form_8ka.htm
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): October 30,
2007
Fellows
Energy Ltd.
(Exact
name of registrant as specified in its charter)
|
Nevada
000-33321
33-0967648
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(State
or other
jurisdiction (Commission
File
Number) (IRS
Employer
of
incorporation) Identification
No.)
|
1369
Forest Park Cir. Suite #202, Lafayette, CO 80026
(Address
of principal executive offices and Zip Code)
Registrant's
telephone number, including area code (303) 926-4415
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 (see General Instruction A.2. below):
[
]
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))
Item
1.01 Entry into a Material Definitive Agreement.
On
October 30th, 2007, Fellows Energy (the "Company") entered into an
agreement to provide for (1) the earn-in by Fellows on the Divide,
Pinedale and Wilkens Ridge projects; (2) the hiring of Mark S. Dolar and Ken
Allen into the management of Fellows and their appointment as directors of
Fellows; and (3) to provide for the potential growth of Fellows
through a joint venture or other financing arrangement, or a potential business
combination whereby Fellows would merge with a new company to be named Moose
Mountain Energy, Inc., hereinafter referred to as “Newco” through a reverse
merger with Newco, as described below. It is expected that either
Fellows or Newco would continue to conduct the business of Fellows and of Dolar
and would raise capital through a joint venture, or other financing, or in
connection with a merger with Newco to conclude the transactions described
below
and to acquire and/or develop the assets as described below.
1(a). Earn-In
and Acquisition Agreement relating to the Divide Field, Pinedale, and Wilkens
Ridge projects
Fellows
agreed to acquire, and/or assist in the arranging of financing (through
purchase, joint venturing or otherwise) for the acquisition of the 23.73%
undivided interest owned by Uton Divide, LLC in the Divide Field project,
including the interests in the three existing wells on the project and the
production and equipment and other assets related thereto, for a total cash
consideration of $2,400,000. The agreement to make the acquisition is
subject to customary technical, title and legal due diligence being completed
to
the reasonable satisfaction of Fellows and to financing as contemplated, as
well
as to the execution and delivery of conveyance documents containing
representations and warranties and such other customary provisions as are
reasonably required by Fellows. At the option of Dolar, up to 50.0%
of the purchase price may be taken in stock of Newco (in the event Newco is
involved in the transaction). Closing shall occur on or before
February 28, 2008, except as may be extended as provided
below.
Upon
completion of the acquisition of the interests of Dolar, Fellows or Newco will
commit to fund Dolar’s portion of drilling and seismic budgets that are
anticipated to be established for the second half of 2008, including $1,500,000
(being 23.73% of the total anticipated budget for the second half of
2008). Failure to fund such budget is governed by the
provisions of Paragraph 4 below.
Newco
shall also have the option to offer to purchase the remaining 73.27% interest
in
the play for $7,500,000 in the event Newco timely acquires the Uton Divide
LLC
interests.
1(b).
Earn-In and Acquisition Agreement relating to the Pinedale Project
Fellows agreed
to acquire, and/or assist in the arranging of financing (through purchase,
joint
venturing or otherwise) for the acquisition of the leasehold interests
of a 25% working interest held by Dolar in the Pinedale project in
Wyoming for $100,000 in cash payable to Dolar at closing, and $87,500 worth
of
stock to Mark Dolar at closing in the event Newco is used in the financing;
otherwise the entire $187,500 shall be paid to Dolar in cash at
closing. The agreement to make the acquisition is subject to
customary technical, title and legal due diligence being completed to the
reasonable satisfaction of Fellows and to financing as hereinafter contemplated,
as well as to the execution and delivery of conveyance documents containing
representations and warranties and such other customary provisions as are
reasonably required by Fellows. Upon closing, Dolar will deliver assignments
with respect to a 25% working interest in an 81.0% net revenue interest in
the
leases owned of record, with royalty rates of 15.0% or less. Leases
with royalty rates exceeding 15.0% NRI will be delivered at 80.0% net revenue
interest.
Upon
completion of the acquisition of the interests of Dolar in the Pinedale Project,
Newco shall make a drilling commitment of $5,250,000 (being 25% on a four well
program) in 2008. Failure to meet the drilling commitment is governed by the
provisions of Paragraph 4 below.
1(c). Earn-In
and Acquisition Agreement Relating to the Wilkens Ridge Waterflood
Project
Fellows agreed
to acquire, and/or assist in the arranging of financing (through purchase,
joint
venturing or otherwise) for the acquisition of the interests owned by Cochrane
in the proposed Wilkens Ridge Waterflood Unit Project. The exact
interest owned will be determined on the basis of participation in the unit
when
formed, but it is believed Cochrane will own at least 35% in the Unit, and
will
be the Operator. Increased interest in the development project may be
available should current owners decline participation in the Unit.
