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Home My WebLink About951742.tiffUSE BY SPECIAL REVIEW APPLICATION Department of Planning Services, 1400 N. 17th Avenue, Greeley, CO 80631 Phone (970) 353-6100, Ext. 3540, Fax (970) 351-6312 LEGAL DESCRIPTION OF SPECIAL REVIEW PERMIT AREA: Wv2NW'/4 of Section 4, Township 5 North, Range 65 West Total Acreage: 80 acres Present Zone: 1-2 and R-1 Overlay Zone - AI PROPOSED USE: Oil and gas wells and related production equipment COUNTY Pr:" JUN 231995 ECEIVIE -7O SURFACE FEE OWNERS OF AREA PROPOSED FOR THE SPECIAL REVIEW PERMIT: See Narative in Application APPLICANT: Prima Oil and Gas Company 1801 Broadway, Suite 500 Denver, CO 80202 (303) 297-2300 f�flltu' Ito URcmEL AGENT FOR APPLICANT: William G. Crews, CPL 1223 28th Avenue, Suite 2 Greeley, CO 80631 (970) 351-0733 DEPARTMENT OF PLANNING SERVICES USE ONLY Application Fee Paid: Id')O f / Receipt #: 021/4 7 Date: l 0 - d 3__`7 -. Zoning District:1 f g/ Zoning Permit #is,,e_ f/029' l Chaindexed: Flood Plain: £ FLT " l Yes ❑ No � Geologic Hazard: ❑ Yes @1,,No County Commissioners - Hearing Date: Approved by: ■ Staff O Board of Recording Fee Paid: In i M. Receipt #: a/ /4 7- Date: ISSUED BY: Date: Pre -add. eitefi 02 I hereby state that all statements and plans submitted with this Application are true and correct to the best of my knowledge. William G. Crews, Agent June 22, 1995 951742 Narrative to Application REQUESTED USE: Applicant requests a Use by Special Review Permit to allow the drilling, completion and operation of two oil and gas wells within the USR area (which is defined as the W1/2NW1/4 of Section 4, Township 5 North, Range 65 West, Weld County, Colorado). One such well will be located in the NW1/4NW1/4 and the other in the SW1/4NW1/4. The tank battery (one battery area serving both wells) will be located to the east and adjacent to the access road to the northern well on the Harrell property. Access to the southern well will be from 8th Street Road north over an existing road on the Monroe property to the wellsite and tank battery. Access to the northern site will be from 1st Avenue east over an existing road, on the north side of the Geisert Industrial P.U.C., to the Harrell property, then north parallel to the Harrell west property line, then east to the drillsite. CONSISTENT WITH COMPREHENSIVE PLAN: Oil and gas drilling has been shown to be consistent with the Weld County Comprehensive Plan, which encourages mineral extraction prior to surface development. Residential or industrial development would reduce the feasibility of ever developing the minerals in question. Similar USRs have been approved in the same R-1 zoning in adjacent Section 33...to the north of the USR area. NEED: The requested USR is needed in order to extract the known reserves of oil and gas before surface usage becomes so dense, at some point in the future, as to economically preclude development of the oil and gas, and to protect the rights of the applicant to drill for and produce oil and gas under the terms of the leases granted by the various mineral owners. To avoid termination of oil and gas leases, drilling of the first (northern) well must commence on or before September 1, 1995. ZONING DISTRICT HISTORY AND USE: The R-1 district was established prior to 1982 as an Estate zone in an attempt to preclude certain uses at the time of zoning. When the current Weld County Zoning Ordinance was established in 1982, the Estate zones were changed to R-1 zones in this area, which encompasses all of Section 33, Township 6 North, Range 65 West (directly to the North of Section 4) as well as some lands in the WV2NW'/4 of Section 4. The lands have not been used for low -density residential development, but instead have been left in grass. Surrounding uses are all lower uses than R-1, such as C-1, C-3 and I-3. The lands to the east (C-1) are in pasture, those to the north (R-1) are farmed; those to the west (1-3) are being used for industry, and those to the south (C-1 or 1-2) are either still in grass or are commercial in use. AGRICULTURAL LAND: No agricultural land will be taken out of use by the drilling of the requested wells. Both sites are in grass and are unsuitable for farming due to high water tables and poor soil. HEALTH, SAFETY AND WELFARE: The health, safety and welfare of the occupants and surrounding owners will be protected by strict adherence to the safety and other rules of the Colorado Oil and Gas Conservation Commission. Blowout preventers will be installed as required by the Commission. Oil and gas drilling has been shown to be a safe use as regards the general public; there have been no known injuries to members of the general public from oil and gas well development in Weld County. SITE LOCATIONS AND USE: The wells will be located as follows: NWIANW1/4: Approximately 195 feet SE of the center of the NW1/4NW'/4. If consent of the Colorado Oil and Gas Conservation Commission can be obtained, the well will be moved farther south (approximately 150 feet) to reach an area of more stable ground. NW1/4NW'/4: Approximately 150 feet SE of the center of the SW1/4NW1/4. 1 951742 The tank battery will be located on the Harrell parcel...between the access road and the west Harrell property line. The sites will be used for the drilling, completion and operation of oil and gas wells. No other uses are contemplated under this USR. NEARBY HOMES: There are no homes nearer than 200 feet to the wellsites. The nearest home is that of Larry and Lois Monroe, which is approximately 300 feet to the south of the southern wellsite. PERSONNEL: There will be no permanent employees. During the drilling of the wells (approximately one week), there will be five to six members of the drilling crew on site around the clock, plus those delivering materials and supervising operations. During the completion phase, there are normally no more than four people at the site. After completion, there will be only the daily visit of the pumper and occasional pickups of oil by tanker truck. ANIMALS: There will be no animals at the site. EQUIPMENT: Other than temporary presence of the drilling rig and completion equipment, the only permanent fixtures will be the wellheads (2), separators (2 at most), meter runs (2 at most) and oil stock tanks (2 at most). Initially it is planned that there will be two 400 -barrel oil stock tanks at the site. After the initial decline, one tank may be removed if it is deemed to be no longer necessary. As explained above, only one tank battery facility is contemplated. STRUCTURES: Other than the equipment described above, there will be no structures. VEHICLES: During the drilling and completion phases, there will be heavy truck traffic (some oversized) to move the rig on and off, deliver water and equipment, and provide completion services. After completion, there will normally be only pickup truck and oil tanker traffic, which will be minimal (normally one pickup truck per day and a tanker truck every week to two weeks.) SEWER: No sewer or septic facilities will be installed. Portable latrines will be used for drilling and completion personnel. WASTE: There will be no storage of waste. Debris will be hauled from the site by commercial trash haulers, and will not be allowed to blow away. TIMETABLE: Once move -on commences, drilling is expected to take approximately one week at each wellsite. Completion is anticipated within 30 days of commencement of drilling. LANDSCAPING: No landscaping is anticipated. EROSION AND STORM WATER DRAINAGE: There should be no activities which will cause or allow significant additional erosion. Both drillsites are essentially level, creating the need for little if any land - leveling. Runoff should be no greater during/after drilling than it is at present, since there will be no surfacing of disturbed areas to cause increased runoff. Precipitation should be normally absorbed. FIRE PROTECTION: Fire protection will be provided by the Western Hills Fire Department. There should be no increased demand for fire protection services. WATER: All water needed for drilling and completion operations will be brought to the site by commercial water hauling services. There will be no need for any municipal water supplies. SOIL CLASSIFICATIONS: The soil classification of the areas to be disturbed by the applicant, from Soil 2 951742 Survey of Weld County, Colorado, Southern Part, U.S. Department of Agriculture, September, 1980, Sheet 8 - Greeley Quadrangle, is Aquolls and Aquents, gravelly substratum (bottom lands and flood plains). FLOODPLAIN: Portions of the USR area are within the floodplain for a 100 -year flood. Oil stock tanks will therefore be anchored, and a bar -type fence will be placed around wellheads. AIRPORT OVERLAY: While drilling is not anticipated to create a hazard to aviation, Applicant will obtain a Hazard Determination from the Federal Aviation Administration and coordinate drilling with Greeley -Weld County Airport management. SURFACE OWNERS: The following are the names of the surface owners within the USR Area (refer to the surface owner affidavit for addresses): Lawrence L. & Lois C. Monroe Evelyn H. McElroy William C. McElroy Mary Ann McElroy Sherley Lynn McElroy Carter Richard Hoffman McElroy William C. McElroy, Jr. and Ann McElroy Sherley as Co -Personal Representatives of the Estate of Katharine S. McElroy, aka Katherine S. McElroy, Jr., deceased Gilbert D. Shultz, Sr. Wayne & Mary Wadsworth Sharp Bros. Seed Company Intermountain Leasing Inc. Greeley Aerial Crop Dusters Inc. T-ed Rothe 3 JayE. Goza Eldon L. & Patricia J. Harrell Selustriano & Marina M. Salazar Audelio R. Moreno Helen E. Browning Arthur Trujillo (LE) Esther Munoz Anna Mae DeAngelis Caroline Weston Delilah Perez Charles A. &Patricia Jean Forester Curtis L. & Heide Shupe -Kimberle A. & Kevin D. Skattum JCellie S. Malone Kejo Investments H.R. Catherwood Raymond L. Crouse 951742 PRODUCER" is OIL AND GAS I - 1E 1E Paid Up PAID UP Rev. 1992 (WP version) AR24LLs259 94 THIS AGREEMENT is made and entered into as of the 22nd day of July 19 by and between the (alloying parties: "LESSOR": Lawrence L. Monroe and Lois C. Monroe, husband and wife (whether one or more) 369 E. 8th Street Greeley, CO 80631 and "LESSEE": _Crews & Zeren, a general partnership 1223 28th Avenue,Suite 2 Greeley, CO 80631 The said land included in this lease k situated in the County of Weld State of Colorado and is described as follows, to -wit'. Township 5 North. Ranee 65 West, 6th P.M. Section 4: Lot 4 of the SW'/4NWV4 and Lot 1 of the NWV.SW' , according to the Subdivision of Lands by the Union Colony (also described as the SEt/SW'WNWt/ and NE'/4NWYSWt/4) 20.00 The said land contains acres of land, more or less, and includes all oil and gas underlying lakes, streams, roads, easements and rights -of -way -which traverse or adjoin said land: and includes all lands owned or claimed by Lessor as a pan of any tract above described. This (case shall cover all the interest in said land now owned by or hereafter vented in Lessor. For the purpose of calculating any payments based on acreage, Lessee, at Lessee's option, may act as if said land and its constituent parcels contain the acreage above stated, whether they actually contain more or less. tWo years from the date hereof, cited "rime Subject the other provisions herein contained, this lease shall remain in force for a period of Ye "primary _term", and so long thereafter as oil or gas is produced from said land hereunder or Lessee is engaged in drilling or reworking operations on said land hereunder as herein provided. Each of the covenants, terms and provisions contained on the reverse side of this page is incorporated herein by this reference. IN WITNESS WHEREOF, this instrument is executed as of the date first above written. Soc. Sec No. Sao - 3H- 6Lla2 r Tax I.D. No. Lawrence L. onroe --Lois C. Monroe 2401259 B-1454 P-187 08/05/94 03:05P PG 1 OF 2 Mary Ann Feuerstein Weld Co., Clerk & Recorder 10.00 STATE OF COLORADO ) ss. _COUNTY OF WELD The foregoing instrument was acknowledged before me this as -day of July, 1994, by Lawrence L. Monroe and Lois C. Monroe dlii.i(ness,my hand and official seal. My cdtnlnission expires: my iffilskS;.- urn. REC D0C 251.742 'he following covenants, terms and provisic 3 an integral part of this lease. ‘1 L Lessor for and in considerationf the sum of9 Dollarshand paidof the royaltiesherein provided, and ofd b nt of Lessee herein contained,hereby grans. demises, leasesand lets 'lu: ely unto Lessee the land herein described, for the purpose of investigating. exploring and drilling for, producing, saving, tak rig owning, transporting. storing, handling and treating oil and gas. together with all rights, privileges and easements useful for Lessee's operations hereunder on said land and on lands in the same field, including but not limited to the following rights'_ to lay pipe lines; to build roads'. and to construct tanks, pump and power stations, power and communications Ilnes, and other structures and facilities. The phrase "oil and gas", as used in this lease, shall embrace all hydrocarbons, as well as other substances produced therewith. 2. Royalties to be paid Lessor are: (a) on nil, one -eighth (1/81 of that produced and saved from said land, to be delivered at the wells or to the credit of Lessor into the pipe line to which the wells may be connected. Lessee may from time to time purchase any royalty oil, paying therefor the market value in the field where produced on the day it is run to the pipe line or storage tanks; (b) on gas, including casinghead gas or other gaseous substances, produced from said land and sold or used off the premises, the market value at the well of one -eighth (1/8) of the gas so sold or used, provided that on gas sold at the well the royalty shall be one.eighih (1/8) of the amount realized from such sales, (c) on other substances produced with oil or gas, and covered by this lease, one -eighth (1/8) of their value at the well. If at any time oil and/or gas from a well capable of producing oil and/or gas is not being sold or used off the premises, and this lease is not being otherwise maintained in full force and effect, Lessee shall pay or tender to Lessor, as royalty, the sum of One Dollar ($1.00) per acre per year on the acreage then held by Lessee hereunder, the fat such payment or tender to be made on or before the anniversary date of this lease next ensuing after the expiration of 90 days after the date such well is shut in and subsequent payments or tenders to be mace on or before the anniversary date of this lease, provided, however, that if oil or gas from any such well is sold or used off the premises before the applicable anniversary date of this lease (even if such well is again shut in before such date), or if on such date this lease is being maintained in force and effect other than by reason of such shut in well. Lessee shall not be obligated to pay or tender, on or before that particular anniversary date, said sum as shut in royalty. If such payment or tender is made, it will be considered that oil and/or gas, as applicable, is being produced within the meaning of this lease. During such time, Lessee may remove the pumping unit, rods, tubing and other equipment from the well or wells for use elsewhere in Lessee's business, consistent with all applicable laws. rules and regulations. Lessee may use, free of royalty, oil, gas and water produced from said land by Lessee for all operations hereunder. 