-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IEt9rmnrQCpn2c4J7ngTsg78eAdSBbFw6ecAtUV0vVbBjG/D3qebY7z0JlzMbJDf nowVJGpFU+EH0XwDGVMTgg== 0000932384-97-000306.txt : 19971212 0000932384-97-000306.hdr.sgml : 19971212 ACCESSION NUMBER: 0000932384-97-000306 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971126 ITEM INFORMATION: FILED AS OF DATE: 19971211 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BASIN EXPLORATION INC CENTRAL INDEX KEY: 0000827795 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 841143307 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-20125 FILM NUMBER: 97736545 BUSINESS ADDRESS: STREET 1: 370 SEVENTEENTH ST STE 1800 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3036858000 MAIL ADDRESS: STREET 2: 370 SEVENTEENTH STREET SUITE 1800 CITY: DENVER STATE: CO ZIP: 80202 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): November 26, 1997 BASIN EXPLORATION, INC. (Exact Name of Registrant as Specified in Charter) Delaware 0-20125 84-1143307 (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) 370 Seventeenth Street, Suite 3400, Denver, Colorado 80202 (Address of principal executive offices, zip code) Registrant's telephone number, including area code: (303) 685-8000 Not Applicable Former Name or Former Address if Changed Since Last Report -1- ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. Basin Exploration, Inc. completed its acquisition of certain assets of Midcon Offshore, Inc. on November 26, 1997 from Midcon's chapter 11 trustee, for a purchase price of approximately $31.3 million. Basin was high bidder at a bankruptcy court proceeding conducted to sell the assets. The principal assets acquired were interests in four productive offshore oil and gas properties, including a 33% working interest in High Island Block A-568, a 52% working interest in Vermilion Blocks 329/338, a 100% working interest in East Cameron Block 220, and a 100% working interest (reduced to 25% below certain depths) in West Cameron Blocks 45/56. Basin will operate all of these properties except High Island Block A-568, which is operated by Samedan Oil Corporation. The company estimates that, as of the September 1, 1997 effective date, net proved oil and gas reserves attributable to the acquired interests total approximately 30 billion cubic feet of natural gas equivalent, over 85% of which is gas. The company has also identified additional reserves potential related to future planned drilling and recompletion activities, including six currently identified prospective well locations. Approximately $5 million of the purchase price has been attributed to these prospective locations and other non-proved reserves potential. Closing proceeds for acquisition of the Midcon assets were held in escrow pending Minerals Management Service approval of assignments of the property interests to Basin and removal of liens and encumbrances. These conditions were satisfied and proceeds were released from escrow and assignments delivered to the company. Among the liens and encumbrances that were released was a volumetric production payment that previously burdened Midcon's interests in the acquired properties. As a result of the company's previously announced, recently-completed sale of 2.875 million shares of common stock, through which it raised net proceeds of approximately $50 million, the company was able to fund the acquisition of the Midcon assets in part with approximately $23 million of cash equivalents on hand. The remainder of the purchase price, approximately $8 million, was funded through a draw-down on the company's otherwise fully-available $45 million line of credit with Nations Bank, Colorado National Bank and Union Bank. -2- The statements in this report regarding projected production performance, financial results, and expected drilling and development activities are "forward-looking statements" within the meaning of the federal security laws. Such statements are inherently uncertain, and actual results and activities may differ materially from those estimated or projected. Certain factors that can affect the company's ability to achieve projected results are described in the company's prospectus dated October 2, 1997 and prospectus supplement dated October 24, 1997 filed with the Securities and Exchange Commission and the company's periodic reports filed pursuant to the Securities Exchange Act of 1934. Such factors include, among others, uncertainties inherent in cash flow and reserve estimations especially for estimates of non-proved and undeveloped reserves, uncertain reliability of short-term test data, operational risks inherent in the offshore environment with corresponding exposure to delays and significant cost overruns, the highly competitive nature of activity offshore with corresponding shortages of equipment and personnel, the risks of exploratory drilling, and the uncertain cost and pricing environment in the oil and gas industry. The company has no obligation to update the statements contained in this report or to take action that is described herein or otherwise presently planned. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED. The financial statements are not included in this initial report but will be filed no later than February 9, 1998. (b) PRO FORMA FINANCIAL INFORMATION. Pro forma financial information is not included in this initial report but will be filed no later than February 9, 1998. (c) EXHIBITS. 10.1 Order of the United States Bankruptcy Court for the Southern District of Texas Corpus Christi Division, dated November 18, 1997, with exhibits, including the Agreement of Purchase and Sale. 99.1 Press Release, dated December 8, 1997. -3- SIGNATURES 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 hereunto duly authorized. BASIN EXPLORATION, INC. (Registrant) Date: December 10, 1997 By: /S/ HOWARD L. BOIGON, ESQ. --------------------------- Howard L. Boigon Vice President, General Counsel and Secretary -4- EXHIBIT INDEX 10.1 Order of the United States Bankruptcy Court for the Southern District of Texas Corpus Christi Division, dated November 18, 1997, with exhibits, including the Agreement of Purchase and Sale. 99.1 Press Release, dated December 8, 1997. -5- EX-10.1 2 CONFORMED NUNC PRO TUNC ORDER IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS CORPUS CHRISTI DIVISION IN RE: SS. SS. MIDCON OFFSHORE, INC., SS. CASE NO. 96-25269-C-11 SS. (CHAPTER 11) DEBTOR. SS. CONFORMED NUNC PRO TUNC ORDER APPROVING: (I) SALE OF SUBSTANTIALLY ALL OF THE DEBTOR'S ASSETS FREE AND CLEAR OF ALL CLAIMS, LIENS, INTERESTS AND ENCUMBRANCES PURSUANT TO SECTIONS 105 AND 363 OF THE BANKRUPTCY CODE, SUBJECT TO THE TERMS OF A PURCHASE AND SALE AGREEMENT; (II) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS PURSUANT TO SECTION 365 OF THE BANKRUPTCY CODE AND RULE 6006 OF THE BANKRUPTCY RULES AND FIX CURE AMOUNTS THEREUNDER; AND (III) REJECTION CERTAIN EXECUTORY CONTRACTS PURSUANT TO SECTION 365 OF THE BANKRUPTCY CODE AND RULE 6006 OF THE BANKRUPTCY RULES AND ESTABLISH A BAR DATE FOR THE FILING OF CLAIMS FOR REJECTION DAMAGES ARISING FROM THE REJECTION OF SUCH EXECUTORY CONTRACTS A hearing having been held on November 7, 1997 to consider Sheila Macdonald's motion seeking entry of an order (i) authorizing Trustee to sell substantially all of Debtor's assets free and clear of liens, claims, interests and encumbrances to Saratoga Resources, Inc., subject to the terms of a purchase and sale agreement; (ii) approving the assumption and assignment of certain executory contracts and fixing the cure amounts -1- thereunder, and (iii) approving the rejection of certain executory contracts and establishing a bar date for filing claims for rejection damages arising thereunder (the "Sale Motion"); and upon consideration of the Sale Motion, any objections thereto and the evidence presented to the Court; and it appearing that good and sufficient notice has been given; and after due deliberation and sufficient cause appearing, the Court enters the following findings of fact and conclusions of law: A. FINDINGS OF FACT AND CONCLUSIONS OF LAW 1. This Court has jurisdiction to consider the Sale Motion pursuant to 28 U.S.C. ss.ss. 157 and 1334. The Sale Motion is a core proceeding pursuant to 28 U.S.C. ss. 157(b). Venue is proper before this Court pursuant to 28 U.S.C. ss.ss. 1408 and 1409. 2. Notice of the Sale Motion and the hearing thereon is sufficient and proper and complies with all applicable provisions and requirements of chapter 11 of title 11 of the United States Code (the "Bankruptcy Code"), Federal Rules of Bankruptcy Procedure, Local Rules of Bankruptcy Procedure and the order entered by the Court on October 28, 1997. 3. On December 16, 1996 (the "Petition Date"), Midcon Offshore, Inc. ("Debtor") filed its voluntary petition for relief under the Bankruptcy Code. 4. On June 17, 1997, Sheila Macdonald ("Trustee") was appointed to act as chapter 11 trustee for Debtor. 5. Shortly after her appointment, Trustee began marketing substantially all of Debtor's assets for sale. To this end, Trustee organized data rooms on substantially all of Debtor's offshore oil and gas properties and prepared a videotape sales presentation regarding -2- these properties.\1\ Trustee then scheduled appointments with potential purchasers to review the data. The data rooms opened on August 13, 1997 and closed on September 30, 1997. In order to obtain an appointment to review the data, potential purchasers were required to sign a confidentiality agreement. Trustee received and complied with approximately 75 requests for confidentiality agreements. Trustee received approximately 44 signed confidentiality agreements from potential purchasers and scheduled approximately 31 appointments to review the data. Due to a number of cancellations, approximately 26 potential purchasers actually reviewed the data. All of the potential purchasers were instructed to submit offers to Trustee on or before October 3, 1997. Trustee received eight (8) such offers to acquire substantially all of Debtor's offshore oil and gas properties (excluding the South Marsh Island 141/144 Field). 6. Thereafter, Trustee engaged in negotiations to sell substantially all of Debtor's assets to Saratoga Resources, Inc. ("Saratoga"). The Agreement of Purchase and Sale between Trustee and Saratoga, attached hereto as EXHIBIT A, and the Amendment to the Agreement of Purchase and Sale, attached hereto as EXHIBIT A, (collectively, the "Agreement") is the product of substantial and good faith negotiations that were conducted at arm's length and without collusion. Following the submission of higher and better offers, the Trustee has agreed to sell the Assets to Basin Exploration, Inc. ("Buyer"). Trustee and Debtor are good faith sellers and Buyer is a good faith purchaser within the meaning of section 363(m) of the - -------- 1. Due to complicated title issues with respect to the South Marsh Island 141/144 Field, Trustee and the statutory committee of unsecured creditors jointly negotiated a sale of this field separate and apart from the sale of Debtor's other oil and gas properties. This Court has previously entered an order approving Trustee's sale of the South Marsh Island 141/144 Field. -3- Bankruptcy Code and are entitled to protection as such under section 363(m) of the Bankruptcy Code. The $400,000 Buyer Expense Reimbursement set forth in the Amendment to the Agreement of Purchase and Sale is fair and reasonable. Wherever in the attached EXHIBIT A the name Saratoga Resources, Inc. appears, it shall be substituted with the name of Basin Exploration, Inc.; provided, however, that Basin Exploration, Inc. shall not be entitled to the Buyer's Expense Reimbursement provided in Section 1.8 of the Agreement. Further Basin Exploration, Inc. shall be deemed to be a signatory party to the Agreement as if their signatures were annexed thereto and Basin Exploration, Inc. shall be entitled to all rights, privileges and obligations arising thereunder. 7. Trustee has full corporate power and authority to execute the Agreement. 8. The Agreement provides, INTER ALIA, for Trustee to sell, transfer, assign, convey and deliver to Buyer all of Debtor's right, title and interest in: a. the following oil and gas leases and interests (collectively, "Leases"): (1) Oil and Gas Lease between the State of Louisiana, as Lessor and Stanolind Oil and Gas Company, as Lessee, dated effective July 17, 1947 (State Lease No. 1134) now United States of America lease bearing Serial No. OCS 0300 covering the North Half of Block 45, West Cameron Area as shown on OCS Official Leasing Map, Louisiana Map No. 1, containing 2,500 acres, (2) Oil and Gas Lease between the State of Louisiana, as Lessor and Stanolind Oil and Gas Company, as Lessee, dated effective July 17, 1947 (State Lease No. 1133) now United States of America lease bearing Serial No. OCS-0299 covering the South Half of Block 45, West Cameron Area as shown on OCS Official Leasing Map, Louisiana Map No. 1, containing 2,500 acres, -4- (3) Oil and Gas Lease between the State of Louisiana, as Lessor and Stanolind Oil and Gas Company, as Lessee, dated effective July 17, 1947 (State Lease No. 1137) now United States of America lease bearing Serial No. OCS-0301 covering the North Half of Block 56, West Cameron Area as shown on OCS Official Leasing Map, Louisiana Map No. 1, containing 2,500 acres, (4) Oil and Gas Lease granted by the United States of America, as Lessor, unto Husky Oil Company of Delaware, as Lessee, bearing Serial No. OCS-G 2876, effective January 1, 1975, covering all of Block 329, Vermilion Area, South Addition, OCS Official Leasing Map, Louisiana Map No. 3B, containing 5,000 acres, as amended by Lease Addendum dated July 1, 1990, (5) Oil and Gas Lease granted by the United States of America, as Lessor, unto CNG Producing Company, as Lessee, bearing Serial No. OCS-G 2877, effective December 1, 1974, covering all of Block 338, Vermilion Area, South Addition, OCS Official Leasing Map, Louisiana Map No. 3B, containing 5,000 acres, (6) Oil and Gas Lease granted by the United States of America, as Lessor, unto Marathon Oil Company, The Louisiana Land & Exploration Company, Inc., Amerada Hess Corporation and Texas Eastern Exploration Company, as Lessees, bearing Serial No. OCS-G 2716, effective July 1, 1974, covering all of Block A-568, High Island Area, South Addition, OCS Official Leasing Map, Texas Map No. 7B, containing 5,760 acres, (7) Oil and Gas Lease granted by the United States of America, as Lessor unto Texas Gas Exploration Corporation, as Lessee, bearing Serial No. OCS-G 3323, effective April 1, 1976, covering all of Block 220, East Cameron Area, OCS Official Leasing Map, Louisiana Map No. 2, containing 5,000 acres, and (8) Oil and Gas Lease granted by the United States of America, as Lessor, unto Phillips Petroleum Company and SONAT Exploration Company, as Lessee, bearing Serial -5- No. OCS-G 4534, covering all of Block 791, Mustang Island Area, as shown on OCS Leasing Map, Texas Map No. 3, containing 5,760 acres; b. all producing and non-producing oil and gas wells, salt water disposal wells, injection wells and other wells located on the Leases or on lands or waterbottoms pooled therewith (collectively, the "Wells"); c. all facilities, platforms, equipment, compressors, pipelines, separators, meters, dehydrators, tanks, fixtures, machinery, fixtures, flowlines, materials, improvements, and other real, personal, movable, immovable and mixed property located on, used in the operation of, or relating to the production, treatment, sale, or disposal of hydrocarbons, water, and associated substances produced from or attributable to the Leases (the "Personal Property"); d. all natural gas, casinghead gas, drip gasoline, natural gasoline, natural gas liquids, condensate, products, crude oil and other hydrocarbons, whether gaseous or liquid, (i) produced from or allocable to the Assets after the Effective Date, and (ii) either in storage above the pipeline connection on or after the Effective Date, or sold on or after the Effective Date (the "Hydrocarbons"); e. to the extent transferable, all permits, rights-of-way, easements, licenses, servitudes and related agreements (including, but not limited to, those described on EXHIBIT "E" to the Agreement) relating to the Leases, Wells or Personal Property or the ownership or operation thereof, or the production, treatment, sale, storage or disposal of Hydrocarbons, water or substances associated therewith (the "Applicable Agreements"); f. to the extent assumption by Trustee and assignment to the Buyer is approved by the Bankruptcy Court, such contracts, leases and other agreements (including, but not limited to, those described on EXHIBIT "F" to the Agreement) relating to the Leases, Wells or -6- Personal Property or the ownership or operation thereof, or the production, treatment, sale, storage or disposal of Hydrocarbons, water or substances associated therewith (the "Assumed Contracts"); and g. all records relating to the Leases, Wells, Hydrocarbons, Assumed Contracts and Personal Property, owned by Debtor and which Debtor is not prohibited from transferring to Buyer by law or existing contractual relationship including as follows: all (i) lease, land, and division order files (including any abstracts of title, title opinions, certificates of title, title curative documents, and division orders contained therein), (ii) the Applicable Agreements, (iii) all well, facility, and historic production files, (iv) all financial, accounting and tax records and materials relating to the Assets or which are necessary for Buyer's ownership, operation or administration of the Assets, (v) all geological files (including structure maps, logs and isopach maps) relating directly to the Leases (the "Geologic Data"); and (vi) to the extent transferable, all proprietary or licensed raw or processed geophysical data (including magnetic tapes, field notes, or seismic data) or interpretations therefrom; the above items (i), (ii), (iii), (iv), (v) and (vi) being accepted "AS IS, WHERE IS" without warranty or representation of any nature or kind as to the accuracy, completeness, materiality, validity or fitness for any purpose of such Geologic Data and Geophysical Data and with all faults and same is delivered for the purpose of Buyer's independent evaluation and any use or reliance thereon is at Buyer's sole risk (collectively, the "Records"). All such Leases, Wells, Personal Property, Hydrocarbons, Applicable Agreements, Assumed Contracts, and Records are hereinafter collectively referred to as the "Assets." 9. The Agreement further provides that the transfer of the Assets shall be made at the Closing, but shall be made effective as of September 1, 1997 ("Effective Date"). -7- 10. Trustee has agreed to sell the Assets to Buyer for $31,254,521 LESS $143,320.75 adjustment for title defect discussed below, but PLUS certain Additional Consideration including (collectively, "Total Consideration"): a. assumption and reimbursement of Debtor for all of Debtor's obligations with respect to all capital expenditures associated with the drilling and completion of High Island Block A-568, OCS-G-2716 Well No. A-17 and all capital expenditures associated with the installation of a pipeline associated with the production from platform(s) located on High Island Block A-568 operated by Samedan Oil Corporation insofar and only insofar as the interest of the Debtor's in the lease is concerned (including the reimbursement of any funds expended by Debtor in this regard); b. assumption of Debtor's plugging and abandonment obligations in accordance with the applicable statutes, rules and regulations with respect to: (1) the Leases; (2) Oil and Gas Lease bearing Serial No. OCS-G 1352, dated June 1, 1964, from the United States of America, as Lessor, in favor of Shell Oil Company, as Lessee, covering all of BLOCK 21/44, WEST CAMERON AREA, OCS Leasing Map, Louisiana Map No. 1 (expired) -- 100.00% WORKING INTEREST; and (3) Oil and Gas Lease bearing Serial No. OCS-G 6651, dated June 1, 1984, from the United States of America, as Lessor, in favor of Marathon Oil Company, Amerada Hess Corporation, Phillips Petroleum Company and TXP Operating Company, as Lessee, covering all of BLOCK 316, EAST CAMERON AREA, South Addition, OCS Leasing Map, Louisiana Map No. 2A, containing 5,000 acres (expired) -- 25.00% WORKING INTEREST; -8- c. reimbursement of Debtor for certain overhead charges not to exceed $80,000 per month for each month from and after the Effective Date to the Closing Date (as such term is defined in the Agreement); and d. assumption of obligations with respect to gas imbalances on High Island A- 568 and payment of cure obligations in the amount of $348,556 relating to the plugging and abandonment escrow obligations on Vermilion 329/338. 