##### 



EXHIBIT A
 EXHIBIT
10.26
 A.A.P.L. FORM 610  1989
 MODEL FORM OPERATING AGREEMENT
 OPERATING AGREEMENT
 DATED
 October 1, 2005
 OPERATOR: EnerVest Operating, L.L.C.
 CONTRACT AREA: Belden & Blake Corporation
 COUNTY OR PARISH OF __________, STATE OF MI, PA, OH, & NY




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OPERATING AGREEMENT
 EnerVest Operating, L.L.C.
 WITNESSETH:
   ARTICLE I.
DEFINITIONS
  A.
    
    The term AFE shall mean an Authority for Expenditure prepared by a party to this
agreement for the purpose of estimating the costs to be incurred in conducting an
operation hereunder.B.
    
    The term Completion or Complete shall mean a single operation intended to
complete a well as a producer of Oil and Gas in one or more Zones, including, but not
limited to, the setting of production casing, perforating, well stimulation and production
testing conducted in such operation.C.
    
    The term Contract Area shall mean all of the lands, Oil and Gas Leases and/or Oil
and Gas Interests intended to be developed and operated for Oil and Gas purposes under
this agreement. Such lands, Oil and Gas Leases and Oil and Gas Interests are described in
Exhibit A.D.
    
    The term Deepen shall mean a single operation whereby a well is drilled to an
objective Zone below the deepest Zone in which the well was previously drilled, or below
the Deepest Zone proposed in the associated AFE, whichever is the lesser.E.
    
    The terms Drilling Party and Consenting Party shall mean a party who agrees to
join in and pay its share of the cost of any operation conducted under the provisions of
this agreement.F.
    
    The term Drilling Unit shall mean the area fixed for the drilling of one well by
order or rule of any state or federal body having authority. If a Drilling Unit is not
fixed by any such rule or order, a Drilling Unit shall be the drilling unit as established
by the pattern of drilling in the Contract Area unless fixed by express agreement of the
Drilling Parties.G.
    
    The term Drillsite shall mean the Oil and Gas Lease or Oil and Gas Interest on
which a proposed well is to be located.H.
    
    The term Initial Well shall mean the well required to be drilled by the parties
hereto as provided in Article VI.A.I.
    
    The term Non-Consent Well shall mean a well in which less than all parties have
conducted an operation as provided in Article Vl.B.2.J.
    
    The terms Non-Drilling Party and Non-Consenting Party shall mean a party who
elects not to participate in a proposed operation.K.
    
    The term Oil and Gas shall mean oil, gas, casinghead gas, gas condensate, and/or
all other liquid or gaseous hydrocarbons and other marketable substances produced
therewith, unless an intent to limit the inclusiveness of this term is specifically
stated.L.
    
    The term Oil and Gas Interests or Interests shall mean unleased fee and mineral
interests in Oil and Gas in tracts of land lying within the Contract Area which are owned
by parties to this agreement.M.
    
    The terms Oil and Gas Lease, Lease and Leasehold shall mean the oil and gas
leases or interests therein covering tracts of land lying within the Contract Area which
are owned by the parties to this agreement.N.
    
    The term Plug Back shall mean a single operation whereby a deeper Zone is abandoned
in order to attempt a Completion in a shallower Zone.O.
    
    The term Recompletion or Recomplete shall mean an operation whereby a Completion
in one Zone is abandoned in order to attempt a Completion in a different Zone within the
existing wellbore.P.
    
    The term Rework shall mean an operation conducted in the wellbore of a well after
it is Completed to secure, restore, or improve production in a Zone which is currently
open to production in the wellbore. Such operations include, but are not limited to, well
stimulation operations but exclude any routine repair or maintenance work or drilling,
Sidetracking, Deepening, Completing, Recompleting, or Plugging Back of a well.Q.
    
    The term Sidetrack shall mean the directional control and intentional deviation of
a well from vertical so as to change the bottom hole location unless done to straighten
the hole or to drill around junk in the hole to overcome other mechanical difficulties.R.
    
    The term Zone shall mean a stratum of earth containing or thought to contain a
common accumulation of Oil and Gas separately producible from any other common
accumulation of Oil and Gas.
  ARTICLE II.
EXHIBITS
  _____A.
    
    Exhibit A shall include the following information:(1
    )
    
    Description of lands subject to this agreement,(2
    )
    
    Restrictions, if any, as to depths, formations, or
substances,(3
    )
    
    Parties to agreement with addresses and telephone numbers for
notice purposes,(4
    )
    
    Percentages or fractional interests of parties to this
agreement,(5
    )
    
    Oil and Gas Leases and/or Oil and Gas Interests subject to
this agreement,(6
    )
    
    Burdens on production._____B.
    
    Exhibit B, Form of Lease._____C.
    
    Exhibit C, Accounting Procedure._____D.
    
    Exhibit D, Insurance._____E.
    
