EXHIBIT 10.1
OPTION AGREEMENT
(OPTION TO ACQUIRE OIL AND GAS
LEASES IN CURRY COUNTY, NEW MEXICO)
FORMCAP CORPORATION, (herein called
"FORMCAP") or its nominee, a
Nevada
Registered Corporation with its business
offices located at 50 West Liberty
Street, Suite 880, Reno, Nevada, USA,
89501; Graham Douglas, President ;
Email:gd@maxxaminvest.com
(PARTY
of the First Part)
AND
MORGAN CREEK ENERGY CORP., (herein
called "MORGAN"), a Nevada Registered
Corporation with its business offices located at 5050 Quorum
Drive, Suite 700,
Dallas, Texas, USA 75254; Ph (214)
722-6490; Fax (214) 722-6499; c/o Peter
Wilson Ph: (604) 649-0945; Fax: (778) 370-0146; Email:
sg@telus.net
(PARTY of the Second Part)
WHEREAS:
A. Formcap or its nominee and/or
its affiliates desires to acquire from
Morgan, a FIFTY
(50%) PERCENT WORKING Interest
(40.75% Net Revenue
Interest) in approximately
13,000 Net Acres of oil and gas leases (herein
called the "LEASES") in the lands located
in Curry County, in the State of
New Mexico, (hereinafter referred to as
the "ACQUIRED PROPERTIES"), a legal
description is attached as Appendix "A" to
this agreement..
B. This Option Agreement (the
"AGREEMENT") is binding on both Parties as
provided herein.
C. Formcap has utilized
information provided by Morgan for
purposes of
entering into this Agreement.
D. This Agreement is based on the
representation by Morgan that it owns all
rights to all depths
pursuant to the Leases comprising
a total of
approximately 13,000 Net Acres
(sometimes also referred to as net mineral
acres herein called "NET ACRES")
comprising the Acquired Properties, a copy
of such Lease(s) to be furnished to
FormCap.
E The Acquired Properties encompass
approximately 13,000 Net Acres with an
81.5% Net Revenue Interest (herein called
"NRI")
The Parties hereby acknowledge,
promise and agree for good and
valuable
consideration to the following:
1. INTERPRETATION.
THE RECITALS - are formally relied
upon by the Parties as an integral part
of the body of this Agreement.
THE HEADINGS - The division of this
Agreement into Articles, Sections and
Subsections and the insertion of
headings is for reference only and does
not affect the construction or
interpretation of this Agreement. References
herein to Articles and
Sections are to Articles and Sections of
this
Agreement.
<PAGE>
INTENDED MEANING - The terms "this
Agreement", "hereof", "hereunder" and
similar expressions
refer to this Agreement and not to any
particular
Article, Section or other portion
hereof, unless expressly stated to apply
to a particular Article, Section or
other portion hereof and this includes
any agreement, schedule or
instrument which is supplemental or ancillary
hereto, unless
something in the subject matter
or the context is
inconsistent therewith.
GENDER, NUMBER ENTITY - In
this Agreement, words importing the singular
number include the plural and vice
versa; words importing the masculine,
feminine or neuter genders
includes the masculine, feminine and neuter
genders; and
words importing persons
will include individuals,
partnerships,
associations, trusts, unincorporated
organizations and
corporations; where such importing
is reasonably consistent with language,
meaning, character and context herein.
CURRENCY - In this Agreement
all references to currency are in
United
States Dollars (USD$) unless expressly
stated to the contrary herein.
2. PAYMENT OF DEPOSIT AND PURCHASE PRICE.
Formcap agrees to pay Morgan a ONE
HUNDRED THOUSAND
(USD$100,000) DOLLARS Initial Payment within five
(5)
business days from the
completion of its Due Diligence. The balance
of
funds for the initial well will
be advanced by FormCap to Morgan within
five (5) business days from the receipt of
a mutually agreed upon "Approval
for Expenditure" ("AFE"). With the
clear understanding that the balance of
funds for the initial well to be received
by Morgan no later than September
8, 2009. These Initial Payment(s)
will go towards the total consideration
paid by FormCap to Morgan to acquire a
50% Working Interest (40.75% Net
Revenue Interest) in the Acquired
Properties, which will include the cost
of drilling and
completing two wells at a total
estimated cost of
approximately USD$650,000 per well
(USD$1.3 million in total).
It is clearly understood
that the drilling and completion
costs are
estimates and any additional
costs, or reduction in costs, to drill and
complete the first two wells will be
the sole responsibility of Formcap.
Formcap will be
responsible for providing 100% of the
drilling and
completion costs of the first two wells to
acquire the 50% Working Interest
in the Acquired Properties. It
is agreed that the location of the initial
two wells will be mutually determined by
the parties.
Formcap will provide the
Dry Hole and Completion costs, estimated
at
USD$650,000 to Morgan in advance of
drilling the first well. Upon drilling
and completion of the
first well Morgan will assign to
Formcap a 25%
Working Interest (20.375% Net Revenue
Interest) in the Acquired Properties.
Upon receipt by Morgan
from FormCap of the funding to be
received in
advance of drilling the second well,
estimated at USD$650,000 to drill and
complete and upon
completion of the second well, Morgan will assign
an
additional 25% Working Interest
(20.375% Net Revenue Interest) for a total
of 50% Working Interest
(40.75% Net Revenue Intertest)in the Acquired
Properties to Formcap. Costs
assoc
