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71).
thereafter as oil, or gas of whatsoever nature or kind, or
both or either of them is produced from said land or from
premises pooled or unitized therewith as provided
hereinafter or drilling operations are continued as
provided hereinafter. If prior to discovery of oil or gas
on said land, or on acreage pooled or unitized therewith as
provided hereinafter, Lessee shall drill a dry hole or
holes thereon, or if after discovery of oil or gas,
production in paying quantities should cease for any cause,
this lease shall not terminate if Lessee commences
additional drilling or reworking operations within One
Hundred Eighty (180) days thereafter, or (if it be within
the primary term) shall not terminate until the expiration
of the primary term if Lessee is not in default hereunder.
If, at the expiration of the primary term of this lease,
oil or gas is not being produced on or from said land or
said pooled or unitized premises, but Lessee is then
engaged in drilling or reworking operations thereon, then
this lease shall continue in force so long thereafter as
drilling or reworking operations are being continuously
prosecuted on said land or on a drilling or development or
operating unit which includes all or a part of said land;
and drilling or reworking operations shall be considered to
be continuously prosecuted if not more than One Hundred and
Eighty (180) days shall elapse between the completion or
abandonment of one well and the beginning of operations for
the drilling or reworking of another well. If oil or gas
shall be discovered and produced from any such well or
wells drilled, being drilled or reworked at or after the
expiration of the primary term of this lease, this lease
shall continue in force so long thereafter as oil or gas is
produced from the leased premises or from any such unit
which includes all or a part of said lands.
3. In consideration hereof, Lessee shall pay to
Lessor, as royalty, for any oil produced from said land an
amount equal to one -sixth (16.67 of market price for oil
of like grade and gravity prevailing in the field where
produced on the day such oil is run into the pipeline or
into storage tanks, without reduction for any cost
whatsoever, except taxes attributable to such royalty,
including, without limitation, production costs, any cost
of gathering, marketing, separating, dehydrating, treating,
compressing, or otherwise preparing the oil for market, or
any other cost whatsoever; and lessee shall pay to Lessor
2
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•(apaJ aad g0'SZ$ sTpnba
sTL uT-gngs eons go apart paTgl agq
go uquoui aad aaap TpaauTw 4au aad 60' Z$ (TTT)
pup :(apart aad t,0 0 Z$ sTpnba
sTUq) uT -gngs dons go apaX puooas aUq
go gquow aad aaop TpaauTw q.au aad L9 "1$ (TT)
(xParC aad 00 5T$ sTpnba
sTUn) uT -4ngs Lions go apaA isaTj aUq
Jo Liquow aad aaop TpaauTw tau aad SZ°T$ (T)
uT -�nqs sT TTaM 34; agpp aUq uioa; sip
(06) Aq@uTN go uoTqpaTdxa egg aag3p 6uTnsua gxau
alpp AapsaaATuue aUq aaogaq JO uo pTpd aq TTpus
Tpquaa Lions gsaTg aUq qpUn 'aanaMOLi 'papTAoad
buTaq qT 'sMOTTo3 SP 'aoupApp uT 'pTpd aq TTpus
AiTpioa go naTT uT sTpWaa uT -Vngs eons pup 'TTaM
Lions go uT -gngs aUq go agpp aUg woaq sapaI aaagq
upgq. aaoui go poTaad p aog goagga uT aspaT sTU
uTpquTpw :ou Apw TT3M lions uo AgTpAoa ;o naTT
uT Tpquaa uT -gngs lions go quawApd aUl 'uoTgonpoad
