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GAS DIVISION ORDER
TO: NORTH AMERICAN RESOURCES COMPANY
EFFECTIVE: Date of First Production
The below named parties, hereinafter designated as"OWNERS", and each of them by their signatures hereto
affixed, do hereby represent, certify and warrant that they are the legal owners in the proportions set out below of all the gas and
associated liquid hydrocarbons produced from or allocated to the well, acreage or communitized area more particularly described
as follows:
Township 2 North, Range 66 West
Section 19:E2
Banged#43-19(J)Well CO.6235
in Weld County, State of Colorado, and are entitled to receive payments for gas taken or sold off of the premises, and until further
notice credit for such gas so taken or sold from said premises shall be given as directed below:
CREDIT TO DIVISION OF INTEREST MAILING ADDRESS
SEE EXHIBIT"A"ATTACHED
NORTH AMERICAN RESOURCES COMPANY, hereinafter called"OPERATOR" may sell and deliver to any purchaser and then
remit to the OWNERS as set out herein for all gas and associated liquid hydrocarbons, including condensate produced, saved
and sold from said premises as follows:
1. Payment for gas shall be paid to the OWNERS according to the division of interest shown above.
Payment therefor may be made monthly by the OPERATOR mailing to such parties its check therefor at the post office address
stated, on or before thirty(30)days after receipt by OPERATOR of sufficient information upon which settlement therefor may be
made. If the amount accruing to the interest of any Owner herein is less than Twenty Five Dollars($25.00) in any one month, the
proceeds of such runs may, at the option of OPERATOR, be accumulated and paid without interest on an annual basis, payment
to be made in December of each year.
If a refund of a portion of the proceeds derived from the sale of gas may be required under any order,
rule or regulation of the Federal Power Commission or other governmental agency having jurisdiction thereof, or the provisions of
the"Natural Gas Act", the price for gas shall be calculated on the basis of the unsuspended or unconditional certificated price for
such gas. OPERATOR may hold, without interest, the portion of proceeds subject to possible refund until the amount of the
refund, if any, is determined by final unappealable order of the Federal Power Commission or such other governmental agency.
OPERATOR is also expressly authorized and given the right, in its sole discretion, to withhold or deduct from the share of any
disbursement, directed hereunder attributable to any Owner, a sufficient sum to pay all ad valorem taxes, applicable State and
Local taxes, Resource Indemnify Fund Tax and any other tax (excluding income taxes)that will become due and payable by any
Owner, and to pay such taxes and render a full account of any such taxes paid by it to any Owner for whom such taxes have
been paid.
2. Settlement for the above interests shall be made on the basis of the net proceeds received from the
sale of gas based upon the volume computations made or accepted by the purchasers thereof. "Net Proceeds" means the
amount received from such sale less transportation, dehydration, separating, treating, processing and compression charges and
other costs or expenses, if any. OPERATOR may sell gas to any purchaser of its choice at such quantities and price as it shall
deem prudent. However, in the event the sales price for gas is established or regulated by the Federal Power Commission, or
other governmental authority, the price applicable to such sales for the purpose of calculating net proceeds shall be the
unsuspended or unconditional certificated price for such gas determined by final unappealable order of the Federal Power
Commission or such other governmental agency.
3. Payments so made are to be in full settlement for such gas so taken or sold from said premises.
4. OWNERS severally shall notify OPERATOR of any change of ownership, and no transfer of interest
shall be binding upon OPERATOR until a request to make such transfer and the recorded instrument evidencing such transfer, or
a certified copy thereof, shall be furnished to OPERATOR. Transfers of interest shall be made effective not earlier than the first
day of the calendar month in which notice is received by OPERATOR. OPERATOR is relieved hereby of any responsibility for
determining if and when any of the interests set forth above shall or should revert to or be owned by other parties as the result of
the completion or discharge of money or other payments from said interests and the OWNERS whose interests are affected by
such money or other payments, if any, assume said responsibility and shall give OPERATOR notice in writing by certified letter
addressed to OPERATOR, when any such money or when any other division of interest than that set forth above shall, for any
reason, become effective, and to furnish requests for transfer accordingly, and that in the event such notice shall not be received,
OPERATOR shall be held harmless in the event of and is hereby released from any and all damage or loss which might arise out
of any overpayment.
