Fill and Sign the Keeping Your Lease Alive in Good Times and in Bad Form

DRILLING REQUIREMENTS Form 1. Lessee is obligated to commence, or cause to be commenced, drilling operations on a well (the “Test Well”) on or before (time period) from the date of this Lease. “Dri lling Operations” means moving onto a drill site location on the lease premises a drilling rig of sufficient size and capability which will enable a well to be drilled t o a depth sufficient to test the ____ formation. The Test Well must be drilled in a good and workmanlike manner to a depth sufficient to adequately test the ____ formation. Total depth must be reached within ____ days of the commencement of Drilling Operations. If Lessee fails to timely commence the Test Well, or having timely commenced the Test Well, Lessee fails to drill to t he required depth within the required ____ day period, this Lease will automatically terminate. If Lessee tim ely drills to the required formation and the Drilling Operations result in a commercially productive we ll, then all of the lease premises shall be deemed to continue to be subject to this Le ase without the further payment of delay rentals or additional Drilling Operations (although development wells tha t a prudent operator would drill will still be required to be drilled) as long as the Test Well produces oil and/or gas in paying quantities. Form 2. Lessee shall be required to commence, or cause to be commenced, drilling operations on a well on the lease premises within (time period) of the date of this Lease (the “Test Well”). The Test Well must be drilled to a subsurface depth of ____ feet or to a depth adequat e to sufficiently test the ____ formation, whichever is the lesser depth. If the Test Well is drill ed in a timely and proper manner and to the specified depth, this Lease shall be maintained until the end of its primary term without the necessity for the continued payment of delay rentals, and wi thout the requirement that the Test Well be completed as a commercially productive well. However, if the Test Well is completed as a well capable of producing oil and/or gas in paying quantities, this Lease shall be maintained both during and after the primary term without the necessi ty of additional operations, except for those operations required under the implied covenant of reasonable development, for so long as the Test Well produces in commercial quantit ies. The timely drilling of the Test Well as a dry hole will not continue this Lease beyond its primary term. Lessee’s failure to drill the Test Well, as required above, shall result i n Lessee being obligated to pay Lessor, as liquidated damages, the sum of $____, which shall be paid to Lessor within ____ days of receipt of written notice by Lessor. “Drilling Operations” means the penetration of the drilling bit into the surface of the ground for the purposes of drilling the T est Well to the required depth.