Silverton Energy, Inc 8-K/A, filed May 17, 2024
Silverton Energy, Inc. (SLTN)
About this 8-K/A
Silverton Energy, Inc filed this 8-K/A on May 17, 2024, reporting on events of May 8, 2024.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.01: Completed an acquisition or sale of assets
- Item 5.06: Change in shell company status
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 8, 2024
SILVERTON ENERGY, INC.
(Exact name of registrant as specified in its charter)
| Nevada | 000-54920 | 92-3197364 | ||
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS Employer Identification No.) |
| 101 E. Park Blvd., Suite 600 Plano, Texas |
75076 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (214) 802-6777
___________________________________
(Former name or former address, if changed since last report)
Copies to:
Eric Newlan
Newlan Law Firm, PLLC
2201 Long Prairie Rd, Suite 107-762
Flower Mound, TX 75022
Phone: (940) 367-6154
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| None | SLTN | OTC Markets |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
EXPLANATORY NOTE
This Amendment No. 2 to the Current Report on Form 8-K amends:
Update of listed legal counsel.
Adjusted filing to include only recent material changes 2.01A and 2.01B.
Removed explanation of audit purpose.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Form 8-K and other reports filed by Silverton Energy, Inc. (“Silverton” or the “Company”) from time to time with the Securities and Exchange Commission (collectively the "Filings") contain or may contain forward looking statements and information that are based upon beliefs of, and information currently available to, the Company's management as well as estimates and assumptions made by the Company's management. When used in the filings the words "anticipate", "believe", "estimate", "expect", "future", "intend", "plan" or the negative of these terms and similar expressions as they relate to the Company’s or Company’s management identify forward looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions and other factors (including the risks contained in the section of this report entitled "Risk Factors") relating to the Company’s industry, the Company’s operations and results of operations and any businesses that may be acquired by the Company. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned. Although the Company’s management believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results. The following discussion should be read in conjunction with the Company's financial statements and the related notes filed with this Form 8-K.
In this Form 8-K, references to "we," "our," "us," the "Company," or “SLTN” refer to Silverton Energy, Inc., a Nevada corporation.
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Item 1.01
Section 1 Registrant’s Business and Operations
“SLTN” or “the Company” refers to the Registrant Silverton Energy, Inc., a Nevada corporation
The Company’s Business
Overall Business Objectives
Silverton Energy, Inc. is a public traded company (listed as “SLTN” on the OTC Markets. The Company was incorporated in the State of Nevada on September 21, 2010, with fiscal year of September 30. The Overall Business Objectives of the Company are:
| (i) | Focus on building a large asset portfolio of oil and gas leases on in Oklahoma. | |
| (ii) | The Company will utilize the services of 3rd party operators for the extraction of hydrocarbons on those leases the company owns. | |
| (iii) | Sales proceeds from the Company’s sales of shares of its Series “A” Common Stock and Series “C” Preferred Stock are being utilized by the Company for three general usages: (a) the Company’s operational and overhead expenses (including legal and auditing); (b) continued acquisitions of qualified leases; and, as needed, (c) selected re-working of its acquired oil and gas existing wells to materially increase the bbl/day output (which increases the value of its other wells drawing from the same reservoir/formation as the re-worked well). |
Asset Acquisition Agreements
A. The AHIC Assets On May 01, 2024, the Company executed acquisitions through two acquisition agreements “Acquisition Agreement” between the Company as the Buyer, and American Heritage Investment Capital, LP. (“AHIC”), (the “AHIC Acquisition Agreement” [see EX 2.01A]. Under the AHIC Acquisition Agreement, the Company purchased for $52,000,000, a group of American Heritage Investment Capital, L.P’s (‘AHIC”) oil and gas leases in Oklahoma, listed in Exhibit A.1 to the Agreement (the “AHIC Assets”), which have a with a “current value” of $81,000,000, via a Contract for Assignment. The AHIC Assets are held in escrow by AHICs attorney, to be formally transferred to the Company upon $81,000,000 PSA from the Company. The $81,000,000 purchase price is to be paid by an $81,000,000, 20-year, non-interest bearing Promissory Note (Secured by the AHIC Assets), payable in instalments towards a lump sum of $81,000,000 payment on May 01, 2044. Section 5A of the Promissory Note provides a credit against the $81,000,000 Promissory Note: “For each $15,000,000 introduced to the company through institutional investors, a payment of $3,000,000 shall be immediately delivered to seller and credited against this note. Upon default, after May 01, 2044, AHIC can foreclose on the collateralized oil and gas leases or convert the $81,000,000 in collateral to “preferred stock,” upon a conversion ratio, based on a fair market value of the preferred stock. The $81,000,000, if divided by 1,072,500 of currently available Class “C” Preferred shares is $0.75/share, which is more than the offering price of Class “C” Preferred shares at $0.40 per share. After a period of five (5) years from the date of conversion of the Company’s $81,000,000 into the Company’s Class “C” Preferred shares, the preferred shares shall automatically convert into shares of common stock of the Borrower company on a one-for-one basis (which is a contractual agreement to convert under the pre-existing five-for-one conversion rights for the Company’s Class “C” Preferred Stock. The converted preferred stock shall have one-for-one voting rights per share, the same as the Company’s Series “A” Common Stock.
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B. The Agrawal Assets On May 01, 2024, the Company entered into an “Acquisition Agreement” between AHIC and SLTN, as the “Buyer” and Kris Agrawal and Kris k. Agrawal, et al, Exxon Oil & Gas, Inc., Vance-1 Properties, LLC, as the “Seller” (the Agrawal Acquisition Agreement”), with an effective date of April 04, 2024 [see EX 2.01B]. The Company, together with AHIC purchased all of Seller’s “(Kris Agrawal and Kris K. Agrawal, et. al. collectively referred to as “Agrawal”), working interests and overriding royalty interests in a list of oil and gas leases attached as Exh. A1 (the “Agrawal Assets”). At ¶ 2.2(b)(1), the Agrawal Assets shall be held in escrow by Agrawal’s Escrow Agent and will not be recorded/retitled to Buyers until “one day after receipt of the full purchase price. As such, this transaction is a contract (a “chose in action”) for lease assignments and is not currently vesting title to the assets in Buyers.
The agreed purchase price of the Assets is $3,500,000.00, the payment of which by a “convertible note,” which is to be readily convertible into the Company’s Class “A” Common Stock, at its “market value” per share “at the moment of execution,” within 13 months of the date of the agreement. The agreement, itself, is considered to be a “Promissory Note and Mortgage of $3,500,000 upon the purchased leaseholds. The Buyer must pay $150,000.00 to the Seller within the first six months of the Agreement to improve the purchased leaseholds. The Agreement can be terminated by Buyer or Seller if they cannot agree upon the obligations under the acquisition. However, all parties to the Agrawal Acquisition Agreement have expressed a common goal of agreeing upon their obligations under the acquisition.
Value-Added Aspects of the Acquired Assets
Osage County Oil and Gas properties are attractive because of the high-quality oil and gas, the extensive reserves, and long production history of Oklahoma Oil Fields. In addition, the Osage County minerals are owned by the Osage Nation Head Rights which is managed by the US. Department of Interior’s Bureau of Indian Affairs (BIA). BIA oversight means that all lease contracts are issued and managed by the BIA with the guaranty of clean title, clean environmental standards, oversite and in good standing for all compliance orders and code.
The Company has now entered into three oil and gas lease acquisition agreements to provide a substantial increase in the Company’s lease holdings. With this foothold, the Company’s plan is to build on this success by evaluating and acquiring neighboring oil and gas lease operations. We are confident in our ability to identify and fund acquisition prospects in Oklahoma to continually build our base of production assets and revenues.
Silverton Energy, Inc. as an Oil and Gas Company
Through Managements extensive industry experience, certain fundamental elements were recognized as a necessary baseline to function as an Oil & Gas Company. Those certain elements are:
| 1.) | Exploration & Production – The company must own the rights to the hydrocarbons in the ground and have the industry relations to extract those commodities. |
| 2.) | Risk aversion – The companies industry relations avert the operating risks associated with hydrocarbon extraction. |
| 3.) | Revenue – As a public company, minimizing royalty participants and mitigating operating risks is key to retaining the value exploited through the extraction process and maximizes returns to the company. |
The following are our guiding principles:
| ü | Focus on core production with high reserve value |
| ü | Seek Upside in Acquisitions for cost advantaged production |
| ü | Purchase assets at attractive multiples |
| ü | Seek to consistently recapitalize the company through the recognition of acquired reserves |
| ü | Maintain flexibility and creativity in deal structures to maximize shareholder value. |
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Risk Factors
The following is a summary of some of the risks related to an investment in the Company’s securities. Prospective Investors are asked to carefully consider the following factors relating to risks associated with an investment in the Company’s securities, which should be discussed in greater detail with the Investors’ personal tax counsel, legal advisor, and/or accountant. The order in which the following risks are presented is not intended to represent the magnitude of the risks described. Additionally, the enumeration of these risks does not preclude other risks associated with an investment in the Company’s securities.
Limited Operating History. We acquired our first oil and gas property in March of 2023. As a result, our company has a limited history. However, we are led by a team of professionals with decades of experience in the oil and gas industry and a proven track record of evaluating, acquiring, and maximizing values in existing producing wells and fields.
Reliance Upon Management. Our success is largely dependent upon the efforts of our executive officers. Although our management has extensive experience in the industry, if any member of our management ceases to be associated with Silverton, our business could suffer.
Duties and Responsibility of our Directors and Executive Officers. Our Directors and management are accountable to the shareholders and have a duty to exercise good faith and to deal fairly with Silverton in handling their affairs. Our corporate organizational documents contain provisions which are intended to limit the liability of our management for any act or omission within the scope of their authority if it is determined in good faith that such course of conduct was (a) undertaken in good faith and (b) did not constitute gross negligence or misconduct.
Restriction on Trading. Investors should be fully aware of the long-term nature of their investment in the Company’s Securities. Although a public trading market does not yet exist for our common stock, the shares of our Class “A,” “B” and “C” Preferred Stock are NOT and WILL NOT be registered, but rather, only the shares of Class “C” Preferred Stock are eligible to convert to common shares when an exemption becomes available. Absent a registration statement, the common shares are eligible for restriction removal and trading through an exemption under Rule 144 or Rule 4(a)1.5. However, this could take as long as 2 years if the company is unsuccessful in executing its plan to become a fully reporting company. Each Investor will be required to represent that such Investor is purchasing the Shares for such Investor’s own account for investment purposes and not with a view to resale or distribute The Shares will not be registered under the Securities Act or under state securities law but will instead be issued pursuant to specific exemptions, the availability of which is based in part upon the investment intent of each Investor.
Restrictions on Transfer. The Shares are not readily transferable, and no transfer of Shares may be made unless the transferor delivers, if requested, an opinion of counsel to us, satisfactory to our management, that the transfer does not violate federal or state securities laws. To obtain such an opinion would generally require the Shares be registered under such laws or that an exemption from registration exists. There can be no assurance that an exemption will be available. If, as a result of some change in circumstances arising from an event not now contemplated, an investor wishes to transfer his or her Interests, that investor will in all likelihood find no market in the near future.
Risks Related to Ownership of Our Common Stock. Our Common Stock is currently eligible for quotation on the OTC-Pink Market, but few quotations have been made and limited trading has occurred in our Common Stock. Due to the lack of an active trading market for our securities, investors may have difficulty selling any shares they purchase, which could result in the loss of their investment. Our Common Stock is eligible for quotation on the Pink Market operated by OTC Markets Group Inc. The Pink Market is a regulated quotation service that displays real-time quotes, last sale prices and volume information in over-the-counter securities. The Pink Market is not an issuer listing service, market or exchange. The requirements for quotation on the Pink Market are considerably lower and less regulated than those of an exchange. Because of this, it is possible that fewer brokers or dealers will be interested in making a market in our Common Stock because the market for such securities is more limited, the stocks are more volatile, and the risk to investors is greater, which may impact the liquidity of our Common Stock. Even if an active market begins to develop in our Common Stock, the quotation of our Common Stock on the Pink Market may result in a less liquid market available for existing and potential stockholders to trade Common Stock, could depress the trading price of our Common Stock and could have a long-term adverse impact on our ability to raise capital in the future. If an active market is never developed for our Common Stock, it will be difficult or impossible for any purchasers to sell any Common Stock they purchase.
Acquisition of Additional Properties. Although our management has significant experience in identifying and acquiring oil and gas properties and has already identified properties that would be a good acquisition for us, there can be no assurance we will be successful in our efforts to acquire additional properties at values that make economic sense. The primary purpose of the Company’s securities offerings is to raise funds to purchase additional producing oil and gas properties.
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Importance of Future Prices and Demand for Oil and Gas and Delays in Marketing Production. There can be no assurance that a market for any oil or gas produced from our properties will exist or that the prices obtainable will be adequate to cover the cost of operating such properties. Our revenues are highly dependent upon future prices of and demand for oil and gas. The energy market makes it particularly difficult to estimate accurately future oil and gas prices. Various factors beyond our control will continue to affect oil and gas prices. Such factors include, among other things, the domestic and foreign supply of oil and gas and the price of foreign imports, war or civil unrest, terrorism, the levels of consumer demand and consumer confidence, recession, decline in economic activity, changes in weather, the price and availability of alternative fuels, the rate of inflation, the availability of pipeline capacity and changes in existing and proposed state and federal regulations.
Speculative Nature of Oil and Gas Activities. Oil and gas development involves a high risk of loss. Decisions to acquire properties will be dependent in part on the evaluation of data compiled by petroleum engineers and geologists and obtained through geophysical testing and geological analysis. The results of such studies and tests are sometimes inconclusive or subject to varying interpretations. In any oil or gas activity, economic success depends almost entirely on the accuracy of estimates of oil or gas reserves in the ground, rates of production, demand for oil or gas and the prices of oil or gas. There can be no assurance that we will recover our investment in any properties we own.
