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EXHIBIT 1
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WHITING PETROLEUM CORPORATION
(a Delaware
corporation)
7 1/4% SENIOR SUBORDINATED NOTES DUE 2013
PURCHASE AGREEMENT
Dated: April 14, 2005
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WHITING PETROLEUM CORPORATION
(a Delaware corporation)
$220,000,000
7 1/4% Senior Subordinated Notes Due 2013
PURCHASE AGREEMENT
April 14, 2005
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner &
Smith
Incorporated
Lehman Brothers Inc.
Banc of America Securities LLC
J.P. Morgan Securities Inc.
Wachovia Capital Markets, LLC
A.G. Edwards & Sons, Inc.
KeyBanc Capital Markets, a Division of
McDonald
Investments Inc.
Petrie Parkman & Co., Inc.
Raymond James & Associates, Inc.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill
Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center
New York, New York 10080
Ladies and Gentlemen:
Whiting
Petroleum Corporation, a Delaware corporation (the "Company"),
Whiting Oil and Gas Corporation, a Delaware
corporation and wholly-owned
subsidiary of the Company ("Whiting Oil and
Gas"), Whiting Programs, Inc., a
Delaware corporation and wholly-owned
subsidiary of the Company ("Whiting
Programs"), and Equity Oil Company, a
Colorado corporation and wholly-owned
subsidiary of the Company ("Equity Oil"
and, collectively with Whiting Oil and
Gas and Whiting Programs, the
"Guarantors"), confirm their agreement with
Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and each of the other
underwriters named in Schedule A hereto
(collectively, the "Underwriters", which
term shall also include any underwriter
substituted as hereinafter provided in
Section 10 hereof), for whom Merrill
Lynch, Lehman Brothers Inc., Banc of
America Securities LLC, J.P. Morgan
Securities Inc., Wachovia Capital Markets,
LLC, A.G. Edwards & Sons, Inc.,
KeyBanc Capital Markets, a Division of
McDonald Investments Inc., Petrie Parkman
& Co., Inc. and Raymond James &
Associates, Inc. are acting as representatives
(in such capacity, the
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"Representatives"), with respect to the
issue and sale by the Company and the
purchase by the Underwriters, acting
severally and not jointly, of the
respective principal amounts set forth in
said Schedule A of $220,000,000
aggregate principal amount of the Company's
7 1/4% Senior Subordinated Notes due
2013 (the "Securities"). The Securities are
to be issued pursuant to an
indenture to be dated as of April 19, 2005,
and supplemented by the First
Supplemental Indenture to be dated as of
April 19, 2005 (collectively, the
"Indenture"), among the Company, the
Guarantors and J.P. Morgan Trust Company,
National Association, as trustee (the
"Trustee"). Securities issued in
book-entry form will be issued to Cede
& Co. as nominee of The Depository Trust
Company ("DTC") pursuant to a blanket
letter agreement, dated March 30, 2004 (as
defined in Section 2(b)) (the "DTC
Agreement"), between the Company and DTC. The
Securities will be unconditionally
guaranteed (the "Guaranties" and each a
"Guaranty") on a senior subordinated basis
by the Guarantors.
The
Company understands that the Underwriters propose to make a
public
offering of the Securities as soon as the
Representatives deem advisable after
this Agreement has been executed and
delivered.
The
Company has filed with the Securities and Exchange Commission
(the
"Commission") a registration statement on
Form S-3 (Registration No.
333-121615), including the related
prospectus, for the registration of debt
securities and other securities of the
Company (including the Securities) under
the Securities Act of 1933, as amended (the
"1933 Act"), and the offering
thereof from time to time in accordance
with Rule 415 of the rules and
regulations of the Commission under the
1933 Act (the "1933 Act Regulations").
Such registration statement, including any
Rule 462(b) Registration Statement
(as defined below), has been declared
effective by the Commission and the
Indenture has been duly qualified under the
Trust Indenture Act of 1939, as
amended (the "1939 Act"). A prospectus
supplement reflecting the terms of the
Securities, the terms of the offering
thereof and the other matters set forth
therein has been prepared and will be filed
pursuant to Rule 424 of the 1933 Act
Regulations. Such prospectus supplement, in
the form first filed after the date
hereof pursuant to Rule 424, is herein
referred to as the "Prospectus
Supplement." Such registration statement on
Form S-3 (Registration No.
