Storage Lease

STATE:

COUNTY:

This Storage Lease (the “Lease”) is dated to be effective (the “Effective Date”), between (the “Owner”) whether one or more, whose address is , and (the “Lessee”), whose address is .

Owner owns the surface estate, and certain interests in the mineral estate, in and to the tract or parcel of land more particularly described below (the “Land”).

Owner desires to lease to Lessee, and Lessee desires to lease from Owner, the Land for the purpose of conducting Storage Operations (as defined below).

For valuable consideration paid by Lessee to Owner, and of the agreements contained in this Lease, Owner grants, demises, leases, and lets to Lessee the following tract or parcel of land for the purpose of conducting Storage Operations:

(Description of Land)

together with all estates, interests and rights appurtenant to it as may be reasonable or necessary for Lessee to conduct Storage Operations including, without limitation, the rights to: (a) build and use roads on the Land; (b) construct, convert, install, maintain, operate, remove, and replace Surface Equipment on the Land; (c) enter, cross over or on, occupy or use the surface of the Land, or any part of it; and, (d) other rights and privileges as may be reasonably necessary or convenient for Lessee to conduct Storage Operations (all collectively the “Land”).

1. TERM. This Lease shall be for a term of () year(s) from the Effective Date, and as long thereafter as the Lessee conducts Storage Operations in, on, under, or with respect to the Land including, without limitation, acreage adjacent to it or in the vicinity of it or the Buffer Zone (defined below).

a. “Buffer Zone” means tracts or parcels of land that: (i) are located adjacent to or in the vicinity of a Storage Unit; (ii) overlie the extremities of any of the depths covered by it, or cover portions of the depths that may have limited potential for storage of Non-Native Substances; and, (iii) are used or useful for the purpose of creating a buffer zone between the Storage Unit and adjacent acreage to reduce the possibility that wells on adjacent property could interfere with the Lessee’s conduct of Storage Operations.

b. “Native Hydrocarbons” means all classifications and types of oil, gas, and other hydrocarbons indigenous to the Land, and currently in place in depths under the Land, excluding any Non-Native Substances.

c. “Non-Native Substances” means all classifications and types of non-native gaseous, liquid or liquefiable substances including carbon dioxide owned, injected, stored and withdrawn by the Lessee or third parties in, on, under, or with respect to the Land.

d. “Storage Operations” means: (i) injecting, storing, and withdrawing Non-Native Substances in, on, under, or with respect to the Land; and, (ii) conducting any and all activities, operations and undertakings associated with them or related to them.

2. POOLING. Lessee is granted the right to combine, pool, or unitize all or any portion of the Land with any other land, lease, or leases adjacent to or in the vicinity of the Land, at the Lessee’s option during the term of this Lease, to form one or more storage units.

a. The Lessee may conduct physical operations at one or more locations on a Storage Unit, which shall constitute Storage Operations for all tracts or parcels of land within that Storage Unit.

b. The formation of any Storage Unit shall not reduce the amount of rental payable to the Owner pursuant to Section 3.

c. The formation of any Storage Unit shall be independent of, and separate from, any existing or future oil, gas, and mineral lease.

d. The formation of one Storage Unit shall not exhaust the rights of the Lessee to form additional Storage Units or modify any previously formed Storage Unit.

3. RENTAL. This is a Paid-Up lease. Lessee shall not owe Owner any rental or other payment under this Lease prior to the anniversary date of it.

Beginning on the anniversary date of this Lease, and on each anniversary date thereafter that Lessee wishes to conduct Storage Operations, Lessee shall pay Owner an annual rental in an amount equal to Dollars ($) times the number of surface acres covered by this Lease.

a. Lessee and Owner shall adjust the annual rental rate based on increases of the Consumer Price Index as measured by the Bureau of Labor Statistics of the United States Department of Commerce (“CPI”) on or before the anniversary date of this Lease.

