain conditions included in the Southern Oklahoma divestiture. See
30
Note 7 to the unaudited condensed consolidated financial statements for additional information regarding our revolving cr edit facility.
Commodity Derivative Contracts
Our risk management program is intended to reduce our exposure to commodity price volatility and to assist with stabilizing cash flows. Accordingly, we utilize commodity derivative contracts (swaps, calls, puts and collars) to manage a portion of our exposure to commodity prices and specific delivery points. The commodity derivative contracts that we have entered into generally have the effect of providing us with a fixed price or a floor for a portion of our expected future oil production over a fixed period of time. We enter into commodity derivative contracts or modify our portfolio of existing commodity derivative contracts when we believe market conditions or other circumstances suggest that it is prudent to do so, or as required by our lenders. At September 30, 2017, we had commodity derivative contracts covering approximately 78%, 49% and 13%, respectively, of our estimated 2017, 2018 and 2019 average daily production (estimate calculated based on the mid-point of our full year 2017 Boe production guidance as released on November 14, 2017, and multiplied by a 94% oil weighting based on third quarter 2017 reported production volumes). See Note 4 to the unaudited condensed consolidated financial statements for additional information regarding our commodity derivative contracts.
Preferred Units
As of September 30, 2017, we have issued $25.0 million of Class A Preferred Units, which were issued during August 2016. Class A preferred unitholders receive a cumulative, quarterly cash distribution on all Class A Preferred Units then outstanding at an annual rate of 8.0%, or in the event that the Partnership’s existing secured indebtedness prevents the payment of a cash distribution to all holders of the Class A Preferred Units, in kind (additional Class A Preferred Units), at an annual rate of 10.0%. Such distributions will be paid for each such quarter within 45 days after such quarter end, or as otherwise permitted to accumulate pursuant to the Partnership Agreement. See Note 9 to the unaudited condensed consolidated financial statements for additional information regarding Class A Preferred Units.
Off–Balance Sheet Arrangements
As of September 30, 2017, we had no off-balance sheet arrangements.
Recently Issued Accounting Pronouncements
See Note 11 to the unaudited condensed consolidated financial statements for additional information regarding recently issued accounting pronouncements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to a variety of market risks including commodity price risk, interest rate risk and credit risk. The primary objective of the following information is to provide quantitative and qualitative information about our potential exposure to market risks. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses.
Commodity Price Risk
Our primary market risk exposure is the pricing we receive for our oil and natural gas sales. Historically, energy prices have exhibited, and are generally expected to continue to exhibit, some of the highest volatility levels observed within the commodity and financial markets. The prices we receive for our oil and natural gas sales depend on many factors outside of our control, such as the strength of the global economy and changes in supply and demand.
Our risk management program is intended to reduce exposure to commodity price volatility and to assist with stabilizing cash flows. Accordingly, we utilize commodity derivatives contracts (swaps, calls, puts and costless collars), to manage a portion of our exposure to commodity prices and specific delivery points. The commodity derivative contracts that we have entered into generally have the effect of providing us with a fixed price for a portion of our expected future oil production over a fixed period of time. We enter into commodity derivative contracts or modify our portfolio of existing commodity derivative contracts when we believe market conditions or other circumstances suggest that it is prudent to do so, or as required by our lenders.
31
Our commodity derivative contracts expose us to credit risk in the event of nonperformance by counterparties. While we do not require the counterparties to our commo dity derivative contracts to post collateral, it is our policy to enter into commodity derivative contracts only with counterparties that are major, creditworthy financial institutions deemed by management as competent and competitive market makers. We eva luate the credit standing of such counterparties by reviewing their credit ratings. The counterparties to our commodity derivative contracts currently in place are lenders under our revolving credit facility and have investment grade ratings. We expect to enter into future commodity derivative contracts with these or other lenders under our revolving credit facility whom we expect will also carry investment grade ratings.
Our commodity price risk management activities are recorded at fair value and changes to the future commodity prices could have the effect of reducing net income and the value of our securities. The fair value of our oil commodity derivative contracts at September 30, 2017, was a net liability of approximately $0.6 million. A 10% change in oil prices, with all other factors held constant, would result in a change in the fair value (generally correlated to our estimated future net cash flows from such instruments) of our oil commodity derivative contracts of approximately $3.7 million. See Note 4 to the unaudited condensed consolidated financial statements for additional information regarding our commodity derivative contracts.
Interest Rate Risk
Our exposure to changes in interest rates relates primarily to debt obligations. At September 30, 2017, we had debt outstanding of $122.0 million, with an effective interest rate of 3.80%. Assuming no change in the amount outstanding, the impact on interest expense of a 10% increase or decrease in the average interest rate would be approximately $0.5 million on an annual basis. See Note 7 to the unaudited condensed consolidated financial statements for additional information regarding our revolving credit facility.
Counterparty and Customer Credit Risk
We are subject to credit risk due to the concentration of our revenues attributable to a small number of customers for our current production. The inability or failure of any of our customers to meet its obligations to us or its insolvency or liquidation may adversely affect our financial results. We monitor our exposure to these counterparties primarily by reviewing credit ratings and payment history. As of September 30, 2017, our current purchasers had positive payment histories.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our chief executive officer (principal executive officer) and chief accounting officer (principal financial officer), the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2017. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Form 10-Q.
Changes in Internal Controls Over Financial Reporting
There were no changes in our system of internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) that occurred during the quarterly period ended September 30, 2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
In the course of our ongoing preparations for making management’s report on internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002, from time to time we have identified areas in need of improvement and have taken remedial actions to strengthen the affected controls as appropriate. We make these and other changes to enhance the effectiveness of our internal control over financial reporting, which do not have a material effect on our overall internal control over financial reporting.
32
Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we are not currently a party to any material legal proceedings. In addition, we are not aware of any significant legal or governmental proceedings against us, or contemplated to be brought against us, under the various environmental protection statutes to which we are subject.
Except for the risk factor discussed below, there have been no material changes with respect to the risk factors disclosed in our Annual Report for the year ended December 31, 2016.
If we do not maintain certain financial covenants under our revolving credit facility we may be deemed in breach, entitling our lenders to accelerate the amounts due under the facility or foreclose on our properties.
We are dependent on our revolving credit facility, and a change in a number of financial and operating factors that can materially influence the cash flow generation of our business, including but not limited to, future oil and natural gas prices, sales from produced oil and natural gas volumes, and cash operating expenses, could result in our breaching certain financial covenants under the revolving credit facility, which would constitute a default under the revolving credit facility. Such default, if not cured, would require a waiver from our lenders to avoid an event of default and, subject to certain limitations, subsequent acceleration of all amounts outstanding under the revolving credit facility and potential foreclosure on our oil and natural gas properties.
At the quarter ended September 30, 2017, we were not in compliance with our leverage calculation ratio. On November 10, 2017, the Partnership received a waiver from the Administrative Agent and the Lenders of our revolving credit facility waiving the noncompliance through the earlier of (a) December 15, 2017, or (b) the termination, for any reason, of the Purchase and Sale Agreement, dated November 8, 2017, governing the sale of certain oil and gas properties located in Carter and Love Counties, Oklahoma.
If the transaction contemplated by the Sale Agreement is not timely completed, and we are unable to negotiate an additional waiver of the leverage calculation ratio with the Administrative Agent and the Lenders of our revolving credit facility, we may be deemed in default of the revolving credit facility. In that case, unless we are able to secure financing from another source, our lenders would be entitled to accelerate the amounts owed under the revolving credit facility or foreclose on our oil and natural gas properties, either of which would have a material effect on our business and financial condition.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
None.
33
The exhibits listed below are filed as part of this Quarterly Report:
Exhibit No. |
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Exhibit Description |
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10.1+ |
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10.2+ |
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31.1+ |
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Rule 13a-14(a)/ 15(d)- 14(a) Certification of Chief Executive Officer |
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31.2+ |
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Rule 13a-14(a)/ 15(d)- 14(a) Certification of Principal Financial Officer |
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32.1+ |
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32.2+ |
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101.INS+ |
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XBRL Instance Document |
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101.SCH+ |
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XBRL Taxonomy Extension Schema Document |
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101.CAL+ |
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XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF+ |
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XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB+ |
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XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE+ |
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XBRL Taxonomy Extension Presentation Linkbase Document |
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+ |
Filed herewith |
34
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 thereunto duly authorized.
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MID-CON ENERGY PARTNERS, LP |
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By: |
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Mid-Con Energy GP, LLC, its general partner |
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November 14, 2017 |
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By: |
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/s/ Jeffrey R. Olmstead |
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Jeffrey R. Olmstead |
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Chief Executive Officer |
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November 14, 2017 |
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By: |
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/ s/ Sherry L. Morgan |
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Sherry L. Morgan |
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Chief Accounting Officer as principal financial officer |
35
Exhibit 10.1
PURCHASE AND SALE AGREEMENT
AMONG
MID-CON ENERGY PROPERTIES, LLC
(“SELLER”)
AND
EXPONENT ENERGY III LLC
(“BUYER”)
DATED AS OF
NOVEMBER 8, 2017
i
ii
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11.1 |
Recordation and Filing of Documents |
36 |
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11.2 |
Records |
36 |
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11.3 |
Final Settlement Statement |
36 |
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11.4 |
Cooperation with Seller’s Retained Assets |
37 |
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11.5 |
Suspense Accounts |
37 |
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11.6 |
Further Assurances |
37 |
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11.7 |
Escrow Account |
37 |
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12. |
TAXES |
38 |
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12.1 |
Property Taxes |
38 |
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12.2 |
Production Taxes |
38 |
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12.3 |
Other Taxes |
38 |
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13. |
OWNERSHIP OF ASSETS |
39 |
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13.1 |
Distribution of Production |
39 |
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13.2 |
Proration of Income and Expenses |
39 |
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13.3 |
Notice to Remitters of Proceeds |
39 |
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13.4 |
Production Imbalances |
39 |
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13.5 |
Pipeline and Other Non-Wellhead Imbalances |
40 |
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14. |
INTERIM OPERATIONS |
41 |
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14.1 |
Standard of Care |
41 |
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14.2 |
Liability of Operator |
41 |
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14.3 |
Removal of Signs |
41 |
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14.4 |
Third-Party Notifications |
41 |
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14.5 |
Seller Credit Obligations |
41 |
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14.6 |
Employment Matters |
42 |
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14.7 |
Notification of Breaches |
43 |
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15. |
EXCHANGE PROVISION |
43 |
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16. |
ASSUMPTION OF LIABILITY AND GENERAL INDEMNIFICATION |
43 |
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16.1 |
Buyer’s Assumption of Obligations |
43 |
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16.2 |
Definitions |
45 |
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16.3 |
Buyer’s General Indemnity |
45 |
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16.4 |
Seller’s General Indemnity |
45 |
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16.5 |
Limitation on Indemnification |
47 |
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16.6 |
Further Limitation on Indemnification |
47 |
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16.7 |
Indemnification Procedures |
47 |
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17. |
CASUALTY LOSS |
48 |
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18. |
NOTICES |
49 |
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19. |
TERMINATION |
50 |
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19.1 |
Termination |
50 |
iii
List of Exhibits:
Exhibit “A” – Schedule of Leases
Exhibit “B” – Schedule of Wells
Exhibit “C” – Allocation Value
Exhibit “D” – Conveyance
Exhibit “E” – Certificate of Non-Foreign Status
List of Schedules :
Schedule 2.3 – Equipment
Schedule 2.5 – Easements and Surface Agreements
Schedule 2.8 – Retained Assets
Schedule 3.2 – Escrow Agreement
Schedule 5.3 – Compliance
Schedule 5.6 – Material Contracts
Schedule 5.7 – Permits
Schedule 5.8 – Litigation
Schedule 5.10 – Notices
Schedule 5.14 – Outstanding Obligations/AFEs
Schedule 5.17 – Third Party Consents
Schedule 5.18 – Preferential Purchase Rights
Schedule 5.19 – Mechanical Integrity
Schedule 11.5 – Suspense Accounts
Schedule 13.4 – Production Imbalances
iv
This Purchase and Sale Agreement (“ Agreement ”) is made and entered into as of November 8, 2017 (“ Execution Date ”) by and between Mid-Con Energy Properties, LLC, a Delaware limited liability company, whose address is 2431 E. 61 st Street, Suite 850, Tulsa, Oklahoma 74136 ( “ Seller ”), and Exponent Energy III LLC, a Delaware LLC, whose address is 1560 E 21 st St, Suite 215, Tulsa, Oklahoma 74114 (“ Buyer ”). Buyer and Seller may sometimes be referred to in this Agreement individually as a “ Party ” or collectively as the “ Parties ”.
WHEREAS, Buyer desires to purchase the Assets (as defined below) from Seller, and Seller desires to sell the Assets to Buyer on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller agree as follows:
“ Additional Interest ” has the meaning set forth in Section 7.2 .
“ Agreement ” has the meaning set forth in the Preamble .
“ Allocated Values ” has the meaning set forth in Section 3.4 .
“ Asset ” or “ Assets ” has the meaning set forth in Article 2 .
“ Assumed Imbalance ” or “ Assumed Imbalances ” has the meaning set forth in Section 13.4 .
“ Assumed Obligations ” has the meaning set forth in Section 16.1.1 .
“ Available Employees ” has the meaning set forth in Section 14.6 .
“ Available Employees List ” has the meaning set forth in Section 14.6 .
“ Base Purchase Price ” has the meaning set forth in Section 3.1 .
“ Business Day ” means any day, other than Saturday or Sunday, on which commercial banks are open for commercial business with the public in Tulsa, Oklahoma.
“ Buyer ” has the meaning set forth in the Preamble .
“ Buyer Group ” has the meaning set forth in Section 16.2 .
“ Casualty Defect ” has the meaning set forth in Article 17 .
“ Claim Notice ” has the meaning set forth in Section 16.7.2 .
5
“ Claims ” means any and all claims, rights, demands, causes of action, liabilities (including civil fines), damages, losses, fines, penalties, sanctions of every kind and character including reasonable fees and expenses of attorneys, technical experts and expert witnesses, judgments or proceedings of any kind or character whatsoever, whether arising or founded in law, equity, statute, contract, tort, strict liability or voluntary settlement and all reasonable expenses, costs and fees (including reasonable attorneys’ fees) in connection therewith.
“ Cleanup ” has the meaning set forth in Section 8.1(d) .
“ Closing ” has the meaning set forth in Section 10.4 .
“ Closing Date ” has the meaning set forth in Section 10.4 .
“ Closing Settlement Statement ” has the meaning set forth in Section 10.3 .
“ Consents ” has the meaning set forth in Section 9.1 .
“ Contracts ” means all contract rights directly relating to the Assets, including, but not limited to, any operating agreements, joint venture agreements, unit agreements, orders and decisions of state, tribal and federal regulatory authorities establishing units, unit operating agreements, farm-in and/or farmout agreements, pooling or unitization or communitization agreements, processing agreements, transportation agreements, gathering and processing agreements, enhanced recovery and injection agreements, balancing agreements, options, drilling agreements, exploration agreements, area of mutual interest agreements, oil and/or gas production sales or marketing agreements, and assignments of operating rights, working interests, subleases and rights above or below certain footage depths or geological formations, to the extent the same are directly related to the Assets; provided , however , the term “ Contract ” shall not include any master service contract or any other contract or agreement which precludes assignment for which Seller, using its reasonable efforts, cannot secure a waiver or consent to assignment prior to Closing by the other party(s) to such contract or agreement.
“ Conveyances ” means the one or more conveyances, assignments, deeds, and bills of sale, in form and substance mutually agreed to by Buyer and Seller, conveying the Assets to Buyer in accordance with the terms of this Agreement, to be executed and delivered in accordance with the provisions of Section 10.5.2 .
“ Current Tax Period ” has the meaning set forth in Section 12.1 .
“ Deductible Amount ” has the meaning set forth in Section 7.5 .
“ Deposit ” has the meaning set forth in Section 3.2 .
“ Due Diligence Period ” has the meaning set forth in Section 7.1 .
“ Easements ” means rights-of-way, easements, permits, licenses, approvals, servitudes and franchises specifically acquired for, or used in connection with, operations for the exploration and production of oil, gas or other minerals on or from the Interests or otherwise in connection with the Wells, Equipment, any gathering system(s) (whether used for the gathering
6
of Hydrocarbons or non-Hydrocarbon substances produced in association therewith, including produced water and saltwater) or Surface Agreements, including, without limitation, the rights to permits and licenses of any nature owned, held or operated in connection with said operations.
“ Effective Time ” means 12:00 a.m. local time where the Assets are located on October 1, 2017.
“ Environmental Adjustment ” has the meaning set forth in Section 8.2(a) .
“ Environmental Defect ” has the meaning set forth in Section 8.1 .
“ Environmental Laws ” means any and all present and future laws, statutes, regulations, rules, orders, ordinances, codes, plans, requirements, criteria, standards, decrees, judgments, injunctions, notices, demand letters, permits, licenses or determinations issued, or promulgated by any Governmental Authority now or hereafter in effect, and in each as amended or supplemented from time to time, and any applicable administrative or judicial interpretation thereof, pertaining to (a) use, storage, emission, discharge, clean-up, release, or threatened release of pollutants, contaminants, NORM, chemicals, or industrial, toxic or hazardous substances (collectively, “ Pollutants ”) on or into the environment or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation or handling of Pollutants, (b) health, (c) the environment, or (d) wildlife or natural resources applicable to the Assets and in effect in or for the jurisdiction in which the Assets are located, including, without limitation, the Clean Air Act (CAA), the Clean Water Act (CWA), the Federal Water Pollution Act, the Rivers and Harbors Act, the Safe Drinking Water Act, the National Environmental Policy Act of 1969 (NEPA), the Endangered Species Act (ESA), the Fish and Wildlife Conservation Act of 1980, the Fish and Wildlife Coordination Act (FWCA), the Oil Pollution Act, the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the Superfund Amendments and Reauthorization Act of 1986 (SARA), the Resources Conservation and Recovery Act (RCRA), the Toxic Substance Control Act, the Occupational, Safety and Health Act (OSHA), the Emergency Planning and Community Right-To-Know Act (EPCRA), the Hazardous Materials Transportation Act, the Hazardous and Solid Waste Amendments of 1984 (HSWA), and any and all other applicable present and future federal, state and local laws, statutes, regulations, rules, orders, ordinances, codes, plans, requirements, criteria, standards, decrees, judgments, injunctions, notices, demand letters, permits, licenses or determinations whose purpose is to regulate Pollutants or to conserve or protect health, the environment, wildlife or natural resources as any of the foregoing are now existing or may hereafter be amended or interpreted.
“ Environmental Notice ” has the meaning set forth in Section 8.1 .
“ Equipment ” has the meaning set forth in Section 2.3 .
“ Execution Date ” has the meaning set forth in the Preamble .
“ Final Settlement Statement ” has the meaning set forth in Section 11.3 .
“ Final Suspense Account Statement ” has the meaning set forth in Section 11.5 .
7
“ Governmental Authority ” or “ Governmental Authorities ” means any court or tribunal (including an arbitrator or arbitral panel) in any jurisdiction (domestic or foreign) or any federal, tribal, state, county, municipal or other governmental or quasi-governmental body, agency, authority, department, board, commission, bureau, official or other authority or instrumentality.
“ Hire Date ” has the meaning set forth in Section 14.6 .
“ Hydrocarbons ” has the meaning set forth in Section 2.4 .
“ Interests ” has the meaning set forth in Section 2.1 .
“ Indemnified Party ” has the meaning set forth in Section 16.7.1 .
“ Indemnifying Party ” has the meaning set forth in Section 16.7.1 .
“ Leases ” has the meaning set forth in Section 2.1 .
“ Loss ” has the meaning set forth in Section 8.1(e) .
“ Material Contracts ” means (a) all area of mutual interests agreements (other than customary area of mutual interest provisions in operating agreements), partnership (other than tax partnerships), joint venture and/or exploration or development program agreements relating to Wells and Leases or otherwise included in the Assets and (b) all of the oil and/or gas production sales, marketing and processing agreements relating to the Wells and Leases, other than such agreements which are terminable by Seller without penalty on 90 or fewer days’ notice.
“ Net Mineral Acres ” means, as calculated separately with respect to each Lease, (a) the number of gross acres in the lands covered by such Lease, multiplied by (b) the lessor’s undivided percentage interest in oil, gas or other minerals covered by such Lease in such lands, multiplied by (c) Seller’s working interest in such Lease; provided , that if items (b) and/or (c) vary as to different areas of such lands (including depths) covered by such Lease, a separate calculation shall be done for each such area as if it were a separate Lease.
“ New Employees ” has the meaning set forth in Section 14.6 .
“ NORM ” means naturally occurring radioactive material.
“ Notice Period ” has the meaning set forth in Section 16.7.3 .
“ Open Defect ” has the meaning set forth in Section 7.4(c) .
“ Party ” or “ Parties ” has the meaning set forth in the Preamble .
“ Party Affiliate ” has the meaning set forth in Section 20.15 .
“ Permits ” has the meaning set forth in Section 2.6 .
8
“ Permitted Encumbrances ” means (i) any third party consents to assignment and similar agreements with respect to which waivers or consents are obtained prior to Closing or which are typically obtained after Closing (including any applicable approval(s) from Governmental Authorities); (ii) easements, rights of way, servitudes, licenses and permits on, over, across or in respect of any of the Assets which do not materially interfere with the use, operation or development of the Assets; (iii) rights reserved to or vested in any Governmental Authority to control or regulate any of the Assets in any manner, and all obligations and duties under all applicable laws, rules and orders of any such Governmental Authority or under any franchise, grant, license or permit issued by any such Governmental Authority; (iv) materialmen’s, mechanics’, repairmen’s, employees’, contractors’, operators’, tax and other similar liens or charges arising in the ordinary course of business incidental to the construction, maintenance or operation of any of the Assets which have not yet become due and payable or payment is being withheld as provided by law or are being contested in good faith in the ordinary course of business by appropriate action; (v) any other liens, charges, encumbrances, contracts, agreements, instruments, obligations, defects or irregularities of any kind whatsoever affecting the Assets that do not operate to reduce the net revenue interest below that set forth on the applicable Exhibit ( s ) hereto for such Interest or increase the working interest above that set forth on the applicable Exhibit(s) hereto without a proportionate increase in the corresponding net revenue interest; (vi) defects and irregularities arising out of the lack of a survey; (vii) defects or irregularities arising out of the lack of recorded powers of attorney from any Person to execute and deliver documents on their behalf; (viii) defects arising out of a lack of evidence of corporate authorization; (ix ) defects in the chain of title consisting of failure to recite marital status or the omission of succession o f heirship or estate proceedings; (x) defects or irregularities arising out of improper or incomplete acknowledgement, witness, or attestation; (x i ) defects or irregularities of title as to which the relevant statute(s) of limitations or prescription would bar any attack or claim against Seller’s title (or, after the Closing, Buyer’s title); (x ii ) any of the matters disclosed on any Exhibit or any Schedule to this Agreement; (x ii i) defects based on lack of information in Seller’s files; (xi v ) defects or irregularities arising out of prior oil and gas leases which by their terms and on their face, expired more than ten (10) years prior to the Effective Time, and which have not been releas ed of record; (xv ) defects or irregularities arising out of liens, mortgages or deeds of trust which, by their terms and on their face, expired and terminated more than ten (10) years prior to the Effective Time but which remain unreleased of record; (xv i ) defects and irregularities cured by possession under applicable statutes of limitation or statutes relating to prescription; (xv ii ) all approvals or rights to consent by, required notices to, filings with or other actions by Governmental Authorities in connection with the sale or conveyance of oil and gas leases or interests therein if they are customarily obtained subsequent to the sale or conveyance; (xvi ii ) Preferential Purchase Rights which are subject to Article 9 ; (x ix ) conventional rights of reassignment triggered by Seller’s (or, after the Closing, Buyer’s) express indication of its intention to release or abandon its interest prior to expiration of the primary term or other te rmination of such interest; (xx ) any maintenance of uniform interest provision in an operating agreement if waived by the party or parties having the right to enforce such provision or if the violation of such provision would not give rise to the unwinding of the sale of the affected Asset; and (xx i ) such other defects or irregularities of title as Buyer may have waived in writing or by which Buyer shall be deemed to have waived pursuant to the provisions of Section 6.3 and Section 7.3 .
9
“ Person ” means any individual, partnership, joint venture, corporation, trust, limited liability company, unincorporated organization, government or department or agency thereof, or any other entity.
“ Pipeline Imbalances ” has the meaning set forth in Section 13.5 .
“ Pollutants ” has the meaning set forth in the definition of Environmental Laws.
“ Preferential Purchase Right ” has the meaning set forth in Section 9.1 .
“ Property Taxes ” has the meaning set forth in Section 12.1 .
“ Records ” has the meaning set forth in Section 2.7 .
“ Represented Imbalance ” has the meaning set forth in Section 13.4 .
“ Retained Assets ” has the meaning set forth in Section 2.8 .
“ Seller ” has the meaning set forth in the Preamble .
“ Seller Credit Obligations ” has the meaning set forth in Section 14.5 .
“ Seller Group ” has the meaning set forth in Section 16.2 .
“ Surface Agreements ” means any contracts, rights, permits, permissions or licenses to use of the surface estate as related to the Assets, including any surface leases, surface use rights or agreements or any similar surface rights, agreements or licenses relating to the Assets.
“ Suspense Accounts ” has the meaning set forth in Section 11.5 .
“ Tax Deferred Exchange ” has the meaning set forth in Article 15 .
“ Termination Threshold ” has the meaning set forth in Section 7.6 .
“ Title Defect ” has the meaning set forth in Section 7.1 .
“ Wells ” has the meaning set forth in Section 2.2 .
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Subject to the terms and conditions of this Agreement, Seller agrees to sell to Buyer and Buyer agrees to buy from Seller, effective as of the Effective Time for the consideration recited and subject to the terms and conditions set forth in this Agreement, all of Seller’s right, title and interest in the following (each individually referred to as an “ Asset ” and all collectively referred to as the “ Assets ”):
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2.5 |
Easements and Surface Agreements - All Easements and Surface Agreements, including but not limited to, those identified and described on the attached Schedule 2.5 . |
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2.8 |
Retained Assets - Notwithstanding anything to the contrary in Section 2.1 through Section 2.7 or elsewhere herein, the Assets do not include the following (collectively, the “ Retained Assets ”): |
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(a) |
All rights and interests of Seller (i) under any policy or agreement of insurance or indemnity, (ii) under any bond or (iii) to any insurance or condemnation proceeds or awards arising, in each case, from acts, omissions or events related to, or damage to or destruction of, the Assets occurring or accrued prior to the Effective Time; |
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(b) |
All claims of Seller for refunds or loss carry forwards with respect to (i) production, severance or any other taxes attributable to the Assets for any period prior to the Effective Time, (ii) income or franchise taxes or (iii) any taxes attributable to the Retained Assets; |
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(c) |
All proceeds, income, revenues, claims, refunds or other benefits (including any benefit attributable to any current or future laws or regulations in respect of “royalty relief” or other similar measures) not otherwise enumerated above, prior to the Effective Time as well as any security or other deposits made, attributable to (i) the Assets for any period prior to the Effective Time, or (ii) any Retained Assets; |
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(d) |
All documents and instruments of Seller relating to the Assets that may be protected by an attorney-client or attorney-work product privilege; |
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(e) |
All audit rights arising under any of the Contracts or otherwise with respect to any period prior to the Effective Time or to any Retained Assets; and |
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(f) |
Those items more particularly identified and described on Schedule 2.8 hereto. |
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of Buyer’s title and environmental due diligence and distributed as set forth elsewhere herein . If Closing does not occur and the Agreement is terminated, then the Deposit shall be retained by Seller or paid to Buyer, as provided in Article 19 below. |
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(a) |
Upward Adjustments - The Base Purchase Price shall be adjusted upward for the following, without duplication: |
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(i) |
all production expenses, operating expenses, and capital expenditures paid or incurred by Seller in connection with the ownership and operation of the Assets, including, but not limited to, lease option or extension payments, attributable to the periods from and after the Effective Time (including, without limitation, royalties and taxes attributable to Hydrocarbons produced and saved from and after the Effective Time, and pre-paid charges); |
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(ii) |
all proceeds attributable to the sale of Hydrocarbons from the Assets and all other income and benefits received by Buyer attributable to production, ownership and operation of the Assets prior to the Effective Time (net of royalties, overriding royalties and other burdens on Seller’s share of production not otherwise accounted for hereunder); |
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(iii) |
all positive adjustments, if any, regarding Additional Interests, as provided in Section 7.2 ; |
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(iv) |
to the extent the Assumed Imbalances reflect an underbalanced (or under-produced or under-received balance) position of Seller as of the Effective Time regarding the Assets, all adjustments regarding such underbalanced Assumed Imbalances in accordance with the provisions of Section 13.4 ; |
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(v) |
all adjustments for oil in storage above the pipeline connection, as provided in Section 13.1 ; |
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(vi) |
adjustments for over-delivered Pipeline Imbalances (volumes owed to Seller) as provided in Section 13.5 ; |
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(vii) |
all royalty overpayment amounts and/or future deductions as royalty offsets associated with the Assets as of the Effective Time; |
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(viii) |
gross overhead charges of $156,000.00/month for the operation of the Assets attributable to the periods from and after the Effective Time; and |
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(b) |
Downward Adjustments - The Base Purchase Price shall be adjusted downward for the following, without duplication: |
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(i) |
except as otherwise provided in this Agreement, all production expenses, operating expenses, operated and non-operated overhead charges and other costs under applicable operating agreements (or other contracts, pooling orders, or other similar agreements) and other expenses, costs and charges paid or incurred by Buyer in connection with the Assets and attributable to periods prior to the Effective Time, including, without limitation, taxes, capital expenses and other costs; |
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(ii) |
except as otherwise provided in this Agreement, all proceeds attributable to the sale of Hydrocarbons and all other income and benefits received by Seller and attributable to the production, operation or ownership of the Assets on or after the Effective Time (net of royalties, overriding royalties (other than overriding royalties that are conveyed as part of the Assets) and other burdens on Buyer’s share of production not otherwise accounted for hereunder); |
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(iii) |
all adjustments regarding Title Defects, in accordance with the provisions of Article 7 ; |
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(iv) |
all adjustments regarding Environmental Defects, in accordance with the provisions of Article 8 ; |
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(v) |
all adjustments regarding exercised Preferential Purchase Rights, as contemplated in Article 9 ; |
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(vi) |
all adjustments regarding Casualty Defects, in accordance with the provisions of Article 17 ; |
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(vii) |
to the extent the Assumed Imbalances reflect an overbalanced (or over-produced or over-received balance) position of Seller as of the Effective Time regarding the Assets, all adjustments regarding such overbalanced Assumed Imbalances, in accordance with the provisions of Sections 13.4 ; |
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(viii) |
adjustments for under-delivered Pipeline Imbalances (volumes owed by Seller), as provided in Section 13.5 ; |
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(ix) |
an amount equal to the amounts held in the Suspense Accounts as of the Closing, as contemplated in Section 11.5 ; |
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(x) |
any other downward adjustments to the Base Purchase Price as specifically provided for under the terms of this Agreement. |
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In connection with any on-site inspections, Buyer agrees to not unreasonably interfere with the normal operation of the Assets and further agrees that under no circumstances shall it perform any invasive tests of any nature on the Assets without the prior express written consent of Seller. In connection with granting such access, and except to the extent that such claims are caused by the gross negligence of Seller, Buyer waives and releases all claims against Seller Group (as defined in Section 16.2 ) for injury to, or death of persons, or damage to property INCURRED, HOWSOEVER CAUSED, in connection with the performance of this diligence and Buyer SHALL indemnify, defend and hold harmless Seller Group from and against all such claims. |
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Effective Time, and shall otherwise be conveyed in accordance with the terms of this Agreement and the Conveyances. |
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4.2.2 |
Disclaimer of Warranty - EXCEPT AS EXPRESSLY PROVIDED FOR OTHERWISE IN THIS AGREEMENT, OR IN THE CONVEYANCES, SELLER EXPRESSLY DISCLAIMS AND NEGATES ANY REPRESENTATION, COVENANT OR WARRANTY, EXPRESS OR IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE, RELATING TO THE TITLE OR CONDITION OF THE ASSETS AND ANY PERSONAL PROPERTY, EQUIPMENT, FIXTURES AND ITEMS OF MOVABLE PROPERTY COMPRISING ANY PART OF THE ASSETS, INCLUDING (i) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR ANY PARTICULAR PURPOSE OR WARRANTY OF MERCHANTABILITY; (ii) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS; (iii) ANY RIGHTS OF BUYER UNDER APPLICABLE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION OR RETURN OF THE PURCHASE PRICE; (iv) ANY CLAIM BY BUYER FOR DAMAGES BECAUSE OF DEFECTS OR OTHER VICES, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, LATENT OR PATENT; (v) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT OR INFRINGEMENT OF ANY OTHER INTELLECTUAL PROPERTY RIGHT; (vi) ANY IMPLIED OR EXPRESS WARRANTY REGARDING ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT INCLUDING, WITHOUT LIMITATION, NATURALLY OCCURRING RADIOACTIVE MATERIAL OR ASBESTOS, OR PROTECTION OF THE ENVIRONMENT OR HEALTH; OR (vii) ANY IMPLIED OR EXPRESS WARRANTY REGARDING TITLE TO ANY OF THE ASSETS. UPON CLOSING, IT IS THE EXPRESS INTENTION OF BUYER AND SELLER THAT, EXCEPT AS EXPRESSLY PROVIDED FOR OTHERWISE IN THIS AGREEMENT, OR IN THE CONVEYANCES, THE PERSONAL PROPERTY, EQUIPMENT, FIXTURES AND ITEMS AND THE CONDITION OF THE ASSETS ARE BEING CONVEYED TO BUYER “AS IS, WHERE IS,” WITH ALL FAULTS, AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR AND BUYER WAIVES ANY CLAIM(S) FOR BREACH OF WARRANTY UNDER THE CONVEYANCES, WHICH WERE NOT ASSERTED BY BUYER IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT. AS ONE OF ITS CONDITIONS TO CLOSING, BUYER ACKNOWLEDGES, AGREES AND REPRESENTS TO SELLER THAT AS OF CLOSING BUYER WILL HAVE BEEN GIVEN THE OPPORTUNITY TO MAKE OR CAUSE TO BE MADE SUCH INSPECTIONS AS BUYER DEEMS APPROPRIATE. |
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Seller represents the following to Buyer as of the Execution Date:
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5.2 |
Authority - Seller has all requisite power and authority to carry on its business as presently conducted, to enter into this Agreement and to perform its obligations |
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under this Agreement. Furthermore, as of the Execution Date, Seller has obtained all necessary board of directors and/or such other internal approvals as are required under its own corporate governance requirements to close this transaction. This Agreement constitutes the legal, valid and binding obligation of Seller and is enforceable against Seller in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws of general application with respect to creditors, (ii) general principles of equity, and (iii) the power of a court to deny enforcement of remedies generally based upon public policy. |
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5.16 |
Bankruptcy - There are no bankruptcy, reorganization or arrangement proceedings pending, being contemplated by, or to the knowledge of Seller, threatened against Seller. |
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5.20 |
Information - To the best of Seller’s knowledge, the information provided to Buyer by Seller is true and correct. |
Buyer represents the following to Seller as of the Execution Date:
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required under its own corporate governance requirements to close this transaction. This Agreement constitutes the legal, valid and binding obligation of Buyer and is enforceable against Buyer in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws of general application with respect to creditors, (ii) general principles of equity, and (iii) the power of a court to deny enforcement of remedies generally based upon public policy. The execution, delivery and performance of this Agreement (and such documents) and the consummation of the transactions contemplated hereby (and thereby) do not violate, or conflict with, any material provision of Buyer’s governing documents or any material provisions of any agreement or instrument to which it is a party or by which it is bound, or any judgment, decree, order, statute, rule or regulation applicable to Buyer. |
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6.8 |
Bankruptcy - There are no bankruptcy, reorganization or arrangement proceedings pending, being contemplated by, or to the knowledge of Buyer, threatened against Buyer. |
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6.12 |
No Known Title Defects – As of the Execution Date, Buyer is not aware of any Title Defects against the Assets for which it will submit a Title Defect notice. |
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6.13 |
No Known Environmental Defects - As of the Execution Date, Buyer is not aware of any Environmental Defects against the Assets for which it will submit an Environmental Defect notice. |
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7.1.1 |
Adverse Claims – Seller’s title as to all or part of a Well or Unit Lease is subject to (i) an outstanding mortgage which is not released on or before Closing; (ii) a deed of trust which is not released on or before Closing; (iii) a lien or encumbrance which is not released on or before Closing; or (iv) a pending claim or cause of action in which a competing ownership interest in a Well or Unit Lease is claimed or implied; |
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7.1.2 |
Decreased Net Revenue Interest - Seller owns less than the net revenue interest shown on Exhibit “B” for a particular Well; |
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7.1.3 |
Increased Working Interest - Seller owns more than the working interest shown on Exhibit “B” for a particular Well without a proportionate increase in the corresponding net revenue interest shown on Exhibit “B” ; and |
provided , however , that no Title Defect shall be deemed to exist and/or be asserted by Buyer with respect to (i) any Well operated by Buyer (or any of its affiliates), or (ii) any Unit Lease in which Buyer (or any of its affiliates) owns an
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interest, in each case, as of the Execution Date or at any point during the Due Diligence Period.
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(a) |
Liquidated Charges - If the adjustment is based upon a lien, encumbrance, or other charge upon a Well or Unit Lease which is liquidated in amount or which can be estimated with reasonable certainty, then the adjustment shall be the sum necessary to be paid to the obligee to remove the encumbrance from the affected Well or Unit Lease. |
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excluded from this transaction pursuant to clause (2) above and Seller cures the Title Defect to Buyer’s reasonable satisfaction prior to one hundred eighty (180) days after Closing, Buyer shall purchase the said excluded Asset for its Allocated Value as of the Effective Time; or (ii) in the case of an Additional Interest, sell to Buyer the entire Well(s) or Unit Lease(s) affected by the Additional Interest at the original Allocated Value set forth on either Exhibit “C ” attributable to such Wells and/or Unit Leases increased by the agreed upon amount associated with such Additional Interest. |
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Lease exceeds Fifty Thousan d and No/100 U.S. Dollars ($5 0,000.00); and complies with all of the following conditions precedent: |
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(a) |
The Environmental Notice must be received by Seller as soon as reasonably practical after discovery of the Environmental Defect by Buyer, but in any event on or before December 15, 2017, and thereafter any such claim shall be deemed to have been waived; |
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(c) |
The evidence referred to in Section 8.1(b) must be fully described, substantiated in good faith by Buyer’s environmental experts, and in the case of documentary evidence, enclosed; |
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(f) |
Except as set forth in paragraph 16.4, if Buyer does not provide Seller with an Environmental Notice by December 15, 2017, Buyer shall be deemed to have accepted such Well(s) and Unit Lease(s) in their current condition and to have forever waived Buyer’s right to assert on Environmental Defect. |
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agencies having jurisdiction, (ii) contesting the existence of an Environmental Defect or Buyer’s estimate of the amount of all Losses associated with the Environmental Defect pursuant to Section 8.2(c) , (iii) paying Buyer’s good faith estimate of the amount of all Losses associated with the Environmental Defect in the form of a reduction to the Purchase Price (an “ Environmental Adjustment ”), or (iv) excluding the Well or Lease pursuant to Section 8.2(b) . |
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BEEN MADE, BUYER SHALL ASSUME ANY AND ALL FUTURE ENVIRONMENTAL OBLIGATIONS ASSOCIATED WITH SUCH ASSET. |
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(d) |
Implementing Cleanup - If Seller elects to Cleanup an Environmental Defect pursuant to Section 8.2(a) , Seller shall select the means and methods of effecting the Cleanup in accordance with applicable Environmental Laws, applicable industry standards, and any applicable agreement, provided , however , that Seller shall not be required to plug and abandon any currently unplugged wells if the cost thereof would be customary and normal site remediation costs assumed by Buyer in the transfer of the Assets hereunder, including without limitation, plugging and abandonment of Wells. Seller’s responsibility for remediation under this Section 8.2 shall be limited to a standard appropriate for the use of an Asset for oil and gas activities and in accordance with all applicable laws. |
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located on or included in the Assets may contain NORM and other wastes or hazardous substances/materials; and NORM containing material and other wastes or hazardous substances/materials may have been buried, come in contact with the soil or otherwise been disposed of on or around the Assets. Special procedures may be required for the remediation, removal, transportation or disposal of wastes, asbestos, hazardous substances/materials, including hydrogen sulfide gas and NORM from the Assets. From and after the Closing, Buyer shall assume responsibility for the control, storage, handling, transporting and disposing of or discharge of all materials, substances and wastes from the Assets (including produced water, hydrogen sulfide gas, drilling fluids, NORM and other wastes), whether present before or after the Effective Time, in a safe and prudent manner and in accordance with all applicable Environmental Laws (as defined below). |
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ARTICLE 10
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10.1 |
Seller’s Conditions to Closing - The obligations of Seller at the Closing are subject to the satisfaction at or prior to the Closing, or waiver in writing by Seller, of the following conditions: |
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(c) |
All material consents and approvals required of Governmental Authorities in order to sell and transfer the Assets to Buyer and otherwise close and consummate the transaction contemplated herein, except consents and approvals of assignments by Governmental Authorities that are customarily obtained after Closing, shall have been received or waived in writing, or the necessary waiting period shall have expired, or early termination of the waiting period shall have been granted; provided that Seller shall not be responsible for any repair or remediation costs to any wells set forth on Schedule 5.19 that fail to pass a mechanical integrity test or other inspection by the Oklahoma Corporation Commission. |
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(d) |
Buyer shall have provided Seller evidence satisfactory to Seller that Buyer, as of Closing (i) is qualified to do business and to own and operate the Assets in all jurisdictions in which the Assets are located and (ii) has posted all bonds and obtained all insurance required by any Governmental Authority or other body to own and operate the Assets or by any applicable operating agreement. |
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(e) |
The aggregate adjustments to the Base Purchase Price attributable to Title Defects, Environmental Defects, Open Defects and Casualty Defects shall not have exceeded the Termination Threshold. |
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(f) |
Buyer shall have performed its obligations set forth in Section 10.5 . |
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(g) |
Seller shall have executed the Closing Settlement Statement defined under Section 10.3 . |
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10.2 |
Buyer’s Conditions to Closing - The obligations of Buyer at the Closing are subject to the satisfaction at or prior to the Closing, or waiver in writing by Buyer, of the following conditions: |
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|
(c) |
All material consents and approvals required of Governmental Authorities in order to sell and transfer the Assets to Buyer and otherwise close and consummate the transaction contemplated herein, except consents and approvals of assignments by Governmental Authorities that are customarily obtained after Closing, shall have been received or waived in writing, or the necessary waiting period shall have expired, or early termination of the waiting period shall have been granted; provided that Seller shall not be responsible for any repair or remediation costs to any wells set forth on Schedule 5.19 that fail to pass a mechanical integrity test or other inspection by the Oklahoma Corporation Commission. |
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(d) |
The aggregate adjustments to the Base Purchase Price attributable to Title Defects, Environmental Defects, Open Defects and Casualty Defects shall not have exceeded the Termination Threshold. |
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(e) |
Seller shall have performed its obligations set forth in Section 10.5 . |
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(f) |
Buyer shall have executed the Closing Settlement Statement defined under Section 10.3 . |
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10.5.3 |
Payment - Buyer shall deliver to an account designated in writing by Seller by wire transfer of same day funds the amount as set forth on the Closing Settlement Statement. |
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10.5.4 |
Additional Documents – Buyer shall (i) furnish to Seller such evidence (including evidence of satisfaction of all applicable bonding or insurance requirements) as Seller may require demonstrating that Buyer’s designated affiliate is qualified with the applicable Governmental Authorities or pursuant to any operating agreement to succeed Seller as the owners and, where applicable, the operator of the Assets, (ii) with respect to Assets operated by Seller where Buyer’s designated affiliate is to succeed Seller as operator, have such designated affiliate execute and deliver to Seller appropriate evidence reflecting change of operator as required by applicable Governmental Authorities, and (iii) execute and deliver to Seller such forms as Seller may reasonably request for filing with applicable Governmental Authorities to reflect Buyer’s designated affiliate’s assumption of plugging and abandonment liabilities with respect to all of the Assets. |
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10.5.5 |
Possession – Seller shall (subject to the terms of any applicable operating agreements and to the other provisions hereof) deliver to Buyer possession of the Assets to be conveyed at the Closing. |
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10.5.6 |
Letters-in-Lieu - Seller shall prepare and Seller and Buyer shall execute and deliver to Buyer the Letters-in-Lieu of Transfer Orders provided for in Section 13.3 . |
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10.5.7 |
Release of Mortgages, Deeds of Trusts, Liens, Encumbrances and Financing Statements - Seller shall deliver to Buyer duly executed releases of any mortgages, deeds of trust, liens, encumbrances and financing statements, if any, placed by Seller upon and encumbering Seller’s interest in the Assets, other than Permitted Encumbrances. |
35
Seller and Buyer agree to the following post-Closing obligations:
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against Seller with respect to the transaction covered herein shall be paid by Buyer or, if paid by Seller, Buyer shall promptly reimburse Seller therefor. Any documentary stamp tax which may be due shall be paid by Buyer. |
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Settlement Statement, the Base Purchase Price shall be adjusted, upward or downward as appropriate, to reflect the value of the difference between the aggregate net volume of overproduction or underproduction associated with the Assets set forth on Schedule 13.4 and the aggregate net volume of overproduction or underproduction associated with the Assets as of the Effective Time (the “ Assumed Imbalances ”). The value of said difference between the aggregate net volume (less royalties) of overproduction or underproduction, as applicable, shall be the product obtained by multiplying $ 3 .00 by the volume of such difference in MCFs. Buyer shall be solely responsible for any liability and solely entitled to any benefit from such production imbalances relating to the Assets, whether occurring on, before or after the Effective Time. |
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14.5 |
Seller Credit Obligations - The Parties understand that none of the bonds, letters of credit, guarantees and insurance, if any, posted or owned by Seller with any |
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Governmental Authority or third party and relating to the Assets (“ Seller Credit Obligations ”) are to be transferred to Buyer. On or before the Closing Date, Buyer shall obtain, or cause to be obtained in the name of Buyer, replacements for such Seller Credit Obligations. If any such Seller Credit Obligation remains outstanding as of the Closing Date, Buyer shall indemnify each member of the Seller Group and hold them harmless against any Losses that the Seller Group may incur under any such Seller Credit Obligations from and after the Effective Date. |
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Agreement, the provisions of this Section 14.6 are not intended to and shall not create or confer any third-party beneficiary rights respecting any Available Employee or New Employee. |
Each Seller and Buyer, respectively, shall have the right, prior to Closing, to elect to effect a tax-deferred exchange under Internal Revenue Code Section 1031 (a “ Tax Deferred Exchange ”) for the Assets at any time prior to Closing. If such Party elects to effect a Tax-Deferred Exchange, the other Party agrees to execute escrow instructions, documents, agreements or instruments to effect the exchange; provided , however , that the other Party shall incur no additional costs, expenses, fees or liabilities as a result of or connected with the exchange. Each Seller and Buyer, as the case may be, may assign any of its rights and delegate performance of any of its duties under this Agreement in whole or in part to a third party in order to effect such an exchange; provided , however , that each such Seller and/or Buyer shall remain responsible to the other Party for the full and prompt performance of its respective delegated duties. The electing Party shall indemnify and hold the other Party and its affiliates harmless from and against all claims, expenses (including reasonable attorneys’ fees), loss and liability resulting from its participation in any exchange undertaken pursuant to this Article 15 pursuant to the request of the electing Party.
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OR IN PART, TO THE STRICT LIABILITY OR NEGLIGENCE OF SELLER GROUP, BUYER OR THIRD PARTIES, WHETHER SUCH NEGLIGENCE IS ACTIVE OR PASSIVE, JOINT, CONCURRENT OR SOLE (collectively, the “ Assumed Obligations ”). The Assumed Obligations include, without limitation, the payment and/or performance of all taxes, leasehold and equipment rentals and release payments, royalties, excess royalties, in-lieu royalties, overriding royalty interests, production payments, net profit obligat ions, carried working interests and any other matters with which the Assets may be burdened, insofar as the same are attributable to the periods before, on or after the Effective Time. Subject to the Seller’s indemnification provisions of Section 16.4 : |
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(i) |
THE ASSUMED OBLIGATIONS SHALL INCLUDE, AND BUYER, FROM AND AFTER THE CLOSING ACCEPTS SOLE RESPONSIBILITY FOR AND AGREES TO PAY, ALL COSTS AND EXPENSES INCURRED FROM AND AFTER THE EFFECTIVE TIME AND ASSOCIATED WITH PLUGGING AND ABANDONMENT OF ALL WELLS, DECOMMISSIONING OF ALL FACILITIES AND PLATFORMS, AND CLEARING AND RESTORATION OF ALL SITES, IN EACH CASE INCLUDED IN, OR ASSOCIATED WITH, THE ASSETS, AND BUYER MAY NOT CLAIM THE FACT THAT PLUGGING AND ABANDONMENT, DECOMMISSIONING, SITE CLEARANCE OR RESTORATION OPERATIONS ARE NOT COMPLETE OR THAT ADDITIONAL COSTS AND EXPENSES ARE REQUIRED TO COMPLETE ANY SUCH OPERATIONS AS A BREACH OF SELLER’S REPRESENTATIONS OR WARRANTIES MADE HEREUNDER OR THE BASIS FOR ANY OTHER REDRESS AGAINST SELLER. |
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LIABILITIES AROSE PRIOR TO, ON, OR AFTER THE EFFECTIVE TIME. BUYER EXPRESSLY AGREES TO ASSUME THE RISK THAT THE ASSETS MAY CONTAIN WASTE MATERIALS, INCLUDING, WITHOUT LIMITATION, NORM, HAZARDOUS SUBSTANCES, HAZARDOUS WASTES, HAZARDOUS MATERIALS, SOLID WASTES, OR OTHER POLLUTANTS. |
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(i) |
Buyer’s breach of any of its representations and warranties in this Agreement; |
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(ii) |
Buyer’s breach of any of its covenants in and under this Agreement; and |
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(iii) |
the Assumed Obligations. |
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(ii) |
Seller’s breach of any of its covenants in and under this Agreement; |
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|
(iv) |
subject to the provisions of Article 8 , any Claims for damage to or property owned by a third party or for personal injury, illness, bodily injury, or death of any person arising before the Effective Time; |
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(v) |
except as otherwise provided in this Agreement, any other Claims arising directly or indirectly from, or incident to, the use, occupation, operation (including, but not limited to, royalty and accounting Claims) or maintenance of any of the Assets, and arising or accruing prior to the Effective Time; |
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(vii) |
claims related to an environmental matter arising prior to the Effective Date not known by Buyer prior to the end of the Due Diligence Period. |
REGARDLESS OF WHETHER ANY OF SUCH CLAIMS MAY BE ATTRIBUTABLE, IN WHOLE OR IN PART, TO THE STRICT LIABILITY OR negligence of BUYER GROUP, SELLER or third parties, whether such negligence is active or passive, joint, concurrent or sole; provided , however , that seller’s obligation to indemnify buyer pursuant to SECTIONS 16.4(i) THROUGH (vii) above shall apply only for a period of SIX (6) MONTHS following the closing date, AND tHEREAFTER, BUYER SHALL, PURSUANT TO SECTIONs 16.1 and 16.3 , ASSUME RESPONSIBILITY FOR, AND SHALL ALSO AGREE TO PROTECT, DEFEND, INDEMNIFY AND HOLD SELLER GROUP HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS ARISING IN FAVOR OF ANY PERSON FOR PERSONAL INJURY, ILLNESS, BODILY INJURY, DEATH, DAMAGE TO PROPERTY OR FOR ANY OTHER CLAIMS
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ARISING DIRECTLY OR INDIRECTLY FROM, OR INCIDENT TO, THE USE, OCCUPATION, OPERATION OR MAINTENANCE OF ANY OF THE ASSETS OR ANY OTHER CLAIMS WHICH WOULD OTHERWISE BE SUBJECT TO SELLER’S GENERAL INDEMNITY UNDER SECTIONS 16.4(i) THROUGH (vii) .
