Loading...
HomeMy WebLinkAboutResolution - 4190 - Royalty Pooling Agreement With Tex-Land Petroleum, Inc. - 06_24_1993Resolution No. 4190 June 24, 1993 Item #33 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Royalty Pooling Agreement by and between the City of Lubbock and Texland Petroleum, Inc., attached herewith, which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied he 'n detail. Passed by the City Council this 24 h day June _1993. LANGSVK, MAYOR ATTEST: etty a ns , City Secretary APPROVED AS TO CONTENT: - o ga ert assene, Assi>ftan Manager/Financial Services APPROVED AS TO FORM: C J s, Jr Irial Atto JES:js/FWLAWr,RES DZ-Agenda/June 17, 1993 ROYALTY POOLING AGREEMENT SECTION 5, BLOCK A LUBBOCK COUNTY, TEXAS STATE OF TEXAS KNOW ALL MEN BY THESE PRESENTS: COUNTY OF LUBBOCK WHEREAS Texland Petroleum, Inc. (hereinafter called TEXLAND) of 500 Throckmorton, Suite 3100, Fort Worth, Texas 76102 is the current operator and a leasehold owner of the following described Oil and Gas Leases covering lands in Section 5, Block A, Lubbock County, Texas: L# 1749-B - The City Lease Date: December 13, 1984 Lessor: The City of Lubbock, Texas Lessee: Texland Petroleum, Inc. Recording: Volume 55, Page 685, Oil Gas and Mineral Records, Lubbock County, Texas Description: All of Section 5, Block A, Lubbock County, Texas, LESS AND EXCEPT that certain 8.4 acre tract of land described as Lot 1, Allen Industrial Park Addition to the City of Lubbock. L# 1749-C - The Grinnell Lease Date: April 19, 1989 Lessor: Grinnell Corporation Lessee: Texland Petroleum, Inc. Recording: Volume 3086, Page 218, Official Real Property Records, Lubbock County, Texas Description: All of Lot 1, Allen Industrial Park Addn. to the City of Lubbock, containing 8.4 acres. WHEREAS TEXLAND has drilled and completed fifteen (15) oil wells in the Clearfork Formation under Section 5, Block A, Lubbock County, Texas (hereinafter called Section 5). WHEREAS pursuant to the authority granted in the City Lease and the Grinnell Lease, TEXLAND did pool and combine all of the 8.4 acres in the Grinnell Lease with 31.6 acres of the City Lease to form a single forty (40) acre Pooled Unit for the LIF-Lubheirs Unit #7 well; said forty (40) acre pooled unit being more particularly described in that certain Declaration of Pooled Unit dated June 12, 1989 and recorded in Volume 3102, page 193 of the Real Property Records of Lubbock County, Texas, reference to 1 which is hereby made for a metes and bounds description of said Pooled Unit. WHEREAS the CITY OF LUBBOCK, whose mailing address is P. O. Box 2000, Lubbock, Texas 79457, was the owner of one-half of the oil and gas estate under all of Section 5 except Lot 1 of the Allen Industrial Park Addition to the City of Lubbock, when it executed the City Lease; WHEREAS the GRINNELL CORPORATION, whose mailing address is 1 Tyco Park, Exeter, New Hampshire 03833, was the owner of one-half of the oil and gas estate under all of Lot 1, Allen Industrial park Addition to the City of Lubbock when it executed the Grinnell Lease; WHEREAS TEXLAND desires to conduct certain additional development operations in the Clearfork Formation under Section 5 which will involve drilling one or more wells in and/or around the LIF - Lubheirs Unit #7 in Section 5 and converting certain existing wells to water injection wells to increase the ultimate recovery of oil from the Clearfork Formation under all of Section 5. WHEREAS in order to protect the rights of the City of Lubbock and the Grinnell Corporation in the oil and gas under Section 5, it is deemed necessary and desirable to pool and combine their respective royalty interests in the Clearfork Formation under all of Section 5. NOW THEREFORE, in consideration of the above stated premises and the mutual agreements contained herein, it is agreed as follows: Section 1, Definitions As used in this agreement: A. Pooled Area - means all of Section 5, Block A, Lubbock County, Texas. B. Pooled Formation - means all that subsurface interval commonly known as the Clearfork Formation and more specifically herein defined as the stratigraphic equivalent of the depths from 4850' to 5250' under Section 5 as found in the Texland-Rector & Schumacher LIF - Lubheirs #1 well located 19801 FSL and 660' FEL of Section 5, Block A, Lubbock County, Texas. C. Pooled Substances - means all oil, gas, gaseous substances, sulphur contained in gas, condensate, distillate and all K associated liquid hydrocarbons within or produced from the Pooled Formation. D. Tract refers to either of the two following parts of Section 5. Tract 1 - All of Section 5 LESS AND EXCEPT the forty (40) acre Pooled Unit for the LIF - Lubheirs #7 described by metes and bounds in the Declaration of Pooled Unit dated June 12, 1989 and recorded in Volume 3102, Page 193 of the Real Property Records of Lubbock County,, Texas. Tract 2 - The forty (40) acre Pooled Unit for the LIF - Lubheirs #7 Unit which is referenced hereinabove. E. Tract Participation - means the percentage shown below for allocating pooled substances to each Tract: Tract 1 Lubheirs #1-6, 8-15 88% Tract 2 Lubheirs #7 12% 100% F. Oil and Gas Rights - means the rights to explore, develop and operate lands within the Pooled Area for the production of Pooled Substances, or to share in the production of oil and gas from the Pooled Formation or the proceeds of such production. G. Royalty Owner - means the owner of a royalty interest in the Oil and Gas Rights in the Pooled Formation. H. Effective Date - means April 1, 1993, at 7:00 A.M. local time. Section 2. Implementation of Pooling Agreement All Oil and Gas Rights of Royalty Owners in and to the Pooled