Common use of ROYALTY SETTLEMENT Clause in Contracts

ROYALTY SETTLEMENT. The United States and any State and any royalty owner who is entitled to take in kind a share of the substances now unitized hereunder shall be hereafter be entitled to the right to take in kind its share of the unitized substances, and Unit Operator, or the non-unit operator in the case of the operation of a well by a non- unit operator as herein provided for in spe- cial cases, shall make deliveries of such xxx- xxxx share taken in kind in conformity with the applicable contracts, laws, and regula- tions. Settlement for royalty interest not taken in kind shall be made by an operator responsible therefor under existing con- tracts, laws and regulations, or by the Unit Operator on or before the last day of each month for unitized substances produced dur- ing the preceding calendar month; provided, however, that nothing in this section shall operate to relieve the responsible parties of any land from their respective lease obliga- tions for the payment of any royalties due under their leases. If gas obtained from lands not subject to this agreement is introduced into any par- ticipating area hereunder, for use in repres- suring, stimulation of production, or increas- ing ultimate recovery, in conformity with a plan of development and operation approved by the AO, a like amount of gas, after settle- ment as herein provided for any gas trans- ferred from any other participating area and with appropriate deduction for loss from any cause, may be withdrawn from the formation into which the gas is introduced, royalty free as to dry gas, but not as to any products which may be extracted therefrom; provided that such withdrawal shall be at such time as may be provided in the approved plan of development and operation or as may other- wise be consented to by the AO as con- forming to good petroleum engineering prac- xxxx; and provided further, that such right of withdrawal shall terminate on the termi- nation of this unit agreement. Royalty due the United States shall be computed as provided in 30 CFR Group 200 and paid in value or delivered in kind as to all unitized substances on the basis of the amounts thereof allocated to unitized Fed- eral land as provided in Section 12 at the rates specified in the respective Federal leases, or at such other rate or rates as may be authorized by law or regulation and ap- proved by the AO; provided, that for leases on which the royalty rate depends on the daily average production per well, said aver- age production shall be determined in ac- cordance with the operating regulations as though each participating area were a single consolidated lease.

ROYALTY SETTLEMENT. The United States and any State and any royalty owner who is entitled to take in kind a share of the substances now unitized hereunder shall be hereafter be entitled to the right to take in kind its share of the unitized substances, and Unit Operator, or the non-unit operator working interest owner in the case of the operation of a well by a non- unit operator working interest owner as herein provided for in spe- cial special cases, shall make deliveries of such xxx- xxxx royalty share taken in kind in conformity with the applicable contracts, laws, and regula- tionsregulations. Settlement for royalty interest not taken in kind shall be made by an operator working interest owners responsible therefor therefore under existing con- tractscontracts, laws and regulations, or by the Unit Operator on or before the last day of each month for unitized substances produced dur- ing during the preceding calendar month; provided, however, that nothing in this section shall operate to relieve the responsible parties lessees of any land from their respective lease obliga- tions obligations for the payment of any royalties due under their leases. If gas obtained from lands not subject to this agreement is introduced into any par- ticipating participating area hereunder, for use in repres- suringrepressuring, stimulation of production, or increas- ing increasing ultimate recovery, recovery in conformity with a plan of development and operation approved by the AOAO and the Land Commissioner and the Division, a like amount of gas, after settle- ment settlement as herein provided for any gas trans- ferred transferred from any other participating area and with appropriate deduction for loss from any cause, may be withdrawn from the formation into which the gas is introduced, royalty free as to dry gas, but not as to any products which may be extracted therefrom; provided that such withdrawal shall be at such time as may be provided in the approved plan of development and operation or as may other- wise otherwise be consented to by the AO and the Land Commissioner and the Division as con- forming conforming to good petroleum engineering prac- xxxxpractice; and provided further, that such right of withdrawal shall terminate on the termi- nation termination of this unit agreement. Royalty due the United States shall be computed as provided in 30 CFR Group 200 and paid in value or delivered in kind as to all unitized substances on the basis of the amounts thereof allocated to unitized Fed- eral Federal land as provided in Section 12 at the rates specified in the respective Federal leaseslease, or at such other rate or rates as may be authorized by law or regulation and ap- proved approved by the AO; provided, that for leases on which the royalty rate depends on the daily average production per well, said aver- age average production shall be determined in ac- cordance accordance with the operating regulations as though each participating area were a single consolidated lease. Royalty due on account of State lands shall be computed and paid on the basis of all unitized substances allocated to such lands.

