Exhibit 10.1


    

      


      


      EXHIBIT
        10.1

      


      


      


      


      


      


      


      DRILLING
        AND OPERATING AGREEMENT

      FOR

      ATLAS
        AMERICA PUBLIC #15-2006(B) L.P.

      


      Dated
        May 9, 2006

      


      


      


      


      


      


      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      INDEX

      
        	
                Section

              	 	
                Page
                  #

              
	
                1.

              	
                Assignment
                  of Well Locations; Representations and Indemnification Associated
                  with the
                  

              	 
	 	
                Assignment
                  of the Lease; Designation of Additional Well Locations; Outside
                  Activities
                  Are

              	 
	 	
                Not
                  Restricted

              	
                3

              
	 	 	 
	
                2.

              	
                Drilling
                  of Wells; Timing; Depth; Interest of Developer; Right to Substitute
                  Well
                  Locations

              	
                4

              
	 	 	 
	
                3.

              	
                Operator
                  - Responsibilities in General; Covenants; Term

              	
                6

              
	 	 	 
	
                4.

              	
                Operator’s
                  Charges for Drilling and Completing Wells; Payment; Completion
                  Determination;

              	 
	 	
                Dry
                  Hole Determination; Excess Funds and Cost Overruns-Intangible Drilling
                  Costs; Excess

              	 
	 	
                Funds
                  and Cost Overruns-Tangible Costs

              	
                7

              
	 	 	 
	
                5.

              	
                Title
                  Examination of Well Locations; Developer’s Acceptance and Liability;
                  Additional Well Locations

              	
                11

              
	 	 	 
	
                6.

              	
                Operations
                  Subsequent to Completion of the Wells; Fee Adjustments; Extraordinary
                  Costs;

              	 
	 	
                Pipelines;
                  Price Determinations; Plugging and Abandonment

              	
                11

              
	 	 	 
	
                7.

              	
                Billing
                  and Payment Procedure with Respect to Operation of Wells; Disbursements;
                  Separate

              	 
	 	
                Account
                  for Sale Proceeds; Records and Reports; Additional
                  Information

              	
                14

              
	 	 	 
	
                8.

              	
                Operator’s
                  Lien; Right to Collect from Oil or Gas Purchaser

              	
                15

              
	 	 	 
	
                9.

              	
                Successors
                  and Assigns, Transfers; Appointment of Agent

              	
                16

              
	 	 	 
	
                10.

              	
                Operator’s
                  Insurance; Subcontractors’’ Insurance; Operation’s
                  Liability

              	
                17

              
	 	 	 
	
                11.

              	
                Internal
                  Revenue Code Election; Relationship of Parties; Right to Take Production
                  in Kind

              	
                18

              
	 	 	 
	
                12.

              	
                Effect
                  of Force Majeure; Definition of Force Majeure; Limitation

              	
                19

              
	 	 	 
	
                13.

              	
                Term

              	
                20

              
	 	 	 
	
                14.

              	
                Governing
                  Law; Invalidity

              	
                20

              
	 	 	 
	
                15.

              	
                Integration;
                  Written Amendment

              	
                20

              
	 	 	 
	
                16.

              	
                Waiver
                  of Default or Breach

              	
                20

              
	 	 	 
	
                17.

              	
                Notices

              	
                21

              
	 	 	 
	
                18.

              	
                Interpretation

              	
                21

              
	 	 	 
	
                19.

              	
                Counterparts

              	
                21

              
	 	 	 
	 	
                Signature
                  Page

              	
                22

              
	 	 	 
	 	
                Exhibit
                  A Description
                  of Leases and Initial Well Locations

              	
                23

              
	 	
                Exhibits
                  A __ through A__ Maps
                  of Initial Well Locations 

              	 
	 	
                Exhibit
                  B Form
                  of Assignment 

              	 
	 	
                Exhibit
                  C Form
                  of Addendum 

              	 


      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      


       

      DRILLING
        AND OPERATING AGREEMENT

       

      THIS
        AGREEMENT made this 9th.
        day of
        May, 2006, by and between ATLAS RESOURCES, LLC, a Pennsylvania limited liability
        company (hereinafter referred to as “Atlas” or “Operator”),

      and

       

      ATLAS
        AMERICA PUBLIC #15-2006(B) L.P., a Delaware limited partnership, (hereinafter
        referred to as the “Developer”).

       

      WITNESSETH
        THAT:

       

      WHEREAS,
        the Operator, by virtue of the Oil and Gas Leases (the “Leases”) described on
        Exhibit A attached to and made a part of this Agreement, has certain rights
        to
        develop the nine (9) initial well locations (the “Initial Well Locations”)
        identified on the maps attached to and made a part of this Agreement as Exhibits
        A-l through A-9;

       

      WHEREAS,
        the Developer, subject to the terms and conditions of this Agreement, desires
        to
        acquire certain of the Operator’s rights to develop the Initial Well Locations
        and to provide for the development on the terms and conditions set forth
        in this
        Agreement of additional well locations (“Additional Well Locations”) which the
        parties may from time to time designate; and

       

      WHEREAS,
        the Operator is in the oil and gas exploration and development business,
        and the
        Developer desires that Operator, as its independent contractor, perform certain
        services in connection with its efforts to develop the aforesaid Initial
        and
        Additional Well Locations (collectively the “Well Locations”) and to operate the
        wells completed on the Well Locations, on the terms and conditions set forth
        in
        this Agreement;

       

      NOW
        THEREFORE, in consideration of the mutual covenants herein contained and
        subject
        to the terms and conditions hereinafter set forth, the parties hereto, intending
        to be legally bound, hereby agree as follows:

       

      
        	
                1.

              	
                Assignment
                  of Well Locations; Representations and Indemnification Associated
                  with the
                  Assignment of the Lease; Designation of Additional Well Locations;
                  Outside
                  Activities Are Not
                  Restricted.

              


      

       

      	(a)
                	
              Assignment
                of Well Locations.
                The Operator shall execute an assignment of an undivided percentage
                of
                Working Interest in the Well Location acreage for each well to the
                Developer as shown on Exhibit A attached hereto, which assignment
                shall be
                limited to a depth from the surface to the deepest depth penetrated
                at the
                cessation of drilling operations.

            


       

      The
        assignment shall be substantially in the form of Exhibit B attached to and
        made
        a part of this Agreement. The amount of acreage included in each Initial
        Well
        Location and the configuration of the Initial Well Location are indicated
        on the
        maps attached as Exhibits A-l through A-9. The amount of acreage included
        in
        each Additional Well Location and the configuration of the Additional Well
        Location shall be indicated on the maps to be attached as exhibits to the
        applicable addendum to this Agreement as provided in sub-section (c)
        below.

       

      
        	 	
                (b)

              	
                Representations
                  and Indemnification Associated with the Assignment of the
                  Lease.
                  The Operator represents and warrants to the Developer
                  that:

              


      

       

      	(i)
                	
              the
                Operator is the lawful owner of the Lease and rights and interest
                under
                the Lease and of the personal property on the Lease or used in connection
                with the Lease; 

            


       

      	(ii)
                	
              the
                Operator has good right and authority to sell and convey the rights,
                interest, and property;

            


       


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      


      


       

      	(iii)
                	
              the
                rights, interest, and property are free and clear from all liens
                and
                encumbrances; and 

            


       

      	(iv)
                	
              all
                rentals and royalties due and payable under the Lease have been duly
                paid.
                

            


       

      These
        representations and warranties shall also be included in each recorded
        assignment of the acreage included in each Initial Well Location and Additional
        Well Location designated pursuant to sub-section (c) below, substantially
        in the
        manner set forth in Exhibit B. 

       

      The
        Operator agrees to indemnify, protect and hold the Developer and its successors
        and assigns harmless from and against all costs (including but not limited
        to
        reasonable attorneys’ fees), liabilities, claims, penalties, losses, suits,
        actions, causes of action, judgments or decrees resulting from the breach
        of any
        of the above representations and warranties. It is understood and agreed
        that,
        except as specifically set forth above, the Operator makes no warranty or
        representation, express or implied, as to its title or the title of the lessors
        in and to the lands or oil and gas interests covered by said
        Leases.

       

      
        	 	
                (c)

              	
                Designation
                  of Additional Well Locations.
                  If
                  the parties hereto desire to designate Additional Well Locations
                  to be
                  developed in accordance with the terms and conditions of this Agreement,
                  then the parties shall execute an addendum substantially in the
                  form of
                  Exhibit C attached to and made a part of this Agreement (Exhibit
“C”)
                  specifying:

              


      

       

      	(i)
                	
              the
                undivided percentage of Working Interest and the Oil and Gas Leases
                to be
                included as Leases under this Agreement;

            


       

      	(ii)
                	
              the
                amount and configuration of acreage included in each Additional Well
                Location on maps attached as exhibits to the addendum;
                and

            


       

      	(iii)
                	
              their
                agreement that the Additional Well Locations shall be developed in
                accordance with the terms and conditions of this
                Agreement.

