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The statement concerning information collection states that the form contains information that doesnêt require approval by the Office of Management and Budget. Headings in the upper right include cash bonus, rental rate per acre, nectare or traction, min royalty rate per rate, royalty rate and profit share rate.

The statement concerning information collection has been revised to indicate that the form contains information collection requirements that have been approved by the Office of Management & Budget. Headings in the upper right are revised for clarity. The (j) Net Profit Share headings is replaced with "other" to accommodate the recording of a broader range of special terms that might pertain to a lease.

1 Statutes & Regulations

This lease is issued pursuant to the Outer Continental Shelf Lands Act of August 17, 1953, 67 Stat. 462; 43 U.S.C. 1331 et seq. as amended (92 Stat.629), (hereinafter called the "Act"). The lease is issued subject to the Act; all regulations issued pursuant to the Act and in existence upon the Effective Date of the lease; all regulations issued pursuant to the statute in the future which provide for the prevention of waste and conservation of the natural resources of the Outer Continental Shelf and the protection of correlative rights therein; and all other applicable statutes and regulations.

Statutes & Regulations. This lease is issued under the Outer Continental Shelf Lands Act 43 U.S.C. 1331 et seq., as amended (the "Act"), and the Notice of Sale dated . This lease is subject to the terms of that Notice, the Act, all applicable laws, and the rules and regulations of the Secretary of the Interior now or hereafter in effect, when not inconsistent with any express provisions of this lease. This lease is also subject to all applicable Executive Orders issued by the President now or hereafter in effect.

2 Rights of Lessee

The Lessor hereby grants and leases to the Lessee the exclusive right and privilege to drill for, develop, and produce oil and gas resources, except helium gas, in the submerged lands of the Outer Continental Shelf containing approximately _________ acres ____________ hectares (hereinafter referred to as the "leased area", described as follows:

(a) the nonexclusive right to conduct within theleased area geological and geophysical explorations in accordance with applicable regulations; (b) the nonexclusive right to drill water wells within the leased area, unless the water is part of geopressured-geothermal and associated resources, and to use the water produced therefrom for operations pursuant to the Act free of' cost, on the condition that the drilling is conducted in accord-ance with procedures approved by the Director of the Minerals Manage-ment Service or the Director's delegate (hereinafter called the "Director"); and

(c) the right to construct or erect and to maintain within the leased area artificial islands, installations, and other devices permanently or temporarily attached to the seabed and other works and structures necessary tothe full enjoyment of the lease, subject to compliance with applicable laws and regulations.

Rights Granted to the Lessee. The Lessor grants to the Lessee the exclusive right to explore for, develop, and produce oil and gas resources, except helium gas, in the submerged lands of the Outer Continental Shelf. The right is subject to the Lessorês approval of plans and permits required under the Act and regulations. The Lessee also has the following rights:

(a) the nonexclusive right to conduct geological and geophysical explorations according to applicable regulations; (b) the nonexclusive right to drill water wells, except wells in geopressured-geothermal and other geothermal reservoirs, and to use the water produced for operations under the Act free of cost. Drilling must be conducted according to procedures approved by the Lessor; (c) the right to construct and maintain devices and structures necessary to the full exercise of rights under lease, subject to compliance with applicable laws and regulations.

3 Term

This lease shall continue from the Effective Date of the lease for the Initial Period and so long thereafter as oil or gas is produced from the leased area in paying quantities, or drilling or well reworking opera-tions, as approved by the Lessor, are conducted thereon, or as otherwise provided by regulation.

Rewritten in plain language

4 Rentals

The Lessee shall pay the Lessor, on or before the first day of each lease year which commences prior to a discovery in paying quantities of oil or gas on the leased area, a rental as shown on the face hereof.

This section was combined with 5,6, 7 and renumbered and retitled Section 7; Payment of Rent and Royalty. Redundant provisions: 43 USC 1337; 30 CFR 206, Subpart C, 30 CFR 202.100; and 30 CFR 218, subparts B&D. Also rewritten in plain language.

