Exhibit 10.1

 

AMENDED AND RESTATED

GAS GATHERING AND PROCESSING AGREEMENT

 

THIS AMENDED AND RESTATED GAS GATHERING AND PROCESSING AGREEMENT (this
“Agreement”), effective March 22, 2012 (the “Effective Date”), is by and between
Monarch Natural Gas, LLC, a Delaware Limited Liability Company whose address is
5613 DTC Parkway, Suite 200, Greenwood Village, Colorado 80111 (“Gatherer”), and
Gasco Production Company, a Delaware Corporation whose address is 8 Inverness
Drive East, Suite 100, Englewood, Colorado 80112 (“Producer”).  Gatherer and
Producer are sometimes referred to herein individually as a “Party” and
collectively as the “Parties.”

 

Recitals:

 

A.            Gatherer owns and operates a natural gas gathering system and
related facilities in Uintah and Duchesne Counties, Utah.

 

B.            Producer has an interest in certain oil and gas leases and lands
located in Uintah and Duchesne Counties, Utah, as described in Schedule 3 (the
“Leases”), and owns, controls or otherwise has the right to deliver to
Gatherer’s gathering system, natural gas produced and saved from wells located
on the Leases and more particularly described in Schedule 2 (the “Wells”).

 

C.            The Parties have entered into a Gas Gathering and Processing
Agreement dated effective March 1, 2010, as subsequently amended, including by
that certain Letter Agreement dated September 20, 2011 (the “Existing Gathering
Agreement”) pursuant to which Gatherer agreed to gather, compress and process
Producer’s Gas and Producer agreed to exclusively dedicate the Dedicated
Reserves to Gatherer under the terms of the Existing Gathering Agreement.

 

D.            The Parties desire to amend, restate and replace the Existing
Gathering Agreement with this Agreement.

 

Agreements:

 

NOW, THEREFORE, for good and valuable consideration, Gatherer and Producer agree
as follows:

 

Article 1

Definitions

 

1.1           Definitions.           The following capitalized terms used in
this Agreement and the attached exhibits and schedules shall have the meanings
set forth below:

 

“Agreement” is defined in the preamble.

 

“Affiliate” means, as to any Person, any other Person that, directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with such Person, whether by contract, voting power, or
otherwise.  As used in

 

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this definition, the term “control,” including the correlative terms
“controlling,” “controlled by,” and “under common control with,” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of an entity, whether through ownership
of voting securities, by contract, or otherwise.

 

“AMI” means the geographic area described in Schedule 1.

 

“Applicable Law” means any applicable law, statute, rule, regulation, ordinance,
order, or other pronouncement, action, or requirement of any Governmental
Authority.

 

“Bcf” means one million Mcf’s.

 

“Btu” means the amount of heat energy needed to raise the temperature of one
pound of water from 58.5 degrees Fahrenheit to 59.5 degrees Fahrenheit at a
constant pressure of 14.65 pounds per square inch absolute.

 

“Business Day” means any day except Saturday, Sunday, or Federal Reserve Bank
holidays.

 

“Chipeta” means Chipeta Processing LLC.

 

“Chipeta Plant” means the processing plant owned by Chipeta located in Uintah
County, Utah.

 

“Chipeta Plant Products” means the raw mix of liquefiable hydrocarbons,
including without limitation, ethane, propane, butane, and natural gasoline,
extracted and saved at the Chipeta Plant from all of Producer’s Gas delivered to
and processed by Chipeta.

 

“Chipeta Processing Agreement” means the Gas Processing Agreement dated
September 21, 2011, between Chipeta and Gasco Energy, Inc. attached hereto as
Exhibit B.

 

“Chipeta Residue Gas” means that portion of Producer’s Gas remaining after
processing at the Chipeta Plant.

 

“Day” means a period of 24 consecutive hours, coextensive with a “day” as
defined by the Receiving Transporter.

 

“Dedicated Reserves” means the interest of Producer in all Gas reserves in and
under, and all Gas owned by Producer and produced or delivered from (i) the
Leases and (ii) other lands within the AMI, whether now owned or hereafter
acquired, along with the processing rights, subject to certain volume exclusions
as described herein, and any and all additional right, title, interest, or claim
of every kind and character of Producer or its Affiliates in (x) the Leases or
(y) lands within the AMI, and Gas production therefrom, and all interests in any
wells, whether now existing or drilled hereafter, on, or completed on, lands
covered by a Lease or within the AMI.  Dedicated Reserves shall include Gas
under contract with Producer from or otherwise attributable to (i) NFR Uinta
Basin LLC

 

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under the Agreement dated July 25, 2007, and (ii) Halliburton Energy
Services, Inc. under the Agreement dated May 1, 2005, and (iii) MBG Trust under
the Agreement dated August 1, 2008, as they currently exist.  Dedicated Reserves
shall not include Gas that Producer comes into control of, but not ownership of,
after the Effective Date of this Agreement as a result of marketing
arrangements, joint operating agreements or other similar arrangements.

 

“Delivery Points” means (i) the points identified in Schedule 2 at which Gas is
delivered to a Receiving Transporter by Gatherer and (ii) any additional
delivery point that, from time to time, may be added by Gatherer to the
Gathering System after the Effective Date to permit delivery of Gas to other
Receiving Transporters.

 

“Drip Liquid” means that portion of the Gas that condenses in, and is removed
from, the Gathering System as a liquid by Gatherer.

 

“Equivalent Quantity” means, on any Day, a quantity of Gas (in MMBtu’s) that is
thermally equivalent to the quantity of Producer’s Gas received from Producer at
the Receipt Points on the Gathering System on that Day.

 

“Effective Date” is defined in the preamble.

 

“Excluded Production” is defined in Section 3.3(a).

 

“Force Majeure” is defined in Article 10.2.

 

“FL&U” shall mean the combination of Fuel Gas and Lost and Unaccounted for Gas.

 

“Fuel Gas” means Gas used by Gatherer to operate compressors, processing plants,
dehydrators, and related equipment and facilities on the Gathering System.

 

“Gas” means any mixture of hydrocarbons and noncombustible gases in a gaseous
state consisting primarily of methane.

 

“Gatherer” is defined in the preamble.

 

“Gathering and Processing Fees” means the fees pursuant to Sections 4.1, 4.2,
and 4.3.

 

“Gathering System” means the gas gathering facilities of Gatherer extending
generally from the Receipt Points to the Delivery Points, including any
facilities for compression, treating, and processing, and all modifications,
alterations, replacements, extensions, or expansions made by Gatherer, from time
to time.

 

“Governmental Authority” means any court, government (federal, state, local, or
foreign), department, political subdivision, commission, board, bureau, agency,
official, or other regulatory, administrative, or governmental authority.

 

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“Gross Heating Value” means the total calorific value (expressed in Btu’s)
obtained by the complete combustion, at constant pressure, of the amount of Gas
which would occupy a volume of one cubic foot at a temperature of 60o F, if
saturated with water vapor and under a pressure equivalent to 14.65 psia and
under standard gravitational force (980.665 cm per second per second) with air
of the same temperature and pressure as the Gas, when the products of combustion
are cooled to the initial temperature of the Gas and air and when the water
formed by combustion is condensed to the liquid state.

 

“High Pressure Line” is defined in Section 5.13(a).

 

“Leases” is defined in the Recitals.

 

“Losses” means all losses, liabilities, damages, claims, fines, penalties,
costs, or expenses, including reasonable attorneys’ fees and court costs.

 

“Lost and Unaccounted for Gas” means the volumetric gains or losses in Gas that
occur on the Gathering System, including any system blowdowns for maintenance,
emergency, or repair, and losses through the emergency shutdown system and flare
stack, other than Gas used for Fuel Gas.

 

“Market Price” shall mean, in the case of Riverbend Residue Gas and Chipeta
Residue Gas, the weighted average commodity price per MMBtu of such Riverbend
Residue Gas or Chipeta Residue Gas, as the case may be, received by Producer for
the amounts of such Riverbend Residue Gas or Chipeta Residue Gas (in each case,
excluding any storage amounts) sold and otherwise accounted for on substantially
the same terms as Producer sells its Gas and other Third Party Gas.  “Market
Price” shall mean, in the case of Riverbend Plant Products, the weighted average
commodity price per gallon received by Gatherer for the amounts of Plant Product
(excluding any storage amounts) sold under arm’s-length agreements at the best
price then obtainable in Gatherer’s reasonable judgment and discretion, less any
allocated transportation, handling and storage fees incurred and paid by
Producer in association therewith.

 

“Maximum Operating Pressure” is defined in Section 5.13(a).

 

“Mcf” means one thousand cubic feet of Gas at a temperature of 60 (o)F and a
pressure of 14.65 pounds per square inch absolute.

 

“Mcf/d” means Mcf’s per Day.

 

“Minimum Volume Period” means the period beginning on the Effective Date and
ending on March 1, 2017, as such date may be adjusted pursuant to
Section 5.2(a).

 

“MMBtu” means one million Btu’s, which is equivalent to one dekatherm.

 

“Month” means the period beginning on the first Day of the calendar month and
ending immediately prior to the commencement of the first Day of the next
calendar month.

 

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“New Compression” is defined in Section 5.11(a).

 

“New Compression Expenditure” is defined in Section 5.11(b).

 

“New Well Connection Expenditure” is defined in Section 5.11(b).

 

“Net Uplift” means (a) the payment received from Chipeta or a third party for
the sale of Chipeta Plant Products or plant products recovered by such third
party from the Excluded Production less, without duplication,
(b) (i) reservation charges, usage charges, fuel costs and any supplemental
charges pursuant to the transportation service agreement to be entered into
pursuant to the Questar Wet Line agreement, attached hereto as Exhibit C, for
transportation of the Excluded Production on the Questar Wet Line, (ii) the
processing fee, electric compression, and fuel costs related to the Excluded
Production paid by Producer to Chipeta pursuant to the Chipeta Processing
Agreement; except where such fees, costs or charges were offset from the amount
paid to Producer by Chipeta described in (a) above, and (iii) any deficiency
payment paid by Producer to Chipeta under the Chipeta Processing Agreement to
the extent caused, in whole or in part, by Gatherer, including, but not limited
to, Gatherer’s failure to perform its obligations under this Agreement; except
that, with respect to (iii) above, Net Uplift shall not include any deficiency
payment paid by Producer to Chipeta under the Chipeta Processing Agreement to
the extent caused by the routine maintenance of Gatherer’s Gathering System in
accordance with Section 10.5 of this Agreement or a Gathering System Force
Majeure event.

 

“Notice” is defined in Section 13.1.

 

“Other Delay” is defined in Section 10.2.

 

“Party” and “Parties” are defined in the preamble.

 

“Person” means any individual, corporation, partnership, joint venture, limited
liability company, association (whether incorporated or unincorporated),
joint-stock company, trust, Governmental Authority, unincorporated organization,
or other entity.

 

“Plant” means the Riverbend Gas Processing Plant, Section 36, Township 9 South,
Range 18 East, Uintah County, Utah, together with any facilities connecting the
Plant to Questar.

 

“Plant Shrinkage” means the thermal content of Riverbend Plant Products removed
from Gas as a result of processing at the Plant.

 

“Producer” is defined in the preamble.

 

“Producer’s Gas” means the Dedicated Reserves committed hereunder by Producer.

 

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“Producer Price Index” means the index covering intermediate materials, supplies
and components; as determined and published by the United States Bureau of Labor
Statistics (“BLS”) or any successor agency thereto.

 

“Producer’s Reservations” is defined in Section 3.6.

 

“Quarterly Minimum Volume” means, (i) for each calendar quarter or portion
thereof from the Effective Date until December 31, 2012, a minimum volume of
Producer’s Gas equal to 22,800 Mcf per Day multiplied by the number of Days in
each such calendar quarter, and (ii) for each calendar quarter or portion
thereof from January 1, 2013 through the end of the Minimum Volume Period, a
minimum volume of Producer’s Gas equal to 25,000 Mcf per Day multiplied by the
number of Days in each such calendar quarter.

 

“Questar” means Questar Pipeline Company and any successor thereto.

 

“Receipt Points” means (i) the outlet flange of the metering facilities
described on Schedule 2 and (ii) the inlet flange of the metering facilities for
any new points that may, from time to time, be added by Gatherer to the
Gathering System after the Effective Date to permit Producer to deliver
Producer’s Gas to the Gathering System.

 

“Receiving Transporter” means the intrastate or interstate pipeline company,
local distribution company, or other party taking delivery or custody of
Producer’s Gas at, or immediately downstream of, the Delivery Points.

 

“Riverbend Plant Products” means the raw mix of liquefiable hydrocarbons,
including without limitation, ethane, propane, butane, and natural gasoline,
extracted and saved at the Plant from all of Producer’s Gas delivered to and
processed by Gatherer.

 

“Riverbend Residue Gas” means that portion of Producer’s Gas remaining after
processing at the Plant, and of Producer’s Gas bypassed around the Plant.

 

“Scheduled Gas” means, for a specified period of time, the quantity of
Producer’s Gas scheduled by Producer and confirmed by Gatherer for delivery and
gathering on the Gathering System.

 

“Services” is defined in Section 3.1.

 

“Term” is defined in Section 2.1.

 

“Third Party Gas” means all Gas under contract with Gatherer from or otherwise
attributable to the Leases, other than Producer’s Gas.

 

“Train III In-Service Date” means the commencement date of Train III, which is
defined in the Chipeta Processing Agreement as a 300 MMcf/d cryogenic processing
facility to be located at the Chipeta Plant.

 

“Wells” is defined in the Recitals.

 

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“Year” means the period of time beginning on one Day and ending on the same Day
the following year.

 

1.2           Attachments.  Each exhibit, schedule, or other attachment to this
Agreement is a part of this Agreement and incorporated herein for all purposes. 
When the term “Agreement” is used herein, it means this Agreement and all of the
exhibits, schedules, and other attachments hereto. A list of the exhibits,
schedules, and other attachments to this Agreement is attached behind the
signature page.

 

Article 2

Term

 

2.1           Term.  The term of this Agreement (“Term”) shall commence on
March 1, 2010 and continue in effect until February 28, 2025.  For Wells already
connected to the Gathering System on February 28, 2025, the Term as to those
Wells shall continue in effect for so long as Producer’s Gas can be produced in
commercial quantities from such Wells.

 

Article 3

Gathering and Processing of Producer’s Gas

 

3.1           The Services.  Gatherer shall provide gathering, compression and
processing services as further detailed in this Agreement and as can be provided
by the existing Gathering System (the “Services”) for Producer’s Gas delivered
by Producer to the Receipt Point(s) for receipt into the Gathering System. 
Gatherer shall redeliver Producer’s Gas to Producer at the Delivery Point(s)
and, subject to Article 3 of Exhibit A hereto, Producer’s Gas so delivered will
meet the dew point and other quality specifications of the Downstream
Transporter, as those quality specifications may change from time to time.

 

3.2           Gate Canyon Gas.  The Parties hereto acknowledge that Producer’s
Gas produced in the Gate Canyon area does not currently require processing, and
is gathered in a separate gathering system that has no processing facilities. 
Should processing be required in the future for such Gas, Gatherer may first
choose to process such Producer’s Gas pursuant to this Agreement.  If Gatherer
chooses to not process such Producer’s Gas pursuant to this Agreement, the
Parties agree to work in good faith to evaluate the alternatives available to
Gatherer, including construction of a new processing plant, connection of the
Gate Canyon system to the Plant, or a short-term processing arrangement on
Questar.  After evaluation, if Gatherer elects not to provide processing,
Producer may process Producer’s Gas, and Gatherer shall continue to waive the
fees under Section 4.1(ii) and (iii) for that Gas.

 

3.3           Release of Processing Rights to Certain Gas Volumes.

 

(a)           Subject to Section 3.3(b) below, from the Effective Date until ten
years after the first Day of the first accounting period following the Train III
In-Service Date, Gatherer agrees to release and waive its rights to process Gas
on the first 50,000 MMBtu/day of Producer’s Gas delivered to the Gathering
System pursuant to this Agreement (the “Excluded Production”).  Gatherer shall
retain all processing rights for all Gas volumes from the Dedicated Reserves in

 

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excess of the Excluded Production.  Producer shall not amend the term of any
processing agreement downstream of the Delivery Point without Gatherer’s written
consent.

 

(b)           Producer agrees to commit or cause to be committed $50,000,000
(gross) for drilling and completing new wells in the AMI (“Drilling
Commitment”).  If, on the third anniversary of the Train III In-Service Date,
Producer has not meet its Drilling Commitment, then the Excluded Production
shall be reduced in an amount up to 20,000 MMBtu/day, such reduction to be
proportionate to the positive difference between the Drilling Commitment and the
amount actually spent.  By way of example, if Producer invests or causes to be
invested $25,000,000 on or before the third anniversary of the Train III
In-Service Date, then the amount of the Excluded Production would be reduced by
fifty percent to 10,000 MMBtu/day (20,000 x ($25,000,000 / $50,000,000).

 

3.4           Dedicated Reserves.  Subject to Producer’s Reservations and to the
other terms and conditions of this Agreement, including Section 3.3 above,
Producer (i) exclusively dedicates and commits to the performance of this
Agreement the Dedicated Reserves, (ii) represents that the Dedicated Reserves
are not otherwise subject to any other gas gathering agreement or commitment and
(iii) agrees not to deliver any Gas produced from the Dedicated Reserves and
owned by Producer to any other gas gatherer, processor, or gas gathering system.
Producer possesses the right to deliver the Dedicated Reserves to the Gathering
System. Producer agrees to cause any existing or future Affiliates of Producer
holding Dedicated Reserves to be bound by, and to execute and join as a party,
this Agreement.  The dedication and commitment made by Producer under this
Agreement is a covenant running with the land.

 

3.5           Producer shall not tender for gathering any Gas other than
Producer’s Gas without first obtaining Gatherer’s written approval.

 

3.6           Producer’s Reservations.  Producer reserves the following rights
(and reasonable quantities of Gas to satisfy same) (“Producer’s Reservations”):
(i) to operate Wells producing from the Dedicated Reserves as a reasonably
prudent operator, (ii) to separate or process Gas using only mechanical, ambient
temperature equipment located at surface production facilities on or near Wells
producing from the Dedicated Reserves, (iii) to use Gas produced from the
Dedicated Reserves for lease operations, and (iv) to pool, communitize, or
unitize Producer’s interests in the Dedicated Reserves.  If Producer should
commence Gas flow from any new Well or if Producer repairs, reworks, curtails,
or plugs and abandons any existing Well, written Notice thereof shall be given
to Gatherer no later than 5 Business Days prior to delivering or curtailing
deliveries of Gas from such Well to a Receipt Point.

 

3.7           Prudent Operator.  Producer and Gatherer shall each perform their
obligations under this Agreement in a good, efficient and workmanlike manner, in
their best judgment as prudent operators, in conformity with the best practices
of the industry and in accordance with all valid and applicable laws, rules, and
regulations of Governmental Authorities.

 

3.8           Memorandum of Agreement.  The Parties agree to execute a
Memorandum of Amended and Restated Gas Gathering and Processing Agreement in the
form of Schedule 6 contemporaneously with the execution of this Agreement and
that Gatherer may record such memorandum in the county or counties in which the
Dedicated Lands are located.

 

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Article 4

Gathering and Processing Fees

 

4.1           Gathering and Processing Fees.  As consideration for the Services
provided hereunder by Gatherer, Producer shall pay Gatherer:

 

(i)            $0.465 per MMBtu for Producer’s Gas received at the Receipt
Points each Month, as provided herein.  Of the $0.465 per MMBtu fee, $0.28 shall
represent consideration for gathering service and $0.185 shall represent
consideration for the current two stages of compression service, however, in no
event shall the fee for Producer’s Gas received at the Receipt Points be less
than $0.465 per MMBtu, as adjusted in Section 4.3 herein;

 

(ii)           5% of the Riverbend Residue Gas revenues and 5% of the Chipeta
Residue Gas revenues attributable to Producer’s Gas.  Producer shall market, at
no fee to Gatherer, all Riverbend Residue Gas and Chipeta Residue Gas, and shall
make all arrangements, on a timely basis, for the further transportation,
marketing and disposition of such Riverbend Residue Gas and Chipeta Residue Gas,
which shall be done and accounted for on substantially the same terms as
Producer transports, markets and disposes of its Gas and Third Party Gas;

 

(iii)          5% of the Riverbend Plant Products’ revenues attributable to
Producer’s Gas.  Gatherer shall market, at no fee to Producer, all Riverbend
Plant Products, and shall make all arrangements, on a timely basis, for the
further transportation, marketing and disposition of such Riverbend Plant
Products.

 

(iv)          $250 per active meter per Month on the Gathering System; and

 

(v)           100% of the Drip Liquids attributable to Producer’s Gas.

 

4.2           High-Volume Fee Discount.  In any Month in which Gatherer receives
an aggregate volume of Producer’s Gas that exceeds a daily average rate of
35,000 Mcf, the fee charged for Producer’s Gas pursuant to Section 4.1(i) above
shall be reduced to $0.30 per MMbtu for each Mcf of Producer’s Gas gathered in
excess of 35,000 Mcf per Day during such Month.  Of the $0.30 per MMBtu fee in
this Section 4.2, $0.17 shall represent consideration for gathering service and
$0.13 shall represent consideration for compression service.  The Gathering and
Processing Fees described in Sections 4.1(ii), (iii), (iv) and (v) shall remain
unchanged.

 

4.3           Adjustment of Fees.  On each January 1 during the Term, the
Gathering and Processing Fees then in effect in Sections 4.1(i) and (iv), and
Section 4.2of this Agreement, shall be increased by multiplying the fees then in
effect by the percentage increase in the Producer Price Index as published by
the U.S. Department of Labor for the prior 12-Month period.  If the change in
the Producer Price Index shows a percentage decrease, the Gathering and
Processing Fees then in effect shall be reduced by such percentage change in the
Producer Price Index, but in no event shall the Gathering and Processing Fees
drop below the fees in effect as of the Effective Date.  In no event shall the
Gathering Fee in Section 4.1(i) be adjusted, up or down, by greater than 5% in
any single Year, or exceed $0.65 per MMBtu during the Term.  In no event shall
the metering fee be adjusted, up or down, by greater than 5% in any single Year,
or exceed $375 during the Term.  If

 

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the Producer Price Index ceases publication, the parties hereto shall negotiate
in good faith a replacement index.  For purposes of splitting out the gathering
and compression components of the Gathering and Processing Fees, any fee
adjustment carried out pursuant to this Section 4.3 or Section 5.13(b)(ii) will
automatically establish a proportional adjustment of the underlying gathering
and compression components of the Gathering and Processing Fees.

 

4.4           Process Sharing Fee.  Producer agrees to pay Gatherer a process
sharing fee equal to one-third of the Net Uplift realized downstream of the
Delivery Points (“Process Sharing Fee”).

 

4.5           Payment.  Payment of the Gathering and Processing Fees shall be
made in accordance with the procedures set forth in Article 9.

 

Article 5

Gas Delivery

 

5.1           Receipt and Delivery.  Producer agrees to tender, or cause to be
tendered, to the Receipt Points, Producer’s Gas, each Day, and Gatherer agrees
to accept Producer’s Gas at the Receipt Points and redeliver Producer’s Gas, to
the Delivery Points, subject to the terms hereof.  Producer shall endeavor to
deliver the daily quantities of Gas at each Receipt Point at a reasonably
constant rate.

 

5.2           Minimum Volume Commitment.

 

(a)           Producer’s Obligation.  Producer commits to deliver to Gatherer
for gathering on the Gathering System in each calendar quarter during the
Minimum Volume Period no less than the Quarterly Minimum Volume for each such
calendar quarter.  Such commitment shall be suspended by events of Force Majeure
(but not by events of Other Delay) and prorated during periods of high pipeline
pressure pursuant to Section 5.13.  The Parties shall act in good faith such
that the Gathering System can be operated in a manner that will not unduly
hinder Producer’s ability to so tender such Quarterly Minimum Volumes to
Gatherer, which good faith practices shall include prudent maintenance and
repair of the Gathering System, compliance with Gatherer’s Maximum Operating
Pressure obligations, and avoidance of free liquids being introduced into the
Gathering System as set out in Section 3(a)(1) of Exhibit A hereunder.  To the
extent that Producer tenders, in accordance with the terms of this Agreement,
Producer’s Gas at a Receipt Point during any calendar quarter of the Minimum
Volume Period, and Producer is unable to effect delivery of such Gas due to
Gatherer’s failure to comply with its Maximum Operating Pressure obligation, the
Minimum Volume Commitment applicable to each such calendar quarter shall be
reduced by an amount equivalent to the volume shortfall so caused.

 

(b)           Deficit Volumes.  If the total aggregate volume of 1) Producer’s
Gas, 2) Third Party Gas, and 3) Gas from any Dedicated Reserves caused to be
drilled by Producer either through acreage farm-out or non-consent Wells,
delivered to the Gathering System in a calendar quarter of the Minimum Volume
Period is less than the Quarterly Minimum Volume, then Producer shall pay
Gatherer in cash, no later than 30 Days following the end of such calendar
quarter, an amount equal to the shortfall quantity for such calendar quarter (in
Mcf’s) multiplied by the then-current Gathering and Processing Fees, as
applicable (including any possible adjustment under Section 5.13(b)(ii)), for
such calendar quarter, as liquidated and agreed

 

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damages for Producer’s failure to deliver the Quarterly Minimum Volume in such
calendar quarter.

 

(c)           Excess Volumes.  If the volume of (i) Producer’s Gas,
(ii) Third-Party Gas, and (iii) Gas from any Dedicated Reserves caused to be
drilled by Producer either through acreage farm-out or non-consent Wells,
delivered to the Gathering System in a calendar quarter of the Minimum Volume
Period is greater than the Quarterly Minimum Volume, then such excess volume
will be credited to the last volumes due during the Minimum Volume Period.  Such
crediting shall thereby shorten the Minimum Volume Period by one Day for each
22,800 Mcf or 25,000 Mcf, as applicable, of excess volumes so credited.

 

5.3           Ratable Takes.  Producer acknowledges and understands that
Gatherer may be providing gathering, processing, and other services to third
parties.  In the event of a capacity restriction, Gatherer shall treat each
party ratably in its Gathering System, or any portion thereof, and shall not
grant to any third party a higher priority to capacity on the Gathering System
than the priority granted hereunder to Producer.  In the event and to the extent
that Gatherer’s ratable takes prevent Producer from delivering its full
Quarterly Minimum Volume obligation in such calendar quarter, then the Quarterly
Minimum Volume for that calendar quarter shall be reduced by the amount of such
shortfall.

 

5.4           Scheduling.  Producer shall notify Gatherer not less than 5
Business Days before the last Day of each Month of the total volume of Gas (in
Mcf/d and MMBtu) that Producer expects to deliver in the following Month,
specifying the volumes to be delivered to or by Gatherer at each of the Receipt
Points and the Delivery Points.  Producer may modify its nominations at any time
upon at least 24 hours advance Notice.  The Parties shall coordinate their
nomination activities, giving sufficient time to meet the deadlines of the
receiving transporter.  Each Party shall give the other Party timely prior
Notice, sufficient to meet the requirements of the Receiving Transporter
involved in the transaction, of the quantities of Producer’s Gas to be delivered
to the Delivery Points each Day.  If either Party becomes aware that actual
deliveries at the Receipt Points or Delivery Points are greater or lesser than
the quantities of Scheduled Gas, then such Party shall promptly notify the other
Party.  Throughout the term of this Agreement, the Parties agree to work
together to refine and improve the scheduling, nominating, and balancing
procedures applicable to Producer’s Gas to accommodate the Receiving
Transporter’s nomination procedures (or changes to such procedures) and the
operational requirements of both Gatherer and Producer.  If Gatherer incurs any
liabilities, costs, or expenses as a result of Producer not scheduling
deliveries of Producer’s Gas at the Delivery Points in accordance with the
receiving transporter’s requirements, then Producer shall promptly reimburse
Gatherer for such liabilities, costs, or expenses, including all imbalance
charges assessed in respect of the delivery of Producer’s Gas to the receiving
transporter.

 

5.5           Thermally Equivalent Quantity.  Subject to this Agreement,
Gatherer shall, as nearly as practicable each Day, receive at the Receipt Points
and deliver for Producer’s account, at the Delivery Points, an Equivalent
Quantity of Producer’s Gas, less FL&U, Plant Shrinkage (as applicable) and Drip
Liquid shrinkage.  Producer’s allocated share of Fuel Gas shall be rendered to
Gatherer by Producer for Gatherer’s use at no cost to Gatherer.  All receipts
and deliveries of Producer’s Gas hereunder shall be balanced on an MMBtu basis,
less Producer’s allocated share of FL&U, Plant Shrinkage (as applicable) and
Drip Liquid shrinkage.

 

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5.6           Equal Receipt and Delivery.  The Parties intend that Producer’s
Gas will be received and delivered hereunder at the same rates, and Producer
shall not, in any manner, use the Gathering System for storage or peaking
purposes.  If, on any Day, Producer delivers a quantity of Producer’s Gas in
excess of the quantity of Producer’s Gas being concurrently redelivered by
Gatherer at the Delivery Points, Gatherer shall have the right to reduce or
discontinue its receipts of Producer’s Gas at the Receipt Points until such time
as arrangements have been made by Producer to balance such excess.  If on any
Day Producer delivers a quantity of Producer’s Gas less than the quantity of
Producer’s Gas being concurrently redelivered by Gatherer at the Delivery
Points, then Gatherer shall have the right to reduce or discontinue deliveries
of Producer’s Gas to the Receiving Transporter until arrangements have been made
by Producer to balance such under delivery.  An exact daily balancing of
receipts and deliveries may not be possible due to the inability of the Parties
to control precisely such receipts and deliveries.  However, Gatherer, to the
extent reasonably practicable, will deliver each Day an Equivalent Quantity,
less FL&U, Plant Shrinkage (as applicable) and Drip Liquids shrinkage, to the
Delivery Points.

 

5.7           Information.  Each Party will furnish or cause to be furnished to
the other Party hereto all data required to accurately account for all
Producer’s Gas received and delivered hereunder.

 

5.8           Third Party Arrangements.  Producer shall make, or cause to be
made, all necessary arrangements with other pipelines or third parties at or
upstream of the Receipt Points and at or downstream of the Delivery Points to
effect Gatherer’s receipt and delivery of Producer’s Gas.  Such arrangements
affecting Receipt and Delivery shall be coordinated between Producer and
Gatherer.

 

5.9           Commingling.  Although Producer shall retain title to Producer’s
Gas delivered to Gatherer at the Receipt Points hereunder, Producer’s Gas
received by Gatherer shall constitute part of the supply of Gas from all sources
in the Gathering System, and as such Gatherer shall, subject to its obligation
to deliver an Equivalent Quantity, less FL&U, Plant Shrinkage (as applicable),
and Drip Liquids shrinkage, as provided in Section 5.5, have the absolute and
unqualified right to commingle Producer’s Gas and to deliver molecules different
from those received and to handle the molecules received in any manner.

 

5.10         Lost and Unaccounted for Gas and Fuel Gas.  Gatherer agrees to use
ordinary care in gathering Producer’s Gas from the Receipt Points to the
Delivery Points.  However, Producer acknowledges that certain volumetric gains
and losses in Producer’s Gas will occur, and such gains and losses attributable
to Lost and Unaccounted For Gas and Fuel Gas shall be shared and allocated among
the Producer and other third parties whose Gas is gathered on the Gathering
System, on a Btu basis, in the proportion that each party delivers Gas to the
Gathering System and, consistent with Gatherer’s facilities, in proportion to
the Services provided.

 

5.11         New Well Connections and Compression.

 

(a)           Notice of New Well or Compression.  Producer shall provide
Gatherer with written Notice of any additional Well located in Area “A” on
Schedule 1 dedicated to this Agreement to be connected to the Gathering System
hereunder, including Producer’s working interest, Well name, Well location, and
Producer’s best estimate of Well deliverability, and of any

 

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proposed new compression facilities or the relocation of existing compression
facilities (in each case, “New Compression”).

 

(b)           Cost Estimate.  Within 10 Days of receipt of such Notice, Gatherer
shall provide Producer with a written estimate of the cost of (1) connecting
such new Well to the Gathering System, which shall include any necessary
facilities to accommodate the Gas in the Gathering System (“New Well Connection
Expenditure”), or (2) constructing or complying with a New Compression request
(a “New Compression Expenditure”), which shall include the incremental gathering
fee (the “Incremental Fee”) to be applicable to all volumes of Producer’s Gas
delivered to the Gathering System until such time as Gatherer recoups 130% of
such cost.  Gatherer shall proceed with connection of such new Well or
installation of New Compression 10 Days after the estimate is received by
Producer, unless advised otherwise pursuant to this Section 5.11(c) below.  Such
New Well Connection Expenditure and New Compression Expenditure shall be subject
to the Indemnity in Section 5.11(d).

