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Rocky Mountain Producers 88d A 9 -56 IL AND GAS LEASE Vic 10 THIS AGREEMENT is entered into as of July 27 '19 57 between J Delbert Lewis, and Hazel M., Lewis, his wife, _ Gibbon, Nebraska, hereinafter called Lessor, and— Transeontinent ail Company, Denver, Colorado hereinafter called Lessee, 1. Lessor, for and in consideration of 1E.111 QC KJ.VAUU ___ Lon_, I the receipt of which is hereby acknowledged and the covenants and agreements herein contained, does grant, demise, lease and let exclusively unto Lessee, for the ' purpose and with exclusive right of mining, exploring by geophysical and other methods, drilling and operating for and producing therefrom oil, gas and as- sociated hydrocarbons, with the exclusive right of injecting water, brine and other fluids and gases into subsurface strata, with rights of way and easements for lay - I ing pipe lines, telephone and telegraph lines, tanks, powerhouses, stations, gasoline plants, ponds, roadways and fixtures for producing, saving, treating and caring for such products and housing and boarding employees, and any and all other rights and privileges necessary, incident to, or convenient for the economical operation, alone or conjointly with neighboring land, on said land for said purposes, and upon the terms hereinafter provided, all that certain land situated in the County of Hall State of Nebraska described as follows (herein called "said land ") j TOWNSHIP 1(T NORTH —RANGE 12 WEST: Section 20:: SW For the purpose of determining the amount of any money payment hereunder, said land shall be considered to comprise 160 acres. 2. Subject to the other provisions herein contained, this lease shall be lot a term of fifteen years from this date (herein called "primary term ") and as long thereafter as oil or gas is or can be produced from said land hereunder, or as long thereafter as Lessee shall conduct drilling, redrilling, deepening, mining, producing, remedial, or other operations hereunder and during the production of oil or gas resulting therefrom. 3. The Lessee shall deliver to lessor as royalty, free of cost, on the lease, or into the pipe line to which Lessee may connect its wells the equal one- eighth part of all oil produced and saved from the leased premises, or at the Lessee's option may pay to the Lessor for such royalty the market price for oil of like grade and gravity prevailing in the same field or area on the day such oil is run into the pipe line or into storage tanks. 4. The Lessee shall pay to lessor a royalty on gas produced and sold from said land or used for the manufacture of gasoline or any other product, one - eighth of the market value of such gas at the mouth of the well. Where gas only is found and where such gas is not sold or used, Lessee shall pay or tender at the end of each anniversary period during which such gas is not sold or used, as royalty, an amount equal to the delay rental provided in paragraph 5 hereof less any amount paid as royalty on gas sold or used during such period, and while said royalty is so paid or tendered this lease shall be held as a producing lease under paragraph 2 hereof. 5. If operations for the drilling of a well for oil or gas are not commenced on said land on or before_ July 27 19_58 , this lease shall terminate, unless the Lessee shall on or before said date pay or tender to the Lessor or for the Lessor's credit in the— — First National __Bank at Kearney. Nebraska or its successors, which Bank and its successors are the Lessor's agent and shall continue as the depository of any and all sums operate as a p pays a under this lease regardless of changes of ownership in said land or in the oil Dollars, o and gas or in the rentals to accrue hereunder, the sum of FLIRTY & N00/-- 1.00 which shall - - - - -- rental and cover the privilege of deferring the commencement of operations for drilling for a period of one year. In like manner and upon like payments or tenders the commencement of operations for drilling may further be deferred for like periods successively. All payments or •tenders may be made by check or draft of Lessee or any assignee thereof, nailed or delivered on or before the rental date, either direct to Lessor or assigns or to said depository bank, and it is understood and agreed that the consideration first recited herein covers not only the privilege granted to the date when said first rental is payable as aforesaid, but also the Lessee's option of extending that period as aforesaid and any and all other rights conferred. Notwithstanding the death of the lessor or his successors in interest, the pay- ment or tender of rentals in the manner above shall be binding on the heirs, devisees, executors, and administrators of such persons. If Lessee shall, in good faith, and with reasonable diligence, attempt to pay any rental, but shall fail to pay or incorrectly pay some portion thereof, this lease shall not terminate unless Lessee, within thirty days after written notice of its error or failure, shall fail to rectify the same. 6. If at any time prior to the discovery of oil or gas on said land and during the term of this lease, the Lessee shall drill a dry hole, or holes on said land, this lease shall not terminate, provided operations for the drilling of a further well shall be commenced within 12 months from the expiration of the last rental period for which rental has been paid or provided the Lessee, on or before the expiration of said 12 months begins or resumes the payment of rentals in the manner and amount hereinabove provided; and in this event the preceding section hereof governing the payment of rentals and the manner and effect thereof shall continue in force. 