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Party, to defend the Indemnified Party against any such Losses. In the event that the Indemnifying Party notifies the Indemnified Party within the Notice Period that it desires to defend the Indemnified Party against such Losses, the Indemnifying Party shall have the right to defend all appropriate proceedings with counsel of its own choosing. If the Indemnified Party desires to participate in, but not control, any such defense or settlement it may do so at its sole cost and expense. |
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16.7.4 |
Cooperation - If requested by the Indemnifying Party, the Indemnified Party agrees to cooperate with the Indemnifying Party and its counsel in contesting any Losses that the Indemnifying Party elects to contest or, if appropriate and related to the claim in question, in making any counterclaims against the third party asserting such Losses, or any cross-complaint against any third party (other than a Seller Indemnified Party, if the Indemnified Party is a Seller Indemnified Party; and other than a Buyer Indemnified Party, if the Indemnified Party is a Buyer Indemnified Party). Such cooperation shall include the retention and provision to the Indemnifying Party of all records and other information that are reasonably relevant to the losses at issue. |
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16.7.5 |
Settlement - No third party claim that is the subject of indemnification hereunder may be settled or otherwise compromised without the prior written consent of the Indemnifying Party. No such claim may be settled or compromised by the Indemnifying Party without the prior written consent of the Indemnified Party unless such settlement or compromise (i) entails a full and unconditional release of the Indemnified Party (and any other members of the Indemnified Party’s group, i.e., all Seller Indemnified Parties or all Buyer Indemnified Parties) without any admission or finding of fault or liability and (ii) does not impose on the Indemnified Party any material non-financial obligation or any financial obligation that is not fully paid by the Indemnifying Party. |
If prior to Closing any of the Assets are substantially damaged or destroyed by fire or other casualty (“ Casualty Defect ”), Seller shall notify Buyer promptly after Seller learns of such event. Seller shall have the right, but not the obligation, to cure any such Casualty Defect by repairing such damage or, in the case of Equipment, replacing the damaged Equipment with equivalent items, no later than the Closing, insofar as the same are done to Buyer’s reasonable satisfaction. Subject to Section 7.6 , if any Casualty Defect exists at Closing, at Seller’s option, Buyer shall proceed to purchase the damaged Assets, and the Base Purchase Price shall be reduced by the aggregate reduction in value of all affected Assets on account of such Casualty Defect. In the event the parties cannot agree on the value, the dispute shall be resolved in accordance with the dispute resolution provisions set forth in Section 20.3 . Notwithstanding any of the preceding provisions of
48
this Article 17 , all adjustments applicable to Casualty Defects shall be made prior to Closing, and Closing shall be extended until resolution of any disputes relating to the Casualty Defects; provided , however , that if adjustments for alleged Title Defects, Environmental Defects, Casualty Defects and Open Defects do not, in the aggregate, exceed the Termination Threshold, then Closing shall occur as to the other Assets that are not subject to the dispute (with the portion of the Assets subject to the dispute being excluded, and the Base Purchase Price reduced for the entire Allocated Values thereof) and Closing shall subsequently occur as to the Assets made the subject of the dispute within thirty (30) days following the final resolution of the dispute. Notwithstanding anything to the contrary contained in this Article 17 , Seller shall be entitled to retain all insurance proceeds, if any, and claims against other parties relating to any such Casualty Defect. For purposes of this provision, normal wear and tear shall not be considered a Casualty Defect.
All communications between Buyer and Seller required or permitted under this Agreement shall be in writing and addressed as set forth below. Any communication or delivery hereunder must be given by personal delivery (if signed for receipt), by certified or registered United States mail (postage prepaid, return receipt requested), by a nationally recognized overnight delivery service for next day delivery, transmitted via electronic mail or by facsimile transmission shall be deemed to have been made and the receiving Party charged with notice, when received except that if received after 5:00 p.m. (in the recipient’s time zone) on a Business Day or if received on a day that is not a Business Day, such notice, request or communication will not be effective until the next succeeding Business Day. All notices shall be addressed as follows:
BUYER |
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SELLER |
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EXPONENT ENERGY III LLC |
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MID-CON ENERGY PROPERTIES, LLC
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1560 East 21 st Street, Suite 215 |
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2431 E. 61 st Street, Suite 850 |
Tulsa, Oklahoma 74114 |
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Tulsa, Oklahoma 74136 |
Attention: Chris Bird – Managing Member |
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Attention: Vice President – General Counsel |
Phone: 918-270-9927 |
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Phone: 918-743-7575 |
Fax: N/A |
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Fax: 918-743-8859 |
Email: chris@exponent-energy.com |
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Email: cmclawhorn@midcon-energy.com |
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19.1 |
Termination - This Agreement and the transactions contemplated hereby may be terminated at any time prior to the Closing: |
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(a) |
by the mutual written agreement of Buyer and Seller; |
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(c) |
by written notice from either Buyer or Seller if the aggregate sum of (i) the Title Defect amounts for all Title Defects timely and properly asserted pursuant to Article 7 , (ii) the Environmental Defect amounts for all Environmental Defects timely and properly asserted pursuant to Article 8 , and (ii) the Casualty Defect amounts pursuant to Article 17 , exceed the Termination Threshold. |
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(a) |
a willful or intentional breach of this Agreement by Seller or because Buyer’s conditions to Closing are not satisfied (and, as a result, Buyer elects to terminate this Agreement under Section 19.1(b) above), then Buyer shall be entitled to the immediate return of the Deposit and shall also be entitled to pursue all remedies available at law for damages or other relief, in equity or otherwise; or |
50
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payment of the Purchase Price or other payment ordered by the arbitration panel or court. |
|
(a) |
by mutual agreement of Buyer and Seller; or |
|
(b) |
failing such agreement, within sixty (60) days of the request for arbitration, each Party shall appoint one arbitrator, and the third arbitrator shall be appointed by the other two arbitrators, or, if they cannot agree, by a Judge of the United States District Court, Northern District of Oklahoma, Tenth Circuit. |
In the event of the failure of refusal of the Parties to appoint the arbitrator(s) within one hundred twenty (120) days of the request for arbitration, the arbitrator remaining to be named shall be selected in accordance with the Rules of the American Arbitration Association. The arbitration shall be conducted in accordance with reasonable rules established by the arbitrators. Any award by the arbitrator shall be final, binding and non-appealable, and judgment may be entered thereon in any court of competent jurisdiction. The fees charged by the arbitrators for the arbitration shall be paid one-half by Buyer and one-half by Seller.
51
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Agreement. Furthermore, any additional information obtained as a result of Buyer’s access to the Assets which does not specifically relate to the Assets shall continue to be treated as confidential for a period of two (2) years following the Execution Date and shall not be disclosed by the Buyer without the prior written consent of the Seller. The above restrictions on disclosure and use of information obtained pursuant to this Agreement shall not apply to information to the extent it: |
|
(a) |
is or becomes publicly available through no act or omission of the Buyer or any of its consultants or advisors; |
|
(b) |
is subsequently obtained lawfully from a third party, where the Buyer has made reasonable efforts to insure that such third party is not a party to or bound by any confidentiality agreement with the Seller; or |
|
(c) |
is already in the Buyer’s possession at the time of disclosure, without restriction on disclosure. |
If the Buyer employs consultants, advisors or agents to assist in its review of the Assets, Buyer shall be responsible to Seller for ensuring that such consultants, advisors and agents comply with the restrictions on the use and disclosure of information set forth in this Section 20.4 .
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20.5 |
Choice of Law - THIS AGREEMENT AND ITS PERFORMANCE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF OKLAHOMA. |
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20.6 |
Assignment - The rights and obligations under this Agreement may not be assigned by any Party without the prior written consent of the other Party. |
52
53
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hereby, including brokers’ fees. Buyer shall be responsible for the cost of all fees for the recording of the Conveyances relating to the Assets. All other costs shall be borne by the Party incurring them. |
54
IN WITNESS WHEREOF, the Parties have executed this Agreement on the Execution Date.
“SELLER” |
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“BUYER” |
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MID-CON ENERGY PROPERTIES, LLC |
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EXPONENT ENERGY III, LLC |
By: Mid-Con Energy Partners, LP Its Sole Member By: Mid-Con Energy GP, LLC Its General Partner |
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By: /s/Jeffrey R Olmstead |
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By: /s/Chris Bird |
Name: Jeffrey R Olmstead |
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Name: Chris Bird |
Title:President & General Counsel |
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Title: Managing Member |
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[Signature Page to Purchase and Sale Agreement]
Exhibit “A”
Schedule of Leases
Property |
Lessor: |
Lessee: |
Dated: |
Recorded |
Description: |
County, State |
Pinkerton |
Orval Forrest Fitzsimmons |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4359, Page 70 |
SE/4 NE/4 and E/2 SW/4 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Chester Loyd Fitzsimmons |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4359, Page 76 |
SE/4 NE/4 and E/2 SW/4 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Maudean Pierce Harden |
Arbuckle Enterprises, Inc. |
29-Sep-05 |
Book 4400, Page 279 |
SE/4 NE/4 and E/2 SW/4 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Darlene Pierce now Watashe |
Arbuckle Enterprises, Inc. |
29-Sep-05 |
Book 4400, Page 299 |
SE/4 NE/4 and E/2 SW/4 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Frances Hauser |
Arbuckle Enterprises, Inc. |
29-Sep-05 |
Book 4400, Page 283 |
SE/4 NE/4 and E/2 SW/4 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Joe T. Packnett and Marguerite Packnett, H/W |
Arbuckle Enterprises, Inc. |
5-Dec-05 |
Book 4405, Page 207 |
SE/4 NE/4 and E/2 SW/4 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Carole Pierce |
Arbuckle Enterprises, Inc. |
29-Sep-05 |
Book 4400, Page 287 |
SE/4 NE/4 and E/2 SW/4 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Randye Lee Pierce |
Arbuckle Enterprises, Inc. |
29-Sep-05 |
Book 4400, Page 295 |
SE/4 NE/4 and E/2 SW/4 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Rhonda Jo Pierce |
Arbuckle Enterprises, Inc. |
29-Sep-05 |
Book 4400, Page 291 |
SE/4 NE/4 and E/2 SW/4 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Carl Theodore Bolander, Jr. |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4364, Page 219 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Noel E. Bolander |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4364, Page 227 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Allene Holman Shoup aka Allene Shoup aka Allene Holman |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4383, Page 224 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Louis A. Piel, Jr. |
Arbuckle Enterprises, Inc. |
1-Jan-10 |
Book 5107, Page 5 |
NW/4 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Vicky Lynn Plangman |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4378, Page 62 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Susan Margo Hertel aka Margo Laurence Hertel |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4368, Page 80 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
William Lee Perego |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4364, Page 221 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
W. N. Bentsen aka William Neil Bentsen |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4383, Page 230 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Richard Garner |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4383, Page 226 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Ann Guest Carter |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4386, Page 16 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Madeline Guest Brown |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4383, Page 222 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
|
Pinkerton |
Steven Dale Guest |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4368, Page 78 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Cathy Guest Meietschlager |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4378, Page 60 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Karen Guest Draughon |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4383, Page 228 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Anna Guest Neill |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4378, Page 58 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Anna Beth Brown Guest |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4383, Page 220 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Emma Adler |
Arbuckle Enterprises, Inc. |
30-Aug-05 |
Book 4383, Page 247 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Johnie Lee Guest |
Arbuckle Enterprises, Inc. |
17-Jul-08 |
Book 4894, Page 263 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Carolyn Y. Holman |
Arbuckle Enterprises, Inc. |
15-Jul-08 |
Book 4873, Page 72 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Claire Beers |
Arbuckle Enterprises, Inc. |
4-Feb-09 |
Book 4961, Page 288 |
N/2 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Charles Alan Beers |
Arbuckle Enterprises, Inc. |
18-Aug-09 |
Book 5045, Page 56 |
NW/4 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
Marla Sue Beers Lowery |
Arbuckle Enterprises, Inc. |
18-Aug-09 |
Book 5046, Page 283 |
NW/4 NE/4 of Section 10-5S-2W |
Carter County, OK |
Pinkerton |
James Russell Beers |
Arbuckle Enterprises, Inc. |
18-Aug-09 |
Book 5045, Page 59 |
NW/4 NE/4 of Section 10-5S-2W |
Carter County, OK |
All Interest Acquired by Arbuckle Enterpirises, Inc. through OCC Pooling Order 559583, dated September 16, 2008, covering the E/2 NE/4 of Section 10-5S-2W, Carter County, OK |
|
|
All Interest acquired through OCC Pooling Order 571852, dated November 30, 2009, covering the W/2 NE/4 of of Section 10-5S-2W, Carter County, OK |
|
|
Lessor: |
Lessee: |
Date: |
Recorded: |
Description: |
County, State: |
|
SEHU |
Joan Thomas, et vir |
Kaiser-Francis Oil Company |
1-Jul-85 |
Book 1024, Page 280 |
E/2 SE/4 of Sec 10-5S-2W |
Carter County, Oklahoma |
SEHU |
W. R. Goddard, et al |
Kaiser-Francis Oil Company |
5-Jun-85 |
Book 1193, Page 38 |
E/2 SE/4 of Sec 10-5S-2W |
Carter County, Oklahoma |
SEHU |
Diana H. Blackburn |
Kaiser-Francis Oil Company |
5-Jun-85 |
Book 1193, Page 40 |
E/2 SE/4 of Sec 10-5S-2W |
Carter County, Oklahoma |
SEHU |
Edward B. Linthicum, Trustee u/w Maybelle Goddard Linthicum |
Kaiser-Francis Oil Company |
5-Jun-85 |
Book 1193, Page 42 |
E/2 SE/4 of Sec 10-5S-2W |
Carter County, Oklahoma |
SEHU |
Barbara Bogy Thomas, et al |
Kaiser-Francis Oil Company |
5-Jun-85 |
Book 1193, Page 44 |
E/2 SE/4 of Sec 10-5S-2W |
Carter County, Oklahoma |
SEHU |
Goddard Investment Company |
Kaiser-Francis Oil Company |
5-Jun-85 |
Book 1193, Page 46 |
E/2 SE/4 of Sec 10-5S-2W |
Carter County, Oklahoma |
SEHU |
Lucille Akers Wheeler |
R. D. Williams |
18-Oct-85 |
Book 1211, Page 125 |
S/2 S/2 SW/4 of Sec 11-5S-2W |
Carter County, Oklahoma |
SEHU |
Billie Ruth McCharen |
R. D. Williams |
18-Oct-85 |
Book 1211, Page 129 |
S/2 S/2 SW/4 of Sec 11-5S-2W |
Carter County, Oklahoma |
SEHU |
A. D. Akers |
R. D. Williams |
18-Oct-85 |
Book 1211, Page 131 |
S/2 S/2 SW/4 of Sec 11-5S-2W |
Carter County, Oklahoma |
SEHU |
Jill Marguerite Thompson |
G. W. Wallace |
18-Oct-85 |
Book 1211, Page 77 |
S/2 SW/4 SW/4; NE/4 SW/4 SW/4; SE/4 NW/4 SW/4 of Sec 11-5S-2W |
Carter County, Oklahoma |
SEHU |
Etta L. Morrell |
R. D. Williams |
18-Oct-85 |
Book 1211, Page 127 |
S/2 SW/4 SW/4 of Sec 11-5S-2W |
Carter County, Oklahoma |
SEHU |
Josephine Packnett Pierce, AKA Mrs. Leroy Pierce |
R. D. Williams |
28-Oct-85 |
Book 1211, Page 123 |
N/2 NW/4 SW/4; SW/4 NW/4 SW/4; NW/4 SW/4 SW/4 of Sec 11-5S-2W |
Carter County, Oklahoma |
SEHU |
The First National Bank and Trust Company of Ardmore, Trustee for |
T. C. Craighead |
19-Nov-82 |
Book 1020, Page 222 |
Insofar as lease covers NE/4 NE/4 NW/4 of Sec 15-5S-2W |
Carter County, Oklahoma |
SEHU |
Max Greenberg |
Nondorf Oil & Gas, Inc. |
23-Nov-87 |
Book 1055, Page 588 |
Insofar as lease covers NE/4 NE/4 NW/4 of Sec 15-5S-2W |
Carter County, Oklahoma |
SEHU |
Rufus Merrill Laurence, Jr. |
Nondorf Oil & Gas, Inc. |
14-Dec-83 |
Book 1058, Page 789 |
Insofar as lease covers NE/4 NE/4 NW/4 of Sec 15-5S-2W |
Carter County, Oklahoma |
SEHU |
Virginia Lee Laurence |
Nondorf Oil & Gas, Inc. |
9-Dec-83 |
Book 1059, Page 118 |
Insofar as lease covers NE/4 NE/4 NW/4 of Sec 15-5S-2W |
Carter County, Oklahoma |
SEHU |
Mamie Lee Laurence, Trustee of the R. M. Laurence Family Trust dated |
Nondorf Oil & Gas, Inc. |
9-Dec-84 |
Book 1063, Page 648 |
Insofar as lease covers NE/4 NE/4 NW/4 of Sec 15-5S-2W |
Carter County, Oklahoma |
SEHU |
Milford Corporation |
Nondorf Oil & Gas, Inc. |
6-Feb-84 |
Book 1059, Page 116 |
Insofar as lease covers NE/4 NE/4 NW/4 of Sec 15-5S-2W |
Carter County, Oklahoma |
SEHU |
James C. & Janice Johnson |
Arbuckle Enterprises, Inc. |
9-Oct-96 |
Book 3065, Page 10 |
SE/4 NE/4 NW/4 of Sec 15-5S-2W |
Carter County, Oklahoma |
SEHU |
Jackie Y. Marutzky |
Arbuckle Enterprises, Inc. |
25-Mar-96 |
Book 3065, Page 20 |
NE/4 SE/4 of Sec 15-5S-2W |
Carter County, Oklahoma |
SEHU |
Don Marutzky |
Arbuckle Enterprises, Inc. |
15-Jun-96 |
Book 3065, Page 22 |
NE/4 SE/4 of Sec 15-5S-2W |
Carter County, Oklahoma |
SEHU |
Karen Johnson, Trustee |
Arbuckle Enterprises, Inc. |
18-Apr-96 |
Book 3065, Page 18 |
NE/4 SE/4 of Sec 15-5S-2W |
Carter County, Oklahoma |
SEHU |
Harry L. Bickford |
Arbuckle Enterprises, Inc. |
14-Mar-96 |
Book 3065, Page 16 |
NE/4 SE/4 of Sec 15-5S-2W |
Carter County, Oklahoma |
SEHU |
Robert C. Longest |
Arbuckle Enterprises, Inc. |
14-Mar-96 |
Book 3065, Page 14 |
NE/4 SE/4 of Sec 15-5S-2W |
Carter County, Oklahoma |
SEHU |
Norman Highfill |
Arbuckle Enterprises, Inc. |
14-Mar-96 |
Book 3065, Page 12 |
NE/4 SE/4 of Sec 15-5S-2W |
Carter County, Oklahoma |
SEHU |
Panhandle Royalty Co. |
Arbuckle Enterprises, Inc. |
5-Nov-96 |
Book 3153, Page 284 |
NE/4 SE/4 of Sec 15-5S-2W |
Carter County, Oklahoma |
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It is the intent for this instrument to assign and include all of Assignors right, title and interest in and to all wells and interests in the E/2 SW/4 and SE/4 of Section 10-5S-2W; W/2 SW/4 of Section 11-5S-2W; W/2 of Section 14-5S-2W; NE/4, NE/4 SE/4 and E/2 NE/4 NW/4 of Section 15-5S-2W, Carter County, Oklahoma, whether such interests and/or wells are properly described herein or not, including but not limited to the following: |
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SE Hewitt Deese Unit established under Oklahoma Corporation Commission Order #408098, Cause CD 960002895, covering the East Half Southwest Quarter(E/2 SW/4) and Southeast Quarter (SE/4) of Section 10, Township 5 South, Range 2 West; West Half Southwest Quarter (W/2 SW/4) of Section 11, Township 5 South, Range 2 West; West Half (W/2) of Section 14, Township 5 South, Range 2 West and Northeast Quarter (NE/4), Northeast Quarter Southeast Quarter (NE/4 SE/4) and East Half Northeast Quarter Northwest Quarter (E/2 NE/4 NW/4) of Section 15, Township 5 South, Range 2 West in Carter County, Oklahoma, containing 860 acres, more or less. |
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Property |
Lessor: |
Lessee: |
Dated: |
Recorded: |
Description: |
County, State |
TFDU |
Bridget Ann Sullivan Wicklander & Ray Wicklander, wife & husband |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 942, Page 494 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Byron H. Schaff |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 942, Page 461 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Charles Dudley & Edie Dudley |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 941, Page 252 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Charles Franklin Sullivan |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 942, Page 482 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Chase F. Schaff |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 942, Page 479 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
F. M. Dudley & Jessie R. Dudley |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 941, Page 261 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Ferrel Sullivan |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 942, Page 488 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Frances Dunbar & Robert O. Dunbar |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 943, Page 489 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
Jane Sullivan Elam & Joe Elam |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 942, Page 491 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
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TFDU |
Jerome Sullivan, Jr. & Marilynn Sullivan |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 941, Page 249 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Lawrence S. McGee, Jr. |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 942, Page 464 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Mercedes Curry & John L. Curry |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 941, Page 255 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Ms. Mary M. Boggs |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 942, Page 476 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Patricia Sullivan Gregory |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 942, Page 497 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Patrick D. Sullivan & Charlene Sullivan |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 942, Page 467 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Paul D. Sullivan, Jr. & Helen Sullivan |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 942, Page 470 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Robert A. Schaff |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 942, Page 473 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Ruth Eugenia Schmidt |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 941, Page 258 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Sonja Sullivan Adams |
Nondorf Oil & Gas, Inc. |
18-Dec-80 |
Book 942, Page 485 |
E/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Gussie Lee McGee, nee Sullivan |
R.S. Gardenhire, Jr. |
10-Nov-77 |
Book 821, Page 443 |
N/2 NW/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Frances Prickett and James Kenton Parton |
Tom R. Gray, Jr. |
6-Dec-75 |
Book 761, Page 418 |
N/2 SW/4; E/2 SE/4 SW/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Castle Royalties LLC |
RDT Properties, Inc. |
1-Dec-08 |
Book 4948, Page 295 |
SE/4 NE/4; S/2 NE/4 NE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Dunlap & Co. |
Adobe Oil & Gas Corporation |
24-Mar-82 |
Book 998, Page 551 |
SE/4 NW/4 NE/4; NE/4 SW/4 NE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Milford Corporation |
Adobe Oil & Gas Corporation |
12-Mar-82 |
Book 996, Page 820 |
SE/4 NW/4 NE/4; NE/4 SW/4 NE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
State Oil Company |
Adobe Oil & Gas Corporation |
24-Mar-82 |
Book 998, Page 549 |
SE/4 NW/4 NE/4; NE/4 SW/4 NE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Edna McCarty, now Moore |
R.S. Gardenhire, Jr. |
15-Jun-78 |
Book 844, Page 147 |
SE/4 NW/4 NE/4; S/2 NE/4 NE/4; NE/4 SW/4 NE/4; SE/4 NE/4 of Section 36, T5 South, R2 West |
Carter County, OK |
First National Bank and Trust Company of Ardmore, as Trustee of the Virginia Greenburg Trust |
T. C. Craighead |
11-Aug-78 |
Book 846, Page 407 |
SE/4 NW/4 NE/4; S/2 NE/4 NE/4; NE/4 SW/4 NE/4; SE/4 NE/4 of Section 36, T5 South, R2 West |
Carter County, OK |
|
TFDU |
James Hefley and Josephine Hefley |
James L. Kirk |
22-Jun-78 |
Book 842, Page 111 |
SE/4 NW/4 NE/4; S/2 NE/4 NE/4; NE/4 SW/4 NE/4; SE/4 NE/4 of Section 36, T5 South, R2 West |
Carter County, OK |
TFDU |
M.C.B.A. Van Eaton Partnership |
Samedan Oil Corporation |
10-Jan-80 |
Book 898, Page 277 |
SE/4 NW/4 NE/4; S/2 NE/4 NE/4; NE/4 SW/4 NE/4; SE/4 NE/4 of Section 36, T5 South, R2 West |
Carter County, OK |
TFDU |
Margaret Ann Short |
R.S. Gardenhire, Jr. |
15-Jun-78 |
Book 840, Page 575 |
SE/4 NW/4 NE/4; S/2 NE/4 NE/4; NE/4 SW/4 NE/4; SE/4 NE/4 of Section 36, T5 South, R2 West |
Carter County, OK |
TFDU |
Max Greenberg |
R.S. Gardenhire, Jr. |
12-Jun-78 |
Book 840, Page 180 |
SE/4 NW/4 NE/4; S/2 NE/4 NE/4; NE/4 SW/4 NE/4; SE/4 NE/4 of Section 36, T5 South, R2 West |
Carter County, OK |
TFDU |
Milford Corporation |
Taft Milford |
26-Jan-79 |
Book 860, Page 475 |
SE/4 NW/4 NE/4; S/2 NE/4 NE/4; NE/4 SW/4 NE/4; SE/4 NE/4 of Section 36, T5 South, R2 West |
Carter County, OK |
TFDU |
Robert S. Gardenhire, Jr. |
Harris S. Smith |
20-Jun-78 |
Book 840, Page 563 |
SE/4 NW/4 NE/4; S/2 NE/4 NE/4; NE/4 SW/4 NE/4; SE/4 NE/4 of Section 36, T5 South, R2 West |
Carter County, OK |
TFDU |
Ruth Spring |
R.S. Gardenhire, Jr. |
13-Jun-78 |
Book 840, Page 571 |
SE/4 NW/4 NE/4; S/2 NE/4 NE/4; NE/4 SW/4 NE/4; SE/4 NE/4 of Section 36, T5 South, R2 West |
Carter County, OK |
TFDU |
Walter H. Gant |
R.S. Gardenhire, Jr. |
15-Jun-78 |
Book 840, Page 573 |
SE/4 NW/4 NE/4; S/2 NE/4 NE/4; NE/4 SW/4 NE/4; SE/4 NE/4 of Section 36, T5 South, R2 West |
Carter County, OK |
TFDU |
Bridget Sullivan Wicklander |
RDT Properties, Inc. |
10-Jul-08 |
Book 4883, Page 221 |
SE/4 NW/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Jane Sullivan Elam |
RDT Properties, Inc. |
10-Jul-08 |
Book 4875, Page 66 |
SE/4 NW/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
B.W. James |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
26-Jan-78 |
Book 827, Page 209 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Beeler Turner |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
31-Jan-78 |
Book 827, Page 105 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
Bela L. James |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
31-Jan-78 |
Book 827, Page 211 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
|
TFDU |
Buena V. Franklin |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
31-Jan-78 |
Book 827, Page 213 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
C. M. Fleetwood |
R. S. Gardenhire Jr. |
23-Jan-79 |
Book 861, Page 122 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Col. Curtis A. James |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
7-Feb-78 |
Book 830, Page 224 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Curtiss Williams, individually and as AIF for Virgie Kirkpatrick; J.R. Williams; Opal Reeves; Edith Carruth; Maxine Wilkerson; Joe R. Todd; Harry Wayne Todd; Darla Jean Todd, now Stein |
Tom R. Gray, Jr. |
19-Dec-75 |
Book 761, Page 422 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Eudora Adelle Whitaker |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
7-Feb-78 |
Book 828, Page 40 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Francis M. James, widow |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
23-Jan-78 |
Book 826, Page 130 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Frank G. Weimer |
R. S. Gardenhire Jr. |
25-Jan-79 |
Book 861, Page 216 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Fred R. Hirzel Jr. |
R. S. Gardenhire Jr. |
23-Jan-79 |
Book 861, Page 124 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Howard S. and Dorothy E. Smith, husband and wife |
R. S. Gardenhire Jr. |
23-Jan-79 |
Book 861, Page 118 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
J. S. Peerson |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976 |
23-Jun-78 |
Book 841, Page 479 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
|
TFDU |
James F. Turner |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
31-Jan-78 |
Book 827, Page 440 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
John W. Cram |
R. S. Gardenhire Jr. |
24-Jan-79 |
Book 861, Page 120 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Joyce Miller |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976 |
1-Jul-78 |
Book 841, Page 481 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Lt. Col. Gordon James |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
7-Feb-78 |
Book 828, Page 271 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Manette L. Bell and Frank S. Bell |
R. S. Gardenhire Jr. |
27-Jun-78 |
Book 842, Page 424 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Marie V. Turner, individually and Executrix of the Estate of Ray C. Turner, |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
27-Feb-78 |
Book 830, Page 313 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
McDonald Turner |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
3-Feb-78 |
Book 828, Page 569 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Mrs. Betty Bostick |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
7-Feb-78 |
Book 828, Page 571 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
Mrs. Etie Neill |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
3-Feb-78 |
Book 828, Page 38 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
|
TFDU |
Mrs. Ruth Wisdom |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
17-Feb-78 |
Book 828, Page 269 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Nell M. Fleetwood, widow; Amanda Payne Fleetwood Moore; Lelia Elizabeth Fleetwood Bixler |
R. S. Gardenhire Jr. |
23-Jan-79 |
Book 863, Page 374 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
O.C. Turner |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
31-Jan-78 |
Book 827, Page 107 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Ruby Carter |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
31-Jan-78 |
Book 827, Page 103 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Tucker Interests (A partnership composed of Elizabeth L. Tucker; Barbara F. Wilkinson; Charles Tucker Wilkinson and Bruce Warren Wilkinson) |
D.C. Fitzgerald Jr., Trustee of the FR&M Trust, dated 5-24-1976; Jerome M. Westheimer, C/O D.C. Fitzgerald Jr. |
8-Feb-78 |
Book 830, Page 311 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Willis Martin |
R. S. Gardenhire Jr. |
1-Jul-78 |
Book 842, Page 422 |
SE/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Charles Dudley |
R.S. Gardenhire, Jr. |
10-Nov-77 |
Book 821, Page 437 |
SW/4 NW/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Ruth Eugenia Schmidt, nee Dudley |
R.S. Gardenhire, Jr. |
10-Nov-77 |
Book 821, Page 435 |
SW/4 NW/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Don J. Leeman |
Nondorf Oil & Gas, Inc. |
6-Feb-82 |
Book 1000, Page 548 |
SW/4 of Section 25, Township 5 South, Range 2 West, insofar and only insofar as said lease covers the E/2 SW/4 only. |
Carter County, OK |
M. L. Leeman, Jermaine L. Dinges & Don J. Leeman |
Nondorf Oil & Gas, Inc. |
6-Feb-82 |
Book 994, Page 405 |
SW/4 of Section 25, Township 5 South, Range 2 West, insofar and only insofar as said lease covers the E/2 SW/4 only. |
Carter County, OK |
|
TFDU |
E. L. Stacy and Rose Stacy |
Tom R. Gray, Jr. |
6-Dec-75 |
Book 761, Page 420 |
SW/4 SW/4; W/2 SE/4 SW/4 of Section 36, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Bridget Sullivan Wicklander |
RDT Properties, Inc. |
10-Jul-08 |
Book 4883, Page 219 |
W/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Charles Franklin Sullivan Trust, Charles F. Sullivan Trustee |
RDT Properties, Inc. |
10-Jul-08 |
Book 4878, Page 38 |
W/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Eugenia Sullivan Richards representative of the Estate of Ferrel Sullivan |
RDT Properties, Inc. |
10-Jul-08 |
Book 4921, Page 198 |
W/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Frances Dunbar |
RDT Properties, Inc. |
23-Feb-09 |
Book 4975, Page 31 |
W/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Helen F. Sullivan Revocable Trust, Helen F. Sullivan Trustee |
RDT Properties, Inc. |
10-Jul-08 |
Book 4887, Page 238 |
W/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Jane Sullivan Elam |
RDT Properties, Inc. |
10-Jul-08 |
Book 4875, Page 70 |
W/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Jerome C. Sullivan Jr., Testamentary Trust, Michael P. Sullivan and Kent P Sullivan |
RDT Properties, Inc. |
10-Jul-08 |
Book 4887, Page 240 |
W/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Lawrence S. McGee, Jr. |
RDT Properties, Inc. |
10-Jul-08 |
Book 4875, Page 62 |
W/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Patricia Sullivan Earle |
RDT Properties, Inc. |
10-Jul-08 |
Book 4882, Page 270 |
W/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Patrick D. Sullivan |
RDT Properties, Inc. |
10-Jul-08 |
Book 4873, Page 280 |
W/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
REDS, LLC, an Oklahoma Limited Liability Company |
RDT Properties, Inc. |
10-Jul-08 |
Book 4873, Page 286 |
W/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Robert Adair Schaff Estate, A Edward Ball Executor |
RDT Properties, Inc. |
20-Jan-09 |
Book 4991, Page 180 |
W/2 NW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Bridget Sullivan Wicklander |
RDT Properties, Inc. |
10-Jul-08 |
Book 4883, Page 223 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Byron H. Schaff Jr. |
RDT Properties, Inc. |
10-Jul-08 |
Book 4867, Page 100 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Charles D. Dudley |
RDT Properties, Inc. |
10-Jul-08 |
Book 4868, Page 245 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Charles Franklin Sullivan Trust, Charles F. Sullivan Trustee |
RDT Properties, Inc. |
10-Jul-08 |
Book 4878, Page 36 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Chase F. Schaff |
RDT Properties, Inc. |
10-Jul-08 |
Book 4868, Page 191 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
Eugenia Sullivan Richards representative of the Estate of Ferrel Sullivan |
RDT Properties, Inc. |
10-Jul-08 |
Book 4921, Page 196 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
|
TFDU |
Frances Dunbar |
RDT Properties, Inc. |
23-Feb-09 |
Book 4975, Page 29 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Helen F. Sullivan Revocable Trust, Helen F. Sullivan Trustee |
RDT Properties, Inc. |
10-Jul-08 |
Book 4911, Page 183 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Jane Sullivan Elam |
RDT Properties, Inc. |
10-Jul-08 |
Book 4875, Page 68 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Jerome C. Sullivan Jr., Testamentary Trust, Michael P. Sullivan and Kent P Sullivan Trustees |
RDT Properties, Inc. |
10-Jul-08 |
Book 4911, Page 185 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Lawrence S. McGee Jr. |
RDT Properties, Inc. |
10-Jul-08 |
Book 4875, Page 64 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Mary McGee Boggs |
RDT Properties, Inc. |
10-Jul-08 |
Book 4872, Page 269 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Mercedes S. Curry Trust B, u/w Mercedes S Curry |
RDT Properties, Inc. |
10-Jul-08 |
Book 4866, Page 218 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Patricia Sullivan Earle |
RDT Properties, Inc. |
10-Jul-08 |
Book 4882, Page 272 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Patrick D. Sullivan |
RDT Properties, Inc. |
10-Jul-08 |
Book 4873, Page 282 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
REDS, LLC, an Oklahoma Limited Liability Company |
RDT Properties, Inc. |
10-Jul-08 |
Book 4873, Page 284 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Robert Adair Schaff Estate, A Edward Ball Executor |
RDT Properties, Inc. |
20-Jan-09 |
Book 5004, Page 148 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Sonja Sullivan Adams Pellow |
RDT Properties, Inc. |
10-Jul-08 |
Book 4875, Page 57 |
W/2 SE/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Don J. Leeman Revocable Trust, dated 7-1-98 |
RDT Properties, Inc. |
29-Jan-09 |
Book 4954, Page 254 |
W/2 SW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Jermaine Leeman Dinges Revocable Trust |
RDT Properties, Inc. |
24-Nov-08 |
Book 4936, Page 141 |
W/2 SW/4 of Section 25, Township 5 South, Range 2 West |
Carter County, OK |
TFDU |
Byron H. Schaff |
R.S. Gardenhire, Jr. |
16-Feb-82 |
Book 995, Page 943 |
W/2 W/2 NE/4; NE/4 NW/4 NE/4; N/2 NE/4 NE/4; SE/4 SW/4 NE/4 of Section 36, T5 South, R2 West |
Carter County, OK |
TFDU |
Byron H. Schaff, Robert A. Schaff and Chase F. Schaff |
R.S. Gardenhire, Jr. |
27-Dec-77 |
Book 825, Page 341 |
W/2 W/2 NE/4; NE/4 NW/4 NE/4; N/2 NE/4 NE/4; SE/4 SW/4 NE/4 of Section 36, T5 South, R2 West |
Carter County, OK |
TFDU |
Chase F. Schaff |
R.S. Gardenhire, Jr. |
16-Feb-82 |
Book 995, Page 945 |
W/2 W/2 NE/4; NE/4 NW/4 NE/4; N/2 NE/4 NE/4; SE/4 SW/4 NE/4 of Section 36, T5 South, R2 West |
Carter County, OK |
TFDU |
Robert A. Schaff |
Nondorf Oil & Gas, Inc. |
16-Feb-82 |
Book 994, Page 412 |
W/2 W/2 NE/4; NE/4 NW/4 NE/4; N/2 NE/4 NE/4; SE/4 SW/4 NE/4 of Section 36, T5 South, R2 West |
Carter County, OK |
|
It is the intent for this instrument to assign and include all of Assignors right, title and interest in and to all wells and interests in the W/2 and W/2 SE/4 of Section 25 and all of Section 36-5S-2W, Carter County, Oklahoma, whether such interests and/or wells are properly described herein or not, including but not limited to the following: |
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Twin Forks Deese Unit established under Oklahoma Corporation Commission Order #563436, Cause CD 200806911-T and Order #571849, Cause CD 200902739-T, covering the West Half and West Half of the Southeast Quarter (W/2 and W/2 SE/4) of Section 25 and all of Section 36 of Township 5 South, Range 2 West, Carter County, Oklahoma, containing 1040 acres more or less. |
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Lessor: |
Lessee: |
Date: |
Recorded: |
Description: |
County, State |
|
AWDU |
Edward A. Luke 1979 Revocable Trust, under agreement dated, Robert Phillips Luke, Trustee |
RDT Properties, Inc. |
1-Oct-08 |
Book 4913, Page 58 |
E/2 SW/4 and W/2 NW/4 SW/4 and E/2 SW/4 SW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Mary Hermes Wood Trust, Mary Frances Hermes Wood, Trustee |
RDT Properties, Inc. |
1-Oct-08 |
Book 4913, Page 56 |
E/2 SW/4 and W/2 NW/4 SW/4 and E/2 SW/4 SW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Edward Albert Luke, Jr. |
RDT Properties, Inc. |
1-Oct-08 |
Book 4921, Page 204 |
E/2 SW/4 and W/2 NW/4 SW/4 and E/2 SW/4 SW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Robert Phillips Luke and Karen L. Luke, husband and wife |
RDT Properties, Inc. |
1-Oct-08 |
Book 4926, Page 113 |
E/2 SW/4 and W/2 NW/4 SW/4 and E/2 SW/4 SW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Mary Kathryn Griffin |
RDT Properties, Inc. |
1-Oct-08 |
Book 4921, Page 201 |
E/2 SW/4 and W/2 NW/4 SW/4 and E/2 SW/4 SW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Ninnie M. Coffey |
Don Cude |
2-Jan-68 |
Book 578, Page 635 |
SE/4 of Section 29, Township 4 South, Range 1 East, insofar and only insofar as lease covers from the surface of the earth to the base of the Deese common source of supply |
Carter County, Oklahoma |
AWDU |
Edward A. Luke 1979 Revocable Trust |
RDT Properties, Inc. |
1-Oct-08 |
Book 4913, Page 58 |
E/2 SW/4 and W/2 NW/4 SW/4 and E/2 SW/4 SW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Mary Hermes Wood Trust, Mary Frances Hermes Wood, Trustee |
RDT Properties, Inc. |
1-Oct-08 |
Book 4913, Page 56 |
E/2 SW/4 and W/2 NW/4 SW/4 and E/2 SW/4 SW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Edward Albert Luke, Jr. |
RDT Properties, Inc. |
1-Oct-08 |
Book 4921, Page 204 |
E/2 SW/4 and W/2 NW/4 SW/4 and E/2 SW/4 SW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Robert Phillips Luke and Karen L. Luke, husband and wife |
RDT Properties, Inc. |
1-Oct-08 |
Book 4926, Page 113 |
E/2 SW/4 and W/2 NW/4 SW/4 and E/2 SW/4 SW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Mary Kathryn Griffin |
RDT Properties, Inc. |
1-Oct-08 |
Book 4921, Page 201 |
E/2 SW/4 and W/2 NW/4 SW/4 and E/2 SW/4 SW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Michael F. Cusack, Trustee of the Cusack Family Revocable Trust |
David W. Potts Land & Exploration |
18-Jun-08 |
Book 4861, Page 110 |
E/2 NW/4 SW/4 and S/2 S/2 SW/4 NW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
LUBCO LLC |
David W. Potts Land & Exploration |
18-Jun-08 |
Book 4861, Page 112 |
E/2 NW/4 SW/4 and S/2 S/2 SW/4 NW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
Joel F. Wellnitz and Christian O’Donnell, Co-Personal Representatives of the Estate of Beverly Westheimer Wellnitz, deceased |
David W. Potts Land & Exploration |
12-Aug-08 |
Book 4909, Page 193 |
E/2 NW/4 SW/4 and S/2 S/2 SW/4 NW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
|
AWDU |
Jerry Ray Pennington |
RDT Properties, Inc. |
1-Jun-10 |
Book 5170, Page 111 |
E/2 NW/4 SW/4 and S/2 S/2 SW/4 NW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
F.R. & M. Trust dated May 24, 1976 |
RDT Properties, Inc. |
21-Jun-10 |
Book 5183, Page 146 |
E/2 NW/4 SW/4 and S/2 S/2 SW/4 NW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Sagacity, Inc. |
RDT Properties, Inc. |
1-Mar-10 |
Book 5149, Page 154 |
E/2 NW/4 SW/4 of Section 28, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Thomas A. Ward, Personal Representative of the Estate of Evelyn Wynell Woodruff, deceased |
David W. Potts Land & Exploration |
13-Jan-09 |
Book 4965, Page 234 |
SE/4 NE/4 of Section 29, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Thomas A. Weaver and Susan C. Weaver, Trustees, or Successor Trustee of the Weaver 2005 Revocable Trust U/T/A dated 4-11-2005 |
David W. Potts Land & Exploration |
12-Dec-08 |
Book 4959, Page 264 correction Book 5126, Page 98 |
SE/4 NE/4 of Section 29, Township 4 South, Range 1 East and N/2 N/2 SE/4, SW/4 SW/4 NE/4, W/2 NW/4 NW/4 NE/4, W/2 NW/4 SW/4 NE/4, W/2 E/2 NW/4 NE/4 and W/2 NE/4 SW/4 NE/4, E/2 W/2 NW/4 NE/4 and E/2 NW/4 SW/4 NE/4 , E/2 E/2 NW/4 NE/4, E/2 NE/4 SW/4 NE/4, S/2 N/2 SE/4 NE/4 , S/2 SE/4 NE/4, SE/4 SW/4 NE/4 and N/2 N/2 SE/4 NE/4 all in Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Thomas Hardy Murphy |
David W. Potts Land & Exploration |
22-Jul-08 |
Book 4883, Page 79 |
N/2 N/2 SE/4 and SW/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Polly K. Murphy aka Kathryn Pauline Murphy |
David W. Potts Land & Exploration |
22-Jul-08 |
Book 4909, Page 178 |
N/2 N/2 SE/4 and SW/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Polly K. Murphy aka Kathryn Pauline Murphy |
David W. Potts Land & Exploration |
22-Jul-08 |
Book 4909, Page 178 |
N/2 N/2 SE/4 and SW/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Steven Michael Irwin and Claudia D. Irwin |
David W. Potts Land & Exploration |
25-Jul-08 |
Book 4909, Page 226 |
N/2 N/2 SE/4 and SW/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Jimmy Geary Cheek |
David W. Potts Land & Exploration |
20-Aug-08 |
Book 4909, Page 224 |
SE/4 NE/4 and SE/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
Jimmy Geary Cheek |
David W. Potts Land & Exploration |
25-Jul-08 |
Book 4883, Page 77 Corrected Book 5126, Page 105 |
N/2 N/2 SE/4 and SW/4 SW/4 NE/4 and W/2 NW/4 NW/4 NE/4, W/2 NW/4 SW/4 NE/4, W/2 E/2 NW/4 NE/4 and W/2 NE/4 SW/4 NE/4, E/2 W/2 NW/4 NE/4 and E/2 NW/4 SW/4 NE/4 , E/2 E/2 NW/4 NE/4, E/2 NE/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
|
AWDU |
Janice Jean Cheek Noce |
David W. Potts Land & Exploration |
22-Aug-08 |
Book 4909 & 5126, Page 222 & 101 corrected Book 5155, Page 1 |
N/2 N/2 SE/4, SW/4 SW/4 NE/4, and W/2 NW/4 NW/4 NE/4, W/2 NW/4 SW/4 NE/4, W/2 E/2 NW/4 NE/4 and W/2 NE/4 SW/4 NE/4, E/2 W/2 NW/4 NE/4 and E/2 NW/4 SW/4 NE/4, E/2 E/2 NW/4 NE/4 and E/2 NE/4 SW/4 NE/4, W/2 SW/4 NW/4 NE/4, S/2 N/2 SE/4 NE/4, S/2 SE/4 NE/4 and SE/4 SW/4 NE/4 and N/2 N/2 SE/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Thomas A. Ward, Personal Representative of the Estate of Evelyn Wynell Woodruff, deceased |
David W. Potts Land & Exploration |
|
Book 4965, Page 236, Corrected Book 5126, Page 103 |
N/2 N/2 SE/4 and SW/4 SW/4 NE/4, SE/4 NE/4, SE/4 SW/4 NE/4, E/2 NW/4 NE/4, NW/4 NW/4 NE/4 and SW/4 NW/4 NE/4 and N/2 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Kevin Martin Taylor and Donna Marie Taylor |
David W. Potts Land & Exploration |
24-Jul-08 |
Book 4909, Page 191 |
W/2 NW/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Elizabeth Ann Gauley, now McCaney |
David W. Potts Land & Exploration |
26-Aug-08 |
Book 4909, Page 176 |
W/2 NW/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Michael A. Gibson, Successor Trustee of the” M.A.G. Trust 92” created under Trust Agreement dated 9/25/2002 |
David W. Potts Land & Exploration |
12-Aug-08 |
Book 4909, Page 195 |
NW/4 NE/4, N/2 SW/4 NE/4, SE/4 NE/4 and SE/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Malinda Gibson Archer, Successor Trustee of the” M.G.A. Trust 92” created under Trust Agreement dated 9/25/2002 |
David W. Potts Land & Exploration |
12-Aug-08 |
Book 4920, Page 236 |
NW/4 NE/4, N/2 SW/4 NE/4, SE/4 NE/4 and SE/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Gerald M. Church and Phyllis D. Church, Trustees of the Gerald M. and Phyllis D. Church Family Trust |
David W. Potts Land & Exploration |
12-Aug-08 |
Book 4909, Page 197 |
S/2 SE/4 NE/4, and SE/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
Gerald M. Church and Phyllis D. Church, Trustees of the Gerald M. and Phyllis D. Church Family Trust |
David W. Potts Land & Exploration |
12-Aug-08 |
Book 4909, Page 197 |
S/2 SE/4 NE/4, and SE/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
|
AWDU |
Mary Linda Ayres and Thomas R. Ayres |
David W. Potts Land & Exploration |
18-Aug-08 |
Book 4909, Page 174 |
E/2 W/2 NW/4 NE/4, E/2 NW/4 SW/4 NE/4 and W/2 SW/4 NW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Mary Linda Ayres and Thomas R. Ayres |
David W. Potts Land & Exploration |
18-Aug-08 |
Book 4909, Page 174 |
E/2 W/2 NW/4 NE/4, E/2 NW/4 SW/4 NE/4 and W/2 SW/4 NW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Donna Lee Elmore |
David W. Potts Land & Exploration |
12-Aug-08 |
Book 4929, Page 113 |
E/2 E/2 NW/4 NE/4 and, E/2 NE/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Cecil A. Arnold and Kathryn Arnold, Trustees of the Cecil A. Arnold Family Revocable Trust |
David W. Potts Land & Exploration |