    Exhibit E, Gas Balancing Agreement._____F.
    
    Exhibit F, Non-Discrimination and Certification of Non-Segregated Facilities._____G.
    
    Exhibit G, Tax Partnership._____H.
    
    Other: _________________________________________________




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ARTICLE III.
INTERESTS OF PARTIES
 A. Oil and Gas Interests:
  B. Interests of Parties in Costs and Production:
     C. Subsequently Created Interests:
   ARTICLE IV.
TITLES
 A. Title Examination:




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B. Loss or Failure of Title:
 Failure of Title:
        Loss by Non-Payment or Erroneous Payment of Amount Due:
    Other Losses:
 Curing
Title:




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ARTICLE V.
OPERATOR
 A. Designation and Responsibilities of Operator:
 EnerVest Operating, L.L.C.
 B. Resignation or Removal of Operator and Selection of Successor:
 Resignation or Removal of Operator:
  Selection of Successor Operator:
 Effect of Bankruptcy:
 C. Employees and Contractors:
  D. Rights and Duties of Operator:
 Competitive Rates and Use of Affiliates:
 Discharge of Joint Account Obligations:
 Protection from Liens:




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Custody of Funds:
 Access to Contract Area and Records:
 Filing and Furnishing Governmental Reports:
 Drilling and Testing Operations:
    Cost Estimates.
 Insurance:
  ARTICLE VI.
DRILLING AND DEVELOPMENT
 Proposed Operations:




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Operations by Less Than All Parties:
 Determination of Participation.
  Relinquishment of Interest for Non-Participation




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400%
 400 %
  Reworking, Recompletion or Plugging Back. 400 %
 Recoupment Matters.
    Stand-By Costs:




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Deepening:
     Sidetracking:
   Order of Preference of Operations. artie




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not
 Conformity to Spacing Pattern.
 Paying Wells.
 C. Completion of Wells; Reworking and Plugging Back:
 Completion:
 þ Option No. 1:
 o Option No. 2: not
 Rework, Recomplete or Plug Back:
 D. Other Operations:
 Twenty-five thousand Dollars ($ 25,000.00) Twenty-five thousand Dollars ($ 25,000.00) . 50
 E. Abandonment of Wells:
 Abandonment of Dry Holes:




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Abandonment of Wells That Have Produced:
   Abandonment of Non-Consent Operations:
 F. Termination of Operations:
 50




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ARTICLE VII.
EXPENDITURES AND LIABILITY OF PARTIES
 A. Liability of Parties:




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B. Liens and Security Interests:
        C. Advances:
  D. Defaults and Remedies:




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Suspension of Rights:
 Suit for Damages:
 Deemed Non-Consent:
  Advance Payment:
 Costs and Attorneys Fees.
 E. Rentals, Shut-in Well Payments and Minimum Royalties:
   F. Taxes:




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ARTICLE VIII.
ACQUISITION, MAINTENANCE OR TRANSFER OF INTEREST
 A. Surrender of Leases:
    B. Renewal or Extension of Leases:
      C. Acreage or Cash Contributions:




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D. Assignment; Maintenance of Uniform Interest:
      E. Waiver of Rights to Partition:
  ARTICLE IX.
INTERNAL REVENUE CODE ELECTION
  ARTICLE X.
CLAIMS AND LAWSUITS
 twenty-five thousand ($25,000.00)




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ARTICLE XI.
FORCE MAJEURE
   ARTICLE XII.
NOTICES
  ARTICLE XIII
TERM OF AGREEMENT
  þ
    
    Option No. 1: So long as any of the Oil and Gas Leases subject to this
agreement remain or are continued in force as to any part of the Contract Area, whether by
production, extension, renewal or otherwise.
   ARTICLE XIV.
COMPLIANCE WITH LAWS AND REGULATIONS
 A. Laws, Regulations and Orders:
  B. Governing Law:
 Texas
 C. Regulatory Agencies:




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ARTICLE XV.
MISCELLANEOUS
 A. Execution:
  B. Successors and Assigns:
  C. Counterparts:
  D. Severability:
  ARTICLE XVI.
OTHER PROVISIONS




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##### 



ATTEST OR WITNESS
    
    
    
    
    
    OPERATOREnerVest Operating, L.L.C.By
    
    /S/ Kenneth MarianiKenneth MarianiType or print nameTitle V.P.Date 3  15  06Tax ID or S.S. No.
 NON-OPERATORS
 Belden & Blake CorporationBy
    
    /S/ James M. VanderhiderJAMES M. VANDERHIDERType or print nameTitle PRESIDENT AND CHIEF FINANCIAL OFFICERDate 3  15  06Tax ID or S.S. No.
 ByType or print nameTitleDateTax ID or S.S. No.
 ByType or print nameTitleDateTax ID or S.S. No.




