Common use of Well Proposals Clause in Contracts

Well Proposals. 7.1 Each Party shall have the right to propose ▇▇▇▇▇ within the Program Area. The well proposal shall be communicated in writing, and shall contain at a minimum the following information: a) A plat outlining the proposed well and the Drilling and Spacing Unit. b) AFE inclusive of Drilling Costs and Completion Costs; and c) Drilling and completion prognosis. 7.2 The non-proposing Party shall have thirty (30) days from receipt of the written proposal to make its election pursuant to the Operating Agreement. Failure to timely respond shall be deemed an election to go non-consent by the non-proposing Party. If either Party elects, or is deemed to have elected, not to participate in the drilling of the proposed well and if the proposing Party timely commences operations within the time specified in Sub-Article 8.1 hereof and drills such well to the depth specified in the proposal for such well, the Non- Participating Party shall be deemed to have forfeited and relinquished all right, title and interest as to the first test well drilled within each Drilling and Spacing Unit (“Exploratory Well”). For ▇▇▇▇▇ that are not Exploratory ▇▇▇▇▇ (“Subsequent ▇▇▇▇▇”), the Non-Participating Party shall forfeit and relinquish unto the Participating Party its right, title and interest in such Subsequent Well until the payout of the non-consent penalty under the Operating Agreement. 7.3 The Parties agree to openly share data and information on joint ▇▇▇▇▇ drilled or to be drilled pursuant to this Agreement, including: logs, cores, well plans, cost estimates, marketing arrangements, production data and analysis. However, with respect to the information provided to a Party pursuant to this Sub-Article 7.3, the other Party EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, AS TO (I) THE CONTENT, CHARACTER OR NATURE OF ANY REPORT OR ANY ENGINEERING OR GEOLOGICAL INTERPRETATION RELATING TO THE PROSPECT, (II) THE QUANTITY, QUALITY OR RECOVERABILITY OF HYDROCARBONS IN OR FROM THE PROPERTIES, (III) ANY ESTIMATES OF THE VALUE OF THE PROSPECT OR FUTURE REVENUES GENERATED BY THE PROSPECT, (IV) THE PRODUCTION OF HYDROCARBONS FROM THE PROSPECT, (V) THE CONTENT, CHARACTER OR NATURE OF ANY INFORMATION, MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS PREPARED BY ANY PARTY OR THIRD PARTIES WITH RESPECT TO THE PROPOSED WELL, AND (VI) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE TO NON- PROPOSING PARTY OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE PROSPECT PROPOSAL OR ANY DISCUSSION OR PRESENTATION RELATING THERETO. The Parties agree that, to the extent required by applicable law to be effective, the disclaimers contained in this Sub-Article 7.3 are “conspicuous” disclaimers for the purpose of any applicable Law.

Well Proposals. 7.1 Each Party shall have the right to propose ▇▇▇▇▇ within the Program Area. The well proposal shall be communicated in writing, and shall contain at a minimum the following information: a) A plat outlining the proposed well and the Drilling and Spacing Unit. b) AFE inclusive of Drilling Costs and Completion Costs; and and c) Drilling and completion prognosis. 7.2 The non-proposing Party shall have thirty (30) days from receipt of the written proposal to make its election pursuant to the Operating Agreement. Failure to timely respond shall be deemed an election to go non-consent by the non-proposing Party. If either Party elects, or is deemed to have elected, not to participate in the drilling of the proposed well and if the proposing Party timely commences operations within the time specified in Sub-Article 8.1 hereof and drills such well to the depth specified in the proposal for such well, the Non- Participating Party shall be deemed to have forfeited and relinquished all right, title and interest as to the first test well drilled within each Drilling and Spacing Unit (“Exploratory Well”). For ▇▇▇▇▇ that are not Exploratory ▇▇▇▇▇ (“Subsequent ▇▇▇▇▇”), the Non-Participating Party shall forfeit and relinquish unto the Participating Party its right, title and interest in such Subsequent Well until the payout of the non-consent penalty under the Operating Agreement. 7.3 The Parties agree to openly share data and information on joint ▇▇▇▇▇ drilled or to be drilled pursuant to this Agreement, including: logs, cores, well plans, cost estimates, marketing arrangements, production data and analysis. However, with respect to the information provided to a Party pursuant to this Sub-Article 7.3, the other Party EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, AS TO (I) THE CONTENT, CHARACTER OR NATURE OF ANY REPORT OR ANY ENGINEERING OR GEOLOGICAL INTERPRETATION RELATING TO THE PROSPECT, (II) THE QUANTITY, QUALITY OR RECOVERABILITY OF HYDROCARBONS IN OR FROM THE PROPERTIES, (III) ANY ESTIMATES OF THE VALUE OF THE PROSPECT OR FUTURE REVENUES GENERATED BY THE PROSPECT, (IV) THE PRODUCTION OF HYDROCARBONS FROM THE PROSPECT, (V) THE CONTENT, CHARACTER OR NATURE OF ANY INFORMATION, MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS PREPARED BY ANY PARTY OR THIRD PARTIES WITH RESPECT TO THE PROPOSED WELL, AND (VI) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE TO NON- PROPOSING PARTY OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE PROSPECT PROPOSAL OR ANY DISCUSSION OR PRESENTATION RELATING THERETO. The Parties agree that, to the extent required by applicable law to be effective, the disclaimers contained in this Sub-Article 7.3 are “conspicuous” disclaimers for the purpose of any applicable Law.

