J. F. Kile & Mattie Kile

Coleman County Deed Book 103

Page 609

KNOW ALL MEN BY THESE PRESENTS: THAT we, J. F. Kile and Mattie Kile, husband and wife of the Postoffice of Coleman, State of Texas hereinafter called lessor (whether one or more), for and in consideration of Eighty & 75/100 Dollars cash in hand paid, receipt of which is hereby acknowledged do hereby lease unto R.E.L.Culp hereinafter called lessee his heirs and assigns, the following described land, situated in the county of Coleman State of Texas; Being 161 1/2 acres of land out of the G.H.& H.H.R. Co. survey No. 83, abstract No. 330 and being the same land conveyed to Grantor on the first day of February A. D. 1917, by W.M. Leonard, and wife, as shown of record in the Deed Records of Coleman County, Texas, Vol. 97 page 303, and said deed is here referred to and made a part hereof for better description, for the purpose of prospecting for oil, gas and sulphur and the production of the same therefrom, together with the exclusive right of ingress and egress at any and all times to prospect, drill mine and otherwise operate hereunder, and the right to erect, maintain and remove all necessary or proper structures and appliances including the right to pull the piping from wells, and to install, maintain and remove all tanks and other means of storage and all pipes and other means of transportation; and subject to the royalties hereinafter mentioned, there is hereby granted and conveyed to said lessee all of the oil gas, and sulphur in and under said land.

The royalties above mentioned shall be (a) on oil, a quantity equal to one-eighth of all produced and saved, the same to be delivered at the wells or to the credit of the lessor in the pipe line to which the wells may be connected; (b) on natural gas, at the rate of two hundred dollars per annum, payable quarterly, for each well producing gas exclusively, and from which gas is then being used or sold off the premises it being understood that the lessor shall have the privilege at the lessor's own risk and expense, of making connections and using gas from such wells free of charge for one dwelling on said land; (c) on gas produced from oil wells when such gas is used or sold off the premises, at the rate of ten dollars per annum for each well while the gas is being so used or sold, and when such gas is used for the manufacture of gasoline there shall be an additional payment at the rate of ten dollars per annum for each well, while such gas is being so used for the manufacture of gasoline; and (d) on sulphur at the rate of one dollar per ton for all mined and marketed from said land. But it is understood and agreed that the lessee shall have the free use of oil, gas, wood and water from said land for all purposes of development and operation.

If operations for the drilling of an oil or gas well are not begun on said land on or before the first day of February 1919, this lease shall terminate as to both parties, unless the lease on or before that date shall pay or tender to the lessor, or to the credit of the lessor in the Central State Bank of Coleman, Texas, (which shall continue as the depository regardless of changes in ownership of the land), the sum of Eighty & 75/100 dollars, which payment or tender may be made by the check or draft of the lessee and however made shall operate to confer on the lessee the privilege of deferring the time limit for one year from said date. Thereafter, in like manner and upon like payments or tenders of said amount, the time limit may by further deferred for additional periods of one year successively, provided always that this lease cannot be kept in force by such payments in the absence of drilling operations for a longer period than five years from the date last above set forth.

But nothing in this paragraph contained shall obligate the lessee, against his wish or option, to make any such payment or to drill or otherwise carry on operations hereunder. And it is understood and expressly agreed that the consideration first recited in this lease the down cash payment, and the obligations of the grantee contained in the next ensuing paragraph hereof, shall be held to support and sustain, not only the privilege granted to the date first written in this paragraph namely, the date when this lease is to terminate unless an additional payment or tender is made, but also the lessee's option of extending that period from time to time and keeping this lease in force as aforesaid, as well as any and all other rights and privileges conferred on the lessee by this instrument.

If during the period of this lease or the extension of the time limit for drilling and within five years from the date last above set forth, and prior to the discovery of oil or gas on said leased land, there shall be drilled on adjacent land and within 200 feet of any line of said lease land, a well producing as much a fifty barrels of oil per day for thirty consecutive days the lessee will with reasonable diligence, begin and prosecute the drilling of a well on said leased land in a faithful effort to find and produce oil in paying quantities.

After operations for the drilling of an oil or gas well shall have been begun on said leased land it shall not be necessary for the lessee to make any further payments in lieu of frilling operations as provided in the second preceding paragraph hereof in order to keep this lease in force; and during said period of five years drilling operations may be suspended from time to time without terminating this lease, provided the lessee shall have paid or tendered or shall then pay or tender the amount herein before mentioned for the then currnet period of one year including the time of such suspensions and provided further that after such operations are so begun no such payment or tender shall be necessary when he operations are being carried on in good faith and the period of suspension is less than thirty days.

If the lessee shall sink a well or shaft and discover oil, gas or sulphur in paying quantities in or under the above described land, then this lease shall remain in full force and effect for ten years from such discovery and as much longer as oil, gas or sulphur shall be produced therefrom in paying quantities; and having so discovered oil, gas or sulphur in paying quantities, the lessee shall be exempt from loss or forfeiture of this lease in whole or in part, except for judicial ascertainment that the lessee has failed to perform his duty and discharge his obligations hereunder and a reasonable opportunity thereafter to prevent such loss or forfeiture, and in event of final loss or forfeiture there shall be reserved to the lessee each producing well or mine with ten acres of land surrounding the same to be designated by the lessee.

No well shall be drilled nearer than two hundred feet to any house or barn now on said land, unless by consent of the lessor, and nothing herein contained shall deprive the lessor of the full use and enjoyment of said land, subject to the privileges and estate hereby granted, and when requested by the lessor the lessee shall bury its pipe lines so they will not interfere with cultivation.

If the interest owned by the lessor in said land is or shall prove to be less than the entire fee the royalties and moneys herein provided for shall be delivered or paid to the lessor in the proportion only that the interest of the lessor bears to the entire fee.

If the estate of either party hereto is assigned and the privilege of assigning in whole or in part is expressly allowed the covenants hereof shall extend to the assigns and successive assigns, but no change in the ownership of the land or the rentals or royalties, by purchase of otherwise shall be binding on the lessee until lessee shall have been furnished with notice and proper evidence of such change.

Lessor hereby warrants and agrees to defend the title to the lands herein described and agrees that the lessee shall have the right at any time to redeem for lessor by payment any mortgages, taxes or other liens on the above described lands in the event of default of payment by lessor, and to be subrogated to the rights of the holder thereof.

In Testimony whereof this instrument is signed this 22nd day of January 1918.

J. F. Kile

Mattie Kile.

THE STATE OF TEXAS()

COUNTY OF COLEMAN.() BEFORE ME, the undersigned authority, a Notary Public in and for Coleman County, Texas, on this day personally appeared J.F. Kile & wife Mattie Kile, known to me to be the person whose names are subscribed to the foregoing instrument and acknowledged to me that they executed the same for the purposes and considerations therein expressed, and the said Mattie Kile, wife of J. F. Kile, having been examined by me privily and apart from her husband and having the said instrument by me fully explained to her, she acknowledged the same to be her act and deed and declared that she had willingly executed the same for the purposes and considerations therein expressed, and that she did not wish to retract it.

Given under my hand and seal of office this 22nd day of January A.D. 1918.

D. D. Knight, Notary Public in and for Coleman County, Texas.

(SEAL)

Filed for Record Feb. 5, 1918 at 8:00 o'clock A. M.

Recorded Feb. 5, 1918 at 4:00 o'clock P. M. Fred Henderson County Clerk,

By Edna Gilmore, Deputy. Coleman County, Texas