NESS ENERGY INTERNATIONAL INC /NV/
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>e102.htm
<TEXT>


<HTML>
<HEAD>
<TITLE>Exhibit</TITLE>
</HEAD>
<BODY>




<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<A NAME=A001></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT &#147;B&#148; </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A002></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L. FORM 610-1982 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A003></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>MODEL FORM OPERATING
AGREEMENT </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<A NAME=A004></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OPERATING AGREEMENT </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Default" -->
<A NAME=A005></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DATED </FONT></P>


<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>April 12         ,    2004     ,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>year </I></FONT></P>



<P ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
OPERATOR            PARTY</FONT></P>



<P ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
CONTRACT AREA               See Exhibit "A"</FONT></P>






 <P ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
COUNTY OR PARISH OF                 Parker &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;                  STATE OF          Texas</FONT></P>



<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<A NAME=A007></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>COPYRIGHT 1982 &#150;
ALL RIGHTS RESERVED <BR>AMERICAN ASSOCIATION OF
PETROLEUM <BR>LANDMEN, 4100 FOSSIL
CREEK BLVD., FORT <BR>WORTH, TEXAS,
76137-2791, APPROVED<BR>
 FORM. A.A.P.L. NO. 610 &#150; 1982 REVISED </FONT></P>




<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L.&nbsp;&nbsp;&nbsp;&nbsp;
          FORM 610 &#151; MODEL FORM OPERATING AGREEMENT &#151; 1982 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Workstation" -->
<A NAME=A011></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Table of Contents </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<A NAME=A012></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TABLE OF CONTENTS </FONT></H1>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Article&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Page</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=95% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;I.  DEFINITIONS</FONT></TD>
     <TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;II.  EXHIBITS</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;III.  INTERESTS OF PARTIES</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. OIL AND GAS INTERESTS</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. INTERESTS OF PARTIES IN COSTS AND PRODUCTION</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. EXCESS ROYALTIES, OVERRIDING ROYALTIES AND OTHER PAYMENTS</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. SUBSEQUENTLY CREATED INTERESTS</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;IV.  TITLES</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. TITLE EXAMINATION</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2-3</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. LOSS OF TITLE</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.  Failure of Title</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.  Loss by Non-Payment or Erroneous Payment of Amount Due</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.  Other Losses</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;V.  OPERATOR</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. DESIGNATION AND RESPONSIBILITIES OF OPERATOR</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. RESIGNATION OR REMOVAL OF OPERATOR AND SELECTION OF SUCCESSOR</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.  Resignation or Removal of Operator</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.  Selection of Successor Operator</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. EMPLOYEES</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. DRILLING CONTRACTS</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;VI.  DRILLING AND DEVELOPMENT</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. INITIAL WELL</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4-5</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. SUBSEQUENT OPERATIONS</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.  Proposed Operations</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.  Operations by Less than All Parties</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5-6-7</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.  Stand-By Time</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.  Sidetracking</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. TAKING PRODUCTION IN KIND</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. ACCESS TO CONTRACT AREA AND INFORMATION</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. ABANDONMENT OF WELLS</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.  Abandonment of Dry Holes</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.  Abandonment of Wells that have Produced</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8-9</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.  Abandonment of Non-Consent Operations</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;VII.  EXPENDITURES AND LIABILITY OF PARTIES</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. LIABILITY OF PARTIES</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. LIENS AND PAYMENT DEFAULTS</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. PAYMENTS AND ACCOUNTING</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. LIMITATION OF EXPENDITURES</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9-10</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.  Drill or Deepen</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9-10</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.  Rework or Plug Back</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.  Other Operations</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. RENTALS, SHUT-IN WELL PAYMENTS AND MINIMUM ROYALTIES</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. TAXES</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. INSURANCE</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>VIII.  ACQUISITION, MAINTENANCE OR TRANSFER OF INTEREST</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. SURRENDER OF LEASES</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. RENEWAL OR EXTENSION OF LEASES</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. ACREAGE OR CASH CONTRIBUTIONS</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11-12</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. MAINTENANCE OF UNIFORM INTEREST</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. WAIVER OF RIGHTS TO PARTITION</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;IX.  INTERNAL REVENUE CODE ELECTION</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;X.  CLAIMS AND LAWSUITS</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;XI.  FORCE MAJEURE</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;XII.  NOTICES</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>XIII.  TERM OF AGREEMENT</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;XIV.  COMPLIANCE WITH LAWS AND REGULATIONS</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. LAWS, REGULATIONS AND ORDERS</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. GOVERNING LAW</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. REGULATORY AGENCIES</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;XV.  OTHER PROVISIONS</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;XVI.  MISCELLANEOUS</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>15&nbsp;</FONT></TD></TR>
</TABLE><BR>






<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L.&nbsp;&nbsp;&nbsp;&nbsp;
          FORM 610 &#151; MODEL FORM OPERATING AGREEMENT &#151; 1982 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<A NAME=A013></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OPERATING AGREEMENT </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS AGREEMENT,
entered into by and between <U> PARTY</U>, hereinafter designated and

 referred to as  "Operator",  and the signatory  party or parties  other than  Operator,  sometimes  hereinafter
 referred to individually herein as
&#147;Non-Operator&#148;, and collectively as &#147;Non-Operators&#148;. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<A NAME=A014></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>WITNESSETH: </FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,  the parties to this  agreement  are owners of oil and gas leases and/or oil and gas interests in
 the land identified in Exhibit
&#147;A&#148;, and the parties hereto have reached an agreement to explore and develop
these leases and/or oil and gas interests for the production of oil and gas to the extent and as hereinafter provided,</FONT></P>






<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, it is agreed as follows: </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A015></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE I. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A016></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DEFINITIONS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
used in this agreement, the following words and terms shall have the meanings here
ascribed to them: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          The
term &#147;oil and gas&#148; shall mean oil, gas, casinghead gas, gas
          condensate, and all other liquid or gaseous hydrocarbons and other marketable
substances produced therewith, unless an intent to limit the inclusiveness of this term
is specifically stated.  </FONT>
</TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               The terms &#147;oil and gas lease&#148;, &#147;lease&#148; and
               &#147;leasehold&#148; shall mean the oil and gas leases covering tracts of land
               lying within the Contract Area which are owned by the parties to this agreement. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               The term &#147;oil and gas interests&#148; shall mean unleased fee and mineral
               interests in tracts of land lying within the Contract Area which are owned by
               parties to this agreement. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Default" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               The term &#147;Contract Area&#148; shall mean all of the lands, oil and gas
               leasehold interests and oil and gas interests intended to be developed and
               operated for oil and gas purposes under this agreement. Such lands, oil and gas
               leasehold interests and oil and gas interests are described in Exhibit
               &#147;A&#148;. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               The term &#147;drilling unit&#148; shall mean the area fixed for the drilling of
               one well by order or rule of any state or federal body having authority. If a
               drilling unit is not fixed by any such rule or order, a drilling unit shall be
               the drilling unit as establish-ed by the pattern of drilling in the Contract
               Area or as fixed by express agreement of the Drilling Parties. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;F.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               The term &#147;drillsite&#148; shall mean the oil and gas lease or interest on
               which a proposed well is to be located. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;G.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               The terms &#147;Drilling Party&#148; and &#147;Consenting Party&#148; shall mean
               a party who agrees to join in and pay its share of the cost of any operation
               conducted under the provisions of this agreement. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;H.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               The terms &#147;Non-Drilling Party&#148; and &#147;Non-Consenting Party&#148;
               shall mean a party who elects not to participate in a proposed operation. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
the context otherwise clearly indicates, words used in the singular include the plural,
the plural includes the singular, and the neuter gender includes the masculine and the
feminine.  </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A017></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE II. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A018></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBITS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following exhibits, as indicated below and attached hereto, are incorporated in and made a
part hereof: </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|X|
A. Exhibit &#147;A&#148;, shall include the following information: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 2-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          Identification
of lands subject to this agreement,  </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 2-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          Restrictions,
if any, as to depths, formations, or substances,  </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 2-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          Percentages
or fractional interests of parties to this agreement,  </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 2-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          Oil
and gas leases and/or oil and gas interests subject to this agreement,  </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 2-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          Addresses
of parties for notice purposes.  </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|_|
 B. Exhibit "B", Form of Lease. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|X|
 C. Exhibit "C", Accounting Procedure. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|X|
D. Exhibit &#147;D&#148;, Insurance. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|X|
 E. Exhibit "E", Gas Balancing Agreement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|X| F.
Exhibit &#147;F&#148;, Non-Discrimination and Certification of Non-Segregated Facilities. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|X|
 G. Exhibit "G", Tax Partnership.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
any provision of any exhibit, except Exhibits &#147;E&#148; and &#147;G&#148;, is
inconsistent with any provision contained in the body of this agreement, the provisions
in the body of this agreement shall prevail.  </font></TD>
</TR>
</TABLE>
<BR>



<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> - 1 -</FONT> </P><BR><BR>