Lack of Diversification. Although our intent behind any securities offering is to raise funds to acquire interests in other properties, at present our assets are limited. Acquiring additional properties will spread operational risks across more properties.
Environmental Hazards and Regulatory Liabilities. There are numerous natural hazards involved in the operation of oil and gas wells, including unexpected or unusual formations, pressures, surface damage, bodily injuries, damage to and loss of equipment, reservoir damage, loss of reserves, and temporary/permanent shut-in costs of wells. Uninsured or under insured liabilities would reduce the funds available to us and may result in the loss of properties. Even as a non-operator, and potentially responsible party for our properties, it is possible that insurance coverage may be insufficient. In that event, assets could be utilized to pay personal injury and property damage claims and the costs of replacing destroyed equipment rather than for additional development activities.
Increases in Development Costs. The oil and gas industry historically has experienced periods of cost increases from time to time which can occur within short periods of time. These price fluctuations are real and will affect the overall final budget of any well in which we own an interest. Increases in the cost of exploration and development could affect our ability to operate properties within the budget originally established. Increased development activity could lead to shortages of certain equipment and materials needed for properties in which we own an interest which could make timely development of our properties more difficult.
Unpredictable Producing Life of Oil and Gas Wells. We cannot predict the life and production of any properties in which we have an interest. The actual life of individual wells could differ from the currently predicted economic life expectancy now anticipated. However, our existing properties and properties we anticipate acquiring are in areas that are anticipated to produce from a formation or formations for multiple years. Nevertheless, sufficient natural gas or oil may not be produced from our properties to provide us with a profit on our investment in such properties.
Joint Activities with Others. The company intends to acquire and operate its own properties. However, the company may participate in a joint venture with operators, acquiring less than 100% of the working interest. Full development of the properties in which we own an interest may be jeopardized in the event of the inability of other working interest owners to pay their respective shares of development costs. These potential non-payments may limit us from recognizing the full value of our interest in our properties.
Competition Against Larger Companies. The oil and gas industry is highly competitive. We will be competing against other companies with significantly more resources than we have in the pursuit of good oil and gas properties.
Future Offerings. Our present intent is to use either equity or a combination of equity and bank debt to acquire additional properties. If we are unsuccessful in raising additional equity or borrowing funds, our ability to acquire additional properties will be limited.
Bank Debt. Consideration has been made, and meetings set up to explore the possibility of utilizing bank debt as part of an acquisition. Introducing leverage to the company could have a negative impact on cashflow and even ability to borrow for future acquisitions in the future.
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Executive Officers and Managing Directors
Samuel C. Smith – Chief Executive Officer
Mr. Smith is a United States Marine Corps Veteran who graduated from Texas A&M University in Commerce with degrees in both Economics and Political Science. Subsequently, he attended the University of Tulsa College of Law.
His career started in 2001 as a registered representative for an NASD Member Firm soliciting high net worth investors for participation in Limited Partnership Projects. Shortly following his role in sales, Mr. Smith moved into analysis and ultimately investment banking with activities focused on the “Buy-Side” of Mergers & Acquisitions, Leveraged Buyouts, and other types of combinations.
In 2009, with almost a decade of corporate finance experience, Sam embarked on a career as a Venture Capitalist, raising private and public equity, managing buying and selling groups, and identifying niche opportunities in a variety of industries.
Mr. Smith has owned and operated numerous businesses with an emphasis on corporate finance, growth and innovation. He has extensive experience in origination, structuring and oversight for seed capital funding and structured finance. He guided or overseen numerous private and public companies from the startup phase through the growth stage including and in particular exploration and production companies in the oil and gas space. At one point, Mr. Smith actively managed three operatorships, extensive acreage and upwards of 400 producing wells.
Mr. Smith has accepted the role of CEO and brings the early stage, corporate finance, public company, and energy production experience required to move the company to its full potential.
Dr Eduardo Balli – Chief Financial Officer
With over 30 years of experience, Dr Eduardo Balli has worked for both public and private companies within the Accounting and Auditing fields, as well as in the startup and buildout of several Midwest companies.
Dr. Ed has been a Senior Faculty Member for two major Midwest and East Coast Universities. He has been an instructor for Auditing, General Accounting, Taxation, Information Systems Audit, and Cost Accounting. Dr. Ed works with students pursuing both Bachelor and Graduate degrees. He has been on several University committees such as Curriculum Development, Student Retention, and spent a year as President of the Faculty Advisory Committee providing improvement suggestions and areas of concern to upper Universities Leadership.
With a B.S, in Economics and Accounting, he graduated from Northern Illinois University, NIU. Dr Ed earned an M.B.A. in Finance from the University of Wisconsin-Madison, ultimately attained Doctor of Business Administration (D.B.A.) in Accounting from Argosy University.
John Long – Chief Operating Officer
Mr. Long is a hands-on operator in the mid-south oilfield. He was born to a multi-generational oil patch family and began checking wells with his father at the age of 10. He later progressed to helping on the pulling rig and the drilling rig at the age of 14. Thus began Mr. Long’s nearly 50 years working in “The Patch.”
By the age of 20, John bought his first pulling rig and began a decade of work as an independent contractor servicing several large oil companies before acquiring his own producing leases at the age of 29. After his production and service company was firmly established, John steadily added equipment, leases and labor to his company before acquiring his drilling rig at the age of 36.
Mr Long drilled more than 40 wells for his own production while maintaining his continued contract drilling, well service, dozer and roustabout work for other large and small oil companies in the region.
At 41, John sold his business to enjoy the fruits of his endeavor only to discover his desire to remain in the patch was in his blood. In truly short order, John built a new bonded oil company generating greater than $1,000,000 in annual revenue through efficient operations and strategic acquisitions.
Mr. Long has accepted the role of Chief Operating Officer and brings his decades of successful oilfield operations experience to assist in evaluating potential acquisitions as well as managing field operations.
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The Company’s Securities
Class “A” Common Stock: The Company has 500,000,000 authorized shares of Class “A” Common Stock. To date, 95,100,000 shares of the Class “A” Common Stock has been issued:
Ownership of our executive officers and directors and any other security holder who owns more than 10% of our common stock are:
| Samuel C. Smith – Board Chair and CEO: | 32,003,266 | |||
| John Long – Board Member and COO: | 30,000,000 | |||
| Edward Balli – Board Member and CFO: | 500,000 | |||
| Ownership by Other Shareholders: | 32,596,734 | |||
| Total Class “A” Common Shares Issued: | 95,100,000 |
Preferred Stock.
The Company currently has three classes of preferred stock authorized:
| • | Class “A” Preferred Stock: This class consists of a single share created in the custodianship process as a control mechanism, the current holder of which is the Company’s CEO and Board Chair, Samuel C. Smith. The Class “A” Preferred Stock has 60% voting rights, and the single issued share can be converted into 300,000,000 shares of common stock. At this time, there is no intention by Mr. Smith to utilize his voting rights under his single share of the Class “A” Preferred Stock. |
| • | Class B Preferred Stock: This is the control block of stock held by Samuel C. Smith and John P Long Jr. Each share of Class B Preferred Stock entitles the holder thereof to cast 500 votes on all matters requiring vote. |
| • | Class C Preferred Stock: The Company’s Class C Preferred Stock, consisting of 5,000,000 authorized shares, was created for purposes of the Company’s Reg D, Section 506(c), exempt private offering, which was disclosed to the Securities and Exchange Commission in its September 15, 2023 Reg D filing, which is adopted in this 8K filing by reverence, and can be located under the SEC’s Edgar filing system at the following hyperlink: |
https://www.sec.gov/Archives/edgar/data/1508786/000168316823006305/xslFormDX01/primary_doc.xml
The Reg D Offering is offered solely to qualified investors a maximum offering of 5,000,000 Class “C” Preferred Stock shares priced at $0.40 per share for a Maximum Offering Purchase Amount of $2,000,000.
This share class is a Preferred Equity Class that converts at a rate of five (5) Class “A” Common Stock shares for each single (1) Class “C” Preferred Stock share. As of the date of this filing, of the 5,000,000 authorized shares, 927,500 shares have been issued, with a current Company Treasury balance of 4,072,500 shares of Series “C” Preferred Stock.
Item 1.01 Entry into Material Definitive Agreements.
Since the Company entered into three material definitive agreements, which also constituted completion of the acquisition of assets, the entry into Material Definitive Agreements is reported in conjunction with Item 2.01 Completion of Acquisition of Assets.
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Item 2.01 Completion of Acquisition or Disposition of Assets.
The Company, starting on March 09, 2023 – May 01, 2024, has entered into and completed three Material Definitive Agreements, which resulted in the Company’s Acquisition of Assets:
2.01A. Acquisition Agreement Between the Company and American Heritage Investment Capital, L.P. (“AHIC”), dated May 01, 2024, with the Company as Buyer and AHIC, as Seller (the “AHIC Acquisition Agreement”);
2.01B. Acquisition Agreement between American Heritage Investment Capital, L.P. and SLTN, as “Buyer” and Kris Agrawal and Kris k. Agrawal, et al, Exxon Oil& Gas, Inc., Vance-1 Properties, LLC, as “Seller,” signed on May 01, 2024, with an effective date of April 04, 2024).
Item 2.01A
Acquisition Agreement Between Buyer, the Company and Seller, American Heritage Investment Capital, L.P., dated May 01, 2024, (the “AHIC Acquisition Agreement”), a copy of which is EX 2.01A.
Assets Acquired . Under the AHIC Acquisition Agreement, the Company purchasing for $52,000,000, a group of American Heritage Investment Capital, L.P’s (‘AHIC”) oil and gas leases in Oklahoma (the “AHIC Assets,” listing in Exhibit A.1 to the Agreement), with a “current value” of $81,000,000, via a Contract for Assignment. The Acquired Assets are held in escrow by AHICs attorney, to be formally transferred to the Company upon ACH receiving the agreed upon $81,000,000 from the Company.
Payment for Assets Acquired - $81,000,000 Promissory Note. The $81,000,000 purchase price is to be paid by an $81M, 20-year, non-interest bearing Promissory Note (Secured by the leases),payable in a lump sum $81,000,000 payment on May 01, 2044. Section 5A of the Promissory Note provides a credit against the $81,000,000 Promissory Note:
| 5 (a) | For each $15,000,000 introduced to the company through institutional investors, a payment of $3,000,000 shall be immediately delivered to seller and credited against this note. |
Default and Conversion to Shares of Class “C” Preferred Stock. Upon default, after May 01, 2044, AHIC can: (i) foreclose on the collateralized oil and gas leases, or (ii) convert the $81,000,000 in collateral to “preferred stock,” upon a conversion ratio, based on a fair market value of the preferred stock. The $81,000,000, if divided by 927,500 of currently available Class “C” Preferred shares is $0.87/share (the current more than the offering price of Class “C” Preferred shares is $0.40 per share.
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Conversion of Converted Series “C” Preferred Stock shares into Series “A” Common Stock shares After a period of five (5) years from the date of conversion of the Company’s $81,000,000 into the Company’s Class “C” Preferred shares, the preferred shares shall automatically convert into shares of common stock of the Borrower company on a one-for-one basis (which is a contractual agreement not to convert under the pre-existing five-for-one conversion rights for the Company’s Class “C” Preferred Stock). The converted preferred stock shall have one-for-one voting rights per share, the same as the Company’
Voting Rights: The preferred stock shall have one-for-one voting rights per share, the same as the Company’s Series “A” Common Stock.
Effect of AHIC Conversion of its Class “C” Preferred Shares to Class “A” Common Shares. The Company has 500,000,000 authorized Class “A” Common Stock, of which 88,600,000 shares have been issued or committed. Even if all 5,000,000 shares of Class “C” Preferred Stock were sold and converted on a 5/1 basis to Class “A” Common Stock, which would result in 20,000,000 shares of Class “A” Common Stock. The remaining 391,140,000 remaining shares of Class “A” Common Stock would be sufficient to absorb a conversion by AHIC.
* There are currently available of 1,072,500 shares of Series “C” Preferred Stock in the Company’s corporate treasury, which is assumed, and should be specified as Series “C” Preferred, it is $0.206 per share of Series “C” Preferred Stock, if all $52,000,000 of the debt is converted. The current Reg. D offering is $0.40 per share. The fair market value of the Class “C” Preferred Stock, 20 years from the date of the agreement, is not currently known.
Item 2.01B
Acquisition Agreement between American Heritage Capital, L.P. and SLTN, as “Buyer” and Kris Agrawal and Kris k. Agrawal, et al, Exxon Oil& Gas, Inc., Vance-1 Properties, LLC, as “Seller,” signed on May 01, 2024, with an effective date of April 04, 2024), a copy of which is EX 2.01B
The Company, together with American Heritage Capital, L.P., on May 01, 2024, entered into an Acquisition Agreement, the Company and American Heritage Investment Capital, L.P. “(“AHIC”) purchased all of Seller’s “(Kris Agrawal and Kris K. Agrawal, et. al. collectively referred to as “Agrawal”), working interests and overriding royalty interests in a list of oil and gas leases attached as Exh. A1 (the “Assets”) “(the “Agrawal Acquisition Agreement”). At ¶ 2.2(b)(1), the Assets shall be held in escrow by Seller’s Escrow Agent and will not be recorded/retitled to Buyers “one day after receipt of the full purchase price. As such, this transaction is a contract (a “chose in action”) for lease assignments and is not currently vesting title to the assets in Buyers.
