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Home My WebLink About940226.tiff 8:t2.3,585,32 CORRECTED RESOLUTION RE: APPROVE REQUEST FOR AN EXCEPTION LOCATION TO DRILL A COMMINGLED WELL FROM ENERGY MINERALS CORPORATION AND AUTHORIZE CHAIRMAN TO SIGN WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to Colorado statute and the Weld County Home Rule Charter, is vested with the authority of administering the affairs of Weld County, Colorado, and WHEREAS, Weld County, Colorado, has received a request for an exception location to drill a commingled well from Energy Minerals Corporation for the purpose of facilitating extraction, and WHEREAS, said well is situated on land more particularly described as: Township 3 North, Range 62 West, 6th P.M. Section 32: SEt NEI Weld County, Colorado WHEREAS, said request has been reviewed by a member of the Weld County Attorney's staff and found to be in order, and WHEREAS, the Board deems it advisable to approve said request on the parcel of land described herein, and WHEREAS, on July 28, 1993 the Board approved said request by Resolution; however, said Resolution incorrectly stated that "Weld County is entitled to a one-eighth royalty interest on production, " and WHEREAS, this Corrected Resolution is intended to correct the Board's Resolution of Approval dated July 28, 1993, and recorded at Book 1395, Reception 02344480 on August 3, 1993, in the office of the Weld County Clerk and Recorder to reflect that Weld County has no claim of an interest in the minerals underlying the parcel of land described herein or in any oil and gas lease pertaining to said parcel of land. NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of Weld County, Colorado, that the request for an exception location to drill a commingled well from Energy Minerals Corporation on the hereinabove described parcel of land be, and hereby is, approved. BE IT FURTHER RESOLVED by the Board the Chairman be, and hereby is, authorized to sign said request. BE IT FURTHER RESOLVED by the Board of County Commissioners that this Corrected Resolution shall correct and replace the Board's previous Resolution on this subject dated July 28, 1993, and recorded at Book 1395, Reception 02344480 on August 3, 1993, in the office of the Weld County Clerk and Recorder. B 1433 REC 02380582 03/29/94 14 : 23 $0 . 00 1/002 F 1815 MARY ANN FEUERSTEIN CLERK & RECORDER WELD CO, CO 940226 Leong ap_e : f-LAi?wa6bn) RE: CORRECTED RESOLUTION - EXCEPTION LOCATION FROM ENERGY MINERALS CORPORATION PAGE 2 The above and foregoing Resolution was, on motion duly made and seconded, adopted by the following vote on the 9th day of March, A.D. , 1994. BOARD OF COUNTY COMMISSIONERS/k1444g7 ATTEST: WELD COUNTY, COLORADO ) Weld County Clerk to the Board zziki //L.L ,firscee=ersc W. H. Webster, Cha'rman 66 ... %X1theBoa Daale . Hall, �P o-Tem� APPROVED AS TO FORM: �--. �/�J ./ 4 �et-y" /Georg . Baxter Cunt __ - ` •nstance L. Harbert EXCUSED Barbara J. Kirkmeyer B 1433 REC 02380582 03/29/94 14 : 23 $0 . 00 2/002 940226 F 1816 MARY ANN FEUERSTEIN CLERK & RECORDER WELD CO, CO CORRECTED RESOLUTION RE: APPROVE REQUEST FOR AN EXCEPTION LOCATION TO DRILL A COMMINGLED WELL FROM ENERGY MINERALS CORPORATION AND AUTHORIZE CHAIRMAN TO SIGN WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to Colorado statute and the Weld County Home Rule Charter, is vested with the authority of administering the affairs of Weld County, Colorado, and WHEREAS, Weld County, Colorado, has received a request for an exception location to drill a commingled well from Energy Minerals Corporation for the purpose of facilitating extraction, and WHEREAS, said well is situated on land more particularly described as : Township 3 North, Range 62 West, 6th P.M. Section 32 : Southeast