4 Indemnification

The Lessee must indemnify the Lessor for any claim, including claims for loss or damage to property or injury to persons resulting from any operation on the leased area conducted by or on behalf of the Lessee. However, the Lessee is not responsible to the Lessor under this section for any loss, damage, or injury caused by or resulting from:a) the Lessorês negligence, other than the commission or omission of a discretionary function or duty, or

b) the Lesseeês compliance with an order of the Lessor against which the Lessee filed an administrative appeal if the appeal is filed before the cause of action for the claim arose and if the Lessee prevails in the administrative appeal or subsequent action for Judicial review.

5 Minimum Royalty

Minimum Royalty. The Lessee shall pay the Lessor, at the expiration of each lease year which commences after a discovery of oil and gas in paying quantities, itminimum royalty as shown on the face hereof or, if there is production, the difference between the actual royalty required to be paid with respect to such lease year and the prescribed minimum royalty if the actual royalty paid is less than the minimum royalty.

This language was combined with and renumbered with original Section 4, 6 and 7 to Section 7, Payment of Rent and Royalty and written in plain language.

5 Access to Records

Access to Records. In accordance with regulations, if requested by the Lessor the Lessee agrees to provide within a reasonable time to any authorized representative of the Department of the Interior all books, accounts, maps and any other words in the possession or under control of the Lessee, its affiliates, or agents, that are relevant to operations, payments, disposition of the production, or any other activity occurring under this lease. The Lessee also agrees to keep these records open for inspection by any authorized representative at all reasonable times. This clause applies regardless of whether the records were prepared by or are under the control of the Lessee, or its affiliates, or agents. Information regarding disposition of the production includes, but is not limited to, all records regarding the sale or other disposition of oil or gas produced from the leased area by the Lessee or any of its affiliated or related entities.

6 Royalty on Production

Royalty on Production.

(a) The Lessee shall pay a fixed royalty as shown on the face hereof in amount or value of production saved, removed, or sold from the leased area. Gas (except helium) and oil of all kinds are subject to royalty. Any Lessee is liable for royalty payments on oil or gas lost or wasted from a lease site when such loss or waste is due to negligence on the part of the operator of the lease, or due to the failure to comply with any rule or regula-tion., order, or citation issued under the Federal Oil and Gas Royalty Management Act of 1982 or theAct. The Lessor shall determine whether production royalty shall be paid in amount or value.

(b) The value of production for purposes of computing royalty on pro-duction from this lease shall neverbe less than the fair market value of the production. The value of production shall be the estimated reasonable value of tie production as determined by the Lessor, due consideration being to the highest price paid for a part or for a majority of production of like quality in the same field or area, to the price received by ,fie Lessee, to posted prices, to regulated prices, and to other relevant mat-ters. Except when the Lessor, in its discretion, determines not to consider special pricing relief from otherwise applicable Federal regulatory re-quirements, the value of production for the purposes of computing royalty shall not be deemed o be less than the gross proceeds accruing to the Lessee from the sale thereof. I n the absence of good reason to the contrary, value

computed on the basis of thehighest price paid or offered at the time of production in a fair and open market for the major portion of like-quality products produced and sold from the field or area where the leased area is situated will be considered to be a reasonable value.

(el When paid in value, royalties on production shall be due and payable monthly on the last day of each month next following the month in which the production is obtained, unless the Lessor designates a later time. When paid in amount, such royalties shall be delivered at pipeline connections or in tanks provided by theLessee. Such deliveries shall be made at reasonable times and intervals and, at the Lessor's option, shall be effected either (i) on or immediately adjacent to the leased area, without cost to the Lessor, or (ii) at a more convenient point closer to shore or on shore, in which eventLessee shall be entitled to reimbursement for the reasonable cost of transporting the royalty substance to such delivery point.

This section was rewritten in plain language and combined, renumbered with sections 4, 5 & 7 to Section 7: "Payment of Rent and Royalty"

6 Reservations to Lessor

Reservations to Lessor. All rights in the leased area not expressly granted to the Lessee by the Act, the regulations, or this lease are reserved to the Lessor. Reserved rights include, but are not limited to: (a) authorizing geological and geophysical exploration in the leased area which does not unreasonably interfere with or endanger actual operations under this lease; (b) granting easements or right-of-ways; (c) granting leases for any minerals other than oil and gas, provided that operations under such leases do not unreasonably interfere with or endanger operations under this lease; and (d) suspending operations under this lease during war or national emergency as provided in section 12 (c) or 12 (d) of the Act. If the Lessor suspends operations or restricts activities under those sections of the Act, rent and royalty payments will be suspended and the term of this lease will be extended by adding the suspension period. The Lessor will pay the Lessee just compensation for such suspension as provided by the Act.