Formation under the Pooled Area are hereby pooled and combined so that operations may be conducted with respect to the Pooled Formation as if the Pooled Area had been included in a single lease executed by all Royalty Owners and as if the lease contained all the provisions of this Agreement. The City Lease and the Grinnell Lease and all other instruments pertaining to the Tracts herein described or production therefrom are hereby amended to the extent necessary to make them conform to the provisions of this Agreement, but otherwise shall remain in effect. Production of Pooled Substances from any part of the Pooled Formation, except for the purpose of determining payments to Royalty Owners, or other operations shall be considered production from or operations upon each Tract described herein, and such production or operations shall continue in effect each lease as to all the lands and formations covered thereby just as if such production was from or operations were conducted on each Tract. Nothing herein shall be construed to result in the transfer of title to Oil and Gas Rights by any party hereto to any other party. Royalty Owners hereby grant TEMAND the right to inject into the Pooled Formation any substance in whatever amounts TEMAND deems expedient for recovery of oil and/or gas from the Pooled Formation; together with the right to drill, use, and maintain injection wells on the Pooled Area and to use for injection purposes any non -producing wells, dry holes, and any producing wells completed in the Pooled Formation subject only to all local, state, and federal rules and/or regulations governing such operations; provided, however, that none of the operations described in this paragraph shall be conducted on the surface of either Tract without the prior written consent of the surface owners thereof. Section 3. Allocation of Pooled Substances All Pooled Substances produced and saved from the Pooled Formation shall be allocated to the two Tracts in accordance with the respective Tract Participations. The amount of Pooled Substances allocated to each Tract, regardless of whether the amount is more or less than the actual production of Pooled Substances from the well or wells, if any, on such Tract, shall be deemed for all purposes to have been produced from such Tract. The Pooled Substances allocated to each Tract shall be distributed among, or accounted for to, the parties entitled to share in production from such Tract in the same manner, in the same proportions, and upon the same conditions as they would have participated and shared in actual production from such Tract, or in the proceeds thereof, had this Agreement not been entered into, and with the same legal effect. Section 4. Transfer of Title Any conveyance of all or any part of any Royalty Interest owned by either party hereto with respect to any Tract shall be made expressly subject to this Agreement. If any Oil and Gas Rights in a Tract hereafter become divided and owned in severalty as to different parts of the Tract, the owners of the divided 4 interests, in the absence of an agreement providing for a different division, shall share in the Pooled Substances allocated to the Tract, or in the proceeds thereof, in proportion to the surface acreage of their respective parts of the Tract. Each party hereto agrees that, during the existence of this Agreement, it will not resort to any action to partition the Pooled Formation, and to that extent waives the benefits of all laws authorizing such partition. Section 5` Relationship of Parties The duties, obligations, and liabilities of the parties hereto are intended to be several and not joint or collective. This Agreement is not intended to create, and shall not be construed to create, an association or trust, or to impose a partnership duty, obligation, or liability with regard to any party hereto. Each party shall be individually responsible for its own obligations. This Agreement is not intended to impose, and shall not be construed to impose, upon any Royalty Owner any obligation to pay any expense associated with producing Pooled Substances unless such Royalty Owner is otherwise obligated to do so. Section 6. Laws and Regulations This Agreement shall be subject to all applicable federal, state, and municipal laws, rules, regulations and orders including, but not limited to, the Oil and Gas Drilling ordinances of the City of Lubbock. Section 7, Effective Date This Agreement shall be effective for all purposes on April 1, 1993, at 7:00 A.M. local time. Section 8, Term The term of this Agreement shall be for the time that Pooled Substances are produced in paying quantities or other operations with respect to the Pooled Formation are conducted on the Pooled Area without a cessation of more than sixty (60) consecutive days. upon termination of this Agreement, each Oil and Gas Lease covering lands in the Pooled area shall remain in force for thirty (30) days after the date on which the Agreement terminates, and for such further period as is provided by the specific lease terms. 5 Section 9. Execution A Royalty Owner may become a party to this Agreement by signing the original of this Agreement, a counterpart thereof, or other instrument agreeing to become a party hereto. The signing of any such instruments shall have the same effect as if all parties had signed the same instrument. Execution by any party shall commit all Oil and Gas Rights owned or controlled by such party. Section 10, Successors and Assigns This Agreement shall extend to, be binding upon, and inure to the benefit of the parties hereto and their respective heirs, successors, and assigns, and shall constitute a covenant running with the lands, leases, and interests covered hereby. IN WITNESS WHEREOF the parties hereto have executed this Agreement on the dates opposite their respective signatures. Date �1 Z! < . Date Date GRINNELL CORPORATION By Title V1.08 TEXLAND PETROLEUM, INC. Lease Operator By R. J. Schumacher Title President 6 ACKNOWLEDGEMENTS STATE OF TEXAS ) COUNTY OF LUBBOCK ) .