Exhibit 10.2


 


PAM064100R


 


GAS PURCHASE CONTRACT


 


Between W.O. OPERATING COMPANY, LTD as Seller


 


And DCP MIDSTREAM, LP as Buyer


 


Dated July 1, 2009


 


INDEX


 


	
  SECTION

  	
   

  	
   

  	
  PAGE

  
	
  1.

  	
  COMMITMENT

  	
   

  	
  1

  
	
  2.

  	
  DELIVERY
  POINTS

  	
   

  	
  1

  
	
  3.

  	
  DELIVERY
  PRESSURE

  	
   

  	
  1

  
	
  4.

  	
  QUANTITY

  	
   

  	
  2

  
	
  5.

  	
  PRICE

  	
   

  	
  2

  
	
  6.

  	
  TERM

  	
   

  	
  5

  
	
  7.

  	
  ADDRESSES
  AND NOTICES

  	
   

  	
  6

  
	
  8.

  	
  TERMINATION
  OF PRIOR CONTRACTS AND RELEASE

  	
   

  	
  7

  
	
   

  	
  SIGNATURE
  PAGE

  	
   

  	
  8

  
					



 


EXHIBIT
A


GENERAL
TERMS AND CONDITIONS


 


	
  A.

  	
  DEFINITIONS

  	
   

  	
  A-1

  
	
  B.

  	
  DELIVERY
  DATE; COMPRESSION

  	
   

  	
  A-1

  
	
  C.

  	
  RESERVATIONS
  OF SELLER

  	
   

  	
  A-2

  
	
  D.

  	
  METERING
  AND MEASUREMENT

  	
   

  	
  A-2

  
	
  E.

  	
  DETERMINATION
  OF GAS COMPOSITION AND HEATING VALUE

  	
   

  	
  A-3

  
	
  F.

  	
  QUALITY
  OF GAS

  	
   

  	
  A-3

  
	
  G.

  	
  BILLING
  AND PAYMENT

  	
   

  	
  A-4

  
	
  H.

  	
  FORCE
  MAJEURE

  	
   

  	
  A-4

  
	
  I.

  	
  WARRANTY
  OF TITLE

  	
   

  	
  A-5

  
	
  J.

  	
  ROYALTY
  AND OTHER INTERESTS

  	
   

  	
  A-5

  
	
  K.

  	
  SEVERANCE
  AND SIMILAR TAXES

  	
   

  	
  A-5

  
	
  L.

  	
  INDEMNIFICATION
  AND RESPONSIBILITY FOR INJURY OR DAMAGE

  	
   

  	
  A-5

  
	
  M.

  	
  RIGHT
  OF WAY

  	
   

  	
  A-6

  
	
  N.

  	
  ASSIGNMENT

  	
   

  	
  A-6

  
	
  0.

  	
  MISCELLANEOUS
  PROVISIONS

  	
   

  	
  A-6

  



 


EXHIBIT B COMMITTED LEASES AND WELLS


EXHIBIT C NEW DELIVERY POINTS


 


POP1 Fixed Eff GPC  8-1-05


 

















 


PAM064100R


 


GAS PURCHASE CONTRACT


 


This Contract is entered as of July 1, 2009,
between W.O. OPERATING COMPANY, LTD (“Seller”)
and DCP MIDSTREAM, LP (“Buyer”).


 


For and in consideration of the mutual covenants
contained herein, the parties agree as follows:


 


1.             COMMITMENT.  Seller will sell and deliver and Buyer will
purchase and receive gas produced from all wells now
or later located on all oil and gas interests now or later owned or controlled
by Seller on or allocated to the following lands in Various Counties, Texas:


 


See Exhibit B


 


Definitions and General Terms and Conditions
included in this Contract are attached as Exhibit A.  All Exhibits referenced herein are attached
and incorporated by reference.


 


2.             DELIVERY POINTS.  The
Delivery Points for gas to be delivered by Seller to Buyer for existing sources
of production will be at the inlets of Buyer’s Facilities as described in Exhibit C.  Seller shall use best efforts to commence and
complete the construction of the facilities necessary to enable Seller to
deliver the committed gas to Buyer at these Delivery Points.  Deliveries under this Contract shall commence
promptly upon completion of the facilities. 
During the transition period for wells and leases that have not yet been
connected to the Buyer’s system, Seller shall be entitled to sell its gas from
these unconnected wells to a third party until they are connected to the Buyer’s
system.  The Delivery Points for any
future sources of production committed under this Contract and not to be
delivered under any of the Exhibit C central Delivery Points will be
established under Section B.2 of Exhibit A.  Title to the gas and all its components shall
pass to and vest in Buyer at the Delivery Points without regard to the purposes
for which Buyer may later use or sell the gas or its components.


 


3.             DELIVERY PRESSURE.  Seller
will deliver the gas at the Delivery Points at a pressure sufficient to enable
it to enter Buyer’s Facilities against the working pressure at reasonably
uniform rates of delivery, not to exceed the maximum allowable operating
pressure established by Buyer or pressures that prevent others from producing
ratably.  Buyer in its reasonable
discretion may require that Seller install and operate a pressure relief or
reduction device upstream of any Delivery Point set at the pressure designated
by Buyer to limit the pressure at which Seller delivers gas, where Seller’s
deliveries might interfere with ratable deliveries from others or to enhance
safety.  Buyer will endeavor to maintain
at the Delivery Points an average working pressure during each month of no
greater than 100 psig.  Should Buyer
exceed this pressure 


 

















 


on a monthly basis, then promptly following
Buyer’s receipt of a written request from Seller, Buyer and Seller will meet to
discuss the problem; and if no resolution is reached within 15 days following
the date of Seller’s initial request, then as Seller’s remedy for excess
pressure, Buyer shall upon written request from Seller release from commitment
under this Contract the affected Leases.


 


4.             QUANTITY.        (a) 
Seller shall deliver and Buyer shall purchase and take Seller’s gas subject to
the operating conditions and capacity of Buyer’s Facilities and resale
markets.  Although there is no specific
purchase quantity, Buyer will use commercially reasonable efforts to market gas
for resale and operate its facilities in an effort to maintain consistent takes
of all available quantities.  If Buyer
takes less than the full quantities available, Buyer will use commercially
reasonable efforts to purchase gas from the lands covered by this Contract
ratably with its purchases of similar gas in each common gathering system or
area within its capabilities using existing facilities, in compliance with
Buyer’s existing contracts and with applicable laws and regulations, including
ratable purchases from Buyer’s affiliates.


 


(b)           Seller
may dispose of any gas not taken by Buyer for any reason, including events of
Force Majeure, subject to Buyer’s right to resume purchases at any subsequent
time.  If Buyer does not take gas for 15
consecutive Days and Seller secures a different temporary market, Buyer may
resume purchases only upon 15 Days’ advance written notice as of the beginning
of a Month unless otherwise agreed.


 


(c)            Seller
will use commercially reasonable efforts to deliver gas meeting the quality
requirements and to avoid delivery of Inferior Liquids.  If the gas at any Delivery Point becomes
insufficient in volume, quality, or pressure, Buyer may cease gas takes at such
Delivery Point for so long as the condition exists.  If Buyer ceases taking gas under this Section for
30 consecutive Days for reasons other than quality or Force Majeure, Seller may
terminate this Contract with respect to the affected Delivery Points and the
Leases delivering to those Delivery Points upon 10 Days’ advance written notice
to Buyer; provided that during the notice period Buyer may resume consistent
takes and purchases, and thereby avoid Contract termination under Seller’s
notice.


 


5.               PRICE.


 


5.1             Consideration.         As
full consideration for Seller’s gas and all its components delivered to Buyer
each month, Buyer shall pay Seller (a) the applicable percentage under
Table 5.1 below of the net
Residue Gas value determined under Section 5.2 below for Residue Gas
allocated to Seller’s gas, and (b) the applicable percentage under Table
5.1 below of the net value under Section 5.3  below for any
recovered NGLs allocated to Seller’s gas. No separate payment or value
calculation is to be made under this Contract for helium, sulfur, C02, other non-hydrocarbons, or
for Inferior Liquids.


 


2

















 


Table 5.1


 




	
  Monthly Average Mcf/Day

  For the Delivery Point

  	
   

  	
  Applicable Percentages

  	
   

  
	
  0 – 200

  	
   

  	
  77

  	
  %

  
	
  201 – 500

  	
   

  	
   81

  	
  %

  
	
  501 and Greater

  	
   

  	
  85

  	
  %

  






 


5.2           Residue Gas Value.       The net  Residue Gas
value will be determined by multiplying the MMBtus of Residue Gas attributable
to Seller times ninety eight percent (98%) of the “Index Price,” which will be
the price per MMBtu published in Inside
F.E.R. C.’s Gas Market Report in its first publication of the Month
in which the gas is delivered for “Prices of Spot Gas Delivered to Pipelines”
for Panhandle Eastern Pipe Line Company Texas, Oklahoma (Mainline).  If this price quotation is discontinued or
materially modified, its successor will be used, or in the absence of a
successor, Buyer will select another publication that enables calculation of an
Index Price closely comparable to that previously used.  If a change in the Index Price calculation
becomes necessary, Buyer will so inform Seller by written notice, stating the
changes. If Buyer installs or operates additional facilities downstream from
Buyer’s Facilities to provide resale markets and/or to meet the specifications
of Buyer’s resale purchasers or transporters, Buyer may deduct the reasonable
cost (including return on and of investment) of installation and operation of
those added facilities, provided Buyer provides Seller with at least 60 Days
notice of such costs and an estimation as to their amounts.  For months in which Buyer installs a new
Delivery Point or Seller ties in a new well behind an existing Delivery Point
during a month, Buyer may elect to use instead for pricing of the gas
production from the new source for the first partial month the “Daily Price
Survey” as quoted by Gas Daily for
Panhandle Eastern Pipe Line Company:  Texas, Oklahoma (mainline) less
$0.1 0/MMBtu, or another daily price index publication representative of gas
prices for the Texas-Oklahoma Panhandle area.


 


5.3           NGL Value.      (a) The
net value for the ethane, propane, and butanes NGLs components allocable to
Seller shall be the midpoint of the daily high/low spot price for (i) ethane,
(ii) propane, (iii) isobutane, and (iv) normal butane during the
month as reported for the Conway In-Well Spot Gas Liquids Price published by
the Oil Price Information Service (or
in its absence, a comparable successor publication designated by Buyer) less a
transportation, fractionation, and storage (“TF&S”) fee of $0.0724l07 per
gallon. As of the beginning of each calendar year beginning with 2010, Buyer
will adjust the current year’s TF&S fee for ethane, propane and butanes
upward or downward, but not below the initial fee, by an amount equal to the
annual percentage of change in the preliminary estimate of the implicit price
deflator, seasonally adjusted, for the gross domestic product (“GDP”) as
computed and most recently published by the 


 


3

















 


U.S.
Department of Commerce, rounded to the nearest 100th cent, or in its absence, a
similar successor adjustment factor designated by Buyer.


 


(b)           The
net value for natural gasoline (pentanes and heavier) allocable to Seller will
be the weighted average net natural gasoline price per gallon that Buyer receives
on resale for deliveries during the month at or f.o.b. Buyer’s plants, as
adjusted, including deduction of actual resale contract(s) TF&S fees.
Seller acknowledges that Buyer resells natural gasoline and other NGLs
components to an affiliated purchaser and represents that their actual resale
prices are at area market rates; Seller agrees to natural gasoline pricing
based on the actual resale prices.


 


5.4           Low Volume Delivery Points.     The proceeds
computed under Sections 5.1, 5.2, and 5.3 for any Delivery Point where the
Monthly volume delivered at the Delivery Point falls below 450 MMBtu shall be reduced to
one-half (1/2)of that computed under
Sections 5.1, 5.2, and 5.3 for
each low volume Month. Seller may cease application of low volume fees under
this Section by giving Buyer 30 Days advance written notice of Seller’s
request to have the affected meters disconnected; the low volume fees will no
longer apply as of the end of the Month following the notice period, and Buyer
may disconnect the affected meters.


 


5.5           Allocation of Residue Gas and NGLs.    Buyer will
determine the Residue Gas and NGLs attributable to Seller using the following
definitions and procedures. Additional definitions are in Section A of Exhibit A.
From time to time Buyer may make changes and adjustments in its allocation
methods if it believes it will improve accuracy or efficiency.


 


a.             Field
Compression.  All compression
downstream from the Delivery Points, including that adjacent to the plant
inlet, that compresses gas to the plant inlet pressure.


 


b.              Low
Pressure Gas.  Any gas delivered by
Seller into Buyer’s Facilities at pressures that allow receipt at Buyer’s Field
Compression at a compressor station inlet pressure equal to or less than zero
pounds psig.


 


c.               Intermediate
Pressure Gas.  Any gas delivered by
Seller into Buyer’s Facilities at pressures that allow receipt at Buyer’s Field
Compression at a compressor station inlet pressure of greater than zero pounds
(0#) psig.