333-121615), as amended at the date hereof,
including the exhibits thereto, is
herein called the "Registration Statement,"
and the basic prospectus included
therein relating to all offerings of
securities under the Registration
Statement, as supplemented by the
Prospectus Supplement, is herein called the
"Prospectus;" provided, however, that, if
such basic prospectus is amended or
supplemented on or after the date hereof
but prior to the date on which the
Prospectus Supplement is first filed
pursuant to Rule 424, the term "Prospectus"
shall refer to the basic prospectus as so
amended or supplemented and as
supplemented by the Prospectus Supplement;
and provided, further, that all
references to the "Registration Statement"
and the "Prospectus" shall be deemed
to include all documents incorporated
therein by reference pursuant to the
Securities Exchange Act of 1934, as amended
(the "1934 Act"); and provided,
further, that if the Company files a
registration statement with the Commission
pursuant to Rule 462(b) of the 1933 Act
Regulations (the "Rule 462(b)
Registration Statement"), then, after such
filing, all references to the
"Registration Statement" shall also be
deemed to include the Rule 462(b)
Registration Statement. For purposes of
this Agreement, all references to the
Registration Statement, Prospectus,
Prospectus Supplement or preliminary
prospectus or to any amendment or
supplement to any of the foregoing shall be
deemed to include any copy filed with
the
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Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval
system ("EDGAR").
All
references in this Agreement to financial statements and schedules
and
other information which is "described,"
"contained," "included" or "stated" in
the Registration Statement, any preliminary
prospectus or the Prospectus (or
other references of like import) shall be
deemed to mean and include all such
financial statements and schedules and
other information which is incorporated
by reference in the Registration Statement,
any preliminary prospectus or the
Prospectus, as the case may be; and all
references in this Agreement to
amendments or supplements to the
Registration Statement, any preliminary
prospectus or the Prospectus shall be
deemed to mean and include the filing of
any document under the 1934 Act which is
incorporated by reference in the
Registration Statement, such preliminary
prospectus or the Prospectus, as the
case may be.
SECTION 1.
Representations and
Warranties.
(a)
Representations and Warranties by the Company and the Guarantors.
The
Company and the Guarantors jointly and
severally represent and warrant to each
Underwriter as of the date hereof and as of
the Closing Time referred to in
Section 2(b) hereof, and agree with each
Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company meets
the
requirements for use of Form S-3 under the 1933 Act. Each of
the
Registration Statement, any Rule 462(b) Registration Statement and
any
post-effective amendment thereto has become effective under the
1933 Act
and no
stop order suspending the effectiveness of the Registration
Statement,
any Rule 462(b) Registration Statement or any post-effective
amendment
thereto has been issued under the 1933 Act and no proceedings
for that
purpose have been instituted or are pending or, to the
knowledge
of the
Company, are contemplated by the Commission, and any request on
the
part of
the Commission for additional information has been complied
with.
At the respective times the Registration Statement, any Rule
462(b)
Registration Statement and any post-effective amendments thereto
became
effective
and at the Closing Time, the Registration Statement, the Rule
462(b)
Registration Statement and any amendments and supplements
thereto
complied
and will comply in all material respects with the requirements
of
the 1933
Act and the 1933 Act Regulations and the 1939 Act and the rules
and
regulations of the Commission under the 1939 Act (the "1939 Act
Regulations"), and did not and will not contain 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.
Neither
the Prospectus nor any amendments or supplements thereto, at
the
time the
Prospectus or any such amendment or supplement is issued and at
the
Closing Time, will include an untrue statement of a material fact
or
will omit
to state a material fact necessary in order to make the
statements
therein, in the light of the circumstances under which they
were made,
not misleading. The representations and warranties in this
paragraph
shall not apply to statements in or omissions from the
Registration Statement or Prospectus or any amendment or
supplement
thereto
made in reliance upon and in conformity with written
information
furnished
to the Company by
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any
Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus
(or
any
amendment or supplement thereto).
