Document:

Gas Well Oil Agreement

 Exhibit 10.1 
 GAS WELL OPERATING AGREEMENT 
 THIS OPERATING AGREEMENT made this 2nd day of January 2002, by and between
Wilon Resources, Inc., 931 Ashland Terrace, Chattanooga, Tennessee 37415, hereinafter referred to as Wilon and R & D Drilling & Completion, Inc., P.O. Box 242, Salyersville, Kentucky 41465, hereinafter referred to as R & D.

 WHEREAS, R & D is an independent oil and gas management, development and production company, and currently operates and manages oil
and gas wells in Kentucky and West Virginia, and 
 WHEREAS, Wilon has gas wells located in Butler District, Wayne County, West Virginia and
desires R & D as an independent contractor to act on its behalf as the operator of said gas wells, and 
 WHEREAS, this agreement is
entered into to effectuate the agreements and covenants contained herein. 
 NOW THEREFORE, in consideration of the promises and mutual
covenants contained herein, the parties do hereby agree as follows: 
 1. OPERATING AREA 
 The Operating Area is designated as the Butler District, Wayne County, West Virginia and shall include the wells, the surface and subsurface equipment
associated with the gas wells, the gas gathering system, the gas pipelines from the wells to the master sales meters and the well access roads, hereinafter simply as the “wells”. A list of said wells is attached hereto as Exhibit A and
made a part of this agreement. Wells may be added to this Operating Agreement in writing by Wilon and accepted by R & D. 
 2. OPERATOR 
 Wilon appoints R & D as Operator of the wells. R & D shall manage and conduct all well operations as required or permitted pursuant to the terms
and conditions of this agreement. R & D shall have no liability to Wilon for losses sustained or liabilities incurred in the operation of the wells, except such as may result from gross negligence or willful misconduct by R & D. 

3. TERM OF OPERATING AGREEMENT 
 (1) This agreement shall
become effective as of the day and year first written above, when executed by the parties hereto, and except as provided for in 3(2) hereof, shall continue and remain in full force and effect during the productive life of the wells. 
 (2) This agreement shall terminate between the parties hereto, upon the earliest of (a) the plugging or abandonment of the wells, (b) the
resignation of R & D as operator, which may be effected with just cause, upon ninety (90) days prior written notice to Wilon, or (c) the removal of R & D as operator, which may be effected with just cause, upon thirty
(30) days prior written notice to R & D, from Wilon. 
  

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 (3) Upon resignation or removal of R & D as operator, as provided herein, R & D shall provide the
successor operator, upon written request by such operator, all well records, books and property pertaining to the wells. 
 4. WELL INTERESTS 
 Wilon hereby represents and warrants to R & D that it is the legal owners of the wells. 
 5. WELL OPERATIONS 
 The term “well operations” shall generally mean any labor or service,
including third party services, required to maintain the wells, the surface and subsurface equipment associated with the wells, gas gathering system, gas pipelines, well access roads and right of ways, and to maintain the quality of gas as the
standard requires by the gas purchasing entities, and all other services that would be required following the end of the month. 
 6. CHARGES FOR WELL
OPERATION 
 (1) R & D shall be paid, except as specifically provided for in 6(2) hereof, the invoice price for all supplies, equipment,
insurance, labor and services, including third party services, that R & D supplies, purchases or contracts for, pertaining to or for the benefit of the wells. 
 (2) R & D shall be paid a monthly operating fee of $250.00 per well, for each month a well has any production. The monthly operating fee paid R & D shall include the cost of (a) a well tender and a four
(4) wheel drive vehicle, (b) the routine maintenance and adjustments to the wellheads, gas gathering system, pipelines and meters, and the services for maintaining well records. 
 (3) The monthly operating fee paid R & D, as provided for in 6(2) hereof, shall not include the costs of (a) supplies used in the maintenance of
the wells, gas pipelines and meters, (b) the equipment, labor or third party services to repair or service the wells, gas gathering system, pipelines, meters and well access roads, (c) any special fees or reports required by State or
Federal agencies, including well bonds, and (d) the costs associated with title opinions or gas purchase contracts. 
 7. PAYMENTS AND APPROVALS

 (1) R & D shall in good faith conduct all well operations in a prudent and workmanlike manner using technically sound, customary and
generally accepted oil and gas field practices and techniques currently prevailing within the geographical area of the wells. 
 (2) R &
D shall not start any project or incur any extraordinary costs to the wells reasonably estimated to result in an expenditure of more than $1,000.00, without first sending written notice and then receiving written approval from Wilon, unless such
project or costs are necessary in the sole opinion of R & D to protect person, persons, or property in the event of a sudden emergency. 
 (3) R & D shall send written notice to Wilon of any project pertaining to the wells estimated to result in an expenditure of more than $1,000.00, as provided for in 7(3) hereof. Such notice shall specify (a) the well or wells,
(b) the purpose of the project, (c) the equipment, labor and third party services required for the project, and (d) the estimated cost of the project. Such notice shall require Wilon to advance payment of the estimated cost of the
project. 
  

