PENNSYLVANIA GENERAL ENERGY COMPANY, L.L.C.

PENNSYLVANIA GENERAL ENERGY COMPANY, L.L.C.
TEL: (814) 723-3230
FAX: (814) 723-7719
120 MARKET STREET
WARREN, PA 16365
ORDER OF PAYMENT
Conditioned on approval of the agreement associated herewith and on approval of title to same,
Lessee will make payment as indicated herein by check within 60 business days of receipt of the
agreement by Lessee at Lessee's business office address noted above. No default shall be declared
for failure to make payment until 30 days after receipt of written notice from payee of intention to
declare such default.
For collection, the original copy of this Order of Payment must be forwarded along with the associated
agreement to Lessee at the above listed address. A copy of this Order of Payment is to be retained
by payee.
Pay To:
Patrick W Gorey Sr., a widower
The amount of:
Three thousand & 00/100
Address:
dollars ( $3,000.00
)
19906 Coles Valley Rd., Robertsdale Pa. 16674
Payee Social Security Number / Tax ID Number:
Consideration for 100% interest in Oil and Gas Lease
5
effective
net acres in the Twp/Dist(s) of Todd
10.0
Huntingdon
,
covering
, County of
State of Pennsylvania
,
and further described as
Tax Parcel # 49 18 09.4, Deed Book 469/ Page 252
-
-
In the event Lessee determines by record title search that payee's interest in the leased premises is
either greater or less than stated above, this payment may be proportionally increased or reduced by
Lessee to reflect the correct interest. In such event, payee shall be furnished copies of pertinent
instruments evidencing the correct interest.
Prospect:
❑
New
GA2 Paradise
❑
Prospect No.
Renewal
Landowner(t)
Date Signed:
Completed By: Howard Lochrie
Order of Payment 2009-02-14 60 day
Approved By:
72000
PGE-PA 20090214
OIL AND GAS LEASE
THIS AGREEMENT (the "Lease") is made this
Patrick W. Gorey Sr., a widower, of
between
LPN
May
of
joe.o esday
Valley Rd., Robertsdale Pa. 16b74
9
2011
Lessor (whether one or more), and
PENNSYLVANIA GENERAL ENERGY COMPANY, L.L.C., 120 MARKET STREET, WARREN, PENNSYLVANIA 16365, Lessee.
WITNESSETH:
1. LEASING CLAUSE — For and in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and the covenants contained in this Lease, Lessor hereby grants, leases, and lets exclusively to
Todd
Huntingdon
Lessee all those certain lands situate in
Township(s),
County, Commonwealth of Pennsylvania, (the "Leased Premises"), further described as follows:
Tax Parcel # 49-18-09.4 , Deed Book 469 / Page 252
acres, more or less, for the purpose of exploring for, developing, producing, transporting,
and containing a total of 10
and marketing oil, gas and/or their constituents (the phrase "oil, gas and/or their constituents" is intended throughout this lease to include these
products either individually or in combination) together with such exclusive rights as may be necessary or convenient for Lessee, at its election,
to explore for, develop, produce, measure, and market production from the Leased Premises and from any other lands, using methods and
techniques which are not restricted to current technology, including the exclusive right to A) conduct geophysical and other exploratory tests; B)
drill, maintain, operate, cease to operate, plug, abandon, and remove wells; C) inject gas, water and other fluids into the subsurface strata; D) use
or install roads, electric power and telephone facilities; E) construct pipelines with appurtenant facilities, including data acquisition, compression
and collection facilities for use in the production and transportation of products and water to and from the Leased Premises and any other lands
across the Leased Premises, which rights shall survive the term of this agreement until abandoned by Lessee; F) use oil, gas, sand, gravel, rock
and non-domestic water sources, free of cost for operations pursuant to the lease; G) store gas of any kind underground in any strata or horizon,
regardless of the source thereof, including the injecting of gas therein and removing the same therefrom, and to protect stored gas; H) to
operate, maintain, repair, and remove material and equipment; and I) ingress and egress for the purpose of conducting all of the foregoing
operations on the Leased Premises or any other lands. The term gas, as used herein, shall include, without limitation, condensate, helium, carbon
dioxide, gaseous sulfur compounds, coalbed methane gas contained in or associated with any coal seam, and other commercial gasses, as well as
normal hydrocarbon gasses. In addition to the land described above, this lease also covers all accretions and any strips or parcels of land now or
later owned by Lessor which are contiguous or adjacent to the Leased Premises, including any interest in the Leased Premises which Lessor may
later acquire by reversion, prescription, grant or otherwise, together with all oil, gas, and their constituents underlying lakes, rivers, streams,
roads, easements, and rights of way which traverse or adjoin any of the Leased Premises.
