Notice of confidentiality rights: if you are a natural person, you may remove or strike any of the following information from this instrument before it is filed for record in the public records – your social security number or your driver’s license number


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NameNotice of confidentiality rights: if you are a natural person, you may remove or strike any of the following information from this instrument before it is filed for record in the public records – your social security number or your driver’s license number
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38. All openings in fences shall be made to Lessor’s reasonable specification. All openings in fences shall, when they are required to be restored under other provisions hereof, be restored in accordance with the provisions of this lease applicable to restoring fences. All gates shall be kept closed at all times except when vehicles or personnel or equipment shall actually be passing through such gate. Lessee shall post a lookout at any open gate or any opening in any fence so long as livestock can get through the fence if there are any livestock in the pasture enclosed by the fence or into which such gate is an entrance to be sure that no livestock escapes while such fence remains open or such gate remains open so that livestock could escape. If Lessee leaves any gate open without a guard being posted or any opening in a fence without a guard being posted and any livestock escape from the pasture surrounded by such fence or through which such gate is an entrance, it shall be presumed that such livestock escaped through such opening in the fence or such gate and Lessee shall be liable for the death of or injury to or loss of any livestock which shall have escaped from such pasture during the period when such gate was left open and unguarded or such opening in the fence was left unguarded, unless Lessee shall prove that the livestock escaped in some other manner than through the opening in the fence or the open gate.

39. All rocks which may be brought to the surface by Lessee in any operation under this lease except rock rightfully buried in a pipeline or power line trench as required by this lease, or those rocks buried in drilling pits, shall be removed from the premises at the sole cost and expense of Lessee, and shall in no event be stacked on the premises or left on the premises in any other form, regardless of how neat it might be. Lessee agrees that all brush will be stacked at a location to be mutually agreed to by the parties hereto, at the sole cost, risk and expense of Lessee.
40. All existing roads used by Lessee will, so long as Lessee is using them, and all roads constructed by Lessee shall, so long as this lease remains in effect, be maintained in good condition, without pot holes, and roads constructed by Lessee shall have a base of a sufficient amount of caliche to make them all weather roads. All traffic of Lessee or any of its employees, agents, contractors, vendors, and others coming on the leased premises for purposes of operations on the lease shall be confined to the roads and Lessee shall be liable for any damage caused to any of Lessor’s land by any vehicle going off of the road. Any new roads must be located at locations reasonably agreed to in writing by Lessor, provided that Lessee shall have a right to build a road from an existing road to a well along the route which least interferes with agricultural operations by Lessor or a Tenant of Lessor on the land without consent of Lessor, if Lessor refuses to consent to any reasonable location of such road.

If any vehicle on the land for the purpose of operations on the lease or supervision of operations on the lease shall drive out onto any of Lessor’s adjoining land, Lessee agrees to pay a minimum penalty of $1,000.00 per occurrence for each such occurrence, without regard to the amount of actual damage done by such action, provided that if more than $1,000.00 actual damage is incurred as a result of such action, Lessor shall be entitled to recover the amount of actual damages.

There shall be a speed limit of 25 m.p.h., and Lessee shall post signs showing such speed limit, on all roads used by Lessee on any of the lands described above. Lessor shall have the right to demand a fee not to exceed $500.00 for each incident in which such speed limit is exceeded by Lessee, its agents, contractors, employees or invitees.

Lessee agrees to periodically water all roads used by Lessee during periods of Lessee’s high concentration of motor vehicle traffic and at other times so as to prevent excessive dust and erosion on the roadway.

41. Lessee shall have no right to store on the land any surface equipment, flow lines, poly line, connections, fixtures or other material of any nature which is not actually in use. Any such equipment not removed from the land within thirty (30) days after it ceases to be used or after it is put on the ground without being used shall be deemed equipment or property of Lessee remaining on the land after the expiration of the period for removing the same and Lessor shall have all of the rights with respect to such property granted to Lessor with respect to property which has not been cleaned up and removed upon completion of any operation under this lease.

42. Lessee agrees that, in all wells drilled on land covered by this lease, a sufficient amount of surface casing shall be set and cemented to properly protect all fresh water formations which are now, or may be, a source of water supply in accordance with the rules and regulations promulgated by the Texas Water Quality Board, the Texas Commission on Environmental Quality, Howard and/or Borden County Water District, the Texas Railroad Commission, any successor to any of such agencies, or any other governmental agency having jurisdiction in the premises. (“Water Authorities”). Cementing of the surface casing shall be by the pump and plug method and sufficient cement shall be used to fill the calculated annular space back to the back of the casing to the surface of the ground. “Sufficient amount of casing” shall mean the amount of surface casing required to reach the depth recommended by the Water Authorities, to protect all fresh water formations which are currently found, or may be found, on said land. Under no circumstances shall Lessee use less than the full amount of surface casing required hereby.

