Tract No. 9
TRMS1351

Purchase price includes the lease bonus and 1st year rental and buyer's premium. Buyer will be responsible for paying rental payments for years 2 through 5.

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There is no assurance that there is any potential for production on any tract offered for leasing by the State Board of Land Commissioners.

Revisions to the Oil and Gas Lease form were approved by the Board, effective for the May auction. Some of these revision include:

• Addition of Paragraph 4(d) ""Land Board Policies, Directives and Schedules"": Lessee's responsibility to be aware of and comply with all published Board Policies
• Addition of Paragraph 4(e)(vii) ""Unmanned Aerial Systems (UAS)"": Lessor's right to use UAS (otherwise known as drones) to inspect property
• Updated ""Natural Gas Liquids"", ""Shut-in"", and ""Temporarily Abandoned"" definitions
• Elimination of the six-months' royalty-free flaring provision
• Reduction of overriding royalty allowance to 3%
• Clarification regarding the requirement to obtain a Communitization Agreement to pool state trust minerals
• Revision of Shut-in Wells Paragraph: shut-in is permitted for lack of market only, limits shut-in period to two (2) years, requires payment of shut-in royalty within 90 days of shutting-in a lease, and clarifies plugging and abandonment of a well will end shut-in period
• Inclusion of a new ""Temporarily Abandoned Wells and Mechanical Delays"" paragraph permitting 60 days to repair a well with extensions to be granted by Staff

Click here to view the updated lease form.

A) Lease contains Colorado Parks & Wildlife (CPW) mapped High Priority Habitat (HPH) and/ or occurrences of Federally-listed Endangered, Threatened, or Candidate wildlife or plant species as mapped by Colorado Natural Heritage Program (CNHP). Prior to surface access for operations and in connection with any Location Assessment for oil and gas operations, or the submittal of an Application for Permit to Drill (APO) with the Colorado Oil and Gas Conservation Commission (OGCC), Lessee shall consult with and obtain approval of the Lessor's District Manager, or his designee, for operations, including without limitation, exploration activities, well siting and access, and facilities locations. In connection therewith, Lessee shall consult with CPW and CNHP representatives regarding appropriate design measures and best management practices (BMPs) to avoid and minimize adverse impacts to biological resources, species, and habitats. Lessor's conservation mandate may require Lessee's compliance with site specific measures to address CPW and CNHP concerns relating to the siting of facilities and the implementation of BMPs to avoid, minimize, and mitigate adverse impacts. Site specific requirements may include, but are not limited to: 1) restricted or prohibited surface occupancy, 2) noise limitations or mitigation measures, 3) seasonal operations restrictions, 4) biological resource mapping, 5) ground or surface water testing, 6) air quality testing and 7) adoption of a comprehensive soil management plan. Lessor does not waive any OGCC consultation requirements with the surface owner, and Lessee shall not seek a variance to any required consultation without the advance written approval of the Lessor. Without excluding other penalties or remedies available under this Lease or as provided by law, Lessor shall impose penalties, subject to the applicable Lease notice and cure rights, including Lease cancellation and fines of up to $10,000 per day, for any violation of this special stipulation or the resulting BMPs, in whole or in part, arising directly or indirectly from the use, occupation or control of the Leased Premises by Lessee, Lessee's contractor or operator under this Lease. If Lessor determines any oil and gas operations pose a risk of immediate damage to public health, safety or welfare Lessor may order the immediate suspension of operations to investigate and remedy the issues.

B) A limit of 2 surface locations to be determined after consultation with State Land Board Staff, CPW, and existing coal lessee on property.

C) The Leased Premises are in the State Land Board's Stewardship Trust. Additional review of operations proposed on the Leased Premises may be required.

D) Columbian Sharp-tailed Grouse Lek, Production Area, and Winter Range: This lease falls within the Columbian Sharp-tailed Grouse Lek, Production Area, and Winter Range. There shall be No Surface Occupancy (NSO) within 0.4 miles of a lek site. Prior to drilling operations, Lessee must consult with the State Land Board to determine if a nest site exists and to discuss Columbian Sharp-tailed Grouse best management practices.

E) Elk Winter Concentration Area: This lease falls within mapped Elk Winter Concentration Areas. There shall be No Surface Occupancy (NSO) between December 1-April 15 to protect winter habitat.

F) Golden Eagle Nest Sites: This lease has an active golden eagle nest site. Lessee shall conduct a pre-construction nest survey and consult with the State Land Board regarding best management practices. There will be NSO within 0.25 miles of an active nest site year round and NSO within 0.5 miles of an active nest site between December 15 - July 15.

After all auctions have closed, the successful bidder will be notified via email with closing instructions, including total amount due.

Payment must be made within two business days.

A 2% Buyer Premium, calculated as 2% of the total rental, will be added to the cost of this lease.