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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
eithe






