HomeMy WebLinkAbout943514
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STATE OJ!' WYOMING ..va~v Jr 'VI -YY If ·
OIL AND GAS LEASE' D~rcel# 188
""-r'und Code: S8
entered into by and between the State of Wyoming, acting by
Commissioners as LESSOR, and the following as LESSEE:
(0\1677
Energy West Corp.
Section 1. PURPOSE. The LESSOR, in consideration of the rents and royalties to be
paid and the covenants and agreements to be kept and performed by the LESSEE, does hereby
grant and lease to the LESSEE, the exclusive right to drill for, mine, extract, remove, and
dispose of all the oil, gas and associated hydrocarbon substances and gaseous substances and
elements produced therewith, including sulphur, hydrogen sulfide, sulphur dioxide, nitrogen,
carbon dioxide and helium, which may be produced from the following described land, to wit:
County: Lincoln
SESE Section: 10 Township: 23 North Range: 118 West of the 6th P.M.
SWSE Sectien: 11 Township: 23 North Range: 118 West of the 6th P.M.
SWSE Section: 14 Township: 23 North Range: 118 West ofthe 6th P.M.
Acres: 120.00
$120.00
($1.00 per acre or fraction thereof)
Together with the right of ingress and egress and the right to use so much of the
surface of said lands as is necessary to construct and maintain thereupon all works,
building, plants, waterways, roads, communication lines, pipe lines, reservoirs, tanks,
pumping stations, or other facilities necessary to the proper conduct of operations there
under.
Section 2. TERM OF LEASE. This lease shall become effective on the day and year set
out below and shall remain in effect for a primary term of five (5) years and for so long
thereafter as leased substances may be produced from the lands in paying quantities. This
lease may also be extended beyond its primary term in the absence of production of leased
substances as may be provided by the statutes of the State of Wyoming and the regulations of
the Board of Land Commissioners adopted pursuant thereto. Provided, however, if drilling,
completion, testing or reworking operations are being diligently conducted, either during
the primary term or during any extension thereof, this lease shall continue in full force
and effect so long as such operations are being conducted and so long thereafter as oil or
gas may be produced in paying quantities. This lease may be relinquished or terminated at
an earlier date as herein provided.
Section 3. If the LESSOR owns an interest in oil and gas in said land less than the
entire fee simple estate, then the royalties and rentals to be paid LESSOR shall be reduced
proportionately.
Section 4. LESSEE expressly represents that, if an individual, LESSEE is a citizen of
the United States, or has declared an intention to become a citizen, and is over 19 years of
age-and if a corporation, is duly qualified to transact business in Wyoming.
Section 5. This lease is issued under the authority conferred by Title 36, W.S. 1977
as to ·the State and School Lands, and Title 11, W.S. 1977 as to Farm Loan lands, and shall
be subject to, and operations by LESSEE hereunder shall be conducted in compliance with the
specific lease terms set out on the reverse of this lease, and with all applicable state
statutory requirements and the regulations issued thereunder, including those providing for:
the leasing of State or Farm Loan Lands for oil and gas; the conservation of oil and gas;
and the regulation of security transactions.
Section 6. HEIRS AND SUCCESSORS IN INTEREST. It is covenante~ and agreed that each
obligation hereunder shall extend to and be binding upon, and every "benefit thereof shall
inure to the heirs, executors, administrators, successors of, or assigns of the respective
parties hereto.
Section 7. SOVEREIGN ~ITY. The State of Wyoming and the lessor do not waive
sovereign immunity by entering into this lease, and specifically retain immunity and all
defenses available to them as sovereigns pursuant to Wyoming Statute 1-39-104 (a) and all
other state laws.
IN WITNESS WHEREOF , this lease has been executed by LESSOR and LESSEE to become
effective on the day of, Febr , 2007 A.D.
