Ann: Letter Of Intent Executed for Pathfinder Far, page-32

re: Ann: Letter Of Intent Executed for Pathfi... Hi Cmon,

Still haven't got a reply to the first email.

'Farmout makes this "reimbursement" equal to $3M. Really should be paid as cash up front - since they are buying actual assets (Wells 1&2 plus acreage)'

Agree at face value. Its the third well that begs the question how was the value agreement reached. The cash reimbursement pursuant to existing assets might have been considered the lesser of two options, the 2nd being the FO partner funding of a third well on the property.

Considering the deal was probably not done from negotiating strength, the FO'ee was probably predisposed to leverage the deal to drilling success rather than front up with the readies.