Fill and Sign the Producers 88 Oklahoma Rentalpooling Form

Producers 88 / Oklahoma – Rental/Pooling ___________________________________________________________________________________________________________________________________ Page 1 of 5 OIL AND GAS LEASE This Lease Agreement (the “Lease”) is entered into on _____ (the “Effective Date”), between _____ whose address is _____, as Lessor (whether one or more), and _____ whose address is _____, as Lessee. 1.Description . In consideration of a cash bonus paid to Lessor and the covenants contained in this Lease, Lessor hereby grants, leases, and lets exclusively to Lessee the following land (the “Leased Premises”): (Description of Lands) in _____ County, Oklahoma, containing _____ gross acres, more or less (including any interests which Lessor may later acquire by reversion, prescription or otherwise), for the purpose of exploring for, developing, producing, and marketing oil and gas, along with all hydrocarbon and associated nonhydrocarbon substances produced. The term “gas” as used in this Lease includes helium, carbon dioxide, gaseous sulfur compounds, coalbed methane and other commercial gases, as well as normal hydrocarbon gases. In addition to the Leased Premises, this Lease and the term “Leased Premises” also covers accretions and any small strips or parcels of land now or later owned by Lessor which are contiguous or adjacent to the land described above. In consideration of the bonus paid to Lessor, Lessor agrees to execute, at Lessee’s request, any additional or supplemental instruments for a more complete or accurate description of the land covered by this Lease. For the purpose of determining the amount of any payments based on acreage, the number of gross acres specified above shall be deemed correct, whether actually more or less.2.Term of Lease. This lease shall be in force for a Primary Term of _____ years from the Effective Date (the “Primary Term”), and for as long thereafter as oil and gas or other substances covered by this Lease are produced in paying quantities from the Leased Premises or from lands pooled with the Leased Premises, or this Lease is otherwise maintained in effect pursuant to its provisions.3. Rental Payment. If on or before the first anniversary date of the Effective Date of this Lease, operations for the drilling of a well for oil or gas or other substances have not been commenced on the Leased Premises or lands pooled with the Leased Premises, or if there is no production in paying quantities from the leased premises or lands pooled with the Leased Premises, then, subject to paragraph 5. below, this Lease shall terminate as to both Lessor and Lessee unless Lessee, on or before that date, pays or tenders to Lessor, or to Lessor’s credit in _____ at _____ or its successors, which shall be Lessor’s depository agent for receiving payments, regardless of changes in the ownership of the Leased Premises, the sum of $_____ as rental covering the privilege of deferring the commencement of operations for the drilling of a well for a period of twelve months from that anniversary date. In like manner and on like payments or tenders, the commencement of operations for the drilling of a well may be further deferred for one or more twelve-month periods during the Primary Term of this Lease. All payments or tenders may be made in currency, check, or by draft, and the payments or tenders to Lessor or to the depository by deposit in the U.S. Mails on or before the rental due date in a stamped envelope addressed to the depository or to the Lessor at the last address known to Lessee shall constitute proper payment. If the depository should liquidate or be succeeded by another institution, or for any reason fail or refuse to accept a rental payment, Lessee shall not be held in default for failure to make that payment until 60 days after Lessor has delivered to Lessee a proper recordable instrument naming another institution as depository agent to receive payments. If on or before any rental due date Lessee in good faith makes an erroneous rental payment by paying the wrong person, the wrong depository, or the wrong amount, Lessee shall be unconditionally obligated to pay or tender proper rental for the period involved and this Lease shall continue in effect as though the rental payment had been properly made, provided that proper rental shall be paid or tendered within 30 days after receipt by Lessee of written notice from Lessor of the error, accompanied by any documents and other evidence necessary to enable Lessee to make proper payment. Lessee may pay or tender any rental at any time in advance of its due date to the Lessor then known to Lessee as provided in paragraph 8 and the payment or tender shall bind all persons then or later claiming any part of the rental.4. Royalty. 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 Page 2 of 5 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 taxes, 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. At the expiration of the Primary Term or at any later 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, 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 then this 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 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, as 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 and 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 5. 