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EXHIBIT 10.1
2000 DEVELOPMENT AGREEMENT
WELD, ADAMS, AND ARAPAHOE COUNTIES, COLORADO
(UXP'S CONTRACT NUMBER CO-0004-00)
THIS AGREEMENT, is entered into between United States Exploration,
Inc. ("UXP"), with an office at 0000 Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx
00000, hereinafter referred to as "Farmor," and Petroleum Development
Corporation, with an office at 000 Xxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxx Xxxxxxxx
00000, hereinafter referred to as "Operator."
WITNESSETH, THAT:
WHEREAS, Farmor has acquired various oil and gas leases from Union
Pacific Resources Company ("UPRC") and has entered into that certain
Exploration Agreement dated effective June 1, 1998, as amended, ("Exploration
Agreement") with UPRC which allows Farmor to conduct certain drilling
operations and thereby acquire by lease from UPRC all of UPRC's interest in any
unleased oil and gas mineral estate which is not under contract with a third
party which may include lands under the Test Xxxxx listed on Exhibit "1";
WHEREAS, Farmor and Operator would like to drill the Test Xxxxx as
listed on Exhibit "1"; and,
WHEREAS, Farmor has agreed to grant to Operator and Operator has
agreed to accept from Farmor oil and gas assignments covering certain interests
in the Test Xxxxx, on the terms, covenants, and conditions as hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and agreements
hereinafter contained, to be performed by the parties hereto, it is agreed
between the parties as follows:
1. TEST XXXXX:
Subject to the terms contained in this Agreement, on or before
December 31, 2002, Operator shall have commenced the drilling of all sixty-two
(62) Test Xxxxx listed on Exhibit "1", attached hereto and by reference made a
part hereof, and either have completed each Test Well as a well capable of
producing oil and/or gas in commercial quantities or plugged and abandoned it
as a dry hole. Each Test Well shall be located at a lawful location in the
quarter-quarter section as shown on Exhibit "1". If any well location is
undrillable for whatever reason, which may include, but not be limited to, for
reasons of 1) title, 2) surface conditions, 3) inability by UPRC to obtain a
Surface Owner's Agreement, or 4) not owned or controlled 100% by Farmor; a
mutually agreeable substitute
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location shall be added to Exhibit "1" and the undrillable location deleted.
Each Test Well drilled hereunder shall be drilled in a diligent and workmanlike
manner, without unnecessary delay, to a depth to test adequately the
formations) as shown on Exhibit "1" in accordance with all applicable laws,
rules, regulations, orders, and this Agreement.
Operator shall meet certain performance requirements to allow it to
continue to drill Test Xxxxx as provided herein. Operator must spud a minimum
of five (5) Test Xxxxx, identified on Exhibit 1 as "Commitment Xxxxx" by
December 1, 2000; an additional five (5) Commitment Xxxxx by March 31, 2001; an
additional five (5) Commitment Xxxxx by July 31, 2001; and, an additional five
(5) Commitment Xxxxx by December 1, 2001. Provided Operator fails to spud the
minimum number of Commitment Xxxxx by any deadline date as indicated above,
this Agreement shall terminate and Operator shall forfeit any further rights to
drill additional Test Xxxxx or Option Xx Xxxxx beyond such date. Any Commitment
Xxxxx drilled over the five (5) minimum for any period shall be credited
against future period obligations. While in compliance with the above minimum
drilling schedule Operator may drill any other Test Well identified on Exhibit
"1" that it desires. The sole penalty to be incurred by Operator's failure to
meet the minimum drilling schedule outlined above is the loss of future
drilling rights hereunder.
1.1 SUBSTITUTE WELL: If prior to reaching the objective
depth, impenetrable substances, heaving shale, excessive salt, mechanical
conditions, or other condition which makes further drilling impracticable and
which Operator, after a diligent effort, is unable to overcome Operator shall
have the right, but not the obligation to drill a substitute well at a lawful
location selected by it in the same quarter-quarter section on which the
discontinued well is located, provided the actual drilling of said substitute
well is commenced not later than thirty (30) days after the abandonment of the
discontinued well.
The substitute well shall be drilled in the manner and to the
depth specified for the discontinued well. If the substitute well is commenced,
drilled, and completed as herein provided, Operator shall be deemed to have
complied with this Agreement to the same extent as if the discontinued well had
been commenced, drilled, and completed in accordance herewith. If Operator
fails to drill a substitute well as provided above, Operator shall earn no
interest in, to, or under such well. However, Operator may continue to drill
any of the remaining Test Xxxxx listed on Exhibit "1" on the ten-ns as provided
herein.