11. Pursuant to section 3.4 of the Agreement, on October 24, 1997, Saratoga submitted a letter to Trustee setting forth certain alleged title defects with respect to the Assets. Trustee has cured and/or resolved all such alleged title defects with the exception of certain State of Texas pipeline easements for which a purchase price adjustment in the amount of $143,320.75 will be made. 12. The Total Consideration represents the highest and best offer for the Assets. The Trustee has articulated good and sufficient business reasons justifying the sale of the Assets to Buyer pursuant to the terms of the Agreement and thus the sale of the Assets to Buyer pursuant to the terms of the Agreement is a reasonable business decision in light of the circumstances and is in the best interest of the estate and its creditors. Further, the sale of the Assets to Buyer pursuant to the terms of the Agreement presents the best opportunity to realize the maximum value of the estate's assets for distribution to creditors and is necessary to preserve the value of the estate's assets for the estate and its creditors. -9- 13. The Total Consideration to be paid and/or assumed by Buyer is fair and constitutes reasonably equivalent value and reasonable market value for the Assets under the Bankruptcy Code and the laws of the United States, any State, territory or possession or the District of Columbia. 14. Pursuant to section 2.6 of the Agreement, Trustee and Buyer have agreed to the following allocation of the purchase price: AREA ALLOCATION High Island A-568 Field $18,000,000.00 West Cameron 45 Field 2,500,000.00 East Cameron 220 Field 4,500,000.00 Mustang Island 791 Field 254,521.00 Vermillion 329/338 Field 6,000,000.00 TOTAL $31,254,251.00 15. Debtor's right, title and interest in the Leases is expressly subject to the following interests and encumbrances (collectively, the "Permitted Encumbrances"): a. recorded 3% overriding royalty interest held by LaSalle Street Natural Resources Corporation in all of the Leases; -10- b. recorded 6.25% overriding royalty interest held by Amoco Production Company in South One-Half (S/2) of Tract 2362, Block 45, West Cameron Area, North One-Half (N/2) of Tract 2362, Block 45, West Cameron Area, and North One-Half (N/2) of Tract 2369, Block 56, West Cameron Area; c. farmout to Basin Exploration, Inc. of the Northeast One-Quarter (NE1/4) of Tract 2369, Block 56, West Cameron Area from depths below the stratigraphic equivalent of 9,872 feet in the Stanolind West Cameron No. A-3 Well to a true vertical depth of 10,500' or such lesser depth equal to the stratigraphic equivalent of the base of the Planulina Sand as found in the interval from 10,051' to 10,350'; d. Title Defects not asserted by Saratoga in writing on or before October 24, 1997; e. continuing obligation to pay royalties on the Leases to the Department of Interior Minerals Management Service ("MMS") on and after the Effective Date; and f. obligations (including, but not limited to, payments, liens and duties) set forth in any executory contract assumed and assigned to Buyer, provided, however, unless otherwise provided herein, that such obligations shall not include obligations incurred on or before the Effective Date. 16. With the exception of the Permitted Encumbrances, Debtor's right, title and interest in the Assets is being sold free and clear of any and all liens, claims, interests and encumbrances, with such liens, claims, interests and encumbrances attaching to the proceeds of the sale of the Assets. 17. Pursuant to section 541 of the Bankruptcy Code, subject to the release and reassignment of Golden Gate Natural Resources 1995 Partnership's interest in the -11- Volumetric Production Payment as provided in Section B, Paragraph 23 below, Debtor owns and is authorized to convey the following net revenue and working interests in the Leases: Working Net Revenue AREA INTEREST % INTEREST % West Cameron Area, Block 45 (N/2) 100.00 78.2500 (OCS-G 0300). (Record Title) 100.00 78.2500 West Cameron Area, Block 45 (S/2) (OCS-0299) down to the stratigraphic equivalent of 9,872 feet MD in the Stanolind West Cameron No. A-3 Well. (Operating Rights) 25.00 19.5625 West Cameron Area, Block 45 (S/2) (OCS-0299) below the stratigraphic equivalent of 9,872 feet MD in the Stanolind West Cameron No. A-3 Well. (Record Title) 100.00 78.2500 West Cameron Area, Block 56 (N/2) (OCS- 0301) down to the stratigraphic equivalent of 9,872 feet MD in the Stanolind West Cameron No. A-3 Well. (Operating Rights) 25.00 19.5625 West Cameron Area, Block 56 (N/2) (OCS- 0301) below the stratigraphic equivalent of 9,872 feet MD in the Stanolind West Cameron No. A-3 Well. Vermilion Area, South Addition, Block 329 52.00 35.4432 (OCS-G 2876). -12- Vermilion Area, South Addition, Block 338 52.00 41.7733 (OCS-G 2877) High Island Area, South Addition, Block A- 33.33 26.7777 568 (OCS-G 2716) East Cameron Area, Block 220 (OCS-G 3323) 100.00 80.3333 Mustang Island Area, Block 791 100.00 80.3333 (OCS-G 4534) East Cameron Area, Block 316 25.00 --- (OCS-G-6651) (Expired)* West Cameron Area, Block 21 (OCS-G-1352) 100.00 --- (Expired)* (*Provided for the purpose of determining the extent of Buyer's plugging and abandonment liability pursuant to Section 2.5(b) and (c) of the Agreement.) 18. Certain parties (including, but not limited to, Robin L. Lyon, Virginia R. Lyon, Sanders W. Davis, Glen Goldfinger, Goren Brothers, Thomas H. Mahoney, IV, Petroshul, Inc. and the North Grandfield/West Cameron Group) have asserted an ownership interest in portions of the Leases. No assignments to such parties of an interest in the Leases was ever recorded and/or perfected with the MMS. Trustee can sell the Assets free and clear of such interests pursuant to section 363(f) of the Bankruptcy Code. Any and all claims of such parties shall attach to the proceeds from the sale of the Assets. 19. Certain parties (including, but not limited to, Long Horizons Fund L.P., Golden Gate Natural Resources 1995 Partnership, Bank of America Illinois, Bank of America -13- National Trust and Savings Association, Louis Dreyfus Natural Gas Corporation and those parties listed on EXHIBIT B attached hereto) have asserted liens on the Leases. Trustee can sell the Assets free and clear of such liens pursuant to section 363(f) of the Bankruptcy Code. Any and all claims of such parties shall attach to the proceeds from the sale of the Assets. 20. All requirements of section 363(b) and section 363(f) of the Bankruptcy Code and any other applicable law relating to the sale of the Assets have been satisfied. 21. Any and all liens, claims, interests and encumbrances not expressly assumed by Buyer, including, but not limited to, any and all mechanic's and materialmen's claims, shall be transferred from the Debtor's interest in the Leases and shall attach to the proceeds of the sale of the Assets. 22. The sale of the Assets to Buyer is expressly contingent upon MMS approval of the assignment of the Leases to Buyer and transfer of operator designation to Buyer. 23. The assumption and assignment to Buyer of the executory contracts identified on EXHIBIT C ("Assumed Contracts") attached hereto is in Debtor's economic best interest because the assumption and assignment of such executory contracts is an integral part of the sale of the Assets. 24. Excluding postpetition amounts to be paid in the ordinary course of business, the cure amount for the Assumed Contracts is the cure amounts reflected in Column -14- D to EXHIBIT C; provided, however, that the cure obligations on Items No. 5, 7, 8 and 17 shall be paid out of the sale proceeds as soon as practicable following Closing out of the Escrow Account. 25. Buyer has provided adequate assurance of future performance of the Assumed Contracts sufficient to satisfy section 365(f)(2) of the Bankruptcy Code. 26. In connection with the assumption and assignment of the Assumed Contracts, Debtor owes the MMS $2,185,193.10 (excluding prepetition interest, prepetition penalties and postpetition penalties) with respect to prepetition royalties arising from the Debtor's prepetition operation and production of the Leases. Debtor is current on all post-petition royalties arising from the Debtor's postpetition operation and production of the Leases. 27. Trustee, Debtor and MMS have reserved their rights with respect to the determination of the amount of the prepetition and postpetition penalties on the Leases, provided, however, that MMS releases Buyer from any such obligations and such release shall be effective once closing occurs. To the extent allowed, any claim of the MMS for prepetition interest and/or prepetition penalties shall be treated as a general unsecured claim against the Debtor. To the extent allowed, any claim of the MMS for postpetition penalties shall be treated as a priority unsecured claim against the Debtor. 28. The rejection of the executory contracts identified on EXHIBIT D-1 and EXHIBIT D-2 (the "Rejected Contracts") is in Debtor's economic best interest because Buyer has -15- not sought the assumption and assignment of such executory contracts, the estate no longer has an economically viable use for the Rejected Contracts and the Rejected Contracts are of no value to the estate. B. IN ACCORDANCE WITH AND BASED ON THE FOREGOING, IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT: 1. The relief requested in the Sale Motion is granted as modified herein. 2. All objections to the Sale Motion not resolved by the terms of this Order or withdrawn are hereby overruled and denied. The $400,000 Buyer Expense Reimbursement set forth in the Amendment to the Agreement of Purchase and Sale is hereby approved and shall be paid out of the Escrowed Proceeds as soon as practicable following MMS approval of the form of the assignments and of the Buyer. 3. Pursuant to section 363 of the Bankruptcy Code, Trustee is hereby authorized to sell the Assets free and clear of all liens, claims, interests and encumbrances (excluding the Permitted Encumbrances) to the Buyer, subject to the terms of the Agreement and this Order. 4. The terms and conditions of the Agreement are approved in all respects except as modified by this Order. 5. Trustee is hereby authorized to enter into and to execute the Agreement with Buyer substituted as signatory and such Agreement is hereby approved in all respects. -16- Trustee is hereby authorized and empowered to consummate the sale of the Assets to Buyer subject to the terms of the Agreement and to execute such additional documents as may be reasonable and necessary to consummate the sale. 6. Trustee and each other person or entity having duties or responsibilities under the Agreement or this Order and their respective representatives and attorneys are hereby authorized and empowered to carry out all of the provisions of the Agreement and this Order and to issue, execute, deliver, file and record as appropriate the Agreement and such additional documents as may be reasonable and necessary to consummate the sale of the Assets and to take any action contemplated by the Agreement and/or this Order. 7. Trustee and Buyer shall comply with the final adjustment provisions provided in section 13.4 of the Agreement, provided, however, that the adjustments after the Effective Date with respect to the production from the Volumetric Production Payment shall be calculated pursuant to the Scheduled Gas Price set forth in the Hydrocarbon Purchase and Sale Agreement dated December 29, 1995 as amended August 23, 1996, attached hereto as EXHIBIT E. 8. Subject to MMS approval of the assignment of the Leases and transfer of the operator designation on those Leases currently operated by Trustee and subject to the release and reassignment of Golden Gate Natural Resources 1995 Partnership's interest in the Volumetric Production Payment as provided in Section B, paragraph 23 below, excluding the -17- Permitted Encumbrances, at closing, all of Debtor's right, title and interest in and to the Assets including without limitation the interests described in paragraph 17 above shall immediately vest in Buyer free and clear of all liens, claims, interests and encumbrances of any type whatsoever pursuant to section 363 of the Bankruptcy Code. 9. Except as otherwise provided herein, any and all liens, claims, interests or encumbrances of any type or nature whatsoever on the Assets shall attach to the proceeds of the sale in the order of their priority to the same extent and with the same validity, force and effect as if the Assets had not been sold. 10. The clerk of the court of the respective parishes and counties in which any liens, encumbrances and/or disputed working interests shall have been filed on Debtor's interest in the Assets are hereby ordered to cancel and remove from the public records of such parishes and counties all such liens, encumbrances and disputed working interests from the Assets, including, but not limited to, the liens, encumbrances and disputed working interests (if any) of Louis Dreyfus Natural Gas Corporation, those parties listed on EXHIBIT B attached hereto, Testamentary Trust of Bruce Norris, Robin L. Lyon, Virginia R. Lyon, Sanders W. Davis, Glenn Goldfinger, Goren Brothers, Thomas H. Mahoney, IV, Petroshul, Inc., Janet Ades, Aaron L. Akabas, Patricia Alexander, Jean-Claude Bystryn, David Fleischer, John Friedler, Ben-Ami Friedman, Valerie-Furth, Daniel Gildesgame, Matilda Goldfinger, Bruce B. Grynbaum, Eric Hadar, Jack M. Hofkosh, Raananah Katz, Peter Landau, Alan Lesure, Pam -18- Levin, Paul A. Levin, Ginny MacKenzie, Thomas H. Mahoney, Peirre D. Martinet, Manton B. Metcalf, III, Richard T. Millard, Ida Reich, Lawrence R. Ross, John G. Sacchi, Randolph C. Sailer, II, Marilyn Salant, Theodore Schatzberg, Jay Schneiderman, Richard J. Shaver, Jack Sokolow, Paul Sperry, Frederick Swerdlow, Arthur Tobin, Edward S. Trippe, Gale Wall, Pamela Wolfe, Matina Yamin, Sol Zimmerman and Diana Zimmerman; provided, however, that Production Management Corporation's lien shall only be released as to the Assets sold to the Buyer. 11. Upon Buyer's request, any and all holders of any liens, encumbrances and/or disputed working interests filed of public record on Debtor's interest in the Assets and/or on the Leases being assumed and assigned hereunder, are hereby ordered to execute a release of such liens, encumbrances and/or disputed working interests as they affect the Assets. 12. Pursuant to section 365 of the Bankruptcy Code, effective as of October 22, 1997, the assumption of the Assumed Contracts identified on EXHIBIT C attached hereto and the assignment of the Assumed Contracts is hereby approved. 13. The Assumed Contracts will be transferred to, and remain in full force and effect for the benefit of, Buyer in accordance with their respective terms notwithstanding any provision in any such Assumed Contract (including those described in sections 365(b)(2) and section 365(f) of the Bankruptcy Code) that prohibits, restricts or conditions such assignment or transfer; provided, however, that such prohibition, restriction or condition of -19- assignment or transfer shall be negated only with respect to transfers and assignments by Trustee to Buyer effected pursuant to the Agreement this Order, and that such prohibitions, restrictions and conditions of assignment or transfer shall otherwise remain in full force and effect and a part of the Assumed Contracts so assigned or transferred. 14. Except as otherwise provided herein, all of Debtor's rights and obligations under the Assumed Contracts are fully assumed by Buyer, including without limitation, all of Debtor's monetary and nonmonetary rights and obligations under the Assumed Contracts, and Trustee and Debtor shall not be liable or responsible in any way for such Assumed Contracts or any obligations thereunder. 15. The failure of Trustee, Debtor or Buyer to enforce at any time one or more terms or conditions of the Assumed Contracts shall not be a waiver of such terms or conditions or of Trustee, Debtor and Buyer's rights to enforce every term and condition of the Assumed Contracts. 16. The cure amount for the Assumed Contracts shall be the cure amounts reflected in Column D to EXHIBIT C, provided, however, that a hearing will be held to determine whether the obligations to the MMS reflected therein constitute cure obligations under section 365 of the Bankruptcy Code and provided further that all rights of the MMS to seek payment of its prepetition royalty claims out of the Escrowed Proceeds (as defined herein) shall be preserved. It is specifically recognized that, except as to the interest which Buyer -20- acquires in the Leases, the entry of this Order shall not prejudice the rights of the MMS with respect to any obligation arising under the Leases and which the MMS may have had prior to the sale of the Leases or prior to the entry of this Order. Such rights, if any, are hereby reserved. The Leases shall be sold free and clear of any claim of the MMS for prepetition royalty, however the MMS retains its rights under the applicable regulations to approve the form of the assignments and the Buyer and to set required bonding amount. Louis Dreyfus Natural Gas Corp (LDNG) reserves the right to assert that, if the Court find that the MMS is entitled to cure under section 365, such cure claims may not be satisfied with LDNG's cash collateral without a finding of adequate protection by the Court. 17. Pursuant to section 365 of the Bankruptcy Code, effective as of November 14, 1997, the rejection of the Rejected Contracts identified on EXHIBIT D-1 to the Sale Motion are hereby approved. Should any party to any Assumed Contract ("Contract Party") be required or be at risk to pay, directly or indirectly, any portion of the Debtor's prepetition royalty obligation to the MMS, then such Contract Party shall be permitted to assert that such amount is a cure obligation or otherwise payable to such Contract Party pursuant to the provisions of the Agreement, this Order, section 365 of the Bankruptcy Code or any other provision of the Bankruptcy Code or otherwise. Such assertions shall be subject to the assertions of LDNG that LDNG's cash collateral is not subject to the claims of any Contract -21- Party absent a finding of adequate protection of LDNG's interest in its cash collateral. As set forth in the Agreement, in no event will such cure obligation be an obligation of Basin. 18. Pursuant to section 365 of the Bankruptcy Code, effective as of December 1, 1997, the rejection of the Rejected Contracts identified on EXHIBIT D-2 to the Sale Motion are hereby approved. 19. Any person or entity that holds a claim arising from the rejection of any of the Rejected Contracts identified on EXHIBIT D-1 and EXHIBIT D-2 to the Sale Motion must file a proof of claim the later of 30 days from the date hereof or 30 days from the date the rejection becomes effective or they shall be forever barred from asserting a claim against Debtor. 20. Upon closing: a. Buyer and Trustee shall execute and acknowledge an Assignment for each of the Leases and Applicable Agreements (excluding certain State of Texas easements) listed on EXHIBITS "A", "A-1" AND "E" to the Agreement in form and substance sufficient to convey title to the Assets in accordance with the terms of the Agreement. The form of the Assignments shall be substantially similar to the form attached to the Agreement as EXHIBITS "B-1", "B-2", "B-3" AND "B-4". b. Buyer and Trustee shall execute and acknowledge any such other instruments as are reasonably necessary to effectuate the conveyance of the Assets to Buyer, including without limitation, separate assignments of the Assets on officially approved forms in sufficient counterparts to satisfy applicable statutory and regulatory requirements for the transfer of the Assets. -22- c. To the extent permitted by law or contract, Trustee shall execute and deliver at Closing the requisite number of Designation of Operator forms and any other necessary forms, as may be required by the MMS or other governmental agency having jurisdiction, to designate Buyer, or an affiliate or subsidiary or its designee or nominee, as operator. d. Trustee shall execute and deliver at Closing all transfer orders or Letters-in-Lieu as may be required by Buyer. e. Trustee and Buyer shall execute the Escrow Agreement in a form substantially similar to EXHIBIT "C" to the Agreement. f. Buyer shall pay $31,800,000 into the Escrow Account via wire transfer (the "Escrowed Proceeds"). Trustee and Buyer acknowledge and agree that the assignment of the Leases and the designation of the change of operatorship are required to be submitted to the MMS for approval. Distribution of the proceeds shall be contingent upon MMS approval of (i) the assignment(s) of the Leases, (ii) change or designation of operator forms on those leases for which Debtor is currently designated as operator and (iii) all such other governmental compliance forms as may be required by the MMS to complete the transfer of the Leases to Buyer. 21. Following MMS approval of (i) the assignment(s) of the Leases, (ii) change or designation of operator forms and (iii) all such other governmental compliance forms as may be required by the MMS to complete the transfer of the Leases to Buyer, the sale proceeds shall be released from the Escrow Account and Trustee shall pay the following as soon as practicable thereafter: a. all outstanding amounts under the debtor-in-possession facility with Long Horizons Fund L.L.P.; -23- b. all outstanding amounts under and associated with the Volumetric Production Payment Agreement with Golden Gate Natural Resources 1995 Partnership, Bank of America Illinois and Bank of America National Trust and Savings Association; and in connection therewith Golden Gate shall supply Trustee and LDNG and any other parties who request a copy, a statement of the methodology of determining such amounts on or before 10:00 a.m. on the day prior to the date such payment is to be made to allow verification of the calculation thereof and will telephonically notify the Trustee and LDNG, and any other party requesting such information, of the calculation of the actual amount thereof based upon such methodology by 10:30 a.m. on the date of such payment and Trustee or LDNG shall notify telephonically Golden Gate of any errors therein by 11:30 on such date of payment; c. except as otherwise provided herein, the cure obligations assumed by Debtor in the Agreement and the cure obligations set forth in paragraph 24 on page 14. Moreover, the Trustee is authorized to draw $60,000 per month to pay ongoing administrative expenses such as employee payroll and utilities for four months following release of the Escrowed Proceeds. The remaining sale proceeds shall be segregated pending confirmation of a plan or further order of the Court. 