quarter, northeast quarter Weld County, Colorado WHEREAS, said request has been reviewed by a member of the Weld County Attorney' s staff and found to be in order, and WHEREAS, the Board deems it advisable to approve said request on the parcel of land described herein, and WHEREAS, on July 28, 1993 the Board approved said request by Resolution; however, said Resolution incorrectly stated that "Weld 940226 � t County is entitled to a one-eighth royalty interest on production, " and WHEREAS, this Corrected Resolution is intended to correct the Board' s Resolution of Approval dated July 28, 1993 and recorded at Book 1395, Reception 02344480 on August 3, 1993 in the office of the Weld County Clerk and Recorder to reflect that Weld County has no claim of an interest in the minerals underlying the parcel of land described herein or in any oil and gas lease pertaining to said parcel of land. NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of Weld County, Colorado, that the request for an exception location to drill a commingled well from Energy Minerals Corporation on the hereinabove described parcel of land be, and hereby is, approved. BE IT FURTHER RESOLVED by the Board the Chairman be, and hereby is, authorized to sign said request. BE IT FURTHER RESOLVED by the Board of County Commissioners that this Corrected Resolution shall correct and replace the Board' s previous Resolution on this subject dated July 28, 1993 and recorded at Book 1395, Reception 02344480 on August 3, 1993 in the office of the Weld County Clerk and Recorder. 940226 ATTEST: BOARD OF COUNTY COMMISSIONERS OF WELD COUNTY, COLORADO CLERK TO THE BOARD OF COUNTY COMMISSIONERS W. H. Webster, Chairman BY: Deputy Clerk to the Board George E. Baxter APPROVED AS TO FORM: Dale K. Hall BY: Weld County Attorney Constance L. Harbert Barbara J. Kirkmeyer cresoexc .gjb 940226 Mar. 4. 1994 4: 14PM "° EXPLORATION INC No, 9422 P. 1/14 ELK EXPLORATION, NC. a subrcia.ri of ES Resources, Inc. 216 16th Street Telephone: (303) 572-1400 Suite 1400 Telefax: (303) 572-3411 Denver, CO 80202 TO: MA( 44 OM/14iS.fYdMODATE: 1/4 %y AT: dee iv trteu s 00 A✓ COPIES TO: • FAX #: 1— 30 3 - 5.6g- 4,141,71- FROM: 4/1/9S0 4/ lV Total page(s) including this cover page. If you should experi r._a troubla with this transmission, please call (3__03))572-1 00 as soon as poss5.e. RE: /7 �iGL� eteda,i_ freGar2 rye t, tree "4"0-(244124-vent 75e- `g/___ kijuipt;_, WelaaR., sya - / 4610 6 OP-jai . MAR 4 '94 16: 14 303 5723411 PAGE . 001 %film.. Mar, 4. 1994 4: 14PM "V EXPLORATION INC No. 9422 P. 2/14 CORPORON HOEHN SVITAVSKY VAUGHTERS & EYLER ATTORNEYS AT LAW VERN R.CORPORON 17835 EAST ARAPAHOE ROAD ROBERT D.HOEHN TOWER ONE-SUn'E 100 TED T.SVITAVSCY• ENGLEWOOD,COLORADO 80117.3940 JAMES C.VAUGHIERS TELEPHONE(303)790-4103 RICHARD R.EYLER FAX(303)790-0927 ALIOADWmD OS LAMAS "ALSO ADMITTED L\021NON DATE: March 4, 1994 STATE: Colorado COUNTY: Weld LESSOR: State of Colorado PROSPECT: Lanyard WELL NAME: Hobe State 42-32 DRILLING AND DIVISION ORDER TITLE OPINION HS Resources, Inc. 216 Sixteenth Street Suite 14OO Denver, Colorado 8O2O2 Attention: James P. Wason, Consulting Landman LAND DESCRIPTIQN: Township 3 North. Range 62 West, 6th P.M. Weld County, Colorado Section 32: NE/4, E/2SW/4 Containing 240.00 acres, more or less. LIMITED TO OIL AND GAS PRODUCTION FROM THE SURFACE OF THE EARTH TO THE BASE OF THE STRATIGRAPHIC EQUIVALENT OF THE DEEPEST DEPTH DRILLED IN THE ROBE STATE 42-32 WELL 1 - See Requirement No. 23 in the body of this opinion. NUM Mete 4 nr MAR 4 '94 16: 14 303 5723411 PRGE. 002 940226 Mar, 4. 