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SUBSURFACE OIL AND GAS LEASE
THIS LEASE, made this 25th day of October 19 65 by and between the parties whose names are
subscribed hereto as Lessor on the signature page attached hereto, hereinafter called "Lessor" (whether one or more), and
OCCIDENTAL PETROLEUM CORPORATION, a Corporation, hereinafter called "Lessee ".
WITNESSETH
1. The Lands covered by this lease are all that portion lying below five hundred feet (500') from the surface of the land
described on the Lessor's Signature Page attached hereto and is hereinafter referred to as the "leased land." Notwithstanding
any provision to the contrary contained herein, this lease and all rights granted to Lessee hereunder are expressly limited to
those depths lying below five hundred feet (500') from the surface of the land described on the Lessor's Signature Page, and
Lessee shall not have the right to enter upon or use the surface of such land lying above said depth.
2. Lessor, for and in consideration of the sum of One Dollar ($1.00) and of other valuable consideration in hand paid,
the receipt and adequacy of Which is hereby acknowledged, and of the covenants and agreement$ hereinafter contained on
the part of Lessee to be kept and performed, does hereby let, demise and lease unto Lessee, its successors and assigns the leased land
now owned or hereafter acquired by Lessor, by operations of law or otherwise, with the exclusive and sole right to prospect,
expiorc, mine, drill and operate the leased land for oil, gas and other hydrocarbon substances, hereinafter referred to as `said
substances,' and to produce, take, treat, store, remove and to dispose of said substances from the leased land, and the right to
inject into the leased land, gas, water or other fluids for purposes of pressure maintenance or secondary recovery of oil, gas and
other hydrocarbon substances from the leased land and the right to conduct secondary recovery operations, together with all other
rights necessary or convenient for any and all of said purposes including, but not limited to subsurface rights of way for drilling,
repairing, redrilling, deepening, maintaining, operating, abandoning, reworking and removing wells, into and through 'd leased
lands, and such other necessary subsurface easements in and through the leased lands.
3. This lease, except as otherwise herein provided, shall remain in force for a term of twe�nt� rs ��s e date hereof
(hereinafter referred to as the "Primary Term "), and for so long thereafter (but not to exceed s from the date
hereof) as oil, gas or other hydrocarbon substances shall be produced from the leased land, %r land with which the leased land
may be pooled, in quantities deemed paying by Lessee, or as Lessee shall conduct drilling operations (including, but not
limited to, drilling, deepening, plugging back, redrilling, repairing, cleaning out and similar operations) on the leased land or
land with which the leased land may be pooled, or shall be excused therefrom as hereinafter set forth; provided, however, that
so long as Lessee shall continue to drill wells within the intervals permitted in Paragraph 9 hereof, Lessee shall be deemed to be
conducting drilling operations within the meaning of this provision.
4. The expression "royalty share" as used hereinafter shall mean the fraction one -sixth (1/6) and all royalties shall be
payable on a quarterly basis not later than the last day of January, April, July and October of each calendar year for the
preceding calendar quarters ending December 31, March 31, June 30 and September 30, respectively.
5. Lessee shall pay to Lessor as royalty on oil the royalty share of all oil produced, saved and removed from the leased
land. Lessee may purchase Lessor's royalty oil at the public posted market price currently offered and paid in the field in
which the leased land is located for oil of like gravity and quality the day the oil is removed from gauging tanks. In the event
there is no such public posted market price, Lessee may purchase Lessor's royalty oil at the same price the company or com-
panies purchasing the majority of the oil in the field in which the leased land is located shall be paying for crude oil of like
gravity and quality. In the event Lessee shall treat the oil produced for the purpose of making the same marketable, Lessor
shall bear his royalty share, of the cost of treating such oil and for disposing of water or other waste materials by Lessee, -
which Lessee may deduct from any payments due Lessor. In determining the gravity, quality and quantity of oil purchased,
the methods and practices including metering which are usual and customary among major oil purchasing companies shall be
followed. The customary temperature corrections and deductions for injected oil, water and other substances shall be made.