5. In the event of any dispute or question at any time concerning title to the above described lands, or
the gas produced therefrom, OPERATOR may hold the proceeds of all gas runs hereunder, until indemnity satisfactory to
OPERATOR has been furnished or until such dispute or question of title is corrected or removed to court affecting title to either
the real property above described or to the gas produced therefrom in which any of the undersigned are parties, written notice of
the filing of such action shall immediately be furnished to OPERATOR by the undersigned, stating the court in which the same is
filed and the title of such action or suit, and OPERATOR or any purchaser of gas runs shall be held harmless from and any
judgment rendered in such suit and all reasonable costs and expenses incurred in defending against said claim whether in
OPERATOR's defense of the gas purchaser, and the undersigned shall pay said judgment and said costs and expenses in the
proportion and to the extent that the same affects his or their interest. Where, under this provision the proceeds of any gas sales
are retained, OWNERS agree to indemnify and hold the OPERATOR harmless from any liability for any tax proposed or
assessed against or paid on account of such retained proceeds,together with the penalties incident thereto, and the OPERATOR
may deduct the same from any amount owing by it to OWNERS. In the event of overpayment for gas to the interest of any Owner
herein, OPERATOR is authorized upon discovery thereof to recoup such amounts from future accruals to this or any other
interest of such Owner for which OPERATOR may make settlement.
LL-cO/ 11
6. This Agreement shall be binding upon all parties agreeing hereto irrespective of whether all parties
owning an interest in the minerals, royalty, and leasehold estates execute the same, and shall extend to and be binding upon
their respective heirs, devisees, executors, legal representatives, successors and assigns. This Agreement may be attached as
an exhibit to any other document and incorporated therein by reference for all purposes and execution of any such document to
which this Gas Division Order may be attached shall be deemed to be for all purposes of the same force and effect as execution
of this document.
7. If applicable, the OPERATOR will comply with all provisions of Executive Order No. 11246 of
September 24, 1965, and any amendments or supplement thereto and of the rules, regulations and relevant orders of the
Secretary of Labor.
8. Special Provisions:
Wit e.s
► , �L�iJ/i'/ ` Weld County Board of Commissioners
er to t
Deputy Cler %t Dale ' , Chair 0 /28/99)
the Board
®6 � , 84-6000-813
SS#
915 10th Street
Mailing Address
Greeley, CO 80632
EXHIBIT 'A'
Attached to and made a part of that
Certain Gas Division Order effective
Date of First Production covering the
Bangert #43-19 (J) Well CO. 6235
As to the J Sand Formation
OWNER# NAME INTEREST
13396 Donald A Parker 4 . 70574% RI (1)
12877 WCR #18
Ft Lupton, CO 80621
8035 Weld County . 11016% RI (1)
c/o Board of County Comm
Weld County Centennial Center
915 10th Street
Greeley, CO 80631
26940 Mark L and Kelly A Kinnear . 44738% RI
12857 WCR #18
Ft Lupton, CO 80621
7524 Farmers Reservoir & Irrigation Co . 00469% RI
80 South 27th Avenue
Brighton, CO 80601
12383 Cannon Land Company 1 . 55313% RI
36 Steele Street, Suite 250
Denver, CO 80206
11535 Alice Irene Couch 1 . 04167% RI
1517 Court Street
Adel, IA 50003
11536 Virginia Elaine Harvey 1 . 04167% RI
3038 York Avenue
Redfield, IA 50233
11537 Helen Mary Imboden 1 . 04166% RI
520 N NW Poplar Avenue
Earlham, IA 50072
11539 Michael D Bangert . 71719% RI
14256 Weld County Road #18
