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unless they had assumed personal liability for them. No interest
was payable on the unpaid accruals.
Recoupment from the 67-percent production royalties of full
payment of the $30,362,000 of minimum annual royalties projected
to be accrued by Stonehurst through 1994 would have required an
average price per barrel of oil between $58.93 and $86.11 over
the course of the lease at the levels of production assumed by
the economic projections in the Memorandum. Stonehurst could
avoid liability for all or a proportionate part of the minimum
annual royalties not yet accrued by surrendering its rights under
the sublease to the entire leased property or to any parcel of 6
contiguous acres or more prior to the beginning of the next lease
year.
c. Turnkey Contract
On December 29, 1979, Stonehurst also entered into a
“turnkey and drilling completion contract” with R.H. Energy for
25 wells to be completed by June 30, 1980. The Memorandum
described R.H. Energy as a joint venture between H.H. Oil & Gas
Co., a Colorado based corporation, and Synergistics Equities,
Ltd. The Memorandum indicated that there was a relationship
between R.H. Energy and Craig that gave rise to a possible
conflict of interest between R.H. Energy and Wind River
concerning R.H. Energy’s recommendations to Craig about whether
to complete drilling on any wells, inasmuch as incomplete wells
would eventually be forfeited back to R.H. Energy. This possible
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