�. This instrument nwa-s acknowledged before me this off$ �- day ofOAP M,xF , 1993, by Wuoic� R_ L_QnX:-,l-o� as for the City of Lubbock. Ndtary Public for the State of Texas STATE OF NEW HAMPSHIRE ) ) COUNTY OF �OCk(IUv 14*m ) &is instrument was acknowledged before me this Q1, day of, 1993 by Bernard J. Doherty, Vice President of Grinnell Corporation, a _&GA��i�9.G corporation, on behalf of said corporation. aJ4' -Lz� �?? - S4� ry— Pub for the State of New Hampshire THERESA M. HANN. Notary Public My Contmles(on Expires May 8, 1995 STATE OF TEXAS ) ) COUNTY OF TARRANT ) This instrument was acknowledged before me this day of April, 1993, by R. J. Schumacher, President of Texland Petroleum, Inc., a Texas corporation, on behalf of said corporation. 968 Notary Public for the State of Texas 7 CRENSHAW, DUPREE & MILAM, L.L.P. CHAS. C. CRENSHAW. 9FL I1666.1 Md) (3EO. W. DUPREE (16Go-1075) FLK (IOm] HARiY (1911-1978) J.ORVILLE SM7H (1912.1SM) JAB. H. MILAM WILLL M A MOSS CECIL C, KUHNE JOE H. NAGY BFI D CRAWFORD JOHN CREW-, P.C. WILLIM4 F. R USSELL. P.C. WILLNA4 J. WADE JACK LU CUrIGHIN, JFL, P.C. PHILIP W. JOHNSON, P.C. A ATTORNEYS AT LAW w C BRATCHER P.C. A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS LAYTON Z. WOODUL 6FL FICBERT L_ DUNCIN, P.C. FIRST NATIONAL BUILDING W. CHR IS BOYER P.C. 15�0 BRDADWAY � JONES, P.C. LUBBOCK, TEXAS 79401 �c W. a MARKO. BLANI�FISHIP LANKE CPUUXOTTE BINGHAM JOHN FL PAPOCER (806) 782-5281�� P. O. BOX 1499 OF 79408-1499 TOM B. MILAM Telecopier (806) 762-Wlo M46X a,aDDISON A. DOYLE JUSTICE June 23, 1993 HAND DELIVERED Mr. Jean Shotts, Jr. City Attorney P. ❑. Box 2000 Lubbock, Tx 79423 Re: Texland Petroleum, Section 5, Black A, Dear Mr. Shotts: L J•I f U L 1. Inc. - Royalty Pawling Agreement Lubbock, Lubbock County, Texas Pursuant to your request yesterday, enclosed are two originals of the proposed Royalty Pooling Agreement in the above -referenced matter. Mr. Bill Russell of our firm will be attending the Council meeting on Thursday, June 24, 1993 relative to this matter. If you have any questions, please do not hesitate to call Mr. Russell. With kindest personal regards, we are Yours very truly, CRENSHAW, DUPREE & MILAM, L.L.P. W C Bratcher, P.C. WCB:kdm Enclosures If CHAS. C. CRENSHAW, SR. (18aaI" QED. W. DUPREE (IJJ90.1973) R.K. POW) HARIY (1011.1916) J.ORVILLE SMITH p01a.iwq JAS. K MILAM WRUJAM R. MOSS CECIL C. KUKNE JOE H. NAGY BRAD CRAWFORD JOHN CREWS. P.C. WtWAM F. RUSSEI W[LLLAM J. WADE JACK McCUTCHN, PHap W. CRENSHAW, DUPREE & MILAM, L.L.P. ATTORNEYS AT LAW A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS FIRST NATIONAL BUILDING 1500 BROADWAY LUBBOCK TEXAS 79401 RECEIVED , ,4..C. JUN 14 1993 CITY MANADER'S OFFICE (ON) 76245281 P. 0. Box 1499 79406-1499 Telempler (806) 762.3510 June 8, 1993 W C BRATCHER, RC. LAYTON L WOOOUL SR. ROGERT L DUNCAN. P.C. W. CHF4S BOYEK P.C. R7BEFJT L JONES. P.C. MIRK W. HARMON MARK O. BLANXEN" Cr1ARLOM INNOJiAM JOHN R. PARKER TOM S. MRAM MAX C. ADDtSON A. DOYLE JUSTICE Mr. J n C. Ross, Jr. C(DPY City Attorney P. Box 2000 L bock, TX 79457 Re: Royalty Pooling Agreement - Lubheirs Lease Section 5, Block A, Lubbock County, Texas Dear Mr. Ross: A�� ou know, the City of Lubbock owns a one-half mineral interest under all of Section 5, except the 8.4 acres owned by Grinnell. The other one-half interest is owned by Lubheirs, Inc. Texland secured leases from Grinnell Corporation, Lubheirs, Inc., and the City of Lubbock, and those leases were pooled and a 40-acre unit formed. Since its formation 15 wells have been drilled in Section 5. A water injection program has been instituted by Texland Petroleum, with the anticipated result being an increase in the amount of oil recovered from the Clearfork formation. A number of wells in Section 5 will be converted to injection and ultimately additional in -field drilling will be required. To insure as successful a water injection program as possible, it is important that Texland be in a position to choose which wells to convert to injection and where enhancement wells should be drilled. In order to accomplish this end, it is a common practice to pool reservoir interest. Texland believes this can be accomplished by having the City of Lubbock and Grinnell Corporation pool their royalty interests in Section 5, and thereafter each will share in the production derived from all wells in that section. Estimates of ultimate primary production suggest that the Grinnell well (Lubheirs No. 7) would contribute about 12% of ultimate primary production from the entire lease, and the remaining 14 wells would contribute about 88% of the ultimate primary production. Pooling of the Grinnell interest with the City of Lubbock interest would result in Grinnell and the City of Lubbock Mr. John C. Ross, Jr. June S. 1993 Page 2 sharing royalty income from all wells within Section 5, and the ownership of the respective royalty interest in all production under Section 5 would be as follows: Current Proposed Royalty Royalty Interest interest City of Lubbock 12% of .0987500 + 88% of .125 or .1218500 Grinnell 12% of .0196875 or .0023625 I am enclosing for your review a copy of the proposed Royalty Pooling Agreement which has already been approved by Grinnell and which I trust can be executed