Ft Lupton, CO 80621
11540 Paulette J Evans . 71719% RI
725 S Ninth Street
Brighton, CO 80601-3232
11541 Dorothy M Johnson . 71719% RI
1317 S Drew Way
Denver, CO 80232
12380 W Jean Bangert . 71718% RI
8713 HWY 85
Ft Lupton, CO 80621
12381 Platte Valley Irrigation Co . 25625% RI
1007 9th Avenue
Greeley, CO 80631
19136 David F Wiesner . 17465% RI
1446 Dahlia Street
Denver, CO 80220
10834 William G McCanne . 01027% RI
2415 S Lansing Way
Aurora, CO 80014
10835 Jack A and Karen L McCartney . 02055% RI
8955 W 10th Avenue
Lakewood, CO 80215
3759 Sun Operating Ltd Partnership . 00478% OR
P O Box 2880
Dallas, TX 75221-2880
10926 Margaret F Boudreau . 00012% OR
1414 Tenth Street
Lake Charles, LA 70601
10922 Marcus A Degenhart . 00078% OR
6505 East 160"' Avenue
Brighton, CO 80601
10927 Betty Marie Field . 00013% OR
2440 Palmer Avenue
New Orleans, LA 70118
10923 Hill Enterprises Inc . 00078% OR
P O Box 621147
Littleton, CO 80162-1147
10924 Matthew R Hoovler . 00078% OR
805 Meadow Run
Golden, CO 80403
10928 Janis Grace Lowrey . 00013% OR
143 US Highway 190 West SP 29
Woodville, TX 75979
7968 Lena Mae Grant Irrevocable Trust . 02510% OR
c/o Errol J McBride Trustee
RR 4 Box 8
Crawfordsville, IN 47933
8648 Billye L Hix . 03012% OR
4222 Jennie Street
Amarillo, TX 79106-6031
8716 Western Oil & Minerals Ltd 2 . 70169% OR
P O Drawer 1228
Farmington, NM 87499
10895 William & Margaret Green Trustees . 45028% OR
Green Family Trust
9337 W Pebblebrook Lane
Boise, ID 83703
8929 Norma Jeanne Freedman . 10758% OR
1580 Lincoln Street #650
Denver, CO 80203
10829 Tiago Corp . 28688% OR
P O Box 370053
Denver, CO 80237
8450 Martin L Rogers . 01649% OR
3737 14`h Street SE
Loveland, CO 80537
22 North American Resources Co 83 . 09779% WI
16 East Granite
Butte, MT 59701
TOTAL 100 . 00000%
(1) Subject to Comments and Requirements #14 of 1/18/99
Drilling Title Opinion
�Op�l
TRANSFER ORDER
TO: North American Resources Company DATE: April 7, 1999
16 East Granite
Butte, MT 59701
Effective the 1st day of April, 1999, the undersigned Transferor
has sold, transferred and assigned the interests in the production
from the wells set out in Exhibit "A" attached hereto and by this
reference made a part of this transfer, located in Weld County,
Colorado.
The transfer evidenced hereby is subject to the terms and
conditions of all valid oil and gas leases of record and any other
existing contracts or agreements covering the above lands and
interests . The undersigned Transferor hereby relinquishes all
right, title and interest in and to the interest described in
Exhibit"A" attached and the proceeds from the sale of production
attributed to said interests, as of the effective date of this
transfer.
Commencing with the effective date hereof , you are authorized
to credit, as set forth on Exhibit "A" , the production to
Transferee, its heirs, devisees, successors, legal representatives
and assigns .
The undersigned Transferee, and each of them, guarantee and
warrant that they are the legal owners of the interests in
production from the described property in the proportions set out
and hereby authorize you to receive production from said property
in accordance with the terms of any oil, gas or other existing
sales agreements and to give credit therefor, until further
notified, as stated herein.
This transfer shall be binding upon all parties agreeing hereto
irrespective of whether all parties herein execute the same or
counterpart orders .
Witness Transferor
By:
Donald A Parker
Wit' -ss .. , Transferee
i --‘11AEra .
Clerk to the Board V� � e • Coun y Board of Commissioners
(� 'cc' �• $ ale K. Hall, Chair (04/28/99)
By: ` tJ G/. �� .,'t' .-,-
Deputy Clerk .