The agreed purchase price of the Assets is $3,500,000.00, the payment of which by a “convertible note,” which is to be readily convertible into the Company’s Class “A” Common Stock, at its “market value” per share “at the moment of execution,” within 13 months of the date of the agreement. The agreement, itself, is considered to be a “Promissory Note and Mortgage of $3,500,000 upon the purchased leaseholds. The Buyer must pay $150,000.00 to the Seller within the first six months of the Agreement to improve the purchased leaseholds. The Agreement can be terminated by Buyer or Seller if they cannot agree upon the obligations under the acquisition. However, all parties to the Agrawal Acquisition Agreement have expressed a common goal of agreeing upon their obligations under the acquisition.
Item 5.06 Change in Shell Company Status
April 08, 2024 attorney opinion of D. Grant Seabolt, Jr., of the Seabolt Law Group (the “Shell Company Opinion Letter”), that the company should no longer be listed as a shell company and requesting that its “shell company” status be removed from the Company’s listing on the OTC Markets Pink Market, a copy of which is a hyperlink in Item 5.06A.
The Shell Company Opinion Letter provided proof that the Company ceased being a shell company after its initial March 09, 2023 acquisition of oil and gas lease assets, and that the company regularly reported quarterly and annual GAAP financial reports from March 31, 2023 to March 31, 2024. As a result of the Shell Company Opinion Letter, on April 10, 2024 and continuing to the date of this Form 8K filing by the Company, the OTC Markets Pink Market has removed the “shell company” status from the Company’s SLTN Pink Sheet Stock listing. As a result, the Company is no longer a shell company.
Item 5.06A
https://www.otcmarkets.com/otcapi/company/financial-report/397207/content
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Item 8.01 Other Events
Item 8.01A – Retaining of a Certified Public Accounting Firm to prepare a GAAP level audit of the Company’s Fiscal Year 2023-2024 Third Quarter Financial Statements, which were previously prepared according to U.S. Generally Accepted Accounting Principles (GAAP).
The Company has retained the following certified CPA firm of:
FM Financial Services, LLC
2910 Grants Lake Blvd., Unit 1402
Sugarland, TX 77479
929-571-1666
Faiza Mehmood, CPA
Item 9.01 Financial Statements and Exhibits
(d) Exhibits. The following is a complete list of exhibits filed as part of this Report. Exhibit numbers correspond to the numbers in the exhibit table of Item 601 of Regulation S-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: May 17, 2024 | Silverton Energy, Inc. | |
| By: | /s/ Samuel C. Smith | |
| Samuel C. Smith, CEO | ||
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Exhibit 2.01A
A C Q UIS ITIO N AGRE EMENT BETW EEN : S IL VE RTO N ENE RGY In c, a N e v ad a C orpor a ti o n a 101 E Park Blvd Ste 600, Plano , TX 75074 (" SL TN " r eferred to as " Buy e r ".) AND: AME RIC AN HERITAG E IN V E ST MEN T CAPI T AL , LP a T e x as Co rporation 1001 Texas Ave #14 00 , Houston , T X 77 002 (referred to as " AHI C " the "Se ll er ".) and: ( Bu ye r a nd Seller incl u ding their below defined representatives are con secutiv el y referred as t h e " Parti es" ) Attachm e n t s: App e ndix " A1" : Definitions and Interpreta t ion s Append ix " A2 " : List of A s sets Appendix "A3" : Li s t and particul ars of Overridin g Royalti es Appendix "A3" : Selle rs Statements Page l of 14
Page 2 of 14 WHEREAS: A. (a) Buyer is a public company, reporting to a fully regulated sto ck exchange in the OTCMARKETS, INC USA, with more than three hundred shareholders. The company has its common s har es li ste d on the OTC Markets , Inc (the "SLTN") under the symbol SLTN. Bu yer is in good standing with all Regulatory Authorities as well as current with all its corporate filings and has i ts registered offices. Buyer 's objectives are to be focused on investments and E& P within the Oil & Gas i ndu stry and, SLTN i s desirous to acquire certain percentages of the NRI of se l ected assets of NET in stages including o pera ting experience to expand its management team withi n that industry sector. (b) Seller is represented by its General Partners , Mr . Jeffrey Fannmg ("JF"}, and Mr . Rafael Pinedo ("RP"), whereby JF a nd RP will also be th e agen ts for Buyer to nego t iat i ons to facilitate the execution of the proposed transaction with Seller ; and (c) Buyer d esi r es to acquire all the working interest and overriding royalty interests in the listed Assets of the Leasehold (Appendix " A") . B. (a) Se ller owns and operates an oil a nd gas Leasehold described in Append i x " A I", which are all l ocated in Oklahoma and Arkansas (hereinafter the " Assets ") covering we lls and leases located in Beaver , Creek, C ana dian, Garvin , Garfie ld , Harper, Kingfisher, Major , Okmul gee, Muskogee (C ul to n , Milligan , fuller, an d Woodward Co u nties, including its in Oklahoma located Assets listed in Appendix "A 1 ". C. Seller believes the curren t value of these assets is E i ghty - one Million dollars ($81,000,00 0 ), based upon the Resou r ce Evaluat i on Report prepared according to National Instrum e nt 51 - 101 by MKM ENGINEERING (QP), In dependent Qualified Reserves Evaluator License F - 009377 , dated April 2 9 , 2022. This report reflected a Net P resent Value of Future Net Reve n ues (10% di scount rate) of $52,500,000 at the time of the report. Based upon the increase in the market value of the underlying pr ice of a barre l of oil and billion cubic feet of gas s in ce t hi s report , Se ll er believes that the value of the asset s has increased to $81, 00 0,000. However, Seller can offe r no assurances as to the increase in the value of the assets; Seller has agreed hereb y to se ll , assign , and convey to the Company and the Company has agreed hereby to purchase and accept the Subject Interest in the L eases subject to the terms and conditions of this Agreement a n d all it s working and overriding royalty interests i n the Assets listed in Appen di x "A2". D. The Parties have reached a consent as to the terms and conditions of the purchase and sale and wish to articulate this agreement. NOW THEREFORE t he Parti es agree that, to proceed effectively, the terms and conditions set forth within thi s agreement including its Appendices will be the basic terms and therefore the Parties agree to the following : 1. Definitions and Interpretation 2. (a) For the purposes of this Agreement and the convenience to the r eader hereof , the Definitions and Interpretations are attached as Appendix " Al . 0 " to this Agreemen t whereby all capitalized word and short for ms within this Agreement are referred to as defined herein ; (b) th i s Agreement may include additional defin ed tem 1 s set forth within "ex clama tio n marks " ; (c) unless the context otherw ise clearly indicates , words u se d in the sing ular include the plural , the word "Person" includ es natural and artificial persons as define in Appendix " A " 1 . 0 ", t h e plural includes the singular, and any gender includes the masculine, feminine, and n euter . 1. Basic Structure the Acquisition of Seller's Assets and Int e gration of Operating Entity 2. The Parties agree to use their best commercial efforts to formulate a payment structure for the acqu isiti on of Assets including the integration of operating entity including an operating team into Bu yer 's organization: (a) the Partie s will minimize or eliminate any adverse approval tax conse quence s and be as cost effect i ve , but also to provide the possibility of a cost - efficient unwinding of the Transaction for the
Page 3 of 14 Parties in case the desired funding or any other of the agreed upon conditions cannot be accomplished; and (b) the Transa ction becomes effective subsequent to the approval of the company including the approval of the Board of Directors ("BoD ") and the completio n of a NI 51 - 101 Repo rt performed by a Qua l ified Person ("QP"), wh i c h is compliant w ith the ''Nl 51 - 10 I "Stan dards of Disclosure for Oil and Gas Activities " under the SEC rules. 2. Th e Parties r ecog nize and confirm further tha t: (a) Buyer will continue its due diligence and will have examined the title and cond i tions of all equipment which Seller will sell , assign, and deliver t o Buyer all of Seller's right, title, and interest, in the working interests in the listed Assets i s going to be executed; but (b) the acquisition and assignme nt of leases shall be those listed in Appendix " Al ", The Parties agree that Seller will assign all its right , title, and interest of every kind in the Leasehold regardless of whether it i s covered by the leas es described in said assignmen t ; but ( ii) (i) the said assignment shall stay in the control of t h e Seller's Escrow Agent , as i n demnified within Appendix "A1 ") and shall only be recorded one day after the receipt of the full purchase price and No recordation provision will survive this agreement, the Acquisition include that Seller will assign and deliver, and Buye r will acquire all the working and overriding royalty interest of all Assets owned by Selle r ; whereby (i) Seller shall not merge the Overriding Royalty Interests into the working interest until purchase price h as been paid in full; and Parties agree that the overriding royalty interest in the Silver Red Fork Sand unit i s amounts to three hundred thousand US dollars (US$300,000) as w ill be confirmed by QP; (c) unless disclosed the Assets to be acquired by Buyer, will be free from any outstanding l iens, charges, claims or Encumbrances and the Partie s wi ll execute all documents as the Parties, or their solicitors may require in order to effect Transaction under this Agreement. The Parties also confirm that they have no further engagements and liabilities outs tand ing othe r than those that have been di sclose d herewith o r within their attached financial statements. 1. A gr eed ba sic Te rms for the Transaction 2. Buyer desires to acquire the Assets of Seller's Leasehold for the Acqui sition - P rice referred to the va l ue of the Leasehold must be confirmed by an ''NI 51 - 10I Report' ' or verified by a PQ as referred to in this Agreement as basis for the accounting validation by Bu yers's auditors. 3. The execution of the agreement will contai n the custom ar y representations, warranties and covenants given by the Parties which wil1 also include in more detail the initial operating objectives 4. upon the execution of this agreement , with the consent of the board of directors. 5. The term "Leasehold" as used he rein, shall mean: • all oil, gas, and mineral lea ses, any unitization orders, all forced poolin g orders and all othe r licen ses, permits and orders which cover , authorize or relate to the exploration for and production of oil, gas, and other minerals from the lands described above . all wells located on the above described lands, personal prope1ty , fixture s, compressors, gatheri n g systems, pipelines, inventory located thereon , equipment, a n d improvements located on the Leases or the Land, or u s ed or obtained in connection with the ownership, exploration, dev e l opme nt , or operation of the leases
Page 4 of 14 • on the Land, or th e production, sa le , processing, treating, stor i ng, gathering, transportat i on or disposal of h ydrocarbons, water or any other s ub stances p r oduced th erefrom or attributable thereto; • all contracts, agreements, l eases, lic enses, easements, right s - of - way, ri gh t s under o rd e r s of re gulatory authorities ha ving jurisdiction w i th re spect to, a n d other properties and rights of every nature whatso ever in or incident to the owners hip, exploration, development , u se or occupancy of t he Leases or the Land or any interest t her e in , or th e pro d uc ti on, sa le, proce ss in g, treatin g, sto rin g, gathe rin g, tran s portation or d i sposa l of h y drocarbons , wate r or any othe r substance prod u ced therefrom or attributable thereto ; and all other right s a nd intere sts of every nature whatsoever owned by Sell e r r el ating to the Leases o r the listed Assets, Land or the ownership or operation t h ereof, including, but not limited t o, s urface l eases and und e veloped l ease hold l oca t e d within the Listed Assets, prov ided , however, that there i s excepted speci fically from the t erm Leas eh old: • • surface ownership of the real pro p erty cove r ed by the Assets , all mineral int erests and ro ya lty inter est, overriding royalty interest owned b y third patties, and ot h er similat · rights and in tere sts in and under the Leasehold and t he Land, and all hydrocarbon pr od uction fro m or attributable to the Leasehold or the Lan d with resp ect to all p er i ods prior to the Effe ct ive Time of this agreement. 1. Acquisition or Purchase Price and Payment Terms for Acquisition 2. Buyer agrees to pay for a ll of Seller' s in terest in th e Leas e h o ld includin g Royaltie s and ov er riding Royalties, the principal s um of eighty - one million US Dollars , (US$81,0 0 0,000.00), which s hall be paid as follows: WHER EAS, t he Company and Purchaser are executing a nd deliverin g this Agreement in reliance upon the exemptio n from secu r ities regi stration afforded by the rules and r egulat ion s promulgated by the U nited States Secu ri ties an d Exchange Commission (The "SE C ") under the Sec uritie s Act of 1933 , and amended (the '' 1 933 Act ") ; WHEREAS, t be Purchase Price for th e Purchased Assets s h all be paid b y the Company t o t he sell e r : 1. the iss uance of a Co nvertibl e Promissory Note payable to (AHIC) in the principal amount of E ighty - one million d olla r s ($81 ,00 0 , 000) in the form of Exhi bit B , attac hed hereto and incorporated herein. The note is convertible into shares of the Company's co mm on stock. Notes maturing within (twe n ty years) 20 years of the acquisition , upon execution of this Agreement. (c) Un til full pay ment h as been re ceive d by Seller : (i) B uyer shall not encumbe r the leases , wells equ ipment and th e U nit Pr oduc t ion, with mortgages, liens , saJe contracts, dr illing co ntract s, UCC - l liens (see Appendix "Al"), Operator's Lien, Un it Op e rator 's lien s, production payment s ; (ii) Bu yer sha ll at all times maintain th e p r operty su bj ect to its contracted free and clear to be handed over to the Seller in the present o r better condition as received on date of this contr act until fu ll pa yment has been received. (d) Once Buy e r is in charge of the operation, Buyer - S eller shall operate the wells and the l eases ; and (e) This contract shall be treated as a Promissor y Note and Mortgage upon the Leasehold with right to sell and rep oss es s without a judicial s al e which shall be updated and reduced t o the remaining
Page 5 of 14 balance after each payment to the p r incipal s u m of the Acquisit i on - Price. (f) Selle r shall still be deemed to be tbe owner of the leases and the production of the Leasehold until payment has been received i n full by the Buyer. Seller may enter the premises at mutuall y agreed times, but will take back contro l of premises , wells, equipme n t, product ion and exclude the Buyer from the premises only, if an uncured default is es t ablished. 5. The Effective Date of the Ac quisition . The Parties agree that the Effe ctive Date of the Acquisit i on w ill b e the April 4, 2024. 6. No Warrantv of Equ ipm ent or Amount of Production. Buyer acknowledges that the e q ui p ment located o n or in the we ll s located on th e Listed Asset s and an y equipment used for the production of the Assets, wells, are being tr ansferred "as is" and "where is" without warranty of merchantability or condition and that Bu yer has satisfied itself regarding the condition of the equipment and the wells ability to produce a specified amount of oi l or othe r products therefrom and no warranty or repr ese n tatio n regarding the amoun t of production that will be availa ble from operating the wells is being made by Seller. 7. Representations and Warranties of Se ller. 1. As a mate ri a l i nduce m ent to Buyer enter ing int o and perfor ming it s obligations under t hi s Agree ment , Seller h ereby represents and warrants to Buyer as of the date hereof, and by proceeding with theClosing will be deemed to represent and warrant to Bu yer as of the C l osing - Date , t h e following: (a) B in ding Effect . That the u nd ers i gned has duly executed and delivered this AGR EE MENT as Seller and he is author i zed to execute it on behalf of all parties named ab ove as Seller, and a ll in str ument s required h ereu nder to be executed and delivered by Seller . (b) Status of Properties: No Liens . Since the acquisition by Seller of the Leasehold, Seller ha s not made any assignment, conveyance , or other dispo sitio n of any suc h prop ert ie s or any intere st therei n . Seller's interests i n the Leasehold are not subject to or b u rdened by a mortgage , security inte r est or other lien cre ated or arising by , thr ough o r under Seller. Any benefits accrued to Seller by any instrument file d , are to be conveyed to Buyer. No l abor or material liens may be filed against the pro perty or the intere st of S ell er for services provided within the l ast 1 80 day s has not been paid for by Seller, or Seller sha ll beobligated to pay all costs i ncurred by it to develo p and mainta i n the Leasehold oil and gas production. (c) Status of Leas eh old : All leases are in full force and effect (an d before the end of February 2022). Seller wou l d have made shut in royalty payments or are being held by production from the lis t ed Assets. All royalty and Overriding R oyalty Interest payments have been made current through Oil Purchasers via l ast purchase of o i l in January 2022 . Th ere are no lawsuits or disputes filed i11 any Distr ic t Court of La w w ith min era l owners ove r the validity of the o il and gas le ases . T h e ac re age under non - operated wells are for Buyer to propose n ew dri ll ing s ite s. All expenses to suc h non operated wells have not been paid and Bu yer is under n o obligation to purchase them without reducing the purchasing price. Seller will give notice to Operators of non - operating we ll s to shut dow n the ope r at i ons to not in cur add i tiona l lia bilit ies. Selle r h as ce11a in o bl i gations to Ok l ahoma Corporation Commission. 1. Broker and Other Fees. Seller has in cu1Ted no li ab ility, contingent or otherw ise, for broker or si milar fees in respect of t hi s tra n sac tion for which B uyer s hall have any r esponsibil i ty whatsoever. 2. Compliance with Agreements and Laws. To Seller ' s knowledge, no default exists under any of the tenns and provisi on , express or implied , of the Leases or of any material agreement , contract or co mm itment to which Se ller i s a party or to which any of the Le asehol d i s subject, and Se ll er has not received any notice of any claim of s uch default from mineral owners. Seller is unaware if any wells included in the Lea seho ld have been drilled , completed , and operated in substantial compliance with all applicable rules and regulations of the Oklahoma Corporation Commi ssio n . T h ere are no unabated environmental vio l ations.
