**Exhibit 10.2**

 

PAM064100R

 

**GAS PURCHASE CONTRACT**

 

**Between W.O. OPERATING COMPANY, LTD as Seller**

 

**And DCP MIDSTREAM, LP as Buyer**

 

**Dated July 1, 2009**

 

**INDEX**

 
| **SECTION** | ** **                                  | ** ** | **PAGE** |
|-------------|---------------------------------------------|------------|----------|
| 1.          | COMMITMENT                                  |       | 1        |
| 2.          | DELIVERY  POINTS                            |       | 1        |
| 3.          | DELIVERY  PRESSURE                          |       | 1        |
| *4.*        | QUANTITY                                    |       | 2        |
| 5.          | PRICE                                       |       | 2        |
| 6.          | TERM                                        |       | 5        |
| *7.*        | ADDRESSES  AND NOTICES                      |       | 6        |
| 8.          | TERMINATION  OF PRIOR CONTRACTS AND RELEASE |       | 7        |
|        | SIGNATURE  PAGE                             |       | 8        |
|             |                                             |            |          |  |

 

**EXHIBITA**

**GENERALTERMS AND CONDITIONS**

 
| A. | DEFINITIONS                                              |   | A-1 |
|----|----------------------------------------------------------|--------|-----|
| B. | DELIVERY  DATE; COMPRESSION                              |   | A-1 |
| C. | RESERVATIONS  OF SELLER                                  |   | A-2 |
| D. | METERING  AND MEASUREMENT                                |   | A-2 |
| E. | DETERMINATION  OF GAS COMPOSITION AND HEATING VALUE      |   | A-3 |
| F. | QUALITY  OF GAS                                          |   | A-3 |
| G. | BILLING  AND PAYMENT                                     |   | A-4 |
| H. | FORCE  MAJEURE                                           |   | A-4 |
| I. | WARRANTY  OF TITLE                                       |   | A-5 |
| J. | ROYALTY  AND OTHER INTERESTS                             |   | A-5 |
| K. | SEVERANCE  AND SIMILAR TAXES                             |   | A-5 |
| L. | INDEMNIFICATION  AND RESPONSIBILITY FOR INJURY OR DAMAGE |   | A-5 |
| M. | RIGHT  OF WAY                                            |   | A-6 |
| N. | ASSIGNMENT                                               |   | A-6 |
| 0. | MISCELLANEOUS  PROVISIONS                                |   | A-6 |

 

**EXHIBIT B COMMITTED LEASES AND WELLS**

**EXHIBIT C NEW DELIVERY POINTS**

 

POP1 Fixed Eff GPC  8-1-05

 

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PAM064100R

 

**GAS PURCHASE CONTRACT**

 

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

 

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

 

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

 

See Exhibit B

 

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

 

2.             **DELIVERY POINTS**.  TheDelivery Points for gas to be delivered by Seller to Buyer for existing sourcesof production will be at the inlets of Buyer’s Facilities as described in Exhibit C.  Seller shall use best efforts to commence andcomplete the construction of the facilities necessary to enable Seller todeliver the committed gas to Buyer at these Delivery Points.  Deliveries under this Contract shall commencepromptly upon completion of the facilities. During the transition period for wells and leases that have not yet beenconnected to the Buyer’s system, Seller shall be entitled to sell its gas fromthese unconnected wells to a third party until they are connected to the Buyer’ssystem.  The Delivery Points for anyfuture sources of production committed under this Contract and not to bedelivered under any of the Exhibit C central Delivery Points will beestablished under Section B.2 of Exhibit A.  Title to the gas and all its components shallpass to and vest in Buyer at the Delivery Points without regard to the purposesfor which Buyer may later use or sell the gas or its components.

 

3.             **DELIVERY PRESSURE**.  Sellerwill deliver the gas at the Delivery Points at a pressure sufficient to enableit to enter Buyer’s Facilities against the working pressure at reasonablyuniform rates of delivery, not to exceed the maximum allowable operatingpressure established by Buyer or pressures that prevent others from producingratably.  Buyer in its reasonablediscretion may require that Seller install and operate a pressure relief orreduction device upstream of any Delivery Point set at the pressure designatedby Buyer to limit the pressure at which Seller delivers gas, where Seller’sdeliveries might interfere with ratable deliveries from others or to enhancesafety.  Buyer will endeavor to maintainat the Delivery Points an average working pressure during each month of nogreater than 100 psig.  Should Buyerexceed this pressure 

 

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on a monthly basis, then promptly followingBuyer’s receipt of a written request from Seller, Buyer and Seller will meet todiscuss the problem; and if no resolution is reached within 15 days followingthe date of Seller’s initial request, then as Seller’s remedy for excesspressure, Buyer shall upon written request from Seller release from commitmentunder this Contract the affected Leases.

 

4.             **QUANTITY**.        (a) Seller shall deliver and Buyer shall purchase and take Seller’s gas subject tothe operating conditions and capacity of Buyer’s Facilities and resalemarkets.  Although there is no specificpurchase quantity, Buyer will use commercially reasonable efforts to market gasfor resale and operate its facilities in an effort to maintain consistent takesof all available quantities.  If Buyertakes less than the full quantities available, Buyer will use commerciallyreasonable efforts to purchase gas from the lands covered by this Contractratably with its purchases of similar gas in each common gathering system orarea within its capabilities using existing facilities, in compliance withBuyer’s existing contracts and with applicable laws and regulations, includingratable purchases from Buyer’s affiliates.

 

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

 

(c)            Sellerwill use commercially reasonable efforts to deliver gas meeting the qualityrequirements and to avoid delivery of Inferior Liquids.  If the gas at any Delivery Point becomesinsufficient in volume, quality, or pressure, Buyer may cease gas takes at suchDelivery Point for so long as the condition exists.  If Buyer ceases taking gas under this Section for30 consecutive Days for reasons other than quality or Force Majeure, Seller mayterminate this Contract with respect to the affected Delivery Points and theLeases delivering to those Delivery Points upon 10 Days’ advance written noticeto Buyer; provided that during the notice period Buyer may resume consistenttakes and purchases, and thereby avoid Contract termination under Seller’snotice.

 

5.               **PRICE**.