P Y to - ,�
Exhibit "A"
Attached to that certain Transfer Order
effective April 1, 1999
Wells Description
Bangert 2-19 J Well CO. 2194 E2 Section 19 T2N-R66W
Bangert 3-19 J Well CO. 2195 as to the J Sand Formation
Owner# Name Interest
13396 Donald A Parker 5 . 15312% RI
8035 Weld County . 11016% RI
North American
Resources Company
a Montana Power company
April 7 , 1999
Weld County
Weld County Centennial Center
915 10th Street
Greeley, CO 80631
RE : Gas Division Orders
Transfer Orders
Bangert 2-19 J Well CO. 2194
Bangert 3-19 J Well CO. 2195
Bangert 43-19 J Well CO. 6235
Weld County, Colorado
Greetings :
Enclosed please find two (2) Gas Division Orders I have prepared
relative to the Bangert 43 -19 well (OO. 6235) and two (2) Transfer
Orders for the Bangert 2-19 (CO. 2194) and Bangert 3-19 (CO. 2195)
wells . Also enclosed is a copy of the instructions .
Please refer to the enclosed pages of the January 18 , 1999
Drilling Title Opinion concerning Requirement #14 . If you did
acquire the mineral interest, please execute the instruments per
the instructions .
If you should have any questions, please do not hesitate to call
me . My number is (406) 496-5266 . Thank you.
Sinc- e 'y
• ' e-Moses
Division Order Analyst
EM/em
Encls .
16 East Granite Street•Butte,Montana 59701-9326
Telephone 406-782-4233
facsimile:406-496-5295(Land,Lease&Accounting)• 406-496-5300(Engineering)
North American Resources Company January 18, 1999
Page 34
REOUIREMENT NO. 11: As with other chains of title originating with the "Vessels Group",
there are some questions in the chain of title for the subject Lease VII (Tract G) with regard to
overriding royalty interests. For the sake of continuity, we have credited Norma Jeanne
Freedman with the same overriding royalty interest in Lease II that was credited by the previous
examiner; although, we have not credited Patina Oil & Gas Corporation with an override in the
Dakota formations as did the previous examiner. As you know from our review of other chains
of title, it is our opinion that her predecessor in title, Martin J. Freedman did not assign out his
original (nonconvertible) override to Lawrence/Vessels/Coors; and, despite whether Adolph
Coors Company executed the Overriding Royalty Clarification Agreement, we believe that he
retained the full original override. Consequently, we believe that her override is .9375% in the
SE/4. Because of this interpretation, we believe that her interests should be increased
accordingly and yours (and those of Patina Oil & Gas Corporation in the Dakota formation)
decreased accordingly. However, this is a division order matter only.
REQUIREMENT: Division order matter only.
REOUIREMENT NO. 12: As noted above, mineral interests in Tract E, under Lease V, are
held by a life tenant, subject to a second life tenant, and then passing to the remaindermen. We
have no information indicating whether either of the parties entitled to a life tenancy is deceased.
Colorado law indicates that, absent limiting factors, the life tenant is entitled to all royalty
proceeds during the term of the life tenancy. However, it would be prudent to obtain
confirmation of this by virtue of executed division orders from each of the parties.
REQUIREMENT: Division order matter only.
REQUIREMENT NO. 13: J. P. Field received assignment of a 1 % overriding royalty interest
in Lease I by an April 1, 1973 (see Exhibit "A" for chain of title). The previous examiner, Mr.
Foster, reviewed an unrecorded affidavit which states that J. P. Field died September 19, 1987,
that his estate was probated in Calcasieu Parish, Louisiana, and that his successors in interest
are Margaret F. Boudreau, Janis Grace Lowrey, and Betty Marie Field. However, there is
nothing in the materials reviewed to confirm that these parties are the successors in interest; and,
no such affidavit appears in the materials covering the period since the previous review. For
division order purposes, further curative is warranted to confirm the succession and provide
documentation in Weld County. Your division order files may contain information relating to
this matter.
REOUIREMENT: Division order matter only.
REOUIREMENT NO. 14: We have credited the surface and minerals in Tract D-1 to Weld
County. This is based upon a Quitclaim Deed, dated March 16, 1994, recorded in Book 1435,
No. 2382177. The deed conveys the Tract D-1 lands from Donald A. Parker to Weld County.
The deed, as reviewed, does not contain any limiting language and does not include any
/ io 511
North American Resources Company January 18, 1999
Page 35
reservation of minerals or other interests. However, the deed stems from an agreement recorded
at Book 1435, No. 2382178, between Donald A. Parker and Weld County. The agreement
indicates that the county is to acquire easements or rights-of-way only. Consequently, it is
possible that the county was to acquire something less than a fee simple interest in the Tract D-1
lands.
