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Home My WebLink About949348When recorded, please return to: Gary-Williams Production Company 370 17`h Street, Suite 5300 Denver, CO 80202 Attn: Tim Howard STATE OF WYOMING ) COUNTY OF LINCOLN ) ASSIGNMENT OF OVERRIDING ROYALTY INTEREST C,GV- 4®2 THIS ASSIGNMENT OF OVERRIDING ROYALTY INTEREST (this "Assignment"), dated August 25, 2009, is from GARY-WILLIAMS PRODUCTION COMPANY, a Delaware corporation ("Assignor"), 370 Seventeenth Street, Suite 5300, Denver, Colorado 80202, to SARLAN RESOURCES, INC. ("Sarlan"), 6052 South Lima Way, Englewood, Colorado 80111. Sarlan shall be referred to herein, as "Assignee". Assignor and Assignee shall be referred to herein, collectively, as the "Parties". Recitals A. Assignor owns the entire oil and gas leasehold estates created by the leases (the "Leases") described in Exhibit "A" hereto, insofar as the Leases cover the land (the "Land") described in Exhibit "A". B. Assignor and Assignee desire Assignor to assign to Assignee an overriding royalty interest burdening the Leases in accordance with the terms and conditions hereof. PART I Assignment IN CONSIDERATION OF TEN DOLLARS ($10.00), and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: 1.1 Assignment. Assignor hereby sells, assigns, transfers and conveys to Assignee an overriding royalty interest (the "Override") equal to three-fourths of one percent of 8/8ths (.75% of 100%) of all oil, gas and other hydrocarbons produced, saved and marketed from the Land described in Exhibit "A" hereto covered by the Leases described in Exhibit "A" hereto; provided, however, that the Override shall be reduced, on a lease-by-lease basis, to the extent that the aggregate of all landowners' royalty and overriding royalty interests burdening such lease recorded in the real property records (excluding any such royalty interests owned by Assignor or any of Assignor's affiliates and consultants) exceeds 17%, but in no event shall the Override be reduced thereby to less than one-half of one percent of 8/8ths (.50% of 100%). 1.2 Warranty. Assignor warrants title to the Override against all liens, encumbrances and defects of title arising by, through or under Assignor, but not otherwise. EXCEPT FOR THE FOREGOING, THIS ASSIGNMENT IS "AS IS, WHERE IS, WITH ALL FAULTS AND WITHOUT RECOURSE". THE PARTIES HEREBY EXPRESSLY DISCLAIM ALL WARRANTIES, EXPRESS, IMPLIED, RECEIVED 9/8/2009 at 3:56 PM RECEIVING # 949348 BOOK: 731 PAGE: 402 JEANNE WAGNER LINCOLN COUNTY CLERK, KEMMERER, WY Page 1 of 3 C Ov. 403 STATUTORY OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTY OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. 1.3 Payment. The Override shall be free and clear of all costs of drilling, development and operations. The Override shall not be paid or accrued on oil, gas or other hydrocarbons unavoidably lost, or used at the property for operations, development or production purposes including, without limitation, repressuring or recycling operations or pressure maintenance. However, that with respect to native gas produced from Lands used for re-pressuring, pressure maintenance or recycling operations, the Override shall be paid when such native gas is produced and sold (as opposed to gas produced from other lands used for such operations and upon which the Override shall never be paid or accrued). In addition, the Override shall bear its proportionate share of costs for transportation, taxes, gathering and compression to the same extent that such costs are deductible from the lessor's royalty interest under the Leases under applicable laws and regulations. 