Cochrane
will also convey interests from various operated and non-operated wells in
the
Uinta Basin of eastern Utah and North Dakota; along with equipment
and other assets related thereto, for a total cash consideration of
$510,000 to Cochrane/Dolar. The leases will be assigned at an eighty percent
(80%) net revenue interest. The agreement to make the acquisition is subject
to
customary technical, title and legal due diligence being completed to the
reasonable satisfaction of Fellows and to financing as hereinafter contemplated,
as well as to the execution and delivery of conveyance documents containing
representations and warranties and such other customary provisions as are
reasonably required by Fellows. At the option of Cochrane, up to
50.0% of the purchase price may be taken in stock of Newco (in the event Newco
is involved in the transaction).
Upon
completion of the acquisition of the interests of Cochrane, Fellows or Newco
will commit to fund Cochrane’s portion of drilling and waterflood conversion
budgets that are anticipated to be established for the second half of 2008,
including $1,400,000, being based on 35% of the total anticipated budget for
the
Wilkens Ridge Waterflood Unit in the first half of 2008. In the event
Cochrane ends up owning more than the projected 35% interests, contributions
for
the 2008 drill program will be increased accordingly. Failure
to meet such funding shall be governed by the provisions of Paragraph 4
below.
2. Fellows/Newco
Management
Fellows
and Dolar will merge management resources to operate the Newco. Mark
S. Dolar will join Fellows as President/COO and as a Director, and will oversee
business development and acquisitions and will receive an incentive stock
package, salary and benefits on an industry standard basis once the Company
(whether through Newco, joint venture or otherwise) achieves the closings
contemplated. The incentive package will be based on the value
of the assets brought to the Company in relation to the value of the assets
currently owned by the Company. Prior to such closings, Dolar will
accrue for his time spent on the basis of the consulting rates he currently
charges to his clients, and such accrued amount shall be paid from the
financings associated with the closings.
Ken
Allen
of Cochrane Resources, Inc. will join Fellows as Field Operations Manager
and as a Director. He will oversee field operations for the
development of all assets. Allen will receive an incentive package
similar to that of Dolar, and will also accrue his consulting charges pending
the closings.
S.
Robert
Bereskin, G. Gregory Francis and John D. Adamson will be asked to join the
Company to serve as Exploration Geologists. The individuals will
receive an incentive package similar to that of Dolar, and will also accrue
their consulting charges pending the closings.
In
the
event the closings do not occur as contemplated herein, all of the then current
management and directors of Fellows shall determine the manner to proceed with
Fellows and the projects in accordance with good industry and market
practice.
3. Fellows
Interests:
The
Fellows owned Gordon Creek, Weston and Anadarko Basin projects will also be
contributed to the Newco for a transfer of stock in the
Newco. All projects owned by Fellows are currently under
farmout consideration to third parties.
4. Drilling
Expenditures
It
is
anticipated that Fellows/Newco will raise at least $3.85 million dollars to
fund
the the Dolar/Cochrane assets as defined in Paragraphs 1-3 above, in addition
to
commissions, financial, legal, operational and managerial expenditures of Newco,
as well as the acquisitions of the projects as described above by February
28,
2008. In the event such funding occurs, the closing of such
acquisitions shall take place and the commitments to fund the drilling budgets
and commitments shall also remain in force; provided, however, that in the
event
funding of any amount of drilling does not occur as set forth in Paragraphs
1
through 3 above, Fellows/Newco shall provide the compensation to Dolar as
follows:
a.
Divide $100,000
cash $275,000
stock
b.
Pinedale $100,000
cash $500,000
stock
c.
Wilkens
Ridge $ 50,000
cash $225,000
stock
In
the
event of a merger with Newco occurs, and in the event Newco does not complete
the drilling expenditures called for in the above agreement in the time frames
provided herein in paragraphs 1 through 3 of this agreement, stock values shall
be determined by the market price on June 30, 2008, In the event
Management of Newco determines the funds set forth for projects defined in
paragraphs 1 through 3 are better spent elsewhere, and makes financial
contributions of equal or greater value to said defined projects, the payment
of
compensation for the Unmet Drilling Expenditures shall not be
required.
Item
9.01 Financial Statements and Exhibits.
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Exhibit
Number
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Description
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Agreement
for the Acquisition of the Divide, Pinedale, and Wilkens Ridge Projects
and also business combination and management dated October 21,
2007.
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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.
Fellows
Energy
Ltd.
Date:
November 16,
2007 By:
/s/ GEORGE S. YOUNG
George
S. Young
Chief Executive Officer