Subscription AgreDividerement
West Asher Prospect LLC
West Asher Pool Extension Development Project
West Asher Prospect LLC
Independent Exploration Group LLC (Joint Venture Manager)
16775 Addison Rd #305
Addison, TX 75001
With this Agreement submitted for acceptance on ___________________________, 20____, _______________________________________ (the “Undersigned”), tenders this subscription to you as Joint Venture Manager (herein so called) of the West Asher Pool Extension Development Project (the “Joint Venture”) and applies for the purchase of Joint Venture Interests (“Interests”) in the West Asher Pool Extension Development Project as shown on Page 9 hereof, and herewith encloses a check or sends a wire transfer as payment for the Interests in the aforementioned wells. West Asher Prospect LLC has been created as a new Texas LLC with no debts or liabilities to hold these interests on behalf of the joint venture and its participants.
The undersigned hereby acknowledges:
(i) That the undersigned has received, read, and understood a copy of the Summary of the Offering pertaining to the Joint Venture.
(ii) That upon the execution hereof by the undersigned, payment by the undersigned of the additional capital contribution of the Interests subscribed for hereby shall be due and payable and shall accompany the return of this Subscription Agreement by the undersigned.
(iii) The undersigned understands and acknowledges that the investment in the West Asher Pool Extension Development Project held within West Asher Prospect LLC is not liquid, not easily transferable or disposed of, and that he has no need for liquidity of this investment; also, the Undersigned understands and acknowledges that this investment involves a certain degree of risk, including but not limited to the loss of investment capital. There are no guarantees given or implied, and projections given are meant as illustrations and examples, not as promises or guarantees of specific returns on an investment.
(iv) That each subscriber is personally liable for the total amount of the subscription price.
The undersigned hereby represents and warrants as follows:
1. The undersigned has read and is familiar with the Summary, the Agreement, and all other Exhibits to the Summary.
2. The principle residence of the undersigned, if an individual, is in the State shown hereof; if the undersigned is a corporation, trust or other entity (except a partnership), it was incorporated or organized and is existing under the laws of the State shown hereof; and if the undersigned is a corporation, trust, partnership or other entity, it was not organized for the specific purpose of acquiring the Interest.
3. The Interests for which the undersigned hereby subscribes will be acquired solely for the account of the undersigned for investment and is not being purchased for subdivision or fractionalization thereof.
4. The Joint Venture Manager has made research material pertaining to this investment available to the undersigned.
5. The undersigned has had the opportunity to ask questions of, and receive answers from, the Joint Venture Manager concerning the Joint Venture.
6. The undersigned acknowledges an understanding of the restrictions on transferability of the Interests purchased herein.
7. No federal or state agency has made any finding or determination as to the fairness of the offering, or any recommendation or endorsement of the Interests.
8. This is not a security and is not being offered as such.
The undersigned recognizes that the offer and sale of the Interests to the undersigned were based upon the representations and warranties of the undersigned contained in the paragraphs above and hereby agrees to indemnify the Joint Venture and the Joint Venture Manager thereof and to hold each of such entities and persons harmless against all liabilities, costs or expenses (including reasonable attorney’s fees) arising by reason of or in connection with any misrepresentation or any breach of such warranties by the undersigned, or arising as a result of the sale or distribution of the Interests by the undersigned in violation of the Securities Exchange Act of 1934, as amended, the Securities Act of 1933, as amended, or any other applicable federal or state statute.
The undersigned hereby indemnifies the Joint Venture and the Joint Venture Manager thereof, as well as any affiliated parties, executives, contractors, or employees, and holds each of such persons and entities harmless from and against any and all loss, damages, liability and/or expense, including costs and reasonable attorney’s fees to which they may be put or which they may incur by reason of or in connection with any misrepresentation made by the undersigned, any breach of any of his warranties, or his failure to fulfill any of his covenants or agreements set forth herein. This subscription and the representations and warranties contained herein shall be binding upon the heirs, legal representatives, successors, and assignees of the undersigned.