1.2 DRILLING AND COMPLETION OF THE TEST XXXXX: All of
Operator's operations hereunder shall be conducted prudently in a diligent and
workmanlike manner, without unnecessary delay, and in accordance with all
applicable laws, rules, regulations, and orders. Additionally, Operator shall
comply with all of the ten-ns and conditions contained in the Exploration
Agreement attached hereto as Exhibit "3", including but not limited to,
providing UPRC with all notices and reports required therein for operations
conducted hereunder. After actual drilling has commenced, and continuing until
the total depth is reached and Operator has completed a Test Well as a
commercial producer or plugged and abandoned it as a dry hole, Operator shall
furnish to Farmor daily reports as to the progress of drilling, as well as all
other information as required to be furnished
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to Farmor relative to the drilling of a Test Well as provided on the Exhibit
"2" attached hereto and by reference made a part hereof. Farmor shall have full
and free access to any Test Well and to the records thereof at any and all
reasonable times.
If Operator determines that a Test Well is capable of
producing oil or gas in commercial quantities at any depth drilled; or, if the
information from any drillstem test, core cutting, or formation survey
indicates that the Test Well is capable of producing oil or gas in commercial
quantities at any depth drilled, Operator shall attempt to complete such Test
Well as a producer and, if successful, shall equip such well for production
through and including the tank batteries if an oil well, or pipeline connection
if a gas well.
1.3 PROCEDURE TO INITIATE THE DRILLING OF A TEST WELL: Prior
to the spudding of a Test Well hereunder, Operator must have received from
Farmor written notice that title to drill such Test Well has been approved by
Farmor. There shall be no nonconsent election in the drilling of a Test Well
proposed under this Agreement.
Upon entering into this Agreement, Farmor agrees to request UPRC to
waive its Right of First Refusal as provided in Article 10 of the Exploration
Agreement. Additionally, the rights granted to Operator herein to drill a Test
Well and earn an interest is subject to Farmor's obtaining the necessary
consents from UPRC allowing Operator to operate a Test Well and Farmor to
assign an interest into Operator. Farmor will attempt to obtain UPRC's consent,
as required under the Exploration Agreement or lease acquired (or to be
acquired) from UPRC, just once to allow Operator to operate all of the Test
Xxxxx identified on Exhibit "1"; and, to allow Farmor to assign to Operator the
interest as provided herein under any UPRC lease to which Operator shall be
entitled by the drilling of the Test Xxxxx hereunder. If UPRC is unwilling to
give a blanket consent, Farmor shall obtain such consents as such Test Xxxxx
are proposed by Operator.
2. TITLES:
Upon request, Farmor shall furnish to Operator such title information
as Farmor has in its files, but there shall be no obligation on the part of
Farmor to purchase new or supplemental abstracts or to do any curative work in
connection with the title to any Test Well. Operator agrees to have title
covering at least the drillsite spacing unit examined by a competent oil and
gas attorney and title cured so that title is marketable prior to commencing
operations on a Test Well. The drillsite spacing unit shall be as established
by order of the Colorado Oil and Gas Conservation Commission. If no such order
exists, the drillsite spacing unit for purposes of title examination shall be
at least the governmental quarter section on which the Test Well is proposed.
Operator shall furnish Farmor copies of all title opinions and all title
material obtained by Operator covering any of the Test Xxxxx in sufficient time
to allow Farmor to review same prior to Operator's spudding of such xxxxx.
Farmor makes no representation as to the accuracy of any information provided
to Operator hereunder.
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3. EARNING:
Operator must satisfy itself as to what lands will be earned by Farmor
under the Exploration Agreement from UPRC by Operator's drilling operations
conducted hereunder. This Agreement is made expressly subject to the
Exploration Agreement. Operator shall comply with all of the terms and
conditions contained therein. A copy of the Exploration Agreement and its
amendments are attached hereto as Exhibit "3", by reference made a part hereof
The terms and conditions of the Exploration Agreement shall be held strictly
confidential and no part thereof shall be disclosed by Operator to a third
party without prior written consent from Farmor. Operator must satisfy itself
as to what rights Farmor has under the Exploration Agreement prior to
commencing any well hereunder. Farmor is under no obligation to exercise any
option contained in the Exploration Agreement and failure to do so shall result
in no liability on Farmor to Operator. NOTWITHSTANDING ANYTHING CONTAINED
HEREIN TO THE CONTRARY, IT IS UNDERSTOOD THAT FARMOR'S FAILURE TO EXERCISE AN
OPTION UNDER THE EXPLORATION AGREEMENT WILL RESULT IN FARMOR'S LOSS OF CERTAIN
RIGHTS THEREUNDER WHICH MAY AFFECT OPERATOR'S RIGHTS UNDER THIS AGREEMENT. By
Operator's accepting an assignment affecting a lease covering UPRC-owned
minerals from Farmor as provided herein, Operator agrees that UPRC's royalty
interest shall never be placed into suspense.