<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L.&nbsp;&nbsp;&nbsp;&nbsp;
          FORM 610 &#151; MODEL FORM OPERATING AGREEMENT &#151; 1982 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A019></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE III. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A020></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>INTERESTS OF PARTIES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A021></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.
Oil and Gas Interests:</b></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any party owns an oil and gas interest in the Contract  Area,  that  interest  shall be treated for all
purposes of this agreement and during the term hereof as if it were covered by the form of oil and
gas lease attached hereto as Exhibit &#147;B&#148;, and the owner thereof shall be deemed
to own both the royalty interest reserved in such lease and the interest of the lessee
thereunder. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;<B>B.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B>Interests of Parties in Costs and Production:</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
changed by other provisions, all costs and liabilities incurred in operations under this
agreement shall be borne and paid, and all equipment and materials acquired in operations
on the Contract Area shall be owned, by the parties as their interests are set forth in
Exhibit &#147;A&#148;. In the same manner, the parties shall also own all production of
oil and gas from the Contract Area subject to the payment of royalties to the extent of
one-eighth (1/8) which shall be borne as hereinafter set forth. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regardless
of which party has contributed the lease(s) and/or oil and gas interest(s) hereto on which
royalty is due and payable, each party entitled to receive a share of production of oil
and gas from the Contract Area shall bear and shall pay or deliver, or cause to be paid or
delivered, to the extent of its interest in such production, the royalty amount stipulated
hereinabove and shall hold the other parties free from any liability therefor. No party
shall ever be responsible, however, on a price basis higher than the price received by
such party, to any other party&#146;s lessor or royalty owner, and if any such other
party&#146;s lessor or royalty owner should demand and receive settlement on a higher
price basis, the party contributing the affected lease shall bear the additional royalty
burden attributable to such higher price. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nothing
contained in this Article III.B.  shall be deemed an assignment or  cross-assignment  of
interests  covered hereby. </FONT></TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Workstation" -->
<A NAME=A022></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.
Excess Royalties, Overriding Royalties and Other Payments:</b></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
changed by other provisions, if the interest of any party in any lease covered hereby is
subject to any royalty, overriding royalty, production payment or other burden on
production in excess of the amount stipulated in Article III.B., such party so burdened
shall assume and alone bear all such excess obligations and shall indemnify and hold the
other parties hereto harmless from any and all claims and demands for payment asserted by
owners of such excess burden. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR"  -->
<A NAME=A023></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.
Subsequently Created Interests:</b></FONT></P>



<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;<U>after the date hereof</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
any party should / create an overriding royalty, production payment or other burden
payable out of production attributable to its working interest hereunder, (any such
interest being hereinafter referred to as &#147;subsequently created interest&#148;
irrespective of the timing of its creation and the party out of whose working interest the
subsequently created interest is derived being hereinafter referred to as &#147;burdened
party&#148;), and: </FONT>
</TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 2-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the burdened party is required under this agreement to assign or relinquish to any other
party, or parties, all or a portion of its working interest and/or the production
attributable thereto, said other party, or parties, shall receive said assignment and/or
production free and clear of said subsequently created interest and the burdened party
shall indemnify and save said other party, or parties, harmless from any and all claims
and demands for payment asserted by owners of the subsequently created interest; and,  </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 2-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          If
the burdened party fails to pay, when due, its share of expenses chargeable
          hereunder, all provisions of Article VII.B. shall be enforceable against the
subsequently created interest in the same manner as they are enforceable against the
working interest of the burdened party. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A024></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE IV. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A025></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TITLES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A026></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.
Title Examination:</b></FONT></P>

<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title  examination  shall be made on the  drill site of any proposed well prior to  commencement  of drilling
 operations or, if<BR>
&nbsp;&nbsp;<U>majority of</U><BR>
 the / Drilling Parties so request,  title  examination shall be made on the leases and/or oil and gas interests
included,
or planned to be includ-ed, in the drilling unit around such well. The opinion will
include the ownership of the working interest, minerals, royalty, overriding royalty and
production payments under the applicable leases. At the time a well is proposed, each
party contributing leases and/or oil and gas interests to the drillsite, or to be included
in such drilling unit, shall furnish to Operator all abstracts (including federal lease
status reports), title opinions, title papers and curative material in its possession free
of charge. All such information not in the possession of or made available to Operator by
the parties, but necessary for the examination of the title, shall be obtained by
Operator. Operator shall cause title to be examined by attorneys on its staff or by
outside attorneys. Copies of all title opinions shall be furnished to each party hereto.
The cost incurred by Operator in this title program shall be borne as follows: </FONT></p>






<!-- MARKER FORMAT-SHEET="Para Flush Lv 2-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
|_| <U>Option No. 1</U>:  Costs  incurred  by  Operator  in  procuring  abstracts  and title
 examination  (including preliminary, supplemental, shut-in gas royalty opinions and
division order title opinions) shall be a part of the administrative overhead as provided
in Exhibit &#147;C&#148;, and shall not be a direct charge, whether performed by Operator&#146;s
staff attorneys or by outside attorneys.  </FONT></TD>
</TR>
</TABLE>
<BR>



<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> - 2 -</FONT> </P><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L.&nbsp;&nbsp;&nbsp;&nbsp;
          FORM 610 &#151; MODEL FORM OPERATING AGREEMENT &#151; 1982 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A027></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE IV </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Workstation" -->
<A NAME=A028></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>continued </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 2-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
|X|
<U>Option No. 2:</U> Costs incurred by Operator in procuring abstracts and fees paid
outside attorneys for title examination (including preliminary, supplemental, shut-in gas
royalty opinions and division order title opinions) shall be borne by the Drilling Parties
in the proportion that the interest of each Drilling Party bears to the total interest of
all Drilling Parties as such interests appear in Ex-hibit &#147;A&#148;. Operator shall
make no charge for services rendered by its staff attorneys or other personnel in the
performance of the above functions. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 2-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each party shall be  responsible  for  securing  curative  matter and  pooling  amendments  or  agreements required
in connection with leases or oil and gas interests contributed by such party. Operator
shall be responsible for the preparation and recording of pooling designations or
declarations as well as the conduct of hearings before governmental agencies for the
securing of spacing or pooling orders. This
shall not prevent any party from appearing on its own behalf at any such hearing.</FONT></TD>
</TR>
</TABLE>
<BR>





<!-- MARKER FORMAT-SHEET="Para Flush Lv 2-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
well shall be drilled on the Contract Area until after (1) the title to the drillsite or
drilling unit has
been examined as above provided, and (2) the title has been approved by the examining
attorney or title has been accepted by all of the parties who are to par-ticipate in the
drilling of the well. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR"  -->
<A NAME=A029></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.
Loss of Title:</b></FONT></P>



<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 2- TNR"  -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=10%></TD>
               <TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>of title</U><BR>&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <U>Other Losses:</U> All losses / incurred, , shall be joint losses and shall be
               borne by all parties in proportion to their interests. There shall be no
               readjustment of interests in the remaining portion of the Contract Area. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>





<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 3 - </FONT> </P><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L.&nbsp;&nbsp;&nbsp;&nbsp;
          FORM 610 &#151; MODEL FORM OPERATING AGREEMENT &#151; 1982 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A030></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE V. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A031></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OPERATOR </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A032></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.
Designation and Responsibilities of Operator:</b></FONT></P>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>PARTY</U> shall be the
Operator of the Contract Area, and shall conduct and direct and have full control of all operations on the Contract
Area as permitted and required by, and within the limits of this agreement. It shall
conduct all such operations in a good and workmanlike manner, but it shall have no
liability as Operator to the other parties for losses sustained or liabilities incurred,
except such as may result from gross negligence or willful misconduct. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;<B>B.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B>Resignation or Removal of Operator and Selection of Successor:</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Default" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <U>Resignation or Removal of Operator:</U> Operator may resign at any time by
               giving written notice thereof to Non-Operators.  If Operator  terminates its legal existence,  no longer owns an interest  hereunder in the Contract Area, or is
no longer capable of serving as Operator, Operator shall be deemed to have resigned without
any action by Non-Operators, except the selection of a successor. Operator may be removed
if it fails or refuses to carry out its duties hereunder, or becomes insolvent, bankrupt
or is placed in receivership, by the affirmative vote of two (2) or more Non-Operators
owning a majority interest based on ownership as shown on Exhibit &#147;A&#148; remaining
after excluding the voting interest of Operator. Such resignation or removal shall not
become effective until 7:00 o&#146;clock A.M. on the first day of the calendar month
following the expiration of ninety (90) days after the giving of notice of resignation by
Operator or action by the Non-Operators to remove Operator, unless a successor Operator
has been selected and assumes the duties of Operator at an earlier date. Operator, after
effective date of resignation or removal, shall be bound by the terms hereof as a
Non-Operator. A change of a cor-porate name or structure of Operator or transfer of
Operator&#146;s interest to any single subsidiary, parent or successor corporation shall
not be the basis for removal of Operator.</FONT></TD>
               </TR>
               </TABLE>
               <BR>




<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Selection
of Successor Operator:</U> Upon the resignation or removal of           Operator, a
successor Operator shall be selected by the parties. The successor Operator shall be
selected from the parties owning an interest in the Contract Area at the time such
successor Operator is selected. The successor Operator shall be selected by the
affirmative vote of two (2) or more parties owning a majority interest based on ownership
as shown on Exhibit &#147;A&#148;; provided, however, if an Operator which has been
removed fails to vote or votes only to succeed itself, the successor Operator shall be
selected by the affirmative vote of two (2) or more parties owning a majority interest
based on ownership as shown on Exhibit &#147;A&#148; remaining after excluding the voting
interest of the Operator that was removed. </FONT></P></TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR"  -->
<A NAME=A033></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.
Employees:</b></FONT></P>



<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;<U>or contractors</U><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
number of employees used / by Operator in conducting operations hereunder, their
selection, and the hours of labor and the compensation  for services  performed  shall be determined by Operator,  and all
<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>or
contractors</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>or contractors</U><BR> such employees / shall be the  employees / of Operator.</FONT>
</TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A036></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.
Drilling Contracts:</b></FONT></P>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All wells  drilled on the  Contract  Area shall be drilled on a  competitive  contract  basis at the usual
 rates prevailing in the area. If it so  desires,  Operator may employ its own tools and  equipment in the drilling of wells,  but its charges  therefor
 shall not exceed the prevailing rates
in the area and the rate of such charges shall be agreed upon by the parties in writing
before drilling operations are commenced, and such work shall be performed by Operator  under the same terms and  conditions  as are  customary  and usual in
 the area in contracts of in-dependent
contractors who are doing work of a similar nature.</FONT></TD>
</TR>
</TABLE>
<BR>




