EXHIBIT 10.1
OIL AND GAS LEASE
STATE OF TEXAS
ss.
ss.
COUNTY OP CALHOUN
ss.
THIS OIL AND GAS LEASE is made this 24th day of October,
2001,
between
Nolie Tiedt, whose address is
406 W. Market Street,
Fayetteville, Texas
78940,
hereinafter "Lessor," and James T. Roche,
whose address is 5901
Highland Hills
Trail, Austin, Texas 78731,
hereinafter "Lessee."
WITNESSETH
1. That Lessor,
in consideration of Ten Dollars ($10.00) and other
valuable consideration,
the receipt of which
is hereby acknowledged, and of the
covenants and agreements of
Lessee hereinafter contained, do hereby grant, lease
and let unto Lessee the land covered hereby for the purposes hereinafter
described and with the exclusive right of exploring, drilling, mining and
operating for, producing and
owning oil, gas and sulphur, together with right to
make surveys on said land,
lay pipe lines,
establish and utilize facilities for
surface or subsurface
disposal of salt water, construct roads and bridges,
build
tanks, power stations,
telephone lines,
employee houses and other structures on
said land, necessary or useful in Lessee's
operations in
exploring,
drilling
for, producing, treating, storing and transporting
minerals produced from
the
land covered hereby or adjacent thereto. The land covered hereby and herein
referred to as the "land" or "said
land" is located in
the County of
Calhoun,
State of Texas, and is
described as follows:
TRACT ONE: Being all of the ISAAC W. BOONE SURVEY No. 15,
Abstract
No.
56, Calhoun County, Texas, containing approximately 801.26 acres,
more
or less, and being a
part of that certain
land described in a Deed
dated July 15, 1949,
Edwin Hawes, Jr., et
al to George Rust Hawes, as
recorded in Volume 70, Page 209, Deed Records of Calhoun County,
Texas.
TRACT TWO: Being all of the ISAAC W. BOONE SURVEY No. 16,
Abstract
No.
57, Calhoun County, Texas, containing approximately 770.24 acres,
more
or less, and being the
same land described in
that certain Deed dated
July 15, 1949,
Edwin Hawes, Jr., et al to George Rust Hawes, as
recorded in Volume 70, Page 211, Deed Records of Calhoun County,
Texas.
OIL AND GAS LEASE, PAGE -1- OF 10 PAGES
<PAGE>
For the purposes of determining the amount of any bonus,
delay
rental
or other payment hereunder, said
land shall be deemed to contain 1,571.5 acres,
whether actually containing more or less, and the
above recital of acreage in
any tract shall be deemed to be
the true acreage
thereof. Lessor
accepts the
bonus and agrees to accept the
delay rentals as lump sum consideration for this
lease and all rights and options
hereunder.
2. Unless sooner terminated or longer kept in force under other
provision hereof, this lease
shall remain in force for a term of three (3) years
from the effective date
hereof, hereinafter
called "primary term",
and as long
thereafter as oil, gas and/or sulphur is produced from the land or other
land
pooled therewith in
commercial quantities or operations, as hereinafter
defined,
are conducted upon said land with no cessation for more than ninety (90)
consecutive days.
3. As royalty, Lessee covenants and agrees:
(a) To deliver to the
credit of Lessor,
in the pipe line to
which
Lessee may
connect its wells, the equal l/5th part of all oil
produced and saved by
Lessee from said land,
or from time to time,
at the option of Lessee, to pay Lessor the average posted market
price of such l/5th
part of such oil at
the wells as of the day it
is run to the pipe line or storage tanks, Lessor's interest, in
either
case, to bear l/5th of
the cost of treating oil to render it
marketable pipe line-oil;
(b) To pay Lessor on gas and casinghead gas produced from said
land
(1) when sold by
Lessee, l/5th of the
amount realized
by Lessee,
computed at the mouth
of the well, of (2)
when used by Lessee
off
said land or in the manufacture of gasoline or other products, the
market value,
at the mouth of the
well, of l/5th of such gas
and
casinghead gas;
(c) To pay Lessor
on all other minerals mined or marketed or
utilized by Lessee from said land, one-tenth either in kind or
value
at the well or mine at
Lessee's election,
except that on sulphur
mined and marketed
the royalty
shall be $2.50 per
long ton. If at
the expiration
of the primary term or at any time or times
thereafter, there is
any well on said land or on lands with which
said land or any
portion thereof has been pooled, capable of
producing oil and gas,
and all such wells are
shut-in, this
lease
shall, nevertheless,
continue in force as
though operations
were
being conducted on
said land for so long as said wells are shut-in,
and thereafter 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
OIL AND GAS LEASE, PAGE -2- OF 10 PAGES
<PAGE>
being produced
from said wells, but in the exercise OF such
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 gas upon terms unacceptable to
Lessee. If at any time
or times after the expiration of the primary
term, all such wells are shut-in for a period of ninety
consecutive
days, and during
such time there are no
operations
on said
land,
then at or before the
expiration of said ninety day period, Lessee
shall pay or tender by check or draft of Lessee, as royalty, a sum
equal to the amount of
annual delay
rental provided for in this
lease. Upon making
said payment, it will
be considered
that each
such well is producing gas in paying quantities within the meaning
of this lease for a period of one (1) year after the expiration of
said ninety (90) day
period. In like manner
and upon like
payment
being made
annually on or before the expiration of the last
preceding year for
which such payment or
tender has been made,
it
will be considered
that said well or
wells are producing gas in
commercial quantities
for successive periods
of one (1) year each.