s ,TTaM Lions uo pTpd uaaq aaAa spq quawApd
'gTpAoa ou gpgq lions 'TTaM aLT go uoTgaTdwoa
woo; sanuTquoo pup sanoao uT -gngs aqg ;I •p
:suoTgTpuoo
6uTMOTTog oq ioaCgns 'AgTp'Coa go naTT uT quawAPd Tpquaa
Lit -gnus p bpd Apw aassaq 'pasn ao pTos qou sT sp5 buTonpoad
'Tam p woo; spb quana 8Lq uI 'aaneOSTPgM asoo aaggo iU
ao 'ga){apw ao; sp6 6uTapdaad asTMaaggo ao 6uTuaqaaMs
'6uTssaadwoo '6uTgpaaq 'uoTgpapXgap '6uTTpapdas '6uTgaNapw
'6uTaaggp6 go lsoo Aup 'sgsoo uoTgonpoad 'uoTTpgTwTT
flOIflTM '6uTpnTouT 'spaaooad ssoab lions woad 'AgTpAoa
lions o1 aTgpgnqTaqqp saxpq gdaoxa 'aanaosTpuM 3s0O Aup
aog uoTgonpaa gnoufTM 'woogaaatq sgonpoad go aanjopgnupw
auk uT ao 'sasTwaad paspaT aU: ;go ao uo pasn 'pros aq 03
TTaM 31 13 sanpaT S 6 Lions app aUq uo 'paonpoad aaa1M 'pTaT;
a13 uT 6uTTTpnaad sp6 aog aoTad ga3{apw aU; go (%L9 "9T)
UfxTs auo og Tpnba 3unowp up woogaaagq s3onpoad iUP
go aan3opgnupw a13 uT pasn ao 'sasTwaad paspaT a13 uo pasn
ao pTos pup paonpoad puT){ ao aan3pu aaAaos3p1M go sp6 aog
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7L
shut -in is an interruption of production), the
payment of such shut -in rental in lieu of royalty
on such well may not maintain this lease in
effect for a period of more than three years from
the date of interruption of production shut -in of
such well, and such shut -in rentals in lieu of
royalty shall be paid as follows:
(i) If the shut -in continues for a
period of twelve consecutive months, Lessee
shall pay to Lessor at the end of such
period, an amount equal to $15.00 multiplied
by the net mineral acres of the lease;
(ii) If the shut -in continues beyond
the period described in the subparagraph
immediately preceding this subparagraph,
Lessee shall, within Thirty (30) days of the
continuation date, pay Lessor an amount
equal to $20.00 multiplied by the net
mineral acres of the lease; provided,
however, should production be recommenced
during the ensuing twelve month period,
Lessee shall have the right to withhold from
its production royalty payment to Lessor the
amount paid under this subparagraph; and
(iii) If the term of the shut -in
continues beyond the period described in the
subparagraph immediately preceding this
subparagraph, Lessee shall, within Thirty
(30) days of the continuation date, pay
.Lessor an amount equal to $25.00 multiplied
by the net mineral acres of the lease;
provided, however, should production be
recommenced during the ensuing twelve month
period, Lessee shall have the right to
withhold from its production royalty
payments to Lessor the amount paid under
this subparagraph; and
(iv) If the term of the shut -in
continues beyond the period described in the
subparagraph immediately preceding this
4
awls agq UT pusT aaggo tflTM aapunaaagq suoTJswaog agq go
aaow ao auo oq. SP pusT pagTaosap anogs aLiq Jo gasd ius ao
TT auTgwoo JO Tood 'azTiTun oq gg6Ta age ansg TTsus aassaq
'buTObaaog age oq uoTTTpps uI 4 run goes uT saaas aosgans
;o .zaquinu Tsgoq agq of sasaq gTun agq uT papnTouT pus assaT
sTgq Aq paaanoo sat aos ;ans go aagwnu Tsgoq agq Tsgq
uoTgonpoad gTun agq go uoTgaodoad ,sgj aq TTsus uoT1sooTTs
eons :assaT agq oq pagsooTTP uoTgonpoad Lions go uoTgaod agq
uo RTuo saTgTsIoa 'paTood os 'gTun agq wo1J uoTgonpoad uo
aATaoaa TT sus aossaq 'paTgToads uTaaag aaa4MasTa saTTTsAoa
agq go naTT uI °assaT sTLD aapun 5UTS[aoMaa ao buTTTTap
'uoTgonpoad aaaM ;T gT ss pagsaaq aq TTsus assaT sTg; go
