2008-09-08_REVISION - M1997058 - Laserfiche WebLink

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02/19/2008 12:58 3038576789 JUL.-11-06 08:26 PM K.CROUCH 14-06-2005 09 -[Cam Froa-HAIL IRWIN CORP MERIT ENERGY 444 4513 49103526114 PAGE 02/11 P. 02 T-619 8.009/000 9-no developmem of its oil and gas l.ewehold estate. Agreement In consideration of the mutual eov6wou contained herein. and other good and mhuble consitlt"cation, the receipt and suffiaidacy of which is hereby aclaaowledJ14 the parties lane as follows: L OIL AND GAS OP)i<'.RA.'T1014S AREA RESERVED. a. With respect to the drilling, op=tion and mainteuance of the 10rby 33-36 add the 43-:16 Wells Surface: Owner shall provide Merit a flat circular well location on the HME properly with a minimum radius of 150 feet wormd each of the wellheads of the two welts in the Nt.!SS/4 of Section. 36, depicted as it circle drawn on Exhibit A, p. 3 (the -North Well Area"1 for the purpose of drilling two oil an&or gas wells and for operations conducted by vlerit in eomiectton with the operation toad production of the wells. With respect to the drilling, operation and maintenance of the Kkby 34-36 and 44-36 W ells, Surthce Owner steal' provide Merit a flat woxk3aag area of 200x:!00 feet until the two wells axe drilled and complex ed and a flat circular woll location with a adnimurn radius of 150 feet around each of the wet. Beads of the two wells in the S/2SE/4 of Section 36. The 200x200 foot area and the 150 foot radii are depicted on Exhibit A. p. 3 (the "South W611 Area"). In addition to the four oil and ;;as wells referred to in this paragraph 1 a, Merit may drill Future W'elis if the same can U- drilled, completed, operated and snaWtained wiftin the 150-1oot radius around each of the fc ur wells. Excerpt for the four oll and gas wells referred to in ibis paragraph 1 a and the Future Wells, Merit shall not otherwise have the right to drill wells on the Property, and specif is al ty agrees that the drilling site and acres toad fotmedy reserved by Merit's predowswr in rote st, Bataa Oil, hoc., on the NYSE property by that certain lcttor dated October 1, 1997, a copy of whlcb is attacbe d hereto, is hereby abandoned and released and shall hereafter be available fc : mining, use and occupancy by HM and/or Operator. b. Operator shall have tht: right to reasonable use and occupancy of the svdace Well Areas, inaluding the right to extract the; sand, gravel and aggregates $tom *e Well Are is if said extraction and fill can be acco q)lish ed before Merit needs to initife operations % ithin the Well Areas with heavy equiptrlent. Operator shall also have the right to extract sat,d. gravel and aggregates after Merit's drUng operations are completxd, as set tbrth in Section 2, below. Operator's use of the Well Areas shall not binder or interfere with MedV9 nto a In no e ient n; or scausc hall an unsafb condition of any kind or nawic for any parry Operator stockpile mined materials within the Well Areas. 2. EXTRACTION ON VICMr1'Y OV WELL AREA.; SETBACK REOUME11 V-TS. Operator reserves the optiot?to mine ft sand, gravel turd agweptes within the NN ell Areas, and agrees to give Merit written notice at least 60 days prior to rhea corru mm -ernent of operations in the Well Areas. Operator shall conduct such miring by exca le ing Pie 7