            


       

      
        	 	
                (d)

              	
                Outside
                  Activities Are Not Restricted.
                  It
                  is understood and agreed that the assignment of rights under the
                  Leases
                  and the oil and gas development activities contemplated by this
                  Agreement
                  relate only to the Initial Well Locations and the Additional Well
                  Locations. Nothing contained in this Agreement shall be interpreted
                  to
                  restrict in any manner the right of each of the parties to conduct
                  without
                  the participation of the other party any additional activities
                  relating to
                  exploration, development, drilling, production, or delivery of
                  oil and gas
                  on lands adjacent to or in the immediate vicinity of the Well Locations
                  or
                  elsewhere.

              


      

       

      
        	
                2.

              	
                Drilling
                  of Wells; Timing; Depth; Interest of Developer; Right to Substitute
                  Well
                  Locations.

              


      

       

      
        	 	
                (a)

              	
                Drilling
                  of Wells.
                  Operator, as Developer’s independent contractor, agrees to drill, complete
                  (or plug) and operate nine (9) oil and gas wells on the nine (9)
                  Initial
                  Well Locations in accordance with the terms and conditions of this
                  Agreement. Developer, as a minimum commitment, agrees to participate
                  in
                  and pay the Operator’s charges for drilling and completing the wells and
                  any extra costs pursuant to Section 4 in proportion to the share
                  of the
                  Working Interest owned by the Developer in the wells with respect
                  to all
                  initial wells. It is understood and agreed that, subject to sub-section
                  (e) below, Developer does not reserve the right to decline participation
                  in the drilling of any of the initial wells to be drilled under
                  this
                  Agreement.

              


      

       


      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      


      


       

      
        	 	
                (b)

              	
                Timing.
                  Operator shall begin drilling the first well within thirty (30)
                  days after
                  the date of this Agreement, and shall begin drilling each of the
                  other
                  initial wells for which payment is made pursuant to Section 4(b)
                  of this
                  Agreement before the close of the 90th
                  day after the close of the calendar year in which this Agreement
                  is
                  entered into by Operator and the Developer. Subject to the foregoing
                  time
                  limits, Operator shall determine the timing of and the order of
                  drilling
                  the Initial Well Locations.

              


      

       

      
        	 	
                (c)

              	
                Depth.
                  All of the wells to be drilled under this Agreement shall be:
                  

              


      

       

      	(i)  	
              drilled
                and completed (or plugged) in accordance with the generally accepted
                and
                customary oil and gas field practices and techniques then prevailing
                in
                the geographical area of the Well Locations; and
                

            


       

      	(ii)  	
              drilled
                to a depth sufficient to test thoroughly the objective formation
                or the
                deepest assigned depth, whichever is
                less.

            


       

      
        	 	
                (d)

              	
                Interest
                  of Developer.
                  Except as otherwise provided in this Agreement, all costs, expenses,
                  and
                  liabilities incurred in connection with the drilling and other
                  operations
                  and activities contemplated by this Agreement shall be borne and
                  paid, and
                  all wells, gathering lines of up to approximately 2,500 feet on
                  the Well
                  Location in connection with a natural gas well, equipment, materials,
                  and
                  facilities acquired, constructed or installed under this Agreement
                  shall
                  be owned, by the Developer in proportion to the share of the Working
                  Interest owned by the Developer in the wells. Subject to the payment
                  of
                  lessor’s royalties and other royalties and overriding royalties, if any,
                  production of oil and gas from the wells to be drilled under this
                  Agreement shall be owned by the Developer in proportion to the
                  share of
                  the Working Interest owned by the Developer in the
                  wells.

              


      

       

      
        	 	
                (e)

              	
                Right
                  to Substitute Well Locations.
                  Notwithstanding the provisions of sub-section (a) above, if the
                  Operator
                  or Developer determines in good faith, with respect to any Well
                  Location,
                  before operations begin under this Agreement on the Well Location,
                  that it
                  would not be in the best interest of the parties to drill a well
                  on the
                  Well Location, then the party making the determination shall notify
                  the
                  other party of its determination and its basis for its determination
                  and,
                  unless otherwise instructed by Developer, the well shall not be
                  drilled.
                  This determination may be based on:

              


      

       

      	(i)
                	
              the
                production or failure of production of any other wells which may
                have been
                recently drilled in the immediate area of the Well Location;
                

            


       

      	(ii)
                	
              newly
                discovered title defects; or 

            


       

      	(iii)
                	
              any
                other evidence with respect to the Well Location as may be obtained.
                

            


       

      If
        the
        well is not drilled, then Operator shall promptly propose a new well location
        (including all information for the Well Location as Developer may reasonably
        request) to be substituted for the original Well Location. Developer shall
        then
        have seven (7) business days to either reject or accept the proposed new
        well
        location. If the new well location is rejected, then Operator shall promptly
        propose another substitute well location pursuant to the provisions of this
        sub-section. 

       

      Once
        the
        Developer accepts a substitute well location or does not reject it within
        said
        seven (7) day period, this Agreement shall terminate as to the original Well
        Location and the substitute well location shall become subject to the terms
        and
        conditions of this Agreement.

       


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      


      


       

      3. Operator
        - Responsibilities in General; Covenants; Term.

       

      
        	 	
                (a)

              	
                Operator
                  - Responsibilities in General.
                  Atlas shall be the Operator of the wells and Well Locations subject
                  to
                  this Agreement and, as the Developer’s independent contractor, shall, in
                  addition to its other obligations under this Agreement do the following:
                  

              


      

       

      	(i)
                	
              arrange
                for drilling and completing the wells and, if a gas well, installing
                the
                necessary gas gathering line systems and connection facilities;
                

            


       

      	(ii)
                	
              make
                the technical decisions required in drilling, testing, completing,
                and
                operating the wells; 

            


       

      	(iii)
                	
              manage
                and conduct all field operations in connection with the drilling,
                testing,
                completing, equipping, operating, and producing the
                wells;

            


       

      	(iv)
                	
              maintain
                all wells, equipment, gathering lines if a gas well, and facilities
                in
                good working order during their useful lives; and
                

            


       

      	(v)
                	
              perform
                the necessary administrative and accounting functions.
                

            


       

      In
        performing the work contemplated by this Agreement, Operator is an independent
        contractor with authority to control and direct the performance of the details
        of the work.

       

      
        	 	
                (b)

              	
                Covenants.
                  Operator covenants and agrees that under this
                  Agreement:

              


      

       

      	(i)
                	
              it
                shall perform and carry on (or cause to be performed and carried
                on) its
                duties and obligations in a good, prudent, diligent, and workmanlike
                manner using technically sound, acceptable oil and gas field practices
                then prevailing in the geographical area of the Well Locations;
                

            


       

      	(ii)
                	
              all
                drilling and other operations conducted by, for and under the control
                of
                Operator shall conform in all respects to federal, state and local
                laws,
                statutes, ordinances, regulations, and requirements;
                

            


       

      	(iii)
                	
              unless
                otherwise agreed in writing by the Developer, all work performed
                pursuant
                to a written estimate shall conform to the technical specifications
                set
                forth in the written estimate and all equipment and materials installed
                or
                incorporated in the wells and facilities shall be new or used and
                of good
                quality; 

            


       

      	(iv)
                	
              in
                the course of conducting operations, it shall comply with all terms
                and
                conditions, other than any minimum drilling commitments, of the Leases
                (and any related assignments, amendments, subleases, modifications
                and
                supplements);

            


       

      	(v)
                	
              it
                shall keep the Well Locations and all wells, equipment and facilities
                located on the Well Locations free and clear of all labor, materials
                and
                other liens or encumbrances arising out of operations;
                

            


       

      	(vi)
                	
              it
                shall file all reports and obtain all permits and bonds required
                to be
                filed with or obtained from any governmental authority or agency
                in
                connection with the drilling or other operations and activities;
                and
                

            


       


      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      


      


       

      	(vii)
                	
              it
                will provide competent and experienced personnel to supervise drilling,
                completing (or plugging), and operating the wells and use the services
                of
                competent and experienced service companies to provide any third
                party
                services necessary or appropriate in order to perform its
                duties.

            


       

      
        	 	
                (c)

              	
                Term.
                  Atlas shall serve as Operator under this Agreement until the earliest
                  of:
                  

              


      

       

      	(i)
                	
              the
                termination of this Agreement pursuant to Section 13;
                

            


       

      	(ii)
                	
              the
                termination of Atlas as Operator by the Developer at any time in
                the
                Developer’s discretion, with or without cause on sixty (60) days’ advance
                written notice to the Operator; or 

            


       

      	(iii)
                	
              the
                resignation of Atlas as Operator under this Agreement which may occur
                on
                ninety (90) days’ written notice to the Developer at any time after five
                (5) years from the date of this Agreement, it being expressly understood
                and agreed that Atlas shall have no right to resign as Operator before
                the
                expiration of the five-year period. 

            


       

      Any
        successor Operator shall be selected by the Developer. Nothing contained
        in this
        sub-section shall relieve or release Atlas or the Developer from any liability
        or obligation under this Agreement which accrued or occurred before Atlas’
removal or resignation as Operator under this Agreement. On any change in
        Operator under this provision, the then present Operator shall deliver to
        the
        successor Operator possession of all records, equipment, materials and
        appurtenances used or obtained for use in connection with operations under
        this
        Agreement and owned by the Developer.