6. In case of sale by Lessee of gas produced from said leased land in the natural state- as produced, Lessee shall pay
Lessor in cash the royalty share of the net proceeds of such sale received by Lessee. In case gas produced from said leased
land is utilized by Lessee (in excess of the amount herein allowed to be used by Lessee free of royalty) in the natural state as
produced, Lessee shall pay Lessor in cash the royalty share of the market value of the gas so utilized. In case Lessee delivers
such gas to a third party for treatment, Lessee shall pay Lessor in cash (a) the royalty share of the market value of the net
,natural gasoline and /or net other liquefied petroleum gases redelivered to Lessee and utilized by Lessee (in excess of the
amount herein allowed to be used by Lessee free of royalty) and (b) the .royalty share of any net proceeds received by Lessee
from the sale of natural gasoline and /or other liquefied petroleum gases redelivered to Lessee after deducting the royalty
share o: ed the cost of delivery for sale and (c) the royalty share of any net proceeds received by Lessee from the sale of residual
dry gas relivered to Lessee and (d) the royalty share of the market value of residual dry gas redelivered to Lessee and utilized
by Lessee (in excess of the amount herein allowed to be used by Lessee free of royalty). In case Lessee shall extract in its own
plant or :acuity on said leased land or elsewhere natural gasoline and /or other liquefied petroleum gases from the gas pro-
duced from said leased land, Lessee shall pay Lessor in cash as royalty (a) the royalty share of 40% of the market value of the
net natural gasoline and /or net other liquefied petroleum gases so extracted and utilized by Lessee (in excess of the amount
herein aliowed to be used by Lessee free of royalty) and (b) the royalty share of 40% of any net proceeds received by Lessee
from the sale of the net natural gasoline and /or other net liquefied petroleum gases so extracted and sold by Lessee after
deductinS the royalty share of the cost of delivery for sale and (c) the royalty share of 60% of any net proceeds received by
Lessee iron the sale of residual dry gas and (d) the royalty share of 60% of the market value of residual dry gas utilized by
Lessee (in excess of the amount herein allowed to be used by Lessee free of royalty). The market value of natural gasoline
or other iiquciied petroleum gases for the purposes hereof shall be the price as posted and generally paid by major processors
for products of like specifications and quality effective in the same district on the date of extraction by Lessee or of redelivery
to Lessee. The market value of gas in its natural state and residual dry gas for the purposes hereof shall be the price generally
paid to Lessee by the major purchaser for gas of like specifications and quality effective in the same district on the date of
delivery or redelivery to Lessee. Lessee shall have the right to deduct from Lessor's royalty on any gas produced hereunder
the royalty share of the cost, if any, of compression for delivery, transportation and /or delivery thereof. Lessee shall have the
right to commingle gas produced from said leased land with other gas and thereupon the royalty shall be computed upon
an appropriate fraction of the commingled gas. Nothing in this agreement contained shall require Lessee to save, market or
utilize gas from said leased land unless there be a surplus above lease requirements and a market at the well for same, nor
shall Lessee be required to extract or cause to be extracted any products therefrom.
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7. Lessee shall not be required to account to Lessor for or pay royalty on oil, gas, natural gasoline, other liquefied
petroleum gases, hydrocarbons, associated substances or water used by Lessee in its operations hereunder (including, without
limiting the generality hereof), for fuel and /or lifting and /or injection purposes anywhere in said leased land, and gas or
other substances used as fuel or lost or consumed in the gathering, compressing for processing and processing thereof and
Lessee may use such oil, gas and other substances free of charge and same shall not be deemed to be "utilized" within the
meaning hereof. In no event shall Lessee be responsible to Lessor for its failure or inability to save any of said substances,
or for shrinkage or loss thereof, and royalty shall not be payable in respect to any of such substances lost through evaporation,
leakage, fire or otherwise. In the event Lessee in its operations hereunder shall substitute other fuel or power for fuel obtained
from said leased land, Lessee shall be entitled to deduct from the amount of the increased royalty accruing thereby to Lessor
the royalty share of the cost of such other fuel or power, provided that no deduction hereunder shall in any event exceed
the amount of such increased royalty.
8. Lessee agrees to commence drilling operations on the leased lands or lands pooled therewith within said primary
term and to prosecute such drilling operations with reasonable diligence until oil or gas is found in paying quantities, or to
a depth at which further drilling operations would, in the judgment of Lessee, be unprofitable or impractical, or it may at
any time within said primary term terminate this lease and surrender said lands; provided that, commencing two (2) years
from the date hereof, if Lessee has not therefore terminated this lease or commenced drilling operations, Lessee shall pay
or tender yearly in advance, as rental to Lessor, an amount equal to the sum paid to Lessor on the execution hereof until
operations have been commenced on leased lands or lands pooled therewith. Should Lessee elect to commence drilling opera-
tions on leased lands or lands pooled therewith, and if oil, gas or other hydrocarbons shall not be obtained in paying quan-
tities in such well, and such well is abandoned, Lessee shall: Commence drilling operations on said leased lands or lands
pooled therewith for another well within six (6) months after the completion as a dry hole or the abandonment of the last
preceding well and prosecute such drilling operations with reasonable diligence until oil, gas or other hydrocarbons shall
have been found in paying quantities by Lessee, or until further drilling would, in the judgment of Lessee, be unprofitable
or impracticable; or terminate this lease; or Lessee may defer the commencement of further drilling operations (except offset
wells) during any period for which rentals have theretofore been paid or until six (6) months after the abandonment of the
last preceding well, whichever is later, and so long thereafter as Lessee continues the payment of rentals annually on a pro
rata basis and in the manner and at the rate above provided, but in no event shall the commencement of drilling operations
be deferred beyond the expiration of the primary term by the payment of such rentals. The consideration expressed in
Paragraph 2 above covers all rental for the first two years of the primary term hereof.
9. Within six (6) months after the completion and testing of a well producing oil in quantities deemed paying by Lessee,
Lessee shall commence drilling operations for another well for oil or gas, and thereafter continuously operate one string of
tools, allowing six (6) months (subject to extension as provided in this lease) between the completion or abandonment of one
well and the commencement of drilling operations for the next succeeding well until one well has been drilled for each forty
(40) acres, or major fraction thereof, of the leased land or land with which the leased land may be pooled; provided, however,
that if and when drilling on the leased land or lands with which the leased land may be pooled shall indicate that oil cannot
be produced therefrom in quantities deemed paying by-Lessee but that gas can be produced in quantities deemed paying by
Lessee, the obligation of Lessee hereunder shall be to drill only one (1) well for each one hundred sixty (160) acres, or major
fraction thereof; the number of wells to be an average of one (1) to forty (40) acres for oil wells and one (1) to one hundred
sixty (160) acres for gas wells, regardless of where drilled. Lessee shall be given credit for so much of the time in each such
six (6) months drilling interval as is not utilized because of drilling by Lessee sooner than required and such credit may be
used to extend subsequent drilling intervals in such manner as Lessee may determine. Lessee may drill as many additional
wells as it may elect in excess of the number hereinabove specified. Lessee shall not be obligated'to use more than one (1)-
string of tools for drilling on the leased land or lands with which the leased land may be pooled.