43. Lessee agrees, for Lessee, its successors and assigns, that all operations, working and actions taken under this lease will be taken in a good and workman like manner and in the same manner as a reasonably prudent operator under the same or similar circumstances would act. Lessee also agrees to manage and administer the lease as a reasonably prudent operator and to adopt all reasonably prudent modern methods of operation and drill all reasonably prudent wells so as to maximize the profit from this lease for both Lessee and Lessor.

44. Any notice required or permitted to be given hereunder shall be deemed to have been properly given (a) three days after deposited in the United States Mail, with first-class postage affixed, properly addressed; (b) immediately upon receipt of a telefax or e-mail, provided that a hard copy is thereafter received by regular mail, by Federal Express, U.P.S., or by Express Mail, (c) immediately upon receipt of certified or registered United States Mail, Return Receipt Requested, all of which shall be addressed to the party to whom notice is intended at the address of each part set forth above or the latest address which such party shall have furnished to the other party in writing at least ten days prior to the date of such notice, if different from the address set forth in this lease.

45. Lessee agrees that all operations under this lease shall be conducted so as to reasonably accommodate the use by the surface owners of the land for the agricultural purposes which such surface owners are then using or have in the past used such land.

46. Lessee agrees to provide Lessor with copies of all supplemental abstracts, all run sheets and all title opinions covering the land, if any, which are procured by Lessee or prepared by Lessee’s employees.

47. Lessee agrees to furnish to Lessor, upon Lessor’s written consent, without cost, one copy of all electric logs or other downhole surveys, and any drillstem test reports, potential test reports, drilling logs, daily reports of drilling progress, and any other reports, data and information made or obtained during the drilling or testing of any well on the leased premises. With respect to any geophysical surveys previously run or to be run, Lessee shall furnish Lessor all raw data, including computer tapes, brute stock and a map showing each site of each geophysical operation and the nature of the operation performed. Lessor agrees not to sell or trade the data made available by Lessee to any third parties during the term of this lease, however, such data may be shown to any duly authorized consultant of Lessor for analysis and interpretation, or may be used to determine the further development or exploration of any lands hereunder not held under the terms of this lease. Any authorized consultant of Lessor agrees in writing to keep all data confidential and not to disclose the same to any third party during the term of this lease. Lessor hereby covenants that any raw data provided to Lessor under this paragraph shall be kept confidential and shall not be disclosed to any third party during the term of this lease; provided, however, the data may be used with respect to any lands not held by this Lease.

48. If during construction climate conditions are conductive to range or grass fires, welding crews must be accompanied by water trucks with high pressure spraying capacities. Lessee shall exercise every reasonable precaution for the prevention of grass fire and if, notwithstanding such precautions, a fire shall occur, Lessee shall, in addition to other remedies, pay Lessor for any damages resulting from such fires which are agreed to be not less than $20.00 per acre burned plus the cost of repairing or replacing damaged fences and other improvements.

49. Before entering the premises, Lessee shall require all bulldozers and other earth moving equipment, trucks carrying drilling rigs and other equipment and pulling units to use their best reasonable efforts to remove all noxious plants or seeds, including bitterweed and grass burrs.

50. No well shall be drilled closer than 200’ to any water well located on any land covered by this lease.
51. Lessee is hereby given the exclusive option to extend the primary term of this lease for an additional two (2) years from the expiration of the original primary term plus any extension of the primary term extended under any lease provision contained herein. This option may be exercised by Lessee at any time during the last year of the original primary term, plus any extension periods, by paying to Lessor herein, or their heirs, successors or assigns, the sum of seven hundred fifty dollars ($_____) per net mineral acre. Lessee shall exercise such option by placing written notice of such election along with the payment in the U.S. Mail, postage prepaid, to Lessor at the above addresses, or by delivery of such notice and payment to Lessor, in either case, prior to the end of the primary term hereof, as extended by any other provision contained herein. This option shall be deemed to be properly, timely and fully exercised if payment is forwarded by Lessee to Lessor’s last known address on or before the expiration of the primary term or any extension thereof, either by (i) U.S. Mail, (ii) Overnight Delivery Service, or (iii) by personal delivery.

Dated as of the day and year first above stated.

__________________________________________________

THE STATE OF TEXAS §

COUNTY OF ______________ §
This instrument was acknowledged before me on the ____ day of ________________, 2012, by ________________________

___________________________________________

Notary Public, State of Texas
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