Fill and Sign the Producers 88 7 69 R Rental Form

Producers 88 – Kansas – Rental/Pooling _____________________________________________________________________________________________________________________________ ___________________________ Page 1 of 4 OIL, GAS, AND MINERAL LEASE THIS 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 _____ . 1. Lessor, in consideration of Ten Dollars and other valuable consideration ($10.00 & OVC), the receipt and sufficiency of which is acknowledged, and for the royalties reserved in this Lease, GRANTS, LEASES, and LETS the l ands described below, exclusively to Lessee , for the purpose of exploring, drilling, producing and owning, oil, gas, and all other minerals produced with them, and conducting all activities necessary or reasonably incident to the exploration for, operation s in search of, and production of oil, gas, and other minerals . The lands subject to this Lease (referred to as the “ Land ” or the “ Leased Premises ”) are located in _____ County, Kansas , and are described as follows : (Description of Land) This L ease also covers and includes, in addition to that described above , all land, if any : (a) owned or claimed by L essor by limitation s, prescription, possession, reversion , or unrecorded instrument ; or, (b) which Lessor has a preferential right or option to acquire . Lessor agrees to execute any supplemental instrument requested by Lessee for a more complete or accurate description of the Land . For the purpose of determining the amount of any bonus, delay rental , or other payment provided for in this Lease, the Lan d shall be deemed to contain _____ acres, whethe r actually contain ing more or less. A recital of acreage in any tract shall be deeme d to be the true acreage in a described tract. Lessor accepts the bonus , and agrees to accept the delay rental as l ump sum consideration for this L ease and all rights and options it provides . 2. Unless sooner terminated , or longer kept in force under other provisions , this Lease shall remain in force for a term of _____ from the Effective D ate stated above (the “Primary Ter m”), and as long th ereafter as operations, as defined in this Lease , are conducted on the Land with no cessation for more than ninety (90) consecutive days. If, at the end of the Primary Term Lessee has drilled and abandoned a well on the Leased Premises , or lands pooled with it, this Lease shall not terminate at the end of the Primary Term , if Lessee, within 180 days of the end of the end of the Primary Term , commences additional operations on the Leased Premises , or lands pooled with it, which operation s shall be deemed operations during the Primary Term of this Lease and serve to maintain it in full force and effect. 3. Lessor reserves as royalty, and Lessee agrees to pay 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 produce d from the Leased Premises _____ of the net amount received b y Lessee for the gas if sold at the wellhead, at a 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 de livering, processing, compressing , or otherwise making the gas merchantable or enhancing its marketability. On all other gas and casinghead gas, Lessee s hall pay Lessor as royal ty _____ of the net amount received by Lessee for the gas so sold, less its proportionate share of all costs of transportation, compression, processing, treating, and all other costs of marketing. For all gas sold , Lessor shall bear its proportionate share of all adjustments for heat ing content, shrinkage, and deductions for impurities. If, at the expiration of the Primary Term or at any later time or times , there is any well or well on the Land or on lands with which the Land or any portion of it has been pooled or unitized, capable of producing oil or gas, and all the wells are shut - in, this Lease 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 t his Lease may be continued in force as if no shut -in had occurred. Lessee covenants and agrees to use reasonable diligence to produce, utilize, or market the oil or gas capable of being produced from the wells, but in t he exercise of diligence, L essee sha ll not be obligated to install or furnish facilities other than well facilities and ordinary lease facilities of flow lines, separator, and lease tank, 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 in, are shut in and this Lease is not otherwise maintained in effect, Lessee may pay or tender, by its check or draft, as shut in royalty, an amount equal to One Dollars ($1.00) for each acre of Land then covered by this Lease (the “shut -in royalty”) on or before the end of the 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 pai d under this Lease if the wells were producing, or may be deposited in the depository bank Page 2 of 4 provided for below. Lessee’s failure to pay, tender, or to properly pay or tender any sum due as sh ut in royalty shall render Lessee liable for the amount due, but shall not operate to terminate this Lease. Nothing shall impair Lessee’s right to release , as provided in paragraph 5 . In the event of an assignment of this Lease , in whole or in part, liab ility for any payment s of any sums which may be due under this Lease shall rest exclusively on the then owner or owners of this Lease, severa lly as to acreage owned by each , and the original Lessee, or an assignee will have no obligation for royalties paya ble on production after an assignment to a subsequent or successor lessee or assignee. 