Special Powers of Attorney
The undersigned hereby constitutes, and appoints the Joint Venture Manager of the Joint Venture with full power of substitution and re-substitution, the true and lawful attorney of the undersigned, for the use and benefit of the undersigned; (i) to sign, execute, certify, swear to, acknowledge, file and record a Joint Venture Agreement substantially in the form of the Agreement; (ii) to sign, execute, certify, swear to, acknowledge, file and record any other certificate, instruments and documents or amendments thereto, which may be required of the Joint Venture or of the Joint Venturers of the Joint Venture under the laws of any state or by any governmental agency, or which the Joint Venture Manager deems necessary or advisable to file, record or deliver; and (iii) to execute, swear to, acknowledge and record all certificates and other documents relating to the dissolution and liquidation of the Joint Venture. The undersigned also constitutes and appoints the Joint Venture Manager with full power of substitution and re-substitution to act on its behalf as Tax Matters Partner as defined in Section 6231(a)(7) of the Internal Revenue Code of 1954, as amended. The foregoing grants of authority may be exercised by each of such attorneysin-fact by listing the name of the undersigned along with the names of all other persons for whom certificates, instruments and documents are prepared, with the single signature of such attorney-in-fact acting for all of the persons whose names are so listed.
Searching for oil and gas is a speculative activity that involves a degree of financial risk. Drilling prospects are generated by experienced professionals using reliable sources of information. The results, however, cannot be 3 accurately forecast. Wells may be dry or productive, wells may not produce enough oil and gas to generate a profit or even a return on the investment. In such an event, an investor would suffer a partial or total loss of their entire investment. This offering is therefore intended only for those investors who can afford the loss of their entire investment and understand that this could potentially be one of the outcomes of this project.
An investment in an oil and gas drilling venture is normally based on the prospect of finding commercial quantities of oil and gas. Favorable income tax treatment presently available with respect to oil and gas drilling and production may, however, have a material effect on the advisability of investing in an oil and gas drilling venture. No assurance can be given that the present tax treatment will continue. No guarantees will be made or implied by IEG or its affiliates regarding these benefits. Partners are responsible for their own tax matters; IEG and its representatives, contractors, employees, and executives are not qualified to give tax advice outside of making a partner or prospective partner aware that certain tax advantages exist and encourage any partners or prospective partners in any project to consult their accountant or tax advisor for advice pertaining to their own tax situation.
West Asher Prospect LLC has acquired the rights to develop the 320-acre West Asher Pool Extension as defined within the prospect materials and these subscription documents. West Asher Prospect LLC will receive substitutions of comparable quality if any interests in this package are not able to convey, or have disputes outstanding with state, federal or local governments, landowners, mineral holders, or other outside forces which prohibit drilling them in a timely manner and will not be held liable if any wells are not viable or transferrable due to actions outside parties. Benson Operating LLC, Oklahoma Operating #24459, will be the registered operator for these Wells.
The sale of working interest in the venture is directed to prospective investors whose incomes are subject to federal income tax at higher rates. The participation in the venture will provide an investor certain deductions for income tax purposes, which will have a material effect upon the economic result afforded him or her. For this additional reason, each investor should consult his/her own tax advisor. By signing below, you acknowledge the possible risks involved in participating in West Asher Prospect LLC and the West Asher Pool Extension Development Project located in Pottawattamie County, Oklahoma.
THE UNDERSIGNED REPRESENTS AND ACKNOWLEDGES THAT IT IS KNOWLEDGEABLE OF THE OIL AND GAS BUSINESS AND OF THE USUAL AND CUSTOMARY PRACTICES OF EXPLORERS AND PRODUCERS SUCH AS WEST ASHER PROSPECT LLC (WEP) AND INDEPENDENT EXPLORATION GROUP (IEG). THE UNDERSIGNED HAS HAD ACCESS TO THE LEASES, THE OFFICES AND EMPLOYEES OF IEG AND WEP, AND THE RECORDS AND FILES OF WEP RELATING TO EXPLORATION DATA, MAPS AND TO THE LEASES IN MAKING THE DECISION TO ENTER INTO THIS AGREEMENT AND CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY. THE UNDERSIGNED HAS RELIED SOLELY ON THE BASIS OF ITS OWN INDEPENDENT DUE DILIGENCE INVESTIGATION OF THE EXPLORATION DATA, MAPS AND TO THE LEASES AND ACCORDINGLY, THE UNDERSIGNED ACKNOWLEDGES THAT IEG/WEP HAS NOT MADE AND IEG/WEP HEREBY EXPRESSLY DISCLAIMS AND NEGATES ANY REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE, RELATING TO THE EXPLORATION DATA, MAPS, AND TO THE LEASES, INCLUDING WITHOUT LIMITATION ANY REPRESENTATION OR WARRANTY, WITH RESPECT TO TITLE OF THE LEASES OR THE QUALITY, QUANTITY OR VOLUME OF THE RESERVES OF OIL, GAS OR OTHER HYDROCARBONS IN OR UNDER THE LEASES. OIL AND GAS IS A SPECULATIVE INVESTMENT, AND THE PROJECTIONS OF RETURNS, RESERVE VOLUMES, RESERVOIR CONDITIONS, AND ANY OTHER VARIABLES ARE SPECULATION BY INDUSTRY PROFESSIONALS.
