ORDER No. 14824
ORDER APPROVING OIL, GAS AND MINERAL LEASE
WITH EVEREST MINERALS CORPORATION AS TO 42.146 ACRES
OF MINERALS OWNED BY KERR COUNTY BENEATH OLD RIGHT OF WAY
OF STATE HIGHWAY NO. 41
On this the 11th day of October, 1982 came on to be
heard and considered by the Court the matter of approving
an oil, aas and mineral lease with Everest Minerals Corporation
as to 42.146 acres of minerals owned by Kerr County beneath
the old right of way of State Highway No. 41; and it appearing
to the Court that the aforesaid lease as to 5 tracts of road
right of way as originally covneyed to Kerr County in fee simple
in the year 1930 has been negotiated, drawn and approved by
County Attorney H. Ritman Jons, and that it would be in the
best interests of Kerr County to approve the lease as drawn for
a 3 year period with Everest Minerals Corporation, the lessee
as to the oil,gas and minerals under the abutting privately owned
lands, for the total consideration offered, and it further appearing
that the notice of the Court's proposed action has been posted in
the Kerr County Courthouse for more than 72 hours in compliance
with the provisions of Art. 6252-17, V.A.T.S., it is ordered
on motion by Commissioner FTolland seconded by
Commissioner Guthrie and unanimously approved by the Court
that Kerr County approve the aforesaid oil, gas and mineral lease
and that the County Judge be authorized to execute the same on
behalf of Kerr County.
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' vn,duars a/Haas Rauh POUND PRINRNOiSTAT10NBRY COMPANY
vi,A a+0 Warn Poaliry Pro.ision 1121 iwNNiN. NOUSTON,TE%Ag 1100; psA tl4)Ifa
~2635~ OIL, GAS AND MINERAL LEAS~ioq'; ao PAGE 157
THIS AGREBMENTmade this Ash dayof Sep temp of 19 ~,besween
Kerr County~Texas
Lessor(whether one or morel. whose address is: r/n Ri man .Tema P_ A_ Anx 4790 Karrvil lea Tax a
and EVereS t-~~LL~rs11.q (veQ=PQLFLt~Qn ,Lessee, WITNESSETH:
L Lessor in consideraion of TeR aRd n~l00ths-~--------------»--- _--
- Dollars
_), in hand paid, of she royalties herein provided, and of she agreements of Lessee herein contained, hereby grants, leases and lets tzdusively
purpose of investigating, exploring, prospering, drilling and mining for and producing oil, gas and all other minerals, condutting ezplorasion,
rsical survrys by seismograph, core tats, gran uy and magnetic methods, injecting gas, wrier and other fluids, and air inm subsurfax orator laying
wad.czarlLS.~^^•~a~ ~ssma,aAeplsoaeliatiasWuWaswswww+sahawwsawJ.uas.wasawW.rryaslrpwswd.rxdaimadby.r ...,.. .n~gay~
so produce, save, take nee of, wear, transport and own said producsseaadJs,au.iuty4suplsyws• the followin¢ dneribed land in
Kerr County, Texas, to-wit:
See Exhibit "A" attached hereto and made a part hereof for all purposes,
TMs lase abo covers and induda dl land owned or claimed by Laaor adjacent or smntigssgw to she rand putlcululy desmibed above, wMha flu time be In said wr-
v<y or surveys or in adjacmt surveys, although not included within the boundaries of she land partiasluly dneribed above. For the purpose of calmlating the rentd
payments hereinafter provided for, said land is estimated to comprise G 7 acres, whether iI attually compriaq more or less.
2. SubjM to the ocher provisions herein <omaincd, this leax shall be for a term of lh rp~s~ 3~ y<ara from this Base (called "primary Term")and u
long thereafter as oil, gas or ocher mineral is produced tram said land or land with which said_I_a_od i_s_pooled_ ereunder.