LESSOR, STATE
Lessee Signa
B
Director
Address: IVED 11/10/2008 at 1:01 PM
City: RECEIVING # 943514
Phone: BOOK: 708 PAGE: 677
Resource Issue: Elk crucial winter range and fossils J EANN E WAG N ER
. LINCOLN COUNTY CLFRK. KEMMERER WY
"ThIs lease is issued subject to and conditioned upon lessee's acknowledgement and agreement \hat any exPloration and development ãëiMiieìi undertaken lI1all:
. .,'
3) avoid human acIIvity in elk crucial winter range from November 15 to April 30; or
4) shall be subject to approval by the Director of \he omœ of Slate Lands & Investments. Director approval will be subject to consultation with Wyoming Game & Fish
Department to consider alternative prac:IIcesfplan of development \hat will proyjde similar resource protection and mitigation.·
Before any road, building, drilling pød construction, building construction or other earth moving activities commence, plans for such activities (Including maps) must be submittød for
prior approval by the omœ of Slate Lands & Investments or his designated representative.
The collection of fossils from this land Is prohibited. Arrt fossils found on \hIs land must be safeguarded by \he IInder and given to the 0IIk:e of Slate Lands & Investments or his
designated reprtl88l"~".1IOOI1 u practk:able after \heir dlSCXJvery.
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SeCtIon. G:THE LÈSSEE AGREES:
(a) BONO. To ",""ill a Þond Wllh an approved CO( lO<8t. aur.ty COf11)IIny aulhotized 10 nnseCl
bU$lne56 In II1II S.... 01 W)'OI"ng. 0( suCh olher IlUrety.s lI1IIy be acceplable to the lessor. in !he
penal sum as r~u'l1Id by the cunenl rules of the Slale Ilo/l111 of Land Conmssioners,
cond!Uoned upon the paymenl of all renlals and royalUes lCCrUinQ 10 the lessor under the terms
hereof, iI~ upoo \he lUll C~lal\Ce 01 all other tm and conditions ollhis lsass and 1:19 rul9S
ana regulabons relabng ther.IO. and also condllioned on the paymenl of all damag.s 10 Ihe
surfa¡;. and l"1)rovements Ih.reon wh.r. Ih. lease co.ers lands the surface of whiCh has be.n
SOld or ot"-rwl.. l.aMCI Such bond or bonds furnished priOl' 10 th. developmenl of Ihe lands
ConLelned In this lea&41 may be Increased In suCh reasonable amounls as Ihe lessor mal' decide
upon c~cemenl 01 dnlbng operalions and aller the discovery of 011 0( gas.
(b)PAYMéNTS. To ....k. ~I paymenls accruing hereund.r 10 Ihe Office of Slale Lands and
Investments. 122 W"I 2~1h Streel. Chey.nn.. Wyoming 82002.0&00.
(c}RENTAlS. PnOl' 10 Ihe dI5CO.'ry of oil or gas in paying quanlilies 10 pay Ihe I.ssor in
advance, beiglnnong WIth lIIIIeneclive dal. hereof. an annua' renlal of $1.00 per acr. or fracUon
thereof.
Aller Ih. dIscovery 0/ 011 or gal ,n paying quanlili..lo pay th.lelSor in ad.anc. b.ginnlnQ wilh I
lhe rorsl day 0/ the 1_ y_ IUCCeedlng the lea.. year In which aelual disco.ery was mad.. an
annual renLeI of $2.00 per acr. 0( fraclion thereof. unles. ChanQed byaQfeement. 5uch reolal SO
paId for anyone year lhall be credIted on Iheroyalty fOl' that year.
Annual renLels on ~I lea... shall be payable In advance for the firsl year and ...Ch year
therealler. No nollce of ren"l due shall be senllo the lelSee. If the rental Is not paid on or
before Ih. dal. II becomes due. nolic. of defaull Will be sent 10 the I...... and a penally of $0.50
per acre fO( lale paymenl WIll be all8lSed.
The I.&see IS nollegally obIlgaled to pay ~ilher the ren"l 0( the penally. but if the renlal and
penally are nOl patd Within thirty (30) days aller the noUce of default has been received. the lease
Wllllermnal. autDmlllcaUy by operalion of law. Terminalion of the I.ase shall nol '.Iie.e the
leS$("OJ u: "n~ l':, lgallon Incurred under Ihe lease other lhan th. obligalion 10 pay ran"l 0(
_1",'. The 1_ ""'II no4 be enUUed to. credll on royalty due for any penally paid for 1.1.
paym"111 of renlel on an operallng lea... '
(d)ROYAl TIES. The roy.IU_lo be paid by 1_ ar.:
(,) On 011, .",..1I1IIh of thai produced, Aved, .nd IOId from seid I.nd, Ih. same to be delivered
.1II1II weill 0< 10 the creelll 0/ 1_ inlo the pipa IIn. 10 whiCh Ih. _II. may be connected.
