HomeMy WebLinkAbout867050AGREEMENT, Made and entered into the 31st day of May 2000 by and betwti''jtnyearroyvct",,,g pale woman,
whose post office address is 8603 Powderhouse Road, Cheyenne, WY82009, hereinafter called Lessor, and Baseline in a'lk 1' Whose post
office address is 1645 Court Place, Suite 422, Denver, CO 80202, hereinafter called Lessee:
PRODC:JERS 88 -PAID UP
WITNESSETH, That the Lessor, for and in consideration of Ten and More Dollars ($10.00 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 mining, exploring by
geophysical and other methods, and operating for and producing therefrom oil and all gas of whatsoever nature or kind, specifically including
coalbed methane and any and all substances produced in association therewith from coal bearing formations, 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 (hereinafter "leased premises
containing 160.00 acres, more or less.
1. It is agreed that this lease shall remain in force for a term of 3 (three)years from this date (hereinafter "primary term and as long thereafter
as oil or gas of whatsoever nature or kind, specifically including coalbed methane and any and all substances produced in association therewith from
coal bearing formations, 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 reworking 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 of oil 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 reworking operations within ninety (90) 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 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 to pay Lessor the following royalties:
(a) On oil and other liquid hydrocarbons, 17.50% of that produced and saved from said land, the same to be delivered at the wells or to the
credit of Lessor, free of all costs of production or delivery, into the pipeline to which the wells may be connected; provided however Lessee
may from time to time purchase any royalty oil or other liquid hydrocarbons in Lessee's possession, paying the market price therefor prevailing
for the field where produced on the date same is produced and run to the pipeline or storage tank therefor (or if there is no market price
prevailing for such field on such date, then the market price prevailing in the nearest field in which there is a market price on such date for oil
or liquid hydrocarbons of the same or similar grade, gravity or quality); (b) on gas, including cashinghead gas or other gaseous substances,
produced from the land and sold, or used off the premises, or used in the manufacture of gasoline or other products therefrom (including within
the foregoing any gas so used by Lessee, either alone or in association with others, or by or through any company or other entity with which
Lessee is affiliated by stock ownership or otherwise, or sold by Lessee to any such affiliated company or entity), the market value at the well of
17.50% of the gas so sold or used (or if there be no market value at well then the market value at the well in the nearest field where there is a
market value at the well for gas of the same of similar quality), but in no event shall the royalty be based on an amount less than the gross
proceeds received from any sale of such gas. It is expressly understood and agreed that Lessee shall not in any event sell or contract for sale of
gas for less than the market value of such gas at the well determined as of the date such gas is produced and delivered, provided, however, that
for purposes hereof any contract entered into by Lessee (other than with any subsidiary, or any company or other entity with which Lessee is
affiliated by stock ownership or otherwise) for the sale of such gas shall be deemed to be a sale of the gas at the market value thereof to the
extent that either such contract provided for redetermination of the purchase price of the gas not less often than annually during the tern of
such contract based upon the market value of gas prevailing on such determination date in the field or area in which the gas is produced, or
such contract has been approved in writing by Lessee. (c) If the gas from any gas well situated on this lease should be sufficiently impregnated
with gasoline, condensate or other liquid hydrocarbons in suspension that paying quantities of such gasoline, condensate or other product can
be separated from said gas and liquefied as a practical lease operation by the installation by Lessee of traps, separators or other divides
ordinarily used in the industry for such purpose on the lease, then Lessee agrees and shall be obligated to install upon the lease such device or
devices to the end that so much of said gasoline, condensate or other products as can be separated through such devices before marketing be
recovered and Lessor shall receive its royalty as specified in paragraph 3(a) of the gasoline, condensate or other liquefied products recovered on
the lease in such manner, together with a royalty on residue gas in the amount and determined as provided in paragraph 3(2nd) of this lease.
The royalties provided in this paragraph 3 shall be determined and delivered to Lessors free of any development, production, compression,
processing, transportation, delivery or like costs excepting, however, taxes applicable to Lessor's share of production which are paid by Lessee.
4. If at any time, whether before or after the expiration of the primary term, Lessee shall have completed a well or wells on the above described
premises (or land with which the said premises or any part thereof may be pooled) which well or wells are capable of producing gas in commercial
quantities but are shut in with the result that gas is not produced and sold or used, Lessee may pay as royalty to Lessor for each such shut -in well on
or before the expiration of ninety (90) days after (i) the date of completion of such gas well as evidenced by the Well Completion Report filed with
the appropriate state or other governmental regulatory agency or commission having jurisdiction, or (ii) the date such gas ceases to be sold or used, as
the case may be, an amount equal to Ten Dollars ($10.00) per acre of land covered by this lease, which shall be attributed to the producing unit upon
which the well or wells are located and upon making said payment, it will be considered that each such well is producing gas in paying quantities
within the meaning of this lease for a period of one (1) year after the expiration of said ninety 90) day period. In like manner and upon like payments
being made annually on or before the expiration of the last preceding year for which such payment or ender has been made, it will be considered that
said well or wells are producing gas in commercial quantities for successive periods of one (1) year each; provided, however, that this lease may not
be maintained in force solely by payment of shut -in gas well royalty for any well under this paragraph for more than two (2) consecutive years after
the effective date of the first such payment, or for shorter periods at various intervals not to exceed in the aggregate two (2) year in all.
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 (but
not the 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 Lessee.
7. When requested by Lessor, Lessee shall bury Lessee's pipeline below plow depth.
8. No well shall be drilled nearer than 400 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 on said land and shall negotiate and settle said damages prior to entering upon
the leased premises.
10. 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 as long as it is done within six (6) months following the termination of this lease.
OIL AND GAS LEASE :7 REC -IvE D
Township 23 North -Range 115 West, 6 P. M.
Section 26: N2N2
00 I 1 8
1: 1 1
BOOK 44§ R PAGE 7 4 4
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-417 L
OSO49sO
IOMOareH ua!1
IMP
STATE OF (i(1 COY 1,4-
COUNTY OF 1 i i ss
The foregoing instrument was acknowledged before me this day of
My Commission Expires i a O Notary Public
INDIVIDUAL ACKNOWLEDGEMENT
74i
t 0 1
011
00, by Ji71i Harrcfwer:
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