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Lessor inm f m which the wells may be connee«d; Lessx may from time to rime purchase any royalty oil in its possession, paying the market price therefor
prevailing for she field whra I. the dine of purchase; tbj to pay lessor on gas and casinRhead gas produced from said land (q when sold by lesstt,wea-wgasNt
of she amoum realized by Ins<e, compute a of she well, or (2) when used by lessee of(said land or in the manufacture of gasoline or other produns, ertn
eigfieh of the amount realized (ram she sale of gasoline or tx extracted therefrom and one<ighrh of she amount realized from she sale of residue gas after
deducing the amount used for plain fuel andior compression; while s m ~II mi this lease or on acreage pooled therewith but bas is not being sold or used,
Lessee may pay as royalty, on or before ninety (901 days a(ur she dare on which p) sin hs 'n, or (')she land covered hereby or any portion thereof is included
in a pooled unit on which a xell is located, or lJ) this lease ceases to br otherwise maimamed as pun ,., '~. haver is she later date, and ther<afstr at annual in-
tervals on or before the anniversary of the da¢ she fire payment is made, a sum equal In she amount of she anua_ s a{sa le in lieu o(drilling operations during
the pnmary term on the number of acre subject so this lease a1 the time such paymem is made, and i1 such paymem n made o b tie shall not termina¢,
and n will be considered that gas is being produced from this lease in paying quantifies; anJ (c)on all other minerals mineQ and marknc kind or
value m the well or mine, at Lessee's election, cxxpt Chas on sulphur mined and markned the royalty shall be FiMveelrrs-t5P2yper IonR ton Lessee shall have
1%6
"° (SEE ADDENDUM)
4. Lessee, at its option, is hereby given she right and Dower so Iiool or combine she acreage covered by this lease or any portion thereof as to oil and gas, or either
of them, with any other land covered by t his tease, and/or with any otA<r land, lax or lases m the immediarn vicinity thereof to the extent hereinafter stipulated, when
m Lessee's judgment is is necessary or advisable so do so in order properly to explore, or to develop and operate said leased premises in compliance wish the spacing
rules of she Railroad Commission of Texas, or of her law (ul awhonsy, or w hen to do so would, in the judgmem o! Lessee, promote the conservation of ail and gas in
and under and that may be produced from said premises. Units pooled far oil hereunder shall not subsumially exceed 40 aces each in area, and units pooled for gas
hereunder shall not substantially exceeJ in area 600 acres each plus a tolerance of tin percent (IOen (hereof, provided that should governmental authority having
jurisdiction prncrib<m p<rmn the creation of units larger than (hose sped tied, for the drilling or operation of a well err a regular location or for obtaining maximum
allowable @om any well so be dolled, do Ihng or already drilled, umss thereafter cren¢d may conform subaam sally in size with those pr<scribcd or permitted by govern-
mrnml regulations. Lena under the provisions hereof may pool or combine acreage emceed by this lease or any portion thercof as above prmided as rn oil in any one
or more svata and as to gas in any one or more strata. The unity farmed by pooling as ro any stratum or strata need not conform in size or area wish the unit or units in-
m whah the Iwsc is pooled or combined as to any other stratum or strata, and oil units need not conform as to area with gas units. The pooling in one or more instances
shall not exhaust the rights of the Lesstt hereunder so pool this Irate or portions rherrof into other units. Lessee shall file for record in the appropriate records o! she
coumy in which the leased premixs are sima«d an irotrumem describing and designating taco pooled acreage at a pooled unit, and upon such recordmion the unit shall
be effecive as so all parties hereto, (heir ours, wccesson, and assigns, irrnpenive of whether or not she unit is likewise effective as to all other owners of surface,
mineral, royalty, or other rights in land included in such unit. Lessee may at ib election exercise its pooling option before or after commencing operations for or com-
pleting an oil or gas well on the leased premises, and the pooled unit may include, but it is not reyuired to include, land or leases upon which a well capable of producing
oil or gas in paying yuamitics has therato(ore been complaed or upon which operations for the drilling of a well for oil or gas have lh<r<lofore been commenced. In the
evem u(operaliom fur dnlhng nn su production of oil or gas from any pan of a pooled unit which indudn all or a portion of the land covered by this Ieas<, regardless
of whether such operations for drilling were commenced or such production was scored before or slur the execution of this instrument or the instrument
designating the pooled unit such operations shall b< considered as operations for drilling oa or production of oil and gas from land covered by this lease
whither or not me well or wells be located on the premises covered by this lease and m such Waco operations for drilling shall be deemed to have been commenced an
said land within the meaning of paragraph 5 0(rhis lease; and she emire acreage consfimring such unit or uniD, as to oil and qas, or either o(shem, as herein provided,
shall be treated for all purposes, except du paYm<m of royalies on produnion from th<pooled unit, as if the same were included in this lease. For lh<Durpose of com-
pming the royalties so which owners of royalties and payments our of production and each of them shall b<entitled on production of oil and gas, or either of [hem,
