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Cherry Creek Block PRODUCERS 69 40 640 REV 3 SD OIL AND GAS LEASE AGREEMENT 'lade and entered into the 2e4 day of April by and bctweep btiria 3-a Christens-on, single N -1139 MNSAS BLUE PRMYCA 1140 LIZA. 19 U whose m'iljng address is Dannel%rog, ?u'ebraska hereinafter called Lebscr (whether o -ie or more) and _ Fred YcCronnell Tal €a, Oklahorrl8, hereinafter called Lessee' 1 N ITIESSETH That the said hssor for and m Twenty -three and 20/loo consideration of Dollars CIA In hand pudt the receipt of which is hereby acknowledged and of the covenants and agreements hereinafter contained on part of lessee to be paid kept and performed has Liam d dtmucd lensed and let and by these presents does grant, dtmmse lease and let unto the said lessee for the sole and only purpose of exploring by geophysical and other methods Mining and operitipg fur oil and gas and of laying of pipe lines and of budding tanks power stations and structures thereon to produce save and take care of said products all chit certain tract of Irod situated in the County of Fall State of Nebraska dtscribetj as follows to wit IT(2 81;14 l i�l $egtion 5 12RT -lzg Uf Secli n Pnslup angV ' ^_ and containing' 232 _ acres more or less 2 It is ago d that this le ise shall remain in force ter a term of LO _ Sears from this date and as long thereafter as oil or Las or either of them is produced from said land n from lands with which said land is pooled therewith by lessee 3 In cgpudtrattun of the pitons s the said lessee covenants and agrees (a) To deliver to the credit of lessor free of cost in the pipe line to which lesste may connect his wells the equal one - eighth part of all oil produced and saved from the leased Premises or it the lessee s option may ply to the lessor for such one eighth royalty the market price for oil of like Lrade and brevity prevailing on the day such oil is run lido the piles line or into storn6e tanks (b) To p Iy I ss rr for g u of whatsoever nature or kind produced and sold or used off the premises or used in the manufacture of any products therefrom one- eiLbth at the o?,trktt price at the well for the gas sold used off the premises or in the manufacture of products therefrom (cr If a Las Hell capable of producing gas only and located on the above described lands or on lands with which the above described lands or a portion thereof are Pooled or undo d n it my time shut in and no gas therefrom is sold or used off of the above described lands or in the manufacture of natural gasoline or other products nevertheless sit h shut in Las well shill under all the provisions of this lease be deemed to he a well on the above described lands producing gas in paying quantities and this It Ise shot continue in force during all the time or tunes while such well is so shut in whether before or after the expiration of the primary tens Lessee shall use reasonable dilnLtince to in irk t the i.ts capable of bung produced from any such shut in Lax well but shall be under no Ohl n ation to market such gas under terms conditions or circum stances Muth kit Lessee s jutlLment cxeruscd m good faith are not for the best interests of both Lessor and esfee The tern sated dde as used in this piriWiph hall mean any rental paying date of this lease or any subsequent anniversary thereof if there be a rental plying date but if no ytntal pt n 6 Bite is %pt0fied in this have then staled dde shall mean any annversary date of this lease If on any such staled date there be on the above de drib d lends or in lints with which the above described lands or portion thereof are pool d or unnticed one or more such gas wellp capable of producing Las only and no j. is his )stn s>id or w used from any of such Las wells at my time during the twelve months period ending with such stated date, Lessee shall before the expiration of sixty (60) dt)s ift r uch strted date pay or tender to I rich owner of the right to receive ro3alty on the gas produced from any part of the above desenbed lands covered by this it Ise on such et Ited dde at each such owners address as last known to Iwssee or to the credit of each such owner in the dt pository h ink named herein in the man ncr provided hcnin for Pkynnnt of dtliy rentals a shut in gas royalty for such period which shut in gas royalty shall be determined as follows The t rial ern Lunt if but in gis tat) illy P13 oble to all such owners shall be determined by multiplying One Doll a ($1 00) by the total number of acres of land covered lv lid tt,}ce on nth std d dde and each uch nwncr shall receive thit part thereof which is in the proportion that his royalty tcreage interest in said land bean to the I tit n4mb r of teri s (f 1 and c)% rid by still 1( 1 e on such st Itt d title Provided however that if on such stated date this is ise is being mamt until in force and effect rtlumivo thin by It icon tit anv sueh but in kas well or %)lut in Las wells Lessee shall not he obliged to pay or tender any such sum of money as shut in gas royalty lice Itngun6e a gis well capable of producing Las only as us it in this Section 3(c) shall mean and include