7 Payments

The Lessee shall make all payments (rentals, royalties and any other payments required by this lease) to the Lessor by electronic transfer of funds, check. draft on a solvent bank, or money order unless otherwise provided by regulations or by direction of the Lessor. Rentals, royalties, and any other payments required by this lease shall be made payable to the Minerals Management Service and tendered to the Direc-tor. Determinations made by the Lessor as to the amount of payment due shall be presumed to be correct and paid as due.

The original section 7 was combined with sections 4,5 & 6. Payment and Rent and Royalty: The Lessee must pay the rent, minimum royalty, or royalty on the value production saved, removed or sold at the rate specified on the face of this lease. The Lessor may require payment of the royalty in kind. Payment must comply with applicable regulations and the following provisions:

(a) The Lessee must pay rent for each lease year which begins before determination of oil or gas in paying quantities in the leased area. Rent for the first year is sue by the eleventh business day after receipt of this lease, and for subsequent years is due on or before the anniversary date of this lease. (b) The Lessee must pay minimum royalty for each year which begins after a determination of oil or gas in paying quantities on the lease area is made by the Lessor. Minimum royalty is due by the day before the next anniversary of the lease. If production occurs, the Lessee must pay the greater minimum royalty or royalty. (c) The Lessor reserves authority to establish reasonable value of all production for royalty purposes. To establish the value of production, the Lessor may use dispositions by the Lessee, its affiliates, and others related to the Lessee, or the Lessor may use other considerations specified under applicable regulations.

(d) The Lessee must place production in marketable condition and market the production at no cost to the Lessor. (e) The lessee shall deliver royalty oil and gas resources taken in kind to a delivery point designated by the Lessor.

7 Payment and Rent and Royalty

Payment and Rent and Royalty: The Lessee must pay the rent, minimum royalty, or royalty on the value production saved, removed or sold at the rate specified on the face of this lease. The Lessor may require payment of the royalty in kind. Payment must comply with applicable regulations and the following provisions:

(a) The Lessee must pay rent for each lease year which begins before determination of oil or gas in paying quantities in the leased area. Rent for the first year is sue by the eleventh business day after receipt of this lease, and for subsequent years is due on or before the anniversary date of this lease. (b) The Lessee must pay minimum royalty for each year which begins after a determination of oil or gas in paying quantities on the lease area is made by the Lessor. Minimum royalty is due by the day before the next anniversary of the lease. If production occurs, the Lessee must pay the greater minimum royalty or royalty. (c) The Lessor reserves authority to establish reasonable value of all production for royalty purposes. To establish the value of production, the Lessor may use dispositions by the Lessee, its affiliates, and others related to the Lessee, or the Lessor may use other considerations specified under applicable regulations.

(d) The Lessee must place production in marketable condition and market the production at no cost to the Lessor. (e) The lessee shall deliver royalty oil and gas resources taken in kind to a delivery point designated by the Lessor.

8 Bonds

Bonds. The Lessee shall maintain at all times the bond(s) required byregulation prior to theissuance of the lease and shall furnish such addi-tional security as may be required by the Lessor if, after operations have begun, the Lessor deems such additional security tobe necessary.

This provision was deleted because it is redundant of 30 CFR 256 Subpart I.

8 Delinquent Operations

Replaced with Diligent Operations: The Lessee must properly and timely develop and produce this lease. Under normal conditions, the Lessee will explore and commence development within the primary term of this lease. After due notice in writing from the Lessor, the Lessee must drill such wells and produce at such rates consistent with sound operating principles as the Lessor may require.

9 Plans

Plans. The Lessee shall conduct all operations on the leased area in accordance with approved exploration plans and approved development and production plans as are required by regulations. The Lessee may depart from an approved plan onlyas provided by applicable regulations.

This provision deleted due to redundance of 30 CFR 250, Subpart B.

