John D. Oil & Gas Co. (JDOGQ)

[MWM]

JDOG 8K they are buying all they land in Montana that they can get their hands on, something is up?


Item 1.01. Entry into a Material Definitive Agreement.
Kykuit Resources, LLC (“Kykuit”) entered into an Assignment of Oil, Gas and Mineral Leases (the “Assignment”) on May 1, 2008 pursuant to which Hemus, Ltd. (“Hemus”) assigned all of its remaining rights, title and interest in certain oil, gas and mineral leases located in Montana to Kykuit for $250,000. Hemus partially assigned these leaseholds to Kykuit in August 2007. John D. Oil and Gas Company (the “Company”) is the managing member of Kykuit. Richard Osborne and Steven A. Calabrese also own interests in Kykuit. Mr. Calabrese is a director of the Company.
On May 29, 2008, the Company sold a 25% interest in Kykuit to Geis Coyne Oil & Gas, LLC (“Geis”) for approximately $1.6 million pursuant to a transfer and acceptance of membership interest agreement (the “Transfer Agreement”). In connection with this transfer, Kykuit amended and restated its operating agreement (the “Operating Agreement”) to incorporate all prior amendments. Terence P. Coyne, a director of the Company, owns a 10% interest in Geis. The Company now owns approximately 19% of the interests of Kykuit and remains its managing member.
Kykuit entered into a Purchase and Sale Agreement dated June 11, 2008 (the “Purchase Agreement”) with Macum Energy, Inc. and various other sellers (collectively, the “Sellers”) pursuant to which Kykuit agreed to purchase approximately 35,000 acres of oil and gas leases located in Montana from the Sellers. The leases included the Sellers’ interest in oil and gas wells and pipeline facilities. The purchase price for the leases was $2.5 million subject to adjustment in the event of defect discovered in the due diligence review period. $50,000 of the purchase price was due within five days of execution of the Purchase Agreement and the balance will be paid at closing, which will occur as determined by Kykuit within thirty days after the due diligence review period. Closing the transaction is contingent on the satisfaction of standard conditions, including Kykuit’s satisfactory completion of its due diligence review. There can be no assurances that the transaction will be completed on the proposed terms or at all.
On May 23, 2008 and May 27, 2008, Great Plains Exploration, LLC (“Great Plains”) loaned the Company $475,000 and $25,000, respectively, for a total of $500,000, to fund the Company’s ongoing capital requirements. Great Plains is owned by Richard M. Osborne, the Company’s chairman and chief executive officer. Each loan is evidenced by a cognovit promissory note (collectively, the “Notes”). The Notes are payable on demand and bear interest at the rate of 8.0% per year.
The foregoing descriptions of the Assignment, the Transfer Agreement, the Operating Agreement, the Purchase Agreement and the Notes are not complete and are qualified in their entirety by reference to the full and complete terms of such agreements. The Assignment, the Transfer Agreement, the Operating Agreement and the Purchase Agreement are attached as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively. The Notes are attached to this current report as Exhibits 10.5 and 10.6.