1.4 Proportionate Reduction. The Override shall be proportionately reduced, on a lease-by-lease basis, to the extent a Lease covers less than the entire undivided oil and gas mineral fee estate in and under the Land covered by such Lease, and to the extent that the interest in a Lease owned by Assignor as of the date of this Assignment is less than the entire oil and gas leasehold estate created by such Lease. 1.5 Extensions and Renewals. The Override shall burden all extensions and renewals of the Leases acquired by Assignor, or Assignor's successors or assigns. For purposes of this Assignment, an "extension or renewal" shall mean any amendment, extension, renewal or new lease covering the Land covered by an expiring Lease which is acquired (and, with respect to a federal or state lease, for which an offer to lease has been filed) by Assignor or Assignee, or Assignor's or Assignee's successors or assigns, on or before the expiration of such Lease or on or before one year thereafter. 1.6 Pooling. Assignor hereby reserves the right to pool, communitize or unitize the Override. TO HAVE AND TO HOLD the Override, subject to the terms and conditions hereof, unto Assignee, and Assignee' successors and assigns, forever. PART I Miscellaneous 2.1 Exhibits. All exhibits attached hereto are hereby incorporated herein and made a part hereof for all purposes, as if set forth in full herein. References in such exhibits to instruments on file in the public records are hereby incorporated by reference herein for all purposes. 2.2 Headings. Headings are included in this Assignment for convenience of reference and shall in no way define, limit, extend, or describe the scope or intent of any provision of this Assignment. 2.3 Severability. In the event any court invalidates any provision of this Assignment, all other provisions shall remain binding and in full force and effect with respect to the Parties. 2.4 Third Party Rights. The references in this Assignment or in the exhibits hereto to liens, encumbrances, agreements and other burdens shall not be deemed to recognize or create any rights in third parties. 2.5 No Merger. The Parties hereby acknowledge and agree that the Override shall not be deemed to merge with any leasehold interests now owned or hereafter acquired by any of the Parties. Page 2 of 3 ry0 4 0 4 2.6 Successors and Assigns. This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee, and their respective heirs, devisees, personal representatives, successors and assigns. 2.7 Further Assurances. Assignor agrees to take all such action and to execute, acknowledge and deliver all such instruments necessary or advisable to consummate the transactions contemplated by this Assignment. Assignor agrees to execute, acknowledge, and deliver to Assignee all such other additional instruments, notices, division orders, transfer orders, and other documents, and to do all such other and further acts and things as may be necessary or useful to more fully and effectively transfer, convey, and assign to Assignee the Override conveyed hereby or intended so to be. 2.8 Governmental Assignments. Separate assignments of the Override may be executed on officially approved forms by Assignor to Assignee in sufficient counterparts to satisfy applicable statutory and regulatory requirements. Those assignments shall be deemed to contain all of the agreements, rights, titles, disclaimers, limitations, powers and privileges set forth herein as fully as though they were set forth in each such assignment. The interests conveyed by such separate assignments are the same, and not in addition to, the Override conveyed herein. 