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Home My WebLink About20071118.tiff Steven S. McWilliams 12236 County Road 8 Fort Lupton, Colorado 80621 Veit Cour h, ;ikon irr Depa-tme,nt February 9, 2007 eRt'I_Ey OFFICE Honorable Weld County Commissioners David Long Douglas Rademacher RECEIVED Rob Masden William Jerke Bill Garcia P.O. Box 758 915 10th Street Greeley, Colorado 80632 Re: Use by Special Review for Lafarge, Riverbend Gravel Mining- Permit #2005- AMUSR 1259 Gentlemen: I am writing in regard to the upcoming permit #2005-AMUSR 1259 to be considered by the Board for final approval. I am a landowner that has agreed to have the gravel reserves extracted by Lafarge on a prior Use by Special Review permit that was approved by the Board in year 2000 that involved my property and the property that abuts to the South. Since that time, Lafarge has acquired additional contiguous properties in the area that is the subject of the current permit application as well as my property. The Weld County Planning Department has required completed oil and gas land access agreements prior to presentation to the Board that have not yet been provided. Lafarge is now requesting a waiver from this requirement. Lafarge has had its engineer design these locations and agreements that have caused a dramatic reduction to the gravel mining and water storage from that as allowed in the original permit from 2000. I am in the process of renegotiating this lease with Lafarge due to this and other changes from our original lease inked in 1999. I am asking that the Weld County Board of Commissioners delay the approval of this USR permit pending a successful renegotiation of the lease between Lafarge and myself. If the Board desires, I will be available to answer any questions in person when requested. Very Truly Yours, Steven S. McWilliams Property Owner Cc: Bruce Barker, County Attorney Kim Ogle, County Planner EXHIBIT 1 E 2007-1118 A,,,u5r?4l59 Steven S. McWilliams 12236 County Road 8 Fort Lupton, Colorado 80621 February 26, 2007 Honorable Weld County Commissioners David Long Douglas Rademacher Rob Masden William Jerke Bill Garcia P.O. Box 758 915 10`h Street Greeley, Colorado 80632 Re: Use by Special Review for Lafarge, Riverbend Gravel Mining- Permit#2005- AMUSR 1259 Gentlemen: I am writing in regard to the above referenced USR and LaFarge Corp. I wrote a letter February 9, 2007 asking the Board to hold any action on the Permit pending resolution of the property access agreements between myself and LaFarge on my property within the permitted area. I met with Eric Richtentine of LaFarge on Friday, February 23, 2007 and have come to an agreement in principal on the items in question. At this time, I have no further objections to the USR Permit#2005- AMUSR 1259 and via this letter is giving the County Board notice of same. I would also like to relay to the Board the prompt and profession manner in which LaFarge addressed my concerns on this issue. Very Truly Yours, Steven S. McWilliams Property Owner Cc: Bruce Barker, County Attorney Kim Ogle, County Planner EXHIBIT I F MEMORANDUM TO: Board of County Commissioners February 26, 2007 �. FROM: Jacqueline Hatch COLORADO SUBJECT: AMUSR-1259 Riverbend The applicant for AMUSR-1259, Eric Reckentine with Lafarge North America has submitted the attached documentation. Prior to scheduling a Board of County Commissioners hearing: A. Section 22-5-100.A of the Weld County Code states "oil and gas exploration and production should occur in a manner which minimizes the impact to agricultural uses and the environment and reduces the conflicts between mineral development and current and future surface uses." Section 22-5-100.B of the Weld County Code states "...encourage cooperation, coordination and communication between the surface owner and the mineral owner/operators of either the surface or the mineral estate." Section 22-5- 100.B.1 of the Weld County Code also states "new development should be planned to take into account current and future oil and gas drilling activity to the extent oil and gas development can reasonably be anticipated." The applicant shall either submit a copy of an agreement with the property's mineral owner/operators stipulating that the oil and gas activities have been adequately incorporated into the design of the site or show evidence that an adequate attempt has been made to mitigate the concerns of the mineral owner/operators. Drill envelopes can be delineated on the plat in accordance with the State requirements as an attempt to mitigate concerns. The plat shall be amended to include any possible future drilling sites. (Department of Planning Services) The applicant has submitted a signed surface use agreement with K.P. Kauffman Company, Inc. and Peterson Energy Operating Inc. The applicant has not submitted surface use agreement with Kerr-McGee and Encana. The applicant has stated that they have attempted to reach an agreement with Kerr-McGee and Encana but have not succeeded in finalizing a surface use agreement at this time and wishes to proceed with their application. The attached documentation was submitted by the applicant demonstrating their attempt to an agreement. . 1 _1 • L ', C�l:�i.� Y.1 L.� ww;t L .I -I -U) B. The applicant shall submit a traffic study to the Colorado Department of Transportation for review. Evidence of approval shall be submitted in writing to the Department of Planning Services. (Department of Planning Services) The Department of Planning Services ahs received an email dated February 13 , 2007 from CDOT stating that a traffic study has been submitted. (( a/ y) C. The applicant shall submit written evidence to the Department of Planning Services that an annexation agreement has been submitted and approved by the City of Fort Lupton. (Department of Planning Services) The applicant has submitted a pre-annexation agreement. (6-.k/,(J, / 7 ) Thank you Riverbend—Lafarge West AMUSR-1259 Page 1 EXHIBIT 1 Amuse 41259 LAFARGE NORTH AMERICA Construction Materials January 25, 2007 Ms. Jacqueline Hatch Weld County Department of Planning Services 4209 CR 2412 Longmont, CO 80504 RE: Request to Schedule a County Commissioners Hearing for AMUSR-1259 (Riverbend) Dear Jacqueline: As you know, on May 16, 2006, the Weld County Planning Commission approved AMUSR-1259 with several conditions that were recommended by Staff. One of those conditions was that prior to scheduling a Board of County Commissioners hearing, the applicant (Lafarge) had to "either submit a copy of an agreement with the property's mineral owner/operators stipulating that the oil and gas activities have been adequately incorporated into the design of the site or show evidence that an adequate attempt has been made to mitigate the concerns of the mineral owner/operator." Consistent with this condition of approval, Lafarge has been diligently pursuing Surface Use Agreements with the four mineral rights operators that have an interest in the AMUSR-1259 (Riverbend) property: K.P. Kauffman, Peterson, Kerr-McGee and Encana. On October 10, 2006 we finalized an agreement with Peterson Energy Operating and on January 15, 2007 we finalized an agreement with K.P. Kauffman Company. Last week, Pam Hora from Tetra Tech provided you with copies of both of these finalized agreements. While we have also been meeting and working with both Kerr-McGee and Encana for several months now, we have been unable to finalize a Surface Use Agreement with either company. Attached is documentation to attest to the fact that we have made an adequate attempt to reach an agreement with both Kerr-McGee and Encana. .refore. `;ccause we have satisfied the c descnb."d lition of appro'- 1. 1 requc,! • °,1USR-12ce hnr a hearing. ;ie tile Board Commissioners. your consideration. Pk ,)N act ,u. nilee en ' , :,i loos. .`>nlc.. . .y, , '. A srca P rag!. -pat( ; n .0"-‘ tac:,,n . • .. ,'. 'NEST iffice • Page 1 of 1 Jacqueline Hatch From: Hice-Idler, Gloria [Gloria.Hice-Idler@DOT.STATE.CO.US] Sent: Monday, November 06, 2006 3:42 PM To: Jacqueline Hatch Cc: Gene Coppola Subject: FW: Lafarge's Riverbend Site Jacqueline, I normally require that the lane be improved when the total traffic(background and site generated) meet the trigger. However, in this case, since the proposed volumes aren't planned to occur for some time, I've decided to wait until LaFarge's volumes trigger the improvement. If you have any questions, please do not hesitate to contact me. GLORIA HICE-IDLER CDOT R4 ACCESS MANAGER (970) 350-2148 From: Gene Coppola [mailto:trafficpe@comcast.net] Sent: Monday, November 06, 2006 3:16 PM ^ To: Hice-Idler, Gloria Subject: Lafarge's Riverbend Site Gloria. At our meeting quite some time ago, it was agreed that Lafarge would improve the southbound right turn lane on U.S. 85 at CR 6 in conjunction with it's Riverbend operation. The improvement will be needed when Lafarge's day to day traffic triggers the volume warrant for this lane, exclusive of background traffic. Please notify Jacqueline Hatch of CDOT's position on this issue in preparation for the upcoming County hearing. I would appreciate a copy for my file. Thanks Gene Gene Coppola PE P.O. Box 630027 Littleton, CO 80163 303-792-2450 303-792-5990 (fax) EXHIBIT I N Am ► ' Oct 11/06/2006 From: Hice-Idler, Gloria [mailto:Gloria.Hice-Idler@DOT.STATE.CO.US] Sent: Tuesday, February 13, 2007 10:36 AM To: Jacqueline Hatch Subject: RE: AMUSR-1259 Riverbend Gravel Pit I got a TIS from Gene Coppola. I don't have any questions. From: Jacqueline Hatch [mailto:jhatch@co.weld.co.us] Sent: Tuesday, February 13, 2007 10:34 AM To: Hice-Idler, Gloria Subject: AMUSR-1259 Riverbend Gravel Pit Gloria, I was just wondering if you have ever received a traffic study from Lafarge regarding the Riverbend site. East of Hwy 85 north of CR 6 and South of Hwy 52 (over 1000 acres)? Let me know if you have any questions Thanks, Jacqueline jlt TETRA TECH, INC. .....j January 19, 2007 Ms. Jacqueline Hatch Weld County Department of Planning Services 4209 CR 241/4 Longmont, CO 80504 RE: Riverbend Use by Special Review Application Dear Jacqueline: Attached please find several documents that pertain to the Riverbend Use by Special Review Application. The documents included are as follows: • Surface Use Agreement between Peterson Energy Operating and Lafarge West, Inc. (I- Z) • Surface Use Agreement between K.P. Kauffman Company, Inc. and Lafarge West, Inc. (I. ) • Pre-Annexation Agreement between City of Fort Lupton and Lafarge West, Inc. Cl 'I} • Memorandum of Understanding between the Fort Lupton Fire Protection District and l t.S) Lafarge West, Inc. • Updated Mineral Rights documentation for Parcels 147107000008 and 147119000003 — previously submitted copies left off Encana as a Mineral Leasehold Owner (1,v) We expect to soon have Surface Use Agreements finalized with Kerr-McGee and Encana. We will provide you with copies of those agreements as soon as they are completed. If you have any questions, please give me a call. Sincerely, TETRA TECH ) I , Pamela Franch Hora, AICP Senior Planner Attachments cc: Eric Reckentine . Jennifer Vecchi Jim King • 1 ArnlISRAVIZSei H94137 012 01 Correspondence final agreements cover letter l doc Tel Fax SURFACE USE AGREEMENT OThis Surface Use Agreement ("Agreement") is dated and made effective this JQ"day of he: , 2006, and is between Peterson Energy Operating, Inc. ("Peterson") with an address of 1805 Morning Drive, Loveland, CO 80538 and Lafarge West, Inc. ( "Lafarge") with an address of 10170 Church Ranch Way#200, Westminster, CO 80021. Whereas: • A. Lafarge is the current landowner'or is the current lessee under one or more sand, gravel ' and aggregate mining leases covering certain tracts of land located in the Riverbend Project more particularly described on Exhibit A attached hereto, being a portion of Sections 12, 13 and 24, TIN, R67W, and Sections 7, 18 and 19, TIN, R66W, 6th P.M., Weld County, Colorado (hereinafter referred to as the"Property"); B Surface ownership of the Property is subject to the rights of the oil and gas mineral leasehold estate,a portion of which is now owned by Peterson; C. Lafarge has received a mining permit from the State of Colorado Division of Reclamation, Mining and Safety, formerly known as the Division of Minerals & Geology ("DMG") for the purpose of open pit sand and gravel mining operations, known as Riverbend. Portions of the mined out Property are to be reclaimed for use as water storage reservoirs. D. Peterson currently operates the MFM Farm Unit 1 well on a portion of the Property, (the "Existing Well") and also has located certain tank facilities and other Production Facilities (defined below)upon a portion of the Property, which Existing Well and Production Facilities are generally located in the SE'''A of the NW'''A of Section 12, T1N, R67W, 6th P.M., Weld County, Colorado described above, and has the right to further develop its oil and gas leasehold estate by drilling additional wells generally located in the SE'''A of the NW`'A of Section 12, T1N,R67W, 6th P.M., Weld County, Colorado (the "Future Wells") and together with the Existing Well, the "Well"or"Wells")on the Property; and E. This Agreement sets forth the parties' rights and obligations regarding the relationship between the operations and development of the Property by Lafarge and Peterson's operation and development of its oil and gas leasehold estate underlying a portion of the Property, such rights and obligations to be binding upon the parties successors and assigns. Now Therefore: In consideration of the mutual covenants contained herein,and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,the parties agree as follows: 1. AREAS RESERVED FOR THE EXISTING WELLS AND FUTURE WELLS; WELL LOCATIONS. Lafarge shall set aside and provide to Peterson that portion of the Property hereinafter referred to as the, "Oil and Gas Operations Areas", such areas being depicted on Exhibit B attached hereto. The Oil and Gas Operations Areas are to be made available to Peterson in their present condition for any operations conducted by Peterson in connection with any Well, including, but not limited to, drilling and production activities, workovers, well deepening, recompletion, fracturing and replacement wells. MI se # a Li 101523411 :. 