from the pooled unit, there shall be allocated so the land covered by this lease and included in said unit far to each separate watt within the unit if this lease covers
separate tracts within the unit) a pro rata portion o! the oil and gas, or either of them, produced from the pooled unit afte deducting that used for operations on the
pooled unit. Such allocation shall be on an acreage basis-that is to say, there shall be allocated to the acreage covered by fists lease and included in the pooled unit (or to
each separate uact within the unit if Ihu leax covers separat<tracts within the unit) that pro rata portion of the oil and gas, or either of them, produced from the pooled
time whmh the number of surface acres covered by this lease (or in each such separate vacs) and included in the pooled unit bears to the total number of surface acres in-
cluded in the pooled unit. Royal[in hereunder shall be computed on the portion o(sucA production, whether it be oil and gas, or either of them, so allocated to the land
covered by this lease and included in the unit just as (hough such production were from such land. The produttion from an oil well will be considered as production
from the lease or oil pooled unit which it is producing and not as production from a gas pooled unit; end production from s gas well will be considered es production
from the lease or gas pooled unit from which it is producing and not from an oil pooled unit. The formation of any unit hereunder shall not have the <ffet of changing
the ownership of any dally rental or shut-in production royalty which may become payable under this (ease. If this lease now or hereafter covers separate tracts, no
poohng or unnizauon of royahy interest as between any such separate tracts is intended or shall be implied or result merely from the inclusion of such separate tracts
within this lease but Lessee shall neverihelns have the right to pool as provided above with eomequent allocation of produttion as above provided. As used in this
paragraph 4, the words °xparau van" mean any voce with royalty ownership differing, now or hereafter, either u ro parties or amounts, from that as to any other
par[ of the leaxd premises.
S. If operations for drilling ere not commenced on said land or on att<age pooled therewith as above provided on pr befort on<yeu from sMs dour the lease shall
then termmam as to both pam<s, unless on or before such anniversary date Lessee shall pay or under (or shall make a bum fide asumpt to paY or under, u hereinafttt
sra«dlto Lessoror mthecredit or Lessor in ChL'{S GChYe~nest Bank
Texas, (which bank and its successors are Lessor's agent and shall continue as the depository for all rentals payable hereunder regudless of changes in ownership of
said land or the remals)the sum of Tern Hnn rlrP_el_.Ten anti nn/1(IOrha--___-_--_~_________~_______
---------------~------------------------~ Dollars (5 210 • 0~ 1, (herein called rentals), which shall cover the
peso dtge of deferring commencemem u(drilling operations for a period of twelve (12) months. In hke manner and upon like payments or lenders annually, she com-
mencement of drilling operations maybe further deferred for successive periods of twelve 112) monks eacA during the Orimary term. The payment or mnder of remal
under this paragraph and of royelp~ under paragraph 3 on any gas well from which gas is not being sold or used may be made by the check or draft of Lesstt mailed or
delrccred m she parries entitled thereto or m said bank on or before the date of payment. If such bank (or any successor bank) should fail, liquidate or be succeeded by
another bank, or for any reason fail or refuse ro accept rental, Lcssre shall not b< held m default for failure to make such payment or tender or r<mal until thirty lydl
days after Lessor shall deliver so Lessee a motor recordable insvument naming another bank as agent to rexive suds payments or mnders. If Lessee shall, on or before
any anniversary date, make a bursa fide atfenips w pay or depmir «nsal m a Lnwr entidrd thereto according to Lessee's records or to a Lessor, who, prior to such 0o-
scmpmd paymrnt of deposit, has Gis en Lts,ee normq in accordance with suMequem provisions of this (case, of his right to receive rental, and i( such payment or
deposit shall b<ineffenive or erroneous in any regard, Lessee shall be unconditionally obllgalN to pay to such Lessor the rental DroperlY payable far the rental period
involved, and this kale shall not mrminare but shall be maintained in she same manner as if such erroneous or ineffective rental payment or deposit had Deers properly
made, pins idcd that I h<vroncom or i ncffeci nc rcnml paymem or dcpmit b<corratcd wthm IO days aher receipt by Lnsee of wrirten notice from such Lessor of such
error atom ponied by such innruments a+ are necnsap' to enable Lessee to make proper payment. The down cash payment is consideration for this lease according to
iu corms and shall not b<allocated as a mer<rcmal for a period. Lnsee may at any time or times ezeu« and delis er to lessor or to th<d<posirory about named or place
of record a relax or rel<ues of this Imvt as toall or any pan of the abovcdeuribed premises, or of any mineral or horizon under all or any Dan thereof. and thereby
be relieved of all obhpauons as to the r<'wsed U nd or inmrnt. If Ihu lease is r<Iwsed as to all minerals and horizon under a portion of the land covered by this ease, the
rentals and other puy menu computed in accordance ihcrew ith shall rhueupon he reduced in Ih<proportion thaz the number of surface acres within such releued por•
lion bears to th<total number of surtax acres wh¢h was covered by this lease immcdiasely prior so sucA release.
