Exhibit
10.1

     

    GAS
GATHERING AGREEMENT

     

    THIS GAS
GATHERING AGREEMENT (this “Agreement”), dated
November 16, 2009, is by and between (i) Hilltop Resort GS, LLC, a Delaware
limited liability company (“Gatherer”) and (ii)
Gastar Exploration Texas, LP, a Delaware limited partnership (“Producer”).  Gatherer
and Producer are sometimes referred to herein individually as a “Party” and
collectively as the “Parties.”

     

    Recitals:

     

    A.           Gatherer
owns and operates a natural gas gathering system and related facilities in Leon
and Robertson Counties, Texas.

     

    B.           Producer
owns or controls, and has the right to deliver, natural gas for gathering on
such gathering systems, and Gatherer desires to gather such gas, on the terms
and subject to the conditions in the Agreement.

     

    Agreements:

     

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

     

    Article
1

    Definitions

     

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

     

    “AAA” is defined in
Section 13.3(ii).

     

    “Agreement” is defined
in the preamble.

     

    “Affiliate” means, as
to any Person, any other Person that, directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with such
Person, whether by contract, voting power, or otherwise.  As used in
this definition, the term “control,” including the correlative terms
“controlling,” “controlled by,” and “under common control with,” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of an entity, whether through ownership
of voting securities, by contract, or otherwise.

     

    “AMI” means the
geographic area described in Schedule
6.

     

    “Ancillary Agreements”
means this Agreement, the Purchase and Sale Agreement, dated of even date
herewith, between Producer and Gatherer, and the other agreements entered into
by the Parties under the Purchase and Sale Agreement.

     

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

     

    “Bcf” means one
million Mcf’s.

     

    “Btu” means the amount
of energy required to raise the temperature of one pound of pure water one
degree Fahrenheit (1 ̊F) from fifty-nine degrees Fahrenheit (59 ̊F) to sixty
degrees Fahrenheit (60 ̊F).

     

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

     

    “Co-Owners” means
Presco, Inc. and Navasota Resources Ltd., LLP.

     


    
      
         


      

      
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    “Co-Owners’ Gas” means
all Gas owned or controlled by Co-Owners or their Affiliates and their
successors and assigns and gathered on the Gathering System.

     

    “Cumulative Volumetric
Commitment” means 91,250,000 Mcf’s of Gas.

     

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

     

    “Dedicated Reserves”
means the interests of Producer and its Affiliates in all Gas reserves in and
under, and all Gas owned or controlled by Producer or its Affiliates and
produced or delivered from, (i) the Subject Leases and (ii) any other lands
located within the AMI, whether now owned or hereafter acquired by Producer or
its Affiliates.

     

    “Delivery Points”
means (i) the points identified in Schedule 4 at which
Gas is delivered to a Receiving Transporter by Gatherer and (ii) any additional
delivery point that, from time to time, may be added by Gatherer and Producer to
the Gathering System after the Effective Date to permit delivery of Gas to other
Receiving Transporters or other local Gas users such as central treating or
compression facilities operated by Gatherer or Producer.

     

    “Dispute”
is defined in Section
13.3(i).

     

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

     

    “Effective Date” means
November 1, 2009.

     

    “ETC Contract” means,
collectively (i) the Agency Agreement between and among ETC Pipeline, Ltd., and
ETC Katy Pipeline, Ltd and Oasis Pipeline, L.P. and Gastar Exploration Texas,
L.P., effective September 1, 2007; (ii) the Gathering and Natural Gas Services
Agreement between Gastar Exploration Texas, L.P. and ETC Texas Pipeline, LTD.,
dated September 1, 2007 [Contract No. 8885-100]; (iii) the Individual
Transaction Confirmation to Gathering and Natural Gas Services Agreement between
Gastar Exploration Texas, L.P. and ETC Texas Pipeline, LTD. dated September 1,
2007 [Individual Transaction No. 8885-101]; (iv) the Intrastate Natural Gas
Transportation Service Agreement dated September 1, 2007 by and between Oasis
Pipeline, L.P. and Gastar Exploration Texas, L.P. [Contract No.
028-31434-02-100]; (v) the Service Agreement Confirmation to the Intrastate
Natural Gas Transportation Service Agreement [Contract No. 028-31434-02-101];
and (vi) the Intrastate Natural Gas Transportation Service Agreement dated
September 1, 2007 by and between ETC Katy Pipeline Ltd., and Gastar Exploration
Texas L.P. [Contract No. 150-31434-02-100]

     

    “Force Majeure Event”
is defined in Section
9.2.

     

    “Fuel Gas” means (i)
necessary amounts of Gas used by Gatherer for operation of the Gathering System
but excluding any fuel used by Gatherer to operate treating and compression
equipment on the Gathering System, or (ii) Gas used upstream of the Receipt
Points by Producer to operate compressors, dehydrators, and related equipment
and facilities in regards to well operations.

     

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

     

    “Gatherer” is defined
in the preamble.

     

    “Gathering Fees” means
the gathering fees shown in Schedule
1.


    
      
         


      

      
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    “Gathering System”
means the gas gathering system described in Schedule 2, together
with any modifications, alterations, replacements, extensions, or expansions
made by Gatherer, from time to time, to such gathering system.

     

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

     

    “Gross Heating Value”
is defined and determined in strict accordance with Gas Processors Association
(GPA) Standard 2172 – “Calculation of Gross Heating Value, Relative Density, and
Compressibility of Natural Gas Mixtures from Compositional
Analysis.”

     

    “Independent Engineer”
means Netherland, Sewell and Associates, Inc. or such other qualified
independent third party engineer that Gatherer and Producer mutually agree
upon.

     

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

     

    “Lost and Unaccounted for
Gas” means the volumetric losses in Gas that occur on the Gathering
System, other than Gas used for Fuel Gas.

     

    “Maximum Daily Volume”
means the maximum volume of Producer’s Gas that Gatherer is obligated to receive
on any Day at a Receipt Point, as shown in Schedule
3.

     

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

     

    “Mcf’s/d” means Mcf’s
per Day.

     

    “Minimum Reserve
Limit” means, for a well or wells to be connected to the Gathering
System, gross proved developed gas reserves attributable to Producer’s and
Co-Owners’ working interests in such wells and committed by Producer and
Co-Owners to Gatherer for gathering on the Gathering System of not less than 1
Bcf for each mile of new gathering line to be constructed by Gatherer to connect
such well or wells to the Gathering System, as such reserves are determined by
the Independent Engineer.

     

    “Minimum Volume
Period” means the period beginning on the Effective Date and ending on
the 5th
anniversary of the Effective Date.

     

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

     

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

     

    “Notice” is defined in
Section
12.1.

     

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

     

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

     

    “Producer” is defined
in the preamble.

     

    “Producer’s Gas” means
all Gas owned or controlled by Producer or its Affiliates and produced from or
otherwise attributable to the Dedicated Reserves.


    
      
         


      

      
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    “Producer’s Quarterly Deficit
Volumes” means, for a calendar quarter, the volume (in Mcf”s), if any, by
which (i) a volume equal to 35,000 Mcf’s per Day multiplied by the number of
Days in such calendar quarter exceeds (ii) the volume of Producer’s Gas gathered
on the Gathering System in such calendar quarter, as such deficit volume is
reduced by (x) any Quarterly Third Party Credit Volumes gathered in such
calendar quarter and (y) any Quarterly Excess Volumes gathered in prior calendar
quarters but only to the extent such Quarterly Excess Volumes have not been
previously applied.

