Lease for Oil, Gas, and Other Liquids

OIL, GAS AND MINERAL LEASE

THIS LEASE (the "Lease") is made and entered into to be effective , deemed the Effective Date, between , referred to as Lessor (whether one or more), whose address is , and , referred to as Lessee, whose address is .

(Description of Lands)

This Lease shall also extend and apply to any interest which Lessor may hereafter acquire, including, but not limited to, outstanding mineral rights acquired by reversion, prescription, or otherwise, and includes battures, accretions, roads, highways, easements, right-of-ways, and all land, if any, contiguous or adjacent to, or adjoining the lands described below. Lessor agrees to execute any supplemental instrument requested by Lessee for a more complete or accurate description of the lands. For all purposes of determining the amount of bonus and the shut-in royalty payment due Lessor, the lands shall be deemed to contain be true acres, whether actually containing more or less, and the recital of acreage in any tract shall be deemed to be the true acreage in each tract.

2. Subject to its other provisions, this Lease shall be for a period of years from the Effective Date (the "primary term"), and as long thereafter as: (a) oil, gas, sulphur, or other minerals are produced from the lands subject to this Lease, or from land pooled with it, or, (b) it is maintained in force in any other manner provided for in this Lease.

3. For the consideration recited, this Lease shall remain in full force and effect during the primary term, without any additional payment and without Lessee being required to conduct any operations on the lands (either before or after the discovery of minerals), except to pay such wells as might be necessary to protect the lands from drainage.

4. Lessee reserves as royalty, and Lessee agrees to pay Lessor as royalty on oil, other liquid hydrocarbons, and non-gaseous minerals produced and saved from the leased premises (the "oil") part of the net amount received by Lessee for the sale of the oil at the time it is run from the storage tanks, or into the pipeline to which the well or wells on the leased premises are connected. In either case, Lessor's interest shall bear the stated part of all taxes and costs of treating the oil to render it marketable. Lessee shall pay Lessor as royalty on gas and casinghead gas produced from the leased premises of the net amount received by Lessee for the gas if sold at the wellhead, at location on the leased premises, or on lands with which the leased premises are pooled, with Lessor's share of those proceeds to bear its proportionate share of all taxes and costs incurred by Lessee in delivering, processing, compression, or otherwise making the gas marketable or enhancing its marketability. On all other gas and casinghead gas, Lessee shall pay Lessor as royalty of the net amount received by Lessee for the gas so sold, less Lessor's proportionate share of all costs of transportation, compression, processing, treating, and all other costs of marketing. For all gas or solids, Lessor shall bear its proportionate share of all adjustments for heating content, shrinkage, and deductions for impurities. At the expiration of the primary term or at any other time or times if there is a well or wells on the land or on lands with which the land or any portion of it has been pooled, capable of producing oil or gas, and all wells are shut-in, but Lessee shall, nevertheless, continue in force as though operations were being conducted on the land for so long as the wells are shut-in, and Lessee pays the shut-in royalty provided below, and then this Lease may be continued in force, if in no shut-in had occurred. Lessee covenants and agrees to use reasonable diligence to produce, utilize, or market the minerals capable of being produced from the wells, but in the exercise of diligence, Lessee shall not be obligated to install or furnish facilities other than well facilities and ordinary lease facilities of flow lines, separator, and lease tank, and shall not be required to settle labor trouble, or to market oil or gas on terms unacceptable to Lessee. If, at any time after the expiration of the primary term of this Lease, all the wells, oil or gas, on the leased premises, or lands pooled with it, are shut in and this Lease is not otherwise maintained in effect, Lessee may pay or tender, by its check or draft, a shut-in royalty, an amount equal to One Dollar ($1.00) for each acre of land then covered by this Lease (the "shut-in royalty"), on or before the end of each 12 month period during which all wells on the leased premises, or lands pooled with it, are shut in and oil or gas is not being produced, sold, or used, and this Lease is not otherwise being maintained. Each payment or

