There shall not be any well drilled, pipeline constructed, or any other surface activity nearer than five hundred (500) feet of any building, water well, spring, stream, pond, or septic system, hunting club or shooting range, or anywhere that animals are stored, or where produce is grown or stored for an active established farming operation, on the leased land without written permission of the lessor.

Location of any well, access roads, pipelines routes, tank batteries, compressor, or other facilities shall be approved by Lessor or one of their representatives in writing prior to location thereof. Location shall not interfer with surface use of the land. Location approval shall not be unreasonably withheld, conditioned, or delayed. Upon receipt of Lessee’s written site-location approval request, Lessor shall have fourteen (21) days from the date of said correspondence to approve in writing or to advise Lessee in writing of Lessor’s disapproval of a specific location(s) associated with Lessee’s site plan and to provide Lessee with an adaquit alternate location(s) that is deemed to be reasonable, economically feasible and at a legal location pursuant to all applicable rules, easements, and regulations. Lessor’s failure to notify Lessee of written approval of said site plan or to provide Lessee with written objection and an alternate location(s) within fourteen (21) days shall constitute Lessor’s approval of the proposed site location

Upon Lessor’s approval of a well site on the lease premises, Lessee agrees to pay Lessor a location fee in the amount of Twenty-Five Thousand Dollars ($25,000.00) for each pad constructed on the surface of the leased premises and the access road(s) constructed in association therewith for the purpose of drilling horizontal gas wells. Multiple wells may be drilled from a single drill site pad located on the surface of the leased premises. In the event Lessee physically and materially disturbs more than ten (10) acres of land for any drill site pad or road leading to said pad, pipelines used to transport oil and/or gas from the well(s) drilled on leased premises or other related surface operations or instalations, Lessor shall be compensated at the rate of Three Thousand Dollars and 00/100 ($3,000.00) for each net acre so disturbed in excess of ten (10) acres.

Upon completion of any operation, Lessee shall restore the lease premises as nearly to original contours as reasonably possible, remove all equipment, debris and personal property which Lessee placed on the lease premises ,except for equipment needed for the operation of producing wells, which shall be removed within six (6) months (weather permitting) after a well ceases to produce as defined herein. After well ceases to produce, Lessee shall promptly plug any abandoned well pursuant to DEP regulations. If said equipment is not removed within six (6) months after a well permanently ceases to produce, then upon written notice from Lessor, said equipment shall become the property of the Lessor.

Without a separate written agreement and fair compensation, pipelines, except for those used to transport oil and/or gas from the well(s) drilled on leased premises or lands pooled therewith, shall not be constructed on the leases premises.

Lessee shall bury any and all pipelines a minimum depth of 36 inches below ground level, measured from the top of the pipe, where possible to ensure safety. Above ground pipelines can only be constructed if written permission is given by Lessor and Lessor is compensated by fair market standards.

No Compression on Leased Premises

Other than those necessary for the production and transportation of products produced from the Leased Premises or lands pooled or unitized therewith, it is agreed and understood that compressionfacilities will not be placed on the leased premises, unless written consent is provided by the Lessor. Lessee agrees that the leased premises described herein will not be used as a central processing facility. Where compression facilities, temporary or permanent, are used upon the premises, Lessee shall take all reasonable efforts to minimize the noise associated with the same.

It is agreed and understood that regional water ponds or pits associated with Lessee’s operations and/or which service wells other than wells drilled on the Leasehold or on lands unitized with the Leasehold will not be placed on the Leasehold unless written permission is provided by the Lessor.

Lessee shall fence all producing wells, pits, tank batteries, storage ponds, separators, drip stations, pump engines, and other equipment placed on the leased premises with a fence capable of detering animals or humans from entry. Lessee must keep the fences on the lease premises in good repair and keep all gates and fences closed at all times when possible or when operations are not attended.

Lessee and Lessor agree that prior to the removal of any marketable timber resulting from Lessee’s operations under the terms of this lease, Lessee shall provide thirty (30) days written notice to Lessor providing Lessor an opportunity to arrange for the harvesting of said timber within thirty (30) days of receipt of said notice. If Lessor does not exercise such right to harvest, an appraisal shall be constructed by a qualified local third party forester and Lessee shall pay Lessor the said appraisal value prior to harvesting. In the event agreement is not reached as to the value of siad timber, each party shall select an appraiser and the two appraisers shall select a third- party neutral appraiser and the three will determine the value of the timber which will be paid by Lessee to Lessor prior to harvesting.

Lessee shall construct or install all well sites, access roads and pipeline rights-of-way in a manner which would minimize any related soil erosion. Further, any related surface reclamation shall be done in a manner which restores said land as nearly to original condition as reasonably possible.