 

(c)           Producer’s Option.  If Producer’s estimate for the cost of the new
Well Connection Expenditure is less than Gatherer’s, Producer may, within 10
Days of receipt of Gatherer’s estimate, give Notice to Gatherer to not proceed
with such connection, which Notice shall include Producer’s estimate of the New
Well Connection Expenditure, and Producer shall proceed with such construction. 
All facilities constructed shall comply with Gatherer’s specifications.  Upon
completion of the construction by Producer, Producer shall invoice Gatherer for
the actual cost of the New Well Connection, not to exceed 110% of Producer’s
estimated cost, along with the transfer of title of the newly-constructed
facilities.  Gatherer shall pay the invoice within 30 Days of receipt and
concurrently obtain title.  Such reimbursed actual cost shall be subject to the
Indemnity in Section 5.11(d).

 

(d)           Indemnity.

 

(i)            New Well.  For the first 2 Years after construction of a New Well
Connection and the other necessary facilities, the Producer shall guarantee
adequate volume from each new Well according to the following procedure: during
each 3-Month period, if the Gathering and Processing Fees derived from the all
Gas contracted and received from the new Well does not equal 1/8 of 130% of the
actual cost of the New Well Connection, then Gatherer shall invoice Producer for
the deficiency on its next regular Monthly invoice.  Excess volume in any
3-Month period shall apply to any subsequent 3-Month period(s).

 

(ii)           New Compression.  During each Month following completion of the
New Compression, the Incremental Fee shall be applied to all Producer’s Gas
delivered to and received by Gatherer into the Gathering System.  Producer shall
guarantee that the increased revenue received by Gatherer each Month as a result
will be at least equal to 1/24th of 130% of the actual cost of the new
Compression and related facilities (the “Monthly Compression Guarantee”). In any
Month in which such revenue does not equal at least the Monthly Compression
Guarantee, Gatherer shall invoice Producer for any deficiency on its next
regular Monthly invoice and payment shall be due in accordance therewith.  In
any Month in which such revenue exceeds the Monthly Compression Guarantee, such
excess shall be credited to Producer toward subsequent Months’ Monthly
Compression Guarantee.  For the avoidance of

 

13

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doubt, at such time as Gatherer has recouped 130% of the actual cost of the new
Compression and related facilities, the Incremental Fee shall expire and no
longer be charged against Producer’s Gas delivered to and received by Gatherer
in the Gathering System.

 

5.12         For any Well or compression facility located in Area “B” on
Schedule 1, Producer shall provide Gatherer with written notice of any
additional Well dedicated to this Agreement that is to be gathered hereunder,
including Producer’s working interest, Well name, and Well location and of any
proposed New Compression.  Within 10 Days of receipt of such notice, Gatherer
shall provide written notice to Producer whether Gatherer will provide gathering
services hereunder for such Well on install such New Compression.  If Gatherer
elects to provide such gathering service, the costs of connecting the Well to
Gatherer’s central point of the Area “B” acreage and installation of New
Compression will be indemnified by Producer under Section 5.11(d) above;
however, any costs incurred by Gatherer in connecting Gatherer’s central point
of the Area “B” acreage to the Riverbend system, in the event Gatherer elects to
construct such a connection, shall not be indemnified by Producer under
Section 5.11(d).  The Maximum Operating Pressure for the system in Area “B”
shall be 125 psig as measured at Gatherer’s central point in Area “B;” provided,
however, that all other terms and conditions related to Section 5.13 shall
apply.  The location of the central point in the Area “B” acreage shall be
determined by the Parties in a manner that fairly apportions cost responsibility
between the Parties and best serves the objectives of each Party under this
Agreement.  If Gatherer elects not to provide gathering services for that Well,
that Well shall be released from dedication hereunder.

 

5.13         Pressures.

 

(a)        Pressure Obligation.  Producer’s Gas shall be delivered at the
Receipt Points at pressures sufficient to effect delivery into the Gathering
System at the Receipt Points, but not to exceed the maximum allowable operating
pressure of the Gathering System from time to time.  Gatherer shall provide a
maximum operating pressure of 125 psig at the suction of the compression located
at the Plant site (“Maximum Operating Pressure”). The Parties acknowledge that a
portion of Gatherer’s pipeline facilities upstream of the Plant inlet is
designated by Gatherer as a high pressure line and is operated by Gatherer
without compression at pressures consistently higher than 125 psig (the “High
Pressure Line”).  At its option, Producer may request the connection, to such
High Pressure Line, of Wells that are capable of delivering Producer’s Gas at
pressures sufficient to effect delivery into the High Pressure Line, and
Gatherer agrees to provide such connection; provided, however, that upon 60
Day’s Notice to Gatherer, Producer may request that such Wells be disconnected
from Gatherer’s High Pressure Line and, instead, be connected to a lower
pressure portion of the Gathering System.  Adequate time will be allowed
Gatherer to accommodate these volumes, pursuant to this Agreement, into its
lower pressure system.  Such Gas shall be excluded from the provisions of
Section 5.13(b) during the period that such Gas is connected to the High
Pressure Line.  Gatherer agrees to provide such disconnection and reconnection
with as little disruption to Gas flow as reasonably practicable.

 

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(b)        Excess Pressure.

 

(i)            If Gatherer’s operating pressures exceed 110% of the Maximum
Operating Pressure, as measured as the daily operating pressure averaged over
each Month, excluding events of Force Majeure and Other Delay, Producer shall
have the right, within 30 Days following that Month, to notify Gatherer in
writing of such occurrence.  Upon receipt of such Notice, Gatherer shall
immediately take steps to reduce the operating pressure to meet the Maximum
Operating Pressure.

 

(ii)           If, after notification by Producer pursuant to
Section 5.13(b)(i), Gatherer fails to reduce the operating pressure within 90
Days following the 30-Day period referenced in Section 5.13(b)(i) (such period
to be extended for delivery of needed equipment, rights-of-way, permitting, and
the like, and for Force Majeure and Other Delay), then for those volumes of
Producer’s Gas that, despite Gatherer’s failure to meet its Maximum Operating
Pressure obligation, Gatherer is nonetheless able to deliver into the Gathering
System, Producer shall receive a reduction in rate under Section 4.1(i) to $0.25
per MMBtu, unadjusted pursuant to Section 4.2, until such time as Gatherer has
reduced its operating pressure to meet its Maximum Operating Pressure
obligation.

 

Article 6
Taxes and Warranties

 

6.1           Taxes.  Producer shall pay or cause to be paid, and agrees to
indemnify and hold harmless Gatherer from and against the payment of, all
excise, gross production, severance, sales, occupation, and all other taxes,
charges, or impositions of every kind and character required by statute or by
any Governmental Authority with respect to Producer’s Gas and the handling
thereof prior to receipt thereof by Gatherer at the Receipt Points.  Gatherer
shall pay or cause to be paid all taxes and assessments, if any, imposed upon
Gatherer for the activity of gathering of Producer’s Gas after receipt and prior
to redelivery thereof by Gatherer at the Delivery Points.  Neither Party shall
be responsible or liable for any taxes or other statutory charges levied or
assessed against the facilities of the other Party used for the purpose of
carrying out the provisions of this Agreement.

 

6.2           Title and No Liens.  Producer warrants to Gatherer good title to
Producer’s Gas delivered to the Receipt Points, free from all liens, charges,
and other adverse claims or encumbrances.  Producer shall indemnify, defend, and
hold harmless Gatherer from and against all Losses arising from all such liens,
charges, and adverse claims and encumbrances, including Losses arising from
claims (i) by co-working interest owners, royalty or overriding royalty owners,
or other purported owners of interests or rights in Producer’s Gas or in the
Dedicated Reserves or (ii) by Persons from whom Producer purchased or otherwise
acquired Producer’s Gas prior to the Receipt Points.

 

6.3           Other Warranties.  EXCEPT AS SET FORTH IN THIS ARTICLE 6 AND THE
OTHER PROVISIONS OF THIS AGREEMENT AND ITS ATTACHMENTS, NEITHER PARTY MAKES ANY
OTHER WARRANTIES, EXPRESSED OR IMPLIED, AND SPECIFICALLY DISCLAIMS ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT
TO THE GAS DELIVERED AND REDELIVERED HEREUNDER.

 

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Article 7

Control, Possession, and Waiver

 

7.1           Control and Possession.  As between the Parties, Producer shall be
deemed to be in exclusive control and possession of Producer’s Gas delivered
hereunder and responsible for any damage or injury caused thereby prior to the
time Producer’s Gas shall have been delivered to Gatherer at the Receipt Points
and after Producer’s Gas is redelivered to or on behalf of Producer at the
Delivery Points.  After delivery of Producer’s Gas to Gatherer at the Receipt
Points, Gatherer shall be deemed to be in exclusive control and possession
thereof and responsible for any injury or damage caused thereby until
redelivered to or on behalf of Producer at the Delivery Points.

 

7.2           Indemnity.  Producer agrees to indemnify, defend, and hold
harmless Gatherer and its Affiliates from any and all Losses arising from or out
of (i) personal injury or property damage attributable to Producer’s Gas when
Producer shall be deemed to be in control and possession of Producer’s Gas as
provided in Section 7.1 and (ii) the delivery by Producer of Producer’s Gas that
does not meet the quality specifications set forth in this Agreement.  Except to
the extent a Loss (or Losses) is covered by the indemnity in the preceding
sentence, Gatherer agrees to indemnify, defend, and hold harmless Producer and
their Affiliates from all Losses arising from or out of personal injury or
property damage attributable to Producer’s Gas when Gatherer shall be deemed to
be in control and possession of Producer’s Gas as provided in Section 7.1.  THE
INDEMNITIES SET FORTH IN THIS SECTION 7.2 ARE TO BE CONSTRUED WITHOUT REGARD TO
THE CAUSES THEREOF, INCLUDING THE NEGLIGENCE OF ANY INDEMNIFIED PARTY, WHETHER
SUCH NEGLIGENCE BE SOLE, JOINT, OR CONCURRENT, OR ACTIVE OR PASSIVE, OR THE
STRICT LIABILITY OF ANY INDEMNIFIED PARTY OR OTHER PERSON.

 

7.3           Waiver of Damages.A PARTY’S LIABILITY HEREUNDER SHALL BE LIMITED
TO DIRECT ACTUAL DAMAGES ONLY.  SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND
EXCLUSIVE REMEDY, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE
WAIVED.  NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ITS AFFILIATES FOR
CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES, LOST
PROFITS, OR OTHER BUSINESS INTERRUPTION OR SIMILAR DAMAGES, BY STATUTE, IN TORT,
OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE.  IT IS THE INTENT OF
THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF
DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE
STRICT LIABILITY OR NEGLIGENCE OF ANY PARTY, WHETHER SUCH STRICT LIABILITY OR
NEGLIGENCE BE SOLE, JOINT, OR CONCURRENT, OR ACTIVE OR PASSIVE.  TO THE EXTENT
ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES
ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR
OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT, AND THE DAMAGES
CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS.

 

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Article 8

Allocation of Residue Gas, Plant Product, and Drip Liquids Revenue

 

8.1           Measurement Allocation.

 

(a)           Residue Gas.  The Riverbend Residue Gas volume and Chipeta Residue
Gas volume attributable to a particular Receipt Point for an Accounting Period
shall be determined by subtracting from the measured volume at each Receipt
Point the allocated FL&U and also subtracting the allocated thermal equivalent
of Riverbend Plant Products or Chipeta Plant Products, as applicable, and other
shrinkage, if any, attributed to a particular Receipt Point for each Accounting
Period.

 

(b)           Riverbend Plant Products.  The quantity of Riverbend Plant
Products (in gallons) of a particular Component Plant Product recovered and
attributable to a particular Receipt Point shall be determined by multiplying
the Component Plant Product recovered by a fraction, the numerator of which is
the theoretical test gallons of the particular Component Plant Product contained
in the Gas delivered at such Receipt Point and the denominator of which is the
total quantity of theoretical test gallons of the particular Component Plant
Product contained in all of the Gas delivered at the receipts points on the
Gathering System, excluding transportation-only Gas.

 

(c)           Drip Liquids.  The Drip Liquids attributable to Producer’s Gas
shall be owned by Gatherer.

 

8.2           Revenue Allocation.

 

(a)           Residue Gas.  The Riverbend Residue Gas Revenue and Chipeta
Residue Gas Revenue attributable to Producer’s Gas for each Accounting Period
shall be calculated by multiplying the quantity of Riverbend Residue Gas or
Chipeta Residue Gas, as applicable, (in MMBtu’s) during such Accounting Period
that is attributable to Producer’s Gas delivered to Gatherer during such
Accounting Period by the Market Price per MMBtu of Riverbend Residue Gas and
Chipeta Residue Gas, as applicable, realized by Producer during such Accounting
Period for such Riverbend Residue Gas and Chipeta Residue Gas.

 

(b)           Riverbend Plant Products.  The Riverbend Plant Products Revenue
attributable to Producer’s Gas for each Accounting Period shall be the sum of
the products obtained by multiplying the volume of each Component Plant Product
recovered during such Accounting Period that is attributable to Producer’s Gas
delivered to Gatherer during such Accounting Period by the Market Price realized
by Gatherer at the tailgate of the Plant during such Accounting Period for such
Component Plant Product.

 

(c)           Drip Liquids.  Any revenue derived by Gatherer from the sale of
such Drip Liquids shall be kept by Gatherer for Gatherer’s own account.

 

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Article 9

Billing and Payments

 

9.1           Billing.  As soon as practicable each Month, Gatherer shall
invoice Producer for volumes of Producer’s Gas received, gathered and/or
processed hereunder in the preceding Month, including any other applicable
charges, and provide a statement setting forth (i) the volumes and quantities
(in Mcf’s and MMBtu’s) of Producer’s Gas received at each Receipt Point and
redelivered to each Delivery Points, (ii) any adjustments for prior periods,
(iii) all allocations made pursuant to Article 8 and (iv) all amounts due
hereunder.  In the event Producer receives, pursuant to Section 4.2 or
Section 5.2(c), one or more adjustments in the Gathering and Processing Fees set
forth in Section 4.1(i), the statement will reflect a single, blended
Section 4.1(i) Gathering and Processing Fee which prorates all fees and
discounts accorded Producer during the relevant Month across all volumes of
Producer’s Gas assessed Gathering and Processing Fees in such Month.  If actual
measurements of volumes of Producer’s Gas are not available in any Month,
Gatherer may prepare and submit its invoice based on estimated volumes, which
estimated volumes shall be corrected to actual volumes in the following Month or
Months.

 

9.2           Payment.

 

(a)           Gathering.  Subject to the Letter Agreement dated February 26,
2010, which is hereby incorporated by reference and attached as Schedule 5,
Producer shall otherwise remit to Gatherer the remaining amount due under
Section 9.1, in immediately available funds, by the 25th Day of each Month or 10
Days from the date of Gatherer’s invoice, whichever is later.  If such due date
is not a Business Day, payment is due on the next Business Day following such
date.

 

(b)           Residue Gas and Riverbend Plant Products.  Producer shall remit to
Gatherer the amount due for Riverbend Residue Gas and Chipeta Residue Gas under
Section 4.1(ii), and Gatherer shall remit to Producer the amount due for
Riverbend Plant Products under Section 4.1(iii), as applicable, in immediately
available funds, by the 25th of each Month.

 

(c)           Netting.  Producer agrees that it shall direct that proceeds from
the sale of (i) Riverbend Plant Products attributable to Producer’s Gas
processed by Gatherer, (ii) Chipeta Plant Products attributable to Producer’s
Gas processed at the Chipeta Plant, or (iii) plant products attributable to
Producer’s Gas processed by a third party to be paid directly to Gatherer, and
Gatherer will deduct any processing fees owed to it by Producer or its share of
the Net Uplift, as the case may be, and thereafter remit the remainder of the
proceeds to Producer.

 

9.3           Dispute.  If Producer, in good faith, disputes the amount of any
such invoice or any part thereof, Producer will pay such amount as it concedes
to be correct. If Producer disputes the amount due, it must provide supporting
documentation acceptable in industry practice to support the amount disputed
within 20 Days of the date of such invoice.  If the Parties are unable to
resolve such dispute, either Party may pursue any remedy available at law or in
equity to enforce its rights under this Agreement.

 

9.4           Late Payments.If either Party fails to pay the amount of any
invoice rendered by the other Party hereunder when such amount is due, interest
thereon shall accrue from, but

 

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excluding, the due date to, and including, the date payment thereof is actually
made at the lesser of the “Prime Rate” plus 12%, computed on an annualized basis
and compounded Monthly, or the maximum rate of interest permitted by Applicable
Law, not to exceed the maximum legal rate.  “Prime Rate” means the prime rate on
corporate loans at large U.S. money center commercial banks as set forth in the
Wall Street Journal “Money Rates” table under the Heading “Prime Rate,” or any
successor thereto, on the first date of publication for the Month in which
payment is due.  The Party which is due payment shall render a late payment
charge invoice and payment shall be due within 10 Days of the date of such
invoice.

 

9.5           Audit.  A Party shall have the right, at its own expense, upon
reasonable Notice and at reasonable times, to examine and audit and to obtain
copies of the relevant portion of the books, records, and telephone recordings
of the other Party to the extent reasonably necessary to verify the accuracy of
any statement, charge, payment, or computation made under this Agreement.  This
right to examine, audit, and to obtain copies shall not be available with
respect to proprietary information not directly relevant to transactions under
this Agreement.  All invoices and billings shall be conclusively presumed final
and accurate and all associated claims for underpayments or overpayments shall
be deemed waived unless such invoices or billings are objected to in writing,
with adequate explanation and/or documentation, within 2 Years after the Month
of Gas delivery.  All retroactive adjustments under this Section 9.5 shall be
paid in full by the Party owing payment within 30 Days of Notice and
substantiation of such inaccuracy.

 

9.6           Minor Adjustments.  No adjustments, retroactive or prospective,
shall be made to volumes for prior periods, whether the result of volume
allocation errors or any other reason other than meter calibration error, that
involve changes that would be less than 50 Mcf’s per Month.

 

9.7           Financial Responsibility.  If Producer fails to pay any amounts
when due under this Agreement, then Gatherer, at its option and without limiting
any other rights available to it under this Agreement or otherwise, may, by
giving Notice to Producer, (i) suspend gathering services hereunder,
(ii) require Producer to pay for the gathering of Producer’s Gas hereunder in
cash in advance of Gatherer performing such gathering services, or (iii) require
Producer’s to provide other security satisfactory to Gatherer.

 

Article 10

Force Majeure

 

10.1         Non-Performance.If a Party is rendered unable, wholly or in part,
by reason of Force Majeure to perform its obligations under this Agreement
(other than the obligation to make payments when due hereunder), then such
Party’s obligations shall be suspended to the extent affected by Force Majeure
or by Other Delay.

 

10.2         “Force Majeure” means any cause or event not reasonably within the
control of the Party whose performance is sought to be excused thereby;
including acts of God, strikes, lockouts, or other industrial disputes or
disturbances, acts of the public enemy, wars, blockades, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, tornadoes, hurricanes,
storms, and warnings for any of the foregoing which may necessitate the
precautionary shut-down of wells, plants, pipelines, gathering systems, or other
related facilities, floods, washouts, arrests and restraints of governments and
people, civil disturbances, explosions, sabotage, breakage or

 

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accidents to equipment, machinery, gathering systems, plants, facilities or
lines of pipe, the making of repairs or alterations to lines of pipe, gathering
systems, plants or equipment, freezing of wells or lines of pipe, electric power
shortages, necessity for compliance with any court order, or any law, statute,
ordinance, regulation or order promulgated by a Governmental Authority having or
asserting jurisdiction, inclement weather that necessitates extraordinary
measures and expense to construct facilities or maintain operations and any
other causes, whether of the kind enumerated herein or otherwise, not reasonably
within the control of the Party claiming suspension.  “Other Delay” shall
include Producer’s inability to comply with the quality specifications herein,
the inability to secure labor or materials, the inability to obtain servitudes,
rights-of-way, grants, permits, or licenses to enable such Party to fulfill its
obligations hereunder, the inability of such Party to acquire, or delays on the
part of such Party in acquiring, at reasonable cost and after the exercise of
reasonable diligence, such servitudes, rights-of-way, grants, permits or
licenses, and in those instances where either Party hereto is required to
furnish materials and supplies for the purpose of constructing or maintaining
facilities or is required to secure permits or permissions from any Governmental
Authority to enable such Party to fulfill its obligations hereunder, the
inability of such Party to acquire, or delays on the part of such Party in
acquiring, at reasonable cost and after the exercise of reasonable diligence,
such materials, supplies, permits, and permissions. “Force Majeure Event” also
includes any event of force majeure occurring with respect to the facilities or
services of either Party’s Affiliates or service providers providing a service
or providing any equipment, goods, supplies or other items necessary to the
performance of such Party’s obligations hereunder.

 

10.3         Strikes.  The settlement of strikes or lockouts shall be entirely
within the discretion of the Party having the difficulty, and any obligation
hereunder to remedy a Force Majeure Event or Other Delay shall not require the
settlement of strikes or lockouts by acceding to the demands of the opposing
Party when such course is inadvisable in the sole discretion of the Party having
the difficulty.

 

10.4         Notice.  The Party whose performance is affected by a Force Majeure
or Other Delay Event must provide Notice to the other Party.  Initial notice may
be given orally, but written Notice with reasonably full particulars of the
Force Majeure or Other Delay Event is required as soon as reasonably possible
after the occurrence of the Force Majeure or Other Delay Event.

 

10.5         Maintenance and Other Operations.  Gatherer may interrupt its
performance hereunder for the purpose of making necessary or desirable
inspections, alterations, and repairs and Gatherer shall give to Producer
reasonable Notice of its intention to suspend its performance hereunder, except
in cases of emergency where such Notice is impracticable or in cases where the
operations of Producer will not be affected.  Gatherer shall endeavor to arrange
such interruptions so as to inconvenience Producer as little as possible. 
Service interruptions on the part of either Party that are covered by this
provision are included within the definition of “Force Majeure or Other Delay
Event” for the purpose of this Agreement.

 

Article 11

Assignment

 

11.1         Restriction on Assignment.  Except as provided below, neither Party
may assign or delegate any of its rights or obligations under this Agreement, by
operation of law, change of

 

20

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control, or otherwise, without the prior written consent of the other Party,
which consent shall not be unreasonably withheld.

 

11.2         Inurement.  Subject to Section 11.1, this Agreement binds and
inures to the benefit of the Parties and their respective successors and
assigns.

 

Article 12
Jurisdiction

 

This Agreement is subject to, and each Party will comply with, all Applicable
Laws of any Governmental Authority now or hereafter having jurisdiction over
either or both Parties or their facilities.

 

Article 13
Notices

 

13.1         Notice.  All notices, invoices, payments, and other communications
made under this Agreement (“Notice”) shall be in writing and sent to:

 

To Producer:

 

Gasco Production Company

 

8 Inverness Drive East, Suite 100

Englewood, Colorado 80112

Attention: Mr. Michael K. Decker

Telephone: 303-483-0044

Facsimile: 303-483-0011

 

To Gatherer:

 

Monarch Natural Gas, LLC

 

5613 DTC Parkway, Suite 200

Greenwood Village, Colorado 80111

Attention: Mr. Judson Williams

Telephone: 303-

Facsimile: 303-

 

13.2         Method.  All Notices required hereunder may be sent by facsimile or
mutually acceptable electronic means, a nationally recognized overnight courier
service, first class mail, or hand delivered.

 

13.3         Delivery.  Notice shall be given when received on a Business Day by
the addressee.  In the absence of proof of the actual receipt date, the
following presumptions will apply.  Notices sent by facsimile shall be deemed to
have been received upon the sending Party’s receipt of its facsimile machine’s
confirmation of successful transmission.  If the Day on which such facsimile is
received is not a Business Day or is after five p.m. on a Business Day, then
such

 

21

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facsimile shall be deemed to have been received on the next following Business
Day.  Notice by overnight mail or courier shall be deemed to have been received
on the next Business Day after it was sent or such earlier time as is confirmed
by the receiving Party.  Notice by first class mail shall be considered
delivered 5 Business Days after mailing.

 

Article 14
Other Provisions

 

14.1         Additional Terms.  The measurement terms and conditions set forth
in Exhibit A are incorporated herein by reference.

 

14.2         Governing Law.  This Agreement shall be construed, enforced, and
interpreted according to the laws of the State of Colorado, without regard to
the conflicts of law rules thereof.  Each Party hereby irrevocably submits to
the jurisdiction of the courts of the State of Colorado and the federal courts
of the United States of America located in Arapahoe County, Colorado over any
dispute or proceeding arising out of or relating to this Agreement or any of the
transactions contemplated hereby, and each Party irrevocably agrees that all
claims in respect of such dispute or proceeding shall be heard and determined in
such courts.  Each Party hereby irrevocably waives, to the fullest extent
permitted by Applicable Law, any objection which it may now or hereafter have to
the venue of any dispute arising out of or relating to this Agreement or any of
the transactions contemplated hereby brought in such court or any defense of
inconvenient forum for the maintenance of such dispute or action.  Each Party
agrees that a judgment in any dispute heard in the venue specified by this
section may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by Applicable Law.

 

14.3         WAIVER OF JURY TRIAL.  EACH PARTY TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT.

 

14.4         Representations.  Each Party represents to the other Party during
the term hereof as follows:  (i) there are no suits, proceedings, judgments, or
orders by or before any governmental authority that materially adversely affect
its ability to perform this Agreement or the rights of the other Parties
hereunder, (ii) it is duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its formation, and it has the legal right,
power and authority and is qualified to conduct its business, and to execute and
deliver this Agreement and perform its obligations hereunder, (iii) the making
and performance by it of this Agreement is within its powers, and has been duly
authorized by all necessary action on its part, (iv) this Agreement constitutes
a legal, valid, and binding act and obligation of it, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, reorganization and
other laws affecting creditor’s rights generally, and with regard to equitable
remedies, to the discretion of the court before which proceedings to obtain same
may be pending, and (v) there are no bankruptcy, insolvency, reorganization,
receivership or other arrangement proceedings pending or being contemplated by
it.

 

14.5         Waiver.  No waiver of any breach of this Agreement shall be held to
be a waiver of any other or subsequent breach.

 

22

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14.6         Rules of Construction.  In construing this Agreement, the following
principles shall be followed:

 

(i)                                     no consideration shall be given to the
fact or presumption that one Party had a greater or lesser hand in drafting this
Agreement;

 

(ii)                                  examples shall not be construed to limit,
expressly or by implication, the matter they illustrate;

 

(iii)                               the word “includes” and its syntactical
variants mean “includes, but is not limited to” and corresponding syntactical
variant expressions;

 

(iv)                              a defined term has its defined meaning
throughout this Agreement, regardless of whether it appears before or after the
place in this Agreement where it is defined;

 

(v)                                 the plural shall be deemed to include the
singular, and vice versa; and

 

(vi)                              each gender shall be deemed to include the
other genders.

 

14.7         No Third Party Beneficiaries.  There is no third party beneficiary
to this Agreement.

 

14.8         Headings.  The headings and subheadings contained in this Agreement
are used solely for convenience and do not constitute a part of this Agreement
between the Parties and shall not be used to construe or interpret the
provisions of this Agreement.

 

[Remainder of page intentionally left blank]

 

23

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.

 

 

Producer:

 

 

 

GASCO PRODUCTION COMPANY

 

 

 

 

 

By:

/s/ W. King Grant

 

Name:

W. King Grant

 

Title:

President and Chief Financial Officer

 

 

 

 

 

Gatherer:

 

 

 

MONARCH NATURAL GAS, LLC

 

 

 

 

 

By:

/s/ C. Judson Williams

 

Name:

C. Judson Williams

 

Title:

Chief Financial Officer

 

SIGNATURE PAGE TO AMENDED AND RESTATED GAS GATHERING & PROCESSING AGREEMENT

 

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List of Exhibits and Schedules

 

Exhibit A              Additional Terms and Conditions

Exhibit B              Chipeta Processing Agreement

Exhibit C              Questar Wet Line Agreement

Exhibit D              Form of Recording Memorandum

 

Schedule 1           Description of AMI

Schedule 2           Receipt Points, Well Names and Locations, and Delivery
Points

Schedule 3           Leases

Schedule 4           Purchase Option

Schedule 5           Letter Agreement Regarding Payment

 

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Exhibit A

ADDITIONAL TERMS AND CONDITIONS

 

The following terms and conditions shall apply to the gathering of Producer’s
Gas on the Gathering System.

 

1.             Measurement and Testing.

 

(a)           Receiving Transporters.  The ultimate custody transfer point for
Producer’s Gas will be at the interconnection between the facilities of Gatherer
and the Receiving Transporter and therefore the volume attributable to Producer
will be an allocated volume based on Producer’s pro rata portion of all Gas
delivered to the Receiving Transporter less Producer’s allocated share of FL&U,
Plant Shrinkage, Drip Liquids shrinkage, and any other adjustments hereunder.

 

(b)           Meters.  Producer shall own, maintain and operate custody transfer
meters at each Receipt Point installed as of the Effective Date.  Electronic
data from those meters shall be provided to Gatherer at no cost, and shall be
the basis for custody transfer at those Receipt Points.  Such electronic data
shall be available to Gatherer on a real time basis, but in no event shall the
necessary production information be provided to Gatherer later than 5 Days after
the end of each Month.  For meters installed after the Effective Date, Gatherer,
or its designee, shall own, maintain and operate those receipt meters, when
installed, and also the measuring stations at the Delivery Points. Either
Gatherer or Producer may install, maintain, and operate, at their own expense,
such check measuring equipment as desired and where appropriate.  Such equipment
shall be installed so as not to interfere with the operation of the other
Party’s measuring equipment.  At any time during the Term hereof, Gatherer shall
have the right to install its own meters at any of the Receipt Points existing
as of the Effective Date.  In that event, for those Receipt Points, (i)
Gatherer’s meters will become the custody transfer meters, and (ii) the Receipt
Point location will transfer from the outlet flange to the inlet flange of the
meter run.

 

(c)           Practices.  All meters, whether owned and operated by Producer or
Gatherer, shall be constructed, installed, and operated in accordance with the
following standards depending on the type of meters used.

 

(1)           Orifice Meters - In accordance with American Gas Association
Report Number 3, dated 2000 or the most recent edition as agreed to by Gatherer
and Producer.  If Gas pulsation problems occur upstream of the Receipt Points or
downstream of the Delivery Points, Producer, or their designee, shall take
whatever steps necessary to mitigate such pulsation.

 

(2)           Positive Meters - In accordance with American National Standards
Institute B109.2, dated 2000 or the most recent edition as agreed to by Gatherer
and Producer.

 

(3)           Turbine Meters - In accordance with American Gas Association
Report Number 7, dated 1996 or the most recent edition as agreed to by Gatherer
and Producer.

 

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(4)           Electronic Transducers and Flow Computers (solar and otherwise) -
in accordance with the applicable American Gas Association standards, including
but not limited to American Gas Association Measurement Committee Report Nos. 3,
5, 6 and 7 and any subsequent amendments, revisions, or modification thereof.

 

(5)           Ultrasonic Meters - In accordance with American Gas Association
Report Number 9, dated 2003 or the most recent edition as agreed to by Gatherer
and Producer.

 

Notwithstanding anything contained in this Section 1(c) to the contrary, neither
Party shall be required to replace or make any alterations to its measuring
equipment as a result of any subsequent amendments, revisions, or modifications
of the American Gas Association Reports cited in Subparagraphs (1) through (5)
of this Section 1(c), unless the Parties mutually agree to such replacement or
alteration.

 

(d)           Testing.  Either Party shall give reasonable Notice to the other
Party of any cleaning, changing, repairing, inspecting, testing, calibrating, or
adjusting of its receipt meters or the measuring equipment at the Delivery
Points to permit both Parties to have a representative present.  The official
records from the measuring equipment shall remain the property of Gatherer.
 Upon request, Gatherer will submit its records, together with calculations
therefrom, to Producer for inspection and verification, subject to return to
Gatherer or its designee within 30 Days after receipt thereof.