(II) On 1181. Including callnghead 1181 or olher hydrocarbon .ubslences, produced from said
I.nd ....ed and IOId or used oIIlh. pr.mses 0( in Ihe ....nuf.ctura of gasoline or olher products
Ih.re/rom. the mtrI<.1 valu. allh. _II of on.-slxlh of Ihe gal SO IOId or used. pro.lded Ihat on
gas SOld allh. wells. Ihe roy.lly shall be one-lixlh of Iheamounl realized from .uch sale.
(III) On ~I other hydrocarbons of value and gaseous sub.lancea and .Iements produced or
extracled. Inctudmg prO )i\I18. buLen., sulphur, nitrog.n. car\)on dioxide. end h.llum, at suCh
royally .s lhall be fT'OJlually d.lerrnned 10 be 'air .nd reasonable.
(IV) Fo< royally purposes on gas .nd nalural gasolin. th. valu. shall be as approved by Ihe
I.ssor. and In lhe delermnellon of the value òf natural gasoline Ih. fair cost of extraclion shall be
conSidered as a deduCltbl. Ilem: proVIded. howe.er,lh.llhe allowance for the cosl of .xtreclion
may exceed ......Ihlldl of II1II amounl or value only on approval of th.'elSor and In no. evelltlhall
Ih. pnce '0( ga., 0( nalurel gasolIne, be I.IS than that recei.ed by the Uniled 5.... of Am<!lica fO(
III royalb.. from lhe ...me foetd.
(.) Nalu.... gal and 011 adually used fO( operaling purposes upon Ih. land and, exceplas 10 the
ulbmele sale \hereof. 1181 0( liqUId hydrocarbons relumed 10 Ih. land for .U~lallng the
productIon 0/ 011 01' _clary recovery purpose. shall be royally tree.
(e) DISPOSITION OF ROYAL TV OIL AND GAS. To d.llver 10 th.I.5Ior. or 10 suCh Indl.idual.
f'rm 0( corpotallOl'l a. the 1_ may dellQnale. all royally oil, gas, or other kindred hydrocarbons.
free of charge on the pr....... whet. produced. or, alth. opUon of Ih.l..sor. and In Ii.u of Aid
royallies In kind, \he I..... agrees 10 pay the lessor the fieid market price or valu. of all royalty
011. ga.. or Other lundred hydrocarbons produced and aaved.
When the lessor elecIIlo lak. ,Is royally oil. gas. or olher hydrocarbons In kind suCh all oil. gas.
or OIher lundred hydrOClltlons shall be good merchanlable oil, gas. or other kindred
hydrocarbons. The Ie_ lhalllf necessary furnish slorage for royally oil free of charge for Ihtrty
(30) daY' after the end of the calendar month in whiCh the oil I. produced. upon Ihe leased
premses, 0( althe IUCh place as th.leHor and th.lessee mey IT'fJlually agr.. upon. provided.
Ihallhe I..... lhall nol be held liabl. for 101S or destruclion of royally 011 so slored fror,l causes
beyond hIS conlro/
The free 51011>g" 01 OIl, a. herem pr~.·'ded. .hall apply only aslonQ as Ihe said ollis the property
01 Ihe 1_.
(f) MEASUREMENTS OF PRODUCTION. To gau;e, ~sure and correct for lerrperalur. all
proc uC1lon Irom _d _ .n o;on omwnce wilh 111. rulea and regulaUons adopted by the Board 0/
Land ComrriaIIonel'l and r_1 said prOducUon 10 the 1_ In accordence lherewllh.
To keep booka. ,ecordl. end r.porta pertaintnQ to 111. production from the land h.reln leased a.
well as IhOM pertal",ng 10 II1II producllon from offsel_lI. operated by th.I.Hee. his o;,erator.
