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88 - PAID UP
Rc\'. 5-60. No. 2-4·89
Rcv 2-11-08
nEC 9 'J008 76320 '
Recorde~ i.. Filing No.
At J,'O ~ _/PM In Book -I/{) Page g9
$ r1t ct)
Fee '. Debra L. Ames Rich County Recorder
Requested by ~I D. :Z:¡/)C .
,
Retllm recorded documellt to:
CTD. fllc.
3355 N Five Mile Road #334
Boise, fD 83713
OIL AND GAS LEASE
AGREEMENT, Made and entered into the 5th
G & D PROPERTIES. LLC
day of
December
00&421-
, 2008, by and between
whose address is 405 Sage Street. Cokeville. WY 83114
hereinafter called Lessor (whether one or more) and CTD. Inc. whose address is 3355 North Five Mile Road #334.
Boise. Idaho 83713 , hereinafter called Lessee:
WITNESSETH, That the Lessor, for and in consideration often and more dollars, 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 said Lessee, the land hereinafter described,
with the exclusive right for the purpose of mining, exploring by seisn1ic, geophysical and other methods, and operating
for and producing therefrom oil and gas of whatsoever nature or kind, with rights-of-way and easements for laying
pipelines 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 Rich, State of Utah; and also in the County of Lincoln, State of Wyoming, described as
follows, to-wit:
See attached Exhibit "A" for Legal Description
and containing 1289,30 acres, more or less, (including any interests therein which Lessor may hereafter
acquire by revision, prescription or otherwise) In addition to the above-described leased premises, this lease also covers
accretions and any small strips or parcels ofland now or hereafter owned by Lessor which are continguous or adjacent to
the above described leased premises, and in consideration of the herein stated consideration, Lessor agrees to execute at
Lessee's request any additional or supplemental instruments for a more complete or accmate description of the land so
covered.
1, It is agreed that this lease shall remain in force for a teml of five (5) years from tillS 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 tills 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 one hundred twenty (120) days shall elapse between the completion or abandonment of one
well and tile beginning of operations for the dl"illing of a subsequent well, If after discovery of oil or gas on said land or
on acreage pooled therewith, the production thereof should cease fi.-om any cause after the primary term, this lease shall
not temllnate if Lessee conIDlences additional drilling or re-working operations within one hundred twenty (120) days
from date of cessation of production or from date of completion of dry hole. If oil or gas shall be discovered and
produced as a result of such operations at or after the expiration ofthe primary telID of this lease, this lease shall continue
in force so long as oil or gas is produced from the leased prenllses or on acreage pooled therewith.
2. This is a P AID-UP LEASE, In the event that payments are necessitated by other provisions of this lease, Lessee
shall payor tender such payments DIRECT TO LESSOR AT THE ABOVE ADDRESS, or its successors, which shall be
Lessor's depository agent for receiving payments regardless of change in the ownership of said land. All payments or
tenders may be made in CUlTency, or by check or by draft, and such payments to Lessor or to the depository by deposit in
the US Mail or other mail caniers on or before the due date in a stamped envelope addressed to the Lessor at the last
address known to Lessee shall constitute proper payment. If the depository should liquidate or be succeeded by another
institution or for any reason fail or refuse to accept payment herewlder, Lessee shall not be held in default for failure to
make such payment until 60 days after Lessor has delivered to Lessee a proper recordable instrument naming another
institution as depository agent to receive payment. If on or before any due date lessee in good-faith makes an erroneous
payment by paying the wrong person, the wrong depository, or the wrong amount, Lessee shall be unconditionally
obligated to make proper payment for the period involved and tile lease shall continue in affect as though such payment
had been properly made, provided that proper payment shall be made within 30 days after receipt by a Lessee of written
notice of the error from Lessor, accompanied by any docwnents and other evidence necessary to enable Lessee to make
proper payment. Lessee may payor tender any payment at any time in advance of its due date to the Lessor then known
to Lessee as provided in Paragraph 11 and such payment or tender shall bind all persons then or thereafter clainllng any
part of such payment. In consideration of the down cash payment, Lessor agrees that Lessee shall not be obligated, except
as otherwise provided herein, to connnence or continue any operations during the primary telID. Lessee may at any time
or times during or after the primary tenn sWTender this lease as to all or any portion of said land and as to any strata or
stratmll 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.
oc a~9
RECEIVED 4/27/2009 at 11 :24 AM
RECEIVING # 946762
BOOK: 721 PAGE: 421
JEANNE WAGNER
LINCOLN COUNTY CLERK, KEMMERER, WY
(;,0\1422
3. In consideration ofthe premises, said Lessee covenants and agrees:
1 st. To deliver to the credit of Lessor, free of cost, in the tanks at the wellhead, the equal one-eighth (1/8)
part of all oil produced and saved from the leased premises,
2nd. To pay Lessor on gas and casinghead gas produced from said land (1) when sold by Lessee, one-eighth
(1/8) of the net proceeds derived from such sale or (2) when used by Lessee off said land or in the
manufacture of gasoline or other products, the market value, payable monthly at the prevailing market
rate, at the mouth of the well, on one-eighth of such gas and casinghead gas. Lessor's interest, in either
case, to bear one-eighth of the cost of compressing, dehydrating and otherwise treating such gas or
casinghead gas to render it marketable or usable and one-eighth of the cost of gathering and transporting
such gas and casinghead gas from the mouth of the well to the point of sale or use, and one-eighth of the
cost of ad valorem taxes and production, severance, or other excise taxes.