ON Etj
(the "Effective Date"),
2. TERM OF LEASE. This lease shall be in force for a primary term of five-(-S) years from
and for as long thereafter as oil and gas, or either of them, or other substances covered by this Lease are pr duced in paying quantities from the
Leased Premises or from lands pooled with the Leased Premises, or this Lease is otherwise maintained in effect pursuant to its provisions.
3. PAYMENTS TO LESSOR - Lessee covenants to pay Lessor, proportionate to Lessor's percentage of ownership, as follows:
(A) DELAY RENTAL: If operations for drilling are not commenced on the Leased Premises or lands pooled or unitized therewith, or any pan
thereof, on or before one year from the effective date, Lessee shall, to continue this lease in full force and effect, make payment to Lessor a
Delay Rental at the rate of Five dollars ($5.00) per acre held by this lease per year payable annually in advance, and continuing thereafter until the
commencement of production. Delay Rental paid for time beyond the commencement date of Royalty payments shall be credited upon the
Royalty payment.
(B) ROYALTY: To pay Lessor as Royalty an amount equal to one-eighth of the gross proceeds reali7fd by Lessee for all oil, gas and/or their
constituents produced and marketed from the Leased Premises less A) excise, production, severance, real estate or windfall profits taxes, if any,
and B) reasonable marketing and/or broker fees, transportation fees, and processing costs actually incurred and paid pursuant to arms-length
agreements with 3rd parties not affiliated through business ownership structure with the Lessee; provided making any such deduction cited in A
and/or B herein does not violate any then current, effective and applicable governmental statute, rule or regulation, or applicable court order, to
Page 1 of 4
the contrary. In the event oil, gas and/o their constituents produced hereunder is/are unmarketable and/or do not meet pipeline requirements
for any reason, including, but not limite to, excessive or inadequate heat value, contamination by naturally occurring water, nitrogen, carbon
dioxide, hydrogen sulfide, or other subStance, Lessee, at its sole option, may take the necessary steps to process the oil, gas and/or their
constituents to marketable pipeline standards. The term processing costs as used herein shall include the costs of compression, dehydration, and
any other treatments or steps taken as noted above to make the product(s) marketable or to meet pipeline standards.
(C) DELAY IN MARKETING: In the event that Lessee does not market producible oil, gas and/or their constituents from the Leased Premises
and this lease is not otherwise held in force by any of the provisions herein, Lessee shall continue to pay Delay Rental until such time as
marketing is established. Such payment shall maintain this lease in full force and effect to the same effect as payment of Royalty.
(D) SHUT-IN: In the event that production of oil, gas and/or their constituents is interrupted and not marketed for a period of six continuous
months, and there is no producing well on the Leased Premises or lands pooled or unitized therewith, and the lease is not otherwise being held
in force by any of the provisions herein, Lessee shall pay a Shut-in payment equal in amount to one half (1/2) the annual Delay Rental until such
time as production is re-established and said payment shall maintain this lease in full force and effect to the same effect as payment of Royalty.
The Shut-in payment shall be due within 45 days of the end of any 6 month period during which there has not been any production from the
Leased Premises or lands pooled or unitized therewith. During Shut-in, Lessee shall have the right to rework, stimulate, or deepen any well on
the Leased Premises or drill a new well on the Leased Premises in an effort to re-establish production, from an original producing formation or
from a different formation. In the event that the production from the Leased Premises or lands pooled or unitized therewith is interrupted for
a period of less than six months, this lease shall remain in full force and effect without payment of Royalty or Shut-in.