 


d.              High
Pressure Gas.  Any gas delivered by
Seller into Buyer’s Facilities that is not compressed by Field Compression.


 


e.             Plant
Inlet Gallons.  The quantity of each
NGL component attributable to Seller delivered to the plant inlet will be
determined by multiplying the gallons of each component contained in the gas
delivered by Seller at each Delivery Point by the applicable percentage as
follows:


 




	
  Pressure

  	
   

  	
  Percentage

  	
   

  
	
  High Pressure

  	
   

  	
  90

  	
  %

  
	
  Intermediate Pressure

  	
   

  	
  88

  	
  %

  
	
  Low Pressure

  	
   

  	
  85

  	
  %

  






 


f.              NGLs
Attributable to Seller.  The quantity
of each NGL component attributable to Seller’s gas will be determined by
multiplying Seller’s Plant Inlet Gallons times fixed recovery percentages as
follows:


 


4

















 




	
  Ethane

  	
   

  	
  50

  	
  %

  
	
  Propane

  	
   

  	
  90

  	
  %

  
	
  Iso & Normal Butanes

  	
   

  	
  95

  	
  %

  
	
  Pentanes & Heavier

  	
   

  	
  95

  	
  %

  






 


g.             Residue Gas Attributable to
Seller.  The MMBtus of Residue Gas
attributable to Seller will be the sum of the MMBtus of methane and heavier
hydrocarbons contained in the gas delivered at the Delivery Points by Seller,
less the MMBtus contained in the NGL gallons allocated to Seller’s gas
determined under Section 5.5(1) above,
less the applicable percentage below of the MMBtus delivered at each Delivery
Point for gathering and plant fuel, losses, and unaccountables:


 




	
  High Pressure

  	
   

  	
  10

  	
  %

  
	
  Intermediate Pressure

  	
   

  	
  12

  	
  %

  
	
  Low Pressure

  	
   

  	
  15

  	
  %

  






 


Whenever Force Majeure or maintenance needs prevent normal gathering
and processing operations for Seller’s gas, fixed recovery percentages will not
apply, and Seller’s attributable NGL gallons and Residue Gas will be based on
Seller’s pro rata share of actual gathering and processing results during those
periods based on gas compositions, volumes from each common source, and an
equitable distribution among suppliers of fuel, losses, and unaccountables, in a
manner similar to that used for Buyer’s purchase contracts that call for
allocations based on actual results. Buyer will include the adjusted overall
monthly recoveries in its monthly gas statement to Seller.


 


5.6           Price Renegotiation Rights.    Notwithstanding
the foregoing provisions of this Section 5, PRICE, if at
any time, and from time to time, Buyer in its reasonable judgment determines
that at any or all Delivery Points, regulatory or operating conditions relating
to Buyer’s Facilities or market conditions relating to Buyer’s purchase of gas
or resale of Residue Gas and NGLs indicate that a downward price revision is
necessary or appropriate, then Buyer may notify Seller of Buyer’s intent to
renegotiate Seller’s price and pricing basis or to terminate this Contract,
upon 30 Days advance written notice from Buyer to Seller prior to the proposed
effective date.  If Seller is not willing
to accept a renegotiated price nominated by Buyer, then as to all gas affected
by Buyer’s notice, Seller may (i) cause a renegotiation of pricing
percentages or (ii) terminate this Contract as to the affected gas by
written notice to Buyer at any time prior to the effective date of Buyer’s
nominated price.  Whether or not notice
of termination is given by Seller within the prescribed period, if Seller makes
and Buyer accepts deliveries of gas from the affected sources after the
effective date of the price change, Seller will be deemed to have accepted
Buyer’s nominated price for those deliveries.


 


6.             TERM.    This
Contract shall be in force for a primary term through April 30, 2016, and
from year to year thereafter until canceled by either party as of the end of
the primary term or any anniversary thereafter by giving the other party at
least 60 Days’ advance written notice of termination.  However, if Buyer fails to take 50% or more
of Seller’s gas (as determined using the previous unaffected month’s 


 


5

















 


production volume as a baseline) within
Contract pressures from the committed wells for reasons other than force
majeure or necessary maintenance over any two consecutive
month period, Seller shall have the right to terminate this Contract upon 30
days advance written notice to Buyer effective as of the end of a month.


 


7.             ADDRESSES AND NOTICES.     Either
party may give notices to the other party or parties by
first class mail postage prepaid, by overnight delivery service, or by
facsimile with receipt confirmed at the following addresses or other
addresses furnished by a party by written notice. Unless Seller objects
in writing, Buyer may also use Seller’s current address for payments
for notice purposes. Any telephone numbers below are not
allowed under this Contract, except that notices and hand-signed amendments may
be delivered by facsimile with receipt confirmed, as stated above.


 


	
  Notices to Seller — Correspondence

  	
   

  	
  W.O. Operating Company, LTD.

  
	
   

  	
   

  	
  Attn: Patrick McKinney

  
	
   

  	
   

  	
  801 Cherry Street, Suite 3200

  
	
   

  	
   

  	
  Fort Worth, TX 76102

  
	
   

  	
   

  	
  Phone: (817) 698-0900

  
	
   

  	
   

  	
  Fax: (817) 334-0222

  
	
   

  	
   

  	
   

  
	
  Payment to Seller:

  	
   

  	
  To the bank and account that Seller will furnish to Buyer’s Division
  Orders office.

  
	
   

  	
   

  	
   

  
	
  Notices to Buyer — Billings & Statements:

  	
   

  	
  DCP Midstream, LP

  
	
   

  	
   

  	
  Attn: Revenue Accounting

  
	
   

  	
   

  	
  6120 S. Yale, Suite 1100

  
	
   

  	
   

  	
  Tulsa, OK 74136

  
	
   

  	
   

  	
  Phone: (918) 492-3331

  
	
   

  	
   

  	
  Fax: (918) 524-0995

  
	
   

  	
   

  	
   

  
	
  Buyer — Correspondence:

  	
   

  	
  DCP Midstream, LP

  
	
   

  	
   

  	
  Attn: Contract Administration

  
	
   

  	
   

  	
  6120 S. Yale, Suite 1100

  
	
   

  	
   

  	
  Tulsa, OK 74136

  
	
   

  	
   

  	
  Phone: (918) 492-3331

  
	
   

  	
   

  	
  Fax: (918)524-0995

  
	
   

  	
   

  	
   

  
	
  Buyer — Division Orders:

  	
   

  	
  DCP Midstream, LP

  
	
   

  	
   

  	
  Attn: Division Orders

  
	
   

  	
   

  	
  6120 S. Yale, Suite 1100

  
	
   

  	
   

  	
  Tulsa, OK 74136

  
	
   

  	
   

  	
  Phone: (918) 492-3331

  
	
   

  	
   

  	
  Fax: (918) 524-0997

  



 


6

















 


8.             TERMINATION OF PRIOR
CONTRACTS AND RELEASE.


 


8.1           Termination and Release.   This
Contract terminates and supersedes any prior contracts for the sale or
handling of gas between the parties or their predecessors in interest that
apply or applied to any gas produced from any sources covered by this Contract
effective as of its date. In negotiating this Contract, the parties have
compromised and settled any and all price, fee, payment, and other disputes
relating to or under the superseded contract(s). In consideration of the
covenants contained herein, each party hereby releases the
other party, its affiliates, and its predecessors in interest
under the prior contracts from any causes of action, claims, and
liabilities (i) that they failed to pay the full prices or fees
under the prior contracts, including interest, (ii) that they failed to
perform any other obligation under the prior contracts, and (iii) arising from
their relationship as parties to the prior contracts.


 


8.2           Exceptions.    This
termination and release does not include, and the pal-ties expressly retain,
the right to receive payments under the prior contract(s) for
current gas production for which payment is not yet due and for which a party has not yet
made payment in the ordinary course of business. This mutual release also does
not include matters relating to title to gas and gas processing rights, Seller’s
obligations for payment of third parties and severance taxes, related interest
and penalties, or gas imbalances under prior gathering or take in kind
agreements.


 


The parties have signed this
Contract by their duly authorized representatives as of the date first stated above.


 


	
  W.O. OPERATING COMPANY, LTD

  	
   

  	
  DCP MIDSTREAM, LP

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/ Patrick M. McKinney

  	
   

  	
  By 

  	
  /s/ Will Wedell

  
	
   

  	
   

  	
   

  
	
  Title Vice President of Operations of W.O. Energy, Inc.,

  	
   

  	
  Title President of Northern BU

  
	
  Its General Partner

  	
   

  	
   

  
	
  Signed on 8/4/09

  	
   

  	
  Signed on 8/4/09

  
	
  Seller

  	
   

  	
  Buyer

  
					



 


Signature Sheet for Gas Purchase Contract


Dated as of July 1, 2009


 


7
















 


PAM064100R


 


EXHIBIT A


 


TO GAS PURCHASE CONTRACT


 


Between W.O. OPERATING COMPANY, LTD as Seller


 


And DCP MIDSTREAM, LP as Buyer


 


Dated July 1, 2009


 


GENERAL TERMS & CONDITIONS


 


A. DEFINITIONS


 


Except where the
context indicates a different meaning or intent, and whether or not
capitalized, the following terms will have meanings as follows:


 


a.                                           Affiliate — a company (i) in which a party owns directly
or indirectly 50% or more of the issued and outstanding voting stock or other
equity interests; (ii) which owns directly or indirectly 50% or more of
the issued and outstanding voting stock or equity interests of the party; (iii) in
which a company described in (ii) owns, directly or indirectly, 50% or more of the issued and
outstanding voting stock or other equity interests.


 


b.                                          Btu — British thermal unit, or the quantity of heat
required to raise the temperature of 1 pound of water 1o  F. at a starting temperature of 58.5°
F.  MMBtu - one million Btus.


 


c.                                           Buyers Facilities — 
the gas delivered by Seller will be gathered in gathering systems and
may be redelivered to a gas processing plant or plants for the removal of NGLs
together with gas produced from other properties. The gathering systems and
plant or plants, or successor facilities, are “Buyer’s Facilities” whether
owned by buyer, an affiliate of Buyer, or an unaffiliated third party. No
facilities downstream of the processing plant or plants other than short
connecting lines to transmission lines are included in “Buyer’s Facilities.”


 


d.                                          Day —  a period of
24 consecutive hours beginning and ending at 9 am, local time or other 24 hour
period designated by Buyer and a downstream pipeline.


 


e.                                           Delivery Points— whether one or more, see Sections 2,
B.l and B.2.


 


f.                                             Force Majeure — see Section H.2 below.


 


g.                                          Gas or gas — all natural gas that arrives at the surface in the
gaseous phase, including all hydrocarbon and non-hydrocarbon components,
casinghead gas produced from oil wells, gas well gas, and stock tank vapors.


 


h.                                          Inferior Liquids — Mixed crude oil, slop oil, salt
nuisance liquids, and other liquids recovered by in its gathering system or at
plant inlet receivers.


 


Revenues from Inferior Liquids, drips, and other
gathering system liquids will be retained by Buyer to defray costs of treating
and handling; Buyer will not allocate or pay for those liquids.


 


i.                                              Mcf — 1,000 cubic feet of gas at standard base conditions
of 60°F and 14.73 psia.


 


j.                                              MMcf — 1,000 Mcf.


 


k.                                           Month or month — a calendar month beginning on the
first Day of a month.


 


1.                                           NGL or NGLs — natural gas liquids, or ethane and
heavier liquefiable hydrocarbons separated from gas and any incidental methane
in NGL after processing.


 


m.                                        psi — pounds per square inch; psia — psi absolute; psig
— psi gauge.


 


n.                                          Residue Gas — merchantable hydrocarbon gas available
for sale from Buyer’s Facilities remaining after processing, and hydrocarbon
gas resold by Buyer without first being processed.


 


o.                                          TF&S — NGL transportation, fractionation, and storage, see Section 5.3.


 


B.  DELIVERY DATE;
COMPRESSION


 


B.1                                 Connected Sources Delivery
Date. As to
committed sources of production already connected to Buyer’s Facilities,
deliveries under this Contract will commence as of the date of the Contract.


 


B.2                                 Additional Sources. 
As to committed sources not yet connected, Seller will commence and
complete with due diligence the construction of the facilities necessary to
enable Seller to deliver the committed gas at the Delivery Points and Buyer
will cause prompt commencement and complete with due diligence the construction
of the facilities necessary and economically feasible in Buyer’s sole
discretion to enable Buyer or its gas gathering contractor to receive
deliveries of gas at the Delivery Points. If Buyer determines it is not
economically feasible for Buyer to construct the facilities, Seller will have
the 


 

















 


option to construct facilities necessary to deliver
gas into Buyer’s then existing facilities. If neither Buyer nor Seller elect to
construct the necessary facilities in a reasonable time, either party may
cancel this Contract as to the affected gas upon 1 5 Days advance written notice to the other.