4. Where gas from a well capable of producing gas is not sold or used, Lessee may payor tender as royalty to the
royalty owners one dollar per year per net royalty acre retained hereunder, such paymellt or tender to be made on or
before the anniversary date of this lease next ensuing after the expiration of ninety (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 a~d undivided fee simple estate
therein, then the royalties (including any shut-in gas royalty) herein provided for shall be paid to said 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 pipelines below plow depth.
8. No well shall be drilled nearer than two hundred (200') feet to the house or barn now on said premises without
written consent of Lessor.
9. Lessee shall pay for damages caused by Lessee's operations to growing crops on said land.
I 0, 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.
11, The rights of Lessor and Lessee hereunder may be assigned in whole or part. No change in ownership of
Lessor's interest (by assiglmlent or otherwise) shall be binding on Lessee until Lessee has been furnished with notice,
consisting of certified copies of all recorded instlllments or documents and other information necessary to establish a
complete chain of record title from Lessor, and then OlÙY with respect to payments thereafter made. No other kind of
notice, whether achml or conshLlctive, shall be binding on Lessee. No present or fhture 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 ofthis lease is assigned,
no leasehold owner shall be liable for any act or omission of any other leasehold owner.
12. Lessee, at its option, is hereby given the right and power at any time and from time to time as a recurring right,
either before or after production, as to all or any part of the land described herein and as to anyone or more of the
fonnations hereunder, to pool or unitize the leasehold estate and the mineral estate covered by this lease with other land,
lease or leases in the immediate vicinity for the production of oil and gas, or separately for the production of either, when
in the Lessee's judgment it is necessary or advisable to do so, and ilTespective of whether authority similar to this exists
with respect to such other land, lease or leases. Likewise, units previously fonned to include fornlations not producing
oil or gas may be reformed to exclude such non-producing fonnations. The forming or reforming of any unit shall be
accomplished by Lessee executing and filing of record a declaration of such unitization or reformation, which declaration
shall describe the unit. Any unit may include land upon which a well has theretofore been completed or upon which
operations for drilling have theretofore been cOlmnenced, Production, drilling or reworking operations or a well shut in
for want of market anywhere on a unit which includes all or a part of tI1is lease shall be treated as if it were production,
drilling or reworking operations,or a well shut in for want of a market under this lease. In lieu of the·royalties elsewhere
herein specified, including shut-in gas l'oyalties, Lessor shall receive on production from the unit so pooled royalties only
on the portion of such production allocated to this lease; such allocation shall be that proportion of the m1it production
that the total number of surface acres èovered by this lease and included in the unit bears to the total number of surface
acres in such Ul1it. In addition to the foregoing;' Lessee shall have the right to m1itize, pool or combine all or any part of
the above described lands as to one or more of the fonnations thereunder with other lands in tile·' same general area by
entering into a cooperative or m1it plan of development or operation approved by any governmental authority and, from
time to time, witIllike approval, to modify, change or tenninate any such plan or agreement and, in such event, tile tern1S,
conditions and provisions of this lease shall be deemed l1lodified to COnfOlTIl to the tenns,· conditions and provisions of
such approved cooperative or lU1it plan of development or operation and particularly all drilling and development
requirements of this lease, express or implied, shall be satisfied by compliance with tlle drilling and development
requirements of such plan or agreement, and this lease shall not tern1Ìnate or expire during the life of such plan or
agreement. In the event that said above described lands, or any part thereof, shall hereafter be operated under any such
cooperative or unit plan of development or operation whereby the production therefrom is allocated to different portiOl1S
of the land covered by said plan, then the production allocated to any paliicular tract of land shall, for the purpose of
computing the royalties to be paid hereunder to Lessor, be regarded as having been produced from the particular tract of
land to which it is allocated and not to any other tract of land; and the royalty payments to be made herelU1der to Lessor
shall be based upon production only as so allocated. Lessor shall formally express Lessor's consent to any cooperative or
unit plan of development or operation adopted by Lessee and approved by any governmental agency by executing the
same upon request of Lessee.
008)0
(:Ov423
13. 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,
14, Lessor hereby wanants and agrees to defend the title to the lands herein described, and agrees that the 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.
15. Should anyone or more of the parties hereinabove named as Lessor fail to execute this lease, it shall
nevertheless be binding upon all such parties who do execute it as Lessor. The word "Lessor", as used in tins lease, shall
mean anyone or more or all of tile parties who execute tills lease as Lessors, All the provisions of tills lease shall be
binding on the heirs, sucèessors and assigns of Lessor and Lessee.