by the Mayor or by Mr. Cass without the necessity of Council intervention. Naturally, we would like to resolve this matter as quickly as possible, and I will retain the originals in my office and make them immediately available for signature upon your request. I look forward to hearing from you concerning this matter and, should you have any questions, please feel free to give me a call. With kindest personal regards, we are Yours very truly, CRENSHAW, DUPREE & MILAM, L.L.P. W C Bratcher, P.C. WCB:kdm ^fir. Bob Cass City Manager P. O. Box 2000 Lubbock, TX 79457 Mr. Frank Pendleton TEXLAND PETROLEUM, INC. 500 Throckmorton, Suite 3100 Fort Worth, Texas 76102-3818 CRENSHAW, DUPREE & MILAM, L.L.P. CHAS. C. CREN"W, SR. (Iewe IMAI ATTORNEYS AT LAW CEO. W. DUPRTE t1 .1L7 A ceaTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS 11 FIX [iGrti} HAFI'TY (1911.1978) J. ORVILLE SMFrH (1912-1985) FIRST NATIONAL BU3LCING 1500 BROADWAY JAS. H. M 11 F•• LUBBOCK, TEXAS 79401 LJAM R.. WIU CECIL C., K .10E H. W BRAD CI9A4 I qu (806) 762-5281 JOHN CIiEN P. O. BOX 1499 WILUAM F. F 784L18-1499 WILUAM J. M JACK WGUT Telecapler (806) 762-3510 PHIUP HI. JOI July 13, 1993 1993 Mr. Jean E. 5hotts, Jr. City Attorney's office P. o. Box 2000 Lubbock, TX 79457 Re: Royalty Pooling Agreement City of LubbockjGrinnell Section 5, Block A, Lubbock County, Texas Dear Mr. Shotts: W C BRATCHEP, P.C. LAYTON Z WOODUL, SFL ROBERT L DUNCAN, P.C. W. CKRS BOYEFk P.C. 1108E1'T7 L JONES. P.C. MARK W, KARIAON MARK O. BLANKENSHIP CJIARLOTTE BINGKkM JOHN R. PA KER OF COUNSEL• TCAI S. MILAM MAX C. ADDISON A DOYLE JUSTICE Pursuant to your request, I am enclosing an original Royalty Pooling Agreement which has been executed by Mr. R. J. Schumacher, president of Texland Petroleum. The other original will be recorded, and upon request I will furnish you with the recording information if you so desire. With kindest personal regards, we are Yours very truly,, - ENS E & LAM, L.L.P. W C Bratc e>~; P.C. WCB:kdm Enclosure ROYALTY POOLING AGREEMENT SECTION 5, BLOCK A LUBBOCK COUNTY, TEXAS STATE OF TEXAS KNOW ALL MEN BY THESE PRESENTS: COUNTY OF LUBBOCK WHEREAS Texland Petroleum, Inc. (hereinafter called TEXLAND) of 500 Throckmorton, Suite 3100, Fort Worth, Texas 76102 is the current operator and a leasehold owner of the following described Oil and Gas Leases covering lands in Section 5, Block A, Lubbock County, Texas: L# 1749-B - The City Lease Date: December 13, 1984 Lessor: The City of Lubbock, Texas Lessee: Texland Petroleum, Inc. Recording: Volume 55, Page 685, Oil Gas and Mineral Records, Lubbock County, Texas Description: All of Section 5, Block A, Lubbock County, Texas, LESS AND EXCEPT that certain 8.4 acre tract of land described as Lot 1, Allen Industrial Park Addition to the City of Lubbock. L# 1749-C - The Grinnell Lease Date: April 19, 1989 Lessor: Grinnell Corporation Lessee: Texland Petroleum, Inc. Recording: Volume 3086, Page 218, Official Real Property Records, Lubbock County, Texas Description: All of Lot 1, Allen Industrial Park Addn. to the City of Lubbock, containing 8.4 acres. WHEREAS TEXLAND has drilled and completed fifteen (15) oil wells in the Clearfork Formation under Section 5, Block A, Lubbock County, Texas (hereinafter called Section 5). WHEREAS pursuant to the authority granted in the City Lease and the Grinnell Lease, TEXLAND did pool and combine all of the 8.4 acres in the Grinnell Lease with 31.6 acres of the City Lease to form a single forty (40) acre Pooled Unit for the LIF-Lubheirs Unit #7 well; said forty (40) acre pooled unit being more particularly described in that certain Declaration of Pooled Unit dated June 12, 1989 and recorded in Volume 3102, page 193 of the Real Property Records of Lubbock County, Texas, reference to 1 which is hereby made for a metes and bounds description of said Pooled Unit. WHEREAS the CITY OF LUBBOCK, whose mailing address is P. O. Box 2000, Lubbock, Texas 79457, was the owner of one-half of the oil and gas estate under all of Section 5 except Lot 1 of the Allen Industrial Park Addition to the City of Lubbock, when it executed the City Lease; WHEREAS the GRINNELL CORPORATION, whose mailing address is 1 Tyco Park, Exeter, New Hampshire 03833, was the owner of one-half of the oil and gas estate under all of Lot 1, Allen Industrial park Addition to the City of Lubbock when it executed the Grinnell Lease; WHEREAS TEXLAND desires to conduct certain additional development operations in the Clearfork Formation under Section 5 which will involve drilling one or more wells in and/or around the LIF - Lubheirs Unit #7 in Section 5 and converting certain existing wells to water injection wells to increase the ultimate recovery of oil from the Clearfork Formation under all of Section 5. WHEREAS in order to protect the rights of the City of Lubbock and the Grinnell Corporation in the oil and gas under Section 5, it is deemed necessary and desirable to pool and combine their respective royalty interests in the Clearfork Formation under all of Section 5. NOW THEREFORE, in consideration of the above stated premises and the mutual agreements contained herein, it is agreed as follows: Section 1. Definitions As used in this agreement: A. Pooled Area - means all of Section 5, Block A, Lubbock County, Texas. B. Pooled Formation - means all that subsurface interval commonly known as the Clearfork Formation and more specifically herein defined as the stratigraphic equivalent of the depths from 4850' to 5250' under Section 5 as found in the Texland-Rector & Schumacher LIF - Lubheirs #1 well located 1980' FSL and 660' FEL of Section 5, Block A, Lubbock County, Texas. C. Pooled Substances - means all oil, gas, gaseous substances, sulphur contained in gas, condensate, distillate and all E a associated liquid hydrocarbons within or produced from the Pooled Formation. D. Tract refers to either of the two following parts of Section 5. Tract 1 - All of Section 5 LESS AND EXCEPT the forty (40) acre Pooled Unit for the LIF - Lubheirs #7 described by metes and bounds in the Declaration of Pooled Unit dated June 12, 1989 and recorded in Volume 3102, Page 193 of the Real Property Records of Lubbock County, Texas. Tract 2 - The forty (40) acre Pooled Unit for the LIF - Lubheirs #7 Unit which is referenced hereinabove. E. Tract Participation - means the percentage shown below for allocating pooled substances to each Tract: Tract 1 Lubheirs #1-6, 8-15 88% Tract 2 Lubheirs #7 12% 100% F. Oil and Gas Rights - means the rights to explore, develop and operate lands within the Pooled Area for the production of Pooled Substances, or to share in the production of oil and gas from the Pooled Formation or the proceeds of such production. G. Royalty Owner - means the owner of a royalty interest in the Oil and Gas Rights in the Pooled Formation. H. Effective Date - means April 1, 1993, at 7:00 A.M. local time. Section 2. Implementation of Pooling Agreement All Oil and Gas Rights of Royalty Owners in and to the Pooled Formation under the Pooled Area are hereby pooled and combined so that operations may be conducted with respect to the Pooled Formation as if the Pooled Area had been included in a single lease executed by all Royalty Owners and as if the lease contained all the provisions of this Agreement. The City Lease and the Grinnell Lease and all other instruments pertaining to the Tracts herein described or production therefrom are hereby amended to the extent necessary to make them conform to the provisions of this Agreement, but otherwise shall remain in effect. 3 Production of Pooled Substances from any part of the Pooled Formation, except for the purpose of determining payments to Royalty Owners, or other operations shall be considered production from or operations upon each Tract described herein, and such production or operations shall continue in effect each lease as to all the lands and formations covered thereby just as if such production was from or operations were conducted on each Tract. Nothing herein shall be construed to result in the transfer of title to Oil and Gas Rights by any party hereto to any other party. Royalty Owners hereby grant TEXLAND the right to inject into the Pooled Formation any substance in whatever amounts TEXLAND deems expedient for recovery of oil and/or gas from the Pooled Formation; together with the right to drill, use, and maintain injection wells on the Pooled Area and to use for injection purposes any non -producing wells, dry holes, and any producing wells completed in the Pooled Formation subject only to all local, state, and federal rules and/or regulations governing such operations; provided, however, that none of the operations described in this paragraph shall be conducted on the surface of either Tract without the prior written consent of the surface owners thereof. Section 3. Allocation of Pooled Substances All Pooled Substances produced and saved from the Pooled Formation shall be allocated to the two Tracts in accordance with the respective Tract Participations. The amount of Pooled Substances allocated to each Tract, regardless of whether the amount is more or less than the actual production of Pooled Substances from the well or wells, if any, on such Tract, shall be deemed for all purposes to have been produced from such Tract. The Pooled Substances allocated to each Tract shall be distributed among, or accounted for to, the parties entitled to share in production from such Tract in the same manner, in the same proportions, and upon the same conditions as they would have participated and shared in actual production from such Tract, or in the proceeds thereof, had this Agreement not been entered into, and with the same legal effect. Section 4. Transfer of Title Any conveyance of all or any part of any Royalty Interest owned by either party hereto with respect to any Tract shall be made expressly subject to this Agreement. If any Oil and Gas Rights in a Tract hereafter become divided and owned in severalty as to different parts of the Tract, the owners of the divided 4 interests, in the absence of an agreement providing for a different division, shall share in the Pooled Substances allocated to the Tract, or in the proceeds thereof, in proportion to the surface acreage of their respective parts of the Tract. Each party hereto agrees that, during the existence of this Agreement, it will not resort to any action to partition the Pooled Formation, and to that extent waives the benefits of all laws authorizing such partition. Section 5. Relationship of Parties The duties, obligations, and liabilities of the parties hereto are intended to be several and not joint or collective. This Agreement is not intended to create, and shall not be construed to create, an association or trust, or to impose a partnership duty, obligation, or liability with regard to any party hereto. Each party shall be individually responsible for its own obligations. This Agreement is not intended to impose, and shall not be construed to impose, upon any Royalty Owner any obligation to pay any expense associated with producing Pooled Substances unless such Royalty Owner is otherwise obligated to do so. Section 6, Laws and Regulations This Agreement shall be subject to all applicable federal, state, and municipal laws, rules, regulations and orders including, but not limited to, the oil and Gas Drilling Ordinances of the City of Lubbock. Section 7, Effective Date This Agreement shall be effective for all purposes on April 1, 1993, at 7:00 A.M. local time. Section 8, Term The term of this Agreement shall be for the time that Pooled Substances are produced in paying quantities or other operations with respect to the Pooled Formation are conducted on the Pooled Area without a cessation of more than sixty (60) consecutive days. Upon termination of this Agreement, each Oil and Gas Lease covering lands in the Pooled area shall remain in force for thirty (30) days after the date on which the Agreement terminates, and for such further period as is provided by the specific lease terms. 