<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A037></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE VI. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A038></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DRILLING AND
DEVELOPMENT </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A039></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.
Initial Well:</b></FONT></P>



<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On or before
the ____________day of __________________ , (year)___________ , Operator shall commence the drilling of a well foroil
and gas at the following location: </FONT></P>



<p><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
and
shall thereafter continue the drilling of the well with due diligence to<BR> <U>a depth
sufficient to test the Barnett Shale Formation</U> </FONT></p>




<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>unless granite or other practically
impenetrable substance or condition in the hole, which renders furtherdrilling
impractical, is en- countered at a lesser depth, or unless all parties agree to complete
or abandon the well at a lesser depth. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operator
shall make reasonable tests of all formations encountered during drilling which give
indication of
containing oil and gas in quantities sufficient to test, unless this agreement shall be
limited in its application to a specific formation or formations, in which event Operator
shall be required to test only the formation or formations to which this agreement may
apply.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR"  -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 </FONT></TD>
</TR>
</TABLE>
<BR>



<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 4 - </FONT> </P><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L.&nbsp;&nbsp;&nbsp;&nbsp;
          FORM 610 &#151; MODEL FORM OPERATING AGREEMENT &#151; 1982 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A040></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE VI </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Workstation" -->
<A NAME=A041></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>continued </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If,
in Operator&#146;s judgment, the well will not produce oil or gas in paying quantities,
and it wishes to plug and abandon the well as a dry hole, the provisions of Article
VI.E.1. shall thereafter apply. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Workstation" -->
<A NAME=A042></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.
Subsequent Operations:</b></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Default" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <U>Proposed Operations:</U> Should any party hereto desire to drill any well on
               the Contract Area<BR> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>on the contract area</U><BR>other than the well
provided for in Article VI.A., or to rework, deepen or plug back a * dry hole drilled / or<BR>&nbsp;&nbsp;&nbsp;&nbsp;<U>on the contract area</U><BR>
a well / and not then producing in paying quantities, the party desiring to drill, rework, deepen or
plug back such a well shall give the other parties written notice of the proposed
operation, specifying the work to be performed, the location, proposed depth, objective
forma-tion and the estimated cost of the operation. The parties receiving such a notice
shall have thirty (30) days after receipt of the notice within which to notify the party
wishing to do the work whether they elect to participate in the cost of the proposed
operation. If a drill-ing rig is on location, notice of a proposal to rework, plug back or
drill deeper may be given by telephone and the response period shall be limited to
forty-eight (48) hours, exclusive of Saturday, Sunday, and legal holidays. Failure of a
party receiving such notice to reply within the period above fixed shall constitute an
election by that party not to participate in the cost of the proposed operation. Any
notice or response given by telephone shall be promptly confirmed in writing. </FONT></TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>*
well producing in paying quantities or</U> </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
all parties elect to participate in such a proposed operation, Operator shall, within
ninety (90) days after
expiration of the notice period of thirty (30) days (or as promptly as possible after the
expiration of the forty-eight (48) hour period when a drilling rig is on loca-tion, as the
case may be), actually commence the proposed operation and complete it with due diligence
at the risk and expense of all par-ties hereto; provided, however, said commencement date
may be extended upon written notice of same by Operator to the other parties, for a period
of up to thirty (30) additional days if, in the sole opinion of Operator, such additional
time is reasonably necessary to obtain permits from governmental authorities, surface
rights (including rights-of-way) or appropriate drilling equipment, or to complete title
ex- amination or curative matter required for title approval or acceptance.
Notwithstanding the force majeure provisions of Article XI, if the actual operation has
not been commenced within the time provided (including any extension thereof as
specifically permitted herein) and if any party hereto still desires to conduct said
operation, written notice proposing same must be resubmitted to the other parties in
accor-dance with the provisions hereof as if no prior proposal had been made. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Operations
by Less than All Parties:</U> If any party receiving such notice as provided in
Article VI.B.1. or VII.D.1. (Option No. 2) elects not to participate in the proposed
operation, then, in order to be entitled to the benefits of this
Article, the party or parties giving the notice and such other
parties as shall elect to participate in the operation shall, within
ninety (90) days after the expiration of the notice period of thirty
(30) days (or as promptly as possible after the expiration of the
forty-eight (48) hour period when a drilling rig is on location, as
the case may be) actually commence the proposed operation and
complete it with due diligence. Operator shall perform all work for
the account of the Consenting Parties; provided, however, if no
drilling rig or other equipment is on location, and if Operator is a
Non-Consenting Party, the Consenting Parties shall either: (a)
request Operator to perform the work required by such proposed
opera-tion for the account of the Consenting Parties, or (b)
designate one (1) of the Consenting Parties as Operator to perform such
work. Con-senting Parties, when conducting operations on the Contract
Area pursuant to this Article VI.B.2., shall comply with all terms
and con-ditions of this agreement. </FONT></P></TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR"  -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
less than all parties approve any proposed operation, the proposing party, immediately
after the<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>all</U><BR> expiration of the applicable / notice  period,  shall advise / Parties of the total  interest of the parties
approving  such  operation and its
recommendation as to whether the Consenting Parties should proceed with the operation as
proposed. Each Consenting Party, within forty-eight (48) hours (exclusive of Saturday,
Sunday and legal holidays) after receipt of such notice, shall advise the proposing party
of its desire to (a) limit par-ticipation to such party&#146;s interest as shown on
Exhibit &#147;A&#148; or (b) carry its proportionate part of Non-Consenting
Parties&#146; interests, / failure to advise the proposing party shall be deemed an
election under (a). In the event a drilling rig is on location, the time permitted for<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>exclusive</U><BR>
such a response shall not exceed a total of forty-eight (48) hours / (of Saturday, Sunday and legal holidays).
The proposing party, at its election, may withdraw such proposal if there is
insufficient participation and shall promptly notify all parties of such
decision.</FONT></TD>
</TR>
</TABLE>
<BR>






<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The entire cost and risk of conducting  such  operations  shall be borne by the Consenting  Parties in the proportions
they have elected to bear same under the terms of the preceding paragraph. Consenting
Parties shall keep the leasehold estates involved in such operations free and clear of all
liens and encumbrances of every kind created by or arising from the operations of the
Consenting Parties. </FONT></TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If such an  operation  results  in a dry hole,  the  Consenting  Parties  shall plug and
abandon  the well and restore the surface location at their sole cost, risk and expense. If any well drilled, reworked,
deepened or plugged back under the provisions of this Article results in a pro-ducer of
oil and/or gas in paying quantities, the Consenting Parties shall complete and equip the
well to produce at their sole cost and risk, <U>* or (c) carry its proportionate part
(determined as provided in (b)) of Non-Consenting Parties&#146; interests together with
all or a portion of its proportionate part of any Non-Consenting Parties&#146; interests
that any Consenting Party did not elect to take. Any interests of
Non-Consenting Parties that is not carried by a Consenting Party shall be deemed to be
carried by the Party proposing the operation if such party does not withdraw its proposal.</U> </FONT></TD>
</TR>
</TABLE>
<BR>




<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 5 - </FONT> </P><BR><BR>






<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
and the well shall then be turned  over to  Operator  and shall be  operated  by it at the  expense and for the account
of the Consenting Par-ties. Upon commencement of operations for the drilling, reworking,
deepening or plugging back of any such well by Consenting Parties in accordance with the
provisions of this Article, each Non-Consenting Party shall be deemed to have relinquished
to Consenting Parties, and the Consenting Parties shall own and be entitled to receive, in
proportion to their respective interests, all of such Non-Consenting Party&#146;s interest
in the well and share of production therefrom until the proceeds of the sale of such
share, calculated at the well, or market
value thereof if such share is not sold,<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>windfall profit taxes,</U><BR>
(after deducting /, royalty, / overriding royalty
and other in- terests not excepted by Article III.D. payable out of or measured by the
production from such well accruing with respect to such interest until it reverts) shall
equal the total of the following: <BR>
<U>* applicable advalorem taxes, production taxes, severance taxes, excise taxes, and gathering
fees,</U> </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               200% of each such Non-Consenting Party&#146;s share of the cost of any newly
               acquired surface equipment beyond the wellhead connections (including, but not
               limited to, stock tanks, separators, treaters, pumping equipment and piping),
               plus 100% of each such Non-Consenting Party&#146;s share of the cost of
               operation of the well commencing with first production and continuing until each
               such Non- Consenting Party&#146;s relinquished interest shall revert to it under
               other provisions of this Article, it being agreed that each Non- Consenting
               Party&#146;s share of such costs and equipment will be that interest which would
               have been chargeable to such Non-Consenting Party had it participated in the
               well from the beginning of the operations; and </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Default" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <U> 400 </U> % of that portion of the costs and expenses of drilling, reworking,
               deepening, plugging back, testing and completing, after deducting any cash contributions received under Article VIII.C., and <U>400</U> %
 of that portion of the cost of newly acquired equip- ment in the well (to and including
the wellhead connections), which would have been chargeable to such Non-Consenting Party
if it had participated therein. </FONT>
</TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An election not to  participate in the drilling or the deepening of a well shall be deemed an election not to
participate in any re-working or plugging back operation proposed in such a well, or
portion thereof, to which the initial Non-Consent election applied that is conducted at
any time prior to full recovery by the Consenting Parties of the Non-Consenting
Party&#146;s recoupment account. Any such reworking or plugging back operation conducted
during the recoupment period shall be deemed part of the cost of operation of said well
and there shall be added to the sums to be recouped by the Consenting Parties one hundred
percent (100%) of that portion of the costs of the reworking or plugging back operation
which would have been chargeable to such Non-Consenting Party had it participated therein.
If such a reworking or plugging back operation is proposed during such recoupment period,
the provisions of this Article VI.B. shall be ap-plicable as between said Consenting
Parties in said well. </FONT></TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the period of time  Consenting  Parties are  entitled to receive  Non-Consenting  Party's  share of
 production, or the  proceeds  therefrom,  Consenting  Parties shall be responsible  for the payment of all<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>windfall profit taxes,</U> <BR>
 production, severance,
excise, / gathering and other taxes, and all royalty, overriding royalty and other burdens
applicable to Non-Consenting Party&#146;s share of production not excepted by Ar-ticle
III.D. </FONT></TD>
</TR>
</TABLE>
<BR>