 

(e)           Accuracy of Meters.  All meters shall be verified (and calibrated)
by its owner at the following intervals: (i) if the deliveries of Gas through
the meter average less than 100 Mcf/d, at least once each Year, (ii) if the
deliveries of Gas through the meter average between 100 Mcf/d and 500 Mcf/d, at
least once every 6 Months, (iii) if the deliveries of Gas through the meter
average between 500 Mcf/d and 5,000 Mcf/d, at least once every 3 Months, or (iv)
if the deliveries of Gas through the meter average more than 5,000 Mcf/d, at
least once each Month.  If, upon any test, the measuring equipment is found to
be inaccurate by 2% or less, previous readings of such equipment will be
considered correct in computing the deliveries of Producer’s Gas hereunder, but
such equipment shall immediately be adjusted to record accurately.  If, upon any
test, the measuring equipment is found to be inaccurate by more than 2% of the
average flow rate since the last test, then any previous recordings of such
equipment shall be corrected to zero (0) error for any period which is known
definitely or agreed upon, using the procedure set forth in Section 1(g).  If
such period is not known or agreed upon, such correction shall be made for a
period covering 1/2 of the time elapsed since the date of the latest test, but
not to exceed 16 Days when the equipment is tested every Month and not to exceed
45 Days when the equipment is tested every 3 Months.  If either Party desires a
special test of any measuring equipment, at least 72 hours advance Notice shall
be given to the other Party, and both Parties shall cooperate to secure a prompt
test of the accuracy of such equipment.  If the measuring equipment so tested is
found to be inaccurate by 2% or less, the testing Party shall have the right to
bill the requesting Party for the costs incurred due to such special test,
including any labor and transportation cost, and Producer shall pay such costs
promptly upon invoice thereof.

 

(f)            Questar Measurement.  Beginning on April 1, 2012, the Parties
agree to use the volume of Producer’s Gas measured at the Questar Delivery
Point, plus (i) metered volumes of Producer’s Gas used by Producer off-lease for
oil well operations; (ii) metered volumes of

 

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Producer’s Gas sold to third-parties upstream of the Questar Delivery Point;
(iii) compressor Fuel Gas; (iv) Drip Liquids shrinkage; and (v) Riverbend Plant
Products shrinkage, and allocate such volume back to each Well.  Notwithstanding
any other provision in this Agreement, the Parties agree to use the measurement
procedure set forth in this subsection (f) until such time as the parties
mutually agree in writing otherwise.

 

(g)           Adjustments.  When Gas is being measured at the Receipt Points, if
any measurement equipment is out of adjustment, out of service, or out of repair
and the total calculated hourly flow rate through each meter run is found to be
in error by an amount of the magnitude described in Section 1(e), the total
quantity of Producer’s Gas delivered shall be redetermined in accordance with
the first of the following methods which is feasible:

 

(1)           by using the registration of any check meters, if installed and
accurately registering (subject to testing as described in Section 1(e)), or

 

(2)           where parallel multiple meter runs exist, by calculation using the
registration of such parallel meter runs; provided that they are measuring
Producer’s Gas from upstream headers in common with the faulty metering
equipment, are not controlled by separate regulators, and are accurately
registering; or

 

(3)           by correcting the error by straightforward application of a
correcting factor to the quantities recorded for the period (if the net
percentage of error is ascertainable by calibration, tests, or mathematical
calculation); or

 

(4)           by estimating the quantity, based upon deliveries made during
periods of similar conditions when the meter was registering accurately.

 

(h)           Meter Records Retention.  Gatherer shall retain and preserve for a
period of at least 2 Years all measurement results, test data and other similar
records.

 

2.             Measurement Specifications.

 

(a)           Units.  The unit of volume for measurement shall be 1 cubic foot. 
Such measured volumes shall be multiplied by their Gross Heating Value per cubic
foot and divided by 1,000,000 to determine MMBtu’s delivered hereunder.

 

(b)           Practices.  Computations for Gas measurement shall be made in
accordance with the following depending on the type of meters used:

 

(1)           Orifice Meters - In accordance with American Gas Association
Report Number 3, dated 2000 or the most recent edition as agreed to by Gatherer
and Producer.

 

(2)           Positive Meters - In accordance with American National Standards
Institute B109.2, dated 2000 or the most recent edition as agreed to by Gatherer
and Producer.

 

(3)           Turbine Meters - In accordance with American Gas Association
Report Number 7, dated 1996 or the most recent edition as agreed to by Gatherer
and Producer.

 

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(4)           Electronic Transducers and Flow Computers (solar and otherwise) -
in accordance with the applicable American Gas Association standards, including
but not limited to American Gas Association Measurement Committee Report Nos. 3,
5, 6 and 7 and any subsequent amendments, revisions, or modification thereof.

 

(5)           Ultrasonic Meters - In accordance with American Gas Association
Report Number 9, dated 2003 or the most recent edition as agreed to by Gatherer
and Producer.

 

(c)           Temperature.  The temperature of Producer’s Gas typically shall be
determined by a temperature measurement device installed as part of the selected
meter and flow computer combination, or such other means of recording
temperature as may be mutually agreed upon by the Parties.  The temperature so
recorded, obtained while Producer’s Gas is being delivered, shall be the
applicable flowing Gas temperature for purposes of calculating the actual gas
flow.

 

(d)           Product Composition of Producer’s Gas.  Gatherer shall obtain a
continuous flow monthly composite sample or a monthly spot sample of the Gas
delivered by Producer hereunder while the Gas is being produced under normal
operating conditions.  Analysis of such sample shall be made by Gatherer, at
Gatherer’s election, by gas chromatography or other industry approved method,
and the results reported as mol percent along with other composition parameters.

 

(e)           Pressure.  For purposes of measurement and meter calibration, the
atmospheric pressure for each of the Receipt Points and Delivery Points shall be
assumed to be the pressure value determined by Gatherer, or its designee, for
the county elevation in which such point is located pursuant to generally
accepted industry practices irrespective of the actual atmospheric pressure at
such points from time to time.  For the purposes herein, such atmospheric
pressure will be assumed to be 14.65 pounds per square inch absolute.

 

(f)            Gross Heating Value, Specific Gravity, and Compressibility.  The
Gross Heating Value, Specific Gravity, and Compressibility of the Gas delivered
at the Receipt Points and Delivery Points shall be determined from compositional
analysis as described in Section 2(d) above as outlined in Gas Processors
Association Standard 2172 Calculation of Gross Heating Value, Relative Density,
and Compressibility of Natural Gas Mixtures from Compositional Analysis.

 

(g)           Other Contaminants.  Other tests to determine water content,
sulfur, hydrogen sulfide, inert gases, and other impurities in Producer’s Gas
shall be conducted whenever requested by either Party and shall be conducted in
accordance with standard industry testing procedures.

 

3.             Quality Specifications.

 

(a)           Producer’s Gas.  Producer’s Gas delivered at each Receipt Point
shall meet the quality specifications imposed by the Receiving Transporter, but
in no event shall exceed the specifications as follows (except for hydrocarbon
dewpoint specifications for Producer’s Gas connected to the Plant):

 

(1)           Water:  No free water.

 

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(2)           Hydrogen Sulfide:  Producer’s Gas shall not contain more than ¼
grain of hydrogen sulfide per 100 cubic feet of Gas at the Receipt Points, as
determined by quantitative tests.  Gatherer is not generally waiving the
hydrogen sulfide specification; however, the Parties acknowledge that: 1)
Producer and Gatherer have existing hydrogen sulfide treating capabilities on
their respective systems, and 2) Producer’s Gas may occasionally and from
time-to-time exceed this specification at the Receipt Point.  Gatherer agrees to
operate and maintain the existing treating facilities on its Gathering System,
and to cooperate with the downstream transporter, to minimize the affect of
hydrogen sulfide.

 

(3)           Total Sulfur:  Producer’s Gas shall not contain more than 5 grains
of total sulfur per 100 cubic feet of Gas at the Receipt Points.

 

(4)           Temperature:  Producer’s Gas shall not have a temperature less
than 40ºF or more than 120 ºF.

 

(5)           Carbon Dioxide:  Producer’s Gas shall not contain more than 2% by
volume of carbon dioxide.

 

(6)           Oxygen:  Producer’s Gas shall contain no oxygen.

 

(7)           Nitrogen:  Producer’s Gas shall not contain more than 2% by volume
of nitrogen.

 

(8)           Total Inert Gas: Producer’s Gas shall not contain more than 3% by
volume of total inert gases.

 

(9)           Objectionable Liquids and Solids and Dilution:  Producer’s Gas
shall be free of all objectionable liquids and solids, including any free
liquids at the Receipt Point, and shall not contain any hydrocarbons which might
condense to free liquids in the pipeline under normal pipeline conditions and
shall be commercially free from dust, gums, gum-forming constituents, and other
liquids or solid matter which might become separated from Producer’s Gas in the
course of transportation through pipelines.

 

(10)         Gross Heating Value:  Producer’s Gas shall not have a Gross Heating
Value less than 950 Btu’s per cubic foot of Gas.

 

(b)           Change in Receiving Transporter’s Specifications.  Notwithstanding
the Gas specifications above, if a Receiving Transporter notifies Gatherer or
Producer of different or additional quality specifications required at the
Delivery Points and different from those outlined in Section 3(a) or (b) above,
Gatherer will notify Producer of any such different or additional specifications
as soon as practicable after being notified of such specifications.  Such
revised specifications will be considered as the quality specifications for
Producer’s Gas under this Agreement for as long as required by the Receiving
Transporter.

 

(c)           Failure to Meet Specifications.  If Producer’s Gas delivered
hereunder fails to meet any of the quality specifications stated in Section 3(a)
or (b) above, Gatherer (i) may install equipment, at Producer’s expense, on the
Gathering System to treat such nonconforming

 

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Producer’s Gas or (ii) may refuse to accept such Producer’s Gas for so long as
Producer is unable to deliver Producer’s Gas conforming to such specifications. 
If Gatherer, in its sole discretion, accepts Producer’s Gas that fails to meet
any of the quality specifications stated above, Gatherer shall not be deemed to
have waived Gatherer’s right to refuse to accept non-specification Gas at a
subsequent time.  In addition, if Producer continues to flow any Gas that fails
to meet the quality specifications under this Section 3, Producer shall be
responsible for (i) any fees charged by any Receiving Transporter and (ii) any
costs, expenses, damages incurred by Gatherer or caused by such
non-specification Producer’s Gas.

 

4.             Easements.

 

(a)           Access.  To the extent that Producer may contractually or lawfully
do so under its leasehold interests and other property rights in the Leases,
Producer hereby grants, convey, assign, and transfer to Gatherer a right of way
and easement across the Leases, and across adjoining lands in which Producer may
have an interest, for the purposes of installing, using, inspecting, repairing,
operating, replacing, and removing Gatherer’s facilities (including installation
of new custody transfer meters and other equipment) used or useful in the
performance of this Agreement.  Any property of Gatherer placed in or on any of
such land shall remain the property of Gatherer, subject to removal by Gatherer
when necessary or desirable, in Gatherer’s sole judgment, or upon the expiration
or termination of this Agreement.  Gatherer shall have a reasonable time after
the expiration or termination of this Agreement to remove its property.

 

Gatherer and Producer shall cooperate to establish separate rights-of-way in
Gatherer’s name for its facilities.

 

(b)           Further Assurances.  Producer shall execute and deliver such
additional instruments and other documents, and shall take such further actions
as may be reasonably necessary or appropriate, to effectuate, carry out, and
comply with the terms of this Section 4.

 

5.             Uneconomic Segments.  At any time, Gatherer shall have the right
to declare, acting reasonably and in good faith, that the operation of all or
part of any segment or segments of the Gathering System has become uneconomic by
giving Notice to Producer.  Upon receipt of such Notice by Producer, Gatherer
and Producer shall negotiate in good faith to reach agreement on additional
gathering fees to be paid by Producer for Producer’s Gas gathered on such
segment or segments that would cause the operation of that segment or segments
of the Gathering System to become economic to Gatherer.  If the Parties fail to
reach agreement on such additional gathering fees within a reasonable period of
time, then Gatherer will have the right, upon no less than 90 Days advance
Notice to Producer, to discontinue gathering Producer’s Gas on such segment or
segments of the Gathering System.  As to such discontinued services on those
segment or segments of the Gathering System, there shall be no further
obligation to Producer under this Agreement, and that portion of Producer’s Gas
so affected shall be released. To the extent that any of Producer’s Gas is so
released, there shall be a corresponding proportional decrease in the Quarterly
Minimum Volume obligation for the remainder of the Term.

 

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Exhibit B

 

Chipeta Processing Agreement

 

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GAS PROCESSING AGREEMENT

 

This GAS PROCESSING AGREEMENT (“Agreement”) is made and entered into this 21st
day of September, 2011, by and between  CHIPETA PROCESSING LLC, a Delaware
limited liability company (“Processor”), and GASCO ENERGY, INC., (“Processing
Customer”).  Processor and Processing Customer may be referred to individually
as “Party,” and collectively as the “Parties.”

 

SECTION 1.        SCOPE OF AGREEMENT AND DEFINITIONS.

 

(a)           Scope of Agreement.  Processing Customer agrees to deliver Gas,
and Processor agrees to receive and process Gas and redeliver Residue Gas, in
accordance with this Agreement.  Subject to the terms of this Agreement,
Processor shall have the exclusive right to receive into its Processing Plant
and process all Gas owned or controlled by Processing Customer within the
Dedication Area, or which is delivered at the Plant Receipt Point by Questar and
with respect to which Processing Customer has the right to process.

 

(b)           General Terms and Conditions.  This Agreement incorporates, and is
subject to, the General Terms and Conditions attached hereto, together with the
Exhibits attached hereto.  In the event of a conflict between the provisions of
this Agreement and the General Terms and Conditions or the Exhibits, the
provisions of this Agreement shall prevail.

 

(c)           Defined Terms.  For purposes of this Agreement, the General Terms
and Conditions and the Exhibits attached hereto, the following definitions shall
apply:

 

(1)           Chipeta Plant.  The term “Chipeta Plant” means Processor’s primary
Processing Plant for the services provided hereunder located in Section 15,
Township 9 South, Range 22 East, Uintah County, Utah.  The Chipeta Plant
includes all facilities within the “Chipeta Plant Complex” and appurtenant
facilities.

 

(2)           Chipeta Plant Complex.  The term “Chipeta Plant Complex” has the
meaning given to such term in the Declaratory Order issued by the Federal Energy
Regulatory Commission in FERC Docket No. CP09-48-000 (128 FERC ¶ 61,122).

 

(3)           Contracted Cryogenic Capacity.  The Term “Contracted Cryogenic
Capacity” means the daily quantity of cryogenic processing capacity specified in
Section 5(a)(2) (Option 1), by a Contracted Cryogenic Customer.

 

(4)           Contracted Cryogenic Customer.  The term “Contracted Cryogenic
Customer” means a Processing Customer which has selected Option 1 under
Section 5(a)(2) of this Agreement and specified a Contracted Cryogenic Capacity
equal to or greater than 15,000 Mcf/d.

 

(5)           Contracted Cryogenic Customer Overrun Quantity.  The term
“Contracted Cryogenic Customer Overrun Quantity” means the Net Delivered Volume
of Gas tendered for processing under this Agreement by a Contracted Cryogenic
Customer in excess of the Contracted Cryogenic Capacity reserved by such
Customer pursuant to Section 5(a)(2) of this Agreement.

 

(6)           Effective Date.  The term “Effective Date” means the date when
processing service through the Processing Plant commences.

 

1

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(7)           FERC.  The term “FERC” means the Federal Energy Regulatory
Commission.

 

(8)           Gas.  The term “Gas” means all hydrocarbon and non-hydrocarbon
substances produced from natural gas and/or oil wells and remaining in a gaseous
state at the Plant Receipt Point.

 

(9)           Historic Capacity.  The term “Historic Capacity” means the
quantity of processing capacity at the Processing Plant expressly or impliedly
reserved by Processor to satisfy its contractual obligations under Processor’s
Gas Processing Agreements with each Historic Customer for processing of such
Customer’s Gas.

 

(10)         Historic Customer.  The term “Historic Customer” means any entity
which, prior to March 1, 2011, entered into a contract with Processor for
processing capacity and processing services at the Processing Plant.

 

(11)         Interruptible Cryogenic Customer.  The term “Interruptible
Cryogenic Customer” means a Processing Customer which has selected Option 2
under Section 5(a)(2) of this Agreement.

 

(12)         Keep Whole Gas.  The term “Keep Whole Gas” means the fraction, if
any, of Processing Customer’s Gas to which neither cryogenic processing or
refrigeration processing capacity is allocated under Section 5(b)(3) and (4) of
this Agreement, including Gas with respect to which Processor exercises it right
under Section 8.2(iii) of the General Terms and Conditions to cease processing
for the reasons set forth in such Section.

 

(13)         ML 104.  The term “ML 104” means Questar’s Main Line 104
facilities.

 

(14)         ML 40.  The term “ML 40” means collectively the portion of
Questar’s Main Line 40 and laterals JL 45, 46 and 47 described in Section
3(a)(1)(B) of this Agreement.

 

(15)         Nameplate Capacity.  The term “Nameplate Capacity” means the stated
design capacity of the cryogenic processing facilities at the Chipeta Plant,
which capacity shall be deemed to be 600 MMcf/day on and after the in-service
date of Train III.

 

(16)         Net Delivered Volume.  The term “Net Delivered Volume” means the
aggregate volume of Processing Customer’s Gas delivered at the Questar Receipt
Points, adjusted to reflect the proportionately allocated change, if any,
between the aggregate volume measured at all Questar Receipt Point(s) and the
volume measured at the Plant Receipt Point, minus two-tenths of one percent
(0.20%) Processing Plant Fuel.

 

(17)         Processing Plant.  The term “Processing Plant” means the Chipeta
Plant as well as any other plant or third party arrangement that Processor
enters into to process all of Processing Customer’s Gas committed for processing
pursuant to this Agreement.  Such term includes the Natural Buttes Plant.

 

(18)         Plant Products.  The term “Plant Products” means commercial sulfur,
carbon dioxide, nitrogen, helium, argon, other inert gases, ethane, propane,
iso-butane, normal butane, iso-pentane, normal pentane, pentanes plus, hexanes
plus, any other liquid hydrocarbon product except for a liquefied methane
product, or any mixtures thereof, and any incidental methane included in any of
the aforementioned products, which are separated, extracted, or condensed from
Gas processed in the Processing Plant.

 

2

--------------------------------------------------------------------------------

 

(19)         Plant Receipt Point.  The term “Plant Receipt Point” means the
inlet flange of the custody transfer meter where Gas is delivered by Questar to
the Processing Plant.

 

(20)         Questar.  The term “Questar” means Questar Pipeline Company.

 

(21)         Questar Receipt Point.  The term “Questar Receipt Point” means the
point on ML 40 at which Processing Customer’s Gas is delivered to Questar for
transportation and delivery to the Plant Receipt Point.

 

(22)         Receipt Point Thermal Content.  The term “Receipt Point Thermal
Content” means the Thermal Content, based on the data provided by Questar
pursuant to Section 4(b)(1) of this Agreement, of the Net Delivered Volume of
Processing Customer’s Gas delivered to Processor at the Plant Receipt Point.

 

(23)         Redelivery Point.  The term “Redelivery Point” means the point(s)
at which Residue Gas is redelivered by Processor to Processing Customer, or to
Processing Customer’s designee, or to others entitled thereto, as designated on
Exhibit B.

 

(24)         Refrigeration Processing Customer.  The term “Refrigeration
Processing Customer” means a Processing Customer which has selected Option 3
under Section 5(a)(2) of this Agreement.

 

(25)         Residue Gas.  The term “Residue Gas” means Gas which is redelivered
by Processor to, or for the account of, Processing Customer at the Redelivery
Point(s), as required under the terms of this Agreement.

 

(26)         Thermal Content.  The term “Thermal Content” means,

 

(A)          in the case of Gas, the product of the measured volume in Mcf
multiplied by the Gross Heating Value per Mcf, adjusted to the same pressure
base and expressed in MMBtus; and

 

(B)           in the case of Plant Products, the product of the measured volume
in gallons multiplied by the Gross Heating Value per gallon.

 

The determination of Thermal Content shall be based upon, inter alia, data
provided by Questar pursuant to Section 4(b)(1) of this Agreement.

 

(27)         Train III.  The term “Train III” means a 300 MMcf/d cryogenic
processing facility to be located at the Chipeta Plant.

 

(28)         In addition to the definitions set forth in this subsection,
capitalized terms not defined in this subsection are given the meaning given to
such terms under the relevant provision of this  Agreement or the General Terms
and Conditions attached hereto.  In the event of a conflict between any
definition in the General Terms and Conditions and a definition in this
Agreement, the definition in this Agreement shall prevail.

 

3

--------------------------------------------------------------------------------

 

SECTION 2.        EFFECTIVE DATE AND TERM.

 

(a)           Effective Date.

 

(1)           Not less than three (3) days prior to the date when processing
service through the Processing Plant is scheduled to commence, Processor shall
provide Processing Customer written notice of such scheduled date.  Processor
shall thereafter notify Processing Customer on a timely basis of any delays in
such scheduled date.

 

(2)           The obligations and duties of the Parties under Sections 4 through
7 of this Agreement shall become effective on the Effective Date following the
notice provided to Processing Customer by Processor in accordance with paragraph
(1) of this subsection.

 

(3)           Processor shall provide written notice to the Processing Customer
of the in-service date of Train III.

 

(b)           Primary Term.

 

(1)           Unless extended pursuant to paragraph (2) of this subsection, this
Agreement shall remain in full force and effect for a “Primary Term” of ten (10)
years following the first day of the first Accounting Period commencing on or
after the in-service date of Train III.

 

(2)           Upon expiration of the Primary Term or any extension thereof under
this paragraph, the term of this Agreement shall be extended for a period of one
(1) year unless terminated by either Party giving written notice to the other
Party not less than one hundred eighty (180) days prior to the expiration of the
then-current term.

 

SECTION 3.        CONDITIONS PRECEDENT.

 

(a)           For Processing Customer.  The obligations of Processing Customer
are contingent upon the following conditions precedent, all of which must have
occurred (or been waived by Processing Customer) on or before December 31,
2012.  If any of the conditions precedent have not been satisfied, or waived by
Processing Customer, on or before December 31, 2012, the obligations of the
Parties under this Agreement shall thereafter be void and of no further force
and effect.

 

(1)           On or before December 31, 2012, Questar shall have —

 

(A)          completed construction and placed into service the extension of ML
104 approved in FERC Docket No. CP11-25-000; and

 

(B)           established a separate chricondentherm hydrocarbon dew point
(“CHDP”) standard for a portion of Questar’s Main Line 40 and laterals JL 45, 46
and 47, and completed construction of any ancillary facilities, converting this
segment of Main Line 40 to a high CHDP Gas line for delivery of Gas to the
Processing Plant.

 

(2)           On or before December 31, 2012, Processor shall have completed
construction of Train III and discharge pipeline facilities to connect the
Processing Plant to Questar’s interstate natural gas transportation facilities.

 

4

--------------------------------------------------------------------------------

 

(3)           On or before December 31, 2012, Processor shall have provided
written notice to Processing Customer of the date when processing service
through the Processing Plant shall commence.

 

(b)           For Processor.  The obligations of Processor are contingent upon
the following conditions precedent, all of which must have occurred (or been
waived by Processor) on or before the date specified herein.  If all of the
conditions precedent have not been satisfied, or waived by Processor, on or
before December 31, 2012, the obligations of the Parties under this Agreement
shall thereafter be void and of no further force and effect.

 

(1)           On or before December 31, 2012, Questar shall have obtained all
required regulatory approvals from the FERC, in form and substance satisfactory
to Questar and to Processor, authorizing Questar to construct and operate the
extension of ML 104.

 

(2)           On or before December 31, 2012, Questar shall have completed
construction and placed into service the extension of ML 104 approved in FERC
Docket No. CP11-25-000;

 

(3)           On or before December 31, 2012, Processor shall have obtained a
clarification, in form and substance satisfactory to Processor, from the FERC of
the Declaratory Order issued in FERC Docket No. CP09-48-000 (128 FERC ¶ 61,122)
that, following modifications necessary to facilitate receipt of  Gas from ML
40, the “Plant Interconnect Line” (as described in such Order) will retain its
non-jurisdictional status, exempt from regulation under the Natural Gas Act; and

 

(4)           On or before December 31, 2012, Processor shall have obtained (i)
all necessary right-of-way easements for construction of certain plant pipeline
facilities across federal, state and/or tribal lands, and (ii) consent from the
Ute Indian Tribe of the Uintah and Ouray Reservation (the “Tribe”) pursuant to
the Surface Use and Access Agreement (“SU&A Agreement”) between Kerr-McGee Oil
and Gas Onshore LP and the Tribe, dated November 15, 2006, and waiver by the
Tribe of the fee specified in Section 1(b)(v) of the SU&A Agreement.

 

SECTION 4.        PROCESSING CUSTOMER OBLIGATIONS.

 

(a)           Delivery of Gas.  Commencing on the Effective Date —

 

(1)           Processing Customer shall discontinue all processing operations
upstream from the Processing Plant, other than those on-lease facilities
required to comply with Questar’s CHDP standard for ML 40 or for use in on-lease
field operations.

 

(2)           Processing Customer shall meet its obligation to deliver
Processing Customer’s Gas to Processor by utilizing services provided under an
agreement with Questar to deliver Processing Customer’s Gas connected to ML 40
to the Plant Receipt Point for processing.

 

(b)           Authorization To Provide Data.  On or before the Effective Date,
Processing Customer shall execute and deliver to Processor written
authorization, in form and substance satisfactory to Questar, authorizing
Questar to determine the quantity and composition of the Gas delivered by
Processing Customer to Questar at each Questar Receipt Point, and to provide to
Processor information respecting the volume, Btu content, and composition of the
Gas delivered by Processing Customer to Questar at each such Questar Receipt
Point.

 

5

--------------------------------------------------------------------------------

 

(1)           The determination of the composition of Processing Customer’s Gas
at the Questar Receipt Point(s), the measurement of volume and the measurement
of Thermal Content by Questar shall be in accordance with Article 14 of
Questar’s Gas Tariff on file with the FERC.  The measurement of volume and
Thermal Content by Processor shall be in accordance with Article 6 of the
General Terms and Conditions.

 

(2)           Processor agrees to treat the information provided to Processor by
Questar under this subsection as confidential and to utilize such information
solely for purposes of administering this Agreement.

 

(c)           Disposition of Residue Gas.  With respect to Residue Gas
redelivered by Processor to Processing Customer or for Processing Customer’s
account, Processing Customer shall dispose of such Residue Gas in accordance
with Exhibit C.

 

SECTION 5.        RESERVATION AND ALLOCATION OF PROCESSING PLANT CAPACITY.

 

(a)           Designation Of Contracted Service.

 

(1)           Processing Customer shall have the option to select from the
following services under this Agreement:

 

(A)          Option 1:               To reserve, effective on the commencement
of operation of Train III, a specified amount of capacity in the Processing
Plant for cryogenic processing, within the Nameplate capacity, of Processing
Customer’s Gas, provided that such Customer’s Contracted Cryogenic Capacity is
at least equal to 15,000 Mcf/d.  To the extent that cryogenic processing
capacity is not allocated to Contracted Cryogenic Customer’s Gas pursuant to
subsection (b)(4) or (5) of this Section, Option 1 includes refrigeration
processing service and compression service.

 

(B)           Option 2:               To contract effective on the commencement
of operation of Train III, for cryogenic processing of Processing Customer’s Gas
to the extent that cryogenic processing capacity within the Nameplate Capacity
is available, without reserving any specified Contracted Cryogenic Capacity.  
To the extent that cryogenic processing capacity is not allocated to
Interruptible Cryogenic Customer’s Gas pursuant to subsection (b)(4) or (5) of
this Section, Option 2 includes refrigeration processing service and compression
service.

 

(C)           Option 3:               To contract for refrigeration processing
service at the Processing Plant.  To the extent that refrigeration processing
capacity is not allocated to Refrigeration Processing Customer’s Gas pursuant to
subsection (b)(4) or (5) of this Section, Option 3 includes compression service.

 

6

--------------------------------------------------------------------------------

 

(2)           Processing Customer hereby elects (check one and initial):

 

o

Option 1

Contracted Cryogenic Capacity: 25,000 Mcf/d

/s/MKD

 

 

 

(Initial)

 

 

 

 

o

Option 2

Interruptible Cryogenic Processing

 

 

 

 

(Initial)

 

 

 

 

o

Option 3

Refrigeration Processing

 

 

 

 

(Initial)

 

(3)           If Processing Customer has elected service under Option 1 —

 

(A)          commencing the first Accounting Period following the in-service
date of Train III, Processing Customer shall deliver at the Plant Receipt Point
an average daily Net Delivered Volume equal to at least Ninety percent (90%) of
the Contracted Cryogenic Capacity specified in paragraph (2) (Option 1) of this
subsection (the “Minimum Daily Quantity”) during each subsequent Accounting
Period.

 

(B)           following the first twelve Accounting Periods commencing after the
in-service date of Train III, and annually thereafter, Processor shall determine
whether Processing Customer failed to deliver to Processor during the
immediately preceding twelve Accounting Periods (“Annual Accounting Period”) a
quantity of Gas equal to or greater than the product of the Minimum Daily
Quantity times the aggregate number of days in the Annual Accounting Period
(“Minimum Annual Quantity”).

 

(i)            If Processing Customer fails to deliver to Processor the Minimum
Annual Quantity in any Annual Accounting Period, Processor shall determine the
deficient Gas quantity for such Period and Processing Customer agrees to pay
Processor an amount  (“Deficiency Payment”) determined by multiplying —

 

(I)            the Cryogenic Processing Fee set forth in Section 6(a)(1)(B) of
this Agreement (as adjusted pursuant to Section 6(e))

by

(II)           such deficient Gas quantity.

 

(ii)           Processing Customer shall not be obligated to make a Deficiency
Payment with respect to any volumes which Processing Customer attempted to
deliver to Processor during such Annual Accounting Period and Processor was
unable to receive and process.

 

(iii)          Processing Customer shall pay the Deficiency Payment within
thirty (30) days after receipt of an invoice from Processor for the Deficiency
Payment amount, setting forth the basis on which such Deficiency Payment was
calculated in sufficient detail to enable Processing Customer to verify such
amount.

 

(b)           Allocation of Processing Plant Capacity.

 

(1)           Processing Customer shall be entitled to receive cryogenic
processing service or refrigeration processing service in accordance with the
capacity allocation methodology set forth in this subsection.

 

7

--------------------------------------------------------------------------------

 

(2)           Capacity constraints may exist from time to time requiring
curtailment or interruption of cryogenic processing service and/or refrigeration
processing service, and curtailment or interruption of cryogenic processing
service and/or refrigeration processing service may also be necessary for other
reasons.  Processor may decline to schedule and/or may curtail cryogenic
processing service and/or refrigeration processing service:

 

(A)          due to Force Majeure;

 

(B)           due to routine repair and maintenance reasonably determined
necessary or prudent by Processor;

 

(C)           to rectify imbalances or to conform physical flows to nominations;

 

(D)          to maintain plant integrity;

 

(E)           if there is a dispute over title, ownership or right to tender or
to receive Gas; or

 

(F)           to fulfill Processor’s contractual obligations with respect to
Historic Capacity.

 

(3)           For the purposes of scheduling and curtailing processing of Gas at
the Processing Plant prior to the in-service date of Train III, and in the case
of cryogenic processing capacity, within the Nameplate Capacity, processing
capacity at the Processing Plant shall be allocated in accordance with the
following schedule —

 

(A)          first, to the Net Delivered Volume of each Historic Customer, pro
rata based on the ratio of each such Customer’s Historic Capacity to the sum of
the aggregate Historic Capacity of all such Customers;

 

(B)           second, to the Net Delivered Volume of Contracted Cryogenic
Customers, pro-rata based on the ratio of the Contracted Cryogenic Customer’s
Contracted Cryogenic Capacity to the aggregate Contracted Cryogenic Capacity of
all such Customers;

 

(C)           third, pro rata, to the Net Delivered Volume of Interruptible
Cryogenic Customers;

 

(D)          fourth, pro rata, to the Net Delivered Volume of Gas of
Refrigeration Processing Customers; and

 

(E)           thereafter to the Net Delivered Volume of all other Gas.

