HomeMy WebLinkAbout909695OIL AND GAS LEASE
AGREEMENT, Made and entered into the 15th day of June, 2005, by and between V CROSS CATTLE
COMPANY, a Wyoming corporation, whose address is Fontenelle Route, Kemmerer, Wyoming 83101,
hereinafter called Lessor (whether one or more) and DAV1S PETROLEUM CORP., whose address is
555 17th Street, Suite #1400, Denver, Colorado 80202, hereinafter called Lessee:
WiTNESSETH, That the Lessor, for and in consideration of fifteen thousand two hundred twenty
five dollars ($15,225) cash in hand paid, the receipt of which is hereby acknowledged, and the covenants
and agreements hereinafter contained, has granted, demised, leased and let, and by these presents does
grant, demise, lease and let exclusively unto the said Lessee, the land hereinafter described, with the
exclusive right for the purpose of drilling, exploring by geophysical and other methods, and operating for
and producing therefrom oil and all gas of whatsoever nature or kind, with rights of way and easements for
laying pipe lines, and erection of structures thereon to produce, save and take care of said products, all that
certain tract of land situated in the County of Lincoln, State of Wyoming, described as follows, to-wit:
~5ownship 24 North, Range 114 West, 6th PM
Sections 4 and 5: Tract 5'1 (154.94 acres), Tract 52 (40 acres), Tract 56 (40 acres) and the' most easterly 40
acre division of Tract 53 (40 acres)
Township North, Range West, PM
25
6m
1
14
Sections 35 and 36:
Township 24 North, Range 114 West, 6th PM
Section 4:
Tract 37 (Containing 160 acres)
Containing 435 acres, more or less
1. It is agreed that this lease shall remain in force ora term of five (5) years from this date and as
long thereafter as oil or gas of whatsoever nature or kind is produced from said leased premises or on
acreage pooled therewith, or drilling operations are continued as hereinafter provided. If, at the expiration
of the primary term of this lease, oil or gas is not being produced on the leased premises or on acreage
pooled therewith but Lessee is then engaged in drilling or re-working operations thereon, then this lease
shall continue in force so long as operations are being continuously prosecuted on the leased premises or on
acreage pooled therewith; and operations shall be considered to be continuously prosecuted if not more than
ninety (90) days shall elapse between the completion or abandonment of one well and the beginning of
operations for the drilling of a subsequent well. If after discovery ofoil or gas on said land or on acreage
pooled therewith, the production thereof should cease from any cause after the primary term, this lease shall
not terminate if Lessee commences additional drilling or re-working operations within ninety (90) days
fi'om date of cessation of production or from date of completion ofa d~y hole. lfoil or gas shall be
discovered and produced as a result of such operations at or after the expiration of the primary term of this
lease, this lease shall continue in force so long as oil or gas is produced from the leased premises or on
acreage pooled therewith.
2. This is a PAID-UP LEASE. In consideration of the down cash payment, Lessor agrees that
Lessee shall not be obligated, except as otherwise provided herein, to commence or continue any operations
during the primary term. Lessee may at any time or times during or after the primary term surrender this
lease as to all or any portion of said land and as to any strata or stratum by delivering to Lessor or by filing
for record a release or releases, and be relieved of all obligation thereafter accruing as to the acreage
surrendered.
3. In consideration of the premises the said Lessee covenants and agrees:
1st. To deliver to the credit of Lessor as royalty, free of cost, in the pipeline to which Lessee may
connect its wells, the equal fifteen (15%) part of all oil produced and saved from the leased premises, or
Lessee may from time to time at its option purchase any royalty oil in its possession, paying the market
price thereof prevailing for oil of like grade and gravity in the field where produced on the date of purchase.
2nd. To pay Lessor fifteen (15%) of the gross proceeds each year, payable quarterly, for the gas
from each well where gas only is found, while the same is being used offthe premises, and if used in the
manufacture of gasoline a royalty of fifteen (15%), payable monthly at the prevailing market rate of gas.
