Exhibit 10.8
 

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WILLIAMS COUNTY, ND
OGL           $16.00
 

 
PRODUCERS 88-PAID UP
Rev. 5-80, No. 2

OIL AND GAS LEASE

AGREEMENT, Made and entered into the 19th Day of December 2011, by and between

Diane C. Geving, a married woman dealing in her sole and separate property, and
as an Heir of Lenard A. Flaten, deceased, whose post office address is 3206
Russell Road, Centralia Washington, 98531,

Party of the first part, hereinafter called Lessor (whether one or more), and

Northland Natural Resources. LLC..
98 Wadsworth Blvd., #127-118,
Lakewood, CO 80226-1553

Party of the second part, hereinafter called Lessee.

WITNESSETH, That the Lessor, for and in considerationof Ten and more ($10.00+)
DOLLARS cash in hand paid, the receipt of which is hereby acknowledged, and the
covenants and agreements hereinafter contained, has granted, demised, leased and
let, and by these presents does grant, demise, lease and let exclusively unto
the said Lessee, the land hereinafter described, with the exclusive right for
the purpose of mining exploring by geophysical and other methods, and operating
for and producing therefrom oil and all gas of whatsoever nature or kind,
specifically induding coalbed methane and any and all substances produced in
association therewith from coal-bearing formations, with rights of way and
easements for laying pipe lines, and erection of structures thereon to produce,
save and take care of said products, all that certain tract of land situated in
the County of Williams, State of North Dakota, described as follows, to-wit:

Township 158 North, Ranee 97 West
Section 19: Lots 1(37.20), 2(37.30), 3(37.38), 4(37.48), E2W2

Township 158 North, Range 98 West
Section 13: SE
Section 24: NE, E2SE

Together with any reversionary rights therein, and together with all strips, or
parcels of land, (not, however, to be construed to include parcels comprising a
regular @acre legal subdivision or lot of approximately corresponding size)
adjoining or contiguous to the above described land and owned or claimed by
Lessor and containing 709.36 acres, more or less.

1. It is agreed that this lease shall remain in force for a term
of Thme (3) years from this date and as long thereafter as oil or gas of
whatsoever nature or kind is produced from said leased premises or on acreage
pooled therewith, or drilling operations are continued as hereinafter provided.
If, at the expiration ofthe primary term of this lease, oil or gas is not being
produced on the leased premises or on acreage pooled therewith but Lessee is
then engaged in drilling or reworking operations thereon, then this lease shall
continue in force so long as operations are being continuously prosecuted on the
leased premises or on acreage pooled therewith and operations shall be
considered to be continuously prosecuted if not more than ninety (90) days shall
elapse between the completion or abandonment of one well and the beginning of
operations for the drilling of a subsequent well. If after discovery of oil or
gas on said land or on acreage pooled therewith, the production thereof should
cease from any cause after the primary term, this lease shall not terminate if
Lessee commences additional drilling or reworking operations within ninety (90)
days from date of cessation of production or from date of completion of dry
hole. If oil or gas shall be discovered and produced as a result of such
operatiins at or after the expiration of the primary term of this lease, this
lease shall continue in force so long as oil or gas is produced from the leased
premises or on acreage pooled therewith.
 
2. This is a PAID-UP LEASE. In consideration of the down cash payment, Lessor
agrees that Lessee shall not be obligated, except as otherwise provided herein
to commence or continue any operations during the primary term. Lessee may at
any time or times during or after the primary term surrender this lease as to
all or any portion of said land and as to any strata or stratum by delivering to
Lessor or by filing for record a release or releases, and be relieved of all
obligation thereafter accruing as to the acreage surrendered.
 
3. In consideration of the premises the said Lessee covenants and agrees:
 
Ist. To deliver to the credit of Lessor, free of cost, in the pipe line to which
Lessee may connect wells on said land, the equal One-Fifth (1/5th or 20%) part
of all oil produced and saved from the leased premises.
 
2nd. To pay Lessor equal One-Fih (1/5th or 20%) of the gross proceeds each year,
payable quarterly, for the gas from each well where gas only is found, while the
same is being used off the premises, and if used in the manufacture of gasoline
a royalty of equal One-Fifth (1/5th or 20%), payable monthly at the prevailing
market rate for gas,
 
3rd. To pay Lessor for gas produced from any oil well and used off the premises
or in the manufacture of gasoline or any other product a royalty of equal
One-Fifth (1/5th or 20%) of the proceeds, at the mouth of the well, payable
monthly at the prevailing market rate.
 
