Exhibit 10.46
A.A.P.L. FORM 610 - 1989
MODEL FORM OPERATING AGREEMENT
OPERATING AGREEMENT
DATED
Effective July 1,
2003,
Year
OPERATOR
WOOLSEY OPERATING COMPANY, LLC
CONTRACT AREA
SEE PROSPECT EXHIBITS "A", ATTACHED HERETO AND MADE A PART HEREOF
COUNTY OF
BARBER, COMANCHE,
, STATE OF
KANSAS
KIOWA
COPYRIGHT 1989 - ALL RIGHTS RESERVED
AMERICAN ASSOCIATION OF PETROLEUM
LANDMEN, 4100 FOSSIL CREEK BLVD.
FORT WORTH, TEXAS, 76137, APPROVED FORM.
A.A.P.L. NO. 610 - 1989
TABLE OF CONTENTS
Article
Title
I.
DEFINITIONS
II.
EXHIBITS
III.
INTERESTS OF PARTIES
A.
OIL AND GAS INTERESTS:
B.
INTERESTS OF PARTIES IN COSTS AND PRODUCTION:
C.
SUBSEQUENTLY CREATED INTERESTS:
IV.
TITLES
A.
TITLE EXAMINATION:
B.
LOSS OR FAILURE OF TITLE:
1.
Failure of Title
2.
Loss by Non-Payment or Erroneous Payment of Amount Due
3.
Other Losses
4.
Curing Title
V.
OPERATOR
A.
DESIGNATION AND RESPONSIBILITIES OF OPERATOR:
B.
RESIGNATION OR REMOVAL OF OPERATOR AND SELECTION OF SUCCESSOR:
1.
Resignation or Removal of Operator
2.
Selection of Successor Operator
3.
Effect of Bankruptcy
C.
EMPLOYEES AND CONTRACTORS:
D.
RIGHTS AND DUTIES OF OPERATOR:
1.
Competitive Rates and Use of Affiliates
2.
Discharge of Joint Account Obligations
3.
Protection from Liens
4.
Custody of Funds
5.
Access to Contract Area and Records
6.
Filing and Furnishing Governmental Reports
7.
Drilling and Testing Operations
8.
Cost Estimates
9.
Insurance
VI.
DRILLING AND DEVELOPMENT
A.
INITIAL WELL:
B.
SUBSEQUENT OPERATIONS:
1.
Proposed Operations
2.
Operations by Less Than All Parties
3.
Stand-By Costs
4.
Deepening
5.
Sidetracking
6.
Order of Preference of Operations
7.
Conformity to Spacing Pattern
8.
Paying Wells
C.
COMPLETION OF WELLS; REWORKING AND PLUGGING BACK:
1.
Completion
2.
Rework, Recomplete or Plug Back
D.
OTHER OPERATIONS:
E.
ABANDONMENT OF WELLS:
1.
Abandonment of Dry Holes
2.
Abandonment of Wells That Have Produced
3.
Abandonment of Non-Consent Operations
F.
TERMINATION OF OPERATIONS:
G.
TAKING PRODUCTION IN KIND:
(Option 1) Gas Balancing Agreement
(Option 2) No Gas Balancing Agreement
VII.
EXPENDITURES AND LIABILITY OF PARTIES
A.
LIABILITY OF PARTIES:
B.
LIENS AND SECURITY INTERESTS:
C.
ADVANCES:
D.
DEFAULTS AND REMEDIES:
1.
Suspension of Rights
2.
Suit for Damages
3.
Deemed Non-Consent
4.
Advance Payment
5.
Costs and Attorneys' Fees
E.
RENTALS, SHUT-IN WELL PAYMENTS AND MINIMUM ROYALTIES:
F.
TAXES:
VIII.
ACQUISITION, MAINTENANCE OR TRANSFER OF INTEREST
A.
SURRENDER OF LEASES:
B.
RENEWAL OR EXTENSION OF LEASES:
C.
ACREAGE OR CASH CONTRIBUTIONS:
i
D.
ASSIGNMENT; MAINTENANCE OF UNIFORM INTEREST:
E.
WAIVER OF RIGHTS TO PARTITION:
IX.
INTERNAL REVENUE CODE ELECTION
X.
CLAIMS AND LAWSUITS
XI.
FORCE MAJEURE
XII.
NOTICES
XIII.
TERM OF AGREEMENT
XIV.
COMPLIANCE WITH LAWS AND REGULATIONS
A.
LAWS, REGULATIONS AND ORDERS:
B.
GOVERNING LAW:
C.
REGULATORY AGENCIES:
XV.
MISCELLANEOUS
A.
EXECUTION:
B.
SUCCESSORS AND ASSIGNS:
C.
COUNTERPARTS:
D.
SEVERABILITY
XVI.
OTHER PROVISIONS
ii
OPERATING AGREEMENT
THIS AGREEMENT, entered into by and between WOOLSEY OPERATING COMPANY, LLC,
hereinafter designated and referred to as "Operator," and the signatory party or
parties other than Operator, sometimes hereinafter referred to individually as
"Non-Operator," and collectively as "Non-Operators."