       

      
        	
                4.

              	
                Operator’s
                  Charges for Drilling and Completing Wells; Payment; Completion
                  Determination; Dry Hole Determination; Excess Funds and Cost
                  Overruns-Intangible Drilling Costs; Excess Funds and Cost
                  Overruns-Tangible Costs.

              


      

       

      
        	 	
                (a)

              	
                Operator’s
                  Charges for Drilling and Completing Wells.
                  Each oil and gas well which is drilled and completed under this
                  Agreement
                  shall be drilled and completed on a Cost basis plus a nonaccountable,
                  fixed payment reimbursement of $15,000 per well for Developer’s
                  Participants’ share of Operator’s general and administrative overhead plus
                  15% of Cost and the nonaccountable fixed payment reimbursement
                  of $15,000
                  per well for Developer’s Participants’ share of Operator’s general and
                  administrative overhead. “Cost,” when used with respect to services, shall
                  mean the reasonable, necessary, and actual expenses incurred by
                  Operator
                  on behalf of Developer in providing the services under this Agreement,
                  determined in accordance with generally accepted accounting principles.
                  As
                  used elsewhere, “Cost” shall mean the price paid by Operator in an
                  arm’s-length transaction. 

              


      

       

      The
        estimated price
        for
        each of the wells shall be set forth in an Authority for Expenditure (“AFE”)
        which shall be attached to this Agreement as an Exhibit, and shall cover
        all
        ordinary costs which may be incurred in drilling and completing each well.
        This
        includes without limitation, site preparation, permits and bonds, roadways,
        surface damages, power at the site, water, Operator’s overhead and profit,
        rights-of-way, drilling rigs, equipment and materials, costs of title
        examinations, logging, cementing, fracturing, casing, meters (other than
        utility
        purchase meters), connection facilities, salt water collection tanks,
        separators, siphon string, rabbit, tubing, an average of 2,500 feet of gathering
        line per well in connection with a gas well, and geological and engineering
        services. 

       


      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      


      


       

      
        	 	
                (b)

              	
                Payment.
                  The Developer shall pay to Operator, in proportion to the share
                  of the
                  Working Interest owned by the Developer in the wells, one hundred
                  percent
                  (100%) of the estimated Intangible Drilling Costs and Tangible
                  Costs, as
                  those terms are defined below, for drilling and completing all
                  initial
                  wells on execution of this Agreement. Notwithstanding, Atlas’ payments for
                  its share of the estimated Tangible Costs, as that term is defined
                  below,
                  of drilling and completing all initial wells as the Managing General
                  Partner of the Developer shall be paid within five (5) business
                  days of
                  notice from Operator that the costs have been incurred. The Developer’s
                  payment shall be nonrefundable in all events in order to enable
                  Operator
                  to do the following:

              


      

       

      	(i)
                	
              commence
                site preparation for the initial wells;

            


       

      	(ii)
                	
              obtain
                suitable subcontractors for drilling and completing the wells at
                currently
                prevailing prices; and 

            


       

      	(iii)
                	
              insure
                the availability of equipment and materials.


            


       

      For
        purposes of this Agreement, “Intangible Drilling Costs” shall mean those
        expenditures associated with property acquisition and the drilling and
        completion of oil and gas wells that under present law are generally accepted
        as
        fully deductible currently for federal income tax purposes. This includes:
        

       

      	(i)  	
              all
                expenditures made with respect to any well before the establishment
                of
                production in commercial quantities for wages, fuel, repairs, hauling,
                supplies and other costs and expenses incident to and necessary for
                the
                drilling of the well and the preparation of the well for the production
                of
                oil or gas, that are currently deductible pursuant to Section 263(c)
                of
                the Internal Revenue Code of 1986, as amended (the “Code”), and Treasury
                Reg. Section 1.612-4, which are generally termed "intangible drilling
                and
                development costs"; 

            


       

      	(ii)  	
              the
                expense of plugging and abandoning any well before a completion attempt;
                and 

            


       

      	(iii)  	
              the
                costs (other than Tangible Costs and Lease costs) to re-enter and
                deepen
                an existing well, complete the well to deeper formations or reservoirs,
                or
                plug and abandon the well if it is nonproductive from the targeted
                deeper
                formations or reservoirs. 

            


       

      “Tangible
        Costs” shall mean those costs associated with property acquisition and the
        drilling and completion of oil and gas wells which are generally accepted
        as
        capital expenditures pursuant to the provisions of the Code. This includes:
        

       

      	(i)  	
              all
                costs of equipment, parts and items of hardware used in drilling
                and
                completing a well; 

            


       

      	(ii)  	
              the
                costs (other than Intangible Drilling Costs and Lease costs) to re-enter
                and deepen an existing well, complete the well to deeper formations
                or
                reservoirs, or plug and abandon the well if it is nonproductive from
                the
                targeted deeper formations or reservoirs; and


            


       

      	(iii)  	
              those
                items necessary to deliver acceptable oil and gas production to purchasers
                to the extent installed downstream
                from the wellhead of any well and which are required to be capitalized
                under the Code and its regulations.

            


       


      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      


      


       

      With
        respect to each additional well drilled on the Additional Well Locations,
        if
        any, the Developer shall pay to Operator, in proportion to the share of the
        Working Interest owned by the Developer in the wells, one hundred percent
        (100%)
        of the estimated Intangible Drilling Costs and Tangible Costs for drilling
        and
        completing the well on execution of the applicable addendum pursuant to Section
        l(c) above. Notwithstanding, Atlas’ payments for its share of the estimated
        Tangible Costs of drilling and completing all additional wells as the Managing
        General Partner of the Developer shall be paid within five (5) business days
        of
        notice from Operator that the costs have been incurred. The Developer’s payment
        shall be nonrefundable in all events in order to enable Operator to do the
        following:

       

      	(i)
                	
              commence
                site preparation;

            


       

      	(ii)
                	
              obtain
                suitable subcontractors for drilling and completing the wells at
                currently
                prevailing prices; and 

            


       

      	(iii)
                	
              insure
                the availability of equipment and
                materials.

            


       

      Developer
        shall pay, in proportion to the share of the Working Interest owned by the
        Developer in the wells, any extra costs incurred for each well pursuant to
        sub-section (a) above within ten (10) business days of its receipt of Operator’s
        statement for the extra costs.

       

      	(c)  	
              Completion
                Determination.
                Operator shall determine whether or not to run the production casing
                for
                an attempted completion or to plug and abandon any well drilled under
                this
                Agreement. However, a well shall be completed only if Operator has
                made a
                good faith determination that there is a reasonable possibility of
                obtaining commercial quantities of oil and/or
                gas.

            


      


      	(d)  	
              Dry
                Hole Determination.
                If
                Operator determines at any time during the drilling or attempted
                completion of any well drilled under this Agreement, in accordance
                with
                the generally accepted and customary oil and gas field practices
                and
                techniques then prevailing in the geographic area
                of the Well Location that the well should not be completed, then
                it shall
                promptly and properly plug and abandon the
                well.

            


      


      	(e)  	
              Excess
                Funds and Cost Overruns-Intangible Drilling Costs.
                Any estimated Intangible Drilling Costs (which are the Intangible
                Drilling
                Costs set forth on the AFE) prepaid by Developer with respect to
                any well
                which exceed Operator’s price specified in sub-section (a) above for the
                Intangible Drilling Costs of the well shall be retained by Operator
                and
                shall be applied, in proportion to the share of the Working Interest
                owned
                by the Developer in the wells, to:

            


      


      	(i)  	
              the
                Intangible Drilling Costs for an additional well or wells to be drilled
                on
                the Additional Well Locations; or 

            


       

      	(ii)  	
              any
                cost overruns owed by the Developer to Operator for Intangible Drilling
                Costs on one or more of the other wells on the Well Locations.
                

            


       

      Conversely,
        if Operator’s price specified in sub-section (a) above for the Intangible
        Drilling Costs of any well exceeds the estimated Intangible Drilling Costs
        (which are the Intangible Drilling Costs set forth on the AFE) prepaid by
        Developer for the well, then:

       


      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      


      


       

      	(i)  	
              Developer
                shall pay the additional price to Operator within five (5) business
                days
                after notice from Operator that the additional amount is due and
                owing;
                or

            


       

      	(ii)  	
              Developer
                and Operator may agree to delete or reduce Developer’s Working Interest in
                one or more wells to be drilled under this Agreement which have not
                yet
                been spudded to provide funds to pay the additional amounts owed
                by
                Developer to Operator. If doing so results in any excess prepaid
                Intangible Drilling Costs, then these funds shall be applied, in
                proportion to the share of the Working Interest owned by the Developer
                in
                the wells, to: 

            


       

      	(a)  	
              the
                Intangible Drilling Costs for an additional well or wells to be drilled
                on
                the Additional Well Locations; or 

            


       

      	(b)  	
              any
                cost overruns owed by the Developer to Operator for Intangible Drilling
                Costs on one or more of the other wells on the Well Locations.
                

            


       

      The
        Exhibits to this Agreement with respect to the affected wells shall be amended
        as appropriate.