12-Aug-08 |
Book 4929, Page 115 |
W/2 E/2 NW/4 NE/4 and, W/2 NE/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Lauren Mobley Harrell Property Trust U/T/A dated 4/18/2002 |
RDT Properties, Inc. |
1-Feb-10 |
Book 5134, Page 243 |
The Deese Formation underlying the SW/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Charlotte L. Henderson |
RDT Properties, Inc. |
1-Mar-10 |
Book 5149, Page 156 |
W/2 NW/4 NW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Ada Mildred Moller, deceased apparent heir of Marc S. Moller |
RDT Properties, Inc. |
1-Feb-10 |
Book 5134, Page 252 |
S/2 SE/4 NE/4 and SE/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Kathryn S. Miller-Evans aka Kathryn Stern Moller |
RDT Properties, Inc. |
1-Feb-10 |
Book 5143, Page 94 |
S/2 SE/4 NE/4 and SE/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
John Charles Murphy |
RDT Properties, Inc. |
1-Mar-10 |
Book 5134, Page 254 corrected Book 5141, Page 240 |
N/2 N/2 SE/4 and SW/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Raymon Stoker |
RDT Properties, Inc. |
1-Mar-10 |
Book 5138, Page 60 |
SE/4 NE/4 and W/2 NE/4 less SW/4 SW/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Merco of Oklahoma, Inc |
RDT Properties, Inc. |
1-Feb-10 |
Book 5128, Page 233 |
NE/4 NE/4of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
ECS Production, LLC |
RDT Properties, Inc. |
1-Feb-10 |
Book 5134, Page 246 |
NE/4 NE/4of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Charles M. Lynch |
RDT Properties, Inc. |
1-Feb-10 |
Book 5271, Page 11 |
N/2 N/2 SE/4 NE/4of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
Ross W. Coe Trust |
RDT Properties, Inc. |
21-Jun-10 |
Book 5178, Page 113 |
NE/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
|
AWDU |
Jack Pot Irrevocable Trust dated 9/30/1977 |
RDT Properties, Inc. |
1-Feb-10 |
Book 5183, Page 148 |
NE/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Euna Mae Heenan Trust |
RDT Properties, Inc. |
1-Mar-10 |
Book 5183, Page 141 |
NE/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Robert A. Hefner IV Trust |
RDT Properties, Inc. |
1-Mar-10 |
Book 5183, Page 154 |
NE/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Charles Ray Hefner Trust |
RDT Properties, Inc. |
1-Feb-10 |
Book 5183, Page 150 |
NE/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Catherine Eva Hefner Trust |
RDT Properties, Inc. |
1-Mar-10 |
Book 5183, Page 152 |
NE/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Cynthia Ann Corley Trust |
RDT Properties, Inc. |
18-Mar-10 |
Book 5134, Page 248 |
W/2 NE/4 and SE/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Charles D. Gandillon |
RDT Properties, Inc. |
1-Feb-10 |
Book 5128, Page 93 |
W/2 NW/4 NW/4 SE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Dorris O. Coffey |
J.M. Huber Corporation |
20-Jan-68 |
Book 578, Page 626 |
E/2 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Billy Jack Stringer |
David W. Potts Land & Exploration |
24-Jul-08 |
Book 4883, Page 75 |
S/2 SW/4, S/2 S/2 N/2 SW/4 and, S/2 N/2 S/2 N/2 SW/4 of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Anna Louise Grissom |
David W. Potts Land & Exploration |
25-Jul-08 |
Book 4909, Page 189 |
S/2 SW/4, S/2 S/2 N/2 SW/4 and, S/2 N/2 S/2 N/2 SW/4 of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Milford Corporation |
David W. Potts Land & Exploration |
10-Sep-08 |
Book 4909, Page 228 |
S/2 SW/4, S/2 S/2 N/2 SW/4 and, S/2 N/2 S/2 N/2 SW/4 of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Jones-Kalkman Mineral Company, a partnership composed of LaWayne E. Jones & Joe Kalkman |
RDT Properties, Inc. |
21-May-10 |
Book 5183, Page 156 |
W/2 NW/4 NE/4 SE/4 and NW/4 SE/4 and SW/4 NE/4 SE/4 and N/2 SW/4 SE/4 and NW/4 SE/4 SE/4 and E/2 NW/4 NE/4 SE/4 and E/2 NE/4 SE/4 of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Lisa Ingram |
Reagan Smith Energy Solutions, Inc. |
15-Jun-10 |
Book 5171, Page 74 |
W/2 NW/4 NE/4 SE/4, NW/4 SE/4, SW/4 NE/4 SE/4 and N/2 SW/4 SE/4 and NW/4 SE/4 SE/4 of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
Angelitta Wildermuth |
Reagan Smith Energy Solutions, Inc. |
15-Jun-10 |
Book 5171, Page 76 |
W/2 NW/4 NE/4 SE/4, NW/4 SE/4, SW/4 NE/4 SE/4 and N/2 SW/4 SE/4 and NW/4 SE/4 SE/4 of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
|
AWDU |
Shawna Whitecotton |
Reagan Smith Energy Solutions, Inc. |
16-Jun-10 |
Book 5176, Page 46 |
W/2 NW/4 NE/4 SE/4, NW/4 SE/4, SW/4 NE/4 SE/4 and N/2 SW/4 SE/4 and NW/4 SE/4 SE/4 of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Diana Starr Linch |
Reagan Smith Energy Solutions, Inc. |
15-Jun-10 |
Book 5176, Page 39 |
W/2 NW/4 NE/4 SE/4, NW/4 SE/4, SW/4 NE/4 SE/4 and N/2 SW/4 SE/4 and NW/4 SE/4 SE/4 of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Stephenson Bond |
Reagan Smith Energy Solutions, Inc. |
15-Jun-10 |
Book 5185, Page 84 |
W/2 NW/4 NE/4 SE/4, NW/4 SE/4, SW/4 NE/4 SE/4 and N/2 SW/4 SE/4 and NW/4 SE/4 SE/4 of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Everett B. Buckholtz, et ux |
Don Cude |
15-Nov-67 |
Book 578, Page 601 |
SW/4 NW/4 SE/4, SW/4 SE/4 (less 5 acs released 6-7-83) of Section 28, Township 4 South, Range 1 East & S/2 NW/4, S/2 N/2 NW/4, W/2 NE/4, W/2 E/2 NE/4, SE/4 SE/4 NE/4, N/2 NW/4 SW/4, N/2 N/2 S/2 NW/4 SW/4, N/2 NW/4 SE/4, SW/4 NW/4 SE/4, NW/4 SW/4 SE/4 of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
J.B. Rickets |
Don Cude |
15-Nov-67 |
Book 578, Page 603 |
S/2 NW/4, S/2 N/2 NW/4, W/2 NE/4, W/2 E/2 NE/4, SE/4 SE/4 NE/4, N/2 NW/4 SW/4, N/2 N/2 S/2 NW/4 SW/4 of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Don A. Rickets |
Don Cude |
15-Nov-67 |
Book 578, Page 605 |
S/2 NW/4, S/2 N/2 NW/4, W/2 NE/4, W/2 E/2 NE/4, SE/4 SE/4 NE/4, N/2 NW/4 SW/4, N/2 N/2 S/2 NW/4 SW/4 of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
Cheryl Gray Rickets |
Don Cude |
27-Nov-67 |
Book 578, Page 607 |
S/2 NW/4, S/2 N/2 NW/4, W/2 NE/4, W/2 E/2 NE/4, SE/4 SE/4 NE/4, N/2 NW/4 SW/4, N/2 N/2 S/2 NW/4 SW/4, of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
|
AWDU |
Guy M. Harris |
Don Cude |
30-Nov-67 |
Book 578, Page 609 |
S/2 NW/4, S/2 N/2 NW/4, W/2 NE/4, W/2 E/2 NE/4, SE/4 SE/4 NE/4, N/2 NW/4 SW/4, N/2 N/2 S/2 NW/4 SW/4, N/2 NW/4 SE/4, SW/4 NW/4 SE/4 of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Christine Rickets Harrison |
Don Cude |
2-Jan-68 |
Book 578, Page 612 |
S/2 NW/4, S/2 N/2 NW/4, W/2 NE/4, W/2 E/2 NE/4, SE/4 SE/4 NE/4, N/2 NW/4 SW/4, N/2 N/2 S/2 NW/4 SW/4, of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Marion C. Cruce et ux |
C.W. Van Eaton |
31-Jan-69 |
Book 592, Page 440 |
S/2 N/2 NW/4, SW/4 NW/4 NE/4, NW/4 SW/4 NE/4of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Eliza Cruce Hall et vir |
C.W. Van Eaton |
31-Jan-69 |
Book 592, Page 442 |
S/2 N/2 NW/4, SW/4 NW/4 NE/4, NW/4 SW/4 NE/4of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
C.W. Van Eaton |
J.M. Huber Corporation |
13-Feb-69 |
Book 592, Page 446 |
S/2 NW/4, N/2 NW/4 SW/4, N/2 N/2 S/2 NW/4 SW/4, NW/4 NW/4 NE/4, E/2 W/2 NE/4, SW/4 SW/4 NE/4, W/2 E/2 NE/4, SE/4 SE/4 NE/4, S/2 N/2 NW/4, SW/4 NW/4 NE/4, NW/4 SW/4 NE/4, N/2 NW/4 SE/4, SW/4 NW/4 SE/4, NW/4 SW/4 SE/4 of Section 33, Township 4 South, Range 1 East |
Carter County, Oklahoma |
AWDU |
Dorris O. Coffey |
J.M. Huber Corporation |
20-Jan-68 |
Book 578, Page 626 |
NW/4 SW/4 SW/4 less east 250 ft. of south 211ft., SW/4 SW/4 SW/4 less east 250 ft. of Section 28, Township 4 South, Range 1 East & N/2 N/2 NW/4 of Section 33, Township 4 South, Range 1 East & NE/4 NE/4 of Section 32, Township 4 South, Range 1 East |
Carter County, Oklahoma |
Lessor: |
Lessee: |
Date: |
Recorded: |
Description: |
County, State |
|
HDSU |
Zelda Danna Paschall, as widow |
W. M Bryan, Inc. |
28-Nov-78 |
Book 236, Page 792 |
All of Lots 1, 2 and 3 of Section 7-6S-1W |
Love County, OK |
HDSU |
Frances Dixon |
James L. Kirk |
5/22/1979 |
Book 242, Page 131 |
E/2 SE/4 SW/4 & SW/4 SE/4 SW/4 of Section 6-6S-1W |
Love County, OK |
HDSU |
Sun Oil Company |
Samedan |
4/1/1980 |
Book 262, Page 306 |
E/2 SE/4 SW/4 & SW/4 SE/4 SW/4 of Section 6-6S-1W |
Love County, OK |
HDSU |
Jerome C Sullivan Jr and Marilynn V Sullivan, his wife and Sonja Sullivan Adams, a single person |
Brooks Hall Oil Corporation |
9-Dec-80 |
Book 269, Page 481 |
E/2 SW/4 of Section 1-6S-2W |
Love County, OK |
HDSU |
Jerome C. Sullivan, Jr. et ux & Sonja Sullivan Adams |
Brooks Hall Oil Corporation |
9-Dec-80 |
Book 269, Page 481 |
E/2 SW/4 of Section 1-6S-2W |
Love County, OK |
HDSU |
Samedan Oil Corporation |
Nondorf Oil & Gas, Inc. |
24-Feb-82 |
Book 290, Page 376 |
Lot 2 of Section 1-6S-2W |
Love County, OK |
HDSU |
The Hefner Company |
T.C. Craighead |
24-Jun-78 |
Book 233, Page 168 |
Lots 1 & 2 of Section 1-6S-2W, |
Love County, OK |
HDSU |
J.E. Devine |
T.C. Craighead |
12-Jun-78 |
Book 233, Page 174 |
Lots 1 & 2 of Section 1-6S-2W, |
Love County, OK |
HDSU |
J.E. Devine |
T.C. Craighead |
12-Jun-78 |
Book 233, Page 174 |
Lots 1 & 2 of Section 1-6S-2W, Insofar and only insofar as said Lease covers the W/2 NE/4 |
Love County, OK |
HDSU |
Jane Sanders Galt |
Tom R. Gray, Jr. |
29-Dec-75 |
Book 217, Page 523 |
Lots 1 & 2 of Section 1-6S-2W, Insofar and only insofar as said Lease covers the W/2 NE/4 |
Love County, OK |
HDSU |
Ruby Justin |
T.C. Craighead |
12-Jun-78 |
Book 233, Page 172 |
Lots 1 &2 of Section 1-6S-2W, |
Love County, OK |
HDSU |
Wilma Choate, Willis Choate III, Marjorie Norene Choate |
T.C. Craighead |
12-Jun-78 |
Book 233, Page 170 |
Lots 1 &2 of Section 1-6S-2W |
Love County, OK |
HDSU |
Ruby Justin |
T.C. Craighead |
12-Jun-78 |
Book 233, Page 172 |
Lots 1 &2 of Section 1-6S-2W, Insofar and only insofar as said lease covers the W/2 NE/4 |
Love County, OK |
HDSU |
Wilma Choate, Willis Choate III, Marjorie Norene Choate |
T.C. Craighead |
12-Jun-78 |
Book 233, Page 171 |
Lots 1 &2 of Section 1-6S-2W, Insofar and only insofar as said lease covers the W/2 NE/4 |
Love County, OK |
HDSU |
Mary Alice Scheflow & O. W., w/h; & Addison Burr Foss |
T. C. Craighead |
11/21/1975 |
Book 217, Page 51 |
Lots 3 & 4 & S/2 NW/4 aka NW/4 of Section 6-6S-1W |
Love County, OK |
HDSU |
Paul D. Sullivan Jr., Mercedes Curry, Patrick Sullivan & Frances Dunbar |
T.C. Craighead |
18-Mar-74 |
Book 205, Page 82 |
Lots 6 & 7 aka W/2 SW/4 of Section 6-6S-1W |
Love County, OK |
HDSU |
Paul D. Sullivan Jr., Mercedes Curry, Patrick Sullivan, Frances Dunbar |
T.C. Craighead |
5-Mar-74 |
Book 205, Page 82 |
Lots 6 & 7 aka W/2 SW/4 of Section 6-6S-1W |
Love County, OK |
Frank G. Weimer |
Patrick Dailey |
28-Apr-81 |
Book 276, Page 649 |
SW/4 NE/4 of Section 1-6S-2W |
Love County, OK |
|
HDSU |
Gerald Tucker |
T.C. Craighead |
12-Jun-78 |
Book 233, Page 160 |
SW/4 NE/4 of Section 1-6S-2W |
Love County, OK |
HDSU |
Gladys Birdwell |
T.C. Craighead |
12-Jun-78 |
Book 233, Page 162 |
SW/4 NE/4 of Section 1-6S-2W |
Love County, OK |
HDSU |
Gussie Tucker Lay |
T.C. Craighead |
12-Jun-78 |
Book 233, Page 166 |
SW/4 NE/4 of Section 1-6S-2W |
Love County, OK |
HDSU |
Manette L. Bell & Frank S. Bell |
T.C. Craighead |
12-Jun-78 |
Book 233, Page 158 |
SW/4 NE/4 of Section 1-6S-2W |
Love County, OK |
HDSU |
Marsha Hughes |
Crawford Cameron Jr. |
27-Jun-80 |
Book 267, Page 843 |
SW/4 NE/4 of Section 1-6S-2W |
Love County, OK |
HDSU |
Mary Garth |
T.C. Craighead |
13-Feb-81 |
Book 271, Page 526 |
SW/4 NE/4 of Section 1-6S-2W |
Love County, OK |
HDSU |
Mary Rabbit |
Crawford Cameron Jr. |
27-Jun-80 |
Book 267, Page 847 |
SW/4 NE/4 of Section 1-6S-2W |
Love County, OK |
HDSU |
Melanie Maxon |
Crawford Cameron Jr. |
27-Jun-80 |
Book 268, Page 361 |
SW/4 NE/4 of Section 1-6S-2W |
Love County, OK |
HDSU |
Sibyl Futch |
T.C. Craighead |
12-Jun-78 |
Book 233, Page 164 |
SW/4 NE/4 of Section 1-6S-2W |
Love County, OK |
HDSU |
Steve A. Tucker, Jr. |
Patrick Dailey |
2-Feb-81 |
Book 272, Page 588 |
SW/4 NE/4 of Section 1-6S-2W |
Love County, OK |
HDSU |
R.A. Hefner Jr. Trustee |
ENSTAR Petroleum Company |
4/10/1984 |
Book 327, Page 102 |
SW/4 SE/4 & S/2 NW/4 SE/4 & NW/4 NW/4 SE/4 of Section 2, Township 6 South, Range 2 West |
Love County, OK |
HDSU |
R.A. Hefner Jr. Trustee |
ENSTAR Petroleum Company |
4/10/1984 |
Book 327, Page 105 |
SW/4 SE/4 & S/2 NW/4 SE/4 & NW/4 NW/4 SE/4 of Section 2, Township 6 South, Range 2 West |
Love County, OK |
HDSU |
R.A. Hefner Jr. Trustee |
ENSTAR Petroleum Company |
4/10/1984 |
Book 327, Page 108 |
SW/4 SE/4 & S/2 NW/4 SE/4 & NW/4 NW/4 SE/4 of Section 2, Township 6 South, Range 2 West |
Love County, OK |
HDSU |
The Hefner Company |
Nondorf Oil & Gas, Inc. |
1-Aug-84 |
Book 332, Page 557 |
SW/4 SE/4 & S/2 NW/4 SE/4 & NW/4 NW/4 SE/4 of Section 2-6S-2W |
Love County, OK |
HDSU |
The Hefner Company |
Nondorf Oil & Gas Inc. |
8/1/1984 |
Book 332, Page 557 |
SW/4 SE/4 and S/2 NW/4 SE/4 and NW/4 NW/4 SE/4 of Section 2-6S-2W |
Love County, OK |
HDSU |
Charles Guy Tate, a married man dealing in his own and separate property |
Patrick Dailey Inc |
23-Jul-82 |
Book 297, Page 186 |
SW/4 SE/4 NW/4, SE/4 SW/4 NW/4, NE/4 NW/4 SW/4, NW/4 NE/4 SW/4 of Section 12-6S-2W |
Love County, OK |
HDSU |
Gwendolyn Gentry, a married woman dealing in her own and separate property |
Patrick Dailey, Inc |
23-Jul-82 |
Book 297, Page 188 |
SW/4 SE/4 NW/4, SE/4 SW/4 NW/4, NE/4 NW/4 SW/4, NW/4 NE/4 SW/4 of Section 12-6S-2W |
Love County, OK |
HDSU |
Roberta Anne Boland, a single woman |
Patrick Dailey Inc |
23-Jul-82 |
Book 297, Page 184 |
SW/4 SE/4 NW/4, SE/4 SW/4 NW/4, NE/4 NW/4 SW/4, NW/4 NE/4 SW/4 of Section 12-6S-2W |
Love County, OK |
Lawrence S McGee, Jr. and Mary McGee Boggs |
Nondorf Oil & Gas, Inc. |
16-Dec-80 |
Book 269, Page 839 |
W/2 NE/4 of Section 12-6S-2W |
Love County, OK |
|
HDSU |
The Tippit Trust |
H. L. Gaston III |
12/8/2004 |
Book 604, Page 298 |
W/2 SE/4 of Section 12-6S-2W |
Love County, OK |
HDSU |
Norwich University |
H. L. Gaston III |
7/10/2006 |
Book 629, Page 266 |
W/2 SE/4 of Section 6-6S-1W |
Love County, OK |
HDSU |
Pamela Riddle Richardson |
H. L. Gaston III |
2/15/2005 |
Book 607, Page 276 |
W/2 SE/4 of Section 6-6S-1W |
Love County, OK |
HDSU |
Pamela Riddle Richardson Trust |
H. L. Gaston III |
2/15/2005 |
Book 607, Page 278 |
W/2 SE/4 of Section 6-6S-1W |
Love County, OK |
HDSU |
Jerome C. Sullivan Jr. et ux. & Sonja Sullivan Adams |
Brooks Hall Oil Corporation |
12/9/1980 |
Book 269, Page 479 |
W/2 SW/4 1-6S-2W |
Love County, OK |
HDSU |
Jerome C. Sullivan, Jr. et ux & Sonja Sullivan Adams |
Brooks Hall Oil Corporation |
9-Dec-80 |
Book 269, Page 479 |
W/2 SW/4 of Section 1-6S-2W |
Love County, OK |
HDSU |
H. G. Nelms estate |
H. L. Gaston III |
1/25/2006 |
Book 628, Page 396 |
W/2 SW/4 SW/4 & SW/4 NW/4 SW/4 & S/2 SE/4 SW/4 of Section 12-6S-2W |
Love County, OK |
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It is the intent for this instrument to assign and include all of Assignors right title and interest in and to all wells, interests and lands in All of Section 1, the East Half (E/2) of Section 2, the North Half of the Northeast Quarter (N/2 NE/4) of Section 11 and All of Section 12 of Township 6 South, Range 2 West, and the West Half and the Southwest Quarter of the Southeast Quarter (W/2 and SW/4 SE/4) of Section 6, all of Section 7 and the West Half (W/2) of Section 8, Township 6 South, Range 1 West, Love County, Oklahoma, whether such interests and/or wells are properly described herein or not, including the following: |
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Highlands Deese Sand Unit covered by Oklahoma Corporation Commission Order No. 553162, Cause CD No: 200703221-T/O, dated April 8 th 2008, covering All of Section 1, the East Half (E/2) of Section 2, the North Half of the Northeast Quarter (N/2 NE/4) of Section 11 and All of Section 12 of Township 6 South, Range 2 West, and the West Half and the Southwest Quarter of the Southeast Quarter (W/2 and SW/4 SE/4) of Section 6, all of Section 7 and the West Half (W/2) of Section 8, Township 6 South, Range 1 West, Love County, Oklahoma containing 2964.3 acres, more or less |
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Joan M. Akers |
Arbuckle Enterprises, Inc. |
18-Nov-04 |
Book 606, Page 606 |
E/2 NW/4 NW/4, SW/4 NE/4 NW/4 & E/2 SE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
|
BSDSU |
Novella Shebester |
Arbuckle Enterprises, Inc. |
20-Apr-05 |
Book 608, Page 819 |
E/2 NW/4 NW/4, SW/4 NE/4 NW/4 & E/2 SE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Jimmy H. Bowden |
Arbuckle Enterprises, Inc. |
20-Apr-05 |
Book 608, Page 821 |
E/2 NW/4 NW/4, SW/4 NE/4 NW/4 & E/2 SE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Bobby R. Bowden |
Arbuckle Enterprises, Inc. |
20-Apr-05 |
Book 608, Page 823 |
E/2 NW/4 NW/4, SW/4 NE/4 NW/4 & E/2 SE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Anna Jean Cullum |
Arbuckle Enterprises, Inc. |
20-Apr-05 |
Book 608, Page 825 |
E/2 NW/4 NW/4, SW/4 NE/4 NW/4 & E/2 SE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Charles D. Bowden |
Arbuckle Enterprises, Inc. |
20-Apr-05 |
Book 608, Page 827 |
E/2 NW/4 NW/4, SW/4 NE/4 NW/4 & E/2 SE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Paula Phillips |
Arbuckle Enterprises, Inc. |
20-Apr-05 |
Book 608, Page 829 |
E/2 NW/4 NW/4, SW/4 NE/4 NW/4 & E/2 SE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Bruce E. Davis, Successor Trustee ULWT Marie Giffey |
Arbuckle Enterprises, Inc. |
30-Jun-05 |
Book 613, Page 695 |
E/2 NW/4 of Section 21, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Rita Jean Teafatiller, now Gantt |
Arbuckle Enterprises, Inc. |
18-Nov-04 |
Book 604, Page 239 |
N/2 NE/4 NW/4 and SE/4 NE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Jack Rhea Jones |
Arbuckle Enterprises, Inc. |
18-Nov-04 |
Book 604, Page 243 |
N/2 NE/4 NW/4 and SE/4 NE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Crawford Cameron, Jr. |
Arbuckle Enterprises, Inc. |
1-Feb-05 |
Book 611, Page 462 |
N/2 NE/4 NW/4 and SE/4 NE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
James E. Cruson |
Arbuckle Enterprises, Inc. |
25-May-05 |
Book 612, Page 814 |
N/2 NE/4 NW/4 and SE/4 NE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Edward Lewis Cruson |
Arbuckle Enterprises, Inc. |
25-May-05 |
Book 612, Page 228 |
N/2 NE/4 NW/4 and SE/4 NE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Paschall Properties, Inc. |
Arbuckle Enterprises, Inc. |
23-Nov-04 |
Book 605, Page 138 |
N/2 SE/4 SE/4 and SW/4 SE/4 SE/4 of Section 20, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Susan P. Paschall Inter Vivos Trust No. 1 |
Arbuckle Enterprises, Inc. |
23-Nov-04 |
Book 605, Page 135 |
N/2 SE/4 SE/4 and SW/4 SE/4 SE/4 of Section 20, Township 6 South, Range 1 West |
Love County, OK |
Judith Citrin |
Arbuckle Enterprises, Inc. |
23-Nov-04 |
Book 605, Page 525 |
W/2 NE/4 NW/4 and S/2 SE/4 NW/4 of Section 18, Township 6 South, Range 1 West |
Love County, OK |
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BSDSU |
Ricky & Linda Banks |
Arbuckle Enterprises, Inc. |
18-Nov-04 |
Book 606, Page 600 |
W/2 NW/4 NW/4, SW/4 NW/4 & W/2 SE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
David Kent Williams, Ellen Williams Loard & Becky Williams Evans |
Arbuckle Enterprises, Inc. |
18-Nov-04 |
Book 606, Page 602 |
W/2 NW/4 NW/4, SW/4 NW/4 & W/2 SE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
J. R. Williams Revocable Trust |
Arbuckle Enterprises, Inc. |
18-Nov-04 |
Book 607, Page 573 |
W/2 NW/4 NW/4, SW/4 NW/4 & W/2 SE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Lynn Watkins Trust |
Arbuckle Enterprises, Inc. |
18-Nov-04 |
Book 604, Page 241 |
W/2 NW/4 NW/4, SW/4 NW/4 & W/2 SE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Merco of Oklahoma, Inc. |
Arbuckle Enterprises, Inc. |
23-Nov-04 |
Book 610, Page 503 |
W/2 NW/4 NW/4, SW/4 NW/4 & W/2 SE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Jim Pool Jr |
RDT Properties, Inc |
1-Jun-06 |
Book -629, Page 408 |
E/2 NW/4 of Section 20, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Map Resources, Inc. |
RDT Properties, Inc |
1-Jun-06 |
Book 629, Page 637 |
W/2 NW/4 NW/4, SW/4 NW/4 & W/2 SE/4 NW/4 of Section 17, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Pamela B Drew |
RDT Properties, Inc |
1-Jun-06 |
Book 629, Page 272 |
N/2 SE/4 NW/4 and SE/4 NE/4 NW/4 of Section 18, Township 6 South, Range 1 West |
Love County, OK |
BSDSU |
Sara Grace Tucker |
RDT Properties, Inc |
1-Jun-06 |
Book 631, Page 68 |
N/2 SE/4 NW/4 and SE/4 NE/4 NW/4 of Section 18, Township 6 South, Range 1 West |
Love County, OK |
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It is the intent for this instrument to assign and include all of Assignors right, title and interest in and to all wells and interests in the SE/4 of Section 8-6S-1W, W/2 W/2 of Section 16-6S-1W, All of Section 17-6S-1W, E/2 NW/4; NE/4 ; E/2 SE/4 of Section 18-6S-1W, E/2 NW/4; NE/4; E/2 SE/4 of Section 20-6S-1W and W/2 of Section 21-6S-1W, Love County, Oklahoma, whether such interests are properly described herein or not, including but not limited to the following: |
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Battle Springs Deese Sand Unit established under Oklahoma Corporation Commission Order #524732, Cause CD 200507484-T, covering the Southeast Quarter (SE/4) of Section 8 and the East Half of the Northwest Quarter and the East Half of the Southeast Quarter and the Northeast Quarter (E/2 NW/4 & E/2 SE/4 & NE/4) of Section 18 and all of Section 17 and the W/2 of the W/2 (W/2 W/2) of Section 16 and the East Half of the Northwest Quarter and the East Half of the Southeast Quarter and the Northeast Quarter (E/2 NW/4 & E/2 SE/4 & NE/4) of Section 20 and the West Half (W/2) of Section 21 of Township 6 South, Range 1 West, Love County, Oklahoma, containing 1920 acres, more or less. |
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Lessor: |
Lessee: |
Recorded: |
Date: |
Description: |
County, State |
|
EHU |
Thelma E. Crosby Burnett |
Arbuckle Enterprises, Inc. |
Book 618, Page 12 |
9/13/2005 |
W/2 NE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Burl and Lamona Bone, husband and wife |
Arbuckle Enterprises, Inc. |
Book 620, Page 290 |
12/1/2005 |
W/2 NE/4 NE/4, SE/4 NE/4 and NE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Estate of Jack A. Crosby, deceased, Joyce L. Crosby, Personal Representative |
Arbuckle Enterprises, Inc. |
Book 637, Page 163 |
12/20/2006 |
W/2 NE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Sandra Kay Whitaker |
Arbuckle Enterprises, Inc. |
Book 641, Page 349 |
2/6/2007 |
W/2 NE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Williams Family Limited Partnership |
Arbuckle Enterprises, Inc. |
Book 617, Page 3 |
9/13/2005 |
W/2 NE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Susan K. Stroman Fox |
Arbuckle Enterprises, Inc. |
Book 617, Page 9 |
9/13/2005 |
E/2 NE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Alicia W. Stroman Trust dated April 8, 1982, Marguerite Stroman Russell, sole trustee |
Arbuckle Enterprises, Inc. |
Book 618, Page 16 |
9/13/2005 |
E/2 NE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Ewing Byron Stroman |
Arbuckle Enterprises, Inc. |
Book 617, Page 655 |
9/13/2005 |
E/2 NE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
John M. Stroman |
Arbuckle Enterprises, Inc. |
Book 617, Page 5 |
9/13/2005 |
E/2 NE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Josh H. Stroman |
Arbuckle Enterprises, Inc. |
Book 617, Page 7 |
9/13/2005 |
E/2 NE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Elmer Stroman Trust dated April 8, 1982, Marguerite Stroman Russell, sole trustee |
Arbuckle Enterprises, Inc. |
Book 618, Page 14 |
9/13/2005 |
E/2 NE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Victoria H. Tanzman |
Arbuckle Enterprises, Inc. |
Book 619, Page 832 |
9/13/2005 |
E/2 NE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Carol Abel 1984 Revocable Trust u/a dated April 17, 1984, Carol Abel Trustee |
Arbuckle Enterprises, Inc. |
Book 633, Page 237 |
8/25/2006 |
SE/4 NE/4 and NE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Sophia Lea Barker and Jeff O. Barker, wife and husband |
Arbuckle Enterprises, Inc. |
Book 619, Page 521 |
10/17/2005 |
SE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Burl and Lamona Bone |
Arbuckle Enterprises, Inc. |
Book 620, Page 290 |
12/1/2005 |
W/2 NE/4 NE/4; SE/4 NE/4; NE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Ella Jean Cary |
Arbuckle Enterprises, Inc. |
Book 618, Page 315 |
10/17/2005 |
SE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Geremy G. Cochran Trust created July 16, 2004, Geremy G. Cochran s/p/a Geremy Guy Cochran, individually and Trustee |
Arbuckle Enterprises, Inc. |
Book 617, Page 11 |
9/13/2005 |
SE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
Alexia Shipman Hattensty, now Copeland and Loyd J. Copeland, her husband |
Arbuckle Enterprises, Inc. |
Book 622, Page 268 |
12/1/2005 |
SE/4 NE/4; NE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
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EHU |
Beth Ann Fint |
Arbuckle Enterprises, Inc. |
Book 632, Page 761 |
9/21/2006 |
SE/4 NE/4; NE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Lenora Garcia |
Arbuckle Enterprises, Inc. |
Book 625, Page 23 |
10/17/2005 |
SE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Wilbert Renick Gates |
Arbuckle Enterprises, Inc. |
Book 620, Page 387 |
10/17/2005 |
SE/4 NE/4; NE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Ella Joyce Morris |
Arbuckle Enterprises, Inc. |
Book 620, Page 385 |
10/17/2005 |
SE/4 NE/4; NE/4 SE/4of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Percival J. Renick and Doris Jean Renick, his wife |
Arbuckle Enterprises, Inc. |
Book 620, Page 389 |
10/17/2005 |
SE/4 NE/4; NE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Katherine Barkley Adams Rice |
Arbuckle Enterprises, Inc. |
Book 624, Page 810 |
10/17/2005 |
SE/4 NE/4; NE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
D. C. Shipman |
Arbuckle Enterprises, Inc. |
Book 619, Page 517 |
10/17/2005 |
SE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Denise Shipman |
Arbuckle Enterprises, Inc. |
Book 622, Page 835 |
10/17/2005 |
SE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Gail Scott Shipman |
Arbuckle Enterprises, Inc. |
Book 619, Page 519 |
10/17/2005 |
SE/4 NE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Lorelie Shipman |
Arbuckle Enterprises, Inc. |
Book 637, Page 666 |
12/18/2006 |
SE/4 NE/4; NE/4 SE/4of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Wanda Fay Smith |
Arbuckle Enterprises, Inc. |
Book 622, Page 696 |
1/6/2006 |
SE/4 NE/4; NE/4 SE/4of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Sophia Lea Barker and Jeff O. Barker, wife and husband |
Arbuckle Enterprises, Inc. |
Book 637, Page 668 |
12/18/2006 |
NE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Ella Jean Cary, a widow |
Arbuckle Enterprises, Inc. |
Book 622, Page 276 |
1/4/2006 |
NE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Lenora Garcia and John P. Garcia, Jr., wife and husband |
Arbuckle Enterprises, Inc. |
Book 624, Page 339 |
1/4/2006 |
NE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
D. C. Shipman and Zelma Shipman, his wife |
Arbuckle Enterprises, Inc. |
Book 622, Page 698 |
1/4/2006 |
NE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Denise Shipman, a widow |
Arbuckle Enterprises, Inc. |
Book 622, Page 272 |
1/4/2006 |
NE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Gail Scott Shipman |
Arbuckle Enterprises, Inc. |
Book 624, Page 118 |
1/4/2006 |
NE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Opal Brown |
Arbuckle Enterprises, Inc. |
Book 620, Page 293 |
10/17/2005 |
SE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Evelyn Beatrice Henson Revocable Trust, Doyle R Henson Successor Trustee |
Arbuckle Enterprises, Inc. |
Book 635, Page 264 |
11/9/2006 |
SE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Thaylia Suggs a/k/a Thalia J. Suggs |
Arbuckle Enterprises, Inc. |
Book 620, Page 301 |
10/17/2005 |
SE/4 SE/4 of Section 14, Township 6 South, Range 1 West |
Love County, Oklahoma |
Opal Brown |
Arbuckle Enterprises, Inc. |
Book 631, Page 747 |
8/10/2006 |
E/2 SW/4 of Section 13, Township 6 South, Range 1 West |
Love County, Oklahoma |
|
EHU |
Evelyn Beatrice Henson Revocable Trust, Doyle R Henson Successor Trustee |
Arbuckle Enterprises, Inc. |
Book 631, Page 749 |
8/10/2006 |
E/2 SW/4 of Section 13, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Thaylia Suggs a/k/a Thaylia J. Suggs |
Arbuckle Enterprises, Inc. |
Book 631, Page 535 |
8/10/2006 |
E/2 SW/4 of Section 13, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Joan M. Akers |
Arbuckle Enterprises, Inc. |
Book 606, Page 604 |
12/8/2004 |
NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Burl Bone and Lamona Bone, husband and wife |
Arbuckle Enterprises, Inc. |
Book 620, Page 295 |
12/1/2005 |
NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Betty Dvorak |
Arbuckle Enterprises, Inc. |
Book 604, Page 781 |
12/8/2004 |
NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Ralph L. Evans and Helen Evans Family Trust dated October 11, 1993, Linda K. Kirby Successor Trustee |
Arbuckle Enterprises, Inc. |
Book 606, Page 598 |
11/23/2004 |
NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Verla Jean Evans |
Arbuckle Enterprises, Inc. |
Book 605, Page 672 |
12/8/2004 |
NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Kerry K. Freeman |
Arbuckle Enterprises, Inc. |
Book 634, Page 778 |
10/23/2006 |
NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Goodland Presbyterian Children’s Home |
Arbuckle Enterprises, Inc. |
Book 621, Page 10 |
12/8/2005 |
NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Carol M. Green |
Arbuckle Enterprises, Inc. |
Book 637, Page 664 |
12/28/2006 |
NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Board of County Commissioners of Love County OK |
Arbuckle Enterprises, Inc. |
Book 621, Page 315 |
12/8/2005 |
NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Harris Bennett Mannahan |
Arbuckle Enterprises, Inc. |
Book 638, Page 729 |
2/6/2007 |
NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
John Charles Mannahan |
Arbuckle Enterprises, Inc. |
Book 638, Page 727 |
2/6/2007 |
NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Darleen Freeman now Manning a/k/a Darleen Manning a/k/a Darlene Manning |
Arbuckle Enterprises, Inc. |
Book 634, Page 776 |
10/23/2006 |
NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Elizabeth Gail Seago |
Arbuckle Enterprises, Inc. |
Book 638, Page 342 |
1/2/2007 |
NE/4 NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Joe and Linda Martin Revocable Trust dated 1/17/02 |
Arbuckle Enterprises, Inc. |
Book 604, Page 777 |
12/8/2004 |
NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Charlotte Seago |
Arbuckle Enterprises, Inc. |
Book 640, Page 350 |
1/11/2007 |
NE/4 NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
Elaine I. Shine |
Arbuckle Enterprises, Inc. |
Book 605, Page 517 |
11/23/2004 |
NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
|
EHU |
Winifred Randall Shine Living Trust, Winifred Randall Shine Trustee |
Arbuckle Enterprises, Inc. |
Book 605, Page 515 |
12/8/2004 |
NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Patricia Ann Goodrich Vinson |
Arbuckle Enterprises, Inc. |
Book 633, Page 231 |
10/11/2006 |
NE/4 NW/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
ECS Production, L.L.C. |
Arbuckle Enterprises, Inc. |
Book 635, Page 534 |
12/12/2006 |
S/2 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Charles Ray Hefner Trust, Robert A. Hefner III Trustee |
Arbuckle Enterprises, Inc. |
Book 643, Page 3 |
1/1/2007 |
S/2 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Robert A. Hefner IV Trust, Robert A. Hefner III Trustee |
Arbuckle Enterprises, Inc. |
Book 643, Page 5 |
1/1/2007 |
S/2 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Catherine Eva Hefner Trust, Robert A. Hefner III Trustee |
Arbuckle Enterprises, Inc. |
Book 643, Page 7 |
1/1/2007 |
S/2 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Lavern Morris a/k/a Laverne Morris |
Arbuckle Enterprises, Inc. |
Book 604, Page 779 |
12/8/2004 |
N/2 NE/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Louise White |
Arbuckle Enterprises, Inc. |
Book 604, Page 775 |
12/8/2004 |
N/2 NE/4 NW/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Carol Abel 1984 Revocable Trust u/a dated April 17, 1984, Carol Abel Trustee |
Arbuckle Enterprises, Inc. |
Book 633, Page 239 |
8/25/2006 |
S/2 NE/4 NW/4 and NW/4 NE/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Jerry Carl Brown |
Arbuckle Enterprises, Inc. |
Book 644, Page 107 |
5/2/2007 |
S/2 NE/4 NW/4 and NW/4 NE/4 of Section 24, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Carolyn Bural |
Arbuckle Enterprises, Inc. |
Book 622, Page 270 |
1/4/2006 |
S/2 NE/4 NW/4 and NW/4 NE/4 |
Love County, Oklahoma |
EHU |
Dorothy Jo Copeland |
Arbuckle Enterprises, Inc. |
Book 620, Page 299 |
10/17/2005 |
S/2 NE/4 NW/4 and NW/4 NE/4 |
Love County, Oklahoma |
EHU |
Beth Ann Fint |
Arbuckle Enterprises, Inc. |
Book 632, Page 759 |
9/21/2006 |
S/2 NE/4 NW/4 and NW/4 NE/4 |
Love County, Oklahoma |
EHU |
Mary Pat Floyd, a widow |
Arbuckle Enterprises, Inc. |
Book 676, Page 569 |
10/17/2005 |
S/2 NE/4 NW/4 and NW/4 NE/4 |
Love County, Oklahoma |
EHU |
Laurie Brown Goetzl |
Arbuckle Enterprises, Inc. |
Book 641, Page 82 |
1/11/2007 |
S/2 NE/4 NW/4 and NW/4 NE/4 |
Love County, Oklahoma |
EHU |
Levine Family Trust dated December 22, 1980, Perry Bennett Levine, Successor Trustee |
Arbuckle Enterprises, Inc. |
Book 619, Page 839 |
10/17/2005 |
S/2 NE/4 NW/4 and NW/4 NE/4 |
Love County, Oklahoma |
EHU |
John T. MacPherson, II |
Arbuckle Enterprises, Inc. |
Book 621, Page 174 |
10/17/2005 |
S/2 NE/4 NW/4 and NW/4 NE/4 |
Love County, Oklahoma |
EHU |
Maxwell Avenue Church of Christ a/k/a Maxwell Avenue Church of Christ |
Arbuckle Enterprises, Inc. |
Book 621, Page 14 |
10/17/2005 |
S/2 NE/4 NW/4 and NW/4 NE/4 |
Love County, Oklahoma |
Thomas E. McDonald, Jr. |
Arbuckle Enterprises, Inc. |
Book 622, Page 274 |
1/4/2006 |
S/2 NE/4 NW/4 and NW/4 NE/4 |
Love County, Oklahoma |
|
EHU |
The Prospect Company |
Arbuckle Enterprises, Inc. |
Book 624, Page 116 |
2/9/2006 |
S/2 NE/4 NW/4 and NW/4 NE/4 |
Love County, Oklahoma |
EHU |
Katherine Barkley Adams Rice |
Arbuckle Enterprises, Inc. |
Book 624, Page 808 |
10/17/2005 |
S/2 NE/4 NW/4 and NW/4 NE/4 |
Love County, Oklahoma |
EHU |
Warren G. Sullivan |
Arbuckle Enterprises, Inc. |
Book 621, Page 5 |
12/1/2005 |
S/2 NE/4 NW/4 and NW/4 NE/4 |
Love County, Oklahoma |
EHU |
The Tipton Home |
Arbuckle Enterprises, Inc. |
Book 620, Page 291 |
10/17/2005 |
S/2 NE/4 NW/4 and NW/4 NE/4 |
Love County, Oklahoma |
EHU |
Westview Boys’ Home |
Arbuckle Enterprises, Inc. |
Book 625, Page 25 |
12/30/2005 |
S/2 NE/4 NW/4 and NW/4 NE/4 |
Love County, Oklahoma |
EHU |
C. R. Henson & Evelyn, h/w |
Nondorf Oil and Gas |
Book 299, Page 483 |
15-Oct-82 |
W/2 SW/4 of Section 13, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Thaylia Suggs & Mildred, w/h |
Nondorf Oil and Gas |
Book 299, Page 486 |
15-Oct-82 |
W/2 SW/4 of Section 13, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
Alva Brown & Opal, h/w |
Nondorf Oil and Gas |
Book 299, Page 489 |
15-Oct-82 |
W/2 SW/4 of Section 13, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
E. L. Evans, Jr. & Jean P. Evans |
R. S. Gardenhire, Jr. |
Book 267, Page 849 |
21-Oct-80 |
NW/4 NW/4 of Section 13, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
A. K. Weiss |
J. O. Easley |
Book 270, Page 98 |
19-Dec-80 |
SW/4 NW/4 of Section 13, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
The Fisher Oil Company |
J. O. Easley |
Book 275, Page 339 |
3-Feb-81 |
SW/4 NW/4 of Section 13, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
S. N. Goldman, a married man, and Margaret K. Goldman, his wife |
Patrick Dailey |
Book 284, Page 727 |
9-Oct-81 |
SW/4 NW/4 of Section 13, Township 6 South, Range 1 West |
Love County, Oklahoma |
EHU |
**John Theel |
**This interest acquired through Oklahoma Corporation Commission Order No. 212961, Cause CD No. 92783. |
SW/4 NW/4 of Section 13, Township 6 South, Range 1 West |
Love County, Oklahoma |
|
It is the intent for this instrument to assign and include all of Assignors right, title and interest in and to all wells and interests in the W/2 NW/4 and SW/4 of Section 13-6S-1W, the E/2 NE/4 and E/2 SE/4 of Section 14-6S-1W and NW/4 NE/4 and the NW/4 of Section 24-6S-1W, Love County, Oklahoma, whether such interests and/or wells are properly described herein or not, including but not limited to the following: |
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Eastman Hills Unit established under Oklahoma Corporation Commission Order #532907, Cause CD 200608546-T, covering the West Half of the Northwest Quarter and the Southwest Quarter (W/2 NW/4 & SW/4) of Section 13 and the East Half of the Northeast Quarter and the East Half of the Southeast Quarter (E/2 NE/4 & E/2 SE/4) of Section 14 and the Northwest Quarter of the Northwest Quarter and the Northwest Quarter (NW/4 NE/4 & NW/4) of Section 24 of Township 6 South, Range 1 West, Love County, Oklahoma, containing 600 acres more or less. |
|
|
Lessor |
Lessee |
Date |
Recording |
Legal Description |
County, State |
|
Van Buskirk |
Marion Gale Cox |
HL Gaston III |
12/21/2004 |
604/759 |
W/2 SE/4 NE/4 |
Love County, OK |
Van Buskirk |
Gloria Fern Craig |
HL Gaston III |
12/21/2004 |
605/808 |
W/2 SE/4 NE/4 |
Love County, OK |
Van Buskirk |
Panzy Lue Dudley |
HL Gaston III |
1/24/2005 |
606/15 |
W/2 SE/4 NE/4 |
Love County, OK |
Van Buskirk |
Miliford Corporation |
HL Gaston III |
8/3/2005 |
614/598 |
W/2 SE/4 NE/4 |
Love County, OK |
Van Buskirk |
Wood Oil Company |
HL Gaston III |
8/3/2005 |
615/665 |
W/2 SE/4 NE/4 |
Love County, OK |
Van Buskirk |
Velma O. W. Peterson |
RDT Properties, Inc. |
11/7/2007 |
650/152 |
E/2 NE/4 |
Love County, OK |
Van Buskirk |
James A. Stevens |
RDT Properties, Inc. |
11/7/2007 |
650/505 |
E/2 NE/4 |
Love County, OK |
Van Buskirk |
L. Mark Edwards |
RDT Properties, Inc. |
6/1/2008 |
661/495 |
Lots 1 & 2 aka N/2 NE/4 |
Love County, OK |
Van Buskirk |
Rice Family, LLC |
Mid-Con Energy Properties, LLC |
12/27/2012 |
742/491 |
E/2 NE/4 (limited to the portion of the Deese Formation from Order 602908) |
Love County, OK |
Van Buskirk |
Jane Sanders Galt |
Tom R. Gray Jr. |
12/29/1975 |
217/523 |
Lots 1 & 2 aka N/2 NE/4 |
Love County, OK |
Van Buskirk |
Wilma Choate & Willis Choate III |
T.C. Craighead |
6/12/1978 |
233/170 |
Lots 1 & 2 aka N/2 NE/4 |
Love County, OK |
Van Buskirk |
Ruby Justin |
T.C. Craighead |
6/12/1978 |
233/172 |
Lots 1 & 2 aka N/2 NE/4 |
Love County, OK |
Van Buskirk |
JE Devine |
T.C. Craighead |
6/12/1978 |
233/174 |
Lots 1 & 2 aka N/2 NE/4 |
Love County, OK |
Van Buskirk |
The Hefner Company |
T.C. Craighead |
6/12/1978 |
233/168 |
Lots 1 & 2 aka N/2 NE/4 |
Love County, OK |
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Property |
Lessor |
Lessee |
Date |
Recording |
Legal Description |
County, State |
Walnut Hills |
Paschall Properties, Inc. |
RDT Properties, Inc |
12/10/2008 |
668/411 |
NW/4 of 006S-001W-28 |
Love County, OK |
Walnut Hills |
Susan P. Paschall, Trustee of the Susan P. Paschall Revocable Inter Vivos Trust # 1 dated 12/23/1993, amended 4/15/2005 |
RDT Properties, Inc |
12/10/2008 |
668/408 |
NW/4 of 006S-001W-28 |
Love County, OK |
Walnut Hills |
BBT Enterprises Ltd. |
David W. Potts Land & Exploration Co |
6/23/2011 |
704/418 |
NE/4; NE/4 SE/4; E/2 NW/4 SE/4; SW/4 NW/4 SE/4 of Section 28-6S-1W |
Love County, OK |
Walnut Hills |
Stroube Energy Corporation |
David W. Potts Land & Exploration Co |
6/23/2011 |
704/420 |
NE/4; NE/4 SE/4; E/2 NW/4 SE/4; SW/4 NW/4 SE/4 of Section 28-6S-1W |
Love County, OK |
Cheyenne Petroleum Corporation |
David W. Potts Land & Exploration Co. |
7/22/2008 |
663/130, 700/56 |
NE/4; NE/4 SE/4; E/2 NW/4 SE/4; SW/4 NW/4 SE/4 of Section 28-6S-1W |
Love County, OK |
|
Walnut Hills |
The Prospect Company, a Delaware Corporation |
RDT Properties, Inc |
10/17/2011 |
711/150 |
NE/4; NE/4 SE/4; E/2 NW/4 SE/4; SW/4 NW/4 SE/4 of Section 28-6S-1W |
Love County, OK |
All right, title and interest, acquired under that certain Pooling Order No. 589646 (Cause CD No. 201103226-T), dated October 3, 2011, in Section 28-T6S-R1W, Love County, OK. |
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Schedule of Wells
UNIT/LEASE |
Property/Well Name |
County |
State |
Sec-Twp-Rng |
Well Type |
API Number |
Current Status |
Last MIT Date |
Ardmore West Deese Sand Unit |
Coffey 2 |
Carter |
OK |
Section 29-T4S-R1E |
INJ |
35-019-25412 |
SI |
7/20/2016 |
Ardmore West Deese Sand Unit |
Coffey 3 |
Carter |
OK |
Section 29-T4S-R1E |
INJ |
35-019-25412 |
SI |
7/20/2016 |
Ardmore West Deese Sand Unit |
Coffey B1 |
Carter |
OK |
Section 29-T4S-R1E |
Oil |
35-019-20639 |
SI |
|
Ardmore West Deese Sand Unit |
Coffey B2 |
Carter |
OK |
Section 29-T4S-R1E |
Oil |
35-019-20760 |
SI |
|
Ardmore West Deese Sand Unit |
Harries Ricketts 1 |
Carter |
OK |
Section 33-T4S-R1E |
WSW |
35-019-00119 |
SI |
|
Ardmore West Deese Sand Unit |
Harries Ricketts 2 |
Carter |
OK |
Section 33-T4S-R1E |
Oil |
35-019-25466 |
PROD |
|
Ardmore West Deese Sand Unit |
Harries Ricketts 3 |
Carter |
OK |
Section 33-T4S-R1E |
INJ |
35-019-25569 |
SI |
1/4/2017 |
Ardmore West Deese Sand Unit |
Van Eaton 1-33 |
Carter |
OK |
Section 33-T4S-R1E |
Oil |
35-019-20602 |
SI |
|
Ardmore West Deese Sand Unit |
Van Eaton 2-33 |
Carter |
OK |
Section 33-T4S-R1E |
INJ |
35-019-25611 |
SI |
3/28/2017 |
Ardmore West Deese Sand Unit |
Van Eaton 3-33 |
Carter |
OK |
Section 33-T4S-R1E |
INJ |
35-019-25702 |
SI |
9/1/2017 |
Battle Springs Deese Sand Unit |
Banks 3 (Outside Unit) |
Love |
OK |
Section 8-T6S-R1W |
Oil |
35-085-20549 |
PROD |
|
Battle Springs Deese Sand Unit |
Banks 6 |
Love |
OK |
Section 17-T6S-R1W |
INJ |
35-085-20581 |
INJ |
6/30/2015 |
Battle Springs Deese Sand Unit |
Banks 7-17 |
Love |
OK |
Section 17-T6S-R1W |
INJ |
35-085-21094 |
INJ |
10/13/2014 |
Battle Springs Deese Sand Unit |
Banks 8-18 |
Love |
OK |
Section 18-T6S-R1W |
INJ |
35-085-21075 |
SI |
9/24/2014 |
Battle Springs Deese Sand Unit |
Banks 9-18 |
Love |
OK |
Section 18-T6S-R1W |
Oil |
35-085-21105 |
SI |
|
Bridge 1-21 |
Love |
OK |
Section 21-T6S-R1W |
INJ |
35-085-20932 |
INJ |
1/15/2013 |
|
Battle Springs Deese Sand Unit |
C. Banks 1-18 |
Love |
OK |
Section 18-T6S-R1W |
INJ |
35-085-20842 |
INJ |
8/1/2016 |
Battle Springs Deese Sand Unit |
C. Banks 2-18 |
Love |
OK |
Section 18-T6S-R1W |
INJ |
35-085-21108 |
INJ |
7/24/2014 |
Battle Springs Deese Sand Unit |
C. Banks 3-18 |
Love |
OK |
Section 18-T6S-R1W |
Oil |
35-085-21205 |
PROD |
|
Battle Springs Deese Sand Unit |
Cantrell 1 |
Love |
OK |
Section 17-T6S-R1W |
Oil |
35-085-20471 |
PROD |
|
Battle Springs Deese Sand Unit |
Cantrell 2 |
Love |
OK |
Section 17-T6S-R1W |
INJ |
35-085-20706 |
INJ |
6/4/2015 |
Battle Springs Deese Sand Unit |
Davis 1 |
Love |
OK |
Section 16-T6S-R1W |
WSW |
35-085-20580 |
PROD |
|
Battle Springs Deese Sand Unit |
Elaine 1-18 |
Love |
OK |
Section 18-T6S-R1W |
INJ |
35-085-20895 |
INJ |
8/5/2015 |
Battle Springs Deese Sand Unit |
Elaine 3-18 |
Love |
OK |
Section 18-T6S-R1W |
Oil |
35-085-21118 |
SI |
|
Battle Springs Deese Sand Unit |
Folsom 1-20 |
Love |
OK |
Section 20-T6S-R1W |
INJ |
35-085-20913 |
INJ |
6/4/2015 |
Battle Springs Deese Sand Unit |
Folsom 2-20 |
Love |
OK |
Section 20-T6S-R1W |
Oil |
35-085-20945 |
PROD |
|
Battle Springs Deese Sand Unit |
Gilley 20-1 |
Love |
OK |
Section 20-T6S-R1W |
Oil |
35-085-20924 |
SI |
|
Battle Springs Deese Sand Unit |
Gilley 3-20 |
Love |
OK |
Section 20-T6S-R1W |
Oil |
35-085-21090 |
PROD |
|
Battle Springs Deese Sand Unit |
Gilley 4-20 |
Love |
OK |
Section 20-T6S-R1W |
Oil |
35-085-21120 |
SI |
|
Battle Springs Deese Sand Unit |
Green 1-17 |
Love |
OK |
Section 17-T6S-R1W |
Oil |
35-085-21077 |
PROD |
|
Battle Springs Deese Sand Unit |
Green 2-17 |
Love |
OK |
Section 17-T6S-R1W |
INJ |
35-085-21101 |
SI |
1/7/2013 |
Battle Springs Deese Sand Unit |
Green 3-17 |
Love |
OK |
Section 17-T6S-R1W |
Oil |
35-085-21103 |
PROD |
|
Mead 3-8 |
Love |
OK |
Section 8-T6S-R1W |
Oil |
35-085-21169 |
PROD |
|
|
Battle Springs Deese Sand Unit |
Moxley 1-21 |
Love |
OK |
Section 21-T6S-R1W |
INJ |
35-085-20583 |
INJ |
6/11/2015 |
Battle Springs Deese Sand Unit |
Moxley 2-21 |
Love |
OK |
Section 21-T6S-R1W |
INJ |
35-085-20958 |
INJ |
6/9/2015 |
Battle Springs Deese Sand Unit |
Moxley 3-21 |
Love |
OK |
Section 21-T6S-R1W |
Oil |
35-085-21091 |
SI |
|
Battle Springs Deese Sand Unit |
Moxley 4-21 |
Love |
OK |
Section 21-T6S-R1W |
Oil |
35-085-21124 |
PROD |
|
Battle Springs Deese Sand Unit |
Moxley Trust 1-17 |
Love |
OK |
Section 17-T6S-R1W |
INJ |
35-085-20837 |
INJ |
6/11/2015 |
Battle Springs Deese Sand Unit |
Moxley Trust 4-17 |
Love |
OK |
Section 17-T6S-R1W |
Oil |
35-085-20935 |
PROD |
|
Battle Springs Deese Sand Unit |
Pool 2-20 |
Love |
OK |
Section 20-T6S-R1W |
INJ |
35-085-21088 |
SI |
6/13/2016 |
Battle Springs Deese Sand Unit |
Pool 3-20 |
Love |
OK |
Section 20-T6S-R1W |
Oil |
35-085-21125 |
PROD |
|
Battle Springs Deese Sand Unit |
R. Banks 2-17 |
Love |
OK |
Section 17-T6S-R1W |
Oil |
35-085-21123 |
PROD |
|
Battle Springs Deese Sand Unit |
R. Banks 3-17 |
Love |
OK |
Section 17-T6S-R1W |
Oil |
35-085-21187 |
PROD |
|
Eastman Hills Unit |
Bean 1 |
Love |
OK |
Section 13-T6S-R1W |
Oil |
35-085-20598 |
SI |
|
Eastman Hills Unit |
Henson 1-13 |
Love |
OK |
Section 13-T6S-R1W |
INJ |
35-085-20714 |
SI |
1/4/2017 |
Eastman Hills Unit |
Henson 2-13 |
Love |
OK |
Section 13-T6S-R1W |
WSW |
35-085-20765 |
PROD |
|
Eastman Hills Unit |
Henson 3-13 |
Love |
OK |
Section 13-T6S-R1W |
INJ |
35-085-21061 |
INJ |
12/10/2014 |
Eastman Hills Unit |
Henson 4-13 |
Love |
OK |
Section 13-T6S-R1W |
Oil |
35-085-21067 |
PROD |
|
Eastman Hills Unit |
Renick 1-14 |
Love |
OK |
Section 14-T6S-R1W |
INJ |
35-085-21069 |
SI |
5/12/2013 |
Highlands Unit |
Banks 10-8 |
Love |
OK |
Section 8-T6S-R1W |
INJ |
35-085-21095 |
SI |
6/13/2016 |
Highlands Unit |
Banks 11-7 |
Love |
OK |
Section 7-T6S-R1W |
INJ |
35-085-21078 |
INJ |
9/17/2014 |
Highlands Unit |
Banks 11-8 |
Love |
OK |
Section 8-T6S-R1W |
Oil |
35-085-21122 |
PROD |
|
Highlands Unit |
Banks 12-7 |
Love |
OK |
Section 7-T6S-R1W |
INJ |
35-085-21082 |
INJ |
8/17/2015 |
Highlands Unit |
Banks 12-8 |
Love |
OK |
Section 8-T6S-R1W |
Oil |
35-085-21132 |
PROD |
|
Highlands Unit |
Banks 13-8 |
Love |
OK |
Section 8-T6S-R1W |
Oil |
35-085-21126 |
PROD |
|
Highlands Unit |
Banks 14-8 |
Love |
OK |
Section 8-T6S-R1W |
INJ |
35-085-21186 |
INJ |
1/28/2014 |
Stacy 2-36 |
Carter |
OK |
Section 36-T5S-R2W |
INJ |
35-019-25367 |
INJ |
8/8/2014 |
|
Twin Forks Unit |
Stacy 3-36 |
Carter |
OK |
Section 36-T5S-R2W |
Oil |
35-019-25754 |
PROD |
|
VB Lease |
VanBuskirk 6-1A (Outside Unit) |
Love |
OK |
Section 1-T6S-R2W |
Oil |
35-085-21162 |
PROD |
|
VB Lease |
VanBuskirk 8-1A (Outside Unit) |
Love |
OK |
Section 1-T6S-R2W |
Oil |
35-085-21219 |
PROD |
|
Walnut Hills Unit |
Cowan 1-28 |
Love |
OK |
Section 28-T6S-R1W |
Oil |
35-085-21151 |
PROD |
|
Walnut Hills Unit |
Jewell 2-21 |
Love |
OK |
Section 21-T6S-R1W |
Oil |
35-085-21183 |
SI |
|
Walnut Hills Unit |
Peyrot 1-28 |
Love |
OK |
Section 28-T6S-R1W |
Oil |
35-085-21142 |
PROD |
|
Walnut Hills Unit |
Peyrot 2-28 |
Love |
OK |
Section 28-T6S-R1W |
Oil |
35-085-21164 |
PROD |
|
Interests/Ownership
Seller Owned Working Interests/Net Revenue Interests
Southern OK Lease |
BPO WI, % |
BPO NRI % |
APO WI % |
APO NRI % |
RI % |
ORRI % |
Davis V-1 |
|
|
9.67320 |
6.43270 |
|
|
BSDSU |
52.6154 |
41.7054 |
48.6972 |
37.5067 |
0.2836 |
0.8706 |
EHU |
58.8446 |
43.5228 |
55.9509 |
41.3512 |
|
0.9391 |
SEHU |
|
|
43.4646 |
33.5850 |
0.0003 |
0.3185 |
HDSU |
75.2490 |
58.8936 |
71.3993 |
56.2537 |
0.9533 |
0.6435 |
TFDU |
77.6192 |
60.2940 |
74.2452 |
57.7294 |
0.8973 |
0.5996 |
AWDU |
96.5362 |
75.3908 |
94.3715 |
73.4977 |
0.4074 |
|
BANKS #3 |
|
|
100.0000 |
80.96395 |
|
0.1037 |
Pinkerton #1 & 3 |
|
|
43.2266 |
35.0002 |
|
|
Van Buskirk #6-1A |
82.4927 |
67.1417 |
66.6754 |
54.3358 |
1.9543 |
|
Van Buskirk 8-1A |
80.7935 |
65.7661 |
66.6754 |
54.3358 |
1.9543 |
|
Peyrot 1 & 2 |
|
|
57.0905 |
46.0580 |
|
|
Cowan |
100.0000 |
81.2500 |
|
|
|
|
Jewell |
|
|
96.9388 |
78.7564 |
|
|
Exhibit “C”
Allocation of Value
Unit |
Allocated Value |
Van Buskirk |
$233,133 |
Peyrot |
$1,678,072 |
Highlands Unit |
$11,473,142 |
SE Hewitt Unit |
$2,469,674 |
Pinkerton #1 & #3 |
$87,040 |
Cowan |
$0 |
Eastman Hills Unit |
$101,699 |
Banks |
$20,405 |
Davis |
$0 |
Battle Springs Unit |
$6,484,236 |
Ardmore West Deese Sand Unit |
$127,686 |
Twin Forks Unit |
$2,324,913 |
Jewell |
$0 |
Total |
$25,000,000 |
To be agreed upon by both parties.