Lessee shall have Lessor’s current water supply sampled and tested prior to spudding of any well drilled on the leased premises, or drilled on acreage unitized with the leasehold. Should Lessor experience a material adverse change in the quality or quantity of Lessor’s water supply, during or immediately after the completion of Lessee’s drilling operations, Lessee shall, within 72 hours of Lessor’s written request, Lesee shale have Lessor’s water supply sampled and tested by a qualified and independent third party at Lessee’s expense. Should such a test reflect a material adverse change as the result of Lessee’s drilling operations (If such test reflects a material adverse change in the Lessor’s water quality or quantity, then it shall be presumed that the same was caused by the Lessee’s operations)in that instance, Lessee agrees to provide Lessor with potable water within 48 hours and until such a time as Lessor’s water source quality and quantity has been repaired or replaced with a source of substantially similar quality, to as close to pre-drilling condition as reasonably possible, with all related costs of repair and maintenance to be paid by Lessee.

Commencement of operations shall be defined as Lessee having secured a drilling permit from the State and further entering upon the herein described premises with equipment necessary for the preparing of a well pad or commencing other activities necessary for the spudding of a well to be drilled, subsequently followed by a drilling rig for the spudding of the well to be drilled. Once commenced, and upon expiration of the primary term of this lease or any extension thereof, said operations shall not lapse for a period of greater than ninety (90) consecutive days prior to the completion of the well.

It is understood and agreed that this lease may not be maintained in force for a continuous period of time longer than thirty-six (36) consecutive months, or sixty (60) cumulative months after the expirations of the primary term or any extension hereof solely by the provision of the shut-in royalty clause. The shut-in status of any well shall persist only so long as it is necessary to correct, through the exercise of good faith and due diligence, the condition giving the rise to the shut-in of the well.Lessee shall tender an additional payment of Twenty-Five ($25.00) per acre, per shut-in well at the end of the first year and each year thereafter while the leased premises are shut-in. Notwithstanding the making of such shut-in well royalty payments, Lessee shall be and remain under the continuing obligation to use all reasonable efforts to find a market for said gas and to commence or resume marketing same when a market is available, to reasonably develop the lands then subject to this Lease, and to drill all such wells on the lands then subject to this Lease as may be reasonably necessary to protect same from drainage by wells on adjoining or adjacent lands.

In the event Lessee desires to pool or unitize the leased premises with other lands and there is no spacing order previously established by a governmental or regulatory body, Lessee shall not have the right to form a production unit larger than 1,280 acres for any horizontal well, and Lessee shall not have the right to form a production unit larger than 60 acres for any vertical well. Lessee shall provide any unitized Lessor with a written unitization plan within thirty (30) days of the recording of the unit designation. Furthermore, Lessee shall provide any unitized Lessor with a written unitization plan within thirty (30) days of initiial permit.

In the event a pooled unit is created which encompasses land located outside the lease premises and some, but not all, of the Leasehold premises, any drilling completing, testing, deepening operations or reworking operations on or production from a well located on that pooled unit shall continue this Lease in full force and effect but only as to that part of the lease premises contained within the pooled unit and only as to those formations and horizons found from the surface down to the deepest depth drilled; specifically, this lease shall automatically terminate two (2) years (“Extended Term”) after the expiration of the primary term or any extension provided herein as to such portions of leased premises not contained within a pooled unit and those formations and horizons below the deepest depth drilled. However, Lessee may, at its option, pay the extension payment included in this lease one time, and one time only, prior to the expiration of the two (2) year Extended Term on the portions of the Leasehold not included in a production unit or below the deepest depth drilled to continue all of its rights in and to the Leasehold or surrender such portions of the Leasehold not included in a production unit or those formations and horizons found below the deepest depth drilled.

Five (5) Year Extension of Primary Term

Should this lease be extended by Lessee’s option pursuant to the extension clause contained herein, the primary term extension shall be for a period of five (5) years from the date of the expiration of the original primary term. The extension payment price shall be for the same monies as the initial signing bonus.

In the event any well is drilled upon the Leased Premises or any portion thereof, and the Lessor is the owner of the surface where the well is located, and upon Lessor’s written request, Lessee shall pay annually to Lessor in lieu of free gas a sum equal to One Thousand One Hundred and Fifty Dollars ($1,150.00) In the event that useable clean dry gas is produced, Lessor shall have the option to retain free gas in the amount stipulated in thisagreement in lieu of monetary compensation. In the event that Lessor chooses to have free gas provided, Lessee will provide a lockable valve for lessor to access gas at Lessee's expense. Any pipeline, connections, and or hookups required to provide gas to said property or home will be the sole responsibility of Lessor at Lessors expense.

excluded from this Lease.

Royalties for oil, gas, and related hydrocarbons shall be paid without deductions for the costs of producing, gathering, storing, separating, treating, dehydrating, compressing, transporting, or otherwise making the oil and/or gas and/or related hydrocarbons produced from the lease premises ready for sale or use. All oil and/or gas, and/or related hydrocarbons royalty shall be delivered free of cost into the tank or pipeline (for oil and/or related hydrocarbons) and into the pipeline and into pipeline (for gas and/or related hydrocarbons) ,measured by volume, on the oil and/or gas and/or related hydrocarbon royalty. It is understood and agreed that to the extent Lessee sells oil, gas or related hydrocarbons to an affiliate, the price upon which royalty shall be based shall be the greater of: a) the price paid by the affiliate; or b) the price that would have been received from a sale to an unaffiliated third party under a sales arrangement for like quantity, quality, term and at the same point of sale to the affiliate

Lessee’s operations on said land shall be in compliance with all applicable federal, state, and local laws and regulations.

