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Home My WebLink About20043626.tiff • CFG Energy, Inc. 3932 West 18th Street Lane Greeley, CO 80634 Telephone (970)330-2660 Cell Phone (970)396-8347 Fax (970) 330-2657 E-Mail TCroke4I aol.com November 19, 2004 Board of County Commissioners Weld County, Colorado 915 10th Street P.O. Box 758 Greeley, CO 80632 Re: Assignment of OIL AND GAS LEASE-NW 1/4, S15, T5N, R61W Dear Commissioners: Enclosed are copies of the following: 1. WELD COUNTY OIL AND GAS LEASE covering NW ''A Section 15, T5N-R61 W, dated July 9, 2003, between Weld County, Colorado as Lessor and El Camino Resources/Raymund A. Tonella as Lessee. 2. RESOLUTION adopted by the BOARD OF COUNTY COMMISSIONERS, WELD COUNTY, COLORADO, dated July, 9, 2004. 3. ASSIGNMENT dated November 19, 2004, between El Camino Resources /Raymund A. Tonella as Assignor, and CFG Energy, Inc., as Assignee, for the oil and gas lease set forth in 1. above. Article 9. ASSIGNMENTS —requires the approval of the Lessor, Weld County, Colorado, of any Assignment(s)by Lessee, El Camino Resources/Raymund A. Tonella. Per Article 9. A., please provide Lessee with written approval of Lessee's Assignment of Lessee's entire leasehold interest in the subject lease to CFG Energy, Inc., a Colorado corporation, whose address is 3932 West 18th Street Lane, Greeley, CO 80634. Per Article 10., please provide Lessee with written approval of Lessee's Assignment of a Five Percent(5%) OVERRIDING ROYALTY in the subject lease to El Camino 2004-3626 � A- �� ( � " )d/y Resources, Inc., a Colorado corporation, whose address is 20153 Cottontail Road, Morrison, CO 80465. Your prompt attention to this request would be greatly appreciated. CFG Energy, Inc.("CFG") intends to begin development of the minerals covered by the Lease as soon as the Colorado Oil and Gas Conservation Commission ("COGCC") issues a permit to CFG for the re-entry of the plugged well in the SENW Section 15. CFG made application to COGCC today,November 22, 2004. Sincerely, 7n.e." Qa Thomas B. Croke, III President cc: El Camino Resources, Inc. /Raymund A. Tonella David G. Ebner, Esq. • / WELD COUNTY OIL AND GAS LEASE *f 555 ' Containing 160.0 acres,more or less: Containing 160 0 net mineral acres,more or less: ff �da of S. ri ,20(3 .made and THIS Lo by and between y litfdal subdivision of the STATE OF entered into by and between WELD COUNTY, COLORADO, a po' COLORADO,acting by and through the BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF WELD, for its respective interests,do BOARD OF COUNTY COMMISSIONERS, 915 10TH STREET,P.O. BOX 758, GREELEY, CO 80632, hereinafter called Lessor,and: .1, c-4t4t..so Qi* 1 xc7c&(7 2KfN1UrJJ A. 1 O,- hereinafter called Lessee: WITNESSETH WHEREAS,said Lessee has applied to Lessor for an oil and gas lease coverin the land herein emidesdescribed, ibac d, and has paid a filing fee in the amount of$10.00,plus a bonus consideration of$_ — pay an annual fixed by Lessor as an additional consideration for the grantin of is lease,rand mineral Lessee ac a or agrees es to on thereof anf per l rental of$ 1 . 6 ,computed at the rate of$ year,and the following consideration: WHEREAS, all the requirements relative to said application have been duly complied with and said application has been approved and allowed by Lessor; . THEREFORE, In consideration of the agreements herein, on the part of Lessee to be paid, kept and performed,Lessor does lease exclusively to Lessee for the sole and only purpose of drilling for,development of and production of oil and gas, or either of them,thereon and therefrom with the right to own all oil and gas so produced and saved therefrom and not reserved as royalty aty by e and telegraph lisor nes,ndrthe terms so f thhis s and lease, fixtures for ther with rights-of-way,easements and servitudes for pipelines, producing and caring for such product, and housing and boarding employees, and any and all rights and priviles necessary for the exploration and situateoperationfollowing d in the County of Weld, State of Colorado,and more particularly described asfolll described land follows: RANGE )(p0 6U Ai DESCRIPTION OF LAND SECTION TOWNSHIP 30 CO NW 1/4 15 5N 619 1110 .00 TO HAVE AND TO HOLD said land,and all the rights and privileges granted hereunder as primary o Lessee term,and paying until i h e hour of twelve o'clock noon on the i{ti` day of ) so long thereafter as oil and gas,or either of them,is prdliced in a ing e e quantities from said land or Lessee is diligently engaged in bona fide drilling or reworking operations on said land, subject to the terms and conditions herein. Drilling or reworking operations shall be deemed to be diligently performed if there is no delay or cessation thereof for a greater period than sixty