ex10_7.htm


    
      
        
          

        

      

      Exhibit 10.7

      
        The
Partnership has redacted certain confidential information in this agreement in
reliance upon its confidential treatment request that it has filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934. In this agreement, we indicate each redaction by use of
asterisk *.

      

       

    

    GAS PURCHASE AGREEMENT

    
       

    

    
      DATED AS
OF JUNE 1, 2006

    

    
      


    

    
      between

    

    
      


    

    
      WILLIAMS
PRODUCTION RMT COMPANY

    

    
      


    

    
      and

    

    
      


    

    
      RILEY
NATURAL GAS COMPANY

    

    
      


    

    
      and

    

    
      


    

    
      PETROLEUM
DEVELOPMENT CORPORATION

       

      
         

          
            

          

        

      

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    GAS PURCHASE
AGREEMENT

     

     

    Table of
Contents

    
 

    
      	
              
                SECTION

              

            	
              
                TITLE

              

            	
              
                PAGE

              

            
	 	 	 
	
              
                1.

              

            	
              
                COMMITMENTS/PERFORMANCE
      OBLIGATIONS

              

            	
              
                1

              

            
	 	 	 
	
              
                2.

              

            	
              
                SERVICE
      OPTIONS

              

            	
              
                5

              

            
	 	 	 
	
              
                3.

              

            	
              
                STATEMENTS
      AND PAYMENT

              

            	
              
                5

              

            
	 	 	 
	
              
                4.

              

            	
              
                TITLE

              

            	
              
                7

              

            
	 	 	 
	
              
                5.

              

            	
              
                TERM
      AND TERMINATION

              

            	
              
                7

              

            
	 	 	 
	
              
                6.

              

            	
              
                EXHIBITS

              

            	
              
                10

              

            
	 	 	 
	
              
                7.

              

            	
              
                ENTIRE
      AGREEMENT, CONSTRUCTION

              

            	
              
                11

              

            


    

     

     

    
      	
              
                EXHIBITS

              

            	
              
                TITLE

              

            
	 
      	 
      
	
              
                A.

              

            	
              
                STANDARD
      TERMS AND CONDITIONS

              

            
	
              
                B.

              

            	
              
                INTENTIONALLY
      OMITTED

              

            
	
              
                C.

              

            	
              
                RECEIPT
      POINT(S)

              

            
	
              
                D.

              

            	
              
                DELIVERY
      POINT(S)

              

            
	
              
                E.

              

            	
              
                SERVICE
      AND FEE DESCRIPTION

              

            
	
              
                F.

              

            	
              
                GAS
      VOLUMES COMMITTED

              

            
	
              
                G.

              

            	
              
                TWO
      YEAR MONTHLY MDQ SCHEDULE

              

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    GAS
PURCHASE AGREEMENT 

    PAGE
1 

    
      

    

     

    THIS GAS
PURCHASE AGREEMENT ("Agreement") is made and entered into as of June 1, 2006 by and between
WILLIAMS PRODUCTION RMT COMPANY
("Buyer") and RILEY
NATURAL GAS COMPANY ("Riley") and PETROLEUM DEVELOPMENT CORPORATION
("PDC," and together with Riley, collectively, "Seller," and Seller,
together with Buyer, the "Parties," and individually, a "Party")

    
      


    

    
      RECITALS

    

    
      


    

    
      


    

    
      A.       Seller
owns or controls a supply of Gas that it desires Buyer to
purchase.

    

    
      


    

    
      
        B.       
Buyer is
willing to purchase such Gas from Seller pursuant to the terms set forth
herein.

      

    

    
      


    

    
      NOW,
THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the Parties agree as follows:

    

    
       

       

    

    
      AGREEMENT

       

    

    
      


    

    
      
        	
                1. 

              	
                COMMITMENTS / PERFORMANCE
      OBLIGATIONS

              


      

    

    
      


    

    
      
        	
                1.1

              	
                Seller's Commitment.
      Seller commits to Buyer to sell and deliver to Buyer, on a Firm
      basis, Seller's present and future right, title, and interest in the Gas
      Volumes Committed to this Agreement and outlined on Exhibit F, that Seller
      delivers to the Receipt Point(s) from the Area of Interest ("Seller's
      Gas"), subject to the terms of this
Agreement.

              


      

    

    
      


    

    
      
        
          	
                  1.2

                	
                  Buyer's Commitment.
      Buyer commits to Seller to buy and receive from Seller at the
      Receipt Point(s), on a Firm basis, Seller's Gas, subject to the terms of
      this Agreement, including, without limitation, Section
  1.3.

                


        

      

    

    
      


    

    
      
        	
                1.3

              	
                Quantity.

              


      

    

    
      


    

    
      
        	
                
                

              	
                1.3.1

              	
                Each
      Day, Seller agrees to sell and deliver, and Buyer agrees to receive and
      purchase, Seller's MDQ, subject to the terms of this
      Agreement   If Seller delivers more than Seller's MDQ to
      Buyer at the Receipt Point(s) on any Day, Buyer shall take and purchase up
      to 105% of Seller's MDQ for such Day, but shall not be obligated
      to take or purchase more than 105% of Seller's MDQ for such Day
      and shall take and/or purchase any such excess amounts
      above 105% in its sole and absolute
  discretion.

              


      

    

    
      


    

    
      
        
          	
                	
                  1.3.1.1

                	
                  Seller's
      MDQ may be reduced proportionately with other Shippers on the Gathering
      System with Guaranteed Capacity pursuant to Section B.4 of Exhibit A to
      this Agreement.

                


        

      

    

    
      


    

    
      
        	
              	
                1.3.2

              	
                Should
      either Party become aware that actual deliveries of Seller's Gas at the
      Receipt Point(s) shall be greater than 105% of Seller's MDQ, such
      Party shall promptly notify the other Party
  thereof.

              


      

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
         

        GAS
PURCHASE AGREEMENT

      

    

    
      PAGE
2 

      
        

      

    

    
      


    

    
      
        
          	
                	
                  1.3.3

                	
                  Seller
      commits to deliver and sell Seller's Annual Volume to Buyer at the Receipt
      Point(s). Notwithstanding the foregoing
  provision:

                


        

      

    

    
      


    

    
      
        	
              	
                1.3.3.1 

              	
                if
      Seller sells and delivers less than [ * ]% of Seller's Annual
      Volume to Buyer for any given Contract Year (a "Shortfall"), and such
      Shortfall is not due to or arising from the circumstances addressed in
      Sections B.3, B.4 and/or B.7 of Exhibit A to this Agreement, Seller agrees
      to pay to Buyer, within ten (10) Business Days of Seller's receipt of
      Buyer's statement therefore, the Shortfall Fee for such Contract Year;
      and

              


      

    

    
       

    

    
      
        
          	
                	
                  1.3.3.2 

                	
                  if
      Seller delivers more than Seller's Annual Volume to Buyer at the Receipt
      Point(s) ("Excess Volumes"), such Excess Volumes shall be included in the
      calculation of Seller's Annual Volume for the immediately following
      Contract Year,

                


        

      

    

    
      


    

    
      
        
          	
                	
                  1.3.4

                	
                  Upon
      written notice to Buyer given on or before July 1 of any calendar year but
      no earlier than March 1 of such calendar year, Seller may request an
      increase to Seller's Annual Volume for any given Contract Year, provided
      that any such revision shall not be effective any earlier than twenty-four
      (24) months after Buyer's receipt of such request. Within thirty (30) Days
      of Buyer's receipt of such request, Buyer and Seller shall negotiate in
      good faith to adjust Seller's MDQ for such Contract Years to accommodate
      such projected increase to Seller's Annual Volume for such Contract Years,
      and shall revise Exhibit F
      accordingly.

                


        

      

    

    
      


    

    
      
        	
                1.4

              	
                Buyer's Processing Service. Seller's Gas
      at the Receipt Point(s) may have a hydrocarbon dew point that exceeds the
      most restrictive quality specification for hydrocarbon dew point required
      from time to time by the Interconnecting Pipeline(s). Buyer shall Process
      Seller's Gas to reduce its hydrocarbon dew point to a maximum of 20°F at
      any pressure between 100 psia and 1,480 psia at the Delivery Point(s). The
      fee for such Processing is incorporated into the Gathering and Processing
      Fee, If the most restrictive quality specification for hydrocarbon dew
      point of the interconnecting Pipeline(s) should ever be reduced below a
      maximum of 20°F at any pressure between 100 psia and 1,480 psia, then the
      Parties shall within thirty (30) Days of written notice thereof from
      Buyer, renegotiate, subject to Section 1.9 of this Agreement, the
      Gathering and Processing Fee. If the Parties are unable to renegotiate the
      Gathering and Processing Fee, then Buyer may refuse to accept further
      deliveries of Seller's Gas affected thereby or Buyer may, at its option,
      upon thirty (30) Days' prior written notice to Seller, release such
      affected Gas from the provisions of this Agreement, Buyer's right to
      renegotiate the Gathering and Processing Fee or, upon the failure of such
      renegotiation, to refuse to accept further deliveries of Seller's Gas
      affected thereby or release such affected Gas from the provisions hereof,
      shall apply to each successive reduction of the most restrictive quality
      specification for hydrocarbon dew point of the Interconnecting Pipeline(s)
      that is below a maximum of 20°F at any pressure between 100 psia and 1,480
      psia.

              


      

    

    
      


    

    
      
        
          	
                  1.5

                	
                  Buyer's Dehydrating
      Service.  Seller's Gas at the Receipt Point(s) may have a
      water vapor content that exceeds the most restrictive quality
      specification for water vapor content required from time to time by the
      Interconnecting Pipeline(s), Buyer shall Dehydrate Seller's Gas to reduce
      its water vapor content to five (5) pounds per MMcf at the Delivery
      Point(s). The fee for such Dehydrating is incorporated into the Gathering
      and Processing Fee, If the most restrictive quality specification for
      water vapor content of the Interconnecting Pipeline(s) should ever be
      reduced below five (5) pounds per MMcf, then the Parties shall within
      thirty (30) Days of written notice thereof from Buyer, renegotiate,
      subject to Section 1.9 of this Agreement, the Gathering and Processing
      Fee, If the Parties are unable to renegotiate the Gathering and Processing
      Fee, then Buyer may refuse to accept further deliveries of Seller's Gas
      affected thereby or Buyer may at its option, upon thirty (30) Days' prior
      written notice to Seller, release such affected Gas from the provisions of
      this Agreement   Buyer's right to renegotiate the Gathering
      and Processing Fee or, upon the failure of such renegotiation, to refuse
      to accept further deliveries of Seller's Gas affected thereby or release
      such affected Gas from the provisions hereof, shall apply to each
      successive reduction of the most restrictive quality specification for
      water vapor content of the Interconnecting Pipeline(s) that is below five
      (5) pounds per
MMcf.

                


        

      

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
         

        GAS
PURCHASE AGREEMENT

        PAGE
3 

        
          

        

      

    

    
       

    

    
      
        	
                1.6

              	
                Buyer's Treating
      Service.  Seller's Gas at the Receipt Point(s) may have a
      C02 content that exceeds the most restrictive quality specification for
      C02 content required from time to time by the Interconnecting Pipeline(s).
      Buyer shall Treat Seller's Gas to reduce its C02 content to no more
      than two percent (2.00%) by volume at the Delivery Point(s),
      provided the CO2 content of Seller's Gas does not exceed four
      percent (4.00%) by volume at the Receipt Point(s)  The
      fee for such Treating is incorporated into the Gathering and Processing
      Fee. In no event, however, is Buyer obligated to accept deliveries of
      Seller's Gas at a given Receipt Point if the CO2 content of Seller's Gas
      at that Receipt Point exceeds four percent (4.00%) by volume, If
      the weighted arithmetic average quality specification for C02 content of
      the Interconnecting Pipeline(s) should ever be reduced below two and
      thirty-one hundredths percent (2.31%) per Mcf, then the Parties shall
      within thirty (30) Days of written notice thereof from Buyer, renegotiate,
      subject to Section 1 9 of this Agreement, the Gathering and Processing
      Fee. If the Parties are unable to renegotiate the Gathering and Processing
      Fee, then Buyer may refuse to accept further deliveries of Seller's Gas
      affected thereby or Buyer may at its option, upon thirty (30) Days' prior
      written notice to Seller, release such affected Gas from the provisions of
      this Agreement. Buyer's right to renegotiate the Gathering and Processing
      Fee or, upon the failure of such renegotiation, to refuse to accept
      further deliveries of Seller's Gas affected thereby or release such
      affected Gas from the provisions hereof, shall apply to each successive
      reduction of the most restrictive quality specification for CO2 content of
      the Interconnecting Pipeline(s) that is below two and thirty-one
      hundredths percent (2.31%)  per
Mcf

              


      

    

    
      


    

    
      
        	
                1.7

              	
                Fee for Low Volumes. In
      the event the volume of Seller's Gas delivered to a Receipt Point operated
      by Buyer falls below 1,000 MMBtu per Accounting Period (each, a "Low
      Volume"), the Low Delivery Fee as set forth in Exhibit E shall
      be payable from Seller to Buyer for each affected Receipt Point, in
      addition to the Gathering and Processing Fee payable with respect to
      Seller's Gas delivered thereto. No Low Delivery Fee shall be due and
      payable from Seller to Buyer if a Low Volume was due to or arising from
      the circumstances addressed in Sections B.3, B.4 and/or B.7 of Exhibit A
      to this Agreement

              


      

    

    
      


    

    
      
        	
                1.8

              	
                FL&U.   Buyer
      shall retain FL&U attributable to Seller's Gas quantities received at
      the Receipt Point(s). The initial FL&U of [ *
      ] percent ([ * ]%) for Low Pressure Receipt Point(s)
      and [ * ]  percent ([ * ]%) for High Pressure
      Receipt Point(s) shall be effective for the initial Contract Year. The
      applicable FL&U percentage shall be included in the calculation of
      Seller's Annual! Volume for the purposes of determining Seller's
      compliance with its delivery to Buyer of Seller's Annual Volume. Buyer
      shall recalculate the FL&U at the beginning of each Contract Year and
      shall notify Seller of the revised applicable percentage. The Parties
      agree that the Lost and Unaccounted for Gas portion of the FL&U shall
      not exceed [ * ]  percent ([ * ]%) during the term of
      this Agreement.