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.Operations. If Lessee drills a well which is incapable of producing in paying quantities (a “dry hole”) on the Leased Premises or lands pooled with the Leased Premises, or if all production (whether or not in paying quantities) permanently ceases from any cause, including a revision of unit boundaries pursuant to the provisions of paragraph 6, or the action of any governmental authority, then in the event this Lease is not otherwise being maintained in force it shall nevertheless remain in force if Lessee commences further operations for reworking an existing well or for drilling an additional well or for otherwise obtaining or restoring production on the Leased Premises or lands pooled with the Leased Premises within 90 days after completion of operations on the dry hole or within 90 days after the cessation of all production, or, should the Lease be within the Primary Term, if Lessee commences the further operations or pays rental on or before the next rental payment date (if any) next ensuing after the expiration of the 90-day period; provided that should completion of operations on the dry hole or cessation of all production occur during the last year of the Primary Term or less than 90 days before the last rental payment date, no rental payments or further operations shall be required to maintain this Lease for the remainder of the Primary Term. If during or after the Primary Term this Lease is not otherwise being maintained in force, but Lessee is then engaged in drilling, reworking, or any other operations reasonably calculated to obtain or restore production, this Lease shall remain in force so long as any one or more of the operations are prosecuted with no interruption of more than 90 consecutive days, and if any operations result in the production of oil or gas or other substances, as long after that time as there is production in paying quantities from the leased premises or lands pooled with the Leased Premises. After completion of a well capable of producing in paying quantities, Lessee shall drill additional wells on the Leased Premises or lands pooled with the Leased Premises as a reasonably prudent operator would drill under the same or similar circumstances to (a) develop the Leased Premises as to reservoirs then capable of producing in paying quantities on the Leased Premises or lands pooled with the Leased Premises, or (b) protect the Leased Premises from Page 3 of 5 uncompensated drainage by any well or wells located on other lands not pooled. There shall be no covenant to drill exploratory wells or any additional wells except as expressly provided for in this Lease.6.Pooling. Lessee shall have the right but not the obligation to pool all or any part of the Leased Premises or interest in it with any other lands or interests, as to any or all depths or zones, and as to any or all substances covered by this Lease, either before or after the commencement of drilling or production, whenever Lessee deems it necessary or proper to do so in order to prudently develop or operate the leased premises, whether or not similar pooling authority exists with respect to the other lands or interests. The creation of a unit by pooling shall be based on the following criteria (the “pooling criteria”): A unit for an oil well (other than a horizontal completion) shall not exceed _____ acres plus a maximum acreage tolerance of 10%, and for a gas well or a horizontal completion shall not exceed _____ acres plus a maximum acreage tolerance of 10%; provided that a larger unit may be formed for an oil well or gas well or horizontal completion to conform to any well spacing or density pattern that may be prescribed or permitted by any governmental authority having jurisdiction to do so. For the purpose of the foregoing, the terms “oil well” and “gas well” shall have the meanings prescribed by applicable law or the appropriate governmental authority, or, if no definition is so prescribed, “oil well” means a well with an initial gas-oil ratio of less than 100,000 cubic feet per barrel and “gas well” means a well with an initial gas-oil ratio of 100,000 cubic feet or more per barrel, based on a 24-hour production test conducted under normal producing conditions using standard lease separator facilities or equivalent testing equipment. The term “horizontal completion” means an oil well in which the horizontal component of the gross completion interval in the reservoir exceeds the vertical component. In exercising its pooling rights, Lessee shall file of record a written declaration describing the unit and stating the effective date of pooling. Production, drilling, or reworking operations anywhere on a unit which includes all or any part of the Leased Premises shall be treated as if it were production, drilling, or reworking operations on the Leased Premises, except that the production on which Lessor’s royalty is calculated