4. Where gas From a well capable of producing gas is not sold or used, Lessee
may pay or tender as royalty to the royalty owners One Dollar per year per net
royalty acre retained hereunder, such payment or tender to be made on or before
the anniversary date of this lease next ensuing after the expiration of 90 days
from the date such well is shut in and thereafter on or before the anniversary
date of this lease during the period such well is shut in. If such payment or
tender is made, it will be considered that gas is being produced within the
meaning of this lease.

 
 

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WILLIAMS COUNTY, ND
OGL           $16.00
 

 
5. If said Lessor owns a less interest in the above described land than the
entire and undivided fee simple estate therein, then the royalties (including
any shut-in gas royalty) herein provided for shall be paid the Lessor only in
the proportion which Lessor's interest bears to the whole and undivided fee.
 
6. Lessee shall have the right to use. free of cost, gas, oil and water produced
on said land for Lessee'soperation thereon. except water from the wells of
Lessor.
 
7.  When requested by Lessor, Lessee shall bury Lessee's pipeline below plow
depth.
 
8.  No well shall be drilled nearer than 200 feet to the house or barn now on
said premises without written consent of Lessor.
 
9.  Lessee shall pay for damages caused by Lessee'soperations to growing crops
on said land.
 
10. Lessee shall have the right at any time to remove all machinery and fixtures
placed on said premises, including the right to draw and remove casing.
 
11. The rights of Lessor and Lessee hereunder may be assigned in whole or part.
No change in ownership of Lessor's interest (by assignment or otherwise) shall
be binding on Lessee until Lessee has been furnished with notice, consisting of
certified copies of all recorded instruments or documents and other information
necessary to establish a complete chain of record tile from Lessor, and then
only with respect to payments thereafter made. No other kind of notice, whether
actual or constructive, shall be binding on Lessee. No present or future
division of Lessor'sownership as to different portions or parcels of said land
shall operate to enlarge the obligations or diminish the rights of Lessee, and
all Lessee'soperations may be conducted without regard to any such division. If
all or any part of this lease is assigned, no leasehold owner shall be liable
for any act or omission of any other leasehold owner.
 
12. Lessee, at its option, is hereby given the right and power at any time and
from time to time as a recurring right, either before or after production, as to
all or any part of the land described herein and as to any one or more of the
formations hereunder, to pool or unitize the leasehold estate and the mineral
estate covered by this lease with other land, lease or leases in the immediate
vicinity for the production of oil and gas, or separately for the production of
either, when in Lessee'sjudgment it is necessary or advisable to do so, and
irrespective of whether authority similar to this exists with respect to such
other land, lease or leases. Likewise, units previously formed to include
formations not producing oil or gas, may be reformed to exclude such
non-producing formations. The forming or reforming of any unit shall be
accomplished by Lessee executing and filing of record a declaration of such
unitization or reformation, which declaration shall describe the unit. Any unit
may include land upon which a well has theretofore been completed or upon which
operations for drilling have theretofore been commenced. Production drilling or
reworking operations or a well shut in for want of a market anywhere on a unit
which includes all or a part of this lease shall be treated as if it were
production, drilling or reworking operations or a well shut in for want of a
market under this lease. In lieu of the royalties elsewhere herein specified,
including shut-in gas royalties, Lessor shall receive on production from the
unit so pooled royalties only on the portion of such production allocated to
this lease; such allocation shall be that proportion of the unit production that
the total number of surface acres covered by this lease and included in the unit
bears to the total number of surface acres in such unit. In addition to the
foregoing, Lessee shall have the right to unitize, pool, or combine all or any
part of the above described lands as to one or more of the formations thereunder
with other lands in the same general area by entering into a cooperative or unit
plan of development or operation approved by any governmental authority and,
from time to time, with like approval, to modify, change or terminate any such
plan or agreement and, in such event, the terms, conditions and provisions of
this lease shall be deemed modified to conform to the terms, conditions, and
provisions of such approved cooperative or unit plan of development or operation
and, particularly, all drilling and development requirements of this lease,
express or implied, shall be satisfied by compliance with the drilling and
development requirements of such plan or agreement, and this lease shall not
terminate or expire during the life of such plan or agreement. In the event that
said above described lands or any part thereof, shall hereafter be operated
under any such cooperative or unit plan of development or operation whereby the
production therefrom is allocated to different portions of the land covered by
said plan, then the production allocated to any particular tract of land shall,
for the purpose of computing the royalties to be paid hereunder to Lessor, be
regarded as having been produced from the particular tract of land to which it
is allocated and not to any other tract of land, and the royalty payments to be
made hereunder to Lessor shall be based upon production only as so allocated.
Lessor shall formally express Lessor's consentto any cooperative or unit plan of
development or operation adopted by Lessee and approved by any governmental
agency by executing the same upon request of Lessee.
 