3. This is a PAID -UP LEASE. In consideration of the cash payment herewith. Lessor agrees that Lessee shall not be obligated. except as otherwise provided herein. to commence or continue any operations durl ng the primary term. Lessee may at any time or times during or after the primary term surrender this lease as to all or any portion of said land and as to any strata or stratum by delivering to Lessor or by filing of record a release or releases, and be relieved of all obligation thereafter accruing as to the acreage surrendered. 9. If, at the expiration of the primary term of this lease, oil or gas is not being produced on the leased premises or on acreage pooled therewith but Lessee is then engaged in drilling, completing or reworking operations thereon, then this lease shall continue in force so long as operations are being continuously prosecuted on the leased premises or on acreage pooled therewith; and operations shall be considered to be continuously prosecuted if not more than ninety (90) days shall elapse between the completion or abandonment of one well and the beg;nn'.ng of operations for the drilling of a subsequent well. If after discovery of oil or gas on said land or on acreage pooled therewith, the production thereof shoo id cease from any cause after the primary term, this lease shall not terminate if Lessee commences additional drilling or reworking operations within ninety I/Ui days -Torn -Torndateof cessation of production or from date of completion of dry hole. If oil or gas shall be discovered and produced as a result of such operations at or after the expiration of the primary term of this lease, this lease shall continue in force so long as oil or gas is produced from the leased premises or acreage pooled therewith. 5 Lessee shall pay for or repair damages caused by Lessee's perations to growing crops, buildings, irrigation ditches, culverts and fences. If requested by Lessor. Lessee will bury pipe lines below ordinary plow depth when crossing cultivated land. No well shall be drilled within two hundred (200) feet of any residence or barn now on said land without the consent of Lessor. Lessee shall have the right at any time to remove all Lessee's property and fixtures, including the right to draw and remove all casing. No default of Lessee hereunder with respect to any well or portion of said land shall impair Lessee's righta with respect to any other well or portion of said land. Lessee may inject writer, gas or other substances into any zone or stratum underlying said land and not productive of fresh water. 6. The igl t' of Lessor and Lessee hereunder 'y be assigned in whole or in part. No change in ownership of Lessor's interest (by assignment or otherwise) shall be binding on Lessee until Lessee has been furnished with notice, consisting of certified copies of all recorded insttwneels or documents and other information necessary o esublish a completei f record title from Lessor, and then only with respect to payments thereafter made. No other kind of notice:whether actual or constructive, shall be binding on Lessee. and Lessee ay commue to makepayments precisely as if no change had occurred. No present or future division of Lessor's ownership as to different portions or parcels of satd land shall operate to enlarge the obligations or diminish the rights of Lessee, and Lessee's operations may be conducted without regard to any such division. If all or any part of the Lessee's interest hereunder shall be assigned, no leasehold owner shall be liable for any act or omission of any other leasehold owner. y. Whenever, as a result of any cause beyond Lessee's control (such as fire, flood, adverse field or weather conditions, windstorm or other Au of God; law, order or regulation of any governmental agency; or inability to secure soon, material or transportation), Lessee is prevented from complying with any provision of this lease. Lessee shall not be liable for damages or forfeiture of this lease, in whole or in pan, and Lessee's obligations hereunder shall be suspended so long as such cause persists. 8 1 may at any time or times pool t' this s lease d the lands covered hereby, 'n whole or in pant or as to any stratum or strata, with other lands and leases in the same e fold as to constitu a unit or units, never, in Lessee's Judgment, required to promote or encourage the conservation of natural resources by facilitating an orderly or uniform II 'P g pattern, n, a cycling, pressuremaintenance. me ace re -pressuring or secondary recovery program; or y cooperative unit plan of development or oiration approvedby the Sr:dietary of tl a Interior of the United Suites, The size of any such unit may be increased by including acreage believed to be productive. and d I by esaluding acreage believer; to be p let ve or the owners of which fail or refuse to in the t but any increase or decrease in Lessor's royalties resultingt any such h 4 v such unit shall notin t 't . Any such unit mayb tabl:h0 enlarged, or din,shW nd in the absence of production therefrom, nary be abolished and dissolved, by filing roe record a declaration of pooling or unitization describing the lands and formations so pooled or it d. Drilling or reworOirig operations upon or production of oil gas from any part of such unit shall he treated and considered, for all purposes of this lease. as sugh operations port or such productioa from this lease Lessee shall allocate to the portion of this lease included in any such unit a fractional pan of all production m any part of h unit, on one of the billowing bases. (a) the ratio between the participating acreage in this lease included in such unit and the total of all participating re g J d in such quit: or T) the ratio between the quantity of recoverable production underlying the portion of this lease included in such unit and the total of all recoverable production derl, g suchunit; or (c) any other basis approved by State or Federal authorities having jurisdiction thereof. Upon production from any part of such not. Lessor herein shall he entitled to the royalties provided in this lease on the fractional pan of the unit production so allocated to that portion ot this lease included in such unit and no more. 9. Lessor and g to defend the title to said lane The royalties herein above provided determined tit respect t the entire mineral estate in oil and gas and f Les:w owns a lesser interest, the y s to he paid Lessor shall be reduced proportionately. Lessee at its option may purchase or discharge in whole or in pan an) tax. mortgage or other lien upon said land. or may redeem the sante from any purchaser at any ux sale or dj dicsi tan. and shall be subrogaled to the rights of the holder i e f. 10 This lease shall be binding upon all who eceatiteit. whether or not they are named in the granting clause hereof and whether or not all parties named in the granting clause execute this lease. All the provisions of this lease shall inure to the benefit of and be binding upon the heirs, executors administrators, successors and assigns of Lessor and Lessee. IL Lessor hereby waives and releases all rights under and by virtue of the homestead laws of this state. Additional Provisions: A. All reference to royalty in this lease is changed to read fifteen percent (15%) instead of one - eighth (I/8th). E. This lease shall be effective to grant an easement from East Eight Street (also known as Highway 263) for access and ingress on and over the lands and easements of lessors in said Section 4 to the lands covered by this lease. 2401259 B-1454 P-187 08/05/94 03:05P PG 2 OF 2 l mwit 1a ZExcii 1223 28th. Ave., - Greeley, QL _ 31 951742 PRODUCER'S "" "Mcn NW Uy Rev. 1987 (WP Version) AR23114'U OIL AND GAS LE ^ SE PAID UP THIS AGREEMENT is made and entered into as of the 21st day of September 1992 by and between the following panics: "LEs5OW': Eldon L. Harrell and Patricia J. Harrell, husband and wife (whether one or morg123 Central Avenue Evans, CO 80620 and "LESSEE": Ted Rothe 1847 26th Avenue Court Greeley, CO 80631 The said land included in this lease is situated in the County of follows, to -wit: Weld Colorado State of and is described as Township 5 North, Ranee 65 West, 6th P.M. Section 4: Lot 4 of the NW,ANW'/., Lot 1 of the SW'JANW'., according to the subdivision of lands by the Union Colony of Colorado, 20.00 acres of land, more or less, and includes all oil and gas underlying lakes, streams, roads, easements and rights -of -way The said traverse land contains which dnoworw adjoin said read, and includes in L all rands heowned or claimed by Lessor as a pan of any on above eadescribed. This lease shall cover alt t said It in said lend now owned by or hereafter vested in Lessor. For the purpose of calculating any payments based on acreage, Lessee, at Lessee's option, may act as if said land and its constituent parcels contain the acreage above stated, whether they actually contain more or less. tWO ears from the date hereof, called "primary Subject to the other provisions herein contained, this lease shall remain in force for a period of years term", and so long thereafter as oil or gas is produced from said land hereunder or Lessee is engaged in drilling or reworking operations on said land hereunder as herein provided. Each of the covenants, terms and provisions contained on the reverse side of this page is incorporated herein by this reference. IN WITNESS WHEREOF, this instrument is executed as of the date first above written. I /// .r r.c. 4'I �:a RP Patricia J. Harrell') Eldon L. Harrell B 1359 REC 02311490 11/18/92 14:47 $10.00 1/002 F 0860 MARY ANN FEUERSTEIN CLERK & RECORDER WELD CO, CO Soc. Sec No. C 2/ —�^.;' _ ,y5�1 �' or Tae 1 D Nor� STATE OF Colorado COUNTY OF Weld } ss. ACKNOWLEDGMENT FOR INDIVIDUAL The wliddBdt°rrInifrerart fat MI?feSi!dt-'KIT me this br 92 5 day of_ Nnv • 19 Witness my hand and official seal. My commission expires: Q —'aI —ci ti STATE OF COUNTY OF by ss. ACKNOWLEDGMENT FOR CORPORATION The within and foregoing instrument was acknowledged before me this day of Lcfa Sycidio Notary Publ 19 President of corporation, on behalf of said corporation. Witness my hand and official seal. My commission expires' Notary Public 951742 'he following covt. Ants, terms and provisir a an integral part of. this lease.' I. Lessor, d in considerationi the sum ofTen Dollars. d paidof Me yli re. cal provided, anJ ofth g t ofL herein contained, hereby grants, demises, leases and lets I' ely unto Lessee the land herein described. f 1 purpose of investigating, exploring and drilling for, producing, saving, akin g. s, owning, transporting, storing. handling and treating oil and gas. together with all rights, privileges and easements useful for Lessee's operations hereunder on said land and on lands in the me field, including but not Ihnited to the railtollowingrights: to lay pipe lines; to build roads; and to construct tanks, pump and power stations, power Os and communications lines and other 51ruci ar s and facilities. The phrase ail and gas as used in this lease, shall embrace all hydrocarbons, as well as other substances ( produced therewith, 2. Royalties to be paid Lessor are: lot on oil, one -eighth (I/8) of that produced and saved from said land, to be delivered at the wells or to the credit of Lessor into the pipe line to which the wells may be connected. Lessee may from time to time purchase any royalty oil, paying therefor the market value in the field where produced on the day it is run to the pipe line or storage tanks; (hl on gas, including cast nghead gas or other gaseous substances, produced from said land and sold or used off the premises, the r ket value ai the well ofone-eighth 11/81 of the gas so sold or used, provided that on gas sold at the well the royalty shall be one eighth (1/8) of the v d frum such/ on otherb r n' s produced ith oil or gas, and covered by this leaseone-eighth (1/8) of their a at the ell. If at any tune l ard/or gas from a well capable ol pr, idueing oil and/orgas t being sold or used off the premises, d this lease is not being otherwise maintained in full force and effect. Lessor shall pay or tenderas Lessor,lty the sum of One Dollar (8100) per acrc per year on the acreage (lien held by Lessee hereunder the first such payment or wader to be made on ur betore tie anniversary date f this lease next ensuing after the expiration of 90 days after the date such well is shut in and subsequent payments J : to be made he fore the anniversary date f this lease; provided however. that if oil or gas from any such well is sold or used off the premises before the applicable anniversary date of this lease (even if such well is again shut in before such date), or if on such date this lease is being maintained in force and effect other than by reason of such shut in well, Lessee shall not be obligated to pay or tender, on or before that particular anniversary dale, said sum as shut in royalty. If such payment or tender is made, it will be considered that oil and/or gas, as applicable, is being produced within the meaning of this lease. During such time. Lessee may remove the pumping unit, rods. tubing and other equipment from the well or wells for use elsewhere in Lessee's business, consistent with all applicable laws, odes and regulations. Lessee may use. free of royalty, oil, gas and water produced from said land by Lessee (or all operations hereunder, 3. This is a PAID -UP LEASE ASt In cisisiderarionf the ! payment herewith, Lessor agrees ees that Lessee shall not be obligated, except as otherwise provided herein, m commence f any operai ions during the primary term. Lessee ay at any fime or times during or after the primary term surrender this lease as to all or any portporthin of said land and as to any straw or stratum by delivering to Lessor or by filing of record a release or releases, and be relieved of all obligation thereafter accruing as to the acreage surrendered. 4. If, al the expiration of the primary terns of this (ease, oil or gas is not being produced on the leased premises or on acreage pooled therewith but Lessee is then engaged in drilling, completing or reworking operations thereon, then this lease shall continue in force so long as operations are being continuously prosecuted on the leased premises or on acreage pooled therewith; and operations shall be considered to be continuously prosecuted if not more than ninety (90) days shall elapse between the completion or abandonment of one well and the beginning of operations for the drilling of a subsequent well. If after discovery of oil or gas on mid land or on acreage pooled therewith. the production thereof should cease from any cause after the primary term, this lease shall not terminate if Lessee commences additional drilling or reworking operations within ninety 19(11 drys from date of cessation of production or from date of completion of dry hole. I( oil or gas shall be discovered and produced as a result of such operations at or after the expiration of the primary term of this (case, this lease shall continue in force so long as oil or gas is produced from the leased premises or acreage pooled therewith. Y. Lessee shall pay liir f damages by Lessee's p ations hi growing crops, buildings, iguti ditches culverts and fences. If requested by Lessor. Leswe will bury pipe lines below ordinary plow depth 1 g cultivated land. No well shall be drilled within two hundred (200) feet of any residence or barn now n said land withoui the f Lessor Lessee h II have he Me right at any time to remove all Lessee's properly and fixtures, including the right to J uw and remove II casing. e sle0 II I I hereunder tab respect es to well or portion of said land shall impair Lessee's rights with respect m any other well or portion of said land Lessee may inject water. gas or other subspaces into any ease or stratum underlying said land and not productive of fresh water. 