Sample Oil and Gas Lease
39
www.earthworksaction.org • www.ogap.org
by this Lease, bears to the whole and undivided fee simple estate therein. Except as provided in Paragraph 9, all royalty interest
covered by this Lease (whether or not owned by Lessor) shall be paid out of the royalty herein provided.
12. Force Majeure. Should Lessee be prevented from complying with any express or implied covenant of this Lease
(except payment of money), from conducting drilling or reworking operations thereon or from producing oil or gas therefrom by reason
of scarcity of or inability to obtain or to use equipment or material, or by operation of force majeure, any Federal or state law or any
order, rule or regulation of governmental authority, then while so prevented, Lessee's obligation to comply with such covenant shall be
suspended, and Lessee shall not be liable in damages for failure to comply therewith; and this Lease shall be extended while and so
long as Lessee is prevented by any such cause from conducting drilling or reworking operations on or from producing oil or gas from the
Leased Premises. However, no event or cause stated in the preceding sentence shall be effective to extend the Primary Term of this
Lease more than ninety (90) days beyond the end of the Primary Term of this Lease specified in Paragraph 2 above.
13. Indemnity. Lessee agrees to defend, indemnify, protect and hold harmless Lessor and Lessor's heirs, successors,
representatives, agents and assigns ("Indemnitees"), from and against any and all claims, demands, causes of action, liability, loss,
damage or expense of any and every kind and nature, including without limitation attorneys’ fees (hereinafter “Claims and Losses”) for
injury (including death) or damage to persons or property (including environmental damage to the surface or subsurface estates of any
person, firm or corporation) arising out of, incidental to or resulting from (i) the operations of or for Lessee or Lessee's servants, agents,
employees, guests, licenses, invitees or independent contractors, (ii) the enjoyment of this Lease, (iii) the exercise of any right granted
hereunder, and/or (iv) any obligation imposed hereby), and from and against all costs and expenses incurred by Indemnitees by reason
of any such Claims and Losses; and each assignee of this Lease, or an interest therein, agrees to indemnify, defend, protect and hold
harmless Indemnitees in the same manner provided above. Any assignee of any rights of Lessee in this Lease shall likewise be obligated
to defend and indemnify Indemnitees in the same manner as the original Lessee herein. Such indemnity shall apply to any Claims and
Losses arising out of operations conducted under or pursuant to this Lease, howsoever caused. LESSEE'S OBLIGATION TO DEFEND AND
INDEMNIFY INDEMNITEES SHALL APPLY WHETHER OR NOT INDEMNITEES MAY BE GUILTY OF ANY NEGLIGENT ACT OR OMISSION
WHICH RESULTED IN OR CONTRIBUTED TO THE COST, EXPENSE OR LIABILITY AGAINST WHICH LESSEE IS OBLIGATED TO INDEMNIFY
INDEMNITEES HEREUNDER, AND WHETHER OR NOT INDEMNITEES MAY BE SUBJECT TO SUCH LIABILITY BY STATUTE OR BY
APPLICATION OF PRINCIPLES OF STRICT LIABILITY. The provisions of this Paragraph shall survive the termination of this Lease.
14. Access to Information. Lessee shall provide written notice to Lessor of Lessee's entry upon the Leased Premises to
drill. Lessee agrees to furnish Lessor, upon request, copies of all title opinions covering the Leased Premises, copies of all filings made
by Lessee with the Railroad Commission of Texas pertinent to drilling and completing wells, copies of all daily drilling reports, full
information as to the production and sales from wells on the Leased Premises, and a copy of all gas contracts or any other agreements
pursuant to which Lessee shall sell, use, transfer or dispose of any hydrocarbon substance or product extracted therefrom which was
produced from the Leased Premises. Lessor shall have the right to inspect, audit and copy all records of Lessee pertaining to the
production and sale of oil and gas from the Leased Premises and the calculation and payment of Lessor's royalty hereunder.
15. Reasonable Development. If oil or gas is discovered on the Leased Premises, Lessee shall develop the Leased
Premises as a reasonable and prudent operator. Lessee shall protect the oil and gas in and under the Leased Premises from drainage by
wells on adjoining or adjacent tracts or leases as a reasonable and prudent operator. Neither the rentals, royalties nor the shut-in gas
well royalties paid or to be paid hereunder, nor any other provision of this Lease, shall relieve Lessee of the obligation to reasonably
develop the Leased Premises and to reasonably protect the oil and gas in and under the Leased Premises from drainage by wells on
adjoining lands or leases. Lessee agrees to notify Lessor of the need to sue an adjoining owner, lessee or operator for damages
resulting from drainage or for damage to a common reservoir. If Lessee intends to make a claim or to file suit for such drainage or
damage, Lessee will notify Lessor and will represent Lessor in such claim or cause of action without cost to Lessor unless Lessor notifies
Lessee in writing to the contrary. If Lessee recovers damages as a result of such claim, either by settlement or judgment, Lessor shall be
entitled to share in such recovery pro rata in accordance with Lessor's interest in production from the Leased Premises whether or not
Lessor is a party to such settlement or judgment.
16. Ratification. Neither the acceptance of royalties, shut-in royalties or other payments by Lessor (regardless of any
notation thereon or instrument accompanying same), nor Lessor's execution of any division order or transfer order or similar
instrument, shall ever constitute or be deemed to effect (a) a ratification, renewal or amendment of this Lease or of any pooled unit
designation filed by Lessee purporting to exercise the pooling rights granted to Lessee in this Lease, or (b) a waiver of the rights granted
to Lessor, or the obligations imposed upon Lessee, express or implied, by the terms of this Lease, or remedies for Lessee's breach
thereof, or (c) an estoppel against Lessor preventing Lessor from enforcing Lessor's rights or Lessee's obligations hereunder, express or
implied, or from seeking damages for Lessee's breach thereof. Lessor's agreement to accept royalties from any purchaser shall not
affect Lessee's obligation to pay royalties pursuant to this Lease. No instrument executed by Lessor shall be effective to constitute a
ratification, renewal, extension or amendment of this Lease unless the instrument is clearly titled to indicate its purpose and intent.