By Operator's timely drilling of a Test Well in the manner provided
herein, and completing same as a well capable of producing oil and/or gas in
commercial quantities, and submitting evidence thereof to Farmor, and otherwise
complying with and performing all other terms, covenants, and conditions
hereof, and as contained in the operating agreement affecting such Test Well,
then Operator shall earn and be entitled to receive from Farmor an assignment
of either eighty percent (80%) or eighty-seven and one half percent (87.5%) of
Farmor's interest in those leases contributed to the Spacing Unit for such Test
Well (the correct interest for each Test Well is as set out by such well on
Exhibit "1"), only insofar as to those lands located in such Spacing Unit,
limited to the wellbore of the Test Well earning such assignment, and further
limited in depth from the surface down to the stratigraphic equivalent of the
total depth reached in the earning Test Well, subject to all burdens presently
affecting such leases, whether actually or contractually burdening such leases.
"Spacing Unit" shall be defined as the drilling and spacing unit as established
by order of the Colorado Oil and Gas Conservation Commission, or if unspaced,
the 40-acre quarter-quarter section on which the well is drilled. It may be
necessary to enter into segregation agreements to reduce the size of a unit
which may be for working interest purposes only, or for working interest and
royalty purposes. Prior to obtaining an assignment from Farmor as provided
herein, Operator grants to Farmor the authority to enter into such segregation
agreements and Operator agrees to be subject to same. Farmor shall provide
Operator with copies of all segregation agreements entered into and affecting a
Test Well in which Operator has participated.
3.1 ASSIGNMENTS: Any assignment made into Operator pursuant
to this Agreement shall be:
(A) Made without warranty of title, either
express or implied;
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(B) Limited to the wellbore and further limited
in depth from the surface down to the
stratigraphic equivalent of the total depth
reached in the Test Well earning such
assignment;
(C) Subject to all of the express and implied
terms of the lease;
(D) Subject to all agreements affecting the
lease;
(E) Subject to any gas purchase contract and
gas gathering contract affecting the
assigned interests on the date of the
assignment;
(F) Subject to the terms and provisions of this
Agreement; and,
(G) Substantially in the form of assignment as
attached hereto as Exhibit "4", by
reference made a part hereof, effective as
of the date the Test Well earning such
assignment is completed.
Anything to the contrary hereinabove notwithstanding, it is
understood that Operator must request such assignment in writing within thirty
(30) days from the date the Test Well earning the assignment is completed, time
being of the essence in this Agreement. This Agreement shall survive any
assignment made into Operator pursuant hereto. Upon receipt of an assignment
earned by Operator under this Agreement, Operator agrees promptly to record
same in the real estate records of the county in which the earning Test Well is
located and furnish Farmor with a copy of the recorded assignment as soon as it
is available.
It is Farmor's understanding that Operator is entering into this
Agreement on its own behalf with the possibility of assigning all or part of
its interest acquired pursuant to this Agreement into one or more Limited
Partnerships under which Operator is, or will be, the General Partner with full
authority to commit such Limited Partnership(s) in any operation contemplated
hereunder. Operator shall notify Farmor of any assignment of any interest
acquired by Operator hereunder by providing Farmor with a copy of the recorded
document assigning such interest. Operator shall be responsible for obtaining
all consents to assign any interest acquired by Operator hereunder whether from
UPRC or otherwise.
4. CONTRIBUTION TO AND COST OF THE TEST XXXXX:
Farmor shall contribute its leasehold interest, whether existing or to
be earned under the Exploration Agreement or other agreement, under any
approved Test Well for either twenty percent (20%) or twelve and one half
percent (12.5%) working interest in such Test Well and the production therefrom
(the correct interest for each Test Well is as set out by such well on Exhibit
"1"). Operator shall pay one hundred percent (100%) of the costs to drill a
Test Well for either eighty percent (80%) or eighty-seven and one half percent
(87.5%) working interest in such Test Well and the production produced
therefrom (the correct interest for each Test Well is as set out by such well
on Exhibit "1").