6. The rights f Lessor and Lessee hereunder me y be assigned h I -n part. No change in ownership of Lessor's interest (by assignment or otherwise) shall be binding .. iil Lessee has beefurnished with notice. consisting ofcertified copies of all recorded instruments or dents and other information -y to sabl complete t h n of record title from Lessor. and [lien only with respeoer peymeras thereafter J. N, other kind of nthice, whether actual or c n tru f shall be hindhinding on Leswe, and Lessee av continue io makepayments precisely as if no change had occurred. No present or future division f Lessor's ownership as to different portions or parcels of said land shall operate to enlarge the obligations or diminish the rights of Lessee, and Lessee's operations y be conducted without regard to any such division. If all or any par of the Lessee's interest hereunder shall be assigned, no leasehold owner shall be liable for any act or omission of any other leasehold owner. ? FIF'henever. as a resuli of any cause beyond Lessee's connr l (such as fire, flood, adverse field or weather conditions, windstorm or other Act of God; law, order or regulation of t y governmental agency: or inability to secure men material or transportation), Lessees prevented from complying with any provision of this lease, Lessee shall noi be liable (or damages or torn ia c of this lease. n whole or in part, and Lessee's obligations hereunder shall be suspended so long as such cause persists. g. Lessee may al any ore or timespool oa ihis lease and the lands ered hereby, in whole or in part or as tany stratum r stratith other lands and leases in the same fide. as to ettnitilute unit or units,whenever. Le:: judgement. required to prat sane or encourage the conservation of natural resources by I llai gasoral (+Weds air uniformwell spiwingmaim cycling. press as tcnance. re -pressuring or secondary recovery program, or any cooperative or unit plan of dm elopment or operation approved by the Secretors ol td Interior of the United State "lhe sire of any such unii mayb d by iId'g acreage believed to be productive. and d decreased by I f g acreage believes] to be unproductive, or the owners of which fail or refuse to join the unit, but any increase hr decrease in Lessor's royalties . tt g from any such change in any such unit shall not be retroactive. Any such unit nay be established, enlarged or diminished, and in the absence of production therefrom. may be abolished and dissolved. by filing for record a declaration of pooling or star /e ti n describing the lands and formations .sec pooled ot/ d. Drilling k g operations upon or production of oil or gas from any part of such unil slain he !rested and considered. for all purposes of this leaseto upon in suchl d to h Lessee .hall allocate to the porthtn this lease I Idiuny such unitafractional pan of all productproduchon Iron any part of such unit. on sine of the f llow. g bases: O the ratio between Me participating age in ihis lease included in such unit and the total of all panicipaiing reage includedin such t t I the ai o between die quantity of recoverable production underlying 'fie portion of this lease included in such unit and rho till fall woolable mode:non underisg siisherit or (c) any other basis approved ln. Stare r Federal authorities havg jurisdiction thereof. Upon produclion tom am lalri ofr herein shall be entitled to the royalties provided in this lease nn the fractional part of the unit produciion so dlm ncd Ii that mint OrtM1is'c„e included in ',deli ,mir no nese 9. Lessor warrants alld agrees tar defend the title to said land. The royals es herein above pr waded are ducrnl ed with respect to the entire tineral estate in oil anti gas arid it Lessor owns a lesser interest, the rossili ies IsI be pall Lessor h It b i d d l moonily less 't ts option may purchase s discharge ge in whole r in pm any wx, mortgage or eiher lien upon said land or may redeem the same Nom any pacehaser at any lax sale or adjudication, and shall be submgated to the rights of the holder !hereof. I0 This lease hll he binding upon all who execuiehtl'r Or not they are named in be granting clause horeol anti whether or not all iodic. the granting CIIIIIStI e l:Ian. All the pis mons of the lease shill( Inure 10 the lament ofand be binding upon 11e hero executors. administrators. successors . J assigns of Lessor and Lessee II. Lessor hereby wanes and releases all rights under Lind by virtue of the homestead laws of this state. 12. Notwithstanding anything to the contrary herein contained, all reference made to royalty shall he deemed to be changed to read fifteen percent (15%) instead of one -eighth (1/8th). 13. Prior to commencing any drilling operations on the lands herein described, Lessee shall consult with Lessors regarding the surface locations of the well site. tank battery facility and axes.` made. B 1359 REC 02311490 11/18/92 14:47 $10.00 2/002 F 0861 MARY ANN FEUERSTEIN CLERK 6 RECORDER WELD CO, CO 1%-3 �oy 2 4351142 13 14. REC 02398418 07/20/94 1 48 $5.00 1/001 AR239e4? F 1541 MARY ANN FEUERS i CLERK a RECORDER WELD D0, CO Ex1 hNSION OF OIL AND GAS LEASE Ted Rothe ("Rothe") is the owner and holder of that certain oil and gas lease ("Lease") dated September 21, 1992, recorded in Book 1359 under Reception Number 2311490 from Eldon L. Harrell and Patricia J. Harrell, as lessors, to Ted Rothe, as lessee, covering the following described lands in Weld County, Colorado: Township 5 North, Range 65 West, 6th P.M. Section 4: Lot 4 of the NWV4NWY., Lot 1 of the SWV4NWy, according to the subdivision of lands by the Union Colony of Colorado The Lease expires in the absence of drilling operations on -September 21, 1994, and Rothe desires to have the primary term of said Lease extended. The undersigned, and each of them, for themselves, their heirs, personal representatives, successors, and assigns, for and in consideration of Ten Dollars and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, do hereby agree that the term of said Lease shall be and is hereby extended, with the same tenor and effect as if such extended term had been originally expressed in such Lease, for a period of one (1) additional year, expiring September 21, 1995 and as long thereafter as oil or gas (including easinghead gas) may be produced from the lands covered by said Lease or lands pooled therewith, subject to the conditions contained in the Lease. The undersigned, and each of them, state that all payments necessary to extend the Lease to the end of its primary term, as herein extended, have been fully and timely paid, and that the Lease is now in full force and effect in respect to all lands covered thereby. For the same consideration, the undersigned, and each of them, do lease, let and demise unto Rothe, his successors and assigns, subject to and under all of the terms and provisions of the Lease, all interest they now own or hereafter acquire in the lands above described. IN WITNESS WHEREOF, this instrument is signed on this 19th day of July, 1994. -Patricia J. Harrell...))) -4123 Central Avenue Evans, CO 80620 STATE OF COLORADO ) ) ss. COUNTY OF WELD -Eldon L Harrell 4123 Central Avenue -Evans, CO 80620 , ;I The foregoing instrument was acknowledged before me this 19th day of July, 1994, by Eldon L. Harrell and Patricia J. Harrell. Witness my hand and official seal. t4;i4y commission expires: 951.742 PRODUCER'S ""-°Mcn P.M Up Rev. 1981 (WP Version) AR231149U OIL AND GAS LEASE PAID UP Patricia J. Harrell- ) 21st September 1992 by and between the following parties: THIS AGREEMENT is made and entered into as of the may of "LESSOR": -Eldon L. Harrell and -Patricia J. Harrell, -husband and wife (whether one or mor01123 Central Avenue Evans, CO 80620 and "LESSEE': Ted Rothe 1847 26th Avenue Court Greeley, -CO 80631 Weld Colorado and, is described as The said land included in this lease is situated in the County of ,State of follows, to -wit: Township 5 North. Ranee 65 West. 6th P.M. Section 4: Lot 4 of the NW'/,NWI/., Lot 1 of the SW'/aNW'4, according to the subdivision of lands by the Union Colony of Colorado. The said land contains 20.00 acres of land, more or less, and includes all oil and gas underlying lakes, streams, made, easements and rightsof way which traverse or adjoin said land; and includes all lands owned or claimed by Lessor as a part of any tract above described. This lease shall cover all the interest in said land now owned by or hereafter vested in Lessor. For the purpose of calculating any payments based on acreage. Lessee, at Lessee's option, may act as if said land and its constituent parcels contain the acreage above stated, whether they actually contain more or less. tWO from the date hereof, called "primary Subject Co the other provisions herein contained, this lease shall remain in force for a period of years term". and so long thereafter as oil or gas is produced from said land hereunder orlessee is engaged in drilling or reworking operations on said land hereunder as herein provided. Each of the covenants, terms and provisions contained on the reverse side of this page Is incorporated herein by this reference. IN WITNESS WHEREOF. this instrument is executed as of the date first above written. /O.2()_V -Eldon L. Harrell B 1359 REC 02311490 11/181-92 14:47 410.00 1/002 F 0860 MARY ANN FEUERSTEIN CLERK & RECORDER WELD CO, CO f rjl Soc. Sec No. [7�/ _`;' , .y�/ 6 or Tax LD, Nor\./ STATE OF Colorado COUNTY OF Weld Iss. ACKNOWLEDGMENT FOR INDIVIDUAL The Mt8a{idLrengrainir tisivfcr ie fiat Cll me this by 5 day of 1\10V • 92 , 19 Witness my hand and official seal. My commission expires' STATE OF _ COUNTY OF by y ss. ACKNOWLEDGMENT FOR CORPORATION The within and foregoing instrument was acknowledged before me this Witness my hand and official seal. My commission expires• day of . 19 as President of a corporation, on behalf of said corporation. Notary Public 251.742 he following covLants, terms and provisic an integral part of this lease • I. Lessor. for and in considerm ion of the suin of Ten Dollars. in hand paid. f Me royaltiesherein provided, and of the agreements of Lessee herein o tai edhereby grants. demises, leases I lets exclusively n Lessee the herein described, die purpose f investigating, ext loring and drilling for, producing, saving, taking, iowning. Ira nsponig storing. handling and nd treating d gas, b ther with all rights, privileges d easements useful for Lessee's operations hereunder onsaid land and on lands the tield. including hut that limited to the ladlowing rights. to lay pipe l' ' to build roads; and to construct tanks, pump and power stations, power and communications lies, and other structures and facilities. The phrase oil and gas", as used in this lease, shall embrace all hydrocarbons, as well as other substances produced therewith. 2. Royaltis to be paid Lessor are: (a) on oil, ono -eighth (I/8) of that produced and saved from said land, to be delivered at the wells or to the credit of Lessor into the pipe line to which the wells may be connected. Lessee may from time to time purchase any royalty oil, paying therefor the market value in the field where produced on the day it is run to the pipe tine or storage tanks; (h) on gas, including caainghead gas or other gaseous substances, produced from said land and sold or used off the premises, the market value at the well of one -eighth (I/8) of the gas so sold or used, provided that on gas sold at the well the royalty shall be one -eighth (I/8) of the amount realized from such sales, (c) on other substances produced with oil or gas, and covered by this lease, one -eighth (I/8) of their value at the well. If at any time oil and/or gas from a well capable of producing oil and/or gas is not being sold or used off the premises, and this lease is not being otherwise maintained in full force and effect. Lessee shall pay or tender to Lessor, as royalty, the sum of One Dollar ($I00) per acre per year on the acreage then held by Lessee hereunder, the first such payment nn tender to be made on or before the anniversary date of this lease next ensuing after the expiration of 90 days after the date such well is shut in and subsequent payments or tenders to be made on or before the anniversary date of this lease; provided, however, that if oil or gas from any such well is sold or used off the premises before the applicable anniversary date of this lease (even if such well is again shut in before such dam), or if on such date this lease is being maintained in fine and effect other than by reason of such shut in well. Lessee shall not be obligated to pay or tender, on or before that particular anniversary date, said sum as shut in royalty. If sh pay ment or tender is made, it will be considered that oil and/or gas, as applicable, is being produced within the meaning of this lease. During such time. Lessee may remme thepumping f ods, tubing nd other equipment from the well or wells for use elsewhere in Lessee's business, consistent with all applicable laws. I s and regulations. Lessee may use. free of t ylry oil, gas and water produced from said land by Lessee for all operations hereunder. 3. This is a PAID -UP LEASE. In considerarionof the cash payment herewith. Lessor agrees that Lessee shall not be obligated, except as otherwise provided herein, to commence or continue any operations during the primary term. Lessee may at any time or times during or after the primary term surrender this lease as to all or any portion of said land and as any strata or stratum by delivering to Lessor or by filing of record a release or releases, and be relieved of all obligation thereafter accruing as to the acreage surrendered. 4. If, at the expiration of the primary term of this lease, oil or gas is not being produced on the leased premises or on acreage pooled therewith but Lessee is then engaged in drilling. completing or reworking operations thereon, then this lease shall continue in force so long as operations are being continuously prosecuted on the leased premises o. acreage pooled the raw lilq and operations shall be considered to be continuously prosecuted if not more than ninety (90) days shall elapse between or on the completion the production omnem ofshoe we sb oul ice froing ny' operationse fah the drilling t of ,this lease well It after inate ifry ssoff or gas on sold ditto al do acreage reword the operati onsithry (r0) should cease fof cessation u f after the nrlmzry mdal this leaps shall fat ty hole. Ife off Lessee shall be dis uveled andpiodug ed as resul of such o elates sl any (aft r the item dam of thepa pterra tf tt from date once shall ti dry hebo, orto gas shall as is prod and prothe as a result of such opemGons at or after the expiration of the primary term of this lease, this (case shall continue in force so long as oil or gas is produced from the leased premises or acreage pooled therewith. 