Joint Exploration Agreement With Millenium

exh101.htm

Exhibit 10.1
JOINT EXPLORATION AGREEMENT
BURR”C” PROJECT
MAVERICK COUNTY, TEXAS


This Joint Exploration Agreement, hereinafter referred to as (“the Agreement”), is made and effective December 30, 2008, by and between TXCO ENERGY CORP., whose address is 777 Sonterra Blvd., Suite 350, San Antonio, Texas78258, hereinafter called “TXCO” and MILLENIUM E&P RESOURCE FUND I, LLC whose address is 250 Sterling Avenue, Winter Park , Florida32789 hereinafter called “Millenium”.
WITNESSETH:

WHEREAS, TXCO is the owner of that certain oil and gas lease dated January 15, 2003 from Theodosia Coppock, as Lessor and The Exploration Company, as Lessee, a Memorandum of Oil and Gas Lease being recorded in Book 717, Page 351, of the Official Public Records of Maverick County, Texas, covering lands in Maverick County, Texas (the “Lease”). The following described lands which are included in the Lease are hereinafter referred to as the ‘Project Area”, to wit:


a)


All
of Survey 53, A-571, I.&G.N.R.R. Co. Blk. No. 4; and


b)


All
of Survey 54, A-572, I.&G.N.R.R. Co. Blk. No. 4; and


c)


All
of Survey 93, A-901, I.&G.N.R.R. Co. Blk. No. 4; and


d)


All
of Survey 231½, A-1143, S.R. Williams original grantee


WHEREAS, Millenium desires to participate in the drilling of an “Initial Well” to be spud before January 31, 2009, with the option to participate in two (2) additional wells (Option Well), to test the Georgetown formation on the Project Area and earn an assignment(s) of certain leasehold rights in and to the Lease.

NOW THEREFORE, for Ten and No/100 dollars ($10.00) and other good and valuable consideration including but not limited to the premises and the mutual covenants herein contained, the receipt and sufficiency of which are mutually acknowledged, the parties hereto agree as follows:


TERMS OF THE AGREEMENT


1.Consideration.On or before December 31, 2008, Millenium will pay to TXCO Energy Corp in immediately available funds, by wire transfer to the account designated by TXCO, the sum of $825,000.00 (“Initial Funds”) being comprised of a prospect fee of $75,000.00 and the estimated cost of $750,000.00 to drill and complete the Initial Well to the point of first sales.

2.Joint Operating Agreement.TXCO and Millenium shall enter into a Joint Operating Agreement in the form attached hereto as Exhibit “A”, designating TXCO Resources Inc. as Operator.Said operating agreement will separately cover all operations on each proration area around the earning well.To the extent, if any, the terms of the Joint Operating Agreement differ from the terms of this Agreement, this Agreement shall control.

3.Option Wells.
(a) Within 30 days following the completion of the Initial Well, TXCO shall select a drillsite location within the Project Area for the drilling of the First Option Well and issue an ...