Stephen R. and Mary K. Herbel - Page 12

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                  the time such natural gas is requested for                          
                  delivery under the Contract.  As used herein,                       
                  "Gross Working Interest" shall mean the share of                    
                  gas Seller has the right to sell, specifically                      
                  being prior to reduction for royalties, over-                       
                  riding royalties and other non-operating                            
                  interests.  Such recoupment shall be accomplished                   
                  as follows:                                                         
                       (a) Fifty percent (50%) of the volumes                         
                            of natural gas delivered from any                         
                            Subject Well and sold to Buyer or                         
                            to Buyer and Buyer's partial                              
                            assignee under the Contract each                          
                            month during the period May 1,                            
                            1988 through the remaining term                           
                            of the Contract, or until such                            
                            time as the Prepayment is fully                           
                            recouped or refunded, whichever                           
                            first occurs (the "Recoupment                             
                            Period"), shall be considered                             
                            recoupment gas and received                               
                            without further payment and,                              
                            accordingly, all such natural gas                         
                            purchased pursuant to the Contract                        
                            from the Subject Wells will be                            
                            retained by Buyer or by Buyer and                         
                            Buyer's partial assignee and                              
                            applied against the Prepayment                            
                            until Buyer has thereby recouped                          
                            the entire Prepayment.                                    
                       (b)  Buyer or Buyer and Buyer's partial                        
                            assignee shall have the right to                          
                            require deliveries and purchases                          
                            from each Subject Well at a daily                         
                            rate of up to the Daily Deliver-                          
                            ability of that well in effect                            
                            from time to time.  In the event                          
                            Seller fails or is unable for any                         
                            reason to tender and deliver gas                          
                            from any Subject Well at the rate                         
                            requested, then Buyer, in addition                        
                            to all other rights and remedies                          
                            available to Buyer, shall be                              
                            entitled to deduct an amount equal                        
                            to fifty percent (50%) of the                             
                            difference between the volume                             
                            requested and the volume actually                         
                            delivered, multiplied by the price                        





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