(E) DAMAGES: Lessee shall be liable and agrees to pay for damages at the then current market value to growing crops, timber or improvements
to the land caused by Lessee's operations
(F) MANNER OF PAYMENT: Lessee shall make or tender all payments due hereunder by check, payable to Lessor, at Lessor's last known
address, and Lessee may withhold any payment pending notification by Lessor of a change in address.
(G) TITLE: If Lessee receives evidence that Lessor does not have title to all or any part of the rights herein leased, Lessee may immediately
withhold payments that would be otherwise due and payable hereunder to Lessor until the adverse claim is fully resolved.
(H) LIENS: Lessee may at its option pay and discharge any past due taxes, mortgages, judgments, or other liens and encumbrances on or
against any land or interest included in the Leased Premises; and Lessee shall be entitled to recover from the debtor, with legal interest and costs,
by deduction from any future payments to Lessor or by any other lawful means.
4. NOTICE - In the event Lessor considers that Lessee has not complied with any or all its obligations hereunder, Lessor shall notify Lessee in
writing, via certified United States mail, setting out specifically in what respects Lessor considers Lessee has breached this contract. Lessee shall
then have sixty (60) days after receipt of said notice within which to meet or commence to meet all or any part of the breaches alleged by Lessor.
The service of said notice shall be precedent to the bringing of any action by Lessor on said Lease for any cause, and no such action shall be
brought by Lessor until the lapse of sixtr(60) days after service of such notice on Lessee. Neither the service of said notice nor the doing of any
act by Lessee to meet all or any of the alleged breaches shall be an admission or presumption that Lessee has failed to perform all its obligations
hereunder. It is agreed that this lease shall never be forfeited or cancelled for Lessee's failure to perform, in whole or in part, any of its express
or implied covenants, conditions, or stipulations, including payment of any rentals and royalties due under this lease, until it shall have been first
finally judicially determined that such failure exists, by a final order of a court of competent jurisdiction and after such final determination,
Lessee is given a reasonable time therefrom to comply with any such covenants, conditions, or stipulations.
Lessor grants Lessee the right to pool, unitize, or combine all or parts of the Leased Premises or interests as to any depths
or zones and as to any or all substances covered by this lease with any other lands, whether contiguous or not contiguous, leased or unleased,
whether owned by Lessee or by others,{ at any time before or after drilling to create drilling or production units either by contract right or
pursuant to governmental authorization or order. Lessee is granted the right to change the size, shape, and conditions of operation or payment
of any unit created. Lessee may utilize governmental property maps, assessment data, deed descriptions, surveys or other reasonable means
available at the time a unit is created or amended in determining the location of property lines or acreage attributed to the Leased Premises and
applicable to any such unit. Lessor agrees to accept and receive out of the production or the revenue reali7Pd from the production of such unit,
such proportional share of the Royalty from each unit well as the number of leasehold acres included in the unit bears to the total number of
acres in the unit; otherwise, drilling, operations in preparation for drilling, production, or shut-in production from the unit, or payment of
Royalty or Delay Rental shall have the same effect upon the terms of this Lease as if a well were located on the Leased Premises.
5. UNITIZATION -
6. EXISTING STRUCTURES AND IMPROVEMENTS - Lessee shall not drill a well within 200 feet of any structure located on the Leased Premises
without Lessor's written consent. Lessor{ shall not erect any building or structure, or plant any trees within 200 feet of a well or within 25 feet of
a pipeline without Lessee's written consent. Lessor shall not improve, modify, degrade, or restrict roads and facilities built by Lessee without
Lessee's written consent.
i
t to convert the Leas Premises or any pa thereof to gas sto e or protectio
7. Conversi n t. Stora - Lessee hereby granted the
time of conve on, Lessee shall pay Lessor, proportionate o Lessor's ownership f the oil, gas and u consti nts
of gas storage.
e estimated recov ble oil and gas rese underlying the Leas Premises, or portio thereof, in the fo tion beind
8 of the value o
versed to gas stora e using methods o alculating oil and gas erves as are generally cepted by the oil and tural gas industry. Upon the
(30) days of cony ion to
ditionally, within
or for such reserves.