consecutive days unless an extension in writing is granted by lessor;provided that such drilling or reworking operations are commenced during said primary term or any extension thereof or while this lease is in force by reason of production of oil and gas or either of them,or that such reworking is commenced within sixty days upon cessation of production for the purpose of re-establishing the same,and provided further that such production is commenced during such primary term or any extension thereof,or while this lease is in force by reason of such drilling or reworking operations or other production. EXPLORATION - Lessor reserves the right to conduct exploration on the leased land provided such exploration does not interfere with 1 rights granted herein. 111111 11111 1111111111 III 1111111 In 111 11111IIIti11 LE0214 3096555 08/18/2003 12:09P Weld County, CO 2003-1837 1 of 8 ft 0.00 D 0.00 Steve Moreno Clerk& Recorder • Oil and Gas Lease Page 2 In consideration of the premises, the parties covenant and agree as follows: 1. RENTAL-If this lease is extended for an additional term as provided for in the EXTENSION paragraph hereof,Lessee shall pay to Lessor the sum of One Dollar($1.00)per acre for the land covered hereby as delayed rental for the term of the extension. Rentals set at the time of established production shall be paid during the remaining life of this lease, annually, in advance, on or before each anniversary date hereof. There shall be no refund of unused rental. 2. ROYALTY-Lessee shall account for any and all substances produced on the leased land and Lessee shall pay to Lessor as royalty, in addition to the rentals provided, but except for products used on the leased land, unavoidably lost or flared on the leased land,with approval of Lessor,the following: A. On oil, 12.5% of the oil produced and saved from the leased land. At the option of Lessor, and with sixty (60)days' notice to Lessee, Lessor may take its royalty oil in kind,in which event Lessee shall deliver such royalty oil to Lessor on the leased land,free of cost or deduction, into the pipelines or storage tanks designated by Lessor,but Lessee shall not in such case be required to provide free tankage for any such oil for a longer period than one month after the same is run into tanks. With sixty(60)days'notice to Lessee, Lessor may cease taking oil royalty in kind. When paid in cash, the royalty shall be calculated upon the fair market value of the oil at the well which shall not be deemed to be less than the price actually paid to Lessee at the well by the purchaser thereof; and in no event shall the royalties be based upon a market value at the well less than the posted price In the field for such oil,or in the absence of a posted price in the field for such oil, upon a market value at the well less than the prevailing price received by other producers in the field for oil of like grade and gravity at the time such oil is run into pipelines or storage tanks. B. On gas, including casing head gas or other gaseous substance, 12.5% of the fair market value at the well or of the price received by Lessee at the well,whichever is greater, of all gas produced and sold from the leased land or utilized off the land by Lessee. A copy of all contracts for sale of gas shall be furnished to Lessor. Where gas is sold under contract that has been approved by Lessor,the fair market value of such gas for determining the royalties payable hereunder shall be the = f$ price at which such gas is sold under such contract. No approval by Lessor of the terms of any such _ o agreement shall operate to make Lessor a party thereto or obligate it thereunder in any way. At the a � option of Lessor, and with sixty (60) days' notice to Lessee, Lessor may take its royalty in kind. $,a With sixty(60)days'notice to Lessee, Lessor may cease taking gas royalty in kind. M >", = C. All costs of marketing the oil and/or gas produced shall be borne by Lessee and such costs shall 3 not directly or indirectly reduce the royalty payments to Lessor. Except that marketing costs for _? g Lessor's in-kind royalty shall be borne by Lessor. —3o m D. If Lessor owns a lesser interest in the oil and gas deposits of the above-described land than the g entire and undivided fee simple estate, then the royalties and rentals herein provided shall be paid " to Lessor only in the portion which its interest bears to the whole and undivided fee, but no refund = of any bonus consideration shall be made by Lessor hereunder. =00 —N 3. RECORDS-Lessee agrees to keep and to have in possession complete and accurate books and records showing the production and disposition of any and all substances produced on the leased land and to _g o permit Lessor,at all reasonable hours,to examine