 

5.1*            ***Consideration**.         Asfull consideration for Seller’s gas and all its components delivered to Buyereach month, Buyer shall pay Seller (a) the applicable percentage underTable 5.1 below of the netResidue Gas value determined under Section 5.2 below for Residue Gasallocated to Seller’s gas, and (b) the applicable percentage under Table5.1 below of the net value under Section 5.3**below for anyrecovered NGLs allocated to Seller’s gas. No separate payment or valuecalculation is to be made under this Contract for helium, sulfur, C02, other non-hydrocarbons, orfor Inferior Liquids.

 

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**Table 5.1**

 

| **Monthly Average Mcf/Day  For the Delivery Point** | ** ** | **Applicable Percentages** | ** ** |
|-----------------------------------------------------|------------|----------------------------|------------|
| **0 – 200**                                    | ** ** | **77**                     | **%**      |
| **201 – 500**                                  | ** ** |  **81**               | **%**      |
| **501 and Greater**                                 | ** ** | **85**                     | **%**      |

 

5.2*          ***Residue Gas Value****.       **The net****Residue Gasvalue will be determined by multiplying the MMBtus of Residue Gas attributableto Seller times ninety eight percent (98%) of the “Index Price,” which will bethe price per MMBtu published in *InsideF.E.R. C.’s Gas Market Report*in its first publication of the Monthin which the gas is delivered for “Prices of Spot Gas Delivered to Pipelines”for Panhandle Eastern Pipe Line Company Texas, Oklahoma (Mainline).  If this price quotation is discontinued ormaterially modified, its successor will be used, or in the absence of asuccessor, Buyer will select another publication that enables calculation of anIndex Price closely comparable to that previously used.  If a change in the Index Price calculationbecomes necessary, Buyer will so inform Seller by written notice, stating thechanges. If Buyer installs or operates additional facilities downstream fromBuyer’s Facilities to provide resale markets and/or to meet the specificationsof Buyer’s resale purchasers or transporters, Buyer may deduct the reasonablecost (including return on and of investment) of installation and operation ofthose added facilities, provided Buyer provides Seller with at least 60 Daysnotice of such costs and an estimation as to their amounts.  For months in which Buyer installs a newDelivery Point or Seller ties in a new well behind an existing Delivery Pointduring a month, Buyer may elect to use instead for pricing of the gasproduction from the new source for the first partial month the “Daily PriceSurvey” as quoted by *Gas Daily*forPanhandle Eastern Pipe Line Company:  Texas, Oklahoma (mainline) less$0.1 0/MMBtu, or another daily price index publication representative of gasprices for the Texas-Oklahoma Panhandle area.

 

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

 

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

 

(b)           Thenet value for natural gasoline (pentanes and heavier) allocable to Seller willbe the weighted average net natural gasoline price per gallon that Buyer receiveson resale for deliveries during the month at or f.o.b. Buyer’s plants, asadjusted, including deduction of actual resale contract(s) TF&S fees.Seller acknowledges that Buyer resells natural gasoline and other NGLscomponents to an affiliated purchaser and represents that their actual resaleprices are at area market rates; Seller agrees to natural gasoline pricingbased on the actual resale prices.

 

5.4           **Low Volume Delivery Points**.     The proceedscomputed under Sections 5.1, 5.2, and 5.3 for any Delivery Point where theMonthly volume delivered at the Delivery Point falls below 450 MMBtu shall be reduced toone-half (1/2)of that computed underSections 5.1, 5.2, and 5.3 foreach low volume Month. Seller may cease application of low volume fees underthis Section by giving Buyer 30 Days advance written notice of Seller’srequest to have the affected meters disconnected; the low volume fees will nolonger apply as of the end of the Month following the notice period, and Buyermay disconnect the affected meters.

 

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

 

a.             FieldCompression.  All compressiondownstream from the Delivery Points, including that adjacent to the plantinlet, that compresses gas to the plant inlet pressure.

 

b.              LowPressure Gas.  Any gas delivered bySeller into Buyer’s Facilities at pressures that allow receipt at Buyer’s FieldCompression at a compressor station inlet pressure equal to or less than zeropounds psig.

 

c.               IntermediatePressure Gas.  Any gas delivered bySeller into Buyer’s Facilities at pressures that allow receipt at Buyer’s FieldCompression at a compressor station inlet pressure of greater than zero pounds(0#) psig.

 

d.              HighPressure Gas.  Any gas delivered bySeller into Buyer’s Facilities that is not compressed by Field Compression.

 

e.             PlantInlet Gallons.  The quantity of eachNGL component attributable to Seller delivered to the plant inlet will bedetermined by multiplying the gallons of each component contained in the gasdelivered by Seller at each Delivery Point by the applicable percentage asfollows:

 

| **Pressure**          | ** ** | **Percentage** | ** ** |
|-----------------------|------------|----------------|------------|
| High Pressure         |       | 90             | %          |
| Intermediate Pressure |       | 88             | %          |
| Low Pressure          |       | 85             | %          |

 

f.              NGLsAttributable to Seller.  The quantityof each NGL component attributable to Seller’s gas will be determined bymultiplying Seller’s Plant Inlet Gallons times fixed recovery percentages asfollows:

 

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| Ethane                        |   | 50 | % |
|-------------------------------|--------|----|---|
| Propane                       |   | 90 | % |
| Iso & Normal Butanes |   | 95 | % |
| Pentanes & Heavier   |   | 95 | % |

 

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

 

| High Pressure         |   | 10 | % |
|-----------------------|--------|----|---|
| Intermediate Pressure |   | 12 | % |
| Low Pressure          |   | 15 | % |

 

Whenever Force Majeure or maintenance needs prevent normal gatheringand processing operations for Seller’s gas, fixed recovery percentages will notapply, and Seller’s attributable NGL gallons and Residue Gas will be based onSeller’s pro rata share of actual gathering and processing results during thoseperiods based on gas compositions, volumes from each common source, and anequitable distribution among suppliers of fuel, losses, and unaccountables, in amanner similar to that used for Buyer’s purchase contracts that call forallocations based on actual results. Buyer will include the adjusted overallmonthly recoveries in its monthly gas statement to Seller.