1 ' Wells will be limited to the Oil and Gas Operations Areas shown on Exhibit B, unless this Agreement is amended by consent of Lafarge and Peterson. Except for the Oil and Gas Operations Areas, and the access roads and Petroleum Pipeline Easements (as defined below) as provided in this Agreement, Peterson shall not occupy the surface of the Property except in the event of an emergency or for reasonable incidental, temporary and non-damaging activities, for which Peterson shall be strictly and solely responsible for any damages that may occur to the Property. Peterson shall have the right to drill Future Wells within the Oil and Gas Operations Areas, including horizontal and directional wells that produce from and drain the Property. As part of the consideration for this Agreement,Lafarge hereby waives its right to,and covenants that it shall not protest or object to any such exception location or application for same by Peterson. Peterson shall not otherwise ' have the right to drill new wells on the Property. The wellhead location for any Future Well drilled from the Oil and Gas Operations Area shall not be closer than 100' from the edge of the Oil and Gas Operations Area. In no event shall Lafarge stockpile mined materials within a radius of 150 feet of any Existing Wells. 2. EXTRACTION IN VICINITY OF OIL AND GAS OPERATIONS AREAS; SETBACK REQUIREMENTS. Lafarge reserves the right, at its option, to mine the gravel within each of the Oil and Gas Operations Areas in accordance with the terms of this Agreement. In the event that Lafarge elects to mine the gravel in an Oil and Gas Operations Area, Lafarge shall notify Peterson in writing 60 days prior to commencing mining operations within the Oil and Gas Operations Areas and shall first place temporary concrete barriers around the Existing Wells as directed by Peterson prior to commencing any mining operations on the Property. Lafarge shall conduct its mining operations in the Oil and Gas Operations Areas as quickly as reasonably practicable. Lafarge shall conduct it mining within the Oil and Gas Operations Area by excavating pie shaped wedges of gravel and aggregate and thereafter backfilling and compacting the area with overburden or other suitable material prior to excavating the next pie shaped area; provided, however, that in no event shall Lafarge mine within 90 feet of any Existing Well or Production Facilities(defined below) and provided further that in no event shall more than one quarter circle segment of the pie shape be excavated at any one time. Excavation in the Oil and Gas Operations Areas will be coordinated with Peterson in a mutually acceptable manner so as to avoid conflict with Peterson's oil and gas operations and to ensure there is an appropriate safety plan and interim emergency procedures. Lafarge will bear all costs associated with the mining operation, including permanent or temporary rerouting and replacement of access roads, and flowlines and utility lines in order to prevent unnecessary interruption of production from any affected Well. In addition,Lafarge and its successor and assigns shall indemnify and hold the Peterson harmless from any and all damage, loss and liability, including attorney's fees, incurred by Peterson as a result of Lafarge operations in an Oil and Gas Operations Area. Lafarge will not locate any lot line, building, or structure within any Oil and Gas Operations Area. Lafarge understands and acknowledges that the COGCC has rules and regulations that apply to the distance between a wellhead and public roads, Production Facilities, building units and surface property lines, among other things. In order to give full effect to the purposes of this Agreement, Lafarge hereby waives its right to object to the location of any of Peterson's facilities on the basis of setback requirements in the rules and regulations of the COGCC, as they may be amended from time to time. Lafarge further and similarly waives its right to object to any other state or local setback requirements or other requirements or regulations that are or become inconsistent with this Agreement or that would prohibit or interfere with the rights of Peterson, its successors and assigns,to explore for and produce the oil and gas in accordance with this Agreement. Peterson or its successors and assigns may cite the waiver in this paragraph in order to obtain a location exception or variance under COGCC rules or from any other state 101523411 or local governmental body having jurisdiction; provided that Lafarge shall not be required to alter the agreed boundary of the Oil and Gas Operations Area to accommodate the location exception or variance. Lafarge agrees not to object to the use of the surface in the Oil and Gas Operations Areas so long as such use is consistent with this Agreement and Lafarge will reasonably cooperate at no material cost to Lafarge in any efforts of Peterson or its successors and assigns to obtain permits from the COGCC or any local jurisdiction. 3. GATHERING LINES AND FLOWLINES. Subject to the limitations hereinafter described, Peterson has a continuing right and entitlement to own,'operate, maintain, repair and replace all existing and future flowlines, gathering lines and other pipelines that may be necessary or convenient to its operations on the Property ("Pipelines"). The construction and burying of additional Pipelines shall be at the sole cost and expense of Peterson or its gas purchaser. Although this Agreement is intended to confine the placement of the Pipelines to certain specified locations within the Property, nothing herein shall be construed as a limitation on Peterson's ultimate right to make all necessary well connections to any Existing or Future Well. Specific locations have been designated on Exhibit B for the location of the Pipelines ("Petroleum Pipeline Easements"). Each Petroleum Pipeline Easement shall be fifty feet (50') in width during construction, installation or relocation operations and otherwise reduced to thirty feet(30') in width for post-construction usage. Lafarge's operating plans anticipate that roadways may cross over Existing and Future Pipelines. "Existing Pipelines" shall mean any Pipeline now existing or hereafter constructed within a Petroleum Pipeline Easement prior to Lafarge's construction of a road for its operations or Lafarge's extraction of sand and gravel and backfilling of the Petroleum Pipeline Ea cement. In connection with Lafarge's construction of roads for its operations or Lafarge's extraction of sand and gravel and backfilling within any Petroleum Pipeline Easement, Lafarge agrees to abide by the General Guidelines for Design and Construction Activities On or Near Kerr- McGee Gathering LLC and Kerr - McGee Rocky Mountain Corporation Pipelines and Related Facilities revised 3-2004. In particular, when crossing Peterson's Existing Pipelines with heavy equipment, like earth moving equipment, Lafarge will maintain a minimum of four feet and a maximum of six feet of dirt coverage in addition to the existing cover over the Pipeline. When crossing Peterson's Existing Pipelines with trucks and lighter equipment, Lafarge will maintain a minimum of two feet and a maximum of six feet of dirt coverage in addition to the existing cover over the Pipeline. Peterson may install and maintain markers on its Petroleum Pipeline Easement. Peterson shall mark its flowlines at all locations reasonably requested by Lafarge. Lafarge will not allow any extraction to occur, commencing at the surface of the original ground, closer than 25 feet from any Existing Pipeline of Peterson as shown on Exhibit B unless a soils stability report prepared by an engineer licensed in the state of Colorado indicates that a lesser set back will be adequate for preservation of the integrity of said pipeline and provided that upon completion of such extraction Lafarge shall back fill and level the area within 25 feet from any Existing Pipeline or within any Petroleum Pipeline Easement designated on Exhibit B. Notwithstanding anything herein to the contrary, in no event shall Lafarge allow any extraction to occur, commencing at the surface of the original ground,closer than 15 feet from any Existing Pipeline without Peterson's prior written approval. Lafarge shall not allow any stockpile of soil to be placed over any Existing Pipeline or in any Petroleum Pipeline Easement as shown on Exhibit B. 101523411 The depth of cover over the Existing Pipelines shall not be reduced or drainage over the Existing Pipelines altered without Peterson's written approval. Any utility crossing must be a minimum of 18" inches vertical separation from any Existing Pipelines. Parallel utilities must maintain a minimum of ten-foot separation from Existing Pipelines, unless Peterson grants a lesser distance of separation which grant shall not be unreasonably withheld. It would not be unreasonable to withhold such consent due to reasonable safety or operational concerns. Lafarge will request that all utility companies contact Peterson prior to laying lines parallel to any Existing Pipelines or within Petroleum Pipeline Easements designated in Exhibit B hereto. Construction of any permanent structure within a Petroleum Pipeline Easement is not permitted. Planting of trees and shrubs is not permitted on any Petroleum Pipeline F.Aement. 4. ACCESS. Lafarge shall provide Peterson with continuous access to all of the Oil and Gas Operations Areas and the Petroleum Pipeline Easement. The access roads to be used by Peterson will either be those roads that currently are in place or those that are anticipated to be constructed by Lafarge at its sole cost and expense as part of Lafarge's operations on the Property. Peterson agrees to access the Property according to the mutes depicted and described on the attached Exhibit B. Access to the Oil and Gas Operations Areas may be changed by mutual agreement of Lafarge and Peterson. Lafarge shall maintain and keep any access jointly used by Lafarge and Peterson in a condition and state of repair that serves the needs of Lafarge. In the event such joint access roads needs to be improved in order to serve the needs of Peterson, the parties agree to coordinate any such improvements as may be required by Peterson in order to conduct its operations, provided that any such improvements shall be at Peterson's sole cost and expense. Neither Peterson, nor Lafarge shall unreasonably interfere with the use by the other party of access roads. Lafarge agrees that it will not mine or extract any portion of the access roads set forth on Exhibit B or other access roads as mutually agreed to by the Parties without the written consent of Peterson. 5. BATTERIES AND EQUIPMENT. PETERSON shall have the right to locate, build, repair and maintain tanks, separators, dehydrators, compressors and other equipment ("Production Facilities") reasonably appropriate for the operation and production of the Existing Wells or the Future Wells at the locations depicted on Exhibit B. With respect to Production Facilities other than flowlines or pipelines: A. Peterson shall install and maintain, at its sole cost and expense, all fences around the Existing Well and any Future Wells and any other Production Facilities in compliance with the Rules and Regulations of the COGCC; B. Peterson shall install and maintain, at its sole cost and expense, all gates and locks reasonably necessary for the security of any Wells or Production Facilities in the Oil and Gas Operations Areas. Such gates and locks shall be the standard gates and locks used by Peterson; C. Peterson shall paint any Production Facilities for any Wells, including wellhead guards, with r•., paint that is approved by the COGCC; and 101523411 D. Lafarge shall not inhibit Peterson's access to the Oil and Gas Operations Areas or inhibit Peterson's operations within the Oil and Gas Operations Areas or in the vicinity of the Production Facilities by landscaping or other improvements, unless otherwise agreed upon between Lafarge and Peterson. Lafarge shall place temporary concrete barriers around all Production Facilities as directed by Peterson before any mining operations commence within an Oil and Gas Operations Area for the Production Facilities. In no event shall Lafarge mine within 90 feet of any Production Facilities or stockpile mined materials within a radius of 50 feet of any Production Facilities. 6. NOTICE OF FUTURE OPERATIONS. Peterson shall provide at least seven(7) days prior written notice to Lafarge of any operations in connection with the reworking, fracturing, deepening or recompletion operation on an Existing Well or Future Well;provided,however,that Peterson shall provide at least thirty(30)days prior written notice to Lafarge of the initial drilling of any Future Wells. Regardless of the foregoing notice requirements, Peterson shall have immediate access to any of its facilities in the event of an emergency. After receipt of the above notice, but not less than five (5) working days prior to Peterson's mobilization on the applicable Oil and Gas Operations Areas, either Peterson or Lafarge may request an on-site meeting. The purpose of the meeting shall be to inform Lafarge of the expected activity and to coordinate site access,hazards, barricades, restoration or any other issues that affect the use and safety of Lafarge operations. 7. COMPLIANCE WITH SAFETY REGULATIONS. Peterson understands that Lafarge surface mining operations on the Property are subject to certain OSHA regulations. Peterson agrees that while conducting operations on Property, it will comply with such OSHA requirements which Lafarge notifies Peterson are applicable to Peterson's operations on the Property. Peterson also agrees to inform its contractors and subcontractors about such requirement. 8. DRILLING AND COMPLETION OPERATIONS. Peterson shall endeavor to diligently pursue any drilling operations to minimize the total time period and to avoid rig relocations or startup during the course of drilling. Lafarge waives any objections to continuous(i.e.,24-hour)drilling operations. 9. SHUT-IN OF WELLS. In the event Lafarge materially interferes with Peterson's operations on the Property which result in Peterson shutting-in or prevents Peterson from repairing or returning to production one or more of the Wells, then Lafarge shall be liable for direct damages or losses incurred by Peterson as a result of such interference. 