Each such 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,
and may
be deposited in the
depository
bank provided for below. Nothing
herein shall
impair Lessee's right to release as provided in
paragraph 4 hereof. In event of assignment of this lease in whole
or
in part, liability for
payment hereunder
shall rest exclusively on
the then owner or
owners of this lease,
severally as to acreage
owned by each.
4. If operations are
not conducted on said land on or before the first
anniversary of the effective
date of this lease, then this lease shall terminate
as to both parties,
unless Lessee on or
before said date shall, subject to the
further provisions hereof,
pay or tender to Lessor or to Lessor's credit the sum
of $7,857.50, which shall operate as delay rental and cover
the privilege
of
deferring operations for one year from said date.
The portion of delay
rental
due to Lessor shall be sent
to Lessor's address as
shown above. In like
manner
and upon like payments or
tenders, operations may be further deferred for a like
period of one year during the
primary term.
If at any time that
Lessee pays or
tenders delay rental,
royalties,
or other moneys,
two or more parties
are, or
claim to be, entitled to receive same,
Lessee may, in lieu of
any other method
of payment herein provided, pay or tender such rental, royalties, or other
moneys, in the manner herein specified, either jointly to such parties or
separately to each in
accordance with their
respective ownership
thereof, as
Lessee may elect. Any payment
hereunder may be made
by check or draft of Lessee
deposited in the mail or delivered to Lessor or to a depository bank on or
before the last date for
payment. Said
OIL AND GAS LEASE, PAGE -3- OF 10 PAGES
<PAGE>
delay rental shall be
apportion able as to
said land on an acreage basis, and
failure to make proper payment or tender of delay
rental as to any
portion of
said land or as to any
interest therein shall not affect this lease as to
any
portion of said land or as to
any interest therein as to which proper payment or
tender is made. Lessee may at
any time and from time to time execute and deliver
to Lessor or file for record
a release or releases
of this lease as to any part
or all of said land or of any
mineral or horizon hereunder, and thereby be
relieved of all obligations as to the released acreage or interest. If this
lease is so released as to
all minerals
and horizons under a portion of said
land, the delay rental and
other payments computed in accordance therewith shall
thereupon be reduced HA the
proportion
that the acreage
released bears to
the
acreage which was covered by
this lease immediately prior to such release.
5. If at any time or times during the primary terra operations are
conducted on said land and if
all operations are discontinued, this lease shall
thereafter terminate on its anniversary date next following the ninetieth
day
after such discontinuance unless on or before such anniversary date Lessee
either (1) conducts
operations or (2) commences or resumes the payment or
tender
of delay rental; provided, however, if such anniversary date is at the
end of
the primary term, or if there is no further
anniversary
date of the
primary
term, this lease shall
terminate at the end of such term or on the ninetieth
day
after discontinuance of all operations,
whichever is the later
date, unless on
such later date either (1)
Lessee is conducting
operations
or (2) the
shut-in
well provisions of paragraph
3 or the provisions of paragraph 11 are applicable.
Whenever used in this lease
the word "operations"
shall mean operations for and
any of the following:
drilling, testing,
completing, reworking,
recompleting,
deepening, plugging back or repairing of a
well in search for or in an endeavor
to obtain production of oil, gas or sulphur, whether or not in paying
quantities.
6. Lessee shall have the use, free from royalty, of water, other than
from Lessor's water wells and of oil and gas
produced from said land in all
operations hereunder. Lessee shall have the right at any time to
remove all
machinery and fixtures placed on said land, including the right to draw and
remove casing. No well shall be drilled
nearer than 200 feet to the house
or
barn now on said land
without the consent of
the Lessor. Lessee
shall pay
for
damages caused by its operations to growing crops and timber on
said land. 7.
The rights and estate of any
party hereto may be
assigned from time to
time in
whole or in part