              


      

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      
        GAS
PURCHASE AGREEMENT

        PAGE
4

        
          
            

          

        

      

    

    
       

    

    
      
        	
                1.9

              	
                Renegotiation of Fees.
      If any fee payable by Seller to Buyer hereunder requires renegotiation in
      accordance with the terms of this Agreement because of changes in
      Interconnecting Pipeline(s) specifications, Buyer will increase any such
      fee in an amount not to exceed any applicable increases in its operating
      costs due directly to such change in Interconnecting Pipeline(s)
      specifications, with a guaranteed after-income-tax rate of return on
      Buyer's additional capital costs of [ * ] percent ([ *
      ]%) over a five-year period (assuming a thirty-seven percent
      (37%) income tax rate).

              


      

    

    
      


    

    
      
        	
                1.10

              	
                Price for Seller's Gas,
      Deductions. As total and complete consideration for the purchase of
      Seller's Gas and the processing rights and Plant Products attributable to
      Seller's Gas, Buyer shall pay Seller for each Accounting Period an amount
      equal to Seller's Allocable MMBtu for such Accounting Period multiplied by
      a price equal to the CIG, Rocky Mountains as posted in Plaits Inside
      FERC's Gas Market Report published monthly which is an estimate for the
      Weighted Average Sale Price for such Accounting Period, This amount, in
      accordance with Section 3.4, shall be reduced by (a) all relevant fees due
      from Seller to Buyer listed on Exhibit E to
      this Agreement and Incurred by Seller in such Accounting Period, and (b)
      all other amounts due Buyer pursuant to this Agreement. All fee and fuel
      deducts applicable hereunder shall be calculated on a dry basis and then
      applied to the Seller's gross MMBtus of Gas received at the Receipt
      Point(s). The amount paid to Seller for such Account Period will be
      adjusted in the next Accounting Period using the actual Weighted Average
      Sales Price once that price has been
calculated.

              


      

    

    
      


    

    
      
        	
                1.11

              	
                Seller's Right to Convert to
      Gathering and Processing. Seller has, at its sole discretion, the
      option to convert this Agreement to a Guaranteed Gathering and Processing
      Agreement (the "Conversion Option"). Should Seller elect to exercise the
      Conversion Option, the effective date of any Guaranteed Gathering and
      Processing Agreement entered into by the Parties in accordance with this
      Section shall be no later than twelve (12) months from the date of Buyer's
      receipt of Seller's written notice and exercise of the Conversion Option.
      This Agreement shall terminate on the effective date of such Guaranteed
      Gathering and Processing Agreement. Buyer shall provide to Seller a form
      of Guaranteed Gathering and Processing Agreement, which shall contain the
      same fees set forth on Exhibit E to
      this Agreement (adjusted as set forth in this Agreement) and capacity
      allocation as outlined in B.4 of the attached Standard Terms and
      Conditions, for acceptance and execution. It is the intent of the parties
      that the Guaranteed Gathering and Processing Agreement will be in
      substantially the same form as this Agreement, excluding provisions
      regarding purchase of gas by
Buyer.

              


      

    

    
      


    

    
      
        	
                1.12

              	
                Delivery of Seller's Gas,
      Seller shall have the sole responsibility for delivering Seller's
      Gas to the Receipt Point(s).

              


      

    

    
      


    

    
      
        	
                1.13

              	
                Forward Contract. The
      Parties agree that this Agreement is a "forward contract" and a "master
      netting agreement" as such terms are defined in the United States
      Bankruptcy Code, and that each Party is a "forward contract merchant" as
      such term is defined in the United States Bankruptcy
  Code.

              


      

    

    
      


    

    
      
        	
                1.14

              	
                Joint and Several Obligations.
      All obligations of Seller hereunder are the joint and several
      obligations of PDC and Riley.

              


      

    

    
      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

    

    
      GAS
PURCHASE AGREEMENT 

      PAGE
5 

      
        

      

    

    
       

    

    
      
        	
                2. 

              	
                SERVICE
      OPTIONS

              


      

    

    
      


    

    
      
        	
                2.1

              	
                Connection of Additional Wells
      to Existing Receipt Point(s). Before commencement of deliveries of
      Gas from wells connected after the Effective Date, Seller will give Buyer
      thirty (30) Days' written notice, prior to commencing Gas deliveries from
      such wells, of the name of the well, the location of the well, the volumes
      of Gas from such well anticipated to be delivered to Buyer and the manner
      and point of connection of such well to a Receipt Point or to gathering
      fines upstream of such Receipt
Point.

              


      

    

    
      


    

    
      
        	
                2.2

              	
                Addition of Receipt Point(s).
      In addition to the Receipt Point(s) listed in Exhibit C on
      the Effective Date, Seller may request that new Receipt Points be added to
      Exhibit C
      for the delivery of Seller's Gas. Buyer shall construct, or cause to be
      constructed, at Buyer's sole cost, the facilities necessary to create
      the first new Receipt Point. Buyer shall construct, or cause to be
      constructed, the facilities necessary for the second new Receipt Point,
      provided that Seller shall reimburse Buyer for all costs associated with
      the construction of such second Receipt Point. For each additional Receipt
      Point thereafter requested by Seller, Buyer and Seller
      shall alternate between them the payment obligation for
      the cost of construction of the necessary facilities for each such Receipt
      Point. Buyer shall maintain records of such payment obligations, and such
      records shall be prima
      facie evidence of the amount owed by a Party pursuant to this
      Section (absent manifest error). Seller and Buyer acknowledge and agree
      that the addition of Receipt Point(s) pursuant to this Section 2.2 shall
      not create an obligation on the part of Buyer to accept, or a right on the
      part of Seller to require, any increase in Seller's Annual Volume or
      Seller's MDQ under this Agreement; any such increase may occur only in
      accordance with the terms of Section
1.3.4.

              


      

    

    
      


    

    
      
        	
                3. 

              	
                STATEMENTS AND
      PAYMENT

              


      

    

    
      


    

    
      
        	
                3.1

              	
                Report by Seller. Where
      CTM is not being performed by Buyer, no later than the fifth (5th)
      Business Day after the end of each Accounting Period, Seller's Operator
      shall deliver to Buyer a report of the Day(s) of Seller's Gas production,
      the applicable Accounting Period and year in which such production is to
      be recognized, Mcf pressure base, Btu pressure base, Daily Mcf, Daily Btu,
      Daily MMBtu and quality of Seller's Gas, all for such Accounting Period,
      Such report shall be transmitted to Buyer electronically in a data file
      format designated by Buyer, Buyer may request from Seller an additional
      monthly electronic audit file with all of the hourly, Daily, configuration
      and event/alarm data for such Accounting Period, which Seller shall
      provide to Buyer within twenty (20) Business Days of Buyer's request
      therefore.

              


      

    

    
      


    

    
      


    

    
      
        	
                3.2

              	
                Statements
      by Buyer.

              


      

    

    
      


    

    
      
        	
              	
                (a) 

              	
                On
      or before thirty (30) Days following the end of each Accounting
      Period(provided
      Buyer has received Seller's report under Section 3.1 above as required in
      such Section), Buyer shall send Seller electronically and/or via U.S. mail
      a statement setting forth the
following:

              


      

    

    
      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

    

    
      GAS
PURCHASE AGREEMENT 

      PAGE
6

      
        
          

        

      

    

    
      


    

    
      
        
          	
                	
                  3.2.a.1 

                	
                  The
      number of MMBtu of Seller's Gas received by Buyer at the Receipt Point(s)
      during such Accounting
Period;

                


        

      

    

    
      


    

    
      
        
          	
                	
                  3.2.a.2

                	
                  The
      number of MMBtu of Seller's Gas retained by Buyer as FL&U during such
      Accounting Period;

                


        

      

    

    
      


    

    
      
        
          	
                	
                  3.2.a.3

                	
                  The
      CIG, Rocky Mountains price as published monthly in Piatt's inside FERC's
      Gas Market Report for such Accounting
Period;

                


        

      

    

    
       

    

    
      
        	
              	
                3.2.a.4 

              	
                The Weighted
      Average Sales Price for the
      previous Accounting Period;

              


      

    

    
      


    

    
      
        
          	
                	
                  3.2.a.5

                	
                  Prior
      Accounting Period adjustment for the price and amount paid to Seller
      and

                


        

      

    

    
      


    

    
      
        
          	
                	
                  3.2.a.6 

                	
                  The
      fees and any other amounts due and payable by Seller to Buyer for services
      rendered by Buyer during such Accounting
Period.

                


        

      

    

    
      


    

    
      
        
          	
                	
                  (b)

                	
                  On
      or before the forty-five (45) Day following the end of each Contract Year,
      Buyer shall send Seller electronically and/or via U.S. mail, a statement
      setting forth the calculation of Seller's Annual Volume, and, if
      applicable, the Shortfall Fee due for such
  period.

                


        

      

    

    
      


    

    
      
        	
                3.3

              	
                Payment by Buyer. On or
      before thirty (30) Days following each Accounting Period, Buyer shall pay
      to Seller an amount due Seller as set forth in the statement delivered by
      Buyer pursuant to Section 3.2(a) of this Agreement, by automated clearing
      house (ACH) transfer of immediate available funds to [ * ]. If the
      thirtieth (30th)
      Day is not a Business Day, then payment shall be made on the Business Day
      immediately following. Seller shall have the right to dispute the amounts
      set forth in any statement as specified in Section F.1 of Exhibit A to
      this Agreement.

              


      

    

    
      


    

    
      
        	
                3.4

              	
                Party's
      Right to Offset.

              


      

    

    


    
      
        	
              	
                (a)

              	
                Buyer
      shall have the right to offset any amounts due Buyer (including amounts
      for which Seller has indemnified Buyer hereunder) from amounts due to
      Seller under this Agreement  Any such offset, including the
      balance remaining after such offset, shall be reflected in Buyer's
      statement described in Section 3 2(a). The remaining balance due to Seller
      shall be paid in accordance with Section
3.3.

              


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                To
      the extent that any amounts payable by Seller to Buyer exceed the amounts
      due to Seller from Buyer hereunder, Seller shall have the right to offset
      any amounts due to Seller (including amounts for which Buyer has
      indemnified Seller hereunder) from amounts due to Buyer under this
      Agreement  Any such offset, including the balance remaining
      after such offset, shall be reflected in a statement, in detail reasonably
      acceptable to Buyer, prepared by Seller and delivered with any remaining
      balance due to Buyer, to Buyer's address specified in Section
      3.5,

              


      

    

    
      


    

    
      
        	
                3.5

              	
                Notice. Any notice
      called for in this Agreement shall be in writing and shall be considered
      as having been given if delivered personally, by U.S. mail, by fax, or by
      express courier, postage
      prepaid, by either Party to the other at the addresses given below.
      A notice received from either of Riley or PDC shall be effective as notice
      from Seller hereunder, and Buyer shall be entitled to act on any such
      notice as notice from Seller. Routine communications, including monthly
      statements, shall be considered as duly delivered when mailed by regular
      U.S. mail. Unless changed upon written notice by a Party, the addresses
      for notices to the Parties are as
follows:

              


      

    

    
      


      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      GAS
PURCHASE AGREEMENT

      PAGE
7 

      
        

      

    

    
       

    

    
      Notices and Statements to
Buyer:

    

    
      


    

    
      WILLIAMS
PRODUCTION RMT COMPANY


    

    
      One
Williams Center

      Tulsa, OK
74172

    

    
      Attn:       Director,
Gas Management- Mail Drop 26-4

    

    
      Telephone:        (918)
573-3885


    

    
      Facsimile:           (918)
573-1324

       

       

    

    
      Notices and Statements to
Seller:

       

    

    
      PETROLEUM
DEVELOPMENT CORPORATION

      103 East
Main Street 

      Bridgeport,
West Virginia   26330

       

    

    
      


    

    
      
        	
                4.

              	
                TITLE

              


      

    

    
      


    

    
      
        
          	
                  4.1

                	
                  Passage of Title, Unless
      otherwise specifically agreed in writing by the Parties, title to Seller's
      Gas shall pass from Seller to Buyer at the Receipt
  Point(s)

                


        

      

    

    
      


    

    
      
        
          	
                  4.2

                	
                  Seller's Warranty of Title.
      Seller warrants that ft (a) has (i) the authority to make the
      commitment set forth in Section 1.1 of this Agreement, and (ii) good and
      marketable title to ail Gas delivered to Buyer at the Receipt Point(s),
      and (b) will have the right to convey, and will transfer good and
      merchantable title to, all of Seller's Gas sold hereunder and delivered by
      it to Buyer, free and clear of all liens, encumbrances and
      claims.

