This Agreement, made and entered into this 9th day of April, A. D. 1005, by and between Richard Reese of Kit Carson County, and State of Colorado, party of the first part, and James Morton of the County of Fremont, and State of Colorado, party of the second part,
Witnesseth: That the said party of the first part, for and in consideration of the royalties hereinafter agreed to be paid and of the covenants and agreements hereinafter expressed to be kept and performed by the said party of the second part, has leased, let and demised and by these presents does lease, let and demise unto the said party of the second part, the following described premises, to-wit: S. E. ¼ of N. E. ¼ of Section 23, Township 16 South, Range 10 East of principal meridian, in Fremont County, State of Colorado, containing 160 acres, more or less:
To have and to hold, unto the said party of the second part for the term of fifty years from the date hereof; the said party of the first part hereby giving and granting to the party of the second part the following rights, powers and privileges, to-wit: to prospect, bore, drill, mine and develop the said premises for oil and gas; to erect, construct and maintain machinery, tanks, pipe lines, refineries, tramways, cable lines, railways, railway sidings, dwelling: houses and any and all structures which may be necessary or proper to be erected, constructed or maintained for the purpose of prospecting, boring, drilling and developing the said premises as aforesaid, and of storing, using and disposing of oil and gas found or discovered upon the said premises or upon premises in the vicinity thereof.
The said party of the second part covenants and agrees as follows, to-wit:
First. - To pay and deliver as royalty to the said party of the first part, ten per cent of the net proceeds derived from all oil or gas obtained by virtue of this agreement, the product so obtained and disposed of for each month to be paid for on the first day of the second month following.
Second. - To commence in the County of Fremont, State of Colorado, within one year of the date hereof, to drill a well for oil and to continue the work thereon with due diligence until the said well shall have reached the depth of 1,000 feet, or oil or gas has been discovered, and in the event of a discovery of oil or gas in paying quantities in said well, to commence, within five years from the date hereof, to drill a well for oil on the above described premises, it being agreed and understood that a failure to commence to drill either of the above mentioned wells shall in no manner render the said second party liable for any damages to the first party, his heirs or assigns.
It is also agreed that the said party of the first part shall fully use and enjoy said premises for horticultural, farming and grazing purposes until said second party is ready to commence operations thereon, and after operations have been commenced on said premises by said second party, said first party shall fully use and enjoy said premises for said purposes, except such parts as may be necessary for the operations of said second party, and for the construction of derricks, pipe lines, tramways, railroad tracks and other things necessary for the purposes herein mentioned.
It is further agreed that there shall be no wells drilled within one hundred feet of the buildings now on the premises, without the consent of the first party.
It is further agreed that if one or more dry wells are drilled on said land, which fail to produce oil or gas in paying quantities, then the party of the second part shall have the right to abandon this lease and said property shall revert to said party of the first part, without liability for further development.
It is hereby further covenanted and agreed that any and all fixtures, buildings, machinery and improvements of every description erected upon the said land and premises under and by virtue of this lease may be removed within ninety days from and after the termination of this agreement; that the said party of the second part shall have the right to take and use water from any ditch or ditches, stream or streams, spring or springs in and upon the said land and premises, so far as may be necessary for the operation of whatever machinery may be necessary or proper to be used on account of this agreement; that the said land and premises, and any part thereof, may be sublet, and any or all rights existing under and by virtue of this agreement may be assigned or transferred; that the title to any and all oil or gas found or discovered in or upon the said land and premises shall be in the said party of the second part, subject, however, to the payment of the royalty herein reserved to be paid; that if the said party of the second part shall fail in any respect to keep and fulfill any and all agreements herein expressed or implied, then, and in that case it shall be lawful for the said party of the first part, his agent or attorney, to declare this lease void and of no effect thereafter, and without process of law, to enter upon and take possession of said premises; and that in such case, or at the expiration of this lease by limitation, the said party of the second part shall surrender, yield and deliver to said party of the first part quiet and peaceable possession of said premises in good condition.
In consideration of the premises, it is also further agreed by and between the parties hereto that the said party of the second part shall have the right and option to purchase all of the land and premises described herein upon the payment of Five Thousand (5,000) dollars as follows, to-wit: $2,000, on or before the 9th day of April, 1906, $2,000, on or before the 9th day of September, 1906, $1,000 on or before the 9th day of April, 1907, a good and sufficient deed, conveying all the right, title and interest of the said party of the first part, to be delivered to the said party of the second part, upon the payment of the said consideration.
Each and every grant, promise and covenant herein made by either party hereto is and shall be a grant, promise and covenant of the heirs, administrators, executors, successors and assigns of such party, and any right, privilege or property herein granted to either of the parties hereto shall be a right, privilege and property of the heirs, executors, administrators, successors and assigns of such party.
In Witness Whereof, The said parties hereto have hereunto set their hands and seals the day and year first above written. (Executed in Duplicate.)
Richard Reese. (Seal) James Morton. (Seal)