 


B.3                                 Delivery Rates. Seller will have agents or employees
available at all reasonable times to receive advice and directions from Buyer
for changes in the rates of delivery of gas as required from time to time.


 


B.4                                 Options to Compress. If Seller’s wells become incapable of
delivering gas into Buyer’s Facilities, neither party will be obligated to
compress, but either party will have the option to do so. If neither party
elects to compress within a reasonable time after the need for compression
appears, Buyer upon written request of Seller will either arrange promptly to
provide compression or as Seller’s sole remedy, release the affected gas
sources as to the then-producing formations from commitment under this
Contract. If Buyer provides additional compression, the price to be paid by
Buyer for Seller’s gas shall be reduced by a reasonable compression fee that
allows recovery of the related fuel and provides Buyer a reasonable return on
investment.


 


C.  RESERVATIONS OF SELLER


 


C.1                                 Reservations. Seller reserves the following rights
with respect to its interests in the oil and gas properties committed by Seller
to Buyer under this Contract together with sufficient gas to satisfy those
rights:


 


a.                                           To operate Seller’s oil and gas
properties free from control by Buyer as Seller in Seller’s sole discretion
deems advisable, including without limitation the right, but never the
obligation, to drill new wells, to repair and rework old wells, renew or
extend, in whole or in part, any oil and gas lease covering any of the oil and
gas properties, and to abandon any well or surrender any such oil and gas
lease, in whole or in part, when no longer deemed by Seller to be capable of
producing gas in paying quantities under normal methods of operation.


 


b.                                          To use gas for developing and operating
Seller’s oil and gas properties committed under this Contract and to fulfill
obligations to Seller’s lessors for those properties.


 


c.     To pool, combine, and unitize any of
Seller’s oil and gas properties with other properties in the same field, and to
alter pooling, combinations, or units, in which event this Contract will cover
Seller’s allocated interest in unitized production insofar as that interest is attributable
to the oil and gas properties committed under this Contract, and the
description of property committed will be considered to have been amended
accordingly.


 


C.2                                 Exception. Notwithstanding Section C.1,
Seller will not engage in any operation, including without limitation
reinjection, recycling, or curtailment, that would materially reduce the amount
of gas available for sale to Buyer except upon 30 Days advance written notice
to Buyer, or as much advance notice as is feasible under the circumstances. If
Seller ceases or materially curtails deliveries to Buyer under this Section C,
the Contract term will be extended by the duration of the interruptions and
curtailments. Buyer will own and be entitled to collect and pay Seller for any
NGLs that condense or are manufactured from gas during any of Seller’s
operations, excluding crude oil and distillate recovered from gas by
conventional type mechanical separation equipment and not delivered to Buyer.


 


D.  METERING AND
MEASUREMENT


 


D.1                                 Buyer to Install Meters. Buyer will own, maintain and operate
orifice meters or other measuring devices of standard make at or near the
Delivery Points. Except as otherwise specifically provided to the contrary in
this Section D, orifice meters or other measurement devices will be
installed and volumes computed in accordance with accepted industry practice.
Buyer may reuse metering equipment not meeting current standards but meeting
1985 or later published standards for gas sources not expected to deliver in
excess of 100 Mcf per Day. A party providing compression facilities will also
provide sufficient pulsation dampening equipment to prevent pulsation from
affecting measurement at the Delivery Points. Electronic recording devices may
be used. Seller will have access to Buyer’s metering equipment at reasonable
hours, but only Buyer will calibrate, adjust, operate, and maintain it.


 


D.2                                 Unit of Volume. The unit of volume will be one cubic
foot of gas at a base temperature of 60°F and at a pressure base of 14.73 psia.
Computations of volumes will follow industry accepted practice.


 


D.3                                 Pressure, Temperature. Buyer may measure the atmospheric pressure or
may assume the atmospheric pressure to be 13.2 psia. Buyer may determine the
gas temperature by using a recording thermometer; otherwise, the temperature
will be assumed to be 60°F.


 


D.4                                 Check Meters. Seller may install, maintain, and operate in
accordance with accepted industry practice at its own expense pressure
regulators and check measuring equipment of standard make using separate taps.
Check meters shall not interfere with operation of Buyer’s equipment. Buyer
will have access to Seller’s check measuring equipment at all reasonable hours,
but only Seller will calibrate, adjust, operate, and maintain it.


 


D.5                                 Meter Tests. At least annually, Buyer will verify
the accuracy of Buyer’s measuring equipment, and Seller or its lease operator
will verify the accuracy of any check measuring equipment. If Seller’s lease
operator or Buyer notifies the other that it desires a special test of any
measuring equipment, they will cooperate to secure a prompt verification of the
accuracy of the equipment. If either at any time observes a variation between
the delivery meter and the check meter, it will promptly notify the other, and
both will then cooperate to secure an immediate verification of the accuracy of
the equipment. Only if so 


 


A-2

















 


requested in advance by Seller in writing, Buyer will
give Seller’s lease operator reasonable advance notice of the time of all
special tests and calibrations of meters and of sampling for determinations of
gas composition and quality, so that the lease operator may have
representatives present to witness tests and sampling or make joint tests and obtain samples
with its own equipment.
Seller will give or cause its lease operator to give reasonable advance notice
to Buyer of the time of tests and calibrations of any check meters and of any
sampling by Seller for determination of gas composition and quality.


 


D.6                                 Correction of Errors. If at any time any of the measuring or
testing equipment is found to be out of service or registering inaccurately in
any percentage, it
will be adjusted promptly to read accurately within the limits prescribed by
the manufacturer. If any measuring equipment is found to be inaccurate or out
of service by an amount exceeding the greater of (i) 2.0 percent at a
recording corresponding to the average hourly rate of flow for the period since
the last test, or (ii) 100 Mcf per Month, then previous readings will be
corrected to zero error for any known or agreed period. The volume of gas
delivered during that period will be estimated by the first feasible of the
following methods:


 


(i)             Using the data recorded by any check
measuring equipment if registering accurately;


 


(ii)          Correcting the error if the percentage of
error is ascertainable by calibration, test, or mathematical calculation; or


 


(iii)       Using
deliveries under similar conditions during a period when the equipment was
registering accurately.


 


No adjustment will
be made for inaccuracies unless they exceed the greater of(i) 2.0 percent
of affected volumes, or (ii) 100 Mcf per Month.


 


D.7                                 Meter Records. The parties will preserve for a period of
at least two years all test data, charts and similar measurement records. The
parties will raise metering questions as soon as practicable after the time of
production. No party will have any obligation to preserve metering records for
more than two years except to the extent that a metering question has been
raised in writing and remains unresolved.


 


E.
DETERMINATION OF GAS


COMPOSITION, GRAVITY, AND


HEATING VALUE


 


At least annually,
Buyer will obtain a representative sample of Seller’s gas delivered at each
Delivery Point; Buyer may use spot sampling, continuous samplers or on-line
chromatography. By chromatography or other accepted method in the industry,
Buyer will determine the composition, gravity and gross heating value of the
hydrocarbon components of Seller’s gas in Btu per cubic foot on a dry basis at
standard conditions, then adjusting the result for the water vapor content of
the gas (by either the volume or Btu content method), using an industry
accepted practice. No heating value will be credited for Btus in H2S or other non-hydrocarbon components. The first determination of
Btu content for Seller’s deliveries will be made within a reasonable
time after deliveries
of gas begin. If continuous samplers or on-line chromatography are
used, the determinations will apply to the gas delivered while the sampler was
installed. If not, the determination will apply until the first Day of the
Month following the next determination.


 


F.  QUALITY OF GAS


 


F.1                                   Quality Specifications. The gas shall be merchantable natural
gas, at all times complying with the following quality requirements. The gas
shall be commercially free of crude oil, water in the liquid phase, brine, air,
dust, gums, gum-forming constituents, bacteria, and other objectionable liquids
and solids, and not contain more than:


 


a.                           1⁄4 grain of H2S
per 100 cubic feet,


 


b.                          5 grains of total sulfur nor more than 7
grain of mercaptan per 100 cubic feet.


 


c.                           2 mole percent of carbon dioxide.


 


d.                          3 mole percent of nitrogen.


 


e.                           10 parts per million by volume of oxygen,
and not have been subjected to any treatment or process that permits or causes
the admission of oxygen, that dilutes the gas, or otherwise causes it to fail
to meet these quality specifications.


 


f.                             5 mole percent of combined carbon
dioxide, nitrogen, and oxygen.


 


The gas shall:


 


g.                          Not exceed 120°F in temperature at the
Delivery Point.


 


h.                          Have a total heating value of at least
1050 Btus per cubic foot.


 


i.                              If a third party pipeline receiving the
gas delivered has more stringent quality specifications than those
stated above, Seller’s gas shall conform to the more stringent pipeline quality standard.


 


F.2                                   Quality Tests. Buyer will make
determinations of conformity of the gas with
the above specifications using procedures generally accepted in the gas
industry. Such
determinations will be made as often as Buyer reasonably deems necessary. If in the lease operator’s  judgment
the result of any such test or determination is inaccurate, Buyer upon request
will again conduct the questioned test or determination. The costs of the
additional test or determination will be borne by Seller unless it shows the
original test or determination to have been materially inaccurate.


 


F.3                                   Separation Equipment. Seller will employ only 


 


A-3

















 


conventional mechanical separation equipment at all
production sites covered by this Contract. Low temperature, absorption, and
similar separation facilities are not considered conventional mechanical
separation equipment. Except for liquids removed through operation of conventional
mechanical separators and except for removal of substances as required to
enable Seller to comply with this Section F, no components of the gas will
be removed prior to delivery to Buyer.


 


F.4                                   Rights as to Off
Specification Gas.


 


a.                                           If any of the gas delivered by Seller
fails to meet the quality specifications stated in this Section, Buyer may at
its option accept delivery of and pay for such gas or discontinue or curtail
taking of gas at any Delivery Point whenever its quality does not conform to
the quality specifications. If Buyer accepts delivery of off specification gas
from Seller or incurs costs relating to inferior gas quality in its gathering
system, Buyer may deduct from the proceeds otherwise payable a reasonable fee
for monitoring the gas quality and treating and handling the gas. Buyer
typically adjusts gas quality deduction levels annually, but may do so more
often if needed.


 


b.                                          If Buyer is declining to take off quality
gas, Seller may by written notice to Buyer request a release of the affected
gas from commitment under this Contract, in response, Buyer will within 30 Days
either (i) waive its right to refuse to take the affected off quality gas
(subject to its right to charge treating fees under this Section F) and
again take gas from the affected sources, or (ii) release the affected gas
from commitment under this Contract.


 


G.  BILLING AND PAYMENT


 


G.1                                 Statement and Payment
Date. Buyer will render to Seller on or before the last Day of each Month a
statement showing the volume of gas delivered by Seller during the preceding
Month. Buyer will make payment to Seller on or before the last Day of each
Month for all gas delivered during the preceding Month. As between the parties,
late payments by Buyer and recoupments/refunds from Seller will carry simple
interest at the lower of 6% per annum or the maximum lawful interest rate;
provided that no interest will accrue as to Monthly principal amounts of less
than $1,000 due for less than one year when paid. The parties waive any rights
to differing interest rates. Except as limited in Section G.2 below, Buyer
may recover any overpayments or collect any amounts due from Seller to Buyer
for any reason at any time under this or other transactions by deducting them
from proceeds payable to Seller.


 


G.2                                   Audit Rights; Time Limit to Assert
Claims.


 


a.                                           Each party will have the right during
reasonable business hours to examine the books, records and charts of the other
party to the extent necessary to verify performance of this Contract and the
accuracy of any payment, statement, charge or computation upon execution of a
reasonable confidentiality agreement. If any audit examination or review of the
party’s own records reveals an inaccuracy in any payment, the appropriate
adjustment will promptly be made.


 


b.                                          No adjustment for any billing or payment
shall be made, and payments shall be final after the lapse of two years
from their due date except as to matters that either party has noted in a
specific written objection to the other party in writing during the two year
period, unless within the two year period Buyer has made the appropriate
correction. However, Seller’s responsibilities for severance taxes and third
party liabilities and related interest are not affected by this subsection.


 


c.                                           No party will have any right to recoup or
recover prior overpayments or underpayments that result from errors that occur
in spite of good faith performance if the amounts involved do not exceed
$10/Month/meter. Either party may require prospective correction of such
errors.


 


G.3                                 Metering Records
Availability.
Buyer will not be required to furnish gas volume records relating to electronic
recording devices for gas meters other than daily volume information unless
there are indications the meter was not operating properly.


 


H.  FORCE MAJEURE


 


H.1                                 Suspension of
Performance. If
either party is rendered unable, wholly or in part, by Force Majeure to carry
out its obligations under this Contract, other than to make payments due, the
obligations of that party, so far as they are affected by Force Majeure, will
be suspended during the continuance of any inability so caused, but for no
longer period. Within 10 days of receipt of the affected party’s written
request the other party shall provide written notice of the condition of Force
Majeure.