                


        

      

    

    
      


    

    
      5.      TERM AND
TERMINATION

    

    
      


    

    
      
        	
                5.1

              	
                Effective Date. This
      Agreement shall become effective upon June 1, 2006 (the "Effective Date"),
      and continue from and after the Effective Date through the end of the last
      Contract Year for the period of volume commitment outlined on Exhibit
      F

              


      

    

    
      


    

    
      
        	
                5.2

              	
                Termination Events.
      Notwithstanding the foregoing Section
  5.1:

              


      

    

    
      


    

    
      
        	
              	
                5.2.1

              	
                in
      the event a Regulatory Event occurs
that:

              


      

    

    
      


    

    
      
        
          	
                	
                  5.2.1.1.

                	
                  renders
      Buyer unable to continue to perform under this Agreement, Buyer shall be
      entitled to terminate this Agreement upon thirty (30) Days' prior notice
      to Seller, such notice to contain a reasonably detailed description of
      such Regulatory Event and the cause for Buyer's inability to perform;
      or

                


        

      

    

    
      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

    
      
         

        GAS
PURCHASE AGREEMENT

        PAGE
8 

        
          

        

      

    

    
      


    

    
      
        
          	
                	
                  5.2.1.2. 

                	
                   is
      the sole cause of making a Party's continued performance uneconomic (the
      "Affected Party"), the Affected Party shall notify the other Party (the
      "Unaffected Party") of such event, and the Parties shall have forty-five
      (45) Days from the Unaffected Party's receipt of such notice to negotiate,
      in good faith, provisions that restore the economic benefit to the
      Affected Party, consistent with the intent originally
      reflected in this Agreement. If the Parties are unable to do so within
      such forty-five (45) Day period, then either Party may thereafter
      terminate this Agreement by giving the other Party written notice of
      termination with an effective date no earlier than thirty (30) Days from
      the date of such notice of termination;
or

                


        

      

    

    
      


    

    
      
        	
              	
                5.2.2.

              	
                 in
      the event that a Party (the "Insolvent Party") files a petition or
      otherwise commences, authorizes or acquiesces in the commencement of a
      proceeding or case under any bankruptcy or similar law for the protection
      of creditors, or has such petition filed or proceeding commenced against
      it, or otherwise becomes bankrupt or insolvent (however evidenced), or has
      a receiver, provisional liquidator, conservator, custodian, trustee or
      other similar official appointed to it or with respect to substantially
      alt of its assets (a "Bankruptcy Event"), then the other Party (the
      "Solvent Party") shall have the right, at its sole election, to
      immediately withhold and/or suspend performance under this Agreement
      and/or to terminate and liquidate this Agreement in the manner provided in
      Section 5.4 of this Agreement and as permitted by Sections 362(b)(6),
      362(b)(27), 556 and 561 of the United States Bankruptcy Code, in addition
      to any and all other remedies available to the Solvent Party hereunder,
      under applicable law or in
  equity.

              


      

    

    
       

    

    
      
        
          	
                	
                  5.2.3.

                	
                    For
      the avoidance of doubt, (a) a Bankruptcy Event occurring with respect to
      PDC shall not create any rights of termination and/or liquidation for
      Riley, (b) a Bankruptcy Event occurring with respect to Riley shall not
      create any rights of termination and/or liquidation for PDC hereunder, and
      (c) a Bankruptcy Event occurring with respect to either of PDC or Riley
      shall create rights of termination and/or liquidation for Buyer
      hereunder.

                


        

      

    

    
      


    

    
      
        	
                5.3

              	
                Additional Termination
      Rights.In addition to the
      termination rights contained in Section 5.2, the Parties, as applicable,
      have rights to terminate this Agreement pursuant to the terms of Sections
      1.11 and 9 of this Agreement, and Sections J. 1 and J .3 of Exhibit A
      hereto

              


      

    

    
       

    

    
      
        	
                5.4 

              	
                Termination and Liquidation
      Upona Bankruptcy
      Event.

              


      

    

    
      


    

    
      
        
          	
                	
                  5
      4.1. 

                	
                  If
      a Bankruptcy Event has occurred and is continuing, the Solvent Party shall
      have the right to terminate this Agreement by giving written notice to the
      Insolvent Party, with the date of the Insolvent Party's receipt of such
      notice being the early termination date for the liquidation and
      termination of this Agreement pursuant to this Section (the "Early
      Termination Date")   On the Early Termination Date, this Agreement shall
      terminate,

                


        

      

    

    
      


    

    
      
        
          	
                	
                  5
      4.2.

                	
                  As
      of the Early Termination Date, the Solvent Party shall determine, in good
      faith and in a commercially reasonable manner, the amount owed by each
      Party with respect to all of Seller's Gas delivered and sold, and received
      and purchased, between the Parties under this Agreement on and before the
      Early Termination Date,
      and all other applicable charges relating to such Seller's Gas, for which
      payment has not yet been made by the
  Parties.

                


        

      

    

    
      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

    

    
      GAS
PURCHASE AGREEMENT

      PAGE 9


        
          

        

      

    

    
       

    

    
      
        
          	
                	
                  5.4.3. 

                	
                  The
      Solvent Party shall liquidate and accelerate the remaining obligations
      under this Agreement in the following
manner:

                


        

      

    

    
      


    

    
      
        
          	
                	
                  5.4.3.1.

                	
                  If
      the Solvent Party is Seller, Seller shall have a liquidated claim against
      Buyer in the amount $[ * ] per MMBtu of Gas to be gathered and
      purchased for a period of two years following the Early Termination Date,
      as specified on Exhibit F in satisfaction of Buyer's remaining obligations
      under this Agreement;
and

                


        

      

    

    
      


    

    
      
        
          	
                	
                  5.4.3.2.
      

                	
                  If
      the Solvent Party is Buyer, Buyer shall have a liquidated claim against
      Seller in the amount $[ * ] per MMBtu of Gas remaining to be
      delivered as specified on Exhibit F in satisfaction of Seller's remaining
      obligations under this
Agreement,

                


        

      

    

    
      


    

    
      
        
          	
                	
                  5.4.4.

                	
                  The
      Solvent Party shall net or aggregate, as appropriate, any and all amounts
      owing between the Parties under this Section so that all such amounts are
      netted or aggregated to a single liquidated amount payable by one Party to
      the other (the "Net Settlement Amount"). At its sole option, the Solvent
      Party may setoff (a) any Net Settlement Amount payable to the Insolvent
      Party against any amounts payable by the Insolvent Party to the Solvent
      Party and/or its affiliates under any other agreement or arrangement
      between the Insolvent Party and the Solvent Party and/or its affiliates
      arising from or related to this Agreement, or (b) any Net Settlement
      Amount payable to the insolvent Party against any amounts payable by the
      Solvent Party or its affiliates to the Insolvent Party or its affiliates
      under any other agreement or arrangement between the Insolvent Party and
      its affiliates and the Solvent Party and its affiliates arising from or
      related to this Agreement. The Solvent Party will give the Insolvent Party
      notice of any set-off effected under this Section, provided that failure
      to give such notice shall not affect the validity of the
      set-off.

                


        

      

    

    
      


    

    
      
        
          	
                	
                  5.4.5. 

                	
                  The
      rights provided by this Section are in addition to and not in limitation
      of any other right or remedy (including any right to set-off,
      counterclaim, claim or otherwise withhold payment) to which a Party may be
      entitled (whether by operation of law, contract or
    otherwise).

                


        

      

    

    
      


    

    
      
        
          	
                	
                  5.4.6. 

                	
                  If
      any obligation that is to be included in any netting, aggregation or
      setoff pursuant to this Section is unascertained, the Solvent Party may,
      in good faith, estimate that obligation and net, aggregate or setoff, as
      applicable, in respect of the estimate, subject to the Solvent Party's
      accounting to the Insolvent Party when the obligation is ascertained, Any
      amount not then due that is included in any netting, aggregation or setoff
      pursuant to this Section shall be discounted to net present value in a
      commercially reasonable manner determined by the Solvent
      Party,

                


        

      

    

    
      


    

    
      
        
          	
                	
                  5
      4.7.

                	
                   As
      soon as practicable after the Early Termination Date, the Solvent Party
      shall notify the Insolvent Party of the Net Settlement Amount, and whether
      the Net Settlement Amount is due to or from the Solvent Party. The notice
      shall include a written statement explaining in reasonable detail the
      calculation of the Net Settlement Amount   The Net
      Settlement Amount shall be paid by the Party owing such amount by the
      close of business on the tenth (10th) Business Day following the Insolvent
      Party's receipt of such notice, which date shall not be earlier than the
      Early Termination Date. Interest on any unpaid portion of the Net
      Settlement Amount shall accrue from such tenth (10th) Business Day until
      the date of payment at a rate equal to the then-effective prime rate of
      interest published under the "Money Rates" column of The Wall Street Journal
      (or if there is more than one such rate, the average of such rates)
      plus two percent (2.0%) per
annum

                


        

      

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      
        GAS
PURCHASE AGREEMENT

        PAGE 10


          
            

          

           

        

      

    

    
      
        
          	
                	
                  5.4.8.

                	
                  The
      Insolvent Party may dispute the calculation of the Net Settlement Amount
      by providing the Solvent Party with written notice of the dispute setting
      forth the insolvent Party's calculation, within seven (7) Days of its
      receipt of the Solvent Party's calculation. The Parties will use the
      dispute resolution process set forth in Article I of Exhibit A to this
      Agreement to resolve the
dispute

                


        

      

    

    
      


    

    
      
        
          	
                	
                  5
      4.9.

                	
                  The
      Solvent Party's remedies under this Section 5.4 are the sole and exclusive
      remedies of the Solvent Party with respect to the declaration of any Early
      Termination Date, Each Party reserves to itself all other rights, setoffs,
      claims, counterclaims and other defenses to which it is or may be entitled
      arising from this
Agreement.

                


        

      

    

    
      


    

    
      
        
          	
                  5.5

                	
                  Release. Promptly after
      any termination of this Agreement, Buyer agrees to record, as applicable,
      any document reasonably required by Seller to effect the release of the
      Memorandum of this Agreement that Buyer may have recorded pursuant to
      Section 8 hereof

                


        

      

    

    
      


    

    
      
        	
                6

              	
                EXHIBITS

              


      

    

    
       

      This
Agreement incorporates and is subject to the following
Exhibits:

    

    
      


    

    
      
        	
              	
                Exhibit
      A:

              	
                Standard
      Terms and Conditions

              


      

    

    
      
        	
              	
                Exhibit
      B:

              	
                Intentionally
      Omitted

              


      

    

    
      
        	
              	
                Exhibit
      C:

              	
                Receipt
      Point(s)

              


      

    

    
      
        	
              	
                Exhibit
      D:

              	
                Delivery
      Point(s)

              


      

    

    
      
        	
              	
                Exhibit
      E: 

              	
                Service
      and Fee Description

              


      

    

    
      
        	
              	
                Exhibit
      F: 

              	
                Gas
      Volumes Committed

              


      

    

    
      
        	
              	
                Exhibit
      G:

              	
                Two
      Year Monthly MDQ Schedule

              


      

       

    

    
      In the
event of a conflict between the terms of the Agreement (without reference to the
Exhibits) and the terms of the Exhibits, the terms of the Agreement (without
reference to the Exhibits) shall control.

    

    
       

    

    
      
        	
                7

              	
                ENTIRE AGREEMENT,
      CONSTRUCTION

              


      

    

    
      


    

    
      This
Agreement, together with its Exhibits, contains the entire agreement of the
Parties with respect to the matters addressed herein and supersedes all prior
and contemporaneous agreements, representations and understandings of the
Parties with respect to such matters. The Parties represent and acknowledge that
in executing this Agreement they do not rely on and have not relied on any
representation or statement, oral or written, which is not set forth in this
Agreement. This Agreement shall be considered for all purposes as prepared
through the joint efforts of the Parties, and the Parties agree that it shall
not be construed against one Party or the other as a result of the manner in
which this Agreement was actually negotiated, prepared, drafted or
executed

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      GAS
PURCHASE AGREEMENT 

      PAGE 11


        
          

        

      

    

    
      


    

    
      IN
WITNESS WHEREOF, the Parties hereto have executed two duplicate original copies
of this Agreement.

       

      
      

       

      
        	WILLIAMS
      PRODUCTION RMT COMPANY	 	RILEY
      NATURAL GAS COMPANY
	 	 	 	 	 
	By:	/s/
      Ralph A. Hill	 	By:	/s/
      Thomas E. Riley
	Name:	 	 	Name:	Thomas
      E. Riley
	Title:	President	 	Title:	President
	 	 	 	 	 
	 	 	 	PETROLEUM
      DEVELOPMENT CORPORATION
	 	 	 	 	 
	 	 	 	By:	/s/
      Eric R Stearns
	 	 	 	Name:	Eric
      R Stearns
	 	 	 	Title:	Exec
      VP


      

      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

    


    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-2

              

            


      
        

      

    

    
       

    

    
      EXHIBIT
A


    

    
      TO THE GAS PURCHASE
AGREEMENT


    

    
      DATED AS OF JUNE 1,
2006


    

    
      Between


    

    
      WILLIAMS PRODUCTION RMT
COMPANY


    

    
      and


    

    
      RILEY NATURAL GAS
COMPANY


    

    
      and


    

    
      PETROLEUM DEVELOPMENT
CORPORATION

       

    

    
      


    

    
      STANDARD
TERMS AND CONDITIONS

    

    
      


    

    
      A.  DEFINITIONS

    

    
      


    

    
      In
addition to the terms defined in the text of this Agreement, the following terms
shall have the meanings indicated:

    

    
      


    

    
      A.1     
Accounting Period shall mean a calendar month commencing on the first Day
of that calendar month and ending on the last Day of that calendar
month.