4. At its option, Lessee is granted the right and authority to pool, unitize, or combine the Land covered by this Lease or any portion of it as to oil and/or gas, with any other Land covered by this Lease, and/or with any other land, lease, or leases in the immediate vicinity of the Leased Premises , when in Lessee's judgm ent it is necessary or advisable to do so in order to explore, develop, and operate the Leased Premises in compliance with the spacing rules of any lawful authority, or when to do so would, in the judgment of Lessee, promote t he conservation of oil and/or gas in and under and that may be produced from the Leased Premises . Units pooled for oil shal l not substantially exceed _____ acres each in area, and units pooled for gas shall not substantially exceed _____ acres each in area, plus, in both instances, a tolerance of ten percent (10%); provided, should a governmental authority having jurisdiction prescribe, allow, or permit the creation of units larger than those specified, fo r the drilling or operation of a well at a regular location, drilled either vertically or horizontally, to comply with existing or subsequently established field rules, or for obtaining a greater allowable from any well to be drilled, drilling, or already drilled, units created may conform substantially in size with those permitted, allowed, or prescribed by applicable governmental regulations, now in existence, or later enacted. Lessee may pool or combine acreage covered by this Lease or any portion of it as to oil and/or gas in any one or more strata. The units formed by pooling as to any stratum or strata need not conform in size or area with the unit or units into which the Lease is pooled or combined as to any other stra tum or strata, and oil units need not conform to the area within gas units. Pooling in one or more instances shall not exhaust the rights of the Lessee to pool this Lease or portions of it into other units. On execution by Lessee of an instrument describ ing and designating the pooled acreage as a pooled unit, the unit shall be effective as to all parties, their heirs, successors, and assigns, irrespective of whether or not the unit is likewise effective as to all other owners of surface, mineral, royalty, or other rights in land included in the unit. Within a reasonable time following the execution of the instrument designating the pooled unit, Lessee shall file the instrument for record in the appropriate records of the county in which the Leased Premise s are located. Any unit formed may b e revised, re-formed, increased or decreased in size, or changed in configuration, at the election of Lessee, at any time either before or after commencement of operations or production from the unit well. Lessee may, at any time, at its election, vacate, dissolve, or terminate any unit formed, by written instrument filed for record in the county where the land is located , which instrument shall specify the date of termination o f the unit. Lessee may exercise its right to pool at any time and from time to time, while this Lease is in force and effect, whether before or after commencing operations, completing an oil or gas well, or establishing production on the Lease d Premises , or on any land pooled or unitized with the Leased Premises . Any operations for drilling on or production of oil or gas from a pooled unit which include all or a part of the Leased Premises , regardless of whether the operations for drilling wer e commenced, or the production was secured, before or after the execution of this Lease or the instrument designating the pooled unit, shall be considered operations for drilling on or production of oil and/or gas from Land covered by this Lease, whether o r not the well or wells is located on the Leased Premises . In that event, operations for drilling shall be deemed to have been commenced on the Leased Premises within the meaning of this Lease; and, the entire acreage constituting the unit or units, as to oil and/or gas, shall be treated for all purposes, except the payment of royalties on production from the pooled unit, as if it were included in this Lease. For the purpose of computing the royalties to whic h owners of royalties and payments out of production shall be entitled on production of oil and/or gas from a pooled unit, there shall be allocated to the Land covered by this Lease and included in a unit (or to each separate tract within the unit if this Lease covers separate tracts within the unit) a pro rata portion of the oil and/or gas, produced from the pooled unit after deducting that used for operations on the Lease or pooled unit. The allocation shall be on an acreage basis; i.e., there shall be allocated to the acreage covered by this Lease and included in the pooled unit (or to each separate tract within the unit if this Lease covers separate tracts within the unit) that pr o rata portion of the oil and/or gas, produced from the pooled unit which the number of surface acres covered by this Lease (or in each separate tract) and included in the pool ed unit bears to the total number of surface acres included in the pooled unit. Royalties shall be computed on the portion of the production, whether it be oil or gas, allocated to the Land covered by this Lease and included in the unit just as though the production were from the Land . The production from an oil well will be considered as production from the Lease or oil pooled unit from which it is producing and not as production from a gas pooled unit; and, production from a gas well will be considered as production from the Lease or gas pooled unit from which it is producing and not from an oil pooled unit. The formation of any unit shall not have the effect of changing the ownership of any delay rental or shut -in royalty which may become payable under this Lease. If this Lease now or later covers separate tracts, no pooling or uniti zation of royalty interest as between any separate tracts is intended or shall be implied or result Page 3 of 4 merely from the inclusion of the separate tracts within this Lease, but Lessee shall nevertheless have the right to pool, as provided above, with the consequent all ocation of production as provided above. As used in this paragraph, the words "separate tract" mean any tract with royalty ownership differing, now or later, either as to parties or amounts, from that a s to any other part of the Leased Premises . 