2.9 Counterparts. This Assignment may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall be deemed to be one assignment. EXECUTED effective on the date first above written, to be effective for all purposes as of the Effective Date. ASSIGNOR: GARY-WILLIAMS PRODUCTION COMPANY Tim Howard, Vice President STATE OF COLORADO ) ) H CITY AND COUNTY OF DENVER ) The foregoing instrument was acknowledged before me this _ day of 2009, by Tim Howard, as Vice President of Gary-Williams Production Company, a Delaw corporation, on behalf of said corporation. Witness my hand and official seal. O~ A R y Nfy om i 'on Ex • ~ Q yO ° • ~ i 901~ O : 19,Y1,00miz Nota*Pblic Page 3 of 3 Exhibit "A" C Gi~405 Attached to and made a part of that certain Assignment of Overriding Royalty Interest dated August 25, 2009 between Gary-Williams Production Company and Sarlan Resources, Inc. Lincoln County, Wyoming 1. Lessor, Federal Serial USA, WYW-137085 Lease Effective Date: October 1, 1995 Original Lessee: Ann M. Trujillo Recorded: Unrecorded Description: Township 20 North - Range 117 West, 61h P.M. Section 8: All Section 18: Lots 5(23.73), 6(16.01), 7(16.10), 8(.33), E/2, SWA Township 20 North - Range 118 West, 6`h P.M. Section 12: NEANEA, W/2E/2, W/2, E/2SE/4 Containing 1776.17 acres, more or less. 2. Lessor, Federal Serial USA, WYW-172578 Lease Effective Date: April 1, 2006 Original Lessee: Baseline Minerals, Inc. Recorded: Book 638, Page 230 Description: Township 22 North - Range 116 West, 61h P.M. Section 8: All Section 9: Lots 1(45.96), 2(39.34), N/2, N/2S/2, SW/4SW/4 Section 17: Lots 1(22.28), 5(40.60), NEA, N/2NW/4, SEANWA, NEASE/4 Section 18: Lot 1(28.30) Containing 1656.48 acres, more or less. 3. Lessor, Federal Serial USA, WYW-173285 Lease Effective Date: October 1, 2006 Original Lessee: Baseline Minerals, Inc. Recorded: Book 638, Page 267 Description: Township 22 North - Range 116 West, 6`h P.M. Section 16: Lots 1(38.26), 2(21.16), 3(20.53), 4(38.37), 5(38.31), W/2NW/4, NWASW/4 Containing 276.63 acres, more or less. 4. Lessor, Federal Serial USA, WYW-173637 Lease Effective Date: December 1, 2006 Original Lessee: Baseline Minerals, Inc. Recorded: Unrecorded Description: Township 20 North - Range 118 West, 6th P.M. Section 1: Lots 5(36.77), 6(36.68), 7(36.58), 8(36.49), S/2 Section 2: Lots 5(36.35), 6(36.18), 7(36.00), 8(35.83), S/2 Section 3: Lots 5(35.70), 6(35.62), 7(35.54), 8(35.46), S/2 Section 4: Lots 5(35.39), 6(35.34), 7(35.28), 8(35.23), S/2 Containing 1854.44 acres, more or less. Page 1 of 5 5. Lessor, Federal Serial USA, WYW-173634 (NG; )406 Lease Effective Date: June 1, 2007 Original Lessee: Baseline Minerals, Inc. Recorded: Unrecorded Description: Township 21 North - Range 117 West, 6`h P.M. Section 17: SEASW/4, SEASE/4 Section 19: Lots 5(39.13), 6(39 ;15), 7(39.17), 8(39.19), NE/4,.E/2W/2, N/2SE/4, SWASE/4 Section 20: NEANEA, S/2NE/4, N/2NW/4, SW/4NW/4, NW/4SW/4, SE/4SW/4, SE/4 