MEMORANDUM OF PAID-UP OIL AND GAS LEASE

This Memorandum of Paid-Up Oil and Gas Lease (hereinafter called “lease”) is entered into effective as of the 12^th day of November, 2003, between SANT FE PACIFIC RAILROAD COMPANY, a federally chartered corporation, whose address is 2400 Lou Menk AOB 3, Fort Worth, Texas 76131-2830, (hereinafter called “Lessor”) and PRIZE ENERGY RESOURCES, L.P., a Delaware limited partnership, whose address is 600 E. Las Colinas Blvd., Suite 1100, Irving, Texas 75039 (hereinafter called “Lessee”).

WITNESSETH:

Lessor, for and in consideration of the payment by Lessee of the sume of One and No/100 Dollar ($1.00) and other good and valuable consideration, the receipt of which is hereby acknowledged, has granted, demised, leased and let and does by these presents grant, demise, lease and let unto the said Lessee for the sole and only purpose of exploring, drilling and operating for the production of oil, gas, casinghead gas and all other gaseous or liquid hydrocarbon substances and all other mineral substancesproduced in association therewith, including helium and CO2, (hereinafter sometimes referred to as “leased substances”) and laying pipelines, building tanks, power stations and structures thereon to produce, save, take care of, treat and transport all of said products in, on or under certain tracts of land in the County of Apache, State of Arizona, more particularly described in attached Exhibit “A” (“leased lands”).

Notwithstanding any provision hereof to the contrary, this lease does not cover or include coal, uranium, geothermal steam, water (except incofar as required in Lessee’s operations upon the leased lands), potash or other mineral substances except those specifically described in the preceding paragraph.

This lease is made for the term and upon the subject to each and all the terms, provisions, covenants and conditions set forth in the certain Paid-Up Oil and Gas Lease of even date herewith between the parties hereto covering the leased lands, and said Paid-Up Oil and Gas Lease is hereby incorporated herein with the same force and effect as though herein set forth at length.

IN WITNESS WHEREOF, said parties have caused this lease to be duly executed as of the date first hereinabove written.