22. As soon as practicable following payment of all outstanding amounts under the debtor-in-possession facility with Long Horizons Fund L.L.P., Long Horizons Fund L.L.P. shall execute a release of its liens and encumbrances on the Assets and claims against Debtor, which release shall instruct the clerk of the court of the respective parishes and counties in which any liens or encumbrances shall have been filed by Long Horizons Fund L.L.P. on -24- Debtor's interest in the Assets to cancel and remove from the public records of such parishes and counties all such liens and encumbrances from Debtor's Assets. 23. As soon as practicable following payment of all outstanding amounts under and associated with the Volumetric Production Payment Agreement with Golden Gate Natural Resources 1995 Partnership, Bank of America Illinois and Bank of America National Trust and Savings Association, such parties shall execute a release of their liens and encumbrances on the Assets and claims against Debtor, which release shall instruct the clerk of the court of the respective parishes and counties in which any liens or encumbrances shall have been filed by Golden Gate Natural Resources 1995 Partnership, Bank of America Illinois and Bank of America National Trust and Savings Association on Debtor's interest in the Assets to cancel and remove from the public records of such parishes and counties all such liens and encumbrances from Debtor's Assets, and Golden Gate Natural Resources 1995 Partnership shall assign and release of record, effective upon receipt of such payment, the Volumetric Production Payment. 24. As soon as practicable following MMS approval of (i) the assignment(s) of the Leases, (ii) change or designation of operator forms and (iii) all such other governmental compliance forms as may be required by the MMS to complete the transfer of the Leases to Buyer, Debtor shall pay all Court approved cure obligations reflected on EXHIBIT C excluding the cure obligations assumed by Buyer and excluding the prepetition royalties owed to MMS. -25- 25. The Court retains exclusive jurisdiction to interpret and enforce the provisions of the Agreement, any related agreement to which Debtor or Trustee is a party and this Order in all respects. 26. Saratoga, a Texas corporation, together with its successors, assigns and heirs, release and discharge Sheila Macdonald, individually and in her capacity as the Chapter 11 Trustee of Midcon Offshore, Inc. in these proceedings, her agents, representatives, employees, attorneys and advisors from and against any and all claims, rights, demands, and causes of action of any kind or nature whatsoever arising directly or indirectly, or as a result of, or in connection with, the performance of any obligation arising under or related to the Agreement or the alleged or claimed efforts of Sheila Macdonald, Chapter 11 Trustee to market and/or sell any of the properties, leases, contracts or assets which are the subject of the Agreement. Dated: NOV 18 1997, 1997 /S/RICHARD SCHMITT --------------------------------------- UNITED STATES BANKRUPTCY JUDGE -26- AGREED TO AND APPROVED: By: /S/HARRY A. PERRIN ----------------------------- Harry A. Perrin State Bar No. 15796800 Sylvia Mayer Baker State Bar No. 00787028 WEIL, GOTSHAL & MANGES LLP 700 Louisiana, Suite 1600 Houston, Texas 77002 Telephone: (713) 546-5000 Facsimile: (713) 224-9511 ATTORNEYS FOR SHEILA MACDONALD, CHAPTER 11 TRUSTEE FOR MIDCON OFFSHORE INC. By: /S/GLENN E. KELLER ----------------------------- Glenn E. Keller DAVIS, GRAHAM & STUBBS 370 17th Street, Suite 4700 Denver, CO 80202 Telephone: (303) 892-9400 Facsimile: (303) 893-1379 ATTORNEYS FOR BASIN EXPLORATION, INC. -27- Approved as to form: By: /S/SHARON M. MURPHY ---------------------------- Sharon M. Murphy Civil Division U.S. Department of Justice P.O. Box 875 Ben Franklin Station Washington, D.C. 20044-0875 Telephone: (202) 616-2238 Facsimile: (202) 514-9163 ATTORNEY FOR U.S. DEPARTMENT OF INTERIOR, MINERALS MANAGEMENT SERVICE -28- EXHIBIT A AGREEMENT OF PURCHASE AND SALE This AGREEMENT OF PURCHASE AND SALE ("Agreement") is made and entered into on this 22nd day of October, 1997, by and between MIDCON OFFSHORE, INC., a Texas corporation, appearing herein through SHEILA MACDONALD, its duly appointed Trustee in a proceeding filed under Title 11 of the United States Code on December 16, 1996, in the Southern District of Texas, Corpus Christi Division, Case No. 96-25269-C (hereinafter referred to as "Seller") and SARATOGA RESOURCES, INC., a Texas corporation (hereinafter referred to as "Buyer"). WITNESSETH: WHEREAS, Seller owns certain oil and gas interests, related facilities and equipment and assets; and WHEREAS, Seller desires to sell and Buyer desires to purchase those oil and gas interests, related equipment, assets and other real, personal movable, immovable and mixed property. NOW THEREFORE, in consideration of the mutual promises contained herein, the benefits to be derived by each party hereunder and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller agree as follows: SECTION 1. DEFINITION OF TERMS As used herein, the following terms shall have the meanings ascribed to them in this Section 1. 1.1 AGREEMENT. The word "Agreement" shall refer to this Purchase and Sale Agreement, executed as of the date set forth above, by and between Midcon Offshore, Inc. and Saratoga Resources, Inc. 1.2 ASSETS. The word "Assets" shall have the meaning ascribed to it in Section 2 hereof. 1.3 ASSIGNMENT. The word "Assignment" shall refer to the form of assignment, bill of sale and conveyance for transferring the Assets, as applicable, as set forth as EXHIBITS "B-1", "B-2" AND "B-3". 1.4 ASSUMED CONTRACTS. The phrase "Assumed Contracts" shall have the meaning ascribed to it in Section 2.1(f) hereof. 1.5 BANKRUPTCY COURT. The phrase "Bankruptcy Court" shall refer to the United States Bankruptcy Court for the Southern District of Texas, Corpus Christi Division. 1.6 BANKRUPTCY PROCEEDING. The phrase "Bankruptcy Proceeding" shall refer to the Seller's pending Chapter 11 bankruptcy proceeding, bearing Case No. 96-25269-C on the docket of the Bankruptcy Court. 1.7 BUYER. The word "Buyer" shall refer to Saratoga Resources, Inc. 1.8 BUYER'S EXPENSE REIMBURSEMENT. The phrase "Buyer's Expense Reimbursement" shall mean an amount equal to Two Hundred Thousand and No/100 Dollars ($200,000) which Buyer has incurred in connection with its efforts to purchase the Assets. 1.9 CLOSING DATE. The phrase "Closing Date" or "Closing" shall refer to the first business day following the date upon which the Bankruptcy Court shall have signed an Order approving the sale of the Assets to the Buyer pursuant to the terms and conditions of this Agreement. 1.10 DEFENSIBLE TITLE. The phrase "Defensible Title" shall mean such title to a Subject Interest that, subject to and except for Permitted Encumbrances, (i) entitles Seller to receive marketable title to not less than the net revenue interest of Seller for the well, unit or lease as set forth in EXHIBIT "A-1" of all hydrocarbons produced, saved and marketed from or attributable to a Subject Interest, and (ii) obligates Seller to bear the costs and expenses relating to the maintenance, development and operation of such well, unit or lease in an amount not greater than the working interest of Seller for such Subject Interest as set forth in EXHIBIT "A-1" (unless Seller's net revenue interest therein is proportionately increased); it being understood that the existence of Permitted Encumbrances affecting any Assets shall not form the basis for a claim that Seller does not have Defensible Title to such Assets. 1.11 DUE DILIGENCE. The phrase "Due Diligence" shall refer to Buyer's independent investigation, evaluation and analysis of the Assets, which shall include such General Due Diligence and Environmental Due Diligence defined in Sections 3.1 and 15.1, respectively. 1.12 EFFECTIVE DATE. The phrase "Effective Date" shall refer to 7:00 a.m. C.S.T. on the 1st day of September, 1997. 1.13 ESCROW ACCOUNT. The phrase "Escrow Account" shall refer to the account established in the name of Seller and Buyer at a mutually acceptable bank, pursuant to the terms and conditions of the Escrow Agreement attached hereto as EXHIBIT "C." -2- 1.14 LIEN. The word "Lien" shall mean any mortgage, lien, pledge, charge, deed of trust, security interest, lis pendens, judgment, encumbrance or other type of preferential arrangement, whether arising by contract, operation of law or otherwise (including, without limitation, the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement). 1.15 MMS. The word "MMS" shall refer to the Department of Interior, Minerals Management Service. 1.16 OVERHEAD FEE. The phrase "Overhead Fee" shall refer to an amount to be paid to Seller by Buyer, at the rate not to exceed $80,000 per month for each month (prorated for any portion of a month), from and after the Effective Date, to discharge certain services performed by Seller on behalf of Buyer, as hereinafter provided. 1.17 PERMITTED ENCUMBRANCES. The phrase "Permitted Encumbrances" shall mean those burdens, conditions, charges, encumbrances, exceptions, and restrictions described on EXHIBIT "D." 1.18 PURCHASE PRICE. The phrase "Purchase Price" shall refer to the Twenty-Seven Million Five Hundred Thousand and No/100 Dollars ($27,500,000) cash payment to be paid to Seller by Buyer for the purchase of the Assets. 1.19 SELLER. The word "Seller" shall refer to Midcon Offshore, Inc. 1.20 SUBJECT INTERESTS. "Subject Interests" shall mean any and all interests owned by Seller (or owned by Seller, but which interest is also claimed by a third party) in oil and gas leases and other properties set forth in EXHIBITS "A" AND "A-1" or which Seller is now entitled to receive by reason of any existing participation, joint venture, farm-in or other agreement, in and to the oil, gas and/or mineral leases, permits, licenses, concessions, leasehold estates, fee royalty and overriding royalty interests, all as are more particularly described in EXHIBITS "A" AND "A-1" attached hereto and incorporated herein. 1.21 TRUSTEE. The word "Trustee" shall refer to Sheila Macdonald, the duly appointed Chapter 11 Trustee of Seller. SECTION 2. ASSETS AND CONSIDERATION 2.1 AGREEMENT TO SELL AND PURCHASE THE ASSETS. Subject to the following terms and conditions, Seller agrees to sell, transfer, assign, convey and deliver to Buyer to the extent of Seller's right, title and interest, and Buyer agrees to purchase, receive, pay for and accept all of Seller's right, title and interest in the Assets as of the Effective Date, as follows: -3- (a) The oil and gas leases and interests listed and described in EXHIBITS "A" AND A-1" (collectively, "Leases"). (b) All producing and non-producing oil and gas wells, salt water disposal wells, injection wells and other wells located on the Leases or on lands or waterbottoms pooled therewith (collectively, the "Wells"). (c) All facilities, platforms, equipment, compressors, pipelines, separators, meters, dehydrators, tanks, fixtures, machinery, fixtures, flowlines, materials, improvements, and other real, personal, movable, immovable and mixed property located on, used in the operation of, or relating to the production, treatment, sale, or disposal of hydrocarbons, water, and associated substances produced from or attributable to the Leases (the "Personal Property"). (d) All natural gas, casinghead gas, drip gasoline, natural gasoline, natural gas liquids, condensate, products, crude oil and other hydrocarbons, whether gaseous or liquid, (i) produced from or allocable to the Assets after the Effective Date, and (ii) either in storage above the pipeline connection on or after the Effective Date, or sold on or after the Effective Date (the "Hydrocarbons"). (e) To the extent transferable, all permits, rights-of-way, easements, licenses, servitudes and related agreements (including, but not limited to, those described on EXHIBIT "E") relating to the Leases, Wells or Personal Property or the ownership or operation thereof, or the production, treatment, sale, storage or disposal of Hydrocarbons, water or substances associated therewith (the "Applicable Agreements"). (f) To the extent assumption by the Seller and assignment to the Buyer is approved by the Bankruptcy Court, such contracts, leases and other agreements (including, but not limited to, those described on EXHIBIT "F") relating to the Leases, Wells or Personal Property or the ownership or operation thereof, or the production, treatment, sale, storage or disposal of Hydrocarbons, water or substances associated therewith (the "Assumed Contracts"); provided, however, that Buyer reserves the right to notify the Seller in writing on or before 5:00 p.m. C.S.T. on October 24, 1997 that the Buyer no longer seeks to acquire any or all of the Assumed Contracts. (g) All records relating to the Leases, Wells, Hydrocarbons, Assumed Contracts and Personal Property, owned by Seller and which Seller is not prohibited from transferring to Buyer by law or existing contractual relationship including as follows: all (i) lease, land, and division order files (including any abstracts of title, title opinions, certificates of title, title curative documents, and division orders contained therein), (ii) the Applicable Agreements, (iii) all well, facility, and historic production files, (iv) all financial, accounting and tax records and materials relating to the Assets -4- or which are necessary for Buyer's ownership, operation or administration of the Assets, (v) all geological files (including structure maps, logs and isopach maps) relating directly to the Leases (the "Geologic Data"); and (vi) to the extent transferable, all proprietary or licensed raw or processed geophysical data (including magnetic tapes, field notes, or seismic data) or interpretations therefrom; the above items (i), (ii), (iii), (iv), (v) and (vi) being accepted "AS IS, WHERE IS" without warranty or representation of any nature or kind as to the accuracy, completeness, materiality, validity or fitness for any purpose of such Geologic Data and Geophysical Data and with all faults and same is delivered for the purpose of Buyer's independent evaluation and any use or reliance thereon is at Buyer's sole risk (collectively, the "Records"). All such Leases, Wells, Personal Property, Hydrocarbons, Applicable Agreements, Assumed Contracts, and Records are hereinafter collectively referred to as the "Assets." The transfer of the Assets shall be made at the Closing, but shall be made effective as of the Effective Date. 2.2 STRAPPING AND GAUGING. All Hydrocarbons in storage facilities above the pipeline connection to each such storage facility, or downstream of delivery point sales meters on gas pipelines, as of the Effective Date, shall belong to Seller, and production placed in such storage facilities thereafter and production upstream of the aforesaid meters on pipelines shall belong to Buyer and shall become a part of the Assets. In order to accomplish the foregoing allocation of production, the parties shall rely upon the records maintained by the operator of the relevant Asset, unless such records are demonstrated to be inaccurate. 2.3 EXCLUDED ASSETS. It is the intention of the Seller to sell and Buyer to purchase only the Assets owned by the Seller as of the Effective Date. Seller specifically excludes and reserves unto Seller: (a) All rights and claims arising from or under any contract or agreement relating to the Assets, occurring or accruing prior to the Effective Date, including, without limitation, any claim for breach of a take-or-pay provision, gas balancing, cash balancing, accrued but unpaid joint interest billings and any other money or property of whatever nature owed to Seller by other working interest owners or any other party. (b) All causes of action belonging to the estate against any third parties or creditors of the Seller, including, but not limited to, causes of action arising under Chapter 5 of the Bankruptcy Code; (c) All books, records or other data relating to, referring to or containing information with respect to claims against the Seller, including, but not limited to the Seller's accounting records); provided, however, that copies of such information shall be provided to Buyer upon reasonable written request and reimbursement of actual expenses incurred in preparing such copies; -5- (d) All funds held in any bank, trust or escrow accounts in the name of the Seller, for the benefit of the Seller or as security for an obligation of the Seller or any suspense accounts, advances, pre-payments or deposits held by any third party, including, but not limited to funds held in the plugging and abandonment escrow accounts, funds held in segregated accounts with respect to disputed working interests and disputed royalty or overriding royalty interests and vendor deposits; (e) Proceeds received by the Seller for the sale of certain liens held on working interests in the oil, gas and leasehold in the Boddy Lease in Clay County, Texas and the Powell Lease in Archer County; (f) Proceeds received by the Seller for the sale of South Marsh Island 141/144 Field, specifically OCS-G-2885 and OCS-G-2886; (g) Seller's ownership interest in any direct or indirect subsidiaries, including, but not limited to, Midcontinent Resources, Inc. Midcon Energy, Inc., Midcon Indo/Phil Energy, Midcon Asian Power Corporation Inc., Midcon Offshore Construction, Inc., Midcon Offshore Operating, Inc., Midcon Shipping & Transport, Inc. and Midcon Central Christian Scholarships, Inc.; (h) Accounts receivable accrued prior to September 1, 1997, including, but not limited to, accounts receivable due from parties asserting working interests and/or overriding royalty interests in the Assets; and (i) All assets, rights and claims of the Seller and granted by the Bankruptcy Code or the Bankruptcy Court not specifically assigned herein and accruing on or accruing prior to the Effective Date. Those items described in Section 2.3(a) through (i) hereinabove are collectively referred to as the "Excluded Assets." The listing of the Excluded Assets is set forth in EXHIBIT "G." 2.4 PURCHASE PRICE. The Purchase Price shall be in the aggregate amount of Twenty-Seven Million Five Hundred Thousand and No/100 Dollars ($27,500,000.00) payable in full in same day funds at the Closing. 2.5 ADDITIONAL CONSIDERATION. In addition to the Purchase Price, Buyer agrees to assume the following obligations ("Additional Consideration"): (a) Buyer will be financially responsible for all capital expenditures associated with the drilling and completion of the High Island Block A-568, OCS-G-2716 Well No. A-17 and the capital expenditures related to the installation of a pipeline associated with the production from platform(s) located on High Island Block -6- A-568 operated by Samedan Oil Corporation insofar and only insofar as the interest of Seller in the lease is concerned. (b) To the extent of Seller's interest in the Subject Interests, as reflected on EXHIBIT "A-1", Buyer shall assume the plugging and abandonment obligations of Seller for that certain expired oil and gas lease bearing Serial No. OCS-G-6651, East Cameron Area, Block 316. (c) To the extent of Seller's interest in the Subject Interests, as reflected on EXHIBIT "A-1", Buyer shall assume the plugging and abandonment obligations of Seller for that certain expired oil and gas lease bearing Serial No. OCS-G-1352, West Cameron Area, Block 21 (West Cameron Area, Block 21/44 Complex). (d) Buyer agrees to pay Seller the Overhead Fee from the Effective Date through and including the Closing Date. (e) Buyer agrees to pay $1,000,000 to the Seller with such funds to be applied first toward the payment of Bankruptcy Court approved fees and expenses of the Trustee, the Trustee's professionals and the professionals of the statutory committee of unsecured creditors appointed in the Bankruptcy Proceeding, all of which shall have been incurred in connection with the sale process, and with the balance of such funds to be disbursed in accordance with further order of the Bankruptcy Court. (f) Buyer agrees to perform all plugging, abandonments, and removals of all wells, pipelines, flowlines, platforms, personal property, machinery, facilities and equipment included in the Assets, in accordance with all applicable statutes, governmental orders and regulations. For purposes of this Section, Seller and Buyer estimate that total value of the Additional Consideration set forth in Section 2.5(a) to (e) to be paid by Buyer is not less than Four Million Six Hundred Eighty Eight Thousand and No/100 Dollars ($4,688,000). The Additional Consideration set forth in Section 2.5(f) above is a contingent liability which cannot be estimated for the purposes of this Agreement. 