<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR"  -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the case of any reworking,  plugging back or deeper drilling operation,
the Consenting Parties shall be permitted to use, free of cost, all casing, tubing and other equipment in the well, but the
ownership of all such equipment shall remain unchanged; and upon abandonment of a well
after such reworking, plugging back or deeper drilling, the Consenting Parties shall
account for all such equip-ment to the owners thereof, with each party receiving its
proportionate part in kind or in value, less cost of salvage, and the proportionate share
of plugging and abandonment costs each party would have paid if the well had been plugged
at a time each party last participated in an operation on the well. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>successful</U><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within
sixty (60) days after the / completion of any operation under this Article, the party
conducting the
operations for the Consenting Parties shall furnish each Non-Consenting Party with an
inventory of the equipment in and connected to the well, and an itemized statement of the
cost of drilling, deepening, plugging back, testing, completing, and equipping the well
for production; or, at its option, the operating party, in lieu of an itemized statement
of such costs of operation, may submit a detailed statement of monthly bill-ings. Each
month thereafter, during the time the Consenting Parties are being reimbursed as provided
above, the party conducting the operations for the Consenting Parties shall furnish the
Non-Consenting Parties with an itemized statement of all costs and liabilities in-curred
in the operation of the well, together with a statement of the quantity of oil and gas
produced from it and the amount of proceeds realized from the sale of the well&#146;s
working interest production during the preceding month. In determining the quantity of oil
and gas produced during any month, Consenting Parties shall use industry accepted methods
such as, but not limited to, metering or periodic well tests. Any amount realized from the
sale or other disposition of equipment newly acquired in connection with any such
operation which would have been owned by a Non-Consenting Party had it participated
therein shall be credited against the total unreturned costs of the work done and of the
equipment purchased in determining when the interest of such Non-Consenting Party shall
revert to it as above provided; and if there is a credit balance, it shall be paid to such
Non-Consenting Party. </FONT></TD>
</TR>
</TABLE>
<BR>



<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 6 -</FONT> </P><BR><BR>





<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If and when the  Consenting  Parties  recover  from a  Non-Consenting  Party's  relinquished  interest the amounts
provided for above, the relinquished interests of such Non-Consenting Party shall
automatically revert to it, and, from and after such reversion, such Non-Consenting Party
shall own the same interest in such well, the material and equipment in or pertaining
thereto, and the production therefrom as such Non-Consenting Party would have been
entitled to had it participated in the drilling, reworking, deepening or plugging back of
said well. Thereafter, such Non-Consenting Party shall be charged with and shall pay its
proportionate part of the further costs of the operation of said well in accordance with
the terms of this agreement and the Accounting Procedure attached hereto. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding  the provisions of this Article  VI.B.2.,  it
is agreed that without the mutual consent of all
parties, no wells shall be completed in or produced from a source of supply from which a
well located elsewhere on the Contract Area is producing, unless such well conforms to the
then-existing well spacing pattern for such source of supply. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The  provisions of this Article shall have no  application  whatsoever to the drilling of the initial well described
in Article VI.A. except (a) as to Article VII.D.1. (Option No. 2), if selected, or (b) as
to the reworking, deepening and plugging back of such initial well after if has been
drilled to the depth specified in Article VI.A. if it shall thereafter prove to be a dry
hole or, if initially completed for pro-duction, ceases to produce in paying quantities. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <U>Stand-By Time:</U> When a well which has been drilled or deepened has reached
               its authorized depth and all tests have been completed, and the results thereof
               furnished to the parties, stand-by costs incurred pending response to a
               party&#146;s notice proposing a reworking, deepening, plugging back or
               completing operation in such a well shall be charged and borne as part of the
               drilling or deepen-ing operation just completed. Stand-by costs subsequent to
               all parties responding, or expiration of the response time permitted, whichever
               first occurs, and prior to agreement as to the participating interests of all
               Consenting Parties pursuant to the terms of the second gram-matical paragraph of
               Article VI.B.2., shall be charged to and borne as part of the proposed
               operation, but if the proposal is subsequently withdrawn because of insufficient
               participation, such stand-by costs shall be allocated between the Consenting
               Parties in the proportion each Consenting Party&#146;s interest as shown on
               Exhibit &#147;A&#148; bears to the total interest as shown on Exhibit
               &#147;A&#148; of all Consenting Par-ties. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Sidetracking:</U> Except as hereinafter provided, those provisions of this
agreement applicable to a &#147;deepening&#148; operation shall also be applicable to any proposal to directionally control and intentionally
 <BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>except the first horizontal borehole of the first well</U><BR>
 deviate a well from vertical / so
as to change the bottom hole location (herein call &#147;sidetracking&#148;), unless done
to straighten the hole or to drill around junk in the hole or because of other mechanical
difficulties. Any party having the right to participate in a proposed sidetracking
operation that does not own an interest in the affected well bore at the time of the
notice shall, upon electing to participate, tender to the well bore owners its
proportionate share (equal to its interest in the sidetracking operation) of the value of
that portion of the existing well bore to be utilized as follows: </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               If the proposal is for sidetracking an existing dry hole, reimbursement shall be
               on the basis of the actual costs incurred in the initial drilling of the well
               down to the depth at which the sidetracking operation is initiated. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Default" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               If the proposal is for sidetracking a well which has previously produced,
               reimbursement shall &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>remaining in the hole</U><BR>be on the basis of the well&#146;s
 salvable  materials  and  equipment / down to the depth at which the<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*<BR>  sidetracking  operation is  initiated,  /
 determined in accordance with the provisions  of Exhibit  "C",  less the  estimated  cost of  salvaging  and the  estimated  cost of plugging and
 abandoning.<BR><U>* and salvable surface equipment used in connection with such well</U></FONT></P></TD>
               </TR>
               </TABLE>
               <BR>








<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that notice for a  sidetracking  operation  is given while the drilling rig to be utilized is on
location, the response period shall be limited to forty-eight (48) hours, exclusive of
Saturday, Sunday and legal holidays; provided, however, any party may request and receive
up to eight (8) additional days after expiration of the forty-eight (48) hours within
which to respond by paying for all stand-by time incurred during such extended response
period. If more than one party elects to take such additional time to respond to the
notice, stand by costs shall be allocated between the parties taking additional time to
respond on a day-to-day basis in the proportion each electing par-ty&#146;s interest as
shown on Exhibit &#147;A&#148; bears to the total interest as shown on Exhibit
&#147;A&#148; of all the electing parties. In all other in-stances the response period to
a proposal for sidetracking shall be limited to thirty (30) days. The provisions of this
subparagraph VI.B.4 will not apply to wells drilled as horizontal wellbores. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A043></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.
TAKING PRODUCTION IN KIND:</b></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR"  -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each  party  shall  take in kind or  separately  dispose
of its proportionate share of all oil and gas produced
from the Contract Area, exclusive of production which may be used in development and
producing operations and in preparing and treating oil and gas for marketing purposes and
production unavoidably lost. Any extra expenditure incurred in the taking in kind or
separate disposition by any party of its proportionate share of the production shall be
borne by such party. Any party taking its share of production in kind shall be </FONT></TD>
</TR>
</TABLE>
<BR>



<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 7 - </FONT> </P><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L.&nbsp;&nbsp;&nbsp;&nbsp;
          FORM 610 &#151; MODEL FORM OPERATING AGREEMENT &#151; 1982 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A044></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE VI </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Workstation" -->
<A NAME=A045></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>continued </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;required
to pay for only its proportionate share of such part of Operator&#146;s surface facilities
which it uses. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each party shall  execute such  division  orders and  contracts  as may be  necessary  for the sale of its interest
in production from the Contract Area, and, except as provided in Article VII.B., shall be
entitled to receive payment directly from the purchaser thereof for its share of all
production. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR"  -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the  event  any party  shall  fail to make the  arrangements  necessary  to take in kind or  separately dispose
of its proportionate share of the oil produced from the Contract Area, Operator shall have
the right, subject to the revocation at will by the party owning it, but not the
obligation, to purchase such oil or sell it<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;<U>reasonably obtainable under the circumstances</U><BR> to others at any time and from time to time,
for the account of the non-taking party at the best price / in
the area for such production. Any such purchase or sale by Operator shall be subject always to the right of the
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>upon thirty days written notice</U><BR>
owner of the production to exercise / its right to take in kind, or separately dispose of, its
share of all oil not previously delivered to a purchaser. Any purchase or sale by Operator
of any other party&#146;s share of oil shall be only for such reasonable periods of time
as are consistent with the minimum needs of the industry under the particular
circumstances, but in no event for a period in excess of one (1) year. </FONT></TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the  event one or more  parties'  separate  disposition  of its  share of the gas  causes  split-stream deliveries
to separate pipelines and/or deliveries which on a day-to-day basis for any reason are not
exactly equal to a party&#146;s respective proportionate share of total gas sales to be
allocated to it, the balancing or accounting between the respective accounts of the
parties shall be in accordance with any gas balancing agreement between the parties
hereto, whether such an agreement is attached as Exhibit &#147;E&#148;, or is a separate
agreement. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Workstation" -->
<A NAME=A046></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.
Access to Contract Area and Information:</b></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
party shall have access to the Contract Area at all reasonable times, at its sole cost
and risk to inspect or observe operations, and shall have access at reasonable times to
information pertaining to the development or operation thereof, including Operator&#146;s
books and records relating thereto. Operator, upon request, shall furnish each of the
other parties with copies of all forms or reports filed with governmental agencies, daily
drilling reports, well logs, tank tables, daily gauge and run tickets and reports of
stock on hand at the first of each month, and shall make available samples of any cores
or cuttings taken from any well drilled on the Contract Area. The cost of gathering and
furnishing information to Non-Operator, other than that specified above, shall be charged
to the Non-Operator that re-quests the Information. </FONT></TD></TR></TABLE><BR>