 

(4)           For the purposes of scheduling and curtailing processing of Gas at
the Processing Plant on and after the in-service date of Train III, and in the
case of cryogenic processing capacity, within the Nameplate Capacity, processing
capacity at the Processing Plant shall be allocated in accordance with the
following schedule —

 

(A)          first, to the Net Delivered Volume of each Historic Customer and
each Contracted Cryogenic Customer up to such Customer’s Historic Capacity (in
the case of

 

8

--------------------------------------------------------------------------------

 

Historic Customers) and Contracted Cryogenic Capacity (in the case of Contracted
Cryogenic Customers), pro rata based on the ratio of each such Customer’s
Historic Capacity or Contracted Cryogenic Capacity (as the case may be) to the
sum of the aggregate Historic Capacity and the aggregate Contracted Cryogenic
Capacity of all such Customers;

 

(B)           second, to the Net Delivered Volume of Historic Customers in
excess of such Customer’s Historic Capacity and to Contracted Cryogenic Customer
Overrun Quantities pro rata based on the ratio of each such Customer’s Historic
Capacity (in the case of Historic Customers) or Contracted Cryogenic Capacity
(in the case of Contracted Cryogenic Customers) to the sum of the aggregate
Historic Capacity and the aggregate Contracted Cryogenic Capacity of all such
Customers;

 

(C)           third, pro rata, to the Net Delivered Volume of Interruptible
Cryogenic Customers;

 

(D)          fourth, pro rata, to the Net Delivered Volume of Refrigeration
Processing Customers; and

 

(E)           thereafter to the Net Delivered Volume of all other Gas.

 

(5)           Gas shall be allocated in accordance with the service contracted
under Section 5(a)(2) and the priorities set forth in paragraphs (3) and (4) of
this subsection (b) first to cryogenic processing to the extent that such
capacity is available within the Nameplate Capacity and, thereafter, to
refrigeration processing to the extent that such capacity is available.

 

SECTION 6.         PROCESSING FEES AND CONSIDERATION.

 

(a)           Processing Fees.  As full consideration for the processing of Gas
delivered hereunder —

 

(1)           Processing Customer shall pay Processor the applicable Processing
Fee listed below, plus Processing Customer’s pro rata share of all applicable
electric compression costs —

 

(A)          for Refrigeration Processing Service contracted under Section
5(a)(2), a Processing Fee equal to $0.12 (as adjusted pursuant to subsection
(e)) multiplied by the fraction of the Receipt Point Thermal Content of such
Customer’s Gas to which refrigeration processing capacity is allocated under
Section 5(b)(3) or (4); and

 

(B)           for Cryogenic Processing Service contracted under Section 5(a)(2),
a Processing Fee equal to $0.33 (as adjusted pursuant to subsection (e))
multiplied by the fraction of the Receipt Point Thermal Content of  such
Customer’s Gas to which cryogenic processing capacity is allocated under Section
5(b)(3) or (4).

 

(2)           Processor shall —

 

(A)          pay Processing Customer a sum equal to 100% of the Net Sales Price,
determined pursuant to Section 7 of this Agreement, for each gallon of
Processing Customer’s allocated Plant Products determined in accordance with
subsection (c) of this Section; and

 

9

--------------------------------------------------------------------------------

 

(B)           redeliver to Processing Customer or for Processing Customer’s
account, at the Redelivery Point(s), 100% of the quantity of Processing
Customer’s Residue Gas determined in accordance with subsection (d) of this
Section;

 

except that, with respect to the fraction of the Receipt Point Thermal Content
of Processing Customer’s Gas to which neither cryogenic nor refrigeration
processing capacity is allocated under Section 5(b)(3) or (4), Processor shall
not be obligated to pay such Customer for any Plant Products which may have been
entrained in the Gas at the Plant Receipt Point, and Processor shall redeliver
to Processing Customer or for Processing Customer’s account, at the Redelivery
Point(s), a quantity of Residue Gas equal to the Receipt Point Thermal Content.

 

(3)           Payment by Processor to Processing Customer of the proceeds
specified in paragraph (2)(A) and delivery by Processor to Processing Customer
or for Processing Customer’s account of the quantity of Processing Customer’s
Residue Gas specified in paragraph (2) shall entitle Processor to own and retain
for its own account and benefit, all portions of Processing Customer’s Gas not
redelivered under paragraph (2), including all Plant Products, together with all
components thereof, which are recovered by Processor in the Processing Plant.

 

(b)           Keep Whole Gas.  With respect to Keep Whole Gas —

 

(1)           Processing Customer shall pay its pro rata share of all applicable
electric compression costs;

 

(2)           Processor shall not be obligated to pay for Plant Products which
may have been entrained in Keep Whole Gas at the Plant Receipt Point;

 

(3)           Processor shall redeliver at the Redelivery Point a quantity of
Residue Gas equal to the Receipt Point Thermal Content of Keep Whole Gas
received at the Plant Receipt Point; and

 

(4)           redelivery by Processor of the quantity of Residue Gas specified
in paragraph (3) shall entitle Processor to own and retain for its own account
and benefit, all portions of such Keep Whole Gas not redelivered under paragraph
(3), including all Plant Products entrained in such Keep Whole Gas at the Plant
Receipt Point.

 

(c)           Determination of Processing Customer’s Allocated Plant Products. 
For purposes of subsections (a)(2) and (3) of this Section, the total quantity
of each Plant Product allocated to Processing Customer’s Gas shall be determined
in accordance with the following formula:

 

(1)                                  Quantity of applicable Plant Product = [A *
B * C * D]

 

Where:

 

A              =     the gallons of the respective Plant Products per Mcf,

 

(i)          except during periods described in clause (ii), as determined from
the Questar Receipt Point chromatographic analysis specified in paragraph 6.2 f.
of the General Terms and Conditions, and

 

(ii)         during any period when Questar delivers Gas from ML 40 to another
processor or to any delivery point other than the Plant Receipt Point, as
determined from the chromatographic analysis specified in

 

10

--------------------------------------------------------------------------------

 

paragraph 6.2 f. of the General Terms and Conditions performed by Processor at
the Plant Receipt Point on the commingled Gas delivered by Questar;

 

B                =      the Net Delivered Volume in Mcf of Processing Customer’s
Gas;

 

C                =      the Online Plant Performance Percentage (stated as a
decimal fraction) for the applicable period; and

 

D               =      the Fixed Recovery Percentage (stated as a decimal
fraction) for the respective Plant Product.

 

(2)           For purposes of the formula set forth in paragraph (1) of this
subsection —

 

(A)          The Fixed Recovery Percentage for purposes of factor “D” shall be
determined in accordance with the following tables:

 

(i)            During periods in which and to the extent that refrigeration
processing capacity is allocated to such Gas under Section 5(b)(3) and (4):

 

REFRIGERATION PROCESSING

 

PLANT PRODUCT

 

FIXED RECOVERY
PERCENTAGE

 

Propane

 

16

%

Iso-butane

 

35

%

Normal butane

 

38

%

Natural gasoline

 

72

%

 

(ii)           During periods, other than periods described in subparagraph
(iii), in which and to the extent that cryogenic processing capacity is
allocated to such Gas under Section 5(b)(3) and (4):

 

CRYOGENIC PROCESSING

 

PLANT PRODUCT

 

FIXED RECOVERY
PERCENTAGE

 

Ethane

 

80

%

Propane

 

94

%

Iso-butane

 

95

%

Normal butane

 

95

%

Natural gasoline

 

95

%

 

(iii)          During any period in which cryogenic processing is performed and
Processor rejects ethane at the Processing Plant, to the extent that cryogenic
(ethane rejection) processing capacity is allocated to such Gas under
Section 5(b)(3) and (4):

 

11

--------------------------------------------------------------------------------

 

CRYOGENIC PROCESSING

(ETHANE REJECTION)

 

PLANT PRODUCT

 

FIXED RECOVERY
PERCENTAGE

 

Ethane

 

20

%

Propane

 

80

%

Iso-butane

 

92

%

Normal butane

 

92

%

Natural gasoline

 

95

%

 

(B)           The Online Plant Performance Percentage (stated as a decimal
fraction) for purposes of factor “C” shall be determined separately with respect
to cryogenic processing capacity and refrigeration processing capacity in
accordance with the following:

 

(Days in Accounting Period X 24) — Downtime

Total Accounting Period Hours

 

Where:

 

Downtime equals the total Processing Plant downtime during the Accounting Period
as recorded by the Processing Plant operating logs (or reports).

 

Total Accounting Period Hours equals the number of days in the applicable
Accounting Period times 24.

 

(i)            Where 100% of the Net Delivered Volume of Gas is allocated
exclusively to cryogenic processing or exclusively to refrigeration processing
during an Accounting Period, the Online Performance Percentage shall be the
applicable percentage for the type of processing capacity allocated to such Gas.

 

(ii)           Where a portion of the Net Delivered Volume of Gas is allocated
cryogenic processing capacity during the Accounting Period and a portion is
allocated refrigeration processing capacity during the Accounting Period, the
Online Performance for each processing service shall be the applicable
percentage for the type of processing allocated during the period in which such
service was provided.  The aggregate Plant Products allocated to Processing
Customer for such Accounting Period shall be the sum of the Plant Products
computed for each form of processing capacity allocated to such Net Delivered
Volume during each applicable period.

 

(3)           The Plant Products Thermal Content shall be the product of —

 

(i)            the allocated volume of each Plant Product (in gallons),
multiplied by

 

(ii)           the Gross Heating Value per gallon for such Plant Product.

 

12

--------------------------------------------------------------------------------

 

(4)           The per gallon Gross Heating Value for each Plant Product shall be
as published in the Standard Table of Physical Constants of Paraffin
Hydrocarbons in GPA Publication 2145-95, “fuel as ideal Gas,” as the same might
be revised from time to time.

 

(d)           Determination of Processing Customer’s Residue Gas.

 

Processing Customer’s share of Residue Gas (“Processing Customer’s Residue Gas”)
shall equal the Receipt Point Thermal Content of Processing Customer’s Gas minus
the aggregate Plant Products Thermal Content allocated to Processing Customer’s
Gas.

 

(e)           CPI-U Index Adjustment.

 

(1)           Except as provided in paragraph (2), all Processing Fees and the
$0.0125 per gallon fee for transportation of Plant Products described in
Section 7(a)(2) and 7(b)(2) of this Agreement will be adjusted on an annual
basis in proportion to the percentage change, from the preceding calendar year,
in the Consumer Price Index — All Urban Consumers (“CPI-U Index”) as published
by the U.S. Department of Labor, Bureau of Labor Statistics.  The foregoing
adjustment shall be made effective January 1, 2013 and each January 1 thereafter
during the Term of this Agreement (including any extension(s) thereof), and
shall reflect the percentage change in the CPI-U Index during the immediately
preceding calendar year.

 

(2)           In no event shall the adjustment set forth in paragraph (1) result
in a decrease of either such Processing Fee or such per-gallon transportation
fee from the amount of the respective Processing Fee or per-gallon
transportation fee in effect during the calendar year immediately preceding the
effective date of the adjustment.

 

SECTION 7.         PLANT PRODUCT PRICING.  For purposes of Section 6(a)(2)(A) of
this Agreement, the “Net Sale Price” of each component of individual Plant
Products allocated to Processing Customer’s Gas shall be determined in
accordance with this Section.

 

(a)                                  Quantity Up To Commitment Volume.

 

(1)           Contracted Cryogenic Customer commits to deliver at the Questar
Receipt Points during each Accounting Period Gas containing an average of 1,158
Barrels per day of Plant Products (“Plant Product Commitment Volume”).

 

(2)           If the Plant Product Commitment Volume is greater than zero, the
“Net Sales Price” of each component of individual Plant Products allocated to
Contracted Cryogenic Customer’s Gas, up to an aggregate quantity equivalent to
the Monthly Aggregate Plant Product Commitment Volume, shall equal the FOB plant
price based on the net price per gallon received by Processor, from its
marketing affiliate in a market based transaction, at Mt. Belvieu, by component,
less Processor’s direct or indirect sales costs and expenses (which shall
include a $0.0125 per gallon fee (as adjusted pursuant to Section 6(e)) for
transportation of Plant Products from the Processing Plant to the MAPL
pipeline), fractionation charges, tank car rentals, Taxes (excluding income
taxes), Processor’s actual costs incurred in transporting Plant Products to the
point of sale, and similar marketing costs and expenses incurred by Processor,
to determine a net price FOB the Plant.

 

(A)          Where the aggregate quantity of Plant Products sold during any
Accounting Period exceeds the quantity equivalent to the Monthly Aggregate Plant
Product Commitment Volume,

 

13

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(i)            Plant Products equivalent to the Monthly Aggregate Plant Product
Commitment Volume shall be allocated proportionately among the individual Plant
Products in the same ratio as the quantity of each individual Plant Product sold
during such Accounting Period bears to the aggregate quantity of Plant Products
sold during such Period; and

 

(ii)           the Net Sales Price established under subsection (b) of this
Section shall apply to the quantity of Plant Products in excess of the quantity
allocated under clause (i) of this subparagraph.

 

(3)           If, during any Accounting Period, Contracted Cryogenic Customer
fails to deliver Gas containing an average daily quantity of Plant Products
equal to or greater than the Plant Product Commitment Volume, Contracted
Cryogenic Customer shall incur a deficiency payment obligation of $0.08 per
gallon multiplied by the deficient number of Plant Product gallons in the
applicable Accounting Period (“Plant Product Deficiency Payment”).  Contracted
Cryogenic Customer shall pay the Plant Product Deficiency Payment to Processor
within thirty (30) days after receipt by such Customer of an invoice from
Processor for such Plant Product Deficiency Payment, setting forth the basis on
which such Plant Product Deficiency Payment was calculated in sufficient detail
to enable such Customer to verify such amount.

 

(4)           For purposes of this Section, the term “Monthly Aggregate Plant
Product Commitment Volume” means the Plant Product Commitment Volume specified
in subsection (a)(1) of this Section multiplied by the number of days in the
Accounting Period.

 

(b)           Quantity In Excess Of Commitment Volume; Zero Commitment Volume.

 

(1)           During each Accounting Period, the Net Sales Price shall be
determined in accordance with paragraph (2) of this subsection —

 

(A)          for 100% of the Plant Products allocated to Interruptible Cryogenic
Customer’s and Refrigeration Processing Customer’s Gas, and

 

(B)           for the quantity of Plant Products allocated to Contracted
Cryogenic Customer’s Gas in excess of the aggregate quantity equivalent to the
Monthly Aggregate Plant Product Commitment Volume.

 

(2)           The Net Sales Price of each component of individual Plant Products
allocated to Processing Customer’s Gas shall equal the FOB plant price based on
the net price per gallon received by Processor, from its marketing affiliate in
a market based transaction,  by component for the total volume of each
individual Plant Product sold at the Processing Plant during the relevant
Accounting Period, less Processor’s direct or indirect sales costs and expenses
(which shall include a $0.0125 per gallon fee (as adjusted pursuant to
Section 6(e)) for transportation of Plant Products from the Processing Plant to
the MAPL pipeline), fractionation charges, tank car rentals, Taxes (excluding
income taxes), Processor’s actual costs incurred in transporting Plant Products
to the point of sale, and similar marketing costs and expenses incurred by
Processor, to determine a net price FOB the Plant.

 

SECTION 8.         NOTICES.  Except as otherwise provided in this section, all
notices, statements, invoices or other communications required or permitted
between the Parties shall be in writing and shall be considered as having been
given if delivered by mail, courier, hand delivery, or facsimile or electronic
means

 

14

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(e-mail) to the other Party at the designated address or facsimile numbers,
provided that any communication by e-mail shall be effective only if
acknowledged by an electronic notice of receipt.  Normal operating instructions
can be delivered by telephone or other agreed means.  Notice of events of Force
Majeure may be made by telephone and confirmed in writing within a reasonable
time after the telephonic notice.  Monthly statements, invoices, payments and
other communications shall be deemed delivered when actually received.  Either
Party may change its address, e-mail or facsimile and telephone numbers upon
written notice to the other Party:

 

Processing Customer:

 

GASCO Energy, Inc.

Address:

 

8 Inverness Drive East, Suite 100

 

 

Englewood, CO 80112

 

 

Attention: Mr. W. King Grant

Telephone:

 

(303) 483-0044

Facsimile:

 

(303) 483-0011

E-mail

 

kgrant@gascoenergy.com

 

 

 

Processor:

 

Chipeta Processing LLC

Address:

 

P.O. Box 137779

 

 

Denver, CO 80217-3779

 

 

Attention: Contract Administration

Telephone:

 

(720) 929-6000

Facsimile:

 

(720) 929-3906

E-mail:

 

marian.kleinbach@anadarko.com

 

SECTION 9.         EXECUTION.  This Agreement may be executed in any number of
counterparts, each of which shall be considered an original, and all of which
shall be considered one instrument.  Facsimile, PDF and other similar signatures
shall be treated for all purposes as if they are originals.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first
set forth above.

 

GASCO ENERGY INC.

 

CHIPETA PROCESSING LLC

 

 

By WGR Operating, LP

 

 

Its Managing Partner

 

 

 

By:

/s/ Michael Decker

 

By:

/s/ Donald R. Sinclair

 

 

 

 

 

Name:

Michael Decker

 

Name:

Donald R. Sinclair

 

 

 

 

 

Title:

EVP/COO

 

Title:

President

 

 

 

 

 

 

 

 

ANADARKO UINTAH MIDSTREAM

 

 

(With respect to Exhibit C only)

 

 

 

 

 

By:

/s/ Danny Rea

 

 

 

 

 

 

Name:

Danny Rea

 

 

 

 

 

 

Title:

Vice President, Midstream

 

15

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GENERAL TERMS AND CONDITIONS

Attached to and made a part of that certain

Gas Processing Agreement

between

GASCO ENERGY INC., as “Processing Customer”

and

Chipeta Processing LLC, as “Processor”

 

Dated:  September 21, 2011

 

ARTICLE 1:  DEFINITIONS

 

Accounting Period.  With respect to the calendar month in which the Effective
Date occurs, the period commencing on commencement of processing service
hereunder and ending at 12:00 am, Mountain Time, on the first day of the next
succeeding calendar month, and thereafter, the period commencing at 12:00 a.m.,
Mountain Time, on the first day of such succeeding calendar month and ending at
12:00 a.m., Mountain Time, on the first day of each succeeding calendar month.

 

Affiliate.  As to the Person specified, any person controlling, controlled by or
under common control with such Person, with the concept of control meaning the
possession, directly or indirectly, of a beneficial or economic ownership of at
least 50 percent of another.

 

Barrels.  Forty-Two U.S. Gallons measured at 60°F.

 

Btu.  The amount of heat required to raise the temperature of 1 pound of water
from 59°F to 60°F.

 

Cubic Foot.  The volume of Gas contained in one Cubic Foot of space at a
standard pressure base of 14.73 pounds per square inch absolute (psia) and a
standard temperature base of 60° F.

 

Dedication Area.  The lands, wells and/or leaseholds described on Exhibit A.

 

Force Majeure.  Any cause or condition not within the commercially reasonable
control of the Party claiming suspension and which by the exercise of
commercially reasonable diligence, such Party is unable to prevent or overcome.

 

Gross Heating Value.  The number of Btus produced by the combustion, on a dry
basis and at a constant pressure, of the amount of the Gas which would occupy a
volume of 1 Cubic Foot at a temperature of 60°F and at a pressure of 14.73 psia,
with air of the same temperature and pressure as the Gas, when the products of
combustion are cooled to the initial temperature of the Gas and air and when the
water formed by combustion is condensed to the liquid state.  Hydrogen sulfide
shall be deemed to have no heating value.

 

Indemnifying Party and Indemnified Party.  As defined in Article 10, below.

 

Interest(s).  Any right, title, or interest in lands and the right to produce
oil and/or Gas therefrom whether arising from fee ownership, working interest
ownership, mineral ownership, deed, lease, assignment, or otherwise, or arising
from any pooling, unitization or communitization of any of the foregoing rights.

 

Losses.  Any actual loss, cost, expense, liability, damage, demand, suit,
sanction, claim, judgment, lien, fine or penalty asserted by a third party
unaffiliated with the Party incurring such, and which are incurred by the
applicable Indemnified Party on account of injuries (including death) to any
person or damage to or destruction of any property, sustained in connection with
or arising out of the matters for which the Indemnifying Party has indemnified
the applicable Indemnified Party.

 

1

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Mcf.  1,000 Cubic Feet.

 

MMBtu.  1,000,000 Btus.

 

MMcf.  1,000,000 Cubic Feet.

 

Processing Plant Fuel.  Gas utilized as fuel or power in the Processing Plant,
including lost and unaccounted for Gas (L&U), which is deducted in determining
Net Delivered Volume.

 

Taxes.  All gross production, severance, conservation, ad valorem and similar or
other taxes measured by or based upon production, together with all taxes on the
right or privilege of ownership of the Gas, or upon the handling, transmission,
compression, processing, treating, conditioning, distribution, sale, delivery or
redelivery of the Gas, including all of the foregoing now existing or in the
future imposed or promulgated.

 

ARTICLE 2:  PROCESSING CUSTOMER COMMITMENTS

 

2.1.          Processing Customer hereby commits and agrees to deliver at the
Receipt Point(s) Gas attributable to Interests now owned, controlled or
hereafter acquired by Processing Customer in the Dedicated Area, including all
Gas from the Dedicated Area which Processing Customer has the right to process.

 

2.2.          Processing Customer shall keep Processor timely informed with
respect to Processing Customer’s volume forecasts and shall provide reasonable
advance notice to Processor of any scheduled adjustments.

 

ARTICLE 3:  OPERATION OF PROCESSOR’S FACILITIES

 

3.1.          Subject to the other provisions of this Agreement, Processor shall
receive into the Processing Plant all Gas, when tendered in accordance with this
Agreement, that Processing Customer commits and agrees to deliver under the
provisions of Section 1(a) of the Agreement and that meets the otherwise
applicable conditions under this Agreement.

 

ARTICLE 4:  RECEIPT POINTS AND CONDITIONS — INTENTIONALLY OMITTED

 

ARTICLE 5:  GAS QUALITY

 

5.1.          Gas delivered by Processing Customer to the Questar Receipt
Point(s) shall:

 

a.             be commercially free from dust, gum, gum-forming constituents,
liquid hydrocarbons, free water, diluent, and other liquids and solids;

 

b.             contain not more than 10 parts per million by volume of oxygen,
and Processing Customer shall make every effort to keep Gas free from oxygen;

 

c.             contain not more than ¼ grain(s) of hydrogen sulfide per 100
Cubic Feet of Gas;

 

d.             contain not more than one grain(s) of total sulfur, including,
but not limited to, sulfur in hydrogen sulfide and mercaptans, per 100 Cubic
Feet of Gas;

 

e.             contain not more than 3% by volume total inerts, including but
not limited to nitrogen and carbon dioxide;

 

f.              contains not more than 2% by volume carbon dioxide;

 

g.             have a temperature not greater than 120°F, nor less than 40°F;

 

h.             contain not more than 7 pounds per Mcf of water vapor;

 

i.              not contain measurable quantities of mercury;

 

j.              have a Gross Heating Value of not less than 1080 BTU per Cubic
Foot;

 

k.             with the exception of Btu content and CHDP specifications, not
exceed any of the specifications of the downstream pipelines at the Redelivery
Points as they may exist from time to time.

 

2

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l.              not contain other objectionable substances, including, but not
limited to, polychlorinated biphenyls, which may be injurious to pipelines,
people, property, or the environment which may interfere with its transportation
or makes the Gas unmarketable or unacceptable at any Redelivery Point.

 

5.2.          If Gas tendered by Processing Customer should fail to meet any one
or more of the above specifications from time to time, then:

 

a.             Processor may accept delivery of the non-conforming Gas from
Questar at the Plant Receipt Point, and such receipt shall not be construed as a
waiver or change of standards for future Gas volumes; or

 

b.             Processor may, at its sole discretion, direct Questar to cease
receiving the non-conforming Gas from Processing Customer, and notify Processing
Customer that Questar has, or will, cease receiving the non-conforming Gas at
the Questar Receipt Point.

 

5.3.          If the Gas as delivered at the Questar Receipt Point contains
contaminants not in conformance with the specifications in Section 5.1.,
Processing Customer shall be responsible for, and shall reimburse Processor for
all actual expenses, damages and costs resulting from Delivery of such Gas by
Questar at the Plant Receipt Point without regard to whether the Gas so
delivered conforms with the specifications in Section 5.1.

 

ARTICLE 6:  MEASUREMENT EQUIPMENT AND PROCEDURES

 

6.1.          The volume of Gas will be measured by a primary and secondary
measurement device that is accepted by industry, state, and federal regulatory
agencies.  The most common primary devices are orifice or ultrasonic meter
tubes.  These devices shall comply with the American Petroleum Institute -
Manual of Petroleum Measurement Standards, 14.3, American Gas Association Report
No. 3, and Report No. 9, (Latest Revisions) where applicable.  The secondary
measurement device shall be an electronic flow meter (“EFM”) that includes a
temperature recording system.  The EFM shall meet and be capable of performing
volume calculations according to the current standards prescribed in the
American Gas Association Report No. 3, Orifice Metering of Natural Gas and Other
Hydrocarbon Fluids, Parts 1-4, and shall comply with the American Petroleum
Institute — Manual of Petroleum Measurement Standards, Chapter 21, Section 1 —
Electronic Gas Measurement, (Latest Revisions).

 

6.2.          The unit of volume for measurement of Gas delivered hereunder
shall be one thousand (1,000) Cubic feet of Gas at a base temperature of sixty
degrees Fahrenheit (60°F) and at an absolute pressure base of 14.73 psia.

 

6.3.          For purposes of measurement hereunder, the atmospheric
(barometric) pressure shall be the average actual atmospheric pressure for the
geographical area as determined by the Processor.  If the pressure transmitter
being used is capable of measuring actual atmospheric pressure, then actual
atmospheric pressure may be used.

 

6.4.          Processor shall determine the Gas stream composition, specific
gravity, and gross Heating Values based on any of the following:  spot samples,
composite samples, on-line Gas chromatograph analysis or portable Gas
chromatograph analysis.  The component analysis of the Gas shall be performed by
Gas chromatography in accordance with GPA 2261 and 2172 or any pertinent
revisions thereto or replacements thereof.  Gas samples shall be obtained in
accordance with the procedures set forth in the Gas Processor’s Association
Standard 2166 (Latest Revision) “Obtaining Natural Gas Samples for Analysis by
Gas Chromatography” and American Petroleum Institute 14.1 Section 1 (Latest
Revision).

 

6.5.          The sampling frequency will be no less than semi-annually or more
often if deemed necessary by Processor.

 

6.6.          Tests for oxygen, carbon dioxide, sulphur, and hydrogen sulfide
content of the Gas delivered hereunder shall be made as often as

 

3

--------------------------------------------------------------------------------

 

deemed necessary by Processor, by means commonly used and accepted in the
industry.

 

6.7.          Deviation from Boyle’s Law at the pressure, specific gravities and
temperatures upon delivery shall be calculated by the NX-19 as outlined or
described in the American Gas Association Report “Manual for the Determination
of Super Compressibility” or AGA 8, Gross or Detail methods as outlined or
described in the AGA Report No. 8 entitled “Compressibility Factors of Natural
Gas and Other Related Hydrocarbon Gases”.

 

6.8.          All measuring equipment, housing, devices, and materials shall be
of standard manufacture and will, with all related equipment, appliances, and
buildings, be maintained and operated by Processor at Processor’s expense.  All
testing equipment shall be provided by Processor at Processor’s expense.

 

6.9.          Processing Customer may, at its option and expense, install and
operate check meters to monitor Processor’s meters.  Such meters shall be for
check purposes only and shall not be used in the measurement of Gas for the
purposes of this Agreement except as provided for in this Agreement.  The
installation and operation thereof shall be done entirely by Processing Customer
and shall not interfere in any way with the operation of Processor’s meter.  The
use of a share bar tubing system shall not be permitted.  Processing Customer
shall also have the right to access, for monitoring purposes, data at
Processor’s Receipt Point(s) meters by way of a Supervisory Control and Data
Acquisition system, so long as the same does not interfere with Processor’s
System.

 

6.10.        Processor’s custody meters shall be tested and calibrated by
Processor semi-annually or more often if deemed necessary by Processor.  If
Processing Customer desires to witness any of the tests provided for herein,
Processing Customer shall so advise Processor in writing.  If Processing
Customer has so advised Processor, then Processor shall give Processing Customer
sufficient notice in advance of such tests so that Processing Customer may have
its representative present to observe adjustments, if any, which are made.

 

6.11.        When any test shows an error of more than two percent (2%) in
measurement, correction shall be made for the period during which the
measurement instruments were in error first by correcting the error if the
percentage of error is ascertainable by calibration, test or mathematical
calculations or second by using the registration of Processing Customer’s check
meter, if installed and registering accurately.  If neither such method is
feasible, correction shall be made by estimating the quantity and quality
delivered, based upon deliveries under similar conditions during a period of
time when the equipment was registering accurately.  If the period during which
the measurement was in error cannot be ascertained, correction shall be made for
one-half (1/2) of the period elapsed since the last date of test, and the
measuring instrument shall be adjusted immediately to measure accurately.

 

6.12.        Production equipment upstream of the Receipt Point(s) shall be
designed and operated in a manner that will not interfere with acceptable
measurement standards.  If such interference is detected, Processor shall notify
Processing Customer and Processing Customer shall have sixty (60) Days to
correct or cause to be corrected the problems causing measurement errors due to
pulsation, vibration, or harmonic wave distortion caused by compressors, pumps,
or other production equipment upstream of the Receipt Point(s).  Volume
inaccuracies greater than or equal to one half of one percent (1/2%) that are
found to be the result of pulsation, vibration, or harmonic wave distortion
caused by compressors, pumps, or other production equipment upstream of the
Receipt Point(s) will be corrected and adjustments made back to the point in
time when the inaccuracies first occurred.

 

6.13.        With respect to the measurement of Gas under this Agreement,
Processor and Processing Customer shall have the right to inspect equipment
installed or furnished by the other, and the charts and other measurement or
testing data of the other, at all times during business

 

4

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hours, but the reading, calibration, and adjustment of such equipment and
changing of charts shall be done only by the Party owning such equipment.  Each
Party shall preserve all original test data, charts and other similar records in
such Party’s possession, for a period of at least two (2) years or the time
required by any governmental agency, whichever is greater.  Upon written request
by either Party, all such data, charts, and other similar records will be made
available to the requesting Party, subject to return within sixty (60) Days
after receipt thereof.

 

ARTICLE 7:  ALLOCATIONS — INTENTIONALLY OMITTED

 

ARTICLE 8:  PAYMENTS

 

8.1.          Processor shall provide Processing Customer with a statement
explaining fully how all consideration due (including deductions) under the
terms of this Agreement was determined not later than the last day of the
Accounting Period following the Accounting Period for which the consideration is
due.

 

8.2.          Any sums due Processor under this Agreement shall be paid no later
than 15 days following the date of the statement furnished under 8.1., above. 
Late payments shall accrue interest at the rate of 1.5% per month until paid. 
If Processing Customer is more than 10 days late in making any payment or if
Processor has reasonable grounds for insecurity regarding the performance of any
obligation under this Agreement (whether or not then due) by Processing Customer
(including, without limitation, a material change in the creditworthiness of
Processing Customer), then in addition to all other rights and remedies of
Processor, Processor may (i) sell for Processing Customer’s account Residue Gas
otherwise deliverable to Processing Customer pursuant to this Agreement and
apply amounts received against Processing Customer’s account, (ii) setoff
amounts owing by Processor or its Affiliates to Processing Customer pursuant to
this Agreement or any other agreement against amounts owing by Processing
Customer to Processor pursuant to this Agreement; or (iii) cease processing
Processing Customer’s Gas until Processing Customer’s account is brought
current, with interest.

 

8.3.          Any sums due Processing Customer under this Agreement shall be
paid no later than the last day of the Accounting Period following the
Accounting Period for which the payment is due.  During any Accounting Period,
if Processing Customer owes any amounts to Processor under this Agreement,
Processor may deduct those amounts from the amounts otherwise due Processing
Customer hereunder before making payment to Processing Customer.