5. If oper ations are not conducted on the Land on or before the first anniversary date of this Lease , it shall termin ate as to both parties unless L essee , on or before that date , shall, subject to the further provisions of this Lease , pay or tender directly to L essor or to the L essor’s credit in the _____ , or its successor , (which shall continue as the depository bank , regardless of changes in ownership of delay rental, royalties, or other moneys ), the sum of $ _____ , which shall operate as delay rental and cover the privilege of deferring operations for one year from that date. In like manner and on like payments or tenders, operations may be further deferred for like periods of one year each during the Primary Term . If at any time L essee pays or tenders delay rent al, royalties, or other moneys and two or more parties are, or claim to be, en titled to receive same, L essee may, at its election, in lieu of any other method of payment provided for in this Lease , pay or tender the ren tal, royalties, or other moneys in the manner specified in this Lease , either jointly to the parties or separately to each in accordance with their respective ownerships. Any payment s may be made by Lessee’s check or draft deposited in the mail or delivered to Lessor or the named depository bank on or before the last date for payment. The delay rental shall be apportionable as to the Land on an acreage basis, and a failure to make proper payment or tender of delay rental as to any p ortion of the Land or as to any interest in the Land shall not affect this L ease as to any portion of the Land or as to any interest in the Land as to which proper payment or tender is made. Any payment or tender which is made in an attempt to make proper payment, but which is erroneous , in whole or in part , as to parties, amounts, or depository shall nevertheless be sufficient to prevent termination of this Lease and to extend the time within wh ich operations may be conducted, in the same manner as though a proper payment had been made; provided, however, Lessee shall correct any error within sixty (60) days after Lessee has received written notice of it from Lessor. Lessee may at any time and from time to time execute and deliver to Lessor or file for re cord a release or releases of this Lea se as to any part or all of the Land or of any mineral or horizon in or under it, and then be relieved of all obligations as to the released acreage or interest. If this Lease is released as to all minerals and horizons under a portion of the Land , the delay rental and other payments computed on an acreage basis shall then be reduced in the proportion that the acreage released bears to the acreage which was covered by this Leas e immediately prior to the release. 6. If at any time or times during the Primary Term operations are conducted on the Land and if all operations are discontinued, thi s L ease shall terminate on its anniversary date next following the ninetieth day after the discontinuance unless on or before the anniversary date Lessee either: (1) conducts operations; or , ( 2) commences or resumes the payment or tender of del ay rental s. H owever, if the anniversary date is at the end of the Primary Term , or if there is no further anniversary date of the Primary Term , this L ease shall terminate at the end of the term or on the ninetieth day after discontinuance of all operations, whichever is the later date, unless on the later date either: (1) L essee is conducting operati ons; or, (2) the shut -in well provisions of paragraph 3 . or the provisions of paragraph 11 . are appl icable. Whenever used in this L ease the word “operations” shall mean operations for any of the following: surface location preparation or maintenance ; expl oring ; surveying ; drilling ; testing ; completing ; reworking ; recompleting ; deepening ; plugging back ; repairing a well in search for or in an endeavor to obtain production of oil, gas, sulphur or other minerals ; excavating a mine ; production of oil, gas, sulphur or other mineral s, whether or not in paying quantities. 7. Lessee shall have the use, free from royalty, of water, other than from Lessor’s water wells, and of oil and gas produced from the Land in all operations under this Lease . Lessee shall have the right at any time to remove all equipment, machinery , and fixtures placed on the Land , including the rights to draw and remove casing. No well shall be drilled nearer than 200 feet to the house or barn now on the Land with out the consent of the L essor. Lessee shall pay for damages caused by its operations to growing crops and timber on the Land . 