     

    “Producer’s Quarterly Excess
Volumes” means, for a calendar quarter, the amount (in Mcf”s), if any, by
which (i) the volume of Producer’s Gas gathered on the Gathering System in such
calendar quarter exceeds (ii) a volume equal to 35,000 Mcf’s per Day multiplied
by the number of Days in such calendar quarter.

     

    “Quarterly Minimum
Volume” means, for each calendar quarter in the Minimum Volume Period, a
minimum volume of Gas equal to 50,000 Mcf’s per Day multiplied by the number of
Days in each such calendar quarter.

     

    “Quarterly Third Party Credit
Volumes” means, for a calendar quarter, 70% of the volume (in Mcf’s) of
Third Party Gas gathered on the Gathering System in such calendar
quarter.

     

    “Receipt Points” means
(i) the receipt points described in Schedule 3 and (ii)
any new receipt points that may, from time to time, be added by Gatherer to the
Gathering System after the Effective Date to permit Producer to deliver
Producer’s Gas to the Gathering System.

     

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

     

    “Rules”
is defined in Section
13.3(ii).

     

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

     

    “Subject Leases” means
the oil, gas, and mineral leases, deeds, conveyances, and other instruments
described in Schedule
5.

     

    “Third Party Gas”
means all Gas gathered on the Gathering System from wells within the AMI, other
than Producer’s Gas and Co-Owners’ Gas.

     

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

     

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

     

    Article
2

    Term

     

    2.1              Term Unless
terminated sooner as provided below, the term of this Agreement shall commence
on the Effective Date and continue in effect through the close of the last Day
of the Month following the fifteenth (15th) anniversary of the Effective Date
and shall continue in effect for so long thereafter as Producer’s Gas can be
produced in commercial quantities from the Dedicated Reserves.

     

    2.2              Termination This
Agreement may be terminated as follows:


    
      
         


      

      
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              (i)

            	
              by
      either Party if the other Party fails to perform any of its material
      obligations under this Agreement and such failure is not (x) excused by a
      Force Majeure Event under Article 9 or
      (y) cured by the defaulting Party within 30 Days after written Notice
      thereof by the non-defaulting Party to the defaulting Party;
      or

            


    

     

    
      	
               
      

            	
              (ii)

            	
              by
      either Party if the other Party fails to pay any amount when due under
      this Agreement if such failure is not remedied within ten (10) Business
      Days after Notice of such failure is given by the non-defaulting Party to
      the defaulting Party (other than amounts disputed in good faith pursuant
      to Section
      8.3);

            


    

     

    
      	
               
      

            	
              (iii)

            	
              by
      either Party by Notice to the other Party if the other Party
      (1) makes an assignment or any general arrangement for the benefit of
      creditors, (2) files a petition or otherwise commences, authorizes,
      or acquiesces in the commencement of a proceeding or cause under any
      bankruptcy or similar law for the protection of creditors or have such
      petition filed or proceeding commenced against them, or (3) otherwise
      becomes bankrupt or insolvent (however
  evidenced).

            


    

     

    2.3              Damages for Early
Termination If
either Party terminates this Agreement under Section 2.2 above,
then the terminating Party may pursue any and all remedies at law or in equity
against the non-terminating Party for its Losses resulting from such
termination.  Upon termination of this Agreement, the Parties shall
retain all other rights and remedies available at law or in equity, and
termination of this Agreement shall not relieve the Parties from any obligation
accruing or accrued prior to the date of such termination.

     

    Article
3

    Gathering of Producer’s
Gas

     

    3.1              Dedicated
Reserves.  Subject only to Producer’s Reservations, Producer
(i) exclusively dedicates and commits to the performance of this Agreement the
Dedicated Reserves, (ii) represents that the Dedicated Reserves are not
otherwise subject to any other gas gathering agreement or commitment, except as
provided in the ETC Contract, and (iii) agrees not to deliver any Gas produced
from the Dedicated Reserves and owned or controlled by Producer or their
Affiliates to any other gas gatherer or gas gathering
system.  Producer agrees to cause any existing or future Affiliates of
Producer to be bound by, and to execute and join as a party, this
Agreement.  The dedication and commitment made by Producer and their
Affiliates under this Agreement is a covenant running with the
land.

     

    3.2              Producer’s
Reservations.  Producer reserves the following rights (and
reasonable quantities of Gas to satisfy same) (“Producer’s
Reservations”):  (i) to operate wells producing from the
Dedicated Reserves as a reasonably prudent operator, (ii) to separate or process
Gas using only mechanical equipment located at surface production facilities on
or near wells producing from the Dedicated Reserves, (iii) to use Gas produced
from the Dedicated Reserves for lease operations, (iv) to pool, communitize, or
unitize Producer’s interests in the Dedicated Reserves, and (v) to pay lessors’
royalties in kind.  Producer shall pay Gathering Fees for any volumes
of Gas reserved to pay lessors’ royalties in kind if said volumes are
transported to market on Gatherer’s Gathering System.  If Producer
should commence Gas flow from any new well or if Producer repairs, reworks,
curtails, or plugs and abandons any existing well, notice thereof shall be given
to Gatherer as soon as is reasonably practicable prior to delivering or
curtailing deliveries of Gas from such well to a Receipt Point.

     

    3.3              Memorandum.  Producer
shall enter into and deliver to Gatherer, at Gatherer’s request, a fully
recordable memorandum of this Agreement.

     

    Article
4

    Gathering
Fees

     

    4.1              Gathering
Fees.  As consideration for gathering Producer’s Gas hereunder,
Producer shall pay Gatherer the Gathering Fees for Producer’s Gas delivered to
the Delivery Points each Month, as provided herein.


    
      
         


      

      
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    4.2              Payment Payment
of the Gathering Fees shall be made in accordance with the procedures set forth
in Article
8.

     

    Article
5

    Gas Delivery and
Allocation

     

    5.1              Receipt and
Delivery.  Producer agrees to tender, or cause to be tendered,
to the Receipt Points, Producer’s Gas, each Day, and Gatherer agrees to accept
Producer’s Gas at the Receipt Points,  and redeliver Producer’s Gas,
to the Delivery Points, subject to the terms hereof.  Producer’s Gas
shall be delivered to the Receiving Transporter under the ETC Contract at the
Delivery Points.  Producer and Gatherer may mutually agree to deliver
Producer’s Gas to other available Delivery Points in the future if capacity is
available at such Delivery Points and on the Gathering System as then
configured.  Such redelivery is subject to any additional compression,
treating, and dehydration charges and fees that may be required to effect such
redelivery.

     

    5.2              Minimum Volume
Commitment.

     

    
      	
               
      

            	
              (i)

            	
              Producer's
      Obligation.  Producer commits to deliver to Gatherer for
      gathering on the Gathering System in each calendar quarter during the
      Minimum Volume Period a volume of Gas, which when added to the volume of
      Co-Owners' Gas and Third Party Gas delivered in such calendar quarter, is
      not less than the Quarterly Minimum
Volume.

            


    

     

    
      	
               
      

            	
              (ii)

            	
              Producer’s Quarterly
      Deficit Volumes.  If the volume of Gas (in Mcf’s)
      delivered to and gathered on the Gathering System (including Producer’s
      Gas, Co-Owners’ Gas and Third Party Gas) in a calendar quarter of the
      Minimum Volume Period is less than the Quarterly Minimum Volume, then
      Producer shall pay Gatherer in cash, no later than 30 days following the
      end of such calendar quarter, an amount equal to the Producer’s Quarterly
      Deficit Volume, if any, for such calendar quarter (in Mcf’s) multiplied by
      the Gathering Fee for such calendar quarter, as its share of liquidated
      and agreed damages for the Quarterly Minimum Volume not being delivered to
      the Gathering System in such calendar
quarter.