 

8.4.          Either Party, on 60 days prior written notice, shall have the
right at its expense, at reasonable times during business hours, to audit the
books and records of the other Party to the extent necessary to verify the
accuracy of any statement, allocation, measurement, computation, charge, or
payment made under or pursuant to this Agreement.  The scope of any audit shall
be limited to transactions affecting the Gas hereunder within the immediate
geographic region of the Dedication Area and the Processing Plant, and shall be
limited to the 24-month period immediately prior to the month in which the audit
is requested. However, no audit may include any time period for which a prior
audit hereunder was conducted, and no audit may occur more frequently than once
each 12 months.  All statements, allocations, measurements, computations,
charges, or payments made in any period prior to the 24 month period immediately
prior to the month in which the audit is requested, or made in any 24 month
period for which the audit is requested but for which a written claim for
adjustments is not made within 90 days after the audit is requested, shall be
conclusively deemed true and correct and shall be final for all purposes.  To
the extent that the foregoing varies from any applicable statute of limitations,
the Parties expressly waive all such applicable statutes of limitations.

 

8.5.          If Processor has reasonable grounds for insecurity regarding the
performance of any obligation under this Agreement (whether or not then due) by
Processing Customer (including,

 

5

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without limitation, the occurrence of a material change in the creditworthiness
of Processing Customer), Processor may demand Adequate Assurance of Performance,
which shall be furnished within five (5) Days of such demand. “Adequate
Assurance of Performance” shall mean sufficient security in the form, amount and
for the term reasonably acceptable to Processor, including, but not limited to,
a standby irrevocable letter of credit, a prepayment, or a performance bond or
guaranty (from an issuer of such security acceptable to Processor).

 

ARTICLE 9:  FORCE MAJEURE

 

9.1.          In the event a Party is rendered unable, wholly or in part, by
Force Majeure, to carry out its obligations under this Agreement, other than the
obligation to make any payments due hereunder, the obligations of that Party, so
far as they are affected by Force Majeure, shall be suspended from the inception
and during the continuance of the inability, and the cause of the Force Majeure,
as far as possible, shall be remedied with commercially reasonable diligence. 
The Party affected by Force Majeure shall provide the other Party with written
notice of the Force Majeure event, with reasonably full detail of the Force
Majeure within a reasonable time after the affected Party learns of the
occurrence of the Force Majeure event.  The settlement of strikes, lockouts, and
other labor difficulty shall be entirely within the discretion of the Party
having the difficulty and nothing herein shall require the settlement of
strikes, lockouts, or other labor difficulty.

 

ARTICLE 10:  LIABILITY AND INDEMNIFICATION

 

10.1.        As among the Parties hereto, Processing Customer and any of its
designees shall be in custody, control and possession of the Gas hereunder,
including any portion thereof which accumulates as liquids, until that Gas is
delivered to the Receipt Point, and after any portion of the Residue Gas is
redelivered to or for the account of Processing Customer at the Redelivery
Point.

 

10.2.        As among the Parties hereto, Processor and any of its designees
shall be in custody, control and possession of the Gas hereunder, including any
portion thereof which accumulates as liquids, after that Gas is delivered at the
Plant Receipt Point and until any portion of the Residue Gas is redelivered to
or for the account of Processing Customer at the Redelivery Point.

 

10.3.        Each Party (“Indemnifying Party”) hereby covenants and agrees with
the other Party, and its Affiliates, and each of their directors, officers and
employees (“Indemnified Parties”), that except to the extent caused by the
Indemnified Parties’ gross negligence or willful conduct, the Indemnifying Party
shall protect, defend, indemnify and hold harmless the Indemnified Parties from,
against and in respect of any and all Losses incurred by the Indemnified Parties
to the extent those Losses arise from or are related to:  (a) the Indemnifying
Party’s facilities; or (b) the Indemnifying Party’s possession and control of
the Gas.

 

ARTICLE 11:  TITLE

 

11.1.        Processing Customer represents and warrants that it owns, or has
the right to commit, all Gas committed under this Agreement and to deliver that
Gas to the Plant Receipt Points for the purposes of this Agreement, free and
clear of all liens, encumbrances and adverse claims.  Processing Customer hereby
indemnifies Processor against and holds Processor harmless from any and all
Losses arising out of or related to any breach of the foregoing representation
and warranty.

 

11.2.        Title to all Gas, including all constituents thereof, shall remain
with Processing Customer at all times; provided, however, that title to all Gas
retained by Processor and not redelivered to Processing Customer hereunder
(including all Plant Products entrained in such Gas and recovered in the
Processing Plant) shall pass to Processor at the Plant Receipt Point.

 

6

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ARTICLE 12:  UNPROFITABLE GAS OR OPERATIONS

 

12.1.        In the event it has become unprofitable for Processor to
(A) continue to receive Processing Customer’s Gas at the Plant Receipt Point, or
(B) continue to operate its Processing Plant (or any portion thereof), in each
case for a period of at least 2 consecutive Accounting Periods, and Processor
reasonably determines that the unprofitable receipt of Gas or operation of its
Processing Plant will likely continue, Processor shall have the right to give
Processing Customer a written notice of unprofitability, which notice shall
include sufficient documentation to substantiate the claim of unprofitability.

 

12.2.        The Parties shall attempt in good faith to negotiate mutually
acceptable terms to provide for continued delivery of Gas at the Plant Receipt
Point.  If the Parties cannot agree on those terms within 30 days following the
notice of unprofitability, then either Party may terminate this Agreement.  If
the unprofitable circumstances affect the operation of the Processing Plant,
Processor may terminate this Agreement upon the expiration of 30 days following
the written notice of unprofitable operations.

 

12.3.        If Processor determines in good faith that the aggregate quantity
of Gas tendered for processing in any period is less than the minimum rate at
which the processing equipment to which such Gas would be allocated capacity
under Section 5(b)(3) and (4) of the Agreement may be operated economically,
Processor may decline to operate such processing equipment until the rate at
which Gas is tendered for processing by such equipment exceeds such minimum
economic rate.

 

12.4.        If, following the conversion of ML 40 to a high CHDP Gas line, FERC
orders or approves a further change to Questar’s minimum Btu or CHDP standards
applicable to ML 40, and Processor determines in good faith that such change
could result in a decrease in the quantity or composition of entrained natural
gas liquids, or in an increase in inert gases or contaminants, in the Gas
delivered to the Plant Receipt Point, Processor shall have the right to
terminate this Agreement.  Processor shall provide thirty (30) days notice to
Processing Customer prior to termination of this Agreement.

 

ARTICLE 13:  ROYALTY AND TAXES

 

13.1.        Processing Customer shall have the sole and exclusive obligation
and liability for the payment of all persons due any proceeds derived from the
Gas delivered under this Agreement, including royalties, overriding royalties,
and similar interests, in accordance with the provisions of the leases or
agreements creating those rights to proceeds.  In no event will Processor have
any obligation to those persons due any of those proceeds of production
attributable to the Gas under this Agreement.

 

13.2.        Processing Customer shall pay and be responsible for all Taxes
levied against or with respect to Gas delivered or services provided under this
Agreement which apply to the Gas prior to delivery of the Gas to Processor. 
Processor shall under no circumstances become liable for those Taxes.

 

13.3.        Processing Customer hereby agrees to defend and indemnify and hold
Processor harmless from and against any and all Losses, arising from the
payments made by Processing Customer in accordance with Sections 13.1. and
13.2., above, including, without limitation, Losses arising from claims for the
nonpayment, mispayment, or wrongful calculation of those payments.

 

ARTICLE 14:  RIGHTS-OF-WAY. — INTENTIONALLY OMITTED

 

ARTICLE 15:  MISCELLANEOUS

 

15.1.        The failure of any Party hereto to exercise any right granted
hereunder shall not impair nor be deemed a waiver of that Party’s privilege of
exercising that right at any subsequent time or times.

 

15.2.        THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED, AND

 

7

--------------------------------------------------------------------------------

 

ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF UTAH WITHOUT REGARD TO
CHOICE OF LAW PRINCIPLES.  This Agreement shall (except for the covenants
running with the land set forth above) further be construed in accordance with
the Uniform Commercial Code as from time to time in effect in that State;
provided, if any provisions of this Agreement contradict, vary or are
inconsistent with the applicable provisions of the Uniform Commercial Code or
other applicable law, then, to the extent permitted by law, the applicable
provisions of this Agreement shall constitute a waiver of the those provisions
of the Uniform Commercial Code or other applicable law.

 

15.3.        This Agreement shall extend to and inure to the benefit of and be
binding upon the Parties, and their respective successors and assigns, including
any assigns of Processing Customer’s Interests covered by this Agreement.  No
assignment of this Agreement shall be binding on either of the Parties until the
first day of the Accounting Period following the date a certified copy of the
instrument evidencing that sale, transfer, assignment or conveyance has been
delivered to the other Party.  Further, if Processing Customer is the assigning
or transferring Party, Processing Customer shall notify its assignee of the
existence of this Agreement and obtain the ratification required above, prior to
such assignment.  No assignment by either Party shall relieve that Party of its
continuing obligations and duties hereunder without the express consent of the
other Party.

 

15.4.        The Parties agree to keep the terms of this Agreement confidential
and not disclose the same to any other persons, firms or entities without the
prior written consent of the other Party; provided, the foregoing shall not
apply to disclosures compelled by law or court order; or to disclosures to a
Party’s financial advisors, consultants, attorneys, banks, institutional
investors and prospective purchasers of property provided those persons, firms
or entities likewise agree to keep this Agreement confidential.

 

15.5.        In the event any published price index referred to in this
Agreement ceases to be published, the Parties shall mutually agree to an
alternative published price index representative of the published price index
referred to in this Agreement.

 

15.6.        Any change, modification, amendment or alteration of this Agreement
shall be in writing, signed by the Parties; and, no course of dealing between
the Parties shall be construed to alter the terms of this Agreement.

 

15.7.        This Agreement, including all exhibits and appendices, contains the
entire agreement between the Parties with respect to the subject matter hereof,
and there are no oral or other promises, agreements, warranties, obligations,
assurances, or conditions precedent, affecting it.

 

15.8.       NO BREACH OF THIS AGREEMENT OR CLAIM FOR LOSSES UNDER ANY INDEMNITY
OBLIGATION CONTAINED IN THIS AGREEMENT SHALL CAUSE ANY PARTY TO BE LIABLE FOR,
NOR SHALL LOSSES INCLUDE, ANY DAMAGES OTHER THAN ACTUAL AND DIRECT DAMAGES, AND
EACH PARTY EXPRESSLY WAIVES ANY RIGHT TO CLAIM ANY OTHER DAMAGES, INCLUDING,
WITHOUT LIMITATION, CONSEQUENTIAL, INCIDENTAL SPECIAL, INDIRECT, PUNITIVE OR
EXEMPLARY DAMAGES.

 

8

--------------------------------------------------------------------------------

 

LIST OF EXHIBITS

 

EXHIBIT A

 

RECEIPT POINTS AND DEDICATION AREA

 

 

 

EXHIBIT B

 

REDELIVERY POINTS

 

 

 

EXHIBIT C

 

NOMINATION AND BALANCING PROCEDURES

 

--------------------------------------------------------------------------------

 

EXHIBIT A

Attached to and Made a Part of that Certain

Gas Processing Agreement

between

GASCO ENERGY INC., as “Processing Customer”

and

Chipeta Processing LLC, as “Processor”

 

Dated:  September 21, 2011

 

RECEIPT POINTS AND DEDICATION AREA

 

Receipt Points:

 

Processing Plant inlet meter.

 

Dedication Area:

 

The Lands covered by this Agreement shall include all Producer’s interest in the
following:

 

QUARTER

 

SECTION

 

TOWNSHIP

 

RANGE

 

COUNTY/STATE

All

 

24

 

10 South

 

14 East

 

Duchesne/Utah

N2, N2S2

 

25

 

10 South

 

14 East

 

Duchesne/Utah

All

 

26

 

10 South

 

14 East

 

Duchesne/Utah

All

 

36

 

10 South

 

14 East

 

Duchesne/Utah

All

 

2

 

10 South

 

15 East

 

Duchesne/Utah

SE, S2NE

 

3

 

10 South

 

15 East

 

Duchesne/Utah

E2

 

10

 

10 South

 

15 East

 

Duchesne/Utah

S2

 

11

 

10 South

 

15 East

 

Duchesne/Utah

All

 

12

 

10 South

 

15 East

 

Duchesne/Utah

All

 

13

 

10 South

 

15 East

 

Duchesne/Utah

All

 

14

 

10 South

 

15 East

 

Duchesne/Utah

E2

 

15

 

10 South

 

15 East

 

Duchesne/Utah

All

 

16

 

10 South

 

15 East

 

Duchesne/Utah

NENE

 

19

 

10 South

 

15 East

 

Duchesne/Utah

All

 

21

 

10 South

 

15 East

 

Duchesne/Utah

W2 excluding W2NW

 

22

 

10 South

 

15 East

 

Duchesne/Utah

E2NE, E2SE

 

23

 

10 South

 

15 East

 

Duchesne/Utah

All

 

24

 

10 South

 

15 East

 

Duchesne/Utah

All

 

25

 

10 South

 

15 East

 

Duchesne/Utah

S2 excluding E2NW, NE

 

27

 

10 South

 

15 East

 

Duchesne/Utah

All

 

28

 

10 South

 

15 East

 

Duchesne/Utah

W2SW

 

30

 

10 South

 

15 East

 

Duchesne/Utah

All excluding E2SE

 

31

 

10 South

 

15 East

 

Duchesne/Utah

All

 

32

 

10 South

 

15 East

 

Duchesne/Utah

N2, N2S2

 

33

 

10 South

 

15 East

 

Duchesne/Utah

N2 excluding NWNE, N2S2

 

34

 

10 South

 

15 East

 

Duchesne/Utah

 

1

--------------------------------------------------------------------------------

 

QUARTER

 

SECTION

 

TOWNSHIP

 

RANGE

 

COUNTY/STATE

All

 

36

 

10 South

 

15 East

 

Duchesne/Utah

All

 

2

 

11 South

 

15 East

 

Duchesne/Utah

SE

 

3

 

11 South

 

15 East

 

Duchesne/Utah

All

 

5

 

11 South

 

15 East

 

Duchesne/Utah

All

 

6

 

11 South

 

15 East

 

Duchesne/Utah

All

 

7

 

11 South

 

15 East

 

Duchesne/Utah

All

 

8

 

11 South

 

15 East

 

Duchesne/Utah

All

 

9

 

11 South

 

15 East

 

Duchesne/Utah

All

 

10

 

11 South

 

15 East

 

Duchesne/Utah

NW

 

11

 

11 South

 

15 East

 

Duchesne/Utah

All

 

13

 

11 South

 

15 East

 

Duchesne/Utah

All

 

14

 

11 South

 

15 East

 

Duchesne/Utah

W2

 

15

 

11 South

 

15 East

 

Duchesne/Utah

All

 

16

 

11 South

 

15 East

 

Duchesne/Utah

All

 

17

 

11 South

 

15 East

 

Duchesne/Utah

All

 

18

 

11 South

 

15 East

 

Duchesne/Utah

All

 

19

 

11 South

 

15 East

 

Duchesne/Utah

All

 

20

 

11 South

 

15 East

 

Duchesne/Utah

All

 

21

 

11 South

 

15 East

 

Duchesne/Utah

All excluding W2SW

 

22

 

11 South

 

15 East

 

Duchesne/Utah

All

 

23

 

11 South

 

15 East

 

Duchesne/Utah

All

 

24

 

11 South

 

15 East

 

Duchesne/Utah

All

 

25

 

11 South

 

15 East

 

Duchesne/Utah

All

 

26

 

11 South

 

15 East

 

Duchesne/Utah

All

 

27

 

11 South

 

15 East

 

Duchesne/Utah

N2, S2 excluding SWSE, NESE

 

28

 

11 South

 

15 East

 

Duchesne/Utah

All

 

29

 

11 South

 

15 East

 

Duchesne/Utah

All

 

30

 

11 South

 

15 East

 

Duchesne/Utah

N2, N2SE

 

31

 

11 South

 

15 East

 

Duchesne/Utah

N2, N2S2 excluding NESE

 

32

 

11 South

 

15 East

 

Duchesne/Utah

All

 

34

 

11 South

 

15 East

 

Duchesne/Utah

All

 

35

 

11 South

 

15 East

 

Duchesne/Utah

All

 

36

 

11 South

 

15 East

 

Duchesne/Utah

All

 

1

 

11 South

 

16 East

 

Duchesne/Utah

All

 

3

 

11 South

 

16 East

 

Duchesne/Utah

 

2

--------------------------------------------------------------------------------

 

QUARTER

 

SECTION

 

TOWNSHIP

 

RANGE

 

COUNTY/STATE

All

 

4

 

11 South

 

16 East

 

Duchesne/Utah

All

 

5

 

11 South

 

16 East

 

Duchesne/Utah

S2, N2 excluding SENE, SENW

 

6

 

11 South

 

16 East

 

Duchesne/Utah

All excluding NE

 

8

 

11 South

 

16 East

 

Duchesne/Utah

All excluding NE

 

9

 

11 South

 

16 East

 

Duchesne/Utah

All

 

10

 

11 South

 

16 East

 

Duchesne/Utah

W2

 

12

 

11 South

 

16 East

 

Duchesne/Utah

SW

 

13

 

11 South

 

16 East

 

Duchesne/Utah

S2

 

14

 

11 South

 

16 East

 

Duchesne/Utah

S2

 

15

 

11 South

 

16 East

 

Duchesne/Utah

All

 

16

 

11 South

 

16 East

 

Duchesne/Utah

All

 

17

 

11 South

 

16 East

 

Duchesne/Utah

All

 

18

 

11 South

 

16 East

 

Duchesne/Utah

All

 

19

 

11 South

 

16 East

 

Duchesne/Utah

All

 

20

 

11 South

 

16 East

 

Duchesne/Utah

All

 

21

 

11 South

 

16 East

 

Duchesne/Utah

All

 

22

 

11 South

 

16 East

 

Duchesne/Utah

All

 

23

 

11 South

 

16 East

 

Duchesne/Utah

All

 

24

 

11 South

 

16 East

 

Duchesne/Utah

All

 

27

 

11 South

 

16 East

 

Duchesne/Utah

All

 

28

 

11 South

 

16 East

 

Duchesne/Utah

All

 

29

 

11 South

 

16 East

 

Duchesne/Utah

All

 

30

 

11 South

 

16 East

 

Duchesne/Utah

All

 

31

 

11 South

 

16 East

 

Duchesne/Utah

All

 

32

 

11 South

 

16 East

 

Duchesne/Utah

All excluding N2SE, SWSE

 

36

 

11 South

 

16 East

 

Duchesne/Utah

SW excluding SESW

 

25

 

9 South

 

16 East

 

Duchesne/Utah

All excluding SENE, N2NE, and SWSW

 

26

 

9 South

 

16 East

 

Duchesne/Utah

NESE, NE Excluding SWNE

 

35

 

9 South

 

16 East

 

Duchesne/Utah

SW excluding SESW, N2, N2SE

 

1

 

10 South

 

17 East

 

Duchesne/Utah

All

 

3

 

10 South

 

17 East

 

Duchesne/Utah

 

3

--------------------------------------------------------------------------------

 

QUARTER

 

SECTION

 

TOWNSHIP

 

RANGE

 

COUNTY/STATE

All

 

4

 

10 South

 

17 East

 

Duchesne/Utah

All

 

5

 

10 South

 

17 East

 

Duchesne/Utah

All

 

6

 

10 South

 

17 East

 

Duchesne/Utah

All

 

7

 

10 South

 

17 East

 

Duchesne/Utah

All

 

8

 

10 South

 

17 East

 

Duchesne/Utah

All

 

9

 

10 South

 

17 East

 

Duchesne/Utah

All

 

10

 

10 South

 

17 East

 

Duchesne/Utah

NE, SW, S2SE

 

12

 

10 South

 

17 East

 

Duchesne/Utah

All

 

13

 

10 South

 

17 East

 

Duchesne/Utah

S2

 

14

 

10 South

 

17 East

 

Duchesne/Utah

S2

 

15

 

10 South

 

17 East

 

Duchesne/Utah

All

 

16

 

10 South

 

17 East

 

Duchesne/Utah

All

 

17

 

10 South

 

17 East

 

Duchesne/Utah

All

 

18

 

10 South

 

17 East

 

Duchesne/Utah

All

 

19

 

10 South

 

17 East

 

Duchesne/Utah

All

 

20

 

10 South

 

17 East

 

Duchesne/Utah

All

 

21

 

10 South

 

17 East

 

Duchesne/Utah

All

 

22

 

10 South

 

17 East

 

Duchesne/Utah

All

 

23

 

10 South

 

17 East

 

Duchesne/Utah

All

 

24

 

10 South

 

17 East

 

Duchesne/Utah

All

 

25

 

10 South

 

17 East

 

Duchesne/Utah

All

 

26

 

10 South

 

17 East

 

Duchesne/Utah

All

 

27

 

10 South

 

17 East

 

Duchesne/Utah

All

 

28

 

10 South

 

17 East

 

Duchesne/Utah

All

 

29

 

10 South

 

17 East

 

Duchesne/Utah

All

 

30

 

10 South

 

17 East

 

Duchesne/Utah

All

 

31

 

10 South

 

17 East

 

Duchesne/Utah

All

 

32

 

10 South

 

17 East

 

Duchesne/Utah

All

 

33

 

10 South

 

17 East

 

Duchesne/Utah

All

 

34

 

10 South

 

17 East

 

Duchesne/Utah

All

 

35

 

10 South

 

17 East

 

Duchesne/Utah

All

 

36

 

10 South

 

17 East

 

Duchesne/Utah

All

 

1

 

11 South

 

17 East

 

Duchesne/Utah

All

 

2

 

11 South

 

17 East

 

Duchesne/Utah

All

 

3

 

11 South

 

17 East

 

Duchesne/Utah

All

 

4

 

11 South

 

17 East

 

Duchesne/Utah

All

 

5

 

11 South

 

17 East

 

Duchesne/Utah

S2

 

6

 

11 South

 

17 East

 

Duchesne/Utah

 

4

--------------------------------------------------------------------------------

 

QUARTER

 

SECTION

 

TOWNSHIP

 

RANGE

 

COUNTY/STATE

All

 

7

 

11 South

 

17 East

 

Duchesne/Utah

All

 

8

 

11 South

 

17 East

 

Duchesne/Utah

All

 

9

 

11 South

 

17 East

 

Duchesne/Utah

W2

 

10

 

11 South

 

17 East

 

Duchesne/Utah

All

 

11

 

11 South

 

17 East

 

Duchesne/Utah

N2, SW

 

12

 

11 South

 

17 East

 

Duchesne/Utah

NW, W2SW

 

13

 

11 South

 

17 East

 

Duchesne/Utah

All

 

14

 

11 South

 

17 East

 

Duchesne/Utah

All

 

15

 

11 South

 

17 East

 

Duchesne/Utah

All

 

16

 

11 South

 

17 East

 

Duchesne/Utah

All

 

17

 

11 South

 

17 East

 

Duchesne/Utah

N2

 

18

 

11 South

 

17 East

 

Duchesne/Utah

N2N2

 

19

 

11 South

 

17 East

 

Duchesne/Utah

N2 excluding SWNW

 

21

 

11 South

 

17 East

 

Duchesne/Utah

All

 

22

 

11 South

 

17 East

 

Duchesne/Utah

N2, N2S2

 

23

 

11 South

 

17 East

 

Duchesne/Utah

N2S2, NW, S2NE

 

24

 

11 South

 

17 East

 

Duchesne/Utah

All

 

32

 

11 South

 

17 East

 

Duchesne/Utah

All

 

36

 

11 South

 

17 East

 

Duchesne/Utah

All

 

2

 

12 South

 

17 East

 

Carbon/Utah

W2W2

 

3

 

12 South

 

17 East

 

Carbon/Utah

E2

 

4

 

12 South

 

17 East

 

Carbon/Utah

E2, E2W2

 

8

 

12 South

 

17 East

 

Carbon/Utah

N2

 

9

 

12 South

 

17 East

 

Carbon/Utah

W2W2

 

10

 

12 South

 

17 East

 

Carbon/Utah

S2, SENE

 

21

 

11 South

 

18 East

 

Uintah/Utah

All

 

32

 

11 South

 

18 East

 

Uintah/Utah

All

 

25

 

9 South

 

18 East

 

Uintah/Utah

All

 

26

 

9 South

 

18 East

 

Uintah/Utah

All

 

27

 

9 South

 

18 East

 

Uintah/Utah

S2

 

33

 

9 South

 

18 East

 

Uintah/Utah

All

 

36

 

9 South

 

18 East

 

Uintah/Utah

All

 

16

 

9 South

 

19 East

 

Uintah/Utah

E2, NW, S2SE

 

17

 

9 South

 

19 East

 

Uintah/Utah

SW, SE excluding SESE

 

18

 

9 South

 

19 East

 

Uintah/Utah

All excluding

 

 

 

 

 

 

 

 

 

5

--------------------------------------------------------------------------------

 

QUARTER

 

SECTION

 

TOWNSHIP

 

RANGE

 

COUNTY/STATE

SESE

 

19

 

9 South

 

19 East

 

Uintah/Utah

All

 

20

 

9 South

 

19 East

 

Uintah/Utah

All

 

21

 

9 South

 

19 East

 

Uintah/Utah

All

 

22

 

9 South

 

19 East

 

Uintah/Utah

All

 

23

 

9 South

 

19 East

 

Uintah/Utah

All

 

27

 

9 South

 

19 East

 

Uintah/Utah

All

 

28

 

9 South

 

19 East

 

Uintah/Utah

All

 

29

 

9 South

 

19 East

 

Uintah/Utah

All excluding NWNW

 

30

 

9 South

 

19 East

 

Uintah/Utah

All

 

31

 

9 South

 

19 East

 

Uintah/Utah

All

 

32

 

9 South

 

19 East

 

Uintah/Utah

All

 

33

 

9 South

 

19 East

 

Uintah/Utah

All

 

34

 

9 South

 

19 East

 

Uintah/Utah

All

 

35

 

9 South

 

19 East

 

Uintah/Utah

All

 

36

 

9 South

 

19 East

 

Uintah/Utah

SE, NWNW

 

3

 

10 South

 

19 East

 

Uintah/Utah

W2

 

4

 

10 South

 

19 East

 

Uintah/Utah

All

 

5

 

10 South

 

19 East

 

Uintah/Utah

All

 

6

 

10 South

 

19 East

 

Uintah/Utah

All

 

7

 

10 South

 

19 East

 

Uintah/Utah

All

 

8

 

10 South

 

19 East

 

Uintah/Utah

All

 

9

 

10 South

 

19 East

 

Uintah/Utah

NW

 

10

 

10 South

 

19 East

 

Uintah/Utah

All

 

15

 

10 South

 

19 East

 

Uintah/Utah

All

 

16

 

10 South

 

19 East

 

Uintah/Utah

E2

 

17

 

10 South

 

19 East

 

Uintah/Utah

All

 

21

 

10 South

 

19 East

 

Uintah/Utah

All

 

23

 

10 South

 

19 East

 

Uintah/Utah

All

 

12

 

9 South

 

19 East

 

Uintah/Utah

All

 

13

 

9 South

 

19 East

 

Uintah/Utah

W2SE, E2SW

 

8

 

9 South

 

20 East

 

Uintah/Utah

 

6

--------------------------------------------------------------------------------

 

EXHIBIT B

Attached to and made a part of that certain

Gas Processing Agreement

between

GASCO ENERGY INC., as “Processing Customer”

and

Chipeta Processing LLC, as “Processor”

 

Dated:  September 21, 2011

 

REDELIVERY POINTS

 

Point of interconnect with Colorado Interstate Gas Company (CIG).

 

Point of interconnect with the Wyoming Interstate Company (WIC) Kanda Lateral.

 

Point of interconnect with Questar Pipeline Company.

 

1

--------------------------------------------------------------------------------

 

EXHIBIT C

Attached to and made a part of that certain

Gas Processing Agreement

between

GASCO ENERGY INC., as “Processing Customer”

and

Chipeta Processing LLC, as “Processor”

 

(Anadarko Uintah Midstream “AUM” will perform all

Nomination and Balancing Procedures for Processor.)

 

Dated:  September 21, 2011

 

NOMINATION AND BALANCING PROCEDURES

 

Capitalized terms in this Exhibit have the meaning given to them under the Gas
Processing Agreement.

 

1.                                      PROCESSING CUSTOMER’S OBLIGATION TO TAKE
IN-KIND

 

1.1.                              Processing Customer shall at all times have
the obligation for receiving its share of Residue Gas at the Redelivery Point
and arranging for the transportation, marketing or further disposition of that
Residue Gas on a daily basis.

 

2.                                      NOMINATION PROCEDURES

 

2.1.                              Pursuant to the terms of this Agreement, the
Nomination Procedures detailed in this Exhibit will be utilized to cover all
nominations made by Processing Customer in respect of the Processing Plant.  All
nominations must be made by either Processing Customer or the authorized agent
of Processing Customer.  The objective of the Parties is to minimize imbalances
affecting Processing Customer’s Residue Gas and sustain the flow of Gas through
the Plant.  Should transporters receiving Processing Customer’s Residue Gas
revise nomination requirements in a manner that conflicts with the nomination
procedures herein, the Parties agree to negotiate changes to the nomination
procedures herein as are reasonably required.

 

3.                                      MONTHLY SCHEDULING OF GAS

 

3.1.                              By 1:00 p.m. Mountain Time (MT), at least five
(5) business days prior to the start of each Accounting Period or initial
delivery of Gas, Processing Customer will inform the Gas Control Department
(GCD) of the amount of Gas to be delivered by Processing Customer at the Plant
Receipt Point and of Processing Customer’s nomination for Residue Gas to be
delivered at the Redelivery Point.  Such nomination shall be submitted to AUM in
a form available upon request from AUM.  AUM nomination forms may include other
information required by AUM to confirm the nomination(s) of Processing
Customer.  Incomplete nominations will not be accepted.

 

3.2.                              By 1:00 p.m. MT, four (4) business days prior
to the start of each Accounting Period or initial delivery of Gas, AUM will
notify Processing Customer if the nomination from Processing Customer specified
above is different from the volume that AUM will confirm at the Redelivery Point
on behalf of Processing Customer.  AUM will use its best efforts to work closely
with Processing Customer

 

1

--------------------------------------------------------------------------------

 

to arrive at a confirmed nomination that best estimates Processing Customer’s
current production adjusted for relief of existing imbalance, if any.  Imbalance
adjustments may be limited by the downstream pipeline’s acceptance of such
adjustments.

 

3.3.                              If, following the initial nomination, AUM
determines, using the best information available, including, but not limited to,
measurement charts, electronically transmitted data from EFMs, and pipeline
confirmations, that Processing Customer should adjust its nominations, then AUM
will not be required to confirm any nomination that is greater or less than
AUM’s estimate of Processing Customer’s Residue Gas availability, and AUM will
notify Processing Customer and Processing Customer will be required to adjust
nominations in accordance with AUM’s request.  Failure by Processing Customer to
adjust said nominations may result in AUM reducing Processing Customer’s
nominations with the downstream pipeline or a rejection of receipts of
Processing Customer’s Gas from Questar at the Plant Receipt Point in order to
balance Gas flow with nominations.  The Parties will use their best efforts to
keep Processing Customer’s Residue Gas position in balance while maintaining Gas
flow, including without limitation, such periodic reporting of relevant data as
may be required to timely adjust nominations.

 

4.                                      DAILY SCHEDULING OF GAS

 

4.1.                              Daily nomination changes must be conveyed by
facsimile to the GCD on a completed nomination form, or such other form
acceptable to AUM, by 6:00 a.m. Mountain Standard Time on the business day prior
to the effective date of that nomination.  All nominations are subject to
confirmation by AUM.

 

4.2.                              If, following any daily nomination, AUM
determines, using the best information available, including, but not limited to,
measurement charts, electronically transmitted data from EFMs, and pipeline
confirmations, that Processing Customer should adjust its nomination, then AUM
will not be required to confirm any nomination that is greater or less than
AUM’s estimate of Processing Customer’s Gas availability, except as may be
necessary to correct any imbalance which may be determined to exist at that
time, and AUM will notify Processing Customer and Processing Customer will be
required to adjust its nomination in accordance with AUM’s request.  The Parties
will use their best efforts to keep Processing Customer’s Residue Gas position
in balance while maintaining Gas flow, including without limitation, such
periodic reporting of relevant data as may be required to timely adjust a
nomination.

 

4.3.                              Processing Customer will promptly advise AUM
when Processing Customer’s market(s) or other dispositions of Processing
Customer’s Residue Gas are interrupted or curtailed and Processing Customer
shall change its nominations accordingly.