 

5.6           **Price Renegotiation Rights.    **Notwithstandingthe foregoing provisions of this Section 5*,*PRICE, if atany time, and from time to time, Buyer in its reasonable judgment determinesthat at any or all Delivery Points, regulatory or operating conditions relatingto Buyer’s Facilities or market conditions relating to Buyer’s purchase of gasor resale of Residue Gas and NGLs indicate that a downward price revision isnecessary or appropriate, then Buyer may notify Seller of Buyer’s intent torenegotiate Seller’s price and pricing basis or to terminate this Contract,upon 30 Days advance written notice from Buyer to Seller prior to the proposedeffective date.  If Seller is not willingto accept a renegotiated price nominated by Buyer, then as to all gas affectedby Buyer’s notice, Seller may (i) cause a renegotiation of pricingpercentages or (ii) terminate this Contract as to the affected gas bywritten notice to Buyer at any time prior to the effective date of Buyer’snominated price.  Whether or not noticeof termination is given by Seller within the prescribed period, if Seller makesand Buyer accepts deliveries of gas from the affected sources after theeffective date of the price change, Seller will be deemed to have acceptedBuyer’s nominated price for those deliveries.

 

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

 

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

 

7.             **ADDRESSES AND NOTICES**.     Eitherparty may give notices to the other party or parties byfirst class mail postage prepaid, by overnight delivery service, or byfacsimile with receipt confirmed at the following addresses or otheraddresses furnished by a party by written notice. Unless Seller objectsin writing, Buyer may also use Seller’s current address for paymentsfor notice purposes. Any telephone numbers below are notallowed under this Contract, except that notices and hand-signed amendments maybe delivered by facsimile with receipt confirmed, as stated above.

 
| Notices to Seller — Correspondence                 |   | W.O. Operating Company, LTD.                                                              |
|---------------------------------------------------------|--------|-------------------------------------------------------------------------------------------|
|                                                    |   | Attn: Patrick McKinney                                                                    |
|                                                    |   | 801 Cherry Street, Suite 3200                                                        |
|                                                    |   | Fort Worth, TX 76102                                                                      |
|                                                    |   | Phone: (817) 698-0900                                                                     |
|                                                    |   | Fax: (817) 334-0222                                                                       |
|                                                    |   |                                                                                      |
| Payment to Seller:                                      |   | To the bank and account that Seller will furnish to Buyer’s Division  Orders office. |
|                                                    |   |                                                                                      |
| Notices to Buyer — Billings & Statements: |   | DCP Midstream, LP                                                                         |
|                                                    |   | Attn: Revenue Accounting                                                                  |
|                                                    |   | 6120 S. Yale, Suite 1100                                                             |
|                                                    |   | Tulsa, OK 74136                                                                           |
|                                                    |   | Phone: (918) 492-3331                                                                     |
|                                                    |   | Fax: (918) 524-0995                                                                       |
|                                                    |   |                                                                                      |
| Buyer — Correspondence:                            |   | DCP Midstream, LP                                                                         |
|                                                    |   | Attn: Contract Administration                                                             |
|                                                    |   | 6120 S. Yale, Suite 1100                                                             |
|                                                    |   | Tulsa, OK 74136                                                                           |
|                                                    |   | Phone: (918) 492-3331                                                                     |
|                                                    |   | Fax: (918)524-0995                                                                        |
|                                                    |   |                                                                                      |
| Buyer — Division Orders:                           |   | DCP Midstream, LP                                                                         |
|                                                    |   | Attn: Division Orders                                                                     |
|                                                    |   | 6120 S. Yale, Suite 1100                                                             |
|                                                    |   | Tulsa, OK 74136                                                                           |
|                                                    |   | Phone: (918) 492-3331                                                                     |
|                                                    |   | Fax: (918) 524-0997                                                                       |

 

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8.             **TERMINATION OF PRIORCONTRACTS AND RELEASE.**

 

8.1           **Termination and Release**.   ThisContract terminates and supersedes any prior contracts for the sale orhandling of gas between the parties or their predecessors in interest thatapply or applied to any gas produced from any sources covered by this Contracteffective as of its date. In negotiating this Contract, the parties havecompromised and settled any and all price, fee, payment, and other disputesrelating to or under the superseded contract(s). In consideration of thecovenants contained herein, each party hereby releases theother party, its affiliates, and its predecessors in interestunder the prior contracts from any causes of action, claims, andliabilities (i) that they failed to pay the full prices or feesunder the prior contracts, including interest, (ii) that they failed toperform any other obligation under the prior contracts, and (iii) arising fromtheir relationship as parties to the prior contracts.

 

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

 

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

 
| **W.O. OPERATING COMPANY, LTD**                               | ** **              | **DCP MIDSTREAM, LP**          |
|---------------------------------------------------------------|-------------------------|--------------------------------|
|                                                          |                    |                           |
| By                                                            | /s/ Patrick M. McKinney |                           | By | /s/ Will Wedell |
|                                                          |                    |                           |
| Title Vice President of Operations of W.O. Energy, Inc., |                    | Title President of Northern BU |
| Its General Partner                                           |                    |                           |
| Signed on 8/4/09                                         |                    | Signed on 8/4/09          |
| Seller                                                        |                    | Buyer                          |
|                                                               |                         |                                |  |  |

 

Signature Sheet for Gas Purchase Contract

Dated as of July 1, 2009

 

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PAM064100R

 

**EXHIBIT A**

 

**TO GAS PURCHASE CONTRACT**

 

**Between W.O. OPERATING COMPANY, LTD as Seller**

 

**And DCP MIDSTREAM, LP as Buyer**

 

**Dated July 1, 2009**

 

**GENERAL****TERMS &****CONDITIONS**

 

**A. DEFINITIONS**

 

Except where thecontext indicates a different meaning or intent, and whether or notcapitalized, the following terms will have meanings as follows:

 

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

 

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

 

c.                                           Buyers Facilities — the gas delivered by Seller will be gathered in gathering systems andmay be redelivered to a gas processing plant or plants for the removal of NGLstogether with gas produced from other properties. The gathering systems andplant or plants, or successor facilities, are “Buyer’s Facilities” whetherowned by buyer, an affiliate of Buyer, or an unaffiliated third party. Nofacilities downstream of the processing plant or plants other than shortconnecting lines to transmission lines are included in “Buyer’s Facilities.”