shall be that proportion of the total unit production which the net acreage covered by this Lease and included in the unit bears to the total gross acreage in the unit, but only to the extent the proportion of unit production is sold by Lessee. In the event a unit is formed before the unit well is drilled and completed, so that the applicable pooling criteria are not yet known, the unit shall be based on the pooling criteria Lessee expects in good faith to apply on completion of the well; provided that within a reasonable time after completion of the well, the unit shall be revised if necessary to conform to the pooling criteria that actually exist. Pooling in one or more instances shall not exhaust Lessee’s pooling rights, and Lessee shall have the recurring right but not the obligation to revise any unit formed by expansion or contraction or both, either before or after commencement of production, in order to conform to the well spacing or density pattern prescribed or permitted by the governmental authority having jurisdiction, or to conform to any productive acreage determination made by the governmental authority. To revise a unit, Lessee shall file of record a written declaration describing the revised unit and stating the effective date of revision. To the extent any portion of the Leased Premises is included in or excluded from the unit by virtue of the revision, the proportion of unit production on which royalties are payable shall then be adjusted accordingly. At Lessee’s election, in the absence of production in paying quantities from a unit, or on permanent cessation, Lessee may terminate the unit by filing of record a written declaration describing the unit and stating the date of termination. Pooling shall not constitute a cross-conveyance of interests. 7. Payment Reductions. If Lessor owns less than the full mineral estate in all or any part of the Leased Premises, payment of rentals, royalties, and shut-in royalties shall be reduced as follows: (a) rentals shall be reduced to the proportion that Lessor’s interest in the entire Leased Premises bears to the full mineral estate in the entire Leased Premises, calculated on a net acreage basis; and (b) royalties and shut-in royalties for any well on any part of the Leased Premises or lands pooled with the Leased Premises shall be reduced to the proportion that Lessor’s interest in the part of the Leased Premises bears to the full mineral estate in the entire Leased Premises. To the extent any royalty or other payment attributable to the mineral estate covered by this Lease is payable to someone other than Lessor, the royalty or other payment shall be deducted from the corresponding amount otherwise payable to Lessor.8. Ownership Changes. The interest of either Lessor or Lessee may be assigned, devised, or otherwise transferred in whole or in part, by area and/or by depth or zone, and the rights and obligations of the parties shall extend to their respective heirs, devisees, executors, administrators, successors, and assigns. No change in Lessor’s ownership shall have the effect of reducing the rights or enlarging the obligations of Lessee, and no change in ownership shall be binding on Lessee until 60 days after Lessee has been furnished the original or duly authenticated copies of the documents establishing a change of ownership to the satisfaction of Lessee or until Lessor has satisfied the notification requirements contained in a usual form of division order. In the event of the death of any person entitled to rentals or shut-in royalties, Lessee may pay or tender the rentals or shut-in royalties to the credit of decedent or decedent’s estate in the depository designated above. If at any time two or more persons are entitled to rentals or shut-in royalties, Lessee may pay or tender the rentals or shut-in royalties Page 4 of 5 to the persons or to their credit in the depository, either jointly, or separately in proportion to the interest which each owns. If Lessee transfers its interest in whole or in part Lessee shall be relieved of all obligations later arising with respect to the transferred interest, and failure of the transferee to satisfy the obligations with respect to the transferred interest shall not affect the rights of Lessee with respect to any interest not transferred. If Lessee transfers a full or undivided interest in all or any portion of the land covered by this Lease, the obligation to pay or tender rentals and shut-in royalties shall be divided between Lessee and the transferee in proportion to the net acreage interest in this Lease then held by each.9.Release of Lease. Lessee may, at any time and from time to time, deliver to Lessor or file of record a written release of this Lease as to a full or undivided interest in all or any portion of the area covered by this Lease or any depths or zones, and shall then be relieved of all obligations later arising with respect to the interest released. If Lessee releases less than all of the interest or land covered by this Lease, Lessee’s obligation to pay or tender rentals and shut-in royalties shall be proportionately reduced in accordance with the net acreage interest