Exhibit
“
E
”
Certificate of Non-Foreign Status
See attached.
Schedule
2.3
Equipment
Equipment:
Tank Batteries
FACILITY/LEASE NAME |
Oil Tanks #-BBLS |
Water Tanks #-BBLS |
Inventory |
Ardmore West North |
2- 210 bbl 10x15 |
1-200 bbl 12x10 |
1-HT 45bbl 4x20 |
Ardmore West South |
4- 210 bbl 10x15 |
1-200 bbl 12x10 |
1-HT 45bbl 4x20 1-SP 9bbl 2.5x10 1-FWKO 4bbl 2.5x5 |
Banks #3 |
1-300 bbl 12x15 |
1-200 bbl 12x10 |
1-HT 45bbl 4x20 |
Banks Unit #1 |
6- 210 bbl 10x15 |
2-300 bbl 12x15 |
1-HT 45bbl 4x20 1-SP 76bbl 6x15 1-SP 8bbl 3x6 LACT UNIT 2 Pumps |
Battle Springs |
300 bbl 12x15 3-100 bbl 20x18 |
2-500 bbl 12x25 |
1-HT 101bbl 6x20 1-FKWO 180bbl 8x20 LACT UNIT 2 Pumps 1-H pump |
Cowan 2-28 |
2-210 bbl 10x15 |
1-200 bbl 12x10 |
1-HT 45bbl 4x20 |
Eastman Hills |
2-300 bbl 12x15 4-210 bbl 10x15 |
2-210 bbl 12x10 1-170 bbl 12x10 |
1- HT 45bbl 4x20 1-H pump |
Highlands Injection Facility |
1-210 bbl 10x15 |
2-500 bbl 12x25 |
1-pumps 1-H pump |
Jewell |
2-200 bbl 12x10 |
1-168 bbl 10x12 |
1-HT 15bbl 3x12 |
Peyrot |
2-210 bbl 10x15 |
1-200 bbl 12x10 |
1-HT 45bbl 4x20 |
Pinkerton 1-10 &4-10 |
4-300 bbl 12x15 |
2-300 bbl 12x15 |
2-HT 45bbl 4x20 1-Pump |
Schaff 1-36 |
4-210 bbl 10x15 |
2-300 bbl 12x15 |
1-SP 3bbl 1-FWKO 8bbl |
Schaff 3-36 water station |
1-210 bbl 10x15 |
1-500 bbl 12x25 |
1-H Pump |
SE Hewitt |
4-400 bbl 12x20 1-200 bbl 12x10 |
2-210 bbl 10x15 |
1-HT 101bbl 6x20 1-FKWO 22bbl 4x10 1-SP 9bbls 2.5x10 LACT UNIT 2 Pumps |
SE Hewitt Water Injection Station |
1-210 bbl 10x15 |
1-500 bbl 12x25 |
1-H Pump |
Sullivan 1-1 & 5-1 |
6-300 bbl 12x15 |
2-400 bbl 12x20 |
1-HT 45bbl 4x20 1-HT 101bbl 6x20 1- FWKO 22bbl 4x10 1-FWKO 34bbl 4x15 LACT Unit 3 Pumps |
Sullivan 1-25 |
2-210 bbl 10x15 |
1-200 bbl 12x10 |
1-HT 45bbl 4x20 1-Pump |
6-210 bbls 10x15 |
2-300 bbl 12x15 |
1-FWKO 50bbl 6x10 1-HT 45bbl 4x20 2-Pumps |
|
Sullivan 2-12 |
8-210 bbls 10x15 |
2-300 bbl 12x15 |
1-FWKO 22bbls 4x10 2-HT 45bbls 1-SP 9bbl |
TwinForks Deese Unit |
4-1000 bbl 21x16 |
2-400 bbl 12x20 |
2-HT 45bbl 4x20 1-FWKO 50bbl 6x10 1-SP 9bbl 2.5x10 2-Pump LACT Unit |
Van Buskirk 6-1A |
2-210 bbl 10x15 |
1-200 bbl 12x10 |
1-HT 45bbl 4x20 |
Van Buskirk 8-1A |
3-210 bbl 10x15 |
1-300 bbl 12x15 |
1-HT 45bbl 4x20 1 Pump |
Dunlap-Tom-Steel |
1-300 bbl 12x15 |
1-400 bbl 12x20 |
1-SP 2bbl 16x8 1-HT 45bbl 4x20 |
Pumping Units
Unit |
Well |
Brand |
Model |
Motor |
HP |
HDSU |
Van Buskirk 1-1 |
CMI |
320-256-100 |
404T |
50 |
HDSU |
Van Buskirk 9-1 |
LUFKIN |
C320D |
365T |
40 |
HDSU |
Van Buskirk 5-1 |
LUFKIN |
C640D-365-168 |
404T |
50 |
HDSU |
Van Buskirk 7-1 |
LUFKIN |
M320D-256-120 |
365T |
40 |
HDSU |
Van Buskirk 6-1 |
AMERICAN |
320G |
365T |
40 |
HDSU |
PD Sullivan 3-6 |
CMI |
456-305-120 |
364T |
30 |
HDSU |
Sullivan 3-1 |
BETHLEHEM |
456D-305SP-120 |
365T |
40 |
HDSU |
Sullivan 13-1 |
BETHLEHEM |
320-256-120 |
365T |
40 |
HDSU |
Sullivan 5-1 |
LUFKIN |
M640D-365-168 |
ND405T |
50 |
HDSU |
Sullivan 7-1 |
LUFKIN |
M320D-305-100 |
326T |
30 |
HDSU |
Sullivan 14-1 |
AMERICAN |
320-305-100 |
365T |
40 |
HDSU |
Sullivan 11-1 |
LUFKIN |
C456D-305-120 |
365T |
40 |
HDSU |
Sullivan 2-12 |
LUFKIN |
TC-1A-41-A (320) |
365T |
50 |
HDSU |
Sullivan 12-1 |
AMERICAN |
320-256-100 |
ND 405T |
50 |
HDSU |
Sullivan 9-12 |
LUFKIN |
M640D-365-168 |
365T |
75 |
HDSU |
Sullivan 8-12 |
LUFKIN |
M640D-365-168 |
444T |
40 |
HDSU |
Daube Wilkins 3-12 |
PARKERSBURG |
C228 |
365T |
40 |
HDSU |
Daube Wilkins 2-12 |
CMI |
456-305-120 |
ND405T |
50 |
HDSU |
Paschall 1 |
LUFKIN |
M640D-365-168 |
404T |
50 |
HDSU |
Paschall 2 |
MORGAN |
320-305-100 |
ND405T |
50 |
HDSU |
Sullivan 3-6 |
LUFKIN |
M640D-365-168 |
404ST |
50 |
HDSU |
Sullivan 4-6 |
LUFKIN |
M320D-256-120 |
ND364T |
40 |
HDSU |
Banks 8-7 |
AMERICAN |
456G-365-120 |
365T |
40 |
HDSU |
Banks 3 |
SENTRY |
G228D-246-86 |
326U |
20 |
HDSU |
Banks 12-8 |
AMERICAN |
228-246-86 |
364T |
30 |
HDSU |
Banks 15-8 |
LUFKIN |
M320D-305-100 |
326T |
30 |
HDSU |
Banks 11-8 |
AMERICAN |
228-246-86 |
365T |
40 |
HDSU |
Berry Williams 2-7 |
CMI |
456 |
ND405T |
50 |
HDSU |
Williams 1-7 |
BETHLEHEM |
228D-255 |
365T |
40 |
HDSU |
Tucker 2-13 |
PARKERSBURG |
74-G320D-25-A6 |
365T |
40 |
HDSU |
Ron 3-12 |
PARKERSBURG |
G2035 |
365T |
40 |
Sullivan 6-12 |
CONTINENTAL |
30DA 320F |
365T |
40 |
|
HDSU |
Sullivan 11-12 |
LUFKIN |
C640D-304-120 |
ND405T |
50 |
HDSU |
Sullivan 12-12 |
LUFKIN |
M640D-365-168 |
404T |
50 |
HDSU |
Tom 3-2 |
CABOT |
320D-298-100 |
364T |
30 |
HDSU |
Tom 4-2 |
LUFKIN |
C228D-246-86 |
324T |
25 |
HDSU |
Steel 2 |
BETHLEHEM |
160D |
284T |
15 |
HDSU |
Dunbar 1-6 |
EMSCO |
11MDS-2 |
326T |
30 |
HDSU |
PD Sullivan 3-6 |
CONTINENTAL |
DB320-298-100A |
|
|
HDSU |
H-Pump |
SERIES 538 HS |
MODEL-PMSXD |
TYPE:61 P37 |
|
HDSU |
Thrust Chamber |
MODEL-HTC 1.XE |
MOTOR-L449TS |
|
400 |
SEHU |
Rummell 2-10 |
LUFKIN |
228DB |
|
40 |
SEHU |
Goddard 2-10 |
LUFKIN |
41B |
|
40 |
SEHU |
Goddard 1-10 |
LUFKIN |
M320D |
|
50 |
SEHU |
Extra |
LUFKIN |
61 |
|
40 |
SEHU |
Goddard 4-10 |
LUFKIN |
35 |
|
40 |
SEHU |
Collins 2-15 |
LUFKIN |
41B |
|
40 |
SEHU |
Chaney |
MORGAN |
320 |
|
50 |
SEHU |
Collins 3-15 |
SENTRY |
G320D |
|
40 |
SEHU |
Nipp 2-10 |
TRASNFORMER |
|
|
|
SEHU |
H-Pump |
BAKER HUGHES |
|
|
150 |
SEHU |
WSW Pump |
GRENCO |
|
|
|
SEHU |
Micro Drive |
BAKER HUGHES |
|
|
|
AWDU |
Van Eaton 1 |
LUFKIN |
M228DA |
|
30 |
AWDU |
Harris-Rickets 2 |
LUFKIN |
228DB |
|
40 |
AWDU |
Coffee B1 |
CONTINENTAL EMSCO |
D160 |
|
20 |
AWDU |
Coffee B2 |
LUFKIN |
22G |
|
20 |
TFDU |
Sullivan 1-25 |
HEC |
UNIT |
|
40 |
TFDU |
Boggs 4-36 |
AMERICAN |
456 |
|
40 |
TFDU |
Boggs 3-36 |
PARKERSBURG |
G320DL |
|
40 |
TFDU |
Martin 7-36 |
LUFKIN |
C228D |
|
50 |
TFDU |
Martin 2-36 |
LUFKIN |
456D |
|
40 |
TFDU |
Martin 4-36 |
LUFKIN |
M456DE |
|
60 |
TFDU |
Martin 5-36 |
LUFKIN |
M456D |
|
50 |
TFDU |
Stacy 3-36 |
LUFKIN |
M320D |
|
50 |
TFDU |
Parton |
LUFKIN |
228D |
|
40 |
TFDU |
|
BETHLEHEM |
320D |
|
40 |
TFDU |
Boggs 3-36 |
SPI |
|
|
100 |
TFDU |
|
SPOC |
|
|
100 |
TFDU |
Martin 3-36 |
SPOC |
|
|
100 |
TFDU |
Boggs 2 |
SPOC |
|
|
100 |
TFDU |
Schaff 1 |
SPOC |
|
|
100 |
TFDU |
Schaff 2 |
SPOC |
|
|
100 |
EHU |
Henson 4-13 |
AMERICAN |
320 |
|
50 |
EHU |
Bean 1 |
CABOT |
320D |
|
30 |
EHU |
INJ H-PUMP |
SPI |
|
|
75 |
BSDSU |
Moxley 3-21 |
LUFKIN |
640D |
|
40 |
BSDSU |
Moxley 4-21 |
LUFKIN |
640D |
|
50 |
BSDSU |
Kirby 4-21 |
LUFKIN |
M640D |
|
75 |
BSDSU |
Kirby 2-21 |
EMSCO |
320D |
|
40 |
BSDSU |
Kirby 3-20 |
LUFKIN |
M640D |
|
50 |
BSDSU |
Gilley 4-20 |
LUFKIN |
M228D |
|
40 |
BSDSU |
Gilley 3-20 |
CMI |
456 |
|
40 |
BSDSU |
Folsom 2-20 |
LUFKIN |
M640D |
|
50 |
Year |
Make |
Model |
VIN |
OK-Tag |
2015 |
Ford |
F2S |
1FT7X2B69FEB51471 |
V26856 |
2016 |
Toyota |
Tacoma |
5TFSZ5AN9GX002255 |
V27066 |
2016 |
Toyota |
Tacoma |
5TFSZ5AN7GX011729 |
256KGT |
Easements and Surface Agreements
Owner |
Type |
Legal |
Date |
Wells |
Prospect |
County |
State |
Riesen Properties, LLC, c/o Albert Riesen, Jr. |
Surface Damage Agreement |
NW/4 of Section 33-4S-1E |
11/9/2011 |
Van Eaton #2-33 |
Ardmore West |
Carter |
OK |
William Lee Coffey |
Surface Damage Agreement |
NW/4 of Section 33-4S-1E |
11/9/2011 |
Van Eaton #2-33 |
Ardmore West |
Carter |
OK |
The Crosby Family, LLC |
Surface Use Agreement |
NE/4 of Section 33-4S-1E |
11/24/2010 |
Harris Ricketts #1-33, Harris Ricketts #2-33 |
Ardmore West |
Carter |
OK |
The Crosby Family, LLC |
Surface Use Agreement |
NE/4 of Section 33-4S-1E |
10/21/2011 |
Harris Ricketts #3-33 |
Ardmore West |
Carter |
OK |
Charles R. Richards |
Surface Damage Agreement |
NE/4 NE/4 SE/4 of Section 29-4S-1E |
7/1/2010 |
Coffey #2 |
Ardmore West |
Carter |
OK |
Charles R. Richards |
Surface Damage Agreement |
C SE/4 of Section 29-4S-1E |
7/1/2010 |
Coffey #3 |
Ardmore West |
Carter |
OK |
Robert W. & Kayla M. Sprouse |
Surface Damage Agreement |
SW/4 of Section 21-6N-1W |
3/14/2017 |
Kirby #4-21 |
Battlesprings |
Love |
OK |
Gary Binderim |
Surface Damage Agreement |
SW/4 of Section 21-6N-1W |
12/13/2013 |
Kirby #4-21 |
Battlesprings |
Love |
OK |
Joey & Daphne Hurst |
Surface Damage Agreement |
NE/4 of Section 20-6S-1W |
3/11/2011 |
Gilley #4-20 |
Battlesprings |
Love |
OK |
Joey & Daphne Hurst |
Surface Damage Agreement |
NW/4 of Section 20-6S-1W |
3/11/2011 |
Poole #3-20 |
Battlesprings |
Love |
OK |
Alta Faye Cox |
Surface Damage Agreement |
SE/4 SW/4 NW/4 of Section 21-6S-1W |
6/7/2010 |
Moxley #3-21 |
Battlesprings |
Love |
OK |
Robert W. Sprouse |
Right of Way |
SW/4 of Section 21-6S-1W |
2/26/2013 |
Kirby #3-21 |
Battlesprings |
Love |
OK |
Gary Binderim |
Surface Damage Agreement |
SW/4 of Section 21-6N-1W |
12/27/2012 |
Kirby #3-21 |
Battlesprings |
Love |
OK |
John Paul Morgan, Jr. |
Surface Damage Settlement and Release |
S/2 SE/4 of Section 8-6S-1W |
1/7/2011 |
Mead #2-8 |
Battlesprings |
Love |
OK |
Ada Morgan Lausen |
Surface Damage Settlement and Release |
S/2 SE/4 of Section 8-6S-1W |
1/7/2011 |
Mead #2-8 |
Battlesprings |
Love |
OK |
Margaret Mead Gilbert |
Surface Damage Settlement and Release |
S/2 SE/4 of Section 8-6S-1W |
1/7/2011 |
Mead #2-8 |
Battlesprings |
Love |
OK |
Mead Children's Trust, Mary Margaret Petty, Trustee |
Surface Damage Settlement and Release |
S/2 SE/4 of Section 8-6S-1W |
1/7/2011 |
Mead #2-8 |
Battlesprings |
Love |
OK |
Ada Morgan Lausen |
Surface Damage Settlement and Release |
S/2 SE/4 of Section 8-6S-1W |
3/25/2013 |
Mead #3-8 |
Battlesprings |
Love |
OK |
H.C. Peyrot |
Surface Damage Agreement |
SW/4 of Section 17-6S-1W |
11/30/2011 |
Hembree #4-17 |
Battlesprings |
Love |
OK |
Surface Damage Agreement |
SW/4 of Section 13-6S-1W |
9/8/2013 |
Henson #4-13 |
Eastman Hills |
Love |
OK |
|
Dr. Emilie T. Stahler |
Surface Damage Release and Grant of Surface Easement |
NE/4 NW/4, NW/4 NE/4 of Section 24-5S-1W |
12/1/2014 |
Stahler #1-24 |
Eastman Hills |
Love |
OK |
Helen F. Sullivan, et al. |
Surface Damage Agreement |
SW/4 NE/4 SW/4 of Section 6-6S-2W |
12/28/2012 |
Sullivan #5-6 |
Highlands |
Love |
OK |
Ricky Banks |
Surface Damage Agreement |
SW/4 of Section 8-6S-1W |
3/19/2013 |
Banks #14-8 |
Highlands |
Love |
OK |
Ricky Banks |
Surface Damage Agreement |
SE/4 of Section 7-6S-1W |
10/23/2012 |
Berry-Williams #2-7 |
Highlands |
Love |
OK |
Ricky Banks |
Surface Damage Agreement |
NE/4 of Section 7-6S-1W |
5/5/2012 |
Banks #8-7 |
Highlands |
Love |
OK |
Ricky Banks |
Surface Damage Agreement |
SW/4 NE/4 SW/4 of Section 7-6S-1W |
6/9/2010 |
Vick #2-7 |
Highlands |
Love |
OK |
Ricky Banks |
Surface Damage Agreement |
S/2 SE/4 SE/4 SW/4 of Section 7-6S-1W |
6/9/2010 |
Banks #12-7 |
Highlands |
Love |
OK |
Ricky Banks |
Surface Damage Agreement |
S/2 SE/4 SW/4 SE/4 of Section 7-6S-1W |
3/17/2010 |
Banks #11-7 |
Highlands |
Love |
OK |
Ricky Banks |
Surface Agreement and Damage Settlement |
NE/4 NE/4 NE/4 of Section 7-6S-1W |
10/1/2010 |
Banks #7-7 |
Highlands |
Love |
OK |
Ricky Banks |
Surface Agreement and Damage Settlement |
NE/4 NW/4 of Section 7-6S-1W |
10/1/2010 |
Banks #6-7 |
Highlands |
Love |
OK |
Ricky Banks |
Surface Agreement and Damage Settlement |
Section 8-6S-1W |
6/4/2011 |
Banks #13-8 |
Highlands |
Love |
OK |
Ricky Banks |
Surface Damage Settlement and Release |
NW/4 of Section 8-6S-1W |
2/10/2009 |
Banks #5-8 |
Highlands |
Love |
OK |
Anthony Schiralli |
Surface Damage Agreement |
NE/4 SW/4 NW/4 of Section 1-6S-2W |
6/15/2010 |
Van Buskirk #5-1 |
Highlands |
Love |
OK |
Anthony Schiralli |
Surface Damage Agreement |
SE/4 SE/4 NE/4 of Section 1-6S-2W |
6/16/2010 |
Van Buskirk #6-1 |
Highlands |
Love |
OK |
Anthony Schiralli |
Surface Damage Agreement |
SW/4 SW/4 NW/4 of Section 1-6S-2W |
6/14/2010 |
Van Buskirk #7-1 |
Highlands |
Love |
OK |
Anthony Schiralli |
Surface Damage Agreement |
NE/4 of Section 1-6S-2W |
1/23/2013 |
Van Buskirk #8-1 |
Highlands |
Love |
OK |
Anthony Schiralli |
Surface Damage Agreement |
NE/4 of Section 1-6S-2W |
3/25/2014 |
Van Buskirk #8-1 A |
Highlands |
Love |
OK |
Anthony Schiralli |
Surface Damage Agreement |
NE/4 of Section 1-6S-2W |
1/23/2013 |
Van Buskirk #9-1 |
Highlands |
Love |
OK |
Lawrence S. McGee, Jr. and Mary McGee Boggs |
Surface Damage Agreement |
NE/4 of Section 12-6S-2W |
1/21/2014, 1/23/2014 |
Sullivan #9-12 |
Highlands |
Love |
OK |
Lawrence S. McGee, Jr. and Mary McGee Boggs |
Surface Damage Agreement |
NE/4 of Section 12-6S-2W |
6/22/2011 |
Sullivan #13-12 |
Highlands |
Love |
OK |
Elam Resources, Jane Sullivan Elam, VP |
Surface Damage Agreement |
NW/4 of Section 12-6S-2W |
8/27/2014 |
Sullivan #12-12 |
Highlands |
Love |
OK |
Surface Damage Agreement |
NW/4 of Section 12-6S-2W |
8/28/2014 |
Sullivan #11-12 |
Highlands |
Love |
OK |
|
Elam Resources, Jane Sullivan Elam, VP |
Surface Damage Agreement |
NW/4 of Section 12-6S-2W |
5/20/2010 |
Sullivan #10-12 |
Highlands |
Love |
OK |
Jerome C. Sullivan, Jr. Testamentary Trust, et al |
Surface Damage Settlement and Release |
S/2 of Section 1-6S-2W |
11/24/2008 |
Sullivan #4-1 Sullivan #A-1 Sullivan 2-1 Sullivan 1-1 |
Highlands |
Love |
OK |
Shanna Kay Stallings, et al |
Surface Damage Agreement |
SE/4 of Section 1-6S-2W |
12/13/2013 |
Sullivan #14-1 |
Highlands |
Love |
OK |
Shanna Kay Stallings, et al |
Surface Damage Agreement |
SE/4 of Section 1-6S-2W |
6/28/2012 |
Sullivan #13-1 |
Highlands |
Love |
OK |
Helen F. Sullivan Revocable Trust, et al |
Surface Damage Agreement |
NW/4 of Section 12-6S-2W |
10/3/2010 |
P.D. Sullivan #3-6 |
Highlands |
Love |
OK |
Jerome C. Sullivan, Jr. Testamentary Trust, et al |
Surface Damage Agreement |
SE/4 of Section 1-6S-2W |
1/1/2011 |
Sullivan #9-12 |
Highlands |
Love |
OK |
Jerome C. Sullivan, Jr. Testamentary Trust, et al |
Surface Damage Agreement |
SE/4 of Section 1-6S-2W |
6/5/2010 |
Sullivan #8-1 |
Highlands |
Love |
OK |
Alan Gustine |
Surface Agreement & Damage Settlement |
Section 2-6S-2W |
7/22/2010 |
Miller #1-11 |
Highlands |
Carter |
OK |
Jeanne Collett aka Cockrill |
Surface Damage Agreement |
NE/4 of Section 11-6S-2W |
9/19/2012 |
Miller #2-11 |
Highlands |
Love |
OK |
Jerome C. Sullivan, Jr. Testamentary Trust, et al |
Surface Damage Agreement |
SE/4 of Section 1-6S-2W |
9/30/2011 |
Sullivan #12-1 |
Highlands |
Love |
OK |
Alan & Theresa Gustine |
Surface Damage Agreement |
SE/4 of Section 2-6S-2W |
3/16/2011 |
Tom #3-2 |
Highlands |
Love |
OK |
Alan & Theresa Gustine |
Surface Damage Agreement |
SE/4 of Section 2-6S-2W |
6/7/2012 |
Tom #4-2 |
Highlands |
Love |
OK |
Helen F. Sullivan Revocable Trust, et al |
Surface Damage Agreement |
SW/4 of Section 6-6S-2W |
12/15/2010 |
Sullivan #4-6 |
Highlands |
Love |
OK |
Jerome C. Sullivan, Jr. Testamentary Trust, et al |
Surface Damage Agreement |
SE/4 of Section 1-6S-2W |
9/30/2017 |
Sullivan #11-1 |
Highlands |
Love |
OK |
Michael R. & Stacey L. Ayres |
Surface Damage Agreement |
Section 7-6S-1W |
3/28/2011 |
Paschall #3-7 |
Highlands |
Love |
OK |
Michael R. & Stacey L. Ayres |
Surface Damage Agreement |
Section 12-6S-2W |
9/28/2011 |
Ron #3-12 |
Highlands |
Love |
OK |
Helen F. Sullivan Revocable Trust, et al |
Surface Damage Settlement and Release |
Section 6-6S-1W |
11/21/2008 |
WJ Banks #1-6 Dunbar #1-6 |
Highlands |
Love |
OK |
Bridget Ann Sullivan Wicklander |
Surface Damage Agreement |
NW/4 of Section 12-6S-2W |
8/1/2012 |
Sullivan #14-12 |
Highlands |
Love |
OK |
Bridget Ann Sullivan Wicklander |
Surface Damage Agreement |
Section 12-6S-2W |
5/26/2010 |
Sullivan #7-12 |
Highlands |
Love |
OK |
L.E. Jones Resources |
Surface Use Agreement |
SW/4 of Section 8-6S-1W |
11/24/2010 |
Banks #10-8 |
Highlands |
Love |
OK |
Jerome C. Sullivan, Jr. Testamentary Trust, et al |
Surface Damage Agreement |
SE/4 of Section 1-6S-2W |
2/10/2011 |
Sullivan #10-12 |
Highlands |
Love |
OK |
Surface Damage Agreement |
SW/4 of Section 6-6S-1W |
8/31/2010 |
Sullivan #3-6 |
Highlands |
Love |
OK |
|
Kimbro Family Catastrophic Trust |
Surface Damage Agreement |
SW/4 of Section 14-5S-2W |
9/27/2010 |
Ringling #4-14 |
SE Hewitt |
Carter |
OK |
Mr. & Mrs. Leslie Kimbro |
Surface Agreement & Damage Settlement |
SE/4 of Section 15-5S-2W |
1/4/2010 |
Collins #2 Collins #3 |
SE Hewitt |
Carter |
OK |
Claud N. Bain |
Surface Damage Agreement |
SE/4 of Section 10-5S-2W |
8/31/2013 |
Goddard #4-10 |
SE Hewitt |
Carter |
OK |
Claude N. Bain & Claudia T. Bain |
Surface Damage Agreement |
E/2 SW/4 of Section 10-5S-2W |
8/28/2009 |
Goddard #2-10 |
SE Hewitt |
Carter |
OK |
Barry Dollar |
Surface Agreement & Damage Settlement |
NE/4 of Section 15-5S-2W |
4/19/2011 |
Collins #1-15 |
SE Hewitt |
Carter |
OK |
Jeanne Vernon |
Surface Agreement & Damage Settlement |
Section 15-5S-2W |
11/1/2009 |
Kim #1-15 |
SE Hewitt |
Carter |
OK |
Conver Nipp |
Surface Agreement & Damage Settlement |
Section 10-5S-2W |
11/4/2009 |
Nipp #10-1 |
SE Hewitt |
Carter |
Ok |
Bob Pinkerton |
Surface Damage Agreement |
SE/4 of Section 10-5S-2W |
8/2/2012 |
Goddard #3-10 |
SE Hewitt |
Carter |
OK |
Rex C. Billingsley |
Surface Agreement & Damage Settlement |
Section 14-5S-2W |
5/26/2011 |
Ringling #1-14 Ringling #2-14 |
SE Hewitt |
Carter |
OK |
Bob Pinkerton |
Surface Damage Agreement |
SW/4 of Section 10-5S-2W |
5/11/2011 |
Rummell #2-10 |
SE Hewitt |
Carter |
OK |
Dale Houska |
Surface Damage Agreement |
NE/4 of Section 36-5S-2W |
5/6/2014 |
Schaff #4-36 |
Twin Forks |
Carter |
OK |
Mid-Con Energy Operating, Inc. |
Surface Damage Agreement |
SW/4 of Section 36-5S-2W |
4/25/2013 |
Parton #2-36 |
Twin Forks |
Carter |
OK |
Mid-Con Energy Operating, Inc. |
Surface Damage Agreement |
SE/4 of Section 36-5S-2W |
6/19/2013 |
Martin #6-36 |
Twin Forks |
Carter |
OK |
Bridget Ann Sullivan Wicklander |
Surface Damage Agreement |
SW/4 SE/4 NW/4 of Section 36-5S-2W |
7/20/2010 |
Boggs #2-36 |
Twin Forks |
Carter |
OK |
Jane Sullivan Elam |
Surface Damage Settlement and Release |
N/2 SE/4 NW/4 of Section 36-5S-2W |
5/25/2011 |
Boggs #2-36 |
Twin Forks |
Carter |
OK |
Lawrence S. McGee, Jr. |
Surface Damage Settlement and Release |
S/2 SE/4 NW/4 of Section 36-5S-2W |
5/23/2011 |
Boggs #2-36 |
Twin Forks |
Carter |
OK |
Mary McGee Boggs |
Surface Damage Settlement and Release |
S/2 SE/4 NW/4 of Section 36-5S-2W |
5/24/2011 |
Boggs #2-36 |
Twin Forks |
Carter |
OK |
Lawrence S. McGee, Jr. and Mary McGee Boggs |
Surface Damage Agreement |
SW/4 NE/4 NW/4 of Section 36-5S-2W |
8/25/2011 |
Boggs #3-36 |
Twin Forks |
Carter |
OK |
Duffy Goode |
Surface Damage Agreement |
NW/4 of Section 36-5S-2W |
8/29/2012 |
Boggs #4-46 |
Twin Forks |
Carter |
OK |
Ken Swan |
Surface Damage Settlement and Release |
E/2 NE/4 of Section 36-5S-2W |
10/19/2009 |
Dunlap #1 |
Twin Forks |
Carter |
OK |
Chase Schaff |
Right of Way Easement |
W/2 NE/4 of Section 36-5S-2W |
12/1/1988 |
Service Schaff Wells |
Twin Forks |
Carter |
OK |
Byron Schaff |
Right of Way Easement |
W/2 NE/4 of Section 36-5S-2W |
11/29/1988 |
Service Schaff Wells |
Twin Forks |
Carter |
OK |
Damage Release and Agreement |
NW/4 NE/4 SE/4 of Section 36-5S-2W |
8/3/2011 |
Martin #3-36 |
Twin Forks |
Carter |
OK |
|
W.W. Martin, LLC |
Damage Release and Agreement |
SE/4 NE/4 SE/4 of Section 36-5S-2W |
6/29/2012 |
Martin #4-36 |
Twin Forks |
Carter |
OK |
W.W. Martin, LLC |
Damage Release and Agreement |
SE/4 NW/4 SE/4 and SW/4 NE/4 SE/4 of Section 36-5S-2W |
12/18/2012 |
Martin #5-36 |
Twin Forks |
Carter |
OK |
Rose Stacy |
Surface Damage Agreement |
SE/4 SW/4 SW/4 of Section 36-5S-2W |
4/12/2010 |
Stacy #2-36 |
Twin Forks |
Carter |
OK |
The surface acreage described below is specifically excluded from the PSA.
County |
Legal Description |
Acres |
Conveyance Document |
Recorded |
Dated |
Carter |
SE/4 of Section 36-T5S-R2W |
160 |
GWD - WW Martin |
5664/242 |
3/7/2013 |
Carter |
N/2 SW/4 and E/2 SE/4 SW/4 of Section 36-T5S-R2W |
100 |
WD - Dolores Willingham |
5576/20 |
9/5/2012 |
Love |
W/2 of 6-6S-1W |
272.8 |
WD - Sullivans |
832/824 |
7/21/2017 |
Carter |
S/2 SW SW of 31-5S-1W |
20 |
WD - Sullivans |
6421/191 |
7/20/2017 |
All equipment owned by ME3 Services, LLC, an independent oil services company.
The vehicles listed below:
Year |
Make |
Model |
VIN |
OK-Tag |
2012 |
Ford |
F-150 |
1FTFX1EF3CFD07706 |
ESY206 |
2012 |
Ford |
F-150 |
1FTFX1EF2CKE32428 |
ESY205 |
2011 |
Ford |
F-250 Super Duty |
1FT7X2B65BEC35197 |
V26850 |
2012 |
Ford |
F-150 |
1FTFW1ET3CKE38876 |
V27003 |
2014 |
GMC |
Sierra |
1GTV2TEH8EZ249715 |
V27004 |
2006 |
Ford |
F-150 |
1FTPX14V76NB40807 |
V27065 |
2014 |
Ford |
F-150 |
1FTFW1EF5EKF90977 |
DLZ-562 |
Escrow Agreement
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this “ Escrow Agreement ”) is dated effective as of the 8 th day of November, 2017 (the “Effective Date”), by and among Exponent Energy III LLC , a Delaware limited liability company (“ Buyer ”), Mid-Con Energy Properties, LLC, , a Delaware limited liability company (“ Seller ”), and SunTrust Bank, a Georgia banking corporation (the “ Escrow Agent ”). Buyer, Seller and the Escrow Agent are sometimes hereinafter referred to collectively as the “Parties” and singularly as a “Party.” The Parties hereby agree as follows:
W I T N E S S E T H :
WHEREAS, Buyer and Seller have entered into that certain Purchase And Sale Agreement dated as of even date herewith (the “Purchase Agreement”) pursuant to the terms of which, Buyer is purchasing from Seller, and Seller is selling to Buyer, certain oil and gas and surface properties located in Carter and Love Counties, Oklahoma; and
WHEREAS, all capitalized terms not herein defined shall have the meanings ascribed to them in the Purchase Agreement unless otherwise specifically indicated; and
WHEREAS, on the Effective Date Buyer shall deliver to the Escrow Agent funds in the amount of One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) (the “ Escrowed Funds ”); and
WHEREAS, the Escrowed Funds are being held by the Escrow Agent pending closing of the transaction contemplated by the Purchase Agreement (the “ Transaction ”); and
WHEREAS, Buyer and Seller acknowledge that the Escrow Agent is not a party to, and has no duties or obligations under, the Purchase Agreement, that all references in this Escrow Agreement to the Purchase Agreement are for convenience only, and that the Escrow Agent shall have no implied duties beyond the express duties set forth in this Escrow Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
I . Terms and Conditions
1.1. The Parties hereby appoint the Escrow Agent as their escrow agent for the purposes set forth herein, and the Escrow Agent hereby accepts such appointment under the terms and conditions set forth herein.
1.2 The Buyer shall remit $1,250,000.00 (the “Escrow Fund”) to the Escrow Agent, using the wire instructions set forth below, to be held by the Escrow Agent and invested and disbursed as provided in this Escrow Agreement.
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SunTrust Bank |
|
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ABA: 061000104 |
|
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Account: 9443001321 |
|
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Account Name: Escrow Services |
|
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Reference: Exponent Energy III LLC |
|
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Attention: Megan Gazzola 804-782-5407 |
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1.3. Within two Business Days of receipt of either (a) joint written instructions (“Joint Instructions”), signed by an authorized representative of the each of the Parties set forth on such Party’s Certificate of
Incumbency provided to the Escrow Agent pursuant to Section 4.13 , or (b) a Final Decision (as defined below), in each case specifying the amount of the disbursement and containing instructions for payment of the disbursement, the Escrow Agent shall disburse funds as provided in the Joint Instructions or Final Decision, as the case may be, but only to the extent that funds are collected and available. For purposes of this Escrow Agreement, “Business Day” shall mean any day other than a Saturday, Sunday or any other day on which the Escrow Agent located at the notice address set forth in Section 4.5 is authorized or required by law or executive order to remain closed. For purposes of this Escrow Agreement, “Final Decision” shall mean a written final order of a court or arbitration panel of competent jurisdiction delivered by a Party to the Escrow Agent and accompanied by a written opinion from legal counsel for such Party to the effect that such order is final and not subject to further proceedings or appeal and a written instruction from such Party to the Escrow Agent to effectuate such order. The Escrow Agent shall be entitled conclusively to rely upon any such opinion and instruction and shall have no responsibility to make any determination as to whether such order is from a court or arbitration panel of competent jurisdiction or is a final order. In addition, in the event of the bankruptcy, reorganization or arrangement proceedings pending, being contemplated by, or threatened against Seller, within two Business Days of receipt of the written instruction of Buyer (“Buyer’s Instructions”), signed by an authorized representative of the Buyer set forth on Buyer’s Certificate of Incumbency provided to the Escrow Agent pursuant to Section 4.13, specifying the amount of the disbursement and containing instructions for payment of the disbursement, the Escrow Agent shall disburse funds as provided in the Buyer’s Instructions, but only to the extent that funds are collected and available.
1.4. If the Buyer has or claims to have amounts for which it is or may be entitled to indemnification under the Purchase Agreement, the Buyer shall deliver on or prior to the Release Date, as defined below, a written claim notice (a “Claim Notice”) to the Buyer and the Escrow Agent. Each Claim Notice shall include the amount claimed (the “Claimed Amount”) and payment instructions for the Claimed Amount.
1.5 On the date that is two Business Days following November 8th, 2019 [the second anniversary of the date of this Escrow Agreement, such anniversary]being the “Release Date”), the Escrow Agent shall distribute to the [Party] an amount from the Escrow Fund equal to (i) the amount then in the Escrow Fund minus (ii) the aggregate Claimed Amount reflected in Claim Notices which the Escrow Agent has received on or prior to the Release Date and which have not been resolved in accordance with Section 1.4 (the “Unresolved Claimed Amount”). The Unresolved Claimed Amount shall be disbursed in accordance with Section 1.3 or Section 1.4, as applicable. After all Claim Notices related to the Unresolved Claimed Amount have been resolved, any amounts remaining in the Escrow Fund shall be distributed by the Escrow Agent to the Seller.
II. Provisions as to Escrow Agent
2.1. This Escrow Agreement expressly and exclusively sets forth the duties of the Escrow Agent with respect to any and all matters pertinent hereto, which duties shall be deemed purely ministerial in nature, and no implied duties or obligations shall be read into this Escrow Agreement against the Escrow Agent. The Escrow Agent shall in no event be deemed to be a fiduciary to any Party or any other person or entity under this Escrow Agreement. The permissive rights of the Escrow Agent to do things enumerated in this Escrow Agreement shall not be construed as duties. In performing its duties under this Escrow Agreement, or upon the claimed failure to perform its duties, the Escrow Agent shall not be liable for any damages, losses or expenses other than damages, losses or expenses which have been finally adjudicated by a court of competent jurisdiction to have directly resulted from the Escrow Agent’s willful misconduct or gross negligence. In no event shall the Escrow Agent be liable for incidental, indirect, special, consequential or punitive damages of any kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. The Escrow Agent shall not be responsible or liable for the failure of any Party to take any action in accordance with this Escrow Agreement. Any wire transfers of funds made by the Escrow Agent pursuant to this Escrow Agreement will be made subject to and in accordance with the Escrow Agent’s usual and ordinary wire transfer procedures in effect from time to time. The Escrow Agent shall have no liability with respect to the transfer or distribution of any funds effected by the Escrow Agent pursuant to wiring or transfer instructions provided to the Escrow Agent in accordance with the provisions of this Escrow Agreement.
The Escrow Agent shall not be obligated to take any legal action or to commence any proceedings in connection with this Escrow Agreement or any property held hereunder or to appear in, prosecute or defend in any such legal action or proceedings.
2.2. The Parties acknowledge and agree that the Escrow Agent acts hereunder as a depository only, and is not responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness or validity of the subject matter of this Escrow Agreement or any part thereof, or of any person executing or depositing such subject matter. No provision of this Escrow Agreement shall require the Escrow Agent to risk or advance its own funds or otherwise incur any financial liability or potential financial liability in the performance of its duties or the exercise of its rights under this Escrow Agreement.
2.3. This Escrow Agreement constitutes the entire agreement between the Escrow Agent and the Parties in connection with the subject matter of this Escrow Agreement, and no other agreement entered into between the Parties, or any of them, including, without limitation, the Purchase and Sale Agreement, shall be considered as adopted or binding, in whole or in part, upon the Escrow Agent notwithstanding that any such other agreement may be deposited with the Escrow Agent or the Escrow Agent may have knowledge thereof.
2.4. The Escrow Agent shall in no way be responsible for nor shall it be its duty to notify any Party or any other person or entity interested in this Escrow Agreement of any payment required or maturity occurring under this Escrow Agreement or under the terms of any instrument deposited herewith unless such notice is explicitly provided for in this Escrow Agreement.
2.5. The Escrow Agent shall be protected in acting upon any written instruction, notice, request, waiver, consent, certificate, receipt, authorization, power of attorney or other paper or document which the Escrow Agent in good faith believes to be genuine and what it purports to be, including, but not limited to, items directing investment or non-investment of funds, items requesting or authorizing release, disbursement or retainage of the subject matter of this Escrow Agreement and items amending the terms of this Escrow Agreement. The Escrow Agent shall be under no duty or obligation to inquire into or investigate the validity, accuracy or content of any such notice, request, waiver, consent, certificate, receipt, authorization, power of attorney or other paper or document. The Escrow Agent shall have no duty or obligation to make any formulaic calculations of any kind hereunder.
2.6. The Escrow Agent may execute any of its powers and perform any of its duties hereunder directly or through affiliates or agents. The Escrow Agent shall be entitled to seek the advice of legal counsel with respect to any matter arising under this Escrow Agreement and the Escrow Agent shall have no liability and shall be fully protected with respect to any action taken or omitted pursuant to the advice of such legal counsel. The Parties shall be jointly and severally liable for and shall promptly pay upon demand by the Escrow Agent the reasonable and documented fees and expenses of any such legal counsel.
2.7. In the event of any disagreement between any of the Parties, or between any of them and any other person or entity, resulting in adverse claims or demands being made in connection with the matters covered by this Escrow Agreement, or in the event that the Escrow Agent, in good faith, is in doubt as to what action it should take hereunder, the Escrow Agent may, at its option, refuse to comply with any claims or demands on it, or refuse to take any other action hereunder, so long as such disagreement continues or such doubt exists, and in any such event, the Escrow Agent shall not be or become liable in any way or to any Party or other person or entity for its failure or refusal to act, and the Escrow Agent shall be entitled to continue to refrain from acting until (i) the rights of the Parties and all other interested persons and entities shall have been fully and finally adjudicated by a court of competent jurisdiction, or (ii) all differences shall have been settled and all doubt resolved by agreement among all of the Parties and all other interested persons and entities, and the Escrow Agent shall have been notified thereof in writing signed by the Parties and all such persons and entities. Notwithstanding the preceding, the Escrow Agent may in its discretion obey the order, judgment, decree or levy of any court, whether with or without jurisdiction, or of an agency of the United States or any political subdivision thereof, or of any agency of any State of the United States or of any political subdivision of any thereof, and the Escrow Agent is hereby authorized in its sole
discretion to comply with and obey any such orders, judgments, decrees or levies. The rights of the Escrow Agent under this sub-paragraph are cumulative of all other rights which it may have by law or otherwise.
In the event of any disagreement or doubt, as described above, the Escrow Agent shall have the right, in addition to the rights described above and at the election of the Escrow Agent, to tender into the registry or custody of any court having jurisdiction, all funds and property held under this Escrow Agreement, and the Escrow Agent shall have the right to take such other legal action as may be appropriate or necessary, in the sole discretion of the Escrow Agent. Upon such tender, the Parties agree that the Escrow Agent shall be discharged from all further duties under this Escrow Agreement; provided, however, that any such action of the Escrow Agent shall not deprive the Escrow Agent of its compensation and right to reimbursement of expenses hereunder arising prior to such action and discharge of the Escrow Agent of its duties hereunder.
2.8. The Parties jointly and severally agree to indemnify, defend and hold harmless the Escrow Agent and each of the Escrow Agent’s officers, directors, agents and employees (the “Indemnified Parties”) from and against any and all losses, liabilities, claims made by any Party or any other person or entity, damages, expenses and costs (including, without limitation, attorneys’ fees and expenses) of every nature whatsoever (collectively, “Losses”) which any such Indemnified Party may incur and which arise directly or indirectly from this Escrow Agreement or which arise directly or indirectly by virtue of the Escrow Agent’s undertaking to serve as Escrow Agent hereunder; provided, however, that no Indemnified Party shall be entitled to indemnity with respect to Losses that have been finally adjudicated by a court of competent jurisdiction to have been directly caused by such Indemnified Party’s gross negligence or willful misconduct. The provisions of this section shall survive the termination of this Escrow Agreement and any resignation or removal of the Escrow Agent.
2.9. Any entity into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any entity to which all or substantially all the escrow business of the Escrow Agent may be transferred, shall be the Escrow Agent under this Escrow Agreement without further act.
2.10. The Escrow Agent may resign at any time from its obligations under this Escrow Agreement by providing written notice to the Parties. Such resignation shall be effective on the date set forth in such written notice, which shall be no earlier than thirty (30) days after such written notice has been furnished. In such event, the Parties shall promptly appoint a successor escrow agent. In the event no successor escrow agent has been appointed on or prior to the date such resignation is to become effective, the Escrow Agent shall be entitled to tender into the custody of any court of competent jurisdiction all funds and other property then held by the Escrow Agent hereunder and the Escrow Agent shall thereupon be relieved of all further duties and obligations under this Escrow Agreement; provided, however, that any such action of the Escrow Agent shall not deprive the Escrow Agent of its compensation and right to reimbursement of expenses hereunder arising prior to such action and discharge of the Escrow Agent of its duties hereunder. The Escrow Agent shall have no responsibility for the appointment of a successor escrow agent hereunder.
2.11 The Escrow Agent and any director, officer or employee of the Escrow Agent may become financially interested in any transaction in which any of the Parties may be interested and may contract with and lend money to any Party and otherwise act as fully and freely as though it were not escrow agent under this Escrow Agreement. Nothing herein shall preclude the Escrow Agent from acting in any other capacity for any Party.
III. Compensation of Escrow Agent
3.1. The Parties jointly and severally agree to pay to the Escrow Agent compensation, and to reimburse the Escrow Agent for costs and expenses, all in accordance with the provisions of Exhibit B hereto, which is incorporated herein by reference and made a part hereof. The fees agreed upon for the services rendered hereunder are intended as full compensation for the Escrow Agent’s services as contemplated by this Escrow Agreement; provided, however, that in the event that the conditions for the disbursement of funds are not fulfilled, or the Escrow Agent renders any service not contemplated in this Escrow Agreement, or there is any assignment of interest in the subject matter of this Escrow Agreement or any material modification hereof, or if any dispute or controversy arises hereunder, or the Escrow Agent is made a party
to any litigation pertaining to this Escrow Agreement or the subject matter hereof, then the Parties jointly and severally agree to compensate the Escrow Agent for such extraordinary services and reimburse the Escrow Agent for all costs and expenses, including reasonable attorneys’ fees and expenses, occasioned by any such event. In the event the Escrow Agent is authorized to make a distribution of funds to any Party (or at the direction of any Party) pursuant to the terms of this Escrow Agreement, and fees or expenses are then due and payable to the Escrow Agent pursuant to the terms of this Escrow Agreement (including, without limitation, amounts owed under this Section 3.1 and Section 2.8) by the Party receiving or directing such distribution, the Escrow Agent is authorized to offset and deduct such amounts due and payable to it from such distribution. The Escrow Agent shall have, and is hereby granted, a prior lien upon and first priority security interest in the Escrow Fund (and the earnings and interest accrued thereon) with respect to its unpaid fees, non-reimbursed expenses and unsatisfied indemnification rights, superior to the interests of any other persons or entities and without judicial action to foreclose such lien and security interest, and the Escrow Agent shall have and is hereby granted the right to set off and deduct any unpaid fees, non-reimbursed expenses and unsatisfied indemnification rights from the Escrow Fund (and the earnings and interest accrued thereon). The provisions of this section shall survive the termination of this Escrow Agreement and any resignation or removal of the Escrow Agent.