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 (4) R & D shall not plug or abandon a well without first receiving the written approval from Wilon
unless such plugging or abandonment of a well or wells is required by a written order from a State or Federal agency. 
 (5) R & D shall
have the right to employ its own equipment in the operation of the wells, but in no event shall R & D charges for its equipment or services exceed the prevailing rates in the area for similar equipment or services; and its services shall be
performed pursuant the same terms and conditions as customary in the area. 
 8. ACCOUNTING AND STATEMENTS 
 (1) R & D shall maintain accurate records of all operating, production and business affairs pertaining to the wells. The records shall include the gas
production from the wells and other business records that would be customary in the day-to-day operation of the wells. 
 (2) R & D shall
have the right and be entitled to receive advance payment from Wilon for such expenditures as set forth in 7(2) hereof within fifteen (15) days after receipt of R & D ‘s written notice, as provided for herein. R & D shall not be
required to commence a project until such payment is made. 
 9. LIENS AND SECURITY INTEREST 
 Wilon hereby grants R & D, as operator, a first lien and security interest in said wells for any unpaid charges, fees or expenditures due R & D,
which remain unpaid for a period of sixty (60) days. 
 10. ACCESS TO INFORMATION AND WELLS 
 (1) Wilon, its agents or representatives, including attorneys, by appointment, shall have the right during normal business hours, to review or audit the
records pertaining to the wells. 
 (2) Wilon, its agents or representatives, including attorneys, at their sole risk, liability and expense,
shall have the right to enter the property and inspect the wells. 
 11. NOTICES 
 (1) All notices required pursuant to this agreement shall be writing and either personally delivered or transmitted by mail, registered or certified,
return receipt requested, postage prepaid to the parties hereto. 
 (2) All notices shall be effective upon personal delivery or upon being
deposited in the United State mail. 
 (3) Each party shall have the right, from time to time, during the term of this agreement, to change
their address for notices by giving the other party written notice of such change. 
 (4) All notices, as provided herein, may also be
delivered by facsimile transmission, provided there is sufficient evidence of actual receipt of such transmission by the receiving party. 
 12. RELATIONSHIP
OF THE PARTIES 
 (1) It is not the intention of the parties hereto to create, nor shall this agreement be construed or considered as
creating, any type of partnership or association between the parties for any purpose or reason whatsoever, including rendering either party liable as partners. 
  

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 (2) It is agreed and clearly understood that R & D shall be deemed to be an independent contractor
and shall perform its duties and obligations as the operator of the wells, as set forth within this agreement. 
 14. FORCE MAJEURE 
 If R & D or Wilon is rendered unable, wholly or in part, by force majeure to carry out their obligations pursuant to this agreement, other than the
obligation to make money payments, they shall give written notice to the other party hereto of the force majeure with full particulars; thereupon, the obligations of either party, as the case may be, shall be suspended during, but not longer than
the continuance of the force majeure. Either party shall use all reasonable diligence to remove the force majeure as quickly as possible to the extent the force majeure is within the reasonable control of either party. The term “force
majeure” shall mean any act of God, strike, lockout, or other industrial disturbance, act of public enemy, war, public riot, lightning, fire, storm, flood, explosion, government restraint, unavailability of equipment, adverse weather conditions
or any other cause, whether of the kind specifically enumerated herein or otherwise, which directly precludes performance hereunder and is not reasonably within the control of either party. 
 15. GOVERNING LAW 
 This agreement shall be governed by, and
construed in accordance with the laws of the State of West Virginia and by no other state. 
 16. CAPTIONS 
 The articles, sections, titles of captions contained in this agreement are inserted only as a matter of convenience and reference, and in no way define,
limit, extend or describe the scope of this agreement, or the intent of any provision hereof. 
 17. SEVERABILITY 
 If any provision of this agreement, or the application thereof to any person, entity or circumstances, shall be invalid or unenforceable to any extent,
the remainder of this agreement, and the application of such provision to other persons, entities or circumstances, shall not be affected thereby and shall be enforced to the greatest extent permitted by law. 
 18. COUNTERPARTS 
 This agreement may be executed in any
number of counterparts and all such counterparts shall, for all purposes, constitute one agreement, binding upon the parties hereto. 
 19. BINDING AGREEMENT

 This agreement shall be binding on and shall inure to the benefit of the parties hereto and their respective successors and assigns.