<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Workstation" -->
<A NAME=A047></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.
Abandonment of Wells:</b></FONT></P>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Abandonment of Dry Holes:</U> Except for any well drilled or deepened
          pursuant to Article VI.B.2., any well
which has been drilled or deepened under the terms of this agreement and is proposed to be
completed as a dry hole shall not be plugged and abandoned without the consent of all
parties. Should Operator, after diligent effort, be unable to contact any party, or should
any party fail to reply within forty-eight (48) hours (exclusive of Saturday, Sunday and
legal holidays) after receipt of notice of the proposal to plug and abandon such well,
such party shall be deemed to have consented to the proposed abandonment. All such wells
shall be plugged and abandoned in accordance with applicable regulations and at the cost,
risk and expense of the parties who participated in the cost of drilling or deepening such
well. Any party who objects to plugging and abandoning such well shall take over the well
and conduct further operations in search of oil and/or gas subject to the provisions of
Article VI.B. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <U>Abandonment of Wells that have Produced:</U> Except for any well in which a
               Non-Consent operation has been conducted hereunder for which the Consenting
               Parties have not been fully reimbursed as herein provided, any well which has
               been completed as a producer shall not be plugged and abandoned without the
               consent of all parties. If all parties consent to such abandonment, the well
               shall be plugged and abandoned in accordance with applicable regulations and at
               the cost, risk and expense of all the parties hereto. If, within thirty (30)
               days after receipt of notice of the proposed abandonment of any well, all
               parties do not agree to the abandonment of such well, those wishing to continue
               its operation from the interval(s) of the formation(s) then open to production
               shall tender to each of the other parties its proportionate share of the value
               of the well&#146;s salvable material and equipment, determined ** / ***, less
               the estimated cost of salvaging and the estimated cost of plugging and
               abandoning. / Each abandoning party shall assign the non-abandoning parties,
               without warranty, express or implied, as to title or as to quantity, or fitness
               for use of the equipment and material, all of its interest in the well and
               related equipment, together with its interest in the leasehold estate as to, but
               only as to, the in-terval or intervals of the formation or formations then open
               to production. If the interest of the abandoning party is or includes an oil and
               gas interest, such party shall execute and deliver to the non-abandoning party
               or parties an oil and gas lease, limited to the interval or in-tervals of the
               formation or formations then open to production, for a term of one (1) year and
               so long thereafter as oil and/or gas is pro-duced from the interval or intervals
               of the formation or formations covered thereby, such lease to be on the form
               attached as Exhibit </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>**
By a reasonable appraisal of its current fair market value.</U> <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>***
Failure of any party to respond within the said thirty (30) day period shall be deemed
consent to the proposed abandonment.</U> </FONT>

<BR>



<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 8 - </FONT> </P><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L.&nbsp;&nbsp;&nbsp;&nbsp;
          FORM 610 &#151; MODEL FORM OPERATING AGREEMENT &#151; 1982 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A048></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE VI </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Workstation" -->
<A NAME=A049></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>continued </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;required
to pay for only its proportionate share of such part of Operator&#146;s surface facilities
which it uses. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each party shall  execute such  division  orders and  contracts  as may be  necessary  for the sale of its interest
in production from the Contract Area, and, except as provided in Article VII.B., shall be
entitled to receive payment directly from the purchaser thereof for its share of all
production. </FONT></TD>
</TR>
</TABLE>
<BR>

      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the  event  any party  shall  fail to make the  arrangements  necessary  to take in kind or  separately
<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
dispose
of its proportionate share of the oil and gas produced from the Contract Area, Operator
shall have the right, subject to the revocation at will by the party owning it, but not
the obligation, to purchase such oil and gas or sell it to others at any time and from
time to time, for the account of the non-taking party at the best price obtainable in the
area for such production. Any such purchase or sale by Operator shall be subject always to
the right of the owner of the production to exercise at any time its right to take in
kind, or separately dispose of, its share of all oil and gas not previously delivered to a
purchaser. Any purchase or sale by Operator of any other party&#146;s share of oil and gas
shall be only for such reasonable periods of time as are consistent with the minimum needs
of the industry under the particular circumstances, but in no event for a period in excess
of one (1) year. Notwithstanding the foregoing, Operator shall not make a sale, including
one into interstate com-merce, of any other party&#146;s share of gas production without
first giving such other party thirty (30) days notice of such intended sale. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Workstation" -->
<A NAME=A050></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.
Access to Contract Area and Information:</b></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
party shall have access to the Contract Area at all reasonable times, at its sole cost and
risk to inspect
or observe operations, and shall have access at reasonable times to information pertaining
to the development or operation thereof, including Operator&#146;s books and records
relating thereto. Operator, upon request, shall furnish each of the other parties with
copies of all forms or reports filed with governmental agencies, daily drilling reports,
well logs, tank tables, daily gauge and run tickets and reports of stock on hand at the
first of each month, and shall make available samples of any cores or cuttings taken from
any well drilled on the Contract Area. The cost of gathering and furnishing information to
Non-Operator, other than that specified above, shall be charged to the Non-Operator that
re-quests the Information. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Workstation" -->
<A NAME=A051></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.
Abandonment of Wells:</b></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <U>Abandonment of Dry Holes:</U> Except for any well drilled or deepened
               pursuant to Article VI.B.2., any well which has been drilled or deepened under
               the terms of this agreement and is proposed to be completed as a dry hole shall
               not be plugged and abandoned without the consent of all parties. Should
               Operator, after diligent effort, be unable to contact any party, or should any
               party fail to reply within forty-eight (48) hours (exclusive of Saturday, Sunday
               and legal holidays) after receipt of notice of the proposal to plug and abandon
               such well, such party shall be deemed to have consented to the proposed
               abandonment. All such wells shall be plugged and abandoned in accordance with
               applicable regulations and at the cost, risk and expense of the parties who
               participated in the cost of drilling or deepening such well. Any party who
               objects to plugging and abandoning such well shall have the right to take over
               the well and conduct further operations in search of oil and/or gas subject to
               the provisions of Article VI.B. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR"  -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <U>Abandonment of Wells that have Produced:</U> Except for any well in which a
               Non-Consent operation has been conducted hereunder for which the Consenting
               Parties have not been fully reimbursed as herein provided, any well which has
               been completed as a producer shall not be plugged and abandoned without the
               consent of all parties. If all parties consent to such abandonment, the well
               shall be plugged and abandoned in accordance with applicable regulations and at
               the cost, risk and expense of all the parties hereto. If, within thirty (30)
               days after receipt of notice of the proposed abandonment of any well, all
               parties do not agree to the abandonment of such well, those wishing to continue
               its operation from the interval(s) of the formation(s) then open to production
               shall tender to each of the other parties its proportionate share of the value
               of the well&#146;s salvable material and equipment, determined in accordance
               with the provisions of Exhibit &#147;C&#148;, less the estimated cost of
               salvaging and the estimated cost of plugging and abandoning. Each abandoning
               party shall assign the non-abandoning parties, without warranty, express or
               implied, as to title or as to quantity, or fitness for use of the equipment and
               material, all of its interest in the well and related equipment, together with
               its interest in the leasehold estate as to, but only as to, the in-terval or
               intervals of the formation or formations then open to production. If the
               interest of the abandoning party is or includes an oil and gas interest, such
               party shall execute and deliver to the non-abandoning party or parties an oil
               and gas lease, limited to the interval or in-tervals of the formation or
               formations then open to production, for a term of one (1) year and so long
               thereafter as oil and/or gas is pro-duced from the interval or intervals of the
               formation or formations covered thereby, such lease to be on the form attached
               as Exhibit </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>