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##### 



ACKNOWLEDGMENTS
   State of    Texas
    
    
    ))
    
    
    ss.County of
    
    Harris
    
    
    )
  March 15, 2006
    
    by
    
    /S/ Jo Ann White(Seal, If any)Title (and Rank) Treasury Cash ManagerMy commission expires: Sept 12, 2009
  State of
    
    
    
    
    
    
    ))
    
    
    ss.County of
    
    
    
    
    )
  by
    
    
    
    
    
    asof(Seal, If any)Title (and Rank)My commission expires:




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EXHIBIT       
 Attached to and made a part of
    
    The Belden & Blake CorporationStates of MI, OH, NY, and PA.
 
 
 ACCOUNTING PROCEDURE
 JOINT OPERATIONS
 I. GENERAL PROVISIONS
 1. Definitions
            2. Statement and Billings
  3. Advances and Payments by Non-Operators
 A.
    
    Unless otherwise provided for in the agreement, the Operator may require the
Non-Operators to advance their share of estimated cash outlay for the succeeding
months operation within fifteen (15) days after receipt of the billing or by the
first day of the month for which the advance is required, whichever is later. Operator
shall adjust each monthly billing to reflect advances received from the Non-Operators.B.
    
    Each Non-Operator shall pay its proportion of all bills within fifteen (15)
days after receipt. If payment is not made within such time, the unpaid balance shall
bear interest monthly at the prime rate in effect at 
on the first day of the month in which delinquency occurs plus 1% or the maximum contract rate permitted by the applicable
usury laws in the state in which the Joint Property is located, whichever is the
lesser, plus attorneys fees, court costs, and other costs in connection with the
collection of unpaid amounts.
 4. Adjustments
  Ò




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5.
    
    Audits
 A.
    
    A Non-Operator, upon notice in writing to Operator and all other
Non-Operators, shall have the right to audit Operators accounts and records relating
to the Joint Account for any calendar year within the twenty-four (24) month period
following the end of such calendar year; provided, however, the making of an audit
shall not extend the time for the taking of written exception to and the adjustments
of accounts as provided for in Paragraph 4 of this Section I. Where there are two or
more Non-Operators, the Non-Operators shall make every reasonable effort to conduct a
joint audit in a manner which will result in a minimum of inconvenience to the
Operator. Operator shall bear no portion of the Non-Operators audit cost incurred
under this paragraph unless agreed to by the Operator. The audits shall not be
conducted more than once each year without prior approval of Operator, except upon the
resignation or removal of the Operator, and shall be made at the expense of those
Non-Operators approving such audit.B.
    
    The Operator shall reply in writing to an audit report within 180 days after
receipt of such report.
 6.
    
    Approval By Non-OperatorsWhere an approval or other agreement of the Parties or Non-Operators is expressly required
under other sections of this Accounting Procedure and if the agreement to which this
Accounting Procedure is attached contains no contrary provisions in regard thereto,
Operator shall notify all Non-Operators of the Operators proposal, and the agreement or
approval of a majority in interest of the Non-Operators shall be controlling on all
Non-Operators.
   1.
    
    Ecological and EnvironmentalCosts incurred for the benefit of the Joint Property as a result of governmental or
regulatory requirements to satisfy environmental considerations applicable to the Joint
Operations. Such costs may include surveys of an ecological or archaeological nature and
pollution control procedures as required by applicable laws and regulations2.
    
    Rentals and RoyaltiesLease rentals and royalties paid by Operator for the Joint Operations.3.
    
    Labor
 A.   (1)
    
    Salaries and wages of Operators field employees directly employed on
Joint Property in the conduct of Joint Operations.(2)
    
    Salaries of First Level Supervisors in the field.(3)
    
    Salaries and wages of Technical Employees directly employed on the
Joint Property if such charges are excluded from the overhead rates.(4)
    
    Salaries and wages of Technical Employees either temporarily or
permanently assigned to and directly employed in the operation of the Joint
Property if such charges are excluded from the overhead rates.B.
    
    Operators cost of holiday, vacation, sickness and disability benefits and
other customary allowances paid to employees whose salaries and wages are chargeable
to the Joint Account under Paragraph 3A of this Section II. Such costs under this
Paragraph 3B may be charged on a when and as paid basis or by percentage
assessment on the amount of salaries and wages chargeable to the Joint Account under
Paragraph 3A of this Section II. If percentage assessment is used, the rate shall be
based on the Operators cost experience.C.
    
    Expenditures or contributions made pursuant to assessments imposed by
governmental authority which are applicable to Operators costs chargeable to the
Joint Account under Paragraphs 3A and 3B of this Section II.D.
    
    Personal Expenses of those employees whose salaries and wages are chargeable
to the Joint Account under Paragraph 3A of this Section II.
 4.
    
