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OIL DIVISION ORDER AND AGREEMENT
TO: TEPPCO CRUDE OIL, L.P. Lease No. 54458B
(fka Duke Energy Transport&Trading Company)
6312 S.Fiddlers Green Circle,Suite 300N
Englewood, CO 80111 Date: August 11, 2004
Each of the undersigned (herein referred to individually and collectively as "Owner") hereby guarantees, represents and warrants to
TEPPCO Crude Oil, L.P. ("TCO"), its successors and assigns, that each Owner is the legal owner of the Owner's respective interest,
in the proportions hereinafter stated, in all Oil (as defined herein) produced and saved from the RUDOLPH 2-34, located in the
County of Weld, State of Colorado,described as follows(the"Lands"):
Township 05 North,Range 67 West
Section 02: SE SW
Effective 7:00 A.M. July 1, 2004 and until further written notice, TCO is hereby authorized to receive all such produced Oil, for
TCO's own purchase or for resale, to receive payment therefore, to make payment of and/or give credit for all proceeds derived
therefrom as follows:
Owner No. Credit To Decimal Interest
22031 WELD COUNTY BOARD RI 0.00615625<<Your Interest
OF COMMISSIONERS
All provisions appearing on the reverse side hereof are incorporated herein by reference and are an essential part of this Division
Order and Agreement(the "Agreement") with the same effect as if printed above the Owner's signatures. If Owner and TCO are or
become parties to a crude oil purchase or sale agreement ("Contract") concerning the Lands, the Contract will control any conflicts
between this Division Order and Agreement(the"Agreement")and the Contract.
Operator, please identify the decimal interest and appropriate lease numbers for Federal, State, University, Indian or any other tax
exempt interest(only if 100%less Taxes or if TEPPCO is disbursing proceeds. )
The Owners expressly waive any claim against TCO for any and all amounts owed to the Owners from any third party for Oil
produced from the Lands prior to the effective date hereof.
Signatures of Witnesses Owners Sign Below Taxpayer ID Number or
q (E er Mailing Address)rt� ( Social Security Number
el) j/�D% �C au-- 84-6000-813
Attest Chair, Robert D. Masden (8/23/04)
ya?�r�n�a Oth Street 970-356-4000 X 4200
TELEPHONE(Optional)
cw_� Colorado 80632
Deputy Clerk to
the Board 1 fri' ¢ • ,.
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Address ✓ ✓f
TELEPHONE(Optional)
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Retain this copy for your records 2004-2622
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The following provisions are also part of this Agreement. All provisions contained herein shall be binding upon the Owners and TCO and their successors,
legal representatives and assigns.
FIRST: The word "Oil"shall mean all crude oil,condensate and other marketable liquid hydrocarbons produced and saved from the above described real
property. Oil shall become TCO's property as soon as the same is received into TCO's custody or that of any carrier designated by TCO. TCO is not
obligated to:(a)receive Oil in definite quantities,(b)receive Oil for fixed periods,or(c)provide storage.
SECOND: The Oil shall be delivered lab.to any carrier designated by TCO which gathers and receives crude oil,condensate or other liquid hydrocarbons,
and TCO shall pay for such Oil to the Owners according to the division of interests herein specified at the price agreed upon between TCO and the lease
operator.
THIRD: Quantities of Oil purchased by TCO shall be determined by the method of measurement and computation employed by TCO or its agent designated
to receive such Oil including without limitation,the gauging of storage tanks using regularly compiled tank tables,the use of certified truck gauges,and the
use of meters or any other reasonably accurate method of measurement and computation. TCO shall correct the volume and gravity to a temperature of 600
Fahrenheit and shall deduct from such corrected volume the full percentages of basic sediment,water and other impurities as shown by tests conducted by
TCO. TCO may refuse to receive any Oil that it does not consider merchantable.
