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<br />1974
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<br />OIL AND GAS LEA~'
<br />
<br />~~
<br />
<br />r"rm 1tK-(I'wduct'I1<}
<br />Kan..Okll.& Culo. ,1')5,
<br />
<br />THIS AGREEMENT, Entered into this the
<br />
<br />3rd
<br />COMPANY, a
<br />
<br />day of AUQust
<br />Colorado corporation
<br />
<br />.19R
<br />
<br />betwun LAKE CANAL & RESERVOIR
<br />Box 204
<br />Timnath, Colorado 80525
<br />I! herelnafterc:alled l"tsor,
<br />,and' 'Breeze Ex lor:ation 1512 Larimer St. #930 Denver CO. 802~reindterC8lledlelSu.doelwltneA:
<br />,Ii. rh1t lnso~. f~r and in ' nsideratlcR of the lum of Ten & more Dollars In hand paid and of the covenant.lnd I.Renlent.
<br />h.ereUUlrte~lont.'ned t<! be perf ed by the lessee. ha. this day c..nted, leued, and let and by these p."sentl does hereby crant leue and let d: 1
<br />alvely ~nto: he lenee1!t.qe herein. te~ described land, and with the ri&hl to unitize thisluse or any part thereof with other OIl.nd'l~ le~se t aU u,
<br />any, p~rt 0 the I-ndl, qovereFf t ereby al. hereinafter provided. for the purpose of. Carry ii'll on leololical. leophysical and other ex lorato:ya~:tli; \~~ I.
<br />dudlnc cor drllllna. and, th~,drl nc. mimi'll. and operatinl for. produclnl.. and saVini III of the oil. ps. cuinlhead laa. eulnlhead aDollne and aU,otber I
<br />auel and t elr respective con. 1m .,ent vapors. and for co.nstructlm: roadl. laylnl pipe Unn. bulldinl t.nks. atorinl oil. bulldirll power stationa. telephone
<br />Un... aDd 0, her Itruchael thereo necessary or converuent for the economical ".per.tion of lIlid land alone or conjointly .....Ith neilhborinl I-nds. to .
<br />p.roduee. ~ e. take cari of. .nd jUfacture all of S\leh "'f's~ncn. and for hous'"l and boardinl employees. uid tr.ct of land with any reversionary
<br />rldttl there belnalltuated in the County of T."'- rl mpr '
<br />Colorado ' , .
<br />State af . lUld described 85 follows:
<br />
<br />RANr.E 68 WEST, 6th P.M.
<br />That part known as North Gray Reservoir, South Gray Reservoir,
<br />and Gray Reservoir 13,& being all the land owned by the Lake Canal
<br />Reservoir Company in Sections 34 & 35 & being the same land descri
<br />, by Plats recorded under file i 898, recorded in the office of Cler
<br />J Recorder of Larimer County, CO.~ subject to Court Decree recorded
<br />I Book 2033,Page 85 .ndcontaininl 177 acrel ",oreode..
<br />II . .
<br />2. J~ b alleed tlat thlsle~ thaU remam In full force for a term of Three (3) yearl from this date. Ind ulonl tbereafter ~ 011
<br />or la~. or ~~~":~d~~:~~~ ::t~~t~~~~~ ~~d':;;~~e~~;r=ea:n.::s ':.~~ =~:~: said I.nd is consolld.ted) or the premise. an belnl developed or oPefjted.
<br />To deliver to the credit at lessor. free of cost. in tbe pipe line to whlcb leasee may connect his .....ells. the eql1ll one-el&ht (1/8) part ot all oll
<br />producedand..ved from the leased premises. ' II
<br />.. The lessee 1lha.1I monthly pay lessor II royalty on 11.$ ma.rketed from each .....ell where las only Is found. one-ei&htb (tIS) of the proceedl tf sold'
<br />at the .....ell. or If marketed by lessee off the leased premises. then one.."lahth (l/B) of Its market value at the well. The le_e sh.1I pay the lenor; (a) one.
