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Home My WebLink About905199 RECEIVED 12/13/2004 at 1:33 PM RECEIVING # 905199 BOOK: 574 PAGE: 572 JEANNE WAGNER LINCOLN COUNTY CLERK, KEMMEP, ER, WY ASSIGNMENT OF PRODUCTION PAYMENT 0572 THIS ASSIGNMENT OF PRODUCTION PAYMENT (the "Assignment") is from Merit Partners, L.P., a Delaware limited partnership ("Assignor") whose address is 13727 Noel Road, Suite 500, Dallas, Texas 75240, to Merit Energy Partners IX, L.P., a Delaware limited partnership ("Assignee") whose address is 13727 Noel Road, Suite 500, Dallas, Texas 75240. WITNESSETH: I. Conveyance 1.1 Assignor, for and in consideration of One Hundred Dollars ($100.00) and other good and valuable consideration, receipt of which is hereby acknowledged, and subject to the conditions and reservations herein set forth, hereby ASSIGNS, TRANSFERS, GRANTS and CONVEYS, effective as of 7:00 a.m., local time, on July 1, 2002 (the "Effective Time"), unto Assignee, a production payment which may equal but not exceed in the aggregate seventy percent (70%) of all the following interests (the "Specified Interests"): that portion of the oil, gas and other minerals in and under and which may be produced from (or otherwise attributable to) the interests assigned to Assignee pursuant to that cedain master Assignment of Net Profits Interests dated effective as of July 1, 2002 (the "Net Profits Assignment") recorded in the locations shown on Exhibit A hereto, free of all exploration, development and operating costs but subject to (i) applicable taxes measured by production or value, including gross production, severance and other taxes, and (ii) all presently valid and subsisting overriding royalties, production payments and similar burdens which were of record and burden the Specified Interests on the effective date of the acquisition of each Specified Interest by Assignor (other than the net profits interests created by the Net Profits Assignment, such Assignment being recorded in the jurisdictions set forth on Exhibit A hereto and at the volumes and pages set forth on such Exhibit A); provided, that the payments made pursuant hereto to Assignee for any particular month with respect to each increase in the Payment Amount (as herein defined) shall not exceed the aggregate sum of (i) one-twelfth (1/12th) of each such increase amount divided by seven (7) plus (ii) an amount equivalent to interest accrued on the Payment Amount outstanding from time to time during such month at the Fluctuating Rate (as herein defined) plus (iii) the aggregate amount, if any, by which the aggregate of all prior payments attributable to clause (i) preceding was less than the aggregate maximum payments that were permissible under clause (i) H'~P.~rnI~WPfift~P~CiFiPMTI~4~,Prrv'I Pmt ~,rm ¢b'u~ (MEP _IX- AGG 21 - Devon) 1 0905:1.99 0573 preceding. All payments made on account of a production payment shall be computed on the basis of Gross Proceeds, as defined in that certain Net Profits Agreement dated May 1, 1994 by and between Assignor and Assignee (the "NPI Agreement"). The production payment granted hereby has a "Payment Amount" that will fluctuate from time to time and that will be adjusted each year prior to the termination hereof in accordance with the NPI Agreement and this Assignment. The "Payment Amount" will increase upon the Effective Time by an initial amount permitted pursuant to the NPI Agreement and thereafter will increase each year, if at all, by the amount permitted pursuant to the NPI Agreement, and will decrease each time a payment is made pursuant hereto (other than payments for the equivalent interest factor described in section 1.1(ii) above). The term "Fluctuating Rate" shall mean a rate per annum of one percent (1%) plus the "reference rate of interest" established from time to time by Bank of America National Trust and Savings Association (or any successor) (the "Bank"), with each change in the interest rate applicable hereunder to be coincident with each change in the reference rate of interest announced from time to time by the Bank. The production payment assigned hereby shall terminate upon the earlier of (i) the recording by Assignee and Assignor of (a) an instrument expressly terminating this Assignment, or (b) as it affects a particular asset, an instrument conveying or unifying Assignor and Assignee's interests in such asset, and (ii) at such time as the remaining commercially recoverable reserves in and under the land from which the production payment is conveyed shall be reduced to 15% of the total commercially recoverable reserves in place as of the date of this assignment. All amounts received by Assignee shall first be credited to accrued interest and then to the reduction of the Payment Amount. At the time of termination, Assignee shall execute an instrument in writing, verifying such termination as a matter of record. The term "commercially recoverable reserves" is defined herein to mean the total commercially recoverable oil and gas in place and attributable to the Specified Interests in and under the land from which the production payment is payable from all productive zones taking into account all methods of production, including, without limitation primary, secondary and tertiary recovery methods. All determinations as to the remaining commercially recoverable reserves and as to the commercially recoverable reserves in place as of the date of this assignment shall be made, from time to time, by mutual agreement of the parties, but if they cannot agree, by an independent petroleum engineer or engineering firm selected by mutual agreem.ent; if the parties cannot agree upon such an engineer or firm, then either party may in writing request the Chief Judge of the United States District Court for the Northern District of Texas to appoint a petroleum engineer to make such determination, which appointment shall be made without any necessity for notice or hearing. The cost of engineering services shall be borne equally by the parties. Such determination shall be binding upon the parties. H'tP.