10. GOVERNMENTAL PROCEEDINGS. Lafarge shall not oppose Peterson in any agency or governmental proceedings, including but not limited to the COGCC, Weld County, or other governing body proceedings, related to Peterson's operations on the Property, including but not limited to drilling, workovers, well deepenings and recompletions, provided that Peterson's position in such proceedings is consistent with this Agreement and provided further the proposed operations are in accordance with applicable laws, COGCC regulations and lawful local ordinances,resolutions or permit conditions. 101523411 11. MINING PLAN. Lafarge has provided herewith copies to Peterson of its Mining Permit, and the engineering structural report prepared in connection with the Mining Permit (the "Plans"). Peterson acknowledges receipt of said Plans and has no objections to said Plans as approved by the DMG. This acceptance by Peterson in no way waives Peterson's rights in this Agreement or obligations of Lafarge under the terms of this Agreement. Lafarge acknowledges that Peterson may conduct oil and gas activities within the applicable Oil and Gas Operations Areas as provided herein and shall not oppose Peterson before any agency or governmental proceeding if such oil and gas activities are proposed and carried out in accordance with the terms of this Agreement and applicable laws, COGCC regulations and lawful local ordinances,resolutions or permit conditions. 12. LIMITATION OF LIABILITY,RELEASE AND INDEMNITY. A. No party shall be liable for,or be required to pay for, special,punitive, exemplary,incidental, consequential or indirect damages to any other party for activities undertaken within the scope of this agreement. B. Except as to claims arising out of pollution or environmental damage (which claims are governed by Section 13 below) or out of other provisions of this Agreement (which claims shall be governed by the terms of this Agreement), each party shall be and remain responsible for its own liability for all losses, claims, damages, demands, suits, causes of action, fines, penalties, expenses and liabilities, including without limitation attorneys' fees and other costs associated therewith (all of the aforesaid herein referred to collectively as "Claims"), arising out of or connected with each such party's ownership or operations on the Property, no matter when asserted, subject to applicable statutes of limitations. Each such party shall release, defend, indemnify and hold the other parties, their officers, directors, employees, successors and assigns, harmless against all such Claims. This provision does not, and shall not be construed to, create any rights in persons or entities not a party to this Agreement, nor does it create any separate rights in parties to this Agreement other than the right to be indemnified for Claims as provided herein; C. Upon the assignment or conveyance of a party's entire interest in the Property,that party shall be released from its indemnification in Sectionl2.b. above, for all actions or occurrences happening after such assignment or conveyance. 13. ENVIRONMENTAL INDEMNITY. The provisions of Section 12 above, except for Section 12.A. shall not apply to any environmental matters,which shall be governed exclusively by the following, subject to the limitations of Section 12.A.above: A. "Environmental Claims"shall mean all Claims asserted by governmental bodies or other third parties for pollution or environmental damage of any kind, arising from operations on or ownership of the Property or ownership of the oil and gas leasehold interest, whichever is applicable, and all cleanup and remediation costs, fines and penalties associated therewith, including but not limited to any Claims arising from Environmental Laws or relating to asbestos or to naturally occurring radioactive material. Environmental Claims shall not include the costs of any remediation undertaken voluntarily by any party, unless such remediation is performed under the imminent threat of a Claim by a governmental body or other third party; 101523411 B. "Environmental Laws" shall mean any laws, regulations, rules, ordinances, or order of any governmental authority(ies), which relate to or otherwise impose liability, obligation, or standards with respect to pollution or the protection of the environment, including but not limited to,the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. § 9601 et seq.),the Resource Conservation and Recovery Act of 1976 (42 U.S.C. §§ 6901 et seq.), the Clean Water Act (33 U.S.C. §§ 466 et seq.), the Safe Drinking Water Act (14 U.S.C. §§ 1401-1450), the Hazardous Material Transportation Act (49 U.S.C. §§ 1801 et seq.), the Clean Air Act, and the Toxic Substances Control Act(15 U.S.C. §§ 2601-2629); and C. Environmental Indemnification. Peterson shall protect, indemnify, and hold harmless Lafarge, its successors and assigns, from any Environmental Claims relating to the Property or oil and gas leasehold thereunder that arise out of Peterson's ownership and'operation of the Oil and Gas Operations Areas and it's ownership and operation of its Petroleum Pipeline Easements or rights-of-way on the Property. Lafarge shall fully protect, defend, indemnify and hold harmless Peterson from any and all Environmental Claims against Peterson, its successors and assigns, relating to the Property that arise out of Lafarge's operations on the Property. 14. EXCLUSION FROM INDEMNITIES. The indemnities of the parties herein shall not cover or include any amounts which the indemnified party is actually reimbursed by any third party. The indemnities in this Agreement shall not relieve any party from any obligations to third parties. 15. NOTICE OF CLAIM FOR INDEMNIFICATION. If a Claim is asserted against a party for which the other party would be liable under the provisions of Section 12 or 13 above, it is a condition precedent to the indemnifying party's obligations hereunder that the indemnified party give the indemnifying party written notice of such Claim setting forth all particulars of the Claim, as known by the indemnified party, including a copy of the Claim(if it is a written Claim). The indemnified party shall make a good faith effort to notify the indemnifying party within five days of receipt of a Claim and shall affect such notice in all events within such time as will allow the indemnifying party to defend against such Claim. An indemnifying party shall not be obligated to reimburse an indemnified party for amounts paid in settlement of an indemnified claim unless the indemnifying party has agreed to the settlement, which agreement shall not be unreasonably withheld or delayed. 16. REPRESENTATIONS. Each party represents that it has the full right and authority to enter into this Agreement. Peterson does not represent that it has rights to settle matters for all of the mineral owners or any other lessees in the Property and this Agreement shall only apply to and bind the Peterson leasehold interest in the property. 17. SUCCESSORS. The terms, covenants, and conditions hereof shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns; provided, as to Peterson, successors and assigns shall be deemed to be limited to lessees under the oil and gas leases which Peterson owns. 101523411 18. TERM. This Agreement shall become effective when it is fully executed and shall remain in full force and effect until the earlier to occur of the following: (a) Peterson's leasehold estate expires or is terminated, and Peterson has plugged and abandoned all wells and complied with the requirements of all applicable oil and gas leases pertaining to removal of equipment, reclamation, cleanup and all other applicable provisions of the leases and existing laws and regulations or (b) as to any portion of the Property leased by Lafarge, the expiration or termination of Lafarge's sand, gravel and aggregate mining lease and Lafarge has complied with the requirements of it mining lease and Mining Permit pertaining to removal of equipment, reclamation, cleanup and all other applicable provisions of the lease, Mining Permit and existing laws and regulations. When this Agreement ceases to be in full force and effect, the Parties shall execute any and all releases necessary to evidence the fact that this Agreement shall no longer apply to the Property, except as to any indemnities set forth herein,which indemnities shall survive termination. 19. NOTICES. Any notice or other communication required or permitted under this Agreement shall be sufficient if deposited in U.S.Mail,postage prepaid,addressed to each of the following: Peterson Energy Operating,Inc. Lafarge West,Inc. 1805 Mooring Drive 10170 Church Ranch Way,#200 Loveland,CO 80538 Westminster,Colorado 80021 Attention: Andrew S.Peterson Any party may, by written notice so delivered to the other parties, change the address or individual to which delivery shall thereafter be made. 20. RECORDING. This Agreement, any amendment hereto shall be recorded by either party, which shall provide the other party with a copy showing the recording information as soon as practicable thereafter. 21. SURFACE DAMAGES. Lafarge hereby waives all surface damage payments pursuant to any COGCC or local regulation, state statute, common law or prior agreement, for each and every well that is drilled within the Oil and Gas Operations Areas and for any access road, flowline, or pipelines constructed on the Property. Peterson may provide a copy of this Agreement to the COGCC as evidence of this waiver. 22. APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado,without reference to its conflict of laws provisions. 23. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding among the parties hereto regarding the matters addressed herein, and supersedes any previous communications, representations or agreement, whether oral or written. This Agreement shall not be amended, except by written document signed by all parties. 101523411 EXECUTION AND BINDING EFFECT. This Agreement may be executed in any number of counterparts each of which shall be deemed an original instrument but all of which together shall constitute one and the same instrument, and shall be binding upon and inure to the benefit of the parties, and each of their respective successors and assigns and is executed by the parties as of the Effective Date set forth above. The parties have executed this Agreement on the day and year first above written. LAFARGE WEST,INC. PETERSON ENERGY OPERATING,INC. BY: BY: j h40t " ✓ ITS: Ibis /net ere/ Nrt(vr, 4 ITS: P/LEstDC'N f �� YA9e t, . . 9 ACKNOWLEDGMENTS =c` �►OTAR/• OQ re a. «" S. STATE OF COLORADO ) NA mu O Q 1/4 COUNTY OF DENVER ) tZI O/tFuco\- $$$- / The foregoing inshumait was acknowledged before me this in day of In '2W6;w' e e /a26e4 as �O1/}!2!/ ,PtrutivMadoecemise _ ,Eva for J afarge West,Inc.,on behalf of such company. Witness my hand and official seal. // My Commission Expires:De /2g//)9 Address: p 00 A�. / (/? VOA/ GO&vo CO St STATE OF COLORADO ) COUNTY OF Wti 4 ) / ., ice, X.+OThe foregoing instrument of writing was aclavOnlg$,yfore me on this I I"day of Cbc r ,2006 by And rrus. eta6o fl as P(eckiefl t .,• NY ic4dPeterson Energy Operating,Inc.,a Colorado corporation, for the uses and purposes stated herein. g&� b/ •.;F,i .r Witness my hand and seal: _� 1 NOTiq,9`1 9 nt 1dh) ''ea. °tett Public 9 LiG rm tame: Jen') Keller My Commission Expires: / �� _�.j»B. P a: yvv GYand au(. '/r//tt t IOI``�� pl a,-New lie C ) good 101523411 EXHIBIT A PHASE 1 -RITTENHOUSE LEASED THAT PART OF THE NW 1/4 OF THE SE 1/4 OF SECTION 19,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH PRINCIPAL MERIDIAN,DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF THE SE 1/4 OF SAID SECTION 19;THENCE SOUTH ALONG THE WEST LINE OF SAID QUARTER SECTION A DISTANCE OF 853 FEET TO THE NORTH LINE OF THE DAMIANA PROPERTY DESCRIBED IN DEED RECORDED IN BOOK 529, PAGE 433; THENCE EAST ALONG THE NORTH LINE OF SAID DAMIANA PROPERTY 264 FEET;THENCE NORTH AND PARALLEL TO THE WEST LINE OF SAID QUARTER SECTION A DISTANCE OF 853 FEET,MORE OR LESS,TO THE NORTH LINE OF THE SE 1/4 OF SAID SECTION 19;THENCE WEST A DISTANCE OF 264 FEET ALONG THE NORTH LINE OF SAID QUARTER SECTION TO THE POINT OF BEGINNING; EXCEPT THAT PORTION THEREOF CONVEYED TO THE STATE HIGHWAY COMMISSION OF COLORADO FOR HIGHWAY PURPOSES IN SPECIAL WARRANTY DEED RECORDED IN BOOK 1401, PAGE 313,DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE SOUTH PROPERTY LINE FROM WHICH THE SOUTHEAST CORNER OF SAID SECTION 19 BEARS SOUTH 54°04'EAST A DISTANCE OF 3011.2 FEET;THENCE ALONG THE SOUTH PROPERTY LINE SOUTH 88°39' EAST A DISTANCE OF 68.9 FEET TO THE SOUTHEAST CORNER OF THE PROPERTY; THENCE ALONG THE EAST PROPERTY LINE NORTH 0°25'30" WEST A DISTANCE OF 856.8 FEET TO THE EAST-WEST QUARTER LINE OF SECTION 19;THENCE ALONG THE EAST-WEST QUARTER LINE OF SECTION 19 SOUTH 89°39' WEST A DISTANCE OF 159.3 FEET; THENCE SOUTH 4°48'EAST A DISTANCE OF 535.9 FEET;THENCE SOUTH 18°50'EAST A DISTANCE OF 103.1 FEET; THENCE SOUTH 4°48'EAST A DISTANCE OF 223.4 FEET,MORE OR LESS TO THE POINT OF BEGINNING. AND THAT PART OF THE W 1/2 OF THE SE 1/4 OF SECTION 19, TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH P.M.,DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE WEST LINE OF THE SE 1/4 OF SAID SECTION 19 WHICH IS 1310 FEET NORTH OF THE SOUTHWEST CORNER OF SAID SE 1/4 OF SAID SECTION 19; THENCE NORTH 504 FEET; THENCE EAST 272 FEET; THENCE SOUTH 504 FEET; THENCE WEST 272 FEET TO THE PLACE OF BEGINNING; EXCEPT THAT PORTION THEREOF INCLUDED WITHIN A PARCEL OF LAND CONVEYED TO JOHN SCHELL AND CONSTANTINE SHELL IN QUIT CLAIM DEED RECORDED IN BOOK 1007,PAGE 39,DESCRIBED AS FOLLOWS: BEGINNING AT A POINT 247 FEET EAST OF THE SOUTHWEST CORNER OF THE SW 1/4 OF THE SE 1/4 OF SAID SECTION 19; THENCE NORTH TO A POINT ON THE NORTH LINE OF SAID SW 1/4 SE 1/4 ; THENCE EAST 25 FEET TO A POINT;THENCE SOUTH TO A POINT ON THE SOUTH LINE OF SAID SW 1/4 SE 1/4; THENCE WEST 25 FEET TO THE PLACE OF BEGINNING; AND EXCEPT THAT PORTION THEREOF LYING WITHIN THE NORTH 10 FEET OF THE S 1/2 OF THE SE 1/4 AND THE SOUTH 20 FEET OF THE N 1/2 OF THE SE 1/4 OF SAID SECTION 19 AS CONVEYED TO THE BOARD OF COUNTY COMMISSIONERS OF WELD COUNTY AND TO WELD COUNTY TO BE USED AND MAINTAINED AS A PUBLIC ROAD IN WARRANTY DEED RECORDED IN BOOK 1229, PAGE 556; AND EXCEPT THAT PORTION THEREOF CONVEYED TO THE STATE HIGHWAY COMMISSION OF COLORADO FOR HIGHWAY