 

d.                                          Day —  a period of24 consecutive hours beginning and ending at 9 am, local time or other 24 hourperiod designated by Buyer and a downstream pipeline.

 

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

 

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

 

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

 

h.                                          Inferior Liquids — Mixed crude oil, slop oil, saltnuisance liquids, and other liquids recovered by in its gathering system or atplant inlet receivers.

 

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

 

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

 

j.**                                             **MMcf — 1,000 Mcf.

 

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

 

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

 

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

 

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

 

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

 

**B.  DELIVERY DATE;COMPRESSION**

 

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

 

**B.2****                                ****Additional Sources**. As to committed sources not yet connected, Seller will commence andcomplete with due diligence the construction of the facilities necessary toenable Seller to deliver the committed gas at the Delivery Points and Buyerwill cause prompt commencement and complete with due diligence the constructionof the facilities necessary and economically feasible in Buyer’s solediscretion to enable Buyer or its gas gathering contractor to receivedeliveries of gas at the Delivery Points. If Buyer determines it is noteconomically feasible for Buyer to construct the facilities, Seller will havethe 

 

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

 

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

 

**B.4****                                ****Options to Compress**. If Seller’s wells become incapable ofdelivering gas into Buyer’s Facilities, neither party will be obligated tocompress, but either party will have the option to do so. If neither partyelects to compress within a reasonable time after the need for compressionappears, Buyer upon written request of Seller will either arrange promptly toprovide compression or as Seller’s sole remedy, release the affected gassources as to the then-producing formations from commitment under thisContract. If Buyer provides additional compression, the price to be paid byBuyer for Seller’s gas shall be reduced by a reasonable compression fee thatallows recovery of the related fuel and provides Buyer a reasonable return oninvestment.

 

**C.  RESERVATIONS OF SELLER**

 

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

 

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

 

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

 

c.     To pool, combine, and unitize any ofSeller’s oil and gas properties with other properties in the same field, and toalter pooling, combinations, or units, in which event this Contract will coverSeller’s allocated interest in unitized production insofar as that interest is attributableto the oil and gas properties committed under this Contract, and thedescription of property committed will be considered to have been amendedaccordingly.

 

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

 

**D.  METERING ANDMEASUREMENT**

 

**D.1****                                ****Buyer to Install Meters**. Buyer will own, maintain and operateorifice meters or other measuring devices of standard make at or near theDelivery Points. Except as otherwise specifically provided to the contrary inthis Section D, orifice meters or other measurement devices will beinstalled and volumes computed in accordance with accepted industry practice.Buyer may reuse metering equipment not meeting current standards but meeting1985 or later published standards for gas sources not expected to deliver inexcess of 100 Mcf per Day. A party providing compression facilities will alsoprovide sufficient pulsation dampening equipment to prevent pulsation fromaffecting measurement at the Delivery Points. Electronic recording devices maybe used. Seller will have access to Buyer’s metering equipment at reasonablehours, but only Buyer will calibrate, adjust, operate, and maintain it.

 

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

 

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

 

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

 

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

 

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requested in advance by Seller in writing, Buyer willgive Seller’s lease operator reasonable advance notice of the time of allspecial tests and calibrations of meters and of sampling for determinations ofgas composition and quality, so that the lease operator may haverepresentatives present to witness tests and sampling or make joint tests and obtain sampleswith its own equipment.Seller will give or cause its lease operator to give reasonable advance noticeto Buyer of the time of tests and calibrations of any check meters and of anysampling by Seller for determination of gas composition and quality.

 

**D.6****                                ****Correction of Errors**. If at any time any of the measuring ortesting equipment is found to be out of service or registering inaccurately inany percentage, itwill be adjusted promptly to read accurately within the limits prescribed bythe manufacturer. If any measuring equipment is found to be inaccurate or outof service by an amount exceeding the greater of (i) 2.0 percent at arecording corresponding to the average hourly rate of flow for the period sincethe last test, or (ii) 100 Mcf per Month, then previous readings will becorrected to zero error for any known or agreed period. The volume of gasdelivered during that period will be estimated by the first feasible of thefollowing methods:

 

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

 

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

 

(iii)       Usingdeliveries under similar conditions during a period when the equipment wasregistering accurately.

 

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

 

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

 

**E.DETERMINATION OF GAS**

**COMPOSITION, GRAVITY, AND**

**HEATING VALUE**

 

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

 

**F.  QUALITY OF****GAS**

 

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

 

a.                           1⁄4 grain of H2Sper 100 cubic feet,

 

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

 

c.                           2 mole percent of carbon dioxide.

 

d.                          3 mole percent of nitrogen.

 

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

 

f.                             5 mole percent of combined carbondioxide, nitrogen, and oxygen.

 

The gas shall:

 

g.                          Not exceed 120°F in temperature at theDelivery Point.

 

h.                          Have a total heating value of at least1050 Btus per cubic foot.

 

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

 

**F.2****                                  ****Quality Tests****.**Buyer will makedeterminations of conformity of the gas withthe above specifications using procedures generally accepted in the gasindustry. Suchdeterminations will be made as often as Buyer reasonably deems necessary. If in the lease operator’s****judgmentthe result of any such test or determination is inaccurate, Buyer upon requestwill again conduct the questioned test or determination. The costs of theadditional test or determination will be borne by Seller unless it shows theoriginal test or determination to have been materially inaccurate.

 

**F.3****                                  ****Separation Equipment**. Seller will employ only 

 

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conventional mechanical separation equipment at allproduction sites covered by this Contract. Low temperature, absorption, andsimilar separation facilities are not considered conventional mechanicalseparation equipment. Except for liquids removed through operation of conventionalmechanical separators and except for removal of substances as required toenable Seller to comply with this Section F, no components of the gas willbe removed prior to delivery to Buyer.