2.6 PURCHASE PRICE ALLOCATION. (a) Seller and Buyer mutually agree to allocate the Purchase Price among the Assets as set forth in EXHIBIT "H" attached hereto. Seller and Buyer agree that the said allocation as set forth on EXHIBIT "H" is the proper allocation of the Purchase Price in accordance with the fair market value of the Assets, and that said allocation of the Purchase Price of the Assets as set forth on EXHIBIT "H" shall comply with Section 1060 of the Internal Revenue Code of 1986, as amended (the "Code"), and Treasury Regulations promulgated thereunder. Subject to the requirements of any applicable tax -7- law, all tax returns and reports including, without limitation, IRS Form 8594 (Asset Acquisition Statement under Section 1060 of the Code), filed by the Seller and/or Buyer shall be prepared consistently with such allocation. In the event of any purchase price adjustment hereunder, the Buyer and Seller agree to adjust such allocation to reflect such purchase price adjustment and to file consistently any tax returns and reports including, without limitation, IRS Form 8594, required as a result of such purchase price adjustment. (b) Buyer and Seller each agree to furnish the other a copy of IRS Form 8594 as filed with the Internal Revenue Service by such party as any affiliate thereof, pursuant to Section 1060 of the Code, as a result of the consummation of the transactions contemplated hereby, within thirty (30) days of the filing of such form with the Internal Revenue Service. 2.7 TRANSFER DATE. The transfer of the Assets in accordance with the terms hereof shall occur at Closing, as defined herein; provided, however, that the effective time of the transfer of the Assets and the assumption by Buyer of the liabilities and obligations associated with the Assets shall be the Effective Date, except as otherwise provided herein. 2.8 ALLOCATION OF RIGHTS AND LIABILITIES. (a) Provided that the transactions contemplated herein are consummated, Seller shall be entitled to all of the rights (including, without limitation, the right to all production, proceeds of production and other proceeds) of ownership, and shall be subject to the duties and obligations of such ownership attributable to the Assets and attributable to the Assets and attributable to periods of time prior to the Effective Date. Subject to the provisions hereof, Buyer shall be entitled to all of the rights (including, without limitation, the right to all production, proceeds or production and other proceeds) of such ownership, and shall be subject to the duties and obligations of such ownership attributable to the Assets and attributable to periods of time from and after the Effective Date. (b) Without limiting the foregoing, the items which shall be allocated to the Assets to the extent that the following arise or accrue prior to or after the Effective Date include: (i) royalties and other amounts payable to third parties with respect to burdens on production attributable to the Assets, (ii) ad valorem, production, excess, severance, windfall profit or other taxes based on measure by the ownership of the Assets or production attributable thereto or the value of the proceeds of the sale thereof; provided, however, that nothing in this Section 2.8(b) shall contravene Section 12.6(a) of this Agreement, (iii) operating and capital costs attributable to the Assets, including, without limitation, expenses incurred under applicable operating agreements and, in the absence of an operating agreement, expenses of the sort -8- customarily billed under such agreements, (iv) all liabilities and duties attributable to the Assets under all pertinent documents. (c) If any adjustments are made pursuant to operating agreements, gas balancing agreements, audits of the joint accounts or gas purchase contracts for periods prior to the Effective Date, Seller shall bear all charges and be entitled to all credits attributable to Seller's interest for such period. Adjustments and/or audits for the period subsequent to the Effective Date shall be borne by or inure to the benefit of the Buyer. 2.9 RISK OF LOSS. Except as otherwise provided in this Agreement, Seller shall assume all risk of loss with respect to the Assets prior to the Closing Date, and Buyer shall assume all risk of loss from and after the Closing Date. In the event any physical asset(s), including fixtures and improvements, valued at less than twenty-five (25%) percent of the Purchase Price and to be sold hereunder is damaged by fire or other calamity before Closing, Seller may repair the damage at its cost or, at its sole option, either reduce the Purchase Price by the cost of the damage or withdraw the damaged Asset from the sale and reduce the Purchase Price by the undamaged value thereof. Should the loss exceed twenty-five (25%) percent of the Purchase Price, Buyer shall have the option either to (i) require Seller to repair the damage, or (ii) terminate this Agreement. SECTION 3. GENERAL DUE DILIGENCE 3.1 GENERAL DUE DILIGENCE. Buyer shall have until 5:00 p.m., C.S.T., on October 24, 1997 (the "General Due Diligence Completion Date") to complete its independent investigation, evaluation and analysis of the Assets which Buyer desires to conduct ("General Due Diligence"). In connection therewith, Buyer shall have the right to independently evaluate, inspect, inventory and verify the Assets, perform its own General Due Diligence examination of the title, governmental requirements, all lease, well and right-of-way files, data and other information regarding the Assets. Subject to the General Due Diligence, Buyer is acquiring the Assets solely in reliance on its own investigations and independently of any evaluation made by Seller, is willing to accept the Assets in their present condition, and understands there are no warranties thereon. At any time prior to the General Due Diligence Completion Date, Buyer may terminate this Agreement without any liability or recourse. 3.2 ACCESS TO INFORMATION. To assist Buyer in performing its General Due Diligence, Seller shall make a good faith effort to give Buyer and Buyer's authorized representatives (a) physical access to the wells and other equipment included in the Assets at Buyer's sole risk, cost and expense for the purpose of inspecting the same, and (b) access to all of Seller's Records and documents relative to the Assets; provided, however, that Seller shall have no obligation to provide Buyer with access to any data or information which access Seller cannot legally provide Buyer because of third party restrictions on Seller. -9- Notwithstanding anything to the contrary, however, Seller shall use its best efforts to obtain a waiver of such third-party restrictions to permit Buyer access to the data or information. In the event a waiver is not obtained, Seller shall provide such information regarding the nature, content, or effect on the Assets or Subject Interests of such data or information. 3.3 ACCESS TO CERTAIN BOOKS, RECORDS AND DOCUMENTS. Seller has heretofore and will continue to make available to Buyer for Buyer's inspection and copying, at Buyer's sole expense, at Seller's offices during normal business hours, copies of oil, gas and mineral leases, assignments, unit and operating agreements, title opinions, related title information and well classification information under applicable state and federal laws, as are available to and/or in Seller's possession. Reliance on such information shall be at the sole risk of Buyer, and Seller makes no warranty, guaranty or representation as to the accuracy of such data. Seller shall not be obligated to update any abstracts, title opinions or additional title information, but shall cooperate with Buyer in Buyer's efforts to obtain, at Buyer's expense, such additional title information as Buyer may reasonably deem prudent. Seller shall have the right to make and retain copies of such records as Seller may desire prior to the delivery of the records to Buyer. Insofar as Seller reasonably believes such records may be needed or useful in connection with federal, state or local regulatory or tax matters or resolution of existing disputes or contract compliance issues, all with third parties, Buyer, for a reasonable period after the Closing, shall further make available to Seller (at the location of such records in Buyer's organization) access to such of the records as Buyer may have in its possession (or to which it may have access) upon written request of Seller during normal business hours and Seller shall have the right to copy and retain such copies of the records; provided, however, the rights granted to Seller hereunder shall not be deemed to obligate Buyer to maintain any of the records for any specified period of time and in the event Buyer plans to destroy any material portions of the records, Buyer shall notify Seller in writing 30 days in advance thereof. 3.4 BUYER'S TITLE REVIEW. (a) Immediately upon execution by all parties hereto of this Agreement, Buyer may, at Buyer's sole cost and expense, commence and diligently pursue such examination of title of the Subject Interests as Buyer desires. Seller shall fully cooperate with Buyer and shall make available to Buyer, all documents, records and material in Seller's possession (except to the extent disclosure of same is prohibited pursuant to agreements with third parties) and all assistance reasonably necessary to assist Buyer in determining the validity of Seller's title in and to the Subject Interests. Title opinions that have been previously prepared by counsel for Seller shall be made available. In no event, however, does Seller warrant or represent the sufficiency, completeness or accuracy of such documents, records and materials, and Buyer's reliance thereon shall be at Buyer's sole risk and expense. Buyer shall notify Seller of any Title Defects associated with such property on or before the General Due Diligence Completion Date. To be effective, Buyer's written notice of a Title Defect must include (i) a brief description of the matter constituting the asserted Title Defect, and -10- (ii) supporting documents reasonably necessary for Seller (or a title attorney or examiner hired by Seller) to verify the existence of such asserted Title Defect. Any matters not described in a written notice of Title Defect prior to the General Due Diligence Completion Date shall conclusively be deemed to have been waived and accepted by Buyer, and shall be deemed Permitted Encumbrances hereunder. (b) Upon receipt of the notice set forth under Section 3.4(a) above, Seller shall have the right, but not the obligation, until the Closing Date to cure all or any portion of asserted Title Defects, such curative costs to be borne solely by Seller; provided, however that if the value of the asserted Title Defect equals or exceeds five percent (5%) of the Purchase Price, then Seller may, at its option and in its sole discretion, exercised by the giving of written notice to Buyer within five (5) days of receipt of Buyer's notice of asserted Title Defects, terminate this Agreement, and Seller and Buyer shall be under no obligation to each other with regard to the purchase and sale of any Assets, such termination to be without liability to either party other than payment of their respective third party charges and out of pocket costs herein. Failure of Seller to give notice of an election to terminate this Agreement shall be deemed an election not to terminate this Agreement and to adopt the procedures and remedies concerning asserted Title Defects set forth herein. If Buyer elects to waive or is deemed to have waived any asserted or unasserted Title Defects, such waived or unasserted Title Defects shall be deemed Permitted Encumbrances hereunder. If Seller within the time provided above is unable, elects not or refuses to cure such asserted Title Defects, Buyer may elect at its option to either (i) reduce the Purchase Price by an amount attributable to the reserves to which title has failed based upon the allocations made pursuant to Section 2.6; provided however, that the Purchase Price shall not be reduced unless the amount attributable to the reserves to which Title Defects exist exceeds in the aggregate Ten Thousand Dollars ($10,000), or (ii) terminate this Agreement. Failure by Buyer to elect adjustment to the Purchase Price or termination of this Agreement shall be deemed an election by Buyer to waive such claim and retain the interest covered by the asserted, but uncured, Title Defect and such uncured Title Defect shall thereupon be deemed a Permitted Encumbrance. 3.5 TITLE DEFECTS. For the purposes of this Agreement, a portion of the Subject Interests shall be deemed to have a "Title Defect" if, as of the Effective Date, there is an encumbrance, encroachment, irregularity, or objection which would cause Seller not to have Defensible Title to the Assets. SECTION 4. DISCLAIMER OF WARRANTIES 4.1 DISCLAIMER OF WARRANTY OF TITLE; SUBROGATION. The net revenue interest and working interests set forth on EXHIBIT "A-1" reflect, to the best knowledge available to Seller, Seller's net revenue interest and working interest in each of the Assets. Seller agrees to notify -11- Buyer if, prior to Closing, Seller becomes aware of any information which would reduce the net revenue or working interests set forth on EXHIBIT "A-1". The assignments and conveyances made by this Agreement are made without warranty of title, express, implied or statutory, and without recourse, even as to the return of the Purchase Price or other consideration, but with full substitution and subrogation of the Seller, and all persons claiming by, through and under Seller, to the extent assignable, in and to all covenants and warranties by the Seller's predecessors in title, and with full subrogation of all rights accruing under the statutes of limitation or prescription under the laws of various states in which the Assets are located and all rights of actions of warranty against all former owners of the Assets. 4.2 DISCLAIMER OF WARRANTY, PERSONAL PROPERTY AND FIXTURES. Seller and Buyer agree that, to the extent required by the applicable law to be operative, the disclaimers of certain warranties contained in this paragraph are "conspicuous" disclaimers for the purposes of any applicable law, rule or order. The Assets are assigned to Buyer without recourse (even as to the return of the Purchase Price or other consideration), covenant or warranty of any kind, express, implied or statutory. WITHOUT LIMITING THE GENERALITY OF THE IMMEDIATELY PRECEDING SENTENCE, SELLER HEREBY (i) EXPRESSLY DISCLAIMS AND NEGATES ANY REPRESENTATION OR WARRANTY, EXPRESSED, IMPLIED, AT COMMON LAW, BY CODE (OR OTHERWISE), BY STATUTE, OR OTHERWISE RELATING TO (A) PRODUCTION RATES, RECOMPILATION OPPORTUNITIES, DECLINE RATES, OR THE QUALITY, QUANTITY OR VOLUME OF THE RESERVES OF HYDROCARBONS, IF ANY, ATTRIBUTABLE TO THE ASSETS, (B) THE ACCURACY, COMPLETENESS OR MATERIALITY OF ANY INFORMATION, DATA OR THEIR MATERIALS (WRITTEN OR ORAL) NOW, HERETOFORE OR HEREAFTER FURNISHED TO BUYER BY OR ON BEHALF OF SELLER, AND (C) THE ENVIRONMENTAL CONDITION OF THE ASSETS. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, SELLER EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER HEREBY WAIVES, AS TO PERSONAL, MOVABLE AND IMMOVABLE PROPERTY, EQUIPMENT AND FIXTURES CONSTITUTING A PART OF THE ASSETS (i) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, (ii) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (iii) ANY IMPLIED OR EXPRESSED WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (iv) ANY RIGHTS OF PURCHASERS UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION OR RETURN OF THE PURCHASE PRICE, (v) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM OF VICES OR DEFECTS, WHETHER KNOWN OR UNKNOWN, AND (vi) ANY ALL IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAW INCLUDING, WITHOUT LIMITATION, THE PROVISIONS OF LOUISIANA CIVIL CODE ARTICLES 2475 THROUGH 2548, INCLUSIVE (WEST 1952 AND SUPP. 1992), AND (vii) ANY IMPLIED OR EXPRESS WARRANTY REGARDING ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT OR PROTECTION OF THE ENVIRONMENT OR HEALTH. IT IS THE EXPRESS INTENTION OF BUYER AND SELLER THAT THE REAL PROPERTY, IMMOVABLE PROPERTY, MOVABLE -12- PROPERTY, EQUIPMENT, INVENTORY, MACHINERY, FIXTURES AND PERSONAL PROPERTY SHALL BE CONVEYED TO BUYER "AS IS" AND "WHERE IS" IN THEIR PRESENT CONDITION AND STATE OF REPAIR, AND BUYER REPRESENTS TO SELLER THAT BUYER HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS WITH RESPECT TO THE ASSETS AS BUYER DEEMS APPROPRIATE AND BUYER WILL ACCEPT THE REAL PROPERTY, IMMOVABLE PROPERTY, MOVABLE PROPERTY, EQUIPMENT, INVENTORY, MACHINERY, FIXTURES AND PERSONAL PROPERTY "AS IS" AND "WHERE IS" IN THEIR PRESENT CONDITION AND STATE OF REPAIR, WITH ALL FAULTS. BUYER WAIVES ITS RIGHTS UNDER THE TEXAS DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT, SECTION 17.41 et seq., TEXAS BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER CONSULTATION WITH AN ATTORNEY OF BUYER'S OWN SELECTION, BUYER VOLUNTARILY CONSENTS TO THIS WAIVER. IN ORDER TO EVIDENCE ITS ABILITY TO GRANT SUCH WAIVER, BUYER HEREBY REPRESENTS AND WARRANTS TO SELLER THAT BUYER (i) IS IN THE BUSINESS OF SEEKING OR ACQUIRING, BY PURCHASE OR LEASE, GOODS OR SERVICES FOR COMMERCIAL OR BUSINESS USE, (ii) HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS OF THE TRANSACTION CONTEMPLATED HEREBY AND (iii) IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION. BUYER EXPRESSLY WAIVES THE WARRANTY OF FITNESS FOR INTENDED PURPOSES OR GUARANTEE AGAINST HIDDEN OR LATENT REDHIBITORY VICES UNDER LOUISIANA LAW, INCLUDING LOUISIANA CIVIL CODE ARTICLES 2520 (1870) THROUGH 2548, AND THE WARRANTY IMPOSED BY LOUISIANA CIVIL CODE ARTICLE 2476; WAIVES ALL RIGHTS IN REDHIBITION PURSUANT TO LOUISIANA CIVIL CODE ARTICLE 2520, ET SEQ.; ACKNOWLEDGES THAT THIS EXPRESS WAIVER SHALL BE CONSIDERED A MATERIAL AND INTEGRAL PART OF THIS SALE AND THE CONSIDERATION THEREOF; AND ACKNOWLEDGES THAT THIS WAIVER HAS BEEN BROUGHT TO THE ATTENTION OF BUYER AND EXPLAINED IN DETAIL AND THAT BUYER HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER OF WARRANTY OF FITNESS AND/OR WARRANTY AGAINST REDHIBITORY VICES AND DEFECTS FOR THE ASSETS. SECTION 5. REPRESENTATIONS OF SELLER Seller represents the following: 5.1 LEGAL POWER AND OWNERSHIP. Subject to Bankruptcy Court approval, Seller owns the Assets (or has a right to receive an assignment thereof, with respect to the interests in the Assets in which record title is currently held by Seller which will be assigned to Seller then to Buyer) and has the full power and right to sell and convey the same. -13- 5.2 LEGAL STATUS AND AUTHORITY. (a) Seller is an organized and existing corporation under the laws of the State of Texas, duly qualified to carry on its business in each state where failure to so qualify would have a materially adverse effect upon its business or properties. (b) Subject to Bankruptcy Court approval, Seller has all requisite power and authority to carry on its business as presently conducted, to enter into this Agreement and to perform their obligations under this Agreement. (c) The execution, delivery and performance of this Agreement, and the transactions contemplated hereby, are expressly subject to Bankruptcy Court approval. (d) Subject to Bankruptcy Court approval, Seller is represented herein by its duly appointed Trustee and that said Trustee has the authority to enter into this Agreement. (e) Subject to Bankruptcy Court approval, this Agreement constitutes, and all documents and instruments required hereunder to be executed and delivered by Seller at Closing, will constitute, legal, valid and binding obligations of Seller enforceable in accordance with their respective terms. (f) There is a Bankruptcy Proceeding pending in the United States Bankruptcy Court, Southern District of Texas, Corpus Christi Division. This Agreement is part of said Bankruptcy Proceeding and will be subject to and require court approval of same. (g) No broker or finder has acted for or on behalf of Seller in accordance with this Agreement or the transaction contemplated by this Agreement, and no broker or finder is entitled to any brokerage or finder's fee or commission in respect thereof based in any way on agreements, arrangements or understandings made by or on behalf of Seller. (h) Subject to Bankruptcy Court approval, the Assets will be sold free and clear of all liens, claims, interests, encumbrances, demands, suits, and except as otherwise set forth herein, actions and other judicial or administrative proceedings or investigations. (i) Subject to Bankruptcy Court approval, all royalties due the lessor of the oil and gas leases which are part of the Subject Interests have been timely paid post petition and, subject to claims in the Bankruptcy Proceeding, will be paid by Seller on the Closing Date. -14- (j) With the exception of Production Management Corporation, all undisputed invoices submitted by contractors and subcontractors performing work on the Assets have been timely paid for work performed since December 16, 1996. The Order referenced in Section 17 herein shall provide that the sale of the Assets is free and clear of any and all claims and/or Liens with respect to work performed by all contractors and subcontractors (including Production Management Corporation) since December 16, 1996. (k) The Order referenced in Section 17 herein shall provide that the sale of the Assets is free and clear of any and all Liens, including but not limited to those listed on EXHIBIT "I". SECTION 6. CERTAIN AGREEMENTS OF SELLER 6.1 OPERATIONS. Seller shall remain designated operator of those Subject Interests for which it is presently designated and recognized as operator by the MMS until the Closing Date, and thereafter until the change of operatorship shall have been approved by the MMS. 6.2 DISBURSEMENT RESPONSIBILITIES. Seller agrees that, as to the Subject Interests for which Seller is responsible, Seller will prepay all minimum royalties required to maintain the oil and gas leases, rights-of-way and surface leases covering the Assets in force and effect and becoming due and payable prior to Closing. Seller will not pay shut-in royalty payments which may fall due at any time after Closing but will provide Buyer at Closing a list of those Subject Interests upon which a shut-in well is located and the date each such well was shut-in. Buyer agrees to reimburse Seller for any and all such payments made by Seller accruing or falling due after the Closing Date. SECTION 7. REPRESENTATIONS OF BUYER Buyer represents the following: 7.1 LEGAL STATUS AND AUTHORITY (a) Buyer is a corporation duly organized and validly existing under the laws of the State of Texas, duly qualified to carry on its business in such state where failure to so qualify would have a materially adverse effect upon its business and properties. (b) Buyer has all requisite power and authority to carry on its business as presently conducted, to enter into this Agreement and to perform its obligations under this Agreement. The consummation of the transactions contemplated by this Agreement will not violate nor be in conflict with any material provision of any of Buyer's Articles of Incorporation or Bylaws or any material provision of any agreement or instrument to -15- which Buyer is a party or is bound, or any judgment, decree, order, statute, rule or regulation applicable to Buyer. (c) The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite action on the part of Buyer. 