Well Proposals. 7.1 Each (a) Any Party shall have the right who desires to propose ▇the drilling of a well in the Project Area shall submit such proposal in writing to the other Parties hereto, UNLESS such proposed well is already subject to the terms of an Operating Agreement (in which event, such Operating Agreement shall control), AND EXCLUDING, without limitation, those w▇▇▇▇ within the Program Areaanticipated at Article II herein. The well Each Party to whom such written proposal shall be communicated in writing, and shall contain at a minimum the following information: a) A plat outlining the proposed well and the Drilling and Spacing Unit. b) AFE inclusive of Drilling Costs and Completion Costs; and c) Drilling and completion prognosis. 7.2 The non-proposing Party is delivered shall have thirty (30) days from receipt of the written proposal to make its election pursuant notify the proposing Party as to the Operating Agreement. Failure whether it elects to timely participate; a Party’s failure to respond within such 30-day period shall be deemed an election not to go non-consent participate. At such time as the Parties have elected to participate or not participate, as the case may be, in the proposed well, the participating Parties shall sign an Operating Agreement (with the proposed well being the “Initial Well”), all as anticipated pursuant to Section 5.1 above, and the terms of this Section 5.2(a) thereafter shall be superseded by such Operating Agreement. Notwithstanding the non-proposing Party. If either foregoing, the Parties agree that, should any Party elects, or is deemed to have elected, hereto elect not to participate in the drilling of the proposed well well, such Party promptly shall relinquish and if the proposing Party timely commences operations within the time specified in Sub-Article 8.1 hereof and drills such well assign to the depth specified in the proposal for such well, the Non- Participating Party shall be deemed to have forfeited and relinquished participating Party(ies) all right, title and interest as to the first test well drilled within each Drilling and Spacing Unit (“Exploratory Well”). For ▇▇▇▇▇ that are not Exploratory ▇▇▇▇▇ (“Subsequent ▇▇▇▇▇”), the Non-Participating Party shall forfeit and relinquish unto the Participating Party of its right, title and interest in the 640-acre section in which such Subsequent Well until well is located, without creating or reserving any new burdens on production. (b) Notwithstanding (a) above, no more than two drilling rigs will be engaged in drilling within the payout of Project Area at the non-consent penalty same time, unless all Parties otherwise agree. Consequently, no Party may make a proposal for a new well under the (a) above, or under any Operating Agreement. 7.3 The , if such proposal would, after giving priority to pending or previously approved well proposals, require the use of a third drilling rig in the Project Area, unless all Parties agree in advance to openly share data and information on joint ▇▇▇▇▇ drilled or to be drilled pursuant to this Agreement, including: logs, cores, well plans, cost estimates, marketing arrangements, production data and analysis. However, with respect to the information provided to a Party pursuant to this Sub-Article 7.3, the other Party EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, AS TO (I) THE CONTENT, CHARACTER OR NATURE OF ANY REPORT OR ANY ENGINEERING OR GEOLOGICAL INTERPRETATION RELATING TO THE PROSPECT, (II) THE QUANTITY, QUALITY OR RECOVERABILITY OF HYDROCARBONS IN OR FROM THE PROPERTIES, (III) ANY ESTIMATES OF THE VALUE OF THE PROSPECT OR FUTURE REVENUES GENERATED BY THE PROSPECT, (IV) THE PRODUCTION OF HYDROCARBONS FROM THE PROSPECT, (V) THE CONTENT, CHARACTER OR NATURE OF ANY INFORMATION, MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS PREPARED BY ANY PARTY OR THIRD PARTIES WITH RESPECT TO THE PROPOSED WELL, AND (VI) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE TO NON- PROPOSING PARTY OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE PROSPECT PROPOSAL OR ANY DISCUSSION OR PRESENTATION RELATING THERETO. The Parties agree that, to the extent required by applicable law to be effective, the disclaimers contained in this Sub-Article 7.3 are “conspicuous” disclaimers for the purpose of any applicable Lawconsider such proposal.