For division order purposes, it may be prudent to investigate the intent of the parties further,
and determine whether the record should be amended.
REOUIREMENT: Division order matter only.
REOUIREMENT NO. 15: Lease II requires consent to assignment. Cannon Minerals LLC
consented to the assignment of Lease II from Vessels Oil & Gas Company to North American
Resources Company. However, Cannon Land Company did not consent to the assignment.
Cannon Land Company is the mineral owner and lessor under Lease II. Consequently, to
comply with the lease, you should obtain a consent to the assignment from Cannon Land
Company. A surface damage agreement entered into in the course of your operations may
include consent language which could be satisfactory to comply with the lease terms.
REQUIREMENT: Obtain and record a consent by Cannon Land Company to
assignment of Lease II from Vessels Oil & Gas Company to North American
Resources Company. In the alternative, you may wish to accept any risk attached to
this matter.
REQUIREMENT NO. 16: By assignment recorded in Book 1523, No. 2468178, Gerrity Oil
& Gas Corporation assigns K. P. Kauffman Company, Inc., all of its interest in the Neff Nos.
1 and 2 Wells and the Parker Nos. 2 and 2 Wells, from surface to base of Sussex only.
Presumably, this is a typographical error, and it was intended that the Parker Nos. I and 2 Wells
were to be assigned, as it is unlikely that there are two wells with the same description. The
assignment of overriding royalty to Carl Friis contains the same description error.
It may be prudent to check the documents of record once again to assure that there is not an
error in the landman memorandum covering these lands. If the instruments are incorrect, they
should be amended, because the assignment appear to be wellbore assignments only, and the
well names are critical to the description.
This matter does not pertain to "J" Sand interests; and, it does not pertain to the interests'of
North American Resources Company.
REQUIREMENT: This requirement pertains to interests from surface to base of
Sussex formation only in Leases IV and V only. Review the record to confirm that
the original instruments are incorrect. If they are incorrect, notify the parties so that
.yam North American
Resources Company
a:Wawa na haver emnparry
INSTRUCTION TO ALL INTEREST OWNERS
THE ENCLOSED DIVISION ORDER OR TRANSFER ORDER 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:
INDIVIDUAL- Sign your name as shown and have your signature
witnessed.
CORPORATION - Signature must be attested, corporate seal
affixed and title of party reflected.
PARTNERSHIP- Must be executed by all partners or by an
authorized partner. Please provide copy of
instrument giving partners authority to sign.
AGENT, ATTORNEY-IN-FACT,GUARDIAN ETC - Please provide copy
of power of attorney of other evidence of
party's authority to sign.
If your name has changed because of marriage or divorce, execute the Division Order with
your current name and send a copy of the marriage certificate or divorce decree with your
executed Division Order.
SHOULD YOU FAIL TO PROVIDE YOUR CORRECT SOCIAL SECURITY NUMBER OR
TAX IDENTIFICATION NUMBER, THE LAW PROVIDES FOR A 20% WITHHOLDING
OF ALL YOUR PRODUCTION PROCEEDS DUE YOU. PLEASE COMPLETE AND
RETURN THE ENCLOSED W-9 FORM WITH YOUR EXECUTED DIVISION ORDER.
Please provide your mailing address in the space provided.
RETURN ONE COPY OF THE DIVISION ORDER/TRANSFER ORDER IN THE SELF-
ADDRESSED ENVELOPE PROVIDED.
If for any reason a suspense has been set out for your interest the reason for the suspense
will be set out with your Division Order. Please respond to the requirements as indicated.
DO NOT DETACH THE EXHIBIT FROM THE DIVISION ORDER IF ONE IS INCLUDED.
If you should have any questions about this instrument please contact Edie Moses at (406)
496-5266.
16 East Granite Street• Butte,Montana 59701-9326
Telephone 406-782-4233
Facsimile:406-496-5295(Land,Lease&Accounting)• 406-496-5300(Engineering)
11909 5�
COUNTY ATTORNEY
STAFF APPROVAL
This is to affirm the attached
Division Order or 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
applicable.
( / /
BY:
�unty Attorney
DATE: 1'
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