10. Definition of "paying quantities" as used in this lease shall mean production that in Lessee's opinion assures to
Lessee a reasonable profit over and above the cost of drilling and producing such well including royalties, taxes and other
charges in respect thereto. v '
11. In the event a well is drilled and completed upon adjacent property in which Lessor has no interest and the producing
interval of such well is located within 330 feet of the exterior boundaries of the leased land and oil of gas in paying quantities
is produced therefrom, Lessee agrees providing it is not then drilling or has not theretofore drilled in the leased land an offset
thereto, within six (6) months after production of oil or gas in paying quantities from said well, if said well is then still
producing oil or gas in paying quantities, either to offset such well by the formation of an operating unit under Paragraph 29
hereof and the commencement of drilling operations hereunder, or to surrender and terminate this lease under the provisions
of Paragraph 17 hereof as to a portion of the leasehold, no dimension of which portion shall be less than 330 feet.
12. Lessee may commingle oil produced from any operating unit or units created under the provisions of Paragraph 29
hereof with oil produced from any other operating unit which is producing from the same pool or structure and located in
the vicinity thereof. For the purpose of accounting hereunder, the quantity of oil produced and saved from each operating
unit shall be determined on the basis of gauges or meter readings and adjusted to conform to the shipping tank measurements
of the commingled oil. Lessee shall take samples and make tests of the oil produced and saved from each operating unit or
units prior to commingling and such samples and tests shall be the basis of determining the gravity and water, sand and
other foreign substance of such oil.
13. After completion of the first well herein required, there shall be no obligation upon the part of Lessee to drill in or
produce from and operate the leased land, except as to offset wells when wells offset are being operated, so long as the market
price in the field for oil of the quality and gravity produced on said property shall be One Dollar and Fifty Cents ($1.50) or
less per barrel at the well. Lessee may at any time and from time to time suspend the production of gas from the leased land,
but for any period during which such production is entirely suspended, oil not having been discovered in quantities deemed
paying by Lessee in the leased land, Lessee shall pay to Lessor quarterly in advance, commencing on the fast day of the month
following such suspension, as advanced royalty, the sum of Twenty -five Cents (250) per acre on the leased land then covered
by this lease and Lessee shall have the right to reimburse itself for any such payment out of one -half (tA) of any royalties
which shall thereafter become payable hereunder. Such production may not be suspended, however, when there is a market
for the gas in the field at a price which will pay Lessee to drill for and produce the same with a reasonable profit.
14. Lessee agrees to perform all operations in a careful, workmanlike manner and in accordance with the laws of the State
of California. Lessee further agrees that any and all structures erected in connection with its drilling operations shall be designed
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to be noise -proof and fire - proof, and that the latest techniques and refinements in equipment and material shall be used. All drill -sites
from which drilling operations are conducted will be fenced and screened. Lessee will remove the derrick used in connection with
drilling operations at the cessation of such operations and all permanent production facilities will be buried in cellars or screened
from view. Lessee shall keep full records covering the production and sale of gas, oil and natural gasoline from the leased land,
and such records shall be open at all reasonable times to the inspection of Lessor or Lessor's duly authorized representative.
15. Lessee agrees, subject to the other provisions of this lease, to operate each completed oil or gas well with reasonable
diligence and in accordance with good oil field practice so long as such well shall produce oil or gas in quantities deemed paying
by Lessee; provided, however, that Lessee shall not be obligated to remove any oil, gas or other hydrocarbon substances produced
from the leased land by any means other than a subsurface line. Lessee will not use trucking facilities to remove oil, gas or other
hydrocarbon substances except during the drilling and testing periods of each well.
16. All the labor to be performed and materials to be furnished in the operations hereunder shall be at the sole cost and
expense of Lessee, and Lessor shall not be chargeable with, nor liable for, any part thereof, and Lessee shall keep said land duly
and fully protected against all liens of every character arising from or connected with its operations. Lessor hereby grants unto
Lessee full power and authority to do and perform all and every act and thing necessary or appropriate to be done to protect said
leased land against all liens of every character arising from or connected with its operations, including the right to post a Notice of
Non - Responsibility on behalf of Lessor.
17. In consideration of the payment made by Lessee to Lessor for the execution of this lease, it is agreed that Lessee may
at any time, or from time to time, either before or after discovery of oil in the leased land, quitclaim this lease, either in its
entirety or in part, and thereupon Lessee shall be released from all further obligations as to the part or parts so quitclaimed, and
ail rentals and drilling obligations as set forth in this lease shall be reduced pro rata according to the amount of acreage so
quitclaimed by Lessee; it being particularly understood, however, that all leased lands so quitclaimed shall remain subject to—
and Lessee shall have the right to use and enjoy —such subsurface rights of way and easements through the quitclaimed portion of
the leased land as may be necessary or convenient, in whole or in part, for Lessee's operations in the leased land retained under
this lease or other lands whether or not pooled with the leased land; provided, however, that any well drilled through any such
quitclaimed portion of the leased land shall have no part of its producing interval in such quitclaimed portion.