0( sub-l_ on ot"'" landa. whiCh shall be opened al all Umes for th. In.peclion of any duly
aulhonzed agenl 01 the lessor.
Tofurniill the lessor Wllh 01111'1181 pipe lin. r.porta ehowing th. day. monlh, y.ar, amount,
graVlUes. and 18fI1)IralUrea of ail od run and with monthly reports showinQ Ihe month. year,
amou '1. a:.; þ)l'lce of all gas and nalural gas galOlln. and olher produCIs produced and sold from
Ihe IUl'd her..n IeiMd, and the 3mount of gas retumed to the sand.
(g) MONTHLY PAYMENTS AND STATEMENTS. Unlesalhe lime of paymenl is olherWIse
.xtended by II1II OffIC. of !'iLeI. Lands and In..stmenls 10 make payment on or before Ihe
Jwen".lh (20!h) day of Ihe calendar rr()I\lh succeed,nQ the monlh of producllon and removal and
sale 01 011 and gal from WlKlland, and 10 furnish sworn monlhly slatemenls therewith showing In
dela,llhe quanl,ly and quality of the production (per welt if required where pracUcal) from lhe land
hereby 1..1ed. and the quanllly and qualily of the production (per well wh.re practical) from offsel
wells upon cornenng or conhguous land operaled by Ihe I.ssee, his opera lor or sub-I."ee and
such other ,nlonnalion as rrey b. called for in the fann or raport prescribed by I.ssor.
(h) WELLS TO BE DRillED. To drill and operale effecuvely alt walls neceS&al)' 10 r.a.onably
oft..1 weill upon and producbon from ad¡oinmg lands.
To d,,1I suCh eddlbonal weill al such limes or plac.. as ar. necessary and elSenlial 10 the
proper d.veIopnwnl Ind conmercíal producUon of the 011 and Qa. content of said land.
(l)lOG OF WELLS AND REPORTS. To keepalog,ln Ihe formappro.ed by the lessor. of each
well dnlled by the 1_ on !he lands herlln leas.d. showinQ Ihe .lrala and Character of the
larmellons. waler sands and mneral d.posUs penetrated by the drill. amounl of casing. .ize and
where sel. and suCh OIher InfO(mallon as Ihe lessor may reqUIre whiCh log Of copy Ihen..d shall
b. furnIshed 10 the Insor
To rol. progr.1S reports. ,n the lorm pr.scribed by the /.lSor, althe .nd of each Ihirty (30) day
penod whil. eaCh _II" bemg dnll.d.
To f,le aMually. 0( al su¡;h limes as Ihe lessor may require, maps showinQ the develo¡.ment of
Ihe .lruclUre Ind Ihe locauon 01 all wells, pipe lines and olher works used in connection with Ihe
operallons of IIIIII.ssee upon Sð,d land.
To rrek. IUI;h OIher reportS pertal",nQ 10 Ih. production and operalions by Ihe lessee on said
land. and report suCh olher mfonnaUon IS may be possessed by Ihe lessee on Ihe wells,
prodUl;!lon 0( opet'BUon. of olhers on lands on the same geologic struclure thaI II19Y be 01
'f11)Ortance In efIecllng proper developmenland operallon of \he lands herein leased, as may be
called fO( by the Ieasor. AAlloga, mapa, and reportS shall be submilled In dupiicaleand the Office
of Slale Land. and Inveslmenls ....y waive such r.ports a. condiUons may warrant.
(¡)PRODUCTION. To operate the _IIi upon \he land herein leased In a col'l'9lllent and elfidenl
....Mer In 111 endea_lo I~ver all Ih. oil and ¡¡as economicelly posatble from seld land and 10
pr.venl II1II under draInage of the 011 and Il8lIhereund8l' by well. operated by th. I....e or
othel1l on comanng 01' conliguou. land. to thOl8 I..sed herein. AAI plans or methods 101' the
purpose 01 11I""IaI,ng or Incr..ling producUon on land. her.ln leased other than Ihose In
corrrnon use ahaIl fll'll be pr...nled to Ihe lillOI' for approval before being put Inlo aclua'
Operallon.