    

    
      


    

    
      A.2     
Bankruptcy Event shall have the meaning given such term in Section 5.2.2
of this Agreement.

    

    
      


    

    
      A.3      British Thermal Unit or Btu shall mean the measurement
unit for the amount of heat required to raise the temperature of one (1) pound
of water, at 60 degrees Fahrenheit, one (1) degree
Fahrenheit.

    

    
      


    

    
      A.4    
 Business Day shall mean a Day on which Buyer is open for business,
and a Business Day shall open at 8:00 am and close at 5:00 pm
CST.

    

    
      


    

    
      A.5      CST shall mean Central
Standard Time.

    

    
      


    

    
      A.6     
Confirmed Receipt Nomination shall mean a Receipt Nomination that is
adjusted by Gatherer when historical production or current data from Gatherer's
Telemetering Facilities suggest that such Receipt Nomination is inaccurate.

    

    
      


    

    
      A.7     
Contract Year shall mean each consecutive twelve month period as detailed
on the attached Exhibit F beginning with the Effective Date hereof or, if the
Effective Date is not
the first Day of a month, then with the first Day of the month following the
Effective Date.

    

    
      


    

    
      A.8      CTM shall mean custody
transfer measurement at the Receipt Point(s).

    

    
      


    

    
      A.9     
Cubic Foot shall mean the volume of Gas occupying one cubic foot of space
when such Gas is at a base temperature of sixty degrees Fahrenheit (60° F) and a
base pressure of 14.73 Psia and shall be calculated in accordance with ANSI/API
2530 where the factors for Fpwl and Fhgt shall each be equal to one
(1).

    

    
      


    

    
      A.10   Day or
Daily shall mean
twenty-four (24) consecutive hours beginning at 9:00 am CST or as otherwise
designated by Buyer.

    

    
      


    

    
      A.11   Dehydrate or
Dehydrating shall mean the removal of water vapor from
Gas.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-3

              

            


      
        

      

    

    
      


    

    
      A.12   Delivery
Point(s) shall mean those point(s) of delivery of Seller's Gas to
Interconnecting Pipeline(s) as shown on Exhibit D to this
Agreement, together with such other Delivery Point{s) as may be added by Buyer
to such Exhibit
D and notified to Seller from time to time.

    

    
      


    

    
      A.13   Early
Termination Date shall have the meaning given such term in Section 5.4.1
of this Agreement.

    

    
      


    

    
      A.14   Effective Date shall have the meaning
given such term in Section 5.1 of this Agreement.

    

    
      


    

    
      A.15   Excess Volumes
shall have the meaning given such term in Section 1.3.3.2 of this
Agreement.

    

    
      


    

    
      A.16   Field shall
mean any point on the Gathering System upstream of a Plant.

    

    
      


    

    
      A.17   Firm
shall mean that either Party may interrupt its performance under this
Agreement without liability only to the extent that such performance is
prevented by reasons of Force Majeure.

    

    
      


    

    
      A.18   FL&U
shall mean Gathering Fuel, Plant Fuel, and Lost and Unaccounted for Gas
volumes.

    

    
      


    

    
      A.19   Force Majeure shall have the meaning
given such term in Section B.3 of Exhibit A to this
Agreement.

    

    
      


    

    
      A.20  Gas shall mean
any mixture of gaseous hydrocarbons or hydrocarbons and other gases, in a
gaseous state, consisting primarily of methane.

    

    
      


    

    
      A.21   Gathering and
Processing Fee shall mean, collectively, the Gathering and Processing
Fees payable from Seller to Buyer for Buyer's services performed under this
Agreement and more specifically set forth on Exhibit £ to this
Agreement.

    

    
      


    

    
      A.22   Gathering Fuel
shall mean that volume of Seller's Gas, expressed as a percentage of the
Receipt Point Gas quantities, used or consumed as fuel in the operation of field
compression on the Gathering System.

    

    
      


    

    
      A.23   Gather,
Gathered or Gathering
shall mean the receipt of Gas at the Receipt Point(s).

    

    
      


    

    
      A.24   Gatherer
shall mean Buyer's gatherer of Gas, Bargath Inc., or such other entity as
Buyer shall select from time to time to Gather Gas on behalf of Buyer under this
Agreement.

    

    
      


    

    
      A.25   Gathering
System shall mean those facilities used by Buyer to Gather Seller's Gas
and provide any other service described in Section 1 in the
Field.

    

    
      


    

    
      A.26   Gross Heating Value
shall mean the total Btu content for a Cubic Foot of Gas on a dry basis
as
determined by calculation from a compositional analysis using physical
properties of gases at fourteen and seventy-three hundredths (14.73) psia and
sixty degrees Fahrenheit (60°F), as prescribed by industry
standards.

    

    
      


    

    
      A.27  Guaranteed Capacity
shall mean that Gatherer has guaranteed to a Shipper to have the capacity
available to Gather such Shipper's Gas in its Gathering System except during
times of capacity allocation pursuant to Section B.4 of Exhibit A to this
Agreement.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-4

              

            


      
        

      

    

    
      


    

    
      A.28   High Pressure
Receipt Point shall mean any Receipt Point above three hundred and fifty
(350) psig.

    

    
      


    

    
      A.29   Insolvent Party
shall have the meaning given such term in Section 5.2.2 of this
Agreement.

    

    
      


    

    
      A.30   Interconnecting
Pipeline(s) shall mean any pipeline connected immediately downstream of
the Delivery Point(s).

    

    
      


    

    
      A.31   Lost and
Unaccounted for Gas shall mean that volume of Seller's Gas, expressed as
a percentage of the Receipt Point Gas quantities, that is lost or unaccounted
for, which may include, but is not limited to, Gas flared or vented by Buyer or
Gatherer.

    

    
      


    

    
      A.32   Low Pressure
Receipt Point shall mean any Receipt Point at or below three hundred and
fifty (350) psig.

    

    
      


    

    
      A.33   Maximum Daily
Quantities shall mean, with respect to a Shipper, the maximum daily
quantity of Gas for which Gatherer has committed to provide service to such
Shipper.

    

    
      


    

    
      A.34   MMBtu
shall mean one million (1,000,000) British Thermal
Units.

    

    
      


    

    
      A.35  Mcf shall mean
one thousand (1,000) Cubic Feet of Gas and shall be the unit of volume typically
utilized under this Agreement.

    

    
      


    

    
      A.35   MMcf
shall mean one million (1,000,000) Cubic Feet of Gas.

    

    
      


    

    
      A.37   New Taxes shall mean any and
all governmental charges, licenses, fees, permits and assessments, or increases
of any thereof (excluding taxes described in Section H of Exhibit A to this
Agreement and taxes based on the net income or net worth of any Party) that are
imposed on a Party or the transactions contemplated under this Agreement that
(a) were not in effect on the Effective Date of this Agreement or (b) were not
imposed on a Party or the transactions contemplated under this Agreement on the
Effective Date of this Agreement.

    

    
      


    

    
      A38    Non-Guaranteed
Capacity shall mean that Gatherer has not guaranteed to a Shipper to have
the capacity available to Gather such Shipper's Gas in its Gathering
System.

    

    
      


    

    
      A.39   Plant shall
mean any of those facilities used by Buyer to Process Gas and provide any other
service described in Section 1 other than in the Field.

    

    
      


    

    
      A.,40   Plant Fuel
shall mean the number of MMBtu of Gas or other hydrocarbons used or
consumed in the operation of the Plant including, but not limited to, fuel,
flared and vented Gas and such Gas as may be lost and unaccounted for despite
the prudent operation of the Plant.

    

    
      


    

    
      A.41   Plant Products
shall mean those liquid hydrocarbons obtained by
Processing.

    

    
      


    

    
      A.42   Process, Processed
or Processing shall mean the liquefaction and removal of hydrocarbons
from Gas at the Plant.

    

    
      


    

    
      A.43   Receipt Nomination
shall mean a notification, submitted in writing or via Gatherer's
nomination and scheduling system, of the number of MMBtus of Gas that a Shipper
will deliver to the Gathering System.

    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-5

              

            


      
        

      

    

    
      


    

    
      A.44   Receipt Point MMBtu shall
mean the number of MMBtu of Gas measured at the Receipt
Point(s).

    

    
      


    

    
      A.45   Receipt Point(s) shall mean
the upstream flange(s) of the Gathering System at the point(s) of receipt shown
on Exhibit C to
this Agreement, as the same may be modified in accordance with Section 2.2 of
this Agreement.

    

    
      


    

    
      A.46   Regulatory Event shall mean
any government action or potential action, such as necessity for compliance with
any court order, FERC order, FERC agreement, FERC settlement agreement, law,
statute, ordinance, regulation or policy having the effect of law, promulgated
by a governmental authority having jurisdiction, including the imposition of New
Taxes.

    

    
      


    

    
      A.47   Seller's Allocable MMBtu shall
be an amount, for each Accounting Period, equal to the Receipt Point MMBtu for
such Accounting Period received by Buyer from Seller less applicable FL&U
for such Accounting Period.

    

    
      


    

    
      A.48   Seller's Annual Volume shall
mean, for any Contract Year, the amount of Seller's Gas as shown on Exhibit F to
this Agreement, (as the same may be modified in accordance with Section 1.3.4 of
this Agreement or Section B7 of Exhibit A to this
Agreement) to be delivered by Seller to the Receipt Point(s) and purchased by
Buyer during such Contract Year.

    

    
      


    

    
      A.49   Seller's Gas shall have
the meaning given such term in Section 1.1 of this Agreement.

    

    
      


    

    
      A.50   Seller's-MDQ shall mean,
for any Contract Year or part thereof shown on Exhibit F to this
Agreement, the maximum Daily quantity of Seller's Gas as shown on such Exhibit F (as the
same may be modified in accordance with Section 1.3.4 of this Agreement or
Section B.7 of Exhibit
A to this Agreement) to be delivered by Seller to the Receipt Point(s)
and purchased by Buyer each Day during such Contract Year or part thereof, as
applicable, not to exceed Seller's Annual Volume for such Contract
Year.

    

    
      


    

    
      A.51   Seller's Operator shall
mean the operator of the facilities upstream of a given Receipt Point Seller's
Operator, however, may also operate CTM equipment located downstream of a given
Receipt Point as provided in Section D of Exhibit A to this
Agreement. Seller's Operator may be either Seller or a third party acting on
Seller's behalf and notified to Buyer. When Seller's Operator is a third party
acting on Seller's behalf, it shall be Seller's responsibility to cause such
third party to comply with those terms of this Agreement which refer to Seller's
Operator.

    

    
      


    

    
      A.52   Shipper shall mean any party
that delivers Gas into the Gathering System.

    

    
      


    

    
      A.53   Shortfall Fee for any
Contract Year, if applicable under Section 1.3.3.1 of this Agreement ("SF"),
shall mean the amount calculated in accordance with the following
formula:

    

     

    
      
        
          
            	
                    SF
      =  

                  	
                    (GPF
      + TF + TS) x (([*] x AV) - (AD + EV)), where

                  
	 
      	 
      
	
                    GPF
      =  

                  	
                    the
      then –applicable Gathering and Processing Fee

                  
	 
      	 
      
	
                    TF
      =  

                  	
                    the
      then –applicable Excess CO2
      Treating Fee, provided that “TF” will equal [*][*] if the weighted
      average CO2
      content of Seller’s Gas from all Receipt Point(s) for the Contract
      Year for which SF is being calculated is less than or equal to three
      percent (3%).

                  
	 
      	 
      
	
                    TS
      =  

                  	
                    Firm
      transport fee equal to [*] $[*] per
MMBtu

                  


          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-6

              

            


      
        

      

    

    
       

      
        
          
            
              
                
                  
                    
                      	
                              AV
      =  

                            	
                              Seller’s
      Annual Volume for such Contract Year

                            
	 	 
	
                              AD
      =  

                            	
                              actual
      deliveries of Seller’s Gas at the Receipt Point(s) taken by Buyer for such
      Contract Year

                            
	 	 
	
                              EV
      =  

                            	
                              any
      Excess Volumes delivered by Seller in the Contract Year immediately
      preceding the Contract Year for which SF is being
    calculated

                            


                    

                  

                

              

            

          

        

         

      

    

    
      A.54   Telemetering
Facilities shall mean electronic monitoring facilities, including, but
not limited to, electronic flow measurement facilities, remote terminal units
and all other end devices and transmitters used to calculate pressure,
temperature, differential pressure, flow and valve position.

    

    
      


    

    
      A.55   Treat, Treating
or Treatment
shall mean the removal, reduction or dilution of C02 in
Gas.

    

    
      


    

    
      A.56   Weighted
Average Sales Price shall mean, for any specified period,
the weighted average sales price that Buyer [*] Gas produced from the Piceance
Basin to [*] markets
through its affiliate, Williams Power Company, Inc., its successors or assigns
(the "Marketing Affiliate"), for such period, less the weighted average
[*] costs (including, but not limited to, demand, commodity and fuel fees )
incurred by Buyer or the Marketing Affiliate for the transport of such Gas from
the Delivery Point(s) to the point of sale to such [*] markets during such period. In the
event that Buyer makes sales directly to [*] markets or the Marketing Affiliate
purchases Buyers gas directly, then such amounts will be included in the
calculation of the Weighted Average Sales
Price.

    

    
      


    

    
      
        	
                B. 

