EXHIBIT 10.27
A.A.P.L. FORM 610 - 1989
MODEL FORM OPERATING AGREEMENT
OPERATING AGREEMENT
DATED
October 31
,
2011
,
Year
OPERATOR
CONDOR ENERGY TECHNOLOGY LLC
CONTRACT AREA
See Exhibit "A"
COUNTY
OF
WELD
,
STATE OF
COLORADO
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
A.A.P.L. FORM 610 - MODEL FORM OPERATING AGREEMENT - 1989
TABLE OF CONTENTS
Article
Title
Page
I.
DEFINITIONS
1
II.
EXHIBITS
2
III.
INTERESTS OF PARTIES
3
A. INTERESTS OF PARTIES IN COSTS AND PRODUCTION:
3
B. SUBSEQUENTLY CREATED INTERESTS:
3
IV.
TITLES
4
A. TITLE EXAMINATION:
4
B. LOSS OR FAILURE OF TITLE:
4
1. Failure of Title
4
2. Loss by Non Payment or Erroneous Payment of Amount Due 4
3. Other
Losses 4
4. Curing Title 4
4
V.
OPERATOR
5
A. DESIGNATION AND RESPONSIBILITIES OF OPERATOR:
5
B. RESIGNATION OR REMOVAL OF OPERATOR AND SELECTION OF SUCCESSOR:
5
1. Resignation or Removal of Operator
5
2. Selection of Successor Operator
5
3. Effect of Bankruptcy
5
C. EMPLOYEES AND CONTRACTORS:
5
D. RIGHTS AND DUTIES OF OPERATOR:
5
1. Competitive Rates and Use of Affiliates
5
2. Discharge of Joint Account Obligations
5
3. Protection from Liens
5
4. Custody of Funds
6
5. Access to Contract Area and Records
6
6. Filing and Furnishing Governmental Reports
6
7. Drilling and Testing Operations
6
8. Cost Estimates
6
9. Insurance
6
VI.
DRILLING AND DEVELOPMENT
6
A. INITIAL WELL:
6
B. SUBSEQUENT OPERATIONS:
6
1. Proposed Operations
6
2. Operations by Less Than All Parties
7
3. Stand-By Costs
9
4. Deepening
9
5. Sidetracking
9
6. Order of Preference of Operations
10
7. Conformity to Spacing Pattern
10
8. Paying Wells
10
C. COMPLETION OF WELLS; REWORKING AND PLUGGING BACK:
10
1. Completion
10
2. Rework, Recomplete or Plug Back
10
D. OTHER OPERATIONS:
10
E. ABANDONMENT OF WELLS:
11
1. Abandonment of Dry Holes
11
2. Abandonment of Wells That Have Produced
11
3. Abandonment of Non-Consent Operations
11
F. TERMINATION OF OPERATIONS:
11
G. TAKING PRODUCTION IN KIND:
12
(Option 1) Gas Balancing Agreement
12
(Option 2) No Gas Balancng Agreement 12
i
A.A.P.L. FORM 610 - MODEL FORM OPERATING AGREEMENT - 1989
TABLE OF CONTENTS
VII.
EXPENDITURES AND LIABILITY OF PARTIES
12
A. LIABILITY OF PARTIES:
12
B. LIENS AND SECURITY INTERESTS:
13
C. ADVANCES:
13
D. DEFAULTS AND REMEDIES:
14
1. Suspension of Rights
14
2. Suit for Damages
14
3. Deemed Non-Consent
14
4. Advance Payment
14
5. Costs and Attorneys' Fees
14
E. RENTALS, SHUT-IN WELL PAYMENTS AND MINIMUM ROYALTIES:
14
F. TAXES:
15
VIII.
ACQUISITION, MAINTENANCE OR TRANSFER OF INTEREST
15
A. SURRENDER OF LEASES:
15
B. RENEWAL OR EXTENSION OF LEASES:
15
C. ACREAGE OR CASH CONTRIBUTIONS:
16
D. ASSIGNMENT; MAINTENANCE OF UNIFORM INTEREST:
16
E. WAIVER OF RIGHTS TO PARTITION:
16
F. PREFERENTIAL RIGHT TO PURCHASE 16
IX.
INTERNAL REVENUE CODE