<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 8 alternate - </FONT> </P><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L.&nbsp;&nbsp;&nbsp;&nbsp;
          FORM 610 &#151; MODEL FORM OPERATING AGREEMENT &#151; 1982 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A052></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE VI </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Workstation" -->
<A NAME=A053></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>continued </FONT></H1>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;B&#148;.
          The assignments or leases so limited shall encompass the &#147;drilling
          unit&#148; upon which the well is located.The
payments by, and the assignments or leases to, the assignees shall be in a ratio based
upon the relationship of their respective percentage of participation in the Contract Area
to the aggregate of the percentages of participation in the Contract Area of all
assignees. There shall be no readjustment of interests in the remaining portion of the
Contract Area. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thereafter, abandoning parties shall have no further responsibility, liability, or
interest in the operation
of or production from the well in the interval or intervals then open other than the
royalties retained in any lease made under the terms of this Article. Upon re-quest,
Operator shall continue to operate the assigned well for the account of the non-abandoning
parties at the rates and charges con-templated by this agreement, plus any additional cost
and charges which may arise as the result of the separate ownership of the assigned well.
Upon proposed abandonment of the producing interval(s) assigned or leased, the assignor or
lessor shall then have the option to repurchase its prior interest in the well (using the
same valuation formula) and participate in further operations therein subject to the
pro-visions hereof. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Abandonment of Non-Consent Operations:</U> The provisions of Article VI.E.1.
          or VI.E.2 above shall be applicable
as between Consenting Parties in the event of the proposed abandonment of any well
excepted from said Articles; provided, however, no well shall be permanently plugged and
abandoned unless and until all parties having the right to conduct further operations
therein have been notified of the proposed abandonment and afforded the opportunity to
elect to take over the well in accordance with the provisions of this Article VI.E. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A054></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE VII. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A055></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXPENDITURES AND
LIABILITY OF PARTIES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A056></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.
Liability of Parties:</b></FONT></P>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The liability of the parties shall be several,  not joint or  collective.  Each party shall be responsible only
for its obligations, and shall be liable only for its proportionate share of the costs of
developing and operating the Contract Area. Accordingly, the liens granted among the
parties in Article VII.B. are given to secure only the debts of each severally. It is not
the intention of the parties to create, nor shall this agreement be construed as creating,
a mining or other partnership or association, or to render the parties liable as partners.
* </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A057></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.
Liens and Payment Defaults:</b></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each  Non-Operator  grants to  Operator a lien upon
its oil and gas  rights in the  Contract  Area,  and a security
interest in its share of oil and/or gas when extracted and its interest in all equipment,
to secure payment of its share of expense, together with interest thereon at the rate
provided in Exhibit &#147;C&#148;. To the extent that Operator has a security interest
under the Uniform Commercial Code of the state, Operator shall be entitled to exercise the
rights and remedies of a secured party under the Code. The bringing of a suit and the
ob-taining of judgment by Operator for the secured indebtedness shall not be deemed an
election of remedies or otherwise affect the lien rights or security interest as security
for the payment thereof. In addition, upon default by any Non-Operator in the payment of
its share of expense, Operator shall have the right, without prejudice to other rights or
remedies, to collect from the purchaser the proceeds from the sale of such
Non-Operator&#146;s share of oil and/or gas until the amount owed by such Non-Operator,
plus interest, has been paid. Each purchaser shall be entitled to rely upon
Operator&#146;s written statement concerning the amount of any default. Operator grants a
like lien and security interest to the Non-Operators to secure payment of Operator&#146;s
proportionate share of expense. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
any party fails or is unable to pay its share of expense within sixty (60) days after
rendition of a statement
therefor by Operator, the non-defaulting parties, including Operator, shall, upon request
by Operator, pay the unpaid amount in the proportion that the interest of each such party
bears to the interest of all such parties. Each party so paying its share of the unpaid
amount shall, to obtain reimbursement thereof, be subrogated to the security rights
described in the foregoing paragraph. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A058></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.
Payments and Accounting:</b></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as herein otherwise specifically provided,
Operator shall promptly pay and discharge expenses incurred
in the development and operation of the Contract Area pursuant to this agreement and shall
charge each of the parties hereto with their respective propor-tionate shares upon the
expense basis provided in Exhibit &#147;C&#148;. Operator shall keep an accurate record of
the joint account hereunder, showing expenses incurred and charges and credits made and
received. </FONT></TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operator,
at its election, shall have the right from time to time to demand and receive from the
other parties
payment in advance of their respective shares of the estimated amount of the expense to be
incurred in operations hereunder during the next succeeding month, which right may be
exercised only by submission to each such party of an itemized statement of such estimated
expense, together with an invoice for its share thereof. Each such statement and invoice
for the payment in advance of estimated expense shall be submitted on or before the 20th
day of the next preceding month. Each party shall pay to Operator its proportionate share
of such estimate within fifteen (15) days after such estimate and invoice is received. If
any party fails to pay its share of said estimate within said time, the amount due shall
bear interest as provided in Exhibit &#147;C&#148; until paid. Proper adjustment shall be
made monthly between advances and actual ex-pense to the end that each party shall bear
and pay its proportionate share of actual expenses incurred, and no more. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Workstation" -->
<A NAME=A059></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.
Limitation of Expenditures:</b></FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Default" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <U>Drill or Deepen:</U> Without the consent of all parties, no well shall be
               drilled or deepened, except any well drilled or deepened pursuant to the provisions of Article  VI.B.2.  of this  agreement.  Consent to the drilling or deepening shall
 include:</FONT></P></TD>
               </TR>
               </TABLE>
               <BR>




<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<U>*It
is not the intention of the parties that this contract is made for or intended for the
benefit of any third person. Nothing herein shall be deemed to create nor shall it create
any fiduciary or trust relationship between
Operator and Non-Operator.</U> </FONT></TD>
</TR>
</TABLE>
<BR>






<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 9 - </FONT> </P><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L.&nbsp;&nbsp;&nbsp;&nbsp;
          FORM 610 &#151; MODEL FORM OPERATING AGREEMENT &#151; 1982 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A061></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE VII </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Default" -->
<A NAME=A062></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>continued </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
|X|  <U>Option  No.  1</U>: All  necessary  expenditures  for the  drilling  or  deepening,
 testing,  completing  and  equipping of the well, including  necessary tankage and/or
surface facilities. </FONT></TD>
</TR>
</TABLE>
<BR>




<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
|_|  <U>Option No. 2</U>: All  necessary  expenditures  for the  drilling or deepening  and testing of the well.  When such
well has reached its authorized depth, and all tests have been completed, and the results
thereof furnished to the parties, Operator shall give immediate notice to the
Non-Operators who have the right to participate in the completion costs. The parties
receiving such notice shall have forty-eight (48) hours (exclusive of Saturday, Sunday and
legal holidays) in which to elect to participate in the setting of casing and the
completion at-tempt. Such election, when made, shall include consent to all necessary
expenditures for the completing and equipping of such well, in-cluding necessary tankage
and/or surface facilities. Failure of any party receiving such notice to reply within the
period above fixed shall constitute an election by that party not to participate in the
cost of the completion attempt. If one or more, but less than all of the parties, elect to
set pipe and to attempt a completion, the provisions of Article VI.B.2. hereof (the phrase
&#147;reworking, deepening or plugging back&#148; as contained in Article VI.B.2. shall be
deemed to include &#147;completing&#148;) shall apply to the operations thereafter
conducted by less than all parties. </FONT></TD>
</TR>
</TABLE>
<BR>




<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Rework or Plug Back:</U> Without the consent of all parties, no well shall be
          reworked or plugged back except
a well reworked or plugged back pursuant to the provisions of Article VI.B.2. of this
agreement. Consent to the reworking or plugging back of a well shall include all necessary
expenditures in conducting such operations and completing and equipping of said well,
including necessary tankage and/or surface facilities. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <U>Other Operations:</U> Without the consent of all parties, Operator shall not
               undertake any single project reasonably estimated to require an expenditure in
               excess of $25,000.00 Dollars ($Twenty-five thousand) except in connection with a
               well, the drilling, reworking, deepening, completing, recompleting, or plugging
               back of which has been previously authorized by or pursuant to this agreement;
               provided, however, that, in case of explosion, fire, flood or other sudden
               emergency, whether of the same or different nature, Operator may take such steps
               and incur such expenses as in its opinion are required to deal with the
               emergency to safeguard life and property but Operator, as promptly as possible,
               shall report the emergency to the other parties. If Operator prepares an
               authority for expenditure (AFE) for its own use, Operator shall furnish any
               Non-Operator so requesting an information copy thereof for any single project
               costing in excess of Twenty-five thousand Dollars ($<U> 25,000.00 </U> ) but
               less than the amount first set forth above in this paragraph. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>


<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A063></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.
Rentals, Shut-in Well Payments and Minimum Royalties:</b></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rentals,  shut-in well payments and minimum
royalties  which may be required under the terms of any lease shall
be paid by the party or parties who subjected such lease to this agreement at its or their
expense. In the event two or more parties own and have con-tributed interests in the same
lease to this agreement, such parties may designate one of such parties to make said
payments for and on behalf of all such parties. Any party may request, and shall be
entitled to receive, proper evidence of all such payments. In the event of failure to make
proper payment of any rental, shut-in well payment or minimum royalty through mistake or
oversight where such pay-ment is required to continue the lease in force, any loss which
results from such non-payment shall be borne in accordance with the pro-visions of Article
IV.B.2. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operator shall notify  Non-Operator of the
anticipated  completion of a shut-in gas well, or the shutting in
or return to production of a producing gas well, at least five (5) days (excluding
Saturday, Sunday and legal holidays), or at the earliest opportunity permitted by
circumstances, prior to taking such action, but assumes no liability for failure to do so.
In the event of failure by Operator to so notify Non-Operator, the loss of any lease
contributed hereto by Non-Operator for failure to make timely payments of any shut-in well
payment shall be borne jointly by the parties hereto under the provisions of Article
IV.B.3. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Workstation" -->
<A NAME=A064></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.
Taxes:</b></FONT></P>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning
with the first calendar year after the effective date hereof, Operator shall render for ad valorem
taxation all property subject to this agreement which by law should be rendered for such
taxes, and it shall pay all such taxes assessed thereon before they become delinquent.
Prior to the rendition date, each Non-Operator shall furnish Operator information as to
burdens (to include, but not be limited to, royalties, overriding royalties and production
payments) on leases and oil and gas interests contributed by such Non-Operator. If the
assessed valuation of any leasehold estate is reduced by reason of its being subject to
outstanding excess royalties, over-riding royalties or production payments, the reduction
in ad valorem taxes resulting therefrom shall inure to the benefit of the owner or owners
of such leasehold estate, and Operator shall adjust the charge to such owner or owners so
as to reflect the benefit of such reduc-tion. If the ad valorem taxes are based in whole
or in part upon separate valuations of each party&#146;s working interest, then
notwithstanding anything to the contrary herein, charges to the joint account shall be
made and paid by the parties hereto in accordance with the tax value generated by each
party&#146;s working interest. Operator shall bill the other parties for their
proportionate shares of all tax payments in the manner provided in Exhibit &#147;C&#148;. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
Operator considers any tax assessment improper, Operator may, at its discretion, protest
within the time and manner prescribed by law, and prosecute the protest to a final
determination, unless all parties agree to abandon the protest prior to final
deter-mination. During the pendency of administrative or judicial proceedings, Operator
may elect to pay, under protest, all such taxes and any interest and penalty. When any
such protested assessment shall have been finally determined, Operator shall pay the tax
for the joint ac-count, together with any interest and penalty accrued, and the total cost
shall then be assessed against the parties, and be paid by them, as provided in Exhibit
&#147;C&#148;. </FONT>
</TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR"  -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each party shall pay or cause to be paid all  production,  severance,  excise,  gathering  and other taxes imposed
upon or with respect to the production or handling of such party&#146;s share of oil
and/or gas produced under the terms of this agreement. </FONT></TD>
</TR>
</TABLE>
<BR>