 

5.                                      BALANCING PROCEDURES

 

5.1.                              Processing Customer will inform AUM of the
amount of Gas to be delivered by Processing Customer at the Plant Receipt Point
and of Processing Customer’s nomination for Residue Gas to be delivered at the
Redelivery Point, in accordance with the nomination procedures described above,
as same may be amended from time to time.  In the event that Processing Customer
does not, on a daily basis, arrange for the transportation and disposition of
its Residue Gas at the Redelivery Point, or if Processing Customer nominates
Residue Gas volumes in a greater or lesser amount than Processing Customer’s
Residue Gas at the Redelivery Point, then a condition of imbalance shall exist. 
A “Positive Imbalance” is the volume by which Processing Customer’s Residue Gas
exceeds the confirmed nominated pipeline Residue Gas volume disposed of by
Processing Customer or the authorized agent of Processing Customer.  A “Negative
Imbalance” is the volume by which Processing Customer’s Residue Gas is less than
the confirmed nominated pipeline Residue Gas volume disposed of by Processing
Customer or the authorized agent of Processing Customer.  AUM and

 

2

--------------------------------------------------------------------------------

 

Processing Customer shall work to minimize any imbalance and agree to exchange
pertinent information in writing in good faith in an attempt to minimize the
imbalance. As soon as practicable AUM shall provide Processing Customer written
notice that Processing Customer has a condition of imbalance during any
Accounting Period, and Processing Customer shall take immediate corrective
action to conform Processing Customer’s nominations to Processing Customer’s
physical flows adjusted for relief of existing imbalance, if requested by AUM. 
Imbalance adjustments may be limited by the downstream pipeline’s acceptance of
such adjustments.

 

5.2.                              In the event a Positive Imbalance exists at
any time during any Accounting Period which is not reasonably within the control
of AUM (provided, in no event will AUM have any obligation to secure markets for
Processing Customer’s Residue Gas in order to eliminate or reduce an imbalance),
and that is greater than 5% of Processing Customer’s current nomination for that
Accounting Period, at any time during the Accounting Period and after 2 days
notice and opportunity for Processing Customer to correct same, AUM, at its sole
discretion may sell Processing Customer’s Positive Imbalance at a price
commensurate with prices generally available at the time of the sale, and remit
the proceeds, if any, to Processing Customer, less any transportation,
compression, or storage charges assessed AUM, and less a $0.10/MMBtu marketing
fee charged to Processing Customer by AUM.

 

5.3.                              AUM shall have the option to “cash out” any
Positive Imbalance or Negative Imbalance existing at the end of any Accounting
Period, which is not reasonably within the control of AUM, and which is a result
of Processing Customer’s failure to fulfill obligations described in this
Exhibit “C”, and adjust the imbalance to zero.  If AUM elects to exercise such
option, AUM will purchase from Processing Customer the Positive Imbalance, and
AUM will sell to Processing Customer the Negative Imbalance, for a price
determined from the following schedule:

 

Tier

 

Positive Imbalance Level

 

Price

1

 

Imbalance up to 5% of Processing Customer’s Residue Gas

 

100% of Index Price

2

 

Incremental Imbalance greater than 5% of Processing Customer’s Residue Gas

 

70% of Index Price

 

 

 

Negative Imbalance Level

 

Price

1

 

Imbalance up to 5% of Processing Customer’s Residue Gas

 

100% of Index Price

2

 

Incremental Imbalance greater than 5% of Processing Customer’s Residue Gas

 

130% of Index Price

 

Where the “Index Price” is the “Inside FERC’s GAS MARKET REPORT, Prices of Spot
Gas Delivered to Pipelines” index for Colorado Interstate Gas Company, Rocky
Mountains minus eighteen cents ($0.18) per MMBtu, in the first publication of
the applicable month; provided, however, the Price to “cash out” that portion of
Processing Customer’s imbalance that results from an act or omission by AUM, or
from a Force Majeure event, regardless of the imbalance level, shall be the Tier
1 prices from the above schedule, and, after subtracting that portion of
Processing Customer’s imbalance that results from an act or omission by AUM, or
from a Force Majeure event, the Price to “cash out” any remaining imbalance
shall be determined in accordance with the above schedule.

 

5.4.                              AUM shall invoice Processing Customer for
Processing Customer’s proportional share of any or all imbalance or variance
penalties, which are caused in total or in part by Processing Customer or the
authorized agent of Processing Customer, that may be imposed or levied by the
residue pipelines at the Redelivery Point.

 

3

--------------------------------------------------------------------------------

 

5.5.                              Should transporters receiving Processing
Customer’s Residue Gas revise their balancing requirements in a manner that
conflicts with the balancing procedures herein, the Parties agree to negotiate
changes to the balancing procedures herein as are reasonably required.

 

6.                                       COMMUNICATION WITH GAS CONTROL
DEPARTMENT

 

6.1.                              Communication with the GCD should be directed
as follows:

 

Anadarko Uintah Midstream

Attention:  Northern Region Gas Control Department

1099 18th Street, Suite 1800

Denver, CO  80202-1955

Telephone:  (720) 929-6204

8:00 a.m. to 5:00 p.m. MT

Facsimile:  (720) 929-7204

 

4

--------------------------------------------------------------------------------

 

Exhibit C

 

Questar Wet Line Agreement

 

--------------------------------------------------------------------------------

 

FIRST REVISED PRECEDENT AGREEMENT FOR

FIRM TRANSPORTATION SERVICE

ON

QUESTAR PIPELINE COMPANY’S

UINTA BASIN TRANSPORTATION PROJECT

 

This Precedent Agreement for Firm Transportation Service (Agreement) is made and
entered on this date September 20, 2011, by and between Questar Pipeline Company
(Questar) and Gasco Production Company, (Shipper).  Questar and Shipper may be
referred to as the “Parties” or individually as a “Party.”

 

The Parties Represent as follows:

 

A.                       Questar owns and operates an interstate natural gas
transmission system subject to the jurisdiction of the Federal Energy Regulatory
Commission (FERC); and

 

B.                        Questar  initiated an open season on January 20, 2011
(Open Season) for Shippers desiring firm transportation service on Questar’s
Uinta Basin Transportation Project (Project) to provide transportation to third
party processing plants, and

 

C.                               Shipper requested firm transportation during
Questar’s Open Season.

 

D.                             Questar and Shipper are willing to execute a
transportation service agreement (TSA) for firm transportation service subject
to the terms and conditions of this Agreement.

 

The Parties Agree as Follows:

 

ARTICLE 1

FIRM TRANSPORTATION SERVICE COMMITMENT

 

1.1                                    In response to the Open Season, Shipper
has requested a TSA for the transportation service described on Exhibit A.

 

1.2                                    Questar shall use reasonable efforts to
construct the facilities necessary to provide the transportation service
requested by Shipper and have them placed into service by April  1, 2012.  The
commencement date under the TSA shall be the date that the service becomes
available.

 

1.3                                    Questar’s obligation to provide the
requested service is subject to: (i) Questar’s receipt of FERC approval for any 
tariff modifications necessary to provide the requested service,  (ii) Questar
management’s ongoing consent and approval to proceed with the project, in its
sole discretion, (iii) Questar’s receipt of all necessary governmental, private
and regulatory approvals, permits and rights-of-way required to construct the
facilities necessary to provide the services contemplated by this Agreement.  
All of the foregoing approvals, permits and rights-of-way must be in a form

 

1

--------------------------------------------------------------------------------

 

acceptable to Questar in its sole discretion.

 

1.4                                    By January 1, 2012, Questar shall notify
Gasco in writing whether or not Questar, in its sole discretion, intends to
proceed with the Project and provide the service contemplated by this Agreement.
If Questar elects not to proceed, this Agreement will terminate effective thirty
(30) days from such notice, unless such notice is rescinded by Questar within
thirty (30) days. If Questar elects to proceed with the Project and provide the
services contemplated by this Agreement, but the in-service date will occur
after September 1, 2012, Questar will provide Shipper with an alternate
projected in-service date. If the alternate in-service date is later than
October 12, 2012, and the alternate in-service date is unacceptable to Gasco,
then Gasco may terminate this Agreement by providing written notice to Questar
not later than January 31, 2012. If either Party exercises its rights under
Section 1.3, then neither Party shall have any liabilities or further
obligations to the other Party.

 

1.5                                    Questar agrees to use commercially
reasonable efforts to receive all required approvals, permits and rights-of-way
to construct the facilities necessary to provide the service contemplated by
this Agreement.  However, Questar will not be liable to Shipper for any damages
for its inability or failure to construct the facilities or provide the services
contemplated by this Agreement.

 

1.6                                    Prior to the service becoming available,
Questar will tender  to Shipper a TSA in substantially the same form as Exhibit
B attached hereto and made a part hereof.  The TSA will reflect the service
provisions set forth on Exhibit A.  Shipper agrees to execute and return the TSA
within fifteen days of being tendered by Questar for execution.

 

ARTICLE 2

TERMINATION

 

Unless terminated by Questar pursuant to Section 1.4, this Agreement will
terminate on the effective in-service date of  the TSA  and thereafter Questar’s
and Shipper’s rights and obligations related to firm transportation service on
Questar’s interstate natural gas transmission system shall in all respects be
subject to the terms and conditions of such TSA and Questar’s  Tariff.

 

ARTICLE 3

CREDITWORTHINESS

 

As a condition precedent to Questar’s performance of any of its obligations
under this Agreement, Shipper must comply with Questar’s creditworthiness
requirements as defined in Section 8 of Part 1 of Questar’s FERC Gas Tariff and
Questar’s credit requirements for the construction of the project facilities to
provide the firm transportation service.

 

2

--------------------------------------------------------------------------------

 

ARTICLE 4

SUCCESSION AND ASSIGNMENT

 

4.1                                 Any entity which shall become a successor to
this Agreement by purchase, merger or consolidation shall be entitled to the
rights and shall be subject to the obligations of its predecessor in interest
under this Agreement.

 

4.2                                 Either Questar or Shipper may, without
relieving itself of its obligations under this Agreement, assign this Agreement
to any entity or entities, with which it is affiliated, including without
limitation any wholly owned subsidiary subject to satisfying Questar’s
creditworthiness standards.  Otherwise, no assignment of this Agreement nor of
any of the rights or obligations hereunder shall be effective without the
express prior written consent of the other Party, which shall not be
unreasonably withheld.  Shipper acknowledges and agrees that Questar may decline
to consent to an assignment by Shipper to a party that does not or cannot
demonstrate satisfaction of Questar’s creditworthiness tariff provisions.

 

4.3                                 Questar shall have the right to pledge this
Agreement, or any and all of Questar’s rights there under, as security for any
indebtedness incurred by Questar in connection with the financing or refinancing
of Questar and to assign this Agreement in accordance with the terms and
conditions of any agreement with third parties pertaining to any such
indebtedness.

 

ARTICLE 5

NO THIRD PARTY BENEFICIARIES

 

This Agreement shall not create any rights in any third parties, and no
provision shall be construed as creating any obligations for the benefit of, or
right in favor of, any person or entity other than Questar or Shipper.

 

ARTICLE 6

NOTIFICATIONS AND COMMUNICATIONS

 

Except as otherwise provided herein, any notice contemplated or required by this
Agreement shall be in writing, and shall be considered duly delivered when sent
by registered or certified mail, or by telefacsimile, to the appropriate address
set forth below, or at such other address as Questar or Shipper may from time to
time designate by express written notice.

 

Questar Pipeline Company

Gasco Production Company

Attn:  Director Business Development

Attn:  David Burnett

180 East 100 South

8 Inverness East, Suite 100

Salt Lake City, Utah 84111

Englewood, Colorado  80112

P.O. Box 45360

Phone:      (303) 483-0044

Salt Lake City, Utah  84145-0360

Fax:     (303)483-0011                                          

Phone:  (801) 324-5349

 

Fax:  (801) 324-2578

 

 

3

--------------------------------------------------------------------------------

 

ARTICLE 7

ENTIRE AGREEMENT

 

7.1                                 This Agreement contains the entire agreement
between Questar and Shipper with respect to the subject matter hereof, and
supersedes any and all prior agreements, understandings and commitments, whether
oral or written, concerning the subject matter hereof, and any and all such
prior agreements, understandings and commitments are hereby deemed to be void
and of no effect.

 

7.2                                 No amendments to or modifications of this
Agreement shall be effective unless agreed upon in a written instrument executed
by Questar and Shipper, which expressly refers to this Agreement.

 

ARTICLE 8

GOVERNING LAW

 

The construction, interpretation, and enforcement of this Agreement shall be
governed by the laws of Utah, excluding any conflict of law rule, which would
refer any matter to the laws of a jurisdiction other than Utah.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective as
of the day and year first above written.

 

 

GASCO PRODUCTION COMPANY:

 

QUESTAR PIPELINE COMPANY:

 

 

 

 

 

 

 

 

By

/s/ Michael Decker

 

By

/s/ Shelley A. Wright

Name

Michael Decker

 

Shelley A. Wright

Title

EVP/COO

 

General Manager Marketing and

 

(Please type name and Title)

 

Business Development

 

4

--------------------------------------------------------------------------------

 

EXHIBIT A

To

First Revised Precedent Agreement

Between

Questar Pipeline Company and Gasco Production Company

For

Uinta Basin Transportation Project

 

New Agreement

 

 

 

Reserved Daily Capacity (RDC)

25,000 Dth/d

 

 

Rate:(1)  $3.65/Dth/Month

 

 

Minimum contract term: 10 years from the date capacity is made available

 

Primary Receipt Point (2)

 

Maximum Receipt Point Quantity(3)

Green River M&R — MAP 359

 

25,000

 

Primary Delivery Point(3)

 

Maximum Delivery Point Quantity

Chipeta Processing Plant

 

25,000

 

--------------------------------------------------------------------------------

(1) This rate does not include usage charges, fuel reimbursement charges and
ACA, and other FERC-approved surcharges.

 

(2) The parties may negotiate revisions to the listed primary points and
quantities if necessary to match capacity availability.

 

(3) Total Receipt Point RDC must equal Total Delivery Point RDC.

 

5

--------------------------------------------------------------------------------

 

EXHIBIT B

To

First Revised Precedent Agreement

Between

Questar Pipeline Company and Gasco Production Company

For

Uinta Basin Transportation Project

 

Contract No.          

 

FIRM TRANSPORTATION SERVICE AGREEMENT

Rate Schedule T-1

 

1.                           SHIPPER’S NAME AND ADDRESS:

 

Gasco Energy Company

 

2.                           SHIPPER’S STATUS:

 

o            Local Distribution Company (LDC)

o            Intrastate Pipeline Company

o            Interstate Pipeline Company

o            End User

x          Producer

o            Marketer

o            Pipeline Sales Operating Unit

 

3.                           TRANSPORTATION AUTHORITY:

 

x          18 C.F.R. § 284 Subpart G

o            18 C.F.R. § 284 Subpart B (NGPA § 311)

Transportation on Behalf of: (only applicable to § 311)

o            LDC or Intrastate Pipeline Company

o            Interstate Pipeline Company or Shipper

 

4.                           RATE SCHEDULE T-1 RDC:

 

25,000

Dth/day

 

Term

 

through

 

Dth/day

 

Term

 

through

 

5.                           PRIMARY RECEIPT POINTS:

 

MAP No.

 

-

 

Description

 

Capacity

 

Term

359

 

-

 

Green River M&R

 

25,000 Dth/day

 

 

 

 

-

 

 

 

 

 

 

 

6

--------------------------------------------------------------------------------

 

6.                           PRIMARY DELIVERY POINTS:

 

MAP No.

 

-

 

Description

 

Capacity

 

Term

 

 

-

 

Chipeta Processing Plant

 

25,000 Dth/day

 

 

 

 

-

 

 

 

 

 

 

 

7.                           SEGMENTED CAPACITY:

 

Capacity

 

-

 

Rec. Pt. MAP No. - Desc.

 

Del. Pt. MAP No. - Desc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8.                           RATES:

Reservation Charge:

 

Primary Points

 

 

 

 

 

 

 

Rate

Rec. Location

 

Del. Location

 

Type of Charge

 

($/Dth/mo.)

Green River M&R

 

Chipeta

 

T-1

 

$3.65/Dth/mo.

 

Alternate Points

 

 

 

 

 

 

 

Rate

Rec. Location

 

Del. Location

 

Type of Charge

 

($/Dth/mo.)

All

 

All

 

T-1

 

maximum

 

Usage Charges:

x          The rate on Questar’s Statement of Rates.

o            See Additional Terms

 

Volumetric Rate:

 

 

 

 

 

 

 

Rate

Rec. Location

 

Del. Location

 

Type of Charge

 

($/Dth/d)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9.                           ADDITIONAL FACILITIES CHARGES:

x          None

o            Lump sum payment of

o            Monthly fee of

o            See additional terms

 

10.                     TERM OF AGREEMENT:

 

A 10 year term beginning on the date the service becomes available.

 

11.                     RENEWAL TERM:

o            None

x          Month to month

o            Year to year

o            Other:

This Agreement may be terminated by either party by giving written notice:

90            days before the expiration of its primary term.

90            days before the expiration of any renewal term.

 

7

--------------------------------------------------------------------------------

 

12.                     ADDITIONAL TERMS:

 

13.                     This Agreement includes all the terms and conditions of
Part 1 of Questar’s FERC Gas Tariff, Second Revised Volume No. 1 and the terms,
conditions and signatures of Shipper’s access agreement with Questar.

 

GASCO PRODUCTION COMPANY:

 

QUESTAR PIPELINE COMPANY:

 

 

 

 

 

 

 

 

By

/s/ Michael Decker

 

By

/s/ Shelley A. Wright

Name

Michael Decker

 

Shelley A. Wright

Title

EVP/COO

 

General Manager Marketing and

 

(Please type name and Title)

 

Business Development

 

8

--------------------------------------------------------------------------------

 

Exhibit D

 

Form of Recording Memorandum

 

Uintah County, Utah

Duchesne County, Utah

 

MEMORANDUM OF AMENDED AND RESTATED GAS GATHERING AND PROCESSING AGREEMENT

 

This MEMORANDUM OF AMENDED AN RESTATED GAS GATHERING AND PROCESSING AGREEMENT
(this “Memorandum”) is to impart notice to all persons of the Amended and
Restated Gas Gathering and Processing Agreement dated                  , 2012
(the “Agreement”) between Monarch Natural Gas, LLC, whose address is 5613 DTC
Parkway, Suite 200, Greenwood Village, CO 80111 (“Gatherer”), and Gasco
Production Company, whose address is 8 Inverness Drive East, Suite 100,
Englewood, CO 80112 (“Producer”).

 

1.             Producer has agreed on an exclusive basis (the “Dedication”) to
make physical delivery to Gatherer of the entirety of gas and associated
hydrocarbons (the “Hydrocarbons”) produced or delivered by Producer and its
Affiliates (as such term is defined in the Agreement) from (i) the leases
described on Schedule A (the “Leases”), and (ii) any other lands located within
the geographic area described on Schedule B (the “AMI”), whether now owned or
hereafter acquired, along with the processing rights, subject to certain volume
exclusions as described herein, and any and all additional right, title,
interest, or claim of every kind and character of Producer or its Affiliates in
(x) the Leases or (y) lands within the AMI, and Gas (as such term is defined in
the Agreement) production therefrom, and all interests in any wells, whether now
existing or drilled hereafter, on, or completed on, lands covered by a Lease or
within the AMI.

 

2.             The Dedication includes Gas under contract with Producer from or
otherwise attributable to (i) NFR Uinta Basin LLC under the Agreement dated
July 25, 2007, and (ii) Halliburton Energy Services, Inc. under the Agreement
dated May 1, 2005, and (iii) MBG Trust under the Agreement dated August 1, 2008,
as they currently exist.  The Dedication shall not include Gas acquired after
the Effective Date of this Agreement by Producer through other means including,
but not limited to, marketing arrangements or joint operating agreements.

 

3.             The Dedication herein constitutes merely an exclusive obligation
to make physical delivery of the Hydrocarbons to Gatherer, and shall not in any
manner whatsoever constitute a conveyance, assignment, transfer, or sale of any
form of ownership interest in the Hydrocarbons or the mineral estate underlying
the Leases.  Ownership, custody, and risk of loss with respect to the
Hydrocarbons shall be determined exclusively pursuant to the terms and condition
of the Agreement.

 

4.             The Dedication herein shall terminate, in part or in its
entirety, pursuant to the terms and conditions of the Agreement.

 

--------------------------------------------------------------------------------

 

5.             Subject to the written approval of both parties in their sole
discretion, the Agreement is available for review during regular business hours
at the offices of Gatherer and Producer.

 

6.             This Memorandum and all rights and covenants in connection
herewith shall run with the underlying Leases and associated lands and shall be
binding upon the parties hereto and their respective successors and assigns.

 

7.             This Memorandum may be executed in multiple counterparts, each of
which shall constitute an original and all of which, when construed together,
shall constitute one and the same instrument.

 

[Execution Page Follows.]

 

--------------------------------------------------------------------------------

 

This MEMORANDUM OF GAS GATHERING AND PROCESSING AGREEMENT is executed and
delivered to be effective as of March 1, 2010.

 

 

MONARCH NATURAL GAS, LLC

GASCO PRODUCTION COMPANY

 

 

 

 

By:

 

 

By:

 

Name:

 

Name:

 

Title:

 

Title:

 

 

 

 

 

STATE OF

)

 

 

) ss.

 

COUNTY OF

)

 

 

The foregoing MEMORANDUM OF GAS GATHERING AGREEMENT was acknowledged before me
on                         , 2012, by C. Judson Williams, in his capacity as
Chief Financial Officer of Monarch Natural Gas, LLC, on behalf of said limited
liability company.

 

 

 

 

Notary Public

 

 

 

My Commission Expires:

 

 

 

 

 

 

 

 

 

STATE OF

)

 

 

) ss.

 

COUNTY OF

)

 

 

The foregoing MEMORANDUM OF GAS GATHERING AGREEMENT was acknowledged before me
on                   , 2012, by                       , in his/her capacity as
                     of Gasco Production Company, on behalf of said corporation.

 

 

 

 

Notary Public

 

 

 

My Commission Expires:

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Schedule 1

 

Description of AMI

 

--------------------------------------------------------------------------------

 

[g78561kk07ci001.jpg]

 

--------------------------------------------------------------------------------

 

Schedule 2

 

Receipt Points, Well Names and Locations, and Delivery Points

 

--------------------------------------------------------------------------------

 

SCHEDULE 2

 

Well Names-Receipt Points

 

Well Name

 

Qtr/Qtr

 

Sec

 

Twn

 

Rge

 

County

Desert Spring Federal 21-1-10-18

 

NE NW

 

1

 

10

 

18

 

Uintah

Desert Spring Federal 41-1-10-18

 

NE NE

 

1

 

10

 

18

 

Uintah

Desert Spring State 12-36-9-18

 

SW NW

 

36

 

9

 

18

 

Uintah

Desert Spring State 21-36-9-18

 

NE NW

 

36

 

9

 

18

 

Uintah

Desert Spring State 23-36-9-18

 

NE SW

 

36

 

9

 

18

 

Uintah

Desert Spring State 33-36-9-18

 

NW SE

 

36

 

9

 

18

 

Uintah

Desert Spring State 34-36-9-18

 

SW SE

 

36

 

9

 

18

 

Uintah

Desert Spring State 41-36-9-18

 

NE NE

 

36

 

9

 

18

 

Uintah

Desert Spring State 43-36-9-18

 

NE SE

 

36

 

9

 

18

 

Uintah

Federal 11-19-9-19

 

NWNW

 

19

 

9

 

19

 

Uintah

Federal 11-21-9-19

 

NW NW

 

21

 

9

 

19

 

Uintah

Federal 11-22-9-19

 

NW NW

 

22

 

9

 

19

 

Uintah

Federal 11-22-10-18

 

NW NW

 

22

 

10

 

18

 

Uintah

Federal 12-1-10-18

 

SW NW

 

1

 

10

 

18

 

Uintah

Federal 12-19-9-19

 

SW NW

 

19

 

9

 

19

 

Uintah

Federal 12-20-9-19

 

SW NW

 

20

 

9

 

19

 

Uintah

Federal 12-29-9-19

 

SW NW

 

29

 

9

 

19

 

Uintah

Federal 12-30-9-19

 

SW NW

 

30

 

9

 

19

 

Uintah

Federal 12-31-9-19

 

SW NW

 

31

 

9

 

19

 

Uintah

Federal 13-30B

 

SW SW

 

30

 

9

 

19

 

Uintah

Federal 14-17-9-19

 

SW SW

 

17

 

9

 

19

 

Uintah

Federal 14-18-2 #1

 

SW SW

 

18

 

10

 

18

 

Uintah

Federal 14-18-9-19

 

SW SW

 

18

 

9

 

19

 

Uintah

Federal 14-19-9-19

 

SW SW

 

19

 

9

 

19

 

Uintah

Federal 14-31-9-19

 

SW SW

 

31

 

9

 

19

 

Uintah

Federal 16-26A

 

SE SE

 

26

 

9

 

18

 

Uintah

Federal 21-19-9-19

 

NE NW

 

19

 

9

 

19

 

Uintah

Federal 21-30-9-19

 

NE NW

 

30

 

9

 

19

 

Uintah

Federal 21-31-9-19

 

NE NW

 

31

 

9

 

19

 

Uintah

Federal 21-6-10-19

 

NE NW

 

6

 

10

 

19

 

Uintah

Federal 22-30-10-18

 

SE NW

 

30

 

10

 

18

 

Uintah

Federal 23-12 #1 (Pete’s Wash)

 

NE SW

 

12

 

10

 

17

 

Uintah

Federal 23-18-9-19

 

NE SW

 

18

 

9

 

19

 

Uintah

Federal 23-19-9-19

 

NE SW

 

19

 

9

 

19

 

Uintah

 

--------------------------------------------------------------------------------

 

Federal 23-21-9-19

 

NE SW

 

21

 

9

 

19

 

Uintah

Federal 23-29 #1

 

NE SW

 

29

 

9

 

19

 

Uintah

Federal 23-30-9-19

 

NE SW

 

30

 

9

 

19

 

Uintah

Federal 23-31-9-19

 

NE SW

 

31

 

9

 

19

 

Uintah

Federal 24-20-9-19

 

SE SW

 

20

 

9

 

19

 

Uintah

Federal 24-31-9-19

 

SE SW

 

31

 

9

 

19

 

Uintah

Federal 24-7 #1

 

SE SW

 

7

 

10

 

18

 

Uintah

Federal 31-21-9-19

 

NW NE

 

21

 

9

 

19

 

Uintah

Federal 31-29 #1

 

NW NE

 

29

 

9

 

19

 

Uintah

Federal 32-19X-9-19

 

SW NE

 

19

 

9

 

19

 

Uintah

Federal 32-20-9-19

 

SW NE

 

20

 

9

 

19

 

Uintah

Federal 32-30-9-19

 

SW NE

 

30

 

9

 

19

 

Uintah

Federal 32-31-9-19

 

SW NE

 

31

 

9

 

19

 

Uintah

Federal 34-18-9-19

 

SW SE

 

18

 

9

 

19

 

Uintah

Federal 34-19-9-19

 

SW SE

 

19

 

9

 

19

 

Uintah

Federal 34-29 #1

 

SW SE

 

29

 

9

 

19

 

Uintah

Federal 34-30-9-19

 

SW SE

 

30

 

9

 

19

 

Uintah

Federal 41-19-9-19

 

NE NE

 

19

 

9

 

19

 

Uintah

Federal 41-30-9-19

 

NE NE

 

30

 

9

 

19

 

Uintah

Federal 41-31-9-19

 

NE NE

 

31

 

9

 

19

 

Uintah

Federal 42-21-9-19

 

SE NE

 

21

 

9

 

19

 

Uintah

Federal 42-29-9-19

 

SE NE

 

29

 

9

 

19

 

Uintah

Federal 43-19-9-19

 

NE SE

 

19

 

9

 

19

 

Uintah

Federal 43-24-3 #1

 

NE SE

 

24

 

10

 

17

 

Uintah

Federal 43-30-9-19

 

NE SE

 

30

 

9

 

19

 

Uintah

Federal 44-20-9-19

 

SE SE

 

20

 

9

 

19

 

Uintah

Gate Canyon Federal 41-19-11-16

 

NE NE

 

19

 

11

 

16

 

Duchesne

Gate Canyon State 23-16-11-15

 

NESW

 

16

 

11

 

15

 

Duchesne

Gate Canyon State 23-16-11-16

 

NE SW

 

16

 

11

 

16

 

Duchesne

Gate Canyon State 31-21-11-15

 

NW NE

 

21

 

11

 

15

 

Duchesne

Gate Canyon State 41-20-11-15

 

NE NE

 

20

 

11

 

15

 

Duchesne

Lamb Trust 14-14-9-19

 

SW SW

 

14

 

9

 

19

 

Uintah

Lamb Trust 24-14-9-19

 

SE SW

 

14

 

9

 

19

 

Uintah

Lamb Trust 24-22-9-19

 

SE SW

 

22

 

9

 

19

 

Uintah

Lamb Trust 34-22-9-19

 

SW SE

 

22

 

9

 

19

 

Uintah

Lamb Trust 34-22A-9-19

 

SW SE

 

22

 

9

 

19

 

Uintah

Lytham Federal 22-22-9-19

 

SE NW

 

22

 

9

 

19

 

Uintah

RBU 01-10D

 

NENE

 

10

 

10

 

18

 

Uintah

RBU 03-12D

 

NENW

 

12

 

10

 

18

 

Uintah

RBU 03-15D

 

NENW

 

15

 

10

 

18

 

Uintah

Sheep Wash Federal 11-25-9-18

 

NW NW

 

25

 

9

 

18

 

Uintah

Sheep Wash Federal 12-25-9-18

 

SW NW

 

25

 

9

 

18

 

Uintah

Sheep Wash Federal 14-25-9-18

 

SW SW

 

25

 

9

 

18

 

Uintah

Sheep Wash Federal 21-25-9-18

 

NE NW

 

25

 

9

 

18

 

Uintah

Sheep Wash Federal 23-25-9-18

 

NE SW

 

25

 

9

 

18

 

Uintah

Sheep Wash Federal 23-26-9-18

 

NE SW

 

26

 

9

 

18

 

Uintah

Sheep Wash Federal 31-25-9-18

 

NW NE

 

25

 

9

 

18

 

Uintah

 

--------------------------------------------------------------------------------

 

Sheep Wash Federal 32-25-9-18

 

SW NE

 

25

 

9

 

18

 

Uintah

Sheep Wash Federal 34-25-9-18

 

SW SE

 

25

 

9

 

18

 

Uintah

Sheep Wash Federal 34-26-9-18

 

SW SE

 

26

 

9

 

18

 

Uintah

Sheep Wash Federal 41-25-9-18

 

NE NE

 

25

 

9

 

18

 

Uintah

Sheep Wash Federal 41-26-9-18

 

NE NE

 

26

 

9

 

18

 

Uintah

Sheep Wash Federal 43-25-9-18

 

NE SE

 

25

 

9

 

18

 

Uintah

State 02-32B

 

NW NE

 

32

 

9

 

19

 

Uintah

State 04-32B

 

NW NW

 

32

 

9

 

19

 

Uintah

State 07-36A

 

SW NE

 

36

 

9

 

18

 

Uintah

State 12-32-9-19

 

SW NW

 

32

 

9

 

19

 

Uintah

State 13-36A

 

SW S

 

36

 

9

 

18

 

Uintah

State 21-32A-9-19

 

NE NW

 

32

 

9

 

19

 

Uintah

State 21-32B-9-19

 

NE NW

 

32

 

9

 

19

 

Uintah

State 22-32A-9-19

 

NE NW

 

32

 

9

 

19

 

Uintah

State 24-16-9-19

 

SE SW

 

16

 

9

 

19

 

Uintah

Uteland Federal 42-11-10-18

 

SE NE

 

11

 

10

 

18

 

Uintah

Uteland State 12-2-10-18

 

SW NW

 

2

 

10

 

18

 

Uintah

Uteland State 21-2-10-18

 

NE NW

 

2

 

10

 

18

 

Uintah

Uteland State 34-2-10-18

 

SW SE

 

2

 

10

 

18

 

Uintah

Uteland State 41-2-10-18

 

NE NE

 

2

 

10

 

18

 

Uintah

Uteland State 43-2-10-18

 

NE SE

 

2

 

10

 

18

 

Uintah

Wilkin Ridge Federal 12-4-11-17

 

SW NW

 

4

 

11

 

17

 

Duchesne

Wilkin Ridge Federal 14-4-11-17

 

SW SW

 

4

 

11

 

17

 

Duchesne

Wilkin Ridge Federal 23-29-10-17

 

NE SW

 

29

 

10

 

17

 

Duchesne

Wilkin Ridge Federal 24-20-10-17

 

SE SW

 

20

 

10

 

17

 

Duchesne

Wilkin Ridge Federal 31-29-10-17

 

NW NE

 

29

 

10

 

17

 

Duchesne

Wilkin Ridge Federal 32-20-10-17

 

SW NE

 

20

 

10

 

17

 

Duchesne

Wilkin Ridge Federal 34-17-10-17

 

SW SE

 

17

 

10

 

17

 

Duchesne

Wilkin Ridge State 12-32-10-17

 

SW NW

 

32

 

10

 

17

 

Duchesne

Wilkin Ridge State 24-32-10-17

 

SE SW

 

32

 

10

 

17

 

Duchesne

Wilkin Ridge State 31-32-10-17

 

NW NE

 

32

 

10

 

17

 

Duchesne

Wilkin Ridge State 34-16-10-17

 

SW SE

 

16

 

10

 

17

 

Duchesne

Wilkin Ridge State 44-32-10-17

 

SE SE

 

32

 

10

 

17

 

Duchesne

 

Delivery Points

Riverbend — Map Point 359 on the Questar Pipeline Map

Gate Canyon — Map Point 349 on the Questar Pipeline Map

 

--------------------------------------------------------------------------------

 

 

 

Schedule 3

 

Leases

 

--------------------------------------------------------------------------------

 

Gasco Lease
No.