If the CPI for the period between of the preceding year and of the then current year increases by per cent (), or more, the Lessee shall increase the initial rental rate of Dollars ($) by the lesser of the actual percentage increase or per cent ().

b. Lessee may pay all rental that accrues under this Lease to Owner by check or draft mailed or delivered to Owner’s address set forth above.

4. SURFACE EQUIPMENT. Lessee agrees to use commercially reasonable efforts to build, drill, install, and lay new Surface Equipment, convert existing Surface Equipment used by Lessee for oil and gas production to Storage Operations, and enhance, maintain, modify, operate, plug and abandon, remove, replace, salvage, and use all Surface Equipment now or later located on the Land by the Lessee.

a. Lessee shall locate all Surface Equipment and conduct all Storage Operations on the Land to accommodate the Owner’s then existing surface uses.

b. As used in this Lease, Surface Equipment means any and all property used in connection with the conduct of Storage Operations on the Land, including appliances, batteries, boilers, buildings, cables, compressors, facilities, fixtures, gathering systems, machinery, pipelines, pumps, tanks, tools, towers, trailers, tubing, valves, wells, wires, and related equipment.

5. LEASE MAINTENANCE AND SURRENDER. The Owner acknowledges that Storage Operations will be the best commercial use of the depths available to Owner, and Lessee shall be entitled to maintain this Lease as long as Lessee determines that it is conducting Storage Operations and pays the rentals pursuant to Section 3.

a. This Lease shall initially be deemed to cover () surface acres for purposes of calculating rentals.

If Lessee determines any part of the Land is no longer necessary or useful, Lessee may surrender the Lease by mailing a release to the Owner and paying all rentals then due.

b. On the final surrender of all of the Land and depths, or the termination of this Lease, Lessee shall file a notice of abandonment in the Records of , .

Lessee shall have a period of thirty-six (36) months thereafter to remove and salvage all Surface Equipment not necessary to the storage or withdrawal of Non-Native Substances.

6. RESERVED RIGHTS. Owner shall retain the right to occupy and use the surface of the Land for farming, grazing, or other purposes, except to the extent such use would unreasonably interfere with Lessee’s Storage Operations.

a. Owner shall not hereafter lease or grant any rights in, on, under or with respect to the Land to any other person for Storage Operations or Mineral Development in any depths developed by Lessee.

b. If any existing oil and gas lease expires, Owner may lease the Released Depths subject to non-disturbance covenants.

c. If Owner or any Mineral Development lessee fails to comply, Lessee shall have the right to enjoin the operation and recover damages.

7. WARRANTY. Owner hereby warrants and agrees to defend the title to the Land against all persons claiming or to claim the Land or any part of it.

If Owner fails or refuses to pay taxes, mortgages, or other liens, Lessee may pay and discharge the applicable obligation and offset such amount against sums owed to Owner.

8. ASSIGNMENT. If Owner conveys all or an undivided interest in the Land, Lessee shall change rental payments after receiving the required conveyance and division documents.

If six or more parties become entitled to royalty, Lessee may withhold payment unless furnished with a recordable instrument designating an agent to receive payment for all.

9. TITLE DISPUTE OR BREACH. If Owner’s title comes into dispute or litigation, Lessee may withhold rental payments until final adjudication or settlement.

If Owner believes Lessee is not in compliance, Owner shall notify Lessee in writing and Lessee shall have thirty (30) days to comply or begin corrective action.

10. SURFACE USE RESTRICTION. Lessee’s rights to utilize the surface of the Land shall be limited to operations necessary to maintain existing oil, gas and mineral leases covering the Land and/or future leases Lessee may enter into with Lessor or other mineral owners in the Land.

To have and to hold the Land, together with all and singular the rights and appurtenances in anywise belonging to it, to Lessee, and Lessee’s successors and assigns subject to the terms and provisions of this Lease. All the terms and conditions of this Lease shall be binding on and inure to the benefit of the heirs, executors, administrators, successors, and assigns of the Lessee and Owner, respectively.

This Lease is executed to be effective as of the Effective Date.

(Acknowledgments)