retained.10.Ancillary Rights. In exploring for, developing, producing and marketing oil, gas, and other substances on the Leased Premises or lands pooled or unitized with the Leased Premises in primary and/or enhanced recovery, Lessee shall have the right of ingress and egress along with the right to conduct operations on the Leased Premises as may be reasonably necessary for such purposes, including but not limited to geophysical operations, the drilling of wells, and the 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 production. Lessee may use in those operations, free of cost, any oil, gas, water and/or other substances produced on the leased premises, except water from Lessor’s wells or ponds. In exploring, developing, producing, or marketing from the Leased Premises or lands pooled or unitized with the Leased Premises, the ancillary rights granted shall apply (a) to the entire Leased Premises described in paragraph 1 above, notwithstanding any partial release or other partial termination of this Lease; and (b) to any other lands in which Lessor now or later has authority to grant such rights in the vicinity of the Leased Premises, or lands pooled with the Leased Premises. When requested by Lessor in writing, Lessee shall bury its pipelines below ordinary plow depth on cultivated lands. No well shall be located less than 200 feet from any house or barn now on the Leased Premises or other lands of Lessor used by Lessee, without Lessor’s consent, and Lessee shall pay for damage caused by its operations to buildings and other improvements now on the Leased Premises or such other lands, and to commercial timber and growing crops. Lessee shall have the right at any time to remove its fixtures, equipment and materials, including well casing, from the Leased Premises or such other lands during the term of this Lease or within a reasonable time.11.Regulation and Delay. Lessee’s obligations under this Lease, whether express or implied, shall be subject to all applicable laws, rules, regulations and orders of any governmental authority having jurisdiction, including restrictions on the drilling and production of wells, and regulation of the price or transportation of oil, gas, and other substances covered hereby. When drilling, reworking, production or other operations are prevented or delayed by such laws, rules, regulations or orders, or by inability to obtain necessary permits, equipment, services, material, water, electricity, fuel, access or easements, or by fire, flood, adverse weather conditions, war sabotage, rebellion, insurrection, riot, strike or labor disputes, or by inability to obtain a satisfactory market for production or failure of purchasers or carriers to take or transport such production, or by any other cause not reasonably within Lessee’s control, this Lease shall not terminate because of the prevention or delay, and, at Lessee’s option, the period of the prevention or delay shall be added to the term of this Lease. Lessee shall not be liable for breach of any provisions or implied covenants of this Lease when drilling, production, or other operations are so prevented or delayed.12.Breach or Default. No litigation shall be initiated by Lessor for damages, forfeiture, or cancellation with respect to any breach or default by Lessee, for a period of at least 90 days after Lessor has given Lessee written notice fully describing the breach or default, and then only if Lessee fails to remedy the breach or default within that period. In the event the matter is litigated and there is a final judicial determination that a breach or default has occurred, this Lease shall not be forfeited or cancelled in whole or in part unless Lessee is given a reasonable time after the judicial determination to remedy the breach or default and Lessee fails to do so. This paragraph 12 shall not apply to erroneous payment of rental.13.Warranty of Title. Lessor hereby warrants and agrees to defend title conveyed to Lessee, and agrees that Lessee at Lessee’s option may pay and discharge any taxes, mortgages or liens that are existing, levied, or assessed on or against the Leased Premises. If Lessee exercises this option, Lessee shall be subrogated to the rights of the party to whom payment is made, and, in addition to its other rights, may reimburse itself out of any rentals, royalties, or shut-in royalties otherwise payable to Lessor. In the event Lessee is made aware of any Page 5 of 5 claim inconsistent with Lessor’s title, Lessee may suspend the payment of rentals, royalties, and shut-in royalties, without interest, until Lessee has been furnished satisfactory evidence that the claim has been resolved. This Lease is executed as of the date of the acknowledgment below, to be effective as of the Effective Date stated above, and on execution shall be binding on the signatory and the signatory’s heirs, devisees, executors, administrators, successors and assigns, whether or not this Lease has been executed by all parties named as Lessor. Witnesses and/or Attestations:Lessor (whether one or more)_______________________________________________________________________________________________________________