5 Section 9 Execution A Royalty Owner may become a party to this Agreement by signing the original of this Agreement, a counterpart thereof, or other instrument agreeing to become a party hereto. The signing of any such instruments shall have the same effect as if all parties had signed the same instrument. Execution by any party shall commit all ail and Gas Rights owned or controlled by such party. Section 10Successors and Assigns This Agreement shall extend to, be binding upon, and inure to the benefit of the parties hereto and their respective heirs, successors, and assigns, and shall constitute a covenant running with the lands, leases, and interests covered hereby. IN WITNESS WHEREOF the parties hereto have executed this Agreement on the dates opposite their respective signatures. Date - ZyT� Date f Date GRINNELL CORPORATION By Title TEXLAND PETROLEUM, INC. Lease Operator By R. J. Schumacher Title President C0 ACKNOWLEDGEMENTS STATE OF TEXAS COUNTY OF LUBBOCK This instrument was acknCr'riiedyed before me this v�$� day of-Fn 1993, by �Q. I as for the city of Lubbock. N ary Public for the State of Texas STATE OF NEW HAMPSHIRE COUNTY OF —Rocw-j1j . k,j-,y ,'This instrument was acknowledged before me this 4L 14 day of April, 1993 by .Bernard J. Doherty, Vice President of Grinnell Corporation, a G �,,,�.0 corporation, on behalf of said corporation. � f Notary Public for the State of New Hampshire THERESA M. HANN, Notary Public MY COMMiMlon Expires May g, 19% STATE OF TEXAS COUNTY OF TARRANT S This instrument was acknowledged before me this day f � oril; 1993, by R. J. Schumacher, President of Texland Petroleum, Inc., a Texas corporation, on behalf of said corporation. ��A r GWM � y STATE OF TSXAS Notary Public for the ate of Texas =r khy Co"i- Exp. A!'_* •• -•-,-ram„- ; — Gm 7 Resolution No. 4190 June 24, 1993 Item #33 llgmll-k► BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Royalty Pooling Agreement by and between the City of Lubbock and Texland Petroleum, Inc., attached herewith, which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copi Passed by the City Council this ATTEST: adt:- 1A Betty 174.-' John sy Secretary APPROVED AS TO CONTENT: ald obert Massengale, Assa Manager/Financial Services APPROVED AS TO FORM: , jr., aria JES:js/FooLAGM.RHs D2-Agenda/June 17, 1993 TE LAND PETROLEUM, INC. EXPLORAmON AN❑ Pg00LJCT10N 500 THROCKIr1OR70N• SUITE 31 QO FOPT WORTH. TEXAS 761 OP-381 B APEA 6 T 7 336-2751 July 20, 1993 City of Lubbock c/o Mr. Jean E. Shotts, Jr. P. O. Box 2000 Lubbock. Tx 79408 Grinnell Corp. c/o Mr. Leo J. Hoffman Strasburger & Price, L.L.P. 901 Main Street, Suite 4300 Dallas, TX 75202 Ms. Susie Hughes Total Petroleum, Inc. 515 Central Park Drive Suite 210 Oklahoma City, OK 73105 Gentlemen: Enclosed for your file is a copy of the recorded Pooling Agreement on the Lubheirs lease. As you know, I have asked Total to implement the pooling by allocating production each month between the two tracts based on the 88% - 12% pooling formula. If you have further questions regarding this matter, picase call. Yours truly, L- l� •�� � i Lr-�-ti-- � i b r W. Frank Pendleton ` Manger, Land and Legal WFPlldg Enclosure 7-57.1tr RVro" To Td �a 300 ThK�. Suite 3100 Fort Worth Tense 76102 STATE OF TEXAS COUNTY OF LUBBOCK VOL 42 59PAct 38 2337 ROYALTY POOLING AGREEMENT SECTION 5, BLOCK A LUBBOCK COUNTY, TEXAS KNOW ALL MEN BY THESE PRESENTS: WHEREAS Texland Petroleum, Inc. (hereinafter called TEXLAND) of 500 'rhroc:cmorton, Suite 3100, Fort Worth, Texas 76102 is the current operator and a leasehold owner of the following described Oil and Gas Leases covering lands in Section 5, Block A, Lubbock County, Texas: L# 1749-B - The City Lease Date: December 13, 1984 Lessor: The City of Lubbock, Texas Lessee: Texland Petroleum, Inc. Recording: Volume 55, Page 685, Oil Gas and Mineral Records, Lubbock County, Texas Description: All of Section 5, Block A, Lubbock County, Texas, LESS AND EXCEPT that certain 8.4 acre tract of land described as Lot 1, Allen Industrial Park Addition to the City of Lubbock. L# 1749-C - The Grinnell Lease Date: April 19, 1989 Lessor: Grinnell Corporation Lessee: Texland Petroleum, Inc. Recording: Volume 3086, Page 218, Official Real Property Records, Lubbock County, Texas Description: All of Lo;, 1, Allan Industrial Park Addn. to the City of Lubbock, containing 8.4 acres. WHEREAS TEXLAND has drilled and completed fifteen (15) oil wells in the Clearfork Formation under Section 5, Block A, Lubbock County, Texas (hereinafter called Section 5). WHEREAS pursuant to the authority granted in the City Lease and the Grinnell Lease, TEXLAND did pool and combine all of the 8.4 acres in the Grinnell Lease with 31.6 acres of the City Lease to form a single forty (40) acre Pooled Unit for the LIF-Lubheirs Unit #7 well; said forty (40) acre pooled unit being more particularly described in that certain Declaration of Pooled Unit