            


    

     

    
      	
               
      

            	
              (iii)

            	
              Quarterly Excess
      Volumes.  Any Producer’s Quarterly Excess Volumes
      delivered in a calendar quarter will accumulate as a positive balance to
      be used by Gatherer in subsequent calendar quarters without limitation
      during the term to determine and remedy any Producer’s Quarterly Deficit
      Volumes.

            


    

     

    
      	
               
      

            	
              (iv)

            	
              Cumulative Volumetric
      Commitment.  Producer’s obligation hereunder to deliver
      its share of the Quarterly Minimum Volume shall terminate upon the
      delivery to the Gathering System of a volume of Producer’s Gas, Co-Owner’s
      Gas and Third Party Gas equal in the aggregate to the Cumulative
      Volumetric Commitment.

            


    

     

    
      	
               
      

            	
              (v)

            	
              No Suspension.
      Producer’s obligations to make payments under this Section 5.2 shall not
      be suspended or affected by the occurrence of Force Majeure Events
      affecting Producer’s or Co-Owners’ Gas, or the production or delivery
      thereof, upstream of the Receipt
Points.

            


    

     

    
      	
               
      

            	
              (vi)

            	
              First
      Quarter.  The calculations under this Section 5.2 for
      the first calendar quarter in the term of this Agreement shall be
      made only for the Months of November and December 2009 (and will
      exclude October 2009).

            


    

     

    5.3              Scheduling.  Producer
shall Notify Gatherer not less than 3 Business Days before the last day of each
Month of the total volume of Gas (in Mcf’s/d and MMBtu’s) that Producer expects
to deliver in the following Month, specifying the volumes to be delivered to or
by Gatherer at each of the Receipt Points and at the Delivery
Points.  Producer may modify its nominations at any time upon at least
24 hours advance Notice.  The Parties shall coordinate their
nomination activities, giving sufficient time to meet the deadlines of the
Receiving Transporter.  Each Party shall give the other Party timely
prior Notice, sufficient to meet the requirements of the Receiving Transporter
involved in the transaction, of the quantities of Producer’s Gas to be delivered
to the Delivery Points each Day. If either Party becomes aware that actual
deliveries of Producer’s Gas at the Receipt Points or Delivery Points are
greater or less than by 5 per cent or more the quantities of Scheduled Gas, then
such Party shall promptly Notify the other Party.  Throughout the term
of this Agreement, the Parties agree to work together to refine and improve the
scheduling, nominating, and balancing procedures applicable to Producer’s Gas to
accommodate the Receiving Transporter’s nomination procedures (or changes to
such procedures) and the operational requirements of both Gatherer and
Producer.  Except in cases where Gatherer is unable to accept delivery
of Producer’s Gas, and unless Gatherer’s liability, costs or expenses are
incurred as a result of the Gatherer failing to take any action or give any
notice required under this Agreement, if Gatherer incurs any liabilities, costs,
or expenses as a result of Producer not scheduling deliveries of Producer’s Gas
at the Delivery Points in accordance with the Receiving Transporter’s
requirements, then Producer shall promptly reimburse Gatherer for such
liabilities, costs, or expenses, including all imbalance charges assessed in
respect of the delivery of Producer’s Gas to the Receiving
Transporter.


    
      
         


      

      
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    5.4              Thermally Equivalent
Volumes.  Subject to this Agreement, Gatherer shall, as nearly
as practicable each Day, deliver for Producer’s account Equivalent Quantities of
Gas at the Delivery Points.  Fuel Gas shall be rendered to Gatherer by
Producer for Gatherer’s use at no cost to Gatherer; except Gatherer agrees
to  reimburse Producer for landowner  royalties actually
paid by Producer on Fuel Gas used by Gatherer, if any.  All receipts
and deliveries of Producer’s Gas hereunder shall be balanced on an MMBtu basis,
less Producer’s allocated share of Fuel Gas and Lost and Unaccounted For
Gas.  No Gathering Fee shall be paid on Fuel Gas.

     

    5.5              Equal Receipt and
Delivery.  Notwithstanding anything herein to the contrary, as
long as Producer’s Gas is the only Gas being gathered by Gatherer, on the
Gathering System then Gatherer will not reduce or discontinue receipt or
delivery of  any of Producer’s Gas at any Receipt Points or Delivery
Points unless required by the Receiving Transporter or as the result of the
occurrence of a Force Majeure Event or other limitations in the capacity of the
Gathering System.  If requested by a Receiving Transporter, receipt of
Producers gas will be reduced as directed by such Receiving Transporter along
with all nominated volumes from other shippers if any using the Delivery Point
affected by the Receiving Transporter’s requirements, and any subsequent
imbalance charges from Receiving Transporter attributable to Producer’s Gas will
be the responsibility of and paid by Producer.  Further, in the event
of Gatherer reducing or discontinuing Producer’s Gas under this Section 5.5, then
Gatherer shall first notify Producer prior to taking any actions to reduce
receipts of Producers Gas under this Section
5.5.

     

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

     

    5.7              Upstream and Downstream
Arrangements.  Producer shall make, or cause to be made, all
necessary arrangements with other pipelines or third parties at or upstream of
the Receipt Points and at or downstream of the Delivery Points to effect
Gatherer’s receipt and delivery of Producer’s Gas.  Such arrangements
must be coordinated with Gatherer. As of the date hereof, Producer’s Gas will be
delivered by Gatherer on behalf of Producer at the Delivery Points under the ETC
Contract.   Gatherer agrees to cause Producer’s Gas to be
delivered at the Delivery Points in a manner that does not violate the
provisions of Sections 4.1, 5.1, 6.1, 6.2 and 6.5 of the ETC Contract (as
described in clause (ii) of the definition), and if Producer’s Gas meets the
specifications requirements of this Agreement, Section 7.1 of the ETC Contract
(as described in clause (ii) of the definition).

     

    5.8              Commingling.  Although
Producer shall retain title to Producer’s Gas delivered to Gatherer at the
Receipt Points hereunder, Producer’s Gas received by Gatherer shall constitute
part of the supply of Gas from all sources in the Gathering System, and as such
Gatherer shall, subject to its obligation to deliver an Equivalent Quantity as
provided in Section
5.4 and to comply with the quality specifications herein have the
absolute and unqualified right to commingle Producer’s Gas and to deliver
molecules different from those received and to handle the molecules received in
any manner.

     

    5.9              Lost and Unaccounted for
Gas.  Gatherer agrees to use ordinary care in gathering
Producer’s Gas from the Receipt Points to the Delivery
Points.  However, Producer acknowledges that certain volumetric losses
in Producer’s Gas will occur, and such losses attributable to Lost and
Unaccounted For Gas shall be shared and allocated among the Producer and
other  parties whose Gas is gathered on the Gathering System in the
proportion that each such party delivers Gas to the Gathering
System.