    Employee BenefitsOperators current costs of established plans for employees group life insurance,
hospitalization, pension, retirement, stock purchase, thrift, bonus, and other benefit
plans of a like nature, applicable to Operators labor cost chargeable to the Joint Account
under Paragraphs 3A and 3B of this Section II shall be Operators actual cost not to exceed
the percent most recently
recommended by the Council of Petroleum Accountants Societies.
 - 2 -




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5.
    
    MaterialMaterial purchased or furnished by Operator for use on the Joint Property as provided under
Section IV. Only such Material shall be purchased for or transferred to the Joint Property
as may be required for immediate use and is reasonably practical and consistent with
efficient and economical operations. The accumulation of surplus stocks shall be avoided.6.
    
    TransportationTransportation of employees and Material necessary for the Joint Operations but subject to
the following limitations:
 A.
    
    If Material is moved to the Joint Property from the Operators warehouse or
other properties, no charge shall be made to the Joint Account for a distance greater
than the distance from the nearest reliable supply store where like material is
normally available or railway receiving point nearest the Joint Property unless agreed
to by the Parties.B.
    
    If surplus Material is moved to Operators warehouse or other storage point,
no charge shall be made to the Joint Account for a distance greater than the distance
to the nearest reliable supply store where like material is normally available, or
railway receiving point nearest the Joint Property unless agreed to by the Parties. No
charge shall be made to the Joint Account for moving Material to other properties
belonging to Operator, unless agreed to by the Parties.C.
    
    In the application of subparagraphs A and B above, the option to equalize or charge actual
trucking cost is available when the actual charge is $400 or less excluding accessorial charges.
The $400 will be adjusted to the amount most recently recommended by the Council of Petroleum
Accountants Societies.
 7.
    
    ServicesThe cost of contract services, equipment and utilities provided by outside sources, except
services excluded by Paragraph 10 of Section II and Paragraph i, ii, and iii, of Section
III. The cost of professional consultant services and contract services of technical
personnel directly engaged on the Joint Property if such charges are excluded from the
overhead rates. The cost of professional consultant services or contract services of
technical personnel not directly engaged on the Joint Property shall not be charged to the
Joint Account unless previously agreed to by the Parties.8.
    
    Equipment and Facilities Furnished By Operator
 A.
    
    Operator shall charge the Joint Account for use of Operator owned equipment
and facilities at rates commensurate with costs of ownership and operation. Such rates
shall include costs of maintenance, repairs, other operating expense, insurance,
taxes, depreciation, and interest on gross investment less accumulated depreciation
not to exceed ___percent ( ___%) per annum. Such rates shall not exceed
average commercial rates currently prevailing in the immediate area of the Joint
Property.
 See Attached Addenda
 B.
    
    In lieu of charges in paragraph 8A above, Operator may elect to use average
commercial rates prevailing in the immediate area of the Joint Property less 20%. For
automotive equipment, Operator may elect to use rates published by the Petroleum Motor
Transport Association.
 9.
    
    Damages and Losses to Joint PropertyAll costs or expenses necessary for the repair or replacement of Joint Property made
necessary because of damages or losses incurred by fire, flood, storm, theft, accident, or
other cause, except those resulting from Operators gross negligence or willful misconduct.
Operator shall furnish Non-Operator written notice of damages or losses incurred as soon as
practicable after a report thereof has been received by Operator.10.
    
    Legal ExpenseExpense of handling, investigating and settling litigation or claims, discharging of liens,
payment of judgements and amounts paid for settlement of claims incurred in or resulting
from operations under the agreement or necessary to protect or recover the Joint Property,
except that no charge for services of Operators legal staff or fees or expense of outside
attorneys shall be made unless previously agreed to by the Parties. All other legal expense
is considered to be covered by the overhead provisions of Section III unless otherwise
agreed to by the Parties, except as provided in Section I, Paragraph 3.11.
    
    TaxesAll taxes of every kind and nature assessed or levied upon or in connection with the Joint
Property, the operation thereof, or the production therefrom, and which taxes have been
paid by the Operator for the benefit of the Parties. If the ad valorem taxes are based in
whole or in part upon separate valuations of each partys working interest, then
notwithstanding anything to the contrary herein, charges to the Joint Account shall be made
and paid by the Parties hereto in accordance with the tax value generated by each partys
working interest.
 - 3 -




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12.
    
    InsuranceNet premiums paid for insurance required to be carried for the Joint Operations for the
protection of the Parties. In the event Joint Operations are conducted in a state in which
Operator may act as self-insurer for Workers Compensation and/or Employers Liability under
the respective states laws, Operator may, at its election, include the risk under its
self-insurance program and in that event, Operator shall include a charge at Operators
cost not to exceed manual rates.13.
    
    Abandonment and ReclamationCosts incurred for abandonment of the Joint Property, including costs required by
governmental or other regulatory authority.14.
    
