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AGREEMENT This Agreement is entered into and made effective as of the ~ ~! day of 5'e.~o }'p,o,, ~7er ; 2001, by and between L. G Everist, Inr,, an low Corporation (hereinafter "Everist")and Merit Energy Company, a(n) Q~atyare Ler~c; ~'m.~(hereinafter "Merit"}. WHEREAS, Everist is in a lease agreement with Theodore and Linda Lohmann, the landowners of property with the following legal description: NW'/. of Section 6, Township 2 North, Range 67 West of the 6th P.M., Weld County, Colorado (hereinafter ("the Lohmann Propertyj. WHEREAS, the lease agreement allows Everist to extract the sand and gravel reserves from the Lohmann Property, and to reclaim the Lohmann Property for end uses as rangeland and water storage reservoirs. WHEREAS, Everist has been issued a permit from the Colorado Division of Minerals and Geology to allow the aforementioned mining and reclamation of the Lohmann Property. WHEREAS, Merit owns interests under an oil and gas lease covering the Lohmann Property and has the right to drill for and produce oil and gas thereon and to construct their related production facilities on the Lohmann Property. WHEREAS, Merit owns and operates two existing oil and gas wells, known as Coors Fee 2-6 Well and Coors Fee 6-6 Well, and the related production facilities and pipelines on the Lohmann Property. WHEREAS, Merit has the right to drill a third well, to be known as Coors Fee 22-6, on the Lohmann Property. WHEREAS, Merit has easements for access to the wells, related facilities, and the pipelines on the Lohmann Property. WHEREAS, Everist and Merit have reviewed their exclusive and overlapping extraction rights and goals and both parties agree to work together so that Everist may extract the sand and gravel reserves to the fullest extent possible in and under the Lohmann Property while ensuring that Merit may continue to safely produce the oil and gas reserves in and under the Lohmann Property and have access to its various structures. NOW THEREFORE, in consideration of the mutual covenants and conditions hereinafter set Forth, Everist and Merit mutually agree as follows: 1. Merit agrees to drill its third well, Coors Fee 22-6 Well, at or very close to the location already staked on the Lohmann Property, approximately 50 feet south and 47 feet east of the Coors Fee 6-6 Well. By executing this Agreement, Merit is not waiving its rights to drill additional wells on the Lohmann Property, subject to the terms of this Agreement. 2. While Merit is drilling and completing the Coors Fee 22-6 Well, Everist agrees to operate in another area of the Lohmann Property to ensure that the two operations do not conflict or in any way jeopardize each others safety or efficiency. ~MILOH-menlagr9emenF2001