1994 4: 15PM "7 EXPLORATION INC -_ Na, 9422 P. 3/14 HS Resources, Inc. Page 2 March 4, 1994 MATERIALS EXAMINED: 1. Personal examination of the records of Weld County, Colorado, located in the office of the Clerk and Recorder of weld County, Colorado, insofar as the same pertain to the captioned lands, for the period of time from April 5, 1939 (which we assume was inception of title) to April 1, 1993 at 7:45 a.m. This examination was based upon a chain of title prepared and provided to the undersigned by HS Resources, Inc. There was no indication as to the source of the chain of title or upon what it was based. 2 . Personal examination of the records of Weld County, Colorado, located in the office of the Clerk and Recorder of weld County, Colorado, insofar as the same pertain to the captioned lands, for the period of time from April 1, 1993 at 7 :45 o'clock a.m. through February 14, 1994 at 7:45 o 'clock a.m. This examination was based upon a chain of title prepared by Crews & Zeren, Petroleum Land Consultants, Greeley, Colorado, which chain was based upon the tract indices of Transamerica Title Insurance Company, Greeley, Colorado, from April 1, 1993 at 7:45 o'clock a.m. through June 1, 1993 at 7:45 o'clock a.m. and the computerized title chains (SKLD searches) provided to Craws & Zeren by Transamerica Title Insurance Company, Greeley, Colorado, covering said Section 32 from June 1, 1993 at 7:45 o'clock a.m. to February 14, 1994 at 7:45 o'clock a.m. and which are purportedly all cf the instruments placed of record with respect to the lands covered by this opinion for the period of time referenced in this Paragraph 2. 3. Personal examination of the records of the Colorado State Board of Land Commissioners in Denver, Colorado on February 23, 1994. The examination included the surface and mineral tract books for the captioned lands, the case file for the subject oil and gas lease, the lease ownership and rental records for the subject oil and gas lease, and other pertinent records. The examination covered the records as posted on February 23, 1994, at 8:00 o'clock a.m. 4. Personal examination of the records of the Colorado State office of the Bureau of Land Management located in Lakewood, Colorado on March 4, 1994. The examination was based upon relevant materials relating to the captioned lands. The examination covered the records as pooled on March 4, 1994 at 9:00 o'clock a.m. Final x1$1 a Vane I.MI MRR 4 '94 16: 14 303 5723411 PRGE . 003 940226 Mar, C 1994 4: 15PM '-v EXPLORATION INC No, 9422 P, 4/14 NS Resources, Inc. Page 3 March 4, 1994 5. A copy of the Lease Exploration Agreement dated effective October 26, 1993, by and between HS Resources, Inc. and Hobe, Inc. , with attached schedules. 6. A copy of Order No. 307-1 entered in Cause No. 307 by the Oil and Gas Conservation Commission of the State of Colorado on February 17, 1976 and Order Nos. 307-2 and 1-151 entered in Cause Nos. 307 and 1 by the Oil and Gas Conservation Commission of the State of Colorado on July 30, 1993, as of July 19, 1993, all entered In The Matter of the Promulgation and Establishment of Field Rules to Govern Operations in the Lost Creek Field, Weld County, Colorado. 7. A copy of Application for Permit to Drill, Permit No. 93-973, filed with the Oil and Gas Conservation Commission of the State of Colorado and approved July 23, 1993 and a copy of a Sundry Notice and Report on Wells requesting a drilling permit extension filed with the oil and Gas Conservation Commission extending Permit No. 93-973 to March 18, 1994. Dear Mr. wason: Based upon an examination of the foregoing materials, the undersigned finds the record ownership of all of the captioned lands, as of the effective date of the materials examined, to be as set forth below, subject, however, to the comments, exceptions and requirements set forth herein. For purposes of this opinion, the captioned lands have been divided into the following two (2) tracts: TRACT 1: Township 3 North. Ranae 62 West, 6th P.M. Weld County, Colorado Section 32: NE/4 containing 160 .00 acres, more or less. TRACT 2: Township 3 North. Ranee 62 West 6th P M Weld County, Colorado Section 32: E/2SW/4 containing 80.00 acres, more or less. RS Ulna Muth„+M MAR 4 ' 94 16: 15 303 5723411 PAGE . 