Each
preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any
amendment
thereto
complied when so filed in all material respects with the 1933
Act
Regulations and each preliminary prospectus and the Prospectus to
be
delivered
to the Underwriters for use in connection with this offering
will be
identical to the electronically transmitted copies thereof
filed
with the
Commission pursuant to EDGAR, except to the extent permitted by
Regulation
S-T.
(ii) Incorporated Documents. The documents incorporated or deemed
to
be
incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with
the
Commission, complied and will comply in all material respects with
the
requirements of the 1934 Act and the rules and regulations of
the
Commission
thereunder (the "1934 Act Regulations"), and, when read
together
with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus
is
issued and
at the Closing Time, did not and will not contain 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.
(iii) Independent Accountants. The accountants who certified
the
financial
statements and supporting schedules included in the
Registration
Statement
are independent public accountants with respect to the Company
as
required by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included in
the
Registration Statement and the Prospectus, together with the
related
schedules
and notes, present fairly in all material respects, on the
basis
set forth
in the Prospectus, the financial position of the Company and
its
consolidated subsidiaries at the dates indicated and the statement
of
income,
stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said
financial
statements
have been prepared in conformity with generally accepted
accounting
principles in the United States ("GAAP") applied on a
consistent
basis throughout the periods involved. The supporting
schedules,
if any, included in the Registration Statement present fairly
in all
material respects, on the basis set forth in the Prospectus, in
accordance
with GAAP the information required to be stated therein. The
summary
financial information included in the Prospectus presents
fairly
in all
material respects the information shown therein and has been
compiled
on a basis consistent with that of the audited financial
statements
included in the Registration Statement.
(v) No Material Adverse Change in Business. Since the
respective
dates as
of which information is given in the Registration Statement and
the
Prospectus, except as otherwise stated therein, (A) there has been
no
material
adverse change in the condition, financial or otherwise, or in
the
earnings, business affairs or business prospects of the Company
and
its
subsidiaries considered as one enterprise, whether or not arising
in
the
ordinary course of business (a "Material Adverse Effect"), (B)
there
have been
no transactions entered into by the Company or any of its
subsidiaries, other than those in
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the
ordinary course of business, which are material with respect to
the
Company
and its subsidiaries considered as one enterprise, and (C)
except
as
described in the Prospectus, there has been no dividend or
distribution
of any
kind declared, paid or made by the Company on any class of its
capital
stock.
(vi) Good Standing of the Company. The Company has been duly
organized
and is validly existing as a corporation in good standing under
the laws
of the State of Delaware and has corporate power and authority
to
own, lease
and operate its properties and to conduct its business as
described in the Prospectus and to
enter into and perform its obligations
under this
Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
other
jurisdiction in which such qualification is required, whether by
reason of
the
ownership or leasing of property or the conduct of business,
except
where the
failure so to qualify or to be in good standing would not
result
in a
Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each of the Guarantors has
been
duly
organized and is validly existing as a corporation in good
standing
under the
laws of the jurisdiction of its incorporation, has corporate
power and
authority to own, lease and operate its properties and to
conduct
its business as described in the Prospectus and is duly
qualified
as a
foreign corporation to transact business and is in good standing
in
each
jurisdiction in which such qualification is required, whether
by
reason of
the ownership or leasing of property or the conduct of
business,
except
where the failure so to qualify or to be in good standing would
not
result in
a Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital
stock of
each such
Guarantor has been duly authorized and validly issued, is fully
paid and
non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear
of any security interest, mortgage, pledge,
lien,
encumbrance, claim or equity; none of the outstanding shares of
capital
stock of any Subsidiary was issued in violation of the
preemptive
or similar
rights of any securityholder of such Guarantor. The other
subsidiaries of the Company other than the Guarantors, considered
in the
aggregate
as a single subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The authorized, issued and outstanding
capital
stock of the Company is as set forth in the Prospectus in the
column
entitled "Actual" under the caption "Capitalization" (except
for
subsequent
issuances, if any, pursuant to reservations, agreements or
employee
benefit plans referred to in the Prospectus). The shares of
issued and
outstanding capital stock of the Company have been duly
authorized
and validly issued and are fully paid and non-assessable; none
of the
outstanding shares of capital stock of the Company was issued
in
violation
of the preemptive or other similar rights of any securityholder
of the
Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company and each
Guarantor.
