Surface Use Agreement

SURFACE USE COMPENSATION AGREEMENT

This Surface Use Compensation Agreement (the “Agreement”) is entered into and to be effective between (the “Lessor”), whose address is , and (the “Lessee”), whose address is .

It is understood that Lessor is the surface owner of the property (the “Land”) on which there has been an oil and gas lease (the “Oil and Gas Lease”) granted by Lessor to Lessee. The Land covered by the Oil and Gas Lease is described on Exhibit “A” to this Agreement, and is located in County/Parish, . Any words and phrases, or definitions of them, which are used in the Oil and Gas Lease shall have the same meaning applied to them in this Agreement. It is agreed and understood between Lessor and Lessee, that the Lessee under the Oil and Gas Lease shall abide by the following terms and provisions:

1. Under the provisions of the Oil and Gas Lease, Lessee is obligated to pay Lessor for actual damages caused to Lessor’s Land and property, arising out of Lessee’s operations on the Land. Nothing in this Surface Use Compensation Agreement shall be construed to mean that Lessor has granted the right to do or perform any of the operations or activities which are not specifically enumerated in this Agreement, nor shall anything in this Agreement be construed to limit Lessor’s rights in any respect.

2. In addition to any damages which may become payable by Lessee to Lessor as provided in 1. above, Lessee shall pay Lessor in , , the following amounts for the following activities and use of the Land:

(i) Dollars ($ ) for each location for a (vertically drilled hole) drilling or producing well, and Dollars ($ ) for each location for a (deviated hole or horizontally drilled hole) drilling or producing well. If the well site location is more than ( ) acres, this amount shall be proportionately increased. Each location shall not exceed more acreage than is reasonably and necessarily required by Lessee in its operations under the terms of the Oil and Gas Lease.

(ii) Dollars ($ ) for the site occupied by each tank battery, pumping station, meter run or other surface production, treating, or marketing facility not previously compensated for, and, if the site is more than one (1) acre, the amount shall be proportionately increased. Each location shall not exceed more acreage than is reasonably and necessarily required by Lessee in its operations under the terms of the Oil and Gas Lease.

(iii) For new roads constructed by Lessee on the Land, the sum of Dollars ($ ) per rod; each road not to exceed feet ( ’) in width. For the use of existing roads on the Land, the sum of Dollars ($ ) per rod.

(iv) For each pipeline not over four inches (4") in diameter laid on top of the ground, the sum of Dollars ($ ) per rod. For each pipeline over four inches (4") in diameter laid on top of the ground the sum of Dollars ($ ) per rod. For buried pipelines, the sum of Dollars ($ ) per rod. The location of any pipeline is to be approved by Lessor prior to the line being laid. To the extent practical, all pipelines shall be laid along fence lines or roads.

(v) For each telephone or electric power line laid on the Land, the sum of Dollars ($ ) per rod, plus the sum of Dollars ($ ) per pole, with the location and height of each line to be approved by Lessor prior to installation.

(vi) For geophysical operations, a sum to be negotiated between Lessor and Lessee prior to any operation being conducted; it being understood that Lessee has no right to conduct geophysical operations on the Land without Lessor’s prior written consent.

(vii) For salt water, oil, or condensate spills, the actual damages, not to be less however, than cents ( ¢) per square foot of area contaminated by a spill.

(viii) For caliche, the sum of Dollars ($ ) per cubic yard.

(ix) For livestock which are injured, the difference in fair market value immediately before and after injury, plus the cost of treatment, if any. For livestock which are killed, the fair market value prior to the injury resulting in death, plus the cost of treatment, if any.

(x) With respect to any bitterweed or other noxious vegetation which is found on the Land, Lessee at Lessor’s request, shall spray same with chemicals specified by Lessor, in order to eradicate the vegetation. Lessee shall not be required to spray more than twice each 12 month period.

3. The foregoing schedule shall remain effective for ( ) years from the date of this Agreement and thereafter Lessee shall pay Lessor the reasonable going rate in the area of the Land, with this schedule to be the minimum.

4. Each payment due under this Agreement shall be due and payable to Lessor within thirty (30) days after Lessee first utilizes any of the Land for a purpose requiring such a payment to Lessor.

5. All provisions of the Oil and Gas Lease where Lessee is obligated to perform any obligation are contractual in nature. It shall never be necessary for Lessor to allege or prove a cause of action in tort based on any breach of the Oil and Gas Lease. This Surface Use Compensation Agreement and the Oil and Gas Lease are each specifically made performable in , .

6. The terms and conditions of this Agreement and of the Oil and Gas Lease shall constitute covenants running with the Land, and shall be binding on and shall inure to the benefit of Lessor, and Lessee, and their respective successors and assigns.

(Exhibit “A”: Lands subject to Agreement)