ROYALTY SETTLEMENT. The United States and any State Slates and any royalty owner who is entitled to take in b kind a share of the substances now unitized hereunder shall be hereafter be entitled to the right tight to take in b kind its share of the ofthe unitized substances, and Unit Operator, or the non-unit operator in the working bterest owner b case of the ofthe operation of a ofa well by a non- unit operator working interest owner as herein haem provided for in spe- cial b special cases, shall make deliveries of such xxx- xxxx ofsuch royalty share taken in kind in b kbd b conformity with the applicable contracts, laws, and regula- tionsaud regulations. Settlement for royalty interest bterest not taken in kind b kbd shall be made by an operator working bterest owuets responsible therefor therefore under existing con- tractsexistbg contracts, laws and regulationsregulaticns, or by the die Unit Operator on or before the die last day of each month for unitized substances produced dur- ing during the preceding precedbg calendar month; provided, however, that nothing in this nothbg b tliis section shall sliall operate to relieve the tlte responsible parties of any ofany land from their respective lease obliga- tions obligations for the payment of any royalties due under their leases. If gas obtained from lands not subject to this tliis agreement is introduced into any par- ticipating btroduced bto the unit area hereunder, for use in repres- suringb repressuring, stimulation of production, or increas- ing bereasbg ultimate recovery, in conformity recovery b confonnity with a plan of development ofdevelopment and operation approved by (he AO. and the AOLand Commissioner, and the Division, a like amount of gas, after settle- ment settlement as herein bereb provided for any gas trans- ferred transferred from any other participating area and with appropriate deduction for loss from any cause, may be withdrawn from the tbe formation into which the gas is introducedbtroduced, royalty free as to dry gas, but not as to any products which may be extracted therefrom; provided that such withdrawal shall be at such time as may be provided in b the approved plan of development ofdevelopment and operation or as may other- wise otherwise be consented to by the AO AO, and the Land Commissioner, and the Division as con- forming conforming to good petroleum engineering prac- xxxxpractice; and provided further, that such right of withdrawal ofwithdrawal shall terminate on the termi- nation of this unit agreementtbe termination ofthis Unit Agreement. Royalty due the ext United States Stales lands, including compensatory royalty specified b Section 15(b) shall be computed as provided in b 30 CFR Group 200 and paid in b value or delivered in b kind as to all unitized imitized substances on the basis of the amounts amouuts thereof allocated to unitized Fed- eral land as provided in b Section 12 11 at the rates specified in the (be respective Federal leaseslease, or at such other rate rale or rates as may be authorized by law or regulation and ap- proved approved by the AO; provided, that for leases on which the royalty rate depends on the tbe daily average production per pa well, said aver- age average production shall be determined in ac- cordance b accordance with the operating regulations as though each participating the imitized area were a single sbgle consolidated lease.. Xxxxxxxx Canyon Unit Agreement 3 608225656.1

ROYALTY SETTLEMENT. The United States and any State States, the Indians , and any royalty owner who is entitled to take in kind a share of the substances now new unitized hereunder shall be shaft hereafter be entitled to the right to take in kind its share of the unitized substances, and Unit Operator, or the non-unit operator working interest owner in the case of the operation of a well by a non- unit operator working interest owner as herein provided for in spe- cial special cases, shall make deliveries of such xxx- xxxx royalty share taken in kind in conformity with the applicable contracts, laws, and regula- tionsregulations. Settlement for royalty interest not taken in kind shall be made by an operator working interest owners responsible therefor therefore under existing con- tractscontracts, laws and regulations, or by the Unit Operator on or before the last day of each month for unitized substances produced dur- ing during the preceding calendar month; provided, however, that nothing in this section shall shaft operate to relieve the responsible parties of any patties ofany land from their respective lease obliga- tions obligations for the payment of any ofany royalties due under their leases. If gas obtained from lands not subject to this agreement is introduced into any par- ticipating area hereunder, for use in repres- suring, stimulation of production, or increas- ing Increasing ultimate recovery, recovery in conformity with a plan of development and operation approved by the AO, a like amount of gas, after settle- ment settlement as herein provided for any gas trans- ferred transferred from any other participating area and with appropriate deduction for loss from any cause, may be withdrawn from the formation into which the gas is introduced, royalty free as to dry gas, . but not as to any products which may be extracted therefrom; : provided that such withdrawal shall be at such time as may be provided in the approved plan of development ofdevelopment and operation or as may other- wise otherwise be consented to by the AO as con- forming conforming to good petroleum engineering prac- xxxx; practice: and provided further, that such right of withdrawal shall terminate on the termi- nation termination of this unit agreementUnit Agreement. Royalty due on the United States and Indian trust lands shall be computed as provided in 30 CFR Group 200 and paid in value or delivered in kind as to all unitized substances on the basis of the amounts thereof allocated to unitized Fed- eral Federal land as provided in Section 12 11 at the rates specified in the respective Federal leaseslease, or at such other rate or rates as may be authorized by law or regulation and ap- proved approved by the AO; : provided, that for leases on which the royalty rate depends on the daily average production per well, said aver- age average production shall be determined in ac- cordance accordance with the operating regulations as though each participating the unitized area were a single consolidated lease.