0

6. If prior to dixovtry and produslon of oil, gu or other mineal op Wd Isnd a oo stage pooled tMre lthO~stt s~ould drill r aAGEor ~ols8ihttcon, or
if after discovery end produttlon of oil, 6u a other minnal, the produttion thereof should mse from any cause, Nis lax shall not terminate if Lsstt commrnm
operatiom for drilling or reworking within slaty (60) days Neralter or if it b<within the primary term, eommenm or ruumn the payment or tender of rentals or com-
mences oMratiom for drilling or reworking on or before the rmW paying dote next coming after the aplration of sixty days from dam o! complttion of dry hol<or
cssation of produttion. If et any lime subsequent to sixty (60) days prior to the beginning of the 45t year of the primary arm and prior to the discovery of oil, gas or
other mineral on said land, or on acreage pooled therewith, Lsstt should drill s dry hole thston, no rental payment or operations are necessary in ordtt to kttp the
Icas< in farce during the r<mninder of the primary term. If at the expiration of the primary term, oil, gu or other mineral is not being produced on said land, or on
acreage pooled therewith, but Lsstt is then engaged in drilling or reworking operations thereon or shall have completed a dry hole thereon within sixty (fi0) days prior
w the end o! the primary term, the least shall remain in force so long ss operstion on said well or (ordrilling or rewoding of any additional well are prosecuted with no
rnsation of more than sixty (60) coruecutive days, and if they result in the produttion of oil, gas or other mineral, so long th<raftcr es oil, gas or other mineral is
prMuced from said land or acreage pooled Herewith. Any pooled unit designated by Lesser in accordance with the terms hereof may be dissolved by Lsstt by in-
strumem flied for record in the appropriau records of the county in which th<lased premiss ue situated al any time afar H<complnion of a dry hole or she cessation
o(production on said unit. In the event a well of wells producing oil or gas in paying quantities should be brought in on adjacent land and within three hundred thirty
IJJO) fttt of end draining the leased premises, or ecr<ag<pooled therewith, Lssee egret to drill wch offset wells as a reasonably prudent operator would drill ands
the same or similar cirnsmsunm.
7. Lsstt shall have the right at any time during or diet Ih<ezpintion of this Icau Io «move all gopeny and fixwrs placed by Lssee on said land, including
the right to draw and remove ell casing. When requirN by Lssor, Lssee will bury ell pipe ling below ordinary Dlow depth, and no well shall be drilled within two hun-
dred (200) fee of any residence or bun now on said land without Lessor's conunt.