 


H.2                                 Force Majeure Definition. “Force Majeure” means acts of God,
strikes, lockouts or other industrial disturbances, acts of the public enemy,
wars, blockades, insurrections, riots, epidemics, landslides, lightning,
earthquakes, storms, floods, washouts, arrests and restraints of governments
and people, civil disturbances, fires, explosions, breakage or accidents to
machinery or lines of pipe, freezing of wells or lines of pipe, partial or
entire failure of wells or sources of supply of gas, inability to obtain at
reasonable cost servitudes, right of way grants, permits, governmental
approvals, or licenses, inability to obtain at reasonable cost materials or
supplies for constructing or maintaining facilities, and other causes, whether
of the kind listed above or otherwise, not within the control of the party
claiming suspension and which by the exercise of reasonable diligence the party
is unable to prevent or overcome.


 


H.3                                 Labor Matters Exception. The settlement of strikes or lockouts will
be entirely within the discretion of the party having the difficulty, and
settlement of strikes, lockouts, or other labor disturbances when that course
is 


 


A-4

















 


considered
inadvisable is not required.


 


I.  WARRANTY OF TITLE


 


Seller warrants
that it has good title and processing rights to the gas delivered, free and
clear of any and all liens, encumbrances, and claims, and that Seller has good
right and lawful authority to sell the same. Seller grants to Buyer the right
to process Seller’s gas for extraction of NGLs and other valuable components,
If Seller’s title or right to receive any payment is questioned or involved in
litigation, Buyer will have the right to withhold the contested payment without
interest until title information is received, during the litigation, until the
title or right to receive the questioned payments is freed from question, or
until Seller furnishes security for repayment acceptable to Buyer. Without
impairment of Seller’s warranty of title to gas and gas processing rights, if
Seller owns or controls less than full title to the gas delivered, payments
will be made only in the proportion that Seller’s interest bears to the entire
title to the gas.


 


J. 
ROYALTY AND OTHER INTERESTS


 


J.1                                   Seller’s Responsibility. Seller is responsible for  all payments to
the owners of all working interests, mineral interests, royalties, overriding
royalties, bonus payments, production payments, and the like. Buyer assumes no
direct liability to Seller’s working or mineral interest, royalty, or other
interest owners under this Contract. For federal and Indian leases, Buyer may
at any time require Seller to sign and furnish a Payor Information Form or
other papers to the Minerals Management Service or successor agency to cover
Buyer’s royalty payments for Seller and to verify Buyer’s refusal to assume
Seller’s lease royalty payment obligations.


 


J.2                                   Buyer’s Payment Services. At Seller’s request, Buyer agrees to
deduct from payments to Seller and to disburse other working and mineral
interests, royalties, overriding royalties, other working interests, bonus
payments, production payments, and the like as Seller directs from time to time
on Seller’s behalf. In return, Buyer shall retain from the proceeds otherwise
due Seller a monthly fee of $35.00 per well or other settlement payment basis.
Buyer reserves the right to adjust this fee upon advance written notice to
Seller.


 


Seller may at any
time upon reasonable advance written notice effective as of the end of a Month
cease Buyer’s payments under this Section J and assume the payments.


 


J.3                                   Buyer’s Reliance on
Ownership Information. Buyer shall not commence payments for any Month under Section J.2
until 30 Days after receipt from Seller of all title information and executed
payment directions necessary for such payments. Payments on behalf of Seller
shall include penalties and interest when payable under applicable laws or
regulations. Buyer shall deduct all such payments, penalties, and interest from
the amounts otherwise due Seller. Buyer may at any time upon at least 30 Days
advance written notice cease disbursements on behalf of Seller under Sections
J.2 and J.3 as of the end of any Month.


 


K. 
SEVERANCE AND SIMILAR TAXES


 


K.1                                 Included in Price. Reimbursement to
Seller  for Seller’s full liability for severance and similar
taxes levied upon Seller’s gas production is included in the prices payable
under this Contract, regardless of whether some included interests may be
exempt from taxation.


 


K.2                                 Tax Responsibilities  and 
Disbursements.


 


Seller shall bear, and unless otherwise required by
law, Seller will pay to taxing authorities all severance, production, excise,
sales, gross receipts, occupation, and other taxes imposed upon Seller with
respect to the gas on or prior to delivery to Buyer. However, if Buyer is
performing royalty and other interest owner disbursement services under Section J.2
above, Buyer will deduct these taxes and pay them to the taxing authorities on
behalf of Seller. Buyer will bear and pay all taxes imposed upon Buyer with
respect to the gas after delivery to Buyer; Upon 30 days written notice to
Seller, Buyer may reduce the price payable to Seller as necessary to recover
any charge on the carbon or MMBtu content of Seller’s gas, whether in, the form
of a “cap and trade” system, tax, or other impost.


 




	
  L.

  	
  INDEMNIFICATION AND

  
	
   

  	
  RESPONSIBILITY FOR

  
	
   

  	
  INJURY OR DAMAGE

  






 


L.1                                  Title,
Royalty, and Severance Taxes. SELLER
RELEASES AND AGREES TO DEFEND, INDEMNIFY, AND SAVE BUYER, ITS AFFILIATES, AND
THEIR OFFICERS, EMPLOYEES, AND AGENTS (“BUYER INDEMNITEES”) HARMLESS FROM AND
AGAINST ALL CLAIMS, CAUSES OF ACTION, LIABILITIES, AND COSTS (INCLUDING
REASONABLE ATTORNEYS’ FEES AND COSTS OF INVESTIGATION AND DEFENSE) RELATING TO (a) SELLER’S
TITLE TO GAS AND GAS PROCESSING RIGHTS, (b) PAYMENTS FOR WORKING, MINERAL,
ROYALTY AND OVERRIDING ROYALTY AND OTHERINTERESTS, AND (c) SALES,
SEVERANCE, AND SIMILAR TAXES, THAT ARE THE RESPONSIBILITY OF SELLER UNDER
SECTIONS I, J, AND K ABOVE.


 


L.2                                  Responsibility for
Injury or Damage. As between the parties, Seller will be in control
and possession of the gas deliverable hereunder and responsible for any injury
or damage relating to handling or delivery of gas until the gas has been
delivered to Buyer at the Delivery Points; after delivery, Buyer will be deemed
to be in exclusive control and possession and responsible for any injury or
damage relating to handling or gathering of gas.


 


A-5

















 


THE PARTY HAVING RESPONSIBILITY UNDER THE PRECEDING
SENTENCE SHALL RELEASE, DEFEND, INDEMNIFY, AND HOLD THE OTHER PARTY, ITS
AFFILIATES, AND THEIR OFFICERS, EMPLOYEES, AND AGENTS HARMLESS FROM AND AGAINST
ALL CLAIMS, CAUSES OF ACTION, LIABILITIES, AND COSTS (INCLUDING REASONABLE
ATTORNEYS’ FEES AND COSTS OF INVESTIGATION AND DEFENSE) ARISING FROM ACTUAL AND
ALLEGED LOSS OF GAS, PERSONAL INJURY, DEATH, AND DAMAGE FOR WHICH THE PARTY IS
RESPONSIBLE UNDER THIS SECTION; PROVIDED THAT NEITHER PARTY WILL BE INDEMNIFIED
FOR ITS OWN NEGLIGENCE OR THAT OF ITS AGENTS, SERVANTS, OR EMPLOYEES.


 


M. 
RIGHT OF WAY


 


Insofar as Seller’s
lease or leases permit and insofar as Seller or its lease operator may have any
rights however derived (whether pursuant to oil and gas lease, easement,
governmental agency order, regulation, statute, or otherwise), Seller grants to Buyer and Buyer’s gas gathering contractor, if any, and
their assignees the right of free entry and the right to lay and maintain
pipelines, meters, and any equipment on the lands or leases subject to this Contract as reasonably necessary in connection with the purchase or
handling of Seller’s gas. Upon written request from Buyer to Seller, Seller
shall grant, in writing, to Buyer or Buyer’s designee, recordable rights of
ingress and egress as necessary or appropriate for the purposes of complying
with the terms of this Contract. All pipelines, meters, and other equipment
placed by Buyer or Buyer’s contractors on the lands and leases will remain the property of the owner and may be
removed by the owner at any time. Without limitation, Buyer or its
gathering contractor may disconnect and remove measurement and other facilities
from any Delivery Point due to low volume, quality, term expiration, or other
cause.


 


N. ASSIGNMENT


 


N.1                             Binding on Assignees.  Either party may assign this Contract. This
Contract is binding upon and inures to the benefit of the successors, assigns,
heirs, personal representatives, and representatives in bankruptcy of the
parties, and, subject to any prior dedications by the assignee, shall be
binding upon any purchaser of Buyer’s Facilities and upon any purchaser of the
properties of Seller subject to this Contract. Nothing contained in this Section will
prevent either party from mortgaging its rights as security for its
indebtedness, but security is subordinate to the parties’ rights and
obligations under this Contract.


 


N.2                                 Notice of Assignment. Seller will
make any assignment
or sublease of any oil and gas properties or any gas rights contracted to Buyer
expressly subject to this Contract. No transfer of or succession to the
interest of Seller, however made, will bind Buyer unless and until the original
instrument or other proper proof that the claimant is legally entitled to an
interest has been furnished to Buyer at its Division Order address noted in the
Notices Section or subsequent address.


 


O. 
MISCELLANEOUS PROVISIONS


 


O.1                                Governing Law. THIS CONTRACT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS without reference
to those that might refer to the laws of another jurisdiction.


 


O.2                                Default and Nonwaiver. A waiver by a party of any one or more defaults by the other in the performance of any provisions of this Contract will not
operate as a waiver of any future default or defaults, whether of a like or
different character.


 


O.3                                Counterparts. This Contract
may be executed in any number of counterparts, all of which
will be considered together as one instrument, and this Contract will be
binding upon all parties executing it, whether or not executed by all parties
owning an interest in the producing sources affected by this Contract.
Signed copies of this Contract and
facsimiles thereof shall have the same force and effect as originals.


 


O.4                                Negotiations; Entire Agreement;
Amendment; No Third Party Beneficiaries. The language of this Contract shall not be construed in favor of or against either Buyer or Seller, but shall be
construed as if the language were
drafted mutually by both parties. This Contract constitutes the final and
complete agreement between the parties. There are no oral promises,
prior agreements, understandings,
obligations, warranties, or representations between the parties relating to
this Contract other than those set forth herein. All waivers, modifications, amendments, and changes to
this Contract shall be in writing and executed by the authorized representatives of the parties. The
relations between the parties are those of independent contractors; this
Contract creates no joint venture, partnership, association, other special
relationship, or fiduciary obligations. There are no third party beneficiaries
of Buyer’s sales contracts or of this Contract.


 


O.5                                Ratification and Third Party Gas. 


Notwithstanding
anything contained herein to the contrary, Buyer has no duty under this Contract
to purchase or handle gas attributable to production from interests of third
parties that has been purchased by Seller for resale, except that Buyer will
purchase Other WI Gas. “Other WI Gas” means gas attributable to working and
mineral interests owned by third parties in wells operated by Seller that are
subject to this Contract that Seller has the right t
market under an
operating agreement. If Buyer requests in writing that Seller obtain
ratification of this Contract from owners of Other WI Gas, Seller will use all
reasonable commercial efforts to cause those Other WI Gas owners to execute and
deliver to Buyer an instrument prepared by Buyer for the


 


A-6

















 


purpose of
ratifying and adopting this Contract with respect to the owner’s Other WI Gas, and the ratifying owner
will become a party to this Contract with like force and effect as though the
Other WI owner had executed this Contract as amended as of the time of the
ratification, and all of the terms and provisions of this Contract as then
amended will become binding upon Buyer and the ratifying owner.


 


O.6                                Compliance with Laws and Regulations. This Contract
is subject to all valid statutes and rules and regulations of any duly
constituted federal or state authority or regulatory body having jurisdiction. Neither party will be
in default as a result of compliance with laws and regulations.


 


O.7                                Fees and Costs; Damages. If a breach
occurs, the parties are entitled to recover as their sole and exclusive damages
for breach of the price and quantity obligations under this Contract the price
for gas taken by Buyer in the case of Seller and the lost margin less avoided
costs in the case of Buyer. If mediation or arbitration is necessary to resolve
a dispute other than one arising under the indemnification obligations of this
Contract, each party agrees to bear its own attorneys’ fees and costs of
investigation and defense, and each party waives any right to recover those
fees and costs from the other party or parties.


 


O.8                                Mutual Waiver of Certain Remedies. Except as to
the parties’ indemnification obligations, NEITHER PARTY SHALL BE LIABLE OR
OTHERWISE RESPONSIBLE TO THE OTHER FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, FOR
LOST PRODUCTION, OR FOR PUNITIVE DAMAGES AS TO ANY ACTION OR OMISSION, WHETHER CHARACTERIZED AS A CONTRACT
BREACI-I OR TORT, THAT ARISES OUT OF OR RELATES TO THIS CONTRACT OR ITS
PERFORMANCE OR NONPERFORMANCE.