ROYALTY SETTLEMENT. The United States and any the State and any royalty owner who is entitled under his lease to take in kind a share of the substances now unitized hereunder shall be hereafter be entitled to the right to take in kind its share of the unitized substances, and Unit Operator, or the non-unit operator working interest owner in the case of the operation of a well by a non- unit operator working interest owner as herein provided for in spe- cial casesSection 13 or otherwise herein, shall make deliveries of such xxx- xxxx royalty share taken in kind kind, in conformity with the applicable contracts, laws, and regula- tionsregulations, at the outlet flange of the Plant (referred to herein as the "delivery point") . The working interest owners receiving in kind or separately disposing of all or part of the unitized substances allocated to any tract (except Unit Operator when disposing of another working interest owner's share pursuant to Section 12 ) shall be responsible for payment of all royalties, overriding royalties and other payments out of production not taken in kind with respect to such tract . Settlement for royalty interest not taken in kind shall be made by an operator working interest owners responsible therefor as provided under existing con- tractsthe applicable lease or, laws and regulationsif not so provided, or by the Unit Operator on or before the last day of each month for unitized substances produced dur- ing during the preceding calendar month; providedmonth . In the event that the State or a private royalty owner elects to lake its royalty share in kind and in the event tllat the applicable royalty owner elects to transport such royalty share through the Pipeline, howeveror to use other infrastructure downstream of the delivery point, that nothing such royalty interest owner shall reimburse the applicable working interest owners the actual cost of such transportation, compression, storage or other infrastructure use, including the royalty interest owner's proportionate share, based on throughput as dcscnbed below in this section shall operate to relieve the responsible parties fuis Section, of any land cost of capital incurred by such working interest owners related to the construction of the Pipeline or such other infrastructure . Royalty owners grant working interest owners the right to inject gas, water or other substances from their respective lease obliga- tions the unit area into the unit area for pwposes of unit operations, together with a right to drill, use and maintain injection xxxxx in the payment unit area, provided that no anthropogenic (man made) carbon dioxide may be injected into the unit area without the prior consent of the Federal AO and the State AO . Royalty owners further grant to working interest owners the right to take over and use for production or injection purposes existing xxxxx or dry holes in the unit area . No royalty shall be payable on unitized substances obtained from any royalties due under their leasesParticipating Area if reinjected in the Participating Area . If gas Gas (other than anthropogenic carbon dioxide}, water and other substances obtained from lands not subject to this agreement is may be introduced into any par- ticipating area Participating Area hereunder, but only for use in repres- suringrepressuring, stimulation of production, or increas- ing increasing ultimate recovery, recovery in conformity with a plan of development and operation approved by tlle Federal AO and the State AO, in which case in the case of gas a like amount of that type of gas, after settle- ment settlement as herein provided for any gas trans- ferred unitized substance transferred from any other participating area Participating Area and with witll appropriate deduction for loss from any cause, may be withdrawn from the formation into which the such gas is was introduced, royalty free as to dry gas, but not as to any products which may be extracted therefromtherefrom ; provided that such withdrawal the first gas of that type withdrawn shall be at such time as may considered to be tlle gas so transferred, unless ofuerwise provided in the approved plan of development and operation or as may other- wise otherwise be consented to by the Federal AO and the State AO as con- forming conforming to good petroleum engineering prac- xxxxpractice ; and provided further, that such right of withdrawal shall terminate on the termi- nation tennination of this unit agreementagreement . 11 DBl/63287028 Royalty due the United States shall be computed as provided in 30 CFR C . F . R . Group 200 and paid in value or delivered in kind as to all unitized substances on the basis of the amounts thereof allocated to unitized Fed- eral Federal land as provided in Section 12 at the rates specified in the respective Federal leaseslease, or at such other rate or rates as may be authorized by law or regulation and ap- proved approved by the AOFederal AO ; provided, that for leases on which the royalty rate depends on the daily average production per well, said aver- age average production shall be determined in ac- cordance accordance with the operating regulations as though each participating area Participating Area were a single consolidated lease.lease . This paragraph does not apply to State unitized substances acquired from the United States and initially leased by a federal agency . Royalty due on account of State lands shall be computed and paid on the basis of all unitized substances allocated to such lands . The royalties paid upon helium allocated to each tract shall be based upon (i) if sold other titan to an affiliate of the applicable working interest owner, the value actually obtained for such helium, free of any costs of production and market preparation, including but not limited to compression, dehydration and gathering, prior to the delivery point of the royalty share as specified in this Section, but net of all costs of compression, transportation, storage and marketing, and costs of liquefaction, if liquefied, on such royalty share incurred from and after such delivery point through such point of sale or (ii) if sold to any affiliate of the applicable working interest owner, the market value at the delivery point of the royalty share . It is recognized by the Parties that there are few arm's length sales for carbon dioxide gas . It is further recognized by the Parties that it is the responsibility of the working interest owners to place carbon dioxide gas in a marketable condition, free of cost to the royalty owners . Therefore, the Parties agree that, as further consideration for entering into this agreement, royalties paid upon carbon dioxide allocated to each tract shall be based upon the greatest of the following : (a) (i) if sold other than to an affiliate of the applicable working interest owner, the value actually obtained for such carbon dioxide, free of any costs of production and market preparation, including but not limited to compression, dehydration, and gathering, prior to the delivery point of the royalty share as specified in this Section, but net of all costs of compression, transportation, storage and marketing on such royalty share incurred from and after such delivery point through such point of sale or (ii) if sold to any affiliate of the applicable working interest owner, the market value at the delivery point of the royalty share ; (b) A minimum value for carbon dioxide of fifty cents per thousand cubic feet ( $ 0 . 