Page 6 of 14 4. Contracts Relating to the Interes t s . Seller has n ot entered on any contracts affecting Seller's interest in the Lease h old for which B uyer will have any responsib i lity or liability after the Closing except as set forth in Appendix ''B" attached hereto. 5. Clai m s o r Lit i gat i on . There is n o suit, act i o n o r other procee d i n g pe n d i ng agai n st Se ll er before any court or govemmentaJ agency relati n g to the Lease h old , nor to the knowledge of the Seller. If there will be any claim, d i spute , suit, action, or other proceedi n g threatened again s t Seller or pend i ng or threatened against any of the Leasehold which might result in the impairment or loss of Seller's title to the same or the va lu e thereof, t hen such lease h o l d shall b e excluded from this sale. 8 . 0 R e pre s entation s and Warranties of Bu ye r . As a material inducement to Seller entering into and performing its obligations under the terms of this agreement . Buyer hereby represents and warrants to Seller as of the date hereof , and by proceeding wi t h t h e Clos i ng will be dee m ed to r epresent a n d warra n t to Seller as of t h e C l osing - D at e . (a) The authorized capital stock of the Compan y consists of " Unlimited " shares of common stock, par value $ . 001 per share (the "Company Common Stock") , of which 94 , 600 , 000 shares are issued and outsta n ding as of thedate of this Agreement, 1 s h are of Se r ies A P r eferre d S t ock, 1 , 0 0 0 , 00 0 shares of Ser i es B P r e ferred Stock and approx i mate l y 825 , 000 shares of S e ries C Preferred Stock at par va l ue $ . 00 per share are a l so issued and outstanding , as oft b e date of this Agreement . (b) All of the issued and outstanding shares of Company Common Stock have been duly authorized and validly i ssued and are fu ll y p a id , nonassessa b le an d free of p reempt i ve r i g h ts . The Company Com m on Stoc k to be i ssue d to the Seller pui - suant to t his Agreement will , w h en issued as specified herein, be validly i ssue d and outstandi n g , fully paid and non - assessable , and not issued in violat i o n of t he p r eem p tive rights of any other person . ( c) To the Company's knowledge, there are no voting trusts, stockholder agreements or other voting arrangements that hav e b een ente r ed in t o among t he s t ockholders o f the Co m pa n y, or charges, lie n s or enc u mbrances on i ssu ed shares of th e Company Common Sto c k . 1. Financial Statements. As a company whose common stock trades on the Over - T he - Counter Bu ll etin Board, the Company is required to file certa i n financial reports with the Securities and Exchange Commission (the "SEC"). The Se ll er a nd its directors have had a c ha n c e to review said reports as they are pu blic d ocuments (said p u bli c l y ava i lable r eports and schedules thereto are referred to herei n as the "Compa n y F inancial Statements"). Except as otherwise set forth in Section 2.4 of the D isclosure Schedule , each of the Company Financial Stateme n ts filed since D ecembe r 31 , 2021 is complete and correct in all material respects , has been prepared in accordance with GAAP consistently applied throughout the periods presented, and p r esents fairly the fi n a n cial posit i o n , re sults of ope ra tions , cash :flo ws and stock h olde r s ' equity of t h e Co mp any as at the dates and for the perio d s indicated (su b ject , in the case of unaudited statements, to n ormal , recurring aud i t adjustments which will n o t be mater i al i n amount or significance) and does not include or omit to state any fact which renders the Company Financial Statements misleading. There has been no change in Company accounting policies since March 16, 2022, except as described i n the notes to the Company F i nancia l Stateme n ts. 2. Absence of Certain Changes. Excep t as otherwise set forth in Section of the Disclosure Schedule or in its periodic r eports fi l ed w i th the SEC pursuant to the Securities Exchange Act of 1934 , since Marc h I6 , 2022 , the Company has not: (a ) suffered any mater i al a d ve r se change i n its bus i ness, o p erations, assets, or fi n a n cia l cond i tio n , except as reflected on the Company Financial Statements;
Page 7 of 14 (b) suffered any material damage or destruction to or loss of the as se ts of the Company, whether or not cov e red by insurance, which property or assets are matedal to the operations or business of the Company taken as a whole ; (c) se ttled, forg iven , compromised , cance l ed, rele ase d, waived or pennitted to lap se any material ri gh ts or clai m s oth er than in th e o rdina ry course of bu siness; (d) entered into or terminated any material agreement, commitment o r tran saction, or agreed to or made any changes in mat e rial leases or agr eeme nt s, ot h er than ren ewals or exte nsi o ns th ereof and leases, agre eme nts, transactions and commitment s ente r ed into or terminated in the o rdi nary course of bu si ness ; (e) w ritten up , written down o r written off the book valu e of a n y material am o unt of ass ets , othe r than in the o rdinary co urse of busine ss ; or declared , paid or s et aside for payment any dividend o r distribution with respec t to the capital s tock of the Company . 9. Th e future Board of Directors As required , the company will need to nominate two direct ors with spe ific knowledge in th e Oil & Gas indu stry to its board. The present boar d members, officers a nd the new board members will provide full di sc l osure and cooperate in every aspect with the affairs of Buyer and Seller , to facilitate an efficie n t team cooperation. 10. Closing Closing Place and T i me . The agreement can be exe cu ted in multipl e l ocation and su bmitt ed via ele c troni c mail or facsimile but the closing shall take place within one (1) Bu s iness Da ys after the confinned ex ecution by both parties. C l osing s hall take place at the offices of Seller, at 4 I33 N. Linc oln Blvd . , Oklahoma City, OK 73105, o r s uch earlie r date or time and place as may be agreed to by Parties. 1. At the Clo si ng : (a) Seller s hall d elive r executed Assignment, Conveyance and B ill of Sale cov ering the Leaseho ld to Buyer to be placed with Seller as defined in Appendix " Al "; (b) Seller sha ll deliver all files, da ta, and r eco rd s pertain i ng t o the Leasehold to be return ed upon demand to Seller in case o f a default by Buyer until said default is cured. (c) Seller s hall d e liver a pr ope rl y exe cut ed Form - 1073 (see Appendix "A I ") for t h e transfer of o perati o n s to Bu yer. 11.0 l 1.1 Preliminary Acts and Conveya nc es . Pri or to effecting the sale and purchase the Buyer has satisfied him se l f on title to the Leasehold and the parties agree to work togeth e r diligentl y and in good faith to acco mpli sh a s ex pediti ously as reasonabl y pra ct icable any qu es ti o ns that ma y arise regarding title to the Leasehold pr operty or theoperations . 2. F o r this agree men t, the purchase price includes 90 % of mineral leasehold and 10 % e quipm e ntlea seho ld du e to depr ec iation . 3. However , n o equipment shall be removed , hypothecated, and sold : (a) by Seller pri o r to transfe r of ope rati o n s to Bu yer ; and (b) by Buyer until full pur c hase price of Leaseho l d has be e n paid ,
Page 8 of 14 (c) any reduction and alienation in equipment or Lease h old value under 11.2, (a) and (b) shall be considered as a criminal felony. 1. Po st - C losing Matters. 2. (a) Sa le s Taxes. lt is under stoo d that sales taxes, if any - ma y be imp osed on account of the transact io n contemplated hereby. Selle r will be respon s ible for a ll s uch taxes , will remit same to the proper governmental authorities within the time allowed for by law for payment t hereof and will h o ld B uyer harm les s with respect thereto, including any penal tie s or i n tere st assessed for l ate payment. (b) Receipts and Disbursements . If, after the Closing, Bu yer r eceives any funds relating t o operatio ns on o r pro ducti on from the Leasehold prior to the Effective Time, or Seller receives any fu nd s re latin g to operations o n or production fr om the L easeho ld after the Effective T i me , thenthe party receiving such funds shall account the r efor and pa y the same to the other party promptl y after re ce ipt th e re of. Oil produced and in the tanks prior to closi ng shall b e mea sured by both part i es prior to closing and if Selle r wishes it pick ed - u p b y purchaser shall cause it to be done prior to clos in g. Otherwise, Buye r will pay the n et amount to Se ller when paymen t t herefo re i s received b y Buyer following closing. 1. Allocation of Liability . (a) Se ller sha ll remain liable and r esponsib le for a ll cost s and expen ses attributable to th e owners hip or operation of the Leasehold in c luding all environmen t a l vio lation s w h ic h occur prior t o the transfer of operat i ons to Buyer ; and (b) Buyer shall be liabl e a nd responsible for all costs and ex penses attributable to the ownership or ope rati on of the Lea se hold including all environmenta l violations which occu r , during the time the transfe r of opera tion s t o Bu yer has been executed by Seller. 2. Access to Information, Co nfidentiality and Disclosure . 3. The Parties agree that , immediately u pon the execution of this agreement: (a) Buye r and its respective or autho r ized advisors will have fu ll acc ess during n onnal business hours to review, or Seller will deliv er to Buyer, copie s ofall documen ts pertaining to the operations of Seller ; (b) Seller and it s r espective adv i sors will have fuH access dur ing normal b usiness hours to r eview, or Buyer will de l iver to Seller, copies of all documents pertaini n g to the operations t o t h e buye r which are reque sted by Seller r equired by the Regulatory Authorities. 4. Confidentiality . (a) Each party shall without limi t in time, keep and procure to be kept secre t and co nfidential all Confident ia l lnfo1mat i on belonging to the other party disclosed or obtained as a re sult of the d i s cussi ons and negotiatio n s leading to the execu ti on of, or t h e performance of this agreement and s hall n eit h er u se n o r disc l ose any s uch Confidential Information except for t h e purposes of the proper performance of this agreement or with th e prior written cons ent of the othe r party. Where disclosure is made to any employee , consultant, adviser , or ag e n t, i t sh all be made subject to obligations eq uivalen t to thos e se t out in th i s agreement; and (b) Each par ty sha ll use i ts b est endeavors to procure that any s uch employee, consultant, adviser, or agent complies with each of those obligations. Each party shall be respo n sib l e to the other party in respe c t of a n y disclo s ur e or us e of a ny of the o ther party's Confidential Information b y a person to w h o m disclosure is made. (c) Buyer shall not contact the mineral owne r s o r Se ll e r shall not contact the Regulatory auth or ities or buyers 's s hareholder s u nless i t is required as part of their due dili ge nce and without the i n te nt to cause any haim to the ot her party.