<br />eilhth (118). of the proceeOs received by the lessae from the sale of casinehead 185. produced from .ny 011 .....ell: (b)one-eipth (l/B) of the value. at the
<br />mouth of the .....ell. computed at the prevallinl market price. of the caslnthead aas. produced from lUly all well .nd used by lessae off the leuad premil'"
<br />for any purpose or used On the leased premise. by the lessee for purposes other than the development and operation thereof. Lell50r shall have the pIlvll-
<br />ele at his own risk .nd expense of uslnl las from any aas well On '-lId land for stoves and inside 1I1nlS In iDe pnndpaJ dwellint loc.~d on the leased
<br />premises by makinl hi. own connections thereto.
<br />Where ,at from. well Or wells. capable ot produclnc lias only, Is not sold or used for a period of one year. lessee shall p.y or tender as royalty.
<br />.n amount equ.vJ to the delay rental as provided In par.ar.ph (5) hereof. pay.ble annually on the anniversary date of this lease followinl the end of each
<br />luch yea.r durinl which such I'll b not sold or used. and while said royalty Is so paid or tendered thb lease sball be held as a produclna property under
<br />par.arapbnumberedt.....oheNlol.
<br />6. If operations far the drllUnC of a .....ell for oil or las.re not commenced On said land on or before the~daY of Auaus t ,
<br />19 ~ . this lease shall terminate as to both p.rtie.. unless the lessee shall on Or before Iilid date p.y or tender to the lellOr or for the le~r" credU In
<br />the U'nited Bank Bank at Fort COllins. Colorado .0rUscucceaors......hichB."'k.ndl\ll
<br />succeaors are tbe lessor'. .aent and shall continue ;u the depository of any .nd .11 suml payable under this lease rep.rdleu of cbanle. of ownenhlp In
<br />said land or In the oU.nd au Or In the rentals to accrue hereunder. the sum of One hundred seventy seven Doll..... wblch shall operate as
<br />a rental and cover the privilele of deferrinl the commencement or operations for drillin,: for a period of one year. In like manner an4 upon Uke
<br />,payments or tenders the commencement of operations for drillln&: may further be deferred for like periods S\lccewvely. All p.yments or tenders fll..y be
<br />made by check or draft of lessee or any aWlnee thereof. m.lled Or delivered on Or before the rental paylna date, either direct to lelSQr or l.ul,rll Qr to
<br />said depository b.nk. and It Is understood and Ilreed that the consideration first recited herein. the do.....n payment, covert not only the privlleee Iranted
<br />to the date .....hen said first rentalls payable IS aforesaid. but .lso the leuee', option 01 utendlna that period as aforeoaid and any and all qther dlPta
<br />conferrer!. LelSee may at .nytlme execute and deUver to Le!l$Or. or place of ncord. a release or releues coverlnl any portion or portions of t~e abOve
<br />described premises .nd tbereby S\lrrender this leue II to S\lch portion or portions and be relieved of all obliptlons II to tbe acre.le sW'lendenll. Ind
<br />thereafter the rentals pay.ble heNlunder shaU be reduced In the proportion that the .creale covered hereon Is reduced by said relel.se or te(euu.
<br />6. Should the first well drilled on the ahove described land be a dry. hole. then. and In that event. If . second well Is not commenced on said land
<br />within twelve month. from upiratlon of the last rental period for which rental has heen paid. this lease shail termlnjl.te III to both parties. unlesSl tbe
<br />le.....e on or before the expintion of sald twelve monthslhall resume the payment of rental. in the same amount and In the ..me manner as hereinbefore
<br />provided. And It Is aa;reed that upon the resumption of the p.yment of rentals,as above provided. that the last precedln&: p.ralraph hereof. &ovel1llnl the
<br />payment of rentall end the effect tbereof shall continue In torce ju.t as thouih there h.d been no Interruption in the nntal. pa)'l'nents.