 


0.9                                   Arbitration. The parties desire to resolve any disputes that may
arise informally, if possible. All disputes arising out of or relating to this
Contract that are not resolved by agreement of the parties must be resolved
using the provisions of this Section. To that end, if a dispute or disputes
arise out of or relating to this Contract, a party shall give written notice of
the disputes to the other involved parties, and each party will appoint an
employee to negotiate with the other party concerning the disputes. If the
disputes have not been resolved by negotiation within 30 Days of the initial
dispute notice, the disputes shall be resolved by arbitration in accordance
with the then current International Institute for Conflict Prevention and
Resolution Rules for Non-Administered Arbitration and related commentary (“Rules”)
and this Section. The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. §§ 1-16, and the Rules, to the exclusion of any
provision of state law inconsistent with them. The arbitration shall be
initiated by a party seeking arbitration by written notice transmitted to the
other party or parties to be involved. The parties shall select one
disinterested arbitrator with at least ten years’ experience in the natural gas
industry or ten years’ experience with natural gas law, and not previously employed
by either party or its affiliates, and, if possible, shall be selected by
agreement between the parties. If the parties cannot select an arbitrator by
agreement within 1 5 Days of the date of the notice of arbitration, a qualified
arbitrator will be selected in accordance with the Rules. If the disputes
involve an amount greater than $500,000, they will be decided by a panel of
three arbitrators with the above qualifications, one selected by each party,
and the third selected by the party-appointed arbitrators, or in the absence of
their agreement, pursuant to the Rules. The arbitrator(s) shall resolve
the disputes and render a final award in accordance with the substantive law of
the state referenced in Section 0.1 above, “Governing Law.” The arbitrator’s
award will be limited by the provisions set forth in Sections 0.7, “Fees and
Costs; Damages” and 0.8 above, “Mutual Waiver of Certain Remedies.” The parties
intend case specific dispute resolution; either party may opt out of any attempted class action for all claims of any
party related to this Contract. The arbitrator(s) shall set forth the
reasons for the award in writing, and judgment on the arbitration award may be entered in any court having
jurisdiction.


 


END
OF EXHIBIT A TO GAS PURCHASE


CONTRACT


 


A-7
















 


EXHIBIT B


 


TO GAS PURCHASE CONTRACT


 


Between W.O. OPERATING COMPANY, LTD as Seller


 


And DCP MIDSTREAM, LP as Buyer


 


Dated July 1, 2009


 


ARNOLD LEASE:


 


East
Half of the Northeast Quarter (E/2 NE/4) of Section 149, Block. 3, I&GN RR Co. Survey, Gray County,
Texas


 


B.F. BLOCK LEASE:


 


Northwest
Quarter (NW/4) of Section One Hundred Eleven (111), Block 4, I&GN RR Co. Survey, Carson County,
Texas.


 


BLOCK LEASE:


 


Northeast
Quarter (NE/4) of Section Number One Hundred Twelve (112), Block (4),
I&GN RR Co. Survey, Carson County, Texas.


 


BLOCK “A” LEASE:


 


All
of the North Half (N12) of the
Northwest Quarter (NW/4) of the Southeast Quarter (SE/4), and the Southeast
Quarter (SE/4) of the Northwest Quarter (NW/4) of the Southeast Quarter (SE/4),
and the North Half (N/2) of the Northeast Quarter (NE/4) of the Southeast
Quarter (SE/4), and the Southeast Quarter (SE/4) of the Northeast Quarter
(NE/4) of the Southeast Quarter (SE/4), and the Northeast Quarter (NE/4) of the
Southwest Quarter (SW/4) of the Southeast Quarter (SE/4) and the Southwest
Quarter (SW/4) of the Southeast Quarter (SE/4) of the Southeast Quarter (SE/4)
of Section Number One Hundred Eleven (111), Block Number Four (4),
I&GN RR Co. Survey, Carson County, Texas as to oil and casinghead gas
rights only.


 


BLOCK “B” LEASE:


 


All
of the East Half (E12) of the
Southeast Quarter (SE/4) of the Southeast Quarter (SE/4), and the Northwest
Quarter (NW/4) of the Southeast Quarter (SE/4) of the Southeast Quarter (SE/4),
and the Southwest Quarter (SW/4) of the Northeast Quarter ~NE/4) of the
Southeast Quarter (SE/4), and the Southwest Quarter (SW/4) of the Northwest
Quarter (NW/4) of the Southeast Quarter (SE/4), and the Northwest Quarter
(NW/4) of the Southwest Quarter (SW/4) of the Southeast Quarter (SE/4), and the
South Half (S/2) of the Southwest Quarter (SW/4) of the Southeast Quarter
(SE/2) of Section Number One Hundred Eleven (111), Block Number Four (4),
I&GN RR Co. Survey, Carson County, Texas, as to oil and casinghead gas
rights only, down to and including 3,300 feet below the surface.


 


B-1

















 


BLOCK “C” LEASE:


 


Northeast Quarter (NE/4) of Section One
Hundred Eleven (111), Block 4, I&GN RR Co. Survey, Carson County, Texas as
to all rights in and to the Brown Dolomite and the White Dolomite Formations,
found at a depth of approximately 2,900 feet to 3,250 feet below the surface,
but in no event to depths exceeding 3,250 feet below the surface.


 


T.J. BONEY NCT 1 LEASE:


 


Northwest
Quarter (NW/4) of Section 91, and Southwest Quarter (SW/4) of Section 108,
Block 4, I&GN Survey, Carson County, Texas.


 


T.J. BONEY NCT 2 LEASE:


 


Southwest
Quarter (SW/4) of Section 90, Block 4, I&GN RR. Co. Survey, Carson
County, Texas.


 


T.J. BONEY NCT 4 LEASE:


 


Northwest
Quarter (NW/4) of Section 89, Block 4, I&GN RR Co. Survey, Carson
County, Texas.


 


CALDWELL BRYAN LEASE:


 


Northwest
Quarter (NW/4) of the Northeast Quarter (NE/4) of the Southwest Quarter (SW/4)
and the North Half (N/2) of the Southwest Quarter (SW/4) of the Northeast
Quarter (NE/4) of the Southwest Quarter (SW/4) of Section Number
Ninety-Two (92), BLOCK FOUR (4), I&GN RY. CO. Survey, Carson County, Texas.


 


CASTLEBERRY B LEASE:


 


North
80 acres of the West 100 acres of the North Half~ Section 151, Block. 3,
I&GN Survey, Gray County, Texas


 


CITIES SERVICE C LEASE:


 


NW/4
of Section 108, Block 4, I&GN Survey, Carson County, Texas


 


COCKRELL
B LEASE:


 


E/2
SE/4, Section 2, Block B-3, D&SE RR Survey, Hutchinson County, Texas


S/2
SE/4 NE/4, Section 2, Block B-3, D&SE P.R Survey, Hutchinson County,
Texas


 


COCKRELL D LEASE: Meter TBD


 


All
of Section 9, Block B-3, D&SE Survey, Hutchinson County, Texas


 


COCKRELL
F LEASE:


 


W/2
NW/4, Section 2, Block B-3, D&SE RR Survey, Hutchinson County, Texas


NW/4
NE/4, Section 2, Block B-3, D&SE RR Survey, Hutchinson County, Texas


North
40 acres of Section 1, Block B-3, D&SE RR Survey, Hutchinson County,
Texas


W/2
SW/4, Section 2, Block B-3, D&SE RR Survey, Hutchinson County, Texas


NE/4
NW/4, Section 2, Block B-3, D&SE P.R Survey, Hutchinson County, Texas


 


B-2

















 


COCKRELL RANCH LEASE:


 


(1)     Section 11, Block B-3, D&SE Ry.
Co. Survey, Hutchinson County, Texas, among other lands not affected hereby,
less and except the following described lands:


 


(a)    100 acres in the Southwest corner of Section 11,
Block B-3, D&SE Survey, Hutchinson County, Texas, said 100 acres more
particularly described as follows: Beginning at the Southwest corner of Section 11,
Block B-3, D&SE Survey, Hutchinson County, Texas; Thence North, with the West
line of said Section 11, 2203.1 feet; Thence East, parallel with the South
line of Section 11, 1320 feet; Thence South, parallel with the West line
of Section 11, 1320 feet; Thence East, parallel with the South line of Section 11,
1639.8 feet; Thence South, parallel with the West line of Section 11,
883.1 feet to a point in the South line of Section 11, Thence West, with
the South line of Section 11, 2959.8
feet to the point of beginning and containing 100 acres, more or less.


 


(b)    132.3 acres in Section 11, Block B-3,
D&SE Survey, Hutchinson County, Texas, said 132.3 acres being more
particularly described in six fracts as follows:


 


TRACT 1:       Beginning
at a point in the North line of Section 11, Block B-3, D&SE Survey,
Hutchinson County, Texas, 660.0 feet East from its Northwest corner;


 


Thence East, with the North line of Section 11, 660.0 feet;


Thence South, parallel with the West line of Section 11, 660.0
feet;


Thence West, parallel with the North line of Section 11, 660.0
feet;


Thence North, parallel with the West line of Section 11, 660.0
feet, to the point of beginning, containing 10.0 acres, more or less.


 


TRACT 2:       Beginning
at a point in the West line of Section 11, Block B-3, D&SE Survey,
Hutchinson, County, Texas, 1533.3 feet South from its Northwest corner;


 


Thence North, with the West line of Section 11,
873.3 feet;


Thence East, parallel with the North line of Section 11,
660.0 feet;


Thence South, parallel with the West line of Section 11,
660.0 feet;


Thence East, parallel with the North line of Section 11,
660.0 feet;


Thence South, parallel with the West line of Section 11,
213.3 feet;


Thence West, parallel with the North line of Section 11,
1320.0 feet, to the point of the beginning, containing 16.5
acres, more or less.


 


TRACT 3:       Beginning
at a point 1320.0 feet East and 660.0 feet South of the Northwest corner of Section 11,
Block B-3, D&SE Survey, Hutchinson. County, Texas;


 


Thence East, parallel with the North line of Section 11,
660.0 feet;


Thence South, parallel with the South line of
Section 11, 660.0 feet;


Thence West, parallel with the North line of Section 11,
660.0 feet;


Thence North, parallel with the West line of Section 11,
660.0 feet, to the point of beginning, containing 10.0 acres, more or less.


 


TRACT 4:       Beginning
at the Northeast corner of Section 11, Block B-3, D&SE Survey,
Hutchinson County, Texas;


 


Thence South, parallel with the East line of Section 11,
1320.0 feet;


Thence West, parallel with the North line of Section 11,
1094.7 feet;


Thence North, parallel with the East line of Section 11,
660.0 feet;


Thence West, parallel with the North line of Section 11,
660.0 feet;


Thence North, parallel with the East line of Section 11,
660.0 feet;


 


B-3

















 


Thence East, with the North line of Section 11, 1754.7 feet, to
the point of beginning, containing 43.2 acres, more or less.


 


TRACT 5:       Beginning
at a point in the East line of Section 11, Block B-3, D&SE Survey,
Hutchinson County, Texas, 565.6 feet North of its Southeast corner;


 


Thence West, parallel with the South line of Section 11,
770.1 feet;


Thence North, parallel with
the East line of Section 11, 530.8 feet;


Thence West, parallel with the South line of Section 11,
324.6 feet;


Thence North, parallel with the East line of Section 11,
660.0 feet;


Thence West, parallel with the South line of Section 11,
660.0 feet;


Thence North, parallel with the East line of Section 11,
660.0 feet;


Thence East, parallel with the South line of Section 11,
660.0 feet;


Thence South, parallel with the East line of Section 11,
397.9 feet;


Thence East, parallel with the South line of Section 11,
1094.7 feet;


Thence South, parallel with the East line of Section 11,
1452.9 feet to the point of the beginning, containing 42.6 acres, more or less.


 


TRACT 6:       Beginning
at the Southwest corner of Section 11, Block B-3, D&SE Survey,
Hutchinson County, Texas;


 


Thence North, with the West line of Section 11,
1096.4 feet;


Thence East, parallel with
the South line of Section 11, 1320.0 feet to the Southwest beginning
corner of the herein described tract;


Thence North, parallel with the West line of Section 11,
660.0 feet;


Thence East, parallel with the South line of Section 11,
660.0 feet;


Thence South, parallel with the West line of Section 11,660.0
feet;


Thence West, parallel with the South line of Section 11,
660.0 feet, to the point of beginning of the herein described tract, containing
10.0 acres, more or less.