THE UNDERSIGNED RESPRESENTS AND ACKNOWLEDGES THAT PRIOR TO ENTERING INTO THIS AGREEMENT, THE UNDERSIGNED WAS ADVISED BY AND HAD RELIED SOLEY ON ITS OWN LEGAL, TAX AND OTHER PROFESSIONAL COUNSEL CONCERNING THIS AGREEMENT, THE LEASES AND THE VALUE THEREOF. THE UNDERSIGNED IS AN ACCREDITED INVESTOR (AS SUCH TERM IS USED IN RULE 501 UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT")), AND ACKNOWLEDGES THAT IT IS ABLE TO BEAR THE ECONOMIC RISK OF ANY OIL AND GAS INVESTMENT THE UNDERSIGNED IS OBLIGATED TO OR MIGHT CHOOSE TO MAKE IN THE LEASES AND THAT THE UNDERSIGNED IS CAPABLE OF EVALUATING THE MERITS AND RISKS OF INVESTMENTS IN THE LEASES. THE UNDERSIGNED IS ACQUIRING THE INTERESTS FOR ITS OWN ACCOUNT AND NOT FOR DISTRIBUTION OR RESALE OF THE LEASES OR ANY DIRECT OR INDIRECT INTEREST THEREIN IN ANY MANNER THAT WOULD VIOLATE ANY STATE OR FEDERAL SECURITIES LAW, RULE, REGULATION OR ORDER AND IN ANY 4 EVENT THE UNDERSIGNED WILL NOT ENGAGE IN ANY SUCH DISTRIBUTION OR RESALE, THAT WOULD SUBJECT IEG/WEP TO EITHER LIABILITY OR FILING REQUIREMENTS RELATING TO SUCH LAW, RULE OR ORDER. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED MAY MAKE NO TRANSFER OF ANY RIGHTS UNDER THIS AGREEMENT TO ANY ASSIGNEE THAT DOES NOT DELIVER TO IEG IN WRITING THE SAME REPRESENTATIONS FOR THE BENEFIT OF IEG AS ARE SET FORWARD IN THE JOINT VENURE.
IN ADDITION TO ALL RIGHTS AND REMEDIES AVAILABLE TO IEG/WEP, THE UNDERSIGNED SHALL INDEMNIFY IEG/WEP AND ITS AFFILIATES, OFFICERS, CONTROL PERSONS, DIRECTORS, OPERATORS, EMPLOYEES, AGENTS, REPRESENTATIVES, CONSULTANTS, COUNSEL, SUCCESSORS AND PERMITTED ASSIGNS (COLLECTIVELY, THE "INDEMNIFIED PERSONS") AND SAVE AND HOLD EACH OF THEM HARMLESS AGAINST AND PAY ON BEHALF OF OR REIMBURSE SUCH INDEMNIFIED PERSONS AS AND WHEN INCURRED FOR ANY LOSS, LIABILITY, CLAIM, DAMAGE, PENALTY, FINE OR EXPENSE, WHETHER OR NOT ARISING OUT OF ANY CLAIMS BY OR ON BEHALF OF IEG/WEP OR ANY THIRD PARTY, INCLUDING INTEREST, PENALTIES, REASONABLE ATTORNEY'S FEES AND EXPENSES AND ALL AMOUNTS PAID IN INVESTIGATION, DEFENSE OR SETTLEMENT OF ANY OF THE FOREGOING WHICH ANY SUCH INDEMNIFIED PERSONS MAY SUFFER, SUSTAIN OR BECOME SUBJECT TO, TO THE EXTENT ARISING OUT OF OR AS A RESULT OF ANY ACTIVITY, ACTIONS OR OMISSIONS BY THE UNDERSIGNED OR ITS AFFILIATES, ASSOCIATES OR RELATED PARTIES RELATED TO ANY OFFERING OR SALE.