 

**F.4****                                  ****Rights as to OffSpecification Gas****.**

 

a.                                           If any of the gas delivered by Sellerfails to meet the quality specifications stated in this Section, Buyer may atits option accept delivery of and pay for such gas or discontinue or curtailtaking of gas at any Delivery Point whenever its quality does not conform tothe quality specifications. If Buyer accepts delivery of off specification gasfrom Seller or incurs costs relating to inferior gas quality in its gatheringsystem, Buyer may deduct from the proceeds otherwise payable a reasonable feefor monitoring the gas quality and treating and handling the gas. Buyertypically adjusts gas quality deduction levels annually, but may do so moreoften if needed.

 

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

 

**G.  BILLING AND PAYMENT**

 

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

 

G.2                                   **Audit Rights;****Time Limit to AssertClaims****.**

 

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

 

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

 

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

 

**G.3****                                ****Metering RecordsAvailability**.Buyer will not be required to furnish gas volume records relating to electronicrecording devices for gas meters other than daily volume information unlessthere are indications the meter was not operating properly.

 

**H.  FORCE MAJEURE**

 

**H.1****                                ****Suspension ofPerformance****.**Ifeither party is rendered unable, wholly or in part, by Force Majeure to carryout its obligations under this Contract, other than to make payments due, theobligations of that party, so far as they are affected by Force Majeure, willbe suspended during the continuance of any inability so caused, but for nolonger period. Within 10 days of receipt of the affected party’s writtenrequest the other party shall provide written notice of the condition of ForceMajeure.

 

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

 

**H.3****                                ****Labor Matters****Exception****.**The settlement of strikes or lockouts willbe entirely within the discretion of the party having the difficulty, andsettlement of strikes, lockouts, or other labor disturbances when that courseis 

 

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consideredinadvisable is not required.

 

**I.  ****WARRANTY****OF TITLE**

 

Seller warrantsthat it has good title and processing rights to the gas delivered, free andclear of any and all liens, encumbrances, and claims, and that Seller has goodright and lawful authority to sell the same. Seller grants to Buyer the rightto process Seller’s gas for extraction of NGLs and other valuable components,If Seller’s title or right to receive any payment is questioned or involved inlitigation, Buyer will have the right to withhold the contested payment withoutinterest until title information is received, during the litigation, until thetitle or right to receive the questioned payments is freed from question, oruntil Seller furnishes security for repayment acceptable to Buyer. Withoutimpairment of Seller’s warranty of title to gas and gas processing rights, ifSeller owns or controls less than full title to the gas delivered, paymentswill be made only in the proportion that Seller’s interest bears to the entiretitle to the gas.

 

**J. ROYALTY****AND****OTHER INTERESTS**

 

**J.1****                                  ****Seller’s Responsibility****.**Seller is responsible for****all payments tothe owners of all working interests, mineral interests, royalties, overridingroyalties, bonus payments, production payments, and the like. Buyer assumes nodirect liability to Seller’s working or mineral interest, royalty, or otherinterest owners under this Contract. For federal and Indian leases, Buyer mayat any time require Seller to sign and furnish a Payor Information Form orother papers to the Minerals Management Service or successor agency to coverBuyer’s royalty payments for Seller and to verify Buyer’s refusal to assumeSeller’s lease royalty payment obligations.

 

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

 

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

 

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

 

**K. SEVERANCE AND SIMILAR TAXES**

 

**K.1****                                ****Included in Price****.**Reimbursement toSeller****for Seller’s full liability for severance and similartaxes levied upon Seller’s gas production is included in the prices payableunder this Contract, regardless of whether some included interests may beexempt from taxation.

 

**K.2****                                ****Tax Responsibilities  and Disbursements****.**

 

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

 

| **L.**     | **INDEMNIFICATION AND** |
|------------|-------------------------|
| ** ** | **RESPONSIBILITY FOR**  |
| ** ** | **INJURY OR DAMAGE**    |

 

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

 

**L.2****                                 ****Responsibility forInjury or Damage****. As between the parties, Seller will be in controland possession of the gas deliverable hereunder and responsible for any injuryor damage relating to handling or delivery of gas until the gas has beendelivered to Buyer at the Delivery Points; after delivery, Buyer will be deemedto be in exclusive control and possession and responsible for any injury ordamage relating to handling or gathering of gas.**

 

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**THE PARTY HAVING RESPONSIBILITY UNDER THE PRECEDINGSENTENCE SHALL RELEASE, DEFEND, INDEMNIFY, AND HOLD THE OTHER PARTY, ITSAFFILIATES, AND THEIR OFFICERS, EMPLOYEES, AND AGENTS HARMLESS FROM AND AGAINSTALL CLAIMS, CAUSES OF ACTION, LIABILITIES, AND COSTS (INCLUDING REASONABLEATTORNEYS’ FEES AND COSTS OF INVESTIGATION AND DEFENSE) ARISING FROM ACTUAL ANDALLEGED LOSS OF GAS, PERSONAL INJURY, DEATH, AND DAMAGE FOR WHICH THE PARTY ISRESPONSIBLE UNDER THIS SECTION; PROVIDED THAT NEITHER PARTY WILL BE INDEMNIFIEDFOR ITS OWN NEGLIGENCE OR THAT OF ITS AGENTS, SERVANTS, OR EMPLOYEES.**

 

**M. RIGHT OF WAY**

 

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

 

**N. ASSIGNMENT**

 

**N.1****                            ****Binding on Assignees****. **Either party may assign this Contract. ThisContract is binding upon and inures to the benefit of the successors, assigns,heirs, personal representatives, and representatives in bankruptcy of theparties, and, subject to any prior dedications by the assignee, shall bebinding upon any purchaser of Buyer’s Facilities and upon any purchaser of theproperties of Seller subject to this Contract. Nothing contained in this Section willprevent either party from mortgaging its rights as security for itsindebtedness, but security is subordinate to the parties’ rights andobligations under this Contract.

 

**N.2****                                ****Notice****of Assignment****.**Seller willmake any assignmentor sublease of any oil and gas properties or any gas rights contracted to Buyerexpressly subject to this Contract. No transfer of or succession to theinterest of Seller, however made, will bind Buyer unless and until the originalinstrument or other proper proof that the claimant is legally entitled to aninterest has been furnished to Buyer at its Division Order address noted in theNotices Section or subsequent address.

