"Whereas, First Party owns outright in his name, the full interest in certain oil and gas leases and part interest in certain other oil and gas leases and is endeavoring to acquire other leases covering lands located in Stephens County, Oklahoma, described and enumerated with valuation placed on each tract, attached hereto, marked `Exhibit A' and made a part hereof, which description and prices and terms are considered in this contract and sale, and
"Whereas, First Party is desirous of selling an undivided one-third interest in and to the leases he owns in full and a one-third interest of the interest he owns in such leases in which he does not own full interest and a one-third interest in and to the full leases or interests in leases that he is arranging to acquire, and
"Whereas, said Second Party having inspected all of said leases, desires to purchase said undivided one-third interest in said full leases, interests in leases now owned and the full interests and part interests in leases arranging to be acquired,
"Now, Therefore, it is agreed and contracted as follows, to-wit:
"That the total consideration for the said interest sold and to be transferred and assigned to second party by first party is $113,294.14, $25,000.00 of this to be paid in cash as follows: $15,000.00 with the execution of this contract, $5,000.00 within ten days from date hereof, and $5,000.00 within twenty days from date hereof, said last two payments to be evidenced by promissory notes of even date herewith, drawing eight rate of interest; and the further consideration of $88,294.14
to be paid out of one-half of the oil or gas or either of them that is produced and marketed from said interests in all of said leases that is sold to Second Party, and further out of the sales of the full amount of interest in said leases Second Party is herewith acquiring. In case any sales of said leases are made, such payments out of the oil, gas and lease sales to continue to First Party until the balance of the full consideration herein described is fully paid.
"To effect the carrying out of the terms of the payment of the unpaid balance due First Party on the purchase price enumerated in next above paragraph of this contract, the Second Party hereby assigns to the First Party one-half of the interest herein acquired by Second Party in the oil or gas produced and saved from said leases, or any part thereof, and hereby agrees to execute proper division orders in favor of First Party for the purpose of delivering same to his credit. The Second Party hereby agrees and by this contract hereby assigns to First Party all of the proceeds from the sale of all or any part of said leases to First Party until, either from the proceeds of oil or gas produced or from the proceeds of property sales, or both, the full consideration has been paid to First Party.
"Included in said one-third interest in said leaseholds is a one-third interest in and to all personal property belonging to or appertaining to said leases for the operation of same, not including, however, any drilling equipment, all of which belongs full interest to the First Party and is not included in this sale.
"As a further consideration for this sale, it is understood, agreed and contracted, that First Party is to control all of the said properties, to do all of the drilling and operating of same, and that the drilling price to be paid for same is $2.50 per foot for the actual drilling; that the cost of derricks on locations, slush pits, water and fuel delivered on locations shall be furnished by both parties hereto, the cost of said drilling and the furnishing of said derrick, slush pits, water and fuel to be paid for rateably to the interests owned, that is, First Party shall pay two-thirds of the same and Second Party shall pay one-third of same. That all materials and furnishings, including casing, cement and cementing, tubing and rods, standardization, power, tanks, and everything incidental to furnishing and finishing the wells, placing the products into tanks, and pipe lines, shall be a joint cost, payable rateably to the interests owned, including the cost of testing of any sands, tested with Rotary drill pipe testing devices.
"It is further agreed and understood that there are several of the leases included in this sale that require drilling as a part of the original consideration for the First Party obtaining said leases, and that the Second Party hereto agrees that First Party shall proceed with said drilling requirements in order to save said leases and that the said Second Party will pay his pro rata of $2.50 per foot to the First Party as drilling contractor, and his pro rata of derricks, slush pits, water and fuel delivered at location.
"It is agreed and contracted that Second Party will pay First Party his pro rata part of said drilling and derricks on locations, slush pits, water and fuel and all materials and labor (not included in moving, setting up and operating the Rotary drilling machine) immediately when any one of said wells is finished and bill rendered covering same.
"First Party agrees to carry and maintain compensation insurance and to take all of the responsibility in his drilling operations but after well is finished in good order and workmanlike manner, the end of this responsibility ceases as a contractor.
"It is agreed that First Party is to have full charge of making locations and drilling such wells as he deems fit or that may be required to hold the leases or to protect them from offset drilling wells or producers, and that, likewise, said First Party shall have full and complete charge in handling all of the said leases when production is obtained thereon, however, that said Second Party shall have the right to, at any and all times, inspect any and all work and drilling and operating of said properties, including the method of doing said work and cost thereof, and the accounting for all of the expenses of same.
"It is agreed that both parties will endeavor to sell at different times a part or all of the properties at a fair value and at the best prices obtainable, and to the best advantage to both parties hereto, and that in case one party deems it advisable to sell any one of the properties or all of same, that he shall communicate any prices made for any such properties to said other Party before sale is made and said other party will be privileged to buy same at the price and terms submitted by First Party or a bona fide buyer.
"It is further agreed and understood that, the price, terms and conditions and deliveries considered, First Party will endeavor to purchase all materials and equipment for operating his drilling rigs, developing and maintaining the leases from Second Party, it being understood that Second Party shall be entitled to make a profit on same, but that his prices must be in accordance with prices of other supply houses for like merchandise.
"First Party agrees that in the handling of the development and operating of said leases, that he will use every effort to do so as economically as good work and material will justify.
"It is agreed that pipe line division orders covering any and all of said leases on which production may be obtained, will be duly executed in favor of both parties hereto, pro rata to the interests owned, except that as long as any unpaid balance is due First Party, of the purchase price and consideration, one-half of the Second Party's oil or gas run settlements will be paid direct to First Party by the purchasers of any such oil or gas, but when said balance of purchase price consideration is paid, then said Second Party will be entitled to and shall receive direct settlement for his full interest from said purchasers of oil and gas. This will also cover lease sales or personal property, that is, after all of the purchase price consideration is paid, Second Party's part of any lease sales shall be paid direct to them by the purchaser.
"It is agreed that there are...