     


    
      
         


      

      
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    5.10            Notice of New
Connections.  Producer and Gatherer agree to work together to
connect  new wells drilled by Producer within the AMI as soon as
practical to the Gathering System upon completion of any such well by
Producer.  This may include laying a connection before a well can be
practically assessed or completed.  Under normal conditions, Producer
shall provide Gatherer no less than 3 Months’ Notice of the expected date of
first production for each new well or wells in the AMI operated by Producer that
Producer desires to connect to the Gathering System.  Such Notice to
Gatherer shall include the location of the well or wells to be connected to the
Gathering System, the projected date of final completion and testing of such
well or wells, Producer’s good faith estimate of the Gas reserves for each such
well, the projected monthly production profile for the first 5 Years after
initial production for each such well or wells, and all other information or
data reasonably requested by Gatherer.  If the projected Gas reserves
for such well or wells equal or exceed the Minimum Reserve Limit, as determined
by the Independent Engineer, then such well or wells shall be connected to the
Gathering System by Gatherer as soon as reasonably practicable and Producer’s
gas delivered through such connection shall be gathered under the terms of this
Agreement.  Such connection shall be constructed by Gatherer at its
sole cost.  All Producer’s Gas delivered through a connection
constructed by Gatherer shall be gathered by Gatherer on the Gathering System
under the terms of this Agreement.  If the projected Gas reserves for
such well or wells cannot be reasonably determined in advance or do not equal or
exceed the Minimum Reserve Limit, as determined by the Independent Engineer,
then Gatherer and Producer may mutually agree to elect one of two alternate
courses:

     

    
      	
               
      

            	
              i.

            	
              Producer
      may request that Gatherer complete the connection as if the Gas Reserves
      for such well or wells equals or exceeds the Minimum Reserve
      Limit.  Producer’s working interest share of all costs incurred
      by Gatherer to complete such connection shall be charged to the account of
      the Producer.  When any such well is completed, a new
      determination will be made by the Independent Engineer to assess if the
      completed well or wells meets or exceeds the Minimum Reserve
      Limit.  If the Minimum Reserve Limit, as determined by the
      Independent Engineer, is met, Producer shall have no obligation for the
      costs of Gatherer to construct and complete such connection and Gatherer
      shall promptly reimburse Producer for any such costs charged to
      Producer.  If the completed well or wells does not meet the
      Minimum Reserve Limit as determined by the Independent Engineer, Producer
      shall promptly reimburse Gatherer for its working interest share of
      Gatherer’s costs to construct and complete such connection.  In
      that event all production from such well or wells shall be gathered by
      Gatherer  on the Gathering System under the terms of this
      Agreement, except the Gathering fee shall not exceed $.20 per
      Mcf  per day.  The costs of the Independent Engineer,
      if used, will be added to the construction costs for such
      connection.

            


    

    


    
      	
               
      

            	
              ii.

            	
              By
      mutual agreement with the Gatherer, such mutual agreement on the part of
      the Gatherer not to be unreasonably withheld, Producer may complete such
      connection to the Gathering System, at Producer’s sole
      cost.  All facilities constructed by Producer to complete such
      connection shall meet or exceed the reasonable design and operating
      standards of Gatherer for the Gathering System.  All Producer’s
      Gas delivered through a connection constructed by Producer shall be
      gathered by Gatherer on the Gathering System under the terms of this
      Agreement, except the Gathering Fee shall not exceed $0.20 per
      Mcf.  This option may not be elected by the Producer unless
      Gatherer has waived in writing its right to provide the connection as
      otherwise described in this Section 5.10,
      such waiver shall not be unreasonably withheld after reserve information
      has been provided and assessed by the Independent
  Engineer.

            


    

     

    5.11              Pressures.  Producer’s
Gas shall be delivered at the Receipt Points at pressures sufficient to effect
delivery into Gatherer’s facilities at the Receipt Points, but not to exceed the
maximum allowable operating pressure of the Gathering System from time to
time.  Gatherer shall cause Producer’s Gas to be redelivered at the
Delivery Points at pressures sufficient to effect delivery into Receiving
Transporter’s facilities at the Delivery Points, but not to exceed the maximum
allowable operating pressure of such facilities from time to time.

     

    5.12              Allocation Of Volumes
Delivered.  Producer shall be credited with its allocated
portion of volumes of Gas received at the  Delivery Points by the
Receiving Transporters.  So long as no Third Party Gas is received by
Gatherer on the Gathering System, all delivered volumes shall be credited to
Producer and Co-Owners, as applicable.  Gathering Fees shall be
calculated based on volumes of Producer’s Gas delivered to the Delivery
Points.  Allocation of volumes and Gathering Fees among Receipt Points
shall be the responsibility of Producer based on measurement made by its
measurement equipment at the Receipt Points.  If Gas is delivered by
shippers other than Producer and Co-Owners to the Gathering System , Gatherer
shall allocate total delivered volumes among all shippers and calculate the
Gathering Fees based on metering and equipment installed and operated by
Gatherer.  Gatherer may elect to install area metering covering
multiple wells for purposes of such allocations.  Allocations by
Gatherer will not be based on meters operated by Producer unless check metering
and equipment is installed by Gatherer.


    
      
         


      

      
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    Article
6

    Taxes and
Warranties

     

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

     

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

     

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

     

    Article
7

    Control, Possession, and
Waiver

     

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

     

    7.2              Indemnity Producer
agrees to indemnify, defend, and hold harmless Gatherer and its Affiliates from
any and all Losses arising from or out of (i) personal injury or property damage
attributable to Producer’s Gas when Producer shall be deemed to be in control
and possession of Producer’s Gas as provided in Section 7.1 and (ii)
the delivery by Producer of Producer’s Gas that does not meet the quality
specifications in Section 3 of Exhibit A of this
Agreement.  Except to the extent a Loss (or Losses) is covered by the
indemnity in the preceding sentence, Gatherer agrees to indemnify, defend, and
hold harmless Producer and their Affiliates from all Losses arising from or out
of personal injury or property damage attributable to Producer’s Gas when
Gatherer shall be deemed to be in control and possession of Producer’s Gas as
provided in Section
7. THE INDEMNITIES SET FORTH IN THIS SECTION 7.2 ARE
TO BE CONSTRUED WITHOUT REGARD TO THE CAUSES THEREOF, INCLUDING THE NEGLIGENCE
OF ANY INDEMNIFIED PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT, OR CONCURRENT,
OR ACTIVE OR PASSIVE, OR THE STRICT LIABILITY OF ANY INDEMNIFIED PARTY OR OTHER
PERSON.


    
      
         


      

      
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9

        
          

        

      

      
         


      

    


    7.3              Waiver of Damages A
PARTY’S LIABILITY HEREUNDER SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES
ONLY.  SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE
REMEDY, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE
WAIVED.  NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ITS
AFFILIATES FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, OR INDIRECT
DAMAGES, LOST PROFITS, OR OTHER BUSINESS INTERRUPTION OR SIMILAR DAMAGES, BY
STATUTE, IN TORT, OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR
OTHERWISE.  IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS
HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE
CAUSE OR CAUSES RELATED THERETO, INCLUDING THE STRICT LIABILITY OR NEGLIGENCE OF
ANY PARTY, WHETHER SUCH STRICT LIABILITY OR NEGLIGENCE BE SOLE, JOINT, OR
CONCURRENT, OR ACTIVE OR PASSIVE.  TO THE EXTENT ANY DAMAGES REQUIRED
TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES
ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN ADEQUATE
REMEDY IS INCONVENIENT, AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A
REASONABLE APPROXIMATION OF THE HARM OR LOSS.  DAMAGES OWING BY
PRODUCER UNDER THE ETC CONTRACT CAUSED BY A FAILURE BY GATHERER TO PERFORM ITS
OBLIGATIONS UNDER SECTION 5.7 OF THIS
AGREEMENT SHALL BE CONSIDERED DIRECT ACTUAL DAMAGES.