7.2 BROKER'S FEES. Buyer has incurred no obligation or liability, contingent or otherwise, for broker's or finder's fees with respect to the transaction contemplated in this Agreement that will be the responsibility of Seller. SECTION 8. ADDITIONAL COVENANTS 8.1 OPERATIONS PRIOR TO CLOSING. After the date of this Agreement and prior to the Closing, Seller shall use and maintain the Assets in substantially the same manner in which they have been used and maintained prior to this Agreement. Unless Seller and Buyer otherwise agree, Seller shall only enter into agreements or transactions in relation to the Assets which (i) individually involve a fair market value of less than Twenty Thousand and no/100 ($20,000.00) Dollars, and (ii) are entered into in the ordinary course of business consistent with past practices. In the event that an expenditure for purposes other than day-to-day operations is proposed or contemplated, Seller shall submit such proposal to Buyer for concurrence. Buyer will assume the risk of any consequences which arise as a result of Buyer's failure or refusal to approve and pay such expenditure. Additionally, after the signing of this Agreement and prior to Closing, Seller shall have the right to make any changes, repairs or modifications, or incur any expenditures necessary relative to the Assets to prevent or react to an emergency or environmental incident. With regard to the preceding sentence, Seller shall attempt to secure Buyer's consent prior to any such expenditure or action, however, Seller shall have the right to effect such expenditure or action with or without such approval, acting as would any prudent operator under similar circumstances. Unless Buyer and Seller otherwise agree, Seller shall not materially alter the Assets (other than the use of supplies and consumables) or remove any improvements, equipment or property which comprise the Assets (other than the use of supplies and consumables). 8.2 INSURANCE. Seller shall maintain in full force and effect all policies of insurance covering the Assets now maintained by Seller through the Closing Date. Seller shall obtain an endorsement of insurance naming Buyer as an additional insured as of the Effective Date. A copy of such certificate shall be attached as EXHIBIT "J" to this Agreement. 8.3 PRESERVATION OF MATERIAL AGREEMENTS. Seller shall preserve in full force and effect the Assumed Contracts. -16- 8.4 BUSINESS RELATIONS. Use Seller's reasonable efforts to maintain its relationship with suppliers, employees, customers and others having material business relations with Seller with respect to the Assets so that they will be preserved for Buyer on and after the Closing Date. 8.5 EQUIPMENT. Seller shall maintain all material equipment included in the Assets in accordance with customary industry operating practices and procedures. 8.6 MISCELLANEOUS. Notwithstanding the other provisions of this Section 8, Seller (i) may take any action with respect to the Assets if reasonably necessary under emergency circumstances and provided Buyer is notified as soon as reasonably practical and (ii) shall have no liability (except to the extent such constitutes a Title Defect) to Buyer for the incorrect payment of minimum royalties or similar payments or for any failure to pay any such payments through mistake or oversight (including Seller's negligence). Seller's non-willful failure to comply with any of the requirements of this Article 8 shall not serve as a basis for a claim by Buyer for damages, or afford Buyer the right to make claim for damages. SECTION 9. CERTAIN AGREEMENTS OF BUYER 9.1 ASSUMPTION BY BUYER. Provided the transactions contemplated herein are consummated: Buyer shall (a) on the Effective Date assume and be responsible for and shall comply with all duties and obligations of Seller as owner of the Leases (and as operator of those Leases for which Seller currently serves as operator, upon approval by the MMS), express or implied, with respect to the Assets, including without limitation, those duties and obligations arising, under or by virtue of any lease, contract, agreement, document, permit, applicable statute or rule, regulation or order of any governmental authority (specifically including, without limitation, any governmental request or requirement to plug, re-plug and/or abandon any well of whatsoever type, status or classification or take any cleanup or other remedial action with respect to the property or premises) and (b) post all necessary bonds required by the MMS in a form acceptable to the MMS 9.2 COMMITMENT LETTER. Provided that this Agreement has not terminated in accordance with the provisions hereof, Buyer shall, on or before October 31, 1997, furnish Seller with an unconditional letter of financial commitment from Buyer's lender (the "Lender's Commitment Letter") for an amount not less than the Purchase Price. SECTION 10. BUYER'S CONDITIONS TO CLOSING The obligation of Buyer to consummate the transaction provided for herein is subject, at the option of Buyer, to the fulfillment on or prior to Closing of each of the following conditions: -17- 10.1 BANKRUPTCY COURT APPROVAL. The obtaining on or before November 7, 1997 of an Order from the Bankruptcy Court (i) authorizing the sale of the Assets pursuant to the terms of this Agreement free and clear of all liens, claims and interests, (including, but not limited to any charges or liens against adverse claims to or preferential rights to purchase the Assets) and (ii) finds that the Seller has sold the Asset in good faith and in accordance with Section 363(m) of the Bankruptcy Code. 10.2 REPRESENTATIONS. The representations by Seller set forth in Section 5 above shall be true and correct in all material respects as of the Closing Date. 10.3 PERFORMANCE. The Seller shall have performed or complied with all agreements and covenants required by this Agreement of which performance or compliance is required prior to or at the Closing Date. 10.4 FURTHER ASSURANCES. Buyer shall have received Seller's assurance that the Assignments delivered hereunder are validly executed on behalf of Seller. 10.5 BUYER'S LENDER'S REVIEW. Buyer's lender shall have the right to review and ratify the Agreement and request reasonable technical amendments thereto to facilitate Buyer's financing of the Purchase Price of the Assets. Notwithstanding any provisions to the contrary, such review shall be completed by October 30, 1997. SECTION 11. SELLER'S CONDITIONS TO CLOSING The obligations of Seller to consummate the transaction provided for herein are subject, at the option of Seller, to the fulfillment on or prior to Closing, of each of the following conditions: 11.1 BANKRUPTCY COURT APPROVAL. The obtaining on or before November 7, 1997 of an Order for the Bankruptcy Court (i) authorizing the sale of the Assets pursuant to the terms of this Agreement free and clear of all liens, claims and interest (including, but not limited to any charges or liens against adverse claims to or preferential rights to purchase the Assets) and (ii) finding that the Buyer has purchased the Assets in good faith in accordance with Section 363(m) of the Bankruptcy Code. 11.2 REPRESENTATIONS. The representations by Buyer set forth in Section 7 above shall be true and correct in all material respects as of the Closing Date. 11.3 PERFORMANCE. The Buyer shall have performed or complied with all agreements and covenants required by this Agreement of which performance or compliance is required prior to or at the Closing Date. -18- 11.4 FURTHER ASSURANCES. Seller shall have received Buyer's assurance that (a) the consummation of the transaction contemplated by the Agreement will not violate the provisions of Buyer's corporate charter, by-laws or any agreement, instrument, order of judgment or law by which it is bound, and (b) the Assignments delivered hereunder are validly executed on behalf of Buyer. 11.5 POSTING AND SUBSTITUTION OF BONDS. Seller shall have received evidence of the Buyer's posting of all bonds required by the MMS. 11.6 POSTING OF THE LENDER'S COMMITMENT LETTER. The Buyer shall have delivered to Seller the Lender's Commitment Letter in accordance with the provisions of Section 9.2 hereof. 11.7 MMS APPROVAL. (a) This Agreement is subject to the approval by the MMS of (i) the Assignments of Leases, (ii) the resignation of Seller as operator of the Subject Interests for which it is presently designated as operator, (iii) the designation of Buyer, or its affiliate, subsidiary, designee or nominee, as operator of those Leases presently operated by Seller, and (iv) such other governmental conditions or requirements imposed by statute, regulation, rule, order or decree. (b) In the event MMS approval of (i) the Assignments of Leases, (ii) the resignation of Seller as operator, (iii) the designation of Buyer or its affiliate, subsidiary, designee or nominee as operator, and (iv) such other governmental conditions or requirements imposed by statute, regulation, rule, order or decree, is not obtained as of the Closing Date, the Purchase Price shall be placed in an escrow account pursuant to the terms and conditions of a mutually agreed upon Escrow Agreement, which agreement shall be in a form substantially similar to the Escrow Agreement EXHIBIT "C". 11.8 REJECTION OF EXECUTORY CONTRACTS. The filing with the Bankruptcy Court of a motion or motions for the rejection of those executory contracts which Buyer has notified Seller it does not wish to assume. SECTION 12. CLOSING 12.1 TIME AND PLACE OF CLOSING. Closing shall occur on the Closing Date, or such other time as may be mutually agreed by the parties with approval of the Bankruptcy Court, at the offices of Weil, Gotshal & Manges LLP at 700 Louisiana, Suite 1600, Houston, Texas 77002. -19- 12.2 CONDITIONS PRECEDENT. Each party's obligation to consummate the transactions contemplated by this Agreement is subject to the satisfaction or waiver by the other party of the following conditions: (a) Seller has Defensible Title; (b) Buyer shall have received a certificate, dated as of the Closing Date, and in the form attached as Exhibit "K" executed by the duly authorized Trustee to the effect that to the Trustee's knowledge, the statements made herein by Seller are true and correct as of the Closing Date. (c) Seller shall have received a certificate, dated as of the Closing Date, and in the form attached hereto as Exhibit "L", executed by a duly authorized officer of Buyer to the effect that the statements made herein by Buyer are true and correct as of the Closing Date. (d) Each party shall have performed and complied with all terms of this Agreement required to be performed or complied with by it at or prior to Closing. (e) No action or proceeding by or before any governmental authority shall have been instituted or threatened (and not subsequently dismissed, settled or otherwise terminated) which might restrain, prohibit or invalidate any of the transactions contemplated by this Agreement, other than an action or proceeding instituted or threatened by a party or any of its affiliates. (f) The representations contained in Sections 5 and 7 shall be true and correct in all material respects on the Closing Date as though made on and as of the Closing Date. 12.3 CLOSING EVENTS. At Closing, the following events shall occur: (a) Buyer and Seller shall execute and acknowledge an Assignment for each of the Subject Interests Assets listed on EXHIBITS "A" AND "A-1" in form and substance sufficient to convey title to the Assets in accordance with the terms of this Agreement. The form of the Assignments shall be substantially similar to the form attached hereto as EXHIBITS "B-1," "B-2" AND "B-3". (b) Buyer and Seller shall execute and acknowledge any such other instruments as are reasonably necessary to effectuate the conveyance of the Assets to Buyer, including without limitation, separate assignments of the Assets on officially approved forms in sufficient counterparts to satisfy applicable statutory and regulatory requirements for the transfer of the Assets. -20- (c) To the extent permitted by law or contract, Seller shall execute and deliver at Closing the requisite number of Designation of Operator forms and any other necessary forms, as may be required by the MMS or other governmental agency having jurisdiction, to designate Buyer, or an affiliate or subsidiary or its designee or nominee, as operator. (d) Seller shall execute and deliver at Closing all transfer orders or Letters-in-Lieu as may be required by Buyer. (e) Seller and Buyer shall execute the Escrow Agreement. (f) The Purchase Price shall be paid by the Buyer into the Escrow Account via wire transfer. Seller and Buyer acknowledge and agree that the assignment of the Subject Interests and the designation of the change of operatorship are required to be submitted to the MMS for approval. Distribution of the Purchase Price and payment (or assumption) of the Additional Consideration shall be contingent upon MMS approval of (i) the assignment(s) of the Subject Interests, (ii) change or designation of operator forms and (iii) all such other governmental compliance forms as may be required by the MMS to complete the transfer of the Subject Interests to Buyer. SECTION 13. EFFECT OF CLOSING 13.1 ALLOCATION OF REVENUES. Seller shall receive all proceeds from the sale of Hydrocarbons physically produced or allocable to the Assets, prior to the Effective Date, and shall also receive all other revenues attributable to the Assets accruing or relating to all periods before the Effective Date. Buyer shall receive all proceeds from the sale of Hydrocarbons physically produced from or allocable to the Assets on or after the Effective Date, and shall also receive all other revenues and benefits attributable to the Assets accruing or relating to all periods after the Effective Date. 13.2 PAYMENT OF INVOICES. After the Closing, Seller shall be required to pay only that portion of invoices received that are applicable to work performed or material received in the period prior to the Effective Date; other charges and invoices shall be returned to the vendor for rebilling to Buyer. Similarly, after the Closing, Buyer shall pay only that portion of invoices received that are applicable to work performed or material received in the period subsequent to the Effective Date; other charges and invoices shall be returned to the vendor for rebilling to Seller. 13.3 TAXES. (a) APPORTIONMENT OF AD VALOREM AND PROPERTY TAXES. All ad valorem, real property taxes and personal property taxes, including interest and penalties attributable -21- thereto (hereinafter "Property Taxes"), attributable to the Assets with respect to the tax assessment period during which the Effective Date occurs ("Tax Period") shall be apportioned as of the Effective Date between Seller and Buyer, with Seller paying a fraction thereof based upon the number of days in the Tax Period prior to the Effective Date and Buyer paying the balance for the period beginning on or after the Effective Date. The owner of record on the assessment date shall file or cause to be filed all required reports and returns incident to the Property Taxes and shall pay or cause to be paid to the taxing authorities all Property Taxes relating to the Tax Period. If the Seller is the owner of record on the assessment date, then Buyer shall pay to Seller Buyer's pro-rata portion of Property Taxes within thirty (30) days after receipt of Seller's invoice thereof. If Buyer is the owner of record as of the assessment date then Seller shall pay to Buyer Seller's pro-rata portion of the Property Taxes within thirty (30) days after receipt of Buyer's invoice therefore. (b) SALES TAXES. Notwithstanding any other provision of this Agreement to the contrary, the Buyer shall be liable for and shall pay all of (a) any transfer taxes (including documentary taxes) and fees imposed with respect to instruments of conveyance in the transactions contemplated hereby and (b) any sales, use, gains (including state and local transfer gains taxes), excise and other transfer or similar taxes incurred in connection with the transactions contemplated by this Agreement. Each party shall execute and deliver to each other party any certificates or other documents as such other party may reasonably request to perfect any exemption from any such transfer, documentary, sales, gains excise or use Tax or otherwise comply with the applicable reporting requirements with respect to such taxes. (c) OTHER TAXES. Except for income taxes, franchise taxes and those taxes described in Sections 12.6(a) and (b) of this Agreement, all other federal, state and local taxes (including interest and penalties attributable thereto) on the ownership or operations of the Assets which are imposed with respect to periods or portions of periods prior to the Effective Date shall be paid by Seller and all such Taxes imposed with respect to periods or portions of periods beginning on or after the Effective Date shall be paid by Buyer. 13.4 FINAL ADJUSTMENTS. (a) Within thirty days (30) days after the date of Closing, Seller shall prepare a final accounting (the "Final Accounting") for the adjustments to the Purchase Price. Seller shall submit the Final Accounting statement to Buyer, along with copies of third party vendor invoices or other evidence of expenses agreed to by Buyer and Seller, and Buyer shall have thirty (30) days to audit same and confirm the accuracy thereof. Upon agreement by Buyer and Seller as to the accuracy of said Final Accounting, or upon the expiration of said thirty (30) day period, whichever occurs first, Seller or Buyer, whichever the case may be, shall promptly pay to the other such sum as may be found -22- due, after making adjustments for any payments made at Closing in accordance with the Closing Statement. (b) If Buyer and Seller are unable to agree to all adjustments respecting the Final Accounting, within thirty (30) days after Buyer's receipt of the Final Accounting submitted by Seller, such adjustments which are not in dispute shall be made between Buyer or Seller at the expiration of such 30-day period, and as to the adjustments, which remain in dispute, Buyer and Seller shall continue to negotiate in good faith to reach a final agreement as to such disputed adjustments. If Buyer and Seller are unable to agree to such final adjustments within sixty (60) days after Seller provides the Final Accounting to Buyer, the parties shall submit such disagreement to the Bankruptcy Court for final resolution. Within five (5) days after the decision of the Bankruptcy Court, the Buyer or Seller, as the case may be, shall promptly make a cash payment to the other equal to the sum as may be found to be due as the Final Accounting. (c) Nothing in this Section 13.4 shall limit any right of either party to assert a claim for revenues or reimbursement after the Final Accounting, and in this regard (i) should any party receive revenues to which the other is entitled, such party shall pay over such revenues to the appropriate party within 30 days of receipt thereof, and (ii) should any party pay for costs or expenses for which the other party is responsible, such party shall reimburse the other party within 30 days of the date the responsible party receives an invoice for such costs and expenses. SECTION 14. INDEMNITY 14.1 LIABILITIES. The term "Liabilities" shall mean any and all payments, charges, judgments, assessments, liabilities, damages, penalties, fines or costs and expenses paid or incurred by the person seeking indemnification, including any legal or other expenses reasonably incurred in connection therewith. 