J,asd P ao Tip sapnTouT goTIM jTun s uo aaaTMAus uoTgsaado
buTS{aoMaa ao 6uTTTTap 'uoTgonpoad °aangng asau age uT aog
pauuwTd sT TTaM s g0 6uTTTTap agq aaagM pusT ao 'paouauiuioo
uaaq aaogoJaaagf ansu 6uTTTTap JOJ suoTJsaado goTgM uodn
ao 'pagaTduioo uaaq aao ;ogaaaq; ssg TTaM s goTgM uodn pusT
apnTouT Jsw gTun Ruy °gTun agq agTaosap TTsus uoTgsasToap
goTgM 'uoTgswaogaa ao UOTgszTgTun cans go uoTJsasToap
P paooaa g0 6uTTT3 pus 6uTgnoaxa aassaq Aq pagsTTdw000s
aq TTsus gTun AUP go buTwao ;aa ao buTwaoJ aqy °suoTgswao;
6uTonpoad -uou Bons apnToxa oq pawaogaa aq isw 'ssb ao
TTo buTonpoad qou suoTgswaog apnTouT 01 pawaog JTsnoTnaad
sITun 'asTMa3{Tq •sassaT ao assaT 'pusT aagfo gaps
01 1oadsaa glTM s1sTxa sTgq 01 asTTWTS A1Taog1ns aaLilagM
go aAT1oadsaaaT pus 'os op o1 aTgssTnps ao Jasssaaau sT
1T 1uaw6pnC s,aassaq uT uaLM 'aau1Ta go uoTgonpoad agq aog
ATagsasdas ao 'ss6 pus TTo go uoTlonpoad agq aog AgTuTOTA
a1sTpawwT ag1 uT sassaT ao assaT 'pusT aaggo ggTM assaT
sTgq Aq paaanoo agsgsa TsaauTw agq pus agsgsa pTogassaT ag1
azTiTun ao Tood oq aapunaaag suoTJswaog agi 3o aaow ao OLIO
Aus oq SP pus uTaaag pagTaosap pusT agq go 1asd Aus ao TTs
oa SP 'uoTqonpoad aaggs ao aaogaq aagyTa 'lgBTa buTaanoaa
P SP awns oq awT wo1J pus awTq iUS ,s aaMOd pus 1g6Ta
ag1 uaAT6 igaaau sT 'uoTldo s1T 1s 'aassaq °S
•saT1asd ggoq of SP
a1suTwaaq TTsus assaT sTg1 ;oaaag agsp agq woaj sasa) aATg
aaogaq ao uo papTnoad aaggsuTaaag ss gnTMaaag1 pazT1Tun
ao paTood a6saaos uo ao pusT pTss uo paonpoad buTaq
ss6 pus TTo ou sT aaag1 gT ao paouawwoo qou aas ss6 ao TTo
10; TTaM s g0 6uTTTTap auk aog suoT1saado ;I f7
°a1suTwaag
ICTa1sTpaUUT TTsus assaT ST 'gdsabsasdgns
9fi01.9S0
OS67046
Ml 1
general area by entering into a cooperative or unit plan of
development or operation approval, to modify, change or
terminate any such plan or agreement, provided, however,
that if the terms and provisions of such cooperative or
unit plan of development or operation are inconsistent with
any terms or provisions contained in the body of this
lease, the terms and provisions in the body of this lease
shall prevail. In the event that said above described land
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
portions of the land covered by said plan, then the
production allocated to any particular tract of land shall,
for the purpose of computing the royalty 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 hereunder 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 provided that any such ratification by Lessor
shall provide that if the terms and provisions of such
cooperative or unit plan of development or operation are
inconsistent with any terms or provisions contained in the
body of this lease, the terms and provisions in the body of
this lease shall prevail. Drilling operations on or
production from any unit or units formed in accordance with
the provisions hereof and covering all or part of the lands
described herein shall maintain this lease in force only as
to that portion of the land described herein included in
any such unit or units, and as to lands covered hereby and
not included in any such unit or units, this lease may be
maintained in any manner herein provided for, provided that
if it be by rental payments, rentals shall be reduced
proportionately to the number of net mineral acres not
included in any such unit or units and not being otherwise
maintained.