50 /MCF) . At the beginning of the calendar year after first delivery carbon dioxide gas from the unit area is made, and each year thereafter, said value shall be adjusted in accordance with the annual rate of change in the Oil and Gas Extraction Index (or the successor index thereto) published by the Bureau of Labor Statistics of the United States Department of Commerce for the prior calendar year, or, if such Index ceases to be published and there is no successor index, a reasonably equivalent index published by an authoritative third party that Unit Operator reasonably designates and is approved by the State AO, such consent not to be unreasonably withhold . However, no adjustment below fifty cents per thousand cubic feet ( $ 0 . 50 /MCF) shall ever be made ; or (c) In no case shall (i) the royalties paid under this agreement for any calendar year after the first commercial delivery of carbon dioxide gas from the unit area is made be less than (ii) the annual rentals or minimum royalties paid for the calendar year preceding the calendar year during which the first commercial delivery of carbon dioxide gas from the unit area occWTed . In the case whore amount (i) is less than amount (ii) for any year, an appropriate retroactive payment shall be made in an amount equal to the difference between the amount that would have been paid for such year in accordance with subpart (ii) of this paragraph and the amount actually paid for such year in accordance with subpart (i) of this paragraph . Where the cost of capital incurred by a working interest owner or its affiliates downstream of the delivery point is to be deducted or recovered, deduction or recovery shall be accomplished over time by dividing the total capital cost by the forecast quantities of unitized substances to be produced from the Participating Areas for the first twenty years of commercial production, as approved by the working interest owners in accordance with the voting provisions of the unit operating agreement, to obtain a capital recovery charge per unit of production . That charge shall then be applied against all production using the relevant facilities until the applicable capital costs have been fully deducted or recovered . 12 DB1/63287028

ROYALTY SETTLEMENT. The State of New Mexico and United States of America and any State and any royalty owner who is all Royalty Owners who, under an existing contract, are entitled to take in kind a share of the substances now produced from any Tract unitized hereunder hereunder, shall be hereafter continue to be entitled to the such right to take in kind its their share of the unitized substancesUnitized Substances allocated to such Tract, and Unit Operator, or the non-unit operator in the case of the operation of a well by a non- unit operator as herein provided for in spe- cial cases, Operator shall make deliveries of such xxx- xxxx Royalty share taken in kind in conformity with the applicable contracts, laws, laws and regula- tionsregulations. Settlement for royalty interest Royalty not taken in kind shall be made by an operator Working Interest Owners responsible therefor under existing con- tractscontracts, laws and regulations, or by the Unit Operator regulations on or before the last day of each month for unitized substances Unitized Substances produced dur- ing during the preceding calendar month; provided, however, that nothing in this section herein contained shall operate to relieve the responsible parties lessees of any land from their respective lease obliga- tions obligations for the payment of any royalties Royalty due under their the leases. If gas obtained from lands not subject to this agreement is introduced into any par- ticipating area hereunder, for use in repres- suring, stimulation of production, or increas- ing ultimate recovery, in conformity with a plan of development and operation approved by the AO, a like amount of gas, after settle- ment as herein provided for any gas trans- ferred from any other participating area and with appropriate deduction for loss from any cause, may be withdrawn from the formation into which the gas is introduced, royalty free as to dry gas, but not as to any products which may be extracted therefrom; provided except that such withdrawal shall be at such time as may be provided in the approved plan of development and operation or as may other- wise be consented to by the AO as con- forming to good petroleum engineering prac- xxxx; and provided further, that such right of withdrawal shall terminate on the termi- nation of this unit agreement. Royalty due the United States shall be computed on Unitized Substances as provided in 30 CFR Group 200 and paid in value or delivered in kind as to all unitized substances on the basis of the amounts thereof allocated to unitized Fed- eral land as provided each Tract in Section 12 at accordance with the rates specified in the respective terms of this Agreement. With respect to Federal leases, or at such other rate or rates as may be authorized by law or regulation and ap- proved by the AO; provided, that for leases committed hereto on which the royalty rate depends on upon the daily average production per well, said aver- age such average production shall be determined in ac- cordance accordance with the operating regulations pertaining to Federal leases as though each participating area the committed Tracts were included in a single consolidated lease. If the amount of production or the proceeds thereof accruing to any Royalty Owner (except the United States of America) in a Tract depends upon the average production per well or the average pipeline runs per well from such Tract during any period of time, then such production shall be determined from and after the effective date hereof by dividing the quantity of Unitized Substances allocated hereunder to such Tract during such period of time by the number of xxxxx located thereon capable of producing Unitized Substances as of the Effective Date hereof, provided that any Tract not having any well so capable of producing Unitized Substances on the Effective Date hereof shall be considered as having one such well for the purpose of this provision. All Royalty due the State of New Mexico and the United States of America and the other Royalty Owners hereunder shall be computed and paid on the basis of all Unitized Substances allocated to the respective Tract or Tracts committed hereto, in lieu of actual production from such Tract or Tracts. With the exception of Federal and State requirements to the contrary, Working Interest Owners may use or consume Unitized Substances for Unit Operations and no Royalty, overriding royalty, production or other payments shall be payable on account of Unitized Substances used, lost, or consumed in Unit Operations. Each Royalty Owner (other than the State of New Mexico and the United States of America) that executes this Agreement represents and warrants that it is the owner of a Royalty Interest in a Tract or Tracts within the Unit Area as its interest appears in Exhibit "B" attached hereto. If any Royalty Interest in a Tract or Tracts should be lost by title failure or otherwise in whole or in part, during the term of this Agreement, then the Royalty Interest of the party representing himself to be the owner thereof shall be reduced proportionately and the interest of all parties shall be adjusted accordingly.

