EXHIBIT 10.1
FARMOUT AGREEMENT
WHEREAS: Bedrock
Energy, Inc. wishes to enter into a FARMOUT agreement
for certain leases
with Sun River Energy,
Inc. ("Farmor")
dated November 10,
2007.
NOW THEREFORE:
The purposes of this letter agreement is to consolidate and merge in
writing all of the terms and conditions of prior agreements
reached between
Sun
River Energy, Inc. as "Farmor" and Bedrock Energy, Inc.
hereinafter referred
to
as "Farmee,"
whereby Farmee will commit and be
obligated to drill one well to
earn interests in the leases described on Exhibit A, according
to the terms and
conditions as outlined below:
For and in consideration of mutual benefits, detriments, and promises,
the adequacy of which
is hereby
acknowledged, Farmor
hereby grant Farmee
the
right to explore the subject leases under the terms hereof as
follows:
1.
DEFINITIONS
(A) "Contract
Depth" means a depth
sufficient to
penetrate into
the Sussex
formations
or to a final
depth of 4,000 feet
subsurface, whichever depth first occurs.
(B) "Effective
Date" will mean November 10, 2007.
(C) "Farmout
Lands" means the Farmor leaseholding net interest in
and to the mineral
leases set forth in Exhibit A attached
hereto and made a part hereof.
2.
EXHIBITS
The following
Schedules and Exhibits are attached hereto and made part
of this Agreement:
(A) Exhibit A
is a map which provides a general description of the
Farmout Lands
known also as the "subject leases," also
described as Lease No.
06-00256, Wyoming
State, Section 36,
T41N, R81W.
(B) The AAPL
Joint Operating
Agreement will be
executed between
the Farmor and Farmee,
which agreement governs operations on
the subject leases and the various amendments thereto, all of
which are incorporated herein by reference
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3.
CONSIDERATION AND COMMITMENT
(A) Farmee
hereby commits to drill one obligation well to contract
depth; and
(B) Farmor and
Farmee agree to all other terms and conditions of
this Agreement.
4.
OBLIGATION WELL
(A) Farmee
shall be the
operator of all Exploration Wells and
development wells;
(B) Farmee on
or before November 1, 2008, or as soon thereafter as
field, weather,
and regulations permit, shall commence to
drill the initial Test Well at a location prescribed by Farmee
on the Farmout
Lands to the test
depth, and Farmee shall
continuously drill
and test any and all zones which by
engineering, log,
and/or geological analysis suggest the
presence of hydrocarbons and shall complete the well and fully
equip with all necessary facilities and secure and acquire all
necessary regulatory permits for production and water disposal
required to test and produce any economic hydrocarbons from
such test well and, if non-producible, shall abandon the well
all at the sole cost, risk, and expense of Farmee in
accordance with
the provisions of the Joint Operating
Agreement attached hereto as Exhibit B; and
5.
INTEREST EARNED
(A) Farmor
represent to Farmees that Farmor own an 80%% NRI in the
subject leases.
(B)
Provided
Farmee is not in default hereunder, Farmee shall earn
in the Farmout Lands an undivided 100% of the Farmor's working
interest in,
to, and of the hydrocarbons, subject to a
non-convertible
Overriding Royalty
(ORR) reserved to the
Farmor of 2%,
such ORR to be free
and clear of any and all
exploration,
development, drilling,
completion,
production,
processing, water disposal, and gas gathering costs.
6.
RENTALS
Farmee shall be
responsible
for payment of 100% of
the leaseholding
rentals for the
Farmin Lands from the date of execution of this
Agreement, provided
that the Farmee shall not pay rentals on any
leaseholds Farmee holds by production.
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<PAGE>
7.
ADDITIONAL PROVISIONS
(A) Backin for
Farmor: Farmor, shall
receive, after payout of all
costs of drilling, completion pipeline, production facilities,
and fees, a backin
interest of twenty five percent of the
working interest in
the wells drilled on the subject leases,
on a well by well basis.
(B) Farmee
shall be responsible for providing all accounting
records to Farmor to support a determination by a qualified
account of all costs
of exploration,
drilling, completion,
pipeline, production facilities, and fees.
(C) Prior to
the spudding of the Initial Well, Parties shall enter
into a mutually
acceptable AAPL 610-1989 Operating Agreement
covering the subject
leases. Said Operating
Agreement shall
declare Farmee
as Operator and shall include, but not be
limited to, among others, the following provisions:
(i)
Preferential Right to Purchase will be deleted in its
entirety; and
(ii)
Non-consent penalties will be 300% / 300%.
(D) Force
Majeure provisions,
Federal Lease Stipulations, and rig
availability
shall
apply
to all drilling commitments
hereunder.
(E) Geological
information
and well data from any Test Well
drilled hereunder
shall be provided to Farmor by Farmee in
confidence as trade secrets, not to be published.
(F) Farmee may
assign all of the
rights and obligations
created
under this Agreement,
subject to Farmor's written permission,
which permission shall not be unreasonably withheld.
(G) Farmor
and Farmees shall enter into an "Area of Mutual
Interest" Agreement
for a radius of three
miles around the
subject leases on or
before the drilling of
the initial test
well.
(H) Farmor
will provide an
Abstract and Mineral
Title Lawyer's
Opinion within thirty
days hereafter on the
subject leases.
Farmee shall pay any costs thereof. If any title defects are
noted, Farmor agree to
take whatever action is appropriate to
correct the defects, promptly, to allow drilling to commence.
8.
ADDRESS FOR SERVICE
The address for each of the Parties for service of notices
shall be as
follows:
FARMOR:
FARMEE:
Sun River Energy, Inc.
Bedrock Energy, Inc.
10200 West 44th Ave., Suite 210E
6795 E. Tennessee Avenue
Wheat Ridge, CO 80033
Denver, CO 80224
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9.
EXECUTION
Execution of the signature page to this Agreement by your
company will
constitute an Agreement between our companies.
If this reflects your
understanding
of the terms and
conditions
agreed upon
respecting this
Ag
