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<br />(L%) of the amount realizsi froal st1:h sale• In ealculaGag the market Value of gas or
<br />amount reali2ed from the hale of gas, Lesser shall deduct all toss incurred subscqucrtt to
<br />produc¢on, including, without limitarioq costs of dchydrarion, compassion, gathering,
<br />tsrating, processing, vavsportation and taarketing, and ad valorem, consc:vatiua,
<br />severance and other razes mcasured'oy production. Lcssx shall hsve fi-c use atoll, gzs.
<br />a_nd wait f1om.S?id land, cxe.-?t water from Lessor's wells, stze:,rts, Iaices cad ponds, fa:
<br />all operations hereunder, and the royalty on oil and gas shall be computed afteI deducting
<br />any so used.
<br />4. If a well capable ofproduciag gas andlor oil, in paying gttantitias is
<br />located on said land and is shut-in, before production cotaactecs, or at any time
<br />tlteteafter, this leas shall continue in efL'x, fat a period on one year from the date such
<br />well is shut-ia Lessx tray thereafter, pay oc tender to Lessor as royalty, 00 or before
<br />one year fivm the date. such well is shut-in, err, amount ofS5,000.00 pe;well, per ycsr,
<br />wd, if such pavmez;t or tender is toads, such well shall caati;zue this Iese in effe^_t for x
<br />further pc-iod ofone year. In filet manner and upon like pa}^eats o: textdcs anntu!ly
<br />made on or before Cch anrtivetsrry c•f the shut-lII ante of such tc•ell, such weR shall
<br />CaQltatL' 11119 IrwsC Cl cffecz for successive peiods of twelve (l2) months each.
<br />Notwithstanding any otilCr prn~zsioa to the con~ari, ills lease shall not terminate
<br />bcause of a fzilur m pmpclyor timely tnske shut-ia well payment unless Lessor shall
<br />bout given Lessee writt~ notice of such failure to properly or timely' make suet scut-in
<br />wdl paytnc:t and Lessx shall have ~ilecl for a pcaod of thirty (30) days aftc receipt of
<br />such notice to tends; such payment in roc proper amotm4 together vriL~, a late or improper
<br />payment perslty of 55,000.00.
<br />5. Lessee shad have the ri¢ltc az any time without I„-ssor's consent to
<br />suzt~der al! or any portion of said land and be rcliwed of all obligarion as to the acresge
<br />etuttstdred Lessx sh211 have the right within a rusorable time aRer the expirasion of
<br />this least to trnavc all propcty and fixtures placed by Lessee on said land, lacludiag th<
<br />right to draw cad remove all casing.' When required by Lessor, Lessee will bury all
<br />pipelines bcIaw ordinary plow depth, and nn well shall be drilled within two hundred
<br />(200) feet of any resid~ce or beta now on said land without Lessor's oonsatt. The
<br />Lcssa agues to promptly pay to the owns thereof nay damages to crops, or
<br />improvements, caused by or resulting from nay operations of Less
<br />6. Tae rights of eithez party heretmder rosy be assigned, is whole or ir. part,
<br />and Che provisions hereof shall extend to the heirs, successors and assgrs of the parde5
<br />hereto, but no c`.umg- err division of owaaship of cold lend, or royalties, haweve;
<br />accomplished, shall apcatc to tmlarge the obligations o: dirstistish the rights ofLesset.
<br />Na change in the ownership ofsaid land, at any interest thaei0. shall be biadmg on
<br />Lessx uua! Lessee shalt he famished with a c."t1f' fed copy of all r:-arded in~..~rn xr;,
<br />all cause proce~ittgs sad all ocher nccasa^/ evidrnce of say carsfe:, inheritance, err salt
<br />of said rights. In we Lssec assigns this lease, in whole oc in part, Lessee sluIl be
<br />relieved of all obligarions with cespat to the assigned potion or pocdons arising
<br />subscgaert ro the date of assigttmeat Upon Lessees consent to nssi¢nmeat, Lessee shad
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<br />08 /Ol /2001 k'HIl 17'01 fTX/RX ND 71691 idi 003
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