a well capable of producing natural gas only or a well capable of producing n ttural Las and /err c md( ns tie or distillate or a well classified v e gas well by any governmental authority or any well in which the gas oil ratio is so Im6h that a L)%(riumentit mthorty will not permit It juid hydrocarbons to be produced therefrom unless the gas is marketed 4 if of) rations 6r the drilling of a well for oil t gas are not commenced or if there is no oil or Las being produced on sud land or on acreage pooltd therewith as hcre'ntfter provided on or before one )(ar from the dde hereof this lease shall terminate is to both parties unless the lessee on or before that date shall pay or tender to the! lessor or to the itssors credit in the 'State .wank of Dannebrog ]lank at Dannetrog, :Nebraska or its successors, which shill continue as the it pository for rental regardless of changes in the ownership of said land the sum of Fe if ty - 01F'tiit Sind no /IUD - — — — — — - — - - - - - - - - - — - - — — - — — — - — — - DOLL4FS (5 58000 ) which Shall oparite as a rental and cover the pnsilpge of deferring the commencement of operations for drilling of a well for twelve months from said it lie In like mans r end upon like pay met is or tendtrs the eomnie 'let ment of cperations for dnlbng of a well may be further deferred for like periods if the 4ne number of months succcssntly All pa�m<nts or lenders may be made by check o6 drift of lessee or any usigIne the rruF mailed or delivered on or before the r .,tit pUuog dde It is unit Motel and ijrecd thtt the consideration first recited herein the down payment covers not only the prisile6e granted to the date when said fist rudd is pnable is If,, slid but ilso the lessees right of extending that period as afortsajd and any and 111 other rights conferred Should the depositors, bank hen ifttr close wrth(ut a successor lesste or its assigns may dcposd rentals or royalties in any National bank located in the same county with the first named batik due It lice of sixth d per at to be mailed to lessor it last known address 5 Vdh re `{net to the pi)mud of and the n6ht to receive delay rentals and ro3alties (including shut in gas ro3alties) it to agreed that the knilmdion of a life estate t rin nun nl nttnst or other precedent estate whereby the Lessor shall come Into possession or use of an interest in said land shall subject to all the provisions of this lease became fftetive from and ifter the dde when such Lessor shall have furnished satisfactory evidence to Lessee showIng the termination of such life estate titan nuneril mtet. t or other precedent estate but for all other puropscs this lease shall cover such interest as and when the Lessor shall so come into the possession or use of it 6 Le see It ti (pion is btreby gi%en the rnbt and power to pool or combine the land covered by this lease or any portion thereof or formations thereunder as to oil and Les it ithtr of them tither itfore or after production with any other land ]else or it1%es when in Lessee s judgment it is necessary or advisable to do so in order to Ir ptrly it %tl p or (pirate slid prenists and irrespective at whether authority sunder to this ext Is with respect to such other land lease or leases such pooling to be Into a well unit or u)uts not exceeding forts, (40) aces plus an acreage tolerance of ten per cent (10%) of forty (40) acres for oil and not exceeding six hundred and forty 640) acrt� plus an acreage tol ranee of ten phi cent (10%) of six hundred and forts, (640) acres for gas except that larger units oily he created to conform to anv pit rig r % (11 unit p itt rn th tt ma% be prescribed I v gov iamat ntal authonties ha%mg )on diction The pooling in one or more Instances shill not exhaust the raLhts of the L s t h r under to pool this le Ise or portnns thereof or formations thereunder into their units Iwssee shall execute in writing and place of record an instrument r in tnmxnts ill utdvmg and dtscnbmg the pooho acreage Production dnllina or reworking ojitritions anywhere on a unit which includes all or a part of this lease shill be tr it it n% if It were producum drilling or reworking operations under this lease In lieu of the ro3alties (excepting shut in gas ro) iltits) elsewhere herein specified C r hill rec I e from a unit so formrIt only such portion of the royalty stipulated herein as the amount of his acreage placed in the unit or his royalty inter st therein I II% to the t t d lcre ai t so pot led in the p lrtncul lr unit involved In the absence of production Lesser mss, terminate any umueed area is) filing of record notice of t rim it,( n un1 s them tium tat or Instruments identAving and describing the uninnd area contain provisions for termination upon certain contingencies —�If I rtor to de%co%aI) f ul )r Las on sud land or on acreal,e pooled therewith lessee should drill a dry hole or holes thereon or of after discovery of oil or gas produc ion th n tit r hould Lea e f tar any c rose this lease hall not it inmate if lessee commences additional dialling or reworking operations w ithm sixty ( 60 ) da%s tht re titer r id it be within tht pnnnlry