IV. Miscellaneous
4.1. The Escrow Agent shall make no disbursement, investment or other use of funds until and unless it has collected funds. The Escrow Agent shall not be liable for collection items until the proceeds of the same in actual cash have been received or the Federal Reserve has given the Escrow Agent credit for such funds.
4.2. The Escrow Agent shall invest all funds held pursuant to this Escrow Agreement in the SunTrust Non-Interest Deposit Option (SNIDO). The investments in the SNIDO are insured, subject to the applicable rules and regulations of the Federal Deposit Insurance Corporation (the “FDIC”), in the standard FDIC insurance amount of $250,000, including principal and accrued interest, and are not secured. The SNIDO is more fully described in materials which have been furnished to the Parties by the Escrow Agent, and the Parties acknowledge receipt of such materials from the Escrow Agent. Instructions to make any other investment must be in writing and signed by each of the Parties. The Parties recognize and agree that the Escrow Agent will not provide supervision, recommendations or advice relating to the investment of moneys held hereunder or the purchase, sale, retention or other disposition of any investment, and the Escrow Agent shall not be liable to any Party or any other person or entity for any loss incurred in connection with any such investment. The Escrow Agent is hereby authorized to execute purchases and sales of investments through the facilities of its own trading or capital markets operations or those of any affiliated entity. The Escrow Agent or any of its affiliates may receive compensation with respect to any investment directed hereunder including without limitation charging any applicable agency fee in connection with each transaction. The Escrow Agent shall use its best efforts to invest funds on a timely basis upon receipt of such funds; provided, however, that the Escrow Agent shall in no event be liable for compensation to any Party or other person or entity related to funds which are held un-invested or funds which are not invested timely. The Escrow Agent is authorized and directed to sell or redeem any investments as it deems necessary to make any payments or distributions required under this Escrow Agreement. Any investment earnings and income on the Escrow Fund shall become part of the Escrow Fund and shall be disbursed in accordance with this Escrow Agreement.
4.3 The Escrow Agent shall provide monthly reports of transactions and holdings to the Parties as of the end of each month, at the addresses provided by the Parties in Section 4.5.
4.4 The Parties agree that all interest and income from the investment of the funds shall be reported as having been earned by the Seller as of the end of each calendar year whether or not such income was disbursed during such calendar year and to the extent required by the Internal Revenue Service. On or before the execution and delivery of this Escrow Agreement, each of the Parties shall provide to the Escrow Agent a correct, duly completed, dated and executed current United States Internal Revenue Service Form W-9 or Form W-8, whichever is appropriate, or any successor forms thereto, in a form and substance satisfactory to the Escrow Agent including appropriate supporting documentation and/or any
other form, document, and/or certificate required or reasonably requested by the Escrow Agent to validate the form provided. Notwithstanding anything to the contrary herein provided, except for the delivery and filing of tax information reporting forms required pursuant to the Internal Revenue Code of 1986, as amended, to be delivered and filed with the Internal Revenue Service by the Escrow Agent, as escrow agent hereunder, the Escrow Agent shall have no duty to prepare or file any Federal or state tax report or return with respect to any funds held pursuant to this Escrow Agreement or any income earned thereon. With respect to the preparation, delivery and filing of such required tax information reporting forms and all matters pertaining to the reporting of earnings on funds held under this Escrow Agreement, the Escrow Agent shall be entitled to request and receive written instructions from the Seller, and the Escrow Agent shall be entitled to rely conclusively and without further inquiry on such written instructions. The Parties jointly and severally agree to indemnify, defend and hold the Escrow Agent harmless from and against any tax, late payment, interest, penalty or other cost or expense that may be assessed against the Escrow Agent on or with respect to the Escrow Fund or any earnings or interest thereon unless such tax, late payment, interest, penalty or other cost or expense was finally adjudicated by a court of competent jurisdiction to have been directly caused by the gross negligence of willful misconduct of the Escrow Agent. The indemnification provided in this section is in addition to the indemnification provided to the Escrow Agent elsewhere in this Escrow Agreement and shall survive the resignation or removal of the Escrow Agent and the termination of this Escrow Agreement.
4.5. Any notice, request for consent, report, or any other communication required or permitted in this Escrow Agreement shall be in writing and shall be deemed to have been given when delivered (i) personally, (ii) by facsimile transmission with written confirmation of receipt, (iii) by electronic mail to the e-mail address given below, and written confirmation of receipt is obtained promptly after completion of the transmission, (iv) by overnight delivery by a reputable national overnight delivery service, or (v) by United States mail, postage prepaid, or by certified mail, return receipt requested and postage prepaid, in each case to the appropriate address set forth below or at such other address as any party hereto may have furnished to the other parties hereto in writing :
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If to Escrow Agent: |
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SunTrust Bank |
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Attn: Escrow Services |
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919 East Main Street, 7 th Floor |
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Richmond, Virginia 23219 |
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Client Manager: Megan Gazzola |
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Phone: 804-782-5407 |
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Facsimile: 804-225-7141 |
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Email: Megan.Gazzola@SunTrust.com |
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If to Buyer: |
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Exponent Energy III LLC |
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1650 East 21 st Street, Suite 215 |
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Tulsa, Oklahoma 74114 |
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Attn: Chris Bird – Managing Member |
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Phone: 918-270-9927 |
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Email: chris@exponent-energy.com |
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Tax identification #: |
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If to Seller: |
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Mid-Con Energy Properties, LLC |
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2431 E. 61 st Street, Suite 850 |
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Tulsa, Oklahoma 74136 |
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Attention: Vice President General Counsel |
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Phone: 918-743-7575 |
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Facsimile: 918-743-8859 |
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Email: cmclawhorn@midcon-energy.com |
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Tax identification #: 45-2842566 |
Any party hereto may unilaterally designate a different address by giving notice of each change in the manner specified above to each other party hereto. Notwithstanding anything to the contrary herein provided, the Escrow Agent shall not be deemed to have received any notice, request, report or other communication hereunder prior to the Escrow Agent’s actual receipt thereof.
4.6. This Escrow Agreement is being made in and is intended to be construed according to the laws of the State of Oklahoma. Except as permitted in Section 2.9, neither this Escrow Agreement nor any rights or obligations hereunder may be assigned by any party hereto without the express written consent of each of the other parties hereto. This Escrow Agreement shall inure to and be binding upon the Parties and the Escrow Agent and their respective successors, heirs and permitted assigns.
4.7. The terms of this Escrow Agreement may be altered, amended, modified or revoked only by an instrument in writing signed by all the Parties and the Escrow Agent.
4.8. This Escrow Agreement is for the sole benefit of the Indemnified Parties, the Parties and the Escrow Agent, and their respective successors and permitted assigns, and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Escrow Agreement.
4.9. No party to this Escrow Agreement shall be liable to any other party hereto for losses due to, or if it is unable to perform its obligations under the terms of this Escrow Agreement because of, acts of God, fire, war, terrorism, floods, strikes, electrical outages, equipment or transmission failure, or other causes reasonably beyond its control.
4.10 This Escrow Agreement shall terminate on the first to occur of (i) the date on which all of the funds and property held by the Escrow Agent under this Escrow Agreement have been disbursed or (ii) November 15 2019 at which time the Escrow Agent is authorized and directed to disburse all of the remaining funds and property held hereunder in accordance with the joint written instructions of the Parties. Upon the termination of this Escrow Agreement and the disbursement of all of the funds and property held hereunder, this Escrow Agreement shall be of no further effect except that the provisions of Sections 2.8, 3.1 and 4.4 shall survive such termination.
4.11. All titles and headings in this Escrow Agreement are intended solely for convenience of reference and shall in no way limit or otherwise affect the interpretation of any of the provisions hereof.
4.12. This Escrow Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
4.13. Contemporaneously with the execution and delivery of this Escrow Agreement and, if necessary, from time to time thereafter, each of the Parties shall execute and deliver to the Escrow Agent a Certificate of Incumbency substantially in the form of Exhibit A-1 and A-2 hereto, as applicable (a “Certificate of Incumbency”), for the purpose of establishing the identity and authority of persons entitled to issue notices, instructions or directions to the Escrow Agent on behalf of each such party. Until such time as the Escrow Agent shall receive an amended Certificate of Incumbency replacing any Certificate of Incumbency theretofore delivered to the Escrow Agent, the Escrow Agent shall be fully protected in relying, without further inquiry, on the most recent Certificate of Incumbency furnished to the Escrow Agent. Whenever this Escrow Agreement provides for joint written notices, joint written instructions or other joint actions to be delivered to the Escrow Agent, the Escrow Agent shall be fully protected in relying, without further inquiry, on any joint written notice, instructions or action executed by persons named in such Certificate of Incumbency.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first above written.
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SunTrust Bank, as Escrow Agent |
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By: |
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Name: |
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Title: |
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Exponent Energy III LLC |
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By: |
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Name: |
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Title: |
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Mid-Con Energy Properties, LLC |
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By: |
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Name: |
Jeffrey R Olmstead |
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Title: |
President & Chief Executive Officer |
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Certificate of Incumbency
(List of Authorized Representatives)
Client Name: Buyer: Exponent Energy LLC
As an Authorized Officer of the above referenced entity, I hereby certify that each person listed below is an authorized signor for such entity, and that the title and signature appearing beside each name is true and correct.
Name |
Title |
Signature |
Phone Number |
Nathan Buchanan |
Managing Member |
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918-270-9927 |
Christopher Bird |
Managing Member |
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918-270-9927 |
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IN WITNESS WHEREOF, this certificate has been executed by a duly authorized officer on November ___, 2017.
By: |
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Name: |
Nathan Buchanan |
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Its: |
Managing Member |
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Certificate of Incumbency
(List of Authorized Representatives)
Client Name: Mid-Con Energy Properties, LLC
As an Authorized Officer of the above referenced entity, I hereby certify that each person listed below is an authorized signor for such entity, and that the title and signature appearing beside each name is true and correct.
Name |
Title |
Signature |
Phone Number |
Jeffrey R Olmstead |
President & CEO |
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(972) 215-6080 |
Charles L. McLawhorn, III |
VP & General Counsel |
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(405) 627-7016 |
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IN WITNESS WHEREOF, this certificate has been executed by a duly authorized officer on:
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Date
By: __________________________
Name: Charles L. McLawhorn, III
Its: VP & General Counsel
SunTrust Bank, as Escrow Agent
Schedule of Fees & Expenses
Legal Review Fee: |
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$600.00 – one time only payable at the time of signing the Escrow Agreement |
The Legal Review Fee includes review of all related documents and accepting the appointment of Escrow Agent on behalf of SunTrust Bank. The fee also includes setting up the required account(s) and accounting records, document filing, and coordinating the receipt of funds/assets for deposit to the Escrow Account. This is a one-time fee payable upon execution of the Escrow Agreement. As soon as SunTrust Bank’s attorney begins to review the Escrow Agreement, the legal review fee is subject to payment regardless if the Parties decide to appoint a different escrow agent or a decision is made that the Escrow Agreement is not needed.
Administration Fee: |
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$WAIVED – payable at the time of signing the Escrow Agreement and on the anniversary date thereafter, if applicable |
The Administration Fee includes providing routine and standard services of an Escrow Agent. The fee includes administering the escrow account, performing investment transactions, processing cash transactions (including wires and check processing), disbursing funds in accordance with the Agreement (note any pricing considerations below), and providing trust account statements to the Parties for a twelve (12) month period. If the account remains open beyond the twelve (12) month term, the Parties will be invoiced each year on the anniversary date of the execution of the Escrow Agreement. Extraordinary expenses, including legal counsel fees, will be billed as out-of-pocket. The Administration Fee is due upon execution of the Escrow Agreement. The fees shall be deemed earned in full upon receipt by the Escrow Agent, and no portion shall be refundable for any reason, including without limitation, termination of the agreement.
Out-of-Pocket Expenses: |
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At Cost |
Out-of-pocket expenses such as, but not limited to, postage, courier, overnight mail, wire transfer, travel, legal (out-of-pocket to counsel) or accounting, will be billed at cost.
Note: This fee schedule is based on the assumption that the escrowed funds will be invested in one of the SunTrust Deposit Options. If any other investment options are chosen, this fee schedule will become subject to change.
SunTrust Bank
Deborah Spitale
Deb.Spitale@SunTrust.com
404-588-7191
Brine Water Spill, Banks Lease (Battlesprings Deese Sand Unit) - Ongoing remediation and monitoring of site in Love County, Oklahoma.
Material Contracts
Marketing:
Crude Marketing Agreement with Enterprise Crude Oil, LLC (Contract No. MCJ-P12012002-M) dated July 1, 2016
Crude Marketing Agreement with Enterprise Crude Oil, LLC (Contract No. MCJ-P141220125-M) dated December 1, 2014 through November, 2019
Pipeline Connection Agreement with Enterprise Crude Pipeline, LLC effective March 26, 2013 through March 26, 2018
Gas Marketing Contract with DCP (Contract P12954-500) amended July 1, 2011.
Gas Marketing Contract with DCP (Contract P12685) dated February 1, 1994.
Unit Agreements:
Plan of Unitization for Ardmore West Deese Unit dated November 1, 2009
Plan of Unitization for Battle Springs Deese Sand Unit dated March 17, 2006
Plan of Unitization for Highlands Deese Sand Unit dated May 1, 2007
Plan of Unitization for Southeast Hewitt Unit dated March 20, 1996
Plan of Unitization for Eastman Hills Unit dated October 31, 2006
Plan of Unitization for Twin Forks Deese Unit dated July 1, 2008
Operating Agreement for the E/2 NE/4 of Section 1-6S-2W, Love County, OK dated January 20, 1980
Operating Agreement for Sections 5, 6, 7, 8-6S-1W and Section 1-6S-2W Love County, OK dated December 8, 1978
Operating Agreement for the E/2 NE/4 of Section 10-5S-2W, Carter County, OK dated July 31, 2008
Permits
Injection Permit: Approved Application for Administrative Approval dated 09/20/2017, for the BSDSU C. Banks #3-18, located in the SE NE of Section 18, Township 6S, Range 1W, Love
Nipp Multi-Unit Spacing/Pooling for Cause 201409158, 201603858. Mid-Con has an election once the pooling is completed on the well drilled in Sections 14 and 11-6S-2W, Love County, OK.
Mid-Con has received notice of the Expansion of Oswalt Road in Love County, OK, State and Project No. CIRB-143C (091) RB, State Job No. 25447. This road expansion affects portions of the Battlesprings Deese Sand Unit operations and has required some relocation of flowlines and will require additional relocation of flowlines in the future.
Schedule 5.14
Outstanding Obligations/AFEs
No AFEs approved as of October 1, 2017.
No ongoing obligations.
Third Party Consents
None.
Preferential Purchase Rights
None.
Mechanical Integrity
UNIT/LEASE |
Property/Well Name |
County |
Sec-Twp-Rng |
API Number |
Current Status |
Last MIT Date |
MIT Status |
Ardmore West Deese Sand Unit |
Harries Ricketts 3 |
Carter |
Section 33-T4S-R1E |
35-019-25569 |
SI |
1/4/2017 |
PASS |
Ardmore West Deese Sand Unit |
Van Eaton 2-33 |
Carter |
Section 33-T4S-R1E |
35-019-25611 |
SI |
3/28/2017 |
PASS |
Ardmore West Deese Sand Unit |
Van Eaton 3-33 |
Carter |
Section 33-T4S-R1E |
35-019-25702 |
SI |
9/1/2017 |
PASS |
Battle Springs Deese Sand Unit |
Green 4-17"R" |
Love |
Section 17-T6S-R1W |
35-085-21111/*35-085-21089 |
SI |
9/1/2017 |
PASS |
Battle Springs Deese Sand Unit |
Kirby 4-21 |
Love |
Section 21-T6S-R1W |
35-085-21207 |
INJ |
5/22/2017 |
PASS |
Eastman Hills Unit |
Henson 1-13 |
Love |
Section 13-T6S-R1W |
35-085-20714 |
SI |
1/4/2017 |
PASS |
Highlands Unit |
Banks 6-7 |
Love |
Section 7-T6S-R1W |
35-085-21100 |
INJ |
1/4/2017 |
PASS |
Highlands Unit |
Daube Wilkins 2-12 |
Love |
Section 12-T6S-R2W |
35-085-21179 |
INJ |
3/29/2017 |
PASS |
Highlands Unit |
Paschall 3-7 |
Love |
Section 7-T6S-R1W |
35-085-21114 |
SI |
1/4/2017 |
PASS |
Highlands Unit |
Sullivan 13-12 |
Love |
Section 12-T6S-R2W |
35-085-21127 |
INJ |
1/4/2017 |
PASS |
Highlands Unit |
Sullivan 6-1 |
Love |
Section 1-T6S-R2W |
35-085-20889 |
INJ |
9/1/2017 |
PASS |
SE Hewitt Unit |
Nipp 1-10 |
Carter |
Section 10-T5S-R2W |
35-019-23460 |
INJ |
8/31/2017 |
PASS |
SE Hewitt Unit |
Ringling 1-14 |
Carter |
Section 14-T5S-R2W |
35-019-23391 |
INJ |
1/12/2017 |
PASS |
Twin Forks Unit |
Martin 7-36 |
Carter |
Section 36-T5S-R2W |
35-019-25923 |
INJ |
12/2/2016 |
PASS |
Twin Forks Unit |
Martin 1-36 |
Carter |
Section 36-T5S-R2W |
35-019-21920 |
INJ |
2/28/2017 |
PASS |
Suspense Accounts
Revenue Suspense as of October 15, 2017
Owner Code |
Total |
000308 |
70,802.54 |
000716 |
7,130.59 |
000625 |
1,391.78 |
AR as of October 13, 2017
Owner Code |
Total |
000308 |
67,128.87 |
Production Imbalances
None.
Exhibit 10.2
Execution Copy
CLASS B CONVERTIBLE PREFERRED UNIT
PURCHASE AGREEMENT
DATED NOVEMBER 14 , 2017
BY AND AMONG
MID-CON ENERGY PARTNERS, LP
AND
THE CLASS B PURCHASERS NAMED ON SCHEDULE A HERETO
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ARTICLE I DEFINITIONS |
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SECTION 1.01 |
Definitions |
1 |
SECTION 1.02 |
Accounting Procedures and Interpretation |
7 |
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ARTICLE II |
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SALE AND PURCHASE |
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SECTION 2.01 |
Sale and Purchase |
8 |
SECTION 2.02 |
Funding Notices |
8 |
SECTION 2.03 |
Closing |
8 |
SECTION 2.04 |
Independent Nature of Class B Purchasers’ Obligations and Rights |
9 |
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP |
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SECTION 3.01 |
Formation and Qualification |
9 |
SECTION 3.02 |
Capitalization |
9 |
SECTION 3.03 |
SEC Documents |
10 |
SECTION 3.04 |
Independent Accountants |
11 |
SECTION 3.05 |
Independent Reserve Engineer |
11 |
SECTION 3.06 |
Litigation |
11 |
SECTION 3.07 |
No Material Adverse Change |
11 |
SECTION 3.08 |
Authority; Enforceability |
11 |
SECTION 3.09 |
Approvals |
12 |
SECTION 3.10 |
Compliance with Law |
12 |
SECTION 3.11 |
Valid Issuance |
12 |
SECTION 3.12 |
Absence of Defaults and Conflicts |
12 |
SECTION 3.13 |
Absence of Labor Dispute |
13 |
SECTION 3.14 |
Possession of Intellectual Property |
13 |
SECTION 3.15 |
Permits |
13 |
SECTION 3.16 |
Title to Property |
13 |
SECTION 3.17 |
Reserve Estimates |
14 |
SECTION 3.18 |
Environmental Laws |
14 |
SECTION 3.19 |
No Preemptive Rights |
15 |
SECTION 3.20 |
Investment Company Status |
15 |
SECTION 3.21 |
MLP Status |
15 |
SECTION 3.22 |
No Registration Required |
15 |
SECTION 3.23 |
No Integration |
15 |
SECTION 3.24 |
Certain Fees |
15 |
SECTION 3.25 |
Form S-3 Eligibility |
15 |
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Page |
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Tax Returns |
15 |
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SECTION 3.27 |
Insurance |
16 |
SECTION 3.28 |
Compliance with the Sarbanes-Oxley Act |
16 |
SECTION 3.29 |
ERISA Compliance |
16 |
SECTION 3.30 |
No Restrictions on Distributions |
16 |
SECTION 3.31 |
Related Party Transactions |
17 |
SECTION 3.32 |
OFAC |
17 |
SECTION 3.33 |
FCPA |
17 |
SECTION 3.34 |
Money Laundering Laws |
17 |
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF EACH CLASS B PURCHASER |
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SECTION 4.01 |
Valid Existence |
17 |
SECTION 4.02 |
No Consents; Violations, Etc |
17 |
SECTION 4.03 |
Investment |
18 |
SECTION 4.04 |
Nature of Class B Purchaser |
18 |
SECTION 4.05 |
Receipt of Information |
18 |
SECTION 4.06 |
Restricted Securities |
19 |
SECTION 4.07 |
Certain Fees |
19 |
SECTION 4.08 |
Legend |
19 |
SECTION 4.09 |
Reliance on Exemptions |
19 |
SECTION 4.10 |
Authority |
19 |
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ARTICLE V COVENANTS |
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SECTION 5.01 |
Taking of Necessary Action |
20 |
SECTION 5.02 |
Public Announcements |
20 |
SECTION 5.03 |
Disclosure; Public Filings |
20 |
SECTION 5.04 |
NASDAQ Listing of Additional Shares |
20 |
SECTION 5.05 |
Use of Proceeds |
20 |
SECTION 5.06 |
ATM Program |
20 |
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ARTICLE VI CLOSING CONDITIONS |
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SECTION 6.01 |
Conditions to Closing. |
21 |
SECTION 6.02 |
Partnership Deliveries |
22 |
SECTION 6.03 |
Class B Purchaser Deliveries |
23 |
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ii
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Page |
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ARTICLE VII INDEMNIFICATION, COSTS AND EXPENSES |
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SECTION 7.01 |
Indemnification by the Partnership |
24 |
SECTION 7.02 |
Indemnification by Class B Purchasers |
24 |
SECTION 7.03 |
Indemnification Procedure |
24 |
SECTION 7.04 |
Tax Treatment |
25 |
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ARTICLE VIII MISCELLANEOUS |
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SECTION 8.01 |
Interpretation |
25 |
SECTION 8.02 |
Survival of Provisions |
25 |
SECTION 8.03 |
No Waiver; Modifications in Writing |
26 |
SECTION 8.04 |
Binding Effect; Assignment |
26 |
SECTION 8.05 |
Communications |
27 |
SECTION 8.06 |
Entire Agreement |
27 |
SECTION 8.07 |
Governing Law; Submission to Jurisdiction |
28 |
SECTION 8.08 |
Waiver of Jury Trial |
28 |
SECTION 8.09 |
Execution in Counterparts |
28 |
SECTION 8.10 |
Termination |
28 |
SECTION 8.11 |
Recapitalization, Exchanges, Etc |
29 |
SECTION 8.12 |
Specific Performance |
29 |
Schedules and Exhibits:
Schedule A |
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List of Class B Purchasers and Purchase Prices |
Schedule 8.05 |
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Notice and Contact Information |
Exhibit A |
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Form of Second Amendment |
Exhibit B |
— |
Form of Registration Rights Agreement |
Exhibit C |
— |
Form of Lock-Up Agreement |
Exhibit D |
— |
Form of Monitoring Agreement |
Exhibit E |
— |
Form of Standstill Agreement |
Exhibit F |
— |
Form of General Partner Officer’s Certificate |
Exhibit G |
— |
Form of Class B Purchaser’s Officer’s Certificate |
Exhibit H |
— |
Form of General Partner Waiver |
Exhibit I |
— |
Form of Joinder Agreement |
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CLASS B CONVERTIBLE PREFERRED UNIT
PURCHASE AGREEMENT
CLASS B CONVERTIBLE PREFERRED UNIT PURCHASE AGREEMENT dated November 14, 2017 (this “ Agreement ”), by and among Mid-Con Energy Partners, LP, a Delaware limited partnership (the “ Partnership ”), and each of the Class B Purchasers listed in Schedule A attached hereto (each referred to herein as a “ Class B Purchaser ” and collectively, the “ Class B Purchasers ”).
WHEREAS, the Partnership desires to issue and sell to the Class B Purchasers, and each Class B Purchaser desires to purchase from the Partnership, certain Class B Convertible Preferred Units (as defined below);
WHEREAS, concurrently with the consummation of the transactions contemplated by this Agreement, the General Partner (as defined herein) will execute and deliver an amendment, in the form attached as Exhibit A hereto (the “ Second Amendment ”), to the Partnership Agreement (as defined herein), which amendment shall establish the terms of the Class B Convertible Preferred Units; and
WHEREAS, concurrently with the consummation of the transactions contemplated by this Agreement, the Partnership and the Class B Purchasers will enter into a registration rights agreement, in the form attached as Exhibit B hereto (the “ Registration Rights Agreement ”), pursuant to which the Partnership will provide the Class B Purchasers with certain registration rights with respect to the Conversion Units (as defined below).
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partnership and each of the Class B Purchasers, severally and not jointly, hereby agree as follows:
Section 1.01 Definitions . As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:
“ Action ” against a Person means any lawsuit, action, proceeding, investigation, inquiry, or complaint before any Governmental Authority, mediator or arbitrator.
“ Affiliate ” means, with respect to a specified Person, any other Person, whether now in existence or hereafter created, directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, “ controlling ,” “ controlled by ,” and “ under common control with ”) means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. For the avoidance of doubt, for purposes of this Agreement, any fund, entity or account managed, advised or sub-advised, directly or indirectly, by a Class B Purchaser or any of its Affiliates, or the direct or indirect equity owners, including general partners of a Class B Purchaser or any of its Affiliates, shall be considered an Affiliate of such Class B Purchaser.
“ Agreement ” has the meaning given to such term in the introductory paragraph hereof.
“ Amended Partnership Agreement ” means the Partnership Agreement, as amended as of the Closing Date, including pursuant to the Second Amendment.
“ Anticipated Closing Date ” has the meaning given to such term in Section 2.02 .
“ ATM Managers ” means RBC Capital Markets, LLC, Wells Fargo Securities, LLC, UBS Securities LLC, Raymond James & Associates, Inc. and MLV & Co. LLC.
“ ATM Program ” means the at-the-market offering program to which the Distribution Agreement relates.
“ Board ” means the board of directors of the General Partner.
“ Business Day ” means any day other than (a) a Saturday or Sunday or (b) a day on which banks located in Tulsa, Oklahoma are authorized or obligated to close.
“ Cawley Gillespie ” has the meaning given to such term in Section 3.05 .
“ Class A Closing Date ” means August 11, 2016.
“ Class A Convertible Preferred Units ” means Class A Convertible Preferred Units representing limited partner interests in the Partnership, the terms of which are set forth in the Partnership Agreement.
“ Class B Convertible Preferred Units ” means Class B Convertible Preferred Units representing limited partner interests in the Partnership, the terms of which are to be set forth in the Amended Partnership Agreement.
“ Class B PIK Units ” means a Class B Convertible Preferred Unit issued pursuant to a Class B Convertible Preferred Unit distribution, pursuant to the terms of the Amended Partnership Agreement.
“ Class B Purchaser ” and “ Class B Purchasers ” have the meanings given to such terms in the introductory paragraph of this Agreement.
“ Class B Purchaser Designee ” has the meaning given to such term in Section 2.01(b) .
“ Class B Purchaser Material Adverse Effect ” means any material adverse effect on the ability of a Class B Purchaser to perform its obligations under the Transaction Agreements on a timely basis.
“ Class B Purchaser Related Parties ” has the meaning given to such term in Section 7.01 .
“ Closing ” means the consummation of the purchase and sale of the Purchased Units on the Closing Date hereunder.
“ Closing Date ” has the meaning given to such term in Section 2.03 .
“ Code ” means the Internal Revenue Code of 1986, as amended.
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“ Common Units ” means common units representing limited partner interests in the Partnership, the terms of which are set forth in the Partnership Agreement.
“ Conversion Units ” means Common Units issuable upon conversion of any of the Class B Convertible Preferred Units.
“ Credit Agreement ” shall mean, the Credit Agreement, dated as of April 23, 2012, as amended, by and among the Operating Subsidiary, as borrower, the Partnership, as guarantor, Wells Fargo Bank, National Association, as administrative agent and collateral agent, and the other financial institutions party thereto.
“ Delaware LLC Act ” means the Delaware Limited Liability Company Act.
“ Delaware LP Act ” means the Delaware Revised Uniform Limited Partnership Act.
“ Designation Notice ” has the meaning given to such term in Section 2.01(b) .
“ Designation Units ” has the meaning given to such term in Section 2.01(b) .
“ Distribution Agreement ” means the Equity Distribution Agreement by and among the Partnership, the General Partner and the Operating Subsidiary and the ATM Managers, dated May 5, 2015.
“ Environmental Laws ” has the meaning given to such term in Section 3.18 .
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder.
“ ERISA Affiliate ” means, with respect to the Partnership Entities, any trade or business (whether or not incorporated) under common control with the Partnership Entities within the meaning of Section 414(b) or (c) of the Code and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code.
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the SEC promulgated thereunder.
“ Expense Notice ” has the meaning given to such term in Section 2.02 .
“ FCPA ” means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.
“ First Amendment ” means the First Amendment to the Partnership Agreement, dated as of August 11, 2016.
“ Founders ” means S. Craig George, Charles R. Olmstead and Jeffrey Olmstead, collectively.
“ Funding Notice ” has the meaning given to such term in Section 2.02 .
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“ GAAP ” means generally accepted accounting principles in the United States of America in effect from time to time.
“ General Partner ” means Mid-Con Energy GP, LLC, a Delaware limited liability company and the general partner of the Partnership.
“ Goff ” means Goff Focused Strategies, LLC.
“ Governmental Authority ” means, with respect to any Person, the country, state, county, city and political subdivisions in which any Person or such Person’s Property is located or which exercises valid jurisdiction over any such Person or such Person’s Property, and any court, agency, department, commission, board, bureau, instrumentality, official or other regulatory (including self-regulated organizations or other non-governmental regulatory authorities) of any of them and any monetary authorities that exercise valid jurisdiction over any such Person or such Person’s Property. Unless otherwise specified, all references to Governmental Authority herein shall mean a Governmental Authority having jurisdiction over, where applicable, any of the Partnership Entities or their Properties.
“ GP LLC Agreement ” means the Amended and Restated Limited Liability Company Agreement of the General Partner dated as of December 11, 2011, as amended to date.
“ Grant Thornton ” has the meaning given to such term in Section 3.04 .
“ Indemnified Party ” has the meaning given to such term in Section 7.03 .
“ Indemnifying Party ” has the meaning given to such term in Section 7.03 .
“ Joinder Agreement ” has the meaning given to such term in Section 2.01(b) .
“ Law ” or “ Laws ” means any federal, state, local or foreign order, writ, injunction, judgment, settlement, award, decree, statute, law, ordinance rule or regulation.
“ Leased and Subleased Properties ” has the meaning given to such term in Section 3.16 .
“ Lock-Up Agreement ” means the Lock-Up Agreement in substantially the form attached as Exhibit C to this Agreement.
“ Lien ” means any mortgage, claim, pledge, lien (statutory or otherwise), security agreement, conditional sale or trust receipt or a lease, consignment or bailment, preference or priority, assessment, deed of trust, charge, easement, servitude or other encumbrance upon or with respect to any property of any kind.
“ LTIP ” means the Mid-Con Energy Partners, LP Long-Term Incentive Plan, as amended.
“ Mid-Con Energy Operating ” means Mid-Con Energy Operating, LLC, a Delaware limited liability company and Affiliate of the General Partner.
“ Monitoring Agreement ” means the Monitoring Agreement in substantially the form attached as Exhibit D to this Agreement.
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“ Multiemployer Plan ” has the meaning given to such term in Section 3.29 .
“ NASDAQ ” means National Association of Securities Dealers Automated Quotation System Global Select Market.
“ OFAC ” means the Office of Foreign Assets Control of the U.S. Treasury Department.
“ Operating Subsidiary ” means Mid-Con Energy Properties, LLC, a Delaware limited liability company and wholly-owned Subsidiary of the Partnership.
“ Organizational Documents ” means (a) in the case of a corporation, its charter and by-laws; (b) in the case of a limited or general partnership, its partnership certificate, certificate of formation or similar organizational document and its partnership agreement; (c) in the case of a limited liability company, its articles of organization, certificate of formation or similar organizational documents and its operating agreement, limited liability company agreement, membership agreement or other similar agreement; (d) in the case of a trust, its certificate of trust, certificate of formation or similar organizational document and its trust agreement or other similar agreement; and (e) in the case of any other entity, the organizational and governing documents of such entity.
“ Outstanding ” has the meaning given to such term in the Partnership Agreement.
“ Partnership ” has the meaning given to such term in the introductory paragraph of this Agreement.
“ Partnership Agreement ” means the First Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of December 20, 2011, as amended by the First Amendment.
“ Partnership Bank Account ” means the bank account designated as such by the Partnership pursuant to the Funding Notice.
“ Partnership Documents ” means (a) the Credit Agreement and (b) all other contracts, indentures, mortgages, deeds of trust, loan or credit agreements, bonds, notes, debentures, evidences of indebtedness, swap agreements, leases or other instruments or agreements to which any of the Partnership Entities is a party or by which any of the Partnership Entities is bound or to which any of the property or assets of the Partnership Entities is subject that, solely in the case of this clause (b), are material with respect to the Partnership Entities taken as a whole.
“ Partnership Entities ” means the Partnership and the Operating Subsidiary.
“ Partnership Material Adverse Effect ” means any change, event or effect that, individually or together with any other changes, events or effects, (a) has a material adverse effect on (i) the legality, validity or enforceability of any Transaction Agreement, or (ii) the financial condition, business, assets or results of operations of the Partnership Entities, considered as a single enterprise, or (b) the ability of the Partnership or the General Partner to perform its obligations under the Transaction Agreements in full on a timely basis. Notwithstanding the foregoing, a “Partnership Material Adverse Effect” shall not include any effect to the extent resulting or arising from: (i) any change in general economic conditions in the industries or markets in which any of the Partnership Entities operate that do not have a disproportionate effect on the Partnership Entities, considered as a single enterprise; (ii) any engagement
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in hostilities pursuant to a declaration of war, or the occurrence of any military or terrorist attack; (iii) changes in GAAP or other accounting principles, except to the extent such change has a disproportionate effect on the Partnership Entities, considered as a single enterprise; (iv) changes in commodity prices, except to the extent such change has a disproportionate effect on the Partnership Entities, considered as a single enterprise; or (v) other than for purposes of Section 3.12 , the consummation of the transactions contemplated hereby.
“ Partnership Related Parties ” has the meaning given to such term in Section 7.02 .
“ Party ” or “ Parties ” means the Partnership and the Class B Purchasers party to this Agreement, individually or collectively, as the case may be.
“ Per Unit Price ” means $1.36.
“ Permits ” has the meaning given to such term in Section 3.15 .
“ Person ” means any individual, corporation, company, voluntary association, partnership, joint venture, trust, limited liability company, unincorporated organization or government or any agency, instrumentality or political subdivision thereof, or any other form of entity.
“ Plan ” has the meaning given to such term in Section 3.29 .
“ Property ” or “ Properties ” means any interest or interests in any kind of property or asset, whether real, personal or mixed, or tangible or intangible (including intellectual property).
“ Purchase Price ” means, with respect to each Class B Purchaser, the dollar amount set forth opposite such Class B Purchaser’s name under the heading “ Purchase Price ” on Schedule A hereto, as adjusted in accordance with Section 8.11 , if applicable; provided , that in no event will the Purchase Price applicable to such Class B Purchaser be increased without the prior written consent of such Class B Purchaser.
“ Purchased Units ” means, with respect to each Class B Purchaser, the number of Class B Convertible Preferred Units equal to the quotient determined by dividing (a) the Purchase Price set forth opposite such Class B Purchaser’s name under the heading “Purchase Price” on Schedule A hereto by (b) the Per Unit Price.
“ Registration Rights Agreement ” has the meaning given to such term in the recitals to this Agreement.
“ Reimbursable Legal Expenses ” means the out-of-pocket legal expenses actually incurred by Goff prior to the Closing in connection with the consummation of the transactions contemplated by the Transaction Agreements; provided, however , that the Reimbursable Legal Expenses shall not exceed $25,000 in the aggregate.
“ Representatives ” of any Person means the Affiliates, control persons, officers, directors, employees, agents, counsel, investment bankers and other representatives of such Person.
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“ Sarbanes-Oxley Act ” means the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder or implementing the provisions thereof.
“ SEC ” means the United States Securities and Exchange Commission.
“ SEC Documents ” has the meaning given to such term in Section 3.03 .
“ Second Amendment ” has the meaning given to such term in the recitals to this Agreement.
“ Securities Act ” means the Securities Act of 1933, as amended from time to time, and the rules and regulations of the SEC promulgated thereunder.
“ Securities Act Regulations ” means the rules and regulations of the SEC promulgated under the Securities Act.
“ Standstill Agreement ” means the Standstill Agreement in substantially the form attached to this Agreement as Exhibit E .
“ Subsidiary ” means, as to any Person, (a) any corporation, limited liability company, general partnership or other entity (other than a limited partnership) of which at least a majority of the outstanding equity interest having by the terms thereof ordinary voting power to elect a majority of the board of directors of such corporation, limited liability company, general partnership or other entity is at the time directly or indirectly owned or controlled by such Person or one or more of its Subsidiaries and (b) any limited partnership of which (i) a majority of the voting power to elect a majority of the board of directors or board of managers of the general partner of such limited partnership and (ii) a majority of the outstanding limited partner interests is at the time directly or indirectly owned or controlled by such Person.
“ Third Party Claim ” has the meaning given to such term in Section 7.03 .
“ Transaction Agreements ” means, collectively, this Agreement, the Registration Rights Agreement, the Second Amendment, the Standstill Agreement, the Monitoring Agreement, the Lock-Up Agreement and any amendments, supplements, continuations or modifications thereto. References to the Second Amendment shall be deemed to include the Amended Partnership Agreement unless the context requires otherwise.
“ Units ” means the Common Units and the Class A Convertible Preferred Units.
Section 1.02 Accounting Procedures and Interpretation . Unless otherwise specified in this Agreement, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters under this Agreement shall be made, and all financial statements and certificates and reports as to financial matters required to be furnished to the Class B Purchasers under this Agreement shall be prepared, in accordance with GAAP applied on a consistent basis during the periods involved (except, in the case of unaudited statements, as permitted by Form 10-Q promulgated by the SEC) and in compliance as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto.
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Section 2.01 Sale and Purchase .
(a) Subject to the terms and conditions hereof, the Partnership will issue and sell to each Class B Purchaser on the Closing Date, and each Class B Purchaser hereby agrees, severally and not jointly, to purchase from the Partnership on the Closing Date, such Class B Purchaser’s respective Purchased Units, as set forth on Schedule A hereto.
(b) By written notice to the Partnership (a “ Designation Notice ”), a Class B Purchaser may designate an Affiliate or another Class B Purchaser (a “ Class B Purchaser Designee ”) to acquire all or any portion of the Purchased Units otherwise issuable to such Class B Purchaser at Closing (such Purchased Units, the “ Designated Units ”), and such Class B Purchaser Designee shall, if not already a signatory to this Agreement, execute and deliver to the Partnership a joinder agreement, in the form attached hereto as Exhibit I (a “ Joinder Agreement ”), pursuant to which such Class B Purchaser Designee shall agree (i) to join and become a party to this Agreement; (ii) to be bound by all covenants, agreements, representations, warranties and acknowledgments attributable to the Class B Purchasers hereunder, as if made by, and with respect to, such Class B Purchaser Designee; and (iii) to perform all obligations and duties required of a Class B Purchaser with respect to Purchased Units. Upon receipt by the Partnership of (x) a Designation Notice, executed by the designating Class B Purchaser and acknowledged in writing by the Class B Purchaser Designee, specifying the name of the Class B Purchaser Designee and the number of Purchased Units to be designated thereby, and (y) a fully executed Joinder Agreement, if applicable, Schedule A and Schedule 8.05 hereto shall be amended, without further action of any Party hereto, to include such Class B Purchaser Designee and, with respect to Schedule A , to reflect the designation of the Designated Units from the designating Class B Purchaser to such Class B Purchaser Designee.
Section 2.02 Funding Notices . On or prior to the fifth Business Day prior to the date on which the Partnership reasonably anticipates a Closing to occur (the “ Anticipated Closing Date ”), the Partnership shall deliver a written notice (the “ Funding Notice ”) to each of the Class B Purchasers (a) specifying the Anticipated Closing Date, (b) directing each such Class B Purchaser to pay the Purchase Price for its Purchased Units by wire transfer(s) of immediately available funds to the Partnership Bank Account, prior to 10:00 a.m. Central Time on the Closing Date, and (c) specifying wiring instructions for wiring funds into the Partnership Bank Account. Within one Business Day following the delivery by the Partnership of the Funding Notice, Goff shall deliver a written notice (the “ Expense Notice ”) to the Partnership, specifying the amount of Reimbursable Legal Expenses.
Section 2.03 Closing . Subject to the terms and conditions hereof, the Closing shall take place remotely via electronic exchange of documents and signatures on the first Business Day after satisfaction or waiver of the conditions set forth in Sections 6.01(a) , 6.01(b) and 6.01(c) has occurred (other than those conditions that are by their terms to be satisfied at the Closing) (the date of the Closing being referred to herein as the “ Closing Date ”); provided that the Closing Date shall not be earlier than the date set forth in the applicable Funding Notice unless mutually agreed by the Parties.
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Section 2.04 Independent Nature of Class B Purchasers’ Obligations and Rights . The respective representations, warranties and obligations of each Class B Purchaser under the Transaction Agreements are several and not joint with the obligations of any other Class B Purchaser, and no Class B Purchaser shall be responsible in any way for the representations and warranties or the performance of the obligations of any other Class B Purchaser under any Transaction Agreement. The failure or waiver of performance under any Transaction Agreement by any Class B Purchaser, or on its behalf, does not excuse performance by any other Class B Purchaser. Nothing contained in any Transaction Agreement, and no action taken by any Class B Purchaser pursuant thereto, shall be deemed to constitute the Class B Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Class B Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Agreements. Each Class B Purchaser shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement or out of the Registration Rights Agreement, and it shall not be necessary for any other Class B Purchaser to be joined as an additional party in any proceeding for such purpose; provided that any enforcement of an indemnity claim may only be initiated by holders of a majority of the Purchased Units then outstanding. The failure or waiver of performance by any Class B Purchaser does not excuse performance by any other Class B Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP
The Partnership represents and warrants to the Class B Purchasers that the representations and warranties set forth in this ARTICLE III are true and correct as of the date of this Agreement and as of the Closing Date.
Section 3.01 Formation and Qualification . The General Partner and each of the Partnership Entities has been duly formed and is validly existing and in good standing under the Laws of the State or other jurisdiction of its organization and has the requisite power and authority, and has all governmental licenses, authorizations, consents and approvals necessary, to own, lease, use or operate its Properties and carry on its business as now being conducted, except where the failure to obtain such licenses, authorizations, consents and approvals would not be reasonably likely, individually or in the aggregate, to have a Partnership Material Adverse Effect. The General Partner and each of the Partnership Entities is duly qualified or licensed and in good standing as a foreign corporation, limited partnership, limited liability company or unlimited liability company, as applicable, and is authorized to do business in each jurisdiction in which the ownership or leasing of its Properties or the character of its operations makes such qualification necessary, except where the failure to obtain such qualification, license, authorization or good standing would not be reasonably likely, individually or in the aggregate, to have a Partnership Material Adverse Effect.
(a) The Purchased Units shall have those rights, preferences, privileges and restrictions governing the Class B Convertible Preferred Units as reflected in the Amended Partnership Agreement.
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(b) As of the date hereof, the Founders own 100% of the membership interests in the General Partner. Such membership interests have been duly authorized and validly issued in accordance with the GP LLC Agreement and are fully paid (to the extent required by the GP LLC Agreement) and nonassessable (except as such nonassessability may be affected by matters described in Sections 18-607 and 18-804 of the Delaware LLC Act).
(c) The General Partner is the sole general partner of the Partnership and owns an interest in the Partnership (the “ GP Interest ”), and at the Closing Date, will be the sole general partner of the Partnership and will own the GP Interest. Such GP Interest has been duly authorized and validly issued in accordance with the Partnership Agreement, and the General Partner owns such GP Interest free and clear of all Liens (except restrictions on transferability as described in the SEC Documents), other than those created by or arising under the Delaware LP Act.
(d) As of the date hereof, other than the GP Interest and its indirect ownership interests in the Operating Subsidiary, the General Partner does not own, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity. As of the date hereof, other than the Partnership’s ownership of the Operating Subsidiary, none of the Partnership or the Operating Subsidiary owns, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity.
(e) All outstanding Common Units and the limited partner interests represented thereby have been duly authorized and validly issued in accordance with the Partnership Agreement and are fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware LP Act).
(f) All outstanding Class A Convertible Preferred Units and the limited partner interests represented thereby have been duly authorized and validly issued in accordance with the Partnership Agreement and are fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware LP Act).
(f) The Partnership’s currently outstanding Common Units are registered pursuant to Section 12(b) of the Exchange Act and are quoted on the NASDAQ, and the Partnership has taken no action designed to terminate the registration of such Common Units under the Exchange Act nor has the Partnership received any notification that the SEC is contemplating terminating such registration.
Section 3.03 SEC Documents . The Partnership has filed with the SEC all reports, schedules and statements required to be filed by it under the Exchange Act on a timely basis since January 1, 2016 (all such documents filed prior to the date hereof, collectively, the “ SEC Documents ”). The SEC Documents, including any audited or unaudited financial statements and any notes thereto or schedules included therein, at the time filed, (a) complied as to form in all material respects with applicable requirements of the Exchange Act and Securities Act and the applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, (b) were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC), (c) fairly present (subject in the case of unaudited statements to normal, recurring and year-
10
end audit adjustments) in all material respects the consolidated financial position of the Partnership as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended and (d) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
Section 3.04 Independent Accountants . Grant Thornton LLP (“ Grant Thornton ”), who certified the audited consolidated financial statements of the Partnership Entities as of December 31, 2016 and 2015 and for the years ended December 31, 2016, 2015, and 2014 are independent public accountants as required by the Securities Act, the Securities Act Regulations and the standards of the Public Company Accounting Oversight Board.
Section 3.05 Independent Reserve Engineer. Cawley, Gillespie & Associates, Inc. (“ Cawley Gillespie ”), who audited the reserve reports prepared by the Partnership Entities’ internal reserve engineers for the year ended December 31, 2016 was an independent petroleum engineer with respect to the Partnership Entities.
Section 3.06 Litigation . Except as described in the SEC Documents, no Action by or before any court or governmental or other regulatory or administrative agency, authority or body or any arbitrator involving any of the Partnership Entities or their property is pending, or to the knowledge of any of the Partnership Entities, threatened that would reasonably be expected, individually or in the aggregate, to have a Partnership Material Adverse Effect or prevent the performance by the Partnership of its obligations under this Agreement or the consummation by the Partnership of the transactions contemplated by this Agreement.
Section 3.07 No Material Adverse Change . Since December 31, 2016, (a) none of the Partnership Entities has, directly or indirectly, sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental Action, order or decree and (b) since such date, there has not been any change in the capitalization or material increase in long-term debt of the Partnership Entities, or any adverse change in or affecting the condition (financial or otherwise), Properties, assets, liabilities, results of operations, earnings, business or prospects of the Partnership Entities, taken as a whole, in each case as would not reasonably be expected to have a Partnership Material Adverse Effect.
Section 3.08 Authority; Enforceability . The Partnership and the General Partner have all necessary limited partnership and limited liability company, as applicable, power and authority to execute, deliver and perform their obligations under the Transaction Agreements to which they are parties and to consummate the transactions contemplated thereby; the execution, delivery and performance by the Partnership and the General Partner of the Transaction Agreements to which they are parties and the consummation of the transactions contemplated thereby have been duly authorized by all necessary action on their part; and, assuming the due authorization, execution and delivery by the other parties thereto, each of the Transaction Agreements to which either the Partnership or the General Partner is a party will constitute the legal, valid and binding obligations of the Partnership or the General Partner, as applicable, enforceable in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and similar Laws affecting creditors’ rights generally or by general principles of equity, including principles of commercial reasonableness, fair dealing and good faith.
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Section 3.09 Approvals . No authorization, consent, approval, waiver, license, qualification or written exemption from, nor any filing, declaration, qualification or registration with, any Governmental Authority or any other Person is required in connection with the execution, delivery or performance by the Partnership of the Transaction Agreements to which it is a party or the issuance and sale of the Purchased Units, except (a) as required by the SEC in connection with the Partnership’s obligations under the Registration Rights Agreement, (b) as may be required under the state securities or “Blue Sky” Laws or (c) as required under Section 5.10(c)(iv) of the Partnership Agreement.
Section 3.10 Compliance with Law . None of the Partnership Entities is in violation of any Law applicable to such Partnership Entity, except as would not, individually or in the aggregate, have a Partnership Material Adverse Effect. The Partnership Entities each possess all Permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such Permits would not, individually or in the aggregate, have a Partnership Material Adverse Effect, and none of the Partnership Entities has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit, except where such potential revocation or modification would not, individually or in the aggregate, have a Partnership Material Adverse Effect.
Section 3.11 Valid Issuance . The offer and sale of the Purchased Units and the limited partner interests represented thereby will be duly authorized by the Partnership pursuant to the Amended Partnership Agreement and, when issued and delivered to the Class B Purchasers against payment therefor in accordance with the terms of this Agreement, will be validly issued, fully paid (to the extent required by and the Amended Partnership Agreement), nonassessable (except as such nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware LP Act), and will be free of any and all Liens and restrictions on transfer, other than restrictions on transfer under the Amended Partnership Agreement and under applicable state and federal securities Laws. Upon issuance in accordance with the terms of the Amended Partnership Agreement, the Conversion Units and Class B PIK Units will be duly authorized by the Partnership pursuant to the Amended Partnership Agreement and will be validly issued, fully paid (to the extent required by the Amended Partnership Agreement), nonassessable (except as such nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware LP Act), and will be free of any and all Liens and restrictions on transfer, other than restrictions on transfer under the Amended Partnership Agreement and under applicable state and federal securities Laws.
Section 3.12 Absence of Defaults and Conflicts . None of the Partnership Entities is in violation of its Organizational Documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any Partnership Document, except for such defaults that would not reasonably be expected, individually or in the aggregate, to result in a Partnership Material Adverse Effect. Neither the execution, delivery and performance by the Partnership or the General Partner of the Transaction Agreements to which it is a party (including issuance of the Conversion Units in accordance with the terms of the Transaction Agreements) nor the issuance and sale of the Purchased Units and compliance by the Partnership or the General Partner with its obligations under the Transaction Agreements to which it is a party will, whether with or without the giving of notice or passage of time or both, require any consent, approval or notice under, or will constitute a violation or breach of, the Partnership Agreement or the GP LLC Agreement, conflict with or constitute a breach of, or default under, or result in the creation or imposition of any Lien upon any property or assets of the Partnership Entities pursuant to, any Partnership Documents, except for (i) the
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approval required under Section 5.10(c)(iv) of the Partnership Agreement and (ii) such conflicts, breaches, defaults or Liens that would not reasonably be expected, individually or in the aggregate, to result in a Partnership Material Adverse Effect, nor will such action result in any violation of the provisions of the Organizational Documents of any of the Partnership Entities or any applicable Law, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Partnership Entities or any of their respective assets, Properties or operations.
Section 3.13 Absence of Labor Dispute . No labor problem or dispute with the employees of Mid-Con Energy Operating exists or, to the knowledge of any of the Partnership Entities, is threatened or imminent, and the Partnership is not aware of any existing or imminent labor disturbance by the employees of any of the principal suppliers, contractors or customers of the Partnership Entities that would reasonably be expected, individually or in the aggregate, to result in a Partnership Material Adverse Effect.