tion shall be due
ten ring of such pa
t no further cons{
sor's ownership in the
sor, proportionate to
of the Leased Pre es, Lessee shall pay
stora or protection of
storage of all or
PGE-PA 20090214
Page 2 of 4
storage rights underlying the Leased Pre es, an annual Storage mai in the same am unt as the Delay ental for as long th eafter as th
. ull for t
e compensation in
tal payment sh
sed Premises
es is us d for gas storage o or protection of gas s rage. This Storage
sto e rights herein g ted and shall contin this lease in full force d effect with said p ent being in lieu f all Delay Rentals r Royalty
due o to become due for he right to produce r for the production of it and gas from the aced Premises. Th ayment of Storag Rentals
shall no however, relieve ssee of the obligati to pay royalties purl t to Paragraph 3B h rein on native oil a d gas produced fr any
portion o the Leased Premises not converted to st rage or protection of gas storage.
8. TITLE AND INTERESTS Lessor hereby generally warrants and agrees to defend title to the Leased Premises. Lessor covenants that Lessee
shall have quiet enjoyment hereunder. Should any person having tide to the Leased Premises fail to execute this Lease, the Lease shall
nevertheless be binding upon all persons who do execute it as Lessor.
-
' e or covenant, express or implied, obligating the Lessee
9. LEASE DEVELOPMENT Lessor and Lessee agree that in this lease there Ls. no prom's
to engage in development or extraction activities so long as Lessee continues to pay Lessor for the opportunity to develop and produce oil, gas
and/or their constituents by way of the payments prescribed in this lease.
-
10. CONTINUING OPERATIONS
If, at the expiration of the primary term of this lease, there is no production of oil, gas and/or their
constituents on the Leased Premises or lands pooled or unitized therewith, but Lessee is engaged in operations for drilling, reworking, plugging
back or deepening a well thereon, this lease shall remain in force and its term shall continue for so long as such operations or additional drilling,
reworking, plugging back or deepening are prosecuted with no cessation of more than ninety (90) consecutive days and if any such operations
result in a well Lessee deems capable of production of oil, gas and/or their constituents, such well shall be deemed to have been completed
within the primary term of this lease.
-
11. CESSATION OF PRODUCTION
If, within the primary term of this lease, production of oil, gas and/or their constituents on the Leased
Premises or lands pooled or unitized therewith shall cease, this lease shall continue in force, and the Lessee may commence operations for
drilling, reworking, plugging back or deepening of a well or may in lieu thereof commence or resume the payment of Delay Rentals on or before
the anniversary date of the Effective Date of this lease next following the 120th day after such cessation of production. If, after the expiration
of the primary term of this lease, production of oil, gas and/or their constituents on the Leased Premises, or lands pooled or unitized herewith,
should cease, this lease shall not terminate, provided that Lessee commences operations for drilling, reworking, plugging back or deepening a
well within ninety (90) days from such cessation, and this lease shall remain in force during the prosecution of such operations, and for so long
as such operations are prosecuted with no cessation of more than ninety (90) days, and, if production of oil, gas and/or their constituents results
from such operations, then this lease shall remain in force and effect for so long as production continues or operations are being conducted as
herein provided, or the term of this lease is otherwise extended by any of the provisions herein.
-
12. FORCE MAJEURE This lease shall not be subject to termination, forfeiture of rights, or damages due to Lessee's failure to comply with any
obligation under this Lease if compliance is prevented or delayed by acts of God, federal, state, or local law, regulation, or decree, or any
circumstance reasonably beyond the control of Lessee, and this Lease shall be extended while and so long as Lessee is prevented by any such
cause from conducting any operations on the Leased Premises or lands pooled or unitized therewith, and the time while Lessee is so prevented
shall not be counted against Lessee.
-
13. EXCEPTED WELL(S)
There is excepted and reserved from the grant of this lease any well and/or wellborn, at its present depth, now
located on the Leased Premises.
-
Prior to the end of the primary term hereof, Lessee shall have the optfikichrtifiefeilifiktsfyoffoodditional period
Dollars
urs. The Lessee may exercise this option by paying to the Lessor an option payment of
($
) per net acre in addition to the Delay Rental set forth in Paragraph three (3) of this lease. If Lessee exerciseses this option to
renew, this lease shall continue under the same terms and conditions for said additional period.