(x) Authorization of the Indenture. The Indenture has been duly
authorized
by the Company and each Guarantor and duly qualified under the
1939 Act
and, when
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duly
executed and delivered by the Company and each Guarantor and
the
Trustee,
will constitute a valid and binding agreement of the Company
and
each
Guarantor, enforceable against the Company and each Guarantor
in
accordance
with its terms, except as the enforcement thereof may be
limited by
bankruptcy, insolvency (including, without limitation, all laws
relating
to fraudulent transfers), reorganization, moratorium or similar
laws
affecting enforcement of creditors' rights generally and except
as
enforcement thereof is subject to general principles of equity
(regardless
of whether
enforcement is considered in a proceeding in equity or at law).
(xi) Authorization of the Securities. The Securities have been
duly
authorized
and, at the Closing Time, will have been duly executed by the
Company
and, when authenticated, issued and delivered in the manner
provided for in the Indenture and
delivered against payment of the
purchase
price therefor as provided in this Agreement, will constitute
valid and
binding obligations of the Company, enforceable against the
Company in
accordance with their terms, except as the enforcement thereof
may be
limited by bankruptcy, insolvency (including, without
limitation,
all laws
relating to fraudulent transfers), reorganization, moratorium
or
similar
laws affecting enforcement of creditors' rights generally and
except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity
or at
law), and will be in the form contemplated by, and entitled to
the
benefits
of, the Indenture.
(xii) Description of the Securities and the Indenture. The
Securities
and the Indenture will conform in all material respects to the
respective
statements relating thereto contained in the Prospectus and
will be in
substantially the respective forms filed or incorporated by
reference,
as the case may be, as exhibits to the Registration Statement.
(xiii) Authorization of the Guaranties. The Guaranty of the
Securities
by each Guarantor thereof has been duly authorized by such
Guarantor,
and at Closing Time, will conform in all material respects to
the
description thereof contained in the Prospectus; when the
Securities
have been
issued, executed and authenticated in accordance with the
Indenture
and delivered to and paid for by the Underwriters in accordance
with the
terms of this Agreement, the Guaranty of each Guarantor will
constitute
valid and legally binding obligations of such Guarantor
enforceable against such Guarantor in accordance with its terms,
except as
the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws
affecting
enforcement of creditors' rights generally and except as
enforcement
thereof is
subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xiv) Absence of Defaults and Conflicts. None of the Company,
the
Guarantors
or any of the Guarantors' subsidiaries is in violation of its
charter or
by-laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract,
indenture,
mortgage, deed of trust, loan or credit agreement, note, lease
or other
agreement or instrument to which the Company, the Guarantors or
any of the
Guarantors' subsidiaries is a party or by which any of them may
be bound,
or
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to which
any of the property or assets of the Company, the Guarantors or
any of the
Guarantors' subsidiaries is subject (collectively, "Agreements
and
Instruments"), except for such violations or defaults that would
not
result in
a Material Adverse Effect; and, except with respect to the
retirement, redemption or payment by the Company or any affiliate
of the
Company of
any part of the principal of the Securities at any time prior
to the
termination of all commitments and the payment and performance
in
full of
all obligations under Whiting Oil and Gas' credit agreement,
the
execution,
delivery and performance of this Agreement, the Indenture and
the
Securities and any other agreement or instrument entered into
or
issued or
to be entered into or issued by the Company in connection with
the
transactions contemplated hereby or thereby or in the Prospectus
and
the
consummation of the transactions contemplated herein and in the
Prospectus
(including the issuance and sale of the Securities and the use
of the
proceeds from the sale of the Securities as described in the
Prospectus
under the caption "Use of Proceeds") and compliance by each of
the
Company and the Guarantors with its obligations hereunder and
under
the
Indenture and the Securities have been duly authorized by all