9 Removal of Property on Termination of Lease

Removal of Property on Termination of Lease. In accordance with regulations, the Lessee must submit for approval a plan for well abandonment and platform decommissioning within three months after termination in whole or in part unless the Lessor approves a longer period. The Lessee must provide for the removal of all devices, works, and structures from the premises no longer subject to the lease, according to applicable regulations and orders of the Lessor. All abandonment and removal operations must be completed within one year after termination of this lease unless otherwise approved by the Lessor. Failure to comply will result in penalties under the regulations. The Lessor may take title to any property not removed within such time. With the written approval of the Lessor under a right of use and easement, the Lessee may continue to maintain devices, works, and structures on the leased areas for drilling or producing on other leases or for other purposes.

10 Performance

Performance. The Lessee shall comply with all regulations and Orders. After due notice in writing, the Lessee shall drill such wellsand produce at such rates as the Lessor may require in order that the leased area or any part thereof may be properly and timely developed and pro-duced in accordance with sound operating principles.

Renumbered and retitled Section 8, Diligent Operations. Rewritten in Plain Language.

10 Remedies

Remedies for Lessee Non-Compliance: (a) Whenever the Lessee fails to comply with any provisions of the Act, the regulations issued under the Act, or the terms of this lease, the Lessorês remedies include, but are not limited to:

1) Penalties under Section 24 of the Act;

2) Suspension or cancellation under Section 5 of the Act;

3) Demands for payment or forfeiture of bond; or

4) Other remedies for nonperformance of a contract available under common law or statutes.

(b) The Lessorês nonenforcement of a remedy for any violation does not prevent the Lessor from exercising any other remedies for any other violation or from exercising any other remedies for the same violation occurring at any other time.

11 Directional Billing

Directional Drilling. A directional well drilled under theleased area from a surfacelocation on nearby land not covered by this lease shall bedeemed to have thesame effectfor all purposes of the lease as a well drilled from a surface location on the leased area. In those circumstances, drilling shall be considered to have been commenced on the leased area when drilling is commenced on the nearby land for the purpose of directional drilling under the leased area, and production of oil or gas from the leased area through any directional well surfaced on nearby land or drilling or reworking of any such directional well shall be considered pro-duction or drilling or reworking operations on the leased area for all pur-poses of the lease.Nothing contained in this Section shall be construed as granting to the Lessee any interest, license, easement, or other right in any nearby land.

Provision deleted due to redundance of 30 CFR 256.71

12 Safety Requirements

Safety Requirements.
The Lessee shall:

(a) maintain all places of employment within the leased area in com-pliance with occupational safety and health standards and, in addition, free from recognized hazards to employees of the Lessee or of any con-tractor or subcontractor operating within the lease area;

(b) maintain all operations within the leased area in compliance with regulations or orders intended to protect persons, property and the en-vironment on the Outer Continental Shelf; and

(c) allow prompt access, at the site of any operation subject to safety regulations, to any authorized Federal inspector and shall provide any documents and records which are pertinent to occupational or public health, safety, or environmental protection as may be requested.

Provision deleted due to redundance of 30 CFR 250.120-122 and 443 USC 1347 and 1348.

13 Suspension & Cancellation

Suspension and Cancellation.

(a)The Lessor may suspend or cancel this lease pursuant to section 5 of the Act, and compensation shall be paid when provided by the Act.

(b)The Lessor may, upon recommendation of the Secretary of Defense, during a stateof war or national emergency declared by Congress or the President of the United States, suspend operations under the lease, as pro-vided in section 12(c) of the Act, and just compensation shall be paid to the Lessee for such suspension.

Provision deleted due to redundance of 30 CFR 250.110, 250.112 and 43 U.S.C. 1334.

14 Indemnification

Indemnification.
The Lessee shall indemnify the Lessor for, and hold it harmless from, any claim, including claims for loss or damage to property or injury to persons caused by or resulting from any operation on the leased area conducted by or on behalf of the Lessee. However, the Lessee shall not be held responsible to the Lessor under this section for any loss, damage, or injury caused by or resulting from:

(a) negligence of the Lessor other than the commission, or omission of a discretionary function or duty on the part of a Federal Agency whether or not the discretion involved is abused; or

(b) The Lessee's compliance with an order or directive of the Lessor against which an administrative appeal by the Lessee is Filed before the cause of action for the claim arises and is pursued diligently thereafter.

Renumbered Section 4 and rewritten in plain language.

