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to apply EOR technology to the production of oil from the wells.
Drake, like Barton, did not participate in any transactions
involving the lease of tar sands properties from TexOil
International Corp. nor the lease of natural gas properties in
the Monroe gas field in Louisiana. See id. at 150-157.
Drake and the related partnerships, as described in detail
in Krause v. Commissioner, supra at 140-143, 152-157, entered
into license agreements either with Elektra Energy Corp.
(Elektra) or with Hemisphere Licensing Corp. (Hemisphere) to
obtain limited rights to use certain purported EOR technology in
the production of oil.
General explanatory material relating to the oil crisis of
the late 1970's and early 1980's and a detailed explanation of
the EOR technology involved herein are set forth in Krause and
will not be repeated herein. See id. at 134-136, 157-165.
The EOR technology licensed by Drake constituted essentially
the same EOR technology as that licensed to many of the other
related partnerships, including Barton and other partnerships
involved in the Krause test case. Id. at 157-165.
Under the EOR license agreement that was entered into
between Drake and Hemisphere, Drake nominally agreed to pay fixed
license fees to Hemisphere of $50,000 per partnership unit per
year for 5 years.
Drake’s annual $50,000 per partnership unit technology
license fee to Hemisphere was to be paid, during each of the 5
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