Fill and Sign the Producers 88 Arkansas Rental Pooling Form

Producers 88 - Arkansas Rental / Pooling__________________________________________________________________________________________ Page 1 of 5 OIL AND GAS 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 lands 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, operations 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, Arkansas, and are described as follows: (Description of Land) This Lease also covers and includes all land owned or claimed by Lessor by limitation, prescription, possession, reversion or unrecorded instrument, adjacent or contiguous to the Land described above, whether in the same or adjacent surveys, although not included within the boundaries of the Land described above. For all purposes of this Lease, the Land is estimated to comprise _____ acres, whether it actually comprises more or less. 2. Subject to all its other provisions, this Lease shall be for a term of _____ from the Effective Date (the "Primary Term") and as long thereafter as oil, gas, or other mineral is produced from the Land or land with which the land is pooled under the terms of this Lease, or as maintained by any of its other provisions. 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 operations shall be deemed operations during the Primary Term of this Lease and serve to maintain it in full force and effect. When used in this Lease, the term “operations” means: surface location preparation or maintenance; drilling; testing; completing; reworking; recompleting; deepening; plugging back or repair of a well in search of or in an endeavor to obtain production of oil, gas, or other minerals; or, production of oil, gas, or other minerals, whether or not in paying quantities.3. Lessor 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 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 delivering, processing, compressing or otherwise making the gas merchantable 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 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 heating content, shrinkage, and deductions for impurities.If this Lease is not being maintained by operations or delay rental payments, and there is a well or wells on the Land, or on lands pooled with the Land subject to this Lease, capable of producing oil or gas and all wells are shut-in, and during that time this Lease is not otherwise being maintained, 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 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. Lessee’s failure to pay, tender, 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.Lessee shall have free use of oil, gas, water, and all other minerals from the Land, except water from Lessor’s wells, for all operations under this Lease, and the royalty on oil, gas, and coal shall be computed after deducting any so used.4. This Lease shall not terminate on any failure of the Lessee, for whatever reason, to make payments of any required rentals, provided for in this Lease, on or before the specified due dates unless and until: (1) Lessor notifies Lessee in writing by registered or certified mail, return receipt requested, of non-payment of the rentals; and, (2) Lessee fails to make payment of the rentals to Lessor within sixty (60) days following Lessee’s actual receipt of the written notice. Payment of rentals by Lessee to Lessor within sixty (60) days following Lessee’s actual receipt of a written notice from Lessor shall be deemed timely and sufficient to maintain this Lease in Page 2 of 5 force and effect. The provisions of this paragraph are a part of the consideration for this Lease, are contractual, and constitute a warranty from Lessor to Lessee. It is the intent and agreement of Lessor and Lessee to avoid forfeiture of this Lease should Lessee fail to make payment of any required rentals on or before the scheduled due dates, and to afford Lessee an opportunity to make the payments within thirty (30) days following actual receipt or written notice of non-payment from Lessor, and maintaining this Lease in force. A written notice from Lessor to Lessee shall state the full particulars concerning non-payment of rentals, identify the Lease and land involved, the due date and amount claimed by Lessor, and Lessor’s full name, current address, and telephone number. 5. 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 judgment 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 the conservation of oil and/or gas in and under and that may be produced from the Leased Premises. Units pooled for oil shall 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, for 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 stratum 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 describing 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 Premises are located. Any unit formed may be 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 of 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 Leased 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 were 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 or 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 which 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 pro 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 pooled 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 Page 3 of 5 pooling or unitization of royalty interest as between any separate tracts is intended or shall be implied or result 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 allocation 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 as to any other part of the Leased Premises. 