3rd. To pay Lessor for gas produced from any oil well and used off the premises or in the
manufacture of gasoline or any other product, a royalty of fifteen (15%) of the proceeds, at the mouth of the
well, payable monthly at the prevailing market rate.
4. Where gas from a well capable of producing gas is not sold Or used, Lessee may pay or tender as
royalty to the royalty owners One Dollar and no/100s per year per net royalty acre retained hereunder, such
payment or tender to be made on or before the anniversary date of this lease next ensuing after the
expiration of 90 days from the date such well is shut in and thereafter on or before the anniversary date of
this lease during the period such well is shut in. If such payment or tender is made, it will be considered that
gas is being produced within the meaning of this lease.
5. If said Lessor owns a less interest in the above described land than the entire and undivided fee
simple estate therein, then the royalties (including any shut-in gas royalty) herein provided for shall be paid
the Lessor only in the proportion which Lessor's interest bears to the whole and undivided fee.
6. Lessee shall have the right to use, free of cost, gas, oil and water produced on said land for
Lessee's operation thereon, except water from the wells of Lessor.
7. When requested by Lessor, Lessee shall bury Lessee's pipe line below plow depth.
8. No well shall be drilled nearer than 300 feet to the house or barn now on said premises without
written consefit of Lessor.
9. Lessee shall pay for damages caused by Lessee's operations to growing crops on said land.
I0. Lessee shall have the right at any time to remove all machinery and fixtures placed on said
premises, including the right to draw and remove casing.
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0909ti . The rights of Lessor and Lessee hereunder may be assigned in whole or part. No change in
ownership of Lessor's interest (by assignment or otherwise) shall be binding on Lessee until Lessee has
been furnished with notice, consisting of certified copies of all recorded instruments or documents and other
information necessary to establish a complete chain of record title from Lessor, and then only with respect
to payments thereafter made. No other kind of notice, whether actual or constructive, shall be binding on
Lessee. No present or future division of Lessor's ownership as to different portions or parcels of said land
shall operate to enlarge the obligations or diminish the rights of Lessee, and all Lessee's operations may be
conducted without regard to any such division. If all or any part of this lease is assigned, no leasehold
owner shall be liable for any act or omission of any other leasehold owner.
12. All express or implied covenants of this lease shall be subject to all Federal and State Laws,
Executive Orders, Rules or Regulations, and this lease shall not be terminated, in whole or in part, nor
Lessee held liable in damages, for failure to comply therewith, if compliance is prevented by, or if such
failure is the result of, any such Law, Order, Rule or Regulation.
13. Lessor hereby warrants and agrees to defend the title to the lands herein described and agrees
that Lessee shall have the right at any time to redeem for Lessor, by payment, any mortgages, taxes or other
liens on the above described lands, in the event of default of payment by Lessor and be subrogated to the
rights of the holder thereof, and the undersigned Lessors, for themselves and their heirs, successors and
assigns, hereby surrender and release all right of dower and homestead in the premises described herein,
insofar as said right of dower and homestead may in any way affect the purposes for which this lease is
made, as recited herein.
14. Should any one or more of the parties hereinabove named as Lessor fail to execute this lease, it
shall nevertheless be binding on all such parties who do execute it as Lessor. The word "Lessor," as used in
this lease, shall mean any one or more or all of the parties who execute this lease as Lessor. All the
provisions of this lease shall be binding on the heirs, successors and assigns of Lessor and Lessee.
IN WITNESS WHEREOF, this instrument is executed as of the date first above written.
V CROSS CATTLE COMPANY
B~ Jerry. hunt, ~'resi-dent
State of Wyoming )
)ss
County Lincoln )
On the '7 day of June, 2005, before me personally appeared JERRY D. HUNT,
PRESIDENT OF V CROSS CATTLE COMPANY, a corporation, to me personally known
to be the identical person who executed the within and foregoing instrument and acknowledged
to me that he executed the same on behalf of V CROSS CATTLE COMPANY as President for
the uses and purposes recited therein.
Witness my hand and seal this '7 day of June, 2005.
My commission expires:
Notary Public