g. Thr rights of tither party Aereundtt may be assigned in whole or in part, and the provisions hereof shalt extend Io their heirs, sucessors and assigns; but no
change or division in ownership of the land, rentals or royahies, however accomplished, shall oMrate to enlarge the obligations or diminish the rights of Lessee; and no
change or derision in such ownership shall be binding on Lssstt until thirty (30) days after Lssee shall have been furnished by registered U.S. mail at Lssee's principal
place of business with a certified copy of recorded instrument or instrumrn¢ evidencing same. In the teem of assignment hereof in whole or in part, liability for breach
of any obligation hereunder shall rst exclusively upon the owner of this Icau or of a portion thereof who commits such breach. In the event of the death of any person
emitted to rentals hereunder, Lsstt may pay or mnder such renals to the ercdi[ of the deceased or the stat<of the dttased until such tim<u Lssee u furnished with
proper evidence of the appointment and quali5cation of an execumr or administrator of the smte, or if there b< none, then until Lssee is furnished with <videntt
satisfactory to it as to the heirs or devisor oI the deceased and that all debts ofthe seam have been paid. If at any time two or more persons be entitled to participam in
the rental pa>'able hereunder, Lssee may pay or tender said rental jointly to such persons or to their joim credit in the depository named herein; oq at Lessee's election,
the proportionate part of said rentals to which each participant is entitled may be paid or rendered to him separately or to his separate credit in said depository; and
paymem or tender to any participant of his portion of th<renmis h<r<under shall maintain this Icau as to such participant. In cram of assignmem of this lease as to a
segregated portion of said land, the rentals payable hereunder shall be apportionable as betwttn the several Itasehotd owners ratably according to the surface area of
each, and default in remal paymem by one shall not affect the rights of shat leasehold owners hereunder. If su or more panic become emitted to royaly hereunder,
Lsstt may withhold payment thermf unless and until furnished with a recordable imirumens executed by all such parties designating an agent to receive payment for
aiL In t~e event ~f As~i~nment, ~essee shall fl~ Wish Les~o in Jfrcitin within 30 days
date o any sac ass g ant., t e names an a ~resses. o ~~ssee s ass~~nees.
9. The breach by Lessee of any obligation ariung hereunder shall not work • forf<uure or tummauon o t u )ease nor cause a to unateon or reversion of the
esuu seated hereby nor be grounds for cancellation hereof in whole or in part In the evem Lessor comiders that oMrateons are not at any time being conducted in
compliance with this lease, Lssor shall notify Lssee in writing of the facts relied upon as constituting a bream hereof, and Lessee, if in default, shall have sixty days
after receipt of such notice in which to commence the compliance with the obligations imposed by virtuF of this instrument. Alter the discovery of oil, gas or other
mineral in paying quamities on said premises, Lessee shall develop the acreage retained hereunder u a reasonably prudem operator, but in discharging this obligation it
shall in no event be required to drill more Nan one welt per forty (40) acres of the area r<tai nd hereunder and capable of producing oil in paying quantities and one well
per 610 acres plus an aatage tolerance not to <x<ttd 10~'s of 6s0 acres of the area « rained hereunder and capp,D ble of roducing gasa~ pu r~ssYn<raL in paygtg g
quantities. rOm every person W[10mSBever 1 I ~l clalmin
claim the same or any part thereof b~, [ltrough or under it, but not otheryfise
10. Lessor hereby wurants and agrees to defend the title to said land 6n ogres that Lssee at its option may dixharge any tax, mortag<or other ben upon said
land, tither in whole or in part, and in acne Lsstt dos so, it shall be su rogated to such lien wish right to enforce same and apply rentals and royaltis accruing
hereunder toward satisfying same. W ilhout impairment of Lsse<'s rights under the warranty in event of failure o(title, it is agreed that if this lease covers a Tess interest
in the ml, gas, sutphuq or other minerals in all or any part of said land than the entire and undivided fee simple store (whether Lessor's interrn is herein spttified or
non, or na intern therein, then the royalties, delay renal, and other monies accruing from any part as to which this bast covers less than such full interest, shall be
paid only in the proportion which the interst therein, if any, covered by this least, bears to the whole and undivided fee simple estate therein. All royalty imerest
covered by Ihis lease (whether or not owned by Lssor) shall be paid out o(the royalty herein provided. Should any one or more of the poetic named above as Lessors
fail io aecuu this least, it shall nevtttheles b<bitWing upon the party or pubs executing the sane. Failure of Lsstt to reduce rental paid hereunder shall not impair
the right of Lsstt to reduce royaltis.
