Thompson Amendment Group

1. Thompson Amendment Group T.A.G. PowerPoint of Revised Amendment January 1, 2013

2. FYI : Member Information Information from the last poll of TAG members: The majority are accepting the revised amendment. The majority of members have not sought legal advice from a professional. Members that have sought legal advice are accepting the revised amendment. A small number are undecided and have yet to seek legal advice. As of this writing, very few members are considering rejecting the revised amendment.

3. The original SWN Amendment stated: “Lessor and Lessee desire to amend certain terms and provisions of the Subject Lease to conform to and be consistent with comparable terms in other leases to be pooled therewith for  the full and uniform development of Lessee’s proposed gas unitsin the general area of the Subject Lease” TAG has requested that Southwestern Energy bring together our neighbors who have signed the original amendment. A Southwestern representative has stated they are “considering” extending the terms of the TAG/SWN Amendment to those who previously signed, based on the approval numbers of the TAG membership.

4. Southwestern Amendment Deleted: “defined Vertical Well Area 40 Acres (as defined herein) or defined Horizontal Well Area 160 Acres (as defined herein)” Added: Leasehold UnitorPooled Unit Southwestern maintained the position they could not properly conduct business without this change. TAG requested security for landowners in the Pooled Unit. Our position was if we were not to receive added monetary benefits, our decision to agree to such terms must involve language of security and long term involvement in the Unit. THIS HAS NOT CHANGED!

5. In Deleting the definition of Horizontal and Vertical Wells, the gas company no longer has to place a well (every 40 acres = V, every 160 Acres = H) before reaching the maximum Unit size currently allowed by the lease of 640 + 10% (704) acres into a Unit; and with one Well, can declare all 640 + acres as “In Development” Why is this important? Land “in development” or “in operations” is not returned to the landowner or subject to Paragraph 18: EXTENSION OF TERMS at the end of the primary term! A PUGH Clause modifies the effect of the lease pooling by severing pooled portions of the leasehold from non-pooled portions, so that drilling, or production will not extendthe lease for non-pooled, non-royalty paying portions. The Pugh Clause for surface areas are intact. Leasehold surface acreage Not in a Pooled Unit at the conclusion of the lease primary term - December 2014 - will either be released or subject to Paragraph 18: Extension of Terms.

6. Review of Paragraph 18: Extension of Terms This Lease may, at lessee’s option, be extended as to all or part of the lands covered hereby for one (1) additional term of three years commencing on the date that the Lease would have expired but for the extension. Lessee may exercise its option by paying or tendering to Lessor prior to the expiration of the primary term an extension payment of (a) Five Thousand Seven Hundred Fifty Dollars ($5,750.00) per acre included within the Leasehold, or (b) the highest verifiable per acre offer in hand by Lessor no later than thirty (30) days prior to the expiration of the Primary Term, whichever is greater.In the event the Lessor possesses a bona fide offer, in order to be considered verifiable, such offer must be in writing and signed by an officer of the proposing company, which must be an industry recognized oil and gas exploration and production company and not, for example, an independent land consulting firm. If Lessee exercises this option, the primary term of this Lease shall be considered to expire on…. (December ---, 2014.)

7. To be Clear The gas company has the first option to extend or hold your lease for an additional three (3) years – in exchange for the same, or greater, bonus payment amount as received at the initial signing. Paragraph 18 also states that if the Landowner has another offer to lease and Southwestern Energy chooses not to meet that offer, the landowner may lease to another gas company. Unless your land is in a Unit and considered “In Development”

8. Vertical Pugh Clause Clarified The Third paragraph of numbered Paragraph 3 is amended to read: If at the end of the Primary Term, a part but not all of the Leasehold is not included within a Leasehold Unit or Pooled Unit, this Lease shall terminate as to: (i)such part, or parts, of the Leasehold not included in a Leasehold Unit or Pooled Unit, and (ii) such part or parts of the Leasehold included in a Leasehold Unit or Pooled Unit, but only as to formations situated one hundred feet (100’) below the top of the Onondaga Formation, unless this Lease is perpetuated under Paragraph 7 or perpetuated as to such portion of the Leasehold by operations conducted thereon or by the production of oil or gas, or by such operations and such production in accordance with the provisions hereof. OLD WORDING: If at the end of the Primary Term, a part but not all of the Leasehold, on a surface acreage basis and on a vertical basis (with the lower terminus being the horizon that is one hundred feet (100') below the deepest producing interval for a specific well) is not included within a defined Vertical Well Area (as defined herein) or defined Horizontal Well Area (as defined herein), this Lease shall terminate …