PURPOSES IN SPECIAL WARRANTY DEED RECORDED IN BOOK 1401, PAGE 313, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTH PROPERTY LINE FROM WHICH THE SOUTHEAST CORNER OF SAID SECTION 19 BEARS SOUTH 54°04'EAST A DISTANCE OF 3011.2 FEET;THENCE SOUTH 4°48' 1 EAST A DISTANCE OF 247.6 FEET;THENCE ALONG THE ARC OF A CURVE TO THE LEFT A DISTANCE OF 186.3 FEET,THE RADIUS OF WHICH ARC HAS A LENGTH OF 5805 FEET,AND THE CHORD OF WHICH ARC BEARS SOUTH 5°43'EAST A DISTANCE OF 186.2 FEET,TO THE SOUTH PROPERTY LINE; THENCE ALONG THE SOUTH PROPERTY LINE NORTH 89°50'EAST A DISTANCE OF 32.8 FEET TO THE EAST PROPERTY LINE;THENCE ALONG THE EAST PROPERTY LINE NORTH 0°25'30"WEST,A DISTANCE OF 430.3 FEET TO THE NORTH PROPERTY LINE;THENCE ALONG THE NORTH PROPERTY LINE NORTH 88°39'WEST A DISTANCE OF 68.9 FEET,MORE OR LESS,TO THE POINT OF BEGINNING. AND LOTS 1 AND 2 IN THE SW 1/4 OF SAID SECTION 19,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH P.M.ALL IN WELD COUNTY,COLORADO. PHASE 2-NORDEN TRUST LAFARGE OWNERSHIP THE N 1/2 OF THE NE 1/4 OF SECTION 24, TOWNSHIP 1 NORTH, RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN,COUNTY OF WELD,STATE OF COLORADO,DESCRIBED AS FOLLOWS: BEGINNING AT THE NE CORNER OF SAID SECTION 24; THENCE S 00°25'10" W, ALONG THE EAST LINE OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24, 1310.16 FEET TO THE SE CORNER OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24; THENCE S 89°45'34" W, ALONG THE SOUTH LINE OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24,2637.68 ItEi TO THE SW CORNER OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24;THENCE N 00°12'27"E,ALONG THE WEST LINE OF THEN 1/2 OF THE NE 1/4 OF SAID SECTION 24, 1309.10 FEET TO THE NW CORNER OF THEN 1/2 OF THE NE 1/4 OF SAID SECTION 24;THENCE N 89°44'15"E,ALONG THE NORTH LINE OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24,2642.54 FEET TO THE POINT OF BEGINNING. PHASE 3-ANDERSON LAFARGE OWNERSHIP THE WEST 1/2 OF THE SOUTHWEST 1/4 OF SECTION 18,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH P.M.,COUNTY OF WELD,STATE OF COLORADO. PHASE 4-MCWILLIAMS LEASED ALL THAT PART OF THE NW 1/4 OF SECTION 19,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH P.M. WHICH LIPS WEST OF THE CENTER LINE OF THE SOUTH PLATTE RIVER, WELD COUNTY, COLORADO, EXCEPT: A PARCEL OF LAND LOCATED IN THE NW 1/4 OF SECTION 19,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH PRINCIPAL MERIDIAN, WELD COUNTY, COLORADO, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 19,THENCE S 00°11'42" W,ALONG THE WEST LINE OF SAID NW 1/4,A DISTANCE OF 30.00 FEET;THENCE NORTH 90°00'00"EAST 747.67 FEET TO THE POINT OF BEGINNING OF SAID EXCEPTED PARCEL; 1)THENCE CONTINUING ALONG SAID PARALLEL LINE,N 90°00'00"E,A DISTANCE OF 882.35 FEET TO THE CENTERLINE OF THE MAIN CHANNEL OF THE SOUTH PLATTE RIVER (1997) AND CONTINUING ALONG SAID CENTERLINE THE FOLLOWING 5(FIVE)COURSES; 2)THENCE S 22°2123"W,A DISTANCE OF 119.58 FEET; 3)THENCE S 33°1922"W,A DISTANCE OF 67.31 FEET; 4)THENCE S 43°51'39"W,A DISTANCE OF 182.10 FEET; • 5)THENCE S 46°41'03"W,A DISTANCE OF 182.88 FEET; 6)THENCE S 35°51'46"W,A DISTANCE OF 4.35 FEET; 7)THENCE DEPARTING SAID CENTERLINE,N 90°00'00"W,A DISTANCE OF 542.31 FEET; 8) THENCE N 00°33'48" E, A DISTANCE OF 427.13 FEET TO THE POINT OF BEGINNING OF SAID EXCEPTED PARCEL,CONTAINING 7.273 ACRES,MORE OR LESS. PHASE 5-CHIKUMA LEASED THE N 1/2 OF SECTION 13,TOWNSHIP 1 NORTH,RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN AND THE W 1/2 OF THE NW 1/4 OF SECTION 18,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH PRINCIPAL MERIDIAN,WELD COUNTY,COLORADO. LESS THAT PORTION IN THAT WARRANTY DEED RECORDED OCTOBER 23, 1908 IN BOOK 287,PAGE 208 OF THE WELD COUNTY RECORDS. PHASE 6-CITY OF THORNTON/D&S MINING LEASED THE W 1/2 OF THE SW 1/4 OF SECTION 7,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH PRINCIPAL MERIDIAN(CONTAINS 80 ACRES MORE OR LESS),TOGETHER WITH THEE 1/2 OF THE SE 1/4 OF SECTION 12,TOWNSHIP 1 NORTH,RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN (CONTAINS 80 ACRES MORE OR LESS),ALL IN WELD COUNTY,COLORADO. PHASE 7(SOUTHERN PORTION)-MYRNA LAFARGE OWNERSHIP THE S 1/2 OF THE EAST 60 ACRES OF THE SW 1/4 OF SECTION 12, TOWNSHIP 1 NORTH,RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN. THE W 1/4 OF THE SW 1/4 OF THE SE 1/4 OF SECTION 12, TOWNSHIP 1 NORTH, RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN.THE EAST 30 ACRES OF THE SW 1/4 OF THE SE 1/4 OF SECTION 12, TOWNSHIP 1 NORTH, RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN. ALL IN WELD COUNTY,CO. PHASE 7(NORTHERN PORTION)AND 8-MFM FARMS LAFARGE OWNERSHIP THE SE 1/4 OF THE NW 1/4 OF SECTION 12,TOWNSHIP 1 NORTH,RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN AND THE NW 1/4 OF THE SE 1/4 AND THE EAST 30 ACRES OF THE NE 1/4 OF THE SW 1/4 OF SECTION 12,TOWNSHIP I NORTH,RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN,ALL IN WELD COUNTY,COLORADO. 11M137_012 011011 and Gas cxhibitA 100606.doc ROW 1 _ rt66W I A I L INC. I \ � 0 PRO• t I • SEC. 12 P SET. 7 LAFARGE ITYEOF ® WEST, INC. I 'r: ,.• T.:"' ; PROPERTY i+ P•0', I ilk . . ��wy � d .,� .q§ T1N EC. Jfi'=�/ -- W SE c7 1 . �'� 0, s 0 l Q �, 0.-1— 3 — _` I r,.' ,GE ? 'S 1% G i ,I . Tri it ) 0 R'; I 0SEG. 24 n'`-' ' SEA 19 RIVERBEND BOUNDARY s ►.''' ' ' ':• ► S %___ •t Ex WCR 6 � � .._... 1 I PETERSON ENERGY OPERATING INC. g Nom' EXHIBIT "B" MFM FARMS WELL g PARCEL 12,TIN,R67W, 6T P.M.,WELDNW 1/4, OCNOUNTYCOLOADO 2 ' 0 ID1t 2oar 1900 S SUNSET ST., SUITE 1-F, LONGMONT, CO 80501 MAP TEL 303.772.5282 METRO 303.665.6283 FM 301665.6959 - MIMnRIVERBEND OIL AND GAS FACILITIES SCA E OF: P=2000' 80-4137.012.00 r s ROW • '66W i { _- \, I .> SEC. 12 SE9.1 7 ® ' `3 TIN 4 ,; 1E EC. SE 1.... ......—... ..... ... : ...—... ..........r i s' co CO cr ; 1 w 1 J °0SEQ. 24 t SEA 19 RIVERBEND s BOUNDARY • ►� k i 0 N.... WCR 6 I `� r►�'V� r; ' F X w 5-1 "PETERSON ENERGY OPERATING INC. North MFM FARMS WELL ,- Ng cc KEY MAP 6TH ..M., WELD OCOUNTY CAL DO y TETRA TECH RMC I- 0 1000' 2000' Mb 1900 5. SUNSET ST.. SUITE 1-F, LONGMONT, CO 50501 TEL 303.772.5282 METRO 303.665.6283 FM 303.665.6959 o SCALE: f '=2 80-4137.012.00 RBEND ND GAS FACILITIES A OF A c, G r 'f 5 i _ -, �... T "'-�"-� �� -� ' ri I II V 13j3IMIN. P I vN K) I 132' P / . CM ..a �fcYr: .ai. -..�. +d — '� - - / — � P 132 - + • KERR McGEE F i\ \25' W :, JafjL2lfl A N I� .♦ • `/ .. •gy (STING ` ON +1 `\ FOISTING 3••,..,--<-OAS WTERELL r .0 PETERS° I TANK'S \ r1 i1 CILITr- \ II 1 III_ N `N N I I I- N ~ N d I �i N. N N it I— 01 \ \ ,I y II _ 1 \ N \ \ J 4 \ \ \ \ 3 s - - - y � . -- =� - = _ LE EN _ 0.1.=41-41}-G-11L-0-- _- _• . - KERR-McGEE FUTURE GAS WELL m_ x 2 E?ZQ 2 EXISTING PETROLEUM PIPELINE EASEMENT& m ACCESS ROAD TO BE ABANDONED w North so REFERENCES TO NOTES ON PAGE4OF4 PETERSON ENERGY OPERATING INC. z wifgkij5 ACCESS ROAD SURFACE&WE.LAREA- MFM FARMS WELL s SEE NOTES 3&4 ONPAGE4CF4 E lai -7 Ely-PETERSON EXISTINGTANK/GAS WELL NW 1/4, SECTION 12,T1 N,R67W, 6TH P.M., WELD COUNTY COLOADO 9 ,�, �-c 7 GEXISTINGPETROLEUMPIPEJN TETRA TECH RMC m -.1- PETROLEUM PIPELINE ...t EASEMENT AND ACCESS ROAD 1900 S. SUNSET ST., SUITE I—F, IDNGMONT, CO 80501 /11.x\ OIL AND GAS OPERATIONS TEL 303.7725282 METRO 303.665.6283 FAX 303.665.6959 • ' SCALE:1''� . ' AREA RIVERBEND OIL AND GAS FACILITIES 5 - - -non i Innunntsin 80-4137.012.00 3 OF 4 PETERSON ENERGY'S MFM FARMS WELL: 1.)THERE WILL BE A RADIUS OF 150' TO THE EDGE OF THE EXCAVATION,AND THIS RADIUS STARTS AT A POINT 25' SOUTHWEST OF THE CURRENT WELL THE ACCESS ROAD/FLOWLINE RIGHT-OF-WAY RUNNING NORTHEAST FROM THE WELL SITE SHALL BE 132'WIDE AS SPECIFIED ON SHEET#8 OF THE WELD COUNTY AMUSR-1259. 2.)ALL EXISTING DIRT PILES AND OTHER OBSTRUCTIONS WILL BE REMOVED FROM THE PROPOSED ACCESS ROAD/FLOWLINE RIGHT-OF-WAY BETWEEN THE WELL AND THE OFFSITE TANK BATTERY. 3.)THERE SHALL BE AN 18' BERM PUT IN PLACE AT THE EDGE OF THE EXCAVATION AROUND THE WELL SITE, REFERRED TO AS THE PETERSON OIL& GAS OPERATIONS AREA, AND ALONG THE ACCESS ROAD FOR SPILL CONTAINMENT AND A VEHICLE BARRIER. 4.)THE 30'ACCESS ROAD RUNNING SURFACE AND ENTIRE WELL SITE AREA WILL BE RESURFACED WITH 6'OF 1-INCH-MINUS COMPACTED ROADBASE. 5.) PRIOR TO ITS INSTALLATION, PETERSON ENERGY WILL APPROVE THE PLACEMENT OF THE MWA-2 MONITORING WELL AT THE TANK BATTERY SITE TO INSURE IT DOES NOT INTERFERE WITH PETERSON ENERGY'S OPERATIONS. 6.) LAFARGE WILL PAY ALL COSTS ASSOCIATED WITH ALL WORK,INCLUDING POTHOLING TO LOCATE THE EXISTING FLOWLINE PRIOR TO EXTRACTION. 7.)NO GRAVEL/TOPSOIL ETC.,WILL BE STOCKPILED ON THE PETERSON ENERGY WELL SITE OR ACCESS ROAD AT ANY TIME,AND PETERSON ENERGY WILL HAVE FULL ACCESS TO THE WELL SITE AND TANK BATTERY AT ALL TIMES. PETERSON ENERGY OPERATING INC. MFM FARMS WELL E NW 1/4, SECTION 12,T1N,R67W, 6TH P.M., WELD COUNTY COLOADO 3 © TETRA TECH RMC 1900 5. SUNSET ST., SUTTE 1-1, LONGMONT, CO 80501 TEL 303.772.5282 METRO 303.665.6283 FAX 303.665.6959 (41 RIVER80 1END OIL 37 O12 O0 AND GAS FACILITIES -41 4 OF 4 SURFACE USE AGREEMENT This Surface Use Agreement ("Agreement") is dated and made effective this if day of 20 and is between K.P. Kauffman Company, Inc. ("KPK") with an address of 1675 Broadway, 28th Floor, enver, CO 80202-4628, and Lafarge West, Inc. ("Lafarge") with an address of 10170 Church Ranch Way#200,Westminster,CO 80021. Whereas: A. Lafarge is the current landowner pr is the current lessee under one or more sand, gravel and aggregate mining leases covering certain tracts of land located in the Riverbend Project more particularly described on Exhibit "A" attached hereto, being a portion of Sections 12, 13 and 24, TIN, R67W, and Sections 7, 18 and 19, TIN, R66W, 6m P.M., Weld County, Colorado (hereinafter referred to as the"Property"); B Surface ownership of the Property is subject to the rights of the oil and gas mineral leasehold estate,a portion of which is now owned by KPK; C. Lafarge has received a mining permit from the State of Colorado Division of Reclamation, Mining and Safety, formerly known as the Division of Minerals & Geology ("DMG") for the purpose of open pit sand and gravel mining operations, known as Riverbend. Portions of the mined out Property are to be reclaimed for use as water storage reservoirs. D. KPK currently operates the George R. Norden Unit 1 and the Harry S. Chikuma#3 well on the Property, (the"Existing Wells") generally located in the Section 13 and 24, TIN, R67W, 6`" P.M., Weld County, Colorado described above, and has the right to develop its oil and gas leasehold estate by drilling additional wells generally located in Section 19, TIN, R66W, 6th P.M., Weld County, Colorado (the "Future Wells" and together with the Existing Wells, the "Wells")on the Property;and E. KPK shall continue to have the right to exercise its oil and gas leasehold rights to drill a second,twinned well on each Oil and Gas Operations Area(as hereinafter defined) in accordance with COGCC rules. F. This Agreement sets forth the parties' rights and obligations regarding the relationship between the operations and development of the Property by Lafarge and KPK's operation and development of its oil and gas leasehold estate underlying the Property, such rights and obligations to be binding upon the parties' successors and assigns. Now Therefore: In consideration of the mutual covenants contained herein,and other good and valuable consideration,the receipt and sufficiency of which is hereby acknowledged,the parties agree as follows: 1. AREAS RESERVED FOR THE EXISTING WELLS AND FUTURE WELLS; WELL LOCATIONS. Lafarge shall set aside and provide to KPK that portion of the Property hereinafter referred to as the, "Oil and Gas Operations Areas", such areas being depicted on Exhibit B attached hereto. The Oil and Gas Operations Areas are to be made available to KPK in their present condition for any operations ava.ti.. conducted by KPK in connection with any Well, including, but not limited to, drilling and production activities,workovers,well deepening, recompletion, fracturing and drilling replacement wells. All Wells will be limited to the Oil and Gas Operations Areas shown on Exhibit B, unless this Agreement is amended by consent of Lafarge and KPK. Except for the Oil and Gas Operations Areas, and the access roads and Petroleum Pipeline Easements(as defined below)as provided in this Agreement,KPK shall not occupy the surface of the Property except in the event of an emergency or for reasonable incidental, temporary and non-damaging activities, for which KPK shall be strictly and solely responsible for any damages that may occur to the Property. KPK shall have the right to drill Future Wells within the Oil and Gas Operations Areas, including horizontal and directional wells that produce from and drain the Property. As part of the consideration for this Agreement, Lafarge hereby waives its right to, and covenants that it shall not protest or object to any such exception location or application for same by KPK. KPK shall not otherwise have the right to drill new wells on the Property. The wellhead location for any Future Well drilled from the Oil and Gas Operations Area shall not be closer than 100' from the edge of the Oil and Gas Operations Area. In no event shall Lafarge stockpile mined materials within a radius of 150 feet of any Existing Wells. 