004 94022R Mar. 4. 1994 4: I6PM "" EXPLORATION INC No, 9422 P. 5/14 HS Resources, Inc. Page 4 March 4, 1994 OWNERSHIP: SURFACE: Tracts 1 and 2: State of Colorado 100.00% OIL. OAS AND OTHER MINERALS: Tracts 1 and 2: State of Colorado 100.00% OIL AND GAS LEASEHOLD: Tract 1: Before Payout (Nat Revenue Interests) . 1 Royalty: State of Colorado 12.50000% ( 100.00% x 12.5%) Total RI: 12.50000% Overr{dina Royalty Intar�ost: John H. Dolloff .50000% ( .50% x 8/8) Karen O'Hara Garr .50000% ( .50% x 8/8 ) Kathryn O'Hara Altman .50000% ( .50% x 8/8) Colleen O'Hara Hannen .50000% ( .50% x 8/8) Bernard J. O'Hara .50000% ( .50% x 8/8 ) damp Pima THAN w is lION MAR 4 '94 16: 15 303 5723411 PRGE . 005 940226 Mar, 4. 1994 4: 16PM "`° EXPLORATION INC No, 9422 P. 6/14 HS Resources, Inc. Page 5 March 4, 1994 Brian E. O'Hara .50000% ( .50% x 8/8) Rita A. O'Hara 2.00000% (2.00% x 8/B) Hobe, Inc. .50000% ( .50% x 8/8) Total ORI: 5 .50000% working interest: HS Resources, Inc. 82.00000% (100% x 82%) Total WI: 82.00000% TOTAL 100.00000% After Payout (Net Revenue Interests) . a Royalty: State of Colorado 12.50000% (100.00% x 12.50%) Total RI: 12.50000% Qverridisa Royalty Interest: John H. Dolloff .50000% ( .50% X 8/8) Karen O'Hara Garr .50000% ( .50% x 8/8) Kathryn O'Hara Altman .50000% ( .50% x 8/8) Colleen O'Hara Hannen . 50000% ( .50% x 8/8) Bernard J. O'Hara .50000% ( . 50% x 8/8) uitalgtop R1wi 9g51'! MMY 41901 MAR 4 ' 94 16: 15 303 5723411 PAGE . 006 940226 Mar, 4. 1994 4: 16PM _,( EXPLORATION INC No, 9422 P. 7/14 HS Resources, Inc. Page 6 March 4, 1994 • Brian E. O'Hara .50000% ( .50% a 8/8) Rita A. O'Hara 2.00000% (2 .00% I 8/8) Hobe, Inc. .50000% • ( .50% x 8/8) Total ORI: 5.50000% working Interest: • HS Resources, Inc. 69.70000% (85% x 82%) Hobe, Inc. 12,30000% (15% x 82%) Total WI: 82.00000% TOTAL 100.00000% GROSS WORKING INTERESTS: BPO1 1221 HS Resources, Inc. 100.00% 85 .00% Hobe, Inc. - 0 - 15 .00% TOTAL 100.00% 100.00% 1 - See Requirement No. 7 in the body of this opinion. Tract 2: Royalty: State of Colorado 12.50000% (100.00% x 12.50%) Total RI: 12.50000% W.MLq' Fwl WIXO 11MM MAR 4 ' 94 16: 16 303 5723411 PAGE . 007 940226 Mar, 4. 1994 4: 16PM ( EXPLORATION INC No. 9422 P. 8/14 ' HS Resources, Inc.. Page 7 March 4, 1994 Overriding Royalty Interest: • None of record. working Interest: Hobe, Inc. • 87.50000% (100% S 87.50%) Total WI: 87.50000% TOTAL 100.00000% GROSS WORRINO INTERESTS: Hobe, Inc. 100.00% ,EASE INFORMATION: NOTE: All recording references are to the official records of the county in which the captioned lands are located. SURFACE LEASE: By Lease AGS-39285 dated January 1, 1987, the State of Colorado, acting through the State Board of Land Commissioners, leased all of the captioned lands, and other lands, to Northwestern Mutual Life Insurance Company, 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, for grazing and agricultural purposes. The lease is a ten year lease and expires January 1, 1997. The lease was assigned by Northwestern Mutual Life Insurance Company to Lost Creek Land and Cattle Company on February 16, 1990. The assignment was approved April 4, 1990 by the State Board of Land Commissioners. The address of Lost Creek Land and Cattle Company is P. 0. Box 85, Roggen, Colorado 80652. OIL AND GAS LEASE (Base Lease) : Serial Number: 85/1019-S Effective: January 17, 1985 Recorded: February 29, 1988 in Book 1186 at Reception No. 2132186 un.ri- nta wssw 'Arch .nw MAR 4 '94 16: 16 303 5723411 PAGE . 