 

**O. MISCELLANEOUS PROVISIONS**

 

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

 

**O.2****                               ****Default and Nonwaiver****.**A waiver by a party of any one or more defaults by the other in the performance of any provisions of this Contract will notoperate as a waiver of any future default or defaults, whether of a like ordifferent character.

 

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

 

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

 

**O.5****                               ****Ratification and Third Party Gas**. 

Notwithstandinganything contained herein to the contrary, Buyer has no duty under this Contractto purchase or handle gas attributable to production from interests of thirdparties that has been purchased by Seller for resale, except that Buyer willpurchase Other WI Gas. “Other WI Gas” means gas attributable to working andmineral interests owned by third parties in wells operated by Seller that aresubject to this Contract that Seller has the right **t**market under anoperating agreement. If Buyer requests in writing that Seller obtainratification of this Contract from owners of Other WI Gas, Seller will use allreasonable commercial efforts to cause those Other WI Gas owners to execute anddeliver to Buyer an instrument prepared by Buyer for the

 

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

 

**O.6****                               ****Compliance with Laws and Regulations****.**This Contractis subject to all valid statutes and rules and regulations of any dulyconstituted federal or state authority or regulatory body having jurisdiction. Neither party will bein default as a result of compliance with laws and regulations.

 

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

 

**O.8****                               ****Mutual Waiver of Certain Remedies****.**Except as tothe parties’ indemnification obligations, NEITHER PARTY SHALL BE LIABLE OROTHERWISE RESPONSIBLE TO THE OTHER FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, FORLOST PRODUCTION, OR FOR PUNITIVE DAMAGES AS TO ANY ACTION OR OMISSION, WHETHER CHARACTERIZED AS A CONTRACTBREACI-I OR TORT, THAT ARISES OUT OF OR RELATES TO THIS CONTRACT OR ITSPERFORMANCE OR NONPERFORMANCE.

 

**0.9****                                  ****Arbitration****.** The parties desire to resolve any disputes that mayarise informally, if possible. All disputes arising out of or relating to thisContract that are not resolved by agreement of the parties must be resolvedusing the provisions of this Section. To that end, if a dispute or disputesarise out of or relating to this Contract, a party shall give written notice ofthe disputes to the other involved parties, and each party will appoint anemployee to negotiate with the other party concerning the disputes. If thedisputes have not been resolved by negotiation within 30 Days of the initialdispute notice, the disputes shall be resolved by arbitration in accordancewith the then current International Institute for Conflict Prevention andResolution Rules for Non-Administered Arbitration and related commentary (“Rules”)and this Section. The arbitration shall be governed by the United StatesArbitration Act, 9 U.S.C. §§ 1-16, and the Rules, to the exclusion of anyprovision of state law inconsistent with them. The arbitration shall beinitiated by a party seeking arbitration by written notice transmitted to theother party or parties to be involved. The parties shall select onedisinterested arbitrator with at least ten years’ experience in the natural gasindustry or ten years’ experience with natural gas law, and not previously employedby either party or its affiliates, and, if possible, shall be selected byagreement between the parties. If the parties cannot select an arbitrator byagreement within 1 5 Days of the date of the notice of arbitration, a qualifiedarbitrator will be selected in accordance with the Rules. If the disputesinvolve an amount greater than $500,000, they will be decided by a panel ofthree arbitrators with the above qualifications, one selected by each party,and the third selected by the party-appointed arbitrators, or in the absence oftheir agreement, pursuant to the Rules. The arbitrator(s) shall resolvethe disputes and render a final award in accordance with the substantive law ofthe state referenced in Section 0.1 above, “Governing Law.” The arbitrator’saward will be limited by the provisions set forth in Sections 0.7, “Fees andCosts; Damages” and 0.8 above, “Mutual Waiver of Certain Remedies.” The partiesintend case specific dispute resolution; either party may opt out of any attempted class action for all claims of anyparty related to this Contract. The arbitrator(s) shall set forth thereasons for the award in writing, and judgment on the arbitration award may be entered in any court havingjurisdiction.

 

ENDOF EXHIBIT A TO GAS PURCHASE

CONTRACT

 

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**EXHIBIT B**

 

**TO GAS PURCHASE CONTRACT**

 

**Between W.O.****OPERATING COMPANY, LTD as Seller**

 

**And DCP MIDSTREAM, LP as Buyer**

 

**Dated July 1, 2009**

 

**ARNOLD LEASE****:**

 

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

 

**B.F. BLOCK LEASE****:**

 

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

 

**BLOCK LEASE****:**

 

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

 

**BLOCK “A” LEASE****:**

 

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

 

**BLOCK “B” LEASE****:**

 

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

 

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**BLOCK “C” LEASE****:**

 

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

 

**T.J. BONEY NCT 1 LEASE**:

 

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

 

**T.J. BONEY NCT 2 LEASE**:

 

SouthwestQuarter (SW/4) of Section 90, Block 4, I&GN RR. Co. Survey, CarsonCounty, Texas.

 

**T.J. BONEY NCT 4 LEASE**:

 

NorthwestQuarter (NW/4) of Section 89, Block 4, I&GN RR Co. Survey, CarsonCounty, Texas.

 

**CALDWELL BRYAN LEASE**:

 

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

 

**CASTLEBERRY B LEASE**:

 

North80 acres of the West 100 acres of the North Half~ Section 151, Block. 3,I&GN Survey, Gray County, Texas

 

**CITIES SERVICE C LEASE**:

 

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

 

**COCKRELLB LEASE**:

 

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

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

 

**COCKRELL D LEASE: Meter TBD**

 

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

 

**COCKRELLF LEASE**:

 

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

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

North40 acres of Section 1, Block B-3, D&SE RR Survey, Hutchinson County,Texas

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

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

 

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**COCKRELL RANCH LEASE****:**

 

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

 

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

 

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

 

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

 

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

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

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

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

 

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

 

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

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

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

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

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

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

 

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

 

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

Thence South, parallel with the South line ofSection 11, 660.0 feet;

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

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

 

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

 

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

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

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

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

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

 

B-3

----

 

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

 

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

 

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

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

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

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

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

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

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

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

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

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

 

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

 

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

Thence East, parallel withthe South line of Section 11, 1320.0 feet to the Southwest beginningcorner of the herein described tract;

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

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

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

Thence West, parallel with the South line of Section 11,660.0 feet, to the point of beginning of the herein described tract, containing10.0 acres, more or less.