2. EXTRACTION IN VICINITY OF OIL AND GAS OPERATIONS AREAS; SETBACK REQUIREMENTS. Lafarge reserves the right, at its option, to mine the gravel within each of the Oil and Gas Operations Areas in accordance with the terms of this Agreement. In the event that Lafarge elects to mine the gravel in an Oil and Gas Operations Area, Lafarge shall notify KPK in writing 60 days prior to commencing mining operations within the Oil and Gas Operations Areas and shall first place temporary concrete barriers around the Existing Wells as directed by KPK prior to commencing any mining operations on the Property. Lafarge shall conduct its mining operations in the Oil and Gas Operations Areas as quickly as reasonably practicable. Lafarge shall conduct it mining within the Oil and Gas Operations Area by excavating pie shaped wedges of gravel and aggregate and thereafter backfilling and compacting the area with overburden or other suitable material prior to excavating the next pie shaped area; provided, however, that in no event shall Lafarge mine within 90 feet of any Existing Well or Production Facilities (defined below) and provided further that in no event shall more than one quarter circle segment of the pie shape be excavated at any one time. Excavation in the Oil and Gas Operations Areas will be coordinated with KPK in a mutually acceptable manner so as to avoid conflict with KPK's oil and gas operations and to ensure there is an appropriate safety plan and interim emergency procedures. Lafarge will bear all costs associated with the mining operation, including permanent or temporary rerouting and replacement of access roads, and flowlines and utility lines in order to prevent unnecessary interruption of production from any affected Well. In addition, Lafarge and its successor and assigns shall indemnify and hold the KPK harmless from any and all damage, loss and liability, including attorney's fees,incurred by KPK as a result of Lafarge operations in an Oil and Gas Operations Area. Lafarge will not locate any lot line, building, or structure within any Oil and Gas Operations Area. Lafarge understands and acknowledges that the COGCC has rules and regulations that apply to the distance between a wellhead and public roads, Production Facilities, building units and surface property lines, among other things. In order to give full effect to the purposes of this Agreement, Lafarge hereby waives its right to object to the location of any of KPK's facilities on the basis of setback requirements in the rules and regulations of the COGCC,as they may be amended from time to time. Lafarge further and similarly waives its right to object to any other state or local setback requirements or other requirements or regulations that are or become inconsistent with this Agreement or that would prohibit or interfere with the rights of KPIC, its successors and assigns, to explore for and produce the oil and gas in accordance with this Agreement. KPK or its successors and assigns may cite the waiver in this paragraph in order to obtain a location exception or variance under COGCC rules or from any other state or local governmental -2 - body having jurisdiction; provided that Lafarge shall not be required to alter the agreed boundary of the Oil and Gas Operations Area to accommodate the location exception or variance. Lafarge agrees not to object to the use of the surface in the Oil and Gas Operations Areas so long as such use is consistent with this Agreement and Lafarge will reasonably cooperate at no material cost to Lafarge in any efforts of KPK or its successors and assigns to obtain permits from the COGCC or any local jurisdiction. 3. GATHERING LINES AND FLOWLINES. Subject to the limitations hereinafter described, KPK has a continuing right and entitlement to own, operate, maintain, repair and replace all existing and future flowlines, gathering lines and other pipelines that may be necessary or convenient to its operations on the Property ("Pipelines"). The construction and burying of additional Pipelines shall be at the sole cost and expense of KPK or its gas purchaser. Lafarge has no intention to move KPK's existing Pipelines, Flowlines, Consolidation Lines, Headers,Tanks,or any other oil and gas facilities. Although this Agreement is intended to confine the placement of the Pipelines to certain specified locations within the Property,nothing herein shall be construed as a limitation on KPK's ultimate right to make all necessary well connections to any Existing or Future Well. Specific locations have been designated on Exhibit B for the location of the Pipelines ("Petroleum Pipeline Easements"). Each Petroleum Pipeline Easement shall be fifty feet (50') in width during construction, installation or relocation operations and otherwise reduced to thirty feet(30')in width for post-construction usage. Each Petroleum Pipeline Easement may be expanded to accommodate new pipeline, but in no event will the Easement exceed sixty feet (60'), with ten feet (10') separating each pipeline. No Petroleum Pipeline Easement will be closer than one hundred feet(100')from the Platte River. Lafarge's operating plans anticipate that roadways may cross over Existing and Future Pipelines. "Existing Pipelines" shall mean any Pipeline now existing or hereafter constructed within a Petroleum Pipeline Easement prior to Lafarge's construction of a road for its operations or Lafarge's extraction of sand and gravel and backfdling of the Petroleum Pipeline Easement. In particular, when crossing KPK Existing Pipelines with heavy equipment, like earth moving equipment, Lafarge will maintain a minimum of four feet and a maximum of six feet of dirt coverage in addition to the existing cover over the Pipeline. When crossing KPK Existing Pipelines with trucks and lighter equipment, Lafarge will maintain a minimum of two feet and a maximum of six feet of dirt coverage in addition to the existing cover over the Pipeline. KPK may install and maintain markers on its Petroleum Pipeline Easement. KPK shall mark its flowlines at all locations reasonably requested by Lafarge. Lafarge will not allow any extraction to occur, commencing at the surface of the original ground, closer than 25 feet from any Existing Pipeline of KPK as shown on Exhibit 13 unless a soils stability report prepared by an engineer licensed in the state of Colorado indicates that a lesser set back will be adequate for preservation of the integrity of said pipeline and provided that upon completion of such extraction Lafarge shall back fill and level the area within 25 feet from any Existing Pipeline or within any Petroleum Pipeline Easement designated on Exhibit B. Notwithstanding anything herein to the contrary, in no event shall Lafarge allow any extraction to occur, commencing at the surface of the original ground,closer than 15 feet from any Existing Pipeline without KPK's prior written approval. Lafarge shall not allow any stockpile of soil to be placed over any Existing Pipeline of KPK or in any Petroleum Pipeline Easement as shown on Exhibit B. After written notice of at least fifteen(15)days,Lafarge,shall have the right to cross any Pipeline Easement with roadways and other utilities, provided such crossing of any utilities is made with its acute angle being not less than 60° with respect to KPK's Pipelines, but in no event shall such utility cross -3 - above or run parallel above KPK's Lines, except as noted. KPK requires all subsurface utilities be not less than 18 inches below KPK's Pipelines. The depth of cover over the KPK Existing Pipelines shall not be reduced or drainage over KPK's Pipelines altered without KPK's written approval. Parallel utilities must maintain a minimum of ten-foot separation from KPK Pipelines,unless KPK grants a lesser distance of separation which grant shall not be unreasonably withheld. It would not be unreasonable to withhold such consent due to reasonable safety or operational concerns. Lafarge will request that all utility companies contact KPK prior to laying lines parallel to KPK Existing Pipelines or within Petroleum Pipeline Easements designated in Exhibit B hereto. Construction of any permanent structure within KPK's Petroleum Pipeline Easement is not permitted. Planting of trees and shrubs is not permitted on KPK's Petroleum Pipeline Easement. 4. ACCESS. Lafarge shall provide KPK with continuous access to all of the Oil and Gas Operations Areas and the Petroleum Pipeline Easements. The access roads to be used by KPK will either be those roads that currently are in place or those that are anticipated to be constructed by Lafarge at its sole cost and expense as part of Lafarge's operations on the Property. KPK shall be responsible for construction of its own roads in the locations shown on Exhibit B to Oil and Gas Operations Areas for Future Wells where Lafarge is not constructing road for its own operations. If Lafarge relocates an existing road being used by KPK for access to any Oil and Gas Operations Area, such relocated road shall be built to at least the quality of the road it replaces. The easements for KPK's access roads for its Oil and Gas Operations Areas are shown on Exhibit B hereto and Lafarge hereby grants KPK the non-exclusive right to the use of such easements for so long as KPK or its successors or assigns has rights in and to the oil and gas estate in the Property. KPK agrees to access the Property according to the routes depicted and described on the attached Exhibit B. Access to the Oil and Gas Operations Areas may be changed by mutual agreement of Lafarge and KPK. Lafarge shall maintain and keep any access jointly used by Lafarge and KPK in a condition and state of repair that serves the needs of Lafarge or, in the case of relocated existing roads, to at least the standard such road was maintained prior to its relocation. In the event such joint access roads needs to be improved in order to serve the needs of KPIC, the parties agree to coordinate any such improvements as may be required by KPK in order to conduct its operations,provided that any such improvements shall be at KPK's sole cost and expense. Neither KPK, nor Lafarge shall unreasonably interfere with the use by the other party of access roads. Lafarge agrees that it will not mine or extract any portion of areas designated as access roads set forth on Exhibit B or as mutually agreed to by the Parties without the written consent of KPK. 5. BATTERIES AND EQUIPMENT. KPK shall have the right to locate, build, repair and maintain tanks, separators, dehydrators, compressors and other equipment("Production Facilities")reasonably appropriate for the operation and production of the Existing Wells or the Future Wells at the locations depicted on Exhibit B. With respect to KPK's Production Facilities other than flowlines or pipelines: A. KPK shall install and maintain, at its sole cost and expense, all fences around the Existing Wells and any Future Wells and any other Production Facilities in compliance with the Rules and Regulations of the COGCC; r -4- B. KPK shall install and maintain, at its sole cost and expense, all gates and locks reasonably necessary for the security of any Wells or Production Facilities in the Oil and Gas Operations Areas. Such gates and locks shall be the standard gates and locks used by KPK; C. At KPK's discretion, KPK shall paint any Production Facilities for any Wells, including wellhead guards,with paint that is approved by the COGCC;and D. Lafarge shall not inhibit KPK's access to the Oil and Gas Operations Areas or inhibit KPK's operations within the Oil and Gas Operations Areas or in the vicinity of the Production Facilities by landscaping or other improvements, unless otherwise agreed upon between Lafarge and KPK. Lafarge shall place temporary concrete barriers around all Production Facilities as directed by KPK before any mining operations commence within an Oil and Gas Operations Area for the Production Facilities. In no event shall Lafarge mine within 90 feet of any Production Facilities or stockpile mined materials within a radius of 50 feet of any Production Facilities. 6. NOTICE OF FUTURE OPERATIONS. KPK shall provide at least seven(7) days prior notice to Lafarge of any operations in connection with the reworking, fracturing, deepening or recompletion operation on an Existing Well or Future Well; provided, however, that KPK shall provide at least thirty (30) days prior written notice to Lafarge of the initial drilling of any Future Wells. Regardless of the foregoing notice requirements, KPK shall have immediate access to any of its facilities in the event of an emergency. After receipt of the above notice, but not less than five (5) working days prior to KPK's mobilization on the applicable Oil and Gas Operations Areas, either KPK or Lafarge may request an on- site meeting. The purpose of the meeting shall be to inform Lafarge of the expected activity and to coordinate site access, hazards, barricades, restoration or any other issues that affect the use and safety of Lafarge operations. 7. COMPLIANCE WITH SAFETY REGULATIONS. KPK understands that Lafarge surface mining operations on the Property are subject to certain OSHA regulations. KPK agrees that while conducting operations on Property, it will comply with such OSHA requirements which Lafarge notifies KPK are applicable to KPK's operations on the Property. KPK also agrees to inform its contractors and subcontractors about such requirement. 8. DRILLING AND COMPLETION OPERATIONS. KPK shall endeavor to diligently pursue any drilling operations to minimize the total time period and to avoid rig relocations or startup during the course of drilling. Lafarge waives any objections to continuous(i.e.,24-hour)drilling operations. 