Page 9 of 14 3. Disclosure. (a) Except as and to the extent required by law or policies of any Governmental Authorities , withoutthe prior written consent of the other party, neither Seller nor Buyer w i ll, and each will direct its representatives not to make, directly or indirectly , any public comment, statement, or remarks with respect to the transaction, o r otherwise d i sclose or to pennit the disclos u re of the existence of d iscussio n s r egard i ng a possible Acquisitio n between the Parties or any of the terms. (b) if a party is required by law to make any such disclosure, it must first provide to the other Parties the content of the proposed d i sclosure, the reasons that such disclosure is required by law, and the time and place that the disclosure will be made. 1. Termin a tion . It is understood and agreed that this AGREEME T may be te1minated by either Party if: (a) the Parties cannot meet the agreed upon obligatio n s of the Acquisition; and (b) t h e Parties agree to promptly return all doc u mentations, upon req u est, w hi ch have be en delive r e d t o each other as part of the anticipated Acquisition. (c) Buyer s hall reserve the right to terminate this agreement, in all parts, in the event the completed R esource Eva l uation Report does not reflect , at minimum, the value of the cont r acted purchase p ri ce. (d) Buyer shall reserve the right to tenninate th i s agreement, in all parts, in the event Buyer should identify a discrepancy in the chain of titlefor sufficient delivery of the asse t s to the Buyer. (e) Buyer shall reserve the right to terminate this agreement in the event i n st i t u tiona l s p onsors are unw ill ing to ap propriately c a p i talize the company wi t h at minimum , 10% of the R esource Eva l uation Repott Value . 1. Misc e ll a n eo u s . 2. Notices. All comm u nications r eq uired or permitted to be g i ve n u nder th i s A greement s h a ll be in wr i ting and delivered, ma i led , or transmitted by e - mail to the Parties at the addresses set out below. Not i ces shall be deemed given when received except t hose notices given by e - mail transmi ssion on weekends, holiday s or after 5:00 p.m. Ce n tral Time, shall be deemed received on the next bus i ness day. If delive r ed by commercial delivery service or mailed by registered or certified mail, th e delivery receipt shall be evidence of the date of recei p t. Either party m ay , by w r itten notice so deli v ered to t h e other, cha n ge the address to which del iv ery shall thereafter b e made. Venue of this agreement shall be in Ok l ahoma County. (a) Not i ces to Seller : AME RIC AN HE RI TAGE INVE S TMENT C APIT AL, L P a Te x a s C orpor a ti o n at 4133 N. Lincoln Blvd , Oklahoma City, OK 73105. Notices to Buy e r : S ILVERTON ENE RG Y In c, a N e v ada C orporation at 101 E P ark Blvd Ste 600 , Plano, TX 7507. 2. Binding Ef f e ct and Co un te rparts. This Agreement shall be binding upon and shall inureto the benefit of the parties h e r eto and their respective successors and assigns and may be executed in any nu m ber of counte rp arts wh i c h take n together s h a ll constitute o ne and the same instrument and each of which shall be cons i dered an original for all purposes. 3. E xp e n ses . Each party hereto will bear and pay its own expenses of negotiating and consummatingthe transactions contemplated hereby. 4. S uper se ding E ffect and S urvival . This Ag r eement supersedes any prior agreement or understanding between the parties with respect to the subject matter hereof a n d the representations, warranties and covenants of the parties set out he r ein shall s urvive the Closing. 5. Waiver . The rights and remedies of the Parties to the Agreement are cumulative and not alternative.
Page 10 of 14 Neither the failure nor any delay by any party in exercising any right, power or privilege under this Agreement or the documents referred to herein will operate as a waiver of s uch right, power or privilege, and no si ngle or partia l exercise of any such right, power o r privilege will preclude any othe r or further exerc i se of such right, power or privilege or the exercise of any other right, power or privilege. To the maximum extent pennitted by applicable law; (a) no waiver of any claim or right under this Agreement will be valid unless evidenced by a writing signed by the waiving party; (b) no waiver given by a party will be app l icab l e excep t in the specific instance for which it is given; and (c) no notice to or demand on a party will be deemed to be a waiver of any obligation of such party or of the right of the pa 1 ty giving such notice or demand to take fu 1 ther action without notice or demand as provided in this Agreement or the documents r eferred to herein . 6. Liti g ation. In the event it is necessary to file suit or hire an attorney to enforce the provisions oft his agreement each party shall incur its own costs of litigation. 7. Offe r to E mp loy . Bu yer sha ll not hire Se ller 's employees and vice versa, prior to the transfer of operations from Seller to Bu yer unless it is mutually agreed upon. It is understood that irreparable harm cou ld occur to the Parties and the Parties shal l be entitled to immediate injunction against each other without posting a bond for violation, se lling , encumbering the equipment, lease s, wells, production, and the Leasehold. 8. T i me l y Rova l tv pa y m ents . The patty in c harge of th e o peration shall always assure that all R oy alties are paid and kept current. 9. C urren cy. All references to "US $" in this agreement shall refer to currency of USA . 10. Severa bili ty . Jf one or more of the provisions in this AGREEME T are deemed void by law, then the remaining provisions will con tinue in full force and effect. 11. Successors and Ass i g n s. This AGRE EMEN T will be binding upon, executors, administrators and other legal representatives and its assigns. 12. Fo rbe ara n ce Not a Waiver . Extension of the time for or modification of perfonnance shall not operate to release the liability of Parties. A party shall not be required to comme nce proceedings against any default party. Any forbearance in exercising any right or remedy including, without limitati o n, sha ll not be a waiver of or preclude the exercise of any right or remedy.
IN WITNESS WHEREOF, the Parties hereto have agreed to accept the reference date as the execution date of this Agreement. For Buyer: SILVERTON ENERGY Inc For Seller ; AMERICAN HERITAGE INVESTMENT CAPITAL, LP ACKNOWLEDGE ME TS STATE OF \ Ot..OtS ) )SS COUNTY OF 't> \ \ Q.S. ) 'S4 c 1 .. . . - . , .. - , .. C - , . \ The foregoing instrument was acknowledged before me this _ \ _ day of VY' \ o...d , 2024, by s .t - ' - " \ . Manager and Authorized Repr esentative of Silverton Energy, Inc ., on behalfoft he Silverton Energy I nc . IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year first above written . Page 11 of 14 ( SE A L _ ) - -- -- - - - -- Notary Public My Commission Expires 2 \ \ \ i . Commission No. \ 5' - \ '1.0 \ L YOANY SERV I N Notary ID #134203912 My Commission Expires February 15, 202 7 STATE OF Texas ) )SS COUNTY OF Tarrant ) The foregoing instrument was acknowledged before me this day of May 2024, by Rafael Pinedo Manager and Authorized Representative of AMERICAN HERITAGE INVESTMENT CAPITAL, LP of the company . IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year first above written. (SEAL) -- - ..!l :S:: =11 • = Notary Public, State of Texas otary Public Shannon Johnson Shannon Johnson ID NUMBER 134729043 COM M I SSION E X P I RE S Jan u ary 24 , 2 028 My Commission Expires 0112412028 . Commission o . 13 4729043 . Electronically signed and notar i zed online using the Proof platform.
Page 12 of 14 PROMISSORY N OT E B o rrower : S ILVER T O N E N ER GY, IN C . ( th e " Borro we r ") a Nev ada C orp orat ion L e nd er/H old e r: AME RI CAN HERI T AG E INVESTMENT C APIT AL, LP . ( th e "L end e r ") a Te xas Co rporation MA TURITY D ATE: Ma y 1 , 2044 REG IS TERE D O WNE R : AME RI CAN HE RI TA G E INVE ST MEN T CAPIT AL , LP PRIN C IPAL AMO UN T : E I GH T Y - ONE MIL L I ON AND NO/ 100 DOLLARS ($81 ,000 , 000 . 00 ) Section 1. Loan Amount. FOR VA L UE RECEIVED , the Bo r rower promises to pay to the Lender at such address as listed above, or such other address as may be provided in writing to the Borrower, the principal s um of Eighty - on Million and no /1 00 dollars ($81,000,000.00), without interest. Section 2. Loan Payme n t. This Note w il l be repaid in in a single , lump - sum payment on May 1 , 2044 . At any time, the Borrower may pay the outstanding balan ce owing under this ote to the Lender without further bon u s or prepayment penalty. Section 3. Default; Late P ayment and Right to Cure. Notwithsta n ding anything to the contrary in this Note , i f the Borrower defaults in the perfonnance of any obligation u n der this Note, the Borrower shall have thirty (90) days to cure t h e default. Section 4. Costs and Remedies . All costs , expenses and expenditures including , and without limitation, the complete legal costs incurred by the Lender in enforcing this Note as a result of any defau l t by the B o rrower, will be added to the pr i nc i pa l then outstandi n g and s h all be imme d iately paid by the Bo rr ower . I n t h e case of the Borrowe r 's d efault an d the acceleration of the amount due by the Lende r , all amounts outstanding under this Note will bear interest at the rate often (5 %) pe r cent per an n um from the date of demand unti l paid. Section 5. Collat e r a l (Modifi e d) This No t e is giv e n to secur e t he paym e nt of the purchase pric e of certain as s et s . S hould the Borr owe r default in pa y m e nt as r e qui r ed und e r t his N ot e, o r aft e r d e mand for p ay m e nt ba s b ee n give n p ur s u a n t t o Se ction 3 abo ve , the Le nd e r shall h ave the op ti on to : (a) For ea ch $15 , 000 , 000 int r oduced to t h e comp a n y throu g h instituti on al inve s t ors, a p ay m e n t of $ 3 , 000 , 000 s h a ll be imm e diat e l y d e liver e d t o se ller and c redi te d a ga in s t t hi s no te. (b) F o r e clos e on th e collat e r a l as de sc ribed in thi s Section S ; or (c) Co nv e rt th e co llat e ral to p re f er r e d s tock: In th e eve n t o f a d e fault that i s n o t c ured w i t hin th e c ur e p er i o d s pecifi e d in Se c tion 3, all or a p o rti o n o f th e colla te r a l , at th e L end e r 's s ol e di s cr e tion, s hall a utomati ca lly con ve rt into s har e s of pr e ferred s toc k of t h e Borrower c ompany. T h e con ve r s ion ratio ( i .e ., the numb e r of s h a res of pref e rred st oc k i ss u e d for e a ch unit of c o llateral ) s h a ll be d e t e rmined b as ed on a f air mark et valuation condu c t e d b y a mutu a ll y ag r ee d - upon independ e nt app raise r . Th e co n ve rted p refe rr e d stoc k s hall h ave t he foll o wing cha r a cte ristics: Vo tin g Ri g ht s : T h e preferr e d s tock s hall ha v e o n e - vote fo r on e - shar e. C on ve r s ion: A ft e r a peri o d o f fi ve ( 5) y ears from t he date o f con v er s i o n , the pr e f e rred s to c k s hall automatic a ll y con ve rt into sh a r e s of c ommon s tock of the Borrower comp a ny on a o n e - for - on e b as is. The Lender shall be entitled to all rights and privileges associated with the ownership of the preferred stock, including the right to r ece i ve dividends if declared by the Board of D i rectors . Th is Note is given to secure the p ay m e n t of t h e purchase price of ce,tain a ssets. Should the b orrower default in payment as required u nder this Note, o r after de m and for payment h as been given pursuant to Section 3 above , the collateral shal l be immediate l y provided t o the Lender and the Lender s hall be immediately granted all rights of possession as the owner, subject to the limitations as identified in Section 3 above .
Page 13 o f 14 Section 6. Severability. If any term, covenant, condition or provi sio n of this Note is h el d by a court of competent jurisdiction t o be i n valid, voi d or unenforceable , it i s the parties' intent tha t suc h provi s i o n be reduced in scope by the court only to the exte nt deemed necessary by that court to render the provi s ion reasonable and enforcea bl e and the remaind e r of the provisions of this Note will in no way be affected, im p aired or in validate d as a r es ult. Secti on 7. Applicable L aw; Venue. The tenns of this Not e shaU be governed exclusiv e l y and construed in accordance with the laws of the State of Nevada, or any state that has jurisdiction over the bu yers co mpan y . Section 8. Binding ; Waiver of Certa in Not i ce. This Note w i ll enu r e to t he benefit of and be b inding upon th e hei rs , executor, administrators, successor and assigns of the Borrow e r and Lender. The Borr ow er h ereby waives demand, pre sentmen t, notice of dishono r , protest, notice of protest, and diligence in co llectin g this not e an d diligen ce i n bringing and prosecuting su i t against any pa rty bound hereb y; and agr ee t hat no extensio n , r enewa l , or partial payment , or release or substitution of col lateral before o r after maturity with or without notice , s hall relea se o r d ischarge the obligation of any such pa rty . Section 9. Section Headings Not Controlling. Th e Headings of the several Sec tion s of this Note have been p r ep ared for convenience of re f erence only and shall not contro l , affect the meaning of , or be taken as an interpre t at i on of any provi sion of this No te Indenture. Secti on I 0. Counterparts. This Note may be executed i n several counterparts, each of which sha JI be an origina l and a ll of which shall constitute b u t one and the same instrument. Section 11. Sa l e of Note (Modified)Th e Lender s hall have the right to sell, assign , or transfer this Note , in whole or in part , to a third party (including, but not limited to, banks or inve st m ent funds) at any time a fter twenty - four (24) months from the date of this Note's execution b y the Borrower. The Borrower acknow l edges and agrees to b e bound by the terms of this Note by any subsequent holder . [Remainder of Page Left Blank In t entionally]
arties have du ly affixed their signatures as of this 1 st day of May 2024 . ...) <...) C . th Printed rune for AMERICAN HERITAGE INVESTMENT CAPITAL, LP ACKNOWLEDG EME NTS STATE OF \ Cl:) C - . C \ 5 . ) )SS COUNTY OF \ )a.). \ _a.S ) '$01"""U. C.o..,, - ' The foregoing instrument was acknowledged before me this_ \ _ day of '(Y \ o_ . 2024, by s , Representative of Silverton E nergy , Inc . , on behalf of the Silverton E nergy, Inc . Manager and Authorized IN WITNESS WHEREOF , I have hereunto set my hand and affixed my notarial seal the day and year first above written. (S EAL) , _ otary Public My Commission Expires - Z \ tsl . Commission o . \ 3 \ . \ W39 , - i - YOANY SERV IN Notary ID #134203912 My Commission Expires February 15, 2027 STATEOF Texas )SS COUNTY OF Tarrant T he foregoing instrument was acknowledged before me this Jg day of May 2024, by Rafael Pinedo Manager and Authorized Representative of AMERICA HERITAGE lNVESTME T CAPITAL, LP of the company . IN WITNESS WHEREOF , I have hereunto set my hand and affixed my notarial seal the day and year first above written. (SEAL) S• Notary Public, State of I exas otary Public Shannon Johnson M y Comm1 . ss1 . 0n E xpt . res _ 01/24/2020 . Page 14 o f 14 Shannon Johnson ID NUMBER 134729043 COMMISS I ON EX PIRE S January 24 , 2028 Commission o . 134729043 . Electronically signed and notarized online using the Proof platform .