dated June 12, 1989 and recorded in Volume 3102, page 193 of the Real Property Records of Lubbock County, Texas, reference to 1 voi 42 %cf J9 which is hereby made for a metes and bounds description of said Pooled Unit. WHEREAS the CITY OF LUBBOCK, whose mailing address is P. O. Box 2000, Lubbock, Texas 79457, was the owner of one-half of the oil and gas estate under all of Section 5 except Lot 1 of the Allen Industrial Park Addition to the City of Lubbock, when it executed the City Lease; WHEREAS the GRINNELL CORPORATION, whose mailing address is 1 Tyco Park, Exeter, New Hampshire 03833, was the owner of one-half of the oil and gas estate under all of Lot 1, Allen Industrial park Addition to the City of Lubbock when it executed the Grinnell Lease; WHEREAS TEXLAND desires to conduct certain additional development operations in the Clearfork Formation under Section 5 which will involve drilling one or more wells in and/or around the LIF - Lubheirs Unit #7 in Section 5 and converting certain existing wells to water injection wells to increase the ultimate recovery of oil from the Clearfork Formation under all of Section 5. WHEREAS in order to protect the rights of the City of Lubbock and the Grinnell Corporation in the oil and gas under Section 5, it is deemed necessary and desirable to pool and combine their respective royalty interests in the Clearfork Formation under all of Section 5. NOW THEREFORE, in consideration of the above stated premises and the mutual agreements contained herein, it is agreed as follows: Section 1, Definitions As used in this agreement: A. Pooled Area - means all of Section 5, Block A, Lubbock County, Texas. B. Pooled Formation - means all that subsurface interval commonly known as the Clearfork Formation and more specifically herein defined as the stratigraphic equivalent of the depths from 4850' to 5250' under Section 5 as found in the Texland-Rector & Schumacher LIF - Lubheirs #1 well located 1980' FSL and 660' FEL of Section 5, Block A, Lubbock County, Texas. C. Pooled Substances - means all oil, gas, gaseous substances, sulphur contained in gas, condensate, distillate and all 2 voL 42 59PACF 40 associated liquid hydrocarbons within or produced from the Pooled Formation. D. Tract refers to either of the two following parts of Section 5. Tract 1 - All of Section 5 LESS AND EXCEPT the forty (40) acre Pooled Unit for the LIF - Lubheirs 97 described by metes and bounds in the Declaration of Pooled Unit dated June 12, 1989 and recorded in Volume 3102, Page 193 of the Real Property Records of Lubbock County, Texas. Tract 2 - The forty (40) acre Pooled Unit for the LIF - Lubheirs #7 Unit which is referenced hereinabove. E. Tract Participation - means the percentage shown below for allocating pooled substances to each Tract: Tract 1 Lubheirs #1-6, 8-15 88% Tract 2 Lubheirs #7 12% 100% F. oil and Gas Rights - means the rights to explore, develop and operate lands within the Pooled Area for the production of Pooled Substances, or to share in the production of oil and gas from the Pooled Formation or the proceeds of such production. G. Royalty Owner - means the owner of a royalty interest in the Oil and Gas Rights in the Pooled Formation. H. Effective Date - means April 1, 1993, at 7:00 A.M. local time. Section 2, Implementation of Pooling Agreement All Oil and Gas Rights of Royalty Owners in and to the Pooled Formation under the Pooled Area are hereby pooled and combined so that operations may be conducted with respect to the Pooled Formation as if the Pooled Area had been included in a single lease executed by all Royalty Owners and as if the lease contained all the provisions of this Agreement. The City Lease and the Grinnell Lease and all other instruments pertaining to the Tracts herein described or production therefrom are hereby amended to the extent necessary to make them conform to the provisions of this Agreement, but otherwise shall remain in effect. C voL 4259Pdcf 41 Production of Pooled Substances from any part of the Pooled Formation, except for the purpose of determining payments to Royalty Owners, or other operations shall be considered production from or operations upon each Tract described herein, and such production or operations shall continue in effect each lease as to all the lands and formations covered thereby just as if such production was from or operations were conducted on each Tract. Nothing herein shall be construed to result in the transfer of title to oil and Gas Rights by any party hereto to any other party. Royalty Owners hereby grant TEXLAND the right to inject into the Pooled Formation any substance in whatever amounts TEXLAND deems expedient for recovery of oil and/or gas from the Pooled Formation; together with the right to drill, use, and maintain injection wells on the Pooled Area and to use for injection purposes any non -producing wells, dry holes, and any producing wells completed in the Pooled Formation subject only to all local, state, and federal rules and/or regulations governing such operations; provided, however, that none of the operations described in this paragraph shall be conducted on the surface of either Tract without the prior written consent of the surface owners thereof. Section 3, Allocation of Pooled Substances All Pooled Substances produced and saved from the Pooled Formation shall be allocated to the two Tracts in accordance with the respective Tract Participations. The amount of Pooled Substances allocated to each Tract, regardless of whether the amount is more or less than the actual production of Pooled Substances from the well or wells, if any, on such Tract, shall be deemed for all