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Such drilling costs shall include, but not be limited to, those costs incurred
in the drilling, testing, completing, equipping of a well through the tanks,
hookup through a gas sales meter [including tap fee and cost of meter], laying
of pipeline, plugging and abandoning costs, site reclamation, all title work,
broker expenses, attorney fees, and all other reasonable costs incurred in the
preparation, drilling, and completing of a well, and gathering of gas. Farmor
shall be responsible for payment of its share of costs and expenses incurred
after the date of first production and hookup to a gas pipeline, if necessary,
for any Test Well drilled hereunder except for the cost to install tubing or
complete an additional zone, provided such zone is indicated as an objective
formation for such Test Well on Exhibit "1" and if such work is commenced
within thirty-six (36) months from the date of spudding a particular Test Well.
Allocation of costs and expenses is further outlined in the Operating Agreement
attached hereto as Exhibit "5".
If Farmor owns or controls (via any interest to be acquired
from UPRC under the Exploration Agreement or to be acquired from another party
by the drilling of a Test Well) less than one hundred percent (100%) of the
working interest in a proposed Test Well, Farmor's and Operator's working
interests and net revenue interests in a Test Well, and payment of the drilling
costs, as defined above, for such Test Well, shall be proportionately reduced.
5. GEOLOGICAL REQUIREMENTS:
Operator agrees to provide Farmor with all of the information
contained in Exhibit "2" attached hereto and by reference made a part hereof,
for all Test Xxxxx drilled hereunder and shall ensure that UPRC receives all
information required either under the Exploration Agreement or under any
existing lease.
6. AGREEMENT GRANTING OVERRIDING ROYALTY:
By Agreement dated May 10, 1998, by and between Xxxxxxx X. Xxxxxx,
Xxxx X. Xxxxxxx, Xxxx X. Xxxxxxx and Xxxxx X. Xxxxxxxx, collectively referred
to as the Xxxxxx Group, and Farmor, Farmor agreed to assign to the Xxxxxx Group
a total overriding royalty equal to two and one half percent (2 1/2%), subject
to proportionate reduction, which shall burden all interests acquired by Farmor
from UPRC under the Exploration Agreement. Accordingly, any assignment acquired
by Operator pursuant to this Agreement subject to the Exploration Agreement
shall be burdened with such overriding royalty.
7. INDEMNIFICATION:
Operator shall protect, indemnify, and hold harmless Farmor, its
directors, officers employees, and agents from and against all risks, expenses,
claims, demands, losses, liabilities and causes of action of every kind and
character, including attorney's fees and expense of investigation and
litigation arising out of , incident to, in connection with, or resulting from
Operator's performance or failure to perform under the Exploration Agreement or
any UPRC lease under which Operator has received, or will receive, an
assignment by the drilling of a Test Well or Option Test
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Well as provided in this Agreement, or the acts of or failure to act by
Operator's employees, agents, contractors and subcontractors. Farmor shall
notify Operator in writing of any matter which gives rise to a claim for
indemnification against Operator hereunder. Farmor shall have the option of
assuming and conducting its defense and billing Operator for the cost of same,
or Farmor may ask Operator to conduct the defense of such matter with counsel
of its choice reasonably satisfactory to Farmor and paying for same directly.
However, Operator shall not consent to the entry of any judgment or enter into
any settlement with respect to any third party claim without the prior written
consent of Farmor, unless the judgment or proposed settlement involves only the
payment of money damages and does not impose an injunction or other equitable
relief upon Farmor, nor constitutes an admission of guilt, liability, fault or
assumption of responsibility by Farmor.
8. MARKETING OF PRODUCTS:
When gas must be nominated on the HS Gathering gas pipeline, Farmor
and Operator may nominate their respective gas volumes separately and receive
their gross revenues directly from the gas purchaser, or Farmor will also
market Operator's share of gas production and make disbursements to Operator.
Farmor has entered into a Letter of Intent dated June 14, 2000 with North
American Resources Company ("NARCO") wherein the lands covered hereunder may be
subject thereto. Provided NARCO pays for the cost to gather the gas from any
well drilled hereunder to its gas gathering system, which would cause a
reduction in the percentage of proceeds pursuant to Paragraph 11 of said Letter
of Intent, Operator agrees promptly to reimburse NARCO in full for such "Payout
Cost", as defined in said Letter of Intent, upon Operator's receipt of a
detailed accounting of the actual costs incurred by NARCO to gather the gas to
avoid any reduction of the percentage of proceeds. Operator agrees that Farmor
may enter into a formal contract with NARCO without Operator's consent,
approval, or execution thereof provided it is entered into based on the terms
and conditions as contained in the Letter of Intent. Farmor shall furnish
Operator with a copy of the fully executed formal agreement when available.