tender shall be made to the parties who at the time of payment would be entitled to receive the royalties which would be paid under this Lease if the wells were producing, or may be deposited in the or its successors, which shall continue as the depository bank for the parties, regardless of changes in the ownership of shut-in royalty. If at any time that Lessee pays or tenders shut-in royalty, two or more parties are, or claim to be, entitled to receive payments, Lessee, at its election, may, in lieu of any other method of payment provided for in this Lease, pay or tender shut-in royalty, in the manner specified above, either jointly to the parties or separately to each in accordance with their respective ownership. Any payment may be made by Lessee's check or draft, deposited in the mail or delivered to the party entitled to receive payment, or to the depository bank provided for above, on or before the last date for payment. Lessee's failure to pay, or to properly pay or tender any sum due as shut in royalty shall render Lessee liable for the amount due, but shall not operate to terminate this Lease. Nothing in this Lease shall impair Lessee's right to release this Lease, in whole or in part, as provided in paragraph 9. below. In the event of assignment of this Lease, in whole or in part, liability for any payments of any sums which may be due under this Lease, shall rest exclusively on the then owners of this Lease, severally as to acreage owned by each, and the original Lessee, or an assignee will have no obligation for royalties payable on production after an assignment to a subsequent or successor lessee or assignee.

5. If within ninety (90) days prior to the end of the primary term, Lessee should complete or abandon a well on the lands subject to this Lease, or on land pooled with it, or if production previously secured should cease from any cause, this Lease shall continue in force and effect for ninety (90) days from the completion, abandonment, or cessation of production. If at the expiration of the primary term or at the expiration of the ninety (90) day period provided for in the preceding sentence, oil, gas, sulphur, or other mineral is not being produced on the lands or on land pooled with it, but Lessee is then engaged in operations for drilling, completion, or reworking, or operations to achieve or restore production, or if production previously secured should cease from any cause after the expiration of the primary term, this Lease shall remain in force so long thereafter as Lessee either: (a) is engaged in operations for drilling, completion, reworking, or operations to achieve or restore production, with no cessation between operations or between the cessation of production and additional operations of more then ninety (90) consecutive days; or, (b) is producing oil, gas, sulphur, or other mineral from the lands or from land pooled with it. If sulphur be encountered on the lands, or on land pooled with it, this Lease shall continue in force and effect so long as Lessee is engaged with due diligence in explorations for and/or erecting a plant for the production of sulphur, and so long as oil, gas, sulphur, or other mineral is produced from the lands or from land pooled with it.

6. Lessee is granted the right as to all or any part of the lands, without Lessor's joinder, to combine, pool, or unitize the acreage royalty or mineral interest covered by this Lease, or any portion of it, at any time during the life of this Lease, with any other land, lease, or leases, royalty or mineral interests in or under any other tract or tracts of land in the vicinity of the lands, whether owned by Lessee or some other person, or corporation so as to create, by the combination of the lands and leases, one or more operating units, as to any and all mineral horizons, provided that no one operating unit shall, in the case of gas, including condensate, embrace more than acres, and in the case of oil, including casinghead gas, embrace more than acres; and provided further, however, that if any spacing or other rules and regulations of the State or Federal Commission, Agency, or regulatory body having or claiming jurisdiction has or shall at any later time permit or prescribe a drilling or operating unit or spacing rule in the case of gas, including condensate, greater than acres, or in the case of oil or casinghead gas greater than acres, then the unit or units contemplated may have, or may be redesigned so as to have, as the case may be, the same surface content as, but not more than, the unit or the acreage in the spacing rule so prescribed or permitted. It is further specifically understood and agreed, the Lessee shall have the right to, and the benefit of an acreage tolerance of ten percent (10%) in excess of any drilling or operating unit authorized. The commencement of operations for the drilling of a well, or the completion of a well to production of either oil, gas, casinghead gas, condensate, or other minerals on any portion of an operating unit in which all or any part of the lands is embraced, or production of oil, gas, casinghead gas, condensate, or other minerals shall have the same effect under the terms of this Lease as if a well were commenced, completed, or producing oil, gas, casinghead gas, condensate, or other minerals in paying quantities on the lands subject to this Lease. Lessee shall execute in writing and file for record in the records of the Parish in which the lands are located, an instrument identifying or describing the pooled acreage, or a supplemental instrument redesignating same, as the case may be. Either prior to the securing of production from any unit created under the authority granted, or after cessation of production, Lessee shall have the right to dissolve the unit so created, without Lessor's joinder or further consent, by executing in writing and placing of record in the Parish or Parishes in which the lands making up the unit may be located, an instrument identifying and dissolving the unit. These provisions shall be construed as a covenant running with the land and shall inure to the benefit of and be binding on the parties to this Lease, their heirs, representatives, successors and assigns. In the event the operating unit or units is/are created by Lessee, Lessor shall receive out of production or the proceeds from production from the operating unit or units or out of the shut-in royalty provided for above, the portion of the royalty or of the shut-in royalty specified, as the number of acres (mineral acres) out of this Lease placed in any operating unit or units bears to the total number of acres included in the operating unit or units.