5. Lessee shall pay Mr or repair damages caused by Lessee's operations to growing crops, buildings, irrigation ditches, culverts and fences. If requested by Lessor, Lessee will bury pipe lines below d' plow depth when crossing cultivated land. No well shall be drilled within two hundred (200) feet of any residence or barn now on said land without the consent of Lessor. Lessee shall have the right at any time to remove ail Lessee's property and fixtures, including the right to drew and remove all casing. No default of Lessee hereunder wllh respect to any well or poninn of said land shall impair Lessee's rights with respect to any other well or portion of said land. Lessee may inject water, gas or other substances into any zone or stratum underlying said land and not productive of fresh water. 6 The rights of Lessor and Lessee hereunder may be assigned in whole or in part, No change in ownership of Lessor's interest (by assignment or otherwise) shall betiding on lessee itI Lessee has been furnishod with notice, consisting of certified copies of all recorded instruments or documents and other information necessary to establish a conII, so thnin riftlfrom L d thenonly with respectl payments thereafter matte. No otherkind of notice. whetheractual or constructive, shall be binding l I lessee may continuenine payments precisely as if no change had d. No present or future division f l n rat ip as to different portions tar parcels of said land shall operate to enlargethe obligations or diminish i sh the rights of Lessee, and Lessee's operations y be conducted without regard to any such division. If all or ally part of the Lessee's interest hereunder shall be assigned, no leasehold owner shall be liable for any act or omission of any other leasehold owner, 7. Whenever. as a result of any cause beyond Lessee's control (such as fire, flood, adverse field or weather conditions. windstorm or other Act of God; law, order or regulation of any governmental agency: or inability to securemen material or transportation), Lessee is prevented from complying with any provision of this lease, Lessee shall not be liable for damages or forfeiture of this lease whole or in part, and Lessee's obligations hereunder shall be suspended so long as such cause persists. S. Lessee nury at any time or times pool or unitize this leasy and the lands •red hereby, in whole or in pan or as to any stratum or strata. with ocher lands and leases iii Mc field. u as to constitute a unit or Mulls.whenever, in Lessee's judgement, required to promote or encourage the conservation of natural resources by facilitating J ly or uniform well ',pacing pattern: cycling, pressureto cc re -pressuring or secondary recovery program; or any cooperative or unit plan of thesetheselopment or operationapproved by the Secretary of the Interior of the United States. The size of any such unit n ay br increased by including acreage believed to he productive, and decreasedb .clod b acreage believed tbe unproductive, or the oers of which fl or refusero join dm unit,but any' aye or decrease in Lessor's roy r resutting lanil any such change in any such unit shall not be retroactive. Any such unit nay be csublished, enlarged, or diminished, ad in d he absence of produenon therefrom. aj by abolished and dissolved. by filing for record s declaration f pooling WWI'S:Mori describing thc lands and format so pooled or f. d. Drilling or reworking rig op I'upon production f MI or gas from any pan or such unit shall he treated and considered, for purr:: of tits lease, such operations upon or such production mom this rinse. Lessee shall allocate to the portion of this lease included y such unit a fractional part of all production from any pat of urch unit, on Oil ono of the following bases: (a) the ratio between the participating acreage in ibis Incise included in such unit and the total of all participating ar a ge included in such unit; or (b) the ratio between the quantity of recoverable production underlying rhe portion of this lease included in such unit and the total of all recoverable production underlyrng such unit or (c) any other basis approved by State or Federal authorities having jurisdiction thereof. Upon production from any part of such tan a. Lessor herein shall be entitled to the royalties provided in this (case On the fractional part of the unit production so tilloented to that portion of this lease included in such unit. and no more. 9. Lessor Warrants and agrees to defend the title to sa id landThe royalties herein above provided are determined ith respect to the entire l estate in oil and gas and il LeSSor owns a lesser t : o the Iti s to be paid Lessor shall be reduced proportionately. Ley:Leysee at us option may purchase or discharge in wlmle or in pan any sox mortgage or oilier lien upon said land, or may redeem the same from any purchaser at any sox salt or adjudication, and shall he subrogated to the rights of the holder thereat. to. This shall hbinding upon all who executeh 0 r or not they are named in the granting clauseh c r stud whetl rat all pt Ole granting clause eau ic this lease. All the pros isions sf this lease shall I n re to the benefit t obi and he binding upon the heirs. executors. 'td nun's ir, t rssuccessors and assigns of Lessor and Lessee. II. Lessor hereby w,uses and releases all rights under and by virtue of the homestead laws of this sate. 12. Notwithstanding anything to the contrary herein contained, all reference made to royally shall be deemed to be changed to read fifteen percent (15%) instead of one -eighth (1/8th). 13. Prior to commencing any drilling operations on the lands herein described, Lessee shall consult with Lessors regarding the surface locations of the well site, tank battery facility and access roads. -B 1359 REC 02311490 11/18/92 14:47 $10.00 2/002 F 0861 MARY ANN FEUERSTEIN CLERK &-RECORDER WELD CO, CO Arson 1222 CU 951742 PRODUCEP 'ca Paid Up Rev. 1992 (WP Version) AR2401259 OIL AND GAS ' -SE PAID UP 22nd July 94 THIS AGREEMENT is made and entered into as of the day of 19 by and between the following parties: "LESSOR": Lawrence L. Monroe and Lois C. Monroe, husband and wife (whether one or mare) 369 E. 8th Street Greeley, CO 80631 and "LESSEE": Crews & Zeren, a general partnership 1223 28th Avenue, Suite 2 Greeley, CO 80631 'Weld Colorado The said land included in this tease is situated in the County of State of and is described as follows, to -wit: Township 5 North, Ranee 65 West, 6th -P.M. Section 4: Lot 4 of the SW'/NW'/4 and Lot 1 of the NW'/.SW'/., according to the Subdivision of Lands by the Union Colony (also described as the SE'/SWrANW'A and NE'/NW'/SW'b) 20.00 The said land contains acres of land, more or less, and includes all oil and gas underlying lakes, streams, roads, easements and rights -of -way which traverse or adjoin said land: and includes all lands owned or claimed by Lessor as a part of any tract above described. -This lease shell cover all the interest in said land now owned by or hereaher vested in Lessor. For the purpose of calculating any payments based on acreage. Lessee, at Lessee's option, may act as if said land and its constituent parcels contain the acreage above stated. whether they actually contain more or less. lWO from the date hereof, called "primary term", and to the other gprovisions herein contained, this lease ishall remain in force efor a priod of years term", so long thereafter as oil or gas is produced from said land hereunder or lessee is engaged in drilling or reworking operations on said lute MaeuMer as herein provided. Each of the covenants, terms and provisions contained on the reverse side of this page is incorporated herein by this reference. IN WITNESS WHEREOF, this instrument is executed as of the date first above written. o See No - 3H -6 L1 2 Ttx 1 U. No ` 2401259 B-1454 P-187 08/05/94 03:05P PG 1 OF 2 REC D0C Mary Ann Feuerstein Weld Co., Clerk & Recorder STATE OF COLORADO ) ) ss. COUNTY OF WELD The foregoing instrument was acknowledged before me this 3(Yl '_day of July, 1994, by Lawrence L. Monroe and Lois C. Monroe vness,my hand and official seal. eec. ' tty ertntn(ii's�sion expires: Mp(F4t1l Xo crq-'m 10,00 951717 The following covenants, terms and provisic :an integral part of this lease. 1 I. Lessor,f r and in consideration of the NUICI of lenin hand paid, of the royalties herein provided, and of the agreements of Lessee herein contained, hereby 'S.. grants, demises leases and lets exclusively unto Lessee the land herein described, for the purpose of investigating, exploring and drilling for, producing, saving, taking, a owning, transposing, storing, handling and treating oil and gas. together with all rights, privileges and easements useful for Lessee's operations hereunder on said land • • and on lands in the same field, including but not limited to the following rights: to lay pipe lines; to build roads; and to construct tanks, pump and power stations, power and communications lines, and other structures and facilities. The phrase "oil and gas", as used in this lease, shall embrace all hydrocarbons, as well as other substances produced therewith, 2 Royalties to be paid Lessor are: (a) on oil, one -eighth (1/8) of that produced and saved from said land, to be delivered at the wells or to the credit of lessor into the pipe line to which the wells may be connected. Lessee may from time to time purchase any royalty oil, paying therefor the market value in the field where produced on the day it is run to the pipe line or storage tanks, (b) on gas, including easinghead gas or other gaseous substances, produced from said land and sold or used off the premises, the market value at the well of one -eighth (I/8) of the gas so sold or used, provided that on gas sold at the well the royalty shall be one -eighth (I/8) of the amount realized from such sales: (c) on ether substances produced with oil or gas, and covered by this lease, one -eighth (I/B) of their value at the well. If at any time oil and/or gas from a well capable of producing oil and/or gas is not being sold or used off the premises, and this lease is not being otherwise maintained in hull force and effect, Lessee shall pay or tender to Lessor, as royalty, the sum of One Dollar ($1.00) per acre par year on the acreage then held by Lessee hereunder, the first such payment or tender to be made on or before the anniversary date of this lease next ensuing after the expiration of 90 days after the date such well is shut in and subsequent payments or tenders to be made on or before the anniversary date of this lease; provided, however, that if oil or gas from any such well is sold or used off the premises before the applicable anniversary date of this lease (even if such well is again shut in before such date), or if on such date this lease is being maintained in force and effect other than by reason of such shut in well, Lessee shall not be obligated to pay or tender, on or before that particular anniversary date, said sum as shat in royalty. If such payment or tender is made, it will he considered that oil and/or gas. as applicable, is being produced within the meaning of this lease. During such onto Lessee may remove the pumping unit, rods, tubing and other equipment from the well or wells for use elsewhere in Lessees business, consistent with all applicable laws, rules and regu lar Ions. Lessee may use, free of royalty, oil, gas and water produced from said land by Lessee for all operations hereunder, 3. This Is a PAID -UP I.EASE In consideration of the cash payment herewith, Lessor agrees that Lessee shall not be obligated, except as otherwise provided herein, to cormnence or continue any operations during dm pAmvy teh. Lessee may at any Jnrc or limes during or after the primary term surrender this lease as to atl or any portion of said land and as to any strata or stratum by delivering to Lessor or by filing of record a release or releases, and be relieved of all obligation thereafter accruing as to the acreage surrendered. 4. If, at the expiration of the primary term of this lease, 0,l or gas is not being produced on the leased premises or on acreage pooled therewith but Lessee is then engaged in premises completing or reworkingttherewith; operations;andpe thereon, then hall be co side o continue in force os /cute as operations notmrnare being (90) days shall eb t ten the co ppltions or ba donme t o f on the ll and/ hed e i n ing o cs ntied ro bn cofa subseq enoseell. I if ram isco than ninety gas)on ss dlaelapse o acreage the completion abandonment ofone wellandthe begfrogny operations for tdrilling ofa hsegase well. If etaifryofoilorgasncsaidZino oral on acreage pooled thng isperati the piodncdon thereof sysulo cease from any oncause pfterrod the primary mdate this lease ion not terminate honIf oil Levee shall additional drillingproduced ed reworking resng a fsuch soperations wabin slat y 1aft rdays Iron dare of oche 'rie oan pterm t inoeom dhis ere se shalli co dryo(holo. toro gaa soil) r ds is prod end fmte as ode soh of such aof or hers the expirutlon of the primary term of this lease, this lease shall continue in force so long as oil or gas is produced from the lensed premises or acreage pooled therewith 5 Lessee shall pay for or e r Damages I by Lessee's operations to growing crops, buildings, irrigation ditches culverts and fences. If requested by Lessor. Lessee will bury prpe lines below ordinary p rw depth when crossing cultivated land. No well shall be drilled within rwo hundred (200) feet of any residence or barn now on said land wit hoot the consent of Lessor. Lessee shall have the right at any time to remove all Lessee's property and fixtures, including the right to draw and remove all casing. No demur( of Lessee hereunder with respeer. to any well or portion of said land shall impair Lessee's rights with respect to any other well or portion of said land. Lessee may inject water, gas or other substances into any zone or stratum underlying said land and not productive of fresh water. 6, The rights of Lessor and Lessee hereunder may be assigned in whole or in part. No change in ownership of Lessors interest (by assignment or otherwise) shall be binding on Lessee until Lessee has seen furnished with notice, consisting of certified copies of all recorded instruments or documents and other information necessary to establish a complete chain of record tide from Lessor, and then only with respect o payments thereafter made. No other kind of notice; whether actual or constructive. shall be binding on Lessee, and Lessee may continue to make payments precisely as if no change had occurred. No present or future division of Lessor's ownership as to different ponions or parcels of said land shall operate to enlarge the obligations or diminish the rights of lessee, and Lessee's operations may be conducted without regard to any such division. If all or any pan of the Lessees interest hereunder shall be assigned, no leasehold owner shall be liable for any set or omission of any other leasehold owner. 