1 t. Should Lsstt be prevented from complying with any express or implied covenant of Ihis Icau, from conducting drilling or reworking opttations Ih<rmn or
from producing oil or gas therefrom by «ason of uardty or or inability to obtain or so use equipmem or material, or by operation of force majrur<, any Federal or
state law or any order, rule or regulation of governmental authority, then while so prevented, Lssee's obligation to comply with such covenant shall be suspended,
and L<ssm shall not be tiablr in damags for failure to comply therewith; and this lease shall be extended while and so long as Lssa is pr<venud by any such cauu
from conducting drilling or reworking operationson or from producing oil or gu from the lase preTnius; and the time while Lsxe u so prevented shalt tut be counted
against Lsstt, ~ryytMts~ tlnhis {r~'tst to th<wntratY notwithstanding.
m! ~cl~ §k~IFE6 ~q,
r~$ O. s)tSl>,ttrumeniis executed on the dot<~ir~ ahovtwrinen, KE COUeITYs/~ w• n~~~
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(~ F7 : Gt[Ifri1 (', -Nl. MlleMKET,t - CO. Clerk
~, ~ '•- Ex=Clfficio CSk. of the Cafmiss.
INDIVIDUAL ACKNOWLEDGMENT
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COU'~1T'~1'~P~'ry~ .~ ..
' ~Oclop tsselthlund rte Wed auNOrity, on this day personally appeared 'R.l :.... n wn....,t,..
__ KPry= r(]Ill')~a. rIWYaCa t
knownmfnerobe tlyperson-whoa namt_u(are)subscribtd to the foregoing inslumenq and acknowledged to methat h~
enetteted the same for the purpous and consideration therein exprased.t d3][1 1Y3 tlJe CdiJlCltY therein StdteCl.
Given under my hand end seal of office this~day of ~,19 ~. J
MY Commission Expires ~./,~~, ~i~L.~
~'~ ~ ~ ~~A~ Hoary Public in and for 'Karr County,SUte of Texas
STATE OF _
COUNTY OF
Before me, the undersigned authority, on this day personally appeared
HUSBAND AND WIFE ACKNOWLEDGMENT
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husband and wife known to me to be the persons whose names ue subscribe to the orgmng tmuument, and acknowledged to me that they executed the same as t ttr
fro an and deed for the purDOSS and consideration therein exDresxd.
Given under my hand and xal of office this_day of ,19
My Commission Expiry
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ADDENDUM ~lQ~ ' 2 0 PAGE l ss
Attached to and made a part of 011, Gas and Mineral Lease dated September 8, 1982 by
and between Kerr County, Texas, as Lessor, and Everest Minerals Corporation as Lessee:
3. Paragraph 3 of this lease shall read ae follows:
The royalties to be paid by Lessee are (a) on oil 1/6th of that produced and saved
from said land, the same to be delivered in kind at the wells or to the credit of Lessor
into the pipelines to which the wells may be connected aC Lessor's election; Lessee may
from time to time with Lessor's concurrence purchase any royalty oil in its posession,
paying the market value therefor prevailing for the field where produced on the date of
purchase; (b) to pay Lessor on gas and casinghead gas produced from said land (1) when
sold by Lessee, l/6th of the amount realized by Lessee, computed at the mouth of the well
or lJ6th of the market value of the gas computed a[ the mouth of the wall, whichever
value or sum is greater, or (2) when used by Lessee off said land or in the manufacture
of gasoline or other products, 1/6th of the amount realized from the sale of gasoline
or other products extracted therefrom and 1/6th of the amount realized from the sale of
residue gas after deducting the amount used for plant fuel and/or compression; while
there is a gas well on this lease or on acreage pooled therewith but gas is not being
produced or sold and no reasonable market for gas then exists, Lessee may pay as royalty,
on or before ninety (90) days after the date on which (1) said well is shut in, or (2)
the land covered thereby or any portion thereof is included in a pooled unit on which
a well is located, or (3) this lease ceases to be otherwise maintained as provided
herein, whichever is the later date, and thereafter at annual intervals on or before
ttie anniversary of the dace the first payment is made, a sum equal to the amount of the
annual rental payment in lieu of drilling operations during the primary term on the
number of acres subject to this lease at the time such payment is made, and if such
payment is made or tendered, this lease shall not terminate, and it will be considered
that gas is being produced from this lease in paying quantities and (c) on all other
minerals mined and marketed 1/8th either in kind or value at the well or mine, at
Lessor's election, except that on sulphur mined and marketed the royalty shall be
$2,00 per long ton. Lessee shall have free use of oil, gas, coal and water from said
land, except water from Lessor's wells, for all operations hereunder, and the royalty
on oil, gas and coal shall be computed after deducting any so used.