term) commences )r resumes the payment or tender of rental an or before the rental pa)ma date next ensuing kfter the expiration of three 1 3) on oths from the dde f completion of a dry hole or ce ss thon of production If at the expiration of the pnman, term oil or gas is not being produced on slid land or m t re alt pool, d the t w rth but lesste i% then engaged in drilling or reworking ope ations thereon this lease shall rt main in effect so long as operations are prose cute el 11th r ill the same w(11 it in% ether well there titer commenced with no cessation of more than sixty (60) consecutive days and if they result in the production of oil it tie is the le Ise ha ra tar un in a fft ct so i nog there afar is such production continues A If %,' hssor own% ltss inkiest urn the thine described land than the entire and undivided fee simple estate therein then the royalties and rentals herein provided shill be peraa a iti of ml In tar portion which his interest bears to the whole and undivided fee Any interest in the production from the lands herein desenbed to which the rot re'r of It sir in Tie object sh ill be deducted from the royalty herein rest ned 9 Lesst4 hall have fhd right to use free of cost, gas oil and water produced on said land for lessees operation thereon except water from the wells of lessor Nhen iequ st It by lessor lca;ee shall hum lessees pipe lines below plow depth \`o well shill be (1011(d nearer than 200 f it to the house or barn now on said premises without written consent of lessor Les e04 if f F ij for d unifies caused by lessees operations to Lrowmg crops on said land Lesseetsh /tjl it%e thq zatlbt at any time to remove all machinery and fixtures placed on said premises including the right to draw and remove casing 10 If the] VOilk tither Party hereto is assigned —and the pr(vdeLe of assigning in whole or in pirt is expressly allowed —the covenants hereof shall extend to their bur es, cul,re idmutistraton uccessors or assii,n% but no chance in the ownership of the land or assi&nments of rental or royalties shill be binding on the I ss a until ift r the h %sir his been r mashed with ctrtifud copes of muniments of title deraogning title from lessor ind it is hereby agreed ill it in the t%ttit this It is hill be Is iLn d is to a part or- is to p sits of the afiose describe it 1 Inds and the assignee or assignees of such p In or p trh shall fail or in eke d f colt in the p n n t tat if the pr portion It Pert of the rents due iron hum or them such default shall not operate to defeat or affect this (ease in so far is it covers a part or parts if skid lands upon which the said lesste or Iny assignee thereof shall make due pi)ment of saie( rental In case lessee assigns this lease in whole or in pant lessee shill he relieved of Ill obligations with r pact to the assnm,n d portion or portions losing subsequent to the date of asiij,nme nt In the event of death of any parson entitled to it tat its h n under If %s e in Iy P IN tr tend r sucb r ntils to the credit (d the deciastel or the estate d the deceased until such time as lessee is furnished with pr per vi(hnce of the appoinlmunt and quill faction if to ucutor or ndnmustritor of the estite or if there he none then until itssee is furnished with tvidtnce satisfactory to it as to the hors or dt%isees of the (iec tsed If it ern time Mo (r more persons be untitled to parhenpite in the rental payable hereunder Lesasee inkv pay or tender slid ienlal jonty to such persons or n their joint credit in the it positom named htrtin or at Lessees election the proportipnate part of said rentils to which each participant is total d into lit Paid or ten dead to him % parittly or to his s(parite credit in said depository and payment or tinder to any participant of his portion of the rentals hereunder shall maintain this le ise as to such p irticipant 11 Lesstt may at any time and from time to time execlte and deliver to Lessor or place of record a release or releases covering either a full interest or an undnudcd inhere t in III or Inv part of the leased premises or in any one or more zones formations or d pths underhma all or any part of the leased prom t% and th(runpon shill he reli `f t %ed 1 alt ulbLthms thereafter to accrue with respect to the trey coney formdtons d pills or undivided interests covered by such release In the t%egt if a It I tie of th`e (ease as to 111 nLhts in only a pirtof the area embraced in the Itased premises or as to an undivided interest in all formations in all or a part of the leased In" 11 vs, alien after the delay rent its hcremabove provided for shall he reduced proportionately 12 Wfun drilling production or other operations are delayed mternipted or stopptd by lack of water labor material inability to obtain access to h tstd premts(s fire Fluid w it rib Ilion mstunem n not strike differences with workmen failure of carriers to transport or fummsh facilities for transportation of any product produced here under 1 ac t Id as ul ible or s da facility market in Lessees a pinion for the oil or Las produced or as a re silt of an order of any go%ernmental agency ( including but n t � 4 r �� J