14.2 INDEMNIFICATION BY SELLER. After the Closing and until the Trustee shall have been discharged, Seller shall be responsible for, shall pay on a current basis, and shall indemnify, defend, save, hold harmless, discharge and release Buyer, all of its affiliates, successors and, permitted assignees, and all of its and their respective stockholders, directors, officers, employees, agents and representatives (collectively, "Buyer Indemnified Parties") from and against any and all Liabilities, arising from, based upon, related to or associated with (a) any act or omission by Seller involving or relating to, or conditions existing on or relating to, the Assets and occurring between June 17, 1997 and the Effective Date, other than obligations and liabilities assumed by Buyer; and (b) any brokers' or finders' fees or commissions arising with respect to brokers or finders retained or engaged by Seller and resulting from or relating to the transactions contemplated in this Agreement. -23- 14.3 INDEMNIFICATION BY BUYER. After the Closing and until the Trustee shall have been discharged, Buyer shall assume, be responsible for, shall pay on a current basis, and shall indemnify, defend, save, hold harmless, discharge and release Seller, its Trustee, its affiliates, its and their successors and permitted assigns, and all of their respective stockholders, directors, officers, employees, agents and representatives (collectively, "Trustee Indemnified Parties") from and against all Liabilities arising from, based upon, related to or associated with (a) any act or omission by Seller involving or relating to, or conditions existing on or relating to, the Assets occurring after the Effective Date; and (b) any brokers' or finders' fees or commissions resulting from or relating to the transactions contemplated in this Agreement. SECTION 15. ENVIRONMENTAL MATTERS 15.1 ENVIRONMENTAL DUE DILIGENCE. Buyer has had, or shall be given access to all environmental data in Seller's files for the Assets to be sold herein. Seller shall cooperate with Buyer for the performance by Buyer of any additional environmental testing, including a Phase I Site Assessment, NORM survey report and Cathodic protection surveys, at Buyer's expense, which testing shall be conducted in a reasonable manner so as not to interfere with Seller's operation of the Assets (the "Environmental Due Diligence"). Seller and Buyer shall cooperate to ensure that such testing is performed and completed on an expedited basis, but in no event later than October 30, 1997 (the "Environmental Due Diligence Completion Date"). 15.2 MATERIAL CONTAMINATION. If as a result of Buyer's environmental review, it is determined that the environment associated with the Assets has been materially contaminated ("Materially Contaminated" or "Material Contamination" being defined as the violation of existing applicable federal or state laws or regulations or common law principles existing as of the Effective Date, with respect to environmental conditions, to the extent that as to each claim, in the aggregate, (i) prosecution, if instituted, would be reasonably likely to result in a penalty, fine or damage payment of $1,000,000.00 or more or (ii) removal and remediation of such contamination required by federal or state laws or regulations existing as of the Effective Date would be reasonably likely to result in expenditures of $1,000,000.00 or more), Buyer shall notify Seller in writing of any and all such Material Contamination claims no later than the Environmental Due Diligence Completion Date. Such notification shall include (i) a detailed description of such claims, (ii) a copy of any environmental assessment, reports, data and information pertaining to such claims, and (iii) Buyer's calculation of the amount by which such claims have diminished the value of the Assets. 15.3 REMEDIES FOR MATERIAL CONTAMINATION. Buyer shall have the unilateral right to terminate this Agreement prior to the Environmental Due Diligence Completion Date for any Material Contamination found to exist with respect to the Assets. In the event Buyer shall not have notified Seller of the existence of any such Material Contamination claim by the Environmental Due Diligence Completion Date, Buyer shall be conclusively presumed to have -24- accepted the Assets in their present condition, including Assets which have been Materially Contaminated or which contain Material Contamination. 15.4 NORM: It is expressly recognized that the lands and/or water bottoms, along with surface facilities and production equipment located thereon, having been used in connection with oil and gas production activities, may contain naturally occurring radioactive materials (NORM) as a result of these operations. Accordingly, lands and/or water bottoms, the Wells, and the Personal Property transferred herein are transferred with the restriction that they will be used only in connection with oil and gas producing activities associated with the Leases, and will not be subsequently transferred for unrestricted use unless the concentrations of NORM associated therewith are below the levels specified as allowable for unrestricted transfer as set forth in any and all applicable laws, orders, rules or regulations of any governmental agency or court having jurisdiction. SECTION 16. TERMINATION Each party to this Agreement shall use its best efforts in the performance of its obligations under this Agreement and the satisfaction of all conditions and obligations. This Agreement and the transactions contemplated herein may be terminated as provided elsewhere in this Agreement or as follows: (a) Either party may terminate this Agreement at any time prior to the General Due Diligence Completion Date, without liability or recourse; or (b) Buyer may terminate this Agreement at any time prior to the Environmental Due Diligence Completion Date, without liability or recourse; or (c) This Agreement may be terminated in accordance with the provisions of Sections 2.9 (Risk of Loss) and 3.4 (Buyer's Title Review), or as may otherwise be specifically provided in this Agreement. In the event of termination of this Agreement pursuant to the terms and provisions hereof, each party shall return all records, maps, files, papers and other property of the other then in its possession and neither party shall thereafter have any liability under this Agreement of any nature to the other. These provisions of this section shall not, however, preclude liability attaching to a party who has willfully caused the termination hereof by any act or failure to act in violation of the terms and provisions of this Agreement. SECTION 17. BANKRUPTCY COURT APPROVAL -25- 17.1 APPROVAL MOTION. As soon as practicable, Seller shall file with Bankruptcy Court a motion, with supporting papers and a proposed form of Order the substance of which shall have been approved by Buyer, seeking the Bankruptcy Court's approval of: (a) the sale of the Assets to Buyer free and clear of all liens, claims, interests and encumbrances pursuant to Section 363 of the Bankruptcy Code, (b) this Agreement, (c) Seller's performance under this Agreement, and (d) the assumption and assignment of the Assumed Contracts. 17.2 SUBSEQUENT OFFERS. Should Seller receive an offer to purchase the Assets subsequent to the execution of this Agreement, such offers shall be submitted to the Bankruptcy Court for approval, and such offers must exceed the aggregate of the Purchase Price, the Additional Consideration and Buyer's Expense Reimbursement, by at least $1,000,000.00 or such other amount as may be set by the Bankruptcy Court. In the event a third party offer is approved by the Bankruptcy Court, the Seller shall pay Buyer an amount equal to Buyer's Expense Reimbursement. 17.3 BANKRUPTCY COURT APPROVAL. (a) This Agreement is entered into by both parties with the express understanding that it is subject to (i) approval of the Bankruptcy Court, (ii) any other offers which may be submitted to the Bankruptcy Court as part of its approval process, which offers must exceed by $1,000,000 of the Purchase Price, the Additional Consideration and Buyer's Expense Reimbursement, in the aggregate or by any such other amount as may be set by the Bankruptcy Court, and (iii) all applicable rules and regulations under the United States Bankruptcy Code. (b) Notwithstanding anything to the contrary, through the date on which the motion to approve this sale is heard by the Bankruptcy Court, Seller shall not actively market any of the Assets covered by this Agreement; provided, however, that Seller shall have the right to receive and entertain other third party offers to purchase the Assets. Upon the receipt of any third party offer or notice of intent to submit an offer, Seller shall provide to Buyer prompt written notice thereof of Seller's receipt of same. Such notice to Buyer shall include the name, address of the third party, the third party purchase price, including any additional consideration, and all other terms, if any. SECTION 18. MISCELLANEOUS 18.1 ENTIRE AGREEMENT. This Agreement, and the documents to be executed hereunder, constitute the entire agreement between the parties hereto pertaining to the Assets and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written. There are no warranties, representations or other agreements between the parties in connection with the Assets except as specifically set forth herein or in documents delivered pursuant hereto or executed contemporaneously herewith. No supplement, amendment, -26- alteration, modification, waiver or termination of this Agreement shall be binding unless executed in writing by the parties right to enforce same. All of the Exhibits referred to in this Agreement are hereby incorporated in this Agreement by reference and constitute a part of this Agreement. Each party to this Agreement and its counsel has received a complete set of Exhibits prior to and as of the execution of this Agreement. 18.2 WAIVER. Any failure of any party to comply with any of its obligations, agreements or conditions contained herein may be waived by the party to whom such compliance is owed. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. 18.3 CAPTIONS. The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. 18.4 ASSIGNMENT. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns and may not be assigned without prior written consent of all parties hereto, which consent shall not be unreasonably withheld. 18.5 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement shall entitle any party other than Buyer and Seller to any claim, cause of action, remedy or right of any kind. 18.6 NEWS RELEASES. Seller and Buyer shall consult with each other with regard to all press releases. 18.7 JURISDICTION. The Bankruptcy Court has, and shall retain, to the extent permissible under the Bankruptcy Code, jurisdiction over the transactions contemplated hereby, including without limitation jurisdiction over the Agreement, the signatories to this Agreement and their successors and assigns, for the purposes of enforcing the terms of this Agreement and adjudicating any disputes arising hereunder or thereunder. 18.8 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas without regard to its conflict of laws provisions; provided, however, the validity of the various conveyances affecting the title to real property shall be governed by and construed in accordance with the laws of the state in which the Assets are located. 18.9 NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been given if delivered to: -27- SELLER: Sheila Macdonald, Trustee Midcon Offshore, Inc. 2323 Shepherd, Suite 915 Houston, Texas 77019 Telephone: (713) 520-0377 Telecopier: (713) 520-1427 and Harry A. Perrin Weil, Gotshal & Manges LLP 700 Louisiana, Suite 1600 Houston, Texas 77002 Telephone: (713) 546-5000 Telecopier: (713) 224-9511 and M. Taylor Darden Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, L.L.C. 1100 Poydras St., Suite 2700 New Orleans, Louisiana 70163 Telephone: (504) 585-3000 Telecopier: (504) 585-3801 BUYER: Thomas F. Cooke Saratoga Resources, Inc. 2000 Dairy Ashford S., Suite 410 Houston, Texas 77077 Telephone: (713) 531-0022 Telecopier: and William M. Gray 3850 N. Causeway Boulevard, Suite 830 Metairie, Louisiana 70002 Telephone: (504) 831-9008 Telecopier: (504) 831-1528, or to such other address as either party may communicate to the other in writing. -28- 18.10 EXPENSES. Except as otherwise provided herein, each party shall be solely responsible for all expenses incurred by it in connection with this transaction (including, without limitation, fees and expenses of its own counsel and accountants) and shall not be entitled to any reimbursement therefor from the other; provided, however, that this provision shall not limit Seller's ability to seek compensation for the benefit of the Seller's "Estate" (as defined and understood under Title 11 of the United States Code) to recover from the proceeds distributable to the holders of secured claims the reasonable and necessary costs and expenses of preserving or selling the property pursuant to 11 U.S.C. ss.506. 18.11 SURVIVAL. The terms and provisions of this Agreement shall survive the Closing. 18.12 FURTHER COOPERATION. After the Closing, each party shall execute, acknowledge, and deliver all documents, and take all such acts which from time to time may be reasonably requested by the other party in order to carry out the purposes and intent of this Agreement. 18.13 COUNTERPARTS. This Agreement may be executed in one or more counterparts with the same effect as if all signatures of the parties hereto were on the same document, but in such event each counterpart shall constitute an original, and all of such counterparts shall constitute one Agreement; but in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart signed by each party. 18.14 SEVERABILITY. If any term, agreement between the parties or other provisions of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any adverse manner to either party. 18.15 TIME OF THE ESSENCE. Unless otherwise indicated, time is of the essence in the performance of each and every obligation under this Agreement. 18.16 BINDING EFFECT. Subject to Bankruptcy Court approval, this Agreement shall be binding upon the undersigned and their respective successors and assigns. -29- EXECUTED on the day and year first written above. SELLER: MIDCON OFFSHORE, INC. By: /S/ S. MACDONALD -------------------------------------------- Sheila Macdonald Chapter 11 Trustee for Midcon Offshore, Inc. BUYER: SARATOGA RESOURCES, INC. By: /S/ THOMAS F. COOK -------------------------------------------- Thomas F. Cooke Chairman and Chief Executive Officer -30- AMENDMENT TO AGREEMENT OF PURCHASE AND SALE This AMENDMENT TO AGREEMENT OF PURCHASE AND SALE ("Agreement") is made and entered into on this day of November, 1997, by and between MIDCON OFFSHORE, ---- INC., a Texas corporation, appearing herein through SHEILA MACDONALD, its duly appointed Trustee in a proceeding filed under Title 11 of the United States Code on December 16, 1996, in the Southern District of Texas, Corpus Christi Division, Case No. 96-25269-C (hereinafter referred to as "Seller") and SARATOGA RESOURCES, INC., a Texas corporation (hereinafter referred to as "Buyer"). WITNESSETH: WHEREAS, under date of October 22, 1997, Seller and Buyer entered into that certain Agreement of Purchase and Sale (the "Agreement") providing for the purchase and sale of Seller's interest in certain oil and gas interests, related equipment, assets and other real, personal movable, immovable and mixed property, all as is more particularly set forth and described in said Agreement; and WHEREAS, Buyer and Seller wish to amend certain provisions thereof; and to correct others. NOW THEREFORE, in consideration of the mutual promises contained herein, the benefits to be derived by each party hereunder and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller agree to the following clarifying amendment: 1. Section 1.8, BUYER'S EXPENSE REIMBURSEMENT, shall be amended and restated in its entirety to read as follows: Section 1.8. BUYER'S EXPENSE REIMBURSEMENT. The phrase "Buyer's Expense Reimbursement" shall mean an amount equal to Four Hundred Thousand and No/100 Dollars ($400,000) which Buyer has incurred in connection with its efforts to purchase the Assets. 2. Section 2.4 shall be amended and restated in its entirety to read as follows: Section 2.4 PURCHASE PRICE. The Purchase Price shall be in the aggregate amount of Twenty-Eight Million Five Hundred Thousand and No/100 Dollars ($28,500,000.00) payable in full in same day funds at the Closing. 3. Section 2.5, ADDITIONAL CONSIDERATION, shall be amended to delete in its entirety paragraph 2.5(e). 4. Section 2.5, ADDITIONAL CONSIDERATION, shall be amended to re-number paragraph 2.5(f) as paragraph 2.5(e). 5. The last two sentences of Section 2.5, ADDITIONAL CONSIDERATION, shall be amended and restated in its entirety to read as follows: For purposes of this Section, Seller and Buyer estimate that total value of the Additional Consideration set forth in Section 2.5(a) to (d) to be paid by Buyer is not less than Three Million Six Hundred Eighty Eight Thousand and No/100 Dollars ($3,688,000). The Additional Consideration set forth in Section 2.5(e) above is a contingent liability which cannot be estimated for purposes of this Agreement. 6. With respect to all liabilities arising in connection with the contracts listed and described on EXHIBIT "F" to the Agreement (the "Assumed Contracts"), which contracts are to be assumed and assigned by Seller as part of the sale of the Assets to Buyer: (a) Seller agrees to pay all cure obligations under Section 365 of the Bankruptcy Code determined by the Bankruptcy Court to be due and owing with respect to the Leases (as defined in the Agreement and listed under Item Nos. 20, 21, 22, 23, 24, 25, 26 and 27 of EXHIBIT "F" to the Agreement) to be sold and assigned under the Agreement. (b) Seller agrees to pay all cure costs associated with the assumption of the Operating Agreement regarding High Island Block A-568 (Item No. 17), provided, however, that Buyer agrees to assume and cure all obligations for the gas imbalance attributable to the interests of Samedan in and to High Island Block A-568. -2- (c) Seller agrees to pay all cure costs associated with the assumption of the Unit Operating Agreement covering Vermilion Blocks 329 and 338 (Item No. 11); provided, however, that Buyer agrees to assume and cure all obligations arising under the contributions to the plugging and abandonment escrow fund. Further, Seller agrees to give credit to Buyer equal to the amount of all mechanics' and materialmen's liens which have not been released as against 100% of the working interest of the leases (OCS-G 2876 and OCS-G 2877) within thirty (30) days following Closing. 7. In subsection (g) of Section 2.1, AGREEMENT TO SELL AND PURCHASE THE ASSETS, the following shall be inserted in the fifth line from the top of page 5, after the work "therefrom": (the "Geophysical Data"). 8. Subsection (b) of Section 2.8, ALLOCATION OF RIGHTS AND LIABILITIES, shall be amended to delete therefrom the reference to Section 12.6(a) and to substitute therefor "Section 2.6(a)." 9. Section 8.3, PRESERVATION OF MATERIAL AGREEMENTS, shall be amended and restated in its entirety as follows: Section 8.3. PRESERVATION OF MATERIAL AGREEMENTS. The Seller shall preserve in full force and effect the Assumed Contracts and the Applicable Agreements. -3- 10. Except as corrected and amended herein, the Agreement to Purchase and Sale entered into between Seller and Buyer shall remain as written. EXECUTED on this day of November, 1997. ---- SELLER: MIDCON OFFSHORE, INC. By: ----------------------------------------- Sheila Macdonald Chapter 11 Trustee for Midcon Offshore, Inc. BUYER: SARATOGA RESOURCES, INC. By: ----------------------------------------- Its: ---------------------------------------- -4- EXHIBIT B 10/18/97 CHART OF RECORDED LIENS*
