EXHIBIT "B"
A.A.P.L. FORM 610-1982
MODEL FORM OPERATING AGREEMENT
OPERATING AGREEMENT
DATED
April 12 , 2004 ,
year
OPERATOR PARTY
CONTRACT AREA See Exhibit "A"
COUNTY OR PARISH OF Parker
STATE OF Texas
COPYRIGHT 1982 - ALL RIGHTS RESERVED
AMERICAN ASSOCIATION OF PETROLEUM
LANDMEN, 4100 FOSSIL CREEK BLVD., FORT
WORTH, TEXAS, 76137-2791, APPROVED
FORM. A.A.P.L. NO. 610 - 1982 REVISED
A.A.P.L.
FORM 610 - MODEL FORM OPERATING AGREEMENT - 1982
TABLE OF CONTENTS
TABLE OF CONTENTS
Article
Title
Page
I. DEFINITIONS 1
II. EXHIBITS 1
III. INTERESTS OF PARTIES 2
A.
OIL AND GAS INTERESTS 2
B. INTERESTS OF PARTIES IN COSTS AND PRODUCTION
2
C. EXCESS ROYALTIES, OVERRIDING ROYALTIES AND OTHER PAYMENTS 2
D. SUBSEQUENTLY CREATED INTERESTS 2
IV. TITLES 2
A. TITLE
EXAMINATION 2-3
B. LOSS OF TITLE 3
1. Failure of Title 3
2. Loss by Non-Payment or Erroneous Payment of Amount Due 3
3. Other Losses 3
V. OPERATOR 4
A. DESIGNATION AND
RESPONSIBILITIES OF OPERATOR 4
B. RESIGNATION OR REMOVAL OF OPERATOR AND
SELECTION OF SUCCESSOR 4
1. Resignation or Removal of Operator 4
2. Selection of Successor Operator 4
C. EMPLOYEES 4
D.
DRILLING CONTRACTS 4
VI. DRILLING AND DEVELOPMENT 4
A. INITIAL WELL
4-5
B. SUBSEQUENT OPERATIONS 5
1. Proposed Operations 5
2. Operations by Less than All Parties 5-6-7
3. Stand-By
Time 7
4. Sidetracking 7
C. TAKING PRODUCTION IN KIND 7
D. ACCESS TO CONTRACT AREA AND INFORMATION 8
E. ABANDONMENT OF
WELLS 8
1. Abandonment of Dry Holes 8
2. Abandonment of
Wells that have Produced 8-9
3. Abandonment of Non-Consent Operations
9
VII. EXPENDITURES AND LIABILITY OF PARTIES 9
A. LIABILITY OF PARTIES
9
B. LIENS AND PAYMENT DEFAULTS 9
C. PAYMENTS AND ACCOUNTING 9
D. LIMITATION OF EXPENDITURES 9-10
1. Drill or Deepen 9-10
2. Rework or Plug Back 10
3. Other Operations 10
E.
RENTALS, SHUT-IN WELL PAYMENTS AND MINIMUM ROYALTIES 10
F. TAXES 10
G. INSURANCE 11
VIII. ACQUISITION, MAINTENANCE OR TRANSFER OF INTEREST
11
A. SURRENDER OF LEASES 11
B. RENEWAL OR EXTENSION OF LEASES
11
C. ACREAGE OR CASH CONTRIBUTIONS 11-12
D. MAINTENANCE OF
UNIFORM INTEREST 12
E. WAIVER OF RIGHTS TO PARTITION 12
12
IX.
INTERNAL REVENUE CODE ELECTION 12
X. CLAIMS AND LAWSUITS 13
XI. FORCE
MAJEURE 13
XII. NOTICES 13
XIII. TERM OF AGREEMENT 13
XIV. COMPLIANCE WITH
LAWS AND REGULATIONS 14
A. LAWS, REGULATIONS AND ORDERS 14
B.
GOVERNING LAW 14
C. REGULATORY AGENCIES 14
XV. OTHER PROVISIONS 14
XVI. MISCELLANEOUS 15
A.A.P.L.
FORM 610 - MODEL FORM OPERATING AGREEMENT - 1982
OPERATING AGREEMENT
THIS AGREEMENT, entered into by and between PARTY, hereinafter
designated and referred to as "Operator", and the signatory party or parties
other than Operator, sometimes hereinafter referred to individually herein as
"Non-Operator", and collectively as "Non-Operators".
WITNESSETH:
WHEREAS, the parties to this agreement are owners of oil and gas leases
and/or oil and gas interests in the land identified in Exhibit "A", and the
parties hereto have reached an agreement to explore and develop