9. Example of Vertical Pugh Clause SURFACE MARCELLUS – Natural Gas ONONDAGA 100 Feet All formations below this green line remain un-leased and the property of the Landowner UTICA SHALE - Oil

10. The Amendment no longer deletes: Contiguous land means lands connected together so as to form an unbroken sequence. “contiguous lands” This was a concern for landowners with smaller parcels of land. Paragraph 7 is amended to read as follows: “Subject to the terms of this Lease, Lessor grants Lessee the right to pool, unitize or combine all or parts of the Leasehold with other contiguous or adjacent lands or lands located within a 1,000’ radius of other contiguous or adjacent lands, whether leased or un-leased, whether owned by Lessee or by others, at any time before or after the commencement of actual drilling operations to create drilling or production units (each a “Unit,” individually referred to as Leasehold Units or Pooled Units, as defined above) either by contract right or pursuant to governmental authorization, rule or order.

11. Example of Adjacent and Contiguous Adjacent Contiguous A B C D 1,000 Feet BLUE = Pooled Unit WHITE = “B” Non –Leased Property

12. UNITIZATION AND POOLING. 7 (a) Original last sentence Lessee shall record the Unit Agreement with the land records of Susquehanna County, Pennsylvania, and provide Lessor with a recorded copy of the Unit Agreement, prior to drilling a well on the Unit. 7 - Last sentence amended to read: Lessee shall record the Unit Agreement with the land records of Susquehanna County, Pennsylvania, and provide Lessor with a recorded copy of the Unit Agreement within sixty (60) days of its receipt of same from the County Recorder’s office.

13. Unit Size and Shape Southwestern deleted: Lessee shall not, at its sole option, change the size, shape, and conditions of operation or payment of any Unit created hereunder without the express written consent of Lessor. The amendment now reads: Lessee may at its sole discretion, at its sole option, change the size, shape, and conditions of operation or payment of any Unit created hereunder without the express written consent of Lessor.

14. Landowner Security If the landowner is expected to share monthly royalties in a larger pooled unit and give the Gas Company sole discretion to change the shape and size of such a Pooled Unit… The landowner should remain in the producing Unit until royalties from the entire pooled unit are realized. The revised amendment agrees to protect the interest of the landowner with language stating that upon first production, those portions of the leasehold in a Unit, will remain in such UNIT. Added to Paragraph 7: “However, and notwithstanding the foregoing, Lessee agrees that after establishing first production in a Pooled Unit containing all or any portion or portions of the Leasehold, it will not exclude or eliminate any portion of the Leasehold from such Pooled Unit, except through title failure or similar circumstances beyond its control.”

15. Remember this? As a result of the amendment, the gas company will have the “sole discretion” to change the size and shape of the Unit without written consent or notification to Landowners in the UNIT. C A Landowner “A” has been excluded from the NEW Unit H B What happens to landowner “A” ? D

16. Size and Shape The gas company will “still” have the “sole discretion” to change the size and shape of the Unit without written consent or notification to Landowners in the UNIT.However… “However, and notwithstanding the foregoing, Lessee agrees that after establishing first production in a Pooled Unit containing all or any portion or portions of the Leasehold, it will not exclude or eliminate any portion of the Leasehold from such Pooled Unit, except through title failure or similar circumstances beyond its control.” C A H B The gas company will not exclude or eliminate any portion of the leasehold from such pooled unit, and must now include Landowner A regardless of shape or size D

17. How Does Size and Shape Matter? Amended Paragraph 7: Lessor agrees to accept and receive out of the production or the revenue realized from the production of a well drilled on such Unit, such proportional share of the Royalty from each Unit as the number of Leasehold acres included in the Unit bears to the total number of acres in the Unit. Otherwise, as to any part of the Unit, drilling, operations in preparation of drilling, production, or shut-in production from the Unit, or payment of Royalty or Shut-in Royalty attributable to any part of the Unit (including non-Leasehold land) shall have the same effect upon the acreage of the Leasehold included in such Unit as if a well were located on, or the subject activity attributable solely to, the Leasehold. Lessee shall record the Unit Agreement with the land records of Susquehanna County, Pennsylvania, and provide Lessor with a recorded copy of the Unit Agreement within sixty (60) days of its receipt of same from the County Recorder’s office.