 


(2)     Section 6, Block M-2 1, TCRR Survey,
Hutchinson County, Texas, among other lands not affected hereby, less and
except the following described lands:


 


110.0
acres in Section 6, Block M-21, TCRR Survey, Hutchinson County, Texas,
said 110.0 acres being more particularly described in two tracts as follows:


 


TRACT 1:       Beginning
at a point in the most northerly South line of Section 6, Block M-21,
TCR.R Survey, Hutchinson County, Texas, approximately 1570.0 feet easterly from
the most northerly Southwest corner of said Section 6;


 


Thence North, parallel with the most westerly
West line of Section 6, 660.0 feet;


Thence
East, parallel with the most northerly South line of Section 6, 660.0
feet;


Thence South, parallel with the West line of
the herein described tract 660.0 feet to the most northerly South line of Section 6;


Thence West, with the said most northerly
South line, 660.0 feet to the point of beginning, containing 10.0 acres, more
or less.


 


TRAC 2:       Beginning
at the most southerly Southwest corner of Section 6, Block M-2l, TCRR
Survey, Hutchinson County, Texas;


 


Thence North, with the most easterly West
line of Section 6, 1160.0 feet;


Thence East, parallel with the most southerly
South line of Section 6, 620.0 feet;


Thence North, parallel with the most easterly
West line of Section 6, 1510.0 feet;


 


B-4

















 


Thence East, parallel with the most southerly
South of Section 6, 775.0 feet;


Thence South, parallel with the most easterly
West line of Section 6, 1225.0 feet;


Thence East, parallel with the most southerly
South line of Section 6, 580.0 feet;


Thence North, parallel with the most easterly
West line of Section 6, 1215.0 feet;


Thence East, parallel with the most southerly
South line of Section 6, 775.0 feet;


Thence South, parallel with the most easterly
West line of Section 6, 1540.0 feet;


Thence West, parallel with the most southerly
South line of Section 6, 600.0 feet;


Thence South, parallel with the most easterly
West line of Section 6, 570.0 feet;


Thence West, parallel with the most southerly
South line of Section 6, 1200 feet;


Thence South, parallel with the most easterly
West line of Section 6, 550.0 feet
to a point in the most southerly South line of Section 6;


Thence West, with the said southerly South
line, 950.0 feet to the point of 100.0 acres, more or less.


 


(3) East
199.9 acres of N/2, East 160 acres of South 320 acres of Section 3, Block
M-2l, TCRR Survey, Hutchinson County, Texas, among other lands not affected
hereby, less and except the following described tract of land:


 


20 acres of land in the South part of Section 3, M-2l, TCRR
Survey, Hutchinson County, Texas, more particularly described as follows:


 


Beginning at a point in the
South line of Section 3, M-21, TCRR Survey, Hutchinson County, Texas,
3532.2 feet East from the Southwest corner of said Section 3;


Thence North, parallel with
the West line of Section 3, 660 feet;


Thence East, parallel with
the South line of Section 3, 1320 feet;


Thence South, parallel with
the West line of Section 3, 660 feet;


Thence West, along with the
South line of Section 3, 1320 feet to the point of beginning, containing
20.0 acres, more or less.


 


(4) West
240 acres of North 320 acres of Section 2, M-21, TCRR Survey, Hutchinson
County, Texas, among other lands not affected hereby, less and except the
following described land:


 


Beginning at a point on the East line of Section 10
of D&SE RR Co. Survey, in Block B-3, a distance of 1975.1 feet South from
the Northeast corner thereof;


Thence North 1582 feet to a
point on the East line of said Section 10;


Thence East, parallel to the North line of
said Section 2, a distance of 1572.667 feet to a point;


Thence North 660 feet to a point in the North
line of said Section 2;


Thence East along the North
line of Section 2, a distance of 786.333 feet to a point;


Thence South 01 degrees 01
feet 30 inches East, 1494.667 feet;


Thence West, parallel to the
North line of said Section 2, a distance of 969.933 feet to a point;


Thence South 01 degrees 01
feet 30 inches East, a distance of 747.333 feet to a point;


Thence South 88 degrees 58
feet 30 inches West, a distance of 1389.067 feet to the place of beginning,
containing 81 acres, more or less.


 


INSOFAR
ONLY as the same covers and affects the oil, gas and other minerals in the
interval between the surface and 100 feet below the base of the Chase Group of
the Wolfcamp Series of the Permian System.


 


B-5

















 


COOPER “A” LEASE:


 


The Northwest Quarter (NW/4) of the Southeast
Quarter (SE/4) of the Southwest Quarter (SW/4) of the Northeast Quarter (NE/4)
of Section Four (4), Block Nine (9), I&GN RR Co. Survey, Carson
County, Texas.


 


COOPER “B” LEASE:


 


The
Northeast Quarter (NE/4) of the Northeast Quarter (NE/4) and the North Half
(N/2) of the Southeast Quarter (SE/4) of the Northeast Quarter (NE/4) of Section Five
(5), Block Nine (9), I&GN
RR Co. Survey, Carson County, Texas.


 


COOPER “E”
LEASE:


 


Northwest Quarter (NW/4) of Section Four
(4), Block Nine (9), I&GN P.R  Co. Survey, Carson County, Texas.


 


COOPER “G” LEASE:


 


The
southeast Quarter (SE/4) of the Northeast Quarter (NE/4) and the Northeast
Quarter (NE/4) of the Southeast Quarter (SE/4) of Section Four (4), Block Nine
(9), I&GN RR Co. Survey, Carson County, Texas.


 


COOPER “H” LEASE:


 


East
Half (E/2) of the Northwest Quarter (NW/4) of Section Five (5), Block Nine (9), I&GN RR Co. Survey,
Carson County, Texas.


 


DAVE POPE (gas well) LEASE:


 


Southwest
Quarter (S W/4)of Section 173, Block. 3, I&GN PR Co. Survey, Gray County, Texas


 


DJORDAN  LEASE:


 


The
Southwest Quarter (SW/4) of Section 20, Block M-21, TCRR Co. Survey, Cert.
1011, Hutchinson County, Texas; the Southeast Quarter (SE/4) of Section 123,
Block 4, I&GN RR Co. Cert. 1326, Hutchinson and Carson Counties, Texas; The
Southwest Quarter (SW/4) of Section 114, Block 4, I&GN PR Co. Survey,
Cert. 1317, Carson County, Texas; and the Southwest Quarter (SW/4) of Section 105,
Block 4, I&GN RR Co. Survey, Cert. 1308, Carson County, Texas; INSOFAR ONLY
as the same covers and affects the oil, gas, and other minerals in the interval
between the surface and 100 feet below the base of the Chase Group of the
Wolfcamp Series of the Permian Series.


 


DRILLEX LEASE:


 


West 60 acres of the North 319.9 acres and
the West 80 acres of the South 320 acres of Section 3, Block M-2l, TC
Survey, Hutchinson County, Texas


 


E. COOPER NCT “A”, “B”,AND “C” LEASE:


 


Southwest
Quarter (SW/4) of Section One (1), and all of the Southwest Quarter (SW/4)
of Section Four (4), and all of the Southwest Quarter (SW/4) of Section Five
(5), all in Block Nine (9),
I&GN PR Co. Survey, Carson County, Texas.


 


E.F. BRYAN LEASE:


 


S/2 NE/4 SE/4, SE/4 SE/4, NW/4 NW/4 SE/4,
NE/4 SW/4, E/2 NW/4 SE/4, Section 107, Block 4, I&GN PR Co. Survey,
Carson County, Texas.


 


B-6

















 


E. COCKRELL LEASE:


 


That portion of the West 280 acres of Section 3, Block M-2l, TCPR
Survey, as colored in yellow on Exhibit “A-F’ attached hereto.


 


That portion of the East 60 acres of the West 120 acres of the North
319.9 acres and the East 80 acres of the West 160 acres of the South 320 acres
of Section 3, Block M-21, TCRR Survey, Hutchinson County, Texas, as
colored in yellow on Exhibit “A-1” hereto.


 


That portion of the West 120 acres of the North 319.9 acres and the
East 80 acres of the West Half(W/2) of the South 320 acres of Section 3,
Block M-21, TCRR Survey, Hutchinson County, Texas, as colored in yellow on Exhibit “A-1”
hereto.


 


FEE 244 LEASE:


 


E/2,
SW/2 Section 89; N/2 Section 90; E/2 and SW/4 Section 91; E/2 Section 108,
All of Section 109; and E/2 and SW/4 Section 110, Block 4, I&GN
PR Co. Survey, Carson County, Texas.


 


FIRST STATE BANK OF WHITE DEER LEASE:


 


I&GN
PR Co. Survey, Block 4, Section 51: N/2, SW/4; Section 52: All; Section 59: S/2, NE/4; Section 60:
S/2, NW/4


 


Containing
2080.0 acres, more or less in Carson County, Texas, AS TO AND ONLY AS TO oil
and casinghead gas rights from the surface to 100 feet below the Granite Wash
formation. LESS AND EXCEPT a water well located 324 feet from the East Line and
2,227 feet from the South line in Section 59, Block 4, I&GN PR CO. Survey.


 


C.R. GARNER LEASE:


 


I&GN
RR Co. Survey, Block 4, Section 95: All


 


Containing
640 acres, more or less, in Carson County, Texas, AS TO AND
ONLY AS TO oil and casinghead gas rights from the surface to 100
feet below the base of the Granite Wash Formation.


 


W.B. HAILE LEASE:


 


Southwest
Quarter (SW/4) of Section 4, Block, M-21, TCRR Co. Survey, Hutchinson
County, Texas


 


HARVEY UNIT:


 


TRACT 2:              South
Half (S/2) of the East Half(E/2) of the Southwest Quarter (SW/4) of Section 74,
Block Z, HE&WT PR Survey,
Hutchinson County, Texas, among other lands not affected hereby


 


TRACT
3:              East Half(E/2) of the
Northwest Quarter (NW/4) of Section 71, Block Z, HE&WT PR Survey, Hutchinson
County, Texas, among other lands not affected hereby


 


TRACT 5:              Southwest
Quarter (SW/4) of the Southwest Quarter (SW/4) of the Northeast Quarter (NE/4)
of Section 71, Block Z, HE&WT PR Survey,
Hutchinson County, Texas, among other lands not affected hereby


 


TRACT
6:              Southwest Quarter (SW/4)
of Section 71, Block Z, HE&WT P.R Survey,
Hutchinson County, Texas, among other lands not affected hereby


 


B-7

















 


TRACT
7:


 


Lease
No. 1:


 


West
Half (W/2) of the West Half ((W/2) of the Northwest Quarter ~NW/4) of Section 14,
Block M-2 I, TCPR Survey, 1-lutchinson County, Texas, among other lands not
affected hereby


 


Lease
No. 2:


 


Northwest
Quarter (NW/4) of the Northwest Quarter (NW/4) of the Southwest Quarter (SW/4)
and the South Half (S/2) of the South Half (S/2) of the Southwest Quarter
(SW/4) of Section 14, Block M-2 I, TCRR Survey, Hutchinson County, Texas,
among other lands not affected hereby


 


TRACT
8:


 


Lease
No. 1:       (l) Beginning at
the Southwest corner of the Southeast Quarter (SE/4) of Section 71, Block
Z, HE&WT Survey, Hutchinson County, Texas; Thence East 660 feet; Thence North
660 feet;


 


Thence West 660 feet; Thence
South 660 feet to the point of beginning, and containing 10 acres.


 


(2) Beginning
at a point in the South line of Section 71, Block Z, HB&WT S Survey,
Hutchinson County, Texas, 1320.01 feet East of the Southwest corner thereof for
beginning corner of this tract; Thence East 660 feet; Thence North 660 feet;
Thence West 660 feet; Thence South 660 feet to beginning corner this tract, and
containing 10 acres.


 


(3) East Half (E/2) of the West Half (W/2) of
the Northwest Quarter (NW/4) and the Southeast Quarter (SE/4) of the Northwest
Quarter (~TI4) of Section 14,
Block M-21, TC Ry. Co. Survey, Hutchinson County, Texas


 


(4) Northeast Quarter (NE/4) and the Northeast
Quarter (NE/4) of the Southeast Quarter (SE/4) of Section 14, Block M-2l,
TC Ry. Co. Survey, Hutchinson County, Texas, less and except the following:


 


(a)   Beginning at the Northeast
corner of said Section 14; Thence West 660 feet; Thence South 1320 feet;
Thence East 660 feet; Thence North 1320 feet, containing 20 acres.


 


(b)   Beginning at a point in the
East line of Section 14, 1980.5 feet from the Northeast corner; Thence
West 660 feet; Thence South 1320 feet; Thence West 660 feet; Thence South 660
feet; Thence East 1320 feet; Thence North 1980 feet to the point of beginning,
containing 40 acres; among other lands not affected hereby.


