Business
Central Natural Resources, Inc signs settlement agreement with Lessee
Central Natural Resources, Inc signs settlement agreement with Lessee.
About this update from Central Natural Resources
[{"type":"text","content":"\r\nCentral Natural Resources, Inc. (hereinafter \"the Company\") has recently entered into certain agreements with Wilkem, Inc., the Company's lessee of certain coal properties located in Sebastian County, Arkansas, and LeFlore County, Oklahoma, resolving certain disputes which had arisen between the parties. The settlement agreements entered into on August 21, 2006 include a Settlement Agreement, Amendment to Lease, Mutual Release, and Waiver and Estoppel Certificate. Pursuant to these agreements, the Company's royalty rate on coal bed methane gas produced from the subject property increased from the prior amount 9.375% to 10.9375%. In connection with this change, the Company assumed certain contingent liabilities, in connection therewith, which the Company's management believes are remote and not material. In addition, the Company may, in the future, receive a further payment in the amount of $79,375 from Wilkem to be treated as part of the minimum annual royalty under the Coal Lease dependent on payments Wilkem receives from a sublessee of a portion of the subject property. Should the subject property be successfully developed by the sublessee, the Company may receive an additional amount up to $190,625 per year as a further minimum annual royalty amount. Certain other changes in the Coal Lease were made that will not materially change directly and immediately any payments received by the Company. The Company has currently waived any claim of default by Wilkem in the coal lease at this time, and the Company, Wilkem, and Wilkem's sublessee have executed a Mutual Release where each party releases the others from any claim of liability through the effective date of the settlement.\r\n \r\nForward-Looking Statements.\r\n\r\nThis disclosure contains forward-looking statements that are based on current expectations, estimates, forecasts and projections concerning the project discussed, Management's beliefs, and assumptions made by Management. These and other written or oral statements that constitute forward-looking statements may be made or on behalf of the Company. These statements are not guarantees of future performance and involve assumptions and certain risks and uncertainties that are difficult to predict, such as future changes in energy prices, including fluctuations in prevailing prices for gas, coal and other natural re...