18. Can the Size of a Unit affect my royalty payments? YES! But it may not be as bad as it sounds!

19. What happens if Unit Size decreases? If Size of Unit decreases, royalty payments should rise! 600 Acre Unit 300 Acre Unit C 50 Acres A 50 acres / 300 Acre Unit = 1/6 Royalty. B 50 acres / 600 Acre Unit = 1/12 Royalty D

20. What happens if the Unit Size Increases? If Size of Unit increases, royalty payments should also decrease, until, the Unit is developed further! 300 Acre Unit 600 Acre Unit C 50 Acres A H H 1 Well: 50 acres / 600 Acre Unit = 1/24 Royalty. 2 1/12 Royalty B 1 Well: 50 acres / 300 Acre Unit = 1/12 Royalty D A Unit, we are told, will increase in size because of development And, therefore, royalty payments should then increase.

21. “Continuous Development Plan” Paragraph 7, subparagraph 3 • Lessor and Lessee agree that this lease shall remain in full force and effect as to all of the Leasehold hereunder so long as Lessee continuously develops the Leasehold as follows. • If Lessee is engaged in drilling operations on the lease premises or lands pooled or unitized therewith at the end of the primary term, this Lease shall not terminate if Lessee conducts a program of continuous drilling, allowing no more than 180 days to elapse between the completion of one well and the commencement of operations for the next succeeding well. • If Lessee is not actually drilling on the lease premises or lands pooled or unitized therewith at the end of the primary term, but this Lease is maintained at the end of the primary term by some other lease provision to continue to maintain the Lease in force and effect, then within 180 days after the expiration of the primary term, Lessee shall commence to conduct a continuous drilling program allowing no more than 180 days to elapse between the completion of one well and the commencement of operations for the next succeeding well. • For the purposes of this continuous development provision, “commencement of operations” shall be presumed to be the date Lessee commences actually drilling with rotary drilling tools of a suitable size necessary to reach the objective depth. “Completion” shall be presumed to be the date of filing of a completion or potential test report with the applicable governing agency, if a productive well, or the filing date of the plugging report with the applicable government agency, if a dry hole.

22. NOTICE TO DRILL • 8 d: Notice to Drill. Prior to commencement of drilling on the Leasehold or the Pooled Lands, Lessee shall provide written notice (the "Drilling Notice") to Lessor of Lessee's intent to drill a well on or about the Leasehold, together with a plat of the Leasehold and, if applicable, the Pooled Lands showing the location of each well to be drilled, together with the pipelines to be used for the purpose of transporting oil or gas from any well site and, if applicable, for transporting water in the operation of such well. Lessor shall have thirty (30) days after its receipt of the Drilling Notice to furnish its written comments thereto to Lessee and, in the event Lessor meets such deadline, Lessee shall make such changes as may be reasonably practicable under the circumstances to accommodate any reasonable concerns of Lessor. However, in the event Lessor does not furnish its written comments in a timely manner, Lessor's approval of the Drilling Notice shall be deemed to have been given.

23. Paragraph 8 “c” - still applies ! • Notice Prior To Commencement of Drilling: Prior to the commencement of any surface preparation in connection with a drill site or the construction of a road to a drill site, Lessee shall provide to Lessor, in writing, notice of its intent to commence surface preparation, together with a plat describing the proposed area of operations, thirty (30) days prior to Lessee's entry upon the Leasehold

24. “Division Orders” During discussions, the TAG negotiation team was advised that Well information will be made available to the landowners in a Unit through “Division Orders.” Paragraph 4(c) Lessee shall have the right to use, free of cost, gas and/or oil produced on said land for Lessee's post-production operations conducted on the Leasehold, or on lands pooled or unitized therewith, and directly related to constituents produced from the Leasehold. Lessor shall execute a Division Order setting forth his interest in production. Our understanding is that this information is also available through the Courts for a small fee.

