Adventure Energy, Inc. OIL, GAS & COALBED METHANE LEASE
Exhibit
10.3
OIL,
GAS & COALBED METHANE LEASE
THIS
AGREEMENT, made and entered into this_______day of____________ , 20___ , by and
between
_______________________________________________________________________________
_______________________________________________________________________________
party(s)
of the first part, hereinafter referred as Lessor(s); and Adventure Energy, Inc., 00
0xx
Xxxxxx X., Xx. Xxxxxxxxxx, Xxxxxxx 00000, hereinafter referred to as
Lessee.
WITNESSETH:
That the Lessor(s) for and in consideration of the sum of One Dollar ($1.00) and
other good and valuable consideration, the receipt of which is hereby
acknowledged, and performance of the covenants herein has leased and let,
exclusively unto Lessee, the land hereinafter described for the purpose of
exploring, operating and producing oil, gas, coalbed methane and related
products, and the right of injecting water and other fluids in to subsurface
strata, with rights and easements for laying and setting pipes, electric lines,
tanks, power houses, ponds, roadways and fixtures for producing, treating,
maintaining and caring for such products and such other rights and privileges as
are necessary, or convenient for the economical operation alone or conjointly
with neighboring land for oil, gas and coalbed methane products, all that
certain tract of land situated in _________________County, State of
Kentucky,
On the
North by the lands
of: ___________________________________________________________________________
On the
East by the lands
of:_____________________________________________________________________________
On the
South by the lands
of: ___________________________________________________________________________
On the
West by the lands of:
____________________________________________________________________________
This
being the same property conveyed to:
This
lease shall remain in force for a term of________(_______ ) year(s), and as long
thereafter as oil, gas and/or coalbed methane are produced from the premises or
operations by drilling or injection are continued, or thereafter, to pay the
Lessor(s) a delay rental at the rate of Dollars ($_______ ) per acre per annum
payable annually in advance, beginning__________,______ , until, but not after,
a well yielding royalty to the Lessor(s) is drilled and oil, gas and/or coalbed
methane is marketed therefrom. For injection purposes this lease shall continue
in full force and effect, only as to well(s) so used and ten (10) acres
contiguous thereto.
Lessee
covenants and agrees:
1. To
deliver to the credit of Lessor(s), free of cost, in the pipeline to which
Lessee may connect it’s well(s), a 1/8th part of all oil produced and saved from
leased premises, or at the Lessee’s option pay 1/8th of the market price for oil
of like grade and gravity prevailing on the day such oil is
run.
2. To pay
to Lessor(s) for all marketed gas or coalbed methane an amount equal to 1/8th of
the price received at the wellhead or meter station.
3. If
Lessor(s) owns a less interest than the entire undivided fee, royalties and
rentals shall be paid Lessor(s) only in proportion the Lessor(s) interest bears
to the whole.
4. In the
event of a dispute between Lessor(s) and other claimants as to the right to
receive payment of rents and royalties, Lessee may continue it’s operations and
deposit same in an escrow account to be disbursed upon legal resolution of the
controversy.
5. The
Lessee may use, free of cost, gas, oil, coalbed methane and water produced on
said land for it’s operation thereon, except waters from xxxxx of
Lessor(s).
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6.
Lessor(s) may use free of cost, gas for one (1) house residential house upon the
premises, however, this shall apply only to Lessor(s) or their heirs who live on
the leased premises, no other individuals shall have free gas, which shall not
exceed one hundred and fifty thousand (150,000) cubic feet of free gas per year,
which shall be the Lessor(s) sole use for domestic purposes only. Connection
shall be made by a qualified person at Lessor’s expense, responsibility and risk
upon advance written notice. Lessee may observe the connection and disapprove
any connection it deems unsafe. Lessor(s) shall save and indemnify Lessee from
any claims or liabilities from Lessors connection and use of gas.
7. When
requested by Lessor(s), Lessee shall bury pipe below plow depth upon tillable
land.
8. No
well shall be drilled nearer than two hundred (200) feet of the principal
buildings upon said premises, except by mutual consent.
9. Lessee
shall pay for actual damages by it to growing crops.
10.
Lessee shall have the right during or after the term hereof to remove all
machinery and fixtures placed by it on premises, including the right to draw and
remove casing.
11. If
Lessee shall commence to drill a well within the term of this lease or any
extensions, it may drill such well to completion with reasonable dispatch, and,
if oil, gas and/or coalbed methane be found in paying quantities, this lease
shall continue in force as if such well had been completed within the initial
term.