Section 29: All Section 30: Lots 5(39.25), 6(39.35), 7(39.45), 8(39.55), E/2W/2, E/2SE/4 Containing 2194.24 acres, more or less. 6. Lessor, Federal Serial USA, WYW-173636 Lease Effective Date: December 1, 2006 Original Lessee: Baseline Minerals, Inc. Recorded: Unrecorded Description: Township 21 North - Range 117 West, 6`h P.M. Section 31: Lots 5(39.65), 6(39.75), 7(39.85), 8(39.95), E/2, E/2W/2 Section 32: All Containing 1279.20 acres, more or less. 7. Lessor, Federal Serial USA, WYW-173638 Lease Effective Date: December 1, 2006 Original Lessee: Baseline Minerals, Inc. Recorded: Unrecorded Description: Township 20 North - Range 118 West, 6`h P.M. Section 5: Lots 5(35.19), 6(35.15), 7(35.13), 8(35.09), S/2 Section 6: Lots 8(35.04), 9(34.97), 10(34.90), 11(31.44), 12(35.91), 13(35.70), E/2SW/4, SE/4 Section 7: Lots 5(35.56), 6(35.48), 7(35.40), 8(35.32), NW/4NE/4, E/2W/2 Section 8: All Section 9: All Containing 2530.28 acres, more or less. 8. Lessor, Federal Serial USA, WYW-173639 Lease Effective Date: December 1, 2006 Original Lessee: Baseline Minerals, Inc. Recorded: Unrecorded Description: Township 20 North - Range 118 West 6`h P.M. Section 10: All Section 11: All Section 13: Lots 1(39.82), 2(24.18), W/2NE/4, W/2, NW/4SE/4 Section 14: All Containing 2424.00 acres, more or less. Page 2 of 5 9. Lessor, Federal Serial USA, WYW-173640 Lease Effective Date: December 1, 2006 C'0`407 Original Lessee: Baseline Minerals, Inc. Recorded: Unrecorded Description: INSOFAR AS IT COVERS: Township 20 North - Range 118 West, 6`" P.M. Section 15: All Section 17: SE/4NE/4, S/2 Section 18: Lots 5(35.31), 6(35.39), 7(35.45), 8(35.53), W/2E/2, E/2W/2, E/2SE/4 Containing 1541.68 acres, more or less. 10. Lessor, Federal Serial USA, WYW-173642 Lease Effective Date: June 1, 2007 Original Lessee: Baseline Minerals, Inc. Recorded: Unrecorded Description: Township 21 North - Ranee 118 West, 6`" P.M. Section 2: Lots 6(39.77), 7(39.71), 8(39.63), SW/4NE/4, S/2NW/4, SW/4, W/2SE/4 Section 3: Lots 5(39.56), 6(39.48), 7(39.40), 8(39.32), S/2N/2, S/2 Section 4: Lots 5(39.21), 6(39.08), S/2NE/4, N/2SE/4, S/2SE/4 (excluding 15.61 ac. in RR ROW WYW-0294448) Containing 1419.55 acres, more or less. 11. Lessor, Federal Serial USA, WYW-173643 Lease Effective Date: June 1, 2007 Original Lessee: Baseline Minerals, Inc. Recorded: Unrecorded Description: INSOFAR AS IT COVERS: Township 21 North - Range 118 West 6`" P.M. Section 9: All Section 10: S/2N/2, S/2, N/2N/2 (excluding 27.09 ac. in RR ROW WYW- 0294448) Section 11: S/2N/2, S/2, N/2N/2 (excluding 23.87 ac. in RR ROW WYW- 0294448) Containing 1869.04 acres, more or less. 12. Lessor, Federal Serial USA, WYW-174327 Lease Effective Date: January 1, 2008 Original Lessee: Baseline Minerals, Inc. Recorded: Unrecorded Description: Township 21 North - Range 117 West, 6t" P.M. Section 13: All Containing 640.00 acres, more or less. Page 3 of 5 " ~;~a08 13. Lessor: State of Wyoming, acting by and through its Board of Land Commissioners State of Wyoming Serial 06-0215 Lease Effective Date: February 2, 2006 Original Lessee: Baseline Minerals, Inc. Recorded: Unrecorded Description: INSOFAR AS IT COVERS: Township 22 North - Range 117 West, 6`" P.M. Section 36: E/2 Containing 320.00 acres, more or less. 14. Lessor: State of Wyoming, acting by and through its Board of Land Commissioners State of Wyoming Serial 06-00714 Lease Effective Date: October 2, 2006 Original Lessee: Joseph W. Thames Recorded: Unrecorded Description: INSOFAR AS IT COVERS: Township 21 North - Range 117 West, 6"' P.M. Section 16: S/2 Containing 320.00 acres, more or less. 15. Lessor: State of Wyoming, acting by and through its Board of Land Commissioners State of Wyoming Serial 06-00715 Lease Effective Date: October 2, 2006 Original Lessee: Joseph W. Thames Recorded: Unrecorded Description: INSOFAR AS IT COVERS: Township 21 North - Range 117 West, 6`h P.M. Section 17: N/2SW/4, SW/4SW/4 Containing 120.00 acres, more or less. 16. Lessor: State of Wyoming, acting by and through its Board of Land Commissioners State of Wyoming Serial 06-00716 Lease Effective Date: October 2, 2006 Original Lessee: Joseph W. Thames Recorded: Unrecorded Description: INSOFAR AS IT COVERS: Township 21 North - Range 117 West, 6`h P.M. Section 18: Lots 7(39.09), 8(39.11), SE/4SW/4, NEASE/4, S/2SE/4 Containing 238.20 acres, more or less. Page 4 of 5 GOO— 409 17. Lessor: Helen R. Snedden, as Trustee of the Helen R. Snedden Revocable Trust dated January 1, 2003 Lease Date: October 6, 2006 Original Lessee: Gary-Williams Production Company Recorded: Book 729, Page 170 Description: INSOFAR AS IT COVERS: Township 22 North - Range 116 West, 6`h P.M. Section 17: Lots 2(14.22), 3(25.84), 4(16.55), 6(18.52) of Resurvey Tract 45, 7(21.79) of Resurvey Tract 45, 8(4.48) of Resurvey Tract 44, 9(33.58) of Resurvey Tract 44, 10(17.99) of Resurvey Tract 44; 11(3.79) of Resurvey Tract 43, 12(20.51) of Resurvey Tract 43, NE/4SW/4, NW/4SE/4 Section 19: Lots 1(36.47), 3(39.35), 4(44.56), 7(6.15) of Resurvey Tract 44, 8(23.33) of Resurvey Tract 44, 9(35.73) of Resurvey Tract 44, 10(.73) of Resurvey Tract 44 Section 20: Lots 1(20.31), 2(41.05), 10(34.06) of Resurvey Tract 44, 11(32.00) of Resurvey Tract 44, 12(7.12) of Resurvey Tract 44, 13(19.11) of Resurvey Tract 44, 7(19.93) of Resurvey Tract 43, 8(37.50) of Resurvey Tract 43, 9(6.21) of Resurvey Tract 43, 14(3.03) of Resurvey Tract 43, 15(20.08) of Resurvey Tract 43, 16(21.23) of Resurvey Tract 43 Section 21: Lots 11(17.14) of Resurvey Tract 43, 12(20.63) of Resurvey Tract 43 Containing 742.99 acres, more or less. 18. Lessor: Marguerite Daneluk, as Trustee of the Marguerite Daneluk Trust dated October 14, 2005 Lease Date: October 6, 2006 Original Lessee: Gary-Williams Production Company Recorded: Book 729, Page 167 Description: INSOFAR AS IT COVERS: Township 22 North - Range 116 West, 6`h P.M. Section 17: Lots 2(14.22), 3(25.84), 4(16.55), 6(18.52) of Resurvey Tract 45, 7(21.79) of Resurvey Tract 45, 8(4.48) of Resurvey Tract 44, 9(33.58) of Resurvey Tract 44, 10(17.99) of Resurvey Tract 44; 11(3.79) of Resurvey Tract 43, 12(20.51) of Resurvey Tract 43, NE/4SW/4, NWASEA Section 19: Lots 1(36.47), 3(39.35), 4(44.56), 7(6.15) of Resurvey Tract 44, 8(23.33) of Resurvey Tract 44, 9(35.73) of Resurvey Tract 44, 10(.73) of Resurvey Tract 44 Section 20: Lots 1(20.31), 2(41.05), 10(34.06) of Resurvey Tract 44, 11(32.00) of Resurvey Tract 44, 12(7.12) of Resurvey Tract 44, 13(19.11) of Resurvey Tract 44, 7(19.93) of Resurvey Tract 43, 8(37.50) of Resurvey Tract 43, 9(6.21) of Resurvey Tract 43, 14(3.03) of Resurvey Tract 43, 15(20.08) of Resurvey Tract 43, 16(21.23) of Resurvey Tract 43 Section 21: Lots 11(17.14) of Resurvey Tract 43, 12(20.63) of Resurvey Tract 43 Containing 742.99 acres, more or less. Page 5 of 5