No producllon agreemenl' Iomillng, re.lnchng, proraUng, or olhefWIse affecllng the
naluralprO\lucllon from w'd land lhall b. enl.red Inlo by Ih. I.ssee, nor shall the lelSee IImt.
r8$t"CI. 0( proral. the ...tural producbon 'rom seid land in any way or in any evenl, exr.ept wilh
!h. consenl,n willing 0/ the I.ssor ftl5l hed an obla/ned.
(k)SUSPENStON OF OPERA nONS. Sho~ld any well drilled upon lend. co.ered by Ihls I.a..
00"10 producllon of 011. ga.. or othe, hydrocarbOl1l in paying quantili.s and If th. le.see IS
uneble 10 ....blliII a salislal;!ory rrerkel for Ih. OIl, gas or hydrocarbon. produced from said well,
Ihe I~~se. lI'YIy ¡¡pply 10( and I1le les.or may grana permission for the .uspenSion of production
opel;; "onl u,'1I1 such UITI8I as a sall.faClory markel for Ihe producl from said _II can be
a..e;';,ped. Dunng the lime any suCh suspenSion of operallons Is In effect. Ihe lessee shall
conbnue 10 pay Ih. aMUII renlal of $2.00 per acre or fraclion thereof provided by (c) above, and
Ihls lease shall remaIn ,n eft.1;! as IhouQh oil or gas was bemQ produced from said lands.
(I)DILIGENCE-PREVENTION OF WASTE. To ex.rei.. reasonable diligence in drilling.
produCing. end operabnQ of well. on \he land covered hereby, unlesa consent 10 suspend
operabona t~y is granled by the 1_: 10 cany on all operøUOl1l hereunder in a QOod and
wortcmenUke rrenner In accordance with approved melhods and practice, havinQ due regard for
II1II prevention of -'a of aU end ¡¡a.. or Ihe enlranal of WIIter 10 \he 011 or gas bearing Ands or
Slrala 10 \he cleslrucUon or InjUry of IlUch deposlll. th. preservaUon and conaervallon of the
property lor futur. produd,ve opereliOOland 10 the h..,th and safety of workmen and 8f11JI0yees:
10 plug _..y In an approved rrenner any well before abandoninQ it, and not to abandon any
well WlII1O\II permlllon of the 1..-. nollo drill any well wilhln Iwo hundred (200) feet or any of
the out.r boundari.s of Ihe I·-~o.ered hereby. unless II nsl dralnaga by _lis
drilled on lands adjoining I. ·in 200 leel from the pr( .ereof; to conduct all
oper.lion. subject to Ih. In........,on of II1II lessor: to celT)' 0lIl al the lessee'. ~ III
reasonable ordel1l and requlremenll of the 1_ reialive 10 the pre".,lion of wasle and
preserv.tion of Ihe JI'O I8rty end the health and safely of WOÕØI*I indudlnQ the raplenbng and
r_dinQ of drtlllnQ Siles and oIhar' areas disturbed by drtlllng opeqIUon. end on fallura of the
lessee so to do Ihe lessor shall have the riQIII. logether with Other racourM ""'''n provided. 10
enter on the property 10 repalf damage or prevenl WIISIe .1 the __'. expet1M; 10 abide by end
conform 10 vAlid Aøø!leAbl. rOQul.IIMI þf'owìb.ll 10 r':~u...lh. _ 0111,. ou"a~. :loIl,.r
than lhe lessor. or le._ of grazing rtghl' Ihereof fOl' aeluaI dll11ll1181 ther.lo and InjUry 10
lß'4Irovements th.reon, provld.d, thaI th. tessee shall not be held ïesponSìblo for aell of
provld.nce or .cllons b.yond his conlrol.
(m)TAXES AND WAGE5-FREEDOM OF PURCHASE. To pay, when due all ..... lawfully
alS8lSed and I.vied under the laws of the SIa.. of Wyoiring upon i"1lfO_nll, 011 and gas
produced from th.lend hereunder, 01' other rlghll. property or _IS of the lessee. 10 .cconIall
workmen and employees COR1'I.I. freedom of purchasa. and to pay ell WI III due WOÕØI*Iand
employees in conformance wilh the laws of \he SIa.. 01 Wyorring.
