Exploration Alliance with Juneau Exploration L.P.
Juneau Exploration L.P.(“JEX”) is a private company formed for the purpose of generating offshore and onshore domestic natural gas and oil prospects for the Company, either directly, or via our 32.3% owned affiliated company, Republic Exploration LLC (“REX”). In addition to generating prospects, JEX occasionally evaluates exploration prospects generated by third-party independent companies. Once we agree to a prospect from JEX, REX or a third-party, we enter into a participation agreement and joint operating agreement specifying each participant’s working interest, net revenue interest, and description of when such interests are earned, as well as allocating an overriding royalty interest of up to 3.33% to benefit employees of JEX.
Effective January 1, 2013, the Company and JEX entered into a First Right of Refusal Agreement (the "First Right Agreement"). Under the First Right Agreement, JEX grants a first right of refusal to Contango to purchase any exploration prospects generated and recommended by JEX. Prospects will be presented along with terms and conditions for purchasing each prospect and Contango shall have the first right of refusal to purchase the prospect from JEX for a period of 10 days, subject to mutually acceptable terms. Pursuant to the First Right Agreement, JEX will be paid an annual fee of $0.5 million which approximates the costs incurred by JEX for their continued support to the Company in the areas of operations, engineering, and land functions. JEX and its employees will continue to be eligible to receive overriding royalty interests, carried interests and certain back-in rights.
Mr. Brad Juneau, the sole manager of the general partner of JEX, serves on the Company’s board of directors.
The JEX Team
Brad Juneau John Burke Kyle Johns Trupti Patel
John Miller (picture not available)
Leah Gaines (picture not available)