FOURTH: All checks shall be delivered or mailed to the respective Owner at the addresses above stated. TCO shall make payments hereunder monthly by
TCO's check for Oil received during the preceding month;provided that if the monthly payment due an Owner is less than the greater of one hundred dollars
($100.00)or the amount under applicable state law which a purchaser is not required to immediately disburse,TCO may defer such payment,without interest,
until the amount payable to said Owner equals or exceeds said amount. In such event,payment shall be made at the next regular settlement date. TCO is
hereby authorized to withhold from the proceeds of Hydrocarbon's the Owner's proportionate share of any tax levied and assessed by any governmental
authority on the Oil received and purchased hereunder and to pay the same. If Owner is overpaid any amount by TCO, Owner shall promptly return such
overpayment to TCO. If Owner does not return any such overpayment within ten(10)days after mailing of written notice to Owner's last known address by
TCO and TCO thereafter commences a legal proceeding to recover any such overpayment, as part of any judgment in TCO's favor, TCO shall also be
awarded all costs and expenses incurred by TCO, including reasonable attorneys fees, in attempting to recoup any such overpayment. TCO shall have the
right, in its sole discretion, to set off from amounts owed to any Owner from the sale of Oil or from the sale of crude oil, condensate or other liquid
hydrocarbons produced from other properties against any amounts which may be owed to TCO by the respective Owner under the provisions hereof or any
other transaction with TCO.
FIFTH: The Owners shall furnish, at no cost to TCO, evidence of title satisfactory to TCO. Any Owner receiving proceeds of Oil on behalf or for the
account of any other person or entity shall promptly make full and proper settlement to each such person or entity. Until satisfactory evidence of title is
furnished or in the event of any adverse claim to the Oil,lien or dispute at any time concerning title or ownership to the Oil,the proceeds thereof,and/or the
Lands,TCO shall have the right at any time and from time to time to withhold payment for Oil accruing to the interest or interests affected thereby until such
adverse claim,lien or dispute shall have been fully settled,without liability for damage or interest to the Owners in any such case. If suit is filed or an adverse
claim is made affecting title or ownership to the Oil,the proceeds thereof,and/or the Lands,each Owner shall promptly provide to TCO(at the above address)
written notice thereof, together with a certified copy of any complaint or petition filed along with all other pleadings related thereto. Each Owner shall
defend,indemnify and hold TCO and its affiliates,directors,officers,employees,agents and representatives(collectively,the"TCO Indemnitees"),harmless
from and against any and all claims, liabilities, demands, actions, causes of action, costs, damages, and expenses (including, without limitation, costs of
investigation, defense and court and reasonable attorneys' fees) arising from or in any way relating, directly or indirectly, to any proceedings, actions or
adverse claims concerning title to or ownership of the Oil,the proceeds thereof, taxes thereon, and/or the Lands. SUCH INDEMNIFICATION SHALL APPLY
NOTWITHSTANDING YOUR NEGLIGENCE OR OTHER ACTION AND NOTWITHSTANDING SUCH ACT MAY OCCUR IN THE FUTURE,IT BEING THE INTENT OF
THE PARTIES HERETO THAT SUCH INDEMNIFICATION SHALL APPLY TO ALL SUCH ACTS.
SIXTH: TCO shall not be responsible for any change of ownership in the absence of actual notice and satisfactory proof thereof. Each Owner shall notify
TCO in writing of any change in their ownership. Any transfer,assignment,or conveyance of any of an Owner's interest,however accomplished,shall be
made subject to this Agreement and effective at 8:00 A.M.on the first day of the calendar month following the receipt of notice by TCO. If any such written
notice is not received by TCO, the respective Owner shall defend, indemnify and hold the TCO Indemnitees harmless from and against any over or
underpayment,or wrong payment of any such sum or sums and all other damages in connection therewith. TCO shall have the right,in its sole discretion,to
set off from amounts owed to any Owner from the sale of Oil or from the sale of crude oil, condensate or other liquid hydrocarbons produced from other
properties against any amounts which may be owed to TCO by the respective Owner under the provisions hereof or any other transaction with TCO.