    CommunicationsCost of acquiring, leasing, installing, operating, repairing and maintaining communication
systems, including radio and microwave facilities directly serving the Joint Property. In
the event communication facilities/systems serving the Joint Property are Operator owned,
charges to the Joint Account shall be made as provided in Paragraph 8 of this Section II.15.
    
    Other ExpendituresAny other expenditure not covered or dealt with in the foregoing provisions of this Section
II, or in Section III and which is of direct benefit to the Joint Property and is incurred
by the Operator in the necessary and proper conduct of the Joint Operations.
 III. OVERHEAD
 1.
    
    Overhead- Drilling and Producing Operations
 i.
    
    As compensation for administrative, supervision, office services and
warehousing costs, Operator shall charge drilling and producing operations on either:
      See Attached Addenda
(     ) Fixed Rate Basis, Paragraph 1A, or
(     ) Percentage Basis, Paragraph lB
 Unless otherwise agreed to by the Parties, such charge shall be in lieu of costs and
expenses of all offices and salaries or wages plus applicable burdens and expenses of all
personnel, except those directly chargeable under Paragraph 3A, Section II. The cost and
expense of services from outside sources in connection with matters of taxation, traffic,
accounting or matters before or involving governmental agencies shall be considered as
included in the overhead rates provided for in the above selected Paragraph of this Section
III unless such cost and expense are agreed to by the Parties as a direct charge to the
Joint Account.
 ii.
    
    The salaries, wages and Personal Expenses of Technical Employees and/or the
cost of professional consultant services and contract services of technical personnel
directly employed on the Joint Property:
      See Attached Addenda
(     ) shall be covered by the overhead rates,
(     ) or shall not be covered by the overhead rates.iii.
    
    The salaries, wages and Personal Expenses of Technical Employees and/or costs
of professional consultant services and contract services of technical personnel
either temporarily or permanently assigned to and directly employed in the operation
of the Joint Property:
     See Attached Addenda
(     ) shall be covered by the overhead rates, or
(     ) shall not be covered by the overhead rates.
 A.
    
    Overhead  Fixed Rate Basis
 (1)
    
    Operator shall charge the Joint Account at the following rates per
well per month:
See Attached Addenda
Drilling Well Rate $___
     (Prorated for less than a full month)
Producing Well Rate $___
 (2)
    
    Application of Overhead  Fixed Rate Basis shall be as follows:
 (a)
    
    Drilling Well Rate
 (1)
    
    Charges for drilling wells shall begin on the date
the well is spudded and terminate on the date the drilling rig, completion
rig, or other units used in completion of the well is released, whichever
 - 4 -




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is later, except that no charge shall be made during suspension of
drilling or completion operations for fifteen (15) or more consecutive
calendar days.
 (2)
    
    Charges for wells undergoing any type of workover or
recompletion for a period of five (5) consecutive work days or more shall
be made at the drilling well rate. Such charges shall be applied for the
period from date workover operations, with rig or other units used in
workover, commence through date of rig or other unit release, except that
no charge shall be made during suspension of operations for fifteen (15)
or more consecutive calendar days.
 (b)
    
    Producing Well Rates
 (1)
    
    An active well either produced or injected into for
any portion of the month shall be considered as a one-well charge for the
entire month.(2)
    
    Each active completion in a multi-completed well in
which production is not commingled down hole shall be considered as a
one-well charge providing each completion is considered a separate well by
the governing regulatory authority.(3)
    
    An inactive gas well shut in because of
overproduction or failure of purchaser to take the production shall be
considered as a one-well charge providing the gas well is directly
connected to a permanent sales outlet.(4)
    
    A one-well charge shall be made for the month in
which plugging and abandonment operations are completed on any well. This
one-well charge shall be made whether or not the well has produced except
when drilling well rate applies.(5)
    
    All other inactive wells (including but not limited
to inactive wells covered by unit allowable, lease allowable, transferred
allowable, etc.) shall not qualify for an overhead charge.
 (3)
    
    The well rates shall be adjusted as of the first day of April each
year following the effective date of the agreement to which this Accounting
Procedure is attached. The adjustment shall be computed by multiplying the rate
currently in use by the percentage increase or decrease in the average weekly
earnings of Crude Petroleum and Gas Production Workers for the last calendar year
compared to the calendar year preceding as shown by the index of average weekly
earnings of Crude Petroleum and Gas Production Workers as published by the United
States Department of Labor, Bureau of Labor Statistics, or the equivalent
Canadian, index as published by Statistics Canada, as applicable. The adjusted
rates shall be the rates currently in use, plus or minus the computed adjustment.
 B.
    