006 940226 Mar, 4. 1994 4: 19PM —"( EXPLORATION INC No, 9422 P. 9/14 HS Resources,' Inc. Page 8 March 4, 1994 Lessor: State of Colorado, acting by and through the State Board of Land Commissioners Lessee: Hobe, Inc. of Wyoming 1580 Lincoln Street, Suite 1200 Denver, Colorado 80213 Description: Section 32:3 No h, Range aneW62 ._West 6th P.M. containing 240.00 acres, more or less Primary Tern: Five (5) years and so long thereafter as oil and gas, or either of them, is produced in paying 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 of said lease. Royalty: 1/8th Delay Rentals: $240.00 per year, computed at the rate of $1.00 per acre or fraction thereof of the lands covered payable annually in advance. NOTE: If the lease is extended for an additional term, Lessee shall pay an annual rental at double the above rate specified. This lease has been so extended and, therefore, the rental is $2.00 per acre or fraction thereof per year. Shut-in Gas Royalty: Yes, Paragraph 15 . See Requirement No. 5 below in the body of this opinion. Entireties Clause: None Lesser Interest Clause: Yes, Paragraph 2(d) rwmn,cps 0113131 N.�4 Ml MAR 4 ' 94 16: 16 303 5723411 PAGE . 009 940226 Mar, 4. 1994 4: 11PM ""Y EXPLORATION INC No, 9422 P. 10/14 HS Resources, Inc. Page 9 March 4, 1994 Pooling or. Unitization Clause: Yes, Paragraph 13 Lease Form: Form 1935 (Rev. 4/84) NOTE: This lease has been extended by Extension of Oil. and Gas Lease dated effective January 17, 1990. The lease has been extended for a tens of five (5) years and expires on January 17, 1995. The extension was approved by the State Board of Land Commissioners on January 2, 1990. LEASE HISTORY AND ASSIGNS AFFECTING OIL AND GAS LEASE 85/1019-S: 1. The captioned lands were included as Tract No. 21 on the Sale Notice of lands available for leasing for oil and gas purposes at the Oil and Gas Lease Auction for the State of Colorado lands held January 17, 1985. The Notice of Sale complied with the guidelines of the State Board of Land Commissioners in effect at that time. Hobe, Inc. of Wyoming was the winner in the oil and gas lease auction for Tract No. 21 held on January 17, 1985. Hobe, Tnc. of Wyoming bid Fifty Dollars ($50.00) per acre as a bonus and submitted said amount together with a filing fee in the amount of Fourteen and 25/100 Dollars ($14.25) and advance rentals in the amount of Two Hundred Forty Dollars ($240.00) . Lease 85/1019-S was issued to Hobe, Inc. of Wyoming effective as of January 17, 1985. 2. By assignment of overriding royalty interest dated April 15, 1988 and recorded April 21, 1988 in Book 1193 at Recepticn No. 2138528, Hobe, Inc. assigned 5% overriding royalty interest to the following individuals in the proportions set forth after each name: John H. Dolloff .50% of 1% of 8/8ths 365 Spruce Road Golden, Colorado 80401 Karen O'Hara Garr .50% of 1% of 8/8ths 8446 Nelson Court Arvada, Colorado 80005 Kathryn O'Hara Altman .50% of 1% of 8/8ths 6364 East Phillips Place Englewood, Colorado 80110 NOMM ep NW 9115549 Y1.d 9.104 MAR 4 ' 94 16: 17 303 5723411 PRGE . 010 940226 Mar, 4. 1994 4: 17PM EXPLORATION INC No. 9422 P. 11/14 • • HS Resources, Inc. Page 10 March 4, 1994 Colleen O'Hara Hannen .50% of 1% of 8/eths 5709 South Geneva Street Greenwood Village, Colorado 80111 Bernard J. O'Hara .50% of 1% of 8/8ths 9050 Markville Drive, #1335 . Dallas, .Texas 75243 Brian E. O'Hara .50% of 1% of 8/8ths 7475 Highland Drive Lakewood, Colorado 80215 Rita A. O'Hara 2% of 8/8ths 7475 Highland Drive Lakewood, Colorado 80215 The overriding royalty interest assigned was in the subject lease insofar as it covered the NE/4 of Section 32, Township 3 North, Range 62 West, as well as in other leases covering other lands. The assignment contained a lesser interest