7. Whenever. as a resuE of any cause beyond d Lessee's control (such as firefood, adverse field or th conditions, windstorm or other Act of God; order or regulation of any governgovernmenkal agency,inability to securemen, interal or transportation), Lessee IS prevented from complying with any provision of this lease, Lessee shall not be liable for damages or forfeiture of this lease, in whole or in part, and Lessee's obligations hereunder shall be suspended so long as such cause persists. 8. Lessee may at any time or limes pool or unitize ribs lease and the lands covered hereby, in whole or in pan, or as to any stratum or strata. with other lands and leases inthe same field. so as to constitute a unit or gas, whenever, in Lessee's judgement. required to promote or encourage the conservation of natural resources by faciI Lting an orderly or uniform well spacing pattern, a cycling, pressuremai ntenanee. re -pressuring or secondary recovery program; or any cooperative or unit plan 01 development or operation uppmsal by the Semcrary of the Interior of the United States. The size of any sueh relit may he increased by including acreage believed to ha pnoducloveand decreased by excluding acreage selieved to be unproductive, or the owners of which tail or refuse to join the unit, but any increase or decrease in Lessor's r v It ng Rau airy: c h t y sr.-1unit shall hone retro:move Any such imir may be tab/ : h d enlarged. or d. 'shed and, in the absence production therefrom, may be abolished one dissolved, by tiling for record a declaration of pooling or unitization describing the lands and formations so pooled or muswL Drilling or reworking operations upon or production of oil or gas from any pan of such snit shall be treated and considered, for all purposes of Mrs lease as such I r n such producrion form this lease. Lessee shall allocate to the portion of this lease included in any such unit a fractional part of all production from a y pan of such min. on, one of the following bases: (a) the ratio het wren the panicipai ng acreage in this lease included in such unit and the total of all pa rilelpau ng acreage included In sach ana: or bp the redo between the quanfdy of recoverable production underlying the portion of this lease included in such Will and the total of all rem-mble producdun uaslcrla rag such unit, or (e) any other basis approved by State or Federal authorities having jurisdiction thereof. Upon pmduofmn :roar any pan of such unit, Lessor herein shall be entitled to the royalties provided in this lease on the fractional pan of the unit production so allocated to that portion of this lease included in such unii, and nu more. 9 Lessor warrants and agrees to defend the lick to said land. The royah leas herein above provided are determined with respect to the entire mineral estate in oil and gas and if Lessor owns a less.ser interest, the rop lim paid he id Lessor shall be reduced propon ionalely. Lessee at its option may purchase or discharge in whole or in parr any us. mortgage or other 'ICI, s ease saoJ land. or uey redeem the same from any purchaser at any tax sale or adjudication, and shall be subrogated to the rights o: the holder thereof. lO. Th., shall be bid ti upon all who e honor or not they are named in the granting clause hereof and whether or not all parties named in the granting clause curt stirs tease All the pros 'skins cifth s lease shell inure to the benefit of and be binding upon the heirs. exeeulors administrators successors and assigns or Lessor and Lessee. II. Lessor hereby wanes and releases all i iglus under and ny virtue of the homestead laws of this suite. Additional Provisions: A. All reference to royalty in this lease is changed to read fifteen percent (15%) instead of one - eighth (Inith). B. This lease shall be effective to grant an easement from East Eight Street (also known as Highway 263) for access and ingress on and over the lands and easements of lessors in said Section 4 to the lands covered by this lease. 2401259 B-1454 P-187 08/05/94 03:05P PG 2 OF 2 R)l?5; di ittieti 1223 28th. An., Greeley, 3 951742 • ROEHN ao Po 0`j55 \3 2 00, 6 8 I \ MtILROY • • 4..\ . _` R-1 N 9 119 CARLSON ARNOLD 003 ORE NO 004 C$IZMA01 EAER 4REE TS 001 FORESTER NZ W N W C ^ LO 00 Jy ooa e TRUJILLO 002 SALAZAR 005 C c - [/AOSVORTM, - 1 004 ROTH 001 SHARKS PROS E 9 SI dinn W •• 003 ERM'T EASIN 005 0024 I-3 FENCE r r$RY5C S ST N0 I 006 S UPE CC 002 CROUSE 037 ES Al AIAL 'IRONS ANS CASON 9L STOCR TAME WATER CURIUM LEAK Row SVMAIOR TANK RATTrRY IXTAII 1LLTn SCE 6rpwwsrns1RA ww out ►r.SV,4 by:IV Cron Delos 06/15/11 -Jai. 199511:26 a.m. OH MM9 C50•4111• 011•41059•401364.9 003 SRATTUM I MALONE 15' ` c HARRELL \ -22 WELL . ✓0'1 5 6 • EQCERTI\ Loc'N 31T[ TE .` R-1 11 3 ACCESS RD 1 / 1, '.- TSbe ..—...— BATTERS Z 0 005 EL ATHERM000 Co 004 REJO INYE3I RHEA() LAIC) CE ROSS 0'O -MONPOE 002 HARPILL C-1 60MONR02 I 2l 4-23 WELL ACCESS 1 ROAD . 11 1 ,` 10\ USE BY SPECI U.S.R. W1/2 NW1/' Y NORTH 0 ,00' 200' SCALE; I' • 200' LOLOFF CONSTRUCTION III III 1 /-1 r--- F 1 1 1 , MONROE- 951742 Weld County Road Access Information Sheet Use by Special Review Weld County Public Works Department 933 North 11th Avenue P.O. Box 758 Greeley, CO 80632 (970) 356-4000-Ext. 3750 June 22, 1995 1. Applicant Name: Prima Oil and Gas Company Phone (303) 297-2300 Address: 1801 Broadway, Suite 500, Denver, CO 80202 2. Address or location of access: Northern well - Exit to east off of 1st Avenue just north of the north line of Geisert Industrial P.U.D. (immediately north of Sharpe Bros. Seed Company) onto the existing access road going to the east. The point of access is in the extreme eastern part of the SEA/sNE1/4 of Section 5, Township 5 North, Range 65 West. Southern well - Exit to north off of E. 8th Street Road onto the existing access road leading north to Rocky Mountain Inspection (first exit to north off of 8th Street Road east of Ellis & Capp. 3. Is there an existing access to the property? Yes. There is one existing access to each of the two wellsites. 4. Site Sketch: See attachment. OFFICE USE ONLY Road Road ADT Date Accidents Date ADT Date Accidents Date 5. Proposed use: ❑ Permanent ❑ Temporary ❑ Other ❑ Residential/Agricultural ❑ Commercial ❑ Industrial ❑ Subdivision Drainage Requirement Culvert Other Comments: Size Length ❑ Installation authorized ❑ Information insufficient Special Conditions: Reviewed by: Title: S51142 CHAPTER 18.17 Oil and Gas Exploration and Production Sections: 18.17.010 Purpose 18.17.020 Definitions 18.17.100 Well and Tank Batteries Location and Setbacks 18.17.105 Geologic Hazard/Flood Plain/Floodway Location Restrictions 18.17.110 Disposal of Drilling Mud 18.17.115 Seismic Operations 18.17.120 Signage 18.17.125 Arrpas Roads 18.17.130 Compliance with State Environmental Requirements 18.17.135 Noise Regulation and Special Mitigation Measures 18.17.140 Visual Impact/Aesthetics Regulation and Special Impact Measures 18.17.145 Wildlife Impact Mitigation 18.17.150 Recordation of Flow Lines 18.17.155 Reclamation 18.17.160 Abandonment and Plugging of Wells Operations Within One -Half Mile of Existing or Platted Developments 18.17.170 Building Permit 18.17.200 Requirements & Procedures 18.17.205 Site Plan Application Elements 18.17.210 Application Review Criteria 18.17.211 Consideration of Waste and Correlative Rights 18.17.212 Written Resolution of Decision 18.17.215 Notice to Procccd 18.17.220 Reports and Inspections 18.17.225 Inspection and Reporting Fees 18.17.300 Violation and Enforcement 18.17.305 Severability 18.17.010 Purpose. These regulations are enacted to protect and promote the health, safety, morals, convenience, order, prosperity or general welfare of the present and future residents of the City of Greeley. It is City of Greeley's intent by enacting these regulations to facilitate the development of oil and gas resources within City of Greeley while mitigating potential land use conflicts between such development and existing, as well as planned, land uses. It is recognized that under Colorado law the surface and mineral estates are separate and distinct interests in land and that one may be severed from the other. Owners of oil and gas interests have certain legal rights and -privileges, including the right to use that part of the surface estate reasonably required to extract and develop their subsurface oil and gas interests, subject to compliance with the provisions of these regulations and any other applicable statutory and regulatory requirements. The State has a recognized interest in fostering the efficient development, production and utilization of oil and gas resources, and particularly in the prevention of waste and protection of the correlative rights of common source owners and 951742 producers to a fair and equitable share of production profits. Similarly, owners of the surface estate have certain legal rights and privileges, including the right to have the mineral estate developed in a reasonable manner and to have adverse land use impacts upon their property, associated with the development of the mineral estate, mitigated through compliance with these regulations. Inral governments have a recognized, traditional authority and responsibility to regulate land use within their . jurisdiction, including use for oil and gas drilling. These regulations are intended as an exercise of this land use authority. Should it be established by competent evidence that a proposed oil or gas facility cannot be operated in compliance with these regulations, land use approval for such a facility may be denied. 18.17.020 Definitions. 1. Definitions: A. ACT shall mean the Oil and Gas Conservation Act of the State of Colorado. B. COMMISSION or OGCC shall mean the Oil and Gas Conservation Commission of the State of Colorado. C. DAY shall mean a period of twenty-four (24) consecutive hours. D. DIRECTOR shall mean Director of the Oil and Gas Conservation Commission of the State of Colorado. E. INSPECTOR means any person designated by the City Manager or by the City Manager's designee, who shall have the authority to inspect a well site to determine compliance with this Article and other applicable ordinances of the City of Greeley. F. OPERATING PLAN means a general description of a facility identifying purpose, use, typical staffing pattern, seasonal or periodic considerations, routine hours of operating, source of services/infrastructure, any mitigation plan(s) and any other information related to regular functioning of that facility. G. OPERATOR means the person, designated by the owner(s) or lessee(s) of the mineral rights as the operator and so identified in Oil and Gas Conservation Commission applications. H. MINERAL OWNER means any person having title or right of ownership in subsurface oil and gas or leasehold interest therein. I. SURFACE OWNER means any person having title or right of ownership in the surface estate of real property or leasehold interest therein. 2 951742 7. TWINNING means the drilling of a well adjacent to or near an existing well bore when the said existing well cannot be drilled to the objective depth and/or produced due to an engineering problem such as collapsed casing or formation damage. K. WELL means a hole drilled into the earth for the purpose of exploring for or extracting oil, gas or other hydrocarbon substances or for purposes of recharging, secondary recovery, storage or disposal . L. WELL HEAD means the mouth of the well at which oil or gas is produced. M. WEIJ SITE means that area surrounding a proposed or existing well or wells, tanks and tank batteries, and accessory structures and equipment necessary for the safe operation of drilling and production activities. 2. All terms used herein that are defined in the Act or in Commission regulations and -are not otherwise defined in Subsection I of this Section shall be defined as provided in the Act or in such regulations. 3. All other words used herein shall be given their usual customary and accepted meaning, and all words of a technical nature, or peculiar to the oil and gas industry, shall be given that meaning which is generally accepted in said oil and gas industry. 18.17.100 Well and Tank Batteries Location and Setbacks. 1. In all areas of the City of Greeley except as provided for in Subsection 2 below, the following shall apply: A. A wellhead location shall be not less than three hundred fifty (350) feet from any occupied building, any proposed building for which a building permit has been issued where the primary use includes regular occupancy, or any building for which a certificate of occupancy has been issued. B. Production tanks and/or associated on -site production equipment shall be located not less than three hundred fifty (350) feet from any building or building permitted for construction. C. Wellheads, tank batteries and associated on -site production equipment shall be located not less than 100 feet from the edge of any public right-of-way. This requirement may be waived as part of the Use by Special Review Process at the request i3f the surface owner if such request is consistent with public safety. 2. Where compliance with O.G.C.C. spacing rules, regulations or orders makes it impossible for the applicant to meet the setbacks stipulated in Subsection 1 of this Section, the applicant shall not be required to fully meet the above described cecks. The applicant shall, however, meet the cerharks to the maximum extent possible within the O.G.C.C. spacing zegulations and may be required to implement special mitigation measures as described herein. 3 951742 18.17.105 Flood Plain and Floodway Location Restrictions. 1. The well and tank battery shall comply with all applicable federal, state, and local laws and regulations when located in a floodway or a 100 -year flood plain area. All equipment at production sites located within a floodway or a 100 -year flood plain shall be anchored as necessary to prevent flotation, lateral movement or collapse or shall be surrounded by a berm with a top elevation at least one foot above the level of a 100 -year flood. Any activity or equipment at any well site within a floodway or a 100 -year flood plain shall comply with the Federal Emergency Management Act and shall not endanger the eligibility of residents of the City of Greeley to obtain federal flood insurance. 18.11.110 Disposal of Drilling Mud and Exploration and Production Waste. No drilling mud or other drilling fluids shall be disposed of at the drilling site. All exploration and production waste shall be disposed of in accordance with OGCC regulations. 18.17.115 Seismic Operations. All persons shall comply with all Commission rules with respect to seismic operations. In addition, the owner or operator shall provide at least fifteen days advance written notice to the Director of Community Development and the Fire Chief whenever seismic activity will be conducted within the City of Greeley. ]8.17.120 Signaee. The well and tank battery owner or operator shall comply with all Commission rules with icaya.t to signage. In addition, the owner or operator shall maintain in good, readable condition all signs required by such Commission regulations. Signs shall comply with Chapter 18.28 ("Signs") of this Code and the Uniform Fire Code, as adopted by the City of Greeley, except when any variations from these Codes are required by OGCC regulations. 