     

    Article
8

    Billing and
Payments

     

    8.1              Billing. As
soon as practicable each Month, Gatherer shall invoice Producer for volumes of
Producer’s Gas received and gathered hereunder in the preceding Month and for
any other applicable charges and provide a statement setting forth (i) the
volumes and quantities (in Mcf’s and MMBtu’s) of Producer’s Gas delivered to
each Delivery Point, (ii) any adjustments for prior periods, (iii) any amount
that may be due for a calendar quarter under Section 5.2, and (iv)
all other amounts due hereunder.  Any amount owing by Producer under
Section 5.2 for
a calendar quarter shall be paid by Producer as provided in Section 8.2 below,
except amounts owing in excess of $350,000 may be paid by Producer in two equal
monthly installments. If actual measurements of volumes of Producer’s Gas are
not available in any Month, Gatherer may prepare and submit its invoice based on
estimated volumes, which estimated volumes shall be corrected to actual volumes
in the Month in which actual volumes are determined.


    
      
         


      

      
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10

        
          

        

      

      
         


      

    

     

    8.2              Payment. Producer
shall remit to Gatherer the amount due under Section 8.1, in
immediately available funds, by the 25th Day of each Month or 10 Days from the
date of Gatherer’s invoice, whichever is later.  If such due date is
not a Business Day, payment is due on the next Business Day following such
date.

     

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

     

    8.4              Late
Payments If
Producer fails to pay the amount of any invoice rendered by Gatherer hereunder
when such amount is due, interest thereon shall accrue from, but excluding, the
due date to, and including, the date payment thereof is actually made at the
lesser of the “Prime
Rate” plus 4%, computed on an annualized basis and compounded Monthly, or
the maximum rate of interest permitted by Applicable Law, not to exceed the
maximum legal rate.  “Prime Rate” means the
prime rate on corporate loans at large U.S. money center commercial banks as set
forth in the Wall
Street Journal “Money Rates” table under the Heading “Prime Rate,” or any
successor thereto, on the first date of publication for the Month in which
payment is due.  Gatherer shall render a late payment charge invoice
and Producer shall make payment within 10 Days of the date of such
invoice.

     

    8.5              Audit A
Party shall have the right, at its own expense, upon reasonable Notice and at
reasonable times, to examine and audit and to obtain copies of the relevant
portion of the books, records, and telephone recordings of the other Party to
the extent reasonably necessary to verify the accuracy of any statement, charge,
payment, or computation made under this Agreement.  This right to
examine, audit, and to obtain copies shall not be available with respect to
proprietary information not directly relevant to transactions under this
Agreement.  All invoices and billings shall be conclusively presumed
final and accurate and all associated claims for underpayments or overpayments
shall be deemed waived unless such invoices or billings are objected to in
writing, with adequate explanation and/or documentation, within 2 Years after
the date of the invoice or billing.  All retroactive adjustments under
this Section 8.5
shall be paid in full by the Party owing payment within 30 Days of Notice and
substantiation of such inaccuracy.

     

    8.6              Financial
Responsibility.  If Producer fails to pay any amounts when due
under this Agreement for any two consecutive months, then Gatherer shall notify
Producer in writing. Producer shall then have a 30 day period to remedy payments
owed in full.  After the second failure to pay for two consecutive
months, in the event Producer fails to remedy within 30 days following notice,
Gatherer may require Producer to post security reasonably satisfactory to
Gatherer, provided that payment in cash in advance by Producer for Gathering of
Producer’s Gas hereunder shall be deemed to satisfy that
requirement.

     

    Article
9

    Force
Majeure

     

    9.1              Non-Performance If
a Party is rendered unable, wholly or in part, by reason of a Force Majeure
Event to perform its obligations under this Agreement, other than a Party’s
obligations to make payments when due hereunder, then such Party’s obligations
shall be suspended to the extent affected by the Force Majeure
Event.  A Party claiming a Force Majeure Event shall use commercially
reasonable efforts to remove such Force Majeure Event, shall give prompt written
notice to the other Party of the termination of such Force Majeure Event, and
shall resume performance of any suspended obligation promptly after termination
of such Force Majeure Event.

     

    
      
         


      

      
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    9.2              Definition “Force Majeure Event”
means any cause or event not reasonably within the control of the Party whose
performance is sought to be excused thereby; including acts of God, strikes,
lockouts, or other industrial disputes or disturbances, acts of the public
enemy, wars, blockades, insurrections, riots, epidemics, landslides, lightning,
earthquakes, fires, tornadoes, hurricanes, storms, and warnings for any of the
foregoing which may necessitate the precautionary shut-down of wells, plants,
pipelines, gathering systems, or other related facilities, floods, washouts,
arrests and restraints of governments and people, civil disturbances,
explosions, sabotage, breakage or accidents to equipment, machinery, gathering
systems, plants, facilities or lines of pipe, the making of repairs or
alterations to lines of pipe, gathering systems, plants or equipment, inability
to secure labor or materials, freezing of wells or lines of pipe, partial or
entire failure of wells or lines of pipe, partial or entire failure of gas
supply, electric power shortages, necessity for compliance with any court order,
or any law, statute, ordinance, regulation or order promulgated by a
Governmental Authority having or asserting jurisdiction prohibiting a Party from
discharging its obligations under this Agreement, inclement weather that
necessitates extraordinary measures and expense to construct facilities or
maintain operations and any other causes, whether of the kind enumerated herein
or otherwise, not reasonably within the control of the Party claiming
suspension. Such term shall likewise include, in those instances where either
Party is required to obtain servitudes, rights-of-way, grants, permits, or
licenses to enable such Party to fulfill its obligations hereunder, the
inability of such Party to acquire, or delays on the part of such Party in
acquiring, at reasonable cost and after the exercise of reasonable diligence,
such servitudes, rights-of-way, grants, permits or licenses, and in those
instances where either Party hereto is required to furnish materials and
supplies for the purpose of constructing or maintaining facilities or is
required to secure permits or permissions from any Governmental Authority to
enable such Party to fulfill its obligations hereunder, the inability of such
Party to acquire, or delays on the part of such Party in acquiring, at
reasonable cost and after the exercise of reasonable diligence, such materials,
supplies, permits, and permissions.  “Force Majeure Event”
also includes any event of force majeure occurring with respect to the
facilities or services of either Party’s Affiliates or service providers
providing a service or providing any equipment, goods, supplies or other items
necessary to the performance of such Party’s obligations hereunder, to the
extent such force majeure event renders a Party unable to perform its
obligations under this Agreement and to the extent such event is not reasonably
within the control of such Party.

     

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

     

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

     

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

     

    Article
10

    Assignment

     

    10.1           Restriction on
Assignment Neither
Party may assign or delegate any of its rights or obligations under this
Agreement, by operation of law, change of control, or otherwise, without the
prior written consent of the other Party which consent shall not be unreasonably
withheld, delayed or conditioned, except as provided in Section 10.2
below.