Section 3.14 Possession of Intellectual Property . The Partnership Entities own, possess, license or have adequate rights to use, on reasonable terms, all material patents, patent rights, patent applications, licenses, inventions, copyrights, inventions, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade and service mark registrations, trade names, service names, software, internet addresses, domain names and other intellectual property that is described in the SEC Documents or that is necessary for the conduct of their respective businesses as currently conducted or as proposed to be conducted and as described in the SEC Documents, except where the failure to have such licenses or rights to use such intellectual property would not reasonably be expected, individually or in the aggregate, to have a Partnership Material Adverse Effect.
Section 3.15 Permits . The Partnership Entities have such material licenses, certifications, permits, consents, franchises, approvals, clearances and authorizations of governmental or other regulatory authorizations (“ Permits ”) as are necessary to conduct their business as currently conducted or to own, lease and operate its Properties in the manner described in the SEC Documents, except as described in the SEC Documents. The Partnership Entities are in compliance with the terms and conditions of such Permits, except where the failure to so comply would not reasonably be expected, individually or in the aggregate, to result in a Partnership Material Adverse Effect.
Section 3.16 Title to Property . The Operating Subsidiary has (a) good, valid and defensible title to the interests in the oil and gas Properties supporting the estimates of its net proved reserves contained in the SEC Documents, (b) good and indefeasible title to all real property owned by it, other than the oil and gas Properties covered by clause (a), and (c) good title to all personal property described in the SEC Documents as being owned by it, in each case free and clear of all Liens except (i) such as are described in the SEC Documents, (ii) such as arise in connection with the Credit Agreement, or (iii) such as do not (individually or in the aggregate) materially interfere with the use made or proposed to be made of such Properties by the Partnership Entities as described in the SEC Documents. The working interests derived from oil, gas and mineral leases or mineral interests, which constitute a portion of the real property held or leased by the Operating Subsidiary, reflect in all material respects the right of the Operating Subsidiary to explore for, develop and produce hydrocarbons from such real property, and the care taken by the Operating Subsidiary and any of its predecessors in interest who are or were affiliates of the Partnership Entities with respect to acquiring or otherwise procuring such leases
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or mineral interests was generally consistent with standard industry practices in the areas in which the Operating Subsidiary and any of its predecessors who are or were affiliates of the Partnership Entities operates for acquiring or procuring leases and interests therein to explore for, develop and produce hydrocarbons. All real property and buildings held under lease or sublease by the Operating Subsidiary, except the oil and gas Properties covered by clause (a) above (the “ Leased and Subleased Properties ”), are held by it under valid, subsisting and enforceable leases or subleases, as the case may be, subject to exceptions that do not materially interfere with the use made and proposed to be made of such Leased and Subleased Properties by the Operating Subsidiary as described in the SEC Documents, and all such leases and subleases are in full force and effect. The Operating Subsidiary has not received any notice of any claim that has been asserted by anyone adverse to the rights of the Operating Subsidiary under any of the leases or subleases mentioned in the prior sentence above or affecting or questioning the rights of the Operating Subsidiary to the continued possession of the Leased and Subleased Properties under any such lease or sublease except for such claims that would not reasonably be expected, individually or in the aggregate, to have a Partnership Material Adverse Effect.
Section 3.17 Reserve Estimates . The historical information underlying the estimates of oil and gas reserves of the Partnership Entities, which were supplied by the Partnership Entities to Cawley Gillespie for purposes of auditing the reserve information included in the SEC Documents, including, without limitation, production, volumes and rates, costs of operation and development, current prices for production, agreements relating to current and future operations and sales of production, was true and correct in all material respects on the dates of such reserve reports and was prepared in all material respects in accordance with customary industry practices. Other than normal production of the reserves, intervening market commodity price fluctuations, fluctuations in demand for such products, adverse weather conditions, unavailability or increased costs of rigs, equipment, supplies or personnel, the timing of third party operations and other factors, in each case as described in the SEC Documents, the Partnership is not aware of any facts or circumstances that (i) would result in a material adverse change in the aggregate net reserves, or the present value of future net cash flows therefrom, as described in the SEC Documents, or (ii) cause them to believe that such estimates do not fairly reflect the oil and gas reserves of the Partnership Entities. Estimates of such reserves and present values as described in the SEC Documents comply in all material respects with the applicable requirements of Regulation S-X and Subpart 1200 of Regulation S-K under the Securities Act.
Section 3.18 Environmental Laws . The Partnership Entities (a) are in compliance with all Laws, Permits or other legal requirements of any Governmental Authority, including without limitation any international, foreign, national, state, provincial, regional, or local authority, relating to pollution, the protection of human health or safety, the environment, or natural resources, or to use, handling, storage, manufacturing, transportation, treatment, discharge, disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants and radioactive or biologic materials (“ Environmental Laws ”) applicable to such entity, which compliance includes, without limitation, obtaining, maintaining and complying with all Permits required by Environmental Laws to conduct their respective businesses, except where such non-compliance with Environmental Laws or failure to receive required Permits, would not reasonably be expected, individually or in the aggregate, to have a Partnership Material Adverse Effect, and (b) do not have knowledge of any actual or alleged violation of Environmental Laws, or of any actual or potential liability for or other obligation concerning the presence, disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants and radioactive or biologic materials, except where such violation, liability or obligation would not reasonably be expected, individually or in the aggregate, to have a Partnership Material Adverse Effect.
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Section 3.19 No Preemptive Rights . The holders of outstanding Units are not entitled to preemptive rights to subscribe for (a) any of the Class B Convertible Preferred Units to be issued and sold to the Class B Purchasers pursuant to this Agreement or (b) the Conversion Units to be issued upon conversion of the Class B Convertible Preferred Units.
Section 3.20 Investment Company Status . The Partnership is not, and upon the issuance and sale of the Purchased Units as herein contemplated and the application of the net proceeds therefrom, the Partnership will not be, an “investment company” or an entity “controlled” by an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC promulgated thereunder.
Section 3.21 MLP Status . The Partnership is properly treated as a partnership for United States federal income tax purposes and has, for each taxable year beginning after December 31, 2011 during which the Partnership was in existence, met the gross income requirements of Section 7704(c)(2) of the Internal Revenue Code. The Partnership expects to meet the gross income requirements of Section 7704(c)(2) of the Code for its taxable year ending December 31, 2017.
Section 3.22 No Registration Required . Assuming the accuracy of the representations and warranties of the Class B Purchasers contained in this Agreement and their compliance with the agreements set forth in this Agreement, the sale and issuance of the Purchased Units (and the Conversion Units) pursuant to this Agreement is exempt from the registration requirements of the Securities Act, and neither the Partnership nor, to the Partnership’s knowledge, any authorized Representative acting on its behalf has taken or will take any action hereafter that would cause the loss of such exemption. The issuance and sale of the Purchased Units and the issuance of the Conversion Units upon conversion of the Class B Convertible Preferred Units do not contravene the rules and regulations of the NASDAQ.
Section 3.23 No Integration . Neither the Partnership nor any of its Affiliates has, directly or indirectly through any Representative, made any offers or sales of any security of the Partnership or solicited any offers to buy any security that is or will be integrated with the sale of the Purchased Units in a manner that would require the offer and sale of the Purchased Units to be registered under the Securities Act.
Section 3.24 Certain Fees . No fees or commissions are or will be payable by the Partnership to brokers, finders or investment bankers with respect to the sale of any of the Purchased Units or the consummation of the transactions contemplated by this Agreement.
Section 3.25 Form S-3 Eligibility . The Partnership is eligible to register the resale of the Conversion Units by the Class B Purchasers on a registration statement on Form S-3 under the Securities Act.
Section 3.26 Tax Returns . The Partnership Entities have filed all foreign, federal, state and local tax returns that are required to be filed or have obtained extensions thereof, except where the failure so to file would not reasonably be expected, individually or in the aggregate, to result in a Partnership Material Adverse Effect, and have paid all taxes (including, without limitation, any estimated taxes) required to be paid and any other assessment, fine or penalty, to the extent that any of the foregoing is due and payable, except for any such tax, assessment, fine or penalty that is currently
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being contested in good faith by appropriate actions and except for such taxes, assessments, fines or penalties the nonpayment of which would not reasonably be expected, individually or in the aggregate, to result in a Partnership Material Adverse Effect.
Section 3.27 Insurance . The Partnership Entities maintain, or are entitled to the benefits of, insurance covering their Properties, operations, personnel and businesses against such losses and risks as is reasonably adequate to protect them and their businesses in a manner consistent with other businesses similarly situated in similar industries. All policies of insurance insuring the Partnership Entities or any of their respective businesses, assets, employees, officers and directors are in full force and effect as of the date hereof; and the Partnership Entities are in compliance with the terms of such policies in all material respects.
Section 3.28 Compliance with the Sarbanes-Oxley Act . The General Partner, the Partnership Entities and, to the knowledge of the Partnership, the officers and directors of the General Partner, in their capacities as such are in compliance in all material respects with all applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated therewith that are effective and applicable to the Partnership.
Section 3.29 ERISA Compliance . Each “employee benefit plan” (within the meaning of Section 3(3) of ERISA) for which any of the Partnership Entities or any ERISA Affiliate (as defined below) would have any liability (each a “ Plan ”), including the LTIP, has been maintained in material compliance with its terms and with the material requirements of all applicable statutes, rules and regulations, including ERISA and the Code, and, to the knowledge of the Partnership, each “multiemployer plan” (as defined in Section 4001 of ERISA) to which the Partnership Entities or any ERISA Affiliate contributes (a “ Multiemployer Plan ”) is in material compliance with all applicable statutes, rules and regulations, including ERISA and the Code. None of the Partnership Entities or any ERISA Affiliate has incurred or reasonably expects to incur any material liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971 or 4975 of the Code. Except where noncompliance would not reasonably be expected to have a Partnership Material Adverse Effect, each “employee benefit plan” established or maintained by the Partnership Entities or any ERISA Affiliate that is intended to be qualified under Section 401 of the Code is so qualified and nothing has occurred, whether by action or failure to act, which would be reasonably likely to cause the loss of such qualification.
Section 3.30 No Restrictions on Distributions . None of the Partnership Entities is a party to or otherwise bound by any instrument or agreement that limits or prohibits or could limit or prohibit, directly or indirectly, the Partnership from redeeming the Purchased Units pursuant to their terms or making distributions on the Purchased Units or the Conversion Units, and no Partnership Entity is a party to or otherwise bound by any instrument or agreement that limits or prohibits or could limit or prohibit, directly or indirectly, any Partnership Entity from making distributions on its limited or general partnership interests, limited liability company interests, or other equity interest, as the case may be, except in each case (a) pursuant to the Credit Agreement, (b) for prohibitions mandated by the Laws of the jurisdiction of formation of such Subsidiary and (c) as described in the SEC Documents.
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Section 3.31 Related Party Transactions . There are no business relationships or related party transactions involving the Partnership or any of its Subsidiaries or, to the knowledge of any of the Partnership Entities, any other Person that are required to be described in the SEC Documents that have not been described as required.
Section 3.32 OFAC . No Partnership Entity nor, to the knowledge of any of the Partnership Entities, any Representative of the Partnership Entities is currently subject to any U.S. sanctions administered by the OFAC; and the Partnership Entities will not directly or indirectly use the proceeds of the transactions contemplated hereby, or lend, contribute or otherwise make available such proceeds to any other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
Section 3.33 FCPA . No Partnership Entity nor, to the knowledge of any of the Partnership Entities, any Representative of the Partnership Entities has made any payment of funds of the Partnership Entities or received or retained any funds in violation of any Law, including the FCPA, which payment, receipt or retention is of a character required to be disclosed in the SEC Documents.
Section 3.34 Money Laundering Laws . The operations of the Partnership Entities are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any Governmental Authority (collectively, “ Money Laundering Laws ”); and no Action by or before any court or Governmental Authority or any arbitrator or non-governmental authority involving the Partnership Entities with respect to Money Laundering Laws is pending or, to the knowledge of the Partnership Entities, threatened.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF EACH CLASS B PURCHASER
Each Class B Purchaser, severally and not jointly, represents and warrants to the Partnership with respect to itself (and not with respect to any other Class B Purchaser) as follows as of the date of this Agreement and as of the Closing Date:
Section 4.01 Valid Existence . Such Class B Purchaser, if not an individual, (a) is duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization and (b) has the requisite power, and has all material governmental licenses, authorizations, consents and approvals necessary to own its Properties and carry on its business as its business is now being conducted, except where the failure to obtain such licenses, authorizations, consents and approvals would not reasonably be expected, individually or in the aggregate, to have a Class B Purchaser Material Adverse Effect.
Section 4.02 No Consents; Violations, Etc . The execution, delivery and performance of the Transaction Agreements to which such Class B Purchaser is a party by such Class B Purchaser and the consummation of the transactions contemplated thereby will not (a) require any consent, approval or notice under, or constitute a violation or breach of, the Organizational Documents of such Class B Purchaser, if not an individual, (b) constitute a violation or breach of, or a default (or an event that, with notice or lapse of time or both, would constitute such a default or give rise to any right of termination,
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cancellation or acceleration) under, any note, bond, mortgage, lease, loan or credit agreement or other material instrument, obligation or agreement to which such Class B Purchaser is a party or by which such Class B Purchaser or any of its Properties may be bound, (c) violate any provision of any Law or any order, judgment or decree of any court or Governmental Authority having jurisdiction over such Class B Purchaser or its Properties, except in the cases of clauses (b) and (c) where such violation, breach or default, would not reasonably be expected, individually or in the aggregate, to have a Class B Purchaser Material Adverse Effect.
Section 4.03 Investment . The Purchased Units are being acquired for such Class B Purchaser’s own account, or the accounts of clients for whom such Class B Purchaser exercises discretionary investment authority, not as a nominee or agent, and with no present intention of distributing the Purchased Units or any part thereof, and such Class B Purchaser has no present intention of selling or granting any participation in or otherwise distributing the same, in any transaction in violation of the securities Laws of the United States of America or any state, without prejudice, however, to such Class B Purchaser’s right at all times to sell or otherwise dispose of all or any part of the Purchased Units or the Conversion Units under a registration statement under the Securities Act and applicable state securities Laws or under an exemption from such registration available thereunder (including, without limitation, if available, Rule 144 promulgated under the Securities Act).
Section 4.04 Nature of Class B Purchaser . Such Class B Purchaser represents and warrants to, and covenants and agrees with, the Partnership that, (a) it is an individual or an institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act, (b) by reason of its business and financial experience it has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Purchased Units, is able to bear the economic risk of such investment and, at the present time, would be able to afford a complete loss of such investment and (c) it is not acquiring the Purchased Units with a view to, or for offer or sale in connection with, any distribution thereof that could result in such Class B Purchaser being an “underwriter" within the meaning of Section 2(11) of the Securities Act or result in any violation of the registration requirements of the Securities Act.
Section 4.05 Receipt of Information . Such Class B Purchaser acknowledges that it (a) has access to the SEC Documents, (b) has been provided a reasonable opportunity to ask questions of and receive answers from Representatives of the Partnership regarding such matters and (c) has sought such financial, accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to the acquisition of the Purchased Units. Neither such inquiries nor any other due diligence investigations conducted at any time by such Class B Purchasers shall modify, amend or affect such Class B Purchasers’ right (i) to rely on the Partnership’s representations and warranties contained in ARTICLE III above or (ii) to indemnification or any other remedy based on, or with respect to the accuracy or inaccuracy of, or compliance with, the representations, warranties, covenants and agreements in any Transaction Agreement.
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Section 4.06 Restricted Securities . Such Class B Purchaser understands that the Purchased Units it is purchasing are characterized as “restricted securities” under the federal securities Laws inasmuch as they are being acquired from the Partnership in a transaction not involving a public offering and that under such Laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances. In this connection, such Class B Purchaser represents that it is knowledgeable with respect to Rule 144 of the SEC promulgated under the Securities Act.
Section 4.07 Certain Fees . No fees or commissions will be payable by such Class B Purchaser to brokers, finders, or investment bankers with respect to the sale of any of the Purchased Units or the consummation of the transactions contemplated by this Agreement.
Section 4.08 Legend . It is understood that the certificates evidencing the Purchased Units will bear the following legend:
“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT OR THE ISSUER HAS RECEIVED DOCUMENTATION REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER SUCH ACT. THIS SECURITY IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN (i) THE FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF THE PARTNERSHIP, DATED AS OF DECEMBER 20, 2011, AS AMENDED OR RESTATED FROM TIME TO TIME, AND (ii) THE CLASS B CONVERTIBLE PREFERRED UNIT PURCHASE AGREEMENT, DATED AS OF NOVEMBER 14, 2017, BY AND BETWEEN THE PARTNERSHIP AND THE CLASS B PURCHASERS PARTY THERETO, IN EACH CASE, A COPY OF WHICH MAY BE OBTAINED FROM THE PARTNERSHIP AT ITS PRINCIPAL EXECUTIVE OFFICES.”
Section 4.09 Reliance on Exemptions . Each Class B Purchaser understands that the Purchased Units are being offered and sold to such Class B Purchaser in reliance upon specific exemptions from the registration requirements of United States federal and state securities Laws and that the Partnership is relying upon the truth and accuracy of, and Class B Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of Class B Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of Class B Purchaser to acquire the Purchased Units.
Section 4.10 Authority . Such Class B Purchaser has all necessary power and authority to execute, deliver and perform its obligations under the Transaction Agreements to which such Class B Purchaser is a party and to consummate the transactions contemplated thereby; the execution, delivery and performance by such Class B Purchaser of the Transaction Agreements and the consummation of the transactions contemplated thereby, have been duly authorized by all necessary action on its part; and,
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assuming the due authorization, execution and delivery by the other parties thereto, the Transaction Agreements to which it is a party constitute the legal, valid and binding obligation of such Class B Purchaser, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and similar Laws affecting creditors’ rights generally or by general principles of equity, including principles of commercial reasonableness, fair dealing and good faith.
Section 5.01 Taking of Necessary Action . Each of the Parties hereto shall use its commercially reasonable efforts promptly to take or cause to be taken all action and promptly to do or cause to be done all things necessary, proper or advisable under applicable Law and regulations to consummate and make effective the transactions contemplated by this Agreement. Without limiting the foregoing, the Partnership and each Class B Purchaser shall use its commercially reasonable efforts to make all filings and obtain all consents of Governmental Authorities that may be necessary or, in the reasonable opinion of the Class B Purchasers or the Partnership, as the case may be, advisable for the consummation of the transactions contemplated by the Transaction Agreements.
Section 5.02 Public Announcements . The initial press release with respect to the transactions contemplated hereby shall be in a form to be reasonably agreed upon by the Partnership and Goff. Thereafter, except as required by applicable Law, neither the Partnership nor the Class B Purchasers shall make any press release or other public announcement with respect to the transactions contemplated hereby without the prior written consent of the other Party (which consent shall not be unreasonably withheld, conditioned or delayed).
Section 5.03 Disclosure; Public Filings . The Partnership may, without prior written consent or notice, (i) file the Transaction Agreements as exhibits to Exchange Act reports, if required by applicable Law and (ii) disclose such information with respect to any Class B Purchaser as required by applicable Law or the rules or regulations of the NASDAQ or other exchange on which securities of the Partnership are listed or traded.
Section 5.04 NASDAQ Listing of Additional Shares . The Partnership shall, prior to the Closing Date, file a listing of additional shares with the NASDAQ to list the Conversion Units and will otherwise use its reasonable commercial efforts to list the Conversion Units on the NASDAQ and maintain such listing.
Section 5.05 Use of Proceeds . The Partnership will use the net proceeds from the sale of Class B Convertible Preferred Units under this Agreement for general partnership purposes, including future acquisitions and reduction of borrowings outstanding under the Partnership’s revolving credit facility.
Section 5.06 ATM Program . The Partnership will continue the suspension of the ATM Program until the earlier of (a) termination of the Suspension Period (as defined in the Partnership Agreement) in accordance with the terms of the Amended Partnership Agreement or (b) the fifth anniversary of the Class A Closing Date.
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Section 6.01 Conditions to Closing.
(a) Mutual Conditions . The respective obligation of each Party to consummate the purchase and issuance and sale of Purchased Units at Closing shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions (any or all of which may be waived by a particular Party on behalf of itself in writing, in whole or in part, to the extent permitted by applicable Law):
(i) no Law shall have been enacted or promulgated, and no action shall have been taken, by any Governmental Authority of competent jurisdiction that temporarily, preliminarily or permanently restrains, precludes, enjoins or otherwise prohibits the consummation of the transactions contemplated by this Agreement or makes the transactions contemplated by this Agreement illegal; and
(ii) there shall not be pending any Action by any Governmental Authority seeking to restrain, preclude, enjoin or prohibit the transactions contemplated by this Agreement.
(b) Each Class B Purchaser’s Conditions . The respective obligation of each Class B Purchaser to consummate the purchase of its Purchased Units on the Closing Date in accordance with Schedule A hereto shall be subject to the satisfaction on or prior to the Closing Date, as applicable, of each of the following conditions (any or all of which may be waived by a particular Class B Purchaser only on behalf of itself in writing, in whole or in part):
(i) the Partnership shall have performed and complied with the covenants and agreements contained in this Agreement that are required to be performed and complied with by the Partnership on or prior to the Closing Date;
(ii) the representations and warranties of the Partnership contained in this Agreement that are qualified by materiality or Partnership Material Adverse Effect shall be true and correct when made and as of the Closing Date, and all other representations and warranties of the Partnership shall be true and correct in all material respects when made and as of the Closing Date, in each case as though made at and as of the Closing Date (except that representations made as of a specific date shall be required to be true and correct as of such date only); and
(iii) the Partnership shall have delivered, or caused to be delivered, to the Class B Purchasers the Partnership’s closing deliveries described in Section 6.02 .
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(c) The Partnership’s Conditions . The obligation of the Partnership to consummate the sale of the Purchased Units to each of the Class B Purchasers on the Closing Date shall be subject to the satisfaction on or prior to the Closing Date, as applicable, of each of the following conditions with respect to each Class B Purchaser individually and not the Class B Purchasers jointly (any or all of which may be waived by the Partnership in writing, in whole or in part, to the extent permitted by applicable Law):
(i) each Class B Purchaser shall have performed and complied with the covenants and agreements contained in this Agreement that are required to be performed and complied with by that Class B Purchaser on or prior to the Closing Date;
(ii) the representations and warranties of each Class B Purchaser contained in this Agreement that are qualified by materiality or Class B Purchaser Material Adverse Effect shall be true and correct when made and as of the Closing Date, and all other representations and warranties of such Class B Purchaser shall be true and correct in all material respects when made and as of the Closing Date, in each case as though made at and as of the Closing Date (except that representations made as of a specific date shall be required to be true and correct as of such date only); and
(iii) each Class B Purchaser shall have delivered, or caused to be delivered, to the Partnership such Class B Purchaser’s closing deliveries set forth in Section 6.03 .
Section 6.02 Partnership Deliveries . At Closing, subject to the terms and conditions of this Agreement, the Partnership will deliver, or cause to be delivered, to each Class B Purchaser or Goff, as applicable:
(a) evidence of issuance of a certificate evidencing the Purchased Units or the Purchased Units credited to book-entry accounts maintained by the transfer agent, as the case may be, bearing the legend or restrictive notation set forth in Section 4.08 , and meeting the requirements of the Amended Partnership Agreement, free and clear of any Liens, other than transfer restrictions under the Amended Partnership Agreement and applicable federal and state securities laws;
(b) a certificate of the Secretary of State of the State of Delaware, dated as of a recent date, to the effect that each of the General Partner and the Partnership is in good standing;
(c) an Officer’s Certificate, substantially in the form attached to this Agreement as Exhibit F ;
(d) the Second Amendment, duly executed by the General Partner;
(e) the Registration Rights Agreement, duly executed by the General Partner on behalf of the Partnership;
(f) the Monitoring Agreement, duly executed by the General Partner;
(g) the Standstill Agreement, duly executed by the General Partner;
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(h) Lock-Up Agreements, duly executed by Charles R. Olmstead, Jeffrey Olmstead and Mid-Con Energy III, LLC;
(i) a certificate of the Secretary or Assistant Secretary of the General Partner, on behalf of the Partnership, dated the Closing Date, certifying as to (i) the certificate of formation of the General Partner, the GP LLC Agreement, the certificate of limited partnership of the Partnership, and the Partnership Agreement, (ii) board resolutions authorizing the execution and delivery of the Transaction Agreements and the consummation of the transactions contemplated thereby and (iii) the incumbent officers authorized to execute the Transaction Agreements, setting forth the name and title and bearing the signatures of such officers;
(j) a cross receipt, dated the Closing Date, executed by the Partnership confirming that the Partnership has received such Class B Purchaser’s Purchase Price;
(k) a duly executed waiver of the General Partner with respect to certain of its rights under the Partnership Agreement, in substantially the form attached hereto as Exhibit H ; and
(l) payment to Goff, by wire transfer of immediately available funds, of an amount equal to the Reimbursable Legal Expenses set forth in the Expense Notice.
Section 6.03 Class B Purchaser Deliveries . At Closing, subject to the terms and conditions of this Agreement, each Class B Purchaser will deliver, or cause to be delivered, to the Partnership:
(a) payment to the Partnership, by wire transfer(s) of immediately available funds to the Partnership Bank Account, of such Class B Purchaser’s Purchase Price;
(b) the Registration Rights Agreement, duly executed by such Class B Purchaser;
(c) if not an individual, an Officers’ certificate, substantially in the form attached to this Agreement as Exhibit G ;
(d) the Monitoring Agreement, duly executed by Goff;
(e) the Standstill Agreement, duly executed by such Class B Purchaser;
(f) a cross receipt, dated the Closing Date, executed by such Class B Purchaser confirming that such Class B Purchaser has received the Purchased Units being purchased by such Class B Purchaser on such Closing Date pursuant hereto; and
(g) a completed Internal Revenue Service Form W-9, Form W-8BEN or applicable substitute form.
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ARTICLE VII
INDEMNIFICATION, COSTS AND EXPENSES
Section 7.01 Indemnification by the Partnership . The Partnership agrees to indemnify each Class B Purchaser and its Representatives (collectively, “ Class B Purchaser Related Parties ”) (a) from costs, losses, liabilities, damages, or expenses, and (b) hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of the Partnership contained herein or in any certificate or instrument delivered by or on behalf of the Partnership hereunder, and in connection therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them (whether or not a party thereto), provided that such claim for indemnification relating to a breach of any representation or warranty is made prior to the expiration of such representations or warranties to the extent applicable.
Section 7.02 Indemnification by Class B Purchasers . Each Class B Purchaser agrees, severally and not jointly, to indemnify the Partnership, the General Partner and their respective Representatives (collectively, “ Partnership Related Parties ”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation, or inquiries), demands and causes of action and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of such Class B Purchaser contained herein or in any certificate or instrument delivered by such Class B Purchaser hereunder; provided that such claim for indemnification relating to a breach of any representation or warranty is made prior to the expiration of such representation or warranty; and provided further , that in no event will such Class B Purchaser be liable under this Section 7.02 for any amount in excess of its Purchase Price.
Section 7.03 Indemnification Procedure . Promptly after any Partnership Related Party or Class B Purchaser Related Party (hereinafter, the “ Indemnified Party ”) has received notice of any indemnifiable claim hereunder, or the commencement of any action, suit or proceeding by a third party, which the Indemnified Party believes in good faith is an indemnifiable claim under this Agreement (each a “Third Party Claim”), the Indemnified Party shall give the indemnitor hereunder (the “ Indemnifying Party ”) written notice of such claim or the commencement of such action, suit or proceeding, but failure to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability it may have to such Indemnified Party hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure. Such notice shall state the nature and the basis of such claim to the extent then known. The Indemnifying Party shall have the right to defend and settle, at its own expense and by its own counsel who shall be reasonably acceptable to the Indemnified Party, any such matter as long as the Indemnifying Party pursues the same diligently and in good faith. If the Indemnifying Party undertakes to defend or settle, it shall promptly notify the Indemnified Party of its intention to do so, and
24
the Indemnified Party shall cooperate with the Indemnifying Party and its counsel in all commercially reasonable respects in the defense thereof and the settlement thereof. Such cooperation shall include furnishing the Indemnifying Party with any books, records and other information reasonably requested by the Indemnifying Party and in the Indemnified Party’s possession or control. Such cooperation of the Indemnified Party shall be at the cost of the Indemnifying Party. After the Indemnifying Party has notified the Indemnified Party of its intention to undertake to defend or settle any such asserted liability, and for so long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such asserted liability; provided, however , that the Indemnified Party shall be entitled, at its expense, to participate in the defense of such asserted liability and the negotiations of the settlement thereof. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not settle any indemnified claim without the consent of the Indemnified Party, unless the settlement thereof imposes no liability or obligation on, involves no admission of wrongdoing or malfeasance by, and includes a complete release from liability of, the Indemnified Party.
Section 7.04 Tax Treatment . All indemnification payments under this ARTICLE VII shall be adjustments to the Per Unit Price except as otherwise required by applicable Law.
Section 8.01 Interpretation . Article, Section, Schedule, and Exhibit references are to this Agreement, unless otherwise specified. All references to instruments, documents, contracts, and agreements are references to such instruments, documents, contracts, and agreements as the same may be amended, supplemented, and otherwise modified from time to time, unless otherwise specified. The word “including” shall mean “including but not limited to.” Whenever a party has an obligation under the Transaction Agreements, the expense of complying with such obligation shall be an expense of such party unless otherwise specified therein. Whenever any determination, consent or approval is to be made or given by a Class B Purchaser under the Transaction Agreements, such action shall be in such Class B Purchaser’s sole discretion, unless otherwise specified therein. The meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term and vice versa, and words denoting any gender shall include all genders as the context requires. Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning. A reference to any Party to this Agreement or a Person party to any other agreement or document shall include such Party’s successors and permitted assigns. If any provision in the Transaction Agreements is held to be illegal, invalid, not binding, or unenforceable, such provision shall be fully severable and the Transaction Agreements shall be construed and enforced as if such illegal, invalid, not binding or unenforceable provision had never comprised a part of the Transaction Agreements, and the remaining provisions shall remain in full force and effect. The Transaction Agreements have been reviewed and negotiated by sophisticated parties with access to legal counsel and shall not be construed against the drafter.
Section 8.02 Survival of Provisions . The representations and warranties set forth in Sections 3.01 , 3.02 , 3.03 , 3.08 , 3.09 , 3.11 , 3.19 , 3.21 , 3.22 , 3.23 , 3.24 , 4.01 , 4.03 , 4.04 , 4.05 , 4.06 , 4.07 , 4.08 , 4.09 and 4.10 of this Agreement shall survive the execution and delivery of this Agreement indefinitely, and the other representations and warranties set forth in this Agreement shall survive until the date that is 30 days following the filing of the Partnership’s Annual Report on Form 10-K for the
25
fiscal year ended December 31, 2018 regardless of any investigation made by or on behalf of the Partnership or any Class B Purchaser. The covenants made in this Agreement or any other Transaction Agreement shall survive the Closing indefinitely until performed and remain operative and in full force and effect regardless of acceptance of any of the Purchased Units and payment therefor and repayment, conversion, exercise, redemption or repurchase thereof. All indemnification obligations of the Partnership and the Class B Purchasers pursuant to this Agreement shall remain operative and in full force and effect unless such obligations are expressly terminated in a writing by the Parties, regardless of any purported general termination of this Agreement.
Section 8.03 No Waiver; Modifications in Writing .
(a) Delay . No failure or delay on the part of any Party in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any right, power, or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to a Party at Law or in equity or otherwise.
(b) Specific Waiver; Amendment . Except as otherwise provided herein, no amendment, waiver, consent, modification or termination of any provision of this Agreement shall be effective, unless signed by each of Parties or each of the original signatories thereto affected by such amendment, waiver, consent, modification or termination. Any amendment, supplement or modification of or to any provision hereof, any waiver of any provision hereof and any consent to any departure by the Partnership from the terms of any provision hereof shall be effective only in the specific instance and for the specific purpose for which made or given. Except where notice is specifically required by this Agreement, no notice to or demand on the Partnership in any case shall entitle the Partnership to any other or further notice or demand in similar or other circumstances.
Section 8.04 Binding Effect; Assignment .
(a) Binding Effect . This Agreement shall be binding upon the Partnership, each Class B Purchaser and their respective successors and permitted assigns. Except as expressly provided in this Agreement, this Agreement shall not be construed so as to confer any right or benefit upon any Person other than the Parties to this Agreement and as provided in ARTICLE VII , and their respective successors and permitted assigns.
(b) Assignment of Rights . All or any portion of the rights and obligations of any Class B Purchaser under this Agreement may be transferred by such Class B Purchaser without the consent of the Partnership, subject to the restrictions set forth in, and compliance with the requirements of, Section 2.01(b) . Any transfer or attempted transfer of the rights and obligations of a Class B Purchaser under this Agreement, other than in accordance with Section 2.01(b) , shall be null and void and of no force and effect.
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Section 8.05 Communications . All notices and demands provided for hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, telecopy, air courier guaranteeing overnight delivery, electronic mail or personal delivery to the following addresses:
(a) If to any Class B Purchaser:
To the address of such Class B Purchaser, as applicable, listed on Schedule 8.05 hereof or such other address as such Class B Purchaser, as applicable, shall have specified by written notice to the Partnership.
(b) If to the Partnership:
Mid-Con Energy Partners, LP
2431 East 61st Street
Suite 850
Tulsa, Oklahoma 74136
Attention: Charles L. McLawhorn, III
Email: cmclawhorn@midcon-energy.com
With a copy to (which shall not constitute notice):
Sidley Austin LLP
1501 K Street, N.W.
Washington, DC 20005
Attention: William J. Cooper
Email: wcooper@sidley.com
or to such other address as the Partnership or such Class B Purchaser may designate in writing. All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; at the time of transmittal, if sent via electronic mail prior to 5:00 p.m., Central Time on the date submitted; on the next succeeding Business Day, if sent via electronic mail at or after 5:00 p.m., Central Time on the date submitted; upon actual receipt if sent by certified mail, return receipt requested, or regular mail, if mailed; when receipt acknowledged, if sent via facsimile; and upon actual receipt when delivered to an air courier guaranteeing overnight delivery.
Section 8.06 Entire Agreement . This Agreement and the other Transaction Agreements are intended by the Parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the Parties hereto and thereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein, with respect to the rights granted by the Partnership or a Class B Purchaser set forth herein and therein. This Agreement and the other Transaction Agreements supersede all prior agreements and understandings between the Parties with respect to such subject matter. The Schedules and Exhibits referred to herein and attached hereto are incorporated herein by this reference, and unless the context expressly requires otherwise, are incorporated in the definition of “ Agreement .”
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Section 8.07 Governing Law; Submission to Jurisdiction . This Agreement, and all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement), will be construed in accordance with and governed by the laws of the State of Delaware. The Parties hereby submit to the non-exclusive jurisdiction of any U.S. fed eral or state court located in Dallas, Texas in any action, suit or proceeding arising out of or based upon this Agreement or any of the transactions contemplated hereby. The Parties hereby irrevocably waive, to the fullest extent permitted by applicable Law, any objection which they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the Parties hereto agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.
Section 8.08 Waiver of Jury Trial . THE PARTIES TO THIS AGREEMENT EACH HEREBY WAIVES, AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
Section 8.09 Execution in Counterparts . This Agreement may be executed in any number of counterparts and by different Parties hereto in separate counterparts, including facsimile or .pdf format counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.
(a) Notwithstanding anything herein to the contrary, this Agreement may be terminated at any time at or prior to the Closing by the mutual written consent of the Partnership and the Class B Purchasers entitled to purchase a majority of the Purchased Units in accordance with Schedule A , or, with respect to any Class B Purchaser, that Class B Purchaser and the Partnership.
(b) Notwithstanding anything herein to the contrary, this Agreement shall automatically terminate at any time at or prior to the Closing:
(i) if a statute, rule, order, decree or regulation shall have been enacted or promulgated, or if any action shall have been taken by any Governmental Authority of competent jurisdiction which permanently restrains, precludes, enjoins or otherwise
28
prohibits the consummation of the transactions contemplated by this Agreement or makes the transactions contemplated by this Agreement illegal; or
(ii) if the Closing shall not have occurred on or before December 31, 2017.
(c) In the event of the termination of this Agreement as provided in Section 8.10(a) or Section 8.10(b) , this Agreement shall forthwith become null and void. In the event of such termination, there shall be no liability on the part of any Party hereto, except with respect to the requirement to comply with any confidentiality agreement in favor of the Partnership; provided that nothing herein shall relieve any party from any liability or obligation with respect to any willful breach of this Agreement.
Section 8.11 Recapitalization, Exchanges, Etc . The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all equity interests of the Partnership or any successor or assign of the Partnership (whether by merger, consolidation, sale of assets or otherwise) that may be issued in respect of, in exchange for or in substitution of, the Purchased Units, and shall be appropriately adjusted for combinations, unit splits, recapitalizations and the like of the Class B Convertible Preferred Units or the Common Units occurring after the date of this Agreement.
Section 8.12 Specific Performance . Damages in the event of breach of this Agreement by a Party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Party, in addition to and without limiting any other remedy or right it may have, will have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the Parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right will not preclude any such Party from pursuing any other rights and remedies at law or in equity that such Party may have.
( Signature Pages Follow )
29
IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first above written.
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Mid-Con Energy Partners, LP |
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By: |
Mid-Con Energy GP, LLC, |
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its General Partner |
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By: |
/s/ Jeffrey R. Olmstead |
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Name: |
Jeffrey R. Olmstead |
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Title: |
Chief Executive Officer |
Signature Page to
Class B Convertible Preferred Unit Purchase Agreement
CLASS B PURCHASERS |
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Goff Focused Energy Strategies, LP |
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By: |
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GFS Energy GP, LLC |
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its General Partner |
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By: |
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GFS Management, LLC |
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its Managing Member |
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By: |
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Goff Focused Strategies, LLC |
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its Managing Member |
By: |
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/s/ John C. Goff |
Name: |
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John C. Goff |
Title: |
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Managing Member |
Goff MCEP II, LP |
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By: |
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GFS MCEP GP, LLC |
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its General Partner |
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By: |
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GFS Management, LLC |
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its Managing Member |
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By: |
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Goff Focused Strategies, LLC |
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its Managing Member |
By: |
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/s/ John C. Goff |
Name: |
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John C. Goff |
Title: |
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Managing Member |
Signature Page to
Class B Convertible Preferred Unit Purchase Agreement
Goff REN Holdings, LLC |
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By: |
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GFS REN GP, LLC |
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its Manager |
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By: |
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GFS Management, LLC |
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its Managing Member |
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By: |
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Goff Focused Strategies, LLC |
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its Managing Member |
By: |
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/s/ John C. Goff |
Name: |
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John C. Goff |
Title: |
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Managing Member |
Mid-Con Energy III, LLC |
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By: |
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Charles L. McLawhorn, III |
Name: |
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Charles L. McLawhorn, III |
Title: |
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Vice President, General Counsel and |
Corporate Secretary |
Signature Page to
Class B Convertible Preferred Unit Purchase Agreement
Schedule A
Class B Purchaser |
Class B Convertible Preferred Units |
Purchase Price |
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Goff Focused Energy Strategies, LP |
2,941,176 |
$4,000,000.00 |
Goff MCEP II, LP |
5,735,294 |
$7,800,000.00 |
Goff REN Holdings, LLC |
1,764,706 |
$2,400,000.00 |
Mid-Con Energy III, LLC |
588,235 |
$800,000.00 |
TOTAL |
11,029,411 |
$15,000,000.00 |
Schedule 8.05
Class B Purchaser |
Contact Information |
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Goff Focused Energy Strategies, LP |
c/o Goff Focused Strategies, LLC 500 Commerce Street Suite 700 Fort Worth, TX 76102 Attention: Jennifer Terrell Email: jterrell@gofffocusedstrategies.com
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Goff MCEP II, LP |
c/o Goff Focused Strategies, LLC 500 Commerce Street Suite 700 Fort Worth, TX 76102 Attention: Jennifer Terrell Email: jterrell@gofffocusedstrategies.com
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Goff REN Holdings, LLC |
c/o Goff Focused Strategies, LLC 500 Commerce Street Suite 700 Fort Worth, TX 76102 Attention: Jennifer Terrell Email: jterrell@gofffocusedstrategies.com
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Mid-Con Energy III, LLC |
Mid-Con Energy III, LLC 2431 East 61st Street Suite 850 Tulsa, Oklahoma 74136 Attention: Charles L. McLawhorn, III Email: cmclawhorn@midcon-energy.com
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ACTIVE 226509354
Exhibit A
[ Form of Second Amendment ]
SECOND AMENDMENT TO
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
MID-CON ENERGY PARTNERS, LP
THIS SECOND AMENDMENT TO FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF MID-CON ENERGY PARTNERS, LP dated as of [●], 2017 (this “ Amendment ”) is entered into by Mid-Con Energy GP, LLC (the “ General Partner ”), a Delaware limited liability company and the general partner of Mid-Con Energy Partners, LP, a Delaware limited partnership (the “ Partnership ”), pursuant to the authority granted to the General Partner in Section 13.1 of the First Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of December 20, 2011, as amended by the First Amendment thereto, dated as of August 11, 2016 (as amended, the “ Partnership Agreement ”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Partnership Agreement.
RECITALS
WHEREAS , Section 5.6(a) of the Partnership Agreement provides that the Partnership may issue additional Partnership Interests for any Partnership purpose at any time and from time to time to such Persons and for such consideration and on such terms and conditions as the General Partner in its sole discretion shall determine, all without the approval of any Limited Partners;
WHEREAS , Section 5.6(b) of the Partnership Agreement provides that the Partnership Interests authorized to be issued by the Partnership pursuant to Section 5.6(a) may be issued in one or more classes, or one or more series of any such classes, with such designations, preferences, rights, powers and duties (which may be senior to existing classes and series of Partnership Interests) as shall be fixed by the General Partner;
WHEREAS , Section 13.1(g) of the Partnership Agreement provides that the General Partner may, without the approval of any Limited Partner, amend any provision of the Partnership Agreement that the General Partner determines to be necessary or appropriate in connection with the creation, authorization or issuance of any class or series of Partnership Interests pursuant to Section 5.6 of the Partnership Agreement; and
WHEREAS , the General Partner deems it advisable and in the best interest of the Partnership to effect this Amendment to provide for (i) the creation of a new class of Units to be designated as Class B Preferred Units and to fix the preferences and the relative participating, optional and other special rights, powers and duties pertaining to the Class B Preferred Units, including, without limitation, the conversion of the Class B Preferred Units into Common Units in accordance with the terms described herein, (ii) the issuance of the Class B Preferred Units to the Purchasers pursuant to the Class B Preferred Unit Purchase Agreement and (iii) such other matters as are provided herein; and
HOU:3835927.4
ACTIVE 226520424
WHEREAS , pursuant to Section 5.10(c)(iv) of the Partnership Agreement, the General Partner has received the approval of a Class A Preferred Unit Majority approving the creation and issuance of the Class B Preferred Units, with such rights, preferences and privileges as are set forth in this Amendment.
NOW, THEREFORE , in consideration of the covenants, conditions and agreements contained herein, the General Partner hereby adopts the following:
A. Amendment . The Partnership Agreement is hereby amended as follows:
1. Article I is hereby amended to add or restate, as applicable, the following definitions in Section 1.1 in the appropriate alphabetical order:
“ Affiliate ” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. For purposes of this Agreement, and not in limitation of the foregoing (i) the Partnership, on the one hand, and the Purchasers, on the other hand, shall not be considered Affiliates solely by virtue of such Purchasers holding Class A Preferred Units, (ii) the Partnership, on the one hand, and the Class B Purchasers, on the other hand, shall not be considered Affiliates solely by virtue of such Class B Purchasers holding Class B Preferred Units and (iii) any fund, entity or account managed, advised or sub-advised, directly or indirectly, by a Purchaser, a Class B Purchaser, or any of their respective Affiliates, or the direct or indirect equity owners, including limited partners of a Purchaser, a Class B Purchaser, or any of their respective Affiliates, shall be considered an Affiliate of such Purchaser or Class B Purchaser, as applicable.
“ Class A Parity Securities ” means any class or series of Partnership Interests that, with respect to distributions on such Partnership Interests of cash or property and/or distributions upon liquidation of the Partnership (taking into account the intend effects of the allocation of gains and losses as provided in this Agreement), ranks pari passu with the Class A Preferred Units, including the Class B Preferred Units.
“ Class B Change of Control ” means the occurrence of any of the following events: (i) the Class B Permitted Holders cease to beneficially own, directly or indirectly, at least 50% of the outstanding voting securities of the General Partner, measured by voting power rather than number of units; (ii) the Common Units are no longer listed or admitted to trading on the NASDAQ or another National Securities Exchange; (iii) the direct or indirect sale, lease, transfer, conveyance or other disposition (including by way of merger or consolidation), in one or more series of related transactions, of all or substantially all of the assets of the Partnership and its Subsidiaries, taken as a whole, to any Section 13(d) Person or Persons ; or (iv) the General Partner withdraws or is removed by the Limited Partners in accordance with the terms of this Agreement.
“ Class B Closing Date ” has the meaning ascribed to the term “Closing Date” in the Class B Preferred Unit Purchase Agreement.
A-2
“ Class B COC Redemption Premium ” means, with respect to a Class B Redemption Date occurring (i) prior to the second anniversary of the Class B Closing Date, 150% of the Class B Preferred Unit Price; (ii) during the period commencing on the second anniversary, and ending on the date immediately preceding the third anniversary, of the Class B Closing Date, 130% of the Class A Preferred Unit Price; (iii) during the period commencing on the third anniversary, and ending on the date immediately preceding the fourth anniversary, of the Class B Closing Date, 110% of the Class B Preferred Unit Price; and (iv) thereafter, 100% of the Class B Preferred Unit Price.
“ Class B Conversion Price ” means, subject to Section 5.12(d)(ix) , the Class B Preferred Unit Price.
“ Class B Conversion Rate ” means a number of Common Units equal to the quotient of (i) the Class B Preferred Unit Price divided by (ii) the Class B Conversion Price.
“ Class B Minimum Conversion Amount ” means (i) a number of Class B Preferred Units having an aggregate value of $1.0 million, which value is calculated by multiplying (A) the number of Class B Preferred Units to be converted by (B) the Class B Preferred Unit Price, or (ii) if the value of the Class B Preferred Units (calculated in accordance with clause (i) above) to be converted by the Class A Preferred Holder requesting conversion does not equal or exceed $1.0 million, then all of the Class B Preferred Units held by such Class B Preferred Holder.
“ Class B Parity Securities ” means any class or series of Partnership Interests that, with respect to distributions on such Partnership Interests of cash or property and/or distributions upon liquidation of the Partnership (taking into account the intend effects of the allocation of gains and losses as provided in this Agreement), ranks pari passu with the Class B Preferred Units, including the Class A Preferred Units.
“ Class B Payment Date ” has the meaning set forth in Section 5.12(b)(iv) .
“ Class B Permitted Affiliate ” has the meaning set forth in Section 4.11(c) .
“ Class B Permitted Holder ” means: (i) Charles R. Olmstead and Jeffrey R. Olmstead; (ii) any wife, lineal descendant, legal guardian or other legal representative or estate of any of Charles R. Olmstead and Jeffrey R. Olmstead; (iii) any estate planning trust of which at least one of the trustees is any of Charles R. Olmstead and Jeffrey R. Olmstead; and (iv) any other Person that is controlled directly or indirectly by any one or more of Charles R. Olmstead and Jeffrey R. Olmstead.
“ Class B PIK Distribution Amount ” has the meaning set forth in Section 5.12(b)(i)(B) .
“ Class B PIK Payment ” has the meaning set forth in Section 5.12(b)(i)(B) .
“ Class B PIK Payment Date ” has the meaning set forth in Section 5.12(b)(v) .
“ Class B PIK Unit ” means a Class B Preferred Unit issued pursuant to a Class B Preferred Unit Distribution in accordance with Section 5.12(b)(i)(B) .
A-3
“ Class B Preferred Holder ” means a holder of a Class B Preferred Unit.
“ Class B Preferred Unit ” means a Partnership Interest representing a fractional part of the Partnership Interests of all Limited Partners and assignees, and having the rights and obligations specified with respect to a Class B Preferred Unit in this Agreement, including Class B PIK Units.
“ Class B Preferred Unit Distribution ” has the meaning assigned to such term in Section 5.12(b)(i)(A) .
“ Class B Preferred Unit Distribution Amount ” has the meaning assigned to such term in Section 5.12(b)(i)(A) .
“ Class B Preferred Unit Majority ” means the affirmative vote or consent of a majority of the Outstanding Class B Preferred Units, voting separately as a class with one vote per Class B Preferred Unit.
“ Class B Preferred Unit Price ” means $1.36 per Class B Preferred Unit.
“ Class B Preferred Unit Purchase Agreement ” means the Class B Preferred Unit Purchase Agreement, dated as of November 14, 2017, among the Partnership and the Class B Purchasers.
“ Class B Prohibited Payment ” has the meaning set forth in Section 5.12(b)(i)(B) .
“ Class B Purchaser ” and “ Class B Purchasers ” have the meaning given to such terms in the introductory paragraph of the Class B Preferred Unit Purchase Agreement.
“ Class B Redemption Date ” means, with respect to each Class B Preferred Unit, the date on which the Partnership has completed the redemption of such Class B Preferred Unit pursuant to Section 5.12(e)(ii) or Section 5.12(f) .
“ Class B Transfer Agent ” means the Person who is then serving as the Transfer Agent with respect to the Common Units.
“ Class B Transfer Limitation Period ” has the meaning set forth in Section 4.11(a) .
“ Common Unit ” means a Partnership Interest representing a fractional part of the Partnership Interests of all Limited Partners and assignees, and having the rights and obligations specified with respect to the Common Units in this Agreement. The term “Common Unit” does not refer to or include any Class A Preferred Unit or Class B Preferred Unit prior to its conversion into a Common Unit pursuant to the terms of this Agreement.
“ Conversion Date ” means, with respect to each Class A Preferred Unit, the date on which the Partnership has completed the conversion of such Class A Preferred Unit pursuant to Section 5.10(d) and, with respect to each Class B Preferred Unit, the date on which the Partnership has completed the conversion of such Class B Preferred Unit pursuant to Section 5.12(d) .
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“ Liquidation Preference ” means, with respect to each Class A Preferred Unit, the sum of the Class A Preferred Unit Price (subject to adjustments for any stock splits, combinations or recapitalization with respect to the Class A Preferred Units) plus all accrued but unpaid and accumulated distribution s , if any, on such Class A Preferred Unit to, but not including, the Liquidation Date, and, with respect to each Class B Preferred Unit, the sum of the Class B Preferred Unit Price (subject to adjustments for any stock splits, combinations or recapitalization with respect to the Class B Preferred Units) plus all accrued but unpaid and accumulated distribution s , if any, on such Class B Preferred Unit to, but not including, the Liquidation Date.
“ Junior Securities ” means any class or series of Partnership Interests that, with respect to distributions on such Partnership Interests of cash or property and distributions upon liquidation of the Partnership (taking into account the intended effects of the allocation of gains and losses as provided in this Agreement), ranks junior to the Class A Preferred Units and the Class B Preferred Units, including but not limited to Common Units and General Partner Interests.
“ Partnership Interest ” means any class or series of equity interest in the Partnership, which shall include any General Partner Interest and Limited Partner Interest (including, for the avoidance of doubt, any Common Unit, Class A Preferred Unit and Class B Preferred Unit), but shall exclude any options, rights, warrants and appreciation rights relating to an equity interest in the Partnership.
“ Percentage Interest ” means as of any date of determination (a) as to the General Partner, with respect to the General Partner Interest (calculated based upon a number of Notional General Partner Units), and as to any Unitholder with respect to Units, the product obtained by multiplying (i) 100% less the percentage applicable to clause (b) below by (ii) the quotient obtained by dividing (A) the number of Notional General Partner Units deemed held by the General Partner or the number of Units held by such Unitholder, as the case may be, by (B) the total number of Outstanding Units and Notional General Partner Units and (b) as to the holders of other Partnership Interests issued by the Partnership in accordance with Section 5.6 , the percentage established as part of such issuance. The Percentage Interest with respect to a Class A Preferred Unit and a Class B Preferred Unit shall, in each case, at all times be zero.
“ Preferred Holder ” means a Record Holder of Preferred Units.
“ Preferred Units ” means any class or series of Partnership Interests that, with respect to distributions on such Partnership Interests of cash or property and distributions upon liquidation of the Partnership (taking into account the intended effects of the allocation of gains and losses as provided in this Agreement), ranks senior to the Common Units, including the Class A Preferred Units and the Class B Preferred Units.