18.17.125 Access Roads. All private roads used to *erns the tank battery and the well head shall be improved and maintained according to the following standards: 1. TANK BATTERY ACCESS ROADS. Access roads to tank batteries shall, at a minimum, be: A. A graded gravel roadway at least twenty (20) feet wide and with a minimum unobstructed overhead clearance of thirteen feet six inches (13'6"), having a prepared subgrade and an aggregate base course surface a minimum of six (6) inches thick compacted to a minimum density of 95 percent of the maximum density determined in accordance with generally accepted engineering sampling and testing procedures approved by the Public Works Department. The aggregate material, at a minimum shall meet the 7equirements for Class 6, Aggregate Base Course as specified in the Colorado Department of Highways "Standard Specifications for Road and Bridge Construction," latest edition. This standard may be waived by the Department of Public Works and the Fire Chief for good cause and at their sole discretion. B. Graded so as to provide drainage from the roadway surface and constructed to allow for cross drainage of waterways (i.e., roadside swells, gulches, rivers, creeks, etc.) by means of an adequate culvert pipe. Adequacy of the pipe shall be subject to approval of the Public Works Department. 4 251942 C. Maintained so as to provide a passable roadway meeting the requirements of subparagraph A, above, at all times. 2. WELLHEAD ACCESS ROADS. Access roads to wellheads shall, at a minimum, be: A. A graded, dirt roadway at least twenty (20) feet wide and with a minimum unobstructed overhead clearance of thirteen feet six inches (13'6"), compacted to a minimum density of 95 percent of the maximum density determined in accordance with -generally accepted engineering sampling and testing procedures approved by the Public Works Department. B. Graded so as to provide drainage from the roadway surface and constructed to allow for cross drainage of waterways by means of an adequate culvert pipe. Adequacy of the drainage plan shall be subject to approval of the Department of Public Works. C. Maintained so as to provide a passable roadway generally free of ruts. 3. No mud or gravel, except minor and nominal amounts, shall be carried onto the city streets. If mud or gravel is carried onto the city streets, the owner or operator shall insure that -the streets are promptly cleaned. With the permission of the Director of Public Works the owner or operator may make arrangements for the Department of Public Works to clean the streets at the sole cost of the owner or operator. 4. No public facilities such as curbs, gutters, pavement, water or sewer lines, etc., shall tie damaged by vehicles entering or leaving the site. In the event of damage the owner and operator, jointly and severally, shall indemnify the City for any reasonable repair costs. 3. All tank battery and wellhead arnss roads which intersect a paved City street or alley shall be paved to standards determined by the Director of Public Works from the existing paved roadway to the edge of the public right-of-way. 38.17.130 Compliance with State Environmental Requirements. Operators shall conform to all current City, County, State and Federal regulations and standards concerning air quality, water quality, and noise. 38.17.135 Noise Regulation and Special Mitigation Measures. 1. State law and regulations concerning noise abatement (Title 25, Article 12, C.R.S.) shall apply to all operations together with applicable local government ordinances, rules, or regulations. 2. Exhaust from all engines, motors, coolers and other mechanized equipment shall be vented in a direction away from all buildings certified or intended for occupancy to the extent practicable. - 5 SSi.742 3. SPECIAL MITIGATION MEASURES. A. Where a well or tank battery does not comply with the Tequired setback or other portions of this ordinance, or where the well or lank battery is in an area of particular noise sensitivity (for example, near hospitals), additional noise mitigation may be required. In determining noise mitigation, spa.ific site characteristics shall be considered, including but not limited to the following: (i) Nature and proximity of adjacent development (design, location, type). (ii) Prevailing weather patterns, including wind directions. (iii) Vegetative _cover on or adjacent to the site. (iv) -Topography. B. Based upon the specific site characteristics set forth above, nature of the proposed activity, and its proximity to surrounding development, and type and intensity of the noise emitted, additional noise abatement measures may be required. The level of required mitigation may increase with the proximity of the well and well site to existing residences and platted subdivision lots, and/or the level of noise emitted by the well and well site. One or more of the following additional noise abatement measures may be required: (i) Acoustically insulated housing or cover enclosing the motor or engine, or compressor. (ii) Vegetative screen consisting of trees and shrubs. (iii) Solid wall or fence of acoustically insulating material surrounding all or part of the facility. (iv) Noise management plan identifying and limiting hours of maximum noise emissions, type, frequency, and level of noise to be emitted, and proposed mitigation measures. (v) Lowering the level of pumps or tank battery. (vi) Requirement for electric motors only. X8.17.140 Visual Impact/Aestbetics Reeulation and Special Impact Measures. 1. VISUAL IMPACTS AND AESTHETICS. A. To the -maximum extent practicable, oil and gas facilities shall be located away from prominent natural features such as distinctive rock and land forms, vegetative patterns, river crossings, and other landmarks. B. To the maximum extent practicable, oil and gas facilities shall -be located to avoid crossing hills and ridges or silhouetting. C. To the maximum extent practicable, the applicant shall use structures of minimal size to satisfy present and future functional requirements. 6 951742 D. Atall times the applicant shall attempt to avoid the removal of trees. E. To the maximum extent practicable, the applicant shall locate facilities at the base of slopes to providea background of topography and/or natural cover. F. The applicant shall replace earth adjacent to water crossings at slopes at an angle which insures stability for the soil type of the site. G. Theapplicantshall alignaccess roads to follow existing grades and minimize cuts and fills. H. Facilities shall be painted as follows: (i) Uniform, rion ontrasting, non -reflective color tones, -similar 10 Munsell Soil Color coding system. (ii) Color -matched to land, not sky, slightly -darker than adjacent landscape. I. -Storage tanks and other facilities shall be _kept clean and well painted and otherwise properly maintained. 2. SPECIAL MITIGATION MEASURES. Where a well or tank battery does -not comply with the required setback or other portions of this ordinance, or in areas of increased visual sensitivity determined by the City, the applicant shall submita VisualMitigation Plan including one or more of the following standards shall include but -not be limited to: A. Exterior lighting shall be directed away from -residential areas, or shielded from said areas to eliminate glare. B. Construction of buildings or other enclosures may be required where facilities create noise and visual impacts non-mitigable because of proximity, density, and/or intensity of adjacent residential land use. C. One or more of the following landscaping practices may berequired, on-asite specific basis: (i) Establishment and proper maintenance of adequate ground covers, shrubs, trees. (ii) Shaping cuts and fillstoappear as natural forms. (iii) Cutting rock areas to create irregular forms. (iv) Designing the facility to utility natural screens. (v) Construction of fences or walls such as woven wood or rock for use with or instead o₹ landscaping. D. Safety Measures. Any well located less than 350 feet from an occupied building shall be equipped with blowoutpreventers during drilling. 7 951.742 18.17.145 Wildlife Imnact Mitigation. 1. When one or more wells or tank batteries are located within wildlife _sensitive areas as identified by the City's comprehensive plan, the applicant shall consult with the Division of Wildlife to obtain recommendations for appropriate site specific and cumulative impact mitigation procedures. -Site and cumulative impact recommendations shall be submitted for review and commenuby Parks and Recreation Department, not to exceed the recommendations of Division of Wildlife. 2. Multiple Sites. In lieu of a site specific mitigation review for each well and well site, The applicant may submit to Community Development Department a multi-siteplan addressing cumulative impacts to wildlife from the estimated total number of facilities. 18.17.150 Recordation of Flow lines. All flow lines, including transmission and gathering systems, shall have their location recorded with the Weld County Clerk and Recorder within thirty (30) days of completion of construction. Abandonment of any flow lines, shall be recorded with the Weld County Clerk and Recorder within thirty (30) days after abandonment. 18.17.155 Reclamation. The operator shall comply with all Commission rules with rcal,ect to site reclamation. The OGCC Drill Site Reclamation Notice shall be filed with the City at the same time it is sent to the surface owner. 18.17.160 Abandonment and Marine of Wells. 1.'The operator shall _comply with all OGCC rules with respect to abandonment and plugging of wells. 2. Operators of wells which are to be abandoned upon The completion of drilling and not be put into production shall notify the Fire Department not less than two hours prior to commencing plugging operations. 3. Operators of -formerly producing wells shall notify the Fire Department not less than two working days prior to removing production equipment or commencing plugging operations. 4. The operator shall provide copies of all OGCC plugging and abandonment reports to the City at the same time They are filed with the OGCC. 18.17165 Operations Within One -Half INifile of Existing or Platted Development. 1. Any proposed well or associated equipment, such as tank batteries, located within one- half mile of existing buildings or existing or platted development, as measured from the nearest point of plat boundary or existing building shall comply with the following requirements: A. All tank batteries shall be restricted to one site per each 160 acres wherever practicable. 8 951742 B. All drilling rigs shall be equipped with blowout preventers. C. All production wells shall be equipped with automatic control valves -on the wellhead which -will close in the well with a sudden change in pressure. D. All production well heads and tank batteries shall be fenced with a fence sufficient for safety and aesthetics. E. At least fifteen days prior toshefirstplanning Commission meeting to -consider a Use By Special Review in any location described in paragraph A of _this Section, the Applicant shall notify by first class mail or hand delivery with _certification of mailing or delivery _to all surface land owners within 'one-half mile of _the wellhead and tank battery end adjacent to the -surface parcel in which the proposed well is _to beiorated of the -proposed well and the date, time, and place of the lint Planning Commission meeting. F. Except for electrically operated drilling -rigs or drilling rigs equipped -with enhanced -efficiency mufflers on any _drilling or workover rig operating within one-half mile of an occupied residential building, -the -bit and drilling pipe shall not be inserted into or removed from the -hole for routine operations such as for bit _change or logging, between The hours of eleven o'clock p.m. and six o'clock a.m. This requirement shall not -apply in emergencies. This requirement may be -waived by written permission of the occupants of allresidential buildings within one-half mile of the drilling site. G. Wellhead arms roads to wellheads located within one -half -mile of existing buildings shall meet the construction standards of section 18.17.125(1)(A) of this Chapter. 2. Exceptions to_theprovisions of this Section may be granted by the City Council as part of its' resolution granting the UseBySpecialReview only if the owner or operator demonstrates by a preponderance of evidence that She waiver or variance is necessary In prevent waste or protect correlative rights and ran provide equivalent mitigation measures for -the standards waived. 18.1'1.170 Building Permit. Building permits shall be obtained for all above -ground structures as required -by the City of Greeley Uniform Building and Fire Codes then in effect. 18.17200 Requirements & Procedures. 1. PROPOSED NEW WELLS, REDR]LLIING AND ENHANCED RECOVERY OPERATIONS. Within all zone districts, it shallbe unlawful for any person to drill a well, or reactivatea plugged orabandoned well,-or_to perform initial installation ofaccessory equipment or pumping systems unless a special use permit has first been granted by the City in accordance with the procedures in _this Chapter 18, where applicable. The initial special use permit shall allow any twinning of -a well and relocation of accessory -equipment or gathering -and 9 951742 transmission lines so long as the standards in this Chapter are met. If any twinning of a well or relocation of accessory equipment or gathering and transmission lines occurs, then not less than thirty dayspriorto such activity, the operator shall file a revised site plan with the City depicting -any changes from Me approved special use permit. When a special use permit has been granted for a well, reentry of such well for purposes of sidetracking, deepening, recompleting, or reworking shall -not -require a special use permit amendment. The granting of such -Use By Specialiteview shall not relieve the operator from otherwise -complying with all applicable regulatory requirements of this jurisdiction, the State of Colorado and United States. 2. INSPECTIONS. In recognition of the potential impacts associated with oil and gas drilling and well operation in an urban setting, all wells and accessory equipment and structures shall be subject to inspection by Inspectors of the City of Greeley at all times to determine compliance with applicable provisions of this Article, the Uniform Fire Code, as adopted by the City of Greeley, the Uniform Building Code, as adopted by the City of Greeley, -and other applicable City of Greeley ordinances and regulations. 