              	
                OPERATING
      PROVISIONS

              


      

    

    
      


    

    
      B.1     Operational
Control   Buyer shall be entitled to complete operational
control of its facilities and shall operate its facilities in a manner that, in
Buyer's sole opinion, is consistent with its obligations under this Agreement,
However, this Section B 1 shall not be interpreted to relieve Buyer of its
obligations under this Agreement.

    

    
      


    

    
      B.2   
 Maintenance, Gatherer shall, without liability, be entitled to
perform such maintenance, testing, alteration, modification, repair or
replacement of the Gathering System and/or Plant, or any part thereof, as would
be done by a prudent operator, even if it requires the allocation of capacity
pursuant to Section B 4 of Exhibit A to this
Agreement, Buyer shall provide or caused to be provided to Seller, thirty (30)
Days' advance written notice of scheduled maintenance to be performed on the
Gathering System and/or Plant.

    

    
      


    

    
      B.3     Force
Majeure   Neither Buyer nor Seller shall be liable in
damages to the other for its inability to perform under this Agreement due to an
event of Force Majeure As used herein, the term "Force Majeure" shall mean any
act, omission, or circumstance occasioned by or in consequence of any acts of
God, acts of terrorism, blockades, insurrections, riots, epidemics, flood,
washouts, landslides, mudslides, earthquakes, storms, threat of hurricanes and
tropical storms that result in the evacuation of the affected area, extreme hot,
cold, or freezing weather, lightning, restraint of rulers and peoples, civil
disturbances, war, explosions, fires, mechanical failure, structural failure,
breakage of or accident to, or the unavailability of supply of, machinery,
equipment, lines of pipe, platform or wells, the inability or failure of
downstream or upstream pipelines to deliver or receive, the inability or failure
of downstream third-party markets to receive, the order of any court or
governmental authority having jurisdiction, any change in any applicable
regulation materially affecting the operation of the facilities or any other
cause of a similar nature, whether of the kind herein enumerated or otherwise,
and including, without limitation, any Regulatory Event, not reasonably within
the control of the Party claiming suspension and that, by the exercise of due
diligence, such Party is or should have been unable to prevent or overcome.
Failure to prevent or settle any strike or strikes shall not be considered a
matter within the control of the Party claiming suspension  With
regard to the installation of new facilities or modifications to existing
facilities, delay or inability to obtain any necessary permits or rights-of-way
from a regulatory agency or landowner after an application or request by Buyer
shall be deemed to be a Force Majeure event, provided Buyer has given reasonable
notice of any planned suspension of service to Seller. Force Majeure shall not
relieve either Party of liability in the event of its concurring negligence and
shall only relieve the non-performing Party from liability for failure to
perform under this Agreement for so long as such Party is making reasonable
efforts to remedy the situation. Force Majeure shall not relieve either Party of
its obligation to pay money due under this Agreement.

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-7

              

            


      
        

      

    

    
       

    

    
      B.4     
Allocation of Capacity, Notwithstanding any other term of this Agreement
if for any Day, Gatherer notifies Buyer that the capacity of its Gathering
System and/or Plant is constrained. Buyer shall cause Gatherer, without
liability to either Gatherer or Buyer, to allocate the available capacity as
follows:

    

    
      


    

    
      
        	
                
                

              	
                (a)

              	
                Capacity
      shall first be allocated pro rata to all Shippers with Guaranteed Capacity
      based upon the lower of their respective (i) Maximum Daily Quantities,
      (ii) Receipt Nominations or (iii) Confirmed Receipt Nominations;
      and

              


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                Any
      remaining capacity shall be allocated pro rata to all Shippers with
      Non-Guaranteed Capacity based upon the lower of their respective (i)
      Maximum Daily Quantities, (ii) Receipt Nominations or (iii) Confirmed
      Receipt Nominations

              


      

    

    
       

    

    
      However,
if Gatherer can identify the location of the constraint, then Buyer shall cause
Gatherer, without liability to either Gatherer or Buyer, to impose such
allocation only upon those Shippers whose Gas is affected, and only at such
location. That capacity will then be allocated pro rata based on the previous 24
hour physical flow through the location that is constrained. From time to time,
Seller may request from Buyer or Gatherer information regarding daily volumes of
Gas received or to be received by the Gathering System to determine available
capacity and capacity allocation on the Gathering System,

    

    
      


    

    
      B.5       Access, Easements and
Rights-of-Way  Seller shall provide Buyer and/or Gatherer such
access to its facilities as is necessary and convenient for Buyer and/or
Gatherer to perform the obligations of Buyer under this
Agreement  Seller grants to Buyer and/or Gatherer, upon the execution
of a mutually agreeable form, the use of ail easements and rights-of-way held by
Seller, to the extent that Seller has the right to do so, that are necessary and
convenient for Buyer and/or Gatherer to perform Buyer's obligations under this
Agreement and for Gatherer to Gather Seller's Gas. Buyer shall cause Gatherer to
fulfill ail obligations of any kind whatsoever for such use as required under
any lease or agreement that pertains to such grant as outlined above utilized by
Gatherer. Such use and grant of rights shall include, but not be limited to,
those rights under Seller's oil and Gas lease(s) to construct, operate, and
maintain pipelines and appurtenant facilities for the purpose of Gathering Gas
from the Area of Interest, Any grant to or use by Buyer or Gatherer as
contemplated above shall be for the express and limited purpose of gathering
Seller's gas from the Receipt Points or otherwise allowing Buyer to meeting its
obligations under this Agreement. Any other use shall be prohibited unless
approved in writing by Seller and appropriate surface owner.

    

    
      


    

    
      B.6     
Seller's Delivery Pressure. Seller shall deliver Seller's Gas to the
Receipt Point(s) at pressure(s) sufficient to cause if to enter Gatherer's
facilities; however, such pressure(s) shall not exceed the Maximum Allowable
Operating Pressure of Gatherer's facilities ("MAOP"). The MAOP for a given
facility may be revised from time to time by Gatherer in its sole discretion,
such revision to be notified to Seller by Buyer promptly thereafter Any such
MAOP revisions shall be applied uniformly and not discriminately against
Seller  Except as otherwise expressly provided in Section B.7 of Exhibit A to this
Agreement, neither Buyer nor Gatherer is obligated to modify the pressure(s) in
its facilities in order to cause the entry of Seller's Gas into its
facilities   Seller shall equip its compression equipment, if
any, with:

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-8

              

            


      
        

      

       

    

    
      
        	
              	
                (a)

              	
                over
      pressurization protection devices in accordance with ANSI B31.8 to prevent
      delivery pressure in excess of the
MAOP;

              


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                Gas
      cooling to prevent delivery temperatures in excess of 120°F into Buyer's
      or Gatherer's facilities; and

              


      

    

    
      


    

    
      
        	
              	
                (c)

              	
                Pulsation
      dampening equipment, as necessary, to minimize pulsation induced
      measurement errors to less than two percent (2%) peak-to-peak square root
      error

              


      

    

    
      


    

    
      B.7     Receipt
Point Pressure Maintenance  Buyer shall cause Gatherer to use
reasonable efforts to maintain an average monthly operating pressure
of three hundred and fifty (350) psig or less (the "Target Pressure")
at the Low Pressure Receipt Point(s) into the Gathering System. Should the
average monthly pressure at any Low Pressure Receipt Point exceed the Target
Pressure for three (3) consecutive months for any Low Pressure Receipt Point,
then, beginning with the fourth month in which such average monthly pressure
exceeds the Target Pressure, Buyer shall reduce the Gathering and Processing Fee
by [ * ] ($[ * ]) per MMBtu. Buyer shall have nine (9) months in which
to install, or cause Gatherer to install, equipment necessary to reduce the
pressure at such Low Pressure Receipt Point to the Target Pressure. If Buyer or
Gatherer has not reduced the pressure at such Low Pressure Receipt Point after
such nine (9) month period to the Target Pressure, then Seller may, at its
option, upon thirty (30) Days' prior written notice to Buyer, release only the
affected Low Pressure Receipt Point and Seller's Gas delivered thereto from the
provisions of this Agreement   In the event of any such release,
during such thirty (30) Day period, Buyer and Seller shall negotiate in good
faith to reduce Seller's MDQ and Seller's Annual Volume by an amount equal to
the Gas that was projected to have been delivered to the affected Low Pressure
Receipt Point, and shall revise Exhibit F
accordingly.

    

    
      


    

    
      C.     
 GAS QUALITY

       

    

    
      
        
          	
                  C.1 

                	
                  Gas Quality at Receipt
      Point(s),Seller's Gas at the Receipt Point(s) shall be commercially
      free of oxygen, hydrocarbons in their liquid state, water in its liquid
      state, crude oil, brine, air, dust, gums, gum-forming constituents,
      bacteria and other objectionable liquids and
  solids,

                


        

      

    

    
      


    

    
      
        	
              	
                (a) 

              	
                       with
      not more than;

              


      

    

    
      
        	
              	
                (1)

              	
                one
      quarter (1/4) grain of H2S per
      one hundred (100) Cubic Feet;

              


      

    

    
      
        	
              	
                (2)

              	
                five
      (5) grains of total sulfur per one hundred (100) Cubic
    Feet;

              


      

    

    
      
        	
              	
                (3)

              	
                one
      (1) grain of mercaptan per one hundred (100) Cubic
  Feet;

              


      

    

    
      
        	
              	
                (4)

              	
                two
      (2) mole percent of carbon
dioxide;

              


      

    

    
      
        	
              	
                (5)

              	
                three
      (3) mole percent of nitrogen;

              


      

    

    
      
        	
              	
                (6)

              	
                five
      (5) mole percent of combined carbon dioxide, nitrogen and oxygen;
      and

              


      

    

    
      
        	
              	
                (b) 

              	
                meeting
      the following additional quality
specifications:

              


      

    

    
      
        	
              	
                (1) 

              	
                not
      exceeding 120°F in temperature at the Receipt
  Point(s);

              


      

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-9

              

            


      
        

      

    

    
       

    

    
      
        	
              	
                (2)

              	
                having
      a total heating value of at least 1,000 Btu per Cubic Foot;
      and

              


      

    

    
      
        	
              	
                (3)

              	
                not
      exceeding seven (7) pounds of water vapor per
  MMcf.

              


      

    

    
       

    

    
      In
addition to the foregoing, unless otherwise expressly provided in Section 1 of
this Agreement, Seller's Gas shall conform to the most restrictive quality
specifications required from time to time by the Interconnecting Pipeline(s). If
at any time Seller's Gas at the Receipt Point(s) fails to conform to such
quality specifications, Buyer shall give Seller written notice of the deficiency
and Seller shall immediately remedy the deficiency. If Seller fails to
immediately remedy the deficiency, Buyer may refuse to accept further deliveries
of Seller's Gas or exercise such other remedies as are provided in Section 1 of
this Agreement, Any such refusal by Buyer to accept Seller's Gas pursuant to
this Section C.1 shall in no way release Seller from its obligations under this
Agreement or reduce Seller's commitment to sell and deliver to Buyer the
quantities of Seller's Gas specified in this Agreement.

    

    
      


    

    
      
        
          	
                  C.2

                	
                  Removal of Liquefiable
      Hydrocarbons in the Field. Seller's Gas shall not be Processed for
      removal of liquefiable hydrocarbons prior to its receipt by Buyer at the
      Receipt Point(s) other than by the use of conventional mechanical
      liquid-Gas separators operated at or above ambient temperatures. Seller
      shall own and be responsible for any liquid hydrocarbons removed by this
      method from Seller's
Gas.

                


        

      

    

    
      


    

    
      
        	
                C.3

              	
                Water Disposal. Buyer
      shall dehydrate Seller's Gas. If Buyer's method of disposal of Seller's
      water is ever disallowed for any reason or is deemed to be uneconomic by
      Buyer, then Buyer shall notify Seller and Seller shall promptly make
      alternate arrangements to dispose of Seller's water at Seller's sole cost
      and expense, and Seller shall reimburse Buyer for any costs incurred by
      Buyer in delivering Seller's water. Seller shall release, indemnify and
      defend Buyer from and against any and all damages, claims, actions,
      expenses, penalties and liabilities, including attorney's fees, arising
      from personal injury, death, property damage, environmental damage,
      pollution, or contamination relating to the disposal of Seller's water by
      either evaporation or any alternate arrangement(s) selected by Seller.
      This Section C.3 by itself does not obligate Buyer to Dehydrate Seller's
      Gas

              


      

    

    
      


    

    
      
        	
                C.4

              	
                C02 Disposal. To the extent that Buyer
      removes C02 from Seller's Gas, Buyer shall dispose of Seller's CO2 by
      venting. If venting Seller's C02 is ever disallowed for any reason or is
      deemed to be uneconomic by Buyer, Buyer shall notify Seller and Seller
      shall promptly make alternate arrangements to dispose of Seller's CO2 at
      Seller's sole cost and expense, and shall reimburse Buyer for any costs
      incurred by Buyer in delivering Seller's C02. Seller shall release,
      indemnify and defend Buyer from and against any and ail damages, claims,
      actions, expenses, penalties and liabilities, including attorney's fees,
      arising from personal injury, death, property damage, environmental
      damage, pollution, or contamination relating to the disposal of Seller's
      C02 by either venting or any alternate arrangement(s) selected by
      Seller   This Section C.4 by itself does not obligate Buyer
      to Treat Seller's Gas

              


      

    

    
      


    

    
      
        	
                C.5

              	
                Gross Heating Value and
      Component Analysis. The component analysis and Gross Heating Value
      of the Gas shall be determined and calculated at least once each year by
      whomever is operating the CTM equipment, The component analysis and Gross
      Heating Value of the Gas shall be based on any of the following at the
      choice of the operator of the CTM equipment: spot samples, continuous
      samples, or on-line analysis  The component analysis of the Gas
      shall be performed by Gas chromatography in accordance with GPA 2261 or
      any pertinent revision(s) thereto or replacement(s) thereof. If the
      component percentages fall outside the limits of GPA 2261, then the
      operator of the CTM equipment shall make a reasonable judgment as to the
      accuracy of the component analysis. If neither Party objects in writing to
      the results within sixty (60) Days after their delivery, such results
      shall become conclusive. If either Party objects in writing to the results
      within sixty (60) Days after their delivery, then: in the case of spot
      samples, a re-sampling, redetermination and recalculation shall be
      performed by a third party acceptable to both Parties and such third
      party's results shall be used; and in the case of continuous samples or
      on-line analysis, the analyzer shall be tested for accuracy according to
      GPA 2261 and, if warranted, a recalculation of the components shall be
      made by a means acceptable to the Parties. The cost of any re-sampling,
      retesting, redetermination and/or recalculation shall be borne by the
      objecting Party.