       

      
        	 	
                (f)

              	
                Excess
                  Funds and Cost Overruns - Tangible Costs.
                  Any estimated Tangible Costs (which are the Tangible Costs set
                  forth on
                  the AFE) prepaid by Developer with respect to any well which exceed
                  Operator’s price specified in sub-section (a) above for the Tangible Costs
                  of the well shall be retained by Operator and shall be applied,
                  in
                  proportion to the share of the Working Interest owned by the Developer
                  in
                  the wells, to: 

              


      

       

      	(i)  	
              the
                Developer’s Participants’ share of the Tangible Costs for an additional
                well or wells to be drilled on the Additional Well Locations; or
                

            


       

      	(ii)  	
              any
                cost overruns owed by the Developer to Operator for the Developer’s
                Participants’ share of the Tangible Costs on one or more of the other
                wells on the Well Locations. 

            


       

      Conversely,
        if Operator’s price specified in sub-section (a) above for the Developer’s
        Participants’ share of Tangible Costs of any well exceeds the estimated Tangible
        Costs (which are the Tangible Costs set forth on the AFE) prepaid by Developer
        for the Developer’s Participants’ share of the Tangible Costs for the well,
        then:

       

      	(i)
                	
              Developer
                shall pay the additional price to Operator within ten (10) business
                days
                after notice from Operator that the additional price is due and owing;
                or

            


       

      	(ii)
                	
              Developer
                and Operator may agree to delete or reduce Developer’s Working Interest in
                one or more wells to be drilled under this Agreement which have not
                yet
                been spudded to provide funds to pay the additional amounts owed
                by
                Developer to Operator. If doing so results in any excess prepaid
                Tangible
                Costs, then these funds shall be applied, in proportion to the share
                of
                the Working Interest owed by the Developer in the wells, to:
                

            


       

      	(a)  	
              the
                Developer’s Participants’ share of the Tangible Costs for an additional
                well or wells to be drilled on the Additional Well Locations; or
                

            


       

      	(b)  	
              any
                cost overruns owed by the Developer to Operator for the Developer’s
                Participants’ share of the Tangible Costs on one or more of the other
                wells on the Well Locations. 

            


       


      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      


      


       

      	(iii)
                	
              The
                Developer’s Participants’ share of the Tangible Costs of all of the wells
                drilled under this Agreement and any additional wells to be drilled
                on the
                Additional Well Locations under any Addendum to this Agreement is
                ten
                percent (10%) of the total price prepaid by Developer to Operator
                pursuant
                to Section 4(b) of this Agreement or any Addendum hereto. The Developer’s
                Participants’ share of the Tangible Costs of any one well drilled under
                this Agreement shall be determined subject to the preceding sentence,
                taking into account the Developer’s share of all of the Tangible Costs of
                all of the wells to be drilled under this Agreement and any Addendum
                hereto.

            


       

      The
        Exhibits to this Agreement with respect to the affected wells shall be amended
        as appropriate.

       

      
        	
                5.

              	
                Title
                  Examination of Well Locations, Developer’s Acceptance and Liability;
                  Additional Well Locations.

              


      

       

      
        	 	
                (a)

              	
                Title
                  Examination of Well Locations, Developer’s Acceptance and
                  Liability.
                  The Developer acknowledges that Operator has furnished Developer
                  with the
                  title opinions identified on Exhibit A, and other documents and
                  information which Developer or its counsel has requested in order
                  to
                  determine the adequacy of the title to the Initial Well Locations
                  and
                  leased premises subject to this Agreement. The Developer accepts
                  the title
                  to the Initial Well Locations and leased premises and acknowledges
                  and
                  agrees that, except for any loss, expense, cost, or liability caused
                  by
                  the breach of any of the warranties and representations made by
                  the
                  Operator in Section l(b), any loss, expense, cost or liability
                  whatsoever
                  caused by or related to any defect or failure of the title shall
                  be the
                  sole responsibility of and shall be borne entirely by the
                  Developer.

              


      

       

      
        	 	
                (b)

              	
                Additional
                  Well Locations.
                  Before beginning drilling of any well on any Additional Well Location,
                  Operator shall conduct, or cause to be conducted, a title examination
                  of
                  the Additional Well Location, in order to obtain appropriate abstracts,
                  opinions and certificates and other information necessary to determine
                  the
                  adequacy of title to both the applicable Lease and the fee title
                  of the
                  lessor to the premises covered by the Lease. The results of the
                  title
                  examination and such other information as is necessary to determine
                  the
                  adequacy of title for drilling purposes shall be submitted to the
                  Developer for its review and acceptance. No drilling on the Additional
                  Well Locations shall begin until the title has been accepted in
                  writing by
                  the Developer. After any title has been accepted by the Developer,
                  any
                  loss, expense, cost, or liability whatsoever, caused by or related
                  to any
                  defect or failure of the title shall be the sole responsibility
                  of and
                  shall be borne entirely by the Developer, unless such loss, expense,
                  cost, or liability was caused by the breach of any of the warranties
                  and
                  representations made by the
                  Operator
                  in
                  Section l(b).

              


      

       

      
        	
                6.

              	
                Operations
                  Subsequent to Completion of the Wells; Fee Adjustments; Extraordinary
                  Costs; Pipelines; Price Determinations; Plugging and
                  Abandonment.

              


      

       

      
        	 	
                (a)

              	
                Operations
                  Subsequent to Completion of the Wells.
                  Beginning with the month in which a well drilled under this Agreement
                  begins to produce, Operator shall be entitled to an operating fee
                  of $285
                  per month for each well being operated under this Agreement,
                  proportionately reduced to the extent the Developer owns less than
                  100% of
                  the Working Interest in the wells. This fee shall be in lieu of
                  any direct
                  charges by Operator for its services or the provision by Operator
                  of its
                  equipment for normal superintendence and maintenance of the wells
                  and
                  related pipelines and facilities. 

              


      

       

      The
        operating fees shall cover all normal, regularly recurring operating expenses
        for the production, delivery and sale of natural gas, including without
        limitation:

       


      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      


      


       

      	(i)
                	
              well
                tending, routine maintenance and adjustment;


            


       

      	(ii)
                	
              reading
                meters, recording production, pumping, maintaining appropriate books
                and
                records; 

            


       

      	(iii)
                	
              preparing
                reports to the Developer and government agencies; and
                

            


       

      	(iv)
                	
              collecting
                and disbursing revenues. 

            


       

      The
        operating fees shall not cover costs and expenses related to the following:
        

       

      	(i)
                	
              the
                production and sale of oil; 

            


       

      	(ii)
                	
              the
                collection and disposal of salt water or other liquids produced by
                the
                wells;

            


       

      	(iii)
                	
              the
                rebuilding of access roads; and 

            


       

      	(iv)
                	
              the
                purchase of equipment, materials or third party services;
                

            


       

      which,
        subject to the provisions of sub-section (c) of this Section 6, shall be
        paid by
        the Developer in proportion to the share of the Working Interest owned by
        the
        Developer in the wells. 

       

      Any
        well
        which is temporarily abandoned or shut-in continuously for the entire month
        shall not be considered a producing well for purposes of determining the
        number
        of wells in the month subject to the operating fee.

       

      
        	 	
                (b)

              	
                Fee
                  Adjustments.
                  The monthly operating fee set forth in sub-section (a) above may
                  be
                  adjusted by Operator annually, as of the first day of January (the
                  “Adjustment Date”) of each year, beginning January 1, 2008. Such
                  adjustment, if any, shall not exceed the percentage increase in
                  the
                  average weekly earnings of “Crude Petroleum, Natural Gas, and Natural Gas
                  Liquids” workers, as published by the U.S. Department of Labor, Bureau of
                  Labor Statistics, and shown in Employment and Earnings Publication,
                  Monthly Establishment Data, Hours and Earning Statistical Table
                  C-2, Index
                  Average Weekly Earnings of “Crude Petroleum, Natural Gas, and Natural Gas
                  Liquids” workers, SIC Code #131-2, or any successor index thereto, since
                  January l, 2006, in the case of the first adjustment, and since
                  the
                  previous Adjustment Date, in the case of each subsequent adjustment.
                  In
                  addition, the monthly operating fee set forth in sub-section (a)
                  above for
                  any given well or wells being operated under this Agreement may
                  be
                  adjusted at any time in the Operator’s discretion to an amount equal to a
                  competitive rate in the area in which the well(s) are
                  situated.

              


      

       

      
        	 	
                (c)

              	
                Extraordinary
                  Costs.
                  Without the prior written consent of the Developer, pursuant to
                  a written
                  estimate submitted by Operator, Operator shall not undertake any
                  single
                  project or incur any extraordinary cost with respect to any well
                  being
                  produced under this Agreement reasonably estimated to result in
                  an
                  expenditure of more than $5,000, unless the project or extraordinary
                  cost
                  is necessary for the following:

              


      

       

      	(i)
                	
              to
                safeguard persons or property; or 

            


       

      	(ii)
                	
              to
                protect the well or related facilities in the event of a sudden emergency.
                

            


       

      In
        no
        event, however, shall the Developer be required to pay for any project or
        extraordinary cost arising from the negligence or misconduct of Operator,
        its
        agents, servants, employees, contractors, licensees, or invitees. 