9. SHUT-IN OF WELLS. The parties recognize that the Pipelines now installed by KPK are made of fiberglass and/or metal and the running of Lafarge's earth moving equipment over said Pipelines tends to crack them, which can cause an oil and gas spill and environmental damage. KPK represents that in its opinion it is not safe to continue to use such Pipelines after heavy earth moving equipment is in use and there is no appropriate dirt coverage in place. If Lafarge begins to use heavy equipment on the property it shall maintain a minimum of four feet (4') and a maximum of six feet (6') of dirt coverage in addition to the existing cover over the Pipeline during Lafarge's operation of such equipment on the property. Lafarge shall -5 - remove the four foot (4') to six foot (6') overburden upon completion of its operations involving heavy earthmoving equipment on the property. KPK will, for safety purposes, shut in any well that has had heavy earth moving equipment run over its Pipeline(s) without appropriate dirt coverage in place. Lafarge shall have the right to request that KPK shut in one or more of its wells during construction activity on the surface. KPK shall not unreasonably refuse to shut in its wells. a. Notification. Lafarge agrees to notify KPK at least twenty (20) days before Lafarge begins any activities on the property which will utilize any heavy equipment or other equipment likely to damage KPK's Pipeline(s)that are not covered appropriately. b. Payment. Lafarge shall pay KPK up front for shut in costs. The parties agree that Lafarge will not pay up front for the shut in of a well for less than five (5) days. If a well or welts is shut in for five days or more,the following payment shall be made to KPK by Lafarge. Lafarge shall provide KPK with an estimate of the amount of time the well or wells will be shut in and KPK will provide Lafarge with an estimate of the gross revenue KPK would have otherwise derived from the well or wells had said well or wells been producing, less a cost of production of$400.00 per month. Gross revenue shall be determined by taking the average production during a one (1) year period before the shut in times the price that KPK is receiving at the time the upfront payment for shut in is due. In addition, KPK will estimate the cost of any rework required to place the well or wells in production status after any such shut in. Lafarge shall pay the full amount of the estimate of the shut in costs to KPK within ten(10)days from the date it receives the estimate. Upon receipt of the estimate of costs by Lafarge, KPK will within a reasonable time commence the shut in of the well or wells in a good and workmanlike manner, and diligently pursue each shut in to completion. Upon completion of the shut in, KPK shall give Lafarge a full accounting of the costs and expenses of the shut in. In connection with such accounting, gross revenue for purposes of the shut in will be adjusted, if necessary, to reflect the price KPK actually receives during the period the well is shut in for its other oil and gas sales during the same period for wells located in the same general area (or, if applicable, the contract price KPK would have otherwise received for production from the shut in well while it is shut in). If the amount of such costs exceeds the amount of the estimate, Lafarge shall pay KPK the amount of the shortfall within ten(10) days from the receipt of the accounting. If the amount of such costs is less than the amount of the estimate, KPK shall reimburse the difference to Lafarge at the time it provides its accounting to Lafarge. 10. GOVERNMENTAL PROCEEDINGS. Lafarge shall not oppose KPK in any agency or governmental proceedings, including but not limited to the COGCC, Weld County, or other governing body proceedings, related to KPK's operations on the Property, including but not limited to drilling, workovers, well deepenings and recompletions, provided that KPK's position in such proceedings is consistent with this Agreement and provided further the proposed operations are in accordance with applicable laws, COGCC regulations and lawful local ordinances,resolutions or permit conditions. 11. MINING PLAN. Lafarge has provided herewith copies to KPK of its Mining Permit, and the engineering structural report prepared in connection with the Mining Permit (the "Plans"). KPK acknowledges receipt of said Plans and has no objections to said Plans as approved by the DMG. This acceptance by KPK in no way waives KPK's rights in this Agreement or obligations of Lafarge under the terms of this Agreement. Lafarge acknowledges that KPK may conduct oil and gas activities within the applicable Oil and Gas Operations Areas as provided herein and shall not oppose KPK before any agency or governmental proceeding if such oil and gas activities are proposed and carried out in accordance with the terms of this -6- �-- Agreement and applicable laws, COGCC regulations and lawful local ordinances, resolutions or permit conditions. 12. LIMITATION OF LIABILITY,RELEASE AND INDEMNITY. A. No party shall be liable for, or be required to pay for, special, punitive, exemplary, incidental, consequential or indirect damages to any other party for activities undertaken within the scope of this agreement; 13. Except as to claims arising out of pollution or environmental damage (which claims are governed by Section 13 below) or out of other provisions of this Agreement (which claims shall be governed by the terms of this Agreement), each party shall be and remain responsible for its own liability for all losses, claims, damages, demands, suits, causes of action, fines,penalties, expenses and liabilities, including without limitation attorneys' fees and other costs associated therewith (all of the aforesaid herein referred to collectively as "Claims"), arising out of or connected with each such party's ownership or operations on the Property,no matter when asserted, subject to applicable statutes of limitations. Each such party shall release,defend, indemnify and hold the other parties, their officers, directors, employees, successors and assigns, harmless against all such Claims. This provision does not, and shall not be construed to, create any rights in persons or entities not a party to this Agreement, nor does it create any separate rights in parties to this Agreement other than the right to be indemnified for Claims as provided herein; C. Upon the assignment or conveyance of a party's entire interest in the Property,that party shall be released from its indemnification in Sectionl2.b. above, for all actions or occurrences happening after such assignment or conveyance. 13. ENVIRONMENTAL INDEMNITY. The provisions of Section 12 above, except for Section 12.A. shall not apply to any environmental matters,which shall be governed exclusively by the following, subject to the limitations of Section 12.A. above: A. "Environmental Claims"shall mean all Claims asserted by governmental bodies or other third parties for pollution or environmental damage of any kind,arising from operations on or ownership of the Property or ownership of the oil and gas leasehold interest, whichever is applicable, and all cleanup and remediation costs, fines and penalties associated therewith, including but not limited to any Claims arising from Environmental Laws or relating to asbestos or to naturally occurring radioactive material. Environmental Claims shall not include the costs of any remediation undertaken voluntarily by any party, unless such remediation is performed under the imminent threat of a Claim by a governmental body or other third party; B. "Environmental Laws" shall mean any laws, regulations, rules, ordinances, or order of any governmental authority(ies), which relate to or otherwise impose liability, obligation, or standards with respect to pollution or the protection of the environment, including but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. § 9601 et seq.), the Resource Conservation and Recovery Act of 1976(42 U.S.C. §§ 6901 et seq.), the Clean Water Act (33 U.S.C. §§ 466 et seq.), the Safe Drinking Water Act (14 U.S.C. §§ 1401-1450), the Hazardous Material Transportation Act (49 U.S.C. §§ 1801 et seq.), the Clean Air Act, and the Toxic Substances Control Act(15 U.S.C. §§ 2601-2629);and -7 - C. Environmental Indemnification. KPK shall protect, indemnify, and hold harmless Lafarge,its successors and assigns, from any Environmental Claims relating to the Property or oil and gas leasehold thereunder that arise out of KPK's ownership and operation of the Oil and Gas Operations Areas and it's ownership and operation of its Petroleum Pipeline Easements or rights-of-way on the Property. Lafarge shall fully protect, defend, indemnify and hold harmless KPK from any and all Environmental Claims against KPK, its successors and assigns, relating to the Property that arise out of Lafarge's operations on the Property. 14. EXCLUSION FROM INDEMNITIES. • The indemnities of the parties hetein shall not cover or include any amounts which the ' indemnified party is actually reimbursed by any third party. The indemnities in this Agreement shall not relieve any party from any obligations to third parties. 15. NOTICE OF CLAIM FOR INDEMNIFICATION. If a Claim is asserted against a party for which the other party would be liable under the provisions of Section 12 or 13 above, it is a condition precedent to the indemnifying party's obligations hereunder that the indemnified party give the indemnifying party written notice of such Claim setting forth all particulars of the Claim, as known by the indemnified party, including a copy of the Claim(if it is a written Claim). The indemnified party shall make a good faith effort to notify the indemnifying party within five days of receipt of a Claim and shall effect such notice in all events within such time as will allow the indemnifying party to defend against such Claim. An indemnifying party shall not be obligated to reimburse an indemnified party for amounts paid in settlement of an indemnified claim unless the indemnifying party has agreed to the settlement, which agreement shall not be unreasonably withheld or delayed. 16. REPRESENTATIONS. Each party represents that it has the full right and authority to enter into this Agreement. KPK does not represent that it has rights to settle matters for all of the mineral owners or any other lessees in the Property and this Agreement shall only apply to and bind the KPK leasehold interest in the property. 17. SUCCESSORS. The terms, covenants, and conditions hereof shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns; provided, as to KPK, successors and assigns shall be deemed to be limited to lessees under the oil and gas leases which KPK owns. 18. TERM. This Agreement shall become effective when it is fully executed and shall remain in full force and effect until the earlier to occur of the following: (a)KPK's leasehold estate expires or is terminated, and KPK has plugged and abandoned all wells and complied with the requirements of all applicable oil and gas leases pertaining to removal of equipment, reclamation, cleanup and all other applicable provisions of the leases and existing laws and regulations or (b) Lafarge's sand, gravel and aggregate mining lease expires or is terminated(as to the portion of the Property leased by Lafarge)and Lafarge has complied with the requirements of it mining lease and Mining Permit pertaining to removal of equipment, reclamation,cleanup and all other applicable provisions of the lease,Mining Permit and existing laws and regulations. When this Agreement ceases to be in full force and effect, the Parties shall execute any and -8 - all releases necessary to evidence the fact that this Agreement shall no longer apply to the Property, except as to any indemnities set forth herein,which indemnities shall survive termination. 19. AMENDMENTS. This agreement may be amended by an instrument in writing signed by the parties hereto. 20. NOTICES. Any notice or other communication required or permitted under this Agreement shall be • sufficient if deposited in U.S.Mail,postage prepaid,addressed to each of the following: K.P. Kaufman Company,Inc. Lafarge West,Inc. 1675 Broadway,28th Floor 10170 Church Ranch Way,#200 Denver,Colorado 80202-4628 Westminster,Colorado 80021 Attention: Land Department Atm: Land Department Any party may, by written notice so delivered to the other parties, change the address or individual to which delivery shall thereafter be made. 21. RECORDING. This Agreement, any amendment hereto shall be recorded by either party,which shall provide the other party with a copy showing the recording information as soon as practicable thereafter. 22. SURFACE DAMAGES. Lafarge hereby waives all surface damage payments pursuant to any COGCC or local regulation, state statute, common law or prior agreement, for each and every well that is drilled within the Oil and Gas Operations Areas and for any access road, flowline, or pipelines constructed on the Property. KPK may provide a copy of this Agreement to the COGCC as evidence of this waiver. 23. APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado, without reference to its conflict of laws provisions. 24. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding among the parties hereto regarding the matters addressed herein, and supersedes any previous communications, representations or agreement, whether oral or written. This Agreement shall not be amended, except by written document signed by all parties. EXECUTION AND BINDING EFFECT. This Agreement may be executed in any number of counterparts each of which shall be deemed an original instrument but all of which together shall constitute one and the same instrument, and shall be binding upon and inure to the benefit of the parties, and each of their respective successors and assigns and is executed by the parties as of the Effective Date set forth above. -9- The parties have executed this Agreement on the day and year first above written. LAFARGE WEST,INC. KP.KAUFFMAN COMPANY,INC. BY: Gordon L.Allott,Jr. Executive Vice President ACKNOWLEDGMENTS STATE OF COLORADO ) COUNTY OF DENVER ) 111-- Tem 2007 & oh L .Alloil Tr. The foregoing instrument of writing was acknowledged before me on this r day of()Glebe!, O er,2606 by Kevie-P. lturfforms,for and on behalf of the K.P.Kauffman Company,Inc.,a California corporation,for the uses and purposes stated herein. An,1I ^ n !//� Witness my band and seal: l(l , o-4A_ NNotar�`y Public �� 11 / UA Print Name: t e..bro 1<. "1-5)6,9 ers My Commission Expires: (74 116 R itfidins4675 3rooAw Jol, ?. '€OO DEBRA K. R0GERS7j vey.r Co go20 j., STATE OF COLORADO NOTARY PUBLIC STATE OF COLORADO COUNTY OF DENVER ) a� l My Commission Expires 1T07/09 92 The foregoing instrument was acknowledged before me this I,5 day of 20116,by fti Q.lD./ t AL_ ,as ' ►r d 11 :al r ••�� f West, on behalf of such company. 