“ Pro Rata ” means (a) when used with respect to Units or any class thereof, apportioned equally among all designated Units in accordance with their relative Percentage Interests, (b) when used with respect to Partners or Record Holders, apportioned among all Partners or Record Holders in accordance with their relative Percentage Interests, (c) when used with respect to Class A Preferred Holders or Class B Preferred Holders, apportioned equally among all Class A Preferred Holders or Class B Preferred Holders, as applicable, in accordance with the relative number or percentage of Class A Preferred Units or Class B Preferred Units, respectively, held
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by each such Class A Preferred Holder or Class B Preferred Holder, as applicable, and (d) when used with respect to Preferred Holders, apportioned equally among all Preferred Holders in accordance with the relative number or percentage of Preferred Units held by each such Preferred Holder.
“ Senior Securities ” means any class or series of Partnership Interests that, with respect to distributions on such Partnership Interests of cash or property and/or distributions upon liquidation of the Partnership (taking into account the intended effects of the allocation of gains and losses as provided in this Agreement), ranks senior to the Class A Preferred Units and the Class B Preferred Units.
“ Stated Class B Liquidation Preferenc e” means an amount equal to $1.36 per Class B Preferred Unit.
“ Stated Liquidation Preference ” means (a) when used with respect to a Class A Preferred Unit, the Stated Class A Liquidation Preference, and (b) when used with respect to a Class B Preferred Unit, the Stated Class B Liquidation Preference.
“ Suspension Period ” means the period beginning on the Class A Closing Date and ending on the fifth anniversary of the Class A Closing Date, unless earlier terminated with the consent of the Class A Preferred Holders and the Class B Preferred Holders in accordance with Section 5.10(c)(iv) and Section 5.12(c)(iv) , respectively.
“ Unit ” means a Partnership Interest that is designated as a “Unit” and shall include Common Units, Class A Preferred Units and Class B Preferred Units but shall not include the General Partner Interest.
2. Article I is hereby amended to delete the following definitions in Section 1.1 :
(a) “Parity Securities”
3. The Partnership Agreement is hereby amended to replace all references to “Parity Securities” with “Class A Parity Securities.”
4. Article IV is hereby amended to add a new Section 4.11 implementing certain transfer restrictions on the Class B Preferred Units:
Section 4.11 |
Restrictions on Transfer of Class B Preferred Units. |
(a) During the period beginning on the Class B Closing Date and ending on the date immediately preceding the first anniversary of the Class B Closing Date (the “ Class B Transfer Limitation Period ”), no Class B Purchaser nor any Affiliate of a Class B Purchaser shall, except as provided in Section 4.11(c) , transfer any Class B Preferred Units held by such Class B Purchaser or Affiliate without the approval of the General Partner.
(b) After the Class B Transfer Limitation Period, each Class B Purchaser may transfer any Class B Preferred Units held by it to any other Person or Persons, except for any transfers to any Section 13(d) Persons that, after giving effect to such transfer, would own more
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than 15% of the Outstanding Common Units, including the number of Common Units into which such Class B Preferred Units to be transferred to such Section 13(d) Persons are then convertible; provided , however , that the foregoing restriction shall not apply to any transfer of Class B Preferred Units to (i) any investment bank or similar institution that assists in the brokering or marketing of the Class B Preferred Units on behalf of any Class B Purchaser or (ii) any Affiliate of such Class B Purchaser, provided , that, in the case of this clause (ii ), subsequent transferees (including such Affiliates) shall remain subject to the restriction.
(c) Notwithstanding anything to the contrary contained herein, a Class B Purchaser shall at all times from and after the Class B Closing Date be permitted to transfer any Class B Preferred Units held by such Class B Purchaser to any Person that is an Affiliate of such Class B Purchaser or to another Class B Purchaser (each such Person, a “ Class B Permitted Affiliate ”), provided that any such transfer would not result in a Technical Termination; provided further , that the Partnership shall provide any Class B Purchaser, upon its request, with information sufficient for such Class B Purchaser to determine if a proposed transfer of Class B Preferred Units would result in a Technical Termination.
(d) Notwithstanding anything to the contrary contained herein, no Class B Purchaser shall transfer any Class B Preferred Units to any Person that is a Competitor; provided , however , that the foregoing restriction shall not apply to any transfer of Class B Preferred Units on any National Securities Exchange on which the Class B Preferred Units are then-listed or admitted for trading; provided , further , that there shall be no obligation to list or admit the Class B Preferred Units for trading on any National Securities Exchange.
(e) This Section 4.11 sets forth all restrictions on transfer applicable to Class B Preferred Units.
5. Section 5.5(a) is hereby amended and restated as follows:
(a) |
The Partnership shall maintain for each Partner (or a beneficial owner of Partnership Interests held by a nominee in any case in which the nominee has furnished the identity of such owner to the Partnership in accordance with Section 6031(c) of the Code or any other method acceptable to the General Partner) owning a Partnership Interest a separate Capital Account with respect to such Partnership Interest in accordance with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of all Capital Contributions made to the Partnership with respect to such Partnership Interest and (ii) all items of Partnership income and gain (including Simulated Gain and income and gain exempt from tax) computed in accordance with Section 5.5(b) and allocated with respect to such Partnership Interest pursuant to Section 6.1 , and decreased by (x) the amount of cash or Net Agreed Value of all actual and deemed distributions of cash or property made with respect to such Partnership Interest; provided that the Capital Account of a holder in respect of Class A Preferred Units or Class B Preferred Units shall not be decreased by the amount of any Class A Preferred Unit Distributions or Class B Preferred Unit Distributions, as applicable, and (y) all items of Partnership deduction and loss (including Simulated Depletion and Simulated Loss) computed in accordance with Section 5.5(b) and allocated with respect to such Partnership Interest pursuant to Section 6.1 . The initial Capital Account with respect to the Class A Preferred Units shall be Stated Class A Liquidation Preference. The initial Capital Account with respect to |
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the Class B Preferred Units shall be Stated Class B Liquidation Preference. In connection with the foregoing, the Partnership shall adopt the methodology set forth in the noncompensatory option regulations under Treasury Regulation Sections 1.704-1 and 1.721-2 with respect to the issuance and conversion of Class A Preferred Units and Class B Preferred Units, unless otherwise required by applicable law. |
6. Section 5.5(d)(i) is hereby amended and restated as follows:
7. (d) (i) Consistent with Treasury Regulation Sections 1.704-1(b)(2)(iv)(f) and 1.704-1(b)(2)(iv)(h)(2), on an issuance of additional Partnership Interests for cash or Contributed Property, the issuance of a Noncompensatory Option (including the conversion of a Class A Preferred Unit or a Class B Preferred Unit in accordance with Section 5.10(d) and Section 5.12(d) , as applicable), the issuance of Partnership Interests as consideration for the provision of services, or the conversion of the Combined Interest to Common Units pursuant to Section 11.3(b) , the Capital Accounts of all Partners and the Carrying Value of each Partnership property immediately prior to such issuance (or, in the case of a Conversion Date, immediately after such Conversion Date) shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property, as if such Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such property for an amount equal to its fair market value immediately prior to such issuance; provided, however , that in the event of the issuance of a Partnership Interest pursuant to the exercise of a Noncompensatory Option where the right to share in Partnership capital represented by such Partnership Interest differs from the consideration paid to acquire and exercise such option, the Carrying Value of each Partnership property immediately after the issuance of such Partnership Interest shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property and the Capital Accounts of the Partners shall be adjusted in a manner consistent with Treasury Regulation Section 1.704-1(b)(2)(iv)(s); provided, further , that in the event of an issuance of Partnership Interests for a de minimis amount of cash or Contributed Property, in the event of an issuance of a Noncompensatory Option to acquire a de minimis Partnership Interest, or in the event of an issuance of a de minimis amount of Partnership Interests as consideration for the provision of services, the General Partner may determine that such adjustments are unnecessary for the proper administration of the Partnership. Any such Unrealized Gain or Unrealized Loss (or items thereof) shall be allocated (A) if the operation of this sentence is triggered by the conversion of a Class A Preferred Unit or Class B Preferred Unit, first among the Partners holding Common Units as may be necessary to cause the Capital Account attributable to each Common Unit to be the same, and (B) any remaining Unrealized Gain or Unrealized Loss shall be allocated among the Partners pursuant to Section 6.1 in the same manner as any item of gain, loss, Simulated Gain or Simulated Loss actually recognized would have been allocated. If the Unrealized Gain or Unrealized Loss allocated as a result of the occurrence of a Conversion Date is not sufficient to cause the Capital Account attributable to each Common Unit to be the same, then Capital Account balances shall be reallocated between the Partners holding such Units so as to cause the Capital Account attributable to each Common Unit to be the same, in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(s)(3). In determining Unrealized Gain or Unrealized Loss in connection with the issuance of additional Partnership Interests or a Conversion Date, the aggregate cash amount and fair market value of all Partnership assets (including cash or cash equivalents) immediately prior to the issuance of additional Partnership Interests (or, in the case of an adjustment to the Carrying Value of
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Partnership property resulting from the exercise of a Noncompensatory Option (including conversion of a Class A Preferred Unit or Class B Preferred Unit) immediately after the issuance of the Partnership Interest acquired pursuant to the exercise of the Noncompensatory Option) shall be determined by the General Partner using such method of valuation as it may adopt in its sole discretion. For this purpose, the General Partner may determine that it is appropriate to first determine an aggregate value for the Partnership, based on the current trading price of the Common Units, the fair market value of all other Partnership Interests at such time (on a fully converted basis) of all Partners at such time, and the amount of Partnership liabilities; and, if before the Conversion Date of any Preferred Units or other Noncompensatory Options, may adjust the fair market value of all Partnership assets to reflect the difference, if any, between the fair market value of any Preferred Units or other Noncompensatory Options for which the Conversion Date has not occurred and the aggregate Capital Accounts attributable to such Preferred Units to the extent of any Unrealized Gain or Unrealized Loss that has not been reflected in the Partners’ Capital Accounts previously, consistent with the methodology of Treasury Regulation Section 1.704-1(b)(2)(iv)(h)(2). The General Partner shall allocate such aggregate value among the assets of the Partnership (in such manner as it determines) to arrive at a fair market value for individual properties.
8. Section 5.10(b)(iv) is hereby amended and restated as follows:
9. (iv) All Class A Preferred Unit Distributions shall be paid Quarterly, in arrears, on the earliest of: (A) the date that distributions are made on the Class B Preferred Units for such Quarter pursuant to Section 5.12(b) ; (B) the date that distributions are made on the Common Units for such Quarter pursuant to Section 6.3(a) and (C) the date that is forty-five (45) days after the end of such Quarter (such date, the “ Payment Date ”).
10. Article V is hereby amended to add a new Section 5.12 creating a new series of Units as follows:
Section 5.12 |
Establishment of Class B Preferred Units |
(a) General . The General Partner hereby designates and creates a series of Units to be designated as “Class B Preferred Units,” having the terms and conditions set forth herein.
(b) Distributions .
(i) Beginning with the Quarter ending December 31, 2017, the Class B Preferred Holders as of the applicable Record Date shall be entitled to receive distributions in accordance with the following provisions:
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A) The Partnership shall pay a cumulative distribution equal to $0.0272 per Quarter in respect of each Outstanding Class B Preferred Unit, subject to adjustment in accordance with Section 5.12(d)(ix) (the “ Class B Preferred Unit Distribution Amount ” and such distribution, a “ Class B Preferred Unit Distribution ” ). The Class B Preferred Unit Distribution Amount for the period ending December 31, 2017 shall be pro-rated for the period commencing on the Class B Closing Date and ending on, and including, December 31, 2017.
B) Each Class B Preferred Unit Distribution shall be paid in cash at the Class B Preferred Unit Distribution Amount; provided , however , that if the Credit Agreement prohibits the Partnership from paying the Class B Preferred Unit Distribution in respect of any Quarter to all Class B Preferred Holders in cash (a “ Class B Prohibited Payment ”), then the Class B Preferred Unit Distribution for such Quarter shall be paid in additional Class B Preferred Units (a “ Class B PIK Payment ”), and the Class B Preferred Unit Distribution Amount for such Quarter shall be $0.034 in respect of each Outstanding Class B Preferred Unit, subject to adjustment in accordance with Section 5.12(d)(ix) (the “ Class B PIK Distribution Amount ”). If the Partnership fails to pay in full any Class B Preferred Unit Distribution (or portion thereof) on the applicable Class B Payment Date, then (1) the Class B Preferred Unit Distribution Amount in respect of such Quarter will accumulate until paid in full in cash (or until the earlier conversion or redemption of the Class B Preferred Unit), and (2) the Partnership shall not be permitted to, and shall not, declare or make (x) any distributions in respect of any Junior Securities, or (y) any distribution in respect of any Class B Parity Securities, unless and until all accrued and unpaid Class B Preferred Unit Distributions have been paid in full in cash; provided , however , that distributions may be declared and paid in respect of the Class B Preferred Units and any Class B Parity Securities, as long as such distributions are declared and paid pro rata such that the amounts of distributions declared per Class B Preferred Unit and per unit of such Class B Parity Security shall in all cases bear to each other the same ratio that accrued but unpaid and accumulated distributions per Class B Preferred Unit and per unit of such Class B Parity Security bear to each other.
(ii) The number of Class B PIK Units to be issued in connection with any Class B PIK Payment shall be equal to the quotient of (A) the Class B PIK Distribution Amount divided by (B) the Class B Preferred Unit Price; provided that instead of issuing any fractional Class B PIK Unit, the Partnership shall round the number of Class B PIK Units issued to each Class B Preferred Holder down to the nearest whole Class B PIK Unit and pay cash in lieu of such fractional Unit.
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(iii) Class B Preferred Unit Distributions shall accrue on a daily basis; provided , however , that, with respect to any Class B Preferred Unit that is converted into Common Units in accordance with Section 5.12(d) , the holder thereof shall not be entitled to both a Class B Preferred Unit Distribution and a Common Unit distribution in respect of (A) the most recently completed Quarter or (B) the Quarter in which the conversion is consummated, but shall be entitled only to the distribution to be paid based upon the class of Units held as of the close of business on the Record Date in respect of each such Quarter, which Record Date shall not be later than 10 days prior to the Class B Payment Date.
(iv) All Class B Preferred Unit Distributions shall be paid Quarterly, in arrears, on the earliest of: (A) the date that distributions are made on the Class A Preferred Units for such Quarter pursuant to Section 5.10(b) ; (B) the date that distributions are made on the Common Units for such Quarter pursuant to Section 6.3(a) or such earlier date after the end of such Quarter as the General Partner may determine, and (C) the date that is forty-five (45) days after the end of such Quarter (such date, the “ Class B Payment Date ”).
(v) When Class B PIK Units are payable to a Class B Preferred Holder pursuant to this Section 5.12 , the Partnership shall issue the Class B PIK Units to such holder in accordance with Section 5.12(b)(iv) above (the date of issuance of such Class B PIK Units, the “ Class B PIK Payment Date ”). On the Class B PIK Payment Date, the Partnership shall issue to such Class B Preferred Holder the number of Class B PIK Units to which such holder shall be entitled by a notation in book entry form in the books of the Class B Transfer Agent or, at the request of such Class B Preferred Holder, by a certificate or certificates for the number of Class B PIK Units to which such Class B Preferred Holder shall be entitled. All Class B PIK Units shall, when so issued, be duly authorized, validly issued fully paid and non-assessable Limited Partner Interests in the Partnership, except as such non-assessability may be affected by Section 17-303, 17-607 or 17-804 of the Delaware Act, and shall be free from preemptive rights and free of any lien, claim, rights or encumbrances, other than those arising under the Delaware Act or the Partnership Agreement, as amended by this Amendment.
(vi) For purposes of maintaining Capital Accounts, if the Partnership issues one or more Class B PIK Units with respect to a Class B Preferred Unit, (i) the Partnership shall be treated for federal income tax purposes as having made a guaranteed payment for the use of capital under Section 707(c) of the Code with respect to such Class B Preferred Unit in an amount equal to the Class B PIK Distribution Amount, and (ii) the holder of such Class B Preferred Unit shall be treated as having contributed to the Partnership in exchange for such newly issued Class B PIK Units an amount of cash equal to the Class B PIK Distribution Amount less the amount of any cash distributed by the Partnership in lieu of fractional Class B PIK Units, with such holder’s Capital Account being increased by the amount of such deemed contribution.
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(vii) For the avoidance of doubt and not withstanding anything in Sections 6.3(a) to the contrary, any Available Cash that is to be distributed pursuant to Sections 6.3(a) shall be distributed first in accordance with this Section 5.12(b) .
(viii) All Class B Preferred Unit Distributions payable by the Partnership pursuant to this Section 5.12 shall be payable without regard to income of the Partnership and shall be treated for federal income tax purposes as guaranteed payments for the use of capital under Section 707(c) of the Code.
(c) Voting Rights .
(i) Notwithstanding anything to the contrary in this Agreement, the Class B Preferred Units shall have no voting rights and no rights to consent or approve any action or matter, except as set forth in this Section 5.12(c) , Section 13.3 , or as otherwise required by Delaware law.
(ii) The Class B Preferred Units will have such voting rights pursuant to this Agreement as such Class B Preferred Units would have if they were converted into Common Units, at the Class B Conversion Rate then in effect, and shall vote together with the Common Units as a single class, except that the Class B Preferred Units shall be entitled to vote as a separate class on any matter on which Unitholders are entitled to vote that adversely affects the rights, powers, privileges or preferences of the Class B Preferred Units in relation to other classes of Partnership Interests or as required by law.
(iii) The approval of a Class B Preferred Unit Majority shall be required to approve any matter for which the Class B Preferred Holders are entitled to vote as a separate class.
(iv) The approval of a Class B Preferred Unit Majority shall be required to:
A) amend this Agreement in any manner that adversely alters or changes the rights, powers, privileges or preferences or duties and obligations of the Class B Preferred Units;
B) amend this Agreement in any manner that modifies any terms of the Class B Preferred Units;
C) issue additional Class B Preferred Units;
D) create (by reclassification or otherwise) and issue any class of Senior Securities or Class B Parity Securities (or amend the provisions of any existing class of Partnership Interests to make any such class of Partnership Interests a class of Senior Securities or Class B Parity Securities);
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E) incur any indebtedness for borrowed money (other than under the Credit Agreement, including any increase in the borrowing base thereunder or any amendment or restatement thereof, and trade accounts payable arising in the ordinary course of business);
F) terminate the Suspension Period under the Equity Distribution Agreement; or
G) enter into any oral or written agreement, including any agreement effecting a merger or consolidation, or otherwise commit to do any of the foregoing.
(d) Conversion .
(i) (A) At any time during the period beginning on [●] 1 , and ending on the Business Day immediately prior to the first to occur of (1) the fifth anniversary of the Class A Closing Date, and (2) the effective date of a Class B Change of Control, each Class B Preferred Holder shall have the right, at its sole election, to convert all or any portion of the Class B Preferred Units held by such electing Class B Preferred Holder, in an aggregate amount equaling or exceeding the Class B Minimum Conversion Amount, into Common Units at the Class B Conversion Rate then in effect, and (B) immediately prior to effectiveness of a Change of Control, in accordance with an election made pursuant to Section 5.12(e)(i)(B) , each Class B Preferred Holder shall have the right, at its sole election, to convert all or any portion of the Class B Preferred Units held by such electing Class B Preferred Holder into Common Units at the Class B Conversion Rate then in effect, in each case, by delivery of: (x) written notice to the Partnership, in the form set forth as Exhibit C hereto, setting forth the number of Class B Preferred Units it holds and the number of Class B Preferred Units it is electing to convert, and (y) if such Class B Preferred Units are Certificated, a Class B Preferred Unit Certificate to the Class B Transfer Agent representing an amount of Class B Preferred Units at least equal to the amount such Class B Preferred Holder is electing to convert (or an instruction letter to the Class B Transfer Agent if the Class B Preferred Units are in book-entry form), together with such additional information as may be requested by the Class B Transfer Agent. The Partnership shall give each Class B Preferred Holder at least ten (10) Business Days prior written notice of any Change of Control. In the case of any Certificate representing Class B Preferred Units which are converted in part only, upon such conversion, the Class B Transfer Agent shall authenticate and deliver to the Class B Preferred Holder thereof, at the expense of the Partnership, a new Certificate representing the number of Class B Preferred Units not so converted.
(ii) On the fifth anniversary of the Class A Closing Date, if a Class B Preferred Holder has not elected, pursuant to Section 5.12(f) , to cause the Partnership to redeem all of the Class B Preferred Units held by such Class B
|
1 |
NTD: Date that is the 6 month anniversary of the Class B Closing Date. |
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Preferred Holder, then immediately following the Partnership’s redemption of Class B Preferred Units pursuant to Section 5.12(f) , all of such Class B Preferred Holder’s Outstanding Class B Preferred Units shall automatically convert into Common Units at the Class B Conversion Rate then in effect.
(iii) The Partnership shall make a cash payment with respect to each Class B Preferred Unit converted pursuant to this Section 5.12(d) , in an amount equal to all accrued but unpaid and accumulated distributions on such Class B Preferred Unit to, but not including, the Conversion Date; provided , however , that such accrued but unpaid and accumulated distributions shall not include any Class B Preferred Unit Distribution accrued in respect of (A) the most recently completed Quarter, if the Record Date in respect of such Quarter has not yet passed, or (B) the Quarter in which the conversion is consummated.
(iv) In lieu of issuing any fractional Common Unit upon the conversion of a Class B Preferred Unit pursuant to this Section 5.12(d) , the Partnership shall, in the sole discretion of the General Partner, round the number of Common Units issued upon conversion of each Class B Preferred Unit (A) up to the nearest whole Common Unit or (B) down to the nearest whole Common Unit and pay cash in lieu of any such fractional Common Unit.
(v) Upon conversion, the rights of a holder of converted Class B Preferred Units as a Class B Preferred Holder shall cease with respect to such converted Class B Preferred Units, including any rights under this Agreement with respect to Class B Preferred Holders, and such Person shall continue to be a Limited Partner and have the rights of a holder of Common Units under this Agreement and the rights of a Class B Preferred Holder in respect of any Class B Preferred Units not converted. Each Class B Preferred Unit shall, upon its Conversion Date, be deemed to be transferred to, and cancelled by, the Partnership in exchange for the issuance of the Common Unit(s) into which such Class B Preferred Unit converted. Notwithstanding the foregoing, as the result of a conversion, a holder shall not lose or relinquish any claims or rights of action such holder may then or thereafter have as a result of such holder’s ownership of the converted Class B Preferred Units.
(vi) The Partnership shall pay any documentary, stamp or similar issue or transfer taxes or duties relating to the issuance or delivery of Common Units upon conversion of the Class B Preferred Units. However, the Class B Preferred Holder whose Class B Preferred Units are converted shall pay any tax or duty which may be payable relating to any transfer involving the issuance or delivery of Common Units in a name other than the holder’s name. The Class B Transfer Agent may refuse to deliver the Certificate representing Common Units (or notation of book entry) being issued in a name other than the holder’s name until the Class B Transfer Agent receives a sum sufficient to pay any tax or duties due because the Units are to be issued in a name other than the holder’s name. Nothing herein shall preclude any tax withholding required by law or regulation.
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(vii) All Common Units delivered upon conversion of the Class B Preferred Units in accordance with this Section 5.12(d) shall be (1) newly issued and (2) duly authorized, validly issued, fully paid and non-assessable Limited Partner Interests in the Partnership, except as such non-assessability may be affected by Section 17-303, 17-607 or 17-804 of the Delaware Act, and shall be free from preemptive rights and free of any lien, claim, rights or encumbrances, other than those arising under the Delaware Act or this Agreement and other than restrictions on transfer under applicable securities laws.
(viii) The Partnership shall comply with all applicable securities laws pertaining to the issuance of any Common Units upon conversion of Class B Preferred Units and, if the Common Units are then listed, quoted or admitted to trading on the NASDAQ or any other National Securities Exchange or other market, shall list or cause to have quoted or admitted to trading and keep listed, quoted or admitted to trading the Common Units issuable upon conversion of the Class B Preferred Units to the extent permitted or required by the rules of such exchange or market.
(ix) If, after the Class B Closing Date, the Partnership (A) makes a distribution on its Common Units in Common Units, (B) subdivides or splits its outstanding Common Units into a greater number of Common Units, (C) combines or reclassifies its Common Units into a smaller number of Common Units or (D) issues by reclassification of its Common Units any Partnership Interests (including any reclassification in connection with a merger, consolidation or business combination in which the Partnership is the surviving Person), then the Class B Conversion Price in effect at the time of the Record Date for such distribution or of the effective date of such subdivision, split, combination, or reclassification shall be proportionately adjusted so that the conversion of the Class B Preferred Units after such time shall entitle the holder to receive (x) the aggregate number of Common Units (or shares of any Partnership Interests into which such shares of Common Units would have been combined, consolidated, merged or reclassified pursuant to clauses (C) and (D) above) that such holder would have been entitled to receive if the Class B Preferred Units had been converted into Common Units immediately prior to such Record Date or effective date, as the case may be, and (y) in the case of clause (A) , the aggregate number of Common Units that such holder would have been entitled to receive in connection with such distribution. In the case of a merger, consolidation or business combination in which the Partnership is the surviving Person, the Partnership shall provide effective provisions to ensure that the provisions of this Section 5.12 relating to the Class B Preferred Units shall not be abridged or amended and that the Class B Preferred Units shall thereafter retain the same powers, preferences and relative participating, optional and other special rights, and the qualifications, limitations and restrictions thereon, that the Class B Preferred Units had immediately prior to such transaction or event. An adjustment made pursuant to this Section 5.12(d)(ix) shall become effective immediately after the Record Date in the case of a distribution and shall become effective immediately after the effective date in the case of a subdivision,
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combination, reclassification (including any reclassification in connection with a merger, consolidation or business combination in which the Partnership is the surviving Person) or split. Such adjustment shall be made successively whenever any event described above shall occur.
(e) Change of Control .
(i) In the event of a Class B Change of Control, each Class B Preferred Holder shall have the option, at its sole election, to:
A) if the Partnership is the surviving entity following such Class B Change of Control, continue to hold Class B Preferred Units; or
B) immediately prior to effectiveness of such Class B Change of Control, convert all or any portion of the Class B Preferred Units held by such Class B Preferred Holder into Common Units, at the Class B Conversion Rate then in effect, in accordance with applicable provisions of Section 5.12(d) .
(ii) If (A) a Class B Preferred Holder does not elect to convert all of the Class B Preferred Units held by such Class B Preferred Holder into Common Units pursuant to Section 5.12(e)(i)(B) , and (B) the Partnership is not the surviving entity following such Class B Change of Control, then immediately following effectiveness of such Class B Change of Control, the Partnership shall redeem in cash all, but not less than all, of the Class B Preferred Units held by such Class B Preferred Holder at a price per Class B Preferred Unit equal to the Class B COC Redemption Premium, plus any accrued but unpaid and accumulated distributions on such Class B Preferred Units to, but not including, the Class B Redemption Date.
(f) Redemption .
(i) On the fifth anniversary of the Class A Closing Date, each Class B Preferred Holder shall be entitled to elect to cause the Partnership to redeem in cash all or any portion of the Class B Preferred Units held by such Class B Preferred Holder at a price per Class B Preferred Unit equal to the Unit Purchase Price, plus any accrued but unpaid and accumulated distributions on such Class B Preferred Units to, but not including, the Class B Redemption Date.
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(g) Certificates .
(i) If requested by a Class B Preferred Holder, the Class B Preferred Units shall be evidenced by certificates in such form as the Board of Directors may approve; unless and until the Board of Directors determines to assign the responsibility to another Person, Wells Fargo Shareowner Services will act as the Class B Transfer Agent for the Class B Preferred Units. The certificates evidencing Class B Preferred Units shall be separately identified and shall not bear the same CUSIP number, if any, as the certificates evidencing Common Units.
(ii) The certificate(s) representing the Class B Preferred Units may be imprinted with a legend in substantially the following form:
(iii) “THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT OR THE ISSUER HAS RECEIVED DOCUMENTATION REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER SUCH ACT. THIS SECURITY IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN (i) THE FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF THE PARTNERSHIP, DATED AS OF DECEMBER 20, 2011, AS AMENDED OR RESTATED FROM TIME TO TIME, AND (ii) THE CLASS B CONVERTIBLE PREFERRED UNIT PURCHASE AGREEMENT, DATED AS OF NOVEMBER 14, 2017, BY AND BETWEEN THE PARTNERSHIP AND THE CLASS B PURCHASERS PARTY THERETO, IN EACH CASE, A COPY OF WHICH MAY BE OBTAINED FROM THE PARTNERSHIP AT ITS PRINCIPAL EXECUTIVE OFFICES.”
(iv) In connection with a sale of Class B Preferred Units pursuant to an effective registration statement or in reliance on Rule 144 of the rules and regulations promulgated under the Securities Act, upon receipt by the Partnership of such information as the Partnership reasonably deems necessary to determine that the sale of the Class B Preferred Units is made in compliance with Rule 144, the Partnership shall remove or cause to be removed the restrictive legend from the certificate(s) representing such Class B Preferred Units (or the book-entry account maintained by the Class B Transfer Agent), and the Partnership shall bear all costs associated therewith.
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11. Article V is hereby amended to add a new Section 5.13 as follows:
Section 5.13 |
Special Provisions Relating to the Class B Preferred Holders. |
(a) Immediately upon the conversion of any Class B Preferred Unit into Common Units pursuant to Section 5.12(d) , the Unitholder holding a Class B Preferred Unit that is converted shall possess all of the rights and obligations of a Unitholder holding Common Units hereunder, including the right to vote as a Common Unitholder and the right to participate in allocations of income, gain, loss and deduction and distributions made with respect to Common Units.
(b) A Unitholder holding a Class B Preferred Unit that has converted into a Common Unit pursuant to Section 5.12(d) shall not be issued a Common Unit Certificate pursuant to Section 4.1 and shall not be permitted to transfer its converted Class B Preferred Units to a Person that is not an Affiliate of the holder until such time as the General Partner determines, based on advice of counsel, that upon transfer, each such converted Class B Preferred Unit should have intrinsic economic and U.S. federal income tax characteristics to the transferee, in all material respects, that are the same as the intrinsic economic and U.S. federal income tax characteristics that a Common Unit (other than a converted Class B Preferred Unit) would have to such transferee upon transfer, provided that in all events such determination shall be made within five (5) Business Days of the date of conversion or receipt by the Partnership of the notice of transfer, as applicable. The General Partner shall act in good faith and shall make the determinations set forth in this Section 5.13(b) as soon as practicable following a Conversion Date or as earlier provided herein.
(c) Except as expressly set forth herein, all payments and distributions to holders of Class B Preferred Units shall be made ratably to them in accordance with the Class B Preferred Units held by them.
12. Section 6.1(a) is hereby amended and restated as follows:
(a) Net Income. After giving effect to the special allocations set forth in Sections 6.1(d) and (e) and any allocations to other Partnership Interests, Net Income for each taxable period and all items of income, gain, loss, deduction, and Simulated Gain taken into account in computing Net Income for such taxable period shall be allocated as follows:
(i) First, 100% to the General Partner until the General Partner has been allocated cumulative Net Income for the current and all prior taxable periods equal to the cumulative Net Loss previously allocated to the General Partner pursuant to Section 6.1(b)(iii) ; and
(ii) The balance , if any, to all Partners (other than Preferred Holders in respect of their Preferred Units), Pro Rata.
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13. Section 6.1(b) is hereby amended and restated as follows:
(a) Net Loss. After giving effect to the special allocations set forth in Sections 6.1(d) and (e) and any allocations to other Partnership Interests, Net Loss for each taxable period and all items of income, gain, loss, deduction and Simulated Gain taken into account in computing Net Loss for such taxable period shall be allocated as follows:
(i) First , to all Partners (other than Preferred Holders in respect of their Preferred Units), Pro Rata; provided , however , that Net Loss shall not be allocated pursuant to this Section 6.1(b)(i) to the extent that such allocation would cause any Partner to have a deficit balance in its Adjusted Capital Account at the end of such taxable period (or increase any existing deficit balance in its Adjusted Capital Account) as such Adjusted Capital Account would be determined without regard to any Preferred Units then held by such Partner;
(ii) Second , to the Class A Preferred Holders and Class B Preferred Holders, Pro Rata; provided that the Net Loss shall not be allocated pursuant to this Section 6.1(b)(ii) to the extent that such allocation would cause any such Class A Preferred Holder or Class B Preferred Holder to have a deficit balance in its Adjusted Capital Account at the end of such taxable period (or increase any existing deficit balance in its Adjusted Capital Account); and
(iii) The balance , if any, 100% to the General Partner.
14. Section 6.1(c) is hereby amended and restated as follows:
(a) Net Termination Gains and Losses. After giving effect to the special allocations set forth in Sections 6.1(d) and (e) and any allocations to other Partnership Interests, Net Termination Gain or Net Termination Loss (including a pro rata part of each item of income, gain, loss, deduction, and Simulated Gain taken into account in computing Net Termination Gain or Net Termination Loss) for such taxable period shall be allocated in the manner set forth in this Section 6.1(c) . All allocations under this Section 6.1(c) shall be made after Capital Account balances have been adjusted by all other allocations provided under this Section 6.1 and after all distributions of Available Cash provided under Section 6.3 have been made; provided , however , that solely for purposes of this Section 6.1(c) , Capital Accounts shall not be adjusted for distributions made pursuant to Section 12.4 .
(i) If a Net Termination Gain (including a pro rata part of each item of income, gain, loss, deduction and Simulated Gain taken into account in computing Net Termination Gain) is recognized, such Net Termination Gain shall be allocated in the following manner:
A) First , to the General Partner until the Net Termination Gain allocated to the General Partner pursuant to this Section 6.1(c)(i)(A) for the current and all previous taxable periods is equal to the aggregate of the Net Termination Loss allocated to the General Partner pursuant to Section 6.1(c)(ii)(C) for all previous taxable periods;
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B) Second , to each Partner having a deficit balance in its Capital Account, in the proportion that such deficit balance bears to the total deficit balances in the Capital Accounts of all Partners, until each such Partner has been allocated Net Termination Gain equal to any such deficit balance in its Capital Account; and
C) Third , 100% to all Partners (other than Preferred Holders in respect of their Preferred Units), Pro Rata.
(ii) If a Net Termination Loss is recognized, such Net Termination Loss shall be allocated among the Partners in the following manner:
A) First , to all Partners (other than Preferred Holders in respect of their Preferred Units), Pro Rata, until the Capital Account in respect of each Common Unit then Outstanding has been reduced to zero;
B) Second , to Class A Preferred Holders and Class B Preferred Holders, Pro Rata, until the Capital Account in respect of each Class A Preferred Unit and Class B Preferred Unit then Outstanding has been reduced to zero; and
C) The balance , if any, 100% to the General Partner.
15. Section 6.1(d)(xii) is hereby amended and restated as follows:
(i) (xii) Allocations with respect to Preferred Units.
A) Net Termination Gain, if any, for the taxable period (or, to the extent necessary, items of income or gain for the taxable period) shall be allocated to each Preferred Holder in proportion to, and to the extent of, an amount equal to the excess, if any, of (x) the Stated Liquidation Preference with respect to such holder’s Preferred Units over (y) such holder’s existing Capital Account balance in respect of such Preferred Units, until the Capital Account balance of each such holder in respect of its Preferred Units is equal to the Stated Liquidation Preference in respect of such Preferred Units.
B) With respect to any taxable period ending upon, or after, an applicable Conversion Date, items of Partnership income, gain or loss, as applicable, shall be allocated 100% to each Partner holding such Preferred Units until each such Partner has been allocated an amount of Partnership income or gain that increases the Capital Account maintained with respect to such converted Preferred Units to an amount equal to the product of (X) the number of converted Preferred Units multiplied by (Y) the Per Unit Capital Account for a Common Unit. The purpose for this allocation is to establish uniformity between the Capital Accounts underlying converted Preferred Units and the Capital Accounts underlying Common Units.
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C) Notwithstanding any other provision of this Section 6.1 (other than the Required Allocations), if (1) the Liquidation Date occurs prior to the conversion of the last Outstanding Preferred Unit and (2) after having made all other allocations provided for in this Section 6.1 for the taxable period in which the Liquidation Date occurs, the Per Unit Capital Amount of each Preferred Unit does not equal or exceed the applicable Liquidation Preference, then items of income, gain, loss and deduction for such taxable period shall be allocated among the Partners in a manner determined appropriate by the General Partner so as to cause, to the maximum extent possible, the Per Unit Capital Amount in respect of each Preferred Unit to equal the applicable Liquidation Preference. For the avoidance of doubt, the reallocation of items set forth in the immediately preceding sentence provides that, to the extent necessary to achieve the Per Unit Capital Amount balances described above, items of income and gain that would otherwise be included in Net Income or Net Loss, as the case may be, for the taxable period in which the Liquidation Date occurs, shall be reallocated from the Unitholders holding Units other than Preferred Units to Unitholders holding Preferred Units. In the event that (i) the Liquidation Date occurs on or before the date (not including any extension of time) prescribed by law for the filing of the Partnership’s federal income tax return for the taxable period immediately prior to the taxable period in which the Liquidation Date occurs and (ii) the reallocation of items for the taxable period in which the Liquidation Date occurs as set forth above in this Section 6.1(d)(xii)(C) fails to achieve the Per Unit Capital Amounts described above, items of income, gain, loss and deduction that would otherwise be included in the Net Income or Net Loss, as the case may be, for such prior taxable period shall be reallocated among all Partners in a manner that will, to the maximum extent possible and after taking into account all other allocations made pursuant to this Section 6.1(d)(xii)(C) , cause the Per Unit Capital Amount in respect of each Preferred Unit to equal the applicable Liquidation Preference.
B. Agreement in Effect . Except as hereby amended, the Partnership Agreement shall remain in full force and effect.
C. Applicable Law . This Amendment shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to principles of conflicts of laws.
D. Severability . Each provision of this Amendment shall be considered severable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Amendment that are valid, enforceable and legal.
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E. Miscellaneous . Notwithstanding anything herein to the contrary, all measurements and references related to Unit prices, Unit numbers and distribution amounts (other than those expressed in percentages) herein, shall be, in each instance, appropriately adjusted for unit splits, combinations, distributions and the like .
F. Ratification of Partnership Agreement . Except as expressly modified and amended herein, all of the terms and conditions of the Partnership Agreement shall remain in full force and effect.
( Signature page follows )
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IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.
GENERAL PARTNER: |
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MID-CON ENERGY GP, LLC |
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By: |
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/s/ Jeffrey R. Olmstead |
Name: |
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Jeffrey R. Olmstead |
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Chief Executive Officer |
SECOND AMENDMENT TO
FIRST AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP OF MID-CON ENERGY PARTNERS, LP
HOU:3835927.4
Exhibit C
FORM OF NOTICE OF CONVERSION
CLASS B PREFERRED UNIT CONVERSION NOTICE
(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER
TO CONVERT CLASS A PREFERRED UNITS)
[Date]
The undersigned hereby elects to convert the number of Class B Preferred Units (“ Class B Preferred Units ”) of Mid-Con Energy Partners, LP, a Delaware limited partnership (the “ Partnership ”), indicated below into common units (“ Common Units ”) of the Partnership, according to the conditions hereof, as of the date written below. If Common Units are to be issued in the name of a person other than the holder of such Class B Preferred Units, such holder will pay all transfer taxes payable with respect thereto and will deliver such certificates and opinions as may be required by the Partnership or its transfer agent. No fee will be charged to the holders for any conversion, except for any such transfer taxes.
Conversion calculations:
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[REGISTERED HOLDER] |
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Exhibit B
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
MID-CON ENERGY PARTNERS, LP
AND
THE PURCHASERS NAMED ON SCHEDULE A HERETO
This REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”) is made and entered into as of [●], 2017, by and among Mid-Con Energy Partners, LP, a Delaware limited partnership (the “ Partnership ”), and each of the Purchasers set forth on Schedule A to this Agreement (each, a “ Purchaser ” and collectively, the “ Purchasers ”).
WHEREAS, this Agreement is entered into in connection with the closing of the issuance and sale of the Class B Preferred Units (as defined below), pursuant to the Class B Convertible Preferred Unit Purchase Agreement, dated as of [●], 2017 (the “ Purchase Agreement ”), by and among the Partnership and the Purchasers;
WHEREAS, the Partnership has agreed to provide the registration and other rights set forth in this Agreement for the benefit of the Purchasers pursuant to the Purchase Agreement; and
WHEREAS, it is a condition to the respective obligations of the Partnership and each of the Purchasers to consummate the transactions contemplated by the Purchase Agreement that each of the parties hereto execute and deliver this Agreement, contemporaneously with the Closing of the transactions contemplated by the Purchase Agreement;
NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows
Article I
DEFINITIONS
Section 1.01 Definitions . Capitalized terms used herein without definition shall have the meanings given to them in the Purchase Agreement. The terms set forth below are used herein as so defined:
“ Agreement ” has the meaning specified therefor in the introductory paragraph of this Agreement.
“ Closing Date ” means [●], 2017.
“ Demand Notice ” has the meaning specified therefor in Section 2.04 of this Agreement.
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“ Effective Date ” means, with respect to a particular Shelf Registration Statement, the date of effectiveness of such Shelf Registration Statement.
“ Effectiveness Deadline ” has the meaning specified therefor in Section 2.01(a) of this Agreement.
“ Effectiveness Period ” means the period beginning on the Effective Date for the Registration Statement and ending at the time all Registrable Securities covered by such Registration Statement have ceased to be Registrable Securities.
“ Holder ” means the record holder of any Registrable Securities under this Agreement. For the avoidance of doubt, in accordance with Section 3.05 of this Agreement, for purposes of determining the availability of any rights and applicability of any obligations under this Agreement, including, calculating the amount of Registrable Securities held by a Holder, a Holder’s Registrable Securities shall be aggregated together with all Registrable Securities held by other Holders who are Affiliates of such Holder.
“ Included Registrable Securities ” has the meaning specified therefor in Section 2.02(a) of this Agreement.
“ Launch ” has the meaning specified therefor in Section 2.04 of this Agreement.
“ Law ” means any statute, law, ordinance, regulation, rule, order, code, governmental restriction, decree, injunction or other requirement of law, or any judicial or administrative interpretation thereof, of any Governmental Authority.
“ Losses ” has the meaning specified therefor in Section 2.09(a) of this Agreement.
“ Managing Underwriter ” means, with respect to any Underwritten Offering, the book-running lead manager of such Underwritten Offering.
“ Opt-Out Notice ” has the meaning specified therefor in Section 2.02(a) of this Agreement.
“ Partnership ” has the meaning specified therefor in the introductory paragraph of this Agreement.
“ Person ” means any individual, corporation, company, voluntary association, partnership, joint venture, trust, limited liability company, unincorporated organization or government or any agency, instrumentality or political subdivision thereof, or any other form of entity.
“ Piggyback Threshold Amount ” means $1.0 million.
“ Post-Launch Withdrawing Selling Holders ” has the meaning specified therefor in Section 2.04 of this Agreement.
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“ Preferred Units ” means the Class B Convertible Preferred Units of the Partnership initially purchased and sold pursuant to the Purchase Agreement (including, with respect to a Selling Holder, Preferred Units acquired from another Selling Holder) and any Class B PIK Units, in each case, issued pursuant to the Amended Partnership Agreement.
“ Purchase Agreement ” has the meaning specified therefor in the recitals of this Agreement.
“ Purchaser ” and “ Purchasers ” have the meanings specified therefor in the introductory paragraph of this Agreement.
“ Registrable Securities ” means the Common Units issued or issuable upon conversion of any of the Preferred Units, and includes any type of ownership interest issued to the Holder as a result of Section 3.04 of this Agreement.
“ Registrable Securities Amount ” means the calculation based on the product of the Unit Purchase Price times the number of Registrable Securities.
“ Registration Effective Date ” has the meaning specified therefor in Section 2.01(a) of this Agreement.
“ Registration Expenses ” has the meaning specified therefor in Section 2.08(b) of this Agreement.
“ Registration Statement ” has the meaning specified therefor in Section 2.01(a) of this Agreement.
“ Selling Expenses ” has the meaning specified therefor in Section 2.08(b) of this Agreement.
“ Selling Holder ” means a Holder who is selling Registrable Securities under a Registration Statement pursuant to the terms of this Agreement.
“ Selling Holder Indemnified Persons ” has the meaning specified therefor in Section 2.09(a) of this Agreement.
“ Shelf Registration Statement ” means a registration statement under the Securities Act to permit the public resale of the Registrable Securities from time to time as permitted by Rule 415 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect).
“ Underwritten Offering ” means an offering (including an offering pursuant to a Shelf Registration Statement) in which Registrable Securities are sold to one or more underwriters on a firm commitment basis for reoffering to the public or an offering that is a “bought deal” with one or more investment banks.
“ Unit Purchase Price ” means $[●].
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“ VWAP Price ” means, for each such period of measurement, the volume weighted average closing price of a Common Unit on the national securities exchange on which the Common Units are then listed (or admitted to trading).
Section 1.02 Registrable Securities . Any Registrable Security shall cease to be a Registrable Security at the earliest of the following: (a) when a registration statement covering such Registrable Security becomes or has been declared effective by the SEC and such Registrable Security has been sold or disposed of pursuant to such effective registration statement; (b) when such Registrable Security has been sold or disposed of (excluding transfers or assignments by a Holder to an Affiliate) pursuant to Rule 144 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect) under circumstances in which all of the applicable conditions of Rule 144 (as then in effect) are met; (c) when such Registrable Security is held by the Partnership or one of its Affiliates (other than a Purchaser or its Affiliates); (d) when such Registrable Security has been sold or disposed of in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of such securities pursuant to Section 2.11 hereof; or (e) the third anniversary of the Effectiveness Deadline (as defined in Section 2.01(a) ).
Article II
REGISTRATION RIGHTS
Section 2.01 Shelf Registration .
(a) Shelf Registration . Within 90 calendar days of the Closing Date, the Partnership shall use its reasonable best efforts to prepare and file a Shelf Registration Statement with the SEC to permit the public resale of all Registrable Securities on the terms and conditions specified in this Section 2.01 (a “ Registration Statement ”). The Registration Statement filed with the SEC pursuant to this Section 2.01(a) shall be on Form S‑3 or, if Form S‑3 is not then available to the Partnership, on Form S‑1 or such other form of registration statement as is then available to effect a registration for resale of the Registrable Securities, covering the Registrable Securities, and shall contain a prospectus in such form as to permit any Selling Holder covered by such Registration Statement to sell such Registrable Securities pursuant to Rule 415 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect) at any time beginning on the Effective Date for such Registration Statement. The Partnership shall use its reasonable best efforts to cause a Registration Statement filed pursuant to this Section 2.01(a) to be declared effective no later than 180 calendar days after the Closing Date (the “ Effectiveness Deadline ”). During the Effectiveness Period, the Partnership shall use its reasonable best efforts to cause a Registration Statement filed pursuant to this Section 2.01(a) to remain continuously effective, and to be supplemented and amended to the extent necessary to ensure that such Registration Statement is available or, if not available, that another registration statement is available for the resale of the Registrable Securities until all Registrable Securities have ceased to be Registrable Securities. The Partnership shall prepare and file a listing of additional shares with the NASDAQ (or such other national securities exchange on which the Registrable Securities are then listed and traded) to list the Registrable Securities covered by a Registration Statement and shall have received approval for such Registrable Securities to be listed on the NASDAQ (or such other national securities exchange on which the Registrable Securities are then listed and traded) by the Effective Date of such Registration Statement,
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subject only to official notice of issuance. As soon as practicable following the Effective Date of a Registration Statement, but in any event within three Business Days of such date, the Partnership shall notify the Selling Holders of the effectiveness of such Registration Statement.
Section 2.02 Piggyback Rights .
(a) Participation . So long as a Holder has Registrable Securities, if the Partnership proposes to file (i) a shelf registration statement, other than a Registration Statement contemplated by Section 2.01(a) , (ii) a prospectus supplement to an effective shelf registration statement relating to the sale of equity securities of the Partnership, other than a Registration Statement contemplated by Section 2.01(a) , and Holders may be included without the filing of a post-effective amendment thereto, or (iii) a registration statement, other than a shelf registration statement, in each case, for the sale of Common Units in an Underwritten Offering for its own account or that of another Person, or both, then promptly following the selection of the Managing Underwriter for such Underwritten Offering, the Partnership shall give notice of such Underwritten Offering to each Holder (together with its Affiliates) holding at least the Piggyback Threshold Amount of the then-outstanding Registrable Securities (calculated based on the Unit Purchase Price) and such notice shall offer such Holders the opportunity to include in such Underwritten Offering such number of Registrable Securities (the “ Included Registrable Securities ”) as each such Holder may request in writing; provided , however , that (A) the Partnership shall not be required to provide such opportunity if, in the aggregate, the Holders do not offer a minimum of the Piggyback Threshold Amount of Registrable Securities (based on the Unit Purchase Price), and (B) if the Partnership has been advised by the Managing Underwriter that the inclusion of Registrable Securities for sale for the benefit of the Holders will have an adverse effect on the price, timing or distribution of the Common Units in the Underwritten Offering, then (x) if, in the opinion of the Managing Underwriter, no Registrable Securities can be included in the Underwritten Offering, the Partnership shall not be required to offer such opportunity to the Holders or (y) if, in the opinion of the Managing Underwriter, any Registrable Securities can be included in the Underwritten Offering, then the amount of Registrable Securities to be offered for the accounts of Holders shall be determined based on the provisions of Section 2.02(b) . Any notice required to be provided in this Section 2.02(a) to Holders shall be provided on a Business Day and receipt of such notice shall be confirmed by the Holder. Each such Holder shall then have three Business Days (or one Business Day in connection with any overnight or bought Underwritten Offering) after notice has been delivered to request in writing the inclusion of Registrable Securities in the Underwritten Offering. If a Holder’s written request for inclusion is not received within the specified time, such Holder shall have no further right to participate in such Underwritten Offering. If, at any time after giving written notice of its intention to undertake an Underwritten Offering and prior to the closing of such Underwritten Offering, the Partnership shall determine for any reason to delay or not to undertake such Underwritten Offering, the Partnership may, at its election, give written notice of such determination to the Selling Holders and, (1) in the case of a determination not to undertake such Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable Securities in connection with such terminated Underwritten Offering, and (2) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering any Included Registrable Securities as part of such Underwritten Offering for the same period as the delay in the Underwritten Offering. Any Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of such Selling Holder’s Registrable Securities in such
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Underwritten Offering by giving written notice to the Partnership of such withdrawal at or prior to the time of pricing of such Underwritten Offering. Any Holder may deliver written notice (an “ Opt-Out Notice ”) to the Partnership requesting that such Holder not receive notice from the Partnership of any proposed Underwritten Offering. Following receipt of an Opt-Out Notice from a Holder, the Partnership shall not be required to deliver any notice to such Holder pursuant to this Section 2.02(a) and such Holder shall no longer be entitled to participate in Underwritten Offerings by the Partnership pursuant to this Section 2.02(a) .
(b) Priority . Except as provided in Section 2.04(b) of this Agreement, if the Managing Underwriter advises the Partnership that the total amount of Common Units that the Selling Holders and any other Persons intend to include in such offering exceeds the number of Common Units that can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the Common Units offered or the market for the Common Units, then the Common Units to be included in such Underwritten Offering shall include the number of Registrable Securities that such Managing Underwriter advises the Partnership can be sold without having such adverse effect, with such number to be allocated (i) first, to the Partnership and (ii) second, to (A) the Selling Holders and Affiliates of the Partnership who have requested participation in such Underwritten Offering and (B) to the other holders of Common Units (other than holders of Registrable Securities) with registration rights entitling them to participate in such Underwritten Offering (if any), allocated among such Selling Holders, Affiliates of the Partnership, and other holders pro rata on the basis of the number of Registrable Securities or Common Units held by each applicable Selling Holder, Affiliate of the Partnership or other holder or in such manner as they may agree.
(c) Termination of Piggyback Registration Rights . The Holders’ rights under this Section 2.02 shall terminate at such time as the Holders (together with their Affiliates) cease to hold at least the Piggyback Threshold Amount of Registrable Securities (calculated based on the Unit Purchase Price).
Notwithstanding anything to the contrary contained herein, the Partnership may, upon written notice to (i) all Holders, delay the filing of a Registration Statement required under Section 2.01(a) , or (ii) any Selling Holder whose Registrable Securities are included in a Registration Statement or other registration statement contemplated by this Agreement, suspend such Selling Holder’s use of any prospectus that is a part of such Registration Statement or other registration statement (in which event the Selling Holder shall discontinue sales of the Registrable Securities pursuant to such Registration Statement or other registration statement contemplated by this Agreement but may settle any previously made sales of Registrable Securities) if the Partnership (x) is pursuing an acquisition, merger, reorganization, disposition or other similar transaction and the General Partner determines in good faith that the Partnership’s ability to pursue or consummate such a transaction would be materially adversely affected by any required disclosure of such transaction in such Registration Statement or other registration statement or (y) has experienced some other material non-public event the disclosure of which at such time, in the good faith judgment of the General Partner, would materially adversely affect the Partnership. Upon disclosure of such information or the termination of the condition described above, the Partnership shall provide prompt notice, but in any event within one
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Business Day of such disclosure or termination, to the Selling Holders whose Registrable Securities are included in such Registration Statement and shall promptly terminate any suspension of sales it has put into effect and shall take such other reasonable actions to permit registered sales of Registrable Securities as contemplated in this Agreement.