purposes to have been produced from such Tract. The Pooled Substances allocated to each Tract shall be distributed among, or accounted for to, the parties entitled to share in production from such Tract in the same manner, in the same proportions, and upon the same conditions as they would have participated and shared in actual production from such Tract, or in the proceeds thereof, had this Agreement not been entered into, and with the same legal effect. Section 4. Transfer of Title Any conveyance of all or any part of any Royalty Interest owned by either party hereto with respect to any Tract shall be made expressly subject to this Agreement. If any Oil and Gas Rights in a Tract hereafter become divided and owned in severalty as to different parts of the Tract, the owners of the divided 4 HL 4259PAcf 42 interests, in the absence of an agreement providing for a different division, shall share in the Pooled Substances allocated to the Tract, or in the proceeds thereof, in proportion to the surface acreage of their respective parts of the Tract. Each party hereto agrees that, during the existence of this Agreement, it will not resort to any action to partition the Pooled Formation, and to that extent waives the benefits of all laws authorizing such partition. Section 5. Relationship of Parties The duties, obligations, and liabilities of the parties hereto are intended to be several and not joint or collective. This Agreement is not intended to create, and shall not be construed to create, an association or trust, or to impose a partnership duty, obligation, or liability with regard to any party hereto. Each party shall be individually responsible for its own obligations. This Agreement is not intended to impose, and shall not be construed to impose, upon any Royalty Owner any obligation to pay any expense associated with producing Pooled Substances unless such Royalty Owner is otherwise obligated to do so. Section 6. Laws and Regulations This Agreement shall be subject to all applicable federal, state, and municipal laws, rules, regulations and orders including, but not limited to, the Oil and Gas Drilling Ordinances of the City of Lubbock. Section 7, Effective Date This Agreement shall be effective for all purposes on April 1, 1993, at 7:00 A.M. local time. Section 8, Term The term of this Agreement shall be for the time that Pooled Substances are produced in paying quantities or other operations with respect to the Pooled Formation are conducted on the Pooled Area without a cessation of more than sixty (60) consecutive days. Upon termination of this Agreement, each Oil and Gas Lease covering lands in the Pooled area shall remain in force for thirty (30) days after the date on which the Agreement terminates, and for such further period as is provided by the specific lease terms. k, VOL 4259PACE 43 Section 9. Execution A Royalty Owner may become a party to this Agreement by signing the original of this Agreement, a counterpart thereof, or other instrument agreeing to become a party hereto. The signing of any such instruments shall have the same effect as if a:l parties had signed the same instrument. Execution by any party shall commit all Oil and Gas Rights owned or controlled by such party. Section 10, Successors and Assigns This Agreement shall extend to, be binding upon, and inure to the benefit of the parties hereto and their respective heirs, successors, and assigns, and shall constitute a covenant running with the lands, leases, and interests covered hereby. IN WITNESS WHEREOF the parties hereto have executed this Agreement on the dates opposite their respective signatures. Date SEAL. V 6 Date •� , 1 cic, 3 Date GRINNELL CORPORATION- i�� By Title Y'1Gr_. Y.? TEXLAND PETROLEUM, INC. Lease Operator / By R. J. Schumacher Title President 6 ACKNOWLEDGEMENTS STATE OF TEXAS ) CGUNTY OF LUBBOCK ) vuc 42;9PACF 44 441-3 „This instrument as ckrr}}QQwl dged before me this day of Ap t, 1993, by �i� �C• LQaC+uA3 as T'rlOAA 0(L for the City of Lubbock. 7-7 r: c� vA.UC?.>,�.. J Notary Public for the State of Texas SEAL STATE OF NEW HAMPSHIRE ) COUNTY OFToc-KrAu6,4N-mil ) Mgis instrument was acknowledged before me this �4J% day of Apr�•1, 1993 by Be nard J. Doherty, Vice President of Grinnell Corporation, a C�auJi4e.� corporation, on behalf of said corporation. SEAL STATE OF TEXAS COUNTY OF TARRANT Jw, This instrument of r tl 1993, by Petroleum, Inc., corporation. IEINtX M notary PubSe ' STATE OF TEXAS a , My Cw n. UP. DULY 141r-=. 968 c��lt,tt.�•s� y� n .ary Public for the :ate of New Hampshire THERESA M. HANN. Notary Pubft My Commission Expires May 6. 1995 was acknowledged before me this _S �h day R. J. Schumacher, President of Texland 3 Texas corporation, on behalf of said Notary Public for the S to of Texas SEAL' 7 nabU.LUL1U11 ou. 41yV June 24, 1993 Item 433 Vtx 425`14a 45 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Royalty Pooling Agreement by and between the City of Lubbock and Texland Petroleum, Inc., attached herewith, which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied heSAU—iv detail. Passed by the City Council this ATTEST: e y d4.-' Jo-hnsoh, City Secretary APPROVED AS TO CONTENT: 'Robert Massengale, AssjAant City Manager/Financial Services APPROVED AS TO FORM: an o ts, Jr., ria t orn JES:js/POOLAGKr.RES D2-Agenda/Jun• 17. 1993 �%J L J l STATE OF TEXAS COUNTY OF LUBBOCK 1 hereby certify that this instrument was FILED on the date and at the time stamped hereon by me and was duly RECORDED in the Yoiume and Page of the Official Real Prop" Records of Lubeck County, Texas as stamped hereon by rn& JUL 12 1993 COUNTY CLERRK"`''�� it LUBBOCK COUNTY, TOM