APPENDIX A - 2 – List of Assets SE C STAT US Well Type Well Name operat or county API No. Sr.N o. 4 SI OIL JERRY NO 2 24595 BEAVER 350072407 7 1 4 ON GAS PLETTE 1 - 4 24595 BEAVER 350072224 3 2 19 SI GAS DICKEY 24595 BEAVER 350072144 0 3 26 SI GAS OLAMSTEAD 24595 BEAVER 350072158 1 4 16 ON GAS SMYRES 24595 BEAVER 350072168 6 5 34 SI OIL MAHANAY 24595 BEAVER 350072211 9 6 4 SI GAS EVANS B 24595 BEAVER 350073623 6 6 4 SI GAS MILES E 24595 BEAVER 350073625 7 7 21 SI OIL GODFREY 24595 BEAVER 350132004 0 8 19 ON GAS KIMBLE 24595 caddo 350152206 3 9 30 SI GAS SCHOOLFIEL D 24595 350252092 1 10 8 SI OIL GORE 24595 DEWEY 350432241 5 11 8 SI GAS THOMSEN 24595 DEWEY 350432243 3 12 23 SI GAS ZOLA FAYE 24595 ELLLIS 350452154 9 13 10 SI GAS BARRETT 24595 ELLIS 350452163 7 14 8 ON GAS KNOWLES 24595 ELLIS 350452187 2 15 35 SI GAS WEINKAUF 24595 BEAVER 350472405 2 16 22 SI GAS STATE 24595 BEAVER 350592004 0 17 11 SI GAS MILES 24595 BEAVER 350592035 8 18 15 SI GAS GEOFREY BARRETT (ADDITN 1 - 15) 24595 HASKELL 350612048 8 19 34 SI GAS ARNY CORPS OF ENGNRS 24595 HASKELL 350612052 1 20
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APPENDIX A - 2 – List of Assets 15 SI GAS RUTHIE LEE (HOLLIS # 1) 24595 HASKELL 350612056 4 21 10 SI GAS LEE MARY 24595 HASKELL 350612062 2 22 10 SI GAS SCOTT PATRICK 24595 HASKELL 350612068 6 23 10 SI GAS PATRICK STEPHEN 24595 HASKELL 350612078 4 24 15 SI GAS ARTHUR SHERMAN 24595 HASKELL 350612082 3 25 28 SI GAS JESS BRYCE 24595 HASKELL 350612153 4 26 34 SI GAS HARJO 24595 HASKELL 351072200 9 27 12 SI OIL SKI 24595 HASKELL 351072236 7 28 27 SI GAS GOLDIE CROWELL 24595 HASKELL 351110744 3 29 27 SI GAS GLODIE 24595 HASKELL 351112184 1 30 27 SI GAS JAMES CROMWELL 24595 HASKELL 351112389 5 31 27 SI GAS CROWELL 24595 HASKELL 351112419 3 32 27 SI GAS CROWELL JAMES 24595 HASKELL 351112419 4 33 27 SI OIL CROWELL LINDA - JEAN 24595 HASKELL 351112573 3 34 13 SI GAS WEST PAUL 24595 HASKELL 351112621 4 35 23 SI GAS WEST 24595 HASKELL 351112699 5 36 35 SI GAS MARY VIRGINIA (KREBS - WELCH) 24595 HASKELL 351210006 5 37 1 SI GAS 1ST OKLA RESOURCES 24595 HASKELL 351212092 9 38 1 SI GAS J C HOUCK 24595 HASKELL 351212100 2 39 19 SI GAS HULIN 24595 HASKELL 351212116 1 40 33 SI OIL HARRISON 24595 TEXAS 351392211 4 41 32 SI inj HARRISON 24595 TEXAS 351392216 5 42 21 SI GAS ANGLETON 24595 BEAVER 350072139 6 43
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APPENDIX A - 2 – List of Assets 36 SI OIL JEFFRIES 24595 350932210 8 44 14 ON GAS REEVES 24595 BEAVER 350072277 7 45 35 ON GAS PEARSON UNIT - B 24595 HARPER 350593529 0 46 26 SI OIL LOYD MCNABB 24595 HARPER 350933006 4 47 26 SI GAS BLACKBURN 24595 350632160 8 48 25 SI GAS CHAPMAN ESTATE (YEAGER) 24595 350632168 2 49 36 SI GAS ROTT 24595 350912168 9 50 32 SI DRY SMITH 24595 350912128 7 51 11 SI GAS BERTIE JONES 24595 351072060 8 52 33 SI GAS ROSE 24595 350912077 7 53 33 SI GAS ROSE 24595 350912077 8 54 33 SI GAS ROSE 24595 350912077 9 55 32 SI GAS J.J. SMITH 24595 350912081 8 56 32 SI DRY SMITH 24595 350912135 9 57 6 SI GAS PRICE 24595 350630156 7 58 6 SI GAS WESLEY 24595 350630156 4 59 30 SI GAS CASSIE 24595 351012287 3 60 1 SI DRY THOMAS "E" 24595 350792030 3 61 17 SI GAS SHELL HEIRS 24595 351072323 8 62 18 SI GAS SHELL HEIRS 24595 351072323 9 63 17 SI GAS TOMAHAWK SHELL - HEIRS 24595 351072324 6 64 SI SI OIL Ammons 1 24595 OKMULG EE 351124898 65 SI OIL ammons 2 24595 OKMULG EE 66
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APPENDIX A - 2 – List of Assets SI OIL ammons 3 24595 OKMULG EE 67 SI OIL Ammons 4 24595 OKMULG EE 68 SI OIL JacobS 2 24595 OKMULG EE 69 SI OIL DeArmon 1 24595 OKMULG EE 70 SI OIL DeArmon 2 24595 OKMULG EE 71 SI OIL DeArmon 3 24595 OKMULG EE 72 SI OIL DeArmon 4 24595 OKMULG EE 73 SI OIL DeArmon 5 24595 OKMULG EE 351112552 1 74 SI OIL DeArmon 6 24595 OKMULG EE 75 SI OIL DeArmon 7 24595 OKMULG EE 76 SI OIL DeArmon 8 24595 OKMULG EE 77 SI OIL DeArmon 9 24595 OKMULG EE 78 SI OIL DeArmon 10 24595 OKMULG EE 79 SI OIL DeArmon 11 24595 OKMULG EE 80 SI OIL DeArmon 12 24595 OKMULG EE 81 SI OIL DeArmon 13 24595 OKMULG EE 82 SI OIL DeArmon 14 24595 OKMULG EE 83 SI OIL DeArmon 15 24595 OKMULG EE 84 SI OIL DeArmon 16 24595 OKMULG EE 85 SI OIL DeArmon 17 24595 OKMULG EE 86 SI OIL Robinson1A 24595 OKMULG EE 87 SI OIL C O Burke - 1 24595 PONTOTO C 88 SI OIL Hickman 1 24595 PONTOTO C 89 SI OIL Hickman 1A 24595 PONTOTO C 90 SI OIL Burke 1 24595 PONTOTO C 91 SI OIL Burke 2 24595 PONTOTO C 92
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APPENDIX A - 2 – List of Assets SI OIL Silver Red Fork SU 1 24595 CREEK 350370016 5 93 SI OIL Silver Red Fork SU 2 24595 CREEK 94 SI OIL Silver Red Fork SU 3 24595 CREEK 95 SI OIL Silver Red Fork SU 4 24595 CREEK 96 SI OIL Silver Red Fork SU 5 24595 CREEK 97 SI OIL Silver Red Fork SU 6 24595 CREEK 98 SI OIL Silver Red Fork SU 7 24595 CREEK 99 SI OIL Silver Red Fork SU 8 24595 CREEK 100 SI OIL Silver Red Fork SU 9 24595 CREEK 101 SI OIL Silver Red Fork SU 10 24595 CREEK 102 SI OIL Silver Red Fork SU 11 24595 CREEK 103 SI OIL Silver Red Fork SU 12 24595 CREEK 104 SI OIL Silver Red Fork SU 13 24595 CREEK 105 SI OIL Silver Red Fork SU 14 24595 CREEK 106 SI OIL Silver Red Fork SU 15 24595 CREEK 107 SI OIL Silver Red Fork SU 16 24595 CREEK 108 SI OIL Silver Red Fork SU 17 24595 CREEK 109 SI OIL Silver Red Fork SU 18 24595 CREEK 110 SI OIL Jason B - 1 24595 HUGHES 350632174 9 111 SI OIL Phillips 1 - 12 24595 HUGHES 350632373 6 112 SI INJ skinner Davis - 1 24595 HUGHES 350632231 9 113 SI OIL skinner Davis - 5 24595 HUGHES 350632174 9 114 SI OIL Lexington - 1 24595 CLEVELA ND 115 SI OIL Lexington - 2 24595 CLEVELA ND 116 SI OIL seminole - 1 24595 SEMINOL E 117 Arkansas wells
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APPENDIX A - 2 – List of Assets SI gas Taylor 1 - 23 Max Extrac t Johnson 307110802 118 ON gas Cagle 1 - 18 Max Extrac t Franklin 304711199 119 SI gas ES 11609 1 - 4 Max Extrac t Franklin 304710179 0 120 SI gas ES 12485, 1 - 33 Max Extrac t Franklin 304710243 0 121 SI gas fedeal es 2495, 2 - 3 Max Extrac t Johnson 307110420 122 ON gas Rameriz - 14 Max Extrac t pope 311510632 0 123 SI gas Deffenbaugh 1 Max Extrac t crawford 303310048 124 SI gas federal es 2495, 2 - 3 Max Extrac t Johnson 307110420 125 ON gas Sterlin 3 - 15 Max Extrac t Johnson 307110907 0 126 ON gas Sherrell 2 - 9 Max Extrac t Johnson 307110245 0 127 ON gas Ozark Real Estate - 1 Max Extrac t Johnson 307110036 0 128 ON gas Marshall Real Estate, 3 - 18 Max Extrac t Johnson 307110329 0 129 SI gas galloway 1 Max Extrac t Johnson 307110138 0 130 SI gas galloway 2 - 36 Max Extrac t Johnson 307110373 0 131 ON gas Goose Camp 1 - 16 Max Extrac t Johnson 307110447 0 133
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APPENDIX A - 2 – List of Assets GARVINN AND McCLAIN COUNTY WELLS ON oil a c wade 24595 GARVIN 350492151 7 134 ON oil BLEVINS 24595 GARVIN 350492138 3 135 inj MARTHA 24595 GARVIN 350492063 5 136 ON oil BARNEY SANDERS 24595 GARVIN 350492280 2 137 oil BROMIDE 24595 GARVIN 350492280 1 138 ON oil HAZEL 1 - 5 24595 GARVIN 350492094 9 139 oil JOHNNY 1 - 5 24595 GARVIN 350492089 5 140 inj EDITH 1 - 5 24595 GARVIN 350492088 5 141 ON oil PLUMMER 1 - 1 24595 GARVIN 350490043 6 142 inj Plummer 1 - 6 24595 GARVIN 350492107 4 143 ON oil PLUMMER 2 - 6 24595 GARVIN 350492298 4 144
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APPENDIX A - 2 – List of Assets SI gas FRANK DENNIS, ETAL 24595 MCLAINE 350873008 1 145 SI oil IVEY 24595 GARVIN 350492262 5 146 SI oil LANE - 1 24595 GARVIN 350492107 2 147 SI inj LANE - 2 24595 GARVIN 350492123 3 148 SI inj WILLARD 24595 MCLAIN 350870029 6 149 SI inj ROBERTSON 24595 GARVIN 350492125 90 150 SI oil HASSIE 1A 24595 MCLAINE 350872061 6 151 SI inj FULLER 2 G2GH GARVIN 350492275 2 152 SI oil LEDGERWOO D 24595 MCLAINE 350492111 7 153 153 wells
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APPENDIX A - 2 – List of Assets AGRAWAL ASSETS 15 gas wells Kan Oak Energy Kansas wells TRAVIS 1 - 18 LANGHOPHER AMIGO MAXWELL BUSH FINCHAM D - 1 DOWDY A - 2 HJVFLUUMEREFELT A - 1 HJV PONDER A - 1 SMITH - 1 SCHMIDT D - 1 ODEA JAMES 1 KELLY D - 1 LEONARD B - 4 MCCLURE D - 5
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Exhibit 2.01B
ACQUISITION AGREEMENT Dated April 04, 2024 BETWEEN: AMERICAN HERITAGE INVESTMENT CAPITAL, LP a Texas Corporation 1001 Texas Ave #1400, Houston, TX 77002 (referred to as "AHIC") and SILVERTON ENERGY Inc, a Nevada Corporation 101 E Park Blvd Ste 600, Plano, TX 75074 ( referred to as "SLTN") (AHIC and SLTN are jointly referred to as "Buyer") AND: KRIS K. AGRAWAL 4133 Lincoln Blvd. Oklahoma City, OK 73105, USA (referred to as "KA") the following: KRIS K. AGRAWAL, ETAL. and EXXON OIL AND GAS, INC, VANCE - 1 PROPERTIES, LLC, a Oklahoma corporation Including: ANY ENTITY WHICH HOLDS ANY INTEREST IN THE LEASEHOLD, Uointly referred to as "Seller". (Buyer and Seller including their below defined representatives are consecutively referred as the "Parties") Attachments: Appendix "Al" : Definitions and Interpretations Appendix "A2" : List of Assets Appendix "A3" : List and particulars of Overriding Royalties Appendix "A3" : Sellers Statements Page 1 of9
WHEREAS: A . (a) Buyer is a public company, reporting to a fully regulated stock exchange in the OTC MARKETsj . INC . with more than three seven hundred sharebo 1 ders . The company has its common shares listed • the OTC Markets, Inc (the "SLTN") under the symbol (SLTN) . Buyer is in good standing with all Authorities as well as cmrent with all its coqxnte filinas and has its registered offices . Buyer' 1 objecµves are to be focused on invcsamem : s and B&P within the Oil & Gas industry and . SLTN ia desilOus to acquire to cerwa, - 1111ses of11ae NIUoi .. - - .ofblET ia...., ieeh1dioa,. - ,erina CX)Wld iu llllllllll"ment'team willlia t1111t - -- ,NCter. (b) Buyer is represented by the pn : sidcnt of SLTN, Mr Samuel Smith, and representatives of AHIC, Mr . Jcfliey Fanning ("JF"), and general Partner Mr . Rafael A Pinedo ("llP"), wbaeby JF and RP wm also be the agents for Buyer to·negotiations to facilitate the executioD of the proposed transaction with Seller ; and (c) Buyer desires io acquin : all the working interest and overridina royalty intmests in the listed Assets of the Leasehold (Appendix "A") . B. (a) Sella' owns and operates an oil - 1,ps IAwhold desaibed 111 Appenclix .. Al", which are all located in Oldabama:.i.A+acu S - ,1illafter1he .. A.ud,sj eovcriDg wd.1$ and leues focawin 8'$ver, Creek. Canadian. Garvin. Garfield. Harper, Kingfisba, Major, Okmu.lgce, Muskope (Culton, Millipin, Fuller, and Woodward Counties. i.oQhldiag it5 in Oklahoma located ASIC1I lis.tcd in Appenclix "Al". (b) Seller is l,y Mr"' X .. AarawaI (' KA ") . 11 an apnt, manager, or autberizedoffiecr ()f the working interest owners and operatots of the bcmnafter described leasehold; and (c) Seller -- - "A2"'. • - ' aiits wedant'IDd overriding royalty interests iD the Assets listed in Appendix • C. the Parties have reached a consent as to the tams and conditions of the pun:base and sale and wish to articulate this apemcnL NOW THEREFORE the Parties agr= that, to proceed effectively, the terms and conditions set forth witbia this agreement including its Appeodices will be the basic terms and therefore the Parties agree to the following: 1. Ddbddeps pd lpterpntatlop ·1.1 (a) ror die plllp8HI el dais Apeeaeat and the convenience to the R3der hereof, the Definitions and Interpretations arc attached u Appendi,x .. AJ .O" to this Agreement whereby all capitalized wonl and short forms within tbia A,n:emcnt are referred to as defined herein; (b) this Agreement may include additional defined terms set forth within "exclamatio . n marb" ; (c) unless tbe context otherwise clearly indicates, words used in die singular include the plural, the word "Person" includes natural and artificial pcnona as define in Appeudix "A "t . cr . the plural mcludes the sm,ular . and any pndel' includes 1 he masculine . ffflliainc, ud neuter . u Buie StnadllQ t11e Aa"'41M o(SeDer'• AfK1I M4 lllklrfdn of Opg:adg laJltY 1. The Parties agree to use their best commercial eftorta to fonmalatc a payment atructure for the acquisition of Assets including the integration of operating entity including an operating team into Buyer's organization: (a) the Parties will minimize or eliminate any adverse approval tax comequences and be as cost effective, but also to provide the pouibility of a COlt - cfficieat lmWinding of the Transaction for the Parties in case the desired fimdin1 or any other of tbe qreed upon conditions cannot be accomplisbed; and Paae2of9