12. Notwithstanding any provision to the contrary contained in this Lease, it
is specifically understood and agreed that:
If a pooled unit is established hereunder which includes land not covered by this
Lease and such unit does not include within the boundaries of the unit all of the land
covered by this Lease (the land covered by this Lease located outside of the boundaries of
such pooled unit being referred to herein as "unpooled land"), then it is agreed that
drilling or reworking operations on a well within such unit, or production of a unitized
mineral from any such unit, shall serve [o continue this Lease in force as Co all land
within the unit as [o all depths thereunder, but shall not serve to continue this lease in
force as to such unpooled land; provided, any drilling or reworking operations on land
covered by this Lease within any such pooled unit with respect to a nonunitized mineral or
horizon or production of non-unitized mineral or from a non-unitized horizon from land
covered by this Lease within any such pooled unit, as well as operations on or production
from unpooled land covered by this Lease and/or operations on or production from a pooled
unit consisting entirely of lands covered by this Lease, shall serve to continue this Lease
in force as to all the lands covered hereby as to all depths thereunder in accordance with
the other provisions of this Leasa as though no such unit had been formed; provided,
further, Lessee shall have the right, at Lessee's option, to continue this Lease in force
as to all or any part of such unpooled land for a period of not to exceed one (1) year
beyond the end of the primary term hereof (if this Lease is no[ otherwise being continued
in force as to such unpooled land) by making annual payments of delay rentals on such
unpooled land at the rate of Five Dollars ($5.00) per acre per year; just as though the
primary term of this Lease, as to such unpooled land were extended for one (1) additional
year beyond the end of the initial primary term hereof, such delay rentals to be payable 1n
accordance with the foregoing provisions of this Lease covering payment of annual delay
rentals hereunder. If a pooled unit is established hereunder which included part but not
all of the land covered by this lease and includes other land not covered by this Lease,
then the delay rentals payable under this Lease be during the primary term and the shut in
royalty payments under Paragraph 3 (b) hereof shall be prorated on an acreage basis as
between the pooled and unpooled land and shall be payable on the land covered by this Lease
as to which this Lease is not otherwise being maintained in force.
13, Should Lessot tenants on the leased premises suffer loss or damage to growing
crops, livestock, water wells, fences or other presently existing improvements on said
premises as a result of Lessee's operations thereon under this lease, Lessee agrees to pay
Lessor or such tenants, as the case may be, the actual amount of their said loss or damage.
Within a reasonable time after Lessee's need therefor shall have ceased, Lessee shall fill
Emc-i~iz
V0~ 20 pgr.F 160
and level all slush pits, ruts and other excavations made by Lessee upon said premises and
shall level off all mounds made by Lessee thereon in operations hereunder so as to return
the surface to as near its original condition insofar as can reasonably be done. At the
time of the abandonment of the leased premises, Lessee shall restore same to substantially
their present condition insofar as can reasonably be done as concerns any material change
in the surface thereof caused by operations of Lessee hereunder. In the event Lessee
constructs any permanent type pits on the leased premises, Lessee agrees to enclose said
pits under substantial outside fence of sufficient strength to turn cattle.
14. Drilling operations for the purpose of this Lease shall be deemed to be
commenced when actual spudding in has commenced on said land.
15. Notwithstanding any provision to the contrary contained in this Lease, it is
specifically understood and agreed that Lessee shall have no right of ingress and egress
to the surface of the hereinabove described property for the purpose of exploring,
developing, mining or drilling for oil, gas and minerals as hereinbefore described, nor
shall Lessee have the right to place any improvements whatsoever on the property herein-
above described; it being specifically understood that this 031, Gas and Mineral Lease
is granting Lessee the right to drill directionally from adjacent properties and not from
the surface of the property herein described.
IN WITNESS WHEREOF this instrument is executed on the date first above written.
KERB COUNTY, TEXAS
Em~.~fl~
ORDER N0. 14824
Order Approving Oil, Gas & Mineral
Lease with Everest rinerals Corp.
as to 42.146 Acres of Minerals Owned
by Kerr County Beneath 01d R/td of
State Highway No. 41
10-11-1982
Vol. P, Page 233