       


      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      


      


       

      All
        extraordinary costs incurred and the cost of projects undertaken with respect
        to
        a well being produced shall be billed at the invoice cost of third-party
        services performed or materials purchased together with a reasonable charge
        by
        Operator for services performed directly by it, in proportion to the share
        of
        the Working Interest owned by the Developer in the wells. Operator shall
        have
        the right to require the Developer to pay in advance of undertaking any project
        all or a portion of the estimated costs of the project in proportion to the
        share of the Working Interest owned by the Developer in the wells. 

       

      
        	 	
                (d)

              	
                Pipelines.
                  Developer shall have no interest in the pipeline gathering system,
                  which
                  gathering system shall remain the sole property of Operator or
                  its
                  Affiliates and shall be maintained at their sole cost and
                  expense.

              


      

       

      
        	 	
                (e)

              	
                Price
                  Determinations.
                  Notwithstanding anything herein to the contrary, the Developer
                  shall pay
                  all costs in proportion to the share of the Working Interest owned
                  by the
                  Developer in the wells with respect to obtaining price determinations
                  under and otherwise complying with the Natural Gas Policy Act of
                  1978 and
                  the implementing state regulations. This responsibility shall include,
                  without limitation, preparing, filing, and executing all applications,
                  affidavits, interim collection notices, reports and other documents
                  necessary or appropriate to obtain price certification, to effect
                  sales of
                  natural gas, or otherwise to comply with the Act and the implementing
                  state regulations. 

              


      

       

      
        	 	 	
                Operator
                  agrees to furnish the information and render the assistance as
                  the
                  Developer may reasonably request in order to comply with the Act
                  and the
                  implementing state regulations without charge for services performed
                  by
                  its employees.

              


      

       

      
        	 	
                (f)

              	
                Plugging
                  and Abandonment.
                  The Developer shall have the right to direct Operator to plug and
                  abandon
                  any well that has been completed under this Agreement as a producer.
                  In
                  addition, Operator shall not plug and abandon any well that has
                  been
                  drilled and completed as a producer before obtaining the written
                  consent
                  of the Developer. However, if the Operator in accordance with the
                  generally accepted and customary oil and gas field practices and
                  techniques then prevailing in the geographic area of the well location,
                  determines that any well should be plugged and abandoned and makes
                  a
                  written request to the Developer for authority to plug and abandon
                  the
                  well and the Developer fails to respond in writing to the request
                  within
                  forty-five (45) days following the date of the request, then the
                  Developer
                  shall be deemed to have consented to the plugging and abandonment
                  of the
                  well. 

              


      

       

      All
        costs
        and expenses related to plugging and abandoning the wells which have been
        drilled and completed as producing wells shall be borne and paid by the
        Developer in proportion to the share of the Working Interest owned by the
        Developer in the wells. Also, at any time after one (1) year from the date
        each
        well drilled and completed is placed into production, Operator shall have
        the
        right to deduct each month from the proceeds of the sale of the production
        from
        the well up to $200, in proportion to the share of the Working Interest owned
        by
        the Developer in the well, for the purpose of establishing a fund to cover
        the
        estimated costs of plugging and abandoning the well. All of these funds shall
        be
        deposited in a separate interest bearing escrow account for the account of
        the
        Developer, and the total amount so retained and deposited shall not exceed
        Operator’s reasonable estimate of Developer’s share of the costs of plugging and
        abandoning the well.

       


      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      


      


       

      
        	
                7.

              	
                Billing
                  and Payment Procedure with Respect to Operation of Wells; Disbursements;
                  Separate Account for Sale Proceeds; Records and Reports; Additional
                  Information.

              


      

       

      
        	 	
                (a)

              	
                Billing
                  and Payment Procedure with Respect to Operation of
                  Wells.
                  Operator shall promptly and timely pay and discharge on behalf
                  of the
                  Developer, in proportion to the share of the Working Interest owned
                  by the
                  Developer in the wells the following:


              


      

       

      	(i)  	
              all
                expenses and liabilities payable and incurred by reason of its operation
                of the wells in accordance with this Agreement , such as severance
                taxes,
                royalties, overriding royalties, operating fees, and pipeline gathering
                charges; and 

            


       

      	(ii)  	
              any
                third-party invoices rendered to Operator with respect to costs and
                expenses incurred in connection with the operation of the wells.
                

            


       

      Operator,
        however, shall not be required to pay and discharge any of the above costs
        and
        expenses which are being contested in good faith by Operator. 

       

      Operator
        shall: 

       

      	(i)  	
              deduct
                the foregoing costs and expenses from the Developer’s share of the
                proceeds of the oil and/or gas sold from the wells; and
                

            


       

      	(ii)  	
              keep
                an accurate record of the Developer’s account, showing expenses incurred
                and charges and credits made and received with respect to each well.
                

            


       

      If
        the
        proceeds are insufficient to pay the costs and expenses, then Operator shall
        promptly and timely pay and discharge the costs and expenses, in proportion
        to
        the share of the Working
        Interest owned by the Developer in the wells, and prepare and submit an invoice
        to the Developer each month for the costs and expenses. The invoice shall
        be
        accompanied by the form of statement specified in sub-section (b) below,
        and
shall
        be
        paid by the Developer within ten (10) business days of its receipt.

       

      
        	 	
                (b)

              	
                Disbursements.
                  Operator shall disburse to the Developer, on a monthly basis, the
                  Developer’s share of the proceeds received from the sale of oil and/or gas
                  sold from the wells operated under this Agreement,
                  less:

              


      

       

      	(i)
                	
              the
                amounts charged to the Developer under sub-section (a); and
                

            


       

      	(ii)
                	
              the
                amount, if any, withheld by Operator for future plugging costs pursuant
                to
                sub-section (f) of Section 6. 

            


       

      Each
        disbursement made and/or invoice submitted pursuant to sub-section (a) above
        shall be accompanied by a statement itemizing with respect to each well:
        

       

      	(i)
                	
              the
                total production of oil and/or gas since the date of the last disbursement
                or invoice billing period, as the case may be, and the Developer’s share
                of the production; 

            


       

      	(ii)
                	
              the
                total proceeds received from any sale of the production, and the
                Developer’s share of the proceeds; 

            


       

      	(iii)
                	
              the
                costs and expenses deducted from the proceeds and/or being billed
                to the
                Developer pursuant to sub-section (a) above;


            


       


      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      


      


       

      	(iv)
                	
              the
                amount withheld for future plugging costs; and


            


       

      	(v)
                	
              any
                other information as Developer may reasonably request, including
                without
                limitation copies of all third-party invoices listed on the statement
                for
                the period. 

            


       

      	(c)  	
              Separate
                Account for Sale Proceeds. Operator
                agrees to deposit all proceeds from the sale of oil and/or gas sold
                from
                the wells operated under this Agreement in a separate checking account
                maintained by Operator. This account shall be used solely for the
                purpose
                of collecting and disbursing funds constituting proceeds from the
                sale of
                production under this Agreement.

            


       

      	(d)  	
              Records
                and Reports.
                In
                addition to the statements required under sub-section (b) above,
                Operator,
                within seventy-five (75) days after the completion of each well drilled,
                shall furnish the Developer with a detailed statement itemizing with
                respect to the well the total costs and charges under Section 4(a)
                and the
                Developer’s share of the costs and charges, and any information as is
                necessary to enable the Developer:

            


       

      	(i)
                	
              to
                allocate any extra costs incurred with respect to the well between
                Tangible Costs and Intangible Drilling Costs; and
                

            


       

      	(ii)
                	
              to
                determine the amount of investment tax credit or marginal well production
                tax credit, if applicable.

            


       

      	(e)  	
              Additional
                Information. Operator
                shall promptly furnish the Developer with any additional information
                as it
                may reasonably request, including without limitation geological,
                technical, and financial information, in the form as may reasonably
                be
                requested, pertaining to any phase of the operations and activities
                governed by this Agreement. The Developer and its authorized employees,
                agents and consultants, including independent accountants shall,
                at
                Developer’s sole cost and expense:

            


       

      	(i)
                	
              on
                at least ten (10) days’ written notice have access during normal business
                hours to all of Operator’s records pertaining to operations, including
                without limitation, the right to audit the books of account of Operator
                relating to all receipts, costs, charges, expenses and disbursements
                under
                this Agreement, including information regarding the separate account
                required under sub-section (c); and 

            


       

      	(ii)
                	
              have
                access, at its sole risk, to any wells drilled by Operator under
                this
                Agreement at all times to inspect and observe any machinery, equipment
                and
                operations.

            


       

      8. Operator’s
        Lien; Right to Collect From Oil or Gas Purchaser.

       

      
        	 	
                (a)

              	
                Operator’s
                  Lien. To
                  secure the payment of all sums due from Developer to Operator under
                  the
                  provisions of this Agreement the Developer grants Operator a first
                  and
                  preferred lien on and security interest in the
                  following:

              


      

       

      	(i)
                	
              the
                Developer’s interest in the Leases covered by this Agreement;
                

            


       

      	(ii)
                	
              the
                Developer’s interest in oil and gas produced under this Agreement and its
                proceeds from the sale of the oil and gas; and


            


       

      	(iii)
                	
              the
                Developer’s interest in materials and equipment under this
                Agreement.