(b) the Transaction becomes effective subsequent to the approval of the company including the approval of the Board of Directors ("BoD"') and the completion of a NI S 1 - 101 hport performed by a Qualified Person ("QP'j. which is compliant with the "NJ SI· l01 .. Standards of Dilclosun:: for Qil and Gas Activities" under the SEC rules. 2. nc Parda rccoplzc ud nnftna ftutlaer tltat: {a) Buyer will continue its due diligence and will have examined the title and oonditions of all equipment which Seller will sell. assign, and deliver to Buyer all of SeUer•s riaht, title. and intcr$t, in the working interests in the listed Assets is going to be executed; but (i) Seller does not warranty any net revenue interest in the Assets being acquired by Buyer; (b) the acquisition and assignma1t of leases &ball be those listed in Appendix ''Al",The Parties / that SeUer will assign all its right, title, ud interest of every kind in the Leasehold iegardJeu of whether it is covered by the leases described in said assipmmt; but (i) the said assigmnent shall stay in th of •• A.,EJ!.M incJcmnificcl within Appendix ..Al; and shall only be _ one day after the receipt of the1ull pun:basc price and No recordation provision will survive this agn,cment, the Acquisition include that Sella will assign and deliver, and Buyer will acquire all the working and overriding royalty irita'qt of all Assets owned by Seller; whezeby (i) Seller shalt not merge the Overriding Royalty Interests into the working interest until price bas been paid in full; and (ii) Parties agree that the overriding TO)'alty interest ia the Silver Reel FOik Sand unit ii amounts Ito three hundred tbousaDcl US dollars (08$300,000) u will be confirmed by QP; (c) unless disclosed the Asaets to be acquired by Buyer, will be free from any outstanding liens, c:twses, claims or Encumbraaccs and the Parties will execute all docwncnts as the Parties. or their solici• may require in order to effect Transaction under this AgreemenL The Parties also coaffrm tbat they have no further enlfllCIDCMS and liabilities outstandina olha than thole that have been ctisclosccl: herewith or within their attached financial statements. 3. Acree4 wk Imm r., tk Ireeesde 1. Buyer desires to acquire the Assets of Seller's Lcaselaold for the Acquisition - Price referred to the value of the Leasehold must be cxmfinncd by an "NI Sl - 101 Report" and verified by a PQ as n=fc!m:d to in this Agreement as basis for the accounting validation by Buyers '1 auditors. 2. The execution of the agreement will contain the customary n=pn:sentations, warranties and covcnant,s given by the Parties which will also iaclude in more detail the initial operatin1objectives: 3.3. upon the execution of this agreement, with the consent of the board of directors 3.S The term .. Leasehold" u used herein, shall mean: (a) all oi gas, and mineral 1cascs. 1111)' unitization qrdcrs, al) forced pooling orders and all other licenses. permits and orders which cover. autboria or ntate to the exploration for and production of oil, ps. and other minerala from the lands dacribed above. (b) all wells located on the above described lands. personal property. fixtures, compressors. gathering systems, pipelines, inventoty located theRoa, equipment, and improvemcms located on the Leaaes or the Land. or used or obtainecl in connection with the owilerlhip, exploration, development, or operation of the leases on the Land, or the production. sale, procesaing, treatiq. storing, ptbcrifl8. transportation or disposal of hydrocarbons. water or any other substances produced tberefiom or attributable thereto; Page3of9
(c) all contracts. leases. lic:emes, casements, rights - of•way, ripts under orders of regulatory authorities having jurisdiction wilh respect to. and other properties and riahts of every nature whatsoever in or incident to the ownership, exploration, devclopmeat, usc or occupancy of the or the Land or any interest therein, or the production, &ale, pmceuiaa. treating. storing. transportation or disposal of hydrocarbons, water or any other substance produced therefrom or ' attributable thereto; and (d) all other rights and interests of every nature whatsoever owned by Seller rdating to the Leases or die listed Assets, Land or the ownership or operation tben:of, ludin&, but not limited to surface leases and undeveloped leasehold located within dx Listed Assets, provui«J. howf!ver, that there ia excepted specifically &om the term Leasehold: (i) SW'face ownership of the real property covered by the Assets. {ii) all mineral mtcrcsts and :royalfy interest, ovenidiag royalty interest owned by third parties. ud other similar rights and iuterests in and under 1be Leasehold and the Land, and (ili) all hydrocarbon production &om or attributable to the Leasehold or the Land with respect to all periods prior to the Effective Time of this agreement. 4.o AcQlsitioa er bmw MB M4 f!YIISP* Imm fer Agpbfflep 4.I Buyer agrees to pay for all of Seller's inlaat in the Leltebold including Royalties and ovenidiDg = sum :;;,ica five US Do8an. (USS3,500.000.00), wbidt +ii WHEREAS. the.f 9'Df \ J'¥ l \ lld !Pmbe,..,. - :e executing and delivering this Agreement in reliance upon tiie exemption from securities iqiscratioD afforded by the rules and regulationa promulgated by the United States Securities and Exchange Commission (The "SEC") UDder the ! L/ Securities Act of 1933, (die 0 1933 Act'1; j fZ/' WHEREAS, to purchase ftom the seller upon the terms and ./ I conditions set forth herein, for a value ofSJ,500,000 (in note payable cooveruble i1J fJJD)JPOO af .!!!!kt vallae at the moment of 8JtQYlion witip e PMPMWD WM Af Cthirteen lDOllths) 13 of the acqu.isitioa, upon execution of this Agreement. (c) Until full payment ha beaueccivcd by Sella - : ft - - 1 (i) Buyer sbaD not encumber the leases . wells equipment and the Unit wida JDOrtgaaes . liens, sale contracts . drilling COD 1 raCts, UCC - 1 liens (see Appendix"Al") . Operator' • Lim . Uut Operator's liens, production payments ; (ii) Buyer shall at all times maintain the property subject to its contractod he and clear to be bmaded over to the Seller in the present or better condition as received on date of this contract until 1'11 payment has been received. (d) Once Buyer is in charge of the operation. Buyer - Seller shall operate the wells and the leues; and i (e) TJds centract dlall be treated as• Prollliuory Nete ad Mortpae ef S3,588,......,.. taJ Leuelaold with rlpt teNI wt repa11ea wldaollt a Jlldldal sale wlda ... be apdatlJd _. reduced to the raaabliaa INllaace after eacll paymeat tb die prladpal .. of tlae Acqadlido Ź Price. (f) Seller shall still be deemed to be the owner of the leases and the production of tbc Leasehold until payment has been received in ftlll by the Buyer. Seller may cater the pn:mises at rnutua1ly agreed times, but will take back coatrol of premises, wells, equiJxnmt. production and exclude the Buyer from the premises only, if an uncun:d default is established. (g) Buyer shall not remove any leasehold equipment from the leases. wells and shall preserve and insure such equipment in the amount of its replacement value but not to be lea than $800,000. The Page4of9
insurance agreement shall list the Seller as additional insured until payment has been m:civcd by the Seller in full. u Improytn• IaerhJfl Buyer aarces to pay for hereby pay one hundred fifty thousand dollars (SlS0,000.00) to Seller to be used for improving the leasebold within a period of six months. This amount will be paid immediately after, confirmation of the Reserve Report tiom MK F.qineeriag. s.o ne Eff,sttye Datt., tllt Asefdder The Parties agree that the Effective Date of the Acquisition will be the April 4. 2024. 6.1 No Warrpty pf Egaipmept 9[ Amopt ef Pnpdpctlop. Buyer acknowled&cs that the equipment located on or in the wells located on the Listed Auets and any equipment used for the production oftbe Asse1s, wells, are being transferred "as i, .. and "where is without warranty of merchantability or condition IDd drat Buyer bu utisticd itself regardmg the condition of the equipment a 1 he wells ability to pn>ducc a apccified amouat of oi l or other productsi therefrom and no warranty or rcpreseatation reprding the amount of produetion that will be awilablc from operating the wells is beina made by Seller . 1 . e BCPf!Hl!ldm R 4 WfnMdst a( † ellcr . 1. As a material inducement to Buyer earaina into and pcd'orming its obligations under this Agreement,j Seller hereby iq,rcsents and warrants to Buyer as of the date hereof, and by proceeding with tbe Closijig will be deemed to represent and wamnt to Buyer as of the Closing - Date, the following: (a) Rjpdig Effect, That the undmsipcd has duly aa : utod and delivered this AGREEMENT • Sel&r and be is authorized to execute it on behalf of all parties named above a Seller, and all instrumedta required hcmmder to be executed and delivered by Seller . (b) Status of Properties: No Lieus. Since the acquisition by Seller of lhc Leuehold, Seller has not m,.te any conveyance, or other disposition of any such properties or any interest thelein. , Sener•s interests in the Leasehold are not subject to or burdened by a mortgage, security interestj or other lien created or arising by, through or under Seller. Any benefits acaued to Seller by any instrument filed. to beconveyed to Buyer. No labor or material liens may be filed apinst the property or the interest of Seller for services provided widuo the last 180 days bu not been paid for by Seller, or Seller shall be oblipied to pay all coats incum:d by it to develop and maintain the Leasehold oil and gas production. (c) fMlf ?f k!erbnld : All leases are in full force and ctrect (and before the end of February 2024 ) . Seller would have made at in royalty payments or arc being held by production from the lilted Assets . All royalty and Overriding Royalty Interest payments have been made current through OiJ via last purchase of 011 ill January 2024. The.le are no .lawsuits or clisputa filed in any District Court of Law with mineral owners over the validity of the oil and pa leases. The 8Cl'NgQ under non - operated wells are fcr Buyer to propose new drilling sites. All expcmca to auch non operated wells have not been paid and Buyer is under no obligation to purchase them without reducin3 the purchasing price. Seller wiU give notice to Operators of non - operating wells to shut down the ope.rations to not incur additional liabilities. Seller has certain obliptiom to Okla1aoma Corporation Commission. 2. Broker and Other Fees Seller has incwTed no liability, contingcnt or othcrwiic, for broker or similar fees in respect of this transaction for whidl Buyer shill have any responsibility wbataoever . 3. Compliance with Amqmcgg pl Laws . To Seller's knowledge, no defauk exists under aay of the tcnns and provision, express or implied, of the Leases or of any mat . erial agreement, contract or commitmmt to wbicb Seller is a party or to which any of the Leasehold is subjeet, and Seller bu not received any notice of any of such default from mincraJ owners . Seller is unaware if any wells included in the Leuchold have been drilled, comploted . and operated in p,betantial compliance with all applicable rut . and regulationa of the Oklahoma PageSof9