8. The rights and estate of any party to this Lease may be assigned from time to time , in whole or in part , and as to any miner al or horizon. All of the covenants, obligatio ns, and considerations of this L ease shall extend to and be binding on the parties to this Lease , their heirs, successors, assigns, and successive assigns. No change or division in the ownership of the Land , royalties, delay rental, or other moneys, or any part of them , how ever effected, shall increase the obligat ions or diminish the rights of L essee, including, but not limited to, the location and drilling of wells and the measurements of production. Notwith standing any other actual or construc tive knowledge or notice of it or to Lessee, its successors or assigns, no change or division in the ownership or the Land or of the royalties, delay rental, or other moneys, or the right to receive them , how ever effect ed, shall be binding on the then record owner of this Lease until sixty (60) days after there has been furnished to the record owner at its principal place of business by L essor or Lessor’s heirs, successors, or assigns, notice of the change or division, supported by either originals or certified copies of the instruments which have been properly filed for record which evidence the change or division, and of the court records and proceedings, transcripts, or other documents as are neces sary , in the opinion of the record owner , to establish the validity of the change or division of ownership . If any change in ownership occurs by reason of the death of an owner, Lessee may, nevertheless , pay or tender all or part of the royalties, delay r ental, or other moneys to the credit of the decedent in the depository bank provided for above. In the event of an assignment of this Lease Page 4 of 4 as to any part (whether divided or undivided) of the Land , the delay rental s payable shall be apportio na ble between the several leasehold owners, ratably , according to the surface area or undivided interests of each, and default in a delay rental payment by one shall not affect the right of any other leasehold owners . 9. In the event Lessor considers Lessee has not c omplied with all its obligations under this Lease , either express or implied, Lessor shall notify Lessee in writing, setting out specifically in what respects Lessee is claimed to have breached this Lease . Lessee shall then have sixty (60) days after receipt of the notice in which to meet or commence to meet all or any part of the breaches alleged by Lessor. The service of a notice shall be a condition precedent to the bringing of any action by Lessor on the L ease for any cause, and no action shall be brought until sixty (60) days after service of the notice on Lessee. Neither the service of a notice or the doing of any acts by Lessee aimed to meet all or any of the alleged breaches shall be deemed an ad mission or presumption that Lessee has failed to perform its obligations under this Lease . If this Lease is cancelled or terminated for any cause, it shall nevertheless re main in force and effect as to: (1) sufficient acreage around each well on which the re are operations to constitute a drilling or maximum allowable unit under applicable governmental regulations, the acreage to be designated by Lessee as nearly as practicable in the form of a square c entered at the well, or in the shape as then existing s pacing rules require; and , (2) any part of the Land included in a pooled unit on which there are operations. Lessee shall also continue to have all easements on all the Land reasonably necessary to operations on the acreage so retained. 10. Lessor hereb y warrants and agrees to defend title to said Land against the claims of all persons whomsoever claiming all or any part of it . Lessor’s rights and interests under this Lease shall be charged primarily with any mortgages, taxes , or other liens, or int eres t and other charges on the Land , but Lessor agrees that Lessee shall have the right at any time to pay or reduce them for Lessor, either before or after maturity, and be subrogated to the rights of the holder of the lien, and to deduct amounts paid from royalties or other payments payable or which may become payable to Lessor under this Lease. If this L ease covers less interest in the oil, gas, sulphur, or other minerals in all or any part of the Land than the entire and undivided fee simple estate (whether Lessor’s interest is specified or not), or no interest in the Land , then the royalties, delay rental, and other moneys accruing from any part of the Land , in which this Lease covers less than the full interest, they sh all be paid only in the proportion which the interest, if any, covered by this Lease, bears to the whole and undivided fee simple estate. All royalty interest covered by this Lease (whether or not owned by Lessor ) shall be paid out of the royalty provided above. This L ease shall be binding on each party who executes it without regard to whether it is executed by all those named above as Lessor. 11. If, while this Lease is in force, at or after the expiration of the stated Primary Term , it is not being continued in force by reason of the shut -in well provisions of paragraph 3 . above , and Lessee is not conduct ing operations on the Land by reason of (1) any law, order, rule, or regulation, (whether or not subsequently determined to be invalid) or (2) any other cause, or force majeure, whether similar or dissimilar, (except financial) beyond the reasonable control of Lessee, the Primary Term and the delay rental provisions above shall be extended until the first anniversary date occurring ninety (90) or mor e days following the removal of the delaying cause, and this Lease may then be extended by operations as if the delay had not occurred. This Lease is executed as of the date of the acknowledgment of the undersigned’ s signature, but shall be deemed effective for all purposes as of the Effective Date stated above. __________________________________________ __________________________________________ Lessor Lessor (Acknowledgments)