6. No surface activities shall be commenced by
Lessee under this lease unless and until Lessee shall have
entered into a surface owner's agreement with the owner of
the surface estate of the lands described herein which
agreement covers any and all lands owned by such surface
6
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aTgpApd sTpquaa agq aaggpaaagq pup pazapuatzns a6patop
aLiq. oq SP suozgp6T -MO TIP go panaTTat aq pup suoTgaod zo
uoTgaod Aup 6uzza.Aoo saspaTaz JO aspaTaz p pzooat go aopTd
JO aossaq oq zaATTap pup agnoaxa sawTq ao awTq AUP Apw
aassaq °6uzspo TTp anowaa pup Mpzp oq gg6Ta agq 6uzpnTouT
'pu2T pips uo aassaq Aq paopTd saangxTj pup Agzadozd
TTp anowaa 0 aspaT sTgq go uoTTp1Tdxa awl zaq ;p apaA (T)
ago go pozaad p z0j gg5za agq aAPg TTpgs aassaq aTgzssod
SP ATzpau SP 'UOT Tpuoo TpuT6zzo sqT oq punoz6 agq go
aop ;zns agq azogsaz pup suoTgpaado s,aassaq Aq pasnpo saTog
dwns TTp ITT; TTpgs aassaq pup utazagq aassaq go gsazaquz
Aup woaj sasTwazd pips 0 aT3' zpaTo ATanTaoajja 0q SP OS
asp sp6 pup TT° j0 aspaTaz quaTOT ;ns pup pooh p zossaq
o1 zaATTap TTpgs pup aossaq oq saszwazd agq go uozssassod
zapuazzns ATgpaopad pup ATgaznb TTpgs aassaq `aspaT
sTgq go uoTipuTwzaq zaU0OS zo uoTqpaTdxa uodn °6
°suoTTpzado s,aassaq
Aq pasnpo uaaq aAPg gozgM aspaT szgq. Aq pazanoo spupT agq
uo saTog dwns TTp aoua; TTpgs aassaq 'aspaT sTgq go wzaq
agq 6uTanp aossaq Aq 6uTgT1M Uz pagsanbaz 3I °8
Liam cans uopupgp oq paT4Tqua aq TTpgs aassaq 'sAPp
0£ pips ut 6utpuoq go goozd apiAozd oq TTp; JO AgTTTgpTT
pup ATTITgzsuodsaa pips awnssp oq ITp.; zo aoTgou uag4T1M
pips go sApp 08 uTI TM puodsaz qou aossaq pTnogs TIM
Lions go sgsoo 6utuopupgp pup 6uz66nTd agq aog 6uTwoAM go
aq-egg 91 Aq paaTnbaz 6uTpuoq Aup axTnbop pup AgTI -MPTT pup
AgTTTgzsuodsaa awnssp pup aaTnbop oq AqTUn ;aoddo Up 1OSSaq
uaAT6 spg pup uopupgp 01 uoTquaquT s,aassaq go aossaq oq
aoTgou uaggz1M uaAT6 spq aassaZ 'nun aassaZ Aq pauopupgp
aq TTpgs zapunazag aassaZ Aq ParTzzp TTaM ON °L
°pTaggqTm ATgpuospaaun aq qou TTpgs
qU SUOD goTgM 'UOTSTAozd szgf go zaATPM oq quasuoo Apw
'aassaZ go gsanbaz uaggTam agq uodn aossaq 'zauMO aop ;ins
Lions L IM 1uawaaz6p gopaz oq aTgpun uaaq spg pup aTplsa
aopgans agq go zauMO Lions gVEM quawaaz6p s,zauMO aopgans
P
out zaqua oq pagdwagqp ggzp3 poo6 uT spq aassaq agq Tpgq
aossaq 0 aouapTna apTAoad TTpgs aassaq 3z Tpgq 'aanaMOg
'papTAozd :uTazag pagT1osap qou sT aipgsa aopgans Lions JT
UaAa pup 'qou zo agpgsa aopgzns Lions woag paaaAas sT agpcisa
TpzauTw goes aaLJagM 'aassaq Aq gzpd uT zo aTogM Uz paspaT
aanaosTpgM agpgsa TpzauTW AUP aTTaano goTgM pup aauMO
9t0L9S0
8
Ot3G'704G
71`
hereunder shall be reduced in the proportion of the acreage
covered hereby is reduced by said release or releases.