7. If Lessor owns a less interest in the lands than the entire and undivided fee simple estate in the lands, then the payments provided for in this Lease shall be paid to Lessor only in the proportion which Lessor's interest bears to the whole and undivided fee.

8. Lessee shall have the exclusive right to explore the lands by geological, geophysical, or other methods, whether similar to those specified or not, and whether now known or not, including the drilling of holes, use of torsion balance, seismograph explosions, magnetometer, or other geophysical or geological instruments, test or procedures, for the purpose of securing geological and geophysical information. All information obtained by Lessee as a result of the activity shall be the exclusive property of Lessee, and Lessee may disseminate or sell the information without Lessor's consent. In exploring for, developing, producing, and marketing oil, gas, and other substances covered by this Lease on the lands or lands pooled or unitized with it, in primary and/or enhanced recovery, Lessee shall have the right of ingress and egress along with the right to conduct all operations on the lands, or on any adjacent or adjoining lands, as may be reasonably necessary for such purpose, including but not limited to the drilling of wells, construction and use of roads, canals, pipelines, tanks, water wells, disposal wells, injection wells, pits, electric and telephone lines, power stations, and other facilities deemed necessary by Lessee to discover, produce, store, treat, and/or transport oil, gas, and other substances. Lessee shall have free use of oil, gas, casinghead gas, condensate, and water from the lands, except water from Lessor's wells, for all operations under this Lease, including repressuring, pressure maintenance, and recycling, and the royalty shall be computed after deducting any so used. Lessee shall have the right at any time during or after the expiration of this Lease to remove all property and fixtures placed by Lessee on the lands, including the right to draw and remove all casing. When required by Lessor, Lessee will bury all pipe lines below ordinary plow depth, and no well shall be drilled within two hundred feet (200') of any residence or barn now on said land without Lessor consent. In the event a well or wells, producing oil, gas, casinghead gas, or condensate in paying quantities should be brought in on adjacent lands not owned by the Lessor and within one hundred fifty feet (150') of and draining the lands, Lessee agrees to drill such offset well or wells as a reasonably prudent operator would drill under the same or similar circumstances.

9. The rights of either party to this Lease may be assigned in whole or in part and the provisions of this Lease shall extend to the heirs, executors, administrators, successors, and assigns, but no change or division in ownership of the lands, or royalties, however accomplished, shall operate to enlarge the obligations or diminish the rights of Lessee. No such change or division in the ownership of the lands or royalties shall be binding on Lessee for any purpose until the person acquiring any interest has furnished Lessee, at its principal place of business, with a certified copy of the instrument or instruments, constituting the chain of title from the original Lessor. Any assignment of this Lease, in whole or in part, shall, to the extent of such assignment, relieve and discharge Lessee of any obligations under this Lease to Lessor and, if Lessee or assignee of part or parts of this Lease shall fail to comply with any other provisions of the Lease, such default shall not affect this Lease insofar as it covers a part of the lands on which Lessee or any assignee shall comply with the provisions of the Lease. In addition, Lessee may at any time and from time to time execute and deliver to Lessor or file for record a release or releases of this Lease as to any part or all of the lands or of any mineral or horizon under it, and then be relieved of all obligations as to the released acreage or interest.