ROYALTY SETTLEMENT. The United States Slates and any State and any royalty royally owner who is entitled to take lake in kind a share of the substances now unitized uniti/ed hereunder shall be hereafter be he entitled to the right to take in kind its share of the unitized uniti/ed substances, and Unit Operator, or the non-unit operator working interest owner in the case of case'of the operation of a well by a non- unit operator working interest owner as herein provided for in spe- cial special cases, shall make deliveries of such xxx- xxxx royalty share taken in kind in conformity with the applicable contracts, laws, and regula- tionsregulations. Settlement for royalty royally interest not taken in kind shall be made by an operator working interest owners responsible therefor therefore under existing con- tractscontracts, laws and regulations, or by the Unit Operator on or before the last Iasi day of each month for unitized uniti/ed substances produced dur- ing during the preceding calendar month; : provided, however, that nothing in this section shall operate to relieve the responsible parties panics of any land from their respective lease obliga- tions obligations for the payment of any royalties due under their leases. If gas obtained from lands not subject to this agreement is introduced into any par- ticipating the unit area hereunder, for use in repres- suringrepressuring, stimulation of production, or increas- ing increasing ultimate recovery, recovery in conformity with a plan of development and operation approved by the AOAO and the Division, a like amount of gas, after settle- ment settlement as herein provided for (or any gas trans- ferred transferred from any other participating area and with appropriate deduction for loss from any cause, may be he withdrawn from the formation into which the gas is introduced, royalty royally free as to dry gas, but not as to any products which may be extracted therefrom; provided that such withdrawal shall be at such time as may be provided in the approved plan of development and operation or as may other- wise otherwise be consented to by the AO AO. and the Division as con- forming conforming to good petroleum engineering prac- xxxxpractice; and provided further, that such right of withdrawal shall terminate on the termi- nation termination of this unit agreementUnit Agreement. Royalty due the on United States and Indian trust lands shall be he computed as provided in 30 .10 CFR Group 200 and paid in value or delivered in kind as to In all unitized uniti/ed substances on the basis of the amounts thereof allocated to unitized Fed- eral uniti/ed land as provided in Section 12 I I at the rates specified .specified in the respective Federal leaseslease, or at such other rate or rates as may be authorized by law or regulation and ap- proved approved by the AO; : provided, that for lor leases on which the royalty rate depends on the daily average production per well, said aver- age average production shall be determined in ac- cordance accordance with the operating regulations as though each participating the uniti/ed area were a single consolidated lease.

ROYALTY SETTLEMENT. The United States and any State and s, the bdians, the Stale of New Mexico, arid any royalty owner who is entitled to take in kind a share of the substances now unitized hereunder hoeundo shall be hereafter be entitled to the right to take in kind its share of the unitized substances, and Unit OperatorOperates, or the non-unit operator working interest owner in the case of the operation of a well by a non- unit operator working interest owno as herein provided for in spe- cial special cases, shall make deliveries of such xxx- xxxx royalty share taken in kind in conformity with the applicable contracts, laws, and regula- tionsregulations. Settlement for royalty interest not taken in kind shall shag be made by an operator working intoest owners responsible therefor therefore under existing con- tractscontracts, laws and regulations, or by the Unit Operator on or before the tbe last day of each month for unitized substances produced dur- ing during the preceding calendar monthmoUh; provided, however, that nothing in this section shall operate to relieve the responsible parties of any land from their respective lease obliga- tions for obligations fix’ the payment paymmt of any royalties due under their leases. . , ” If gas obtained from lands not subject to this agreement is introduced into any par- ticipating the unit area hereunder, for use in repres- suringrepressuring, stimulation of production, or increas- ing increasing ultimate recovery, recovery in conformity with a plan of development ofdevelopmai and operation opoation approved by the AO, and the Land Commissiono and the Division, a like amount amoinn of gas, after settle- ment settlement as herein provided for any gas trans- ferred transferred from any other participating xxxx area and with appropriate deduction deducticn for loss from any cause, may be withdrawn from the formation into which the gas is introduced, royalty free ftee as to dry gas, but not as to any products which may be extracted therefrom; provided that such withdrawal shall sbaD be at such sudh time as may be provided in the (he approved plan of development ofdevelopment and operation opoation or as may other- wise otherwise be consented to by the AO AO, and the Land Commissiono and the Division as con- forming conforming to good petroleum engineering prac- xxxxengineoing practice; and provided further, that such right of withdrawal shall terminate on the termi- nation of this unit agreement. tbe termination ofthis Unit Agreement Royalty due the on United States shall and Indian trust lands shall, including compensatory royalty specified in Section 15(b), be computed canputed as provided in 30 CFR Group 200 and paid in value or delivered in kind as to all unitized substances on the basis of the amounts thereof allocated thereofallocated to unitized Fed- eral land as provided in Section 12 11 at the rates specified in the ihe respective Federal leases, lease; or at such other xxxx rate or rates as may be authorized by law or regulation and ap- proved approved by the AO; provided, that for leases on which the tbe royalty rate depends on the daily average production productioi per well, said aver- age average production shall be determined in ac- cordance accordance with the operating opoaring regulations as though each participating the unitized area were woe a single consolidated lease. North Alamito Unit Agreement (Unleased) 3 Royalty due oo account ofState lands shall be computed and paid on the basis ofall unitized substances allocated to such lands.