25. RESERVED GAS • Clarity has been established for the amount a landowner with a well pad will receive each year in place of reserved gas. The value of 350,000 cubic feet of gas has been set, there are no variables based on landowner use. • (i.e. - if the price of natural gas was $2.00 Mcf, the landowner would receive $7,000 that year. At $4.00 Mcf, the landowner would receive $14,000 that year)

26. Reserved Gas Payment Clarified Revised Amendment: In addition to the above changes, Lessor hereby waives its right to secure reserve gas under option (a) of Paragraph 22 of the Addendum to Oil and Gas Lease Agreement and shall receive from Lessee the cash equivalency for such gas by electing under option (b) of said Paragraph 22 of the Addendum to Oil and Gas Lease Agreement. (Added to Revision) The volume of gas that will be used in this price computation will be 350,000 cubic feet per year and will be free of all costs. Written language assures us there will be no variables in the amount of natural gas. Computation for Annual Cash Amount as per Original Lease: “Lessee shall make one annual payment the timing of such which shall be made in such a manner that allows the price computation to be made based upon the average monthly sales price of gas for the previous year's production of gas from the Leasehold, or if such Sales Price information is not available then the computation shall be made using the average monthly Sales Price of Lessee's production in the closet proximity to the Leasehold. “

27. Original Lease Addendum - Paragraph 22: At the Lessor's election, the Lessor may either: (a) Lessor may, at the Lessor's sole cost, risk and expense, cause to be installed, by a person qualified to do so and approved by Lessee, a meter to measure all gas taken from Lessee's Well by Lessor, a Pipeline from one, and only one, should there be multiple Wells, Gas Well on the Leased Premises, and take Gas produced from said Well physically located on the Leased Premises for one building on the Leased Premises subject to the use and the right of abandonment of the Well by the Lessee. Lessor may take up to Three Hundred Fifty Thousand (350,000) cubic feet of gas in each year free of cost. Any and all gas taken by Lessor, if any, in excess of Three Hundred Fifty Thousand (350,000) cubic feet of gas taken each year shall be paid for at the Sales Price. Lessor shall, at Lessor's sole cost, risk and expense, maintain the said Pipeline, meters, regulators, and equipment in good repair and free of all gas leaks and operate the same so as not to cause waste or unnecessary leaks of gas. Lessee retains the right to approve the construction plans and contractor for the installation of all equipment, to include, by way of example and not limitation, the meter and the pipeline, required for the transmission and measurement of house gas. Lessee also retains the right to repair and maintain Lessor's equipment to Lessees standards. Any cost associated therewith shall be fully reimbursed by Lessor to Lessee. If the Lessor shall take excess gas as aforesaid in any year and fail to pay for the same, the Lessee may deduct payment for such excess gas from any rentals or Royalties accruing to the Lessor hereunder. Lessor acknowledges that he has been advised as to the risks inherent in the taking of gas in this manner, and Lessor agrees to assume all such risks caused by Lessor's lines or equipment, Lessor agrees to hold Lessee and the Well operator and all parties in interest in any Well on the Leased Premises harmless from any claims of any nature whatsoever which may arise by the usage of gas from any such Well by Lessor, his heirs, executors, administrators, and assigns. The meter installed by Lessee shall be the exclusive measuring instrument for the determination of the Gas actually taken by Lessor. Lessee, and only Lessee, shall be responsible for and shall maintain such meter and remove, as and when necessary, all charts and other information necessary to determine the amount of Gas taken by Lessor; or (b) Lessor may permanently waive any right to secure such reserve gas and in consideration of Lessor waiving such right, Lessee agrees to pay Lessor the cash equivalency for such gas at the average Sales Price received by Lessee for the preceding production year. Lessee shall make one annual payment the timing of such which shall be made in such a manner that allows the price computation to be made based upon the average monthly sales price of gas for the previous year's production of gas from the Leasehold, or if such Sales Price information is not available then the computation shall be made using the average monthly Sales Price of Lessee's production in the closet proximity to the Leasehold. If Lessor conveys a portion of its interest in the Leasehold, Lessor may convey its entitlement to the cash equivalency for the reserved gas as part of such conveyance, but may not subdivide such entitlement If the Leasehold is pooled, unitized, or combined with other lands, the cash equivalent entitlement for reserved gas, as herein referred to, shall extend only to the Lessor upon whose property the surface location of the well is situated. Deleted