            


       


      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      


      


       

      
        	 	
                (b)

              	
                Right
                  to Collect From Oil or Gas Purchaser. If
                  the Developer fails to timely pay any amount owing under this Agreement
                  by
                  it to the Operator, then Operator, without prejudice to other existing
                  remedies, may collect and retain from any purchaser or purchasers
                  of oil
                  or gas the Developer’s share of the proceeds from the sale of the oil and
                  gas until the amount owed by the Developer, plus twelve percent
                  (12%)
                  interest on a per annum basis, and any additional costs (including
                  without
                  limitation actual attorneys’ fees and costs) resulting from the
                  delinquency, has been paid. Each purchaser of oil or gas shall
                  be entitled
                  to rely on Operator’s written statement concerning the amount of any
                  default.

              


      

       

      9. Successors
        and Assigns; Transfers; Appointment of Agent.

       

      
        	 	
                (a)

              	
                Successors
                  and Assigns.
                  This Agreement shall be binding on and inure to the benefit of
                  the
                  undersigned parties and their respective successors and permitted
                  assigns.
                  However, without the prior written consent of the Developer, the
                  Operator
                  may not assign, transfer, pledge, mortgage, hypothecate, sell or
                  otherwise
                  dispose of any of its interest in this Agreement, or any of the
                  rights or
                  obligations under this Agreement. Notwithstanding, this consent
                  shall not
                  be required in connection with:

              


      

       

      	(i)
                	
              the
                assignment of work to be performed for Operator by subcontractors,
                it
                being understood and agreed, however, that any assignment to Operator’s
                subcontractors shall not in any manner relieve or release Operator
                from
                any of its obligations and responsibilities under this Agreement;
                

            


       

      	(ii)
                	
              any
                lien, assignment, security interest, pledge or mortgage arising under
                Operator’s present or future financing arrangements; or
                

            


       

      	(iii)
                	
              the
                liquidation, merger, consolidation, or other corporate reorganization
                or
                sale of substantially all of the assets of
                Operator.

            


       

      Further,
        in order to maintain uniformity of ownership in the wells, production,
        equipment, and leasehold interests covered by this Agreement, and
        notwithstanding any other provisions to the contrary, the Developer shall
        not,
        without the prior written consent of Operator, sell, assign, transfer, encumber,
        mortgage or otherwise dispose of any of its interest in the wells, production,
        equipment or leasehold interests covered by this Agreement unless the
        disposition encompasses either:

       

      	(i)
                	
              the
                entire interest of the Developer in all wells, production, equipment
                and
                leasehold interests subject to this Agreement; or
                

            


       

      	(ii)
                	
              an
                equal undivided interest in all such wells, production, equipment,
                and
                leasehold interests.

            


       

      
        	 	
                (b)

              	
                Transfers.
                  Subject to the provisions of sub-section (a) above, any sale, encumbrance,
                  transfer or other disposition made by the Developer of its interests
                  in
                  the wells, production, equipment, and/or leasehold interests covered
                  by
                  this Agreement shall be made:

              


      

       

      	(i)
                	
              expressly
                subject to this Agreement;

            


       

      	(ii)
                	
              without
                prejudice to the rights of the Operator; and


            


       

      	(iii)
                	
              in
                accordance with and subject to the provisions of the
                Lease.

            


       


      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      


      


       

      
        	 	
                (c)

              	
                Appointment
                  of Agent. If
                  at any time the interest of the Developer is divided among or owned
                  by
                  co-owners, Operator may, at its discretion, require the co-owners
                  to
                  appoint a single trustee or agent with full authority to do the
                  following:

              


      

       

      	(i)
                	
              receive
                notices, reports and distributions of the proceeds from production;
                

            


       

      	(ii)
                	
              approve
                expenditures; 

            


       

      	(iii)
                	
              receive
                billings for and approve and pay all costs, expenses and liabilities
                incurred under this Agreement; 

            


       

      	(iv)
                	
              exercise
                any rights granted to the co-owners under this Agreement;
                

            


       

      	(v)
                	
              grant
                any approvals or authorizations required or contemplated by this
                Agreement; 

            


       

      	(vi)
                	
              sign,
                execute, certify, acknowledge, file and/or record any agreements,
                contracts, instruments, reports, or documents whatsoever in connection
                with this Agreement or the activities contemplated by this Agreement;
                and
                

            


       

      	(vii)
                	
              deal
                generally with, and with power to bind, the co-owners with respect
                to all
                activities and operations contemplated by this
                Agreement.

            


       

      However,
        all the co-owners shall continue to have the right to enter into and execute
        all
        contracts or agreements for their respective shares of the oil and gas produced
        from the wells drilled under this Agreement in accordance with sub-section
        (c)
        of Section 11.

       

      10. Operator’s
        Insurance; Subcontractors’ Insurance; Operator’s
        Liability.

       

      
        	 	
                (a)

              	
                Operator’s
                  Insurance.
                  Operator shall obtain and maintain at its own expense so long as
                  it is
                  Operator under this Agreement all required Workmen’s Compensation
                  Insurance and comprehensive general public liability insurance
                  in amounts
                  and coverage not less than $1,000,000 per person per occurrence
                  for
                  personal injury or death and $1,000,000 for property damage per
                  occurrence, which shall include coverage for blow-outs and total
                  liability
                  coverage of not less than $10,000,000.


              


      

       

      Subject
        to the above limits, the Operator’s general public liability insurance shall be
        in all respects comparable to that generally maintained in the industry with
        respect to services of the type to be rendered and activities of the type
        to be
        conducted under this Agreement. Operator’s general public liability insurance
        shall, if permitted by Operator’s insurance carrier:

       

      	(i)
                	
              name
                the Developer as an additional insured party; and
                

            


       

      	(ii)
                	
              provide
                that at least thirty (30) days’ prior notice of cancellation and any other
                adverse material change in the policy shall be given to the
                Developer.

            


       

      However,
        the Developer shall reimburse Operator for the additional cost, if any, of
        including it as an additional insured party under the Operator’s insurance.


       


      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      


      


       

      Current
        copies of all policies or certificates of the Operator’s insurance coverage
        shall be delivered to the Developer on request. It is understood and agreed
        that
        Operator’s insurance coverage may not adequately protect the interests of the
        Developer and that the Developer shall carry at its expense the excess or
        additional general public liability, property damage, and other insurance,
        if
        any, as the Developer deems appropriate.

       

      
        	 	
                (b)

              	
                Subcontractors’
                  Insurance.
                  Operator shall require all of its subcontractors to carry all required
                  Workmen’s Compensation Insurance and to maintain such other insurance,
                  if
                  any, as Operator in its discretion may
                  require.

              


      

       

      
        	 	
                (c)

              	
                Operator’s
                  Liability.
                  Operator’s liability to the Developer as Operator under this Agreement
                  shall be limited to, and Operator shall indemnify the Developer
                  and hold
                  it harmless from, claims, penalties, liabilities, obligations,
                  charges,
                  losses, costs, damages, or expenses (including but not limited
                  to
                  reasonable attorneys’ fees) relating to, caused by or arising out
                  of:

              


      

       

      	(i)
                	
              the
                noncompliance with or violation by Operator, its employees, agents,
                or
                subcontractors of any local, state or federal law, statute, regulation,
                or
                ordinance; 

            


       

      	(ii)
                	
              the
                negligence or misconduct of Operator, its employees, agents or
                subcontractors; or 

            


       

      	(iii)
                	
              the
                breach of or failure to comply with any provisions of this
                Agreement.

            


       

      11. Internal
        Revenue Code Election; Relationship of Parties; Right to Take Production
        in
        Kind.

       

      
        	 	
                (a)

              	
                Internal
                  Revenue Code Election.
                  With respect to this Agreement, each of the parties elects under
                  Section
                  761(a) of the Internal Revenue Code of 1986, as amended, to be
                  excluded
                  from the provisions of Subchapter K of Chapter 1 of Subtitle A
                  of the
                  Internal Revenue Code of 1986, as amended. If the income tax laws
                  of the
                  state or states in which the property covered by this Agreement
                  is located
                  contain, or may subsequently contain, a similar election, each
                  of the
                  parties agrees that the election shall be exercised.
                  

              


      

       

      Beginning
        with the first taxable year of operations under this Agreement, each party
        agrees that the deemed election provided by Section 1.761-2(b)(2)(ii) of
        the
        Regulations under the Internal Revenue Code of 1986, as amended, will apply;
        and
        no party will file an application under Section 1.761-2 (b)(3)(i) of the
        Regulations to revoke the election. Each party agrees to execute the documents
        and make the filings with the appropriate governmental authorities as may
        be
        necessary to effect the election.

       

      
        	 	
                (b)

              	
                Relationship
                  of Parties.
                  It
                  is not the intention of the parties to create, nor shall this Agreement
                  be
                  construed as creating, a mining or other partnership or association
                  or to
                  render the parties liable as partners or joint ventures for any
                  purpose.
                  Operator shall be deemed to be an independent contractor and shall
                  perform
                  its obligations as set forth in this Agreement or as otherwise
                  directed by
                  the Developer.