<br />7. If I.id lessor owns. Ins interest In the ahove described land than the e!ltlre and undivided lea .Imple eotato therein. then tbe royaHles and
<br />rent.ls herein provided shall be paid the le$!lor only In the proportion .....hich. his Interest be... to the whole and undivided lee. Ho.....ever. such rental. shall
<br />be increased at the next succeedlnl rentalannlveuary .Her .ny reversion OCCUfS to cover the interut so llcqulrild. .
<br />B. The (elsee .lall have the rieht to use. free of cost, CIS. oll.nd .....ater found on said I.nd for Its openUon. thenon. except w.ter from tht Wel~
<br />of the lellor. When required by lessor. the lessee shall bury its pipe lines belo..... plow depth and shall p.y for damaae clused by Its operations to ,rowln.
<br />crops on Iilid land. No .....ell shall be drilled nearer than 200 feet to the house Or barn now on uid premises without wIltten consent of the lel4or. Let,ee
<br />shall have the rllht at any time durin':. Or alter the expiration of. this leue to remove all machtnery. fixtures, hou'l!$. bulldlnn and other .tructurea lllaee:d
<br />on said premises, inciudinl the r1&ht to dra..... .nd remove all clllnl. Leaee alfees. upon the completion of .ny test as a drY hole or upon the abandonment
<br />of .ny producinl well. to restore the premises to th,eir orlal.nal contour as near .. practicable and to remove aU Ins~.tiol\S within. reuonablll time. -
<br />9. If the estate of either party hereto Is asstgned (.nd the privUege of .ullninlln .....hole_ or In part it upresaly allowed), the covenants hereot ~all
<br />extend to the heirs. devisees. executors. administrators. succelSOI$. .nd usltn.!l. but no cbanle of ownership In the land or In the rentals or royaltieS or any
<br />.um due under this lease shall be bindina On the lessee untlllt h... b~n furnished with either the orillnal recorded in.tr\l.ment of conveyanct or a duly
<br />certified copy thereof or a certlfled COpy of the .....ill of .ny deceased owner and of the prob.te thereof. or certified cOpy of the proceedlnla tho,!,lnl
<br />.ppointment of .n admlni.trator tor the estate of .ny deceased o.....ner. whichever Is appropriate. tolether with all orillnal recorded lnat:r:urnep,", 01 con-
<br />vey.nce or duly certified capias thereof necess.ry In sho.....inl a complete chain of title b.ck to leuor to tbe fulllntere,t al-imed. .nd aU advlnea pay.
<br />ments of rentals made hereunder before receipt of .aid documents shall be bindl", on any direct or Indirect aulanee, lIl.ntee. devllJee. admlnbtrator,
<br />executor. or heir of leuor. I .
<br />10. It Is hereby alfeed that in the event this le.se Ihall be aWlned as to . part or as to parts of the above deICribed land and the holder or owner
<br />! o'f any sucb part or parts shall m.ke default in the payment of the proporlionate part at the ren~ due from tUrn or them. such def.ult 1lha.1I not oper.te lei
<br />I defeat Or .ffect this lease In,otar..1t covers a part a! said llUld upon whieh the lessee or .ny aal'nee helltof .ball ml'ke due payment of said rentab.
<br />: 11. LeSlor hereby warr.nts and aa:reel to defend the title to the land herein described and apees that the lessee. at Its option. mall' p.y I.tld dls-
<br />eharle In .....bole or_In part any taxes. mortl.aes. or other liens existine.levled. or asse.sed on or alalnl$ the above described lands ..nd.ln event it exerdses
<br />such option, It shall be subrolaled to tile rllhts of _ny holder or Iloldert thereof and may reimburse Itself by applYina to the cflscharle ot any .ucb mon-
<br />1.le, tax or otber lien. any roy.lty Or rental. .ccruine hereunder. . -. .