 


Lease
No. 2:


 


Southwest Quarter (SW/4) of
the Northwest Quarter (NW/4) of the Southwest Quarter (SW/4), and the East Half
(E/2) of the Northwest Quarter (NW/4) of the Southwest Quarter (SW/4), and the
Northeast Quarter (NE/4) of the Southwest Quarter (SW/4), and the North Half
(N/2) of the South Half(S/2) of the Southwest Quarter of Section 14, Block
M-2l, TCRR Survey, Hutchinson County, Texas, among other lands not affected
hereby


 


B-8

















 


Lease No.3:


 


Northwest Quarter (NW/4) of
the Southeast Quarter (SE/4), and the Northeast Quarter (NE/4) of the Northwest
Quarter (NW/4) of Section 14, Block M-21, TCPR Survey, Hutchinson County, Texas


 


TRACT
9:


 


A tract of land beginning at
a point in the East line 1980 feet from the Northeast corner of Section 14,
Block M-2l, TCPR Survey, Hutchinson County, Texas; Thence West 660 feet; Thence
South 1320 feet; Thence West 660 feet; Thence South 660 feet; Thence East 1320
feet to a point on the East line of Section 14, Thence North 1980 feet to
the point of beginning, among other lands not affected here


 


TRACT
10:


 


160 acres out of Section 16, Block M-2 1, TCPR Survey, Hutchinson
County, Texas, described as follows: Beginning at the Southwest corner of said Section 16;
Thence East 1320 feet along the South boundary line of said Section; Thence
North parallel to the West line of said Section 5280 feet; Thence West
1320 feet to the North line of said Section; Thence South 5280 feet along the
West line of said Section, to the point of beginning.


 


J.C. McCONNELL “A” LEASE:


 


Northeast
Quarter (NE/4) of Section 66, Block 4, I&GN PR Co. Survey,


 


Containing
160 acres, more or less, in Carson County, Texas, AS TO AND ONLY AS TO
oil and casinghead gas rights from the surface to 100 feet below the base of
the Granite Wash Formation.


 


JK QUINN LEASE:


 


North
Half (N/2), Southeast Quarter (SE/4) of Section 7, Block 9, I&GN PR Co. Survey,


 


Containing
480 acres, more or less, in Carson and Hutchinson Counties, Texas, AS TO AND
ONLY AS TO oil and casinghead gas rights from the surface to 100 feet below
the base of the Granite Wash Formation.


 


JW MOORE LEASE:


 


S/2
NE/4 and the W/2 NW/4 NE/4, of Section 21, Block M-21, T.C. Ry. Co.
Survey, Hutchinson County, Texas


 


JORD LEASE: Meter TBD


 


The
South Half (S/2) of Southeast Quarter (SE/4) of Section 106, Block 4,
I&GN PR Survey, Carson
County, Texas, INSOFAR ONLY as the same covers and affects the oil, gas and
other minerals in the interval between the surface and 100 feet below the base
of the Chase Group of the Wolfcamp Series of the Permian System.


 


KLAUSE COCKRELL A LEASE:


 


Southeast
Quarter (SE/4) of the Northwest Quarter (NW/4) of Section 3, Block Y, M &
C Survey, Hutchinson County, Texas, consisting of 40 acres, more or less


 


B-9

















 


KLAUSE COCKRELL B LEASE:


 


West
Half (W/2) of the Northwest Quarter (NW/4) of Section 3, Block Y, M &
C Survey, Hutchinson County, Texas, consisting of 80 acres, more or less


 


LANGDON LEASE:


 


North
Half (N/2) of the Northeast Quarter (NE/4) of Section One Hundred
Twenty-Five (125), Block Four
(4), I&GN PR Co. Survey,
Carson County, Texas.


 


LONG LEASE:


 


North
Half (N/2) less the West Half of the Southwest Quarter of the Northwest
Quarter(W/2 SW/4 NW/4),Section 113, Block. 4, I&GN Survey, Carson
County, Texas


 


NEWBLOCK LEASE:


 


South
Half (S/2)  of the Northeast Quarter (NE/4) of Section One
Hundred Twenty-Five (125), Block Four (4), I&GN Co. Survey, Carson County,
Texas.


 


OLIVE COOPER LEASE:


 


S/2
of the SE/4, Section Four, Block Nine, I&GN Survey, Carson County,
Texas.


 


PHILLIPS BRYAN LEASE:


 


W/2 of the NE/4 of the SW/4; W/2 of the SW/4
of the SE/4; N/2 of the NE/4 of the SE/4 of Section 107, Block 4, I&GN
Survey, Carson County, Texas.


 


N/2
and SE/4 of SE/4 of NW/4; S/2 and NW/4 of NW/4 of NE/4; SW/4 of NE/4 of NE/4;
W/2 of SW/4 of NE/4; S/2 and NE/4 of SE/4 of NE/4 of Section 92, Block 4,
I&GN Survey, Carson County, Texas.


 


PHILLIPS COOPER “B” LEASE:


 


W/2 of the SW/4 of Section Three (3),
Block Nine (9), I&GN Survey, Carson, County, Texas.


 


PHILLIPS COOPER “C”
LEASE:


 


W/2
of the NE/4, Section Five, Block Nine, I&GN PR Survey, Carson County,
Texas.


 


PITCHER LEASE:


 


Northwest Quarter (NW/4) of Section Nineteen
(19), Block M-21, TCPR Survey, Hutchinson County, Texas.


 


QUINN LEASE:


 


Southwest Quarter (SW/4) of Section Seven
(7), Block Nine (9), I&GN PR Co. Survey, Hutchinson County, Texas.


 


RUBY SACKETT LEASE:


 


Southwest
Quarter (SW/4) of Section 148; Northwest Quarter(NW/4) of Section 148,
all lying in Block 3, I&GN PR Co. Survey, less the East 80 acres thereof


 


R.W. HARRAH LEASE:


 


South
40 acres of the East 120 acres of the Northeast Quarter (NE/4) of Section 163,
Block. 3, I&GN RRCo. Survey, Gray County, Texas


 


B-10
















 


SCHAFER LEASE:


 


106.62   acres
of land out of the Northwest Quarter (NW/4) of Section Number One Hundred
Ninety-Five (195), in Block
Three (3), I&GN PR Co.
Survey, Carson County, Texas, more particularly described as follows:


 


BEGINNING
at the Southwest corner of said NW/4 of Section 195;


 


THENCE
North with the West line of Section 195, 1980 feet to a point;


 


THENCE
East parallel with the South line of said N~\AT/4 of Section 195, 660 feet to a point;


 


THENCE
South parallel with the West line of said Section 195, 294 feet to a
point;


 


THENCE
East parallel with the South line of said NW/4 of Section 195, 1980 feet to a point in the East
line of the NW/4 of said Section 195;


 


THENCE
South with the East line of the NW/4 of said Section 195, 1686 feet to the
Southeast corner of the NW/4 of said Section 195;


 


THENCE
West parallel with the South line of said Section 195, 2640 feet to the PLACE OF BEGINNING.


 


SCHAFER RANCH LEASE:


 


SW/4
Section 87, Block 4, I&GN Survey, Carson County, Texas, INSOFAR AND
ONLY INSOFAR AS to oil and casinghead gas rights from the surface to 100’ below
the base of Granite Wash.


 


SE/4
Section 87, block 4, I&GN Survey, Carson County, Texas, INSOFAR AND
ONLY INSOFAR AS to the surface to 100’ below the base of Granite Wash.


 


containing
640 acres, more or less in Carson County, Texas


 


S/2,
W2NW/4 of Section 86, Block 4, I&GN Survey, Carson County, Texas,
INSOFAR AND ONLY INSOFAR AS to oil and casinghead gas rights from the surface
to 100’ below the base of Granite Wash.


 


E/2NW/4,
NE4 of Section 86, N/2 of Section 87, Block 4, I&GN Survey,
Carson County, Texas, INSOFAR AND ONLY INSOFAR AS to the surface to 100 below
the base of Granite Wash.


 


containing
640 acres, more or less in Carson County, Texas.


 


E/2E/2NE/4
of Section 85, Block 4, I&GN Survey, Carson County, Texas, INSOFAR AND
ONLY INSOFAR AS to oil and casinghead gas rights from the surface to 100’ below
the base of Granite Wash.


 


W/2SW/4,
W/2E/2SW/4 of Section 88, Block 4, I&GN Survey Carson County, Texas
INSOFAR AND ONLY INSOFAR AS to the surface to 100’ below the base of Granite
Wash.


 


containing
160 acres, more or less in Carson County, Texas.


 


B-11

















 


N/2,
SE/4 of Section 68, Block 4, I&GN Survey, Carson County, Texas,
INSOFAR AND ONLY INSOFAR AS to oil and casinghead gas rights from the surface
to 100’ below the base of Granite Wash. containing 480 acres, more or less in
Carson County, Texas.


 


E/2NE/4
of Section 69, Block 4, I&GN Survey, Carson County, Texas, INSOFAR AND
ONLY INSOFAR AS to oil and casinghead gas rights from the surface to 100’ below
the base of Granite Wash.


 


Containing
80 acres, more or less in Carson County, Texas


 


SIN-HARRAH
LEASE:


 


North
80 acres of the East 240 acres, Section 163, Block 3, I&GN RR Co.
Survey, Gray County, Texas


 


SEIBOLD LEASE:


 


East
Half (E/2) of the Southeast Quarter (SE/4) of Section One Hundred
Twenty-Five (125), Block Four (4),
I&GN PR Co. Survey, Hutchinson and Carson
Counties, Texas.


 


SOUTHLAND B LEASE:


 


SW/4
NE/4, Section 2, Block 3-3, D&SE PR
Survey, Hutchinson County, Texas


North
30 acres of the E/2 NE/4 of Section 2, Block B-3, D&SE PR Survey, Hutchinson County, Texas


W/2
SE/4 Section 2, Block B-3, D&SE PR Survey,
Hutchinson County, Texas


E/2
NE/4 of Section 2, Block 3-3, D&SE PR
Survey, Hutchinson County, Texas


E/2
SW/4 of Section 2, Block B-3, D&SE PR Survey, Hutchinson County,
Texas.


 


SMITTY LEASE:


 


Section One
(1), Block Nine (9), I&GN PR Survey, Carson County, Texas.


 


TURNER KENT “A” LEASE:


 


30
acres in Section 3, Block M-2l, TCPR Survey, Hutchinson County, Texas
being more particularly described as follows:


 


Beginning
at a point in the most southerly North line of Section 3, Block M-21, TCPR
Survey, 2426.7 feet East from its most southerly Northwest corner; Thence East,
with the most southerly North line of Section 3, 446.1 feet; Thence South,
parallel with the most westerly West line of Section 3, 660.0 feet; Thence
East, parallel with the most southerly North line of Section 3, 660.0
feet; Thence South, parallel with the most westerly West line of Section 3,
819.8 feet; Thence West, parallel with the most southerly North line of Section 3,
883.1 feet; Thence North, parallel with the most westerly West line of Section 3,
493.3 feet; Thence West, parallel with the most southerly North line of Section 3,
883.0 feet; Thence North, parallel with the most westerly West line of Section 3,
326.5 feet; Thence East, parallel with the most southerly North line of Section 3,
660.0 feet; Thence North, parallel with the most westerly West line of Section 3,
660,0 feet to the point of beginning, and containing 30.0 acres, more or less.


 


100
acres in the south part of Section 3, Block M-21, TCPR Survey, Hutchinson
County, Texas, being more particularly described as follows:


 


Beginning
at a point in the South line of Section 3, Block M-2l, TCPR Survey, 1766.1
feet easterly from the southwest corner of said Section3; Thence North,
parallel with the west line of Section 3, 2466.5
feet; Thence East, parallel with the south line of Section 3,
883.0 feet; Thence South, parallel 


 


B-12

















 


with the West line of Section 3, 986.6 feet; Thence East, parallel
with the South line of Section 3, 883.1 feet; Thence South, parallel with
the West line of Section 3, 819.9 feet; Thence East, parallel with the
South line of Section 3, 1320 feet; Thence South, parallel with the West
line of Section 3, 660.0 feet to a point in the South line of Section 3;
Thence West, with the South line of Section 3, 3086.1 feet to the point of
beginning, and containing 100 acres, more or less.


 


TURNER KENT “B” LEASE:


 


PARCEL
I: 100 acres in the Southwest corner of Section 11, Block B-3, D&SE
Survey, Hutchinson County, Texas, among other lands not affected hereby, said
100 acres more particularly described as follows:


 


Beginning at the Southwest corner of Section 11,
Block B-3, D&SE Survey, Hutchinson County, Texas; Thence North, with the
west line of said Section 11, 2203.1 feet; Thence East, parallel with the
South line of Section 11, 1320 feet; Thence South, parallel with the west
line of Section 11, 1320 feet;


 


Thence East, parallel with the South line of Section 11,
1639.8 feet; Thence South, parallel with the West line of Section 11,
883.1 feet to a point in the South line of Section 11; Thence West, with
the South line of Section 11, 2959.8 feet to the point of beginning and
containing 100 acres, more or less.