ROYALTY SETTLEMENT. The United States and any States, the Indians, the State of New Mexico, and any royalty owner who is entitled to take in kind a share of the substances now unitized hereunder shall be hereafter be entitled to the right to take in kind its share of the unitized substances, and Unit Operator, or the non-unit operator working interest owner in the case of the operation of a well by a non- unit operator working interest owner as herein provided for in spe- cial special cases, . shall make deliveries of such xxx- xxxx royalty share taken in kind in conformity with the applicable contracts, laws, and regula- tionsregulations. Settlement for royalty interest not taken in kind shall be made by an operator working interest owners responsible therefor therefore under existing con- tractscontracts, laws and regulations, or by the Unit Operator on or before the last day of each month for unitized substances produced dur- ing during the preceding calendar month; provided, however, that nothing in this section shall operate to relieve the responsible parties of any land from their respective lease obliga- tions obligations for the payment of any royalties due under their leases. If gas obtained from lands not subject to this agreement is introduced into any par- ticipating the unit area hereunder, for use in repres- suringrepressunng, stimulation of production, or increas- ing increasing ultimate recovery, recovery in conformity with a plan of development and operation approved by the AO, and the Land Commissioner and the Division, a like amount of gas, after settle- ment settlement as herein provided for any gas trans- ferred transferred from any other participating area and with appropriate deduction for loss from any cause, may be withdrawn from the formation into which the gas is introduced, royalty free as to dry gas, but not as to any products which may be extracted therefrom; , provided that such withdrawal shall be at such time as may be provided in the approved plan of development and operation or as may other- wise otherwise be consented to by the AO AO, and the Land Commissioner and the Division as con- forming conforming to good petroleum engineering prac- xxxxpractice; and provided further, that such right of withdrawal shall terminate on the termi- nation termination of this unit agreementUnit Agreement. Royalty due the on United States and Indian trust lands shall be computed as provided in 30 CFR Group 200 and paid in value or delivered in kind as to all unitized substances on the basis of the amounts thereof allocated to unitized Fed- eral land as provided in Section 12 11 at the rates specified in the respective Federal leaseslease, or at such other rate or rates as may be authorized by law or regulation and ap- proved approved by the AO; , provided, that for leases on which the royalty rate depends on the daily average production per well, said aver- age average production shall be determined in ac- cordance accordance with the operating regulations as though each participating the unitized area were a single consolidated lease. Royalty due on account of State lands shall be computed and paid on the basis of all unitized substances allocated to such lands.

ROYALTY SETTLEMENT. The United States and any State and any royalty owner who is entitled to take in kind a share of the substances now unitized hereunder shall be hereafter be entitled to the right to take in kind its share of the unitized substances, and Unit Operator, or the non-unit operator in the case of the operation of a well by a non- non-unit operator as herein provided for in spe- cial special cases, shall make deliveries of such xxx- xxxx royalty share taken in kind in conformity with the applicable contracts, laws, and regula- tionsregulations. Settlement for royalty interest not taken in kind shall be made by an operator responsible therefor under existing con- tractscontracts, laws and regulations, or by the Unit Operator on or before the last day of each month for unitized substances produced dur- ing during the preceding calendar month; provided, however, that nothing in this section shall operate to relieve the responsible parties of any land from their respective lease obliga- tions obligations for the payment of any royalties due under their leases. If gas obtained from lands not subject to this agreement is introduced into any par- ticipating participating area hereunder, for use in repres- suringrepressuring, stimulation of production, or increas- ing increasing ultimate recovery, in conformity with a plan of development and operation approved by the AO, a like amount of gas, after settle- ment settlement as herein provided for any gas trans- ferred transferred from any other participating area and with appropriate deduction for loss from any cause, may be withdrawn from the formation into which the gas is introduced, royalty free as to dry gas, but not as to any products which may be extracted therefrom; provided that such withdrawal shall be at such time as may be provided in the approved plan of development and operation or as may other- wise otherwise be consented to by the AO as con- forming conforming to good petroleum engineering prac- xxxxpractice; and provided further, that such right of withdrawal shall terminate on the termi- nation termination of this unit agreement. Royalty due the United States shall be computed as provided in 30 CFR Group 200 and paid in value or delivered in kind as to all unitized substances on the basis of the amounts thereof allocated to unitized Fed- eral Federal land as provided in Section 12 at the rates specified in the respective Federal leases, or at such other rate or rates as may be authorized by law or regulation and ap- proved approved by the AO; provided, that for leases on which the royalty rate depends on the daily average production per well, said aver- age average production shall be determined in ac- cordance accordance with the operating regulations as though each participating area were a single consolidated lease.