SEVENTH: If an Owner is a working interest owner and/or operator,it hereby guarantees,represents and warrants to TCO that all Oil tendered hereunder
has been or will be produced and delivered in compliance with all applicable federal, state and local laws, orders, rules and regulations. In addition, if a
working interest owner and/or operator: (a) is being disbursed 100%of the proceeds from the Oil, it hereby assumes liability and shall be responsible for
payment of any and all proceeds from the sale of Oil to all rightful owners, including,without limitation,working interest, royalty and overriding royalty
interest owners and other payments due or to become due on the Oil and, if such disbursed proceeds are inclusive of taxes, all taxes applicable to the
production,purchase,sale,storage,or transportation of Oil,including,without limitation,severance taxes,to the proper governmental authorities and(b)has
requested TCO to disburse the proceeds of production,TCO will disburse proceeds as the operator directs.
EIGHTH: This Agreement shall bind each Owner as soon as signed by them,whether or not signed by any other Owner. All provisions herein contained
shall apply to each Owner separately and not jointly. This Agreement may be executed in counterparts,all of which together shall constitute one Agreement.
This Agreement may be terminated effective no less than thirty (30) days after delivery of written notice. The Owners consent to TCO or any company
owning pipeline connected to wells or tanks located on the Lands or lands pooled therewith,to disconnect and remove such pipelines upon termination hereof
NINTH: This Agreement inures to the sole and exclusive benefit of TCO and Owner, their respective successors, legal representatives and assigns, and
confers no benefit on any third party.
sow TEPPCO
INSTRUCTIONS TO ALL INTEREST OWNERS
TEPPCO CRUDE OIL,L.P. HAS ENCLOSED AN OIL DIVISION ORDER OR TRANSFER ORDER FOR YOUR EXECUTION.
IF YOU ARE RECEIVING A DIVISION ORDER FROM TEPPCO FOR THE FIRST TIME,PLEASE BE ADVISED THAT WE
ARE THE NEW OIL PURCHASER. IF A TRANSFER ORDER IS ENCLOSED WE ARE EVIDENCING CHANGES OF
OWNERSHIP IN AN EXISTING WELL.
THE ATTACHED DOCUMENT SHOULD NOT BE ALTERED IN ANY WAY EXCEPT TO CORRECT SPELLING ERRORS,
UNLESS ACCOMPANIED BY DOCUMENTARY EVIDENCE TO SUPPORT THE CHANGE.
If your name and interest are correctly shown:
1. Sign your name as shown on the Oil Division Order or Oil Transfer Order.
2. Have your signature witnessed by two competent witnesses.
3. If your name has changed due to marriage or divorce,execute the Oil Division Order or Oil Transfer Order
using your present name and furnish a copy of the marriage certificate or divorce decree.
4. If signing for a corporation, signature must be attested, corporate seal fixed and title of signatory party
reflected.
5. If signed by agent,attorney-in-fact,guardian or any party other than the named interest owner,a certified
copy of the power of attorney or other evidence of such party's right to sign must be furnished.
6. Oil Division Orders or Oil Transfer Orders for partnerships must be executed by all partners or by an
authorized partner. A certified copy of the instrument giving said partners authority to sign must be
furnished.
7. Should you fail to provide your correct Social Security Number or Tax Identification Number,the law
provides that we withhold 31%of all production proceeds due you. You may also be subject to a further
penalty levied by the Internal Revenue Service.
8. Your correct mailing address should be noted in the space provided to insure prompt receipt of production proceeds.
9. The top copy or the"Original"of the Oil Division Order or Oil Transfer Order should be returned to:
TEPPCO Crude Oil,L.P.
6312 South Fiddlers Green Circle
Suite 300N
Englewood, CO 80111
Attn: Royalty Relations
10. Should you have any further questions regarding the enclosed Oil Division Order or Oil Transfer Order,
please contact your Operator or TEPPCO Crude Oil, L.P.at(720)528-3140.
11. Please DO NOT DETACH the exhibit from the Oil Division Order or Oil Transfer Order if one is included.
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, legal description, and
percentage of royalties, if appli
BY:
Coun orney
DATE: `d 1/1 )2 )
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