              


      

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-10

              

            


      
        

      

    

    
       

    

    
      
        	
                C.6 

              	
                Correction of Gross Heating
      Value for Water Vapor, The Gross Heating Value of the Gas shall be
      corrected for water vapor content in accordance with GPA 181 and 2172. Gas
      having a water vapor content of greater than seven (7} pounds per MMcf at
      CTM shall be considered fully saturated. Gas having a water vapor content
      of less than or equal to seven (7) pounds per MMcf at CTM shall be
      considered dry.

              


      

    

    
      


    

    
      
        	
                C.7

              	
                Computation Factors. The
      specific gravity of the Gas shall be calculated by the operator of the CTM
      equipment and shall be adjusted for the difference between the specific
      gravity in the ideal state and in the real state in accordance with
      ANSI/API 2530. The deviation of the Gas from Boyle's law shall also be
      calculated by the operator of the CTM equipment and shall be determined in
      accordance with AGA Transmission Measurement Committee Report No 8, Both
      the specific gravity of the Gas and the deviation of the Gas from Boyle's
      law shall be based on the component analysis obtained pursuant to Section
      C.5.

              


      

    

    
      


    

    
      
        	
                D. 

              	
                VOLUME

              


      

    

    
      


    

    
      
        	
                D.1 

              	
                Determination of Temperature
      for Volume Calculation. The temperature of the Gas shall be
      determined by a temperature recording device installed by the operator of
      the CTM equipment in accordance with ANSI/API 2530 and other industry
      standards. If the temperature of the Gas is recorded by chart, the
      arithmetic average of the temperatures recorded during periods of Gas flow
      shall be used in calculating the
Mcf.

              


      

    

    
       

    

    
      
        	
                D.2

              	
                Correction of Volume Due to
      Calculation Error. An error in volume calculation for a given
      Receipt Point shall be corrected for such period as the error is
      determined to have existed, not to exceed one (1) year. In no event,
      however, shall Buyer be obligated to correct an error in volume
      calculation for a given Receipt Point unless it resulted in an error of
      greater than 100 MMBtu per Accounting Period at the Receipt Point during
      the correction period, Such correction shall only be processed by Buyer
      prospectively with the current Accounting Period's
  business

              


      

    

    
      


    

    
      
        	
                D.3

              	
                Custody Transfer Measurement,
      CTM for any Receipt Point in existence as of the Effective Date
      shall be performed by whomever is providing CTM at that Receipt Point as
      of the Effective Date. However, if Buyer installs CTM equipment at any
      Receipt Point after the Effective Date, then CTM at that Receipt Point
      shall be performed by Buyer. Except as otherwise provided in this Section
      D, all CTM and CTM equipment shall comply with ANSI/API 2530. Meter charts
      may be rotated as determined by Buyer, Buyer may install and operate
      electronic flow measurement equipment to perform CTM, in which case it
      shall be installed and operated in accordance with the applicable methods
      and standards that have been approved by the American Petroleum institute
      or successor entity. When alternate methods and standards are permitted
      for low volume wells by any applicable regulatory agency with
      jurisdiction, then such alternate methods and standards shall apply to CTM
      and CTM equipment serving such low volume
wells.

              


      

    

    
      


    

    
      
        	
                D.4 

              	
                Notice of CTM Equipment
      Tests.Tests of the CTM equipment shall be performed by the operator
      of the CTM equipment at least once each calendar year. Where Buyer is
      operating the CTM Equipment, Buyer shall give Seller's Operator
      forty-eight (48) hours' notice of the time and location of any tests of
      the CTM equipment so that Seller's Operator may be present. Where Seller's
      Operator is operating the CTM Equipment, Seller's Operator shall give
      Buyer forty-eight (48) hours' notice of the time and location of any tests
      of the CTM equipment so that Buyer may be present   if the
      Party not operating the CTM equipment is unsatisfied with the test, it
      shall notify the operator of the CTM equipment to perform a retest. The
      cost of retesting shall be paid by the Party requesting the retest unless
      the retest shows a difference between the registration of the CTM
      equipment and test instrument of greater than two percent (2%) and 100
      MMBtu, in which case the cost of retesting shall be paid by the Party who
      did not request the retest. Any CTM equipment found to be measuring
      inaccurately shall be promptly restored to accuracy by the operator of the
      CTM equipment.

              


      

    

    
      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

    

    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-11

              

            


      
        

      

       

    

    
      
        	
                D.5 

              	
                Check Meter. Either
      Party may install and operate a check meter at its own expense to check
      the CTM equipment. Except as provided in Section D.6 or D.7, the readings
      of the CTM equipment shall govern. The check meter shall be installed so
      as not to interfere with the operation of the CTM equipment, Pulsation
      filters may be required if unacceptable square root error or gauge line
      error shift occurs as a result of the check meter, If a disagreement
      arises regarding the source of pulsation, a third party consultant shall
      be selected by the Parties to determine the source of the pulsation. The
      Party responsible for the source of the pulsation shall pay all the
      consulting fees and costs associated with identifying and eliminating the
      source of the pulsation, Seller will use the alternate taps on the meter
      run for check measurement   If alternate taps do not
      provide a viable option, Seller will seek a variance from any applicable
      regulatory entities and Buyer to use Buyer's meter
  taps.

              


      

    

    
      


    

    
      
        	
                D.6

              	
                Correction of CTM Equipment
      Inaccuracies. If any test conducted pursuant to Section D.4 reveals
      an inaccuracy of greater than two percent (2%) and 100 MMBtu in the
      registration of the CTM equipment, the volume of Gas measured by such CTM
      equipment shall be corrected for such period as the inaccuracy is
      confirmed to have existed, not to exceed one (1) year, or, if not
      confirmable, then for such period as the Parties can agree upon, not to
      exceed one (1) year   If the correction period is not
      confirmable and cannot be agreed upon, then the correction period shall
      extend back one-half (1/2) of the time elapsed since the CTM equipment was
      last calibrated, not to exceed one (1) year, The volume of Gas actually
      received per Day through the CTM equipment shall be determined on the
      basis of the best data available using the first of the following methods
      which is feasible:

              


      

    

    
      


    

    
      
        	
              	
                (a)

              	
                by
      using the registration of the other Party's check meter if registering
      accurately; or

              


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                by
      calibration, test, or mathematical calculation if the percentage of
      inaccuracy is ascertainable with reasonable certainty;
  or

              


      

    

    
      


    

    
      
        	
              	
                (c)

              	
                by
      estimating the volume of Gas received by comparison to receipts during
      prior Accounting Periods under similar conditions when the CTM equipment
      was registering accurately.

              


      

    

    
      


    

    
      In no
event, however, shall Buyer be obligated to correct any volume measurement
inaccuracy for given CTM Equipment unless it resulted in an inaccuracy of
greater than two percent (2%) and 100 MMBtu per Accounting Period at the
affected Receipt Point during the correction period. Such correction shall only
be processed by Buyer prospectively with the current Accounting Period's
business,

    

    
      


    

    
      
        	
                D.7 

              	
                Measurement During Periods of
      CTM Equipment Failure. Upon the occurrence of any event of Force
      Majeure that prevents Buyer from obtaining or recovering actual
      measurement data from the CTM Equipment, Buyer shall have the right to
      estimate the volume of Gas received by comparison to receipts during the
      prior Accounting Period under similar conditions until such time as Buyer
      is again able to obtain accurate data from the CTM Equipment, but in no
      event for a period longer than ninety (90) days. Any estimated volumes
      relied upon under such circumstances shall be considered actual volumes
      for such period of time.

              


      

    

    
      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-12

              

            


      
        

      

    

    
       

    

    
      E.        SCHEDULING

    

    
      


    

    
      
        	
                E.1

              	
                Receipt Scheduling. Four
      (4) Business Days prior to the beginning of each Accounting Period and two
      (2) Business Days prior to any change thereof during an Accounting Period,
      Seller's Operator, as directed by Buyer, shall submit electronically or in
      writing as may be required by Gatherer, the number of MMBtu of Gas that
      Seller's Operator will make available at each Receipt
    Point.

              


      

    

    
      


    

    
      
        	
                F.

              	
                DISPUTED STATEMENTS,
      AUDIT

              


      

    

    
      


    

    
      
        	
                F.1

              	
                Statement(s) Disputed by
      Seller. in the event that Seller disputes any statement prepared by
      Buyer pursuant to Section 3 2 of this Agreement, Seller shall provide
      written notice of the dispute to Buyer within one (1) year from the date
      of such statement. Notwithstanding such dispute, Buyer shall nonetheless
      pay the portion of any such statement that Seller concedes to be correct
      without prejudice to Seller's right to dispute the remaining portion of
      such statement. If any statement is not disputed by Seller, if at all,
      within one (1) year from the date of such statement, such statement shall
      be conclusively deemed to be correct. This one (1) year period for
      disputing statements does not extend the dispute period for any matter
      whose dispute period is less than one (1) year, as expressly provided in
      this Agreement, even if it otherwise impacts any such statement. Within
      sixty (60) Days after timely disputing a statement, Seller shall assemble
      all available documentation demonstrating the basis for the dispute and
      furnish it to Buyer   Failure of Seller to fully comply
      with each of the terms of this Section F.1 for disputing a statement shall
      constitute a waiver of Seller's right to dispute such
      statement.

              


      

    

    
      


    

    
      
        	
                F.2

              	
                Audit. The Parties shall each preserve
      all records relating to the performance of this Agreement for a period of
      at least two (2) years, or such longer periods as shall be required by
      law, regulation, rule or order. A Party shall have the right, at its own
      expense, upon reasonable written notice to and during the normal business
      hours of the other Party, to examine, audit and obtain copies of the
      relevant portion of the books, records and telephone recordings of the
      other Party, but only to the extent reasonably necessary to verify the
      accuracy of any statement, charge, payment or computation made under this
      Agreement  The right to examine, audit and obtain copies of the
      records of the other Party shall not apply to proprietary information of a
      Party not directly relevant to the transactions under this
      Agreement

              


      

    

    
      


    

    
      
        	
                G.

              	
                LIABILITY, INDEMNIFICATION AND
      WARRANTY

              


      

    

    
      


    

    
      
        	
                G.1

              	
                Seller's Liability and
      Indemnification. Seller shall be in control and possession of
      Seller's Gas until delivered to Buyer at the Receipt Point(s) and shall be
      fully responsible and liable for any and all damages, claims, actions,
      expenses, penalties and liabilities, including attorney's fees, arising
      from personal injury, death, property damage, environmental damage,
      pollution, or contamination relating to Seller's Gas while in Seller's
      control and possession, and Seller agrees to release, indemnify and defend
      Buyer with respect thereto. Seller further agrees to release, indemnify
      and defend Buyer from and against any and all damages, claims, actions,
      expenses, penalties and liabilities, including attorney's fees, arising
      from personal injury, death, property damage, environmental damage,
      pollution, or contamination relating to Seller's ownership and/or
      operation of the facilities delivering Gas to the Receipt Point(s) and/or
      Seller's performance or nonperformance of its obligations under this
      Agreement.

              


      

    

    
      


    

    
      
        	
                G.2

              	
                Buyer's Liability and
      Indemnification. Buyer shall be in control and possession of
      Seller's Gas from the time delivered to Buyer at the Receipt Point(s), and
      shall be fully responsible and liable for any and all damages, claims,
      actions, expenses, penalties and liabilities, including attorney's fees,
      arising from personal injury, death, property damage, environmental
      damage, pollution or contamination relating to Seller's Gas white in
      Buyer's control and possession, and Buyer agrees to release, indemnify and
      defend Seller with respect thereto. Buyer further agrees to release,
      indemnify and defend Seller from and against any and all damages, claims,
      actions, expenses, penalties and liabilities, including attorney's fees,
      arising from personal injury, death, property damage, environmental
      damage, pollution or contamination relating to Buyer's ownership,
      operation, use or direction, as applicable, of the Gathering System and
      Plant, and/or Buyer's performance or nonperformance of its obligations
      under this Agreement.

              


      

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-13

              

            


    

    
      
        
          

        

      

    

    
      


    

    
      
        	
                G.3 

              	
                Warranty of Title.
      Seller warrants that at the time of delivery of Seller's Gas at the
      Receipt Point(s), it will have title to such Gas, free and clear of all
      liens, encumbrances, and claims whatsoever, and that it will, at the time
      of such delivery, have the right to deliver such Gas. Seller shall
      release, indemnify and defend Buyer against any and all damages, claims,
      actions, expenses, penalties and liabilities, including attorney's fees,
      arising from Seller's breach of the foregoing warranty and Seller's
      warranties contained in Section 4.2 of this
  Agreement.