28. Offset Well Clause Reinstated 7 (g) Offset Well: Should a Well be drilled and completed on lands adjacent to the Leased Premises as a Well capable of production in Paying quantities with a bottom hole location of 660 feet or less from the boundary of the Leased Premises ("Adjacent Well"), but the Unit for such Adjacent Well does not include any portion of the Leased Premises in the Unit therefore, then within six (6) months of Lessee's knowledge of the completion of said Adjacent Well as a Well capable of commercial production, the Lessee shall take such action as would a prudent operator under the same or similar conditions, to protect the drainage of any and all Oil and Gas from Formations underlying the Leased Premises, to include (i) the drilling of an offset well or (ii) releasing such portion of the Leasehold it deems necessary to allow the drilling of an offset Well. REVISED: Should a well be drilled and completed by a third party on lands adjacent to the Leased Premises as a well capable of production in paying quantities with a bottom hole location of 660 feet or less from the boundary of the Leased Premises (“Adjacent Well”), but the Unit for such Adjacent Well does not include any portion of the Leased Premises in the Unit therefore, then within six (6) months of Lessee’s knowledge of the completion of said Adjacent Well as a well capable of commercial production, the Lessee shall take such action as would a prudent operator under the same or similar conditions, to protect the drainage of any and all oil and gas formations underlying the Leased Premises, to include (i) the drilling of an offset well or (ii) releasing such portion of the Leasehold it deems necessary to allow the drilling of an offset well.

29. Paragraphs 4 b (ii) and 4 b (e) - 21% Royalty is Intact • 4 b (ii)  GAS: Lessee shall deliver to the credit of Lessor, free of all costs (whether)pre- production or post-production), a monthly Royalty equal to twenty one percent (21 %) of the greater of (i) the market value, measured at the point of take, of all gas and any constituents produced from the Leasehold or lands pooled or unitized therewith, or (ii) the gross amount of revenue paid to Lessee for all gas and any constituents produced from the Leasehold or lands pooled or unitized therewith, measured at the point of take; provided, however, that when gas production is sold in an arms-length sale transaction with an unaffiliated third party, the value of such gas production shall be the price paid to Lessee. • 4 b (e) Characterization of Payments: Payments set forth herein are covenants and special limitations, regardless of the manner in which these payments may be invoked. Subject to any applicable grace period set forth herein, any failure on the part of the Lessee to timely or otherwise properly tender payment may result in the termination, expiration, cancellation, or forfeiture of this Lease. Royalty payments due hereunder for oil and for gas or other products or liquid hydrocarbons shall be paid monthly within sixty (60) days following each monthly sales period. Lessee shall submit statements of all oil and gas, and other hydrocarbons or products sold within a unitized area along with the royalty payments for each sales period. Lessee shall pay interest on late Royalty or Shut-in Royalty payments and other sums due Lessor at a rate equal to the lesser of the highest lawful rate or fifteen percent (15%) per annum. The obligation of Lessee to pay such interest is in addition to and shall not in any way restrict or limit the rights of Lessor to pursue other remedies. If Lessor considers that Lessee has not complied with all its obligations hereunder, both express and implied, Lessor shall give written notice to Lessee specifically describing Lessee's non-compliance. In the case of monetary noncompliance, the failure to pay any amount due hereunder,Lessee shall have 20 days from receipt of such notice to satisfy such monetary obligation of Lessee with respect to Lessor's notice. No judicial action may be commenced by Lessor for forfeiture of this Lease or for damages until the expiration said 20-day period. In the case of non-monetary noncompliance, Lessee shall have 60 days from receipt of such notice to satisfy such obligation of Lessee, if any, with respect to Lessor's notice or if the non-compliance cannot be expected to be remedied within 60 days then before the expiration of the 60 days Lessee will provide Lessor a written plan of action which includes specific operations to take place and a schedule with dates to remedy the non-compliance and, in such case, then for so long as Lessee is diligently attempting to remedy the non-compliance. Neither the service of said notice nor the doing of any act by Lessee in response thereto shall be deemed an admission or create a presumption that Lessee has failed to perform all its obligations hereunder. No judicial action may be commenced by Lessor for forfeiture of this Lease or for damages until the expiration said 60-day period.