~rnI~WPRil~PRI'lFlPMT~14~prM Prat I~nrm rln~ 2 (MEP _IX - AGG 21 -- Devon) 0574 1.2 Assignee agrees that the production payment herein conveyed is subject to the terms and conditions of the oil, gas and mineral leases described in the Net Profits Assignment and all instruments (other than the Net Profits Assignment) burdening or affecting the leases recorded in the proper public records of the jurisdictions in which such leases are located; the production payment herein conveyed is senior in priority of payment to and not burdened by the Net Profits Assignment. No loss or failure of any such lease or instrument shall serve to reduce the Payment Amount. The reference herein to such terms and conditions is for the purpose of protecting Assignor and Assignee and shall not creale, nor constitute recognition of, any rights in third parties. 1.3 Assignor expressly denies any warranty, whether express, implied or statutory, with respect to the Specified Interests, and except for the special warranty set forth in the next succeeding sentence, this Assignment is executed and delivered without any warranties of title, whether express, implied or statutory. TO HAVE AND TO HOLD the production payment herein assigned unto Assigneb, its successors and assigns, until termination as herein provided; and Assignor hereby binds itself, its successors and assigns, to WARRANT and FOREVER DEFEND the production payment against every person whomsoever lawfully claiming or to claim the same or any part thereof by, through or under Assignor, but not otherwise. Assignor further gives and grants unto Assignee, insofar as it affects the production payment, full power and right of substitution and subrogation in and to all covenants and warranties by others heretofore given or made in respect of the Specified Interests. II. Miscellaneous 2.1 Assignor will do, execute, acknowledge and deliver all and every such further acts and such other instruments as may be necessary or appropriate more fully to assure to Assignee, its successors and assigns, all of the properties, rights, title, interests, estates, remedies, powers and privileges by this instrument transferred, assigned and conveyed or intended so to be. 2.2 All of the terms, provisions, covenants and agreements herein contained shall extend to and be binding upon the parties hereto, their respective successors and assigns. (Signature Page Follows) H'IP.~rnlIWPfltl~PRI"II"iPMTt141prr¢I Pmt Fnrm 3 (MEP _IX- AGG 21 - Devon) IN WITNESS, WHEREOF, Assignor has caused this Assignment to be executed on ,~ _~_~2004. ASSIGNOR: MERIT PARTNERS, L.P. By: Merit Energy Company, General Partner g/Fred N. Diem, Vic'ff President ASSIGNEE: MERIT ENERGY PARTNERS IX, L.P. By: Merit Partners, L.P., General Partner By: Merit Energy Company, General Partner N. Diem, Vice'President THE STATE OF TEXAS § COUNTY OF DALLAS This instrument was acknowledged before me on the ~'~:l~Cday of 2004, by Fred N. Diem, Vice President of MERIT ENERGY GOMPANY, a Delaware corporation, on behalf of said corporation, as General Partner of Merit Partners, k.P., a Delaware limited partnership, which is the General Partner of Merit Energy Partners IX, L.P. ,, ~.~,,, t~,.~ ./~ . . ' My commission expiros: rJot&ry Public, State of Texas 4 (MEP _IX- AGG 21 -- Devon) EXHIBIT A ', ( 0576 ASSIGNEE STATE CO UNTY BOOK PAGE (Or Other Recording Information) Merit Energy Partners IX, L.P. CO KS KS KS KS KS KS KS KS KS LA LA LA LA LA · LA LA LA MS MS MS MS MS Kiowa 437 140-153 Barton 609 317 Ellis 575 718 Finney 257 407 Graham 207 651-664 lIarper 37M 362 Kingman 0-11 41 Rooks 331 203 Seward 557 632 Stafford 173 432 Cameron Book No. 975 Doc. No. 283134 Concordia 403 808 Iberia Book No. 1269 Doc. No. 03-14771 ?laquemines 1056 685 St. Mary 46-F 405 Tensas 64 669 Terrebonne Book No. 1840 Doc. No. 1162301 Vermilion Doc. No. 20314888 Jefferson 109 331 Lowndes 2003 3227 Rankin L197 366 Wayne 1057 206-219 Yazoo 299A 627 McKenzie Doc. No. 346055 Merit Energy Partners IX, L.P. - Page 1 ASSIGNEE 0577 STATE C()UNTY BOOK PAGE (Or Other Recording Information) NM l~ddy 523 740 NM l~ea 1254 452 OK Bcaver 1106 352-365 OK Ilcckham 1789 161 OK l~laine 879 328 OK l~llis 683 509-22 OK Grady 3538 99-112 OK 1 [arper 587 99 OK l,c F'lore 1481 698 OK Rt)gcr Mills 1723 494 TX Andrews 814 299 TX B razos 5716 245 TX Chambers 662 159 TX ('ochran 260 505 TX Crane 452 715 TX Crockett 629 401 TX Dawson 528 37 · ' TX F;ctor 1795 683 · TX I!dwards 218 508 TX (bines 787 110 TX (;arza 268 186 TX G l:tsscock 73 81 TX I k)ckley 728 604 TX h'ion 151 493 TX kipscomb 414 482 TX l,uhbock 8777 167 TX Martin 143 395 TX Matagorda Doc. No. 037903 Merit Energy Partners IX, L.P. - Pc~.cje 2 '--( 0578 ASSIGNEE STATE COUNTY BOOK PAGE (Or Other Recording Information) TX TX TX TX TX TX : TX TX TX TX WY ~ WY WY WY S WY lidland 2269 635 chiltree 621 ' 727 Pecos 747 476 :eagan 54 85 ,oberts 155 385 hleicher 437 830 lutton 327 913 Ferry 696 452 lpton 737 560 ',apata 698 864-877 mpbell 1919 15-28 reverse 1222 778 incoln 538 029 ~ctwater 669 9969 Jinta 809 564-577 ()c[ Sc Merit Energy Parlners IX, L.P. - Page 3