Common use of Phase II Development Clause in Contracts

Phase II Development. The Parties presently agree to a drilling, testing and completion program for twelve (12) ▇▇▇▇▇ with the authority for expenditure (“AFE”), attached as Exhibit “D” hereto and made a part hereof for all purposes in the amount of two million seven hundred seventy-five thousand dollars ($2,775,000). It is anticipated that 10 ▇▇▇▇▇ will be drilled on the West Mule Creek oilfield lease as infield, development ▇▇▇▇▇ and 2 ▇▇▇▇▇ on the adjacent BLM acreage. The 2 BLM ▇▇▇▇▇ will require the setting of separate electric lines and tank batteries (1 set of tank batteries will accommodate both ▇▇▇▇▇), while the 10 infield, development ▇▇▇▇▇ can tie into the existing electric lines and tank batteries. The AFE for the BLM ▇▇▇▇▇ reflects tank batteries with a capacity of 1,300 barrels of storage (water tank and gun barrel or heater treater) will cost seventy-five thousand dollars ($75,000). The electric poles, electric meters and running of electric lines is estimated to cost fifty thousand dollars ($50,000). Upon the completion and equipping of each said well, all costs and expenses thereafter shall be borne and all income shall be received and shared in proportion to each Party’s working interest and net revenue interest. It is further provided, that the Parties shall meet, no later than thirty (30) days after the completion of each well to evaluate the economic merits of the program. At that time, Rangeford shall have the right to elect to keep all interests which it has paid for and earned and discontinue further drilling.

Phase II Development. The Parties presently agree to a drilling, testing and completion program for twelve twenty (1220) ▇▇▇▇▇ with the authority for expenditure (“AFE”), attached as Exhibit “D” hereto and made a part hereof for all purposes in the amount of two million seven two hundred seventy-five thousand dollars ($2,775,0002,200,000). It is presently anticipated that 10 ▇▇▇▇▇ a well will be drilled on the West Mule Creek oilfield lease as infieldfive (5) different leases to hold a maximum amount of acreage, development ▇▇▇▇▇ and 2 ▇▇▇▇▇ on the adjacent BLM acreage. The 2 BLM separation of such ▇▇▇▇▇ will require the setting of five (5) tank batteries , ( one (1) per lease and each requiring separate electric lines and tank batteries (1 set of tank batteries will accommodate both ▇▇▇▇▇connections to each), while the 10 infield, development ▇▇▇▇▇ can tie into the existing electric lines and tank batteries. The AFE for reflects that the BLM ▇▇▇▇▇ reflects five (5) tank batteries batteries, with a capacity of 1,300 990 barrels of storage (water tank and gun barrel or heater treaterbarrel) will cost seventy-five fifty thousand dollars ($75,00050,000) each, for a total cost of two hundred fifty thousand dollars ($250,000). The electric poles, electric meters and running of electric lines is estimated to cost ten thousand dollars ($10,000) per lease for a total of fifty thousand dollars ($50,000). Upon the completion and equipping of each said well, all costs and expenses thereafter shall be borne and all income shall be received and shared in proportion to each Party’s working interest and net revenue interest. It is further provided, that the Parties shall meet, no later than thirty (30) days after the completion of each the fifth (5th) such well to evaluate the economic merits of the program. At that time, Rangeford shall have the right be entitled to elect to keep all interests which it has paid for and earned and discontinue further drilling.