(a) Underwritten Offerings . The Partnership shall, upon the request of one or more Holders holding, in the aggregate, at least $5.0 million of Registrable Securities (calculated based on the Unit Purchase Price) (such request, an “ Demand Notice ” and such electing Holders, the “ Electing Holders ”), retain underwriters in order to permit the Electing Holders to effect such sale through an Underwritten Offering; provided , however , that the Partnership shall not be required to effect more than one Underwritten Offering during any 12-month period pursuant to and subject to the conditions of this Section 2.04(a) . Upon delivery of such Demand Notice to the Partnership, the Partnership shall as soon as practicable (but in no event later than one Business Day following the date of delivery of the Demand Notice to the Partnership) deliver notice of such Demand Notice to all other Holders, who shall then have five Business Days from the date that such notice is given to them to notify the Partnership in writing of the number of Registrable Securities held by such Holder that they want to be included in such Underwritten Offering. For the avoidance of doubt, any Holders notified about an Underwritten Offering by the Partnership after the Partnership has received the corresponding Demand Notice may participate in such Underwritten Offering, but shall not count toward the $5.0 million of Registrable Securities required under the first sentence of this Section 2.04(a) to request an Underwritten Offering pursuant to a Demand Notice. In connection with any Underwritten Offering under this Section 2.04 , the Partnership shall be entitled to select the Managing Underwriter or Underwriters. In connection with an Underwritten Offering contemplated by this Agreement in which a Selling Holder participates, each Selling Holder and the Partnership shall be obligated to enter into an underwriting agreement that contains such representations, covenants, indemnities and other rights and obligations as are customary in underwriting agreements for firm commitment offerings of securities. No Selling Holder may participate in such Underwritten Offering unless such Selling Holder agrees to sell its Registrable Securities on the basis provided in such underwriting agreement and completes and executes all questionnaires, powers of attorney, indemnities and other documents reasonably required under the terms of such underwriting agreement. No Selling Holder shall be required to make any representations or warranties to or agreements with the Partnership or the underwriters other than representations, warranties or agreements regarding such Selling Holder, its authority to enter into such underwriting agreement and to sell, and its ownership of, the securities whose offer and resale will be registered, on its behalf, its intended method of distribution and any other representation required by Law. If any Selling Holder disapproves of the terms of an Underwritten Offering, such Selling Holder may elect to withdraw therefrom by notice to the Partnership, the Electing Holders and the Managing Underwriter; provided , however , that any such withdrawal must be made no later than the time of pricing of such Underwritten Offering. If all Selling Holders withdraw from an Underwritten Offering prior to the public announcement at launch (the “ Launch ”) of such Underwritten Offering, the events will not be considered an Underwritten Offering and will not decrease the number of available Underwritten Offerings the Holders have the right and option to request under this Section 2.04(a) . No such withdrawal or abandonment shall affect the Partnership’s obligation to pay Registration Expenses pursuant to
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Section 2.08 ; provided , however , that if all Selling Holders withdraw from such Underwritten Offering after the Launch, other than as a result of the occurrence of any event that would reasonably be expected to permit the Partnership to exercise its rights to suspend the use of a Registration Statement or other registration statement pursuant to Section 2.03 , then such Selling Holders shall pay (pro rata on the basis of the number of Registrable Securities held by each such Selling Holder) for all reasonable Registration Expenses incurred by the Partnership during the period from the Launch of such Underwritten Offering until the time all Selling Holders have withdrawn from such Underwritten Offering.
(b) Priority . If the Managing Underwriter of any proposed Underwritten Offering that involves Registrable Securities of Electing Holders pursuant to Section 2.04(a) advises the Partnership that the inclusion of all of the Registrable Securities that the Selling Holders intend to include in such offering exceeds the number that can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the Registrable Securities offered or the market for the Registrable Securities, then the Registrable Securities to be included in such Underwritten Offering shall include the number of Registrable Securities that such Managing Underwriter advises the Partnership can be sold without having such adverse effect, with such number to be allocated (i) first, to the Selling Holders, allocated among such Selling Holders pro rata on the basis of the number of Registrable Securities held by each such Selling Holder or in such other manner as such Selling Holders may agree, and (ii) second, to the Partnership and any other holder of securities of the Partnership having rights of registration that rank pari passu with the Holders in respect of the Registrable Securities.
Section 2.05 Sale Procedures .
In connection with its obligations under this Article II , the Partnership shall, as expeditiously as possible:
(a) use its reasonable best efforts to prepare and file with the SEC such amendments and supplements to a Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for the Effectiveness Period and as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement;
(b) furnish to each Selling Holder (i) as far in advance as reasonably practicable before filing a Registration Statement or any other registration statement contemplated by this Agreement or any supplement or amendment thereto and provide each such Selling Holder the opportunity to object to any information pertaining to such Selling Holder that is contained therein and make the corrections reasonably requested by such Selling Holder with respect to such information prior to filing a Registration Statement or such other registration statement or supplement or amendment thereto, and (ii) such number of copies of such Registration Statement or such other registration statement and the prospectus included therein and any supplements and amendments thereto as such Selling Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such Registration Statement or other registration statement;
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(c) if applicable, use its reasonable best efforts to register or qualify the Registrable Securities covered by a Registration Statement or any other registration statement contemplated by this Agreement under the securities or blue sky laws of such jurisdictions as the Selling Holders or, in the case of an Underwritten Offering, the Managing Underwriter, shall reasonably request; provided , however , that the Partnership shall not be required to qualify generally to transact business in any jurisdiction where it is not then required to so qualify or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject;
(d) promptly notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered by any of them under the Securities Act, of (i) the filing of a Registration Statement or any other registration statement contemplated by this Agreement or any prospectus or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and, with respect to such Registration Statement or any other registration statement or any post-effective amendment thereto, when the same has become effective; and (ii) the receipt of any written comments from the SEC with respect to any filing referred to in clause (i) and any written request by the SEC for amendments or supplements to such Registration Statement or any other registration statement or any prospectus or prospectus supplement thereto;
(e) immediately notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the happening of any event as a result of which the prospectus or prospectus supplement contained in a Registration Statement or any other registration statement contemplated by this Agreement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus contained therein, in the light of the circumstances under which a statement is made); (ii) the issuance or express threat of issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or any other registration statement contemplated by this Agreement, or the initiation of any proceedings for that purpose; or (iii) the receipt by the Partnership of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction. Following the provision of such notice, the Partnership agrees to as promptly as practicable amend or supplement the prospectus or prospectus supplement or take other appropriate action so that the prospectus or prospectus supplement does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing and to take such other commercially reasonable action as is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;
(f) upon request and subject to appropriate confidentiality obligations, furnish to each Selling Holder copies of any and all transmittal letters or other correspondence with the SEC or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering of Registrable Securities;
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(g) in the case of an Underwritten Offering, use its reasonable best efforts to furnish to the underwriters upon request, (i) an opinion of counsel for the Partnership dated the date of the closing under the underwriting agreement and (ii) a “comfort” letter, dated the pricing date of such Underwritten Offering and a letter of like kind dated the date of the closing under the underwriting agreement, in each case, signed by the independent public accountants who have certified the Partnership’s financial statements included or incorporated by reference into the applicable registration statement, and each of the opinion and the “comfort” letter shall be in customary form and covering substantially the same matters with respect to such registration statement (and the prospectus and any prospectus supplement included therein) as have been customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to the underwriters in Underwritten Offerings of securities by the Partnership and such other matters as such underwriters and Selling Holders may reasonably request;
(h) make available to its security holders, as soon as reasonably practicable, an earnings statement, covering a period of twelve months beginning within three months after the Effective Date of such Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;
(i) make available to the appropriate representatives of the Managing Underwriter and Selling Holders access to such information and Partnership and General Partner personnel as is reasonable and customary to enable such parties to establish a due diligence defense under the Securities Act; provided, that the Partnership need not disclose any non-public information to any such representative unless and until such representative has entered into a confidentiality agreement with the Partnership;
(j) use its reasonable best efforts to cause all such Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange or nationally recognized quotation system on which the Common Units are then listed or quoted;
(k) provide a transfer agent and registrar for all Registrable Securities covered by such registration statement not later than the Effective Date of such registration statement;
(l) enter into customary agreements and take such other actions as are reasonably requested by the Selling Holders or the underwriters, if any, in order to expedite or facilitate the disposition of such Registrable Securities (including, making appropriate officers of the General Partner available to participate in any “road show” presentations before analysts, and other customary marketing activities (including one-on-one meetings with prospective purchasers of the Registrable Securities)), provided , however , that in the event the Partnership is unable to make such appropriate officers of the General Partner available to participate in connection with any “road show” presentations and other customary marketing activities (whether in person or otherwise), the Partnership shall make such appropriate officers available to participate via conference call or other means of communication in connection with no more than one “road show” presentation per Underwritten Offering; and
(m) if requested by a Selling Holder, (i) incorporate in a prospectus supplement or post-effective amendment such information as such Selling Holder reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including
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information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering, and (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment.
The Partnership shall not name a Holder as an underwriter as defined in Section 2(a)(11) of the Securities Act in any Registration Statement without such Holder’s consent. If the staff of the SEC requires the Partnership to name any Holder as an underwriter as defined in Section 2(a)(11) of the Securities Act, and such Holder does not consent thereto, then such Holder’s Registrable Securities shall not be included on such Registration Statement and the Partnership shall have no further obligations hereunder with respect to Registrable Securities held by such Holder.
Each Selling Holder, upon receipt of notice from the Partnership of the happening of any event of the kind described in Section 2.05(e) , shall forthwith discontinue offers and sales of the Registrable Securities by means of a prospectus or prospectus supplement until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 2.05(e) or until it is advised in writing by the Partnership that the use of the prospectus may be resumed and has received copies of any additional or supplemental filings incorporated by reference in the prospectus, and, if so directed by the Partnership, such Selling Holder shall, or shall request the Managing Underwriter, if any, to deliver to the Partnership (at the Partnership’s expense) all copies in their possession or control, other than permanent file copies then in such Selling Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.
Section 2.06 Cooperation by Holders .
The Partnership shall have no obligation to include in a Registration Statement Registrable Securities of a Holder who has failed to timely furnish, after receipt of a written request from the Partnership, such information that the Partnership determines, after consultation with its counsel, is reasonably required in order for the registration statement or prospectus supplement, as applicable, to comply with the Securities Act.
Section 2.07 Restrictions on Public Sale by Holders of Registrable Securities .
Each Holder of Registrable Securities that participates in an Underwritten Offering will enter into a customary letter agreement with underwriters providing such Holder will not effect any public sale or distribution of Registrable Securities during the 60 calendar-day period beginning on the date of a prospectus or prospectus supplement filed with the SEC with respect to the pricing of any Underwritten Offering, provided that (i) the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction generally imposed by the underwriters on the Partnership or the officers, directors or any other Affiliate of the Partnership or the General Partner on whom a restriction is imposed and (ii) the restrictions set forth in this Section 2.07 shall not apply to any Registrable Securities that are included in such Underwritten Offering by such Holder. In addition, this Section 2.07 shall not apply to any Holder that is not entitled to participate in such Underwritten Offering, whether because such
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Holder delivered an Opt-Out Notice prior to receiving notice of the Underwritten Offering or because the Registrable Securities held by such Holder may be disposed of without restriction pursuant to any section of Rule 144 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect).
(a) Expenses . Subject to the last sentence of Section 2.04(a) , the Partnership shall pay all reasonable Registration Expenses as determined in good faith by the General Partner, including, in the case of an Underwritten Offering, the reasonable Registration Expenses of such Underwritten Offering, regardless of whether any sale is made pursuant to such Underwritten Offering. Each Selling Holder shall pay its pro rata share of all Selling Expenses in connection with any sale of its Registrable Securities hereunder. For the avoidance of doubt, each Selling Holder’s pro rata allocation of Selling Expenses shall be the percentage derived by dividing (i) the number of Registrable Securities sold by such Selling Holder in connection with such sale by (ii) the aggregate number of Registrable Securities sold by all Selling Holders in connection with such sale. In addition, except as otherwise provided in Sections 2.08 and 2.09 hereof, the Partnership shall not be responsible for legal fees incurred by Holders in connection with the exercise of such Holders’ rights hereunder.
(b) Certain Definitions . “ Registration Expenses ” means all expenses incident to the Partnership’s performance under or compliance with this Agreement to effect the registration of Registrable Securities on a Registration Statement pursuant to Section 2.01(a) or an Underwritten Offering covered under this Agreement, and the disposition of such Registrable Securities, including, without limitation, all registration, filing, securities exchange listing and NASDAQ fees, all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws, fees of the Financial Industry Regulatory Authority, Inc., fees of transfer agents and registrars, all word processing, duplicating and printing expenses, any transfer taxes, and the fees and disbursements of counsel and independent public accountants for the Partnership, including the expenses of any special audits or “comfort” letters required by or incident to such performance and compliance, and the reasonable fees and disbursements of one counsel for the Selling Holders participating in such Registration Statement or Underwritten Offering to effect the disposition of such Registrable Securities, selected by the Holders of a majority of the Registrable Securities initially being registered under such Registration Statement or other registration statement as contemplated by this Agreement, subject to the reasonable consent of the Partnership. “ Selling Expenses ” means all underwriting discounts and selling commissions or similar fees or arrangements allocable to the sale of the Registrable Securities, and fees and disbursements of counsel to the Selling Holders, except for the reasonable fees and disbursements of counsel for the Selling Holders required to be paid by the Partnership pursuant to Sections 2.08 and 2.09 .
Section 2.09 Indemnification .
(a) By the Partnership . In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Agreement, the Partnership shall indemnify and hold harmless each Selling Holder thereunder, its directors, officers, managers, employees and agents and each Person, if any, who controls such Selling Holder within the meaning of the Securities
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Act and the Exchange Act, and its directors, officers, employees or agents (collectively, the “ Selling Holder Indemnified Persons ”), against any losses, claims, damages, expenses or liabilities (including reasonable attorneys’ fees and expenses) (collectively, “ Losses ”), joint or several, to which such Selling Holder Indemnified Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact (in the case of any prospectus, in light of the circumstances under which such statement is made) contained in (which, for the avoidance of doubt, includes documents incorporated by reference in) such Registration Statement or any other registration statement contemplated by this Agreement, any preliminary prospectus, prospectus supplement or final prospectus contained therein, or any amendment or supplement thereof, or any free writing prospectus relating thereto or (ii) arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in light of the circumstances under which they were made) not misleading, and shall reimburse each such Selling Holder Indemnified Person for any legal or other expenses reasonably incurred by them in connection with investigating, defending or resolving any such Loss or actions or proceedings; provided , however , that the Partnership shall not be liable in any such case if and to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by or on behalf of such Selling Holder Indemnified Person in writing specifically for use in such Registration Statement or such other registration statement, or prospectus supplement, as applicable. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Selling Holder Indemnified Person, and shall survive the transfer of such securities by such Selling Holder. The Parties hereby designate each Seller Holder Indemnified Person who is not a party to this Agreement as a third-party beneficiary of this Section 2.09 with the right to enforce this Section 2.09 .
(b) By Each Selling Holder . Each Selling Holder agrees severally and not jointly to indemnify and hold harmless the Partnership, the General Partner, its directors, officers, employees and agents and each Person, if any, who controls the Partnership within the meaning of the Securities Act or of the Exchange Act, and its directors, officers, employees and agents the “ Partnership Indemnified Persons ”), to the same extent as the foregoing indemnity from the Partnership to the Selling Holders, but only with respect to information regarding such Selling Holder furnished in writing by or on behalf of such Selling Holder expressly for inclusion in such Registration Statement or any other registration statement contemplated by this Agreement, any preliminary prospectus, prospectus supplement or final prospectus contained therein, or any amendment or supplement thereof, or any free writing prospectus relating thereto; provided , however , that the liability of each Selling Holder shall not be greater in amount than the dollar amount of the proceeds (net of any Selling Expenses) received by such Selling Holder from the sale of the Registrable Securities giving rise to such indemnification. The Parties hereby designate each Partnership Indemnified Person who is not a party to this Agreement as a third-party beneficiary of this Section 2.09 with the right to enforce this Section 2.09 .
(c) Notice . Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof,
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but such omission so to notify the indemnifying party shall not relieve it from any liability that it may have to any indemnified party other than under this Section 2.09 . In any action brought against any indemnified party, it shall notify the indemnifying party of the commencement thereof. The indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 2.09 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided , however , that, (i) if the indemnifying party has failed to assume the defense or employ counsel reasonably acceptable to the indemnified party or (ii) if the defendants in any such action include both the indemnified party and the indemnifying party and counsel to the indemnified party shall have concluded that there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, then the indemnified party shall have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other reasonable expenses related to such participation to be reimbursed by the indemnifying party as incurred. Notwithstanding any other provision of this Agreement, no indemnifying party shall settle any action brought against any indemnified party with respect to which such indemnified party is entitled to indemnification hereunder without the consent of the indemnified party, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional release from all liability of, the indemnified party.
(d) Contribution . If the indemnification provided for in this Section 2.09 is held by a court or government agency of competent jurisdiction to be unavailable to any indemnified party or is insufficient to hold them harmless in respect of any Losses, then each such indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Loss in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of such indemnified party on the other in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations; provided , however , that in no event shall such Selling Holder be required to contribute an aggregate amount in excess of the dollar amount of proceeds (net of Selling Expenses) received by such Selling Holder from the sale of Registrable Securities giving rise to such indemnification. The relative fault of the indemnifying party on the one hand and the indemnified party on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact has been made by, or relates to, information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to herein. The amount paid by an indemnified party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any legal and other expenses reasonably incurred by such indemnified party in connection with investigating,
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defending or resolving any Loss that is the subject of this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation.
(e) Other Indemnification . The provisions of this Section 2.09 shall be in addition to any other rights to indemnification or contribution that an indemnified party may have pursuant to law, equity, contract or otherwise.
Section 2.10 Rule 144 Reporting .
With a view to making available the benefits of certain rules and regulations of the SEC that may permit the sale of the Registrable Securities to the public without registration, the Partnership agrees to use its reasonable best efforts to:
(a) make and keep public information regarding the Partnership available, as those terms are understood and defined in Rule 144 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect), at all times from and after the date hereof;
(b) file with the SEC in a timely manner all reports and other documents required of the Partnership under the Securities Act and the Exchange Act at all times from and after the date hereof; and
(c) so long as a Holder owns any Registrable Securities, furnish, unless otherwise available electronically at no additional charge via the SEC’s EDGAR system, to such Holder forthwith upon request a copy of the most recent annual or quarterly report of the Partnership, and such other reports and documents as such Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing such Holder to sell any such securities without registration.
Section 2.11 Transfer or Assignment of Registration Rights .
The rights to cause the Partnership to register Registrable Securities granted to the Purchasers by the Partnership under this Article II may be transferred or assigned by any Purchaser to one or more transferees or assignees of Registrable Securities, subject to the transfer restrictions set forth in Section 4.11 of the Amended Partnership Agreement, provided , however , that (a) the Partnership is given written notice prior to any said transfer or assignment, stating the name and address of each of the transferee or assignee and identifying the Registrable Securities with respect to which such registration rights are being transferred or assigned and (b) each such transferee or assignee assumes in writing responsibility for its portion of the obligations of such Purchaser under this Agreement.
Section 2.12 Limitation on Subsequent Registration Rights .
From and after the date hereof, the Partnership shall not, without the prior written consent of the Holders of at least a majority of the then outstanding Registrable Securities, enter into any agreement with any current or future holder of any equity securities of the Partnership that would allow such current or future holder to require the Partnership to include equity securities in any
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registration statement filed by the Partnership on a basis that is superior in any respect to the piggyback rights granted to the Holders pursuant to Section 2.02 .
Article III
MISCELLANEOUS
Section 3.01 Communications .
All notices and other communications provided for or permitted hereunder shall be made in writing by facsimile, electronic mail, courier service or personal delivery:
(a) if to any Purchaser, to such Purchaser’s address listed on Schedule A hereof or such other address as such Purchaser shall have specified by written notice to the Partnership
(b) if to a transferee of a Purchaser, to such Holder at the address provided pursuant to Section 2.11 above; and
(c) if to the Partnership:
Mid-Con Energy Partners, LP
2501 North Harwood Street
Suite 2410
Dallas, Texas 75201
Attention: Charles M. McLawhorn, III
Email: cmclawhorn@midcon-energy.com
with a copy (which shall not constitute notice) to:
Sidley Austin LLP
1501 K Street, N.W.
Washington, DC 20005
Attention: William J. Cooper
Email: wcooper@sidley.com
All such notices and communications shall be deemed to have been received at the time delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or sent via Internet electronic mail; and when actually received, if sent by courier service or any other means.
Section 3.02 Successor and Assigns .
This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties, including subsequent Holders of Registrable Securities to the extent permitted herein.
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Section 3.03 Assignment of Rights .
All or any portion of the rights and obligations of any Purchaser under this Agreement may be transferred or assigned by such Purchaser only in accordance with Section 2.11 hereof.
Section 3.04 Recapitalization, Exchanges, Etc. Affecting the Common Units .
The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all units of the Partnership or any successor or assign of the Partnership (whether by merger, consolidation, sale of assets or otherwise) that may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, unit splits, recapitalizations, pro rata distributions of units and the like occurring after the date of this Agreement.
Section 3.05 Aggregation of Registrable Securities .
All Registrable Securities held or acquired by Persons who are Affiliates of one another shall be aggregated together for the purpose of determining the availability of any rights and applicability of any obligations under this Agreement.
Section 3.06 Specific Performance .
Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, in addition to and without limiting any other remedy or right it may have, shall have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right shall not preclude any such Person from pursuing any other rights and remedies at law or in equity that such Person may have.
Section 3.07 Counterparts .
This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, including facsimile or.pdf counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.
Section 3.08 Headings .
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
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ACTIVE 226509354
Section 3.09 Governing Law; Submission to Jurisdiction .
This Agreement, including all issues and questions concerning its application, construction, validity, interpretation and enforcement, shall be construed in accordance with, and governed by, the laws of the State of Delaware. The Parties hereby submit to the non-exclusive jurisdiction of any U.S. federal or state court located in Dallas, Texas in any action, suit or proceeding arising out of or based upon this Agreement or any of the transactions contemplated hereby. The Parties hereby irrevocably waive, to the fullest extent permitted by applicable Law, any objection which they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the Parties hereto agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.
Section 3.10 Severability of Provisions .
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting or impairing the validity or enforceability of such provision in any other jurisdiction.
Section 3.11 Entire Agreement .
This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the rights granted by the Partnership set forth herein. This Agreement, the Purchase Agreement and the Amended Partnership Agreement supersede all prior agreements and understandings between the parties with respect to such subject matter.
Section 3.12 Amendment .
This Agreement may be amended only by means of a written amendment signed by the Partnership and the Holders of a majority of the then outstanding Registrable Securities; provided , however , that no such amendment shall materially and adversely affect the rights of any Holder hereunder without the consent of such Holder.
Section 3.13 No Presumption .
If any claim is made by a party relating to any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular party or its counsel.
Section 3.14 Obligations Limited to Parties to Agreement .
Each of the parties hereto covenants, agrees and acknowledges that no Person other than the Purchasers (and their permitted transferees and assignees) and the Partnership shall have any obligation hereunder. Notwithstanding that one or more of the Purchasers may be a corporation,
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ACTIVE 226509354
partnership or limited liability company, no recourse under this Agreement or under any documents or instruments delivered in connection herewith or therewith shall be had against any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the Purchasers or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate thereof, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable Law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the Purchasers or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate thereof, as such, for any obligations of the Purchasers under this Agreement or any documents or instruments delivered in connection herewith or therewith or for any claim based on, in respect of or by reason of such obligation or its creation, except in each case for any transferee or assignee of a Purchaser hereunder.
Section 3.15 Independent Nature of Purchaser’s Obligations .
The obligations of each Purchaser under this Agreement are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under this Agreement. Nothing contained herein, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement. Each Purchaser shall be entitled to independently protect and enforce its rights, including, the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.
Section 3.16 Interpretation .
Article and Section references are to this Agreement, unless otherwise specified. All references to instruments, documents, contracts and agreements are references to such instruments, documents, contracts and agreements as the same may be amended, supplemented and otherwise modified from time to time, unless otherwise specified. The words “include,” “includes” and “including” or words of similar import shall be deemed to be followed by the words “without limitation.” Whenever any determination, consent or approval is to be made or given by a Purchaser under this Agreement, such action shall be in such Purchaser’s sole discretion unless otherwise specified. Unless expressly set forth or qualified otherwise ( e.g. , by “ Business ” or “ trading ”), all references herein to a “day” are deemed to be a reference to a calendar day.
[ signature page follows ]
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ACTIVE 226509354
IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of the date first above written.
PARTNERSHIP: |
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Mid-Con Energy Partners, LP |
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By: |
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Mid-Con Energy GP, LLC, |
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its General Partner |
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By: |
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Name: |
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Jeffrey R. Olmstead |
Title: |
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Chief Executive Officer |
Signature Page to Registration Rights Agreement
ACTIVE 226509354
PURCHASERS |
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Goff Focused Energy Strategies, LP |
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By: |
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GFS Energy GP, LLC |
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its General Partner |
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By: |
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GFS Management, LLC |
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its Managing Member |
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By: |
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Goff Focused Strategies, LLC |
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its Managing Member |
By: |
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Name: |
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John C. Goff |
Title: |
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Managing Member |
Goff MCEP II, LP |
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By: |
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GFS MCEP GP, LLC |
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its General Partner |
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By: |
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GFS Management, LLC |
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its Managing Member |
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By: |
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Goff Focused Strategies, LLC |
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its Managing Member |
By: |
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Name: |
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John C. Goff |
Title: |
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Managing Member |
Signature Page to Registration Rights Agreement
ACTIVE 226509354
Goff REN Holdings, LLC |
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By: |
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GFS REN GP, LLC |
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its Manager |
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By: |
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GFS Management, LLC |
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its Managing Member |
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By: |
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Goff Focused Strategies, LLC |
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its Managing Member |
By: |
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Name: |
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John C. Goff |
Title: |
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Managing Member |
Mid-Con Energy III, LLC |
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By: |
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Name: |
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Chad McLawhorn |
Title: |
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Vice President, General Counsel and |
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Corporate Secretary |
Signature Page to Registration Rights Agreement
ACTIVE 226509354
SCHEDULE A
Purchaser Name; Notice and Contact Information
Purchaser |
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Contact Information |
Goff Focused Energy Strategies, LP |
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c/o Goff Focused Strategies, LLC 500 Commerce Street Suite 700 Fort Worth, TX 76102 Attention: Jennifer Terrell Email: jterrell@gofffocusedstrategies.com
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Goff MCEP II, LP |
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c/o Goff Focused Strategies, LLC 500 Commerce Street Suite 700 Fort Worth, TX 76102 Attention: Jennifer Terrell Email: jterrell@gofffocusedstrategies.com
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Goff REN Holdings, LLC |
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c/o Goff Focused Strategies, LLC 500 Commerce Street Suite 700 Fort Worth, TX 76102 Attention: Jennifer Terrell Email: jterrell@gofffocusedstrategies.com
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Mid-Con Energy, III |
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Mid-Con Energy III, LLC 2431 East 61st Street Suite 850 Tulsa, Oklahoma 74136 Attention: Charles L. McLawhorn, III Email: cmclawhorn@midcon-energy.com
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HOU:3835927.4
Exhibit C
[ Form of Lock-Up Agreement ]
[●], 2017
To the Purchasers listed on Schedule A
to the Purchase Agreement
c/o Goff Focused Strategies, LLC
500 Commerce Street
Suite 700
Fort Worth, TX 76102
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Re: |
Lock-Up Agreement |
Ladies and Gentlemen:
This letter is being delivered to each of you in connection with the consummation of the transactions contemplated by that certain Class B Convertible Preferred Unit Purchase Agreement, dated November 14, 2017 (the “Purchase Agreement”), by and among Mid-Con Energy Partners, LP, a Delaware limited partnership (the “Partnership”), and each of you as purchasers (collectively, the “Purchasers”) relating to a private placement of Class B Preferred Units representing limited partner interests in the Partnership (the “Preferred Units”). Such Preferred Units will be convertible into common units representing limited partner interests in the Partnership (“Common Units”) pursuant to the terms of the Second Amendment (as defined in the Purchase Agreement). Capitalized terms used but not defined herein shall have the meaning given to them in the Purchase Agreement.
The undersigned will not, directly or indirectly, without the prior written consent of [Goff], as representative of the Purchasers for the purposes of this Agreement: (i) offer, sell, short-sell, or otherwise dispose (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any Affiliate of the undersigned or any person in privity with the undersigned or any Affiliate of the undersigned), including by (A) filing (or participation in the filing of) a registration statement with the Securities and Exchange Commission (the “SEC”) (other than the registration statement filed for the benefit of the Purchasers pursuant to the terms of the Registration Rights Agreement (the “Resale Registration Statement”)), (B) establishing or increasing a put equivalent position, or (C) liquidating or decreasing a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (and the rules and regulations of the SEC promulgated thereunder), in respect of any Common Units of the Partnership or any securities convertible into, or exercisable or exchangeable for such Common Units other than Common Units transferred (x) to an Affiliate or (y) as bona fide gifts; provided that in the case of any such transfer each transferee or donee shall sign and deliver to the Purchasers a lock-up letter substantially in the form of this letter, or (ii) publicly announce an intention to effect any such transaction, in each case, for a period of six months after the date on which the SEC declares the Resale Registration Statement effective (the “Lockup Period”). The Lockup Period shall be extended day-for-day during any period during the Lockup Period in which the Resale
HOU:3835927.4
Registration Statement is withdrawn or sales thereunder are suspended, including pursuant to any exercise by the Partnership of its powers under Section 2.03 of the Registration Rights Agreement.
Yours very truly,
[Signature]
[Name and address]
C-2
Exhibit D
[ Form of Monitoring Agreement ]
This MONITORING FEE AGREEMENT (this “Agreement”) is made and entered into as of ______________, 2017, by and among Mid-Con Energy Partners, LP, a Delaware limited partnership (the “Partnership”), and Goff Focused Strategies, LLC, a Texas limited liability company (“Goff”), and, solely for purposes of Sections 3 and 4 hereof, each of the Purchasers (as defined herein). Capitalized terms used but not defined herein shall have the meaning assigned to such terms in the Class B Convertible Preferred Unit Purchase Agreement, dated as of November 14, 2017 (the “Purchase Agreement”), by and among the Partnership and each of the Purchasers named therein (collectively, the “Purchasers”).
WHEREAS, pursuant to the Purchase Agreement, the Partnership has agreed to issue and sell to the Purchasers, and the Purchasers have agreed to purchase from the Partnership, certain Class B Convertible Preferred Units;
WHEREAS, Goff will expend efforts in connection with monitoring the Purchasers’ investment in the Class B Convertible Preferred Units, the Partnership desires to pay to Goff a quarterly monitoring fee to compensate Goff for such efforts, as described herein; and
WHEREAS, it is a condition to the respective obligations of the Partnership and each of the Purchasers to consummate the transactions contemplated by the Purchase Agreement that each of the parties execute and deliver this Agreement, contemporaneously with the Closing of the transactions contemplated by the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
Section 1. Quarterly Monitoring Fee . The Partnership shall pay, or shall cause to be paid, to Goff (or its designee), on or before the last Business Day of each fiscal quarter during the period beginning on the Effective Date and ending on the Termination Date (as defined below), a quarterly monitoring fee of $30,000 (the “ Monitoring Fee ”) in respect of such quarter; provided , however , that such Monitoring Fee shall be pro-rated (i) with respect to the quarter ended December 31, 2017, for the number of days between the Closing Date and December 31, 2017 (inclusive), and (ii) with respect to the quarter in which the Termination Date occurs, for the number of days between the first day of such quarter and the Termination Date (inclusive).
Section 2. Termination Date . This Agreement shall terminate and be of no further force and effect on the first to occur of: (i) the date on which the Partnership and Goff mutually agree in writing to terminate this Agreement, (ii) the date on which Goff and its Affiliates, together with any fund(s) managed by Goff or its Affiliates, no longer own in the aggregate at least $1.0 million Class B Convertible Preferred Units and Conversion Units, calculated based on the Per Unit Price, or (iii) August 11, 2021 (such date, the “ Termination Date ”); provided , however , that (x) the occurrence of the Termination Date will not affect the Partnership’s obligation to pay, or cause to be paid, any amounts accrued but not yet paid as of such date, and (y) the provisions of this Section 2 and Sections 3 and 4 will survive after the Termination Date.
ACTIVE 226520624
Section 3. Duties; Disclaimers . Goff and each of the Purchasers agree that each of them shall have no duties to one another arising from, or relating to, this Agreement, the Purchase Agreement, or any of the Transaction Agreements, including, but not limited to, any fiduciary duties, any duties of care and/or loyalty, or the like. Each Purchaser agrees and acknowledges that Goff will not provide investment advice to the Purchasers as a group or any of them individually with respect to any equity security, including equity securities of the Partnership (except as may otherwise be specifically agreed to in writing subsequent to the date hereof). By previously entering into the Purchase Agreement and entering into this Agreement and the other Transaction Agreements, Goff and the Purchasers do not, and did not intend to (i) enter into any voting agreement with respect to any equity securities of the Partnership, (ii) form a partnership or joint venture, or (iii) to act together or in concert as a group or otherwise with respect to any matter relating to the Partnership, any equity securities of the Partnership, or any of the business or affairs of the Partnership. Unless explicitly agreed in writing to the contrary, no subsequent action by Goff or the other Purchasers shall be deemed to constitute any such agreement.
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Section 4. |
Miscellaneous . |
(a) Entire Agreement . This Agreement is intended by the parties to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to the subject matter hereof.
(b) Notices . All notices and demands provided for in this Agreement shall be in writing and shall be given as provided in Section 8.05 of the Purchase Agreement.
(c) Interpretation . If any provision in this Agreement is held to be illegal, invalid, not binding or unenforceable, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid, not binding or unenforceable provision had never comprised a part of this Agreement, and the remaining provisions shall remain in full force and effect.
(d) Governing Law; Submission to Jurisdiction . Section 8.07 of the Purchase Agreement shall apply to this Letter Agreement mutatis mutandis .
(e) Waiver of Jury Trial . EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES, AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS
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ACTIVE 226520624
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(f) No Waiver; Modifications in Writing . Section 8.03 of the Purchase Agreement shall apply to this Letter Agreement mutatis mutandis ; provided , however , that, except for Section 3 and this Section 4(f) , this Agreement may be amended by mutual written agreement of Goff and the Partnership.
(g) Execution in Counterparts . This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute one and the same agreement.
(h) Binding Effect; Assignment . This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns . No Person other than the parties hereto and their respective successors and permitted assigns is intended to be a beneficiary of this Agreement.
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ACTIVE 226520624
IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of the date first above written.
PARTNERSHIP: |
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Mid-Con Energy Partners, LP |
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By: |
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Mid-Con Energy GP, LLC, |
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its general partner |
By: |
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Name: |
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Jeffrey R. Olmstead |
Title: |
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Chief Executive Officer |
Signature Page to Monitoring Fee Agreement
Goff: |
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GOFF FOCUSED STRATEGIES, LLC |
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By: |
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Name: |
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John C. Goff |
Title: |
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Managing Member |
Signature Page to Monitoring Fee Agreement
PURCHASERS: |
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Goff Focused Energy Strategies, LP |
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By: |
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GFS Energy GP, LLC |
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its General Partner |
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By: |
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GFS Management, LLC |
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its Managing Member |
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By: |
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Goff Focused Strategies, LLC |
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its Managing Member |
By: |
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Name: |
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John C. Goff |
Title: |
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Managing Member |
Goff MCEP II, LP |
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By: |
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GFS MCEP GP, LLC |
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its General Partner |
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By: |
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GFS Management, LLC |
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its Managing Member |
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By: |
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Goff Focused Strategies, LLC |
its Managing Member |
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By: |
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Name: |
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John C. Goff |
Title: |
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Managing Member |
Signature Page to Monitoring Fee Agreement
Goff REN Holdings, LLC |
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By: |
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GFS REN GP, LLC |
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its Manager |
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By: |
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GFS Management, LLC |
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its Managing Member |
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By: |
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Goff Focused Strategies, LLC |
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its Managing Member |
By: |
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Name: |
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John C. Goff |
Title: |
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Managing Member |
Mid-Con Energy III, LLC |
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By: |
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Name: |
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Charles L. McLawhorn, III |
Title: |
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Vice President, General Counsel and |
Corporate Secretary |
Signature Page to Monitoring Fee Agreement
Exhibit E
[ Form of Standstill Agreement ]
STANDSTILL AGREEMENT
This STANDSTILL AGREEMENT (this “ Agreement ”) is made and entered into as of ______________, 2017, by and among Mid-Con Energy Partners, LP, a Delaware limited partnership (the “ Partnership ”), and each of the Purchasers listed on the signature pages hereto (each referred to herein as a “ Purchaser ” and collectively, the “ Purchasers ”). Capitalized terms used but not defined herein shall have the meaning assigned to such terms in the Class B Convertible Preferred Unit Purchase Agreement, dated as of November 14, 2017 (the “ Purchase Agreement ”), by and among the Partnership and the Purchasers. The Partnership and the Purchasers are referred to collectively herein as the “ Parties .”
WHEREAS, pursuant to the Purchase Agreement, the Partnership has agreed to issue and sell to the Purchasers, and the Purchasers have agreed to purchase from the Partnership, certain Class B Convertible Preferred Units;
WHEREAS, it is a condition to the Partnership’s obligation to consummate the sale of the Class B Convertible Preferred Units under the Purchase Agreement that each of the Purchasers execute and deliver this Agreement to the Partnership, contemporaneously with the Closing of the transactions contemplated by the Purchase Agreement; and
WHEREAS, concurrently with the consummation of the transactions contemplated by the Purchase Agreement, Mid-Con Energy GP, LLC, a Delaware limited liability company and the general partner of the Partnership (the “ General Partner ”), will execute and deliver that certain Second Amendment to First Amended and Restated Agreement of Limited Partnership of the Partnership (the “ Second Amendment ”), which shall establish the terms of the Class B Convertible Preferred Units.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
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Section 1. |
Standstill . |
(a) During the period beginning on the Closing Date and ending on August 11, 2018, without the prior written consent of the Partnership, the Class B Preferred Holders (as defined in the Second Amendment) of Class B Convertible Preferred Units and their Affiliates will not, directly or indirectly:
(i) Enter into any transaction the effect of which would be to “short” any securities of the Partnership, provided that the foregoing shall not preclude transactions that do not involve a broker and are effected wholly among a Purchaser and its Affiliates;
ACTIVE 226566435
(ii) Call (or participate in a group calling) a meeting of the limited partners of the Partnership for the purpose of removing (or approving the removal of) the General Partner as the general partner of the Partnership and/or electing a successor general partner of the Partnership;
(iii)
“Solicit” any “proxies” (as such terms are used in the rules and regulations of the SEC) or votes for or in support of (A) the removal of the General Partner as the general partner of the Partnership
or (B) unless the General Partner shall have resigned or ceased to be the general partner of the Partnership other than as a result of being removed, the election of any successor general partner of the Partnership, or take
any action the direct effect or purpose of which is to induce limited partners of the Partnership to vote or provide proxies that may be voted in favor of any action contemplated by either
of sub-clauses (A) or (B) o
f this
Section 1(a)(iii)
;
(iv) Seek to advise or influence any person (within the meaning of Section 13(d)(3) of the Exchange Act) to vote any limited partner interests of the Partnership to remove (or approve the removal of) the General Partner as the general partner of the Partnership and/or the election of a successor general partner of the Partnership except where the General Partner shall have resigned or ceased to be the general partner of the Partnership other than as a result of being removed;
(v) Issue, induce or assist in the publication of any press release, media report or other publication supporting the removal of the General Partner as the general partner of the Partnership and/or the election of a successor general partner of the Partnership except where the General Partner shall have resigned or ceased to be the general partner of the Partnership other than as a result of being removed; or
(vi) Instigate or encourage any third party to do any of the foregoing.
(b) Notwithstanding anything to the contrary in this Agreement, the foregoing shall not in any way limit (i) the holders of Class B Preferred Units (“ Class B Preferred Holders ”) (or any of them) from discussing with the General Partner the nomination and election of a designee of such Class B Preferred Holder(s) to the Board of Directors of the General Partner (the “ Board ”) or any such designee’s subsequent service as a member of the Board, or (ii) the right of any Class B Preferred Holder to vote its limited partner interests in the Partnership at any meeting of limited partners of the Partnership so long as there has been no breach of Section 1(a) of this Agreement.
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Section 2. |
Miscellaneous . |
(a) Entire Agreement . This Agreement is intended by the Parties to be a complete and exclusive statement of the agreement and understanding of the Parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the Parties with respect to the subject matter hereof.
(b) Notices . All notices and demands provided for in this Agreement shall be in writing and shall be given as provided in Section 8.05 of the Purchase Agreement.
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ACTIVE 226566435
(c) Interpretation . If any provision in this Agreement is held to be illegal, invalid, not binding or unenforceable, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid, not binding or unenforceable provision had never comprised a part of this Agreement, and the remaining provisions shall remain in full force and effect.
(d) Governing Law; Submission to Jurisdiction . Section 8.07 of the Purchase Agreement shall apply to this Letter Agreement mutatis mutandis .
(e) Waiver of Jury Trial . EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES, AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(f) No Waiver; Modifications in Writing . Section 8.03 of the Purchase Agreement shall apply to this Letter Agreement mutatis mutandis .
(g) Execution in Counterparts . This Agreement may be executed in any number of counterparts and by different Parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute one and the same agreement.
(h) Binding Effect; Assignment . This Agreement will be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns ; provided, that the terms and provisions of this Agreement shall not be effective or binding upon a Purchaser that has transferred all of its Class B Convertible Preferred Units to a third-party .
(i) Specific Enforcement . Each of the Parties acknowledges and agrees that monetary damages would not adequately compensate an injured Party for the breach of this Agreement by any Party, that this Agreement shall be specifically enforceable and that any breach or threatened breach of this Agreement shall be the proper subject of a temporary or permanent injunction or restraining order without a requirement of posting bond. Further, each Party hereto waives any claim or defense that there is an adequate remedy at law for such breach or threatened breach.
[ signature page follows ]
E-3
ACTIVE 226566435
IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first above written.
PARTNERSHIP: |
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Mid-Con Energy Partners, LP |
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By: |
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Mid-Con Energy GP, LLC, |
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its general partner |
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By: |
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Name: |
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Jeffrey R. Olmstead |
Title: |
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Chief Executive Officer |
Signature Page to Standstill Agreement
PURCHASERS: |
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Goff Focused Energy Strategies, LP |
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By: |
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GFS Energy GP, LLC |
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its General Partner |
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By: |
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GFS Management, LLC |
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its Managing Member |
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By: |
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Goff Focused Strategies, LLC |
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its Managing Member |
By: |
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Name: |
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John C. Goff |
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Managing Member |
Goff MCEP II, LP |
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GFS MCEP GP, LLC |
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its General Partner |
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GFS Management, LLC |
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its Managing Member |
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Goff Focused Strategies, LLC |
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its Managing Member |
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John C. Goff |
Title: |
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Managing Member |
Signature Page to Standstill Agreement
Goff REN Holdings, LLC |
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GFS REN GP, LLC |
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its Manager |
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GFS Management, LLC |
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its Managing Member |
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By: |
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Goff Focused Strategies, LLC |
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its Managing Member |
By: |
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Name: |
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John C. Goff |
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Managing Member |
Mid-Con Energy III, LLC |
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Chad McLawhorn |
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Vice President, General Counsel and |
Corporate Secretary |
Signature Page to Standstill Agreement
Exhibit F
[Form of General Partner Officer’s Certificate]
Mid-Con Energy GP, LLC
Officer’s Certificate
[Closing Date], 2017
Pursuant to Section 6.02(c) of the Class B Convertible Preferred Unit Purchase Agreement by and among Mid-Con Energy Partners, LP, a Delaware limited partnership (the “ Partnership ”), and each of the Class B Purchasers party thereto, dated [●], 2017 (the “ Purchase Agreement ”), the undersigned, being the Chief Executive Officer of Mid-Con Energy GP, LLC, a Delaware limited liability company, acting in its capacity as the general partner of Partnership, hereby certifies as follows:
1. The Partnership has performed and complied with the covenants and agreements contained in the Purchase Agreement that are required to be performed and complied with by the Partnership on or prior to the Closing Date.
2. The representations and warranties of the Partnership contained in the Purchase Agreement that are qualified by materiality or Partnership Material Adverse Effect were true and correct when made and are true and correct on the date hereof (as though made at and as of the date hereof), and all other representations and warranties were true and correct in all material respects when made and are true and correct in all material respects as of the date hereof (as though made at and as of the date hereof), other than those representations and warranties of the Partnership contained in the Purchase Agreement that expressly relate to a different date, in which case, they are correct in all material respects as of such date.
Capitalized terms used but not defined in this Officer’s Certificate shall have the respective meanings ascribed to them in the Purchase Agreement.
(Signature page follows)
HOU:3835927.4
The undersigned has executed this Officer’s Certificate as of the date first written above, in his capacity as Chief Executive Officer of Mid-Con Energy GP, LLC, a Delaware limited liability company, acting in its capacity as the general partner of the Partnership.
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Jeffrey R. Olmstead |
Chief Executive Officer |
Mid-Con Energy GP, LLC |
A-8
Exhibit G
[Form of Class B Purchaser’s Officer’s Certificate]
Officer’s Certificate
[Closing Date], 2017
Pursuant to Section 6.03(c) of the Class B Convertible Preferred Unit Purchase Agreement by and among Mid-Con Energy Partners, LP, a Delaware limited partnership, and each of the Class B Purchasers party thereto, dated [●], 2017 (the “ Purchase Agreement ”), the undersigned, being the President, Chief Executive Officer or other authorized officer of the Class B Purchaser set forth on the signature page hereto, hereby certifies in his or her capacity as such, and not in his or her individual capacity, solely with respect to such Class B Purchaser as follows:
1. The Class B Purchaser has performed and complied with the covenants and agreements contained in the Purchase Agreement that are required to be performed and complied with by the Class B Purchaser on or prior to the Closing Date.
2. The representations and warranties of the Class B Purchaser contained in the Purchase Agreement that are qualified by materiality or Class B Purchaser Material Adverse Effect were true and correct when made and are true and correct as of the date hereof (as though made at and as of the date hereof), and all other representations and warranties were true and correct in all material respects when made and are true and correct in all material respects as of the date hereof (as though made at and as of the date hereof), other than those representations and warranties of the Class B Purchaser contained in the Purchase Agreement that expressly relate to a different date, in which case, they are correct in all material respects as of such date.
Capitalized terms used but not defined in this Officer’s Certificate shall have the respective meanings ascribed to them in the Purchase Agreement.
(Signature page follows)
HOU:3835927.4
The undersigned has executed this Officer’s Certificate as of the date first written above.
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[Name of Officer] |
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[Title] |
HOU:3835927.4
Exhibit H
Form of General Partner Waiver
[Date], 2016
Mid-Con Energy GP, LLC (the “ General Partner ”), a Delaware limited liability company and the general partner of Mid-Con Energy Partners, LP (the “ Partnership ”), hereby waives any preemptive rights it may hold pursuant to Section 5.7 of the First Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of December 20, 2011, as amended (the “ Partnership Agreement ”), with respect to the Partnership’s privately negotiated Class B Convertible Preferred Unit Purchase Agreement, dated as of [●], 2017 (the “ Purchase Agreement ”), by and among the Partnership and each of the Class B Purchasers set forth in Schedule A thereto (collectively, the “ Class B Purchasers ”), pursuant to which the Partnership has agreed to issue and sell (i) to the Class B Purchasers an aggregate [●] Class B Convertible Preferred Units representing limited partner interests in the Partnership (and any Conversion Units issuable upon conversion of any Class B Convertible Preferred Units) for an aggregate purchase price of $[●][, and (ii) to any New Investors (as defined in the Purchase Agreement) additional Class B Convertible Preferred Units (and any Conversion Units issuable upon conversion of such additional Class B Convertible Preferred Units) with an aggregate purchase price not to exceed $[●].]
The General Partner, in its capacity as the general partner of the Partnership, hereby notifies the Class B Purchasers, in accordance with clause (iv) of the definition of “Outstanding” in the Partnership Agreement, that the Vote Blocker (as defined below) set forth in the definition of “Outstanding” shall not apply to any Class B Purchaser, individually or by virtue of such Class B Purchaser acting in concert with one or more other Class B Purchasers.
As used herein, “ Vote Blocker ” means the limitation set forth in the definition of “Outstanding” in the Partnership Agreement that provides that any Person or Group that beneficially owns 20% or more of the Partnership Interests of any class then Outstanding shall not be entitled to vote any of the Partnership Interests of any class owned by such Person or Group on any matter nor shall any of the Partnership Interests of any class owned by such Person or Group be considered Outstanding when sending notices of a meeting of Limited Partners to vote on any matter, calculating required votes, determining the presence of a quorum or for any other similar purposes under the Partnership Agreement.
Capitalized terms used but not defined herein shall have the meaning assigned to such terms in the Partnership Agreement.
(Signature page follows)
HOU:3835927.4
IN WITNESS WHEREOF, the undersigned executes this General Partner Waiver, effective as of the date first above written.
mid-con energy gp, llc |
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Jeffrey R. Olmstead |
Title: |
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Chief Executive Officer |
HOU:3835927.4
Exhibit I
[Form of Joinder Agreement] 2
JOINDER AGREEMENT
FOR
Class B Convertible Preferred Unit
SECURITIES PURCHASE AGREEMENT
The undersigned hereby agrees, effective as of ______________, 2017, to become a party to that certain Class B Convertible Preferred Unit Purchase Agreement, dated as of [●], 2017, by and among Mid-Con Energy Partners, LP (the “ Partnership ”) and each of the purchasers listed on Schedule A thereto (the “ Purchase Agreement ”), and, for all purposes of the Purchase Agreement, to be included within the term “Class B Purchasers” (as defined in the Purchase Agreement). By execution and delivery of this Joinder Agreement, the undersigned hereby agrees (i) to be bound by all covenants, agreements, representations, warranties and acknowledgements attributable to the Class B Purchasers under the Purchase Agreement, as if made by, and with respect to, the undersigned; and (ii) to perform all obligations and duties required of a Class B Purchaser with respect to its Purchased Units. Capitalized terms used herein, but not otherwise defined herein, shall have the meanings assigned to such terms in the Purchase Agreement.
The mailing and e-mail address to which notices should be sent to the undersigned, for purposes of the Purchase Agreement, are set forth below:
CLASS B PURCHASER: |
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Attention: |
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NTD: Delete exhibit if there are no “New Investors” pursuant to Section 2.01(c) of the Purchase Agreement. |
HOU:3835927.4
I, Jeffrey R. Olmstead, certify that:
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I have reviewed this Quarterly Report on Form 10-Q of Mid-Con Energy Partners, LP; |
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 14, 2017
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/s/ Jeffrey R. Olmstead |
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Jeffrey R. Olmstead |
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Chief Executive Officer |
I, Sherry L. Morgan, certify that:
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I have reviewed this Quarterly Report on Form 10-Q of Mid-Con Energy Partners, LP; |
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 14, 2017
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/s/ Sherry L. Morgan |
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Sherry L. Morgan |
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Chief Accounting Officer |
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the accompanying report on Form 10-Q for the period ended September 30, 2017, of Mid-Con Energy Partners, LP (the “Partnership”) and filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey R. Olmstead, Chief Executive Officer of Mid-Con Energy GP, LLC, the general partner of the Partnership, hereby certify, pursuant to 18 U.S.C § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. |
Date: November 14, 2017
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/s/ Jeffrey R. Olmstead |
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Jeffrey R. Olmstead |
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Chief Executive Officer |
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the accompanying report on Form 10-Q for the period ended September 30, 2017, of Mid-Con Energy Partners, LP (the “Partnership”) and filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sherry L. Morgan, Chief Accounting Officer of Mid-Con Energy GP, LLC, the general partner of the Partnership, hereby certify, pursuant to 18 U.S.C § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. |
Date: November 14, 2017
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/s/ Sherry L. Morgan |
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Sherry L. Morgan |
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Chief Accounting Officer |