6. (a) If operations for drilling are not commenced on the Land or on acreage pooled with it on or before one year from the Effective Date, the Lease shall terminate as to both parties, unless on or before that anniversary date Lessee shall pay or tender (or shall make a bona fide attempt to pay or tender, as provided above) to Lessor or to the credit of Lessor in _____ (which bank and its successors are Lessor’s agent and shall continue as the depository for all rentals payable regardless of change in ownership or the Land or the rentals) the sum of $_____ (called “rentals”), which shall cover the privilege of deferring commencement of drilling operations for a period of twelve (12) months. In like manner and on like payments or tenders, annually, the commencement of drilling operations may be further deferred for successive periods of twelve (12) months each during the Primary Term. The payment or tender of rentals under this paragraph and of royalty under paragraph 3. on any well from which production is not being sold or used may be made by Lessee’s check or draft mailed or delivered to the parties entitled to payment or to the depository bank on or before the date of payment. If the depository bank (or any successor bank) should fail, liquidate, or be succeeded by another bank, or for any reason fail or refuse to accept rentals, Lessee shall not be held in default for failure to make the payment or tender of rental until thirty (30) days after Lessor shall deliver to Lessee a proper recordable instrument naming another depository bank as agent to receive the payments or tenders. If Lessee shall, on or before any anniversary date, make a bona fide attempt to pay or deposit rentals to an entitled Lessor according to Lessee’s records or to a Lessor, who, prior to the attempted payment or deposit, has given Lessee notice, in accordance with subsequent provisions of this Lease, of Lessor’s right to receive rentals, and if the payment or deposit shall be ineffective or erroneous in any regard, Lessee shall be unconditionally obligated to pay to the Lessor the rental properly payable for the rental period involved, and this Lease shall not terminate but shall be maintained in the same manner as if the erroneous or ineffective rental payment of deposit had been properly made; provided, that the erroneous or ineffective rental payment or deposit be corrected within thirty (30) days after receipt by Lessee of written notice from the Lessor of the error, accompanied by the instruments necessary to enable Lessee to make proper payment. The bonus payment is consideration for this Lease according to its terms and shall not be allocated as a mere rental for a period. Lessee may at any time or times execute and deliver to Lessor or to the depository banks, or place of record a release or releases of this lease as to all or any part of the Leased Premises, or of any mineral or horizon under all or any part of it, and then be relieved of all obligations as to the released land, mineral, or horizon. If this Lease is released as to all minerals and horizon under a portion of the Land covered by this Lease, the rentals and other payments computed on an acreage basis shall then be reduced in the proportion that the number of surface acres within the released portion bears to the total number of surface acres which was covered by this Lease immediately prior to the release.(b) Lessor designates the depository bank named in paragraph 6.(a), and its successors as Lessor’s agent to serve as the depository for any payment due with respect to any shut-in well. Payment of shut-in royalty may be made in the manner provided in paragraph 6.(a) for the payment of tender or rentals, including all terms with respect to their deposit in the designated depository bank.7. If prior to discovery and production to oil, gas or other mineral on the Land or on acreage pooled with it, Lessee should drill a dry hole or holes, or if after discovery and production of oil, gas or other mineral, the production should cease from any cause, this Lease shall not terminate if Lessee commences operations for drilling or reworking within ninety (90) days thereafter, or if within the Primary Term, commences or resumes the payment or tender of rentals or commences operations for drilling or reworking on or before the next ensuing rental paying date after the expiration of ninety (90) days from date of completion of dry hole or cessation of production. If at any time subsequent to ninety (90) days prior to the beginning of the last year of the Primary Term and prior to the discovery of oil, gas, or other minerals on the Land, or on acreage pooled with it, Lessee should drill a dry hole, no rental payments or operations are necessary in order to maintain the Lease in force during the reminder of the Primary Term. If at the expiration of the Primary Term, oil, gas, or other minerals are not being produced on the Land, or on acreage pooled with it, but Lessee is then engaged in drilling or reworking operations, the Lease shall remain in force so long as operation on the well, or for drilling or reworking of any additional well, are prosecuted with no cessation of more than ninety (90) consecutive days, and if they result in the production of oil, gas, or other mineral, so long thereafter as oil, gas, or other mineral is produced from the Land or acreage pooled with it.8. Lessee shall have the right at any time during or after the expiration of this Lease to draw and remove all property, fixtures, and all casings placed by Lessee on the Land. When reasonably necessary to accommodate an immediate impending use of the surface estate by Lessor, or anyone claiming by, through, or under Lessor, Lessee will bury all pipelines below ordinary plow depth. No well shall be drilled within two hundred feet (200’) of any residence or barn now on the Land, without Lessor's consent.9. The rights of either party to this Lease may be assigned in whole or in part, and its provisions shall extend to their heirs, successors, and assigns; but, no change or division in ownership of the Land, rentals, or royalties, Page 4 of 5 however accomplished, shall operate to enlarge the obligations or diminish the rights of Lessee; and, no change or division in the ownership shall be binding on Lessee until thirty (30) days after Lessee is furnished by registered U.S. mail at Lessee's principal place of business with a certified copy of recorded instrument or instruments