18. Lessee shall pay all taxes levied on its improvements and personal property: Lessor shall pay all taxes and assessments on
the leased land, exclusive of Lessee's mineral rights therein, and on all other improvements and personal property thereon. All increase
in the taxes and assessments on the leased land or, if Lessee shall have quitclaimed a portion thereof, on such part thereof as is
retained by Lessee under this lease, caused by or resulting from the discovery or production of oil, gas or other hydrocarbon
substances thereon and therefrom, whether assessed upon the leased land as a whole or as mineral rights or otherwise, and all
charges and taxes of whatsoever kind or collected by reason of the production, sale or removal of oil, gas or other hydrocarbon sub-
stances from the leased land shall be borne by the parties hereto in the proportion of the royalty share by Lessor and the remainder
by Lessee. If Lessor shall fail to pay any taxes, assessments or charges required to be paid by Lessor, Lessee may at its option
pay the same and in such event Lessee may reimburse itself for such taxes, assessments or charges so paid by it from any royalties
or rentals accruing hereunder.
19. On the expiration of this lease, or its sooner termination, Lessee shall quietly and peaceably surrender possession of
the leased lands to Lessor, and shall cause a good and sufficient quitclaim deed to be placed of record in said County.
20. In case of default in performance by Lessee of any of its obligations under this lease, and the failure to commence to
remedy the same within ninety (90) days after receipt of written notice so to do signed by parties owning a majority of Lessor's
interest or in the event the leased land is pooled with other lands as provided in paragraph 29 hereof by parties owning a
majority of the landowners' interest in all the lands so pooled, specifying the particulars in which it is claimed Lessee is in'
default and thereupon to continue such remedying with reasonable diligence to completion, then at the option of Lessor all
rights of Lessee under this lease shall forthwith cease and terminate except that Lessee shall have the right to retain all wells then
producing or in the course of drilling or having work done on them, as to which Lessee is not in default, together with forty (40)
acres surrounding the producing interval of each well producing or being drilled for oil or one hupdred sixty (160) acres surround
ing the producing interval of each well producing or being drilled for gas with full right to drill new wells on the lands so
retained and to operate, produce, redrill, deepen or plug back to any depth, and to perforate casing at any, depth believed to
be in an oil or gas zone, and properly to maintain all such wells subject to all provisions of this lease, so long as such wells
respcetively shall produce oil or gas in quantities deemed paying by Lessee. Temporary discontinuance of production from any
well in order to work on such well, or cessation of production in any well which is followed by work on such well diligently
conducted to restore production therefrom shall not be deemed to be an end of producing from such well within the meaning
of this paragraph. Forfeiture of rights in this paragraph provided shall lie the exclusive remedy of Lessor for the breach of
any obligations hereunder except the obligations of Lessee to make payment of rentals or royalties.
21. Notwithstanding anything in this lease contained to the contrary, it is expressly understood and agreed that the
obligations of Lessee hereunder shall be suspended so long as and to the extent that Lessee is prevented or hindered from
complying with such obligations in part or in whole by the elements, accidents, strikes, lockouts, riots, delays in transportation,
inability to secure materials in the open market, acts of war or conditions attributable to war or compliance by Lessee with
federal, state, county, municipal or other governmental agency regulations, rules or orders including but not limited to failure
or refusal to grant land use or operating licenses or permits, or with proration or curtailment regulations of authorities constituted
by law, or other causes beyond the reasonable control of Lessee, whether similar or dissimilar to the foregoing. This lease shall
remain in full force and effect during any suspension of any of Lessee's obligations under any provisions of this paragraph and
for a reasonable time thereafter, provided, that after the removal of the cause or causes preventing or hindering the performance
of such obligation, Lessee diligently commences or resumes the performance of such obligation. Lessee shall have the right to join
in the execution of and to comply with the voluntary agreement of producers representing a majority of the production in the
district in which the leased land is located with respect to proration or curtailment of production in said district, provided such
agreement is not contrary to law or to comply with any laws, regulations or governmental orders with respect to any such
proration or curtailment of production. Whenever Lessee is required to make a payment or suffer termination of this lease as to
any of the lands included hereunder as an alternative to commencing drilling operations, then, so long as the obligation to commence
drilling operations is suspended by any provision of this paragraph, Lessee shall not be required to make such payment nor
shall this lease be terminated. If before Lessee may commence drilling operations in the leased land it must secure a permit
therefor or approval thereof in any form from any federal, state, county or municipal body or agency, than if Lessee shall have
applied for such permit within sixty (60) days prior to the date upon which such drilling operations must be commenced under
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the terms of this lease to avoid a forfeiture or termination thereof, the obligation to commence such drilling operations shall
be suspended until such time as such permit is granted, or in the event such permit is denied so long as Lessee shall in good
faith and with due dill „rr conduct proceedings appealing from such denial, for a period of thirty (30) days thereafter;
provided, however, that in -, event shall such obligation be suspended under this paragraph beyond a period of one (1) year
from the time upon which such drilling operations should otherwise have been commenced.
22 "Drilling operations” as used in this lease is defined to mean any work or operations for the actual purpose of drilling
a well hereunder including but not limited to operations commenced on other land in preparation of the ground therefor and
the building of roads and facilities, provided the same be followed by the construction or erection of a derrick, the installation
of drilling equipment and actual drilling in other land, for a well or wells to be slant drilled into leased lands or lands pooled
with leased lands and that all such work be prosecuted diligently.