    Overhead  Percentage Basis
 (1)
    
    Operator shall charge the Joint Account at the following rates:
 See Attached Addenda(a)
    
    Development___Percent ( ___%) of the cost of development of the Joint
Property exclusive of costs provided under Paragraph 10 of Section II and all
salvage credits.(b)
    
    Operating___Percent ( ___%) of the cost of operating the Joint Property
exclusive of costs provided under Paragraphs 2 and 10 of Section II, all salvage
credits, the value of injected substances purchased for secondary recovery and
all taxes and assessments which are levied, assessed and paid upon the mineral
interest in and to the Joint Property.
 (2)
    
    Application of Overhead   Percentage Basis shall be as follows:For the purpose of determining charges on a percentage basis under Paragraph lB of
this Section III, development shall include all costs in connection with drilling,
redrilling, deepening, or any remedial operations on any or all wells involving the
use of drilling rig and crew capable of drilling to the producing interval on the
Joint Property; also, preliminary expenditures necessary in preparation for
drilling and expenditures incurred in abandoning when the well is not completed as
a producer, and original cost of construction or installation of fixed assets, the
expansion of fixed assets and any other project clearly discernible as a fixed
asset, except Major Construction as defined in Paragraph 2 of this Section III. All
other costs shall be considered as operating.
 2.
    
    Overhead  Major ConstructionTo compensate Operator for overhead costs incurred in the construction and installation of
fixed assets, the expansion of fixed assets, and any other project clearly discernible as a
fixed asset required for the development and operation of the Joint Property, Operator shall
either negotiate a rate prior to the beginning of construction, or shall charge the Joint
 - 5 -




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Account for overhead based on the following rates for any Major Construction project in
excess of $ ___:
 See Attached Addenda
 A.
    
    ___% of first $100,000 or total cost if less, plusB.
    
    ___% of costs in excess of $100,000 but less than $1,000,000, plusC.
    
    ___% of costs in excess of $1,000,000.
 Total cost shall mean the gross cost of any one project. For the purpose of this paragraph, the
component parts of a single project shall not be treated separately and the cost of drilling
and workover wells and artificial lift equipment shall be excluded.
 3.
    
    Catastrophe OverheadTo compensate Operator for overhead costs incurred in the event of expenditures resulting from
a single occurrence due to oil spill, blowout, explosion, fire, storm, hurricane, or other
catastrophes as agreed to by the Parties, which are necessary to restore the Joint Property to
the equivalent condition that existed prior to the event causing the expenditures, Operator
shall either negotiate a rate prior to charging the Joint Account or shall charge the Joint
Account for overhead based on the following rates:
 A.
    
    ___% of total costs through $100,000; plusSee Attached AddendaB.
    
    ___% of total costs in excess of $100,000 but less than $1,000,000; plusSee Attached AddendaC.
    
    ___% of total costs in excess of $1,000,000.See Attached Addenda
 Expenditures subject to the overheads above will not be reduced by insurance recoveries, and no
other overhead provisions of this Section III shall apply.4.
    
    Amendment of RatesThe overhead rates provided for in this Section III may be amended from time to time only by
mutual agreement between the Parties hereto if, in practice, the rates are found to be
insufficient or excessive.
 IV. PRICING OF JOINT ACCOUNT MATERIAL PURCHASES, TRANSFERS AND DISPOSITIONS
  1.
    
    PurchasesMaterial purchased shall be charged at the price paid by Operator after deduction of all
discounts received. In case of Material found to be defective or returned to vendor for any
other reasons, credit shall be passed to the Joint Account when adjustment has been received by
the Operator.2.
    
    Transfers and DispositionsMaterial furnished to the Joint Property and Material transferred from the Joint Property or
disposed of by the Operator, unless otherwise agreed to by the Parties, shall be priced on the
following basis exclusive of cash discounts:
 A.
    
    New Material (Condition A)
 (1)
    
    Tubular Goods Other than Line Pipe
 (a)
    
    Tubular goods, sized 2% inches OD and larger, except line
pipe, shall be priced at Eastern mill published carload base prices effective
as of date of movement plus transportation cost using the 80,000 pound carload
weight basis to the railway receiving point nearest the Joint Property for
which published rail rates for tubular goods exist. If the 80,000 pound rail
rate is not offered, the 70,000 pound or 90,000 pound rail rate may be used.
Freight charges for tubing will be calculated from Lorain, Ohio and casing
from Youngstown, Ohio.(b)
    
    For grades which are special to one mill only, prices shall
be computed at the mill base of that mill plus transportation cost from that
mill to the railway receiving point nearest the Joint Property as provided
above in Paragraph 2.A.(1)(a). For transportation cost from points other than
Eastern mills, the 30,000
 - 6 -




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pound Oil Field Haulers Association interstate truck rate shall be used.(c)
    
    Special end finish tubular goods shall be priced at the
lowest published out-of-stock price, f.o.b. Houston, Texas, plus
transportation cost, using Oil Field Haulers Association interstate 30,000
pound truck rate, to the railway receiving point nearest the Joint Property.(d)
    
    Macaroni tubing (size less than 2% inch OD) shall be priced
at the lowest published out-of-stock prices f.o.b. the supplier plus
transportation costs, using the Oil Field Haulers Association interstate truck
rate per weight of tubing transferred, to the railway receiving point nearest
the Joint Property.
 (2)
    