18.17.205 Site Plan Application Dements. An application for a Use By Special Review pursuant .to this chapter shall be _filed with the Community Development Department, or other official designated by the City, and shall include the following information: 1. VICINITY MAP: APPLICATION ELEMENTS. A. Location and name (if any) of all existing water bodies and watercourses, including -direction of water flow - This information shall be submitted on USGS 73 minute series or assessor base maps which indicate topographic detail and will show all existing water bodies and watercourses with a physically defined channel within a 400 foot radius of the proposed well. For any existing water body or watercourse topographically lower and within 2,000 feet or less from the drill site, a description shall be submitted of proposed methods to be employed to prevent water pollution or contamination of the water body or watercourse. B. Location and Type of Water Supply (rivers, creeks, lakes, ponds, wells, and ditches or similar features) — This information may be shown on a plat or -map or may be a -written description. Source of all water to be used in the drilling operation of the proposed wells shall be noted. Also include methods and routes for transporting water to the well site. C. Location of Existing Oil and GaiWells - Thisinformation shall be submitted on a map and shall include all wells (producing, abandoned, temporarily abandoned, shut-in, injection, drilling, -etc.) within a one -mile radius of the proposed location for the wellhead. 10 951.742 D. Location of Drill Site— This information shall -be submitted on a_plat or map of the section in which the drill site is to be located. The crated _plat of the section will include and clearly show the following information: (i) All dimensions of the section (north line, south line, west line, and east line) as shown on USGS 7.5 minute -quadrangle maps. (ii) Location -of drill site, given in feet -from two lines of She section, e.g. 1,000 ft. From North Line and 1,600 ft. From West Line. (iii) Township and Range information. (iv) Section Number. (v) Location expressed in appropriate 1/4 1/4 1/4 section. (vi) True North Arrow. (vii) parcel Tax Identification Number. 2. SITE_MAP ELEMENTS. This information forthe site shall be submitted on a scaled plat or map showing: A. Proposed location of the well head, tanktattery, and recorded or unrecorded flow lines associated with the proposed well in -the event productionis established. Future development of the resource shall be considered in She location of she lank battery. Existing tank -batteries -and flow lines within a half -mile radius of the proposed location shall be shown. B. Location of layout, including, without limitation, positions of the rig, mud tanks, reserve pits, racks, and all other structures and equipment. C. True north arrow. D. Any and all existing surface improvements and equipment within one half mile. Existing subdivisions may be shown by shading or color in lieu of showing any and all existing surface improvements. E. Recorded or known unrecorded existing utility right-of-ways. easements and other F. Irrigation or drainage ditches within 400feetof the wellhead. G. Dr-ainageand erosion control plans for on -site and off site drainage. H. _Location of access roads, either private or public. I. Site and lease boundaries. J. Adjacent surface owners within 1500 -feet of the wellheadand tank battery. 11 951742 K. A title block showing scale, date of preparation, identity of preparer to include name, address, and -telephone number, and identity of applicant. 3. NARRATIVE ELEMENTS. In -addition -to the mapped information required in Subsections and II of this -Section, the application shall also include: A. The Operator, and Surface Owner's Names and Addresses, copies of any legal instruments of -public -record identifying the applicant's interest in the property and any required OGCC Form 1, Designation of Agent. B. An Operating Plan. C. A listing of all permits or approvals obtained or yet -to be obtained from local, State or Federal agencies other than OGCC. D. An Emergency Response Plan including, but not limited to listing of local telephone numbers of thepublicandprivate entities -and individuals tobe notified in the event of an emergency, means ofidentifying location of well, and provisions to be made for access by emergency response entities to secured facilities. E. Plans designed _to minimize negative effects. Negative effects are deemed to include but are not limited to noise levels, air, water and land quality impacts, vibration and odor levels, visual impacts, wildlife impacts, waste disposal, and public safety. 18.17.210 Application Review Criteria. 1. ThePlanning Commission and City Council decision -to approve ordeny an application shall#>e made and determined based upon The proposed facility's compliance with allapplicable performance standards and other requirements of these -regulations and by applying the following valuative criteria to the evidence in the record of proceedings before the Planning Commission and City Council. A. Whether the special use will be consistent -with the City's current Comprehensive Plan. B. Whether the special use will be compatible with existing conforming surrounding and probable future land uses. C. Whether the -special use -will cause an _unreasonable demand on City services. D. Wbetherihe specialvse will unreasonably and adversely affect -traffic flow and parking in the surrounding area. E. Whetherthe public welfare -requires approval of the special use. 12 951742 2. The Planning Commission -recommendation and City Council -Resolution shall be based upon competent evidence presented in -the application and at the public hearing. following The conclusion of the public hearing, theRlanning Commission and City Council may proceed to verbally render its provisional decision on the application, or it may take the matter _under advisement to an announced date certain not -to exceed thirty (30) days, at which time it shall verbally render its provisional decision. 18.1711 Consideration of Waste and Correlative I2izhts. In the _event that an application is provisionally denied -based upon the criteria of paragraphs 1(A) through (E) of section 18.17.210, the applicant may, within ten (10) days request a rehearing to demonstrate how issuance of The permit is nerrscary to prevent waste orprotect owners of correlative rights in a common source to a fair share of production profits. If the applicant demonstrates by preponderance ofthetwidence that -the Use by Special Review must be'grarned to prevent waste, or to protect owners of correlative rights in a common source of oiland/or gas to a fair share of production profits, the City Councilshall grant the Use by Special Review, but may attach reasonable mitigation conditions to the Use by Special review to protect the -health, safetyand welfare of the public. 18.17.212 Written Resolution of Decision. Following the City Council oral announcement of its decision, and any subsequent sehearing, a written resolution shall be adopted in ten days or less as its final action or decision on the application. This written resolution shall set forth findings based upon competent evidence in the record of proceedings before the City Council and any applicable Federal, State or City of Greeley statutes, soles, -regulations or policies. The Community Development Department shall prepare the written resolution for the City Council consideration. For -the purposes of judicial review, The City's final -action or decision on anapplication shall be deemed to have been made as of the date upon which the City Council executes the written resolution, which shall constitute the City Council'siiinal action or decision. 18.17.215 Notice 10 Proceed. Prior to commencement of construction, drilling, re drilling, or enhanced recovery operations for which a use by Special Review has been previously granted, a "Notice to Proceed" shall be obtained from the City. A -copy of any necessary state Dr -federal permit issued for The operation shall be provided to the City. 1817.220 Reports and inspections. 1. The operator of any producing oil or gas well within the City of Greeley shall provide to the Fire Chief proof of insurance required by any City, County, State or Federal law or regulation and certification of compliance with the conditions of anyspecial use permitand the requirements of -this Chapter and the Uniform -Building -and Fire Codes, asadopted by the City of Greeley, annually. 13 y b� ,yr7 : w 2. Asa condition of any special use permit for any oil or -gas exploration or -production activity or operation, the holder oragent of the special use permit shall allow inspections by City personnel at any reasonable hour. Failure to allow inspections shall result in an immediate suspension of the special usepermit. Failure to allow inspections for more than thirty days shall result in revocation of the special use permit, subject only to appeal to the City Council. City Council's decision on a special usepermit revocation based on failure to allow inspections shall be final. 1-8.17.225 Inspection and ReportingFees. Any operator of any _oil and gas well within the City shall remit to the City an annual inspection and Teporting fee. The fee shall be determined annually by the City Manager or his _or her designee and shall be set to cover the reasonable costs of the City to inspect oil and gas wells -and process the annual reports of operators. This fee -shall -be paid not later Than February 1st of the year following that for which the_fee is due. Wells which have been plugged and abandoned are exempt from this fee. 18.17.300 Violation and Enforcement. 1. UNLAWFUL TO CONSTRUCT OR INSTALL UNAPPROVED OIL AND GAS FACILITIES. it is unlawful to construct, install, or _cause to be constructed or installed, any oil and gasiacility within City of Greeley unless approval has been granted by City Council or its _designee pursuant to this Code. The unlawful drilling or redrilling of any well or she production therefrom shall constitute a public nuisance. The City shall have the right to abate the nuisance at the sole reasonable expense of the operation of the nuisance by any means to include but not be limited to: A. Injunctive relief. B. A stop work order by the Director of Community Development. C. Criminal charges. D. Removal of the nuisance by City -personnel or City contractors. 2. PENALTY. Any person, firm, corporation, or legal entity that -constructs, installs, or uses, or which causes to be constructed, installed, or used, any -oil -and gas well or well site in violation of any provision of -this article or -of the conditions and requirements ofthe special use permit may be punished by a fine of -not -more than one thousand dollars (11,000;00), or by imprisonment for -not -more than one year, or by both such fine and imprisonment. Each _day of such unlawful operation shall constitute a separate violation. My subsequent violation after any conviction of -a violation of this chapter shall be punished by a minimum fine of five -hundred dollars for each subsequent violation -which may not be suspended by the Court. 14 951742 3. CIVIL ACTION. In case any building or structure is or is proposed to be erected, constructed, Teconstructed, altered, or used, oranyland is or is proposed to be used, in violation of any provision of this article or the conditions and requirement, of the special use permit, the City Attorney, in addition tothhe other remedies provided -by law, ordinance, or resolution, may institute an injunction, -mandamus, abatement, or other appropriate -action or proceeding abate nuisances and/or to prevent, 'enjoin, -abate, or remove such unlawful erection, construction, reconstruction, alteration, or use. 4. FALSE OR INACCURATE INFORMATION. The City Council may revoke approval-ofa facility if it is determined at a public hearing, held on at least ten (1D) days notice to the applicant, that the applicant provided information and/or documentation _upon which approval was -based, which the applicant, its agents, servants and employees, knew, -or reasonably should -have known, was false, misleading, deceptive, or inaccurate. Theapplicant and City Staff shall be provided with an opportunity to be heard at the public meeting prior to the City Council rendering its decision. 5. Forthepurpose of implementing and =forcing theseTegulations, Citypersonnel may enter onto subject property _upon notification of the permittee, lessee, or other party holding a legal interest in the property; if such entry is 4enied, the City shall have the right to obtain an order from a court 'of -competent jurisdiction to obtain entry. 6. In any -action for legal or 'equitable relief, in addition to any other penalties or remedies which may beavailable, the City shall be entitles] to recover any damages, costs of action, expert -witness fees and reasonable attorney's fees incurred should the City prevail. 18.17.365 Severability. If any provision of this Ordinance is found by a court of competent jurisdiction to be invalid, the remaining provisions of this Ordinance will remain valid, it being the intentofthe City Council that -the provisions of this Ordinance -are severable. 15 951742 May 8, 1995 William G. Sumners, Jr., Esq. 1550 Larimer Street, Suite 250 Denver, CO 80202 Dear Mr. Sumners: Re: McElroy Tract Oil and Gas Lease Negotiations CREWS & ZEREN PETROLEUM LAND CONSULTANTS 1223 28TH AVENUE. SUITE2 GREELEY. COLORADO 80831 (303) 351-0733 GREELEY (303) 659-9]10 DENVER (303) 35143667 FAX VIA FAX AND MAIL We have discussed your final lease draft, which was faxed touts by you under date ofFebruary 17, 1995, with Prima Oil and Gas Company. Although agreement is near, two items remain unsatisfactory to Prima. Prima is willing to restrict pooling to the W'NW'b for Codell, Niobrara and Sussex production and, as to other formations, to units established by the Colorado Oil and Gas Conservation Commission. However, they are not willing toseek pooling agreements from the various McElroy lessors. Your deletion of the printedTooling clause, together with the newParagraph 8 of the Exhibit, would require such agreements from all of the McElroy lessors. Prima cannot accept the second sentence of new ParagraphS of the Exhibit. While Prima will fully comply with all rules of the Colorado Oil and Gas Conservation Commission, it cannot accept liability for problems with water wells which Prima may not even have caused. Prima'sTosition is that the terms Prima has offered the McElroy owners are most favorable, especially for a non -occupancy lease. Prima has conceded to -most changes in a spirit of cooperation, provided such changes did not materially alter the basic terms of a non -occupancy lease. Prima is still very desirous of entering into a non -occupancy lease with the McElroys, but there must be reinstatement of -the -pooling clauseas presented and the elimination of all reference to any liability regarding water wells. We are of the belief thatlhis will prove satisfactory, but in -the event an agreement cannot be reached, then Prima nevertheless intends to proceed with its drilling -plans. Please reply to me by next Thursday, if at all possible, since Prima is now in the process of finalizing its summer drilling schedules. Very truly yours, William G. Crews, CPL Agent for Prima Oil & Gas Company WGC/mm fc: Prima Oil & Gas Company cotekl - d 7-33 951742 , ADDUCER'S SCEMeD "Paid tip Rev 1991 (WI, version) OIL A + GAfi 1.LA1C MID UI' 21st THIS AGREEMENT is made and emceed true as of the day of November ESSOR Mary Ann McElroy Sherley, a single woman lwhnher one or morel 9673 0 -Went Chatfield Avenue Littleton, CO 80123 and "LESSEE": Prima Oil &Das Company 1801 -Broadway, SuiteS00 Denver, CO 80202 The amid land included in ten leers is situated in the County of follows. to -wit: 94 19 by and between the following parties: 'Weld Colorado state of , and Mderdescribed as Township 5 -North. Ranee 65 West. 6th P.M, Section 4; Lot I and 2Mf the NWV.NWV., according to the subdivision3:f lands by the Union Colonyxxf Colorado (ada NVNWVNWVa) This lease doesmot permit surface entry on the lands specifically described above. The said land contains 20.00 acres of land, mire or less. and includes all nil and gas underlying 'oats, stream, roads, easements end righu-of-way which traverse nr md)oin raid lend. and includes all lands owned nr claimed by Lessor as a pen of any tract above deter prod. This lease shall coves all the interest ,n said land now owned Ivy or hereafter vested in Lesaint Fur the purpose of coltalaimg any pa)onons broad on acreage. Lenart, at Iessee a option, may net as if said land and to constituent parcels Contain the acreage above stated. —whether they an -wally contain more en less. Subject to the other previsions herein contained. this lease shall rennin in force ter a period of _ , 14 months Tease from the date hereof, called 'pruners term", and so long thereafter as oil or gar is pnduced Irvin said laud hcrcurder or Lessee is engaged in drilling err reworking operations on said land hereunder es herein pm.idrd Each of the covenants, terms and provisions contained on the reverse side of this page la Incorporated herein by this reference. IN WITNESS WHEREOF, Ilia. ,nstrvmenn is executed as of the date bra above written. Sur. Sec Nu m 1st I D No Mary Ann McElroyShcrlcy STATE OF COLORADO as. CITY & COUNTY OF DENVER ) The foregoing instrument was acknowledged before me this day of 1994, by Mary Ann McElroy Sherley. Witness my hand and -official seal. My commission eapkes: Notary Public 951.942 The following -covenants, termsnd provisions are an integral part of this lease. 