(n)ASSIGNMENTS OF lEASE.pRODUCTION AGREEMENTS. Nol to aHlgn thl.I.... or .ny
Inlereslthereln. nor sublel any portion of Ihe IeIHd prn_. except willi \he conMl1lln wrlUng
of the le._ fil$l had and ob..tned.
All overriding royallle. 10 b. vatid. ....sl h... the .pp<oval of the IIo/Ird or by th. OffIce of Slale
Lands and In_\menls when authority 10 do SO has been delegated by Ihe Ilo/l111 end will be
recorded with the lease. The Ilo/l111 raservea\he righl 01 dlsappro.eI of suCh ovemdtng royallies
when in its opinion they become excessive and hence are dellimenlll to \he proper developlllllll
of Ihe leased lands.
(o)DELlVER PREMISES IN CASE OF FORFEITURE. To deliver up the 1..1Ied prem_. ...th all
pe¡man.nl iß'4l1Ovemenllthereon. in good order and condition in celiO of fortetlure 01 thIS I.....
but this .hall not be con.trued 10
prevent the removal. al\eration or renewal of ~ulpmenl and Iß1)rOV8menls In Ihe ordinary
course of operallon..
Section 2. THE LESSOR EXPRESSLY RESERVES:
(a) Th. righllo lea.. sell, or otherwi.. dispose of Ih.aurface of th.land enilraced within this
lealiO under axlslinQ 1_ or laws her..fter enaçted. and In accordance with the rutea of th.
Board of Land Cormilalon. Insofar as \he surface i. no4 necessary for the u.. of the 'essee In
the conduct of operalion. hereunder.
(b)Th. rlghllo lea... ..II. or otherwi.. diapoae of oth.r mneral 0( sublurface resources nol
co.ered by Ihe I..... in accordance with lhe appIiceblalaws end the ruI8I of \he Board of Land
Cormillionel1l.
(c)From the operation of Ihi. lea.., Ihe surface lands herelofore W-nled fo< righll-ol-way and
ea.emenlland raserves Ih. rlghllo W-nl.uCh other rfghts-of-way and _Is II provided by
Ihe .Ialules of the Stale of wyoming. as long as suCh righls-of-way and easamenIS do not œnfIlct
wilh Ihe operalions for 011 and gas on th. land her.m lused.
(d)Th. riQhllo r.fuse 10 corrmllthe I..sed land. 10 a unll pian of d.velopmenl if the IIo/Ird find.
such action would Il'I'9IIlr Ih. lesso~s res.rved rtghtlo "ke III royally ga.ln kind and to purd18sa
all olher gas allocaled 10 thel..sed land. a provided In SecIIon 3(e below.
(.)The right 10 aller or modify the quanllly end rale of producllon 10 th. end \hel WIsl. mey be
elimnaled or \het producUon may conform 10 thel_'s fair lhare 01 elloøbIe production under
any syslem of Slate or National cur1ailment .nd proraUon eulhonzed by law.
(f)ln addlUon 10 ill righl to lake II. royally II" In kind, \he Ieasor _th. rlghland option 10
purchas. ell other gal produced for saI. 0( U.. off th. lealed land.. Thl. option aheI' be
.xerclsed only If th. Ilo/l111 IInd. \helth. lessee has received and I. willing 10 .ccepla bona fide
offer from a purd1aser who Intend. 10 sail or Iran.por1\he gas Inlo Inl....llle cornmerce and \hel
one or mor. Inlra...I. purcl1asel$ (I.." purchaHI1I who will UH. consume. or aellthe gal for use
01' consuß'4ltion entirely wilhin the Slate of wyorring) .. willlnQ Ind able 10 purcl1aH lhe gas
upon lerma reaaonably COI\1>IIrablelO and all_lIS fa-.blelo the lessee a. IhOM offered by
the Intel$lale purchasar. The Ilo/l111 shall Wllve !his option and permil an Inlnlale sale If il finds
Ihal no Intrastate purchaser Is willlnQ and able 10 pun:hlse \he ¡¡as upon 1811115 ~ ch .re
reasonably COII1!8røble to and.t lea.las faVOOlblelo the I...... As a condition 10 such waiver.
a satisfactory al l1lel1'18fll may be entered Inlo by ~Ich lIIe producllon of III royalty gas may be
deferred unUl1I cen be produced and sold for consuß1lUon and UIiO enUreiy wilhin the Slale 0'
Wyornng.