7. In case said Lessor owns a less interest in the above described land than the entire and undivided fee simple estate therein then the royalties and rentals herein provided for shall be paid the said Lessor only in the proportion which his interest bears to the whole and undivided fee. However, such rental shall be increased at the next succeeding rental anniversary after any reversion occurs to cover the interest so acquired. 8. The Lessee shall have the right to use, free of cost, gas, oil and water found on said land for its operation thereon, except water from the wells of the Lessor. When required by Lessor, the Lessee shall bury its pipe lines below plow depth and shall pay for damage caused by its operations to growing crops on said land. No well shall be drilled nearer than 200 feet to the house or barn now on said premises without written consent of the Lessor. Lessee shall have the right at any time during, or after the expiration of this lease to remove all machinery, fixtures, houses, buildings and other structures placed on said premises, including the right to draw and remove all casing, but Lessee shall be under no obligation to do so. 9. If the estate of either party hereto is assigned (and the privilege of assigning in whole or in part is expressly allowed), the covenants hereof shall extend to the heirs, devisees, executors, administrators, successors, and assigns, but no change of ownership in the land or in the rentals of royalties or any sum due under this lease shall he binding on the lessee until 30 days after it has been furnished with either the original recorded instrument of conveyance or a duly certified copy thereof or a certified copy of the will of any deceased owner and of the probate thereof, or certified copy of the proceedings showing appointment of an administrator for the estate of any deceased owner, whichever is appropriate, together with all original recorded instruments of conveyance or duly certified copies thereof necessary in showing a complete chain of title back to lessor to the full interest claimed, and all advance payments of rentals made hereunder before receipt of said documents shall be binding on any direct or indirect assignee, grantee, devisee, administrator, executor, or heir of lessor. 10. If the leased premises are now or shall hereafter be owned in severally or in separate tracts, the premises nevertheless shall be developed and operated as one lease, and all royalties accruing hereunder shall be treated as an entirety and shall be divided among and paid to such separate owners in the proportion that the acreage owned by each separate owner bears to the entire leased acreage. There shall he no obligation on the part of the Lessee to offset wells n p separate .tracts into which the land covered by this lease may be hereafter divided by sale, devise, descent or otherwise or to furnish separate measuring or receiving tanks. It is hereby agreed that in the event this lease shall be assigned as to a part or as to parts of the above describes] land and the holder or owner of any such part or parts shall make default in the payment of the proportionate part of the rent due from him or them, such default shall not operate to defeat or affect this lease insofar as it covers a part of said land upon which the Lessee or any assignee hereof shall make due payment of said rentals. 11. Lessor hereby warrants and agrees to defend the title to the land herein described and agrees that the Lessee, at its option, may pay and discharge in whole or in part any taxes, mortgages, or other liens existing, levied, or assessed on or against the above described lands and, in the event it exercises such option, it shall be subrogated to the rights of any holder or holders thereof and may reimburse itself by applying to the discharge of any such mortgage, tax or other lien, any royalty or rentals accuring hereunder. Lessor further agrees that any interest or title to said land acquired by Lessor after the date hereof shall be subject to this lease to the same extent as if said interest or title had been held by Lessor at the date hereof. In such event the amount of rental payable hereunder shall be appropriately adjusted at the next ensuing rental date after Le.;see has been advised of such after acquired title. 12. Notwithstanding anything in this lease contained to the contrary, it is expressly agreed that if Lessee shall commence operations for drilling at any time while this lease is in force, this lease shall remain in force and its terms shall continue so long as operations are continuously prosecuted and, if production results there- from, then as long as production continues. As used in this lease continuously prosecuted shall mean that not more than thirty days shall elapse without operations on any we11 or that not more than ninety days shall elapse between the completion or abandonment of one well and the beginning of operations for the drilling of a subsequent well. 13. If within the primary term of this lease, production on the leased premises shall cease from any cause, this lease shall not terminate provided operations for the drilling of a well shall he commenced before or on the next ensuing rental paying date; or, provided Lessee begins or resumes the payment of rentals in the manner and amount hereinbefore provided. If, after the expiration of the primary term of this lease, production on the leased premises shall cease from any cause, this lease shall not terminate provided lessee resumes operations for drilling a well within sixty days from such cessation, and this lease shall remain in force during the prosecution of such operations and, if production results therefrom, then as long as production continues. 