necessary
corporate action and do not and will not, whether with or
without
the giving of notice or passage of time or both, conflict with
or
constitute
a breach of, or default or Repayment Event (as defined below)
under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, the
Guarantors or
any
subsidiary of the Guarantors pursuant to, the Agreements and
Instruments (except for such conflicts, breaches, defaults or
Repayment
Events or
liens, charges or encumbrances that would not result in a
Material
Adverse Effect), nor will such action result in any violation
of
the
provisions of the charter or by-laws of the Company, the Guarantors
or
any subsidiary
of the Guarantors or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government
instrumentality or court, domestic or foreign, having jurisdiction
over
the
Company, the Guarantors or any subsidiary of the Guarantors or any
of
their
assets, properties or operations (except for such violations
that
would not
result in a Material Adverse Effect). As used herein, a
"Repayment
Event" means any event or condition which gives the holder of
any note,
debenture or other evidence of indebtedness (or any person
acting on
such holder's behalf) the right to require the repurchase,
redemption
or repayment of all or a portion of such indebtedness by the
Company,
the Guarantors or any subsidiary of the Guarantors.
(xv) Absence of Labor Dispute. No labor dispute with the
employees
of the
Company or any subsidiary of the Company exists or, to the
knowledge
of the Company or the Guarantors, is imminent, and the Company
and the
Guarantors are not aware of any existing or imminent labor
disturbance by the employees of any of their or any subsidiary's
principal
suppliers,
manufacturers, customers or contractors, which, in either case,
would
reasonably be expected to result in a Material Adverse Effect.
(xvi) Absence of Proceedings. There is no action, suit,
proceeding,
inquiry or
investigation before or brought by any court or governmental
agency or
body, domestic or foreign, now pending, or, to the knowledge of
the
Company or the Guarantors, threatened, against or affecting the
Company or
any subsidiary of the Company, which is required to be
disclosed
in the Registration Statement (other than as disclosed
therein),
or which
might reasonably be expected to result in a Material Adverse
Effect, or
which
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might
reasonably be expected to materially and adversely affect the
properties
or assets thereof or the consummation of the transactions
contemplated by this Agreement or the performance by the Company or
the
Guarantors
of their respective obligations hereunder. The aggregate of all
pending legal or
governmental proceedings to which the Company or any
subsidiary
of the Company is a party or of which any of their respective
property
or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental
to the
business, could not reasonably be expected to result in a
Material
Adverse
Effect.
(xvii) Accuracy of Exhibits. There are no contracts or
documents
which are
required to be described in the Registration Statement, the
Prospectus
or the documents incorporated by reference therein or to be
filed as
exhibits thereto which have not been so described and filed as
required.
(xviii) Possession of Intellectual Property. The Company and
its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate
patents,
patent rights, licenses, inventions, copyrights, know how
(including
trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or
procedures),
trademarks, service marks, trade names or other intellectual
property
(collectively, "Intellectual Property") necessary to carry on the
business
now
operated by them, and neither the Company nor any of its
subsidiaries
has
received any written notice or is otherwise aware of any
infringement
of or
conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would
render
any
Intellectual Property invalid or inadequate to protect the interest
of
the
Company or any of its subsidiaries therein, and which infringement
or
conflict
(if the subject of any unfavorable decision, ruling or finding)
or
invalidity or inadequacy, singly or in the aggregate, would result
in a
Material
Adverse Effect.
(xix) Absence of Manipulation. Neither the Company nor any
affiliate
of the
Company has taken, nor will the Company or any affiliate take,
directly
or indirectly, any action which is designed to or which has
constituted or which would be expected to cause or result in
stabilization
or
manipulation of the price of any security of the Company to
facilitate
the sale
or resale of the Securities.