              


      

    

    
      


    

    
      
        	
                G.4

              	
                Limitations,
      Notwithstanding any language in this Agreement to the contrary,
      neither Party shall be released, indemnified or defended with respect to
      its own negligence or willful misconduct   No language in
      this Agreement is intended to provide indemnification greater than that
      which is permitted by
      applicable law. If any limitations upon indemnification are imposed
      by applicable law, then such limitations are hereby incorporated by
      reference and made a part of this Agreement. Except as necessary to
      provide the indemnifications contemplated in this Agreement against third
      party claim(s), neither Party shall be liable to the other for any
      incidental, consequential or punitive
damages.

              


      

    

    
      


    

    
      
        	
                H. 

              	
                ROYALTIES, TAXES, FEES AND
      OTHER CHARGES

              


      

    

    
      


    

    
      
        	
                H.1

              	
                Royalties. Seller shall
      be responsible and liable for ail payments due to royalty owners,
      overriding royalty owners or any other persons whomsoever claiming any
      right to payment on account of the production, gathering, dehydration,
      treating and/or marketing of Seller's Gas, and agrees to make all such
      payments prior to the delinquency thereof   Buyer shall
      have no responsibility or liability for such payments, and Seller shall
      release, indemnify and defend Buyer against any and ail damages, claims,
      actions, expenses, penalties and liabilities, including attorney's fees,
      relating to any such
payments,

              


      

    

    
      


    

    
      
        	
                H.2

              	
                   Taxes, Fees
      and Other Charges. Seller shall be responsible and liable for the
      payment of ail taxes, fees and other charges (including penalties and
      interest thereon) now or hereafter levied or assessed by any municipal,
      county, state, federal or tribal government relating to Seller's Gas or
      Buyer's or Gatherer's services under or with respect to this Agreement. If
      Buyer is required to pay any such taxes, fees or other charges (or
      penalties or interest thereon), Seller shall immediately reimburse Buyer
      therefore.

              


      

    

    
      


    

    
      
        	
                H.3

              	
                Limitation on Tax
      Responsibility. Neither Party shall be responsible or liable for
      the taxes now or hereafter levied or assessed by any municipal, county,
      state, federal or tribal government upon the income, operations or
      facilities of the other.

              


      

    

    
      


    

    
      
        	
                I.

              	
                ALTERNATIVE DISPUTE
      RESOLUTION

              


      

    

    
      


    

    
      Any
dispute arising out of or relating to this Agreement shall be resolved in
accordance with the procedures specified in this Article i, which shall be the
sole and exclusive procedures for the resolution of any such
disputes   The Parties shall attempt in good faith to resolve any
dispute arising out of or relating to this Agreement promptly by negotiation
between senior executives of the Parties who have authority to settle the
controversy. Any Party may give the other Party written notice of any dispute
not resolved in the normal course of business. Within fifteen (15) Days after
delivery of the notice, the receiving Party shall submit to the other a written
response. The notice and the response shall include (a) a statement of each
Party's position and a summary of arguments supporting that position, and (b)
the name and title of the senior executive who will represent that Party and of
any other person who will accompany such executive. Within thirty (30) Days
after delivery of the disputing Party's notice, the designated senior executives
of both Parties shall meet at a mutually acceptable time and place, and
thereafter as often as they reasonably deem necessary, to attempt to resolve the
dispute. All reasonable requests for information made by one Party to the other
will be honored. All negotiations pursuant to this clause are confidential and
shall be treated as compromise and settlement negotiations for purposes of
applicable rules of evidence.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-14

              

            


    

    
       

    

    
      If the
dispute has not been resolved by negotiation of the designated senior executives
of the Parties within sixty (60) Days of the receiving Party's receipt of the
disputing Party's notice, or if the Parties failed to meet within thirty (30)
Days of the receiving Party's receipt of the disputing Party's notice, the
Parties shall endeavor to settle the dispute by mediation under the then-current
CPR Institute for Dispute Resolution mediation procedure in effect on the date
of this Agreement. Unless otherwise agreed, the Parties will select a mediator
from the CPR Panels of Distinguished Neutrals. Notwithstanding the provisions of
this clause, either Party may seek from any court having jurisdiction hereof any
interim, provisional or injunctive relief that may be necessary to protect its
rights or property or maintain the status quo before, during or after the
pendency of the mediation proceeding. The institution and maintenance of any
judicial action or proceeding for any such interim, provisional or injunctive
relief shall not constitute a waiver of the right or obligation of either Party
to submit the dispute to negotiation and mediation as described above, including
any claims or disputes arising from the exercise of such interim, provisional or
injunctive relief. If the dispute has not been resolved by mediation as provided
herein within ninety (90) Days of the initiation of the above procedures, either
Party may initiate litigation upon thirty (30) Days' written notice to the other
Party; provided, however, that if one Party has requested the other to
participate in any of the above non-binding procedures and the other has failed
to participate, the requesting Party may initiate litigation before expiration
of the above period. The prevailing Party in the resolution of any dispute
hereunder shall be entitled to have its costs and expenses incurred in the
prosecution of such dispute (including, without limitation, reasonable
attorneys' fees and expenses) reimbursed by the other Party promptly after the
resolution thereof

    

    
      


    

    
      
        	
                J. 

              	
                MISCELLANEOUS

              


      

    

    
      


    

    
      
        	
                J.1 

              	
                New Requirements of
      Interconnecting Pipeline(s).Buyer may from time to time become
      subject to new requirements imposed by the Interconnecting
      Pipeline(s)   Buyer shall provide written notice to Seller
      of any such new requirements. Thereafter, Seller shall promptly comply
      with such new requirements or Buyer may suspend or terminate this
      Agreement. If Buyer has not suspended or terminated this Agreement in
      accordance with the foregoing clause of this Section J.1, Seller shall
      release, indemnify, and defend Buyer from any claims, costs or expenses
      incurred by Buyer resulting from Seller's failure to comply with such new
      requirements.

              


      

    

    
      


    

    
      
        	
                J.2

              	
                Governing Law/Venue.
      This Agreement shall be interpreted, construed, and governed by the
      laws of the State of Colorado, without regard to conflicts of law
      principles thereof.  Venue shall be the State or Federal Courts
      in Colorado.

              


      

    

    
      
         

        
          	
                  J.3

                	
                  Severability. Should any part of this
      Agreement be found to be unenforceable or be required to be modified
      bya
      court or governmental authority, then only that part of this Agreement
      shall be affected or so modified, The remainder of this Agreement shall
      remain in force and unmodified. If the absence or modification of the
      affected part of this Agreement substantially deprives Party of the
      economic benefit of this Agreement or substantially impacts a Party's
      economic benefit hereunder, the Parties shall negotiate reasonable and
      enforceable provisions to restore the economic benefit to the Party so
      deprived or impacted consistent with the intent originally reflected in
      this Agreement. If the Parties are unable to do so, then either Party may
      terminate this Agreement by giving the other Party written notice of
      termination no later than sixty (60) Days after any provision of this
      Agreement was determined to be unenforceable or modified by a court or
      governmental authority.

                


        

      

      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

    

    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-15

              

            


      
        

      

    

    
      


    

    
      
        	
                J.4 

              	
                Waiver. A waiver by either Party of any
      one or more defaults by the other Party shall not operate as a waiver of
      any future default(s), whether of a like or different
      character.

              


      

    

    
      


    

    
      
        	
                J.5 

              	
                Confidentiality. The Parties and their
      respective officers, directors, employees, agents and representatives
      shall keep the terms of this Agreement confidential for the term hereof.
      However, either Party may disclose the terms of this Agreement to the
      following persons or entities in the following
    circumstances:

              


      

    

    
      


    

    
      
        	
              	
                (a)

              	
                To
      financial institutions requiring such disclosure as a condition precedent
      to making or renewing a loan or independent certified public accountants
      for purposes of obtaining a financial audit; provided, however, that such
      financial institutions or accountants have agreed in writing to keep the
      terms of this Agreement
confidential;

              


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                To
      courts or other governmental authorities, including persons or entities to
      whom disclosure is required by such courts or other governmental
      authorities, if such disclosure is required by law, regulation, rule or
      order; provided, however, that the Party making such disclosure shall use
      its best efforts to obtain a protective order or other reliable assurance
      that confidential treatment will be accorded the terms of this
      Agreement;

              


      

    

    
      


    

    
      
        	
              	
                (c)

              	
                To
      any purchaser, or any potential purchaser, of ail or any portion of the
      Gathering System and to any of such purchaser's agents, attorneys, lenders
      or their representatives, provided however that all such parties or
      persons shall first have agreed in writing to maintain the confidentiality
      of the terms and provisions of this Agreement;
  and

              


      

    

    
      


    

    
      
        	
              	
                (d)

              	
                To
      any purchaser, or potential purchaser, of all or any portion of Seller's
      interest in the wells, leasehold estates or other rights to produce Gas
      dedicated hereto and to any of such purchaser's agents, attorneys, lenders
      or their representatives, provided however that all such parties or
      persons shall first have agreed in writing to maintain the confidentiality
      of the terms and provisions of this
Agreement.

              


      

    

    
      


    

    
      Under no
circumstances shall the terms of this Agreement be disclosed to any other third
party, including any newspaper, magazine or other publication, without the prior
written consent of the other Party,

    

    
      


    

    
      
        	
                J.6 

              	
                Transfer. Any transfer, whether voluntary
      or involuntary, of all or any part of Seller's right, title, or interest
      in the Gas committed to Buyer under this Agreement shall not impair its
      commitment to Buyer. Seller shall notify in writing any potential
      transferee that such Gas remains committed to Buyer pursuant to this
      Agreement, and Seller shall ensure that such Gas when produced is
      delivered to Buyer during the term of and in accordance with this
      Agreement, Any such transfer shall not impair Buyer's rights under this
      Agreement as against Seller. Seller shall notify Buyer of any such
      transfer within ten (10) Business Days of the effective date thereof
      Failure of Seller to so notify Buyer shall not impair Buyer's rights under
      this Agreement.

              


      

    

    
       

    

    Any
transfer, whether voluntary or involuntary, of all or any part of  Buyer's
or Gatherer's right, title, or interest in the Agreement or Gatherer's
facilities shall not impair the duties and obligations of Buyer or its
transferee to Seller under the Agreement and shall be subject to this
Agreement  Any such transfer shall not impair Seller's rights under
this Agreement as against Buyer, Buyer shall notify Seller of any such transfer
within ten (10) Business Days of the effective date thereof. Failure of Buyer to
so notify Seller shall not impair Seller's rights under this
Agreement.


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-16

              

            


      
        

      

    

    
       

    

    
      
        	
                J.7 

              	
                No Third Party Beneficiaries.
      It is the intent of the Parties that no person or entity besides
      Buyer, Seller and their respective successors and permitted assigns shall
      be entitled to enforce any provision of this Agreement and that the
      covenants and obligations set forth in this Agreement are solely for the
      benefit of Buyer, Seller and their respective successors and permitted
      assigns.

              


      

    

    
      


    

    
      
        	
                J.8  

              	
                Amendment. Except as
      expressly provided otherwise in this Agreement no amendment of this
      Agreement shall be binding unless in writing and signed by the
      Parties.

              


      

    

    
      


    

    
      
        	
                J.9

              	
                Counterparts, This
      Agreement may be executed in any number of counterparts, each of which
      when so executed and delivered shall be an original, and such counterparts
      together shall constitute one
instrument

              


      

    

    
      


    

    
      
        	
                J.10

              	
                Further Assurances. Each
      Party shall promptly execute, deliver, file or record such agreements,
      instruments, certificates and other documents and take such actions as may
      reasonably requested by the other Party or as may otherwise be necessary
      or proper to carry out the terms and provisions of this Agreement and to
      consummate the transactions contemplated
hereby.

              


      

    

    
      


    

    
      
        	
                J.11

              	
                Telephone Recordings.
      The Parties agree that each Party may electronically record all
      telephone conversations with respect to this Agreement between their
      respective employees, upon notice to the other Party. Each Party shall
      obtain any necessary consent of its agents and employees to such
      recording,

              


      

    

    
      


    

    
      
        
          	
                  K.