14. Lessee may at any time surrender or cancel this lease in whole or in part by delivering or mailing such release to the Lessor, or by placing same of record in the proper county. In case said lease is surrendered and canceled as to only a portion of the acreage covered thereby, tile,, all payments and liabilities thereafter accruing under the terms of said lease as to the portion canceled shall cease and determine and any rentals thereafter paid may be apportioned on an acreage basis, but as to the portion of the acreage not released the terms and provisions of this lease shall continue and remain in full force and effect for all purposes. 15. All provisions hereof, express or implied, shall be subject to all federal and state laws and the orders, rules, or regulations (and interpretations thereof) of all governmental agencies administering the same, and this lease shall not be in any way terminated wholly or partially nor shall the Lessee be liable in damages for failure to comply with any of the express or implied provisions hereof if such failure accords with any such laws, orders, rules or regulations (or interpretations thereof). If Lessee should Le prevented during the last six months of the primary term hereof from drilling a well hereunder by the order of adny constituted authority having jurisdiction thereover, or if Lessee should be unable during said period to drill a well hereunder (file to equipment necessary in the rilling thereof not being available on account of any cause, the primary term of this lease shall continue until six months after said order is suspended and /or said equipment is available, but the Lessee shall pay delay rentals herein provided during such extended time. 16. Lessee shall have the right as to all or any of the land herein leased, to combine the leasehold estate and Lessor's mineral and royalty estate created hereby with any other lease or leases, royalty or mineral estate or estates, in or under any other tract or tracts of land, whether owned by Lessor. Lessee, or another party and thereby create one or more pooling areas of approximately forty acres as to oil or six hundred fort- acres as to gas in :my pooling area. If spacing regulations of any state or federal agency purportedly having jurisdiction shall prescribe a spacing pattern for orderly development or for the acquisition or use of material and equipment or for permission to produce a well or allocate a producing allowable based on acreage per well, then the pooling areas herein contemplated may have the maximum surface acreage content so prescribed or allocated, in effect at the time of Lessee's designation of any such area even though such pooling area may exceed the above specified acreage; each pooled area shall comprise a single contiguous tract of land. If Lessee shall create any such pooling area it shall promptly file in the appropriate county records a written designation of such pooled area and describe the several tracts of land combined therein. In computing royalties on production from any pooled area created hereunder, Lessor shall receive and will accept, even though such production be not obtained from any land subject hereto, royalty equal to such portion of a one- eighth royalty as the number of acres of this lease included in any such pooled area bears to the total number of acres in the respective pooled area; such portion of said one - eighth royalty shall be paid in the manner and under the same conditions as other royalties may be payable to Lessor, and shall be in lieu of any other royalty which would otherwise accrue to Lessor hereunder on account of production of oil or gas from any part or parls of lands herein described which may be included in any pooled area created pursuant hereto. The conduct of drilling or producing operations at any place within any pooled area shall constitute at all times full compliance with and performance of all development, drilling and producing obligations, expressed or implied, under this lease, insofar as they occur upon or affect respective tracts comprising part or parts of the pooled area, and shall also constitute development, drilling or producing operations affecting all lands under this lease, and no obligations either expressed or implied shall be imposed upon Lessee as to any lands in any such pooled area or as to lands adjoining such pooled area where the well site is or has been fixed elsewhere by such state or federal spacing regulations, notwitlhstauding that at any time or from time to time said regulations or any of them may be amended, . revoked or cancelled. Lessee shall not be liable to any party for reduction of acreage content within a pooled area resulting from loss of its title or for any cause beyond its control, nor shall Lessee he obligated to malce any retroactive apportionment of any royalties or sums paid on production in the event of any reduction in acreage content. If and when Lessee shall voluntarily surrender its rights in any pooled area, all rights and obligations therein created pursuant to the pooling provisions hereof shall terminate as to all parties participating therein. 17. Lessor hereby waives and releases all rights of dower and homestead in said lands yyofar as the rights granted under t lease might be affected thereby. This lease and all its terms, conditions, and stipulations shall extend to and be binding on to a, s s ". f a /id L ssor and ( C - v'/ HAl- 88d -Is — - -- Oil and Gas Lease - - -- --- - - - - -- Mzer�e�is