23. In the event that the leased land is less than the entire fee interest in the lands described, or if mineral rights only are
leased and less than the entire mineral rights are covered, then the royalties herein provided for shall be paid Lessor only in the
proportion which Lessor's interest bears to the entire undivided fee interest in the land as a whole or in the mineral rights
therein. If it develops that Lessor owns less than the interest purported to be leased hereby, then the rentals herein provided for
shall be paid Lessor only in the proportion which Lessor's interest bears to the interest purported to be leased hereby. If Lessor
owns a greater interest in the lands described than is purported to be leased hereby or hereafter acquires any additional interest
or title in the lands described, by operation of law or otherwise, then this lease shall cover such greater or additional after -
acquired interest or title, and Lessor agrees to give Lessee written notice of any such acquisition as soon as the same is made,
in which event the rentals and royalties payable to Lessor shall be increased proportionately.
24. Lessor hereby agrees to defend Lessor's title to the leased land and agrees that Lessee, at its option, may pay and dis-
charge any taxes, mortgages or other liens existing, levied or assessed on or against the leased land and, in the event it exercises
such option, it shall be subrogated to the rights of any holder or holders thereof and may reimburse itself by applying to the
discharge of any such mortgage, tax or other lien, any royalty or rentals accruing hereunder. Lessee, at its option, shall have the
right to defend any suit brought attacking Lessor's title to the leased land, or to bring a quiet -title action in Lessor's name to
validate Lessor's title thereto or in its own name to validate Lessee's title to the leasehold created hereby and in such case
Lessor agrees fully to assist and cooperate with Lessee in any such action. The reasonable cost and expense of any action to
defend or validate Lessor's title shall be deductible by Lessee from monies becoming due to Lessor hereunder. This lease shall
be subject to the lien of any mortgage or deed of trust hereafter executed by Lessor, his successors or assigns, to secure a
bonafido loan or renewal of any such loan and Lessee agrees to execute and deliver all such documents as may be reasonably
required in order to assure further such subordination of this lease.
25. If the estate of either party hereto is assigned or conveyed (and the privilege of assigning in whole or in part is
expressly allowed), the rights and obligations created hereby and the covenants hereof shall extend to and be binding upon
such party's assigns or transferee, and the party so assigning or transferring such interest shall thenceforth be released from all
obligations hereunder to the extent of the interest so assigned or transferred, but no change of ownership in the land or in the
rentals or royalties shall be recognized by Lessee until Lessee has been furnished with written notice of such transfer or
assignment, with evidence thereof satisfactory to Lessee, which notice shall designate in writing the address to which checks
covering payments affected by such change shall be mailed. If this lease shall be assigned to as a particular part or as to
particular parts of the leased land, such division or severance of the lease shall constitute and create separate and distinct holdings
under the lease of the several portions of the leased land as thus divided, and the holder of each such portion of the leased
land shall be required to comply with and perform the Lessee's obligations under this lease for, and only to the extent of,
his portion of the leased land; provided that nothing herein shall be construed to enlarge the drilling or rental obligations,
and provided further that the commencement of the drilling operations and the prosecution thereof, as provided in Paragraph
8 hereof, either by the Lessee or any assignee hereunder, shall protect the lease as a whole.
26. All statements of production and royalty and all payments to be made by Lessee to Lessor hereunder shall be sent to
the persons whose names are hereunto subscribed as Lessor on the Signature Page attached hereto, respectively, at the addresses
shown thereon. Lessee shall, upon notification of change of ownership in the lands or in 1entals or royalties hereunder, as
provided in Paragraph 25 hereof, divide and distribute the same to the new owners of such interests; provided, however, that
at any time after royalty becomes payable hereunder, Lessee may, at its option, withhold payment of such 'rentals or royalties
until _)artics owning a majority of Lessor's interest designate in writing a recordable instrument delivered to Lessee, a bank,
trust company or corporation in California, as a common agent and depository, to receive all payments due hereunder to such
persons. Such designation may be changed at any time in the same manner. Delivery of all statements and payments hereunder
may bu made by depositing the same in the United States mail duly addressed to Lessor at the above address or addresses or
to such agent and depository which shall constitute full performance of Lessee's obligation to make such delivery. In the
event that the amount payable under this lease shall result in a payment of less than Twenty -five Dollars ($25.00) becoming
due Lessor, Lessee may, at its option, withhold and accrue sufficient periodic payments until the total due Lessor exceeds
Twenty -five Dollars ($25.00).
27. Lessee may give any notice or deliver any document hereunder to Lessor in person or by delivering the same by mail
addressed to Lessor at the address shown on the signature page attached hereto. Any notice from Lessor to Lessee shall be given by
sending the same by mail addressed to Lessee at 5000 Stockdale Hwy., Bakersfield, Calif. All notices so given by mail shall be
deemed delivered when deposited in any United States Post Office in the State of California. Either party may at any time by
apprc,,�riate written notice to the other change the address to which that party's notices are to be sent.