14. RENEWAL OPTION
of
-
,gt)
15. JOINT OWNERSHIP/TRANSFER If the Leased Premises is owned by two or more parties, or the ownership of any interest therein should
hereafter be transferred by sale, devise or operation of law, the Leased Premises, nevertheless, may be held, developed and operated as an
entirety, and the rentals and royalties may be divided among and paid to such several owners in the proportion that the acreage owned by such
owner bears to the entire leased acreage.
-
16. RIGHT OF FIRST REFUSAL The Lessor will not grant an oil and/or gas lease, or option for any oil and/or gas lease, on all or a portion of
the Leased Premises to any third party during the term of this lease without first offering to Lessee the first option to extend this lease under the
same terms and conditions offered by the third party. Lessor shall notify Lessee of the offer by certified U.S. mail, and Lessee shall have thirty
(30) days from receipt of notice to accept or decline Lessor's offer to extend this lease. Should Lessee accept Lessor's offer, Lessee may exercise
its option by tendering to Lessor any applicable extension payment offered by the third party within fifteen (15) days after receipt of an
extension of lease document properly executed by Lessor.
-
17. SURRENDER Lessee may surrender and cancel this Lease as to all or any part of the Leased Premises by recording a Surrender of Lease,
and if a partial surrender the Delay Rental set forth in Paragraph three (3) of this lease shall be reduced in proportion to the acreage surrendered.
-
18. ASSIGNMENT The rights of either party hereunder may be assigned in whole or in part, and the provisions hereof shall extend to their
heirs, successors and assigns; but no change or division in ownership of the land, or royalties, however accomplished, shall operate to enlarge
the obligations or diminish the rights of Lessee; and no change or division in such ownership shall be binding on Lessee until ninety (90) days
after Lessee shall have been furnished by certified U.S. mail at Lessee's principal place of business with a certified copy of a recorded instrument
-
PGE-PA 20090214
Page 3 of 4
or ins
. truments evidencing same. Pending the receipt of documentation, Lessee may elect either to continue to make or withhold payments as if
such a change had not occurred. If Lessee transfers its interest hereunder, in whole or in part, Lessee shall be relieved of all obligations
thereafter arising with respect to the transferred interest, and failure of the transferee to satisfy such obligations with respect to the transferred
interest shall not affect the rights of Lessee with respect to the interest not so transferred.
This lease and enforcement hereunder shall be governed by the laws of the State in which the Leased
19. CHOICE OF LAW AND FORUM
Premises are located. Further, the parties consent to the sole and exclusive jurisdiction in the state and federal courts that have jurisdiction over
the county in which the Leased Premises are located for all claims related to enforcement of this lease.
—
diction to be
SEVERABILITY Should any provision of this Lease Agreement be declared or determined by any court of competent jurisdiction
illegal or invalid, the validity of the remaining parts, terms, or provisions shall not be affected thereby and said illegal or invalid part, term, or
provision shall not be deemed to be part of the Agreement.
20.
-
ENTIRE CONTRACT The entire agreement between Lessor and Lessee is embodied herein. No oral warranties, representations,
promises have been made or relied upon by either party as an inducement to or modification of this Lease. Paragraph headings are f
convenience of the parties and are not intended to supersede anyparagraph hereof
21.
-
oee Exhibit "A" attached hereto and made a part
Intending to be legally bound, Lessor hereunto sets hand and seal. hereof
Witness (as to all):
Lessor:
COMMONWEALTH/STATE OF
Pennsylvania
}
}
Huntingdon
COUNTY OF
May
Patrick W Gorey Sr.
On this
day of
-
ss: ACKNOWLEDGMENT
}
,2 01 1
, before me, a Notary Public, the undersigned officer, personally appeared
known to me (or satisfactorily proven) to be the person(s) whose name(s)
acknowledged that
he
is
subscribed to the within instrument, and
executed the same for the purposes therein contained.
In Witness Whereof, I hereunto set my hand and official seal.