     

    10.2           Permitted
Assignments.  Producer may assign its rights under this
Agreement, without consent, to a Person that is acquiring an interest in or all
or part of the Dedicated Reserves contemporaneous with such assignment if such
assignment expressly provides that (i) it is subject to the terms of this
Agreement and (ii) the Dedicated Reserves will remain committed to this
Agreement.  Gatherer may assign its rights under this Agreement,
without consent, to a Person that is acquiring an interest in or all or a part
of a Gathering System contemporaneous with such assignment.  Each
Party also (x) may pledge this Agreement (or pledge any of its rights under this
Agreement including the right to receive payments due hereunder) to secure any
credit facility or indebtedness of such Party or its Affiliates for borrowed
money without the consent of the other Party and (y) may assign any of its
rights, or delegate any of its obligations, under this Agreement to one or more
of its Affiliates without the consent of the other Party; provided, no such
pledge or assignment shall relieve the assignor Party from any of its
obligations hereunder.

     

    
      
         


      

      
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12

        
          

        

      

      
         


      

    


    10.3           Inurement Subject
to Section 10.1
and 10.2,  this
Agreement binds and inures to the benefit of the Parties and their respective
successors and assigns.

     

    Article
11

    Jurisdiction

     

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

     

    Article
12

    Notices

     

    12.1           Notice All
notices, invoices, payments, and other communications made under this Agreement
(“Notice”)
shall be in writing and sent to the addresses shown in Exhibit
B.

     

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

     

    12.3           Delivery Notice
shall be given when received on a Business Day by the addressee.  In
the absence of proof of the actual receipt date, the following presumptions will
apply.  Notices sent by facsimile shall be deemed to have been
received upon the sending Party’s receipt of its facsimile machine’s
confirmation of successful transmission.  If the Day on which such
facsimile is received is not a Business Day or is after five p.m. on a Business
Day, then such facsimile shall be deemed to have been received on the next
following Business Day.  Notice by overnight mail or courier shall be
deemed to have been received on the next Business Day after it was sent or such
earlier time as is confirmed by the receiving Party.  Notice by first
class mail shall be considered delivered 5 Business Days after
mailing.

     

    Article
13

    Other
Provisions

     

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

     

    13.2            Governing
Law This
Agreement shall be construed, enforced, and interpreted according to the laws of
the State of Texas, without regard to the conflicts of law rules
thereof.

     

    
      	
               
      

            	
              13.3

            	
              Arbitration Agreement to
      Arbitrate.  Any claim, counterclaim, demand, cause of
      action, dispute, or any other controversy arising out of or relating in
      any way to this Agreement, the subject matter of this Agreement, or the
      relationship between the Parties created by this Agreement (each a “Dispute”),
      shall be resolved by binding arbitration in accordance with the terms of
      this Section
      13.3.  A
      Dispute must be resolved through arbitration regardless of whether the
      Dispute involves claims that the Agreement is unlawful, unenforceable,
      void, or voidable or involves claims sounding in tort, contract, statute
      or common law.  The validity, construction and interpretation of
      this agreement to arbitrate, and all other procedural aspects of the
      arbitration conducted pursuant hereto, shall be decided by the arbitral
      tribunal.

            


    

     

    
      	
               
      

            	
              (ii)

            	
              Rules and Applicable
      Law.  Any arbitration of a Dispute shall be administered
      by the American Arbitration Association (“AAA”) and
      conducted in accordance with the Commercial Arbitration Rules (the “Rules”) of the
      AAA in existence at the time of the arbitration.  In resolving
      any Dispute, the arbitral tribunal shall refer to the governing law as
      specified in Section 13.2, provided
      that legal issues relating to arbitration procedure or the scope or
      enforceability of the arbitration agreement shall be governed by the
      Federal Arbitration Act.  The arbitral tribunal shall not be
      empowered to award exemplary, punitive, indirect, consequential, remote,
      speculative, treble, multiple or special damages, and the Parties waive
      any right they may have to recover such damages from one
      another.

            


    

     

    
      
         


      

      
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              (iii)

            	
              Location of the
      Proceeding.  The seat (or legal place) and venue of the
      arbitration shall be in Houston,
Texas.

            


    

     

    
      	
               
      

            	
              (iv)

            	
              Parties.  This
      shall apply to any Dispute between the Parties, and it shall also apply to
      any (a) Dispute between a Party and any Affiliate of the other Party, and
      (b) Dispute between an Affiliate of one Party and an Affiliate of the
      other Party. With regard to any Dispute, the Affiliates of the Parties are
      intended third party beneficiaries of the agreement to arbitrate set out
      in this Section
      13.3.

            


    

     

    
      	
               
      

            	
              (v)

            	
              Selection of the Arbitral
      Tribunal.  The Dispute shall be decided by a panel of
      three neutral arbitrators.  The claimant shall nominate an
      arbitrator at the time it serves its request for
      arbitration.  The respondent shall nominate an arbitrator at the
      time it serves its response to the request for arbitration.  If
      a Party fails to appoint an arbitrator, then that arbitrator shall be
      appointed in accordance with the Rules.  The two arbitrators
      shall together agree upon a third arbitrator to recommend to the AAA to
      chair the arbitration.  If the two party-appointed arbitrators
      are unable to agree upon an arbitrator within 15 days of the respondent’s
      appointment of an arbitrator, then the chairman shall be chosen according
      to the Rules.

            


    

     

    
      	
               
      

            	
              (vi)

            	
              Interim Measures and
      Provisional Remedies. The arbitral tribunal is authorized to award
      interim measures, provisional remedies or injunctive relief, which may be
      enforced by the arbitral tribunal or by a court of law.  In the
      event of an emergency or if one of the arbitrators is unavailable, then
      the chairman is authorized to award interim measures or injunctive relief,
      which may upon the request of a Party be reviewed by the entire arbitral
      tribunal.

            


    

     

    
      	
               
      

            	
              (vii)

            	
              The
      Award.  The award shall be final and
      binding.  The award shall be required to be in writing, stating
      the award and the reasons therefor.

            


    

     

    
      	
               
      

            	
              (viii)

            	
              Enforcement of Award by a
      Court.  Any arbitration award may be enforced by the
      courts sitting in Houston, Texas or any other court of competent subject
      matter jurisdiction (including any jurisdiction in which a Party holds or
      keeps assets).  The Parties further agree that any action to
      challenge, vacate or set aside the Award in whole or in part must be
      brought in the courts sitting in Houston, Texas.  The Parties
      agree to waive any objections they may have to personal jurisdiction,
      venue, or forum non-conveniens for any action brought to enforce the award
      in the courts sitting in Houston, Texas or any other jurisdiction where a
      Party holds or keeps assets.

            


    

     

    
      	
               
      

            	
              (ix)

            	
              Costs and Attorneys
      Fees.  The arbitral tribunal is authorized to award costs
      of the arbitration in its award and to allocate costs between the Parties,
      including (a)  the fees and expenses of the arbitrators; (b) the
      costs of assistance required by the tribunal, including the fees and
      expenses of its experts; (c) the fees and expenses of the AAA;
      (d)  the reasonable costs for legal representation of a
      successful Party, including attorneys’ fees, expert witness fees, out of
      pocket costs and other expenses; and (e) any such costs incurred in
      connection with an application for interim or emergency
      measures.

            


    

     

    
      	
               
      

            	
              (x)

            	
              Severability.  If
      any provision of this arbitration provision is found by a court to be
      unenforceable or unlawful, then it shall be severed from this Agreement
      and the remaining terms shall be enforced as
  written.