01A <�y Witness my hand and official seal. i O/+ i Notary':.Ir �l� 4 Print N: e: i. p n►i . My Commission Expires: (7 q . I, $oet _ t o _ - 10- EXHIBIT A PHASE 1-RIITENHOUSE LEASED THAT PART OF THE NW 1/4 OF THE SE 1/4 OF SECTION 19,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH PRINCIPAL MERIDIAN,DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF THE SE 1/4 OF SAID SECTION 19;THENCE SOUTH ALONG THE WEST LINE OF SAID QUARTER SECTION A DISTANCE OF 853 FEET TO THE NORTH LINE OF THE DAMIANA PROPERTY DESCRIBED IN DEED RECORDED IN BOOK 529, PAGE 433; THENCE EAST ALONG THE NORTH LINE OF SAID DAMIANA PROPERTY 264 FEET;THENCE NORTH AND PARALLEL TO THE WEST LINE OF SAID QUARTER SECTION A DISTANCE OF 853 FEET,MORE OR LESS,TO THE NORTH LINE OF THE SE 1/4 OF SAID SECTION 19; THENCE WEST A DISTANCE OF 264 FEET ALONG THE NORTH LINE OF SAID QUARTER SECTION TO THE POINT OF BEGINNING; EXCEYt THAT PORTION THEREOF CONVEYED TO THE STATE HIGHWAY COMMISSION OF COLORADO FOR HIGHWAY PURPOSES IN SPECIAL WARRANTY DEED RECORDED IN BOOK 1401, PAGE 313,DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE SOUTH PROPERTY LINE FROM WHICH THE SOUTHEAST CORNER OF SAID SECTION 19 BEARS SOUTH 54°04'EAST A DISTANCE OF 30112 FEET;THENCE ALONG THE SOUTH PROPERTY LINE SOUTH 88°39' EAST A DISTANCE OF 68.9 FEET TO THE SOUTHEAST CORNER OF THE PROPERTY; THENCE ALONG THE EAST PROPERTY LINE NORTH 0°25'30" WEST A DISTANCE OF 856.8 FEET TO THE EAST-WEST QUARTER LINE OF SECTION 19;THENCE ALONG THE EAST-WEST QUARTER LINE OF SECTION 19 SOUTH 89°39' WEST A DISTANCE OF 159.3 FEET; THENCE SOUTH 4°48'EAST A DISTANCE OF 535.9 FEET;THENCE SOUTH 18°50'EAST A DISTANCE OF 103.1 FEET; THENCE SOUTH 4°48'EAST A DISTANCE OF 223.4 FEET,MORE OR LESS TO THE POINT OF BEGINNING. AND THAT PART OF THE W 1/2 OF THE SE 1/4 OF SECTION 19,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH P.M.,DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE WEST LINE OF THE SE 1/4 OF SAID SECTION 19 WHICH IS 1310 }EEI NORTH OF THE SOUTHWEST CORNER OF SAID SE 1/4 OF SAID SECTION 19; THENCE NORTH 504 FEET; THENCE EAST 272 FEET; THENCE SOUTH 504 FEET; THENCE WEST 272 FEET TO THE PLACE OF BEGINNING; EXCEYB THAT PORTION THEREOF INCLUDED WITHIN A PARCEL OF LAND CONVEYED TO JOHN SCHELL AND CONSTANTINE SHELL IN QUIT CLAIM DEED RECORDED IN BOOK 1007,PAGE 39,DESCRIBED AS FOLLOWS: BEGINNING AT A POINT 247 FEET EAST OF THE SOUTHWEST CORNER OF THE SW 1/4 OF THE SE 1/4 OF SAID SECTION 19; THENCE NORTH TO A POINT ON THE NORTH LINE OF SAID SW 1/4 SE 1/4 ; THENCE EAST 25 FEET TO A POINT;THENCE SOUTH TO A POINT ON THE SOUTH LINE OF SAID SW 1/4 SE 1/4; THENCE WEST 25 FEET TO THE PLACE OF BEGINNING; AND EXCEYI THAT PORTION THEREOF LYING WITHIN THE NORTH 10 FEET OF THE S 1/2 OF THE SE 1/4 AND THE SOUTH 20 FEET OF THE N 1/2 OF THE SE 1/4 OF SAID WFrTION 19 AS CONVEYED TO THE BOARD OF COUNTY COMMISSIONERS OF WELD COUNTY AND TO WELD COUNTY TO BE USED AND MAINTAINED AS A PUBLIC ROAD IN WARRANTY DEED RECORDED IN BOOK 1229, PAGE 556; AND EXCEPT THAT PORTION THEREOF CONVEYED TO THE STATE HIGHWAY COMMISSION OF COLORADO FOR HIGHWAY PURPOSES IN SPECIAL WARRANTY DEED RECORDED IN BOOK 1401, PAGE 313, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTH PROPERTY LINE FROM WHICH THE SOUTHEAST CORNER OF SAID SECTION 19 BEARS SOUTH 54°04'EAST A DISTANCE OF 30112 FEET;THENCE SOUTH 4°48' EAST A DISTANCE OF 247.6 FEET;THENCE ALONG THE ARC OF A CURVE TO THE LEFT A DISTANCE OF 186.3 FEET,THE RADIUS OF WHICH ARC HAS A LENGTH OF 5805 FEET,AND THE CHORD OF WHICH ARC BEARS SOUTH 5°43'EAST A DISTANCE OF 186.2 FEET,TO THE SOUTH PROPERTY LINE; THENCE ALONG THE SOUTH PROPERTY LINE NORTH 89°50'EAST A DISTANCE OF 32.8 FEET TO THE EAST PROPERTY LINE;THENCE ALONG THE EAST PROPERTY LINE NORTH 0°25'30"WEST,A DISTANCE OF 430.3 FEET TO THE NORTH PROPERTY LINE;THENCE ALONG THE NORTH PROPERTY LINE NORTH 88°39'WEST A DISTANCE OF 68.9 FEET,MORE OR LESS,TO THE POINT OF BEGINNING. AND LOTS 1 AND 2 IN THE SW 1/4 OF SAID SECTION 19,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH P.M.ALL IN WELD COUNTY,COLORADO. PHASE 2-NORDEN TRUST LAFARGE OWNERSHIP THE N 1/2 OF THE NE 1/4 OF SECTION 24, TOWNSHIP 1 NORTH, RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN,COUNTY OF WELD,STATE OF COLORADO,DESCRIBED AS FOLLOWS: BEGINNING AT THE NE CORNER OF SAID SECTION 24; THENCE S 00°25'10" W, ALONG THE EAST LINE OF THEN 1/2 OF THE NE 1/4 OF SAID SECTION 24, 1310.16 FEET TO THE SE CORNER OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24; THENCE S 89°45'34"W,ALONG THE SOUTH LINE OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24,2637.68 FEET TO THE SW CORNER OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24;THENCE N 00°1277"E,ALONG THE WEST LINE OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24, 1309.10 FEET TO THE NW CORNER OF THEN 1/2 OF THE NE 1/4 OF SAID SECTION 24;THENCE N 89°44'15"E,ALONG THE NORTH LINE OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24,2642.54 FEET TO THE POINT OF BEGINNING. PHASE 3-ANDERSON LAFARGE OWNERSHIP THE WEST 1/2 OF THE SOUTHWEST 1/4 OF SECTION 18,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH P.M.,COUNTY OF WELD,STATE OF COLORADO. PHASE 4-MCWI LLIAMS LEASED ALL THAT PART OF THE NW 1/4 OF SECTION 19,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH P.M. WHICH LIES WEST OF THE CENTER LINE OF THE SOUTH PLATTE RIVER, WELD COUNTY, COLORADO, EXCEPT: A PARCEL OF LAND LOCATED IN THE NW 1/4 OF SECTION 19,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH PRINCIPAL MERIDIAN, WELD COUNTY, COLORADO, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 19,THENCE S 00°11'42"W,ALONG THE WEST LINE OF SAID NW 1/4,A DISTANCE OF 30.00 FEET;THENCE NORTH 90°00'00"EAST 747.67 FEET TO THE POINT OF BEGINNING OF SAID EXCEPTED PARCEL; 1)THENCE CONTINUING ALONG SAID PARALLEL T EL LINE,N 90°00'00"E,A DISTANCE OF 882.35 I'M_I TO THE CENTERLINE OF THE MAIN CHANNEL OF THE SOUTH PLATTE RIVER (1997) AND CONTINUING ALONG SAID CENTERLINE THE FOLLOWING 5(FIVE)COURSES; 2)THENCE S 22°2173"W,A DISTANCE OF 119.58 FEET; 3)THENCE S 33°19'22"W,A DISTANCE OF 6731 1,EET; 4)THENCE S 43°51'39"W,A DISTANCE OF 182.10 FEET; 5)THENCE S 46°41'03"W,A DISTANCE OF 182.88 FEET; 6)THENCE S 35°51'46"W,A DISTANCE OF 4.35 FEET; 7)THENCE DEPARTING SAID CENTERLINE,N 90°00'00"W,A DISTANCE OF 542.31 FEET; 8) THENCE N 00°33'48" E, A DISTANCE OF 427.13 FEET TO THE POINT OF BEGINNING OF SAID EXCEPTED PARCEL,CONTAINING 7.273 ACRES,MORE OR LESS. PHASE 5-CHIKUMA LEASED THE N 1/2 OF SECTION 13,TOWNSHIP 1 NORTH,RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN AND THE W 12 OF THE NW 1/4 OF SECTION 18,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH PRINCIPAL MERIDIAN,WELD COUNTY,COLORADO. LESS THAT PORTION IN THAT WARRANTY DEED RECORDED OCTOBER 23, 1908 IN BOOK 287,PAGE 208 OF THE WELD COUNTY RECORDS. PHASE 6-CITY OF THORNTON/D&S MINING LEASED THEW 1/2 OF THE SW 1/4 OF SECTION 7,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH PRINCIPAL MERIDIAN(CONTAINS 80 ACRES MORE OR LESS),TOGETHER WITH THEE 1/2 OF THE SE 1/4 OF SECTION 12,TOWNSHIP 1 NORTH,RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN (CONTAINS 80 ACRES MORE OR LESS),ALL IN WELD COUNTY,COLORADO. PHASE 7(SOUTHERN PORTION)-MYRNA LAFARGE OWNERSHIP THE S 1/2 OF THE EAST 60 ACRES OF THE SW 1/4 OF SECTION 12, TOWNSHIP 1 NORTH,RANGE 67 WEST OF TTIE 6TH PRINCIPAL MERIDIAN. THE W 1/4 OF THE SW 1/4 OF THE SE 1/4 OF SECTION 12, TOWNSHIP 1 NORTH,RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN. THE EAST 30 ACRES OF TIM SW 1/4 OF THE SE 1/4 OF SECTION 12, TOWNSHIP 1 NORTH, RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN. ALL IN WELD COUNTY,CO. PHASE 7(NORTHERN PORTION)AND 8-MFM FARMS LAFARGE OWNERSHIP THE SE 1/4 OF THE NW 1/4 OF SECTION 12,TOWNSHIP 1 NORTH,RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN AND THE NW 1/4 OF THE SE 1/4 AND THE EAST 30 ACRES OF THE NE 1/4 OF THE SW 1/4 OF SECTION 12,TOWNSHIP 1 NORTH,RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN,ALL IN WELD COUNTY,COLORADO. HM137 012_011/20i1 and OaSxhfirtA 100606.doc I R67W R66W i - i I �, Wt A NC r r. I PROP I • , SEC. 12 j SOC. 7 ' LAFARGE ;, ITY OF 4). I WEST, INC. TO i PROPERTY ! PRO. . , ; 1- --- -ti KMA\ �ra1r� rI i I,Y °la r T N ♦V r Jx 1 1_ SE; . 13 w . ' - (=SEC. 1E , _ o ¢ !a ` 1 a LL S °pq�{ icy ►fi� ` �My-i 0 y I. E'c> I �.�1� I I ' SE 9. 24 m • % • SEC. 19 RIVERBEND I i,� BOUNDARY ''i• I''�-.,.,. i USE , ' / j i K.P. KAUFFMAN COMPANY INC. North EXHIBIT fl ,ft OIL AND GAS WELL OPERATIONS SECTIONS 12, 13 AND 24,T1N,R67W, fail PARCEL SECTIONS 7, 18 AND 19,T1N,R66W, 6114 P.M.,WELD COUNTY COLOADO OWNERSHIP/LEASE TETRA TECH RMC CI 0 1000' 20001 MAP lib 1900 S. SUNSET ST., SUITE 1-F, LONGMONT, CO 80501 ;, 4 TEL 303.772.5282 METRO 303 665 6283 FAX 303.665.6959 I-, SCALE:1'=2000' RIVERBEND OIL & GAS FACILITIES 1 OF 6 80-4137.012.00 DATE:12-22-06 V R67W R66W r..._ _ ' _. . _ .._ _... ..._ _..._..._I --i i r:' i i _ �, r- --- j SEC. 12 SOC. 7 1 ;1L. i i Y r� 1I T N 07 is A CV V jt SE, . 13 La �SEC. 1 :rj-- � d "i • ■ 1 PA :�',� SE 9. 24 � ' SEC. 19 RIVERBEND 'y ;, A BOUNDARY T!� •, 4 . j E: I WCR 6 ,., �'a i i Nom' ' K.P. KAUFFMAN COMPANY INC. OIL AND GAS WELL OPERATIONS iiiii SECTIONS 12, 13 AND 24,T1N, R67W, KEY MAP SECTIONS 7, 18 AND 19,T1 N, R66W, 6TH P.M., WELD COUNTY COLOADO $ ,O. TETRATECH RMC E alk 1900 S. SUNSET ST., SUITE 1-F, LONGMONT. CO 80501 ni = TEL 303 772.5282 METRO 303.665.6283 FAX 303 665.6959 SCALE: 1'=2000' RIVERBEND OIL & GAS FACILITIES 2 OF 80-4137.012.00 DATE:12-22--06 6 �& f b-�' � iF4 f ._r_ Lit -c "L." -L �WELUCOUNTI ROAD-TO r„ �yIDEPETR UM 30'WIDE PETROLEUM I� � PI'EL EASEM T PIPELINE EASEMENT I I i D ACCESS'ROAD / / j'I I l .- / re / / - I Ii i Vi ; ,� i / r i a. i I ' I ir ii 11 ` I ..,•'�� /0 > / ! KERR McGEE / .I_ GAS WELL :,_ / IL-1- / ' 1 1 KERR Mc E Ii I EXISTING/ ;I i I / 1/ GAS WELL QI Ali v / _ ..• a in T. ww� O , it 're r' II :It9 2 / /V / 1 ,U I: I �� llI / m 1 J i /- �.-�A...'e'�� *.• `"n,.• i North I •• t i "a ipiliii;1 0. is / , 1 i KERR MCGEE. - FUTURE � t p_ 30'WIDE PETROLEUM KER McG # GAS WELL "✓ PIPELINE EASEMENT FUT '• ` :� GLASS AND ACCESS ROAD GAS KNELL o 1= It / . i_ - - NOAR S. HIKUMA 4 i 1 O.1) SCALE: 1"=300' ,I I I ,1 I III 1 I LEGEND: KERR-McGEE OIL&GAS K.P. KAUFFMAN COMPANY INC 30'PETROLEUM PIPELINE cnes r"OPERATIONS AREA OIL AND GAS OPERATIONS -----EASEMENT&ACCESS ROAD DRILL WINDOW • KP KAUFFMAN SECTION 13,T1N,R67W, wil KERR-McGEE GAS WELL 6TH P.M.,WELD COUNTY COLOADO TANK/GAS WELL T EXISTING TETRA TECH RMC C. c- -.; - EXISTING PETROLEUM TELEPHONE LINE Z' 1900 S. SUNSET ST., SUITE 1-F, NT, CO 80501 PIPEUNE p EXISTING TEL 303.772.5282 METRO 303 665 6283 FAX FAX 303.fi65.6959 al'e�' '''�� OPFRATI(k•1SARFA,KP MUFFMAN OIL&GAS POWER LINE RIVERBEND OIL & GAS FACILITIES 3 OF 6 ei 80-4137.012.00 DATE:12-22-06 --- _ WELD COUNTY ROAD 1 i I 16"O-KM 30'WInF' -UM - 16"G-KM AM N�` .--:PIP—ELINE ASEMENT " • I � N "N. •i 3a KERRMEGEE PIPEUNE FUTURE AND GAS WELL F —________ L • FURUREcGEE �. GAS WELL ', / " I / ` 30'WI PETROLEUM EASEERR McGEE PIP' ACCESS ROADDT \ ti_ XISTING TANK i / w w cn • .�.� r- - itp. 1 es'.es'./ / Y �.. II ,• / KERR McGEE FUTURE Gir WELL LEGEND: T EXISTING TELEPHONE LINE P EXISTING POWER LINE -,,,.30'^,.30'PETROLEUM PIPELINE North EASEMENT&ACCESS ROAD a DIRECTIONAL DRILL K.P. KAUFFMAN COMPANY INC. ■s KERR-McGEE TANK/GAS WELL OIL & GAS WELL OPERATIONS SECTION 13,T1N,R67W, c c;- EXISTING PETROLEUM PIPELINE 6TH P.M.,WELD COUNTY COLOADO o '� ,.,..„.•'r KERR-McGEEOIL&GAS • TETRA TECH RMC oC f 4 OPERATIONS AREA 1900 S. SUNSET ST.. SUITE 1—F, LONGMONT, CO 80501 < SCALE: 111=300' TEL 303 772.5282 METRO 303.665.6283 FAX 303.665.6959 r. DRILL WINDOW RIVERBEND OIL & GAS FACILITIES 4 OF 80-4137.012.00 DATE:12-22-06 6 I ll , t-- = 30'WI`- 0 'OLEUM , ,�-P- P ELI ... EAS ♦ , 30'WIDE PETR_OtEUM P'p EASEmENT �P,�- r AND ACCESS R -,c c Ol 1J7 . I i I '� ■ ■ I it Icrvli A. i • ,` • L , ' ,r K.P. KAUIPFMAN " 1 EXIgTINAa �' ,,..,o GAS WELL ti (GEORGE R. NORDEN <, NO. 1) Gat 2- I PHASE 2 , 16.5 AC. \ \ it l.' / • I ,o t t-I c_. _ C.__ -._ C (r (r C_G-0. G- - r- _G_ =,_r KERR McGEE '• EXISTING "! TANK STORAGE LEGEND: DRILL WINDOW North •n KERR McGEE TANK/GAS WELL 0 O EXISTING PETROLEUM PIPLINEiii; K.P. KAUFFMAN COMPANY INC. 30'PETROLEUM PIPELINE& OIL & GAS WELL OPERATIONS ACCESS ROAD SECTION 24,TNN,R67W, • KP KAUFFMAN TANK/GAS WELL 6TH P.M., WELD COUNTY COLOADO 0 © TETRA TECH RM C ]0t �■■� �� KP KAUFFMAN OIL&GAS 4 OPERATIONS AREA 1900 S. SUNSET ST., SO 30TE 1-F, 283LONGMONT,3 co 80501 TEL 303.772.5282 METRO 303.665.6283 FAX 303 665.6959 SCALE: 1"=200' ...-.,,'KERR IGEE OILONSAR &GAS RIVERBEND OIL & GAS FACILITIES 5 OF 6 OPERATIONS AREA 80-4137.012.00 DATE:12-22-06 - .- i G - - __ _a l'f ' L' COUNTY ROAD O. /FE- .. 30'PE FICLEUM 7 EASEMENT t ;, r :2-PIPELINE WIDE PETROLEUM FUTURE EN�ANAELINE EASEMENT GAS WELL , ': AND ACCESS ROADa s , FUTURE KP K iPFMAN i'"X ,:.;t. .) pitum NT D KERR MCGEE �,,,,,,,,:•:^•' I FUTURE I 1 II I I KERR McGEE :t•-:;II "'a EXISTING ::""'a) ,.�, .. -.I TANKSTORAG: :'P ` t �°-A- (-I-e-- ( 1 �� O - - -rlrdril'- k n In / KERR-McGEE ( ,t -1 Z FUTURE KERR McGEE I ••»i•4 L II PRODUCTION FUTURE LLS • . $� II FACILITY AREA i • : €�, .• I KP U.S: ate,�� t I GAS LL , •, s, i If/ 1 f,/" FUTURE _ ,,.„•r.=' 1 GAS W LL ' ,••.....; .F I a II LEGEND: I t I, - PETROLEUM PIPELINE TO BE ABANDONED A ENCANA GAS WELL omitG — PETROLEUM PIPELINE RELOCATION ROUTE AREA 4o amm��,,,, ENCANA OIL&GAS OPERATIONS North - -DRILL WINDOW CITY OF AURORA WELL on KERR-McGEE TANK/GAS WELL iiiiK.P. KAUFFMAN COMPANY INC. ".s"' KERR-McGEE OIL&GAS OPERATIONS OIL & GAS WELL OPERATIONS U 150' 300 c-G Y_G- EXISTING PETROLEUM PIPELINE SECTION 19,T1N,R66W, 30'PETROLEUM PIPELINE 6TH P.M.,WELD COUNTY COLOADO tomir 4-Yr=sue` EASEMENT&ACCESS ROAD TETRA TECH RMC t SCALE: 1"=300' ' * KP KAUFFMAN OIL&GAS milib 1900 S. SUNSET ST.. SUITE 1-F. LONGMONT, Co 80501 -Z %Ina 4 OPERATIONS AREA TEL 303.772.5282 METRO 303 665 6283 FA)( 303.665.6959 E1 • - KP KAUFFMAN GAS WELL RIVERBEND OIL & GAS FACILITIES 80-4137.012.00 DATE:12 22 06 OfC A fir 40 * ys City of Fort Luptoni ' 130 S. McKinley Avenue,P.O. Box 148 Fort Lupton, Colorado 80621 303.857.6694 303-857-0351(Fax) PRE-ANNEXATION AGREEMENT Lafarge West, Inc. —Riverbend . This Pre-Annexation Agreement (the "Agreement") is entered into by and between the City of Fort Lupton, a Colorado Municipality (the "City") and Lafarge West, Inc., (the "Applicant"). WHEREAS, the Applicant owns real property(the "Property") a portion of which is located within the Ft. Lupton designated urban growth boundary and a portion of which is located outside the present city limits of the City and the Urban Growth Area of the City,but is within the Municipal Referral Area as defined by the Coordinated Planning Agreement between Weld County and the City; WHEREAS, the Applicant is in the process of seeking a Use by Special Review Permit via a Use by Special Review Application for Mining Operation ("USR") under the current zoning status of "A" Agriculture. As part of the approval process through Weld County, the Applicant is required through a request by the City, to enter into this Pre-Annexation Agreement for the future development of the Property. Annexation of the Property into the City shall only occur if both the Applicant and the City can agree on the final terms of annexation to be specified in an Annexation Agreement, after contiguity has been accomplished. NOW, THEREFORE, in consideration of the above-representations and the covenants and conditions set forth herein, the City and the Applicant agree as follows: 1. The Applicant, by and through the undersigned duly authorized representative, warrants that it is the legal and equitable owner of the real property as legally described in the attached Exhibit "A" and as depicted in the map set forth in the attached Exhibit "B", which are incorporated herein by this reference. smut 4 AIMASe 4g91 Page 1 of 3 . 