10. At the end of One (1) year after the
expiration of the primary term hereof, Lessee covenants and
agrees to execute and deliver to Lessor a written release
of all of the land covered hereby SAVE AND EXCEPT THEREFROM
oil and gas rights from the surface down to, but not below,
the stratigraphic equivalent of 100 feet below the base of
the deepest formation then producing or drilled in and
under that portion of lease premises which have been
allocated to a producing well or wells by inclusion in a
pooled unit or participating area as defined below, created
for such well or wells or if such producing well is a lease
well, 160.0 acres plus 10% tolerance surrounding each
producing oil well and 160 acres plus 10% tolerance
surrounding each producing gas well; provided, however,
that if at such date oil and gas is being produced on or
from said land or said pooled or unitized premises, or if
drilling, reworking, deepening, sidetracking or re-
completion operations are being conducted thereon pursuant
to Paragraph 2 in an effort to restore or enhance
production, or if shut -in payments have been made pursuant
to Paragraph 3, and Lessee is also engaged in drilling or
reworking operations on the lease premises or on lands
pooled or unitized therewith, the date for the execution
and delivery of such release shall be postponed and the
entire lease shall remain in force so long as such
operations on said well or wells are prosecuted with
reasonable diligence, and if, after the completion or
abandonment of such well or wells, Lessee commences the
drilling of an additional well within One Hundred and
Eighty (180) days from the completion or abandonment of the
preceding well, or continuously conducts drilling
operations in good faith and with reasonable diligence on
said lease or land pooled or unitized therewith without any
cessation for longer than One Hundred and Eighty (180)
days, said lease shall remain in full force and effect
during such drilling operations and until the end of One
Hundred and Eighty (180) days after the completion or
abandonment of the final well, at which time Lessee shall
execute and deliver to Lessor said written release.
Provided further, if on or after such date, the lease is
being maintained by payment of shut -in rental in lieu of
production royalty pursuant to Paragraph 3, such shut -in
oq quawuzsgaaoss TsToTpnC Tsuzg lions aaggs wisp (09)
AgxTg 40 pozaad s uaAz6 uaaq ssq aassaq pus aanTzsg ions
go quawutsgaaass TstoTpnC TsuTg aag3s gdaaxa assaT sTgq go
suozgs6TTgo paTidwz ao ssaadxa aqq unTM iiTdwoa oc aanTzsg
aog 'TTaM ss6 6uzanpoad gosa 6UTpunoaans aausaaToq %0T
snTd saaos 0•091 pus TTaM Tzo 6uzonpo.zd gala 6uzpuno.Lxns
aausaaToq %OT snTd saaas 0•091 'rpm OssaT s Ss paTJTsseTo
ST TTaM 6uTOnpo.zd aLiq gT 'ao anogs OT gds16sasd uT
pauz ;ap SP sans 6uzgsdToTgasd ao gzun paTood s uT papnTouT
spuWT saanoo qT Ss JiTuo asgosuz 'SSOT JO aangTaJao;
oq goaCgns aq qou Timis assaT sign ;oaaaq grid Aus ggTM
ao) ggTmaaagq pazTgTun .zo paTood puwT uo .zo Agaaaq paaanoo
puwT a4q woo; pauzsggo uaaq ssq ss6 pus Tzo go uoT onpoad
aagjs JPLil 'aa.AaMOq 'papTAoad sT qI •uotgsutwaaq
lions aATAans TTsgs aapunaaaq uoTsTAoad uoT qPDTJTuw@PuT
rius gsTq 'aaggang papTAoad pup 'aapunaaaq asnso Pius
.1oJ aossaZ )q uozgas Jus quapaaaad uozTzpuoo s aq TTsgs
sagosaaq pa6aTTs aqq qaaw oq 6uzouawwoo ao 6uzgaaw s,aassar
gnoggTM sip (09) ei1xTs go asddi auk pus aoTgou piss go
aoTAaas qsqq papuaquz 6uzaq qT 'aoT ou lions go 6uTTTSw agq.