Additionally, the lands covered hereby may also be subject to that certain Gas
Gathering Agreement dated effective July 30, 1991, between KN Energy, Inc. and
KN Front Range Gathering Company, as Gatherer, and Union Pacific Resources
Company, as Producer, as amended by that certain Agreement for Release and
Termination dated November 20, 1999, by and among United States Exploration,
Inc.; Xxxxxx Xxxxxx, Inc., formerly KN Energy, Inc.; HS Resources, Inc.; and
Resource Gathering Systems, Inc. If Operator acquires an interest in lands
subject to either agreement, Operator agrees to comply with same. If Operator
markets any production, it shall cause all revenues received for UPRC's royalty
interest, and any other burdens affecting its working interest, and Farmor's
gross working interest if marketing same, to be disbursed in a timely manner.
In no event is UPRC's royalty interest to be placed in suspense. Farmor and
Operator shall work together to obtain the best price for any oil production.
9. OPERATING AGREEMENT:
All operations conducted in a Test Well drilled hereunder shall be
subject to and operated under the terms and provision of an operating agreement
in the form of operating agreement attached
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hereto as Exhibit "5", by reference made a part hereof. In the event there is a
conflict between the operating agreement for a Test Well and this Agreement,
this Agreement shall control. Operator agrees to prepare a separate operating
agreement for each Test Well for Farmor's execution in timely manner which may
be after a well is completed.
10. ARBITRATION:
Any disputes under this Agreement shall be resolved through binding
arbitration using the same method and procedure as provided under Article 17 of
the Exploration Agreement attached hereto as Exhibit "3".
11. SHUT-IN PAYMENTS:
Operator shall be responsible for making any and all shut-in payments
which may become due under any lease Operator acquires an interest pursuant to
this Agreement and billing Farmor for its proportionate share. Operator shall
notify Farmor immediately whenever a Test Well is shut-in for whatever reason.
12. ASSIGNABILITY:
This Agreement shall be binding on the parties hereto and their
respective successors and assigns. Operator shall not assign its rights and
duties under this Agreement, in whole or part, without Farmor's prior written
consent, which consent shall not be unreasonably withheld. Any attempted
assignment by Operator of its rights and duties arising under this Agreement
without such written consent shall be void and of no effect.
13. ENTIRE AGREEMENT:
This Agreement constitutes the entire agreement between Farmor and
Operator regarding the drilling of the Test Xxxxx identified on Exhibit "1" and
supersedes any prior understandings, agreements, or representations by or
between the parties, written or oral, to the extent they are related in any way
to the subject matter hereof. This Agreement shall not be amended or modified
except by a written instrument duly executed by Farmor and Operator.
14. GOVERNING LAW:
This Agreement shall be governed by and construed in accordance with
the laws of the State of Colorado without giving effect to any choice or
conflict of law provision.
15. NOTICES:
All notices or other communications required or permitted hereunder,
shall be in writing postage or charges prepaid, and shall be deemed given only
when received by the party to whom the same is directed as follows:
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Except as instructed in Exhibit "2" attached hereto:
United States Exploration, Inc.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Petroleum Development Corporation
X.X. Xxx 00
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
Attention: Mr. Xxxx Steams
Telephone: (000) 000-0000
Fax: (000) 000-0000
Each party may change its address or telephone/fax number for any or
all purposes b3 notifying the other party of such change in writing. A return
receipt of the United States Post Office shall be proof of the date and time of
receipt of notice. Any notice given by fax transmittal shall be deemed given
upon confirmation of transmission of the fax, provided that any attachments
referenced in the notice are also sent via fax at the same time; however, a
party giving notice by fo transmittal shall also send a hard copy of the
notice, and any attachments referenced therein promptly by regular mail.
16. DEFAULT:
The only penalty for Operator's failure to drill any of Test Xxxxx as
provided for herein shall be the loss of all rights to an assignment associated
with such Test Well and as indicated in Paragraph 1 above. All of Operator's
right to drill a Test Well and earn an interest as provided herein shall
terminate on December 3 1, 2002, unless terminated prior to such date pursuant
hereto. If Operator materially breaches the terms of this Agreement, Farmor, at
its option, may terminate this Agreement and be released from all subsequent
obligations hereunder; provided, that in so doing Farmor shall not waive or
otherwise be precluded from exercising any other rights or remedies, at law or
in equity, which it may have available for Operator's breach of this Agreement.