Well Proposals. 7.1 Each (a) Any Party shall have the right who desires to propose ▇the drilling of a well in the Project Area shall submit such proposal in writing to the other Parties hereto, UNLESS such proposed well is already subject to the terms of another operating agreement (in which event, such other operating agreement shall control), AND EXCLUDING, without limitation, those w▇▇▇▇ within the Program Areaanticipated at Article II herein. The well Each Party to whom such written proposal shall be communicated in writing, and shall contain at a minimum the following information: a) A plat outlining the proposed well and the Drilling and Spacing Unit. b) AFE inclusive of Drilling Costs and Completion Costs; and c) Drilling and completion prognosis. 7.2 The non-proposing Party is delivered shall have thirty (30) days from receipt of the written proposal to make its election pursuant notify the proposing Party as to the Operating Agreement. Failure whether it elects to timely participate; a Party’s failure to respond within such 30-day period shall be deemed an election not to go non-consent participate. At such time as the Parties have elected to participate or not participate, as the case may be, in the proposed well, the participating Parties shall sign an Operating Agreement (with the proposed well being the “Initial Well”), all as anticipated pursuant to Section 6.1 above, and the terms of this Section 6.2(a) thereafter shall be superseded by such Operating Agreement. Notwithstanding the non-proposing Party. If either foregoing, the Parties agree that, should any Party elects, or is deemed to have elected, hereto elect not to participate in the drilling proposed well, such non-participating Party, within thirty (30) days of the proposed well and if the proposing Party timely commences operations within the time specified in Sub-Article 8.1 hereof and drills completion of such well (whether completed as a dry hole or as a producer), shall relinquish and assign to the depth specified in the proposal for such well, the Non- Participating Party shall be deemed to have forfeited and relinquished all right, title and interest as to the first test well drilled within each Drilling and Spacing Unit (“Exploratory Well”). For ▇▇▇▇▇ that are not Exploratory ▇▇▇▇▇ (“Subsequent ▇▇▇▇▇”participating Party(ies), the Non-Participating Party shall forfeit and relinquish unto the Participating Party without creating or reserving any new burdens on production, all of its right, title and interest in such Subsequent Well until the payout regulatory spacing unit allocated thereto, BUT LIMITED to a depth of one hundred feet (100’) below the stratigraphic equivalent of the non-consent penalty deepest depth drilled in such well. (b) Notwithstanding (a) above, no more than two drilling rigs will be engaged in drilling within the Project Area at the same time, unless all Parties otherwise agree. Consequently, no Party may make a proposal for a new well under the (a) above, or under any Operating Agreement. 7.3 The , if such proposal would, after giving priority to pending or previously approved well proposals, require the use of a third drilling rig in the Project Area, unless all Parties agree in advance to openly share data and information on joint ▇▇▇▇▇ drilled or to be drilled pursuant to this Agreement, including: logs, cores, well plans, cost estimates, marketing arrangements, production data and analysis. However, with respect to the information provided to a Party pursuant to this Sub-Article 7.3, the other Party EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, AS TO (I) THE CONTENT, CHARACTER OR NATURE OF ANY REPORT OR ANY ENGINEERING OR GEOLOGICAL INTERPRETATION RELATING TO THE PROSPECT, (II) THE QUANTITY, QUALITY OR RECOVERABILITY OF HYDROCARBONS IN OR FROM THE PROPERTIES, (III) ANY ESTIMATES OF THE VALUE OF THE PROSPECT OR FUTURE REVENUES GENERATED BY THE PROSPECT, (IV) THE PRODUCTION OF HYDROCARBONS FROM THE PROSPECT, (V) THE CONTENT, CHARACTER OR NATURE OF ANY INFORMATION, MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS PREPARED BY ANY PARTY OR THIRD PARTIES WITH RESPECT TO THE PROPOSED WELL, AND (VI) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE TO NON- PROPOSING PARTY OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE PROSPECT PROPOSAL OR ANY DISCUSSION OR PRESENTATION RELATING THERETO. The Parties agree that, to the extent required by applicable law to be effective, the disclaimers contained in this Sub-Article 7.3 are “conspicuous” disclaimers for the purpose of any applicable Lawconsider such proposal.