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EXHIBIT 10.2
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SEISMIC DATA ACQUISITION
AND FARM OUT AGREEMENT
THIS AGREEMENT, made and entered into this ___ day of _______,
2007, by
and between, NATIONAL GULF PRODUCTION, INC., of Giddings, Texas
(hereinafter
referred to as "NATIONAL") and TRANS ENERGY, INC., of St.
Mary's, West Virginia
(hereinafter referred to as "TRANS ENERGY"). WITNESSETH:
WHEREAS, National has acquired a Farmout Agreement from
Wevco
Production, Inc. in and to the Oil and Gas Leases, covering the
oil and gas in
and under certain tracts of land, containing 3,120 acres, more
or less, situated
in Trego County, Kansas, described on Exhibit "A" attached
hereto and made a
part hereof; and,
WHEREAS, National is willing to Farmout to Trans Energy 75
percent of
its rights and interests with respect to the above described
leases, and Trans
Energy desires to acquire that 75 percent interest on the above
leases, pursuant
to the provisions contained herein.
NOW THEREFORE, in consideration of the above premises and the
mutual
covenants and agreements set forth herein, National and Trans
Energy
agree as follows:
1. National and Trans Energy will acquire 3-D Seismic Data on
the above
leases , in conjunction with the North Cedar Bluff Group Shoot
that
will commence early 2007 and each will pay its proportionate
share of
approximately $37,000 to $39,000 per square mile.
2. Upon execution of this agreement, Trans Energy will pay
its
proportionate 75 percent of the farmout fee of $ 62.50 per acre
on
3,120 acres or ( $195,000 * .75 = $ 146,250 ) plus its
proportionate 75
percent of the approximate seismic acquisition, processing,
and
interpretation cost of $ 37,000 per square mile on 5 square
miles or (
$ 185,000 * .75 = $ 138,750 ) or a total of $ 285,000.The final
seismic
cost will be adjusted when complete.
3. The leases will have a reservation by Wevco, of an overriding
royalty
interest of 3.5 percent and the right, but not the obligation,
to
participate up to 25 percent at cost, in the wells drilled by
National
and Trans Energy. There will also be an overriding royalty
interest of
1 percent to the Project Geophysicist and National will retain
an
overriding royalty interest of 2 percent, resulting in an 81
percent
working interest.(87.5 - 6.5). National will also earn a 6.15
percent
carried working interest.
4. If Wevco elects to participate in the drilling of a well or
wells, then
the parties will pay and be entitled to receive as follows:
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Wevco National Trans Energy
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