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r t <br /> Drilling Agreement <br /> This Drilling Agreement is entered into thls:tg day oflo :c(f'2U2t) between MGP MINERAL <br /> ENTERPRISES LLLP,a Colorado limited liability Iimited partnership ('iv1GP"), C & N M Ranch, LP, a <br /> Texas limited partnership ("C & N M Ranch"). HUI Ranch, Ltd., a Texas limited partnership CHill <br /> Ranch"), Richard Bowie Hill, as Trustee of the Richard Bowie Hill !Inter Vivos Trust ("Trustee"), <br /> collectively, the "Hill Group", and together with MGP, each a "Mineral Lessor," and collectively, <br /> "Mineral Lessors"),and New Elk Coal Company, LLC,a Colorado limited liability company("NECC"). <br /> A. The Mineral Lessors and NECC have entered into a coal lease dated March 17, <br /> 2020 for the Lorencito Canyon property in Las Animas County, Colorado, as further <br /> described in the coal lease. <br /> B. Hill Ranch owns the surface of the Lorencito Canyon property,and is in the process <br /> of negotiating a surface use agreement with NECC to facilitate operations under the <br /> coal lease. <br /> C. NECC wishes to conduct drilling operations on the Lorencito Canyon property in <br /> anticipation of developmerrt under the coal lease, as further described on Exhibit A <br /> to this Drilling Agreement(the"Drilling Program"). <br /> For ter, dollars and other good and valuable consideration, the sufficiency of which is acknowledged, <br /> NECC, the Mineral Lessors, and Hill Ranch agree as follows: <br /> 1. The Mineral Lessors and Hill Ranch on behalf of the surface owners agree that <br /> NECC may conduct the drilling operations set forth on Exhibit A. No payment shall <br /> be due or owning from NECC in relation to the drilling program. <br /> 2. NECC will indernnify and hold the Mineral Lessors and Hill Ranch harmless from <br /> and against all liability, damages and casts, including attorney fees, arising out of or <br /> related to the Drilling Program. <br /> 3. NECC wlli share with the Mineral Lessors all geological information including <br /> geological interpretations obtained from drilling the core holes and examination of <br /> the cores taken therefrom. <br /> 4. Prior to drilling the core holes, NECC will have approval from Evergreen Resources, <br /> Inc. the oil and gas operator of the wells located on the Lorencito Canyon property, <br /> to ensure that the Drilling Program does not interfere with the oil and gas <br /> operations. <br /> NEE-r6244T?D=1-3W764$v1 <br />