 

Lessor

 

TWP

 

RNG

 

SEC

 

Description

LUT-0002

 

Karl Lamb, Successor Trustee for the beneficiaries under Declaration & Agreement
of Trust, dated November 1, 1965, from Floyd E. Lamb,Trustors and under
Extension of Declaration & Agreement of Trust dated June 26, 1982, from Janet C.
Lamb, et al, beneficiaries of Trust, PO Box 374, Myton, Utah 84052-0374

 

09S

 

19E

 

14

 

S2S2, EXC RIVER

LUT-0002

 

Karl Lamb, Successor Trustee for the beneficiaries under Declaration & Agreement
of Trust, dated November 1, 1965, from Floyd E. Lamb,Trustors and under
Extension of Declaration & Agreement of Trust dated June 26, 1982, from Janet C.
Lamb, et al, beneficiaries of Trust, PO Box 374, Myton, Utah 84052-0374

 

09S

 

19E

 

22

 

SESE

LUT-0002

 

Karl Lamb, Successor Trustee for the beneficiaries under Declaration & Agreement
of Trust, dated November 1, 1965, from Floyd E. Lamb,Trustors and under
Extension of Declaration & Agreement of Trust dated June 26, 1982, from Janet C.
Lamb, et al, beneficiaries of Trust, PO Box 374, Myton, Utah 84052-0374

 

09S

 

19E

 

23

 

S2NW, N2SW, S2SWSW, EXC RIVER

LUT-0002

 

Karl Lamb, Successor Trustee for the beneficiaries under Declaration & Agreement
of Trust, dated November 1, 1965, from Floyd E. Lamb,Trustors and under
Extension of Declaration & Agreement of Trust dated June 26, 1982, from Janet C.
Lamb, et al, beneficiaries of Trust, PO Box 374, Myton, Utah 84052-0374

 

09S

 

19E

 

27

 

NENE, SE, EXC RIVER

 

1

--------------------------------------------------------------------------------

 

Gasco Lease
No.

 

Lessor

 

TWP

 

RNG

 

SEC

 

Description

LUT-0002

 

Karl Lamb, Successor Trustee for the beneficiaries under Declaration & Agreement
of Trust, dated November 1, 1965, from Floyd E. Lamb,Trustors and under
Extension of Declaration & Agreement of Trust dated June 26, 1982, from Janet C.
Lamb, et al, beneficiaries of Trust, PO Box 374, Myton, Utah 84052-0374

 

09S

 

19E

 

22

 

SESW

LUT-0002

 

Karl Lamb, Successor Trustee for the beneficiaries under Declaration & Agreement
of Trust, dated November 1, 1965, from Floyd E. Lamb,Trustors and under
Extension of Declaration & Agreement of Trust dated June 26, 1982, from Janet C.
Lamb, et al, beneficiaries of Trust, PO Box 374, Myton, Utah 84052-0374

 

09S

 

19E

 

14

 

SESW

LUT-0002

 

Karl Lamb, Successor Trustee for the beneficiaries under Declaration & Agreement
of Trust, dated November 1, 1965, from Floyd E. Lamb,Trustors and under
Extension of Declaration & Agreement of Trust dated June 26, 1982, from Janet C.
Lamb, et al, beneficiaries of Trust, PO Box 374, Myton, Utah 84052-0374

 

09S

 

19E

 

22

 

SWSE

LUT-0003-01

 

DOROTHY M. NORSETH FAMILY TRUST DATED APRIL 16, 1992

 

09S

 

19E

 

12

 

N2SE, SWSE, E2SW, EXC RIVER

LUT-0003-01

 

DOROTHY M. NORSETH FAMILY TRUST DATED APRIL 16, 1992

 

09S

 

19E

 

13

 

NENW, E2SW, SWNW, E2NWNW, EXC RIVER

LUT-0003-02

 

Merle G. Hyer Company, Inc.

 

09S

 

19E

 

12

 

N2SE, SWSE, E2SW, EXC RIVER

LUT-0003-02

 

Merle G. Hyer Company, Inc.

 

09S

 

19E

 

13

 

NENW, E2SW, SWNW, E2NWNW, EXC RIVER

LUT-1002

 

State of Utah ML-45171

 

09S

 

18E

 

36

 

NWSW

LUT-1002

 

State of Utah ML-45171

 

09S

 

18E

 

36

 

SENE, NWNE, SENW, NWNW, SESW

LUT-1002

 

State of Utah ML-45171

 

09S

 

18E

 

36

 

SWNE

LUT-1002

 

State of Utah ML-45171

 

09S

 

18E

 

36

 

NENE, NENW, SWNW, NESE, NESW

LUT-1002

 

State of Utah ML-45171

 

09S

 

18E

 

36

 

S2SE, NWSE, SWSW

LUT-1003

 

State of Utah ML-45172

 

09S

 

19E

 

32

 

Lots 1 (24.17), 2 ( (30.30) 3 (41.11). 5 (20.65), E2NE, SWNE

LUT-1003

 

State of Utah ML-45172

 

09S

 

19E

 

32

 

Lot 4 (40.00) aka NWSE

LUT-1003

 

State of Utah ML-45172

 

09S

 

19E

 

32

 

NWNE

LUT-1003

 

State of Utah ML-45172

 

09S

 

19E

 

32

 

NWNW, SWNW

 

2

--------------------------------------------------------------------------------

 

Gasco Lease
No.

 

Lessor

 

TWP

 

RNG

 

SEC

 

Description

LUT-1003

 

State of Utah ML-45172

 

09S

 

19E

 

32

 

NENW

LUT-1003

 

State of Utah ML-45172

 

09S

 

19E

 

32

 

SENW

LUT-1004

 

State of Utah ML-45175

 

10S

 

18E

 

16

 

N2

LUT-1012

 

State of Utah ML-46300

 

11S

 

15E

 

36

 

ALL

LUT-1013

 

State of Utah ML-46301

 

11S

 

16E

 

16

 

N2

LUT-1013

 

State of Utah ML-46301

 

11S

 

16E

 

16

 

S2S2, NWSW, N2SE

LUT-1013

 

State of Utah ML-46301

 

11S

 

16E

 

16

 

NESW

LUT-1014

 

State of Utah ML-46302

 

11S

 

16E

 

32

 

ALL

LUT-1025

 

State of Utah ML-46910

 

11S

 

15E

 

32

 

N2, N2SW, NWSE

LUT-1026

 

State of Utah ML-47057

 

10S

 

17E

 

36

 

ALL

LUT-1028

 

State of Utah ML-47067

 

11S

 

15E

 

16

 

ALL

LUT-1029

 

State of Utah ML-47069

 

11S

 

16E

 

36

 

N2

LUT-1030

 

State of Utah ML-47070

 

11S

 

17E

 

2

 

ALL

LUT-1031

 

State of Utah ML-47071

 

11S

 

17E

 

16

 

ALL

LUT-1032

 

State of Utah ML-47072

 

11S

 

17E

 

32

 

ALL

LUT-1033

 

State of Utah ML-47073

 

11S

 

17E

 

36

 

ALL

LUT-1034

 

State of Utah ML-47074

 

11S

 

18E

 

32

 

ALL

LUT-1037

 

State of Utah ML-47824

 

12S

 

17E

 

2

 

ALL

LUT-1039

 

State of Utah ML-48266

 

09S

 

19E

 

16

 

N2, SE

LUT-1039

 

State of Utah ML-48266

 

09S

 

19E

 

16

 

SWSW, N2SW

LUT-1039

 

State of Utah ML-48266

 

09S

 

19E

 

16

 

SESW

LUT-1040

 

State of Utah ML-48650

 

10S

 

17E

 

16

 

NENE

LUT-1041

 

State of Utah ML-48928

 

10S

 

17E

 

16

 

N2S2, SESE, S2SW, SENE, W2NE, NW

LUT-1041

 

State of Utah ML-48928

 

10S

 

17E

 

16

 

NENW

LUT-1042

 

State of Utah ML-49308

 

11S

 

15E

 

21

 

W2, SE, E2NE, SWNE

LUT-1042

 

State of Utah ML-49308

 

11S

 

15E

 

28

 

N2, SW, NWSE

LUT-1042

 

State of Utah ML-49308

 

11S

 

15E

 

29

 

E2, E2SW

LUT-1042

 

State of Utah ML-49308

 

11S

 

15E

 

21

 

NWNE

LUT-1045

 

State of Utah ML-13214

 

10S

 

19E

 

16

 

ALL

LUT-1046

 

State of Utah ML-13215-A

 

10S

 

18E

 

2

 

W2SE

LUT-1046

 

State of Utah ML-13215-A

 

10S

 

18E

 

2

 

SESE

LUT-1046

 

State of Utah ML-13215-A

 

10S

 

18E

 

2

 

NESE, Drilliste for the Uteland St. 43-2-10-18

LUT-1047

 

State of Utah ML-26968

 

10S

 

18E

 

2

 

NWNE, SWNE, N2SW, SESW

LUT-1047

 

State of Utah ML-26968

 

10S

 

18E

 

2

 

NWNW

LUT-1047

 

State of Utah ML-26968

 

10S

 

18E

 

2

 

SENE

LUT-1047

 

State of Utah ML-26968

 

10S

 

18E

 

2

 

SENW, SWSW

LUT-1047

 

State of Utah ML-26968

 

10S

 

18E

 

2

 

NENE

LUT-1047

 

State of Utah ML-26968

 

10S

 

18E

 

2

 

SWNW

LUT-1047

 

State of Utah ML-26968

 

10S

 

18E

 

2

 

NENW

 

3

--------------------------------------------------------------------------------

 

Gasco Lease
No.

 

Lessor

 

TWP

 

RNG

 

SEC

 

Description

LUT-1048

 

State of Utah ML-47056

 

10S

 

17E

 

32

 

N2NW, SENW

LUT-1048

 

State of Utah ML-47056

 

10S

 

17E

 

32

 

N2S2, SWSW, SWSE, S2NE, NENE

LUT-1048

 

State of Utah ML-47056

 

10S

 

17E

 

32

 

SWNW

LUT-1048

 

State of Utah ML-47056

 

10S

 

17E

 

32

 

NWNE, SESW, SESE

LUT-1055

 

State of Utah ML-49945

 

11S

 

15E

 

19

 

ALL

LUT-1055

 

State of Utah ML-49945

 

11S

 

15E

 

20

 

S2, NW, S2NE, NWNE (IRREGULAR SECTION)

LUT-1055

 

State of Utah ML-49945

 

11S

 

15E

 

29

 

NW, W2SW

LUT-1055

 

State of Utah ML-49945

 

11S

 

15E

 

30

 

ALL

LUT-1055

 

State of Utah ML-49945

 

11S

 

15E

 

31

 

N2, N2SE

LUT-1055

 

State of Utah ML-49945

 

11S

 

15E

 

20

 

NENE

LUT-1056

 

State of Utah ML-50512

 

10S

 

18E

 

32

 

SWSW

LUT-1057

 

State of Utah ML-50966

 

09S

 

19E

 

36

 

All

LUT-3001

 

Bureau of Land Management UTU-0147541

 

09S

 

19E

 

33

 

SWSE, NWNW, E2W2NE, E2NWSE, EXC RIVER

LUT-3002

 

Bureau of Land Management UTU-0147541-A

 

09S

 

19E

 

33

 

SESE

LUT-3003

 

Bureau of Land Management UTU-017991

 

09S

 

19E

 

17

 

N2

LUT-3003

 

Bureau of Land Management UTU-017991

 

09S

 

19E

 

18

 

S2N2, NWNW

LUT-3004

 

Bureau of Land Management UTU-018260-A

 

10S

 

18E

 

22

 

NE, SE

LUT-3004

 

Bureau of Land Management UTU-018260-A

 

10S

 

18E

 

23

 

ALL

LUT-3004

 

Bureau of Land Management UTU-018260-A

 

10S

 

18E

 

22

 

NENW, S2NW

LUT-3004

 

Bureau of Land Management UTU-018260-A

 

10S

 

18E

 

22

 

NWNW

LUT-3005

 

Bureau of Land Management UTU-058148

 

10S

 

18E

 

24

 

NW, NWNE, NWSW

LUT-3006

 

Bureau of Land Management UTU-16544

 

09S

 

19E

 

17

 

SESW, SE

LUT-3006

 

Bureau of Land Management UTU-16544

 

09S

 

19E

 

18

 

SESW, NWSW , SESE

LUT-3006

 

Bureau of Land Management UTU-16544

 

09S

 

19E

 

18

 

NWSE

LUT-3006

 

Bureau of Land Management UTU-16544

 

09S

 

19E

 

18

 

SWSW, NESW, SWSE

LUT-3006

 

Bureau of Land Management UTU-16544

 

09S

 

19E

 

17

 

SWSW

LUT-3007

 

Bureau of Land Management UTU-19266

 

09S

 

18E

 

26

 

NW, S2NE, NWNE

LUT-3007

 

Bureau of Land Management UTU-19266

 

09S

 

18E

 

26

 

NWSW, S2SW

LUT-3007

 

Bureau of Land Management UTU-19266

 

09S

 

18E

 

26

 

N2SE

LUT-3007

 

Bureau of Land Management UTU-19266

 

09S

 

18E

 

26

 

S2SE

LUT-3007

 

Bureau of Land Management UTU-19266

 

09S

 

18E

 

26

 

NENE

LUT-3007

 

Bureau of Land Management UTU-19266

 

09S

 

18E

 

26

 

NWSW

LUT-3009

 

Bureau of Land Management UTU-37246

 

09S

 

19E

 

30

 

SENE, SESE, SESW

LUT-3009

 

Bureau of Land Management UTU-37246

 

09S

 

19E

 

30

 

NWNE, SENW, NWSE, NWSW

LUT-3009

 

Bureau of Land Management UTU-37246

 

09S

 

19E

 

30

 

NENE, NENW, NESE, NESW

LUT-3009

 

Bureau of Land Management UTU-37246

 

09S

 

19E

 

30

 

SWSW

LUT-3009

 

Bureau of Land Management UTU-37246

 

09S

 

19E

 

30

 

SWNE

LUT-3009

 

Bureau of Land Management UTU-37246

 

09S

 

19E

 

30

 

SWSE

LUT-3009

 

Bureau of Land Management UTU-37246

 

09S

 

19E

 

30

 

SWNW

 

4

--------------------------------------------------------------------------------

 

Gasco Lease
No.

 

Lessor

 

TWP

 

RNG

 

SEC

 

Description

LUT-3013

 

Bureau of Land Management UTU-62159

 

11S

 

15E

 

7

 

W2, W2E2, SENE, E2SE

LUT-3013

 

Bureau of Land Management UTU-62159

 

11S

 

15E

 

8

 

S2

LUT-3013

 

Bureau of Land Management UTU-62159

 

11S

 

15E

 

18

 

ALL

LUT-3015

 

Bureau of Land Management UTU-65319

 

11S

 

15E

 

34

 

W2

LUT-3017

 

Bureau of Land Management UTU-65324

 

11S

 

18E

 

28

 

LOTS 1-3, S2NW, all of the bed of the Green River (see lease for metes & bounds
description)

LUT-3021

 

Bureau of Land Management UTU-65779

 

11S

 

16E

 

31

 

S2

LUT-3022

 

Bureau of Land Management UTU-65782

 

12S

 

17E

 

3

 

W2W2

LUT-3022

 

Bureau of Land Management UTU-65782

 

12S

 

17E

 

4

 

E2

LUT-3022

 

Bureau of Land Management UTU-65782

 

12S

 

17E

 

8

 

E2, E2W2

LUT-3022

 

Bureau of Land Management UTU-65782

 

12S

 

17E

 

9

 

N2

LUT-3022

 

Bureau of Land Management UTU-65782

 

12S

 

17E

 

10

 

W2W2

LUT-3023

 

Bureau of Land Management UTU-65783

 

12S

 

17E

 

20

 

N2, N2SW, SE

LUT-3023

 

Bureau of Land Management UTU-65783

 

12S

 

17E

 

21

 

N2SE

LUT-3023

 

Bureau of Land Management UTU-65783

 

12S

 

17E

 

22

 

S2NW, NWSW

LUT-3025

 

Bureau of Land Management UTU-66798

 

11S

 

15E

 

24

 

N2, N2SW, SESW, SE

LUT-3025

 

Bureau of Land Management UTU-66798

 

11S

 

15E

 

25

 

NE, E2NW

LUT-3026

 

Bureau of Land Management UTU-66800

 

11S

 

16E

 

18

 

W2SE

LUT-3026

 

Bureau of Land Management UTU-66800

 

11S

 

16E

 

13

 

SW

LUT-3026

 

Bureau of Land Management UTU-66800

 

11S

 

16E

 

14

 

S2

LUT-3026

 

Bureau of Land Management UTU-66800

 

11S

 

16E

 

15

 

S2

LUT-3026

 

Bureau of Land Management UTU-66800

 

11S

 

16E

 

18

 

W2, NE

LUT-3026

 

Bureau of Land Management UTU-66800

 

11S

 

16E

 

24

 

N2, N2SW, SWSW, SE

LUT-3026

 

Bureau of Land Management UTU-66800

 

11S

 

16E

 

18

 

E2SE

LUT-3027

 

Bureau of Land Management UTU-67253

 

11S

 

16E

 

23

 

S2

LUT-3027

 

Bureau of Land Management UTU-67253

 

11S

 

16E

 

24

 

SESW

LUT-3028

 

Bureau of Land Management UTU-68387

 

10S

 

18E

 

7

 

SESW

LUT-3029

 

Bureau of Land Management UTU-68620

 

10S

 

18E

 

4

 

W2

LUT-3029

 

Bureau of Land Management UTU-68620

 

10S

 

18E

 

9

 

ALL

LUT-3029

 

Bureau of Land Management UTU-68620

 

10S

 

18E

 

3

 

W2

LUT-3043

 

Bureau of Land Management UTU-73165

 

11S

 

15E

 

15

 

NW

LUT-3043

 

Bureau of Land Management UTU-73165

 

11S

 

15E

 

17

 

W2

LUT-3044

 

Bureau of Land Management UTU-73425

 

11S

 

16E

 

31

 

N2

LUT-3048

 

Bureau of Land Management UTU-74387

 

11S

 

15E

 

5

 

E2

LUT-3048

 

Bureau of Land Management UTU-74387

 

11S

 

15E

 

9

 

W2

LUT-3048

 

Bureau of Land Management UTU-74387

 

11S

 

15E

 

15

 

SW

LUT-3050

 

Bureau of Land Management UTU-74396

 

11S

 

16E

 

21

 

ALL

LUT-3050

 

Bureau of Land Management UTU-74396

 

11S

 

16E

 

22

 

ALL

LUT-3050

 

Bureau of Land Management UTU-74396

 

11S

 

16E

 

23

 

N2

 

5

--------------------------------------------------------------------------------

 

Gasco Lease
No.

 

Lessor

 

TWP

 

RNG

 

SEC

 

Description

LUT-3052

 

Bureau of Land Management UTU-74401

 

10S

 

17E

 

24

 

S2NE, SW, NWSE, SWSE

LUT-3052

 

Bureau of Land Management UTU-74401

 

10S

 

17E

 

23

 

NE, NENW, SW, W2SE, SESE

LUT-3052

 

Bureau of Land Management UTU-74401

 

10S

 

17E

 

25

 

NENE, S2NE, W2,SE

LUT-3052

 

Bureau of Land Management UTU-74401

 

10S

 

17E

 

24

 

NESE

LUT-3053

 

Bureau of Land Management UTU-74403

 

11S

 

17E

 

9

 

ALL

LUT-3054

 

Bureau of Land Management UTU-74407

 

10S

 

18E

 

17

 

S2

LUT-3055

 

Bureau of Land Management UTU-74968

 

10S

 

17E

 

13

 

ALL

LUT-3055

 

Bureau of Land Management UTU-74968

 

10S

 

17E

 

24

 

N2NE, NW, SESE

LUT-3055

 

Bureau of Land Management UTU-74968

 

10S

 

17E

 

23

 

W2NW, SENW

LUT-3056

 

Bureau of Land Management UTU-74971

 

10S

 

18E

 

6

 

W2NW, S2

LUT-3056

 

Bureau of Land Management UTU-74971

 

10S

 

18E

 

18

 

N2, E2SW, SE

LUT-3056

 

Bureau of Land Management UTU-74971

 

10S

 

18E

 

18

 

NWSW

LUT-3056

 

Bureau of Land Management UTU-74971

 

10S

 

18E

 

18

 

SWSW

LUT-3057

 

Bureau of Land Management UTU-75079

 

10S

 

17E

 

1

 

NWSW, S2S2

LUT-3057

 

Bureau of Land Management UTU-75079

 

10S

 

17E

 

14

 

S2

LUT-3057

 

Bureau of Land Management UTU-75079

 

10S

 

17E

 

15

 

S2

LUT-3057

 

Bureau of Land Management UTU-75079

 

10S

 

17E

 

12

 

S2S2

LUT-3058

 

Bureau of Land Management UTU-75084

 

10S

 

17E

 

22

 

ALL

LUT-3058

 

Bureau of Land Management UTU-75084

 

10S

 

17E

 

23

 

NESE

LUT-3059

 

Bureau of Land Management UTU-75088

 

10S

 

18E

 

5

 

NWSW, NWSE

LUT-3059

 

Bureau of Land Management UTU-75088

 

10S

 

18E

 

7

 

S2NW, N2SW, SWSW, SE

LUT-3059

 

Bureau of Land Management UTU-75088

 

10S

 

18E

 

19

 

SWSW

LUT-3059

 

Bureau of Land Management UTU-75088

 

10S

 

18E

 

21

 

W2SW

LUT-3059

 

Bureau of Land Management UTU-75088

 

10S

 

18E

 

29

 

N2NE, SW

LUT-3059

 

Bureau of Land Management UTU-75088

 

10S

 

18E

 

31

 

N2SE, SWSE

LUT-3060

 

Bureau of Land Management UTU-75231

 

11S

 

16E

 

17

 

E2SW

LUT-3060

 

Bureau of Land Management UTU-75231

 

11S

 

16E

 

17

 

N2, SE

LUT-3060

 

Bureau of Land Management UTU-75231

 

11S

 

16E

 

17

 

W2SW

LUT-3061

 

Bureau of Land Management UTU-75232

 

11S

 

16E

 

12

 

W2

LUT-3062

 

Bureau of Land Management UTU-75233

 

11S

 

16E

 

27

 

ALL

LUT-3062

 

Bureau of Land Management UTU-75233

 

11S

 

16E

 

28

 

ALL

LUT-3062

 

Bureau of Land Management UTU-75233

 

11S

 

16E

 

29

 

ALL

LUT-3062

 

Bureau of Land Management UTU-75233

 

11S

 

16E

 

30

 

ALL

LUT-3063

 

Bureau of Land Management UTU-75235

 

11S

 

17E

 

4

 

N2, SE

LUT-3063

 

Bureau of Land Management UTU-75235

 

11S

 

17E

 

10

 

W2

LUT-3063

 

Bureau of Land Management UTU-75235

 

11S

 

17E

 

4

 

NWNW

LUT-3063

 

Bureau of Land Management UTU-75235

 

11S

 

17E

 

4

 

SWNW

LUT-3064

 

Bureau of Land Management UTU-75236

 

11S

 

17E

 

12

 

W2

LUT-3064

 

Bureau of Land Management UTU-75236

 

11S

 

17E

 

24

 

S2NE, NW, N2S2

 

6

--------------------------------------------------------------------------------

 

Gasco Lease
No.

 

Lessor

 

TWP

 

RNG

 

SEC

 

Description

LUT-3065

 

Bureau of Land Management UTU-75514

 

11S

 

17E

 

6

 

E2SW, SE

LUT-3065

 

Bureau of Land Management UTU-75514

 

11S

 

17E

 

18

 

W2NW, N2NE, NENW

LUT-3065

 

Bureau of Land Management UTU-75514

 

11S

 

17E

 

19

 

NWNW, N2NE, NENW

LUT-3066

 

Bureau of Land Management UTU-75515

 

11S

 

17E

 

15

 

ALL

LUT-3066

 

Bureau of Land Management UTU-75515

 

11S

 

17E

 

22

 

ALL

LUT-3067

 

Bureau of Land Management UTU-75670

 

11S

 

15E

 

10

 

NE

LUT-3068

 

Bureau of Land Management UTU-75672

 

11S

 

17E

 

3

 

ALL

LUT-3068

 

Bureau of Land Management UTU-75672

 

11S

 

17E

 

5

 

ALL

LUT-3068

 

Bureau of Land Management UTU-75672

 

11S

 

17E

 

7

 

ALL

LUT-3068

 

Bureau of Land Management UTU-75672

 

11S

 

17E

 

8

 

ALL less SWNE

LUT-3068

 

Bureau of Land Management UTU-75672

 

11S

 

17E

 

8

 

SWNE

LUT-3069

 

Bureau of Land Management UTU-76031

 

10S

 

17E

 

30

 

SWSW

LUT-3069

 

Bureau of Land Management UTU-76031

 

10S

 

17E

 

31

 

W2

LUT-3070

 

Bureau of Land Management UTU-76032

 

11S

 

17E

 

4

 

SESW, N2SW

LUT-3070

 

Bureau of Land Management UTU-76032

 

11S

 

17E

 

6

 

W2SW

LUT-3070

 

Bureau of Land Management UTU-76032

 

11S

 

17E

 

12

 

NE

LUT-3070

 

Bureau of Land Management UTU-76032

 

11S

 

17E

 

14

 

ALL

LUT-3070

 

Bureau of Land Management UTU-76032

 

11S

 

17E

 

23

 

N2, N2S2

LUT-3070

 

Bureau of Land Management UTU-76032

 

11S

 

17E

 

4

 

SWSW

LUT-3071

 

Bureau of Land Management UTU-76033

 

09S

 

19E

 

19

 

NWNE, SENW, SENE, NWSW, NWSE, SESW

LUT-3071

 

Bureau of Land Management UTU-76033

 

09S

 

19E

 

19

 

NESW

LUT-3071

 

Bureau of Land Management UTU-76033

 

09S

 

19E

 

19

 

NESE

LUT-3071

 

Bureau of Land Management UTU-76033

 

09S

 

19E

 

19

 

NENW, NENE, SWNW, SWNE, SWSW, SWSE

LUT-3071

 

Bureau of Land Management UTU-76033

 

09S

 

19E

 

19

 

NWNW

LUT-3072

 

Bureau of Land Management UTU-76034

 

09S

 

19E

 

29

 

SWNE, E2NW, SESE, N2SE

LUT-3072

 

Bureau of Land Management UTU-76034

 

09S

 

19E

 

29

 

SWSE

LUT-3074

 

Bureau of Land Management UTU-76256

 

11S

 

17E

 

17

 

ALL

LUT-3074

 

Bureau of Land Management UTU-76256

 

11S

 

17E

 

21

 

NE, N2NW, SENW

LUT-3075

 

Bureau of Land Management UTU-76262

 

09S

 

19E

 

22

 

SWSW

LUT-3075

 

Bureau of Land Management UTU-76262

 

09S

 

19E

 

29

 

NWNW

LUT-3075

 

Bureau of Land Management UTU-76262

 

09S

 

19E

 

28

 

S2S2, E2W2NW, NWNENW, EXC RIVER

LUT-3075

 

Bureau of Land Management UTU-76262

 

09S

 

19E

 

29

 

SESW

LUT-3075

 

Bureau of Land Management UTU-76262

 

09S

 

19E

 

29

 

NENE

LUT-3075

 

Bureau of Land Management UTU-76262

 

09S

 

19E

 

29

 

NESW

LUT-3075

 

Bureau of Land Management UTU-76262

 

09S

 

19E

 

29

 

SENE

LUT-3075

 

Bureau of Land Management UTU-76262

 

09S

 

19E

 

29

 

NWNE

LUT-3075

 

Bureau of Land Management UTU-76262

 

09S

 

19E

 

29

 

SWNW

LUT-3075

 

Bureau of Land Management UTU-76262

 

09S

 

19E

 

29

 

NWSW, SWSW

LUT-3075

 

Bureau of Land Management UTU-76262

 

09S

 

19E

 

21

 

S2S2, EXC RIVER

 

7

--------------------------------------------------------------------------------

 

Gasco Lease
No.

 

Lessor

 

TWP

 

RNG

 

SEC

 

Description

LUT-3077

 

Bureau of Land Management UTU-76478

 

11S

 

15E

 

10

 

W2, SE

LUT-3077

 

Bureau of Land Management UTU-76478

 

11S

 

15E

 

23

 

N2, N2SW, SWSW, SE

LUT-3078

 

Bureau of Land Management UTU-76489

 

09S

 

19E

 

27

 

S2, S2SWNW

LUT-3078

 

Bureau of Land Management UTU-76489

 

09S

 

19E

 

33

 

E2NESW, S2NWSW, SWNE, NWNW, EXC RIVER

LUT-3078

 

Bureau of Land Management UTU-76489

 

09S

 

19E

 

35

 

NENE

LUT-3078

 

Bureau of Land Management UTU-76489

 

09S

 

19E

 

31

 

NWNE, SENE, SE, NWNW, SENW, NWSW

LUT-3078

 

Bureau of Land Management UTU-76489

 

09S

 

19E

 

31

 

SWNW, SWSW, NENW, NESW, SESW, SWNE, NENE

LUT-3079

 

Bureau of Land Management UTU-76490

 

10S

 

19E

 

4

 

S2SW

LUT-3079

 

Bureau of Land Management UTU-76490

 

10S

 

19E

 

5

 

S2S2, NWSW, S2NESW

LUT-3079

 

Bureau of Land Management UTU-76490

 

10S

 

19E

 

6

 

S2SW

LUT-3079

 

Bureau of Land Management UTU-76490

 

10S

 

19E

 

7

 

W2W2, EXC RIVER

LUT-3079

 

Bureau of Land Management UTU-76490

 

10S

 

19E

 

8

 

N2, EXC RIVER

LUT-3079

 

Bureau of Land Management UTU-76490

 

10S

 

19E

 

9

 

N2NW, S2NE, EXC RIVER

LUT-3079

 

Bureau of Land Management UTU-76490

 

10S

 

19E

 

6

 

NWNW, S2NW, SW

LUT-3079

 

Bureau of Land Management UTU-76490

 

10S

 

19E

 

6

 

NENW

LUT-3080

 

Bureau of Land Management UTU-76760

 

10S

 

15E

 

19

 

NENE

LUT-3080

 

Bureau of Land Management UTU-76760

 

10S

 

15E

 

21

 

SE

LUT-3080

 

Bureau of Land Management UTU-76760

 

10S

 

15E

 

28

 

NENE, SW, W2SE, SESE

LUT-3080

 

Bureau of Land Management UTU-76760

 

10S

 

15E

 

31

 

N2, NESW, NWSE

LUT-3081

 

Bureau of Land Management UTU-76761

 

10S

 

15E

 

22

 

E2NW, SW

LUT-3081

 

Bureau of Land Management UTU-76761

 

10S

 

15E

 

27

 

W2NW, S2

LUT-3081

 

Bureau of Land Management UTU-76761

 

10S

 

15E

 

33

 

N2, N2S2

LUT-3081

 

Bureau of Land Management UTU-76761

 

10S

 

15E

 

34

 

NENE, S2NE, N2NW, SWNW, N2S2

LUT-3083

 

Bureau of Land Management UTU-76810

 

11S

 

15E

 

5

 

W2

LUT-3083

 

Bureau of Land Management UTU-76810

 

11S

 

15E

 

6

 

ALL

LUT-3083

 

Bureau of Land Management UTU-76810

 

11S

 

15E

 

7

 

NENE

LUT-3083

 

Bureau of Land Management UTU-76810

 

11S

 

15E

 

8

 

N2

LUT-3083

 

Bureau of Land Management UTU-76810

 

11S

 

15E

 

9

 

NE, N2SE, SWSE

LUT-3083

 

Bureau of Land Management UTU-76810

 

11S

 

15E

 

17

 

E2

LUT-3084

 

Bureau of Land Management UTU-76811

 

11S

 

15E

 

13

 

W2

LUT-3084

 

Bureau of Land Management UTU-76811

 

11S

 

15E

 

14

 

ALL

LUT-3084

 

Bureau of Land Management UTU-76811

 

11S

 

15E

 

22

 

NENE, W2E2, E2W2, W2NW, SESE

LUT-3085

 

Bureau of Land Management UTU-76812

 

11S

 

15E

 

25

 

SW, N2SE, SESE

LUT-3085

 

Bureau of Land Management UTU-76812

 

11S

 

15E

 

26

 

ALL

LUT-3085

 

Bureau of Land Management UTU-76812

 

11S

 

15E

 

27

 

ALL

LUT-3085

 

Bureau of Land Management UTU-76812

 

11S

 

15E

 

34

 

E2

LUT-3085

 

Bureau of Land Management UTU-76812

 

11S

 

15E

 

35

 

W2NE, SENE, W2, SE

LUT-3086

 

Bureau of Land Management UTU-76814

 

11S

 

16E

 

1

 

ALL

LUT-3086

 

Bureau of Land Management UTU-76814

 

11S

 

16E

 

3

 

ALL

 

8

--------------------------------------------------------------------------------

 

Gasco Lease
No.