Coiporation Commission. There are no unabated cnviromncntal violations. 4. Contracts BtWioa to the Iptggts. ScUcr bas not entered on any contracts affec:ting Scller"s interest • the Leasehold for which Buyer W11l have any reirpomibility or liability after the Cosing except u set forth in Appendix "B" attacbed hereto. 5. Claim † or Litigtiop. There is no IAili, action or Olhcr proceeding pend.iDg apinat Seller before any c8'llt or govemmcntal agency relating to the LeuchoW, nor to the knowledge of the Seller. If there will be any claim, , dispute, suit,. action., or other proceeding tbn,atened apinst Seller or pendina or Cbreatencd against any of the Leasehold which mipt rault in the impairmeat or lou of Seller , title to the same or the value duno( thdl such leasehold shall be excluded ftom this sale. LO Bsetw, .. , . , pd WVmtlet ff llYR - As a material induecment to Seller entering iDlo and performing its obligations under the tamt of this agreement . Buyer heteby iCJ)Jeseuta and warraou to Seller u oltbe date hereo and by proeccdiaa wnb the Closing will be deemed to n : preaent and warrant to Seller as of the CJosins - Datc . 9.1 Tile fiat1ln Beard of Dlrec;tm As n,quircd the company dcsira to oomiaate two direcu>rs with specific; knowledge in the Oil & Ou industry to its board. It is also unclentood and asrced that the prcscnt board membc:n and officers of the Par1ies will provide full disclosure and cooperate in every aspect with the affairs of Buyer and Seller and the new Members. to facilitate an efficient team cooperation. Closing Place and Time . The agreement can be cxccuted in multiple location andsubmitted via c mail or f . acsimilc bot the c 1 osinJ shall take place within one ( 1 ) Business Days after tbe eoafirmcd execution by both parties . Closing shall take place at the offices of Seller . at 4133 N . Lincoln Blvd .. Oklahoma City. OK 731 OS, or such earlier date or time and place as may be agreed to by Parties. l 0.3 At the Closing: (a) Seller &ball deliver executed Assignment, Conveyance and Bill of Sale covering the Leuchold to Buyer to be plac:cd with ScUcr u defined in Appendix "Al"; (b) Seller shall deliver all file&, data, and reaJrds patainmg to tbc Leasehold to be mumcd upon demand to SelJer ia caac of a default by BllYCf until said default is and. (c) Seller shall deliver a properly exc:cutcd Fonn - 1073 (sec Appendix "Ai - ') for the transfer of operatioas to Buyer. 1. Pn:11.,,.•a Acta pf frrmrnm 2. Prior to effectina the sale and purc1lase the Buyer bas satiaficd bimaclf on title to the Lcuebold and tht parties agree to work together diligently and in good faith to accomplish ts expeditiously asrcuonabl) practicable any questions that may arise regarding title to the Lcaaebold poperty or the operations. 2. For this agreement, the purchase price includes 90% of mineral leasehold and 10% equipmem leasehold due to depreciation. 1L3 However, no equipment shall be removed, bypothecatcd, and sold: (a) by Seller prior to transfer of operations to Buyer; and (b) by Buyer IIDtil fillt pwdlasc priee 0fl.easebold has been paid, (c) any reduction and alienation in equipment or Lcascbold value IIOdcr 11.2, (a) and (b) shall be Page6of9
considered as a criminal felony. 12.t Post - ont,• Matten, 12.l (a) Sales Taxes, It is understood that sales taxes. if any - may be imposed oa KCOUDt of the tnnlaCtQl contemplated hereby. Seller will be responsible for all such taxes. will n:mit same to the proper governmcntal authorities within tbe umc allowed for by law for payment thereof and will hold B harmless with n::spect thereto. including any penalties or iDtercst asseued for late payment (b) Receipts and 1ly;hypspmg U after the C1osiq. Buyer reecivca any funds relating to operations on or production &am the Leasehold priOI' to the Effective Time. or Seller receives any fiJnds relating to operations on or production ftom the Leasehold after the Effective Time. then .. party m:eiving such funds shall account therefor and pay the same to the other party promptly after receipt thereof. Oil produced and in the tanks prior to closing lhall be mcuured by both parties prior to closing and if Seller wishes it picked - up by pun:haser' aball cause it to be done prior to closing. Otherwise, Buyer will pay the net amount to Soller when payamt1bcreforc ia nx.eived by Buyer following c1o&ing. 13.8 Allocatifl ef I deHM!Y (a) Seller shall mnain liable and respons1ble for all costs and expenses attributable to the ownership pr operation of the Leasehold including all environmatal violations which occur prior to the traasfer of operations to Buyer; and (b) Buyer shal) be liable and responsible for all costs and expenses attributable to the ownership or opeJatioa of the Leasehold includiag all cuvironmatal violatioaa which oceur, during the time transfer of operations to Buyer bu been executed by Seller. ' 14.1 Acceg to hpforppU,, C"""'9flllltJ w Dtldome. 14.l The Parties 1181= that, iJl!fflCCtiately upma the cxecutioa of this ap:ement: (a) Buyer and its respective or authorized advisors will have full access during uormal businclS hours to review. or Seller wiU deliver to Buyer. copies of all documems penaimna to the operations of Seller; (b) Seller and its n:spcctive advisors will have full access during normal business hours to review, or Buyer will deliver to Seller, copies of all documents penaiDin, to the opc:rationa to the buyer which are requested by Seller required by the Regulatory Authorities. t4.2 Confiden1ialitv . (a) F.ach party shall without limit in time; keep and procure to be kept aecret and confidcmial all .Contidential Information belonp1g to the ocher party discloaed or obtained as a rault of the discumona and negotiations leading to the execution of, or the performance oftu. aareement U4I sball neither use nor disclolc any such Coafideatial Information except for the purpo1e5 of_ perfmmance of this agreement or with the prior written comcnt of the other party. Wbcrc ia made to my employee, consultant, adviser, or agent, it shall be made subject to obJiptions equivalent to those set out in this agreement; and (b) Each party shall use its bat endeavon to procure that any such employee. consultant. adviser, or agent complies with each of those obligations. F.acb party shall be responsible to the other party in n:spcc:'l of any diacl06 \ ft or \ l8C of any of me otbu party•, Confidemial Information by a pcnon to whom disclosure is made. (c) Buyer shall not contact the mineral owners or Seller shall not caatact the Regulatory authorities or buyers's shareholders unless it is requiml as part of tbcir due dilipcc and wi1hout tbe intent to cause any harm to the other party. 14.3 Difclour Page 7 of9
• (a) Except as and to the extent required by law or policies of any Oovemmental Authorities, without the prior written consent of the other party, neither Seller nor Buyer will, and each wilJ direct its represeatatives not to make, direet1y or indinlcdy, any public statement. or remarks wi$b respect to the transaction, or othc:nriae disclose or to permit the dilClosure of the existence of discussions regarding a possible Acquisition between the Parties or any of the terms. {b) if a party is required by law to make any sudi disclosure, it must first provide to the other Partiqs the content of the proposed disclosure, the rasons that such disclosure is required by law, and the ti$le and place that the disclosure will be made. lS.8 TemipadePz It is understood and agreed that this AG.REEMENT may be terminated by either Party if: (a) the Parties cannot meet the agreed upon obligations of the Acquisition; and (b) the Parties agree to promptly return all docummtations, upoa n,queat, which have been delivcrtd to each other u part of me anticipated Acquiution. 1. Mid•m,L 2. All communications required OI'pamittcd to be given under th.is Agreement aball be in wri g and dclivm:d. mailed, or transmitted by c - - mail to the Parties at the addresla set out below. Notices shall bej deemed given when n,ceivcd except thole notice& giYCD by e - mail transmission on weekends. holidays or afF' 5:00 p.m. Central Time. sbaU be deemed received on the next busiDaa day. If delivered by commercial de&feiy service or mailed by regiaten,d or cemficd the delivery receipt abaU be evidence of the ct.to of receipt. i_ Either party may. by written notice so delivend to the other, chanp the address to whidl delivery shall 1hcrcafter be made. Venue of this agreement shaB be in Oklahoma County. (a) Notices to Seller: KRIS K. AGRAWAL, 4133 N. Lincoln Blvd, Oklahoma City, OK 73105. (b) Notices to Buyer: SILVERTON ENERGY, INC, a 101 E Park Blvd Ste 600. TX 75074.j 16.2 Bladip1 Eft'ect pd CM9tp ppu, Th.is Aareemeut shall be binding upon and lhaU inure to the beneJit of the parties hereto and their rapcctive &IICCCSIOI'& and auips and may be exocutcd in any number of counterparts which taken together shall eonstimtc one and the same insarumeat and aach of which shall be considered an original for all purposes. J6.3 Em!IH! Each party hcn:to will bear and pay its own expemes of negotiating and CODSUIDIDllliDa the transactions coatanplatcd bcrcby. 16.4 SlgttrpA!•p u.t ucl SunlyaL This Agreement svperacdea any priOI' lpCIDCDt or undcntaDding between the partica with respect to the aubjoct matter hereof and the wammties and covenants of the parties set out herein shall survive the Closing. 16.S ne ripts and remedies of the Parties to the Agn,ement arc cumulative and not altcmative. Neitha' the failure nor any delay by any party ia cxcrcisina any rip&, power or privileae under this Ast or the documents referred to herein will operate II a waiver of such right, power or privilege. and DO single partial exercise of any such righ power or privilege will preclude any other or further exercise of such• power or privileae or the cxen:ise of any other right. power or privilege. To the maximum extent permittDd applicable law; (a) no waiver of any claim or right under this Agreement will be valid unless evidenced by a writio& signed by the waiving party; (b) no waiver given by a pany will be applicable except in the specific inatance for which it is given; and (c) DO notice to or demand on a party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such DOlice or dcmancl to take funhcr action without notice or de as provided in this Agreement or the documents n,ferred to herein . Page8of9
16.6 UdgdoL In the event it is necessary to file suit or hire an attorney to cnfm= the provisions of this ap::ement each party shall incur its own costs of litigation. 16.7 Offer to Employ. Buyer shall not hire Seller's employees and vice prior to the transfer of operations from Seller to Buyer unless it is mutually ap:ed upon. It is understood that irreparable harm couUl ocau - to the Parties and the Pllrtics shall be catitlcd w uornccti•te injwu:tion apinat c:adl ocher without bond for violation, selling. encumbering the cqui leases, production, and the Leescholcl a 8. Timely BGJlln P1Y11C1SL The party in charge of the operation shell always assure that all Royalties iarc paid and kept cwrent. • 9. C,,:nag. All references to "USS.. in this agreemcut sball rcfcr to currency ofUSA. 10. Scypblllty, If one or more of the provisions in this AGREEMENT are deemed void by law, then the remaining provisions witJ continue in full force and effect 11. SJICCfllMI yd AIMSPf, TuAGltEEMENT will be binding upon. exeaaors, admmistrators and other legal representatives and its assigns. 12. Fortpeargq Net a Walyer. Extension of the time for or modification of performance shall not opentc to n:1ease the liability of Parties. A party sball .aot be required to commence proceeding.« any default party. Any fmbearauce in exercising any right or remedy including. without limitation. shall not be a waiver of or preclude the cxcmse of any right or remedy. IN WITNESS WBEREOF, the Parties hemo have agreed to accept the marence date as 1hc execution date of this Agreement For Buyer: SILVERTON ENERGY, INC. By: _ President & CEO For Sek; KRIS K. AGRAWAL VANCE - 1, PROPERTRS, LLC By: da EXXON OIL & GAS lac. By; by Rafael A Pinedo General Partner /Cd President Pa&e9of9
15 gas wells Kan Oak Energy Kansas wells TRAVIS 1 - 18 LANGHOPHER AMIGO MAXWELL BUSH FINCHAM D - 1 : DOWDY A - 2 HJVFLUUMEREFELT A - 1 HJV PONDER A - 1 SMITH - I SCHMIDT D - 1 ODEA JAMES I KELLY D - 1 LEONARD 8 - 4 ' MCCLURE D - 5 ! APPENDIX A - 2 - List of Assets AGRAWAL ASSETS