2007-08-10_REVISION - M2001107

• Permit No: M2001107
• IBM Index Class Name: Revision
• Doc Date: 8/10/2007
• Doc Name: Application
• From: Northern Colorado Constructors, Inc. Aggregate Div
• To: DRMS
• Type & Sequence: AM1
• Media Type: D
• Archive: No

2. WELL LOCATIONS.
I{MG shall have the right to drill Future Wells within the Oil and Gas Operations Areas,
including horizontal and directional wells that produce from and drain lands other than the
Property provided such lands aze validly pooled with all or any portion of the lands included in
KMG's oil and gas lease covering the Property, and so long as such locations are permitted
locations under the then apglicable well spacing regulations of the Colorado Oil and Gas
Conservation Commission ("COGCC") or exceptions granted thereto by the Director of the
COGCC. As part of the consideration for this Agreement, Surface Owner hereby waives its right
to, and covenants that it shall not protest or object to any such excepfoit-ipcation or application
for same by KMG. KMG shall not otherwise have the right to drip new wells on the Property.
Notwithstanding the foregoing, the wellhead location of any. Ftfn'r'e, Well drilled from any Oil
and Gas Operations Area shall not be closer than 150' from a~Yesidental=lot line.
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3. SETBACK REQUIREMENTS. _
Surface Owner will not locate any lot line; #~uilding, orstructure within''agy0i1 and Gas
Operations Area. Surface Owner understands and ackiotwledges that the COGCC`has rules and
regulations that apply to the distance between a wellheadand `public roads, production facilities,
building units and surface property lines, among other thing;- In order to give full effect to the
purposes of this Agreement, Surface Owner,hereby waives itsi^ight to object to the location of
any of KMG's facilities on the bests of setback requirements in therples and regulations of the
COGCC, as they may be amended from fime to time., Surface Owner further and similazly
waives its right to object to any other state or local s~tbaek requirements or other requirements or
regulations that are or becorae:,,inconsistent with this Agreement or that would prohibit or
interfere with the rights„tifKM~, its successors and assigns to explore for and produce the oil
and gas in accordance kvith thisAgreement. KIvIG or its successors and assigns may cite the
waiver in this pazagraph-tti_order to "obtain a location;exception or variance under COGCC rules
,:
or from any other state or local. governmental body having jurisdiction. Surface Owner agrees
not to object: to the:use of the stytface m the'Otl grid Gas Operations Areas so long as such use is
consistent:: with this°`Agtpemerit""°~aud Surface Owner will provide KMG or its successors and
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assigns with whatever wntten support,they may reasonably require to obtain permits from the
COGCC`or any local jurisdiction.
4. GATHERING LINE5 AND FLOWLINES.
Subject to •.t~Ze limitations hereinafter described, KMG has a continuing right and
entitlement to own, operate, maintain, repair and replace all flowlines, gathering lines and other
pipelines that may be necessary or convenient to its operations on the Property. Although this
Agreement is intended to confine the placement of those pipelines to certain specified locations
within the Property, nothing herein shall be construed as a limitation on KMG's ultimate right to
make all necessary weL' ccmttections to aay Existing or l ufure 13~e11. Tire current develop~rtent
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plans fur K ^;,' ' ~~ ~~..„~ may anttcipate the relocation of certain existtng gat'ttxing line,
or flowhnes !"Extsrmg Ptpeitnes'`t to n designated easement certidsir shocvrt Ori Exhtbn ' .`~~"
a:s the "Petroleum Pipeline Easement." It cs furthe-r anticipated that any a~3ditional pipelines,
flos~-lir~es avid ~trhering lines that may tse required in the future (")'afore Pipelines') may also
need to be placed within, or relocated io the Petroleum Pipeline G.asement. All such relocations
shall be at Surface Owner's cost and expense.
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