IN WITNESS WHEREOF, tillS inshll11lent is executed as of the date fIrst above written,
G & D PROPERTIES, LLC
¡jG-tI~ ~ W\(J-.A.-~
Gordon Thornock, Manager
STATE OF
UTAH
SS
COUNTY OF
RICH
BEFORE ME, the undersigned, a Notary Public, in and for said County and State, on this .ç-Il day of
December, 2008, personally appeared Gordon Thornock Manager ofG & D PROPERTIES, LLC
to me known to be the identical persons described in and who executed tile within and foregoing instrument of writing
and acknowledged to me that they executed the same as their free and voluntary act and deed for the uses and pUl110ses
tIlerein set fortIl.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed by notarial seal the day and year last above
writteil.
My Conmnssion expires: 9 J/.:Ltf,/ ;).() I Á
I. ~ GYÆNOOLYN 0. BOI'WM
I~~ ~' II .. , Notaly PublIC
~ .. .~, State Of Utah
~, ".:/~ MrClllmåionExplrelSepten'Oer2l,2D12
'-..ìõ96 ~ Commt..1on 1676182
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Notarypubr .~ j), { .
Printed Name: . {XJb ÜA D. 15ow)ry;f~
Residing at ~Q I W-
OOS1
EXHIBIT" An
(úv424
This Exhibit is attached and made a pmi of that celiain Oil and Gas Lease dated December 5,2008, by
and between G & D PROPERTIES, LLC , as Lessor, and CTD, rnc" as Lessee.
Description oflands covered by this lease, to-wit:
RICH COUNTY, UTAH
Township 11 North, Ran¡re 7 East, S.L.M
Section 8: N2NE, S2N2, N2S2, SESE
Section 9: W2 SW
Containing 520.0 acres, more or less
LINCOLN COUNTY, WYOMING
A parcel of land situate in Sections 1, 11 and 12 of Township 22 North, Range 120 West, and Sections 6 and 7 of
Township 22 North, Range 119 West of the 6th Principal Meridian in Lincoln County, Wyoming, described in particular
by metes and bounds referred to in the plats made by the General Land Office ofthe United States of America under date
of March 31, 1909, and the amendments thereto, as follows, to-wit:
Beginning at a point upon the East boundary of Tract 47 from whence the Northwest comer of said Section' 7, bears South
72°08' West, 42.18 chains; thence West 109,17' chains along the South boundary of the land known as the North Part of
the MJB lands to a point situate in the center of the channel through which Bear River flows, thence meandering the
Central thread of the channel of Bear River, South' 14°07' West 13.03 chains; North 83°51' West 6.54 chains; South
46°38' East 7.43 chains; South 14°25' East 3.61chains; South 23°35' West 17.24 chains; South 42°14' West 0.66 chains
to the end 0 f said meander; thence East 119,89 chains to a point on the East boundary of said Tract 47; thence North
36.83 chains to the point of beginning,
ALSO, That part of the first h'act of record in the Office of the Clerk of Lincoln County in the Book 88PR on page 171
lying and begin situate southerly ofthe following described line:
BEGINNING at a point on the East line of Tract 49 of Township 22 North, Range 119 West, South 06°00'; West,
1485.59 feet from Comer No.1 of said Tract 49; thence West, 6269.64 feet, more or less, to an intersection with the
central thread of channel of Bear River; Said tract may be secondarily described as follows:
BEGINNING at Comer No.2 of said Tract No, 49; thence North 06°00' East 1228.66 feet along the East line of said
Tract 49 to a point; thence West, 6269.64 feet, more or less, to an intersection with the thread of the Chalmel of Bear
River; thence coursing the-thread of the chalmel of Bear River as follows:
Thence South 12°38' East, 691.10 feet; thence South 75°09' W est,,557 .83 feet; thence North 45°00' West, 354.68 feet;
thence North 23°00' West, 1233,21 feet; thence South 18°26' West, 500.87 feet; thence;: South 15°24' East 1143.19 feet;
thence South 14°07' West, 330.66 feet and leave cl1allllel of Bear River; thence East, 7205.22 feet to an intersection with
the East line of said Tract 47; thence North 69,96 feet along the said East line to the CORNER OF BEGINNING
The South 2949 feet of Section 35, Township 23 North, Range 120 West of the 6th P.M., Lincoln County, Wyoming
lying and being situate westerly of the centerline of Co keville-Utah Line County Road No. 12-207.
Containing 769.30 acres, more or less.
Additional Provisions:
16, This lease may, at Lessee's option, be extended as to all or part ofthe lands covered hereby for an additional
primary term of five (5) years commencing on the date that the lease would have expired but for the extension. Lessee
may exercise its option by paying or tendering to Lessor an extension payment of one hundred twenty-five and 00/1 OOths
dollal's ($125.00) per net mineral acre for the land then covered by the extended lease, said bonus to be paid or tendered
to Lessor at Lessor's address as shown above. If the Lessee exercises f!Üs option, the primary tenn of this lease shall be
considered to be continuous, commencing on the date of the lease and continuing from that date to the end of the
extended primary tenn.
Signed for Identification:
G & D PROPERTIES, LLC
~ot~ ~ VlI\~'ÿ--
Gordon Thornock, Manager
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