aaggs sAsp (09) rigxzs go pozaad s uTunTM LiOSaaq ao ginsgap
lions Apawaa 1 Aasssaoau ATTs6aT U 43 aas qsq4 suozgsaado
rius aauawwoo oq "LOGITPJ ansLi TTsgs aassaq aqq ssaTun
pus 'gasaaq ao ginsgap lions 6uTgngTqsuoo Ss uodn peTTaa
slosg aqq go 'Tzsw paz ;zqaeo riq 'aazgou uaggTaM aassaj aqq
uaAT6 ansu TTsus aossaq aLq TTqun pus ssaTun 'uoz3suTwaaq
Lions asToaaxa qou TTsus aossaZ '6UTpusgS4gTM4Ou
liasaWoa auk 0'1 pauzsWoa UTaaaq 6UTLIgAUP 'aaAaMOq
'papTAoad 'WaJ ;a pus aoaog aaggang ou go pus pTOA pus TInu
aq aaggsaaagq TTsgs assaT ss6 pus Tzo pTSS pus pagsuzwaaq
assaT ss6 pus TTo STTI aasToap 'aossari go uoTgoaTa
agq Ds 'rises aossaq 'aassari aTq go Jasd aqq uo qdaN aq oq
pautsquoo uzaaaq suoTgTpuoo auq go lius go gosaaq ao gTnPJap
P sagngT suoo Lions gsLiq pus assaT sTqq L TM GoupTTdwoo
uT pagonpuoo 6uiaq qou aas suozgsaado Tsgq saapzsuoo
aWTq rius qs aossari aq' quana auq uI 'TT
'sans 6uiTsdTOTgasd
ao gTun' paTood pTSS lit sTTaM TTs woag uoTgonpoad TTs
woa3 anuaAaa aLiq go aasus aqsuozgaodoad szu 6uTATaaaa sT
aossaT LDTLiM UT sari 6uzanpoad ao gTun 6uTOnpoad TsnpTATpuT
UP uT papnTou-r 96saaas Tsgq SP pauz ;ap aq TTsus „sans
6uTTsdzoTgasd„ ao „gtun paTood„ papTAoad aAOgsuzaaaq
SP ggdap oq Ss paTTWTT pus s TTaM ao TTaM 6uTOnpoad s o4
pagPOOTTP 96saaas TTs oq SP assaT UTSW1PU TTsgs Tsquaa
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9t01..9S0
6
08G704G
prevent such loss or forfeiture by complying with and
discharging the obligation as to which Lessee has been
judicially determined to be in default.
12. Lessee shall pay all reasonable costs and
expenses, including reasonable attorney's fees, incurred by
Lessor in the enforcement of any portion of this lease
against Lessee or incurred in the recovery of any damage
for any breach hereof by Lessee. The parties agree that
any and all suits for any and every breach of this oil and
gas lease shall be instituted only in the courts of the
State of Wyoming; and it is mutually understood and agreed
that this lease shall be governed by the laws of the State
of Wyoming, both as to interpretation and performance.
13. Waiver by either Lessor or Lessee of any
breach of any condition or provision of this oil and gas
lease shall be limited to the particular instance and shall
not operate or be deemed to waive any future breach or
breaches of said condition, the failure of either Lessor or
Lessee to insist, in any one instance or more, upon the
performance of any of the conditions or provisions of this
oil and gas lease or to exercise any right or privilege
herein conferred, shall not be construed as thereafter
waiving any such condition, provision, right or privilege,
but the same shall continue and remain in full force and
effect.