            


    

     

    
      
         


      

      
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      13.4            Representations Each
Party represents to the other Party during the term hereof as
follows:  (i) there are no suits, proceedings, judgments, or orders by
or before any governmental authority that materially adversely affect its
ability to perform this Agreement or the rights of the other Parties hereunder,
(ii) it is duly organized, validly existing, and in good standing under the laws
of the jurisdiction of its formation, and it has the legal right, power and
authority and is qualified to conduct its business, and to execute and deliver
this Agreement and perform its obligations hereunder, (iii) the making and
performance by it of this Agreement is within its powers, and has been duly
authorized by all necessary action on its part, (iv) this Agreement constitutes
a legal, valid, and binding act and obligation of it, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, reorganization and
other laws affecting creditor’s rights generally, and with regard to equitable
remedies, to the discretion of the court before which proceedings to obtain same
may be pending, and (v) there are no bankruptcy, insolvency, reorganization,
receivership or other arrangement proceedings pending or being contemplated by
it.  .  Producer and Gatherer
jointly acknowledge and agree that (a) the movement of Gas on the Gathering
System under this Agreement constitutes (and is intended to constitute for
purposes of all Applicable Laws) a movement of Producer’s Gas that is not
subject to the jurisdiction of the Federal Energy Regulatory Commission under
the Natural Gas Act or Section 311 of the Natural Gas Policy Act, (b) the
Gathering Fees have been freely negotiated and agreed upon as a result of good
faith negotiations and are not discriminatory or preferential, but are just,
fair, and reasonable in light of the Parties’ respective covenants and
undertakings herein during the term of this Agreement, and (c) neither Producer
nor Gatherer had an unfair advantage over the other during the negotiation of
this Agreement.


    

     

    13.5            Integrated
Transaction This
Agreement is being executed and delivered by the Parties contemporaneous with,
and as a condition precedent to, the execution and delivery of the Ancillary
Agreements by the Persons that are party thereto.  The Parties
acknowledge that the execution and delivery of this Agreement and the rights and
obligations of the Parties hereto are part of an integrated transaction being
affected pursuant to the terms of this Agreement and the Ancillary
Agreements.

     

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

     

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

     

    
      	
               
      

            	
              (i)

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

            


    

     

    
      	
               
      

            	
              (ii)

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

            


    

     

    
      	
               
      

            	
              (iii)

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

            


    

     

    
      	
               
      

            	
              (iv)

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

            


    

     

    
      	
               
      

            	
              (v)

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

            


    

     

    
      	
               
      

            	
              (vi)

            	
              each
      gender shall be deemed to include the other
  genders.

            


    

     

    13.8            No Third Party
Beneficiaries Except
as provided in Section
13.3(iv), there is no third party beneficiary to this
Agreement.

     

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

     

    [Signature
pages follow.]


    
      
         


      

      
        Page
15

        
          

        

      

      
         


      

    


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

     

    
      
        	
                Producer:

              
	 
      
	
                GASTAR
      EXPLORATION TEXAS, LP

              
	 
      
	
                BY:
      GASTAR EXPLORATION TEXAS LLC, its general partner

              
	 
      	 
      
	
                By:

              	
                /s/ Michael
      A. Gerlich

              
	
                Name:
      Michael A. Gerlich

              
	
                Title:
      Secretary and Treasurer

              


      

    

     

    
      Signature
Page to Gas Gathering Agreement


    

    
      
         


      

      
        Page
16

        
          

        

      

      
         


      

    

    


    
      
        	
                Gatherer:

              
	 
      
	
                HILLTOP
      RESORT GS, LLC

              
	 
      	 
      
	
                By:

              	
                /s/ Gilbert
      Burciaga

              
	
                Name:
      Gilbert Burciaga

              
	
                Title: Chief Executive
Officer

              


      

    

    


    
      Signature
Page to Gas Gathering Agreement


    

    
      
         


      

      
        Page
17

        
          

        

      

      
         


      

    


    List of Exhibits and
Schedules

    


    
      
        
          
            
              
                	
                        Exhibit
      A

                      	
                        -

                      	
                        Additional
      Terms and Conditions.

                      
	
                        Exhibit
      B

                      	
                        -

                      	
                        Addresses
      for Notice.

                      
	 
      	 
      	 
      
	
                        Schedule
      1

                      	
                        -

                      	
                        Gathering
      Fees.

                      
	
                        Schedule
      2

                      	
                        -

                      	
                        Gathering
      System Description.

                      
	
                        Schedule
      3

                      	
                        -

                      	
                        Receipt
      Points.

                      
	
                        Schedule
      4

                      	
                        -

                      	
                        Delivery
      Points.

                      
	
                        Schedule
      5

                      	
                        -

                      	
                        Subject
      Leases.

                      
	
                        Schedule
      6

                      	
                        -

                      	
                        Description
      of
AMI.

                      


              

            

          

        

      

    

     

    
      
        
          List
of Exhibits and Schedules

        

        
          Page
1

          
            

          

        

        
           


        

      

    

    


    Exhibit
A

    ADDITIONAL
TERMS AND CONDITIONS

     

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

     

    1.          
 Measurement and
Testing.

     

    (a)           Receiving
Transporters.  The ultimate custody transfer point for
Producer’s Gas will be at the interconnection between the facilities of Gatherer
and the Receiving Transporter and therefore the volume attributable to Producer
will be an allocated volume based on Producer’s pro rata portion of all Gas
delivered to the Receiving Transporter less Producer’s allocated share of Fuel
Gas and Lost and Unaccounted For Gas.

     

    (b)           Meters.  Gatherer
purchased the Gathering System  from Producer and Co-owners, but
Producer shall continue to own, and Producer or its designee shall operate, the
existing meters at the Receipt Points.   Existing check measuring
stations and measuring equipment at the Delivery Points shall be owned and
operated by Gatherer.  Both Producer and Gatherer may install,
maintain, and operate, at their own expense, such additional check measuring
equipment as desired and where appropriate on meters owned by the other
Party.  Such equipment shall be installed so as not to interfere with
the operation of the owning Party’s or its designee’s measuring
equipment.  Where no  check measuring equipment is installed
by the Party that does not own existing meters, the owning Party agrees to
provide the non-owning Party with immediate on-line access to flow information
from such meters.  Ownership and operation of new metering on future
Receipt Points and Delivery Points shall be determined on a case by case basis
by mutual agreement between Gatherer and Producer.

     

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

     

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

     

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

     

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

     

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

     

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

     

    Notwithstanding
anything contained in this Section 1(c) to the
contrary, Gatherer shall not be required to replace or make any alterations to
its measuring equipment as a result of any subsequent amendments, revisions, or
modifications of the American Gas Association Reports cited in Subparagraphs (1)
through (5) of this Section 1(c), unless
the Parties mutually agree to such replacement or alteration.

     

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


    
      
        Exhibit
A

      

      
        Page
1

        
          

        

      

      
         


      

    


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

     

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

     

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

     

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

     

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

     

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

     

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

     

    2.           Measurement
Specifications.

     

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

     

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


    
      
        Exhibit
A  

      

      
        Page
2

        
          

        

      

      
         


      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    3.           Quality
Specifications.

     

    (a)           Producer’s
Gas.  All Producer’s Gas delivered at the Receipt Points shall
meet all quality specifications imposed by the Receiving Transporter as
follows:

     

    (1)           Water
Vapor:  Producer’s Gas shall not have a water vapor content in
excess of 7 pounds of water vapor per 1,000,000 standard cubic feet of
Gas.

     

    (2)           Hydrogen
Sulfide:  Producer’s Gas shall not contain more than 1⁄4 grain of
hydrogen sulfide per 100 standard cubic feet of Gas at the Receipt
Points.