15 Disposition of Production

Disposition of Production.

(a) As provided in section 27(a/(2) of the Act, the Lessor shall have the rightto purchase not more than 16 2/3 percent by volume of the oil and gas produced pursuant to the lease at the regulated price or, if no regulated price applies, at the fair market value at the wellhead of the oil and gas saved, removed, or sold, except that any oil or gas obtained by the Lessor as royalty or net profit share shall be credited against the amount that may be purchased under this subsection.

(b) Pursuant to section 27(b) and (c) of the Act, the Lessor may offer and sell certain oil and gas obtained or purchased pursuant to a lease. As provided in section 27(d) of the Act, the Lessee shall take any Federal oil or gas for which no acceptable bids are received, as determined by the Lessor, and which is not transferred to a Federal Agency pursuant to sec-tion 27(a)(3) of the Act, and shall pay to the Lessor a cash amount equal to the regulated price or, if no regulated price applies, the fair market value of the oil or gas so obtained.

(c) Asprovided in section 8(b)(7) of the Act, the Lessee shall offer 20 percent of the crude oil, condensate, and natural gas liquids produced on the lease, at the market value and point of delivery as provided by regula-tions applicable to Federal royalty oil, to small or independent refiners as defined in the Emergency Petroleum Allocation Act of 1973.

(d) In time of war or when the president of the United States shall so prescribe be, the Lessor shall have the right of first refusal to purchase at the market price all or any portion of the oil or gas produced from the leased area, as provided in section 12(b) of the Act.

This provision deleted due to redundance of 43 U.S.C. 1353 and 43 U.S.C. 1337.

16 Unitization, Pooling and Drilling Agreements

Unitization, Pooling and Drilling Agreements. Within such time as the Lessor may prescribe, the Lessee shall subscribe to and operate under a unit, pooling, or drilling agreement embracing all or part of the lands subject to this lease as the Lessor may determine to be appropriate or necessary. Where any provision of a unit, pooling, or drilling agreement, approved by the Lessor, is inconsistent with a provision of this lease, the provision of the agreement shall govern.

This provision deleted due to redundance of 30 CFR 250, Subpart M.

17 Equal Opportunity Clause

Equal Opportunity Clause.During the performance of this lease, the Lessee shall fully comply with paragraphs (1) through (7) of section

202 of Executive Order 11246, as, amended (reprinted in 41CFR 60-1.4(a)), and the implementing regulations which are for the purpose of preventing employment discrimination against persons on the basis of race, color, religion, sex, or national origin. Paragraphs (1) through (7) of section 202 of Executive Order 11246, as amended, are incorporated in this lease by reference.

This provision deleted due to redundance of 41 CFR 6-1.4(a) and Executive Order 11246.

18 Certification of Nonsegregated Facilities

Certification of Nonsegregated Facilities.
By entering into this lease, the lessee certifies, as specifiedin 41 CFR 60-1.8, that it does not or will not maintain or provide for its employees any segregated facilities at any of its establishments and that it does not and will not permit its employees to perform their services atany location under its control where segregated facilities are maintained.

As used in this certification, the term "segregated facilities" means, but is not limited to, any waiting rooms, work areas, restrooms and washrooms, restaurants and other eating areas, time clocks, locker rooms and other storage or dressing areas, parking lots, drinking fountains, recreation or entertainment areas, transportation, and housing facilities provided for employees which are segregated by explicit directive or are in fact segregated on the basis of race, color, religion, or national origin, because of habit, local custom, or otherwise. The Lessee further agrees that it will obtain identical certifications from proposed con-tractors and subcontractors prior to award of contracts or subcontracts unless they are exempt under 41 CFR 60-1.5.

Effective September 18, 1997 the Labor Department amended its regulations 41 (FR 60-1.8 (b) has been deleted.^[1] The amended 60-1.8 requires the contractor maintain a non-segregated workplace, but no longer relies on the certifications of the contractor.