1_ ... re, ,p ,e,i, i sod oft'. _MAO"- grants, demises, leases and lets exclusively unto_Lessee the land herein described, for the purpose of investigating, ex Lori • . — ucing, saving, taking, owning, transporting, storing, handling and treating oil and gas, together with all rights • - useful for Lessee's operations hereunder on said land and on lands in the same field, including but not li ' g t s: to lay pipe lines; to build roads and to construct tanks, pump and power stations, power and communicati. t .. cures and facilities. The phrase "oil and gas", as used in this lease, shall embrace all hydrocarbons, as well as other substances h 2. Royalties to be paid Lessor are: (a) on oil, one -eighth (I/8) of that produced and saved from said land, to be delivered at the wells or to the credit of Lessor into the pipe line to which the wells may he connected. Lessee may from time to time purchase any royalty oil, paying therefor the market value in the field where produced on the day it is run to the pipe line or storage tanks; (b) on gas, including casinghead gas or other gaseous substances, produced from said land and sold or used off the premises, the market value at the well of one -eighth (I/8) of the gas so sold or used, provided that on gas sold at the well the royalty shall he one -eighth (I/8) of the amount realized from such sales; (c) on other substances produced with oil or gas, and covered by this lease, one -eighth (I/8) of their value at the well. If at any time oil and/or gas from a well capable of producing oil and/or gas is not being sold or used off the premises, and this lease is not being otherwise maintained in full force and effect, Lessee shall pay or tender to Lessor, as royalty, the sum of One Dollar ($1.00) per acre per year on the acreage then held by Lessee hereunder, the first such payment or tender to be made on or before the anniversary date of this lease next ensuing after the expiration of 90 days after the date such well is shut in and subsequent payments or tenders to bcsnade on or before the anniversary date of this lease; provided, however, that if oil or gas from any such well is sold or used off the premises before the applicable anniversary date of this lease (even if such well is again shut in before such date), or if on such date this lease is being maintained in force and effect other than by reason of such shut in well, Lessee shall not be obligated to pay or tender, on or before that particular anniversary dale, said sum as shut in royalty. If such payment or tender is made, it will be considered that oil and/or gas, as applicable, is being produced -within the meaning of this lease. During such time, Lessee may remove the pumping unit, rods, tubing and other equipment front the well or wells for use elsewhere in Lessee's business, consistent with all applicable laws, rules and regulations. Lessee may use, free of -royalty. oil, gasaimisigar produced from said land by_.essee for all operations hereunder. J. This is a PAID -UP LEASE. In consideration of the cash payment herewith, Lessor agrees that Lessee shall not be obligated, except as otherwise povided herein, to commence or continue any operations during the primary term. Lessee may at any time or times during or —after the primary term surrender this lease as to all or any portion of said land and as to any strata or stratum by delivering to Lessor or by filing of record a release or releases, and be relieved of all obligation thereafter accruing as to the acreage surrendered. 4. If, at the expiration of the primary term of this lease, oil or gas is not being produced on the leased premises or on acreage pooled therewith but Lessee is then engaged in drilling, completing or reworking operations thereon, then this lease shall continue in force so long as operations arc being continuously prosecuted on the leased premises or on acreage pooled therewith; and operations shall be considered to be continuously prosecuted if not more than ninety (90) days shall elapse between the completion or abandonment of one well and the beginning of operations for the drilling of a subsequent well. If after discovery of oil or gas on said land or on acreage pooled therewith, the production thereof should cease from any cause after the primary term, this lease shall not terminate if Lessee commences additional drilling or reworking operations within ninety (90) days from date of cessation of production or from date of completion of dry hole If oil or gas shall be discovered and produced as a result of such operations at or after the expiration of the primary term of this lease, this lease shall continue in force so long as oil or gas is produced from the leased premises or acreage pooled therewith. 5. L.,. e., I ,,,a 6 ,,. ,.p,,:, A , ea.e_A by L.....d .,t_ t.,.., Iv e•.•^..•e . op„ b.Ald'rrg^, b,;s,.nl„., diteha; eMo,,.. ...,d fenceHf ,.y....t.J Lessee will bury pipe lines below ordinary plow depth when crossing cultivated land. No well shall he drilled within y rest ence or barn now on said land without the consent of Lessor. Lessee shall have the ri hl ssee s property and fixtures, including the right to draw and remove all casing. No default of c o any —well or portion of said land shall impair Lessee's rights with respect to any other well or portion 6. The rights of Lessor and Lessee hereunder may be assigned in whole or in part. No change in ownership of Lessor's interest (by assignment or otherwise) shall be binding on Lessee until Lessee has been furnished with notice, consisting of certified copies of all recorded instruments or documents and other information necessary to establish a complete chain of record title front Lessor, and then only with respect to payments thereafter made. No other kind of notice, whether actual or constructive, shall be binding on Lessee, and Lessee may continue to make payments precisely as if no change had occurred. ih, t ...t ,.. (u.ur.. J..:.,;.,.. „f L......,.', ....,., Atsp fell of lh IIbk ny 7. Whenever, as a result of any cause beyond Lessee's control (such as fire, flood, adverse field or weather conditions, windstorm or other Act of God; laveeetlee vr inability to secure men, material or transportation), Lessee is prevented from complying with any provision of this lease, Lessee shall not be liable for damages or forfeiture of this lease, in whole or in part, and Lessee's obligations hereunder shall be suspended so long as such cause persists. 8. leases in the same field, so as to constitute a unit or units, whenever, in Lessee's judgement, required to promote or encourage the conservation of esources by facilitating an orderly or uniform well spacing pattern; a cycling, pressuremnintenance, re -pressuring or secondary recovery program;; o perative or unit plan of development or operation approved by the Secretary of the Interior of the United States. The size of any such unit ma • d by including acreage believed to be productive, and decreased by excluding acreage believed to he unproductive, or the owners of which fail .e to join the unit, hut any increase or decrease in Lessor's royalties resulting from any such change in any suds unit shall not he retroactive. An ntt may be established, enlarged, or diminished, and, in the absence of production therefrom, may be abolished and dissolved, by filing for redo nation of pooling or unitization describing the lands and formations so pooled or unitized. Drilling or reworking operations upon r product's' . or gas from any part of such unit shall be treated and considered, for all purposes of this lease, as such operations upon or such production fro Ise. Lessee shall allocate to the portion of this lease included in any such unit a fractional part of all production from any part of such unit, on o a allowing bases, (a) the ratio between the participating acreage in this lease included in such unit and the total of all participating acreage includ ' c c t unit; or (b) the ratio between the quantity of recoverable production underlying the portion of this lease included in such unit and the total of erable production underlying such unit; or (c) my other basis approved by State or Federal authorities having jurisdiction thereof. Upon product' any part of such unit, lessor herein shall be entitled to the royalties provided in this lease on the fractional part of the unit production so allocated 9. k..,,. tow. d— , - t <.t. ' ti v' t. ' t Th y lie. he e' above provided are determined with respect to the entire mineral estate in oil and gas and if Lessor owns a lesser interest, the royalties to be paid Lessor shall he reduced proportionately. Lessee at its option may purchase or discharge in whole or in part any tax,mnongage or other lien upon said land, or may redeem the same from any purchaser at any tax sale or adjudication, and shall be subrogated to the rights of holder thereof. to. This lease shall be binding upon all who execute it, whether or not they are named in the granting clause hereof and whether or not at parties named in the granting clause execute this (ease All the provisions of this lease shall inure to the benefit of and be binding upon the heirs, executors, administrators, successors and assigns of Lessor and Lessee. This Lease is further subject to the terms and provisions more specifically set forth on -Exhibit A hereto. 951742 11/21/94 11:4 3 303 351 0867 CRE 8 2EREN 03 EXHIBIT A TO Oil and Gas Lease dated November 21, 1994, from Mary Ann McElroy Sherley, as lessor, to Prima Oil & Gas Company, as lessee. This Exhibit is made a part of this lease as fully and completely as if the provisions herein were a part of the printed form. In the eventofa conflict between the provisions hereof and those of the printed form, the provisions of this Exhibit shall prevail. 1. Paragraph 1, Granting clause of the Paid -up lease, delete and substitute: Lessor, for and in consideration of the sum of ten ($10.00) dollars, in hand paid, royalties provided and agreements of Lessee contained, grants, demises, leases and lets exclusively unto the Lessee oil, gas, casinghead gas, £asinghead gasoline and associated hydrocarbons as may be produced from, in and under the said lands without the use of any surface of the lands herein described ; Lessor grants only the right -to produce from, in andunder the said lands thesubstances described and denies to the Lessee any right toenter upon, use or investigate, explore or drill for or take any oil and gas by use of the surface, and -the said use of the surface is expressly here denied. Lessor excepts and reserves from the grant any right to enter upon the land for any operations without first procuring written agreement and a lease to necessary surface rights executed in recordable form pas set forth in Paragraph S -below. This lease is only for the ✓ purpose of producing, saving and selling oil, gas and associated hydrocarbons in and under the described property by wells located outside or off of the described property. 2. All reference made to shut -in -royalties in Paragr-aphi shall be changed to read S10 per acre per year. The payment of -shut-in royalties shall not hold this lease in full force and effect fora -period of more than two consecutive years, except in cases of force majeure-as set forth in Paragraph 7 of the -printed portion ofihis lease. After aperiod oftwo consecutive years in which there has been no actual production from the lands herein described or lands pooled therewith, -then -this lease shall terminate. 3. Paragraph 2, delete "andwater"from the last sentence of the paragraph. 4. Add to the end -of Paragraph 3: "Lessee shall surrender the entire lease at the expiration of the primary term, if this lease is not otherwise -extended beyond its primary term 5. Paragraph 5, del-ete and substitute: Lessee shall pay for or repair damages caused by Lessee's operations to -growing crops, buildings, irrigation ditches, water wells, culverts and _fences. If water wells show signs of damage within thirty (30) days after exploration or drilling activities, it shall be presumed that damage was caused by said activity. 953.74i 11/21/94 11:4% $ 303 351 0357 ORE' & ZEREN 04 survey -at the expense of Lessee. Lessee shall pay for growing cro ! = • : e • farmland destroyed by operations, -together with the reaso • • • any crops which cannot be grown or lost rentals as a result of • • - rat ons. Soil strata shall be restored as nearly as is 6. Paragraph 6, delete the last two sentences of Paragraph 6, beginning "No present or future division _of Lessor's -ownership...." 7. Paragraph 8, delete as indicated and substitute: Lessee's rights herein granted to pool or unitize the lands herein described with other lands and leases to form -a unit or pool -are hereby limited to those units which are established under valid spacing _orders issued by the Colorado Oil and Gas Conservation Commission. Lessee shall designate and pool the W' V4 -as the drilling and spacing unit forproduction from the Codell, Niobrara, Sussex and/or Shannon formations. Lessee shall give notice to the Lessor f any-hearingbefore the Colorado _Oil and Gas Conservation Commission applying to the spacing of the lands described in this lease; and, Lessee acknowledges that Lessor is an owner within the meaning of the Oil and Gas Conservation Act of the State of Colorado. 8. Paragraph 2, in connection -with royalties to be paid Lessor, delete all reference to "one -eighth (1/8th)" and substitute "eighteen percent (18%)." Signed for identification, Mary Ann McElroy Sherley 951742 Hello