Seclion 3. APPRAISAL OF IMPROVEMENTS. The I..... ahall have 111. righllUb¡ec\ 10 the
provision. of TIDe 36, as 10 Sial. and Slale School Land.. .nd Tille II, as 10 Slate Loan and
In.estments Ilo/l111 Land.. W.S. 1977, to remove any I"1IfOVIIT*III owned by I..... within a
reasonable lime aller Ih.leminetion of this I..... Lessee agrees thaI any .uch l"1)rovemenls
not r.moved within a reasonabl.time after termlnalion of thi.I.... shall be diapoMd 01 purwanl
10 th. above .lalul....
SectIon 4. FORFEITURE CLAUSE. The Board lhall have the power and authorily 10 cencel
I..... procured by fraud. decell. or m...~..lIons. 01' for \he .... 0/ the l.nd.1or unlawful 01'
Illegal purpo&llll, 01' for the violation of !he _II of th.I_. upon proper proof thereof, In
the e..nl\helth. 1.._ shall detaullln the ~ or ~ of any of the 1_.
co.enanls. and .lipulaUOOI hereof. or of \he geneIIII rwgulaUons protI'IIIge\ed by \he BoanI of
Land Cormisalonn and In Iorce on the del. hereof. the l_shall_ notice of such faikn
or d.faull ellher by personal s.vice 0( by certIfIad or f1II islenKt rrell upon Ihti 1_, and If such
failure or default continues for a period of thirty (30) deyaafllt lhe s.vice of such noUce. Ihen
and In lhal evenl \he lessor rrey, allll opUon. ded.re a lortellure and canc.lthiS I....,
whereupon all riQhls and privileges. obtained by !he I.... hllflllnder &haIlleminale allll cease
and Ihe lessor may r.......ter and lak. IOAeulon of said preII'ÌH. or any part Ihereof. These
provl.ion. shall not be conslrued 10 prevenlthe -0.. by 1_ any legal 0< ~uilable remedy
which the lessor rnQhl olhorwise have. A WII_ of any llftlcular cause or fortellure iIIall nol
prevent the canceilalion and forteilure of !hi. lease by any oilier cause of fOl1eilure. 0( for the
same cause occurring alany other Ume.
Section 5. RELINQUISHMENT AND SURRENDER. This I..se may be reilnqulshed and
surrendered to le._ as to all.or any legalllUbdlvilion of said lands as follQWII:
(a) If no operalions heve been conducted under IheleeH on \he land 10 be relinquIshed. the
lessee .hall ftl. with the Slalo Land Board and Slale Loan and Investment Ilo/l111, a wrillen
relinquishment or .urrner. duty "Qned and ac:knowIed ed and s..ung IheraIn IhøI no operaUOOI
ha.. been conducted on the land. The ralinqulillmenl to filed ""'II become effecllve on the da'e
and hour of recelpl thereof In the office of \he Direc:lor 0( at _ laler dele. If such be so
specified by the lessee therein. If th. said rellnquishmenl fall. 10 sial. that no operalions ha.e
been conducted, the elfecUve date of relinquishmenl shall be the dale the fellnquishment is
approved by the Ilo/l111.
(b) If operaUons have been conducted under lhel88se on land proposed 10 be relinquiilled. the
lessee .hall gJve .b,ly (60) days noUce and ""'II IIle wilh the DlreclOl' a written rellnqulillment or
surrender duly acknowledged and ."Ung therein \hel operalions have been conducted on the
land. The rellnqulillmenl shall not become effecllve untillh. land and \he well. thereon iIIall
have been placed in condiUon acceplaÞlelo lessor .nd shill have been .pproved by the SIa.. Oil
and Gas Supervisor.
All rentals becoming due priO( 10 asurrend8l' 01' rellnqulillmenl becoming .necllve. shall be
payable by lessee unlelS payment thereof shall be waived by lessor. A rellnquiillmenl haVIng
become efIecllvethere shall be no reCOlne by lessee and Ihelease a. to the relinquished lands
may not be reinslaled. c:::EJn1R'Com1S
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