(xx) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency
is
necessary or required for the performance by each of the Company
and
the
Guarantors of their respective obligations hereunder, in
connection
with the
offering, issuance or sale of the Securities hereunder or the
consummation of the transactions contemplated by this Agreement or
for the
due
execution, delivery or performance of the Indenture by the
Company,
except
such as have been already obtained or as may be required under
the
1933 Act
or the 1933 Act Regulations or state securities laws and except
for the
qualification of the Indenture under the 1939 Act.
(xxi) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents
and other
authorizations (collectively, "Governmental Licenses") issued by
the
appropriate federal, state, local or foreign
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regulatory
agencies or bodies necessary to conduct the business now
operated
by them, except where the failure so to possess would not,
singly
or in the
aggregate, result in a Material Adverse Effect; the Company and
its
subsidiaries are in compliance with the terms and conditions of
all
such
Governmental Licenses, except where the failure so to comply
would
not,
singly or in the aggregate, result in a Material Adverse Effect;
all
of the
Governmental Licenses are valid and in full force and effect,
except
where the invalidity of such Governmental Licenses or the
failure
of such
Governmental Licenses to be in full force and effect would not,
singly or
in the aggregate, result in a Material Adverse Effect; and
neither
the Company nor any of its subsidiaries have received any
written
notice of
proceedings relating to the revocation or modification of any
such
Governmental Licenses which, singly or in the aggregate, if the
subject of
an unfavorable decision, ruling or finding, would result in a
Material
Adverse Effect.
(xxii) Title to Property. The Company and its subsidiaries have
good
and
marketable title to all real property owned by the Company and
its
subsidiaries, including, without limitation, all oil and gas
producing
properties, and good title to all other properties owned by
them,
including,
without limitation, all assets and facilities used by the
Company
and its subsidiaries in the production and marketing of oil and
gas, in
each case, free and clear of all mortgages, pledges, liens,
security
interests, claims, restrictions or encumbrances of any kind
except
such as (a) are described in the Prospectus or (b) do not,
singly
or in the
aggregate, materially affect the value of such property and do
not
interfere with the use made and proposed to be made of such
property
by the
Company or any of its subsidiaries; and all of the leases and
subleases
material to the business of the Company and its subsidiaries,
considered
as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Prospectus,
including,
without
limitation, all oil and gas producing properties of the Company
and its subsidiaries and all
assets and facilities used by the Company and
its
subsidiaries in the production and marketing of oil and gas, are
in
full force
and effect, except where such would not have a Material Adverse
Effect,
and neither the Company nor any subsidiary of the Company has
any
written
notice of any material claim of any sort that has been asserted
by
anyone
adverse to the rights of the Company or any of its subsidiaries
under any
of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or such subsidiary to the
continued
possession
of the leased or subleased premises under any such lease or
sublease,
except where such would not have a Material Adverse Effect.
(xxiii) Environmental Laws. Except as described in the
Registration
Statement
and except as would not, singly or in the aggregate, result in
a
Material
Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or
foreign
statute,
law, rule, regulation, ordinance, code, policy or rule of
common
law or any
judicial or administrative interpretation thereof, including
any
judicial or administrative order, consent, decree or judgment,
relating
to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water,
groundwater,
land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or
threatened
release of
chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous
substances, petroleum or petroleum products,
asbestos-containing
materials
or mold (collectively, "Hazardous Materials") or
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to the
manufacture, processing, distribution, use, treatment, storage,
disposal,
transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have
all
permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their
requirements, (C)
there are
no pending or, to the knowledge of the Company or the
Guarantors, threatened administrative, regulatory or judicial
actions,
suits,
demands, demand letters, claims, liens, notices of noncompliance
or
violation,
investigation or proceedings relating to any Environmental Law
against
the Company or any of its subsidiaries and (D) there are no
events
or
circumstances that would reasonably be expected to form the basis
of an
order for
clean-up or remediation, or an action, suit or proceeding by
any
private
party or governmental body or agency, against or affecting the
Company or
any of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xxiv) Independent Petroleum Engineers. Cawley, Gillespie &
Associates, Inc., whose report as of December 31, 2004 was, as of
the date
of such
report, and is, as of the date hereof, an independent petroleum
engineer
with respect to the Company and its subsidiaries. R.A. Lenser
&
Associates, Inc., whose report as of December 31, 2004 was, as of
the date
of such
report, and is, as of the date hereof, an independent petroleum
engineer
with respect to the Company and its subsidiaries. Ryder Scott
Company,
L.P., whose report as of December 31, 2004, was, as of the date
of such
report, and is, as of the date hereof, an independent petroleum
engineer
with respect to the Company and its subsidiaries.