clause and did not contain extensions and renewals or reassignment clauses. ENCUMBRANCES: A. Mortgaaes, Unreleased Deeds of Trust and Other Encumbrances: 1. By Deed of Trust dated February 17, 1993, recorded February 18, 1993 in Book 1371 at Reception No. 2322186, Lost Creek Land and Cattle Company, a Colorado partnership, mortgaged its interest in the above-referenced State Grazing Lease No. 39285 to the public trustee of Weld County, Colorado for use of the Farm Credit Bank of Wichita, 245 North Waco, Wichita, Kansas 67201 to secure a principal indebtedness of $1,850,000.00, due on or before January 1, 2015. This instrument was rerecorded June 16, 1993 in Book 1387 at Reception No. 2337325 for purposes of correcting a signature. By Financing Statement recorded February 18, 1993 in Book 1371 at Reception No. 2322187, Lost Creek Land and Cattle Company, a Colorado partnership, granted a security interest to Farm Credit Savings of Mountain Plains, FLEA, as attorney-in-fact for the Farm Credit Bank of Wichita, granting a security interest in various wells, pumps, motors, equipment and sprinkler systems for irrigation of certain lands as further security of the above- referenced loan. `elt.k+. . final WS9.s '31 Mrth l 14N MAR 4 ' 94 16: 17 303 5723411 PRGE . 011 940226 Nor. 4. 1994 4: 18PM '( EXPLORATION INC No, 9422 P. 12/14 HS Resources, Inc. Page 12 March 4, 1994 • to a point on the North boundary of said Section • 32.; whence the North Quarter corner bears West a distance of 35.16 feet. The referenced right-of-way included a reservation to the State of Colorado of all minerals, including oil and gas, and rights of ingress and egress. The right-of-way was to terminate upon cessation o₹ the use for which it was granted. 2. By Right-of-Way No. 2101-21 dated November 6, 1974 and not recorded in Weld County, Colorado, the State of Colorado, acting by and through the State Board of Land Commissioners, granted to the Board of County Commissioners, Weld County, Colorado, P. O. Box 756, Grealey, Colorado 60631, a right-of-way for the purpose of constructing, reconstructing, operating and maintaining a public road. The right-of-way was 60 feet in width in the NE/4 and NE/4SW/4 of Section 32, Township 3 North, Range 62 West and also crossed other lands. The center line of said right-of-way as it crossed Section 32 is described as follows: Beginning again at a point on the North boundary of said Sec. 32, T.3N. , R. 62W. , which point bears South 88°31'13" West a distance of 2268.55 feet from the Northeast corner of said Sec. 32; Thence South 47°30' 28" west a distance of 137 . 14 feat to a point of curve; Thence on a curve to the left (with a radius of 1601.45 feet, a delta angle of 21°13 ' 14" and a tangent of 300.00 feet) an arc distance of 593.13 feet to a point of tangent; Thence South 26°17 ' 14" West a distance of 2653.15 feet to a point of ending on the West boundary of the NE/43W/4 of said Sec. 32, T.3N. , R.62W. , which point bears South 89°00 ' 37" West a distance of 1,290.62 feet along the east/west center line of said Sec. 32 from the west one-quarter corner of said Sec. 32, and thence South 00°32 ' 33" West a distance of 251.08 feet along the West boundary of the NW/4 SE/4 of said Sec.32. The referenced right-of-way included a reservation of all rights to any and all minerals, including oil and gas. The right-of-way was to continue for as long as the road is used and Welting New; )Weh1,19M MAR 4 '94 16: 18 303 5723411 PAGE . 012 9/0226 . Mar, 4. 