14. Except as may be herein otherwise provided,
all notices required or permitted herein shall be deemed to
have been properly given when sent by certified United
States mail, addressed to the Lessor or Lessee at the above
addresses; the date of such service shall be the date on
which the notice is deposited in the United States Post
Office; all notices shall be sufficient within the terms of
this oil and gas lease when signed by any one or more of
the notifying parties or their agents and mailed to any one
or more of the opposite parties; personal delivery of such
written notice shall have the same effect as notice given
by mail; the above addresses may be changed for the
purposes of this oil and gas lease by notification of the
opposite party in writing. All royalties, rentals and
other payments due under this lease shall be payable to
Lessor at 428 Coventry Court, Helena, Montana 59601. No
change in this address shall be binding on Lessee until 30
10
711
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QS6704(i 7 2 I
therefrom. Acceptance of any royalty payment under this
lease shall not prejudice the right of Lessor to protest or
question the correctness thereof. The aforesaid right to
audit shall extend beyond the termination of this lease for
a period of Thirty -Six (36) months.
17. Lessee agrees to
Lessor from and against any
damage, claims, demands, costs
indemnify and hold harmless
and all liability, loss,
and expenses of whatsoever
nature, including court costs and reasonable attorney's
fees, which may result or arise from Lessee's operations
and activities hereunder; Lessee further agrees to defend
against any claims brought or actions filed against Lessor
with respect to or resulting from lessee's activities and
operations hereunder, whether such claims or actions are
rightfully or wrongfully brought or filed.
18. The royalties and rentals hereinabove
provided are determined with respect to the entire estate
in the leased substances and if Lessor owns a lesser
interest therein, the royalties and rentals to be paid
Lessor shall be reduced proportionally. Lessee at its
option may purchase or discharge in whole or in part any
tax, mortgage or other lien upon said land, or may redeem
the same from any purchaser at any tax sale or adjudication
and may reimburse itself from any royalties accruing
hereunder and shall be subrogated to such lien with the
right to enforce same.
19. Lessor hereby grants to Lessee the right and
option to extend the primary term of the lease from Five
(5) years to Ten (10) years by paying or tendering to
Lessor or or before the expiration of the fifth year of
this lease the sum of Ninety -eight and No /100 Dollars
($98.00) per net mineral acre for all or part of the land
which Lessee elects to continue to hold hereunder,
provided, however, that if Lessee fails to drill a
producing oil well within the first year of the extended
term, this lease shall terminate; provided further that
Lessee may delay such termination for one additional year
by the payment to Lessor the sum of $1.00 per net mineral
acre on or before the end of said first year and may delay
such termination from year to year until the end of the
extended term by the payment of a like sum on or before the
end of each succeeding extended year. In the event that the
12
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036 i 046
72
Lessor hereunder shall be subject to the proportionate
reduction provisions contained in Paragraph 18 hereof.
21. Should Lessee be prevented from complying
with any express or implied covenant of this lease, from
conducting drilling or reworking operations thereon or from
producing oil or gas therefrom by reason of fire, flood,
storm, or other Act of God, governmental law, order or
regulation, labor disputes, war or inability to secure men,
materials, permit(s) or transportation or any other cause
beyond the control of Lessee, then while so prevented,
Lessee's obligation to comply with such covenant shall be
suspended, and Lessee shall not be liable in damages for
failure to comply therewith, and this lease shall be
extended while and so long as Lessee is prevented by any
such cause from conducting drilling or reworking operations
on or from producing oil or gas from the lease premises or
land pooled or unitized therewith; and the time while
Lessee is so prevented shall not be counted against Lessee,
anything in this lease to the contrary notwithstanding.
Provided, however, the provisions of this paragraph shall
be limited to a period not to exceed three years.
22. Should Lessee elect not to place this lease
of record, Lessor agrees, upon request of Lessee, to
execute a Memorandum of lease indicating the parties
hereto, the legal description hereof, a description of the
estate demised hereunder, and the term hereof, in
sufficient form to be placed of record; Lessee's election
to request such a Memorandum shall not prohibit Lessee from
later placing this lease of record, should it determine to
do so.
IN WITNESS WHEREOF, the parties hereto have set
their hands the day and year first above ritten.
ATTEST:
Secretary
14 ..,,,L-L.,...„,..----;
el Marie Lewis, Lessor
Baseline Minerals Inc. a
Colo ado Corpora;' Lessee
By
14
Thames, President
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