19 Reservation to Lessor

Reservations to Lessor.
All rights in the leased area not expressly granted to the Lessee by the Act, the regulations, or this lease are hereby reserved to the Lessor. Without limiting the generality of the foregoing, reserved rights included:

(a)the right to authorize geological and geophysical exploration in the leased area which does not unreasonably interfere with or endanger actual operations under the lease, and the right to grant such easements or rights--of-way upon, through, or in the leased area as may be necessary or ap-propriate to the working of other lands or to the treatment and shipment of products thereof by or under author of the Lessor;

(b) the right to grant leases for any minerals other than oil and gas within the leased area, except that operations under such leases shall not unreasonably interfere with or endanger operations under this lease;

(c) the right, as provided in section 12(d) of the Act, to restrict opera-tions in the leased area or any part thereof which may be designated by the Secretary of Defense, with approval of the President, as being within an area needed for national defense and, so long as such designation re-mains in effect, no operations may be conducted on the surface of the leased area or the part thereof included within the designation except with the concurrence of the Secretary of Defense, If operations or production under this lease within any designated area are suspended pursuant to this paragraph, any payments of rentals and royalty prescribed by this lease likewise shall be suspended during such period of suspension of operations and production, the term of this lease shall be extended by adding thereto any such suspension period, and the Lessor shall be liable to the Lessee for such compensation as is required to be paid under the Constitution of the United States.

Renumbered Section 6 and rewritten in plain language.

20 Transfer of Lease

Transfer of Lease.
The Lessee shall file for approval with the appropriate fieldoffice of the Minerals Management Service any instru-ment of assignment or other transfer of this lease, or any interest therein, in accordance with applicable regulations.

This provision was deleted due to redundance of 30 CFR 256, Subpart J and 43 U.S. C. 1334.

21 Surrender ofLease

Surrender of Lease.
The Lessee may surrender this entire lease or any officially designated subdivision of the leased area by filing with the appropriate field office of the Minerals Management Service a written relin-quishment, in triplicate, which shall be effective as of the date of filing. No surrender of this lease or of any portion of the leased area shall relieve the Lessee or its surety of the obligation to pay all accrued rentals, royalties, and other financial obligations or to abandon all wells on the area to be surrendered in a manner satisfactory to the Director.

This provision deleted due to redundance of 30 CFR 256.76 and 43 U.S.C. 1334.

22 Removal of Property on Termination of Lease

Removal of Property on Termination of Lease. Within a period of 1 year after termination of this lease in whole or in part, the Lessee shall remove all devices, works, and structures from the premises no longer subject to the lease in accordance with applicable regulations and Orders of the Director. However, the Lessee may, with the approval of the Direc-tor, continue to maintain devices, works, and structures on the leased area for drilling or producing on other leases.

Renumbered as Section 9 and rewritten to specify time for submission of a plan for well abandonment and platform removal.

23 Remedies in Case of Default

Remedies in Case of Default.

(a) Whenever the Lessee fails to comply with any of the provisions of the Act, the regulations issued pursuant to the Act, or the terms of this lease, the lease shall be subject to cancellation in accordance with the pro-visions of section 5(c) and (d) of the Act and the Lessor may exercise any other remedies which the Lessor may have, including the penalty provi-sions of section 24 of the Act. Furthermore, pursuant to section 8(o) of the Act, the Lessor may cancel the lease if it is obtained by fraud or misrepresentation. (b) Non-enforcement by the Lessor of a remedy for any particular viola-tion of the provisions of the Act, the regulations issued pursuant to the Act, or the terms of this lease shall not prevent the cancellation of this lease or the exercise of any other remedies under paragraph (a) of this sec-tion for any other violation or for the same violation occurring at any other time.

Renumbered Section 10, retitled remedies for Lessee non-compliance and rewritten in plain language.

24 Unlawful Interest

Unlawful Interest. No member of, or Delegate to, Congress, or Resident Commissioner, after election or appointment, or either before or after they have qualified and during their continuance in office, and no officer, agent, or employee of the Department of the Interior, except as provided in 43 CFR Part 20, shall be admitted to any share or part in this lease or derive any benefit that may arise therefrom. The provisions of Section 3741 of the Revised Statutes, as amended, 41 U.S.C. 22, and the Act of June 25, 1948, 62 Stat. 702, as amended, 18 U.S.C. 431-433, relating to contracts made or entered into, or accepted by or on behalf of the United States, form a part of this lease insofar as they may be applicable.

This provision deleted due to its redundance of 41 U.S.C. 22 and 18 U.S.C. 431-433.