Notwithstanding anything herein contained to the contrary, Lessee agrees the herein described leased premises shall not be used for the purpose of gas storage as defined by the Federal Energy Regulatory Commission. Any reference to gas storage contained in this lease is hereby nul and void. If Lessor wishes to enter into an agreement regarding gas storage using the leased premises with a third party or Lessee, Lessor shall first give Lessee written notice of the identity of the third party, the price or the consideration for which the third party is prepared to offer, the effective date and closing date of the transaction and any other information respecting the transaction which Lessee believes would be material to the exercise of the offering. Lessor does hereby grant Lessee the first option and right to purchase the gas storage rights by matching and tendering to the Lessor any third party’s offering within 30 days of receipt of notice from Lessor.

Lessee agrees that no disposal or injection wells shall be placed upon the leased premises without express written approval from the Lessor.

This lease shall be deemed to cover only oil and gas and associated hydrocarbons/constituents. This lease does not include any other minerals or water rights.

Lessee shall indemnify Lessor for any and all loss or liability resulting from injury or death to any livestock on the leased premises, which are owned by Lessor, Lessor’s tenant or the surface owner, if Lessee or its operations are responsible for such injury or death.

Lessee shall indemnify and hold Lessor harmless from any and all liability, liens, demands, judgments, suits, and claims of any kind or character arising out of, in connection with, or relating to Lessee’s operations (or those holding under the Lessee) under the terms of the Lease, including, but not limited to environmental issues, claims for injury or death of any persons, or damage, loss or destruction of any property, real or personal. Lessee further covenants and agrees to defend any suits brought against Lessor on any claims, and to pay any judgment against Lessor resulting from any suit or suits arising from Lessee’s operation or operations under the terms of this Lease. Lessor, if it so elects, shall have the right to participate, at its sole expense, in its defense in any suit or suits in which it may be a party, without relieving Lessee of the obligation to defend Lessor. Lessor shall be named as an additional insured on Lessee’s liability insurance policy. Prior to the commencement of drilling operations, Lessee shall provide to Lessor, a certificate of evidence for liability, workman’s compensation and disability insurance. The insurance required herein may be met through a combination of primary, excess, and self insurance. It is the intention of Lessee and Lessor that Lessee shall not be liable to Lessor in respect of (and the foregoing indemnity shall not cover) any claim to the extent the same resulted from the gross negligence, willful misconduct or bad faith of the Lessor.

The venue for all actions and proceedings arising from this Lease shall be in the county in which the real property is located. The law of the state in which the real property is located shall apply to this lease and all drilling operations.

Lessee agrees that if any penalty, rollback, or re-capture of tax abatements created or imposed under any governmental program such as, but not limited to CREP, CRP and Clean and Green that is levied on Lessor solely as a result of Lessee’s operations on leased premises, Lessee will reimburse Lessor upon written request and receipt of a copy of the penalty notice. As to future assessment of any ad valorum taxes, Lessee and Lessor agree to pay their proportionate share of any increase in ad valorem taxes solely attributable to, or resulting from, the assessment of oil and gas due to production from the leased premises.

It is understood that Lessor warrants title to said property only with respect that the title is good to the best of Lessor’s knowledge and Lessee agrees that no claims will be made against Lessor pertaining to warranty of title.

Lessee further grants to Lessor or its representative the right quarterly to examine, audit, or inspect books, records, and accounts of Lessee pertinent to the purpose of verifying the accuracy of the reports and statements furnished to Lessor, and for checking the amount of payments lawfully due the Lessor under the terms of this agreement. In exercising this right, Lessor shall give reasonable notice to Lessee of its intended audit and such audit shall be conducted during normal business hours at the office of Lessee. Such examination and audit shall be at the sole cost and expense of Lessor, unless the audit reveals deficiencies or underpayments, at which time Lessee shall pay to Lessor, within thirty (30) days, for the cost of the audit and immediately reimburse any deficiencies plus interest at the rate of 1.5% per month.

Lessor and Lessee hereby agree this Lease will be recorded of record by Memorandum and said Memorandum shall reference this Exhibit “A” and the terms hereof.

Upon written request by Lessor and after termination, expiration, or surrender of this lease in whole or in part, Lessee shall provide Lessor with a copy of an appropriate release of lease and cause the same to be filed on record at county courthouse at Lessee expense.

Any questions concerning this Lease or performance there under shall be ascertained and determined by one neutral arbitrator, to be a licensed attorney with at least ten (10) years experience primarily with an oil and gas practice, to be selected by the parties herein. In the event the parties cannot agree on an arbitrator within twenty (20) days of initiation of a dispute subject to this arbitration clause, then the parties shall have the American Arbitration Association select a qualified arbitrator consistent with the requirement above. The award of such arbitrator shall be final and conclusive. Arbitration proceedings hereunder shall be conducted at the county seat or the county where the Lease is filed, or in the county where the action occurred which caused the arbitration, or such other place as the parties to such arbitration shall all mutually agree upon. Each party will share in the costs of the arbitrator equally.