 


PARCEL
II: 132.3 acres in Section 11, Block B-3, D&SE Survey, Hutchinson
County, Texas, among other lands not affected hereby, said 132.2 acres being
more particularly described in six tracts as follows:


 


TRACT 1:           Beginning
at a point in the North line of Section 11, Block B-3, D&SE Survey,
Hutchinson County, Texas, 660.0 feet East from its Northwest corner; Thence
East, with the North line of Section 11, 660.0 feet; Thence South,
parallel with the West line of Section 11, 660.0 feet; Thence West;
parallel with the North line of Section 11, 660.0 feet; Thence North,
parallel with the West line of Section 11, 660.0 feet to the point
beginning containing 10.0 acres, more or less.


 


TRACT 2:           Beginning
at a point in the West line of Section 11, Block B-3, D&SE Survey,
Hutchinson County, Texas, 1533.3 feet South from its Northwest corner; Thence
North, with the West line of Section 11, 873.3 feet; Thence East, parallel
with the North line of Section 11, 660.0 feet; Thence South, parallel with
the West line of Section 11, 660.0 feet; Thence East, parallel with the
North line of Section 11, 660.0 feet; Thence South, parallel with the West
line of Section 11, 213.3 feet; Thence West, parallel with the North line
of Section 11, 1320.0 feet to the point of beginning containing 16.5 acres, more or less.


 


TRACT 3:              Beginning
at a point 1320.0 feet East and 660.0 feet South of the Northwest corner of Section 11,
Block B-3, D&SE Survey, Hutchinson County, Texas; Thence East, parallel
with the North line of Section 11, 660.0 feet; Thence South, parallel with
the West line of Section 11, 660.0 feet; Thence West, parallel with the
North line of Section 11, 660.0 feet; Thence North, parallel with the West
line of Section 11, 660.0 feet to the point of beginning containing 10.0
acres, more or less.


 


TRACT 4:              Beginning
at the Northeast corner of Section 11, Clock B-3, D&SE Survey, Hutchinson
County, Texas; Thence South, with the East line of Section 11, 1320.0
feet; Thence West, parallel with the North line of Section 11, 1094.7
feet; Thence North, parallel with the East line of Section 11, 660.0 feet;
Thence West, parallel with the North line of Section 11, 660.0 feet; Thence
North, parallel with the East line of Section 11, 660.0 feet to its North
line; Thence East, with the North 


 


B-13

















 


line
of Section 11, 1754.7 feet to the point of beginning containing 43.2 acres
more or less.


 


TRACT 5:           Beginning at a point in the
East line of Section 11, Block B-3, D&SE Survey, Hutchinson County,
Texas, 565.5 feet North of its
Southeast corner, Thence West, parallel with the South line of Section 11,
770.1 feet; Thence North, parallel with the East line of Section 11, 530.8
feet; Thence West, parallel with the South line of Section 11, 324.6 feet;
Thence North, parallel with the East line of Section 11, 660.0 feet;
Thence West, parallel with the South line of Section 11, 660.0 feet; Thence
North, parallel with the East line of Section 11, 660.0 feet; Thence East,
parallel with the South line of Section 11, 660.0 feet; Thence South,
parallel with the East line of Section 11, 397.9 feet; Thence East,
parallel with the South line of Section 1094.7 feet to its East line;
Thence South, with the East line of Section 11, 1452.9 feet to the point
of beginning, containing 42.6 acres, more or less.


 


TRACT 6:           Beginning
at the Southwest corner of Section 11, Block D-3, D&SE Survey,
Hutchinson County, Texas; Thence North, with the West line of Section 11,
1096.4 feet; Thence East, parallel with the South line of Section 11,
1320.0 feet to the Southwest and beginning corner of the herein described
tract; Thence North, parallel with the West line of Section 11, 660.0
feet; Thence East, parallel with the South line of Section 11, 660.0 feet;
Thence South, parallel with the West line of Section 11, 660.0 feet;
Thence West, parallel with the South line of Section 11, 660.0 feet to the
point of beginning of the herein described tract containing 10.0 acres, more or
less.


 


PARCEL
III:          110.0 acres in Section 6,
M-2l, TCRR Survey, Hutchinson County, Texas, among other lands not affected
hereby, said 110.0 acres being more particularly described in two tracts as follows:


 


TRACT 1:           Beginning
at a point in the most northerly South line of Section 1, Block M-21, TCPR
Survey, Hutchinson County, Texas, approximately 1570.0 feet easterly from the
most northerly Southwest corner of Section 6; Thence North, parallel with
the most westerly West line of Section 6, 660.0 feet; Thence East ,
parallel with the most northerly South line of Section 660.0 feet; Thence
South, parallel with the West line of the herein described tract 660.0 feet to
the most northerly South line of Section 6; Thence West, with the said
most northerly South line, 660.0 feet to the point of beginning and containing
10.0 acres, more or less.


 


TRACT 2:              Beginning
at the most southerly Southwest corner of Section 6, Block M-21, TCPR
Survey, Hutchinson County, Texas; Thence North, with the most easterly West
line of Section 6, 1160.0 feet; Thence East, parallel with the most
southerly South line of Section 6, 620.0 feet; Thence North, parallel with
the most easterly West line of Section 6, 1510.0 feet; Thence East,
parallel with the most southerly South line of Section 6, 775.0 feet;
Thence South, parallel with the most easterly West line of Section 6,
1225.0 feet; Thence East, parallel with the most southerly South line of Section 6,
580.0 feet; Thence North, parallel with the most easterly West line of Section 6,
1215.0 feet; Thence East, parallel with the most southerly South line of Section 6,
775.0 feet; Thence South, parallel with the most easterly West line of Section 6,
1540.0 feet; Thence West, parallel with the most southerly South line 660.0
feet; Thence South, parallel with the most easterly West line of Section 6,
570.0 feet; Thence West, parallel with the most southerly South line of Section 6,
1200.0 feet; Thence South, parallel with the most easterly West line of Section 6,
550.0 feet to a point in the most southerly South line of Section 6;
Thence West, with the said southerly South line 950.0 feet to the point of beginning containing 100.0 acres,
more or less.


 


B-14

















 


INSOFAR
ONLY as the above description covers and effects the oil, gas, and other
minerals in the interval between the surface and 100 feet below the base of the
Chase Group of the Wolfcamp Series of the Permian System.


 


VANIMAN LEASE:


 


East
Half of the Northeast Quarter (E/2 NE/4) of Section 175, Block. 3,
I&GN PR Co. Survey, Gray County, Texas


 


W.W. HARRAH LEASE:


 


North
Half of the Northeast Quarter (N/2 NE/4) and the Southwest Quarter of the
Northeast Quarter(SW/4 NE/4) of Section 150, Block. 3, I&GN PR Co. Survey, Gray County, Texas


 


W.W. HARRAH T. LEASE:


 


Southeast
Quarter (SE/4) of Section 150, Block. 3, I&GN PR Co. Survey, Gray County, Texas


 


J.C. McCONNELL LEASE:(gas
well)


 


Section Sixty-Six
(66), Block Four (4), I&GN, Carson County, Texas.


 


McCONNELL LEASE:(gas well)


 


W/2
Section 65, Block 4, I&GN Co. Survey, Carson County, Texas.


 


TEX-ELLER LEASE:(gas well)


 


All
of the Southeast Quarter (SE/4) of Section 200, Block 3, I&GN PR Co. Survey, Carson County, Texas.


 


EXISTING DCP LEASES


 


ANDERSON B LEASE; Meter 43221


 


Northeast
Quarter of the Northeast Quarter (NE/4 NE/4), Section 203, Block. B-2,
H&GN Survey, Gray County, Texas.


 


S.B. BURNETT LEASE TR. 1,2 & 12: Meter 38649 &
38588


 


I&GN
PR Co. Survey, Block 5, Section 114: SW/4; Section 92:
N12; Section 86: N/2,
SE/4, NE/4. Containing 720 acres, more or less, in Carson County, Texas, AS
TO AND ONLY AS TO oil and casinghead gas rights from the surface to 100
feet below the base of the Granite Wash Formation.


 


M.C. BURNETT LEASE TR. 5: Meter 38174


 


H&GN
Survey, Block 5, Section 85: NE/4,
Carson County, Texas


 


CANADIAN KINGSLAND LEASE: Meter 38361


 


North
54 acres of the W/2 SW/4; the South 30 acres of the E/2 NW/4, Section 4,
Block Y, M&C Survey, Hutchinson County, Texas


 


B-15

















 


COCKRELL A LEASE: Meter 38369


 


INSOFAR
as said lease covers the NE/4 NW/4 of Section 3, Block Y, M&C Survey,
Hutchinson County, Texas


 


COCKRELL
E LEASE: Meter 38369


 


NE/4,
Section 3, Block Y, M&C Survey, Hutchinson County, Texas


 


EAKIN LEASE: Meter 43222


 


Northeast
Quarter (NE/4); Northwest Quarter(NW/4) of the Southeast Quarter(NW/4 SE/4)of Section 204,
Block. B-2, H&GN PR Co.
Survey, Gray County, Texas


 


KINGSLAND A LEASE: Meter 38369


 


SE/4
SW/4 and the South 26 acres of the SW/4 SW/4, Section 4, Block Y, M&C
Survey, Hutchinson County, Texas


 


KINGSLAND B LEASE: Meter 38361


 


NW/4
NE/4 of Section 4, Block Y, M&C Survey, Hutchinson County, Texas


 


KINGSLAND C LEASE: Meter 38369


 


SE/4
Section 4, Block Y, M&C Survey, Hutchinson County, Texas


 


MAGIC LEASE: Meter 38361


 


SW/4
NE/4, Section 4, Block Y, M&C Survey, Hutchinson County, Texas


 


N. KINGSLAND B LEASE: Meter 38369


 


N/337
acres of Section 8, Block M-21, TCPR Survey, Hutchinson County, Texas


Southeast
Quarter (SE/4) of Section 150, Block. 3, I&GN RR Co. Survey, Gray
County, Texas


 


BURNETT 1-80 LEASE: Meter 704968 (gas well)


 


Section Eighty
(80), Block Four (4), I&GN Ry. Co. Carson County, Texas


 


BURNETT 1-98 LEASE:
Meter 704968 (gas well)


 


SE/4
Section 98, Block 4 (4), I&GN Ry. Co. Survey, Carson County, Texas


 


BURNETT  1-100
LEASE: Meter 704968 (gas well)


 


Section One
Hundred (100), Block Four (4), I&GN Ry. Co. Survey, Carson County, Texas.


 


J.M. SANFORD LEASE: Meter 33641 & 33326 (gas wells)


 


H. &
T. C. PR. Co. Survey, Block 46, Section 81:
S/2, S/2, of South 320 acres, Section 82: NE/4, N/2, S/2.


 


Containing
120 acres, more or less, in Hutchinson County, Texas, AS TO AND ONLY  AS
TO rights from the surface to 100 feet below the base of the Granite Wash
Formation, less and except gas rights in the Red Cave Formation.


 


B-16

















 


RANCH “E” LEASE: Meter 704978 (gas well)


 


The
East Half (E/2), and the South Half (S/2) of the Southwest Quarter (SW/4) of Section Nine
(9), Block Y, M&C Survey, Hutchinson County, Texas. INSOFAR ONLY as the same
covers and affects the oil, gas, and other minerals in the interval between the
surface and 100 feet below the base of the Chase Group of the Wolfcamp Series of
the Permian System.


 


ROSA #1 & #2 LEASE: Meter 46116 (gas wells)


 


Section 89,
Block Seven (7), I&GN RY. Co. Survey, Carson County, Texas.


 


B-17

















 


PAM064100R


 


EXHIBIT C


 


TO GAS PURCHASE CONTRACT


 


Between W.O. OPERATING COMPANY, LTD as Seller


 


And DCP MIDSTREAM, LP as Buyer


 


Dated July 1, 2009


 


NEW  DELIVERY
POINTS


 


Section 37,
Block 4, I&GN, 35.5l6l8°N, 10l.2392l°W, Carson County, Texas


 


Section 105,
Block 4, I&GN, 35.59162°N, l0l.2l862°W,
Carson County, Texas


 


Section 92,
Block 4, I&GN, 35.58261°N, lOl.l7942°W, Carson County, Texas


 


Section 86,
Block 4, I&GN, 35.57240°N, 10l.15504°W, Carson County, Texas


 


Section 87,
Block 4, I&GN, 35.57042°N, l0l.l4887°W, Carson County, Texas


 


Section 87,
Block 4, I&GN, 35.56794°N, l0l.l4l23°W, Carson County, Texas


 


Section 87,
Block 4, I&GN, 35.56566°N, 101.l3406°W,
Carson County, Texas


 


Section 110,
Block 4, I&GN, 35.59759°N, lOl.12269°W, Carson County, Texas


 


Section 198,
Block 3, I&GN, 35.55l63°N, 101.1
l370°W, Carson County, Texas


 


Section 201,
Block 3, I&GN, 35.51706°N, l0l.10498°W, Carson County, Texas


 


Section 175,
Block 3, I&GN, 35.52496°N, l0l.06640°W,
Gray County, Texas


 


C-1