 

Lessor

 

TWP

 

RNG

 

SEC

 

Description

LUT-3086

 

Bureau of Land Management UTU-76814

 

11S

 

16E

 

4

 

ALL

LUT-3086

 

Bureau of Land Management UTU-76814

 

11S

 

16E

 

10

 

ALL

LUT-3087

 

Bureau of Land Management UTU-76818

 

09S

 

18E

 

33

 

S2

LUT-3088

 

Bureau of Land Management UTU-77063

 

10S

 

17E

 

12

 

NWSW

LUT-3088

 

Bureau of Land Management UTU-77063

 

10S

 

17E

 

12

 

NE

LUT-3088

 

Bureau of Land Management UTU-77063

 

10S

 

17E

 

12

 

NESW (Drillsite Fed 23-12 #1)

LUT-3090

 

Bureau of Land Management UTU-78214

 

10S

 

17E

 

3

 

ALL

LUT-3090

 

Bureau of Land Management UTU-78214

 

10S

 

17E

 

10

 

ALL

LUT-3091

 

Bureau of Land Management UTU-78215

 

10S

 

17E

 

25

 

NWNE

LUT-3091

 

Bureau of Land Management UTU-78215

 

10S

 

17E

 

26

 

ALL

LUT-3091

 

Bureau of Land Management UTU-78215

 

10S

 

17E

 

27

 

ALL

LUT-3092

 

Bureau of Land Management UTU-78216

 

10S

 

17E

 

34

 

ALL

LUT-3092

 

Bureau of Land Management UTU-78216

 

10S

 

17E

 

35

 

ALL

LUT-3093

 

Bureau of Land Management UTU-78433

 

09S

 

19E

 

21

 

S2NW, SWNE, NWSW, N2SE

LUT-3093

 

Bureau of Land Management UTU-78433

 

09S

 

19E

 

22

 

NENW, SWNW, N2SW, NWSE, SWNE

LUT-3093

 

Bureau of Land Management UTU-78433

 

09S

 

19E

 

21

 

NENW, NENE

LUT-3093

 

Bureau of Land Management UTU-78433

 

09S

 

19E

 

22

 

NESE, N2NE, SENE

LUT-3093

 

Bureau of Land Management UTU-78433

 

09S

 

19E

 

27

 

N2NENW, N2NWNE

LUT-3093

 

Bureau of Land Management UTU-78433

 

09S

 

19E

 

21

 

NESW

LUT-3093

 

Bureau of Land Management UTU-78433

 

09S

 

19E

 

21

 

NWNW

LUT-3093

 

Bureau of Land Management UTU-78433

 

09S

 

19E

 

21

 

SENE

LUT-3093

 

Bureau of Land Management UTU-78433

 

09S

 

19E

 

22

 

SENW, NWNW

LUT-3093

 

Bureau of Land Management UTU-78433

 

09S

 

19E

 

21

 

NWNE

LUT-3094

 

Bureau of Land Management UTU-79784

 

11S

 

16E

 

6

 

E2SW, SE

LUT-3097

 

Bureau of Land Management UTU-80679

 

10S

 

16E

 

33

 

SE

LUT-3098

 

Bureau of Land Management UTU-009803

 

09S

 

18E

 

25

 

NWNE, SENE, SENW, W2NW, NWSE, SESE, SESW, NWSW

LUT-3098

 

Bureau of Land Management UTU-009803

 

09S

 

18E

 

27

 

ALL

LUT-3098

 

Bureau of Land Management UTU-009803

 

09S

 

18E

 

1

 

 

LUT-3098

 

Bureau of Land Management UTU-009803

 

09S

 

18E

 

25

 

SWNE

LUT-3098

 

Bureau of Land Management UTU-009803

 

09S

 

18E

 

25

 

NENW, NESW, NENE, NESE

LUT-3098

 

Bureau of Land Management UTU-009803

 

09S

 

18E

 

25

 

SWSW, SWSE

LUT-3099

 

Bureau of Land Management UTU-013766

 

10S

 

19E

 

15

 

ALL

LUT-3099

 

Bureau of Land Management UTU-013766

 

10S

 

19E

 

17

 

E2

LUT-3099

 

Bureau of Land Management UTU-013766

 

10S

 

19E

 

21

 

ALL

LUT-3099

 

Bureau of Land Management UTU-013766

 

10S

 

19E

 

23

 

ALL

LUT-3100

 

Bureau of Land Management UTU-8344

 

11S

 

21E

 

13

 

ALL

LUT-3101

 

Bureau of Land Management UTU-013820

 

10S

 

18E

 

1

 

SE, NWNE, SENE

LUT-3101

 

Bureau of Land Management UTU-013820

 

10S

 

18E

 

3

 

E2

LUT-3101

 

Bureau of Land Management UTU-013820

 

10S

 

18E

 

3

 

S2SE

 

9

--------------------------------------------------------------------------------

 

Gasco Lease
No.

 

Lessor

 

TWP

 

RNG

 

SEC

 

Description

LUT-3101

 

Bureau of Land Management UTU-013820

 

10S

 

18E

 

1

 

NENE

LUT-3102

 

Bureau of Land Management UTU-0125822

 

09S

 

20E

 

8

 

W2SE

LUT-3103

 

Bureau of Land Management UTU-013429-A

 

10S

 

18E

 

10

 

NWNE

LUT-3103

 

Bureau of Land Management UTU-013429-A

 

10S

 

18E

 

11

 

NWNE, SWNE, E2SE

LUT-3103

 

Bureau of Land Management UTU-013429-A

 

10S

 

18E

 

15

 

SW, S2NW, NWNW

LUT-3103

 

Bureau of Land Management UTU-013429-A

 

10S

 

18E

 

10

 

NENE, SENE, NWNE

LUT-3103

 

Bureau of Land Management UTU-013429-A

 

10S

 

18E

 

11

 

NWSE, NENE

LUT-3103

 

Bureau of Land Management UTU-013429-A

 

10S

 

18E

 

15

 

NENW

LUT-3103

 

Bureau of Land Management UTU-013429-A

 

10S

 

18E

 

11

 

SENE

LUT-3104

 

Bureau of Land Management UTU-017713

 

09S

 

19E

 

34

 

ALL

LUT-3104

 

Bureau of Land Management UTU-017713

 

09S

 

19E

 

35

 

S2,NW,S2NE,NWNE

LUT-3105

 

Bureau of Land Management UTU-013818-A

 

10S

 

18E

 

10

 

W2

LUT-3105

 

Bureau of Land Management UTU-013818-A

 

10S

 

18E

 

11

 

NENW

LUT-3105

 

Bureau of Land Management UTU-013818-A

 

10S

 

18E

 

15

 

W2SE

LUT-3105

 

Bureau of Land Management UTU-013818-A

 

10S

 

18E

 

11

 

S2NW, NWNW

LUT-3106

 

Bureau of Land Management UTU-035316

 

10S

 

19E

 

3

 

NWNW, SE

LUT-3106

 

Bureau of Land Management UTU-035316

 

10S

 

19E

 

10

 

NW

LUT-3107

 

Bureau of Land Management UTU-013821-A

 

10S

 

18E

 

12

 

All

LUT-3107

 

Bureau of Land Management UTU-013821-A

 

10S

 

18E

 

12

 

NENW, NWSW

LUT-3108

 

Bureau of Land Management UTU-01562-B

 

09S

 

20E

 

8

 

SESW

LUT-3109

 

Bureau of Land Management UTU-016869-A

 

09S

 

20E

 

8

 

NESW

LUT-3110

 

Bureau of Land Management UTU-03576

 

10S

 

19E

 

4

 

W2, NWNE, EXC RIVER

LUT-3110

 

Bureau of Land Management UTU-03576

 

10S

 

19E

 

5

 

N2SE, NE, E2NW, EXC RIVER

LUT-3110

 

Bureau of Land Management UTU-03576

 

10S

 

19E

 

7

 

E2, SENW, NESW, EXC RIVER

LUT-3110

 

Bureau of Land Management UTU-03576

 

10S

 

19E

 

18

 

E2, NESW, NENW, EXC RIVER

LUT-3111

 

Bureau of Land Management UTU-8346

 

11S

 

21E

 

24

 

ALL

LUT-3111

 

Bureau of Land Management UTU-8346

 

11S

 

21E

 

25

 

ALL

LUT-3112

 

Bureau of Land Management UTU-8348

 

11S

 

21E

 

12

 

ALL

LUT-3112

 

Bureau of Land Management UTU-8348

 

11S

 

22E

 

7

 

ALL

LUT-3112

 

Bureau of Land Management UTU-8348

 

11S

 

22E

 

18

 

ALL

LUT-3112

 

Bureau of Land Management UTU-8348

 

11S

 

22E

 

19

 

ALL

LUT-3114

 

Bureau of Land Management UTU-65632

 

10S

 

17E

 

29

 

SWNW, W2SW, SE

LUT-3114

 

Bureau of Land Management UTU-65632

 

10S

 

17E

 

30

 

ALL

LUT-3114

 

Bureau of Land Management UTU-65632

 

10S

 

17E

 

29

 

NWNW

LUT-3114

 

Bureau of Land Management UTU-65632

 

10S

 

17E

 

29

 

NENW

LUT-3114

 

Bureau of Land Management UTU-65632

 

10S

 

17E

 

29

 

S2NE

LUT-3114

 

Bureau of Land Management UTU-65632

 

10S

 

17E

 

29

 

SENW

LUT-3114

 

Bureau of Land Management UTU-65632

 

10S

 

17E

 

29

 

SESW

LUT-3114

 

Bureau of Land Management UTU-65632

 

10S

 

17E

 

29

 

NENE

 

10

--------------------------------------------------------------------------------

 

Gasco Lease
No.

 

Lessor

 

TWP

 

RNG

 

SEC

 

Description

LUT-3114

 

Bureau of Land Management UTU-65632

 

10S

 

17E

 

29

 

NESW

LUT-3114

 

Bureau of Land Management UTU-65632

 

10S

 

17E

 

29

 

NWNE

LUT-3115

 

Bureau of Land Management UTU-74402

 

10S

 

17E

 

31

 

SE

LUT-3116

 

Bureau of Land Management UTU-75083

 

10S

 

17E

 

19

 

ALL

LUT-3116

 

Bureau of Land Management UTU-75083

 

10S

 

17E

 

20

 

NW, SE

LUT-3116

 

Bureau of Land Management UTU-75083

 

10S

 

17E

 

21

 

ALL

LUT-3116

 

Bureau of Land Management UTU-75083

 

10S

 

17E

 

20

 

N2SW, SWSW

LUT-3116

 

Bureau of Land Management UTU-75083

 

10S

 

17E

 

20

 

SESW

LUT-3116

 

Bureau of Land Management UTU-75083

 

10S

 

17E

 

20

 

SWNE

LUT-3116

 

Bureau of Land Management UTU-75083

 

10S

 

17E

 

20

 

N2NE, SENE

LUT-3117

 

Bureau of Land Management UTU-75085

 

10S

 

17E

 

28

 

ALL

LUT-3118

 

Bureau of Land Management UTU-75086

 

10S

 

17E

 

31

 

NE

LUT-3118

 

Bureau of Land Management UTU-75086

 

10S

 

17E

 

33

 

ALL

LUT-3119

 

Bureau of Land Management UTU-74836

 

10S

 

18E

 

20

 

W2

LUT-3119

 

Bureau of Land Management UTU-74836

 

10S

 

18E

 

29

 

NW

LUT-3120

 

Bureau of Land Management UTU-74408

 

10S

 

18E

 

19

 

E2

LUT-3120

 

Bureau of Land Management UTU-74408

 

10S

 

18E

 

30

 

NE

LUT-3121

 

Bureau of Land Management UTU-56947

 

10S

 

17E

 

8

 

E2SE, SWSE, S2NE, E2SW, SENW

LUT-3121

 

Bureau of Land Management UTU-56947

 

10S

 

17E

 

8

 

NWSE

LUT-3122

 

Bureau of Land Management UTU-75080

 

10S

 

17E

 

4

 

LOTS 1 - 4, S2N2, S2 (ALL)

LUT-3122

 

Bureau of Land Management UTU-75080

 

10S

 

17E

 

9

 

ALL

LUT-3123

 

Bureau of Land Management UTU-75081

 

10S

 

17E

 

5

 

LOTS 1-4, S2N2, S2 (ALL)

LUT-3123

 

Bureau of Land Management UTU-75081

 

10S

 

17E

 

6

 

LOTS 1-7, SENW, E2SW, SE, S2NE (ALL)

LUT-3123

 

Bureau of Land Management UTU-75081

 

10S

 

17E

 

7

 

LOTS 1-4, E2W2, E2 (ALL)

LUT-3123

 

Bureau of Land Management UTU-75081

 

10S

 

17E

 

8

 

N2N2, SWNW, W2SW

LUT-3124

 

Bureau of Land Management UTU-75082

 

10S

 

17E

 

17

 

N2, SW, N2SE, SESE

LUT-3124

 

Bureau of Land Management UTU-75082

 

10S

 

17E

 

18

 

ALL

LUT-3124

 

Bureau of Land Management UTU-75082

 

10S

 

17E

 

17

 

SESE

LUT-3124

 

Bureau of Land Management UTU-75082

 

10S

 

17E

 

17

 

SWSE

LUT-3125

 

Bureau of Land Management UTU-75087

 

11S

 

17E

 

1

 

ALL

LUT-3125

 

Bureau of Land Management UTU-75087

 

11S

 

17E

 

11

 

ALL

LUT-3125

 

Bureau of Land Management UTU-75087

 

11S

 

17E

 

13

 

NW, W2SW

LUT-3126

 

Bureau of Land Management UTU-63150

 

10S

 

15E

 

3

 

S2NE, SE

LUT-3126

 

Bureau of Land Management UTU-63150

 

10S

 

15E

 

10

 

E2

LUT-3126

 

Bureau of Land Management UTU-63150

 

10S

 

15E

 

11

 

S2

LUT-3126

 

Bureau of Land Management UTU-63150

 

10S

 

15E

 

12

 

ALL

LUT-3126

 

Bureau of Land Management UTU-63150

 

10S

 

15E

 

13

 

ALL

LUT-3126

 

Bureau of Land Management UTU-63150

 

10S

 

15E

 

14

 

ALL

LUT-3126

 

Bureau of Land Management UTU-63150

 

10S

 

15E

 

23

 

E2E2

 

11

--------------------------------------------------------------------------------

 

Gasco Lease
No.

 

Lessor

 

TWP

 

RNG

 

SEC

 

Description

LUT-3126

 

Bureau of Land Management UTU-63150

 

10S

 

15E

 

24

 

ALL

LUT-3126

 

Bureau of Land Management UTU-63150

 

10S

 

15E

 

25

 

N2, SE, E2SW, NWSW

LUT-3126

 

Bureau of Land Management UTU-63150

 

10S

 

15E

 

25

 

SWSW

LUT-3127

 

Bureau of Land Management UTU-67844

 

09S

 

16E

 

25

 

W2SW, SESW

LUT-3127

 

Bureau of Land Management UTU-67844

 

09S

 

16E

 

26

 

SWNE, NW, N2SW, SESW, SE

LUT-3127

 

Bureau of Land Management UTU-67844

 

09S

 

16E

 

35

 

N2NE, SENE, NESE

LUT-3128

 

Bureau of Land Management UTU-74457

 

10S

 

15E

 

15

 

E2

LUT-3129

 

Bureau of Land Management UTU-76482

 

10S

 

18E

 

1

 

NWNW, SWNE, SW

LUT-3129

 

Bureau of Land Management UTU-76482

 

10S

 

18E

 

1

 

SENW

LUT-3129

 

Bureau of Land Management UTU-76482

 

10S

 

18E

 

1

 

NENW, SWNW

LUT-3133

 

Bureau of Land Management UTU-79820

 

10S

 

15E

 

21

 

N2, SW

LUT-3133

 

Bureau of Land Management UTU-79820

 

10S

 

15E

 

28

 

W2NE

LUT-3134

 

Bureau of Land Management UTU-81769

 

11S

 

15E

 

9

 

SESE

LUT-3134

 

Bureau of Land Management UTU-81769

 

11S

 

15E

 

13

 

E2

LUT-3135

 

Bureau of Land Management UTU-75090

 

09S

 

19E

 

20

 

N2S2, SWSW, SWSE

LUT-3135

 

Bureau of Land Management UTU-75090

 

09S

 

19E

 

20

 

N2NE, SENE

LUT-3135

 

Bureau of Land Management UTU-75090

 

09S

 

19E

 

20

 

SENW, N2NW

LUT-3135

 

Bureau of Land Management UTU-75090

 

09S

 

19E

 

20

 

SWNW

LUT-3135

 

Bureau of Land Management UTU-75090

 

09S

 

19E

 

20

 

SESE

LUT-3135

 

Bureau of Land Management UTU-75090

 

09S

 

19E

 

20

 

SESW

LUT-3135

 

Bureau of Land Management UTU-75090

 

09S

 

19E

 

20

 

SWNE

LUT-3136

 

Bureau of Land Management UTU-76717

 

10S

 

18E

 

7

 

NENW

LUT-3137

 

Bureau of Land Management UTU-76718

 

10S

 

19E

 

6

 

NE, N/2SE

LUT-3138

 

Bureau of Land Management UTU-82694

 

11S

 

16E

 

6

 

W2W2, NENW, N2NE

LUT-3141

 

Bureau of Land Management UTU-82470

 

12S

 

14E

 

4

 

E2SE, S2SW

LUT-3141

 

Bureau of Land Management UTU-82470

 

12S

 

14E

 

5

 

S2SE

LUT-3141

 

Bureau of Land Management UTU-82470

 

12S

 

14E

 

6

 

ALL

LUT-3141

 

Bureau of Land Management UTU-82470

 

12S

 

14E

 

8

 

ALL

LUT-3141

 

Bureau of Land Management UTU-82470

 

12S

 

14E

 

9

 

ALL

LUT-3142

 

Bureau of Land Management UTU-82699

 

11S

 

16E

 

5

 

ALL

LUT-3142

 

Bureau of Land Management UTU-82699

 

11S

 

16E

 

8

 

W2, SE

LUT-3142

 

Bureau of Land Management UTU-82699

 

11S

 

16E

 

9

 

W2, SE

LUT-3143

 

Bureau of Land Management UTU-82705

 

10S

 

18E

 

20

 

NE

LUT-3144

 

Bureau of Land Management UTU-82706

 

10S

 

18E

 

13

 

NE, N2NW

LUT-3145

 

Bureau of Land Management UTU-82704

 

10S

 

18E

 

4

 

E2

LUT-3146

 

Bureau of Land Management UTU-84265

 

10S

 

18E

 

21

 

N2

LUT-3147

 

Bureau of Land Management UTU-84262

 

10S

 

18E

 

17

 

N2

LUT-3147

 

Bureau of Land Management UTU-84262

 

10S

 

18E

 

6

 

LOTS 1-3 (N2NE, NENW), S2NE, SENW

LUT-3147

 

Bureau of Land Management UTU-84262

 

10S

 

18E

 

7

 

NWNW

 

12

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Gasco Lease
No.

 

Lessor

 

TWP

 

RNG

 

SEC

 

Description

LUT-3149

 

Bureau of Land Management UTU-84263

 

10S

 

18E

 

19

 

NW, N2SW, SESW

LUT-3149

 

Bureau of Land Management UTU-84263

 

10S

 

18E

 

30

 

SW, N2NW, SWNW, SE

LUT-3149

 

Bureau of Land Management UTU-84263

 

10S

 

18E

 

31

 

N2, SW

LUT-3149

 

Bureau of Land Management UTU-84263

 

10S

 

18E

 

30

 

SENW

LUT-3150

 

Bureau of Land Management UTU-84264

 

10S

 

18E

 

20

 

SE

LUT-3151

 

Bureau of Land Management UTU-74395

 

11S

 

16E

 

19

 

W2, SE

LUT-3151

 

Bureau of Land Management UTU-74395

 

11S

 

16E

 

20

 

SW, E2

LUT-3151

 

Bureau of Land Management UTU-74395

 

11S

 

16E

 

19

 

SENE

LUT-3151

 

Bureau of Land Management UTU-74395

 

11S

 

16E

 

20

 

W2NW

LUT-3151

 

Bureau of Land Management UTU-74395

 

11S

 

16E

 

19

 

W2NE

LUT-3151

 

Bureau of Land Management UTU-74395

 

11S

 

16E

 

20

 

E2NW

LUT-3151

 

Bureau of Land Management UTU-74395

 

11S

 

16E

 

19

 

NENE

 

13

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Schedule 4

 

Purchase Option

 

X.1          In consideration of the mutual covenants and restrictions granted
in this Agreement and consummation of the transactions contemplated by the Asset
Purchase Agreement by and among Gasco Energy, Inc., a Nevada corporation
(“Gasco”),  Riverbend Gas Gathering, LLC, a Nevada limited liability company and
a wholly owned subsidiary of Gasco (“Seller”) and Gatherer dated January 29,
2010, Producer hereby grants to Gatherer for a period beginning on March 1, 2010
and terminating at 11:59 p.m. on January 29, 2025, the exclusive and irrevocable
right and option (the “Option”) to purchase fee ownership of a parcel consisting
of 50 acres of land contiguous to certain property owned by the Gatherer (the
“Option Property”) out of the 110 Acre parcel described on the attached plat
(the “Land”).  The Option shall be exercised by the giving of notice to Producer
of the election by Gatherer to exercise the Option (the “Option Exercise
Notice”).

 

X.2          Upon receipt of the Option Exercise Notice, Producer agrees within
thirty (30) days to give Gatherer a notice consisting of the legal description
of the Producer’s proposed Option Property (the “Property Determination
Notice”), as determined by Producer in the exercise of its reasonable discretion
taking into account the needs and requirements of Gatherer in its intended use
of the Option Property as auxiliary to its business operations and Producer in
its use of the remainder of the Land.  Gatherer shall notify Producer in writing
whether such Option Property is acceptable in the exercise of its reasonable
discretion within thirty (30) days after receipt of the Property Determination
Notice.  If the proposed Option Property is not acceptable to Gatherer, then the
parties shall negotiate in good faith to determine the legal description of the
Option Property. If the parties are unable to reach agreement on such
description, then Gatherer shall submit to Producer the name of a qualified
member in good standing of the Utah Society of Professional Engineers whose
expertise is in civil engineering or who otherwise has experience in designing
relevant disposal facilities (the “Engineer”), Producer shall submit to Gatherer
the name of a qualified member in good standing of he Utah Council of Land
Surveyors (the “Surveyor”), and the Engineer and Surveyor shall cooperate to
choose an attorney who is a qualified member of the Utah State Bar and whose
expertise is in oil and gas matters (the “Attorney”, together with the Engineer
and Surveyor, the “Arbiters”).  None of the Arbiters appointed shall have worked
for either Producer or Gatherer during the previous three (3) years.  The
parties agree that the Arbiters shall work together to divide the Land and
delineate the Option Property as a parcel contiguous to Gatherer’s land and
otherwise taking into account the needs and requirements of both Gatherer and
Producer, and that such determination shall be considered final and binding on
both parties.  Any dispute between the Arbiters regarding the division of the
Land shall be settled by a majority vote of the Arbiters. Producer and Gatherer
shall share equally in all costs associated with the Arbiters.

 

X.3          Upon final determination of the Option Property (the “Determination
Date”) as set forth above, Producer agrees within thirty (30) days thereafter
and upon payment of the Purchase Price (as hereafter defined) to deliver unto
Gatherer or its designee a general warranty deed conveying good and marketable
title to the Option Property, free and clear from all liens and encumbrances
other than (a) building and zoning regulations, (b) conditions, agreements,
restrictions and easements now of record, (c) any state of facts an inspection
or survey of the

 

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Option Property may show so long as such state of facts do not materially impair
the value and intended use of the Option Property; and (d) unpaid assessments
payable after the date of the transfer of title.

 

X.4                             Possession of the property shall be delivered to
Gatherer upon delivery of the deed and payment of the Purchase Price (the date
of such delivery, the “Closing Date”).  Producer shall pay all transfer taxes,
if any.  Gatherer shall be responsible for all ad valorem real estate taxes for
period from and after the Closing Date, and Producer shall pay gatherer for all
ad valorem real estate taxes for the period prior to the Closing Date.  If on
such date the amount of taxes is undetermined, proration shall be based on the
prior years taxes and if the real estate is part of a larger tract for tax
purposes, on an equitable basis as well. Producer and Gatherer also agree to
apportion pro rata, as of the Closing Date, the cost of any utilities allocable
to the Option Property.

 

X.5                             Gatherer shall pay as the purchase price for the
Option Property an amount of $108,300 (the “Purchase Price”).

 

X.6                             This Option shall apply to and bind the
distributees, executors, administrators, successors and assigns of Producer and
Gatherer.

 

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Schedule 5

 

Letter Agreement regarding Payment

 

X.1.                          Gasco Production Company (“Gasco”) and Monarch
Natural Gas, LLC (“Monarch”) are Parties to that certain Gas Gathering and
Processing Agreement of even date herewith (the “GGA”).  Under the further terms
and conditions of the GGA, Monarch has agreed to provide certain gathering and
processing services, for which services Gasco has agreed, on a monthly basis, to
pay designated Gathering and Processing Fees as invoiced by Monarch pursuant to
Article 9 of the GGA. As referenced at Section 9.2 of the GGA, the Parties have
agreed to additional terms and conditions in this letter (the “Letter
Agreement”) related to monthly billing, all as set forth in this Letter
Agreement.

 

X.2.                          Gasco acknowledges Monarch’s preference to spread
a portion of the credit risk associated with payment of the monthly Gathering
Fee to an additional payer during the Minimum Volume Period.  To accommodate
this preference, the Parties have entered into a Shared Allocation Escrow
Agreement (the “Escrow Agreement”) of even date herewith with JPMorgan Chase
Bank, National Association as escrow agent (the “Escrow Agent”), pursuant to
which the Parties have established a non-interest bearing escrow account (the
“Fund”) into which amounts that may be payable (“Purchase Payments”) to Gasco by
certain material purchasers of Gas from Gasco (each a “Purchaser”), including
Anadarko Energy Services Company (“Anadarko”), shall be directly deposited and
the Escrow Agent shall disburse the proceeds of the Fund to the Parties in
accordance with the terms and conditions of the Escrow Agreement.

 

X.3.                          Gasco will make a one-time payment to Monarch of
$500,000 on the date hereof, as a prepayment for the first Month of services
that Monarch will provide.

 

X.4.                          Anadarko purchases Gas from Gasco pursuant to the
Base Contract for Sale and Purchase of Natural Gas, between Gasco (d/b/a
Riverbend Gas Gathering, LLC) and Anadarko, dated December 1, 2007, as amended
by the Natural Gas Purchase/Sale Confirmation between those parties, dated April
16, 2009 (the “Anadarko Purchase Agreement”). In accordance with paragraph 3
herein, Gasco has instructed Anadarko to pay directly to the Fund each Month the
Purchase Payment payable in such Month under the Anadarko Purchase Agreement
(the “Anadarko Monthly Payment”).

 

X.5.                          During each Month of the Minimum Volume Period in
which the Anadarko Purchase Agreement is in effect, and in which Gasco’s payment
instruction is still being followed by Anadarko, the Anadarko Monthly Payment
will be delivered by Anadarko to the Fund, by the payment date specified in the
Anadarko Purchase Agreement.

 

X.6.                          Each such Month, pursuant to the terms of the
Escrow Agreement, the Escrow Agent shall disburse from the Fund the cleared
deposit received from the Purchasers to the Parties. For clarity and the
avoidance of doubt, and unless otherwise specified in the Escrow Agreement,
Monarch shall receive a disbursement each Month from the Fund in the amount of

 

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$500,000 as payment for the amount that may be owed by Gasco to Monarch under
the GGA, and the remaining balance of the proceeds of the Fund shall be
disbursed to Gasco.

 

X.7.                          This Letter Agreement is not intended to enlarge
or alter the Parties’ rights and obligations under the GGA beyond the terms
specifically articulated herein, including the manner in which Market Price is
to be calculated and any adjustments that might otherwise be applicable in a
given calendar quarter to the Quarterly Minimum Volume.

 

X.8.                          Gasco acknowledges that notwithstanding Gasco’s
payment instruction to any Purchaser, Gasco remains responsible for full
payment, each Month, of the applicable Gathering Fee pursuant to the further
terms and conditions of the GGA.  To the extent that, in any Month, the Purchase
Payments are insufficient to pay the full Gathering Fee, Gasco will remain
responsible for the full Gathering and Processing Fees owed for such Month
pursuant to the GGA, and Monarch shall have no remedies or recourse against any
Purchaser.  All contact with the Purchasers regarding late or non-payment of any
Purchase Payment is, and shall remain during the term hereof, the exclusive
responsibility of Gasco.

 

X.9.                          Monarch will promptly notify Gasco regarding any
failure to timely receive the full $500,000 Monthly disbursement from the Fund.
Upon such notification, Gasco will, within three Business Days, pay to Monarch
any unpaid portion of amounts due for that Month.

 

X.10.                   Monarch acknowledges that the payment arrangement
described in this letter may be subject to termination, in whole or in part, by
any Purchaser, including by way of termination or expiration of any applicable
purchase agreement, or pursuant to any Purchaser’s decision to pay all amounts
directly to Gasco.

 

X.11.                   The term of this Letter Agreement shall be five years
unless otherwise terminated as allowed herein.

 

X.12.                   By agreeing to this billing and payment arrangement,
Gasco does not grant, assign, sell, transfer or otherwise convey any right or
interest in any other agreement, instrument or document, including the Anadarko
Purchase Agreement, to Monarch or to Monarch’s Affiliates or Assignees.  Gasco
reserves to itself all rights, setoffs, counterclaims and other defenses, if
any, to payment that it otherwise possesses under the GGA.

 

X.13.                   There are no third-party beneficiaries to the agreement
expressed by the Parties in this letter.

 

X.14.                   This letter shall be governed by the laws of the State
of Colorado pursuant to the further terms of Section 14 of the GGA.

 

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