(xxv) Accuracy of Reserve Information. The information
underlying
the
estimates of reserves of the Company and its subsidiaries, which
was
supplied
by the Company to Cawley, Gillespie & Associates, Inc.,
R.A.
Lenser
& Associates, Inc. and Ryder Scott Company, L.P. for purposes
of
auditing
the reserve reports and estimates of the Company and preparing
the
respective letters (the "Reserve Report Letters" and each a
"Reserve
Report
Letter") of each of Cawley, Gillespie & Associates, Inc.,
R.A.
Lenser
& Associates, Inc. and Ryder Scott Company, L.P.,
including,
without
limitation, production, 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 such estimates were made and such information was
supplied
and was prepared in accordance with customary industry
practices;
other than
normal production of the reserves and intervening spot market
product
price fluctuations described in the Prospectus, neither the
Company
nor its subsidiaries are aware of any facts or circumstances
that
would
result in an adverse change in the reserves, or the present value
of
future net
cash flows therefrom, as described in the Prospectus and as
reflected
in each Reserve Report Letter, that would reasonably be
expected
to result
in a Material Adverse Effect; estimates of such reserves and
present
values as described in the Prospectus and reflected in each
Reserve
Report Letter comply in all material respects with the
applicable
requirements of Regulation S-X and Industry Guide 2 under the 1933
Act.
(xxvi) Oil and Gas Agreements. The participation agreements,
joint
development agreements, joint operating agreements, farm-out
agreements
and other
agreements described in the Prospectus relating to the
Company's
or its
subsidiaries'
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<PAGE>
rights
with respect to the ownership, lease or operation of oil and
gas
properties, the acquisition of interests in oil and gas properties
or the
exploration for, development of or production of oil and gas
reserves
thereon,
constitute valid and binding agreements of the Company and its
subsidiaries that are parties thereto and, to the best knowledge of
the
Company,
of the other parties thereto, enforceable in accordance with
their
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating
to
fraudulent transfers), reorganization, moratorium or similar
laws
affecting
enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless
of whether
enforcement is considered in a proceeding in equity or at law).
(xxvii) Insurance. The Company and each of its subsidiaries
maintain
insurance
covering their properties, operations, personnel and businesses
that, in
the Company's reasonable judgment, insures against such losses
and risks
as are adequate in accordance with customary industry practices
to protect
the Company and its subsidiaries and their businesses.
(xxviii) Internal Controls.
(a) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide
reasonable
assurance that (i)
transactions are executed in accordance with
management's general or specific authorizations, (ii)
transactions
are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset
accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization
and
(iv) the recorded accountability for assets is compared with
the
existing assets at reasonable intervals and appropriate action
is
taken with respect to any differences.
(b) The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15
under the Exchange Act), and such disclosure controls and
procedures
are effective in all material respects to perform the functions
for
which they were established.
(c) Since the date of the most recent balance sheet of the
Company and its consolidated subsidiaries reviewed or audited
by
Deloitte & Touche LLP and the audit committee of the board
of
directors of the Company, (i) the Company has not been advised
of
(A) any significant deficiencies in the design or operation of
internal control over financial reporting that are reasonably
likely
to adversely affect the ability of the Company to record,
process,
summarize and report financial data and (B) any fraud, whether
or
not material, that involves management or other employees who have
a
significant role in the Company's internal control over
financial
reporting, and (ii) since that date, there has been no change in
the
Company's internal control over financial reporting that has
materially affected, or is reasonably likely to materially
affect,
the Company's internal control over financial reporting.