 

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

 

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

 

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

 

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

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

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

Thence West, with the said most northerlySouth line, 660.0 feet to the point of beginning, containing 10.0 acres, moreor less.

 

TRAC 2:       Beginningat the most southerly Southwest corner of Section 6, Block M-2l, TCRRSurvey, Hutchinson County, Texas;

 

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

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

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

 

B-4

----

 

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

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

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

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

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

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

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

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

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

Thence South, parallel with the most easterlyWest line of Section 6, 550.0 feetto a point in the most southerly South line of Section 6;

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

 

(3) East199.9 acres of N/2, East 160 acres of South 320 acres of Section 3, BlockM-2l, TCRR Survey, Hutchinson County, Texas, among other lands not affectedhereby, less and except the following described tract of land:

 

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

 

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

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

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

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

Thence West, along with theSouth line of Section 3, 1320 feet to the point of beginning, containing20.0 acres, more or less.

 

(4) West240 acres of North 320 acres of Section 2, M-21, TCRR Survey, HutchinsonCounty, Texas, among other lands not affected hereby, less and except thefollowing described land:

 

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

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

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

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

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

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

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

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

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

 

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

 

B-5

----

 

**COOPER “A” LEASE****:**

 

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

 

**COOPER “B” LEASE**:

 

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

 

**COOPER****“E”LEASE**:

 

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

 

**COOPER “G”****LEASE**:

 

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

 

**COOPER “H” LEASE****:**

 

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

 

**DAVE POPE (gas well) LEASE**:

 

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

 

**DJORDAN****LEASE**:

 

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

 

**DRILLEX LEASE****:**

 

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

 

**E. COOPER NCT “A”, “B”,AND “C” LEASE**:

 

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

 

**E.F. BRYAN LEASE****:**

 

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

 

B-6

----

 

**E. COCKRELL LEASE****:**

 

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

 

That portion of the East 60 acres of the West 120 acres of the North319.9 acres and the East 80 acres of the West 160 acres of the South 320 acresof Section 3, Block M-21, TCRR Survey, Hutchinson County, Texas, ascolored in yellow on Exhibit “A-1” hereto.

 

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

 

**FEE 244 LEASE**:

 

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

 

**FIRST STATE BANK OF WHITE DEER LEASE**:

 

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

 

Containing2080.0 acres, more or less in Carson County, Texas, AS TO AND ONLY AS TO oiland casinghead gas rights from the surface to 100 feet below the Granite Washformation. LESS AND EXCEPT a water well located 324 feet from the East Line and2,227 feet from the South line in Section 59, Block 4, I&GN *PR*CO. Survey.

 

**C.R. GARNER LEASE**:

 

I&GNRR Co. Survey, Block 4, Section *95:*All

 

Containing640 acres, more or less, in Carson County, Texas, **AS TO ANDONLY AS TO** oil and casinghead gas rights from the surface to 100feet below the base of the Granite Wash Formation.

 

**W.B. HAILE LEASE**:

 

SouthwestQuarter (SW/4) of Section 4, Block, M-21, TCRR Co. Survey, HutchinsonCounty, Texas

 

**HARVEY UNIT**:

 

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

 

TRACT3:              East Half(E/2) of theNorthwest Quarter (NW/4) of Section 71, Block Z, HE&WT PR Survey, HutchinsonCounty, Texas, among other lands not affected hereby

 

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

 

TRACT6:              Southwest Quarter (SW/4)of Section 71, Block Z, HE&WT *P.R*Survey,Hutchinson County, Texas, among other lands not affected hereby

 

B-7

----

 

TRACT7:

 

LeaseNo. 1:

 

WestHalf (W/2) of the West Half ((W/2) of the Northwest Quarter ~NW/4) of Section 14,Block M-2 I, TCPR Survey, 1-lutchinson County, Texas, among other lands notaffected hereby

 

LeaseNo. 2:

 

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

 

TRACT8:

 

LeaseNo. 1:       (l) Beginning atthe Southwest corner of the Southeast Quarter (SE/4) of Section 71, BlockZ, HE&WT Survey, Hutchinson County, Texas; Thence East 660 feet; Thence North660 feet;

 

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

 

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

 

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

 

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

 

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

 

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

 

LeaseNo. 2:

 

Southwest Quarter (SW/4) ofthe Northwest Quarter (NW/4) of the Southwest Quarter (SW/4), and the East Half(E/2) of the Northwest Quarter (NW/4) of the Southwest Quarter (SW/4), and theNortheast Quarter (NE/4) of the Southwest Quarter (SW/4), and the North Half(N/2) of the South Half(S/2) of the Southwest Quarter of Section 14, BlockM-2l, TCRR Survey, Hutchinson County, Texas, among other lands not affectedhereby

 

B-8

----

 

Lease No.3:

 

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

 

TRACT9:

 

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

 

TRACT10:

 

160 acres out of Section 16, Block M-2 1, TCPR Survey, HutchinsonCounty, Texas, described as follows: Beginning at the Southwest corner of said Section 16;Thence East 1320 feet along the South boundary line of said Section; ThenceNorth parallel to the West line of said Section 5280 feet; Thence West1320 feet to the North line of said Section; Thence South 5280 feet along theWest line of said Section, to the point of beginning.

 

**J.C. McCONNELL “A” LEASE**:

 

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

 

Containing160 acres, more or less, in Carson County, Texas, AS TO AND ONLY AS TOoil and casinghead gas rights from the surface to 100 feet below the base ofthe Granite Wash Formation.

 

**JK QUINN LEASE**:

 

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

 

Containing480 acres, more or less, in Carson and Hutchinson Counties, Texas, AS TO ANDONLY AS TO oil and casinghead gas rights from the surface to 100 feet belowthe base of the Granite Wash Formation.