<br />12. Notwlthstandlna anythlnaln this lease contained to the contrary. it I. expreSlly .Ireell that It ieuee _hall commence operation. tot drlllin,at
<br />any time .....hUe this lease Is In force. tbt. lease shall rem.ln In force and ita terms shall contlnul! so Ion,.. luch OPl!ntlolU are prolJecuted ItllQ. if produc:-
<br />tion results therefrom. then at loni at production continues.
<br />If .....Uhln the primary term 01 thls lease. production on the leased premlsessh.lI celie from any c.use. thlsleue anall not terminate provided
<br />operrotlon.. ror the drilllnc of . wen shall be commenced before or on the next ensulnl rental paylnl date;.or. prOVided le""e bealns Or reS\lme' the p.y-
<br />ment of rentals In the manner and amount hereinbefore provided. U. after the expiration of the prim..,. term of tbit I..e. production Oil the leased
<br />premises Ihall ceue from any c.use. this lease shall DOt terminate provided lellee resume. operation. for re-workinl or drlUinl a well within Ibty (BO).
<br />days from such cessation and this leue d1al1 remain in force durlnl the Prolfl;",Uon of such operlltiolU and. If produetion ruulta thereform. then as lonl as
<br />production conl.inue.. '
<br />13. Lessee Is hereby alven the riahl at its option. at any time and from time to time, to pool or \InlUu all or any part or parts of ttle above de-
<br />$Cribed land with other land. leue. or leases In the immediate vicinity thereof. sueh poollnC to be Into unitt not exceedlnl the minimum .\2._ tract on
<br />which a .....ell m.y be drllle4 under la....... rules, Or relulallons In torce rot the time of such poollnl or unltlutlon: provided. however. that .ueh unlta may
<br />exceed sucb minimum by not more th.n ten .cres If such exceu I. nece....y In order to eonrarm to ownerahlp subdl~o~ Or lease lines. Lellee shaJI
<br />exercise uld option. as to each desired unit. by axecutiq.1 and recordinl_n In,trument Identifyin& the unltlted are.. Any well drilled or op.ratklp,.con.
<br />dueled on lUlY part of each such !Inlt s~all be conslder.ed I' well drilled o~ oper~t1pns conducted !1nde~ t~ leue. a,.d ~Aere_~~ be &Doc.ted Iq_U1a Pl)rJilO~
<br />ot the ..bove described land'inclrded In any luch unit such proportion of the actu.1 productlon.f<<lm all wells on suoh'.imlt as leaao(',_lnterHt.'.lf,.nx.ln'
<br />luch portion. computed oo;~n 8flre..;e basb, bears to the entire acreale of such unit. And It is understood and alreed. that the pro'duction ao alloclted
<br />thall be considered for all Pp'rp,~.e.. lncludlne the paymeqt or delivery of royalty. to be the entir~ production from the, portion of the above,ducribed
<br />land inclUded in .uch unit hi ~he ~me manner as thdu&:h produced from the above described I.nd under the terms of thlt lean. ! I!, !. I II f Ij ~
<br />. 14. ll'ttis lease and all Its term.. conditions and .stipulations shall utend to. .nd be bindinl on each of the parties who a1lns thl.leue. reludlell of
<br />whether such lellor is named _bove .nd relardless of' whether it il silned by .ny of the other parties hen-In named u le:l101'I. Tttislease may be Ilaned io
<br />counterparts. each to havet:he..~eeffect...the orllina!.
<br />IN WiTNESS WHEREOF. we Sililn the d.y and year rirst above ,!ritten. LAKE CANAL &. RESERVOIR COMPANY
<br />
<br />TOWNSHIP
<br />Sections
<br />
<br />8 NORTH.
<br />34 & 35:
<br />
<br />Witness:
<br />
<br />BY:
<br />
<br />15. Lessee aqrees there will be no drilling
<br />during duck & goose hunting seasons
<br />..~Lllv...L Lito:: w.l.~LLO::ll ,-vlIoo::uL vC LEgS6R.
<br />
<br />President
<br />
<br />BY:
<br />
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