ROYALTY SETTLEMENT. The United States and any States, the Indians, the State of New Mexico, and any royalty owner who is entitled to take in kind a share of the substances now how unitized hereunder shall be hereafter be entitled to the right to take in kind its share of the unitized substances, and Unit Operator, or the non-unit operator working interest owner in the case of the operation of a well by a non- unit operator working interest owner as herein provided for in spe- cial special cases, shall make deliveries of such xxx- xxxx royalty share taken in kind in conformity with the applicable contracts, laws, and regula- tionsregulations. Settlement for royalty interest not taken in kind shall be made by an operator working interest owners responsible therefor therefore under existing con- tractscontracts, laws and regulations, or by the Unit Operator on or before the last day of each month for unitized substances produced dur- ing during the preceding calendar month; provided, however, that nothing in this section shall operate to relieve the responsible parties of any land from their respective lease obliga- tions for the obligations for'the payment of any royalties due under their leases. If gas obtained from lands not subject to this agreement is introduced into any par- ticipating the unit area hereunder, for use in repres- suringrepressuring, stimulation of production, or increas- ing increasing ultimate recovery, recovery in conformity with a plan of development and operation approved by the AO, and the Land Commissioner and the Division, a like amount of gas, after settle- ment settlement as herein provided for any gas trans- ferred transferred from any other participating area and with appropriate deduction for loss from any cause, may be withdrawn from the formation into which the gas is introduced, royalty free as to dry gas, but not as to any products which may be Good Times Unit Agreement 3 extracted therefrom; provided that such withdrawal shall be at such time as may be provided in the approved plan of development and operation or as may other- wise otherwise be consented to by the AO AO, and the Land Commissioner and the Division as con- forming conforming to good petroleum engineering prac- xxxxpractice; and provided further, that such right of withdrawal shall terminate on the termi- nation termination of this unit agreementUnit Agreement. Royalty due the on United States and Indian trust lands shall be computed as provided in 30 CFR Group 200 and paid in value or delivered in kind as to all unitized substances on the basis of the amounts thereof allocated to unitized Fed- eral land as provided in Section 12 11 at the rates specified in the respective Federal leaseslease, or at such other rate or rates as may be authorized by law or regulation and ap- proved approved by the AO; provided, that for leases on which the royalty rate depends on cm the daily average production per well, said aver- age average production shall be determined in ac- cordance accordance with the operating regulations as though each participating the unitized area were a single consolidated lease. Royalty due on account of State lands shall be computed and paid on the basis of all unitized substances allocated to such lands.

ROYALTY SETTLEMENT. The United States and any States, the Indians, the State ofNew Mexico, and any royalty owner who is entitled to take in kind a share sliare of the substances substauces now unitized hereunder shall be sltall hereafter be entitled to the right to take in ill kind its share of the unitized substances, and aud Unit Operator, or the non-unit operator tire working interest owner in the case of the tlie operation of a well by a non- unit operator wotking interest owner as herein provided for in spe- cial special cases, shall sliall make deliveries of such xxx- xxxx royalty share taken in kind in conformity with the applicable contracts, laws, and regula- tionsregulations. Settlement for royalty interest not taken in kind shall be made by an operator woriring interest owuers responsible therefor under Iherefore uuder existing con- tractscontracts, laws and regulations, or by the Unit Operator on or before the last day of each month mouth for unitized umtized substances produced dur- ing during the preceding calendar month; provided, however, that nothing in this section shall sliall operate to relieve the responsible parties of any land from their respective lease obliga- tions obligations for the payment tlie paynieut of any royalties loyalties due under their leasestheirleases. If gas obtained from lands not subject to this tliis agreement is introduced into any par- ticipating the unit area hereunder, for use in repres- suringrepressuring, stimulation of production, or increas- ing ultimate recovery, increasingultimate recovery in conformity with a plan of development ofdevelopment and operation approved by the AO, and tlie Laud Commissioner and tlie Division, a like amount of gas, after settle- ment settlement as herein provided for any gas trans- ferred transferred from any auy other participating area and with appropriate deduction for loss from any cause, may be withdrawn from the formation into which the gas is introduced, royalty free as to dry diy gas, but not as to any products which may be extracted therefrom; provided that such withdrawal shall be at such time as may be provided in the tlie approved plan of development and aud operation or as may other- wise otherwise be consented to by the AO AO, and the Land Commissioner and the Division as con- forming conforming to good petroleum engineering prac- xxxxpractice; and provided further, that tliat such right of withdrawal ofwithdrawal shall terminate tenninate on the termi- nation temiination of this unit agreementUnit Agreement. Royalty due the on United States aud Indian trust lands shall be computed as provided in 30 CFR Group 200 and paid in value or delivered in kind as to all unitized substances on the tlie basis of the amounts thereof allocated thereofallocated to unitized Fed- eral land as provided in iu Section 12 11 at the rates specified in the respective Federal leaseslease, or at such other rate or rates as may be authorized by law or regulation and ap- proved approved by the AO; provided, that for leases on which the royalty rate depends on the die daily average production per well, said aver- age average production shall be determined in ac- cordance iu accordance with the operating regulations as though each participating die unitized area were a single consolidated lease. Royalty due on account ofState lands sliall be computed and paid on the basis ofall unitized substances allocated to such lands.