 

**JW MOORE LEASE**:

 

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

 

**JORD LEASE: Meter TBD**

 

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

 

**KLAUSE COCKRELL A LEASE**:

 

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

 

B-9

----

 

**KLAUSE****COCKRELL B LE****ASE**:

 

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

 

**LANGDON LEASE**:

 

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

 

**LONG LEASE**:

 

NorthHalf (N/2) less the West Half of the Southwest Quarter of the NorthwestQuarter(W/2 SW/4 NW/4),Section 113, Block. 4, I&GN Survey, CarsonCounty, Texas

 

**NEWBLOCK LEASE**:

 

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

 

**OLIVE COOPER LEASE**:

 

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

 

**PHILLIPS BRYAN LEASE**:

 

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

 

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

 

**PHILLIPS COOPER “B” LEASE****:**

 

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

 

**PHILLIPS COOPER****“C”LEASE**:

 

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

 

**PITCHER LEASE****:**

 

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

 

**QUINN LEASE**:

 

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

 

**RUBY****SACKETT LEASE**:

 

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

 

**R.W.****HARRAH****LEASE**:

 

South40 acres of the East 120 acres of the Northeast Quarter (NE/4) of Section 163,Block. 3, I&GN RRCo. Survey, Gray County, Texas

 

B-10

----

 

**SCHAFER LEASE**:

 

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

 

BEGINNINGat the Southwest corner of said NW/4 of Section 195;

 

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

 

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

 

THENCESouth parallel with the West line of said Section 195, 294 feet to apoint;

 

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

 

THENCESouth with the East line of the NW/4 of said Section 195, 1686 feet to theSoutheast corner of the NW/4 of said Section 195;

 

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

 

**SCHAFER RANCH LEASE**:

 

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

 

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

 

containing640 acres, more or less in Carson County, Texas

 

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

 

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

 

containing640 acres, more or less in Carson County, Texas.

 

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

 

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

 

containing160 acres, more or less in Carson County, Texas.

 

B-11

----

 

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

 

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

 

Containing80 acres, more or less in Carson County, Texas

 

**SIN-HARRAHLEASE**:

 

North80 acres of the East 240 acres, Section 163, Block 3, I&GN RR Co.Survey, Gray County, Texas

 

**SEIBOLD LEASE**:

 

EastHalf (E/2) of the Southeast Quarter (SE/4) of Section One HundredTwenty-Five *(125),*Block Four (4),I&GN *PR* Co. Survey, Hutchinson and CarsonCounties, Texas.

 

**SOUTHLAND B LEASE**:

 

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

North30 acres of the E/2 NE/4 of Section 2, Block B-3, D&SE *PR*Survey, Hutchinson County, Texas

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

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

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

 

**SMITTY LEASE**:

 

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

 

**TURNER KENT “A” LEASE:**

 

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

 

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

 

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

 

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

 

B-12

----

 

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

 

**TURNER KENT “B” LEASE**:

 

PARCELI: 100 acres in the Southwest corner of Section 11, Block B-3, D&SESurvey, Hutchinson County, Texas, among other lands not affected hereby, said100 acres more particularly described as follows:

 

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

 

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

 

PARCELII: 132.3 acres in Section 11, Block B-3, D&SE Survey, HutchinsonCounty, Texas, among other lands not affected hereby, said 132.2 acres beingmore particularly described in six tracts as follows:

 

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

 

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

 

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

 

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

 

B-13

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lineof Section 11, 1754.7 feet to the point of beginning containing 43.2 acresmore or less.

 

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

 

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

 

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

 

TRACT 1:           Beginningat a point in the most northerly South line of Section 1, Block M-21, TCPRSurvey, Hutchinson County, Texas, approximately 1570.0 feet easterly from themost northerly Southwest corner of Section 6; Thence North, parallel withthe most westerly West line of Section 6, 660.0 feet; Thence East ,parallel with the most northerly South line of Section 660.0 feet; ThenceSouth, parallel with the West line of the herein described tract 660.0 feet tothe most northerly South line of Section 6; Thence West, with the saidmost northerly South line, 660.0 feet to the point of beginning and containing10.0 acres, more or less.

 

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

 

B-14

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INSOFARONLY as the above description covers and effects the oil, gas, and otherminerals in the interval between the surface and 100 feet below the base of theChase Group of the Wolfcamp Series of the Permian System.

 

**VANIMAN LEASE****:**

 

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

 

**W.W.****HARRAH LEASE**:

 

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

 

**W.W.****HARRAH****T.****LEASE**:

 

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

 

**J.C.****McCONNELL****LEASE:(gaswell)**

 

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

 

**McCONNELL LEASE:(gas well)**

 

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

 

**TEX-ELLER LEASE:(gas****well)**

 

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

 

**EXISTING****DCP LEASES**

 

**ANDERSON B LEASE; Meter 43221**

 

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

 

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

 

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

 

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

 

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

 

**CANADIAN KINGSLAND LEASE: Meter 38361**

 

North54 acres of the W/2 SW/4; the South 30 acres of the E/2 NW/4, Section 4,Block Y, M&C Survey, Hutchinson County, Texas

 

B-15

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**COCKRELL A LEASE: Meter 38369**

 

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

 

**COCKRELLE LEASE:****Meter****38369**

 

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

 

**EAKIN LEASE: Meter 43222**

 

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

 

**KINGSLAND A LEASE: Meter****38369**

 

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

 

**KINGSLAND B LEASE: Meter 38361**

 

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

 

**KINGSLAND C LEASE: Meter****38369**

 

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

 

**MAGIC LEASE: Meter 38361**

 

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

 

**N. KINGSLAND B LEASE: Meter 38369**

 

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

SoutheastQuarter (SE/4) of Section 150, Block. 3, I&GN RR Co. Survey, GrayCounty, Texas

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Containing120 acres, more or less, in Hutchinson County, Texas, AS TO AND ONLYASTO rights from the surface to 100 feet below the base of the Granite WashFormation, less and except gas rights in the Red Cave Formation.

 

B-16

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

 

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

 

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

 

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

 

B-17

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PAM064100R

 

**EXHIBIT C**

 

**TO GAS PURCHASE CONTRACT**

 

**Between W.O. OPERATING COMPANY, LTD as Seller**

 

**And DCP MIDSTREAM, LP as Buyer**

 

**Dated July 1, 2009**

 

**NEW****DELIVERYPOINTS**

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

C-1

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