10. In case of suit, adverse claim, dispute, or question as to the ownership of the royalties (or some part of it) payable under this Lease, Lessee shall not be held in default in payment of the royalties (or the part in dispute), until the suit, claim, dispute, or question has been finally disposed of, and Lessee shall have sixty (60) days after being furnished with a certified copy of the instrument or instruments disposing of the suit, claim, or dispute, or after being furnished with proof sufficient, in Lessee's opinion, to settle the question, within which to make payment. Should the right or interest of Lessee be disputed by Lessor, or any other person, the time covered by the pendency of the dispute shall not be counted against Lessee either as affecting the term of the Lease or for any other purpose, and Lessee may suspend all payments without interest until there is a final adjudication or other determination of the dispute.

11. In case of cancellation or termination of this Lease from any cause, Lessee shall have the right to retain, under the terms of this Lease, around each well producing, being worked on, or drilling, the number of acres in the form allocated to each well under spacing and proration rules issued by the Commissioner of Conservation of the State of Louisiana, or any other State or Federal authority having control of such matters; or any unit or units formed pursuant to paragraph 6. or, in the absence of such rulings, unit or units, acres around each well in as near a square form as practicable, and in the event Lessor considers that operations are not being conducted in compliance with this Lease, Lessee shall be notified in writing of the facts relied on as constituting a breach, and Lessee shall have sixty (60) days after receipt of the notice to comply with the obligations imposed by virtue of this Lease.

12. When drilling, reworking, production, or other operations are delayed or interrupted by force majeure, that is, by storm, flood, or other acts of God, fire, war, rebellion, insurrection, riot, strikes, differences with workmen, or failure of carriers to transport or furnish facilities for transportation, or as a result of some law, order, rule, regulation, requisition or necessity of government, Federal or State, or as a result of any cause whatsoever beyond the control of the Lessee, the time of the delay or interruption shall not be counted against Lessee, but this Lease shall be extended for a period of time equal to that during which Lessee is prevented from conducting drilling or reworking operations on, or producing oil, gas, casinghead gas, condensate, or other minerals from, the lands;

provided that during any period that this Lease is continued in force after its primary term solely by force majeure, Lessee shall pay to the owners of the royalty the shut-in royalty provided in paragraph 4, and in the manner provided, without regard to whether or not there is a producing well shut in, located on the lands, or on land with which the lands or any part thereof has been pooled.

13. Lessee shall pay for actual damages caused by its operations to growing crops and timber on the lands subject to this Lease.

14. Notwithstanding the death of any Lessor, or Lessor's successor in interest, the payment or tender of all sums accruing under this Lease in the manner provided above shall be binding on the heirs, executors and administrators of such person.

15. Lessor hereby warrants and agrees to defend the title to the lands, and agrees that the Lessee at its option shall have the right to redeem for Lessee, by payment, any mortgage, taxes, or other liens on the lands, in the event of default of payment by Lessor, and be subrogated to the rights of the holder thereof. In case of payment of any such mortgage, taxes, or other liens by Lessee, in addition to the right of subrogation granted, Lessee shall also have the right to retain any royalties which become due Lessor and to repay itself from them, and the retention of the royalties by Lessee shall have the same effect as if paid to the Lessor in whose behalf payment of any mortgage, taxes, or other liens was made.

16. This Lease shall be binding on all who execute it, whether or not named in the body of this Lease as Lessor, and without regard to whether this same instrument, or any copy of it, shall be executed by any other Lessor named above.

This Lease is executed as of the date of the acknowledgment below, but shall be deemed effective for all purposes as of the Effective Date stated above.

(Acknowledgments)