ROYALTY SETTLEMENT. The United States and any States, the Indians, the State and any royalty owner who w'ho is entitled to take in kind a share of the substances now unitized hereunder shall be hereafter be entitled to the right to take in kind its share of the unitized substances, and Unit Operator, or the non-unit operator working interest owner in the case of the ofthe operation of a well by a non- unit operator working interest owner as herein provided for in spe- cial special cases, shall make deliveries of such xxx- xxxx royalty share taken in kind in conformity with the applicable contracts, laws, and regula- tionsregulations. Settlement for royalty interest not taken in kind shall be made by an operator working interest owners responsible therefor therefore under existing con- tractscontracts, laws and regulations, or by the Unit Operator on or before the last day of each month for unitized substances produced dur- ing during the preceding calendar month; provided, however, that nothing in this section shall operate to relieve the responsible parties of any ofany land from their respective lease obliga- tions obligations for the payment of any ofany royalties due under their leases. If gas obtained from lands not subject to this agreement is introduced into any par- ticipating the unit area hereunder, for use in repres- suringrepressuring, stimulation of production, or increas- ing increasing ultimate recovery, recovery in conformity with a plan of development and operation approved by the AOAO and the Land Commissioner and the Division, a like amount of gas, after settle- ment settlement as herein provided for any gas trans- ferred transferred from any other participating area and with appropriate deduction for loss from any cause, may be withdrawn from the formation into which the gas is introduced, royalty free as to dry gas, but not as to any products which may be extracted therefrom; provided that such withdrawal shall be at such time as may be provided in the approved plan of development and operation or as may other- wise otherwise be consented to by the AO and the I-and Commissioner and the Division as con- forming conforming to good petroleum engineering prac- xxxxpractice; and provided further, that such right of withdrawal shall terminate on the termi- nation termination of this unit agreementUnit Agreement. Royalty due on the United States and Indian trust lands shall be computed as provided in 30 CFR Group 200 and paid in value or delivered in kind as to all unitized substances on the basis of the amounts thereof allocated to unitized Fed- eral Federal land as provided in Section 12 11 at the rates specified in the respective Federal leaseslease, or at such other rate or rates as may be authorized by law law' or regulation and ap- proved approved by the AO; provided, that for leases on which the royalty rate depends on the daily average production per well, said aver- age average production shall be determined in ac- cordance accordance with the operating regulations as though each participating the unitized area were a single consolidated lease. Royally due on account of State lands shall be computed and paid on the basis ofall unitized substances allocated to such lands.

ROYALTY SETTLEMENT. The United States State of New Mexico and any State and any royalty owner who is all Royalty Owners who, under existing contracts, are entitled to take in kind a share of the substances now produced from any Tract unitized hereunder hereunder, shall be hereafter be entitled to the right to take in kind its their share of the unitized substancesUnitized Substances allocated to such Tract, and Unit Operator, or the non-unit operator in the case of the operation of a well by a non- unit operator as herein provided for in spe- cial cases, Operator shall make deliveries of such xxx- xxxx Royalty share taken in kind in conformity with the applicable contracts, laws, laws and regula- tionsregulations. Settlement for royalty interest Royalty Interests not taken in kind shall be made by an operator Working Interest Owners responsible therefor therefore under existing con- tractscontracts, laws and regulations, or by the Unit Operator on or before the last day of each month for unitized substances Unitized Substances produced dur- ing during the preceding calendar month; provided, however, that nothing in this section herein contained shall operate to relieve the responsible parties lessees of any land from their respective lease obliga- tions obligations for the payment of any royalties Royalty due under their leases, except that such Royalty shall be computed in accordance with the terms of this Unit Agreement. If gas obtained from lands not subject to this agreement Agreement is introduced into any par- ticipating area hereunder, the Unitized Formation for use in repres- suringpressure maintenance, stimulation of production, or increas- ing increasing ultimate recovery, which shall be in conformity with a plan of development and operation first approved by the AO, Commissioner and the Division a like amount of gas, after settle- ment as herein provided for any gas trans- ferred from any other participating area and with less appropriate deduction deductions for loss from any cause, cause may be withdrawn from the formation into which the gas is was introduced, royalty free as to dry gas, but not as to any the products which may be extracted therefrom; provided that such withdrawal shall be at pursuant to such time conditions and formula as may be provided in the prescribed or approved plan of development and operation or as may other- wise be consented to by the AO as con- forming to good petroleum engineering prac- xxxxCommissioner; and Division provided further, that such right of withdrawal shall terminate on the termi- nation termination of this unit agreement. If liquefied petroleum gases obtained from lands or formations not subject to this agreement be injected into the Unitized Formation for the purpose of increasing ultimate recover, which shall be in conformance with a plan first approved by the Commissioner and Division; part or all of such liquefied petroleum gases may be withdrawn royalty free pursuant to such conditions and formula as may be prescribed or approved by the Commissioner and Division. Royalty due the United States on account of State lands shall be computed as provided in 30 CFR Group 200 and paid in value or delivered in kind as to all unitized substances on the basis of the amounts thereof all Unitized Substances allocated to unitized Fed- eral land as provided in Section 12 at the rates specified in the respective Federal leases, or at such other rate or rates as may be authorized by law or regulation and ap- proved by the AO; provided, that for leases on which the royalty rate depends on the daily average production per well, said aver- age production shall be determined in ac- cordance with the operating regulations as though each participating area were a single consolidated leaselands.