28. For the consideration paid at the time of execution of this agreement and without any additional consideration to be paid
therefor, Lessor hereby grants to Lessee and its assigns the exclusive easement and right to drill into and through the leased land,
by means of a well or wells drilled from surface locations outside the leased land together with the sole and exclusive right to repair,
red:iil, deepen, maintain, rework and operate such wells and produce oil, gas and other hydrocarbons from such wells which may be
drilled into or through the leased land or into other land, whether or not pooled with the leased land; such subsurface rights -of -way,
easements and servitudes to continue for the duration of this lease and thereafter as hereinafter provided. If Lessee shall assign to
any third party or parties such subsurface rights granted to Lessee under this paragraph, the said subsurface rights of Lessee shall not
thereby be diminished, in such event both Lessee and its assignee shall have, hold and enjoy said rights, each independently of the
other. The subsurface rights of Lessee and of each assignee of Lessee under this paragraph shall continue after the expiration,
su::ez1er, forfeiture or other termination of this lease for a period of twenty (20) years from the date of this lease and so long
there;fter as oil, gas or other hydrocarbon substances are produced by means of any such well or as drilling. redrilling or remedial
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operations are being conducted with respect to any such well. Lessee and each such assignee utilizing any such rights after the
cxpir ation, surrender, forfeiture or other termination of this lease shall pay to Lessor a rental for each well subsequently maintained
by it under or through the leased land at the rate of One Dollar ($1.00) per annum per foot of the horizontal projection (computed
to the nearest foot) of the surveyed course of the part of the well of such Lessee or assignee lying within the confines of the leased
land, the rental with respect to any such well to commence on the completion thereof and to continue until such well is abandoned in
accordance with the requirements of the State of California; provided, however, that Lessor shall not be entitled to receive any
rental under the provisions of this paragraph during such times as Lessor is entitled to receive royalty or rentals under other provisions
of this lease. During the term of this lease, Lessor shall not grant any subsurface rights of way, easements or servitudes in and to
the leased land in respect to the drilling for or the production of oil, gas, hydrocarbons and associated substances to any other person,
firm or corporation without the written consent of Lessee.
29. Lessee is hereby given the right at its sole option, by a written declaration of pooling, at any time or from time to time, to
combine or pool all or any part of the leased land with all or any part of any other tract or tracts of land, so as to create by such
combining or pooling one or more operating units for the development and production of oil, gas and other hydrocarbon substances.
Any such operating unit shall not exceed three hundred and twenty (320) contiguous acres in area; provided, however, that any
such operating unit may nevertheless include all or any part of the lands within any ell drilling district which embraces the leased
land and which may be established by any federal, state, county or municipal body or agency acting by and pursuant to any present or
future law, ordinance, rule or regulation; and provided further that such operating unit and leased land shall be subject to all of the
provisions and conditions of any such oil drilling district and any present or future laws, ordinances, rules or regulations of any
federal, state, county or municipal body or agency. The designation of such operating unit shall be made prior to thirty (30) days
after the completion of a well capable of producing oil or gas from the lands within the operating unit, but in no event shall such
unit be created later than twenty (20) years from the date of this lease; and such designation shall define the area which shall
constitute such operating unit. In the event and as soon as any such operating unit is so created, Lessee shall promptly record in
the office of the county recorder of the county in which the leased land is situated such written declaration of pooling, and Lessee
shall give written notice of such pooling, and Lessee shall give written notice of such pooling to Lessor. In the event Lessee shall
acquire an Oil and Gas Lease covering any interest in any land within the boundaries of any such unit, then such Lease and the
rights covered thereby shall be included in such unit providing such Lease authorizes such inclusion and Lessee has recorded such
Lease with the County Recorder in the County wherein such unit is situate. Such unit, as theretofore created by such Declaration of
Pooling, shall be considered as amended to cover such Lease. In the event of such pooling, then, in lieu of computing royalties upon
substances produced from the leased land as provided in Paragraphs 4, 5 and 6 hereof, Lessor's royalty shall be computed and paid
upon the value of the total of oil, gas and other hydrocarbon substances produced, saved and sold by Lessee from such operating
unit or units, in the proportion that the amount of said leased land included in such unit bears to the total land in such unit; and in
lieu of the taxes provided to be borne by Lessor under Paragraph 18 hereof, Lessor shall bear the royalty share of such taxes on
land in such unit and taxes on the production therefrom in the same proportion as production is allocated to said leased land
included in such unit. For the purpose of determining drilling obligations for such unit, which shall be equal to the drilling obligations
set forth hercinabove in this lease, the entire land within such unit shall be treated as if it were covered by one lease, and the drilling
of a well into such unit, whether or not in said leased land; shall fulfill Lessee's drilling obligations under this lease to the same extent
as if such well were drilled in said leased land, and no offset obligations shall accrue with respect to the several tracts of land which
have been pooled within the same operating unit. Upon the pooling of less than all of the leased land, as hereinabove provided, this
I
case shall be severed, and leased land included in such unit and leased land not included in such unit shall be segregated and
constitute separate and distinct leaseholds, and the performance of the obligations of one such separate leasehold shall validate that
one regardless of any default in the other separate leasehold. Lessee may, at any time, quitclaim to the persons entitled thereto all or
any part of the land included within such unit, and thereupon Lessee shall be released from all further obligations with respect to-
so quitclaimed, and all drilling requirements with respect to lands included within said unit shall be reduced pro rata, and any
such quitclaim covering any such land, other than said leased land, shall have the same force and effect, for the purpose of clearing
title to the quitclaimed land, as if Lessor had joined in such quitclaim. The division of royalties from such unit between each Lessor
and other owners of interest in such unit shall, after the discovery of oil or gas in paying qua ;tities, not be changed, altered or,
affected notwithstanding any subsequent surrender or quitclaim or forfeiture of any land in such unit, save and except land surrendered
because of lack of good and merchantable title; provided, however, that in the event the leased land of any part thereof, after
surrender or quitclaim or forfeiture shall be made subject to any other oil or gas lease or a well be commenced thereon for oil or
gas, then such of the above described leased lands so surrendered or quitclaimed or forfeited shall thereupon and forever thereafter be
excluded from participating in the benefits accruing from such unit, but Lessee shall not be held responsible or accountable for
payments made without actual knowledge of the execution of any such other oil or gas lease or the drilling of any well for oil or
gas in such cuitclaimed, surrendered or forfeited land. Lessee may, at its sole option, at any time when there is no production from
such unit of oil or gas in quantities deemed paying by Lessee, terminate such operating unit by a written declaration thereof, in the
same manner in which it was created. Upon the termination of any such operating unit, if only a part of the leased land was included
therein, th:s lease shall no longer be considered as a separate and distinct lease, and the effect of such termination shall be to return
this lease to the status in which it was immediately prior to the creation of such operating unit as though no operating unit had been
created.