              


      

       

      
        	 	
                (c)

              	
                Right
                  to Take Production in Kind.
                  Subject to the provisions of Section 8 above, the Developer shall
                  have the
                  exclusive right to sell or dispose of its proportionate share of
                  all oil
                  and gas produced from the wells to be drilled under this Agreement,
                  exclusive of production:

              


      

       


      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      


      


       

      	(i)
                	
              that
                may be used in development and producing operations;
                

            


       

      	(ii)
                	
              unavoidably
                lost; and 

            


       

      	(iii)
                	
              used
                to fulfill any free gas obligations under the terms of the applicable
                Lease or Leases.

            


       

      Operator
        shall not have any right to sell or otherwise dispose of the oil and gas.
        The
        Developer shall have the exclusive right to execute all contracts relating
        to
        the sale or disposition of its proportionate share of the production from
        the
        wells drilled under this Agreement. 

       

      Developer
        shall have no interest in any gas supply agreements of Operator, except the
        right to receive Developer’s share of the proceeds received from the sale of any
        gas or oil from wells developed under this Agreement. The Developer agrees
        to
        designate Operator or Operator’s designated bank agent as the Developer’s
        collection agent in any contracts. On request, Operator shall assist Developer
        in arranging the sale or disposition of Developer’s oil and gas under this
        Agreement and shall promptly provide the Developer with all relevant information
        which comes to Operator’s attention regarding opportunities for sale of
        production. 

       

      If
        Developer fails to take in kind or separately dispose of its proportionate
        share
        of the oil and gas produced under this Agreement, then Operator shall have
        the
        right, subject to the revocation at will by the Developer, but not the
        obligation, to purchase the oil and gas or sell it to others at any time
        and
        from time to time, for the account of the Developer at the best price obtainable
        in the area for the production. Notwithstanding, Operator shall have no
        liability to Developer should Operator fail to market the production.


       

      Any
        purchase or sale by Operator shall be subject always to the right of the
        Developer to exercise at any time its right to take in-kind, or separately
        dispose of, its share of oil and gas not previously delivered to a purchaser.
        Any purchase or sale by Operator of any other party’s share of oil and gas shall
        be only for reasonable periods of time as are consistent with the minimum
        needs
        of the oil and gas industry under the particular circumstances, but in no
        event
        for a period in excess of one (1) year.

       

      12. Effect
        of Force Majeure; Definition of Force Majeure; Limitation.

       

      	(a)  	
              Effect
                of Force Majeure. If
                Operator is rendered unable, wholly or in part, by force majeure
                (as
                defined below) to carry out any of its obligations
                under this Agreement, including
                but not limited to beginning the drilling of one or more wells by
                the
                applicable times set forth in Section 2(b), or any Addendum to this
                Agreement, the obligations of the Operator, so far as it is affected
                by
                the force majeure, shall be suspended during but no longer than,
                the
                continuance of the force majeure. The
                Operator shall give to the Developer prompt written notice of the
                force
                majeure with
                reasonably full particulars concerning it. Operator shall use all
                reasonable diligence to remove the force majeure as quickly as possible
                to
                the extent the same is within reasonable
                control.

            


       


      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      


      


       

      	(b)  	
              Definition
                of Force Majeure. The
                term “force majeure” shall mean an act of God, strike, lockout, or other
                industrial disturbance, act of the public enemy, war, blockade, public
                riot, lightning, fire, storm, flood, explosion, governmental restraint,
                unavailability of drilling rigs, equipment or materials, plant shut-downs,
                curtailments by purchasers and any other causes whether of the kind
                specifically enumerated above or otherwise, which directly preclude
                Operator’s performance under this Agreement and is not reasonably within
                the control of the Operator including, but not limited to, the inability
                of Operator to begin the drilling of the wells subject to this Agreement
                by the applicable times set forth in Section 2(b) or in any Addendum
                to
                this Agreement due to decisions of third-party operators to delay
                drilling
                the wells, poor weather conditions, inability to obtain drilling
                permits,
                access right to the drilling site or title
                problems.

            


       

      	(c)  	
              Limitation.
                The
                requirement that any force majeure shall be remedied with all reasonable
                dispatch shall not require the settlement of strikes, lockouts, or
                other
                labor difficulty affecting the Operator, contrary to its wishes.
                The
                method of handling these difficulties shall be entirely within the
                discretion of the Operator.

            


       

      13. Term.

       

      This
        Agreement shall become effective when executed by Operator and the Developer.
        Except as provided in sub-section (c) of Section 3, this Agreement shall
        continue and remain in full force and effect for the productive lives of
        the
        wells being operated under this Agreement.

       

      14. Governing
        Law; Invalidity.

       

      	(a)  	
              Governing
                Law. This
                Agreement shall be governed by, construed and interpreted in accordance
                with the laws of the Commonwealth of Pennsylvania.
                

            


       

      	(b)  	
              Invalidity.
                The
                invalidity or unenforceability of any particular provision of this
                Agreement shall not affect the other provisions of this Agreement,
                and
                this Agreement shall be construed in all respects as if the invalid
                or
                unenforceable provision were omitted.

            


       

      15. Integration;
        Written Amendment.

       

      	(a)  	
              Integration.
                This
                Agreement, including the Exhibits to this Agreement, constitutes
                and
                represents the entire understanding and agreement of the parties
                with
                respect to the subject matter of this Agreement and supersedes all
                prior
                negotiations, understandings, agreements, and representations relating
                to
                the subject matter of this Agreement. 

            


       

      	(b)  	
              Written
                Amendment. No
                change, waiver, modification, or amendment of this Agreement shall
                be
                binding or of any
                effect unless in writing duly
                signed by the party against which the change, waiver, modification,
                or
                amendment is sought to be enforced.

            


       

      16. Waiver
        of Default or Breach.

       

      No
        waiver
        by any party to any default of or breach by any other party under this Agreement
        shall operate as a waiver of any future default or breach, whether of like
        or
        different character or nature.

       


      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      


      


       

      17. Notices.

       

      Unless
        otherwise provided in this Agreement, all notices, statements, requests,
        or
        demands which are required or contemplated by this Agreement shall be in
        writing
        and shall be hand-delivered or sent by registered or certified mail, postage
        prepaid, to the following addresses until changed by certified or registered
        letter so addressed to the other party:

       

      	(i)
                	
              If
                to the Operator, to:

            


      Atlas
        Resources, LLC

      311
        Rouser Road

      Moon
        Township, Pennsylvania 15108

      Attention:
        President

       

      	(ii)
                	
              If
                to Developer, to:

            


      Atlas
        America Public #15-2006(B) L.P. 

      c/o
        Atlas
        Resources, LLC

      311
        Rouser Road

      Moon
        Township, Pennsylvania 15108

       

      Notices
        which are served by registered or certified mail on the parties in the manner
        provided in this Section shall be deemed sufficiently served or given for
        all
        purposes under this Agreement at the time the notice is mailed in any post
        office or branch post office regularly maintained by the United States Postal
        Service or any successor. All payments shall be hand-delivered or sent by
        United
        States mail, postage prepaid to the addresses set forth above until changed
        by
        certified or registered letter so addressed to the other party.

       

      18. Interpretation.

       

      The
        titles of the Sections in this Agreement are for convenience of reference
        only
        and shall not control or affect the meaning or construction of any of the
        terms
        and provisions of this Agreement. As used in this Agreement, the plural shall
        include the singular and the singular shall include the plural whenever
        appropriate.

       

      19. Counterparts.

       

      The
        parties may execute this Agreement in any number of separate counterparts,
        each
        of which, when executed and delivered by the parties, shall have the force
        and
        effect of an original; but all such counterparts shall be deemed to constitute
        one and the same instrument.

       


      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      


      


       

      IN
        WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
        of the
        day and year first above written.

       

      ATLAS
        RESOURCES, LLC

      


      


      By:    /s/
        Frank P. Carolas

                    
        Frank
        P.
        Carolas, Executive Vice President

      


      


      ATLAS
        AMERICA PUBLIC #15-2006(B) L.P.

      


      


      By
        its
        Managing General Partner:

      ATLAS
        RESOURCES, LLC

      


      


      By:    /s/
        Frank P. Carolas

                   
         Frank
        P. Carolas, Executive Vice President

      


      


      


      


      


      



      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      


      DESCRIPTION
        OF LEASES AND INITIAL WELL LOCATIONS

      


      [To
        be
        completed as information becomes available]

      


      1. WELL
        LOCATION

      


      
        	 	
                (a)

              	
                Oil
                  and Gas Lease from ______________________________________ dated
                  _____________________ and recorded in Deed Book Volume __________,
                  Page
                  __________ in the Recorder’s Office of County, ____________, covering
                  approximately _________ acres in ____________________________ Township,
                  ___________________ County,
                  __________________________.

              


      

      


      
        	 	
                (b)

              	
                The
                  portion of the leasehold estate constituting the
                  ____________________________________________ No. __________ Well
                  Location
                  is described on the map attached hereto as Exhibit
                  A-l.

              


      

      


      
        	 	
                (c)

              	
                Title
                  Opinion of _________________________________,
                  ____________________________________,
                  ________________________________________,
                  ________________________________________, dated ___________________,
                  200___.