 20. ENTIRE AGREEMENT 
 This agreement contains
the entire agreement between the parties hereto, pertaining to R & D ‘s operation of the wells and supersedes all prior and contemporaneous oral and written representations, agreements, arrangements and 

  

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undertakings whatsoever between the parties hereto. No variations, modifications or changes to this agreement shall be binding upon the parties hereto,
unless set forth in a document duly executed by the parties. 
 IN WITNESS WHEREOF, the undersigned have executed this agreement as of the
day and year first above written. 
  

			
	R & D Drilling & Completion, Inc.
		
	By:	 	  

		 	Its President
	
	Wilon Resources, Inc.
		
	By:	 	  

		 	Its President

  

 Page 5 of 5Oil Gas & Coalbed Methane Lease

 Exhibit 10.2 
 OIL, GAS & COALBED METHANE LEASE 
 THIS AGREEMENT, made and entered into this
     day of                     , 20    , by and between
                                        
                                        
                                        
                                        
                                        
                                        
             
 ______________________________________________________________________________________________________________________________ 
 party(s) of the
first part, hereinafter referred as Lessor(s); and Wilon Resources, Inc. 931 Ashland Terrace, Chattanooga, Tennessee 37415, hereinafter referred to as Lessee. 
 WITNESSETH: That the Lessor(s) for and in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration, the receipt of which is hereby acknowledged, and performance of the covenants herein
has leased and let, exclusively unto Lessee, the land hereinafter described for the purpose of exploring, operating and producing oil, gas, coalbed methane and related products, and the right of injecting water and other fluids in to subsurface
strata, with rights and easements for laying and setting pipes, electric lines, tanks, power houses, ponds, roadways and fixtures for producing, treating, maintaining and caring for such products and such other rights and privileges as are
necessary, or convenient for the economical operation alone or conjointly with neighboring land for oil, gas and coalbed methane products, all that certain tract of land situated in Wayne County, State of West Virginia, 
  

			
	On the North by the lands of:	 	  

	On the East by the lands of:	 	  

	On the South by the lands of:	 	  

	On the West by the lands of:	 	  

	This being the same property conveyed to	 	  

 This lease shall remain in force for a term of
             (            ) year(s), and as long thereafter as oil, gas and/or coalbed methane are produced from
the premises or operations by drilling or injection are continued, or thereafter, to pay the Lessor(s) a delay rental at the rate of Dollars ($             ) per acre per annum
payable annually in advance, beginning                     ,             ,
until, but not after, a well yielding royalty to the Lessor(s) is drilled and oil, gas and/or coalbed methane is marketed therefrom. For injection purposes this lease shall continue in full force and effect, only as to well(s) so used and ten (10)
acres contiguous thereto. 
 Lessee covenants and agrees: 
 1. To deliver to the credit of Lessor(s), free of cost, in the pipeline to which Lessee may connect it’s well(s), a 1/8th part of all oil produced and saved from leased premises, or at the Lessee’s option
pay 1/8th of the market price for oil of like grade and gravity prevailing on the day such oil is run. 
 2. To pay to Lessor(s) for all
marketed gas or coalbed methane an amount equal to 1/8th of the price received at the wellhead or meter station. 
  

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 3. If Lessor(s) owns a less interest than the entire undivided fee, royalties and rentals shall be paid
Lessor(s) only in proportion the Lessor(s) interest bears to the whole. 
 4. In the event of a dispute between Lessor(s) and other claimants
as to the right to receive payment of rents and royalties, Lessee may continue it’s operations and deposit same in an escrow account to be disbursed upon legal resolution of the controversy. 
 5. The Lessee may use, free of cost, gas, oil, coalbed methane and water produced on said land for it’s operation thereon, except waters from wells
of Lessor(s). 
 6. Lessor(s) may use free of cost, gas for one (1) house residential house upon the premises, however, this shall apply
only to Lessor(s) or their heirs who live on the leased premises, no other individuals shall have free gas, which shall not exceed two hundred thousand (200,000) cubic feet of free gas per year, which shall be the Lessor(s) sole use for
domestic purposes only. Connection shall be made by a qualified person at Lessor’s expense, responsibility and risk upon advance written notice. Lessee may observe the connection and disapprove any connection it deems unsafe. Lessor(s) shall
save and indemnify Lessee from any claims or liabilities from Lessors connection and use of gas. 
 7. When requested by Lessor(s), Lessee
shall bury pipe below plow depth upon tillable land. 
 8. No well shall be drilled nearer than two hundred (200) feet of the principal
buildings upon said premises, except by mutual consent. 
 9. Lessee shall pay for actual damages by it to growing crops. 
 10. Lessee shall have the right during or after the term hereof to remove all machinery and fixtures placed by it on premises, including the right to
draw and remove casing. 
 11. If Lessee shall commence to drill a well within the term of this lease or any extensions, it may drill such
well to completion with reasonable dispatch, and, if oil, gas and/or coalbed methane be found in paying quantities, this lease shall continue in force as if such well had been completed within the initial term. 
 12. If the estate of either party is assigned (assigning in whole or part is expressly allowed) the covenants hereof shall extend to successors or
assigns, but no change in ownership or assignment shall be binding on Lessee until after Lessee has been furnished with a written transfer or assignment If this lease shall be assigned, as to a part of the lands and the assignee of such part shall
default in payment of a proportionate part of rents due, such default shall not operate to defeat or affect this lease in so far as it covers a part or parts of said lands upon which the Lessee shall make due payments of rentals. 
 13. It the lease premises are now, or shall be hereinafter be owned in several or in separate tracts, the premises nevertheless shall be developed and
operated as one lease, and all royalties accruing hereunder shall be treated as an entirety and shall be divided among, and paid to, such separate owners in the proportion that the acreage owned by such separate owner bears to the entire lease
acreage. 
 14. If at any time there be as many as four (4) parties entitled to rental or royalties, Lessee may withhold payment thereof
until all parties designate in 

  

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 writing, in a recordable instrument, to be filed with Lessee, a common agent to receive all payments due hereunder, and
to execute division and transfer orders on behalf of said parties and their respective successors in title. 
 15. Lessee may pool or combine
the acreage covered by this lease or any portion thereof with other land in the immediate vicinity when in Lessee’s judgment, it is necessary or advisable to do so in order to properly develop and operate said premises in compliance with
spacing rules of any lawful authority or to promote the conservation of oil, gas or coalbed methane produced from said premises. If production is found on the pooled acreage, it shall be treated as if production is had from this l ease, whether the
well or wells be located on the premises covered by this lease or not. In lieu of the royalties elsewhere herein specified, Lessor(s) shall receive on production from a unit so pooled only such portion of the royalty stipulated herein as the amount
of his acreage placed in the unit or his royalty interest herein bears to the total acreage so pooled in the particular unit involved. 
 16.
Lessor(s) hereby warrant generally the title to the lease premises. Lessee shall have the right to redeem from Lessor(s), by payment, any mortgage, taxes or liens on said lands, if Lessor(s) defaults and be subrogated to the rights of the holder
thereof. Any such payments made be Lessee shall be deducted from money due the Lessor(s) under this lease. 
 17. This lease shall not expire
at the end of either the primary or secondary terms hereof if there is a well capable of producing oil, gas and/or coalbed methane in paying quantities located upon some part of the lands embraced herein where such well is shut-in due to the
inability of the Lessee to obtain a pipeline connection or to market the oil and/or gas therefrom; and, if the annual rental as provided herein, is paid the payment of the said annual rental shall be considered for all purposes the same as if oil,
gas and/or coalbed methane were being produced in paying quantities and upon the commencement of marketing oil, gas and/or coalbed methane from any well or wells the royalty paid for the lease year in which the oil, gas and/or coalbed methane is
first marketed shall be credited upon the royalty payable hereunder to the Lessor(s) for such year. 
 18. All covenants of this lease shall
be subject to all Federal and State laws and to all executive orders, rule or regulations of Federal and State authorities and this lease shall not be terminated, in whole or part, nor Lessee held liable for any failure to perform thereunder if such
failure is due to or is the result of any such law, order, rule or regulation. 
 19. Other provisions: 
 IN WITNESS WHEREOF, the parties hereto have signed their names this          day of
                 20     
  

	
	  

	   
	  

  

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 STATE OF WEST VIRGINIA 
 COUNTY OF                      
 I,                     , a Notary Public, in and for said State and County, do certify that
                     whose name(s) are signed to the within writing bearing date the      day of
                    , 19     has (have) this day acknowledged the same before me in my said county. Given under my
hand this      day of             , 20    . 
  

	
	  

	Notary Public

 My commission expires
                                        
                    . 
 STATE OF WEST VIRGINIA

 COUNTY OF                      
 I,                     , a Notary Public in
and for said State and County, do certify that                     ,whose name(s) are signed to the within writing bearing date the
     day of                     , 20     has (have) this day acknowledged the same
before my said county. 
 Given under my hand this      day
            , 20    . 
  

	
	  

	Notary Public

 My commission expires
                                        
                    . 
 THIS INSTRUMENT PREPARED BY

 Wilon Resources, Inc., 931 Ashland Terrace, Chattanooga, Tennessee 37415 
  

	
	By                                      
                                      
 

  

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