17. RIGHT TO USE WELLBORES OF PRODUCING XXXXX:
By providing Operator with thirty (30) days prior written notice of
its intention to deepen a Test Well, Farmor shall have the right to use the
wellbore of any Test Well, which is producing oi capable of producing, to
deepen into formations in which Operator acquired no interest under this
Agreement, and thereafter to commingle such production from such deeper
formation(s) with the shallower production using a mutually acceptable
allocation formula. The deepening operations shall be at Farmor's sole cost,
risk, and expense and Farmor shall indemnify and hold Operator harmless from
and against any losses or damages Operator may suffer as a result of such
deepening
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operations, other than lost production as a result of having to shut-in those
producing formations in which Operator owns an interest to allow Farmor to
conduct its deepening operations, provided such lost production is recoverable
after Farmor completes its deepening operations. Farmor shall take over as
operator for the purposes of the deepening operations, but operations shall be
returned to Operator once Farmor has completed its deepening operations.
Notwithstanding the foregoing contained in this Paragraph 17, the right to use
the wellbore of a well completed in the Codell formation, is limited to any
time after six (6) years from the date of first production, or one (1) year
after the Codell formation has been re-fractured, whichever first occurs.
18. RIGHTS RESERVED BY FARMOR:
With respect to each assignment earned hereunder, Farmor reserves all
interests, rights, horizons, strata and formations which are not included in
such assignment, including, but not limited to, the right of ingress and egress
and concurrent use of the surface and the right to drill through the intervals
earned hereunder.
19. OPTION TO DRILL OFFSETS TO THE COMMITMENT XXXXX:
Provided this Agreement has not terminated pursuant to Paragraph 1
above, Operator shall have the option until December 31, 2002, to drill a well
or xxxxx, each such well referred to as an "Option Test Well", in a 320-acre
unit surrounding each Commitment Well identified in Exhibit " I it. Such
320-acre unit shall be designated by Operator upon its election to exercise its
first option to drill the first Option Test Well therein; but such 320-acre
unit must include any drilling and spacing unit as established by order of the
Colorado Oil and Gas Conservation Commission for any formation as shown on
Exhibit "1" for such Commitment Well. Each Option Test Well shall be drilled to
a depth similar to the Commitment Well which established the 320-acre unit on
which the Option Test Well is located, or shallower at Operator's option, and
Operator shall earn an interest in such Option Test Well on the same terms and
conditions as contained herein for the Commitment Well located in the same
320-acre unit in which the Option Test Well is located. All herein to "Test
Well" shall also be a reference to "Option Test Well".
20. RELATIONSHIP OF PARTIES:
It is not the intention of the parties to create any partnership,
mining partnership, o association, and neither this Agreement nor the
operations contemplated hereunder shall b construed or considered as creating
any such legal relationship. The liabilities of the parties shall be several,
and not joint or collective.
21. HEADINGS:
The headings contained in this Agreement are inserted for convenience
and identification only and are in no way intended to describe, interpret,
define, or limit the scope, extent, or intent of this Agreement or any
provision hereof.
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22. SEVERABILITY:
If any term or provision hereof is determined to be illegal or invalid
for any reason whatsoever, such illegality or invalidity shall not affect the
validity of the remainder of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on this
30th day of June, 2000.
ATTEST: UNITED STATES EXPLORATION, INC.
BY: /s/ F. Xxxxxxx Xxxxxx BY: /s/ Xxxxx X. Xxxxxx
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F. Xxxxxxx Xxxxxx, Secretary Xxxxx X. Xxxxxx, President
ATTEST: PETROLEUM DEVELOPMENT CORPORATION
BY: /s/ Xxxx X. Reuthiger BY: /s/ X.X. Xxxxxx
----------------------------- ----------------------------
NAME: XXXX X. REUTHIGER NAME: XXXX X. XXXXXXX
-------------------------- ---------------------------
(Please type or print) (Please type or print)
TITLE: Asst. Sec. TITLE: VP Exploration
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Listing of Exhibits Attached:
Exhibit "1": Schedule of Well Locations
Exhibit "2": Geological Requirement Sheet
Exhibit "3": Exploration Agreement
Exhibit "4": Form of Assignment
Exhibit "5": Operating Agreement.
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EXHIBITS OMITTED
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