    
      
        Exhibit
A  

      

      
        Page
3

        
          

        

      

      
         


      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    (9)           Objectionable Liquids and
Solids and Dilution:  Producer’s Gas shall be commercially free
of dust, gum, gum-forming constituents, gasoline, liquid hydrocarbons, water,
and any other substance of any kind that may become separated from the Gas
during the handling thereof or that may cause injury to or interference with
proper operation of the lines, meters, regulators, or other appliances through
with it flows.

     

    (10)         Gross Heating
Value:  Producer’s Gas shall not have a Gross Heating Value
less than 950 Btu’s per cubic foot of Gas or more than 1050 Btu’s per cubic foot
of Gas.

     

    (11)         Hydrocarbon
Dewpoint:  Producer’s Gas shall have a hydrocarbon dewpoint
below 40 degrees Fahrenheit (40 oF).

     

    (b)           Treating and Dehydration by
Receiving Transporter: Notwithstanding the Gas specifications above for
carbon dioxide and hydrogen sulfide, Producer may deliver Producer’s Gas at the
Receipt Points with up to 6% by volume carbon dioxide and up to 24 ppm(v)
hydrogen sulfide if Producer has made suitable arrangements for delivering such
non-specification Producer’s Gas under the ETC Contract, at no cost to Gatherer.
These higher limits are intended to mirror the specifications contained in the
Treating Option in the ETC Contract, and shall be determined at the Delivery
Points into such  Receiving Transporter.  Blended H2S content
at the Delivery Points up to 40 ppm(v) will be reduced to below 24 ppm(v) by
injection of suitable scavenger at the Delivery Points by Gatherer at no cost to
the Producer.  Therefore, H2S content
at the Delivery Point above 40 ppm(v) shall be the responsibility of the
Producer, who will be required in that event to reduce the aggregate H2S content
below 40 ppm(v) by treating at selected well sites or curtailment of high H2S well flow
at the Receipt Points.   If the blended CO2 content of
Producer’s Gas exceeds 6% in the aggregate at the Delivery Points, but does not
exceed 8% in the aggregate at Delivery Points, Gatherer shall accept and gather
such non-specification Producer’s Gas if such non-specification Producer’s Gas
is accepted under the ETC Contract, at no cost to Gatherer.  Shut in
of the Producer’s Gas due to CO2 content
above 6% at the Delivery Points shall be the sole responsibility of the
Producer.   Producer’s Gas may also be delivered with water in
excess of 7 pounds per 1,000,000 standard cubic feet, up to complete water
saturation but with no free liquid water, so long as Producer has made suitable
arrangements for delivering Producer’s Gas with this water content by payment of
the Dehydration Fee under the ETC Contract, and at no cost to
Gatherer.  Gatherer warrants that any Third Party Gas received on the
Gathering System shall meet specifications at least as stringent as those then
in effect by the Receiving Transporter, including relaxed specifications for the
Treating and Dehydrations Options, if applicable, and that such Third Party Gas
will meet the quality specifications at the Delivery Points.  Gatherer
shall meter Third Party Gas and measure its quality using procedures
substantially similar to those set forth in this Agreement, and Gatherer shall
notify Producer on a monthly basis of the results of such metering and
measurement.  Anything herein to the contrary notwithstanding,
Gatherer may refuse to accept Producer’s Gas that does not meet the
specifications in Section 3(a) above if Gatherer reasonably determines that
receipt of such non-specification Producer’s Gas will cause material damage the
Gathering System.


    
      
        Exhibit
A  

      

      
        Page
4

        
          

        

      

      
         


      

    

     

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

     

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

     

    4.           Easements.

     

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

     

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

     

    (c)           Uneconomic
Systems.  If total deliveries of Producer’s Gas to Gatherer at
a Receipt Point fall below an average daily quantity of 50 Mcf’s of Gas for any
ninety (90) consecutive Day period, then Gatherer may, in its sole discretion,
assign and convey to Producer, for a mutually acceptable price, the uneconomic
portion of the Gathering System and all related equipment, and Producer shall
assume responsibility for the operation and maintenance of and measurement at
the applicable Receipt Point (including all costs related thereto), subject to
the provisions of a Gas measurement and operation agreement between Producer and
Gatherer, and subject to compliance with the provisions of this Agreement
regarding measurement. If Producer and Gatherer cannot agree on a mutually
acceptable price, the Parties agree to negotiate in good faith to remedy the
uneconomic operation.  Such remedies may include special agreements
for increased Gathering Fees for the uneconomic connection, supplemental
payments by Producer to Gatherer to cover extraordinary costs, or other means as
might be appropriate.  Gatherer reserves the right to shut in, or to
permit Producer to operate and maintain, at Producer’s sole risk, cost, and
expense, any part of the Gathering System that is uneconomic for which a
mutually agreeable solution cannot be agreed to between the
Parties.

     

    
      
        Exhibit
A  

      

      
        Page
5

        
          

        

      

      
         


      

    


    Exhibit
B

    ADDRESSES
FOR NOTICES

     

    Gastar Exploration
Ltd.

     

    Mr.
Michael A. Gerlich

    Chief
Financial Officer

    1331
Lamar, Suite 1080

    Houston,
Texas 77010

    Telephone:
(713) 739-0455

    Fax:
(713) 739-0458

    mgerlich@gastar.com

    


    Mr. Henry
Hansen

    Vice
President Land

    1331
Lamar, Suite 1080

    Houston,
Texas 77010

    Telephone:
(713) 739-0443

    Fax:
(713) 739-0458

    hhansen@gastar.com

    


    Hilltop Resort GS,
LLC

    


    500 North
Capital of Texas Highway

    Building
#3, Suite 100

    Austin,
Texas 78746

    Attn:
Elias F. Urbina

    Telephone:
(512) 415-9090

    Facsimile:
(512) 328-9410


    


    500 North
Capital of Texas Highway

    Building
#3, Suite 100

    Austin,
Texas 78746

    Attn: Gilbert
Burciaga

    Telephone:
(512) 415-9090

    Facsimile:
(512) 328-9410


    
      
        Exhibit B

      

      
        Page
1

        
          

        

      

      
         


      

    


    Schedule
1

     

    GATHERING
FEES


     

    
      
        
          
            
              
                
                  	
                          Cumulative
      Receipt of Producer’s Gas and Quarterly

                          Third
      Party Credit Volumes Equals 70% of the 

                          Following
      Volumes**

                        	 	
                          Gathering Fee (in $/Mcf)

                        	 
	 	 	 	 	 	 	 
	 	
                          0-25

                        	
                          Bcf

                        	 	$	0.325	 
	 	 	 	 	 	 	 
	 	
                          25-50

                        	
                          Bcf

                        	 	$	0.300	 
	 	 	 	 	 	 	 
	 	
                          50-100

                        	
                          Bcf

                        	 	$	0.275	 
	 	 	 	 	 	 	 
	 	
                          100-200

                        	
                          Bcf

                        	 	$	0.275	 
	 	 	 	 	 	 	 
	 	
                          200-300

                        	
                          Bcf

                        	 	$	0.250	 
	 	 	 	 	 	 	 
	 	
                          300-600

                        	
                          Bcf

                        	 	$	0.225	 


                

              

            

          

        

      

    

     

    **The
volume thresholds in this column will be met (and the reduced Gathering Fee will
become applicable) when the sum of (i) the volume of Producer’s Gas delivered
to, and gathered on, the Gathering System and (ii) Quarterly Third Party Credit
Volumes equals or exceeds 70% of the volumes shown in this
column.


    
      
        Schedule
1

      

      
        Page
1