30. This agreement may be executed in any number of counterparts with the same force and effect as if all parties signed
the same document. The execution hereof by any person named as Lessor herein shall bind such person's interest whether or
not any other person named as Lessor herein shall execute the same.
31. The entire agreement between the parties is set forth in this lease, and no covenant or agreement, express or implied,
other than chose set forth in this lease, shall be binding upon either of the parties hereto except insofar as this lease may
subsequently be modified by written agreement of the parties.
32. In the event leased land is pooled under Paragraph 29 hereof, the benefits of Lessor including rent and royalty accruing
under the provisions of Paragraph 29 hereof are appurtenant to the leased land of Lessor, and any transferee or subsequent owner
of the title to the leased land of Lessor shall be entitled to receive such appurtenant benefits under Paragraph 29 hereof, except
to the extent that such benefits shall be expressly reserved or shall have been theretofore transferred in whole or in part. A
reservation or exception of all or any specified portion of the minerals or oil or gas or other hydrocarbon substances in any instru-
ment shall constitute, for the purpose of this agreement, a reservation or exception of all or such specified portion of the appurtenant
benefits under Paragraph 29 hereof.
Page 5A follows
1212.,,"
32A. Notwithstanding anything contained herein to the contrary,
it 4.� expressly understood:
1. The maximum term of this lease is thirty -five (35) years.
2. In the event a lease or leases are executed covering lands
in the City of El Segundo owned by the School District which
are more favorable to the landowner than those contained in
the lease covering the lands owned by the City of E1 Segundo,
the more favorable provisions shall automatically be deemed
apart of the lease between the City of El Segundo and Occidental.
Occidental will agree to execute any further letters or instru-
ments reasonably requested by the City to evidence the incorpora-
tion of the more favorable provisions into the City's lease.
3. If oil and gas production is obtained in quantities within the City
of El Segundo, Occidental will pool, combine or unitze the entire
area proven to be productive of oil and gas.
4. Occidental will market the City's royalty share of oil and gas
on the same terms and conditions and for the same price. In
the event Occidental elects to purchase the City's royalty share
of oil and gas, Occidental agrees to pay therefor the public posted
market price currently offered and paid at the field in which the
City's land is located, or if there is no independent public posted
market price for such field, then at the public posted market price
currently offered and paid in adjoining or nearby fields for oil of
like gravity and quality.
5. Notwithstanding the provisions of Paragraph 9 regarding the
density of wells, Occidental agrees to drill and complete such
wells as may reasonably be required to fully develop the field in
accordance with sound engineering and oil fiel ractice. '
-5A-
1212: .
Rev. 12- 24- 64- J.B.Co.
1 -40 -320
33. The Lessor has executed an extra copy of the Lessor's Signature Page attached to this lease, and it is hereby agreed
that such Lessor's Signature Page may be attached to an identical copy of this Subsurface Oil and Gas Lease, together with other
signature pages from other identical oil and gas leases executed by other lessors, for the sole purpose of recording the same in
the Official Records of the county wherein said leased lands are situate, it being expressly understood that the attaching of such
Signature Page to a similar lease shall not constitute a pooling or combining of the leased land with any other land.
34. Subject to the provisions hereinabove set forth, this lease and agreement shall be binding upon and inure to the benefit
of the heirs, administrators, successors and assigns of the respective parties hereto.
"Exhibit All is attached hereto and by reference made a part hereof.
IN WITNESS WHEREOF, the parties hereto have caused this lease to be executed the day and year first above written.
OCCIDENT PETROLEUM CORPORATION
BY -- .......... ............................
Its Attorney -in- Fact
LESSEE
STATE OF CALIFORNIA,
;1: ss.
COUNTY OF------- .......... . . . . ..
ON THIS ---- ?(IL............ day of ------ -------------------------------------------- ------------------I 19utv., before me,
..: #:= �..,.�.- .....___________ ------------•-- --
____ ..._ - -___, a Notary Public in and for said County and State,
residing therein, duly commissioned and sworn, personally appeared ........ .... ...............................
known to me to be the person who executed the within instrument on behalf of OCCIDENTAL PETROLEUM
CORPORATION, the corporation therein named, and whose name is subscribed to the within instrument as the
Attorney -in -Fact of said corporation, and acknowledged to me that he subscribed the name of said corporation
thereto as principal, and his own name as Attorney -in -Fact and acknowledged to me that such corporation executed
the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.
NOTARY PUIUC - CAUFORNIA - Notary Public in and for said County and State.
PlUNCIPAt OfNCI W
RUIN COUNTY
My Commission expires. !,� ! n! -� e�h 2��
—6—
4131 -26; 4135- 1- 3- 4- 67a3- 14 -16;
1212'•,,
Y113�- 5- 25 -27 -29 Rev. 12- 24- 64- J.B.Co.