<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 10 - </FONT> </P><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L.&nbsp;&nbsp;&nbsp;&nbsp;
          FORM 610 &#151; MODEL FORM OPERATING AGREEMENT &#151; 1982 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A065></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE VII </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Workstation" -->
<A NAME=A066></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>continued </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A067></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G.
Insurance:</b></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At all  times  while  operations  are  conducted  hereunder,
Operator  shall  comply  with the  workmen's compensation
law of the state where the operations are being conducted; provided, however, that
Operator may be a self-insurer for liability under said com-pensation laws in which event
the only charge that shall be made to the joint account shall be as provided in Exhibit
&#147;C&#148;. Operator shall also carry or provide insurance for the benefit of the joint
account of the parties as outlined in Exhibit &#147;D&#148;, attached to and made a part
hereof. Operator shall require all contractors engaged in work on or for the Contract Area
to comply with the workmen&#146;s compensation law of the state where the operations are
being conducted and to maintain such other insurance as Operator may require. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event  automobile  public  liability
insurance is  specified in said Exhibit "D", or  subsequently receives
the approval of the parties, no direct charge shall be made by Operator for premiums paid
for such insurance for Operator&#146;s automotive equipment. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A068></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE VIII. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A069></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ACQUISITION,
MAINTENANCE OR TRANSFER OF INTEREST </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Workstation" -->
<A NAME=A070></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.
Surrender of Leases:</b></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
leases covered by this agreement, insofar as they embrace acreage in the Contract Area,
shall not be surrendered in whole or in part unless all parties consent thereto. </FONT>
</TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;However,  should any party desire to surrender
its interest in any lease or in any portion  thereof,  andthe
other parties do not agree or consent thereto, the party desiring to surrender shall
assign, without express or implied warranty of title, all of its interest in such lease,
or portion thereof, and any well, material and equipment which may be located thereon and
any rights in production thereafter secured, to the parties not consenting to such
surrender. If the interest of the assigning party is or includes an oil and gas in-terest,
the assigning party shall execute and deliver to the party or parties not consenting to
such surrender an oil and gas lease covering such oil and gas interest for a term of one
(1) year and so long thereafter as oil and/or gas is produced from the land covered
thereby, such lease to be on the form attached hereto as Exhibit &#147;B&#148;. Upon such
assignment or lease, the assigning party shall be relieved from all obligations thereafter
accruing, but not theretofore accrued, with respect to the interest assigned or leased and
the operation of any well attributable thereto, and the assigning party shall have no
further interest in the assigned or leased premises and its equipment and pro-duction
other than the royalties retained in any lease made under the terms of this Article. The
party assignee or lessee shall pay to the party assignor or lessor the reasonable salvage
value of the latter&#146;s interest in any wells and equipment attributable to the
assigned or leas-ed acreage. The value of all material shall be determined / , less the estimated cost of
 salvaging and the estimated  cost of plugging and  abandoning.  If the  assignment or lease is in favor of more
than one party, the interest shall be shared by such parties in the proportions that the
interest of each bears to the total interest of all such parties. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>*
by a reasonable appraisal of its current Fair Market Value</U> </FONT></P>




<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
assignment, lease or surrender made under this provision shall not reduce or change the
assignor&#146;s, lessor&#146;s
or surrendering party&#146;s interest as it was immediately before the assignment, lease
or surrender in the balance of the Contract Area; and the acreage assigned, leased or
surrendered, and subsequent operations thereon, shall not thereafter be subject to the
terms and provisions of this agreement. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A071></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.
Renewal or Extension of Leases:</b></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any party  secures a renewal of any oil and gas lease  subject  to this  agreement,  all other  parties shall
be notified promptly, and shall have the right for a period of thirty (30) days following
receipt of such notice in which to elect to participate in the ownership of the renewal
lease, insofar as such lease affects lands within the Contract Area, by paying to the
party who acquired it their several proper pro- portionate shares of the acquisition cost
allocated to that part of such lease within the Contract Area, which shall be in
proportion to the interests held at that time by the parties in the Contract Area. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If some, but less than all, of the parties elect to  participate  in the purchase of a renewal  lease,  it shall
be owned by the parties who elect to participate therein, in a ratio based upon the
relationship of their respective percentage of participation in the Contract Area to the
aggregate of the percentages of participation in the Contract Area of all parties
participating in the purchase of such renewal lease. Any
renewal lease in which less than all parties elect to participate shall not be subject to
this agreement.</FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
party who participates in the purchase of a renewal lease shall be given an assignment of
its proportionate interest therein by the acquiring party.</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
provisions of this Article shall apply to renewal leases whether they are for the entire
interest covered by the expiring lease or cover only a portion of its area or an interest therein. Any
renewal lease taken before the expiration of its predecessor lease, or taken or contracted
for within six (6) months after the expiration of the existing lease shall be subject to
this provision; but any lease taken or con-tracted for more than six (6) months after the
expiration of an existing lease shall not be deemed a renewal lease and shall not be
subject to the provisions of this agreement. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
provisions in this Article shall also be applicable to extensions of oil and gas leases.
</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A072></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.
Acreage or Cash Contributions:</b></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR"  -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While this agreement is in force,  if any party
contracts for a contribution of cash towards the drilling of
a well or any other operation on the Contract Area, such contribution shall be paid to the
party who conducted the drilling or other operation and shall be applied by it against the
cost of such drilling or other operation. If the contribution be in the form of acreage,
the party to whom the con-tribution is made shall promptly tender an assignment of the
acreage, without warranty of title, to the Drilling Parties in the proportions </FONT></TD>
</TR>
</TABLE>
<BR>



<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 11 - </FONT> </P><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L.&nbsp;&nbsp;&nbsp;&nbsp;
          FORM 610 &#151; MODEL FORM OPERATING AGREEMENT &#151; 1982 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A073></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE VIII </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Default" -->
<A NAME=A074></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>continued </FONT></H1>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
said Drilling Parties shared the cost of drilling the well. Such acreage shall become a separate  Contract Area and,
to the extent possible, be governed by provisions identical to this agreement. Each party
shall promptly notify all other parties of any acreage or cash contributions it may obtain
in support of any well or any other operation on the Contract Area. The above provisions
shall also be applicable to op-tional rights to earn acreage outside the Contract Area
which are in support of a well drilled inside the Contract Area. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
any party contracts for any consideration relating to disposition of such party&#146;s
share of substances produced hereunder, such consideration shall not be deemed a
contribution as contemplated in this Article VIII.C. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Workstation" -->
<A NAME=A075></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.
Maintenance of Uniform Interests:</b></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
the purpose of maintaining uniformity of ownership in the oil and gas leasehold interests
covered by this agreement, no party shall sell, encumber, transfer or make other
disposition of its interest in the leases embraced within the Contract Area and in wells,
equipment and production unless such disposition covers either: </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          the
entire interest of the party in all leases and equipment and production; or  </FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 1- TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          an
equal undivided interest in all leases and equipment and production in the
          Contract Area.  </FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Every
such sale, encumbrance, transfer or other disposition made by any party shall be made
expressly subject to this agreement and shall be made without prejudice to the right of
the other parties. </FONT>
</TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If, at any time the interest of any party is divided among and owned by four or more co-owners,  Operator, at
its discretion, may require such co-owners to appoint a single trustee or agent with full
authority to receive notices, approve expenditures, receive billings for and approve and
pay such party&#146;s share of the joint expenses, and to deal generally with, and with
power to bind, the co-owners of such party&#146;s interest within the scope of the
operations embraced in this agreement; however, all such co-owners shall have the right to
enter into and execute all contracts or agreements for the disposition of their respective
shares of the oil and gas produced from the Contract Area and they shall have the right to
receive, separately, payment of the sale proceeds thereof. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A076></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.
Waiver of Rights to Partition:</b></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If  permitted  by the laws of the state or states in which the property  covered  hereby is located,  each party
hereto owning an undivided interest in the Contract Area waives any and all rights it may
have to partition and have set aside to it in severalty its undivided interest therein. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A077></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE IX. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<A NAME=A078></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>INTERNAL REVENUE CODE
ELECTION </FONT></H1>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR"  -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This  agreement  is not  intended to create,  and shall not be  construed  to create,  a  relationship  of partnership
or an association for profit between or among the parties hereto. Notwithstanding any
provision herein that the rights and liabilities hereunder are several and not joint or
collective, or that this agreement and operations hereunder shall not constitute a
partnership, if, for federal income tax purposes, this agreement and the operations
hereunder are regarded as a partnership, each party hereby affected elects to be excluded
from the application of all of the provisions of Subchapter &#147;K&#148;, Chapter 1,
Subtitle &#147;A&#148;, of the Internal Revenue Code of 1954, as per-mitted and authorized
by Section 761 of the Code and the regulations promulgated thereunder. Operator is
authorized and directed to ex-ecute on behalf of each party hereby affected such evidence
of this election as may be required by the Secretary of the Treasury of the United States
or the Federal Internal Revenue Service, including specifically, but not by way of
limitation, all of the returns, statements, and the data required by Federal Regulations
1.761. Should there be any requirement that each party hereby affected give further
evidence of this election, each such party shall execute such documents and furnish such
other evidence as may be required by the Federal Internal Revenue Service or as may be
necessary to evidence this election. No such party shall give any notices or take any
other action inconsistent with the election made hereby. If any present or future income
tax laws of the state or states in which the Contract Area is located or any future income
tax laws of the United States contain provisions similar to those in Subchapter
&#147;K&#148;, Chapter 1, Subtitle &#147;A&#148;, of the Internal Revenue Code of 1954,
under which an election similar to that provided by Section 761 of the Code is per-mitted,
each party hereby affected shall make such election as may be permitted or required by
such laws. In making the foregoing elec-tion, each such party states that the income
derived by such party from operations hereunder can be adequately determined without the
computation of partnership taxable income. </FONT></TD>
</TR>
</TABLE>
<BR>



