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L. G. Everist,Incorporated <br /> Attn: Tim Sittner <br /> 2009 <br /> Page 2 <br /> KMG 23-32 NWSE of Section 32 <br /> KMG 28-5 NWSE of Section 32 <br /> These wells may be used to reach oil and gas resources that are located partially or <br /> entirely under the surface property of another landowner so long as KMG has tights <br /> to such oil and gas resources.. <br /> 3. KMG may drill one (1) directional well to accommodate Everist's request for <br /> directional drilling to a legal drilling window location on Everist's property,, the <br /> surface location for this well will be located at <br /> KMG 7-32: NWSE of Section 32 <br /> and the planned bottomhole location will be at <br /> KMG 7-32: 1980'FNL 1980'FEL.. <br /> 4. KMG will absorb the cost of directionally drilling the well described in Paragraph <br /> 3. <br /> 5 KMG will not compensate Everist for any and all surface damages, including but <br /> not limited to the use of oil and gas operations areas, access ways, surface facilities <br /> such as tank batteries and separators, flowlines, gathering lines and related <br /> equipment. Appropriate crop damages will be paid. KMG will reclaim lands <br /> disturbed by its operations as required by the applicable oil and gas lease(s) and the <br /> regulations of the Colorado Oil and Gas Conservation Commission("COGCC"). <br /> 6 A. KMG is agreeable to installing the new flowline within the area shown on the <br /> attached Exhibit "A The new flowline easement shall be 40 feet in width. KMG <br /> will also relocate, at no cost to Everist, the flowline for the Hazel McHale Unit B <br /> #1 The new flowline easement for that well will be 20 feet in width and will tun <br /> straight east to and then south along Weld County Road 17.,5 at a location mutually <br /> agreeable to Everist and KMG <br /> 7. Surface facilities will be placed only within the area shown on the attached Exhibit <br /> "A". The surface facilities will have setbacks as identified on Exhibit "A", <br /> Notwithstanding the foregoing,Everist shall be entitled to mine up to 80' of'oil and <br />