1-40 -320
LESSOR'S SIGNATURE PAGE TO SUBSURFACE OIL AND GAS LEASE DATED 1--q265 .....
__ -.. - --- ENTERED INTO WITH OCCIDENTAL PETROLEUM CORPORATION.
ALL THAT PORTION OF THE LANDS, IN THE COUNTY OF ............LOS .ANGELES -_...
STATE OF CALIFORNIA, LYING BELOW FIVE HUNDRED FEET (500') FROM THE SURFACE OF
Lots 1, 2 and 3, Block 41; Lots 1 to 19 inclusive and Lots 24 to 42 inclusive, Block
42; Lots 11 and 12, Block 59; Lots 1 to 36 inclusive, Block 61; Lots 1 to 26 inclusive,
Block 62; and Lots 1 to 18 inclusive, Block 85; all in EL SEGUNDO as shown on map in
Book 20, Pages 22 and 23 of Maps, in the office of the County Recorder of said County3
ALSO Lots 15 and 16, Block 37; Lots 11 2, 3 and 43 Block 39; Lots 27 to 33 inclusive,
and Lots 40 to 52 inclusive, Block 62; all in EL SEGUNDO as shown on map in Book 22,
Pages 54 and 55 of Maps, in the office of the County Recorder of said County;
ALSO Lot A and Lots 1 to 10 inclusive, TRACT 2111, as shown on map in Book 22, Page
141 of ;.aps, in the office of the County Recorder of said County, and vacated Holly
Street adjacent to said Lot A on the North; .
ALSO Lots 21, 22 and 233 Block 10; Lot 25, Block 12; Lot 6, Block 14; and Lots 9 to 13,
block 22; all in EL SEGUNDO as shown on map in Book 18, Page 69 of Maps, in the office
of the County Recorder of said County;
ALSO Lot 22, TRACT 23195, as shown on map in Book 704, Pages 66 94 67 of Maps, in the
office of the County Recorder of said County•
......................................................... ............................... ........................................................................................
MATT WO City Clerk
STATE: OF CALIFORNIA
COUM OF LOS ANCEISS
VJ1 TN"ss S my hand and official Vials
t
--A A
1. NO RNIAN - B. RALCM
¢# '„ NUtA<Y PULLIC, CALIFORNIA
r PRINCIPAL OFFICE IN
LOS ANGELES COUNTY
Nozary rublio
NORMAN B. BALCM
My C4ri1MI3510r, rAPJres fw9usi 24, 1966
L XH9 BIT A
1212•....
DESCRIPTION OF POOLED AREA
Beginning at a point at the intersection of the centerline of El Segundo Boulevard with the
Wester]v houndary line of the Clty of El Segundo; thence in a Northwesterly direction
following said houndary line to its intersection with the Hyperion boundary line; thence
Northerly along the 11 %perion houndary line to its intersection with the centerline of
Mariposa Avenue; thence Easterly along the centerline of Mariposa Avenue to its inter-
section with the centerline of Sheldon Street; thence Southerly along the centerline of
Sheldon Street to its intersection with the centerline of Pine Avenue; thence Easterly
along the centerline of Pine Avenue to its intersection with the Northerly prolongation
of the centerline of Penn Street; thence Southerly along the Northerly prolongation of
the centerline of Penn Street and the centerline of Penn Street to its intersection with
the North line of Lots 9 and 18. Block 28 of the El Segundo Tract; thence Easterly along
said Northerly line of Lots 9 and 18 to its intersection with the centerline of Sierra Street;
thence Southerly along the centerline of Sierra Street to its intersection with the center-
line of Franklin Avenue; thence Easterly along the centerline of Franklin Avenue to its
intersection with the centerline of Lomita Street; thence Southerly along the centerline
of Lomita Street to its intersection with the centerline of El Segundo Boulevard; thence
Westerly along the centerline of E1 Segundo Boulevard to the point of beginning.
1
I
I
d
0
U
3495
DECLARATION OF POOLING
EL SEGUNDO AREA
OCCIDENTAL PETROLEUM CORPORATION, a California
corporation ( "Occidental "). pursuant to authority contained in oil and gas
leases owned by it covering the lands described in Exhibit A attached hereto,
hereby combines, pools and unitizes all of the lands described therein to
form an operating unit. Should Occidental hereafter acquire additional oil
and gas leases covering lands within the unit area which by their terms may
be included in the operating w:it formed hereby, this declaration shall be
automatically considered as amended to cover such leases. This declaration
of pooling is executed by Occidental for the purpose of more efficiently de-
veloping, producing and operating said unit area in order to increase the
ultimate recovery of oil, gas, gasoline or other hydrocarbon substances
therefrom.
DATED: May 12, 1966.
s'rATE OF CALIFORNIA 1
COUNTY OF
KERN
o. _ April 12, 1966
before me, the undersigned, a Notary Public in and
for said State, personally appear
E. F. RE_ID _
known to me to be the V1Ce_ President, and
_ LE'O T. ADAMS
known to me to be the-- ASSl an -T__
Secretary of
the Corporation that .-xecuted the within Instrument,
known to me to be the persons who executed the within
Instrument on behalf o` the Corporation therein named,
and acknowledged to ni,a that such corporation executed
the within instruu,ent l,.usuant to its by -laws or a reso-
lution of its board of cirectors.
WITNTESS my bind ana''ofHcial seal.
OCCIDENTAL PETROLEUMT CORPORATION
Bv:
E: F. REID, Vice Pr ident
By: I
LE'O T. ADAMS, Assistant Secretary
[r �M
7