    Line Pipe
 (a)
    
    Line pipe movements (except size 24 inch OD and larger with
walls 3/4 inch and over) 30,000 pounds or more shall be priced under
provisions of tubular goods pricing in Paragraph A.(1)(a) as provided above.
Freight charges shall be calculated from Lorain, Ohio.(b)
    
    Line pipe movements (except size 24 inch OD and larger with
walls 3/4 inch and over) less than 30,000 pounds shall be priced at Eastern
mill published carload base prices effective as of date of shipment, plus 20
percent, plus transportation costs based on freight rates as set forth under
provisions of tubular goods pricing in Para-graph A.(1)(a) as provided above.
Freight charges shall be calculated from Lorain, Ohio.(c)
    
    Line pipe 24 inch OD and over and 3/4 inch wall and larger
shall be priced f.o.b. the point of manufacture at current new published
prices plus transportation cost to the railway receiving point nearest the
Joint Property.(d)
    
    Line pipe, including fabricated line pipe, drive pipe and
conduit not listed on published price lists shall be priced at quoted prices
plus freight to the railway receiving point nearest the Joint Property or at
prices agreed to by the Parties.
 (3)
    
    Other Material shall be priced at the current new price, in effect at
date of movement, as listed by a reliable supply store nearest the Joint Property,
or point of manufacture, plus transportation costs, if applicable, to the railway
receiving point nearest the Joint Property.(4)
    
    Unused new Material, except tubular goods, moved from the Joint
Property shall be priced at the current new price, in effect on date of movement,
as listed by a reliable supply store nearest the Joint Property, or point of
manufacture, plus transportation costs, if applicable, to the railway receiving
point nearest the Joint Property. Unused new tubulars will be priced as provided
above in Paragraph 2.A.(1) and (2).B.
    
    Good Used Material (Condition B)Material in sound and serviceable condition and suitable for reuse without
reconditioning:
 (1)
    
    Material moved to the Joint PropertyAt seventy-five percent (75%) of current new price, as determined by Paragraph A.(2)
    
    Material used on and moved from the Joint Property
 (a)
    
    At seventy-five percent (75%) of current new price,
as determined by Paragraph A, if Material was originally charged to the
Joint Account as new Material or(b)
    
    At sixty-five percent (65%) of current new price, as
determined by Paragraph A, if Material was originally charged to the Joint
Account as used Material.
 (3)
    
    Material not used on and moved from the Joint PropertyAt seventy-five percent (75%) of current new price as determined by Paragraph A.
 The cost of reconditioning, if any, shall be absorbed by the transferring
property.
 C.
    
    Other Used Material
 (1)
    
    Condition CMaterial which is not in sound and serviceable condition and not suitable for
its original function until after reconditioning shall be priced at fifty
percent (50%) of current new price as determined by Paragraph A. The cost of
reconditioning shall be charged to the receiving property, provided Condition C
value plus cost of reconditioning does not exceed Condition B value.
 - 7 -




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##### 



(2)
    
    Condition DMaterial, excluding junk, no longer suitable for its original purpose, but
usable for some other purpose shall be priced on a basis commensurate with its
use. Operator may dispose of Condition D Material under procedures normally
used by Operator without prior approval of Non-Operators.
 (a)
    
    Casing, tubing, or drill pipe used as line pipe shall
be priced as Grade A and B seamless line pipe of comparable size and
weight. Used casing, tubing or drill pipe utilized as line pipe shall be
priced at used line pipe prices.(b)
    
    Casing, tubing or drill pipe used as higher pressure
service lines than standard line pipe, e.g. power oil lines, shall be
priced under normal pricing procedures for casing, tubing, or drill pipe.
Upset tubular goods shall be priced on a non upset basis.
 (3)
    
    Condition EJunk shall be priced at prevailing prices. Operator may dispose of Condition E
Material under procedures normally utilized by Operator without prior approval
of Non-Operators.
 D.
    
    Obsolete MaterialMaterial which is serviceable and usable for its original function but condition and/or
value of such Material is not equivalent to that which would justify a price as provided
above may be specially priced as agreed to by the Parties. Such price should result in the
Joint Account being charged with the value of the service rendered by such Material.E.
    
    Pricing Conditions
 (1)
    
    Loading or unloading costs may be charged to the Joint Account at the
rate of twenty-five cents ($0.25) per hundred weight on all tubular goods
movements, in lieu of actual loading or unloading costs sustained at the stocking
point. The above rate shall be adjusted as of the first day of April each year
following January 1,1985 by the same percentage increase or decrease used to
adjust overhead rates in Section III, Paragraph 1.A(3). Each year, the rate
calculated shall be rounded to the nearest cent and shall be the rate in effect
until the first day of April next year. Such rate shall be published each year by
the Council of Petroleum Accountants Societies.(2)
    
    Material involving erection costs shall be charged at applicable
percentage of the current knocked-down price of new Material.
 3.
    