13. All express or implied covenants of this lease shall be subject to all
Federal and State Laws. Executive Orders, Rules or Regulations, and this lease
shall not be terminated. in whole or in part, nor Lessee held liable in damages,
for failure to comply therewith, if compliance is prevented by, or if such
failure is the result of, any such Law, Order, Rule or Regulation.
 
14. Lessor hereby warrants and agrees to defend the title to the lands herein
described, and agrees that the Lessee shall have the right at any time to redeem
for Lessor, by payment, any mortgages, taxes or other liens on the above
described lands, in the event of default of payment by Lessor and be subrogated
to the rights of the holder thereof, and the undersigned Lessors, for themsetves
and their heirs, successors and assigns, hereby surrender and release all right
of dower and homestead in the premises described herein, insofar as said right
of dower and homestead may in any way affect the purposes for which this lease
is made. as recited herein.
 
15. Should any one or more of the parties hereinabove named as Lessor fail to
execute this lease, it shall nevertheless be binding upon all such parties who
do execute it as Lessor. The word 'Lessor," asused in this lease, shall mean any
one or more or all of the parties who execute this lease as Lessor. All the
provisions of this lease shall be binding on the heirs, successors and assigns
of Lessor and Lessee.
 
16. Lessee is hereby given the option to extend the primary term of this lease
for an additional two (2) years from the expiration of the original primary term
hereof. This option may be exercised by Lessee at any time during the last year
of the original primary by paying the sum of one thousand eight hundred and
No1100 Dollars ($1,800.00) per net mineral acre to Lessor or to the credit of
Lessor payable to Diane C. Geving, whose post office address is 3206 Russell
Road, Centralia Washington, 98531. This payment shall be based upon the number
of net mineral acres then covered by this lease and not at such time being
maintained by other provisions hereof. This payment may be made by the check or
draft of Lessee mailed or delivered to Lessor at any time during the last year
of the original primary term hereof. If lessor should fail, liquidate or be
succeeded by another lessor, or for any reason fail or refuse to accept payment,
Lessee shall not be held in default for failure to make such payment until
thirty (30) days after Lessor's deliveryto Lessee of a proper recordable
instrument naming another bank as agent to receive such payment. If, at the time
this payment is made, various parties are entitled to specific amounts according
to Lessee's records,this payment may be divided between said parties and paid in
the same proportion. Should this option be exercised as herein provided, it
shall be considered for all purposes as though this lease originally provided
for a primary term of five (5) years. In the event this lease is being
maintained by any other lease provisions at the expiration of the primary term,
Lessee shall have a period of thirty (30) days from the date this lease ceases
to be so maintained within which to exercise this option.
 
17. Notwithstandinganything to the contrary, it is agreed that should Lessee
exercise his option to pool or combine any portion of the land covered hereby
with other lands, lease or leases as hereinbefore provided, then such operations
and production on and in any such pooled unit as herein provided, shall continue
this lease in force and effect during or after the primary term as to that
portion of the lands covered by this lease, included in such unit or units as
hereinabove provided, but not as to such portion of said lands covered by this
lease and not included in any such unit 180 days after the expiration of the
primary term of this lease upon the expiration of any extension or renewal, or
after cessation of operations as provided herein, whichever occurs last. This
lease maybe kept in force and effect as to such remainder in any manner
elsewhere provided in this lease not inconsistent with this paragraph.

 
 

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IN WITNESS WHEREOF, this instrument is executed as of the date first above
written.
 

     County Recorder             Signature:     [ex10viii_img001.jpg] 723086    
  Page: 3 of 3   /s/ Diance C. Geving  
11/28/2011  10:26 AP
     
WILLIAMS COUNTY, ND
OGL           $16.00
  By: Diance C. Geving            
COUNTY RECORDER, WILLIAMS COUNTY, ND
       
I certify that this instrument was filed and recorded
Karl Evenson, County Recorder
                  by Jerri Bemlipem Deputy   723086        
 
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ACKNOWLEDGEMENT
STATE OF WASHINGTON
COUNTY OF Lewis
BEFORE ME, the undersigned, a Notary Public, in and for said County and State,
on this 15th day of November, 2011, Personally appeared Diane Geving, to me
known to be the identical and foregoing instrument of writing and acknowledged
to me that helshehhey duly executed the same as herhidtheir free and voluntary
act and deed for the uses and purposes therein set forth. IN WITNESS WHEREOF,
Ihave hereunto set my hand and affixed my notarial seal the day and year last
above written.

Notary Public in and for the State and County above Written Conandea E. Salald
 
Seal
 
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