A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ======================================================================================================================= 1. Abbeville Lumber West Cameron 23,400.00 Dated 11/22/96, Recorded Agreed Order dated 0.00 P.O. Box 818 Block 45 11/25/96, 08/26/97 Abbeville, LA (S/2) Document No. 248505, 70511-0818 Book 221, Page 863 2. Abbeville Lumber West Cameron 32,304.95 Dated 12/04/95, Recorded Agreed Order dated 23,400.00 P.O. Box 818 Block 45 11/21/96, 08/26/97 Abbeville, LA (S/2) Document No. 248451, 70511-0818 Book 221, Page 775 3. Abbeville Lumber Vermilion 338 65,400.00 Dated 11/22/96, Recorded Agreed Order dated 0.00 P.O. Box 818 11/22/96, 08/26/97 Abbeville, LA Document No. 96-13967 70511-0818 4. Abbeville Lumber Vermilion 329 65,400.00 Dated 11/22/96, Recorded Agreed Order dated 0.00 P.O. Box 818 11/22/96, 08/26/97 Abbeville, LA Document No. 96-13967 70511-0818 5. Aries Marine Corporation West Cameron 17,632.28 Dated 12/12/96, Recorded Identical lien on P.O. Drawer 51789 Block 45 12/12/96, multiple 17,632.28 Lafayette, LA 70505 (S/2) Document No. 248726, properties Book 222, Page 805 6. Aries Marine Corporation West Cameron 17,632.28 Dated 12/12/96, Recorded Identical lien on 0.00 P.O. Drawer 51789 Block 56 12/12/96, multiple Lafayette, LA 70505 (N/2) Document No. 248726, properties Book 222, Page 805 7. Baroid Drilling Fluids, West Cameron 99,155.64 Dated 09/30/96, Recorded Inc. Block 45 10/04/96, 99,155.64 P.O. Box 1675 (S/2) Document No. 247578, Houston, Texas 77251 Book 220, Page 728 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 8. C & G Boats, Inc. West Cameron 37,500.00 Dated 12/06/96, Recorded c/o Salvador J. Pusateri Block 45 12/12/96, 37,500.00 4900 One Shell Square (S/2) Document No. 2488721, New Orleans, LA Book 222, 70139-7701 Page 740 C & G Boats, Inc. P.O. Box 789 Golden Meadow, LA 70637 9. C & G Boats, Inc. Vermilion 329 6,000.00 Dated 12/06/96, Recorded c/o Salvador J. Pusateri 12/09/96, 6,000.00 4900 One Shell Square Document No. 96-14617 New Orleans, LA 70139-7701 C & G Boats, Inc. P.O. Box 789 Golden Meadow, LA 70637 10. DataChem, Inc. East Cameron 43,690.75 Dated 04/05/95, Recorded Identical lien on P.O. Drawer 1840 Block 220 04/07/95, multiple 43,690.75 La Place, LA 70069-1840 Document No. 240226, Book properties 208, Page 800 11. DataChem Inc. West Cameron 43,690.75 Dated 04/05/95, Recorded Identical lien on 0.00 P.O. Drawer 1840 Block 45 04/07/95, multiple La Place, LA 70069-1840 (S/2) Document No. 240226, Book properties 208, Page 800 12. DataChem, Inc. West Cameron 43,690.75 Dated 04/05/95, Recorded Identical lien on 0.00 P.O. Drawer 1840 Block 56 04/07/95, multiple La Place, LA 70069-1840 (N/2) Document No. 240226, properties Book 208, Page 800 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 2 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 13. Global Industries East Cameron 291,245.34 Dated 01/15/97, Recorded Offshore, Inc. Block 220 01/16/97, 291,245.34 c/o Mike Tesh Document No. 2490556, 900 Halliburton Center Book 223, 5151 San Felipe Page 541 Houston, Texas 77056 Global Industries Offshore, Inc. Lawrence Uter 107 Global Circle Lafayette, LA 70503 Global Industries Offshore, Inc. P.O. Box 31936 Lafayette, LA 70593-1936 Billy J. Dominque, Esq. Liskow & Lewis P. O. Box 52008 Lafayette, LA 70505-2008 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 3 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 14. Global Industries East Cameron 0.00 Recorded 1/16/97, 0.00 Offshore, Inc. Block 220 Document No. c/o Mike Tesh 249058, Book 223, Page 551 900 Halliburton Center 5151 San Felipe Houston, Texas 77056 Global Industries Offshore, Inc. Lawrence Uter 107 Global Circle Lafayette, LA 70503 Global Industries Offshore, Inc. P.O. Box 31936 Lafayette, LA 70593-1936 Billy J. Dominque, Esq. Liskow & Lewis P. O. Box 52008 Lafayette, LA 70505-2008 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 4 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 15. Global Industries East Cameron 111,089.00 Dated 1/15/97, Book 223, 111,089.00 Offshore, Inc. Block 220 Page 789 c/o Mike Tesh 900 Halliburton Center 5151 San Felipe Houston, Texas 77056 Global Industries Offshore, Inc. Lawrence Uter 107 Global Circle Lafayette, LA 70503 Global Industries Offshore, Inc. P.O. Box 31936 Lafayette, LA 70593-1936 Billy J. Dominque, Esq. Liskow & Lewis P. O. Box 52008 Lafayette, LA 70505-2008 16. Halliburton Energy East Cameron 1,038,746.96 Dated 02/17/97, Recorded 1,038,746. Service, Inc. Block 220 02/20/97, 96 c/o John Estes Document No. 249439, Book 5151 San Felipe, Suite 224, 2000 Page 265 Houston, Texas 77056 Halliburton Energy Services P.O. Box 951046 Dallas, Texas 75395-1046 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 5 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 17. Halliburton Energy East Cameron 1,038,746.96 Dated 03/24/97, Recorded Duplicate lien on 0.00 Service, Inc. Block 220 03/25/97, same c/o John Estes Document No. 249841, Book property 5151 San Felipe, Suite 225, 2000 Page 3 Houston, Texas 77056 Halliburton Energy Services P.O. Box 951046 Dallas, Texas 75395-1046 18. Halliburton Energy West Cameron 8,560.80 Dated 02/17/97, Recorded 8,560.80 Service, Inc. Block 45 02/20/97, c/o John Estes (S/2) Document No. 249440, 5151 San Felipe, Suite Book 224, 2000 Page 295 Houston, Texas 77056 Halliburton Energy Services P.O. Box 951046 Dallas, Texas 75395-1046 19. Halliburton Energy West Cameron 8,560.80 Dated 02/20/97, Recorded Duplicate lien on 0.00 Service, Inc. Block 45 03/21/97, same c/o John Estes (S/2) Document No. 249811, property 5151 San Felipe, Suite Book 224, 2000 Page 891 Houston, Texas 77056 Halliburton Energy Services P.O. Box 951046 Dallas, Texas 75395-1046 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 6 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 20. Halliburton Energy West Cameron 464,290.63 Dated 02/17/97, Recorded 464,290.63 Service, Inc. Block 56 02/20/97, c/o John Estes (N/2) Document No. 249441, 5151 San Felipe, Suite Book 224, 2000 Page 298 Houston, Texas 77056 Halliburton Energy Services P.O. Box 951046 Dallas, Texas 75395-1046 21. Halliburton Energy West Cameron 464,290.63 Dated 02/20/97, Recorded Duplicate lien on 0.00 Service, Inc. Block 56 03/25/97, same c/o John Estes (N/2) Document No. 249842, property 5151 San Felipe, Suite Book 225, 2000 Page 33 Houston, Texas 77056 Halliburton Energy Services P.O. Box 951046 Dallas, Texas 75395-1046 22. Hanover Compressor Co. East Cameron 10,849.55 Dated 12/13/96, Recorded 10,849.55 c/o Paul J. Franzetti Block 220 12/16/96, Sinex & Stephenson Document No. 248754, Book 2323 S. Shepherd, 14th 222, Floor Page 868 Houston, Texas 77019 Hanover Compressor P.O. Box 840332 Dallas, Texas 75284-0332 Hanover Compressor Company, Inc. Attn: Mr. Michael J. McGhan 12001 N. Houston Rossyln Houston, Texas 77086 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 7 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 23. International Boat East Cameron 164,581.41 Dated 04/10/97, Recorded 164,581.41 Rentals Inc. Block 220 04/17/97, P.O. Box 1607 Document No. 250192, Book Larose, LA 70373 225, Page 485 Ryan Marine Services, Inc. P.O. Box 1448 Galveston, Texas 77553 24. International Boat Mustang 13,600.00 Dated 3/5/97, Recorded 13,600.00 Rentals, Inc. Island, 3/6/97, P.O. Box 1607 Block 791 Document No. 1997008349 Larose, LA 70373 25. International Boat West Cameron 60,419.30 Dated 04/10/97, Recorded 60,419.30 Rentals Inc. Block 45 05/17/97, P.O. Box 1607 (S/2) Document No. 250191, Larose, LA 70373 Book 225, Page 471 Ryan Marine Services, Inc. P.O. Box 1448 Galveston, Texas 77553 26. Mar-Con Inc. East Cameron 109,178.93 Dated 12/11/96, Recorded 109,178.93 P.O. Box 40 Block 220 12/12/96, Erath, LA 70533 Document No. 248740, Book 222, Mar-Con, Inc. Page 844 P.O. Box 91027 Lafayette, LA 70509 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 8 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 27. Mar-Con Inc. P.O. Box 40 West Cameron 16,935.50 Dated 12/11/96, Recorded 16,935.50 Erath, LA 70533 Block 45 12/12/96, (S/2) Document No. 248741, Mar-Con, Inc. Book 222, P.O. Box 91027 Page 848 Lafayette, LA 70509 28. Planet Indemnity West Cameron 3,423,870.00 Dated 12/06/96, Recorded All plugging and 0.00 c/o John West Block 45 12/09/96, abandonment Vinson & Elkins, L.L.P. (S/2) Document No. 248694, obligations 2300 First City Tower Book 222, assumed by purchaser 1001 Fannin Street Page 746 Houston, Texas 77002-6760 29. Planet Indemnity Vermilion 338 1,640,188.00 Dated 12/06/96, Recorded All plugging and 0.00 c/o John West 12/09/96, abandonment Vinson & Elkins, L.L.P. Document No. 96-14617 obligations 2300 First City Tower assumed by purchaser 1001 Fannin Street Houston, Texas 77002-6760 30. Planet Indemnity Vermilion 329 1,640,188.00 Dated 12/06/96, Recorded All plugging and 0.00 c/o John West 12/09/96, abandonment Vinson & Elkins, L.L.P. Document No. 96-14617 obligations 2300 First City Tower assumed by purchaser 1001 Fannin Street Houston, Texas 77002-6760 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 9 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 31. Planet Indemnity Co. East Cameron 1,375,881.00 Dated 12/06/96, Recorded All plugging and 0.00 c/o John West Block 220 12/09/96, abandonment Vinson & Elkins, L.L.P. Document No. 248695, Book obligations 2300 First City Tower 222, assumed by purchaser 1001 Fannin Street Page 750 Houston, Texas 77002-6760 32. Platform Crane Service East Cameron 6,053.21 Dated 12/11/96, Recorded 6,053.21 Inc. Block 220 12/12/96, c/o John P. Dillman Document No. 248729, Book 3300 Texas Commerce 222, Tower Page 838 Houston, TX 77002 Platform Crane Service, Inc. P.O. Box 2955 Slidell, LA 70459 33. Platform Crane Service East Cameron 5,387.22 Dated 12/11/96, Recorded 5,387.22 Inc. Block 220 12/12/96, c/o John P. Dillman Document No. 248730, Book 3300 Texas Commerce 222, Tower Page 840 Houston, TX 77002 Platform Crane Service, Inc. P.O. Box 2955 Slidell, LA 70459 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 10 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 34. Platform Crane Service West Cameron 781.91 Dated 12/11/96, Recorded 781.91 Inc. Block 45 12/12/96, c/o John P. Dillman (S/2) Document No. 248728, 3300 Texas Commerce Book 222, Tower Page 836 Houston, TX 77002 Platform Crane Service, Inc. P.O. Box 2955 Slidell, LA 70459 35. Platform Crane Service West Cameron 4,879.79 Dated 12/11/96, Recorded 4,879.79 Inc. Block 45 12/12/96, c/o John P. Dillman (S/2) Document No. 248731, 3300 Texas Commerce Book 222, Tower Page 842 Houston, TX 77002 Platform Crane Service, Inc. P.O. Box 2955 Slidell, LA 70459 36. Platform Crane Service Vermilion 329 7,057.81 Dated 12/11/96, Recorded 7,057.81 Inc. 12/12/96, c/o John P. Dillman Document No. 96-14742 3300 Texas Commerce Tower Houston, TX 77002 Platform Crane Service, Inc. P.O. Box 2955 Slidell, LA 70459 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 11 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 37. Ponder Fishing Tools West Cameron 0.00 Dated 03/14/97, Recorded 0.00 c/o William S. Malinoff 220 03/17/97, Malinoff & Associates Document No. 249735 Legal Services of Texas, P.C. P.O. Box 820529 Houston, Texas 77282-0529 Ponder Fishing Tools c/o Wayne Smith P.O. Box 2229 Alice, Texas 78333 38. Ponder Industries, Inc. East Cameron 126,609.88 Dated 03/14/97, Recorded 126,609.88 c/o William S. Malinoff Block 220 03/17/97, Malinoff & Associates Document No. 249734 Legal Services of Texas, P.C. P.O. Box 820529 Houston, Texas 77282-0529 Ponder Industries, Inc. c/o Wayne Smith P.O. Box 2229 Alice, Texas 78333 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 12 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 39. Production Management East Cameron 251,914.08 Dated 10/22/96, Recorded 251,914.08 Corporation Block 220 10/22/96, c/o Robin D. McGuire Document No. 248104, Book Jones, Walker, Waechter, 221, Poitevent, Carrere & Page 170 Denagre, L.L.P. 201 Rue Iberville, Suite 210 Lafayette, LA 70508 Production Management Corporation Attn: Stanley E. Ellington, Jr. 2439 Manhattan Blvd., Suite 500 P.O. Box 44 Harvey, Louisiana 70059 40. Production Management East Cameron 267,069.75 Dated 03/20/97, Recorded 267,069.75 Corporation Block 220 03/26/97, c/o Robin D. McGuire Document No. 249849, Book Jones, Walker, Waechter, 225, Poitevent, Carrere & Page 101 Denagre, L.L.P. 201 Rue Iberville, Suite 210 Lafayette, LA 70508 Production Management Corporation Attn: Stanley E. Ellington, Jr. 2439 Manhattan Blvd., Suite 500 P.O. Box 44 Harvey, Louisiana 70059 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 13 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 41. Production Management Mustang 66,642.77 Dated 10/22/96, Recorded 66,642.77 Corporation Island, 11/15/96, c/o Robin D. McGuire Block 791 Document No. 1996044521 Jones, Walker, Waechter, Poitevent, Carrere & Denagre, L.L.P. 201 Rue Iberville, Suite 210 Lafayette, LA 70508 Production Management Corporation Attn: Stanley E. Ellington, Jr. 2439 Manhattan Blvd., Suite 500 P.O. Box 44 Harvey, Louisiana 70059 42. Production Management Mustang 66,642.77 Dated 3/20/97, Recorded Duplicate lien on 0.00 Corporation Island, 3/31/97, same c/o Robin D. McGuire Block 791 Document No. 1997011422 property Jones, Walker, Waechter, Poitevent, Carrere & Denagre, L.L.P. 201 Rue Iberville, Suite 210 Lafayette, LA 70508 Production Management Corporation Attn: Stanley E. Ellington, Jr. 2439 Manhattan Blvd., Suite 500 P.O. Box 44 Harvey, Louisiana 70059 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 14 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 43. Production Management West Cameron 500,207.77 Dated 10/22/96, Recorded 500,207.77 Corporation Block 45 10/22/96, c/o Robin D. McGuire (S/2) Document No. 248105, Jones, Walker, Waechter, Book 221, Poitevent, Carrere & Page 173 Denagre, L.L.P. 201 Rue Iberville, Suite 210 Lafayette, LA 70508 Production Management Corporation Attn: Stanley E. Ellington, Jr. 2439 Manhattan Blvd., Suite 500 P.O. Box 44 Harvey, Louisiana 70059 44. Production Management West Cameron 500,207.77 Dated 03/20/97, Recorded Duplicate lien on 0.00 Corporation Block 45 03/26/97, same c/o Robin D. McGuire (S/2) Document No. 249848, property Jones, Walker, Waechter, Book 225, Poitevent, Carrere & Page 64 Denagre, L.L.P. 201 Rue Iberville, Suite 210 Lafayette, LA 70508 Production Management Corporation Attn: Stanley E. Ellington, Jr. 2439 Manhattan Blvd., Suite 500 P.O. Box 44 Harvey, Louisiana 70059 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 15 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 45. Production Management Vermilion 338 72,464.10 Dated 10/22/96, Recorded 72,464.10 Corporation 10/22/96, c/o Robin D. McGuire Document No. 96-12815 Jones, Walker, Waechter, Poitevent, Carrere & Denagre, L.L.P. 201 Rue Iberville, Suite 210 Lafayette, LA 70508 Production Management Corporation Attn: Stanley E. Ellington, Jr. 2439 Manhattan Blvd., Suite 500 P.O. Box 44 Harvey, Louisiana 70059 46. Production Management Vermilion 338 52,162.05 Dated 03/20/97, Recorded 57,162.05 Corporation 03/26/97, c/o Robin D. McGuire Document No. 96-3918 Jones, Walker, Waechter, Poitevent, Carrere & Denagre, L.L.P. 201 Rue Iberville, Suite 210 Lafayette, LA 70508 Production Management Corporation Attn: Stanley E. Ellington, Jr. 2439 Manhattan Blvd., Suite 500 P.O. Box 44 Harvey, Louisiana 70059 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 16 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 47. Production Management Vermilion 329 72,464.10 Dated 10/22/96, Recorded Identical lien on 0.00 Corporation 10/22/96, multiple c/o Robin D. McGuire Document No. 96-12815 properties Jones, Walker, Waechter, Poitevent, Carrere & Denagre, L.L.P. 201 Rue Iberville, Suite 210 Lafayette, LA 70508 Production Management Corporation Attn: Stanley E. Ellington, Jr. 2439 Manhattan Blvd., Suite 500 P.O. Box 44 Harvey, Louisiana 70059 48. Production Management Vermilion 329 52,162.05 Dated 03/20/97, Recorded Identical lien on 0.00 Corporation 03/26/97, multiple c/o Robin D. McGuire Document No. 97-3918 properties Jones, Walker, Waechter, Poitevent, Carrere & Denagre, L.L.P. 201 Rue Iberville, Suite 210 Lafayette, LA 70508 Production Management Corporation Attn: Stanley E. Ellington, Jr. 2439 Manhattan Blvd., Suite 500 P.O. Box 44 Harvey, Louisiana 70059 49. Ryan Marine Service, Mustang 13,600.00 Dated 3/5/97, Recorded Duplicate lien on 0.00 Inc. Island, 3/6/97, same P.O. Box 1448 Block 791 Document No. 1997008350 property filed by Galveston, Texas 77553 International Boat Rentals, Inc. - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 17 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 50. Samedan Oil Corporation High Island 315,877.63 Dated 02/26/97, Recorded 315,877.63 c/o David Bennett Block 568 03/18/97, Thompson & Knight Document No. _______, 1700 Pacific Avenue, Book 325, Suite 3300 Page 779 Dallas, Texas 75201-4693 Samedan Oil Corporation c/o Kent Jones 350 Glenborough #240 Houston, Texas 77067 Samedan Oil Corporation P.O. Box 840747 Dallas, Texas 75284-0747 51. The Sea Nav Corp. East Cameron 3,530.06 Dated 04/22/97, Recorded 3,530.06 1417 Hugh Wallis Road Block 220 04/28/97, South Document No. 250325, Book Lafayette, LA 70508 225, Page 689 52. The Sea Nav Corp. East Cameron 3,326.66 Dated 04/22/97, Recorded 3,326.66 1417 Hugh Wallis Road Block 220 04/28/97, South Document No. 250326, Book Lafayette, LA 70508 225, Page 696 53. The Sea Nav Corp. East Cameron 12,401.84 Dated 04/22/97, Recorded 12,401.84 1417 Hugh Wallis Road Block 220 04/28/97, South Document No. 250327, Book Lafayette, LA 70508 225, Page 703 54. The Sea Nav Corp. East Cameron 8,723.98 Dated 04/22/97, Recorded 8,723.98 1417 Hugh Wallis Road Block 220 04/28/97, South Document No. 250328, Book Lafayette, LA 70508 225, Page 710 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 18 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 55. The Sea Nav Corp. West Cameron 3,530.06 Dated 04/22/97, Recorded Duplicate lien 0.00 1417 Hugh Wallis Road Block 45 04/28/97, filed on South (S/2) Document No. 250325, multiple properties Lafayette, LA 70508 Book 225, Page 689 56. The Sea Nav Corp. West Cameron 3,326.66 Dated 04/22/97, Recorded Duplicate lien 0.00 1417 Hugh Wallis Road Block 45 04/28/97, filed on South (S/2) Document No. 250326, multiple properties Lafayette, LA 70508 Book 225, Page 696 57. The Sea Nav Corp. West Cameron 12,401.84 Dated 04/22/97, Recorded Duplicate lien 0.00 1417 Hugh Wallis Road Block 45 04/28/97, filed on South (S/2) Document No. 250327, multiple properties Lafayette, LA 70508 Book 225, Page 703 58. The Sea Nav Corp. West Cameron 8,723.98 Dated 04/22/97, Recorded Duplicate lien 0.00 1417 Hugh Wallis Road Block 45 04/28/97, filed on South (S/2) Document No. 250328, multiple properties Lafayette, LA 70508 Book 225, Page 710 59. The Sea Nav Corp. West Cameron 3,530.06 Dated 04/22/97, Recorded Duplicate lien 0.00 1417 Hugh Wallis Road Block 56 04/28/97, filed on South (N/2) Document No. 250325, multiple properties Lafayette, LA 70508 Book 225, Page 689 60. The Sea Nav Corp. West Cameron 3,326.66 Dated 04/22/97, Recorded Duplicate lien 0.00 1417 Hugh Wallis Road Block 56 04/28/97, filed on South (N/2) Document No. 250326, multiple properties Lafayette, LA 70508 Book 225, Page 696 61. The Sea Nav Corp. West Cameron 12,401.84 Dated 04/22/97, Recorded Duplicate lien 0.00 1417 Hugh Wallis Road Block 56 04/28/97, filed on South (N/2) Document No. 250327, multiple properties Lafayette, LA 70508 Book 225, Page 703 62. The Sea Nav Corp. West Cameron 8,723.98 Dated 04/22/97, Recorded Duplicate lien 0.00 1417 Hugh Wallis Road Block 56 04/28/97, filed on South (N/2) Document No. 250328, multiple properties Lafayette, LA 70508 Book 225, Page 710 63. The Sea Nav Corp. Vermilion 329 503.49 Dated 04/22/97, Recorded 503.49 1417 Hugh Wallis Road 04/28/97, South Document No. 97-5511 Lafayette, LA 70508 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 19 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 64. The Sea Nav Corp. Vermilion 329 8,723.98 Dated 04/22/97, Recorded Duplicate lien 0.00 1417 Hugh Wallis Road 04/28/97, filed on South Document No. 97-5546 multiple properties Lafayette, LA 70508 65. The Sea Nav Corp. Vermilion 329 503.49 Dated 04/22/97, Recorded Identical lien 0.00 1417 Hugh Wallis Road 04/28/97, filed on same South Document No. 97-5541 property Lafayette, LA 70508 66. Underwriter's Indemnity Vermilion 329 583,020.24 Dated 10/25/96, Recorded 583,020.24 c/o John West 12/09/96, Vinson & Elkins, L.L.P. Document No. 96-14618 2300 First City Tower 1001 Fannin Street Houston, Texas 77002-6760 67. Upstream Production Inc. East Cameron 51,932.11 Dated 11/27/96, Recorded 51,932.11 c/o Barry J. Sallinger Block 220 11/27/96, 820 East St. Mary Document No. 248544, Book Blvd., Suite 1 222, Lafayette, LA 70503 Page 24 Upstream Production Services, Inc. 123 Lafferty Broussard, LA 70518 68. Upstream Production Inc. West Cameron 9,719.80 Dated 11/27/96, Recorded 9,719.80 c/o Barry J. Sallinger Block 45 11/27/96, 820 East St. Mary (S/2) Document No. 248546, Blvd., Suite 1 Book 222, Lafayette, LA 70503 Page 26 Upstream Production Services, Inc. 123 Lafferty Broussard, LA 70518 - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT. 20 CHART OF RECORDED LIENS* (continued) A. C. D. E. F. G. ADJUSTED AMOUNT AMOUNT CREDITOR PROPERTY $ RECORDING INFORMATION BASIS FOR ADJUSTMENT $ ========================================================================================================================== 69. Wedge DiaLog Inc. West Cameron 20,942.90 Dated 11/11/96, Recorded 20,942.90 P.O. Box 540069 Block 45 11/15/96, Grand Prairie, Texas (S/2) Document No. 248387, 75054-0069 Book 221, Page 668 ========================================================================================================================== TOTALS 15,518,198.50 4,893,085.14 ========================================================================================================================== - ------------------------- * THE TRUSTEE RESERVES THE RIGHT TO CHALLENGE THE EXTENT, PRIORITY AND VALIDITY OF ANY AND ALL LIENS REFLECTED ON THIS EXHIBIT. THIS EXHIBIT DOES NOT INCLUDE LIENS ASSERTED BY LDNG, LONG HORIZONS OR IN CONNECTION WITH THE VOLUMETRIC PRODUCTION PAYMENT.