1994 4: 18PM 7 EXPLORATION INC No, 9422 P. 13/14 HS Resources, Inc. Page 13 March 4, 1994 maintained by the grantee. If the use is discontinued or road abandoned for 12 consecutive months, then the right-of-way terminates. • No other easements or rights-of-way of record were noted. COMMENTS. EXCEpTIQNS AND REQUIREMENTS: 1. The captioned lands were obtained by the State of Colorado pursuant to the Act of March 3, 1875, (18 Stat. 475) and Sections 2275 approved February 28, 1891 (26 U.S. Stat. 796) . Pursuant to said acts, title to the captioned lands and the minerals thereunder was transferred by the United States of America to the State of Colorado. As a result, the lands became available for leasing by the State Board of Land Commissioners for the State of Colorado. The subject oil and gas lease was issued in accordance with applicable statutes of the State of Colorado and the guidelines of the State Board of Land Commissioners. REQUIREMENT NO. 1: Advisory only. 2. Oil and Gas Lease 85/1019-S was issued for five (5) years from January 17, 1985. The lease term was extended for an additional five years from January 17, 1990. The records of the State Board of Land Commissioners indicate that advance rental payments necessary to maintain the lease in effect have been timely and properly paid through January 17, 1995. REQUIREMENT NQ. 2: Advisory only. 3 . Your attention is invited to the fact that the subject oil and gas lease contains several provisions of which you should take note. Some of these provisions are discussed in this comment. First, the subject oil and gas lease provides that extension of the term of the lease solely by discovery and production of oil and gas shall not operate to increase the rentals payable under the lease. However, after production is obtained from the subject oil and gas lease, annual rentals shall be paid during wkie ed Fed Maw alert l 11M MAR 4 '94 16: 18 303 5723411 PAGE . 013 940226 ,Mar, 4. 1994 4: 19PM '! EXPLORATION INC No. 9422 P. 14/14 HS Resources, Inc. . Page 24 March 4, 1994 obtaining production in the captioned lands to obtain written authorization from both of the referenced parties to market each parties' proportionate share of production. • 17. A Release of Oil and Gas Lease dated October 28, 1986 ' and recorded November 13, 1986 in Book 1135 at Reception No. 2076984 was executed on behalf of the lessee, Amoco Production Company, by G. W. Chipman, attorney-in-fact. The materials examined by us do not evidence the authority of the attorney-in- fact to so execute the referenced document. The lease released was the prior lease to the current oil and gas lease covering the captioned lands. $EOUIRflENT NO. 17: You should obtain and record sufficient evidence of the authority of the above-named individual to execute the identified document at the time of its execution on behalf of Amoco Production Company. 18. The materials examined included a Resolution dated July 28, 1993 and recorded August 3, 1993 in Book 1395 at Reception No. 2344480 in which the Board of County Commissioners of weld County, Colorado approved a request for an exception location to drill a commingled well which request was submitted by Energy Minerals Corporation. The resolution indicated that the well was to be located in the SE/4NE/4 of Section 32, Township 3 North, Range 62 West, 6th P.M. and that Weld County is entitled to a 1/8th royalty interest on production from said well. Weld County, Colorado does not own an interest in the captioned lands. Moreover, the approval of locations and authority to commingle production lies within the exclusive jurisdiction of the Oil and Gas Conservation Commission of the State of Colorado. $$OUIREMENT NO. 18: You should be certain to obtain a release from Weld County, Colorado of any claim of an interest in the minerals underlying the captioned lands or in the subject oil and gas lease. The release should be placed of record in Weld County, Colorado. ram SCUM 1, MAR 4 ' 94 16: 18 303 5723411 PAGE . 014 94022G Hello