                	
                  REPRESENTATIONS AND
      WARRANTIES

                


        

      

    

    
      


    

    
      
        	
                K.1 

              	
                Representations and Warranties
      of the Parties. Each Party represents and warrants to and in favor
      of the other Party, that:

              


      

    

    
      


    

    
      
        	
              	
                (a)

              	
                it
      is a corporation duly organized, validly existing and in good standing
      under the laws of its state of incorporation; and is duly qualified,
      authorized to do business and in good standing in each jurisdiction where
      the character of its properties or the nature of its activities makes such
      qualification necessary;

              


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                it
      has all requisite power and authority to own or hold under lease or
      easement and operate the property it purports to own or hold under lease
      or easement and to carry on its business as now being conducted and as
      proposed to be conducted under this
Agreement;

              


      

    

    
      


    

    
      
        	
              	
                (c)

              	
                it
      has the requisite power and authority to execute, deliver and perform its
      obligations under this
Agreement;

              


      

    

    
      


    

    
      
        	
              	
                (d)

              	
                it
      has duly authorized, executed and delivered this Agreement, and neither
      its execution and delivery hereof nor its consummation of the transactions
      contemplated hereby nor its compliance with the terms hereof or
      performance of its obligations hereunder (i) does or will contravene any
      of its organizational documents or, in any material respect, any law,
      statute or other legal requirement applicable to or binding upon it or its
      properties; (ii) does or will contravene or result in any material breach
      of or constitute any material default under any agreement or instrument to
      which it is a party or by which it or any of its properties may be bound
      or affected; or (iii) does or will require the consent or approval of any
      person or entity that has not already been
  obtained;

              


      

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    
      	
              
                STANDARD
      TERMS AND CONDITIONS

              

            	
              
                PAGE
      A-17

              

            


      
        

      

    

    
      


    

    
      
        	
              	
                (e)

              	
                this
      Agreement is its legal, valid and binding obligation, enforceable against
      it in accordance with its terms, except to the extent that enforceability
      may be limited by applicable bankruptcy, insolvency, moratorium,
      reorganization or other similar laws affecting the enforcement of
      creditors' rights and subject to general equitable principles (regardless
      of whether such enforceability is considered in a proceeding in equity or
      at law);

              


      

    

    
      


    

    
      
        	
              	
                (f)

              	
                there
      is no action, suit, proceeding, inquiry or investigation, at law or in
      equity, before or by any court, governmental agency, public board or body,
      pending or, to its knowledge, threatened against or affecting it or
      contesting or affecting its execution, delivery or performance, or the
      validity or enforceability, of this Agreement;
  and

              


      

    

    
      


    

    
      
        	
              	
                (g)

              	
                it
      will be able to deliver and sell, or receive and buy, as applicable,
      Seller's Gas in the quantities and for the prices specified in this
      Agreement.

              


      

    

    
      


    

    
      Each
Party (the "Warranting Party") shall release, indemnify and defend the other
Party against any and all damages, claims, actions, expenses, penalties and
liabilities, including attorney's fees, arising from the Warranting Party's
breach of any of the foregoing warranties, or any other representations or
warranties made by the Warranting Party under this Agreement.

    

    
      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

    

    
      EXHIBIT
B

    

    
      TO
THE GAS PURCHASE AGREEMENT

    

    
      DATED
AS OF JUNE 1, 2006

    

    
      Between

    

    
      WILLIAMS
PRODUCTION RMT COMPANY
and

    

    
      RILEY
NATURAL GAS COMPANY

    

    
      and

    

    
      
         
PETROLEUM
DEVELOPMENT CORPORATION 

         

         

        INTENTIONALLY
OMITTED

      

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

    

    
      EXHIBIT
C

    

    
      TO
THE GAS PURCHASE AGREEMENT

    

    
      DATED
AS OF JUNE 1, 2006

    

    
      Between

    

    
      WILLIAMS
PRODUCTION RMT COMPANY

    

    
      and

    

    
      RILEY
NATURAL GAS COMPANY

    

    
      and

    

    
      PETROLEUM
DEVELOPMENT CORPORATION

    

    
      


    

    
      


    

    
      RECEIPT
POlNT(S)


    

    
      	
              
                Meter
      Number

              

            	
              
                Receipt
      Point Name

              

            	
              
                Point
      Type

              

            	
              
                Location

              

            	
              
                County

              

            	
              
                State

              

            
	
              
                RTU
      1224

              

            	
              
                PDC
      Starkey 1

              

            	
              
                Low
      Pressure

              

            	 
      	
              
                Garfield

              

            	
              
                CO

              

            
	
              
                RTU1501

              

            	
              
                PDC
      Starkey 2

              

            	
              
                Low
      Pressure

              

            	 
      	 
      	 
      
	
              
                RTU
      1508

              

            	
              
                PDC
      Starkey 3

              

            	
              
                Low
      Pressure

              

            	 
      	 
      	 
      
	
              
                RTU
      0414

              

            	
              
                PDC
      Nolte

              

            	
              
                Low
      Pressure

              

            	 
      	 
      	 
      
	
              
                RTU
      1263

              

            	
              
                PDC
      Chevron

              

            	
              
                Low
      Pressure

              

            	 
      	 
      	 
      
	
              
                RTU
      1504

              

            	
              
                PDC
      Redpoint

              

            	
              
                Low
      Pressure

              

            	 
      	 
      	 
      
	
              
                RTU
      11509

              

            	
              
                PDC
      Logan

              

            	
              
                Low
      Pressure

              

            	 
      	 
      	 
      
	
              
                RTU

              

            	
              
                PDC
      Garden Gulch

              

            	
              
                High
      Pressure

              

            	 
      	 
      	 
      


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      EXHIBIT
D

    

    
      TO
THE GAS PURCHASE AGREEMENT

    

    
      DATED
AS OF JUNE 1, 2006

    

    
      Between

    

    
      WILLIAMS
PRODUCTION RMT COMPANY

    

    
      and

    

    
      RILEY
NATURAL GAS COMPANY

    

    
      and

    

    
      PETROLEUM
DEVELOPMENT CORPORATION

    

    
      


    

    
      


    

    
      DELIVERY
POINT(S)

    

    


    
      	
              
                Delivery
      Point(s)

              

            	
              
                Location

              

            	
              
                EBB
      Nom Loc.

              

            	
              
                County

              

            	
              
                State

              

            
	
              
                Colorado
      Interstate Gas Company (Parachute)

              

            	
              
                Sec.
      8-T2S-R96W

              

            	
              
                PCH

              

            	
              
                Rio
      Blanco

              

            	
              
                CO

              

            
	
              
                Colorado
      Interstate Gas Company (Roan Cliffs)

              

            	
              
                Sec.
      2-T7S-R96W

              

            	
              
                RCL

              

            	
              
                Garfield

              

            	
              
                CO

              

            
	
              
                Questar
      Pipeline Company

              

            	
              
                Sec
      18-T6S-R93W

              

            	
              
                MAP
      106

              

            	
              
                Garfield

              

            	
              
                CO

              

            
	
              
                TransColorado
      Gas Transmission Co (Raccoon Hollow)

              

            	
              
                Sec
      28-T8S-R97W

              

            	
              
                Pin
      40412

              

            	
              
                Mesa

              

            	
              
                CO

              

            
	
              
                TransColorado
      Gas Transmission Co (Greasewood)

              

            	
              
                Sec
      5-T2S-R96W

              

            	
              
                Pin
      36101

              

            	
              
                Rio
      Blanco

              

            	
              
                CO

              

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      EXHIBIT
E


    

    
      TO THE GAS PURCHASE
AGREEMENT


    

    
      DATED AS OF JUNE 1,
2006


    

    
      Between


    

    
      WILLIAMS PRODUCTION RMT
COMPANY


    

    
      and


    

    
      RILEY NATURAL GAS
COMPANY


    

    
      and


    

    
      PETROLEUM DEVELOPMENT
CORPORATION

    

    
      


    

    
      


    

    
      SERVICE
AND FEE DESCRIPTION


    

    


    
      	
              
                Gathering and Processing Fee
      a/

              

            	
              
                Gathering and Processing Fee
      a/

              

            	
              
                FL&U

                (Low pressure
      receipt points)

              

            	
              
                FL&U

              

              
                (High pressure
      receip points)

              

            	
              
                Low Delivery Fee

              

            	
              
                Excess C02 Treating Fee a/

              

            
	  	  	  	  	  	  
	
              
                $[ *
      ] per MMBtu Received at Low Pressure

              

              
                Receipt
      Point

              

            	
              
                $[ *
      ] per MMBtu Received at a High Pressure Receipt
      Point

              

            	
              
                Actual
      usage

                (Initially [ *
      ]%)

              

            	
              
                Actual
      usage

                (Initially [ *
      ]%)

              

            	
              
                $[ *
      ] per Accounting

              

              
                Period per
      Receipt Point

              

            	
              
                $[ *
      ] per Mcf for each 1 00% Greater
      than 3.00%

              

            


    

    
      (

    

    
       

      
        	 a/
      	 	
                Annually,
      at the beginning of each Contract Year, Buyer shall adjust the Gathering
      and Processing Fee and the Excess C02 Treating Fee by a percentage equal
      to the annual average percentage change, from the preceding Contract Year,
      in the cumulative implicit Gross Domestic Product price deflator
      ("GDPDEF") computed and published by the U.S. Department of
      Commerce.

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      EXHIBIT
F

      TO
THE GAS PURCHASE AGREEMENT

      DATES
AS OF JUNE 1, 2006

      Between

      WILLIAMS
PRODUCTION RMT COMPANY

      and

      RILEY
NATURAL GAS COMPANY

      and

      PETROLEUM
DEVELOPMENT CORPORATION

       

      GAS
VOLUMES COMMITTED

       

      
        
          
            
              
                
                  
                    	
                            Contract Year

                          	
                            Seller’s Annual Volume

                            (In MMBtu)

                          	
                            Seller’s MDQ

                            (In MMBtu)

                          
	
                            1

                          	
                            June
      1, 2006-August 31, 2006

                          	
                            1,978,000

                          	
                            21,500

                          
	
                            1

                          	
                            September
      1, 2006-May 31, 2007

                          	
                            15,578,760

                          	
                            57,065

                          
	
                            2

                          	
                            June
      1, 2007 - May 31, 2008

                          	
                            22,890,878

                          	
                            63,585

                          
	
                            3

                          	
                            June
      1, 2008 - May 31, 2009

                          	
                            32,393,817

                          	
                            88,750

                          
	
                            4

                          	
                            June
      1, 2009 - May 31, 2010

                          	
                            35,164,648

                          	
                            96,342

                          
	
                            5

                          	
                            June
      1, 2010 - May 31, 2011

                          	
                            35,415,768

                          	
                            97,030

                          
	
                            6

                          	
                            June
      1, 2011 - May 31, 2012

                          	
                            36,204,441

                          	
                            99,190

                          
	
                            7

                          	
                            June
      1, 2012 - May 31, 2013

                          	
                            36,588,969

                          	
                            100,244

                          
	
                            8

                          	
                            June
      1, 2013 - May 31, 2014

                          	
                            31,880,469

                          	
                            87,344

                          
	
                            9

                          	
                            June
      1, 2014 - May 31, 2015

                          	
                            25,068,839

                          	
                            68,682

                          
	
                            10

                          	
                            June
      1, 2015 - May 31, 2016

                          	
                            19,328,393

                          	
                            52,955

                          
	
                            11

                          	
                            June
      1, 2016 - May 31, 2017

                          	
                            14,757,224

                          	
                            40,431

                          
	
                            12

                          	
                            June
      1, 2017 - May 31, 2018

                          	
                            11,877,191

                          	
                            32,540

                          
	
                            13

                          	
                            June
      1, 2018 - May 31, 2019

                          	
                            9,750,519

                          	
                            26,714

                          
	
                            14

                          	
                            June
      1, 2020 - May 31, 2021

                          	
                            7,695,618

                          	
                            20,920

                          
	
                            15

                          	
                            June
      1, 2021 - May 31, 2022

                          	
                            5,771,836

                          	
                            15,813

                          


                  

                

              

            

          

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      EXHIBIT
G

      TO
THE GAS PURCHASE AGREEMENT

      DATES
AS OF JUNE 1, 2006

      Between

      WILLIAMS
PRODUCTION RMT COMPANY

      and

      RILEY
NATURAL GAS COMPANY

      and

      PETROLEUM
DEVELOPMENT CORPORATION

       

      TWO YEAR MONTHLY MDQ
SCHEDULE

       

      
        
          
            
              
                
                  	
                          Month

                        	
                          MDQ
      Mcf

                        	
                          MDQ
      MMBtu

                        
	
                          June
      2006

                        	
                          20,000

                        	
                          21,500

                        
	
                          July
      2006

                        	
                          20,000

                        	
                          21,500

                        
	
                          August
      2006

                        	
                          20,000

                        	
                          21,500

                        
	
                          September
      2006

                        	
                          52,900

                        	
                          56,868

                        
	
                          October
      2006

                        	
                          55,280

                        	
                          59,426

                        
	
                          November
      2006

                        	
                          56,850

                        	
                          61,114

                        
	
                          December
      2006

                        	
                          54,290

                        	
                          58,362

                        
	
                          January
      2007

                        	
                          52,040

                        	
                          55,943

                        
	
                          February
      2007

                        	
                          50,040

                        	
                          53,793

                        
	
                          March
      2007

                        	
                          51,250

                        	
                          55,094

                        
	
                          April
      2007

                        	
                          52,000

                        	
                          55,900

                        
	
                          May
      2007

                        	
                          52,890

                        	
                          56,857

                        
	
                          June
      2007

                        	
                          59,460

                        	
                          63,920

                        
	
                          July
      2007

                        	
                          59,430

                        	
                          63,887

                        
	
                          August
      2007

                        	
                          63,910

                        	
                          68,703

                        
	
                          September
      2007

                        	
                          64,090

                        	
                          68,897

                        
	
                          October
      2007

                        	
                          64,550

                        	
                          69,391

                        
	
                          November
      2007

                        	
                          66,230

                        	
                          71,197

                        
	
                          December
      2007

                        	
                          63,650

                        	
                          68,424

                        
	
                          January
      2008

                        	
                          61,330

                        	
                          65,930

                        
	
                          February
      2008

                        	
                          59,200

                        	
                          63,640

                        
	
                          March
      2008

                        	
                          57,260

                        	
                          61,555

                        
	
                          April
      2008

                        	
                          61,300

                        	
                          65,898

                        
	
                          May
      2008

                        	
                          59,240

                        	
                          63,683