21 EXHIBIT C Midcon Offshore, Inc., Case No. 96-25269-C-11 Dated: 11/20/97 CONTRACTS AND LEASES TO BE ASSUMED
A. B. C. D. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY CURE AMOUNT ============================================================= =============================== ====================== =============== 1. Enron Oil & Gas Company Offshore Operating Agreement East Cameron Block (Successor in interest to BelNorth Petroleum July 1, 1983 316 Corporation) (Expired) 1400 Smith Street Houston, TX 77002 Texoma Production Company Norse Petroleum (U.S.) Incorporated Mark Producing, Inc. 2. Amerada Hess Corporation Offshore Operating Agreement East Cameron Block (Successor in interest to TXP Operating Company) June 1, 1984 316 P.O. Box 2040 (Expired) Houston, Texas 77252 Marathon Oil Company P.O. Box 890654 Dallas, Texas 75389-0654 Marathon Oil Company Attn: J.R. Binford P.O. Box 4813 Houston, Texas 77210 Phillips Petroleum Company Attn: Joint Interesting P.O. Box 1967 Houston, Texas 77251-1967 -1- A. B. C. D. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY CURE AMOUNT ============================================================= =============================== ====================== =============== 3. Enron Oil & Gas Company Amendment to Operating East Cameron Block (Successor in interest to BelNorth Petroleum Agreement 316 Corporation) May 1, 1985 (Expired) 1400 Smith Street Houston, TX 77002 Texoma Production Company Norse Petroleum (U.S.) Incorporated Mark Producing, Inc. Amerada Hess Corporation (Successor in interest to TXP Operating Company) P.O. Box 2040 Houston, Texas 77252 Phillips Petroleum Company Attn: Joint Interesting P.O. Box 1967 Houston, Texas 77251-1967 -2- A. B. C. D. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY CURE AMOUNT ============================================================= =============================== ====================== =============== 4. Enron Oil & Gas Company Co-Development Agreement East Cameron Block (Successor in interest to BelNorth Petroleum August 26, 1985 316 Corporation) (Expired) 1400 Smith Street Houston, TX 77002 CNG Producing Company Attn: David Baril 1450 Poydras Street New Orleans, Louisiana 70112-6000 CNG Producing Co. P.O. Box 62764 New Orleans, Louisiana 70162 Marathon Oil Company P.O. Box 890654 Dallas, Texas 75389-0654 Marathon Oil Company Attn: J.R. Binford P.O. Box 4813 Houston, Texas 77210 Phillips Petroleum Company Attn: Joint Interesting P.O. Box 1967 Houston, Texas 77251-1967 Amerada Hess Corporation (Successor in interest to TXP Operating Company) P.O. Box 2040 Hosuton, Texas 77252 Mark Producing, Inc. Norse Petroleum (U.S.) Incorporated Texoma Production Company -3- A. B. C. D. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY CURE AMOUNT ============================================================= =============================== ====================== =============== 5. Chevron USA Inc. Liquids Allocation Agreement East Cameron Block 2,381.84 c/o Chevron U.S.A. Production Company March 1, 1994 220 P.O. Box 840672 Dallas, Texas 75284-0672 6. Clean Gulf Associates Oil Spill Contingency Agreement N/A c/o Nationsbank Effective January 1, 1989 P. O. Box 307005 Nashville, Tennessee 37230-7005 7. A.H. Crain and John Paul Crain Johnson Bayou Surface West Cameron Block 31,342.55 Route 1, Box 70 Facility. 45 (N/2) (Ad valorem taxes) Grand Chenier, Louisiana 70643 Lease Agreement March 1, 1969 Crain Brothers, Inc. P. O. Box 118 Grand Chenier, Louisiana 70643 8. Maxas Exploration Company (Successor in interest to Transportation, Separation and East Cameron Block 6,435.22 Diamond Handling of Liquids/Condensate 220 Shamrock Partners) Agreement 717 North Harwood May 3, 1991 Dallas, Texas 75201 Columbia Gulf Transmission Company Attn: Cash Management P.O. Box 242 Charleston, West Virginia 25329 9. Domain Energy Corporation Offshore Operating Agreement West Cameron Block (successor in interest to Tenneco Ventures, Inc.) July 1, 1995 45 (S/2) P.O. Box 2229 Houston, Texas 77252-2229 Marilee Madan, Esq. Porter & Hedges, L.L.P. 700 Louisiana, 35th Floor Houston, Texas 77002 -4- A. B. C. D. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY CURE AMOUNT ============================================================= =============================== ====================== =============== 10. Domain Energy Corporation Offshore Operating Agreement West Cameron Block P.O. Box 2229 July 1, 1995 56 (N/2) Houston, Texas 77252-2229 Marilee Madan, Esq. Porter & Hedges, L.L.P. 700 Louisiana, 35th Floor Houston, Texas 77002 11. Domain Energy Corporation Unit Operating Agreement Vermillion Block 338; $348,556 P.O. Box 2229 January 10, 1979 Vermillion Block 329 Houston, Texas 77252-2229 Marilee Madan, Esq. Porter & Hedges, L.L.P. 700 Louisiana, 35th Floor Houston, Texas 77002 12. Domain Energy Corporation Unit Agreement Vermillion Block 338 P.O. Box 2229 January 26, 1979 Houston, Texas 77252-2229 Marilee Madan, Esq. Porter & Hedges, L.L.P. 700 Louisiana, 35th Floor Houston, Texas 77002 13. Hanover Compressor Company, Inc. Compressor Rental Unit West Cameron 45 Field Attn: Mr. Michael J. McGhan No. 60066 (Johnson Bayou) 12001 N. Houston Rossyln Rental Agreement Houston, Texas 77086 14. Hanover Compressor Company, Inc. Horizontal Skimmer Rental Unit West Cameron 45 Field Attn: Mr. Michael J. McGhan No. RU188 Rental Agreement 12001 N. Houston Rossyln Effective July 11, 1996 Houston, Texas 77086 -5- A. B. C. D. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY CURE AMOUNT ============================================================= =============================== ====================== =============== 15. Hanover Compressor Company, Inc. Compressor Rental Unit No. East Cameron Block Attn: Mr. Michael J. McGhan 71188 220 12001 N. Houston Rossyln Rental Agreement Houston, Texas 77086 16. Phillips Petroleum Company Agreement for Separation, Mustang Island Block Attn: Joint Interesting Dehydration and Rental of 791 P.O. Box 1967 Excess Houston, Texas 77251-1967 Capacity May 1, 1988 ORYX Energy Company (Successor in interest to Sun Exploration & Production Company) P.O. Box 2880 Dallas, Texas 75221-2880 SONAT Exploration Company P.O. Box 1513 Houston, TX 77251 Texaco, Inc. P.O. Box 430 Bellaire, TX 77402 Hunt Oil Company Foundation Place 1445 Ross at Field Dallas, TX 75202 17. Samedan Oil Corporation Offshore Operating Agreement High Island Block 387,483 c/o Kent Jones April 1, 1981 A-568 350 Glenborough #240 Houston, Texas 77067 David Bennett, Esq. Thompson & Knight 1700 Pacific Avenue, Suite 3300 Dallas, Texas 75201-4693 -6- A. B. C. D. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY CURE AMOUNT ============================================================= =============================== ====================== =============== 18. Stingray Pipeline Company Measurement Agreement January Vermillion Block 338; 701 E. 22nd Street 1, Vermillion Block 329 Lombard, IL 60148 1997 19. Tenneco Gas Production Corporation Gathering Agreement Vermillion Block 338; Treasury Department (T-17) January 1, 1996 Vermillion Block 329 P. O. Box 2511 Houston, Texas 77252-2511 20. United States of America Oil and Gas Lease bearing East Cameron Block 606,335.32 Mineral Management Services Serial 220 Sharon Murphy, Esq. No. OCS-G 3323, dated April 1, United States Department of Justice, Civil Division 1976, from the United States of P. O. Box 875 America, as Lessor, in favor of Ben Franklin Station Texas Gas Exploration Washington, D.C. 20044 Corporation, as Lessee, covering all of Block 220, East Cameron Area, as shown on OCS Official Leasing Map, Louisiana Map No. 2, containing 5,000 acres -- 100.00% Working Interest 21. United States of America Oil and Gas Lease bearing High Island Block A- 238,181.82. Mineral Management Services Serial 568 Sharon Murphy, Esq. No. OCS-G 2716, dated July 1, United States Department of Justice, Civil Division 1974, from the United States of P. O. Box 875 America, as Lessor, in favor of Ben Franklin Station Texas Eastern Exploration Co., Washington, D.C. 20044 et al., as Lessee, covering all of Block A-568, High Island Area, South Addition, OCS Leasing Map, Texas Map No. 7B, containing 5,760 acres -- 33.33% Working Interest -7- A. B. C. D. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY CURE AMOUNT ============================================================= =============================== ====================== =============== 22. United States of America Oil and Gas Lease bearing Mustang Island Block 7,623.83 Mineral Management Services Serial 791 Sharon Murphy, Esq. No. OCS-G 4534, dated January United States Department of Justice, Civil Division 1, P. O. Box 875 1981, from the United States of Ben Franklin Station America, as Lessor, in favor of Washington, D.C. 20044 Phillips Petroleum Company and SONAT Exploration Company, as Lessee, covering all of Block 791, Mustang Island Area, as shown on OCS Leasing Map, Texas Map No. 3, containing 5,760 acres and associated shore base -- 100% Working Interest 23. United States of America Oil and Gas Lease bearing Vermilion Block 338 122,170.63 Mineral Management Services Serial Sharon Murphy, Esq. No. OCS-G 2877, dated December United States Department of Justice, Civil Division 1, 1974, from the United P. O. Box 875 States of Ben Franklin Station America as Lessor, in favor of Washington, D.C. 20044 CNG Producing Company, as Lessee, covering all of Block 338, Vermilion Area, South Addition, OCS Official Leasing Map, Louisiana Map No. 3B, containing 5,000 acres -- 52.00% Working Interest 24. United States of America Oil and Gas Lease bearing Vermillion Block 329 474,464.97 Mineral Management Services Serial Sharon Murphy, Esq. No. OCS-G 2876, dated January United States Department of Justice, Civil Division 1, P. O. Box 875 1975, from the United States of Ben Franklin Station America, as Lessor, in favor of Washington, D.C. 20044 Husky Oil Company, as Lessee, covering all of Block 329, Vermillion Area, South Addition, OCS Official Leasing Map, Louisiana Map No. 3B, containing 5,000 acres, as amended by Lease Addendum dated July 1, 1990 -- 52.00% Working Interest -8- A. B. C. D. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY CURE AMOUNT ============================================================= =============================== ====================== =============== 25. United States of America Oil and Gas Lease (formerly West Cameron Block 222,499.91 Mineral Management Services Louisiana Lease No. 1133) 45 (S/2) Sharon Murphy, Esq. bearing United States Department of Justice, Civil Division Serial No. OCS-0299, dated P. O. Box 875 July 17, Ben Franklin Station 1947, from the State of Washington, D.C. 20044 Louisiana, as Lessor, in favor of Stanolind Oil and Gas Company, as Lessee, covering the South One-Half (S/2) of Tract 2362, Block 45, West Cameron Area, OCS Leasing Map, Louisiana Map No. 1, containing 2,500 acres and associated shore base -- 100% Working Interest (Record Title), 25.00% Working Interest (Operating Rights) 26. United States of America Oil and Gas Lease (formerly West Cameron Block 168,910.25 Mineral Management Services Louisiana Lease No. 1134) 45 (N/2) Sharon Murphy, Esq. bearing United States Department of Justice, Civil Division Serial No. OCS-0300, dated P. O. Box 875 July 17, Ben Franklin Station 1947, from the State of Washington, D.C. 20044 Louisiana, as Lessor, in favor of Stanolind Oil and Gas Company, as Lessee, covering the North One-Half (N/2) of Tract 2362, Block 45, West Cameron Area, OCS Leasing Map, Louisiana Map No. 1, containing 2,500 acres and associated shore base -- 100% Working Interest -9- A. B. C. D. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY CURE AMOUNT ============================================================= =============================== ====================== =============== 27. United States of America Oil and Gas Lease (formerly West Cameron Block Previously Mineral Management Services Louisiana Lease No. 1137) 56 (N/2) assumed by the Sharon Murphy, Esq. bearing Trustee. Trustee United States Department of Justice, Civil Division Serial No. OCS-0301, dated hereby seeks to P. O. Box 875 July 17, assign this lease Ben Franklin Station 1947, from the State of to Washington, D.C. 20044 Louisiana, as the Buyer. Lessor, in favor of Stanolind Oil and Gas Company, as Lessee, covering the North One-Half (N/2) of Tract 2369, Block 56, West Cameron Area, OCS Leasing Map, Louisiana Map No. 1, containing 2,500 acres and associated shore base -- 100% Working Interest (Record Title), 25.00% Working Interest (Operating Rights) 28. Western Gulf Microwave System Microwave Channel Lease Vermillion Block 329 c/o Union Oil Company of California Agreement Attn: Telecommunications Department January 1, 1996 P.O. Box 39200 Lafayette, Louisiana 70593-9200 -10-
EXHIBIT D-1 Midcon Offshore, Inc., Case No. 96-25269-C-11 Dated: 11/20/97 CONTRACTS AND LEASES TO BE REJECTED AS OF NOVEMBER 14, 1997
A. B. C. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY ================================================================================ =============== 1. Andrew Levy Employment Agreement N/A 46 Baldwin Farms N. Greenwich, Connecticut 06381 2. Calibre Geophysical Company Geophysical Data License 8750 South Freeway Agreement Houston, Texas 77051 Effective April 5, 1993 3. Camco International Inc. Master Service Agreement N/A P.O. Box 297935 Houston, TX 77297] 4. CBS Metering, Inc. Master Service Agreement N/A P.O. Box 92302 Lafayette, Louisiana 70509-2302 5. Coastal Production Services Master Service Agreement N/A P. O. Box 1927 Rockport, Texas 78381 6. Delta Coatings, Inc. Master Service Agreement N/A 4835 Adams Avenue Baton Rouge, Louisiana 70802-1004 7. Diversified Oil Field Services, Inc. Master Service Agreement N/A P. O. Box 1153 Mandeville, Louisiana 70470-1153 8. Engineering Mechanics Company Master Service Agreement N/A 2707 N. Loop West, Suite 490 Houston, Texas 77008 9. Fairfield Industries, Inc. Master License Agreement 3D Seismic on c/o Christopher A. Fusselman, Esq. October 26, 1993 West Cameron Willie Ben Daw III & Associates Field One Westheimer Plaza 5718 Westheimer, Suite 1750 Houston, Texas 77057 Fairfield Industries, Inc. P.O. Box 201856 Houston, Texas 77216-1856 10. Filco International, Inc. Master Service Agreement N/A Completion Fluids Filter Division P.O. Box 95093 New Orleans, Louisiana 70195 11. Fire Boss of Louisiana, Inc. Master Service Agreement N/A 1507 Weeks Island Road New Iberia, Louisiana 70560-7105 A. B. C. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY ================================================================================ =============== 12. Global Industries Offshore Blanket Liftboat Day Rate East Cameron Special Services Division Contract Block 220 P.O. Box 31936 Effective August 1, 1996 Lafayette, Louisiana 70593 13. Global X-Ray & Testing Corporation Master Service Agreement N/A Engineering Department P.O. Box 1536 Morgan City, Louisiana 70381 14. Gunn Wireline Master Service Agreement N/A P.O. Box 1108 Friendswood, Texas 77549-1108 15. High Island Offshore System Interruptible Transportation High Island Agreement Block A-568 June 1, 1993 16. J. Schneider and Associates, Ltd. Master Service Agreement N/A 516 Verot School Rd., Suite A Lafayette, Louisiana 70508 17. Louisiana Valve Source, Inc. Master Service Agreement N/A P.O. Box 130 Milton, Louisiana 70558-0130 18. Marathon Oil Company Transportation Agreement Vermillion P.O. Box 890654 December 29, 1988 Block 329 Dallas, Texas 75389-0654 Marathon Oil Company Attn: J.R. Binford P.O. Box 4813 Houston, Texas 77210 Stingray Pipeline Company 701 E. 22nd Street Lombard, IL 60148 19. Production Management Corporation Production Operations and All c/o Mike Sport Maintenance Services Agreement P.O. Box 44 January 1, 1996 Harvey, Louisiana 70059 Production Management Corporation c/o Robin D. McGuire, Esq. Jones, Walker, Waechter, Poitevent, Carrere & Denagre, L.L.P. 201 Rue Iberville, Suite 210 Lafayette, Louisiana 70508 20. Resource Transportation, Inc. Master Service Agreement N/A P.O. Box 1229 Cameron, Louisiana 70631 21. Reynolds Supplies & Services, Inc. Master Service Agreement N/A P.O. Box 476 Scott, Louisiana 70583 -2- A. B. C. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY ================================================================================ =============== 22. Robert R. Rainbolt Employment Agreement N/A c/o 2323 Shepherd, Suite 915 Houston, Texas 77019 23. Roclan Services Inc. Master Service Agreement N/A c/o Parish National Bank P. O. Box 1440 Covington, Louisiana 70434 Roclan Services Inc. P. O. Box 1491 Mandeville, Louisiana 70470-1491 24. Shell Oil Company (Crude) Purchase Contract April East Cameron Attn: Legal Department 1, Block 220 P.O. Box 2463 1994 Houston, Texas 77252 25. Smith Environmental Technologies Master Service Agreement N/A Corporation 26. Smith International, Inc. Master Service Agreement N/A P.O. Box 8500-s3940 Philadelphia, PA 19101-3940 27. Specialty Rental Tools & Supply, Inc. Master Service Agreement N/A 1113 East FM 517 Alvin, Texas 77511 28. Stephens Truck Lines, Inc. Master Service Agreement N/A P.O. Box 5415 Bossier City, Louisiana 71171 29. Tenneco Gas Processing Company Gas Purchase and Sale Agreement Vermillion 1010 Milam June 29, 1994 Block 338; Houston, Texas 77002 [phone book] High Island Block A-568 30. Tennessee Gas Pipeline Company Gas Transportation Agreement East Cameron 1400 Broadfield May 20, 1986 Block 220 Houston, Texas 77084 Texas Gas Exploration Corporation 909 Fannin Houston, Texas 77010 31. Tenngasco Corporation Gas Purchase and Sale Agreement Vermillion 1010 Milam June 1, 1993 Block 338; Houston, Texas 77002 Mustang Island Block 791; High Island Block A-568 32. Wedge Dia-Log, Inc. Master Service Agreement N/A P.O. Box 540069 Grand Prairie, Texas 75054-0069 -3- A. B. C. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY =============================================================================================== 33. Wild Well Control, Inc. Master Service Agreement N/A 22730 Gosling Rd. Spring, TX 77389 =============================================================================================== -4-
EXHIBIT D-2
Midcon Offshore, Inc., Case No. 96-25269-C-11 Dated: 12/08/97 CONTRACTS AND LEASES TO BE REJECTED AS OF DECEMBER 1, 1997 A. B. C. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY =================================================================================== =============== 1. Apex Diving Services Master Service Agreement N/A 3701 5th Avenue North Texas City, Texas 77590 2. Auto-Comm Engineering Corporation Master Service Agreement N/A P.O. Box 51347 Lafayette, Louisiana 70505 3. Automation U.S.A. Master Service Agreement N/A P.O. Box 3307 Lafayette, Louisiana 70502 4. Bayou Testers Master Service Agreement N/A P.O. Box 2336 Morgan City, Louisiana 70381 5. Flow Petroleum Services, Inc. Master Service Contract All Leases 510 Guilbeau Road #C September 5, 1997 Lafayette, Louisiana 70506 6. Mechanical Equipment, Inc. Master Service Agreement N/A P.O. Box 1800 Midland, Texas 79701 7. Miller Environmental Services Work Agreement, Spill Contract Mustang Isalnd 600 Flato Road June 3, 1997 791 Field P.O. Box 5233 Corpus Christi, Texas 78405 8. Mo-Vac Service Company of Alice Master Service Agreement N/A P.O. Box 200238 Houston, Texas 77216-0238] 9. Moore's Pump & Supply, Inc. Master Service Agreement N/A P.O. Box 91027 Lafayette, Louisiana 70509-1027 10. Moores Wireline, Inc. Master Service Agreement N/A Jack Rettig 120 Park Center Street Broussard, Louisiana 70518-3605 11. Newpark Environmental Services, Inc. Master Service Agreement N/A P.O. Box 92223 Lafayette, Louisiana 70509-2223 12. NGC Corporation f/k/a Gas Purchase Agreement East Cameron Chevron U.S.A. Production Company February 1, 1996 Block 220; P.O. Box 840672 Vermillion Dallas, Texas 75284-0672 Block 338; Vermillion Block 329 -1- A. B. C. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY =================================================================================== =============== 13. NGC Oil Trading and Transportation, Inc. Amended Crude Oil Sale West Cameron c/o Natural Gas Clearinghouse Contract Block 45 (N/2) 1000 Louisiana, Suite 5800 March 18, 1997 Houston, Texas 77002-5050 14. NGC Oil Trading and Transportation, Inc. Oil Purchase and Prepayment East Cameron c/o Natural Gas Clearinghouse Agreement Block 220; 1000 Louisiana, Suite 5800 effective June 1, 1996 West Cameron Houston, Texas 77002-5050 Block 45 (N/2); West Cameron Block 45 (S/2); West Cameron Block 56 (N/2) 15. Petroleum Communications, Inc. Lease Agreement West Cameron Attn: Mr. Paul Smith effective October 15, 1993 45 Field 5901 Earhart Expressway Harahan, Louisiana 70123 Petroleum Communications, Inc. P.O. Box 54898 New Orleans, Louisiana 70154 16. Petroleum Helicopters, Inc. Master Service Agreement N/A c/o John Untereker P.O. Box 90808 Lafayette, Louisiana 70509 Petroleum Helicopters, Inc. 2121 Airline Highway, #400 Metairie, Louisiana 70001-5979 Petroleum Helicopters, Inc. c/o R. Lewis McHenry Jones, Walker, Waechter, Poitevent, Carrere & Denegre 201 St. Charles Avenue, 49th Floor New Orleans, Louisiana 70170-5100 17. Southern Petroleum Laboratories, Inc. Master Service Agreement N/A P.O. Box 200172 Houston, TX 77216-0172 Southern Petroleum Laboratories, Inc. P.O. Box 20807 Houston, Texas 77225 18. Texon Corporation (Crude) Purchase Agreement East Cameron 11757 Katy Freeway, Suite 1400 March 28, 1995 Block 220 Houston, Texas 77079 19. Texon Corporation Crude Oil/Condensate Purchase East Cameron 11757 Katy Freeway, Suite 1400 Contract Block 220 Houston, Texas 77079 May 1, 1995 -2- A. B. C. CONTRACT NAME/ADDRESS (NAME OF DOCUMENT) PROPERTY =================================================================================== =============== 20. Total Safety, Inc. Master Service Agreement N/A P. O. Box 297477 Houston, Texas 77297-7477 21. Tri-Star Supply Co., Inc. Master Service Agreement N/A 1906 Engineers Road Belle Chase, Louisiana 70037 -3-
EX-99 3 EXHIBIT 99.1 PRESS RELEASE [LETTERHEAD] Monday, December 8, 1997 Contact: Neil L. Stenbuck Chief Financial Officer (303) 685-8000 BASIN EXPLORATION REPORTS DRILLING RESULTS AND UPDATE ON ACQUISITION Denver, CO - Basin Exploration, Inc. today reported that it recently participated in two apparent discovery wells in the Gulf of Mexico, respectively on Eugene Island Block 64 S/2 and South Timbalier Block 146, and that it has completed the closing of the previously announced acquisition of assets from the chapter 11 bankruptcy trustee for Midcon Offshore, Inc. The well on Eugene Island Block 64 S/2 logged approximately 100 net feet of gas/condensate pay in two Miocene-aged sands below a true vertical depth of 12,750 feet. The company plans to immediately proceed with completion operations and then to temporarily suspend the well pending installation of production facilities, which the company anticipates will occur late in the first quarter of 1998. Basin operates the property with a 50% working interest. Partners are GHP Exploration Corporation and The Houston Exploration Company, each of whom owns a 25% working interest. Basin owns a 50% working interest in the well on South Timbalier 146, which is operated by its 50% partner, Barrett Resources Corporation. The well logged gas/condensate pay in a Pliocene-aged sand interval and current plans are to temporarily suspend the well pending future completion operations and installation of production facilities. As previously announced on November 9, 1997, the company was high bidder at a bankruptcy court proceeding conducted to sell the assets of Midcon Offshore, Inc. The purchase price of $31.3 million was closed into escrow pending Minerals Management Service approval of assignments and removal of liens and encumbrances. These conditions were satisfied and proceeds were recently released from escrow and assignments delivered to the company. Among the liens and encumbrances that were released was a volumetric production payment that previously burdened Midcon's interests in the acquired properties. Operationally, the company reported that one of two recently-drilled wells on the High Island Block A-568 property acquired from Midcon has commenced production and that remedial work required to have all major platforms on-line has been completed, resulting in anticipated improvements in production. As noted in the earlier release, the company estimates that its net oil and gas production from the assets acquired from Midcon will be in excess of 20 million cubic feet of natural gas equivalent per day by approximately the end of the year, when the other recently-drilled well on High Island Block A-568 is expected to commence production. More The statements in this report regarding projected production performance and expected drilling and development activities are "forward-looking statements" within the meaning of the federal security laws. Such statements are inherently uncertain, and actual results and activities may differ materially from those estimated or projected. Certain factors that can affect the company's ability to achieve projected results are described in the company's prospectus dated October 2, 1997 and prospectus supplement dated October 24, 1997 filed with the Securities and Exchange Commission. Such factors include, among others, uncertainties inherent in reserve estimations especially for estimates of non-proved and undeveloped reserves, operational risks inherent in the offshore environment with corresponding exposure to delays and significant cost overruns, the highly competitive nature of activity offshore with corresponding shortages of equipment and personnel, and the uncertain cost and pricing environment in the oil and gas industry. The company has no obligation to update the statements contained in this report or to take action that is described herein or otherwise presently planned. ### -----END PRIVACY-ENHANCED MESSAGE-----