              


      

      


      	(c)  	
              The
                Developer’s interest in the leasehold estate constituting this Well
                Location is an undivided______% Working Interest to those oil and
                gas
                rights from the surface to the deepest depth penetrated at the cessation
                of drilling activities (which is ___________ feet), subject to the
                landowner’s royalty interest and overriding royalty
                interests.

            


      


      


      


      


      


      


      


      


      


      Exhibit
        A

      (Page
        1)


      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      


      


      
        	
                DRILLING
                  AND OPERATING AGREEMENT DATED MAY 9, 2006

              
	
                ATLAS
                  AMERICA PUBLIC #15-2006(B) L.P.

              
	 	 	 	 
	
                WELL

              	
                STATE

              	
                COUNTY

              	
                TOWNSHIP

              
	
                BIRD
                  #3

              	
                PA

              	
                CRAWFORD

              	
                RICHMOND

              
	
                CARPENTER
                  #16

              	
                PA

              	
                CRAWFORD

              	
                RICHMOND

              
	
                CAPTAIN
                  #3

              	
                PA

              	
                FAYETTE
                  

              	
                JEFFERSON

              
	
                FORSYTH/ABBADINI
                  #3

              	
                PA

              	
                FAYETTE

              	
                JEFFERSON

              
	
                PAVLIK/EVANCZUK
                  #1

              	
                PA

              	
                FAYETTE

              	
                JEFFERSON

              
	
                TRUMP
                  UNIT #7

              	
                PA

              	
                FAYETTE

              	
                NICHOLSON

              
	
                TRUMP
                  UNIT #8

              	
                PA

              	
                FAYETTE

              	
                NICHOLSON

              
	
                SABATINE
                  #1

              	
                PA

              	
                FAYETTE

              	
                SPRINGHILL

              
	
                GRIMES/LUXNER
                  #2

              	
                PA

              	
                GREENE

              	
                CUMBERLAND

              


      

      


      


      


      


      


      


      


      


      


      Exhibit
        A

      (Page
        2)


      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      


      


      


      Well
        Name, Twp.

      County,
        State

      


      ASSIGNMENT
        OF OIL AND GAS LEASE

      


       

      STATE
        OF _______________________________

       

      


      COUNTY
        OF _____________________________

      


      KNOW
        ALL MEN BY THESE PRESENTS:

      


      


      THAT
        the
        undersigned
        _____________________________________________________________________

      (hereinafter
        called “Assignor”), for and in consideration of One Dollar and other valuable
        consideration ($1.00 ovc), the receipt whereof is hereby acknowledged, does
        hereby sell, assign, transfer and set over unto ______________________
        (hereinafter called “Assignee”), an undivided _____________________________ in,
        and to, the oil and gas lease described as follows

      


      


      


      


      


      


      


      together
        with the rights incident thereto and the personal property thereto, appurtenant
        thereto, or used, or obtained, in connection therewith.

      


      And
        for
        the same consideration, the assignor covenants with the said assignee his
        or its
        heirs, successors, or assigns that assignor is the lawful owner of said lease
        and rights and interest thereunder and of the personal property thereon or
        used
        in connection therewith; that the undersigned has good right and authority
        to
        sell and convey the same, and that said rights, interest and property are
        free
        and clear from all liens and encumbrances, and that all rentals and royalties
        due and payable thereunder have been duly paid.

      


      In
        Witness Whereof, the undersigned owner ______ and assignor ______ has___
        signed
        and sealed this instrument the ______ day of _______________,
        200___.

      


      


      


      Signed
        and acknowledged in the presence of         _____________________________________________

      


      


      _________________________________________    _____________________________________________

      


      


      _________________________________________     _____________________________________________

      


      


      Exhibit
        B

      (Page
        1)


      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      


      ACKNOWLEDGMENT
        BY INDIVIDUAL

      


      


      STATE
        OF
        __________________________ 

      BEFORE
        ME, a Notary Public, in and for said

      COUNTY
        OF_________________________  

      


      


      County
        and State, on this day personally appeared  
        who


      acknowledged
        to me that ____ he ____ did sign the foregoing instrument and that the same
        is
        _____________ free act and deed.

      


      In
        testimony whereof, I have hereunto set my hand and official seal, at
        _____________________________, this ______ day of _______________, A.D.,
        200___.

      


       

      Notary
        Public

      


      


      CORPORATION
        ACKNOWLEDGMENT

      


      


      STATE
        OF________________________  

      BEFORE
        ME, a Notary Public, in and for said

      COUNTY
        OF______________________  

      


      


      County
        and State, on this day personally appeared ____known to me to be the person
        and
        officer whose name is subscribed to the foregoing instrument and acknowledged
        that the same was the act of the said
        ______________________________________________, a corporation, and that he
        executed the same as the act of such corporation for the purposes and
        consideration therein expressed, and in the capacity therein
        stated.

      


      In
        testimony whereof, I have hereunto set my hand and official seal, at
        _____________________________, this ______ day of _______________, A.D.,
        200___.

      


      


       

      Notary
        Public

      


      


      This
        instrument prepared by:

      


      Atlas
        Resources, LLC

      311
        Rouser Road

      P.O.
        Box
        611

      Moon
        Township, PA 15108

      


      Exhibit
        B

      (Page
        2)


      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      


      ADDENDUM
        NO. ____________

      


      TO
        DRILLING AND OPERATING AGREEMENT

      DATED
        ________200___

      


      THIS
        ADDENDUM NO.__ made and entered into this ___ day of __________, 200__, by
        and
        between ATLAS RESOURCES,LLC, a Pennsylvania limited liability company
        (hereinafter referred to as “Operator”),

      and

      


      ATLAS
        AMERICA PUBLIC #15-2006(B) L.P., a Delaware limited partnership, (hereinafter
        referred to as the Developer).

      


      WITNESSETH
        THAT:

      


      WHEREAS,
        Operator and the Developer have entered into a Drilling and Operating Agreement
        dated ________, 200__, (the “Agreement”), which relates to the drilling and
        operating of ____ (_) wells on the ____ (_) Initial Well Locations identified
        on
        the maps attached as Exhibits A ___ through A ___ to the Agreement, and provides
        for the development on the terms and conditions set forth in the Agreement
        of
        Additional Well Locations as the parties may from time to time designate;
        and

      


      WHEREAS,
        pursuant to Section l (c) of the Agreement, Operator and Developer presently
        desire to designate ___ Additional Well Locations described below to be
        developed in accordance with the terms and conditions of the
        Agreement.

      


      NOW,
        THEREFORE, in consideration of the mutual covenants contained in this Addendum
        and intending to be legally bound, the parties agree as follows:

      


      1. Pursuant
        to Section l(c) of the Agreement, the Developer hereby authorizes Operator
        to
        drill, complete (or plug) and operate, on the terms and conditions set forth
        in
        the Agreement and this Addendum No. __, ___ additional wells on the ___
        Additional Well Locations described on Exhibit A to this Addendum and on
        the
        maps attached to this Addendum as Exhibits A___ through A__.

      


      2. Operator,
        as Developer’s independent contractor, agrees to drill, complete (or plug) and
        operate the additional wells on the Additional Well Locations in accordance
        with
        the terms and conditions of the Agreement and further agrees to begin drilling
        the first additional well within thirty (30) days after the date of this
        Addendum and to begin drilling all of the additional wells before the close
        of
        the 90th
        day
        after the close of the calendar year in which the Agreement was entered into
        by
        Operator and the Developer, or, if this Addendum is dated after that 90 day
        period, to begin drilling the first additional well within thirty (30) days
        after the date of this Addendum and to drill and complete (or plug) all of
        the
        remaining additional wells by the end of the calendar year in which this
        Addendum is dated.

      


      3.
         Developer
        acknowledges that: 

      


      	(a)  	
              Operator
                has furnished Developer with the title opinions identified on Exhibit
                A to
                this Addendum; and 

            


      


      	(b)  	
              Such
                other documents and information which Developer or its counsel has
                requested in order to determine the adequacy of the title to the
                above
                Additional Well Locations. 

            


      


      The
        Developer accepts the title to the Additional Well Locations and leased premises
        in accordance with the provisions of Section 5 of the Agreement.

      


      4.  The
        drilling and operation of the additional wells on the Additional Well Locations
        shall be in accordance with and subject to the terms
        and
        conditions set forth in the Agreement as supplemented by this Addendum No.
        __
        and except as previously supplemented,
        all terms and conditions of the Agreement shall remain in full force and
        effect
        as originally written.

      


      5.  This
        Addendum No. _____ shall be legally binding on, and shall insure to the benefit
        of, the parties and their respective successors
        and permitted assigns.

       

      Exhibit
        C

      (Page
        1)


      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

       

      


      


      WITNESS
        the due execution of this Addendum on the day and year first above
        written.

      


      ATLAS
        RESOURCES, LLC

       

      


      By
        ___________________

      


      


      


      ATLAS
        AMERICA PUBLIC #15-2006(B) L.P.

      


      By
        its
        Managing General Partner:

      


      ATLAS
        RESOURCES, LLC

      


      


      By
        ___________________

      


      


      


      


      


      


      Exhibit
        C

      (Page
        2)