SUCH INDEMNIFICATION RIGHTS SHALL BE APPLICABLE WITHOUT REGARD TO THE CAUSE THEREOF INCLUDING BUT NOT LIMITED TO THE NEGLIGENCE OR STRICT LIABLILITY OF ANY INDEMNIFIED PERSONS AND WHETHER SUCH NEGLIGENCE BE SOLE, JOINT, OR CONCURRENT, ACTIVE, OR PASSIVE AND SHALL SURVIVE THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY WITHOUT LIMIT, REGARDLESS OF ANY INVESTIGATION, INQUIRY OR EXAMINATION.
WHEREFORE, IN CONSIDERATION, of the foregoing covenants and representations, I hereby submit the following subscription for the number of Interests specified below for the Joint Venture Manager’s consideration in West Asher Prospect LLC and its West Asher Pool Extension Development Project.
WHEREAS, The Undersigned desires to provide funds to drill and develop mineral wellbore interests, oil and/ or gas wellbores, and accompanying oil and gas assets in the form of production equipment.
WHEREAS, Executives, Employees, Affiliates, and Contractors of West Asher Prospect LLC are experienced in the purchase, development and marketing of wellbores and wellbore interests.
WHEREAS, The Undersigned now desires to utilize the services and expertise of Independent Exploration Group and its affiliates to procure, purchase and develop, and / or to resell interests in Prospect on its behalf upon the terms specified herein
NOW, THEREFORE, in consideration of the mutual covenants in this agreement, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:
1. West Asher Prospect LLC hereby agrees to use its best efforts to drill wells and subsequently hold mineral wellbore interest in the Prospect for oil and gas development on behalf of, and for the benefit of The Undersigned.
2. West Asher Prospect LLC will provide for The Undersigned Working Interest and Net Revenue Interest in (4) oil and gas wellsto be drilled. The price of the project will include anticipated project development costs for drilling (4) oil and gas wells to the projected depth of the Calvin / Wannette Sands, a water supply well, and associated equipment and installation of said equipment, easements, right of ways, costs of doing business, and any and all other associated costs and expenses. Project development costs include but are not limited to lease acquisition, title opinions, permitting and pooling costs, geological services well site cleanup, equipping and plumbing, frac procedures, rig time, wireline service, employee and contractor salaries and associated labor considerations, accounting, legal, office expenditures, filing fees, mileage, incidentals, and any and all other expenses that can be associated with oil and gas operations and the funding of said operations, among any other expenses deemed necessary by the joint venture manager and operator. West Asher Prospect will be Turn-key those expenses and other associated expenses in exchange for working interest and net revenue interest in the (4) wells. This Turn-key agreement is good for one completion, and/or stimulation procedure either the original zone or a behind pipe reservoir, as well as implementing the field development plan of (4) wells, a water supply well, and the eventual conversion of one of the (4) wells into a disposal well. Operating costs will begin to be charged when the wells begin production, defined as once they are tied into the tanks and moving fluid to those tanks.
3. Upon the execution of this Agreement, Joint Venture Partner shall deliver the Purchase Price to West Asher Prospect LLC, which shall hold and develop the wells outlined in this agreement on behalf of The Undersigned, for The Undersigned’s benefit upon the terms set forth in this Agreement.
4. Any proceeds from the sale of the oil and gas wells to outside entities for the profit of West Asher Prospect LLC will be delivered to The Undersigned on a pro-rata basis dependent on the amount of Working Interest held in West Asher Prospect LLC by the undersigned. Proceeds from the sale of hydrocarbons will be delivered dependent upon the amount of Net Revenue Interest held in West Asher Prospect by The Undersigned. Expenses for the operation of the wells, repairs, maintenance, and labor will be deducted from the revenue based on working interest ownership. If assessments are required for anything outside the scope of the turn-key agreement, an AFE will be presented to all partners via certified mail and billed based on working interest ownership. There may arise a situation where deviations from the development plan may be necessary, for example, if all 4 wells are deemed to valuable to convert to disposal or conditions aren’t favorable for a specific well to be converted to disposal that would otherwise be selected. In this situation we may opt to keep all 4 producers and assess the partners for the cost of drilling of an additional well, or wells, for the benefit of the project.