2. The City agrees that upon annexation into the City, it is understood that the applicant will have a condition precedent to the request for annexation that the Property be zoned consistent with the County zoning of such property by which mining and related uses are allowed and that no additional restrictions, over and above those identified in the Weld County USR shall be placed upon the Property, without agreement by the parties at that time. • 3. The Applicant agrees that this Agreement shall be considered a valid petition for pre-annexation, signed by the Applicant, its heirs or assigns, for the Property or any area, of which it constitutes a portion, subject to such zoning provisions as are consistent with this Agreement. 4. The Applicant agrees that in the event of a sale or transfer of the property, it will, as a condition of such sale or transfer, require the purchaser, or other new owner, to sign a duplicate of this Pre-Annexation Agreement and that this Agreement, and the promises made herein, do constitute a covenant running with the Property and shall be binding on the undersigned Applicant and its successors and interest to such property and that this Agreement shall be filed for record in the office of the Clerk and Recorder of the County of Weld. s. It is also understood that a condition of the request for annexation by the applicant will be that if any improvement districts include the Property following annexation of the Property, Applicant shall not be required to pay assessment thereunder in excess of its fair and equitable share for such improvements. 6. The Applicant agrees that at the time of annexation, the requirements of C.R.S. sections 31-12-104 and 31-12-105, as amended, will be adhered to. DATED this 4/S} day of October , 2006. City of rt Lupton By: City Administrator Page 2 of 3 FOgTlovie Z' I y : SEA � � Attest by: '' C i•1y Town Clerk n„r STATE OF COLORADO ) SS. COUNTY OF WELD The foregoing instrument was acknowledged before me this of by day My commission expires: Witness my hand and official seal. • Notary Public Lafarge W By: pplicant STATE OF COLORADO ) COUNTY OF WELD SS. The foregoing instrument was acknowledged before me this _ /U day of _/Q Olt by My commission expires: Ct3/2$�pg A`ahCuln.v, Witness my hand and official seal. e 4. AZ ;4� NOT, 9�9 Notary Public % t r to iiiiiii ii Page 3 of 3 • • EXHIBIT A LEGAL DESCRIPTIONS FOR RIVERBEND PARCELS UNDER LAFARGE OWNERSHIP PHASE 2: LAFARGE OWNERSHIP THE N 1/2 OF THE NE 1/4 OF SECTION 24, TOWNSHIP 1 NORTH, RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN,COUNTY OF WELD,STATE OF COLORADO,DESCRIBED AS FOLLOWS: BEGINNING AT THE NE CORNER OF SAID SECTION 24; THENCE S 00°25'10" W, ALONG THE EAST LINE OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24; 1310.16 FEET TO THE SE CORNER OF THE N 1/2 OF WE NE 1/4 OF SAID SECTION 24;THENCE S 89°45'34" W,ALONG THE SOUTH LINE OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24,2637.68 FEET TO THE SW CORNER OF THEN 1/2 OF THE NE 1/4 OF SAID SECTION 24;THENCE N 00°12'27"E,ALONG THE WEST LINE OF THEN 1/2 OF THE NE 1/4 OF SAID SECTION 24, 1309.10 FEET TO THE NW CORNER OF THEN 1/2 OF THE NE 1/4 OF SAID SECTION 24; THENCE N 89°44'15"E,ALONG THE NORTH LINE OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24,2642.54 FEET TO THE POINT OF BEGINNING. PHASE 3:LAFARGE OWNERSHIP THE WEST 1/2 OF THE SOUTHWEST 1/4 OF SECTION 18,TOWNSHIP 1 NORTH,RANGE 66 WEST OF THE 6TH P.M.,COUNTY OF WELD,STATE OF COLORADO. PHASE 7(SOUTHERN PORTION): LAFARGE OWNERSHIP THE S 1/2 OF THE EAST 60 ACRES OF THE SW 1/4 OF SECTION 12,TOWNSHIP I NORTH, RANGE 67 WEST OF THE 6Th PRINCIPAL MERIDIAN.THE W 1/4 OF THE SW 1/4 OF THE SE 1/4 OF SECTION 12, TOWNSHIP 1 NORTH,RANGE 67 WEST OF THE 6Th PRINCIPAL MERIDIAN. THE EAST 30 ACRES OF THE SW 1/4 OF THE SE 1/4 OF SECTION 12, TOWNSHIP 1 NORTH, RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN. ALL IN WELD COUNTY,CO. PHASE 7(NORTHERN PORTION)AND 8: LAFARGE OWNERSHIP THE SE 1/4 OF THE NW 1/4 OF SECTION 12,TOWNSHIP 1 NORTH,RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN AND THE NW 1/4 OF THE SE 1/4 AND THE EAST 30 ACRES OF THE NE 1/4 OF THE SW 1/4 OF SECTION 12,TOWNSHIP 1 NORTH,RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN,ALL IN WELD COUNTY,COLORADO. H:41137 012 01VegallLegels of Lafarge parcels_doc , . � R67VV, n_a_77,.;,\...a..._ R66W 1 I I 74,,,,,,,-, Phis II j i 1 ,/, ice;,, ;PHASP� 1 LB Ai —I V ,---! ii---\ _____- _ sI Yr1.014 1 I ._. ._...�.r�..lows• i (4--\,-' - 4 !i TN ^ a . Ilia w _ i)) ;1 ititir--'" d Illratiiiri x SE . 13 P Or _ SEC. 16 L - .,I `Dl_ l�o b`: • t o ! 1/4..-S-- i • b.° 3 r-i '-- 3 ,,,,t It a SE c. 24 SEC. 19 RIVERBEND PSi' 1 ` 1ElBOUl4DARY r-�i 4 �� r �tt witi.t.,mil A.WCR6 t _ t .. j m RIVERBEND PARCELS UNDER 6North EXHIBIT "B" LAFARGE OWNERSHIP SECTIONS 12, 13 AND 24,TIN,R67W,SECTIONS t 7,18 AND 19,T1N,R66W,6TH P.M.,WELD r COUNTY COLOADO • TETRA TECH RMC I 0 1000 2000' 00 S. SUNSETST.. OSUITE 1-665, 28 3, .6 80501 S TEL 303.772.5282 METRO 303.665.628) FAX 303.665,6959 1` SCALE: 1'=2000' 80-4137.012.01 1 OF 1 MEMORANDUM OF UNDERSTANDING BETWEEN THE FORT LUPTON FIRE PROTECTION DISTRICT AND LAFARGE WEST INC. WHEREAS, Lafarge West Inc. is in the permitting process relative to the River Bend Project located generally along the South Platte River between Weld County Road 6 and Colorado Highway 52, and WHEREAS, the area encompassed by the River Bend Project lies within the boundaries of the Fort Lupton Fire Protection District, and WHEItEAS, the Fort Lupton Fire Protection District desires to improve its ability to provide fire services to all areas and citizens within the Fort Lupton Fire Protection District, by securing future sites for satellite fire stations, and WHEREAS, Lafarge West, Inc. owns land which is now or will be available for donation to the Fire Protection District thereby enhancing fire protection services and benefiting the general community at large, NOW therefore it is agreed that: 1. In consideration of the payment of$10.00 receipt of which is hereby acknowledged, Lafarge West, Inc. hereby grants to the Fort Lupton Fire Protection District, for a period of six (6) months from the date of this agreement, the right to investigate the possibility of locating a two acre site for a future fire station on one of the two sites described in the attached legal descriptions which are labeled Exhibit A. 2. The Fort Lupton Fire Protection Districts investigations may include entry onto the described properties,conducting soil testing, gathering soil samples, drilling test holes, surveying, conducting percolation tests and all other activities reasonable necessary to determine the optimal site for a fire station in the judgment of the Fire District, all of which shall be at the Fort Lupton Fire Protection District's sole cost. 3. The Fort Lupton Fire Protection District shall indemnify Lafarge West, Inc. and its agents and employees from any and all liability associated with the District's investigations of the described property and shall also indemnify Lafarge West, Inc. from any and all liability for costs associated with any such testing. 4. The Fort Lupton Fire Protection District is granted only such access as is reasonably necessary to perform the due diligence investigations contemplated by this agreement. 5. No later than six (6) months from the date of this agreement, the Fort Lupton Fire Protection District shall notify Lafarge West, Inc. in writing as to which of the two sites is the District's choice. Upon notification, the parties shall then, in good faith, enter into negotiations for the acquisition by the Fort Lupton Fire Protection District of a single two acre Fire Station site upon such terms and conditions as may . Iz,5 • Memorandum of Understanding between The Fort Lupton Fire Protection District and Lafarge West Inc. Page 2 of 2 acceptable to the parties but which shall generally contemplate that Lafarge West, Inc. may donate the land to the Fort Lupton Fire Protection District with the Fort Lupton Fire Protection District being solely responsible for all costs for subdivision and development of such site for a fire station. In Witness Whereof this agreement is made this day of September, 2006 by and between these parties. LAFARGE WEST, INC. FORT LUPTON FIRE PROTECTION DISTRICT By: ( g By: Authorized Representative Authorized Representative • bxA h, 4 LEGAL DESCRIPTIONS FOR RIVERBEND PARCELS UNDER LAFARGE OWNERSHIP PHASE 2 - NORDEN TRUST LAFARGE OWNERSHIP 79.37 ACRES THE N 1/2 OF THE NE 1/4 OF SECTION 24, TOWNSHIP I NORTH, RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN,COUNTY OF WELD,STATE OF COLORADO,DESCRIBED AS FOLLOWS: BEGINNING AT THE NE CORNER OF SAID SECTION 24; THENCE S 00°25'10" W, ALONG THE EAST LINE OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24, 1310.16 FEET TO THE SE CORNER OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24; THENCE S 89°45'34" W,ALONG THE SOUTH LINE OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24, 2637.68 FEET TO THE SW CORNER OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24; THENCE N 00°12'27"E,ALONG THE WEST LINE OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24, 1309.10 FEET TO THE NW CORNER OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24; THENCE N 89°44'15" E, ALONG THE NORTH LINE OF THE N 1/2 OF THE NE 1/4 OF SAID SECTION 24,2642.54 FEET TO THE POINT OF BEGINNING. PHASE 7 (SOUTHERN PORTION) -MYRNA LAFARGE OWNERSHIP 70 ACRES THE S 1/2 OF THE EAST 60 ACRES OF THE SW 1/4 OF SECTION 12, TOWNSHIP 1 NORTH, RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN. THE W 1/4 OF THE SW 1/4 OF THE SE 1/4 OF SECTION 12, TOWNSHIP I NORTH, RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN. THE EAST 30 ACRES OF THE SW 1/4 OF THE SE 1/4 OF SECTION 12, TOWNSHIP 1 NORTH, RANGE 67 WEST OF THE 6TH PRINCIPAL MERIDIAN. ALL IN WELD COUNTY,CO. H:14137_012_01 Legal\Legals of Lafarge parcels.doc •rr Subject Property: 147107000008 REVISED August 11, 2006 Township 1 North, Range 66 West, 6th P.M., Weld County, CO Sec. 7: W/2SW'/,, Mineral Owners: Mineral Leasehold Owners: D & S Mining, Inc. Encana Energy Resources Inc. 4025 WCR 23 370 17th Street, Suite 1700 Ft. Lupton, CO 80621 Denver,-CO_-80202 Crews a eZeren,LGC 9ruinera[TtkeServices P.O. Box336337 (970)351-0733 g eeky, Co 80633-0606 Page 3 of 17 11t Sax(970)351-0867 916b t nTitx Subject Property: 147119000003 AMENDED - November 8, 2006 Township 1 North, Range 66 West, 6th P.M., Weld County, CO Sec. 19: Lots A and B of Recorded Exemption No. 1471-19-2-RE2347, being a part of the NW% Mineral Owners: Mineral Leasehold Owners: Steven S. McWilliams Kerr-McGee Rky. Mountain Corporation 12236 WCR 8 1999 Broadway, Suite 3600 Ft. Lupton, CO 80621 Denver, CO 80202 Mineral Reserves, Inc. K.P Kauffman Company, Inc. 10170 Church Ranch Way, Ste. 200 1675 Broadway, Suite 1970 Westminster, CO 80221 Denver, CO 80202 EnCana Oil & Gas (USA) Inc. 370 17th Street, Suite 1700 ,,.� Denver, CO 80202 Crews efi'Zeren, LLC Minera Title Services P.O. Box336337 (970)351-0733 Cjreeky, CO 80633-0606 Page 12 of 17 Fax(970)351-0867 Baker Hostetler Baker&Hostetler LLP 303 East 17th Avenue Suite 1100 Denver, CO 80203-1264 T 303 861 0600 February 7 2007 , F 303 861 7805 www.bakerlaw.com James M. King VIA UPS direct dial: 303.764.4087 jking@bakerlaw.com Jaqueline Hatch Weld County Planning and Zoning Department 4209 Weld County Road 24 1/2 Longmont, CO 80504 Re: Lafarge Riverbend USR, Case No. AMUSR-1259 Dear Ms. Hatch: You have advised Lafarge and me that, in the absence of executed Surface Use Agreements with certain of the oil and gas lessees at the Riverbend project of Lafarge, Lafarge should submit evidence of its efforts to reach such agreements if Lafarge wishes to proceed to a hearing before the county commissioners without the agreements actually in hand. As we have advised you, we have executed agreements from KP Kauffman and Peterson. We have been diligently negotiating agreements with Kerr McGee (now Anadarko) and Encana. However, due to high personnel turnover in the oil and gas companies and an apparent lack of priority with respect to these agreements on behalf of the companies, we have not been successful to this point in actually completing agreements with Kerr McGee and Anadarko. Enclosed are copies of the correspondence (primarily in the form of e-mails) between Lafarge and Anadarko that were available from our office. Even more communications have occurred, but I believe that the enclosed clearly demonstrate the very substantial efforts Lafarge has undertaken to reach agreements with these companies and also demonstrates the willingness of Lafarge to work towards mutually compatible solutions as to the correlative rights of the sand and gravel owner and the operator of the oil and gas estate. Lafarge fully intends to continue to work diligently and expeditiously to complete agreements with Kerr McGee and Encana, but, given the glacial progress being made, requests that Lafarge be scheduled for hearing before the county commissioners on its USR Amendment Application even in the absence of such agreements being in hand. As you can see, communication involving Kerr McGee goes back as far as June 21, 2006, and communication with Encana goes back to the beginning of October, 2006. Cincinnati Cleveland Columbus Costa Mesa Denver Houston Los Angeles New York Orlando -r.rypruyi Agrzorkr " Y Lows: Jaqueline Hatch February 7, 2007 Page 2 This is only communication of which this office is aware by copies of e-mails it has received and we are advised that communication with Kerr McGee actually goes back over a year. We do not believe that any of the information provided is of a confidential nature because Kerr McGee has indicated its intent to record an agreement when it is reached and the agreements will be part of the application record. If you have any additional questions or require additional information, please do not hesitate to contact me or Eric Reckentine. Very truly yours, 6 -ite,Wiz" James M. King JMK/jcd Enclosures cc: Eric Reckentine, w/ encs. (via UPS) Jennifer Vecchi, w/ encs. (via US Mail) Hello