    Premium PricesWhenever Material is not readily obtainable at published or listed prices because of national
emergencies, strikes or other unusual causes over which the Operator has no control, the
Operator may charge the Joint Account for the required Material at the Operators actual cost
incurred in providing such Material, in making it suitable for use, and in moving it to the
Joint Property; provided notice in writing is furnished to Non-Operators of the proposed charge
prior to billing Non-Operators for such Material. Each Non-Operator shall have the right, by so
electing and notifying Operator within ten days after receiving notice from Operator, to
furnish in kind all or part of his share of such Material suitable for use and acceptable to
Operator.4.
    
    Warranty of Material Furnished By OperatorOperator does not warrant the Material furnished. In case of defective Material, credit shall
not be passed to the Joint Account until adjustment has been received by Operator from the
manufacturers or their agents.
 V. INVENTORIES
  1.
    
    Periodic Inventories, Notice and RepresentationAt reasonable intervals, inventories shall be taken by Operator of the Joint Account
Controllable Material. Written notice of intention to take inventory shall be given by Operator
at least thirty (30) days before any inventory is to begin so that Non-Operators may be
represented when any inventory is taken. Failure of Non-Operators to be represented at an
inventory shall bind Non-Operators to accept the inventory taken by Operator.2.
    
    Reconciliation and Adjustment of InventoriesAdjustments to the Joint Account resulting from the reconciliation of a physical inventory
shall be made within six months following the taking of the inventory. Inventory adjustments
shall be made by Operator to the Joint Account for
 - 8 -




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##### 



overages and shortages, but, Operator shall be held accountable only for shortages due to lack
of reasonable diligence.3.
    
    Special InventoriesSpecial inventories may be taken whenever there is any sale, change of interest, or change of
Operator in the Joint Property. It shall be the duty of the party selling to notify all other
Parties as quickly as possible after the transfer of interest takes place. In such cases, both
the seller and the purchaser shall be governed by such inventory. In cases involving a change
of Operator, all Parties shall be governed by such inventory.4.
    
    Expense of Conducting Inventories
 A.
    
    The expense of conducting periodic inventories shall not be charged to the Joint
Account unless agreed to by the Parties.B.
    
    The expense of conducting special inventories shall be charged to the Parties
requesting such inventories, except inventories required due to change of Operator shall
be charged to the Joint Account.
 - 9 -




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##### 



Addendum  1
 October 1,
2005
  Belden & Blake Corporation  Appalachian Basin Region Properties located in the States of Ohio,
Pennsylvania, and New York
 II.8.A
    
    
    10
    %III.1.i
    
    
    x
    
    
    Fixed Rate Basis___
    
    
    Percentage Rate BasisIII.1.ii
    
    
    ___
    
    
    shall be covered by the overhead ratesx
    
    
    shall not be covered by the overhead ratesIII.1.iii
    
    
    ___
    
    
    shall be covered by the overhead ratesx
    
    
    shall not be covered by the overhead ratesIII.1.A(1)
    
    
    Drilling Well Rate: $10,000Producing Well Rate: $132III.1.B(1)(a)
    
    
    N/A
    %
    
    Note: Utilizing Fixed Rate not Percentage Rate BasisIII.1.B(1)(b)
    
    
    N/A
    %III.2-A
    
    
    10
    %III.2-B
    
    
    10
    %III.2-C
    
    
    10
    %III.3-A
    
    
    N/A
    %
    
    Note: Covered by WI ownership well insurance.III.3-B
    
    
    N/A
    %III.3-C
    
    
    N/A
    %




---



##### 



Addendum  1
 October 1,
2005
  Belden & Blake Corporation  Michigan Basin Region Properties located in the State of Michigan
 II.8.A
    
    
    10
    %III.1.i
    
    
    x
    
    
    Fixed Rate Basis___
    
    
    Percentage Rate BasisIII.1.ii
    
    
    ___
    
    
    shall be covered by the overhead ratesx
    
    
    shall not be covered by the overhead ratesIII.1.iii
    
    
    ___
    
    
    shall be covered by the overhead ratesx
    
    
    shall not be covered by the overhead ratesIII.1.A(1)
    
    
    Drilling Well Rate: $10,000Producing Well Rate: $250III.1.B(1)(a)
    
    
    N/A
    %
    
    Note:Utilizing Fixed Rate not Percentage Rate BasisIII.1.B(1)(b)
    
    
    N/A
    %III.2-A
    
    
    10
    %III.2-B
    
    
    10
    %III.2-C
    
    
    10
    %III.3-A
    
    
    N/A
    %
    
    Note: Covered by WI ownership well insurance.III.3-B
    
    
    N/A
    %III.3-C
    
    
    N/A
    %