5. Development will begin once the funds are raised.
6. If conditions exist with any proposed well that prohibit the proposed work from taking place, such as defects in title, environmental concerns, disputes with local, state or federal governments, surface owners, mineral holders or other entities, West Asher Prospect LLC may reimburse the partnership by substitution. Partners in West Asher Prospect LLC acknowledge that if such conditions exist, the venture manager will have the discretion to make these decisions for the partnership, and such powers are under the purview of the venture manager.
7. This agreement shall be governed by and construed under the laws of the state of Texas. Any Lawsuit or litigation arising under, out of, in connection with, or in relation to this Agreement, any amendment hereof, or the breach hereof, shall be brought in the courts of Dallas, Texas, which courts will have exclusive jurisdiction over any such lawsuit orlitigation. Parties agree to arbitration in Dallas, Texas to resolve any and all disputes.
8. Acquisition Partner acknowledges they are a FULLY QUALIFIED ACCREDITED INVESTOR OF SUBSTANTIAL MEANS WHO ACKNOWLEDGES THEY HAVE NO NEED FOR LIQUIDITY IN THIS INVESTMENT. The Undersigned and West Asher Prospect LLC, Independent Exploration Group LLC, and its operator, acknowledge a “warm market”, and that this is not considered a security, and therefore will not be registered as one. In addition, this Agreement will not be enforceable as a security by any state or government agency.
9. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (I) upon personal delivery to the party to be notified by phone or mail, (II) upon transmission when sent via e-mail and acknowledged by the receiving party; (III) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (IV) five (5) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (V) one (1) day after deposit with a nationally recognized overnight courier, specifying overnight delivery, with written verification of receipt. All communications shall be sent to the address as set forth on the signature page hereof or at such other address as such party may designate by ten (10) day advance written notice to the other parties hereto.
10. This Agreement constitutes the entire Agreement, and supersedes all prior agreements and understandings, both written and oral, between the parties hereto. The invalidity or unenforceability of any phrase, sentence, clause, or section in this Agreement shall not affect the validity or 7 enforceability of the remaining portions of this Agreement, or any partthereof.
11. If one or more of the provisions of this agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement to the minimum extent necessary to complywith the laws of the relevant jurisdiction and the balance of the agreement shall be interpreted as if such provision were so excluded in such jurisdiction and shall be enforceable in accordance with itsterms.
12. The Undersigned understands all the risks and disclaimers that are associated with oil and gas development. There are no guarantees, written or implied. Delays in or loss of revenue due to depletion and other factors exist, and, as in any investment, there exists a risk where an investor can lose their entire investment.
Development Plan
West Asher Prospect LLC seeks to develop the 320 - acre southern extension of the West Asher Pool in Pottawattamie County, Oklahoma, and has secured the rights to drill on this lease, and Independent Exploration, the joint venture manager, wishes to offer working interest in order to secure funding for the development of this field and its associated business costs, with Benson Operating installed as its operator of record. This prospect has acreage which encompasses portions of section 23 and 26 of Township 6 North, Range 3, with the primary target being the Calvin Sands formation (locally known as the Wannette Sands) at an approximate depth of 3,400’-3,600’, with behind pipe targets that include the Hoover Sand, Hogshooter Lime, and Layton Sand.
The turn-key development plan is as follows:
• Drill 4 wells to the Wannette / Calvin Sands
• Stimulate producers
• Build a central gathering location for production equipment and collection tanks
• Run flow lines from the producers to the central gathering location
• Install pumping units
• Electrify the field, unless inapplicable
• Drill a water supply well
• Convert one of the 4 wells to a saltwater disposal and install a pump to begin injecting water into the reservoir
• Run flow lines to the saltwater disposal from the water supply well and the producers Conditions may be encountered that require deviations from the initial turn-key development plan which would require partners to contribute additional capital.
• Completions in a secondary zone outside the parameters of the turn-key development plan
• If we encounter scenarios where drilling additional well(s) would benefit the development plan, for example, if all 4 producers are solid producers and it would not be desirable to convert one into a disposal, we may drill an additional well or wells at 40-acre spacing so that we may maximize the field’s potential. These additional proposed drilling locations are outlined in the prospectus and would only be drilled if it is believed that this additional drilling would benefit the overall development and its earning potential.
• When in production, if a situation arises where significant damage occurs to operations that require capital contribution to repair said damage, and those funds are not readily available through revenue to the operator.
Registration Information
Signature Page for Subscription in West Asher Prospect LLC