<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 12 - </FONT> </P><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L.&nbsp;&nbsp;&nbsp;&nbsp;
          FORM 610 &#151; MODEL FORM OPERATING AGREEMENT &#151; 1982 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A079></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE X. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A080></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CLAIMS AND LAWSUITS </FONT></H1>




<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operator
may settle any single uninsured third party damage claim or suit arising from operations
hereunder  if the expenditure does not exceed Twenty-five thousand and no/100 &#151; &#151; &#151;
&#151; &#151; &#151; &#151; &#151; &#151; Dollars ($ 25,000.00 ) and if the payment is in complete
settlement of such claim or suit. If the amount required for settlement ex-ceeds
the above amount, the parties hereto shall assume and take over the further handling of
the claim or suit, unless such authority is delegated to Operator. All costs and expenses
of handling, settling, or otherwise discharging such claim or suit shall be at the joint
ex-pense of the parties participating in the operation from which the claim or suit
arises. If a claim is made against any party or if any party is sued on account of any
matter arising from operations hereunder over which such individual has no control because
of the rights given Operator by this agreement, such party shall immediately notify all
other parties, and the claim or suit shall be treated as any other claim or suit involving
operations hereunder.<U> All claims or suits involving title to the oil and gas leases or
interests described on Exhibit &#147;A&#148; shall be treated as a claim on suit against
all parties hereto.</U> </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A081></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE XI. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<A NAME=A082></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FORCE MAJEURE </FONT></H1>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any party is rendered  unable,  wholly or in part, by force majeure to carry out its obligations  under this
agreement, other than the obligation to make money payments, that party shall give to all
other parties prompt written notice of the force majeure with reasonably full particulars
concerning it; thereupon, the obligations of the party giving the notice, so far as they
are affected by the force majeure, shall be suspending during, but no longer than, the
continuance of the force majeure. The affected party shall use all reasonable diligence to
remove the force majeure situation as quickly as practicable. </FONT></TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
requirement that any force majeure shall be remedied with all reasonable dispatch shall
not require the
settlement of strikes, lockouts, or other labor difficulty by the party involved, contrary
to its wishes; how all such difficulties shall be handled shall be entirely within the
discretion of the party concerned. </FONT></TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
term &#147;force majeure&#148;, as here employed, shall mean an act of God, strike,
lockout, or other industrial
disturbance, act of the public enemy, war, blockade, public riot, lightning, fire, storm,
flood, explosion, governmental action, governmental delay, restraint or inaction,
unavailability of equipment, and any other cause, whether of the kind specifically
enumerated above or otherwise, which is not reasonably within the control of the party
claiming suspension. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A083></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE XII. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<A NAME=A084></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTICES </FONT></H1>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All notices  authorized  or required  between the parties and  required by any of the  provisions  of this agreement,
unless otherwise specifically provided, shall be given in writing by mail or telegram,
postage or charges prepaid, or by telex or telecopier and addressed to the parties to whom
the notice is given at the addresses listed on Exhibit &#147;A&#148;. The originating
notice given under any provision hereof shall be deemed given only when received by the
party to whom such notice is directed, and the time for such party to give any notice in
response thereto shall run from the date the originating notice is received. The second or
any responsive notice shall be deemed given when deposited in the mail or with the
telegraph company, with postage or charges prepaid, or sent by telex or telecopier. Each
party shall have the right to change its address at any time, and from time to time, by
giving written notice thereof to all other parties. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A085></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE XIII. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<A NAME=A086></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TERM OF AGREEMENT </FONT></H1>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This  agreement  shall  remain in full force and  effect as to the oil and gas  leases  and/or oil and gas interests
subject hereto for the period of time selected below; provided, however, no party hereto
shall ever be construed as having any right, title or interest in or to any lease or oil
and gas interest contributed by any other party beyond the term of this agreement. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
|_|
<U>Option No. 1:</U> So long as any of the oil and gas leases subject to this agreement
remain or are continued in force as to any part of the Contract Area, whether by
production, extension, renewal, or otherwise. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
|X|
 <U>Option No. 2</U>: In the event the well described in Article VI.A.,  or any subsequent  well
drilled under any  provision of this  agreement,  results in production of oil and/or gas
in paying  quantities,  this  agreement  shall  continue in  force so long as any such
well or  wells produce, or are capable of production, and for an additional period of
90 days from cessation of all production; provided, however, if, prior to the expiration of such
additional period, one or more of the parties hereto are engaged in drilling, reworking,
deepen-ing, plugging back, testing or attempting to complete a well or wells hereunder,
this agreement shall continue in force until such opera-tions have been completed and if
production results therefrom, this agreement shall continue in force as provided herein.
In the event the well described in Article VI.A., or any subsequent well drilled
hereunder, results in a dry hole, and no other well is producing, or capable of producing
oil and/or gas from the Contract Area, this agreement shall terminate unless drilling,
deepening, plugging back or rework-ing operations are commenced within 90 days from the
date of abandonment of said well. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR"  -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It
is agreed, however, that the termination of this agreement shall not relieve any party
hereto from any liability which has accrued or attached prior to the date of such
termination. </FONT>
</TD>
</TR>
</TABLE>
<BR>




<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 13 - </FONT> </P><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L.&nbsp;&nbsp;&nbsp;&nbsp;
          FORM 610 &#151; MODEL FORM OPERATING AGREEMENT &#151; 1982 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A087></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE XIV. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A088></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>COMPLIANCE WITH LAWS
AND REGULATIONS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A089></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.
Laws, Regulations and Orders:</b></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This  agreement  shall be  subject to the  conservation  laws of the state in which the  Contract  Area is located,
to the valid rules, regulations, and orders of any duly constituted regulatory body of
said state; and to all other applicable federal, state, and local laws, or-dinances,
rules, regulations, and orders. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A090></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.
Governing Law:</b></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This agreement and all matters pertaining hereto,  including,  but not limited to, matters of performance, non-performance,
breach, remedies, procedures, rights, duties, and interpretation or construction, shall be
governed and determined by the law of the state in which the Contract Area is located. If
the Contract Area is in two or more states, the law of the state of Texas shall govern. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A091></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.
Regulatory Agencies:</b></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nothing herein  contained shall grant, or be construed to grant,  Operator the right or authority to waive or
release any rights, privileges, or obligations which Non-Operators may have under federal
or state laws or under rules, regulations or orders promulgated under such laws in
reference to oil, gas and mineral operations, including the location, operation, or
production of wells, on tracts offset- ting or adjacent to the Contract Area. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to operations  hereunder,  Non-Operators  agree to release  Operator from any and all losses, damages,
injuries, claims and causes of action arising out of, incident to or resulting directly or
indirectly from Operator&#146;s interpretation or application of rules, rulings,
regulations or orders of the Department of Energy or predecessor or successor agencies to
the extent such interpretation or ap-was made in good faith. Each Non-Operator further
agrees to reimburse Operator for any amounts applicable to such Non- Operator&#146;s share
of production that Operator may be required to refund, rebate or pay as a result of such
an incorrect interpretation or application, together with interest and penalties thereon
owing by Operator as a result of such incorrect interpretation or application. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-Operators
authorize Operator to prepare and submit such documents as may be required to be submitted
to the purchaser of any crude oil sold hereunder or to any other person or entity pursuant
to the requirements of the &#147;Crude Oil Windfall Profit Tax Act of 1980&quot;, as same
may be amended from time to time (&#147;Act&#148;), and any valid regulations or rules
which may be issued by the Treasury Department from time to time pursuant to said Act.
Each party hereto agrees to furnish any and all certifications or other information which
is required to be furnished by said Act in a timely manner and in sufficient detail to
permit compliance with said Act. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A092></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE XV. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A093></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OTHER PROVISIONS </FONT></H1>


<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR"  -->
<A NAME=A094></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SEE ATTACHED OTHER
PROVISIONS </FONT></P>




<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> - 14 - </FONT> </P><BR><BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.A.P.L.&nbsp;&nbsp;&nbsp;&nbsp;
          FORM 610 &#151; MODEL FORM OPERATING AGREEMENT &#151; 1982 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A095></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE XVI. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A096></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>MISCELLANEOUS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
agreement shall be binding upon and shall inure to the benefit of the parties hereto and
to their respective heirs, devisees, legal representatives, successors and assigns. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
instrument may be executed in any number of counterparts, each of which shall be
considered an original for all purposes. </FONT>
</TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 1-TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, this agreement shall be effective as of <U>12th </U> day of <U> April
</U> , (year) <U>2004 </U>. _____________, who has prepared and circulated this form
for execution, represents and warrants that the form  was printed  from and with the
 exception  listed  below,  is identical  to the AAPL Form  610-1982  Model Form Operating
Agreement, as published in diskette form by Forms On-A-Disk, Inc. No changes, alterations,
or modifications, other than those in Articles
<U> III, IV, V, VII, XV </U>, have been made to the form. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<A NAME=A097></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>O P E R A T O R </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A098></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PARTY</FONT></P>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>_______________________________________&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
________________________________________<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U></U><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U></u></FONT></P>


<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<A NAME=A100></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>N O N &#151; O P E R A
T O R S </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Default" -->
<A NAME=A101></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NESS
ENERGY INTERNATIONAL, INC.</FONT></P>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>_______________________________________&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
________________________________________<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Sha
Stephens</U><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>President,
C.E.O.</u></FONT></P>





</BODY>
</HTML>

</TEXT>
</DOCUMENT>