the same,or to furnish copies of same to Lessor upon m gr request along with purchaser's support documentation. Lessor will not be unreasonable with requests. All said books and records shall be retained by Lessee and made available in Colorado to Lessor for a =rut; period of not less than five years. _ N 4. MEASUREMENTS - All production shall be accurately measured using standards established by the American Gas Association (AGA)and/or the American Petroleum Institute(API)and all measuring } Oil and Gas Lease ' Page 3 devices shall be tamper proof as nearly as possible. Oil royalties due within the terms of this lease shall be calculated on actual and accurate measurements within API standards unless a different means of measurement,subject to Lessor's approval,is provided. 5. PAYMENTS AND REPORTS-All payments and reports due hereunder shall be made on or before the day such payments and reports are due. Nothing in this paragraph shall be construed to extend the expiration of the primary term hereof. Oil royalty payments and supporting documents shall be submitted prior to the last day of the month following each month's sale of production,and gas royalty payments and supporting documents shall be submitted prior to the last day of the second month following each month's sale of production. All payments shall be made by cash, check, certified check, or money order. Payment having restrictions,qualifications,or encumbrances of any kind whatsoever shall not be acceptedhby L . ein A penalty for a late payment shall be charged as set forth in the PENALTIES paragraph 6. PENALTIES-A penalty shall be imposed for, but not limited to late payments, Improper payments, operational deficiencies,violation of any covenant of this lease,or false statements made to Lessor. Penalties shall be determined by Lessor unless otherwise provided for by law and may be in the form of, but not limited to, interest, fees, fines, and/or lease cancellation. A penalty schedule shall be prepared by Lessor and shall become effective immediately after public notice. Said schedule may be changed from time to time after public notice. 7. LAW -The terms and conditions of this lease shall be performed and exercised subject to all laws, rules, regulations, orders, local ordinances or resolutions applicable to and binding upon the administration of lands and minerals owned by the County of Weld,and to laws,rules and regulations governing oil and gas operations in Colorado. Violations shall result in penalties as provided for by law or as set forth in the aforementioned schedule or shall,at the option of Lessor,result in default as provided hereinafter. 8. SURRENDER-Lessee may at any time,by paying to Lessor all amounts then due as provided herein, surrender this lease insofar as the same covers all or any portion of the land herein leased and be relieved from further obligations or liability hereunder with respect to the land so sutrendered;provided that no partial surrender or cancellation of this lease shall be for less than contiguous tracts of approximately forty (40) acres or Governmental lot corresponding to a quarter-quarter section; provided further that this surrender clause and the option herein reserved to Lessee shall cease and become absolutely Inoperative immediately and concurrently with the institution of any suit in any court of law by Lessee,Lessor or any assignee of either to enforce this lease,or any of its terms expressed or implied. In no case shall any surrender be effective until Lessee shall have made full provision for conservation of the leased products and protection of the surface rights of the leased land. 9. ASSIGNMENTS- A. Lessee,with prior written consent of Lessor, shall have the right to assign the entire leasehold interest of said Lessee in all or part of the land covered hereby, but not less, however, than contiguous tracts of approximately forty (40) acres or Governmental lot corresponding to a quarter-quarter section for any partial assignment,and for approval of such assignment Lessor shall make an assignment charge in an amount to be determined by Lessor. Prior to written approval by Lessor of assignment of this lease, Lessee (assignor) shall not be relieved of its obligations under the terms and conditions herein. An assignment shall not extend the term of this lease. B. If any assignment of a portion of the land covered hereby shall be approved,a new lease shall be issued to the assignee covering the assigned land,containing the same terms and conditions as this lease,and limited as to term as this lease is limited,and the assignor shall be released and discharged from all further obligations and liabilities as to that portion so assigned. 11111111111 11111111111 III 1111111111111 III 1111111II 1111 3096555 08/18/2003 12:09P Weld County, CO 3 of 8 R 0.00 D 0.00 Steve Moreno Clerk 8 Recorder • Oil and Gas Lease Page 4 C. Lessee shall notify Lessor of all assignments of undivided percentage or other interests. Said interests will not be recognized or approved by Lessor, and the effect of any such assignments will be strictly and only between the parties thereto,and outside the terms of this lease: and no dispute between parties to any such assignment shall operate to relieve Lessee from performance of any terms or conditions hereof or to postpone the time therefor. Lessor shall at all times be entitled to look solely to Lessee or his assignee shown on its books as being the sole owner hereof, and for the sending of all notices required by this lease and for the performance of all terms and conditions hereof. D. Although not binding on Lessor,all instruments of every kind and nature whatsoever affecting this lease should be filed with the Lessor. 10. OVERRIDING ROYALTY-Any and all reservations or assignments or overriding royalties shall be subject to approval by Lessor. The total of said overriding royalties shall not exceed five percent(5%), including any overriding royalty previously provided for unless production exceeds a monthly average of fifteen(15)barrels per day or ninety thousand cubic feet of gas per day(90 MCF/D). In the event production drops to this amount or less,any overriding royalties which exceed five percent(5%)may be suspended. Lessor's approval of a reservation or assignment of an overriding royalty shall not bind Lessor for payment of said overriding royalty and shall not relieve Lessee of any of its obligations for payment of royalties to'Lessor as provided by ROYALTY paragraphs herein. 11. OFFSET WELLS-Lessee agrees to protect the leased land from drainage by offset wells located on adjoining lands not owned by Lessor,when such drainage is not compensated for by counter-drainage. It shall be presumed that the production of oil and gas from offset wells results in drainage from the leased-land,unless Lessee demonstrates to Lessor's satisfaction,by engineering,geological,or other data,that production from such offset well does not result in such drainage,or that the drilling of a well or wells on the leased land would not accomplish the purposes of protecting the deposits under the leased land. Lessor's decision as to the existence of such drainage shall be final, and Lessee shall comply with Lessor's order thereon or surrender this lease as to any such undeveloped acreage as designated by Lessor. 12. DEVELOPMENT-Upon discovery of oil and gas or either of them on the leased land, Lessee shall proceed with reasonable diligence to develop said land at a rate and to an extent commensurate with the economic development of the field in which the leased land lies. 13. POOLING CLAUSE-Lessee may at any time or times pool any part or all of said land or lease or any stratum or strata with other lands and leases,stratum or strata,in the same field so as to constitute a spacing unit to facilitate an orderly or uniform well-spacing pattern or to comply with any order,rule, or regulation of the State or Federal regulatory or conservation agency having jurisdiction. Such pooling shall be accomplished orterminated by filing of record a declaration of pooling,or declaration of termination of pooling, and by mailing or tendering a copy to Lessor, or to the depository bank. Drilling or reworking operations upon or production from any part of such spacing unit shall be considered for all purposes of this lease as operations or productions from this lease. Lessee shall allocate to this lease the proportionate share of production which the acreage in this lease included in any such spacing unit bears to the total acreage in said spacing unit. 14. UNITIZATION - COMMUNITIZATION - In the event Lessor permits the land herein leased to be included within a communitization or unitization agreement,the terms of this lease may be deemed to be modified to conform to such agreement. When only a portion of the land under this lease is committed by an agreement, Lessor may segregate the land and issue a separate lease for each o portion not committed thereunder; the term of such separate lease shall be limited as to the original m term of this lease. The terms of the lease on that portion remaining in the unit shall be deemed to be = modified to conform to such agreement. Non-producing leases shall terminate on the first anniversary date of the lease following the termination date of the unit or part thereof modifying the lease, but in o no event prior to the end of the primary term of the lease or the extension term of the lease. re 11111111111111111111111III 11111111111111 IIIII /III /III 3096665 08/18/2003 12:09P Weld County, CO 4 of 8 R 0.00 D 0.00 Steve Moreno Clerk& Recorder Oil and Gas Lease Page 5 15. PRODUCTION-Lessee shall,subject to applicable laws,regulations and orders,operate and produce all wells upon the leased land so long as the same are capable of producing in paying quantities,and shall operate the same so as to produce at a rate commensurate with the rate of production of wells on adjoining lands within the same field and within the limits of good engineering practice,except for such times as there exist neither market nor storage therefor, and except for such limitations on or suspensions of production as may be approved in writing by Lessor. Lessee shall be responsible for adequate site security on all producing properties. 16. SHUT-IN WELLS-If Lessee shall complete a well on the leased land productive of gas and Lessee is unable to produce such gas due to a lack of suitable market therefor, Lessor may grant Lessee suspension of his obligations to produce hereunder until a suitable market for such gas can be found, and during any such suspension period,It shall be deemed that gas is being produced hereunder in paying quantifies. Except, however, that beginning on the anniversary date next, of the year of an extension of the lease by reason of a shut-in well,Lessee shall pay to Lessor a shut-in royalty equal to$2.00 per acre of the lease per annum in addition to the annual rental. The minimum amount of such shut-in royalty payment shall be$240. Each year's shut-in royalty shall be forfeited to Lessor except for the shut-in royalty paid for the year during which the well begins production. The maximum extesion of the lee, ll,shall be five years beyond the extension termn s described n the uEXTENSION e to the tparagraph hereence of a in eThe granting of any further extensions shall be at the sole option of Lessor. 17. OPERATIONS-No exploration,drilling or production operation,including permanent installations,shall be within 200 feet of any existing building or other improvement, including water well or reservoir, without the written permission of the owner of said improvements. Lessee shall keep a correct log of each well drilled hereunder,showing by name or description the formations passed through,the depth at which each formation was reached,the number of feet of each size casing set in each well,where set, and the total depth of each well drilled. Lessee,within thirty(30) days after the completion or abandonment of any well drilled hereunder,shall file in the office of Lessor a complete and correct log of such well,together with a copy of the electric log and the radioactivity log of the well when such logs, or either of them, are run; and also a copy of all drill stem test results, core records and analyses, record of perforations and initial production tests, if any. If any of the information required by this paragraph is contained in reports required to be filed with the Oil and Gas Conservation Commission of Colorado,the requirements of this paragraph for such information may be satisfied by such filing with said Commission,except for copies of the reports as are required by the following paragraph,and provided that all such Information is immediately available to Lessor. Any proprietary information so submitted shall not be subject to public inspection under Colorado law. Lessee shall bury pipelines below plow depth. Lessee shall set and cement sufficient surface casing to protect the fresh water wells of the area. 18. NOTIFICATION -Lessee shall notify Lessor and the surface lessee or surface owner of the location of each drill site at least two weeks prior to commencing drilling operations thereon. Lessee shall notify Lessor before commencing to plug and abandon any well by copy of Lessee's request for approval or sundry notice of intent to plug and abandon. 19. BONDS-Lessee shall be liable for all damages to the surface of the land, livestock,growing crops, water wells,reservoirs,or improvements caused by Lessee's operations on said land. No operations shall be commenced on the land hereinabove described unless and until Lessee shall have led a good and sufficient bond with Lessor,in an amount to be fixed by Lessor, to secure the payment r such damages as may be caused by Lessee's operations on said land and to assure compliance with all the terms and provisions of this lease, the laws of the State of Colorado, and the rules and regulations thereto appertaining. A bond may be held in effect for the life of production of any well. 20. SETTLEMENT-Lessee shall not remove any machinery,equipment or fixtures placed on said land, other than drilling equipment, nor draw the casing from any well unless and until all payments and obligations currently due Lessor under the terms of this lease shall have been paid or satisfied. Any 111111111111 Ilfl 1111111 III 1111111111111 III 11111 IIII 101 3096555 08/18/2003 12:09P Weld County, CO 6 of 8 R 0.00 D 0.00 Steve Moreno Clerk& Recorder • • Oil and Gas Lease • Page 6 machinery, equipment or fixtures left on this land for a period of more than six (6) months after the expiration hereof,shall automatically become the property of Lessor. 21. OTHER DISCOVERY-Should Lessee discover any valuable products other than oil and gas,on or within the leased land, Lessee shall within seven (7)days report such discovery to Lessor, in which event Lessee and Lessor may negotiate a provision for production of such discovery. 22: WATER-This lease does not grant permission,express or implied,to Lessee for water exploration, drilling,or establishing water wells without the written permission of the surface owner. If Lessor is the surface owner,said permission shall not be unreasonably withheld. If Lessee desires to establish or adjudicate any water right for beneficial use on the leased land,any such adjudication or application shall be in the name of Lessor if Lessor is the surface owner. The same shall apply to any non- tributary water rights established on the leased land which maybe put to beneficial use off said land. 23. DEFAULT-Upon failure or default of Lessee to comply with any of the terms and provisions hereof including but not limited to the failure to comply with laws,rules and regulations governing Colorado oil and gas operations,Lessor is hereby authorized upon notice and hearing,as hereinafter provided, to cancel this lease as to all of the leased land so claimed or possessed by lessee hereunder. In the event of any such default or failure,Lessor shall,before making any such cancellation,send to Lessee by certified mail,to the post office address of said lessee as shown by the records of Lessor,a notice of intention to cancel for such failure or default, specifying the same, stating that if within thirty(30) days from the date of mailing said notice,Lessee shall correct such failure or default,no cancellation will be made. If such failure or default is not corrected within thirty(30)days after the mailing of such notice,and if Lessee does not request a hearing on such notice within thirty(30)days,this lease will terminate and be canceled by operation of this paragraph without further action by Lessor,or further notice to Lessee. 24. EXTENSION-If Lessee falls to make discovery of oil and gas,or either of them,in paying quantities during the primary term hereof, or during drilling operations commenced during the primary term hereof, Lessee may make written application to Lessor for an extension of this lease. The granting of such extension shall be at the sole option of Lessor,according to the following conditions: A. No lease term will be extended for more than six(6)months from the original expiration date. B. That the Lessee shall pay to the Lessor the sum of one-third of the original bonus,with a minimum bonus of Ten Dollars($10.00)per acre. C. The Lessee must pay to the Lessor the sum of One Dollar($1.00) per acre leased as delayed rental for the term of the extension. D. That the royalty will remain the same. 25. HOLD HARMLESS-Lessee shall indemnify Lessor against all liability and loss,and against all claims and actions, including the defense of such claims or actions,based upon or arising out of damage or injury, including death,to persons or property caused by or sustained in connection with operations on this leased land or by conditions created thereby, or based upon any violation of any statute, ordinance,or regulation. 26. CONDEMNATION-tf the leased land shall be taken in any condemnation proceeding,this lease shall o automatically terminate as of the date of taking. The award for such condemnation shall be paid to o Lessor, except for any specific award(s) paid to Lessee for severed oil and gas reserves, in which m event of such specific award(s)shall be paid to Lessor in lieu of royalty lost by virtue of the condemnation. Improvements shall be removed by Lessee per terms in the SETTLEMENT paragraph herein. If only a portion of the leased land is taken by condemnation, Lessor may, at its option,terminate this lease or terminate only that portion of the lease so taken. • re U HIED 11111 111 1111111 III 1111111 111111 III 11111 IIIi 1111 3096565 08/18/2003 12:09P Weld County, CO 5 of 8 R 0.00 D 0.00 Steve Moreno Clerk& Recorder Oil and Gas Lease. Page 7 27. ERRORS-Every effort is made by Lessor to avoid errors in all procedures including but not limited to auction listings and lease preparation. Lessor shall not be liable for any inconvenience or loss caused by errors which may occur. Lessee shall notify Lessor immediately upon discovery of any errors or discrepancy whatsoever. 28. ARCHAEOLOGY-Lessee shall not destroy, disturb, mar, collect, remove or alter any prehistoric or historic resources of any kind on Weld County lands as provided by law. These resources include,but are not limited to,all artifacts of stone,wood or metal,'pictographs,structures,and bones. A discovery of anything of prehistoric or historic nature shall be reported to Lessor or the State of Colorado Archaeologist immediately. 29. DEFINITIONS- -mbustible and noncombustible),Including A 'Gas"as used herein shall mean all gases limited to all gaseous hydrocarbons,gaseous but not compounds,carbon dioxide,and helium. B. "Oil and gas" as used herein shall include all substances produced as by-products therewith, including But not limited to sulfur. • C. "Paying quantities"as used herein shall mean and refer to quantifies of oil and gas or of either of them sufficient to pay for the current cost of producing same. • 30. HEIRS AND ASSIGNS-The benefits and obligations of this lease shall inure to and be binding upon the heirs, legal representatives, successors or assigns of Lessee; but no sublease or assignment E hereof, or of any interest herein,shall be binding upon Lessor until the same has been approved by U Lessor as explained in the ASSIGNMENTS' paragraph provided. d s 31. WARRANTY OF TITLE - Lessor does not warrant title to the leased premises,but it shall,upon �"Y request,allow Lessee access to such abstracts and other title papers as it has in its files. There shall —g ti be no obligation on Lessor's part to purchase new or supplemental or other title papers nor to do any _ c curative work in connection with title to the subject lands. All abstracts of title, whether new or t, E, supplementary,obtained by Lessee and covering the subject lands shall become the property of and —3 f be delivered to Lessor after Lessee has completed its title examination and curative work, subject, a eu however,to the right of Lessee to use such abstracts upon request at any time during the term of the —o ti lease. aI".c IN WITNESS WHEREOF, Lessor has hereunto signed and caused its name to be signed by the CHAIR =0,0 BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF WELD,with the seal of the office affixed,and = o cm Coco Lessee has ned this agree ent,the day and year first above written. IIIIi CO CI ATTEST: I /� !/// isms BOARD OF COUNTY COMMISSIONERS =C s t_ , WE COUNTY,COLORADO m 111 `.`� �rn o Wgld County Clerk to the - -o x _ n Li r \r . ' Chair, and of County Commis ' ners I ' t' David E. Long (07/09/20 3) By: / „ �Cl/ o Deputy Clerk to the Bo `. j \\' ,1' rc BLS E: C4<UA ) � C- ‘‘67--• I BY(--:1; (k Oil and Gas Lease I IIIIII VIII IIII IIIIIII III IIIIIII IIIIII III VIII IIII IIII % Page 8 3096555 08/18/2003 12:09P Weld County, CO 8 of 8 R 0.00 0 0.00 Steve Moreno Clerk& Recorder STATE OF COLORADO ) ) ss COUNT'OF WELD --) LL The foregoing instrument was acknowledged before me this�day of 4, .t.e 7 ,20 D3. eWitness my hand and official seal. SPRY PV Notary Public ` My Commission Expires: '1 CAROL A. •E 1; HARDING • ipj'•. DO OF COlP .MyCommission Expires June 8,20011 • • m:lctbletbfwmslfoiease • (Revised 1112000) • NOZES RECEIPT y� DATE 1 J1--rc.2:3 NO. 7192 C I K RECEIVED FROM . A. 7 nj os. i _ ADDRESS C. I S. Atw, At.4.1.X4nr1 .31n UWiCTltd Dot nuv. 4'4%) $5 tZ•(2. ; x /� 1=- ~m• FOR kid d- lacO4nd✓n (i,3 �-I Z O U7.1)f-0 MI01INI HOW PAID �/. /�y�� w O_ ACCOUNT -. GASN _. 'IT ova 7 C a PAID ..-. 'CHICK . eel n Alpp J J DJ U PUKE ■ . �■ BY n ©2001 1 . j4OTES RECEIPT DATE 7-/1-a00 3 NO, 7193 N RECEIVED FROM E.F3 /SUM /;Lk '.)- CO � t.`O ADDRES i (_i ' CQi.r n .a i a �u,r1A ruT r $ 11770 is >:.::' O X -._- O FOR (..0a J- aa, /> / .24 (#2) I-- CO U 7 0 A((OUNI HOW PAID Uvd � ACCOUNT I. CASH }/ pC ��') Q' N AMT. E /toy`]i C Q J Y.4O _. CHECK Q 3 U . ..AGtDI IN fa:; ,`-■ BY ©2001 11®IP01Y•Ja ASSIGNMENT • THIS ASSIGNMENT("Assignment") is dated November 19, 2004, and is made from El Camino Resources, Inc., a Colorado corporation, and Raymond A. Tonelia, a natural person, whose collective address is 20153 Cottontail Road, Morrison, Colorado 80465 (collectively, "El Camino"), as assignors, to CFG Energy, Inc. ("CFG"), a Colorado corporation whose address is 3932 West 18th Street Lane, Greeley, Colorado 80634 ("CFG"), as assignee. For$100 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, El Camino hereby sells, assigns, transfers, grants, bargains and conveys all of its right, title and interest in and to the following lease to CFG: Lessor: Weld County, Colorado Lessee: El Camino Resources/Raymond A. Tonella Date: July 9, 2003 Recorded: Reception No. 3096555 (Weld County) Description: Township 5 North, Range 61 West, 6th P.M., Weld County, Colorado Section 15: NW/4 RESERVING, however, to El Camino Resources, Inc. (and not to Raymond A. Tonella)a five percent(5 %)of 8/8ths overriding royalty interest(subject to proportionate reduction based both on the percentage leasehold interest being assigned and on the percentage of the fee oil and gas estate covered by the lease)on all oil,gas and other leased substances produced, saved and sold under the terms of the lease. This reserved overriding royalty interest shall be free of all costs of drilling, completing,equipping and operating,but shall bear its proportionate share of all post-wellhead costs (including,without limitation,separation,treatment,gathering and compressing costs),as well as all severance, production and other taxes of every type and nature applicable thereto. This Assignment is made subject to the following terms and conditions: 1. On or before January 8, 2006, CFG shall either(i) spud a new well on lands covered by the lease or(ii) reenter the existing Weld County#22-15 wellbore in the SE/4 NW/4 of Section 15, drilling or opening the wellbore to a depth at least sufficient to test the Niobrara formation, and shall thereafter complete the new or reentered well in its sole discretion as either a dry hole or a producer. If CFG fails either to drill or to reenter the required well by January 8, 2006, it shall promptly thereafter reassign the lease to El Camino, free and clear of all burdens and encumbrances created after the date of this Assignment. 2. CFG shall furnish to El Camino all material information concerning each well drilled on lands covered by the lease consistent with common industry practice, including,without limitation, well logs,drill stem tests,production tests and daily drilling reports delivered by mail,together with copies of all material documents filed with and received from governmental agencies. • y , 3. El Camino warrants title to the lease from and against the claims of all persons claiming by, through, or under El Camino, but not otherwise. 4. This Assignment binds and inures to the benefit of El Camino and CFG,together with their respective successors and assigns. IN WITNESS WHEREOF, the parties have executed this Assignment. ASSIGNORS: ASSIGNEE: EL CAMIN0 RESOURCES, INC. CFG ENERGY, INC, By: / 15L4>4O1- By: ^I »«+ /° . �;c fG or Raymond A, Tonella, President Thomas B. Croke, III, President l�r� 1�iur. lcp-t. Raymond A. Ttnella, individually STATE OF COLORADO ) • ��pp�� ss. COUNTY OFL'�01150) This instrument was acknowledged before me on November iq,2004, by Raymond A. Tonella, individually and as President of El Camino Resources, Inc.,a Colorado corporation. My commission expires: Di toy Xb% • Notary Pub STATE OF COLORADO ) 1 f' t" )ss. COUNTY OF WELD ) This instrument\ I11e td before me on November 19,2004, by Thomas B. Croke, Ill, as President of CFG E�rgIQ Oc,a`Cbfor corporation. - R8 My commission exptirist •o�� O c - i z NU ¢ = 0� <n i o = Notary Public i PV ` O i�� ,,'11 IEttO\V```\`� COUNTY ATTORNEY STAFF APPROVAL This is to affirm the attached Division Order and Authorization to Receive Payment for an Oil and Gas Well has been reviewed by the County Attorney's staff as to form, escription, and percentage of royalties, if applicable. BY: Co Attorney [DATE: 'q JK ) a OFFICE OF THE COUNTY COMMISSIONERS 915 STREET P.O.O. BOX 758 758 GREELEY, COLORADO 80632 liD WEBSITE: www.co.weld.co.us C. PHONE: (970) F3 -4000, EXT. 4200 AX: (970) 352-0242 COLORADO December 13, 2004 CFG Energy, Inc. 3932 West 18"' Street Lane Greeley, CO 80634 Attn: Thomas B. Croke, III Re: Assignment of Oil and Gas Lease—NW'/a, SI5, T5N, R61 W Dear Mr. Croke: This letter is in response to your letter of November 19, 2004, asking for Weld County's consent to an Assignment to CFG Energy, Inc., of rights and interests in an oil and gas lease between Weld County and El Camino Resources/Raymund A. Tonella ("Lessee"), for property located in the NW'/ of Section 15, Township 5 North, Range 61 West of the 6th P.M., Weld County, Colorado. A copy of the Assignment is enclosed. Please be advised that Weld County approves of the Assignment. Specifically, Weld County approves of the Lessee's assignment of the Lessee's entire leasehold interest in the subject lease to CFG Energy, Inc., a Colorado corporation, whose address is detailed above. Additionally, Weld County also approves of the reservation of a five percent(5%)roverriding royalty in the subject lease by El Camino Resources, Inc. (and not Raymond A. Tonella). If you need anything further regarding this matter, please call Mr. Bruce T. Barker, Weld County Attorney, at (970) 356-4000, ext. 4390. Sincerely, BOARD OF COUNTY COMMISSIONERS OF WELD COUNTY, COLORADO - . Robert D. Masden, Chairman Enc. pc: Bruce Barker Hello