12. If
the estate of either party is assigned (assigning in whole or part is expressly
allowed) the covenants hereof shall extend to successors or assigns, but no
change in ownership or assignment shall be binding on Lessee until after Lessee
has been furnished with a written transfer or assignment If this lease shall be
assigned, as to a part of the lands and the assignee of such part shall default
in payment of a proportionate part of rents due, such default shall not operate
to defeat or affect this lease in so far as it covers a part or parts of said
lands upon which the Lessee shall make due payments of rentals.
13. It
the lease premises are now, or shall be hereinafter be owned in several or in
separate tracts, the premises nevertheless shall be developed and operated as
one lease, and all royalties accruing hereunder shall be treated as an entirety
and shall be divided among, and paid to, such separate owners in the proportion
that the acreage owned by such separate owner bears to the entire lease
acreage.
14. If at
any time there be as many as four (4) parties entitled to rental or royalties,
Lessee may withhold payment thereof until all parties designate in writing, in a
recordable instrument, to be filed with Lessee, a common agent to receive all
payments due hereunder, and to execute division and transfer orders on behalf of
said parties and their respective successors in title.
15.
Lessee may pool or combine the acreage covered by this lease or any portion
thereof with other land in the immediate vicinity when in Lessee’s judgment, it
is necessary or advisable to do so in order to properly develop and operate said
premises in compliance with spacing rules of any lawful authority or to promote
the conservation of oil, gas or coalbed methane produced from said premises. If
production is found on the pooled acreage, it shall be treated as if production
is had from this l ease, whether the well or xxxxx be located on the premises
covered by this lease or not. In lieu of the royalties elsewhere herein
specified, Lessor(s) shall receive on production from a unit so pooled only such
portion of the royalty stipulated herein as the amount of his acreage placed in
the unit or his royalty interest herein bears to the total acreage so pooled in
the particular unit involved.
16.
Lessor(s) hereby warrant generally the title to the lease premises. Lessee shall
have the right to redeem from Lessor(s), by payment, any mortgage, taxes or
liens on said lands, if Lessor(s) defaults and be subrogated to the rights of
the holder thereof. Any such payments made be Lessee shall be deducted from
money due the Lessor(s) under this lease.
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17. This
lease shall not expire at the end of either the primary or secondary terms
hereof if there is a well capable of producing oil, gas and/or coalbed methane
in paying quantities located upon some part of the lands embraced herein where
such well is shut-in due to the inability of the Lessee to obtain a pipeline
connection or to market the oil and/or gas therefrom; and, if the annual rental
as provided herein, is paid the payment of the said annual rental shall be
considered for all purposes the same as if oil, gas and/or coalbed methane were
being produced in paying quantities and upon the commencement of marketing oil,
gas and/or coalbed methane from any well or xxxxx the royalty paid for the lease
year in which the oil, gas and/or coalbed methane is first marketed shall be
credited upon the royalty payable hereunder to the Lessor(s) for such
year.
18. All
covenants of this lease shall be subject to all Federal and State laws and to
all executive orders, rule or regulations of Federal and State authorities and
this lease shall not be terminated, in whole or part, nor Lessee held liable for
any failure to perform thereunder if such failure is due to or is the result of
any such law, order, rule or regulation.
19. Other
provisions:
IN
WITNESS WHEREOF, the parties hereto have signed their names this__________day of
__________________20____
STATE OF
KENTUCKY
COUNTY
OF
I,__________________________,
a Notary Public, in and for said State and County, do certify that
____________________whose name(s) are signed to the within writing bearing date
the_________day of_____________, 20___ has (have)
this day acknowledged the same before me in my said county. Given under my hand
this______day of_________, 20___ .
| Notary Public | |||
|
My
Commission Expires____________
|
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STATE OF
KENTUCKY
COUNTY
OF
I,__________________________,
a Notary Public, in and for said State and County, do certify that
____________________whose name(s) are signed to the within writing bearing date
the_________day of_____________, 20___ has (have)
this day acknowledged the same before me in my said county. Given under my hand
this______day of_________, 20___ .
| Notary Public | |||
|
My
Commission Expires____________
|
THIS
INSTRUMENT PREPARED BY
Adventure Energy, Inc.33
0xx
Xxxxxx X., Xx. Xxxxxxxxxx, XX 00000
By______________________________________________________________
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