30. Landowners were told the “assignee” would honor the terms and conditions of the original lease. We were advised that legally there are no provisions in the lease that compels the gas company to develop land, and the “implied covenant to develop” by holding the lease, would be a very difficult and expensive case to successfully argue in court. Gas company’s have the legal right to seek amendments. Original Paragraph 10. SUCCESSORS. All rights, duties, and liabilities herein benefit and bind Lessor and Lessee and their heirs, successors, and assigns; provided that Lessee shall have no right hereunder to assign this Lease or any portion thereof without the express written approval of Lessor (which approval cannot be unreasonably withheld or delayed) given in Lessor's sole and absolute discretion. In requesting such approval, Lessee shall present to Lessor a full and complete final copy of the proposed assignment agreement. Original Paragraph 13.ASSIGNMENT: Lessee shall not use or allow to be used, the Leasehold for any other purpose than authorized by this instrument and shall not assign or sublet the Leasehold in whole or in part, nor grant a working interest in any well on the Leasehold, at any time or from time to time without the prior written consent of Lessor, which approval shall not be unreasonably withheld or delayed. Lessee shall make application to obtain such consent in writing accompanied by a plat to Lessor describing the land or well to be assigned, and the interest therein if less than the whole, together with the interest retained by Lessee/assignor (or overriding royalty to be paid to Lessee/assignor). Assignee shall agree in writing to be bound by all of the terms and provisions of the Lease. Lessor shall respond to such request for approval within 30 days of receipt of such request and accompanying information. After Lessor has consented to the assignment, assignor shall be released from all liability under this Lease arising or accruing subsequent to the date of such assignment as to the part or parts so assigned; and assignee thereof shall, thereupon, be deemed to have assumed and be responsible for the covenants, conditions, and obligations of this Lease as to the part or parts assigned. In the event that a portion only of the Leasehold is assigned, the default of any of the covenants, conditions, or obligations of this Lease by one of the holders of a portion of the Leasehold created by an assignment will not affect the interests of a party not in default. Lessor has entered into this lease with Lessee based upon its confidence in the competency and financial condition of Lessee and Lessor reserves the right to disapprove any proposed assignment of this lease; provided however that the Lessor shall not unreasonably withhold or delay its approval of assignment where the assignee is demonstrated to possess the financial capabilities, technical expertise and experience necessary to complete the Lessee's obligations under this Lease.

31. Affidavit of Possession Original Paragraph 5. TITLE DUE DILIGENCE: Lessor makes no warranty of its title to oil or gas rights under the Leasehold and Lessee enters into this Lease relying solely on its own title due diligence. Notwithstanding the foregoing, in order to protect the rights granted to Lessee herein, if Lessee receives notice that Lessor is delinquent in the payment of any land contract, mortgage, taxes, or other liens or charges with respect to said land either before or after maturity, Lessee may, at its option, pay all or part of such liens, taxes or other encumbrances and be subrogated to the rights of the holder thereof, … and that Lessee shall be entitled to reimbursement out of any royalty or other monies payable to Lessor hereunder. It is recommended that anyone receiving such an affidavit should contact a professional or his or her attorney for advice.”

32. POOLED UNITS If any member has been excluded from a Pooled Unit due to their refusal to sign the original amendment, please advise TAG of your situation ASAP. A Southwestern representative has stated that anyone excluded from a Pooled Unit will “eventually” be included.

33. Signing Arrangements T.A.G. will be making arrangements for members who are accepting the Amendment in the next few weeks. Only members of TAG will be placed on the TAG list. Please contact TAG at the following address: T.A.G. P.O. Box 226, Susquehanna, PA 18847 Email : amendment@post.com If anyone needs special arrangements, please let us know ASAP. Thank You All For Your Consideration; we will be contacting you for a decision mid- January 2013

34. THANK YOU Thank you to the members of TAG for your decision to unite, for your cooperation, and for your quick responses to our constant questions and fact finding. Thank you to our “ special friends,” for being there and helping whenever needed. Thank you to the Landsmen who aggravated and pressured us, causing us to unite! 

35. And a Special Thank you to the members of the Steering Committee for caring so much… Amelia Paterno Tom and Ann Dooley Garry and Ethel Boccafogli Rich and Greta Henry Andrew and Tracy Whitehead

36. The End A Now Glassless Production. In Association with “Monster” Images.