evidencing the change. In the event of assignment of this Lease, in whole or in part, liability for breach of any obligation shall rest exclusively on the owner of this Lease or of a portion of it who commits the breach. In the event of the death of any person entitled to rentals, shut-in royalty, or royalty, Lessee may pay or tender the rentals, shut-in royalty, or royalty, to the credit of the deceased or the estate of the deceased until the time Lessee is furnished with proper evidence of the appointment and qualification of an executor or administrator of the estate, or if there be none, then until Lessee is furnished with evidence satisfactory to it as to the heirs or devisees of the deceased and that all debts of the estate have been paid. If at any time three or more persons be entitled to participate in the rental payable under this Lease, Lessee may pay or tender the rental jointly to those persons or to their joint credit in the depository bank named above, or, at Lessee’s election, the proportionate part of the rentals to which each participant is entitled may be paid or tendered to each separately or to their separate credit in the depository bank; and, payment or tender to any participant of its portion of the rentals shall maintain this Lease as to that participant. In the event of assignment of this Lease as to a segregated portion of the Land, the rentals payable under this Lease shall be apportionable as between the several leasehold owners ratable according to the surface area of each, and default in rental payment by one shall not affect the rights of other leasehold owners. 10. The breach by Lessee of any obligation arising under this Lease shall not work a forfeiture or termination of this Lease nor cause a termination or reversion of the estate created by it or be grounds for cancellation of it in whole or in part. In the event Lessor considers that operations are not at any time being conducted in compliance with this Lease, Lessor shall notify Lessee in writing of the facts relied on as constituting a claimed breach, and Lessee, if in default, shall have sixty (60) days after receipt of the notice in which to commence the compliance with the obligations imposed by virtue of this Lease. The provisions of this paragraph 10. shall be applicable to Lessee’s payment of rentals except that the time for the Lessee to cure any non-payment is specified in paragraph 4. 11. Lessor hereby warrants and agrees to defend the title to the Land and agrees that Lessee, at its option, may discharge any tax, mortgage, or other lien on the Land, either in whole or in part, and in the event Lessee does so, it shall be subrogated to the lien with right to enforce it and apply rentals, royalties, and all other monies accruing under this Lease toward satisfying same. Should Lessee become involved in any dispute or litigation arising out of any claim adverse to the title of Lessor to the Land, Lessee may recover from Lessor its reasonable and necessary expenses and attorneys fees incurred in the dispute or litigation, with the right to apply royalties accruing under this Lease toward satisfying the expenses and attorneys fees. Without impairment of Lessee's rights under this warranty, in the event of failure of title, it is agreed that if this Lease covers less interest in the oil, gas, 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, then the royalties, delay rental, and other monies accruing from any part as to which this Lease covers less than the full interest, shall 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 for above. Should any one or more of the parties named above as Lessor fail to execute this Lease, it shall nevertheless be binding on the party or parties executing it. A failure of Lessee to reduce the rental paid shall not impair the right of Lessee to reduce royalties.12. When drilling, production, or other operations on the Land or land pooled with the Land, or any part of it are prevented, delayed, or interrupted by lack of water, labor, or materials, fire, storm, flood, war, rebellion, insurrection, sabotage, riot, strike, difference with workers, or failure of carriers to transport or furnish facilities for transportation, or as a result of some law, order, rule, regulation or necessity of governmental authority, either State or Federal, or as a result of the filing of a suit in which Lessee’s title may be affected, or as a result of any cause beyond the reasonable control of Lessee, this Lease shall nevertheless continue in full force and effect. If any prevention, delay, or interruption should commence during the Primary Term, the time of the prevention, delay, or interruption shall not be counted against Lessee and the running of the Primary Term shall be suspended during that time; if any prevention, delay, or interruption should commence after the Primary Term, Lessee shall have a period of ninety (90) days after the termination of that period of prevention, delay, or interruption within which to commence or resume drilling, production, or other operations, and this Lease shall remain in force during that ninety (90) day period and thereafter in accordance with the other provisions of this Lease. Lessee shall not be liable for breach of any express or implied covenants of this Lease when drilling, production, or other operations are so prevented, delayed, or interrupted.13. This Lease states the entire agreement between the parties, and no representation or promise, verbal or written, on behalf of either party shall be binding unless contained with the written text of this Lease; and this Lease shall be binding on each party executing it, regardless of whether or not executed by all owners of the Land or by all persons named above as “Lessor,” and, notwithstanding the inclusion above of other names as “Lessor”, this term as used in this Lease shall mean and refer only to the parties executing this Lease and their successors in interest. Page 5 of 5 This Agreement and 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)