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<PAGE>
(b)
Officer's Certificates. Any certificate signed by any officer of
the
Company or any of its subsidiaries
delivered to the Representatives or to
counsel for the Underwriters shall be
deemed a representation and warranty by
the Company to each Underwriter as to the
matters covered thereby.
SECTION 2.
Sale and Delivery to
Underwriters; Closing.
(a)
Securities. On the basis of the representations and warranties
herein
contained and subject to the terms and
conditions herein set forth, the Company
agrees to sell to each Underwriter,
severally and not jointly, and each
Underwriter, severally and not jointly,
agrees to purchase from the Company, at
the price set forth in Schedule B, the
aggregate principal amount of Securities
set forth in Schedule A opposite the name
of such Underwriter, plus any
additional principal amount of Securities
which such Underwriter may become
obligated to purchase pursuant to the
provisions of Section 10 hereof.
(b)
Payment. Payment of the purchase price for, and delivery of a
global
certificate for, the Securities shall be
made at the offices of the Company,
1700 Broadway, Suite 2300, Denver, Colorado
80290-2300, or at such other place
as shall be agreed upon by the
Representatives and the Company, at 9:00 A.M.
(Eastern time) on the third (fourth, if the
pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business
day after the date hereof (unless
postponed in accordance with the provisions
of Section 10), or such other time
not later than ten business days after such
date as shall be agreed upon by the
Representatives and the Company (such time
and date of payment and delivery
being herein called "Closing Time").
Payment shall be
made to the Company by wire transfer of immediately
available funds to a bank account
designated by the Company, against delivery of
the Securities to Merrill Lynch for the
respective accounts of the Underwriters
through the facilities of DTC. It is
understood that each Underwriter has
authorized the Representatives, for its
account, to accept delivery of, receipt
for, and make payment of the purchase price
for, the Securities which it has
agreed to purchase. Merrill Lynch,
individually and not as representative of the
Underwriters, may (but shall not be
obligated to) make payment of the purchase
price for the Securities to be purchased by
any Underwriter whose funds have not
been received by the Closing Time, but such
payment shall not relieve such
Underwriter from its obligations
hereunder.
(c)
Denominations; Registration. The Securities shall be in global
form,
registered in the name of Cede & Co.,
as nominee of DTC.
SECTION 3.
Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a)
Compliance with Securities Regulations and Commission Requests.
The
Company, subject to Section 3(b), will
notify the Representatives immediately,
and confirm the notice in writing, (i) when
any post-effective amendment to the
Registration Statement shall become
effective, or any supplement to the
Prospectus or any amended Prospectus shall
have been filed, (ii) of the receipt
of any comments from the Commission with
respect to the Registration Statement,
(iii) of any request by the Commission for
any amendment to the Registration
Statement or any amendment or supplement to
the Prospectus or any document
12
<PAGE>
incorporated by reference therein or for
additional information, and (iv) of the
issuance by the Commission of any stop
order suspending the effectiveness of the
Registration Statement or of any order
preventing or suspending the use of any
preliminary prospectus, or of the
suspension of the qualification of the
Securities for offering or sale in any
jurisdiction, or of the initiation or
threatening of any proceedings for any of
such purposes. The Company will
promptly effect the filings necessary
pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain
promptly whether the form of prospectus
transmitted for filing under Rule 424(b)
was received for filing by the
Commission and, in the event that it was
not, it will promptly file such
prospectus. The Company will make every
reasonable effort to prevent the
issuance of any stop order and, if any stop
order is issued, to obtain the
lifting thereof at the earliest possible
moment.
(b) Filing
of Amendments. The Company will give the Representatives notice
of its intention to file or prepare any
amendment to the Registration Statement
(includin