My Commission Expires:
4
,&k_uLsL
Notary Public
COMMONWEALTH OF PENNSYLVANIA
Notarial Seal
Howard Lochrie, Notary Public
Paint Twp., Somerset County
My Commission Expires June 9, 2012
Member, Pennsylvania Association of Notaries
PGE-PA 20090214
Approved by Lessee:
Page 4 of 4
EXHIBIT "A"
1,0+11
Attached to and by reference made a part of that certain Oil and Gas Lease effective the
day of
May
2011
between Patrick W. Gorey Sr., a widower, of 19906 Coles Valley Rd.
Robertsdale Pa. 16674
as Lessor,
and PENNSYLVANIA GENERAL ENERGY COMPANY, L.L.C., as Lessee, covering lands situate in the Township(s)
o f Todd
Huntingdon
, County of
, State of Pennsylvania.
Conflicts: In the event of any conflict between the provisions of the printed form lease and this EXHIBIT "A", the provisions of this
EXHIBIT "A" shall control.
No Surface Operations Except Seismic (Nondevelopment Lease)
Anything in this lease to the contrary notwithstanding, no surface operations of any kind except for geological and geophysical testing
may be conducted on the leased premises without the prior express written consent of Lessor
Water Protection: Lessee shall have Lessor's domestic water well tested by an independent laboratory before commencing drilling
operations within 1,000 feet of said water well. If Lessee's operations are demonstrated to have measurably affected the water well,
Lessee shall pay for repair or replacement of the water well. In the event of a disagreement on water quality between Lessor and
Lessee, it is mutually agreed that Lessee's obligation is to perform the work or actions directed by the principal state agency having
jurisdiction over fresh water supplies.
Deletion of Gas Storage: Paragraph 7 and any other references in the printed form lease to gas storage are hereby deleted.
Change in Primary Term: It is understood and agreed that the primary term of this lease is one year from the Effective Date, and any
Delay Rental or payment calculated based on the Delay Rental that may be due the Lessor shall only apply in the event this lease is
extended beyond the one year primary term pursuant to the provisions contained in the printed form lease or any exhibit attached
thereto
Increase in Delay Rental
The Delay Rental set forth in Paragraph 3(A) of the printed form lease is hereby increased from $5.00 per acre to $ 50.00 per acre but
payments due under paragraphs 3(C), 3(D) and 7 shall remain at $5.00 per acre.
Signed for identification this
Paradise Prospect Exhibit A
ao4-1"\
day of
May
2011
MEMORANDUM OF OIL AND GAS LEASE
PGE-PA-MEM 20090214
LPN
Patrick W. Gorey Sr., a widower, of 19906 Coles Valley Rd., Robertsdale Pa. 16674
The undersigned,
, as Lessor,
and PENNSYLVANIA GENERAL ENERGY COMPANY, L.L.C., 120 MARKET ST., WARREN, PA 16365, as Lessee, entered into an Oil and Gas
(the "Lease").
1/
Lease effective
Todd
Huntingdon
Township(s),
The Lease covers all that certain land situate in
Pennsylvania, described as follows:
County,
Tax Parcel # 49-18-09.4 , Deed Book 469 / Page 252
10
acres, more or less (the "Leased Premises).
Containing
1
years from the Effective Date and so long
Under the terms of the Lease, the Leased Premises was leased to Lessee for a term of
thereafter as oil or gas is produced from said land in paying quantities, or the lease is otherwis5 maintained pursuant to the provisions thereof.
Furthermore, the Lease provides for A) an option to extend the primary term f. a period of years; B) a right of first refusal during the
primary term; and Q
S--/20)//
Date:
COMMONWEALTH/STATE OF
Pennsylvania
1
1 ss:
1
opuN-1YoF Huntingdon
May
Patrick W Gorey Sr.
On this
day of
201 1
,
before me, a Notary Public, the undersigned officer, personally appeared
known to me (or satisfactorily proven) to be the person(s) whose name(s)
acknowledged that
he
ACKNOWLEDGMENT
is
subscribed to the within instrument, and
executed the same for the purposes therein contained.
In Witness Whereof, I hereunto set my hand and official seal.
My Commission Expires:
c:).(
7
Notary Public
COMMONWEALTH OF PENNSYLVANIA
Notarial Seal
Howard Lochrie, Notary Public
Paint Twp., Somerset County
My Commission Expires June 9, 2012
Member, Pennsylvania Association of Notaries
Approved by Lessee: