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Home My WebLink AboutResolution - 2003-R0306 - Amendment Of Oil And Gas Lease With Texland Petroleum, LP - 08_06_2003 (3)Resolution No. 2003-RO306 August 6, 2003 Item No. 27 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 an Amendment of Oil and Gas Lease, by and between the City of Lubbock and Texland Petroleum, L.P., and other working interest owners, (collectively the "Texland Group"), and any associated documents, amending that certain Oil and Gas Lease, Resolution No. 1896, dated December 13, 1984 and recorded in Volume 55, Page 685, Oil & Gas Lease Records, Lubbock County, Texas. The execution of the Amendment of Oil and Gas Lease is conditioned upon the prior execution of same by the Texland Group. Said Amendment of Oil and Gas Lease is attached hereto and incorporated in this Resolution as if fully set forth herein and shall be included in the minutes of the City Council. Passed by the City Council this 6th day of August , 2003. ATTEST: Rebecca Garza, City Secretary APPROVED AS TO CONTENT: Ed Bucy, Right of Way ent APPROVED AS TO FORM - Richard K. Casner First Assistant City Attorney ke/ccdocs/Texland-O i1GasLeaseAmendment August 6, 2003 st AMENDMENT OF OIL AND GAS LEASE 2.Uo3_ (Z03®F, STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS THAT: COUNTY OF LUBBOCK § WHEREAS, TEXLAND PETROLEUM, L. P., (formerly known as Texland Petroleum, Inc.) and its assignees as set forth below (collectively "Lessee") are the owners of an undivided 13/16ths of that certain Oil and Gas Lease dated December 13, 1984 (the "Lease") executed by the CITY OF LUBBOCK, as Lessor, in favor of Texland Petroleum, Inc., recorded in Volume 55, Page 685, Oil & Gas Lease Records, Lubbock County, Texas; and, WHEREAS, certain issues have arisen regarding the interpretation of the proportionate reduction clause and its effect on other terms and provisions contained within the Lease; and, WHEREAS, it is the desire of the Lessor and the Lessee to resolve the outstanding issues and to amend the Lease; and, WHEREAS, Cornell Corporation is the owner of the remaining 3/16ths interest in the Lease and has elected not to join in this Agreement. NOW, THEREFORE, for and in consideration of ten dollars ($10.00) and other good and valuable consideration, the receipt of which is acknowledged by each of the undersigned parties, it is hereby agreed as follows: (1) Paragraph 2(a) of the Lease section entitled "DESCRIPTION OF LAND" is hereby deleted in its entirety and the following is substituted in its place: 2. DESCRIPTION OF LAND: The land herein leased to Lessee is located in Lubbock County, Texas, and is described as follows: (a) All of Section 5, Block A, Lubbock County, Texas, LESS AND EXCEPT that certain 8.4 acre tract of land described as Lot 1, Allan Industrial Park Addition to the City of Lubbock, as described in that certain Dedication Deed, dated November 22, 1967, recorded in Volume 1149, page 327, Deed Records, Lubbock County, Texas. 1 N (2) Paragraphs 6(a) and 6(b) of the lease section entitled "PRODUCTION ROYALTIES" are hereby deleted in their entirety and the following are substituted in their place: 6. PRODUCTION ROYALTIES: Lessee agrees to pay or cause to be paid during the term hereof: (a) OIL: As a royalty on oil, 31 % of the value of the gross production of oil, which is defined as including all hydrocarbons produced in a liquid form from the land herein leased to Lessee, save and except casinghead gas, but including also all condensate, distillate, and other liquid hydrocarbons recovered from oil or gas run through a separator or other equipment, as hereinafter provided ("gross production of oil"). Provided, however, if on or after July 1, 2016, the gross production of oil shall average less than 9 1/2 barrels per producing well per day for the prior 12 month period, the royalty on oil shall reduce to 22 % of the value of the gross production of oil, for so long as the gross production of oil from the land averages less than 9 1/2barrels per producing well per day for the prior 12 month period. After any such reduction in royalty, in the event the gross production of oil from the land increases so as to average 9 1/2 barrels or more per producing well per day for the prior 12 month period, then such royalty shall increase to 31 % of the value of the gross production of oil for so long as such average remains at or above 9 1/2barrels per producing well per day for the prior 30 day period. Notwithstanding anything to the contrary herein, the 31 % royalty prescribed in the first paragraph of Section 6(a), above, shall not be reduced any time or in any event prior to July 1, 2016. The value of said gross production shall be based on the highest posted price, plus any premium, offered or paid for oil, condensate, distillate, or other liquid hydrocarbons, respectively, of similar gravity and type in the general area, or the prevailing market price thereof in the general area, or the proceeds of the sale thereof, whichever is greatest. Lessee agrees that any gas produced from the land herein leased that contains liquid hydrocarbons recoverable in commercial quantities by separator on the lease shall be run through an adequate oil and gas separator of conventional type or other equipment at least as efficient prior to the sale, use or processing of such gas in a plant, so that all liquid hydrocarbons recoverable from such gas by such means shall be recovered. Upon written consent of the Lessor, acting through its City Manager, the requirement that 2 such gas be run through a separator or other equipment may be waived upon terms and conditions prescribed by Lessor. (b) GAS: As royalty on any and all gas, including casinghead gas and other gaseous substances, produced from the land herein leased to Lessee, 31 % of the value of the gross production of such gas which is defined as all hydrocarbons and gaseous substances not defined as oil in subparagraph (a) above. Such value shall be determined on the basis of the highest price paid for gas of a similar quality in the general area or on the amount accruing to the producer from all hydrocarbons or other products produced from said gas, whichever is greater. Where gas is run through such separator or other equipment, as provided in subparagraph (a) above, its value, after having been run through such separator or other equipment, shall be determined as specified herein. (3) Paragraph 28 of the Lease entitled "NON WARRANTY AND PROPORTIONATE REDUCTION CLAUSE" is hereby deleted in its entirety and the following is substituted in its place: 28. NON WARRANTY AND PROPORTIONATE REDUCTION CLAUSE: Lessor does not, expressly or impliedly, warrant title to the leased premises. It is agreed that if Lessor owns an interest in the oil and gas in and under any of the leased premises less than the entire oil and gas fee simple estate, then the royalties and all other benefits to accrue or to be paid to Lessor hereunder as to such lands shall be reduced to the proportion thereof which the mineral fee estate of Lessor in such lands bears to the entire mineral fee estate. (4) The Lessor and Lessee ratify and confirm the Lease to be in full force and effect as to all its terms, as amended hereby. This instrument may be executed in multiple counterparts, all of which, taken together, shall constitute one and the same instrument, and any party hereto may execute this instrument by signing one or more counterparts. The undersigned have executed this Agreement this 1211( day of 2003, however to be effective the 1st day of July, 2003. K LESSOR: CI a ATTEST: STATE OF TEXAS § COUNTY OF LUBBOCK § BEFORE ME, the undersigned authority, a Notary Public in and for said Lubbock County, Texas, on this day personally appeared MARC MCDOUGAL, MAYOR, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same as the act and deed of the CITY of LUBBOCK and as MAYOR, for the purposes and consideration therein expressed and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this day of q4�- , 2003. Notary_ Ptb i cr to -of -Texas= _ •, Donna Combs '+° ' r'' t�lotary Public. State 01 Texas t* my ' MyCpmnKaonEwrM !`'-;F JyOCTOBER 01 2005 s 4 LESSEE: TEXLAND PETROLEUM, L. P. By: Texpet Mgt. L.L.C., General Partner By: R. J. Schumacher, Chairman TEXLAND DRILLING PROGRAM-1985 By: Texland Petroleum L.P., General Partner By: TM. L.L.C. General Partner By: i — c%Jerry ICJ. Nainy, PresiiAent and CEO SCHUMACHER TPI, INC. By: R. J. Schumacher, President KELLER ESTATE PARIP By: Wallace T. Keller, M ging Partne Gordon E. Sommers STATE OF TEXAS § COUNTY OF TARRANT § This instrument was acknowledged before me on the _ day of , 2003, by R. J. SCHUMACHER, as Chairman of Texpet Mgt, L.L.C., General r of TEXLAND PETROLEUM, L. P..,a Texa 1' ted partnership, on behalf of said partnership. M. MARGARET L. NETTLETON �_ Notary Public. State of Texas My Commission Expires �''� August 13, 2006 Notary FIblic, State of Te xas STATE OF TEXAS § COUNTY OF TARRANT § This instrument was acknowledged before me on the S day of , 2003, by JERRY N. NAMY, as President and CEO of Texpet Mgt. L.L.C., eneral Partner of Texland Petroleum, L.P., as General Partner of TEXLAND DRILLING PROGRAM-1985, on behal,,Q f „id ogram-1985 . —MARGARET L. NETTLETON Notepublic, State of Texas i MY fission Expires August 13, 2006 Notary gogblic, State of exas STATE OF TEXAS § COUNTY OF TARRANT § This instrument was acknowledged before me on the day of , 2003, by R. J. SCHUMACHER, as President of SCHUMACHER TPI, INC., a Tegs corporation, on e alf of Lid c oration. MARGARET L. NETTLETON Notary Public, State of Texas My Commission Expires t'Ni, August 13, 2006 Notary blic, State of Texas STATE OF TEXAS § COUNTY OF TARRANT § This instrument was acknowledged before me on the ,-5' day of , 2003, by WALLACE T. KELLER, as Managing Partner of KELLER ESTATE P4XTNERSHIP, on behalf of said partnership. sl!Uowy MARGARET L. NETTLETON Notary blic, State of Te s la . x Notary Public, State of Texas 8 My Commission Expires ,,,•� a,.• August 13, 2006 STATE OF TEXAS § COUNTY OF TARRANT § This instrument was acknowledged before me on the 5— day of t , 2003, by JERRY N. NAMY. .'AARGARET L. NETTLETON ..,-ary Public. State of Texas ' J r - bty Commission Expires Notarylublic, State of T as August 13, 2006 STATE OF TEXAS § COUNTY OF TARRANT § This instrument was acknowledged before me on the S' day of �� , 2003, by GORDON E. SOMMERS. MARGARET L. NETTLETON '.' Notary Public, State of Texas Notary bllc, State of T xas 1. My Commission Expires August 13, 2006 7 JAMES M. ALEXANDER & CO. By: James Minor Corp., Gene 1 — ( '.- ) 0,artner By: J s M. AA a der, P ent STATE OF TEXAS § COUNTY OF TAYLOR § This instrument was acknowledged before me on the O day of , 2003, by JAMES M. ALEXANDER, as President of James Minor Corp., General Partn'ejr of JAMES M. ALEXANDER & CO., on behalf of said James M. Alexander & Co. DEBBIE J. TAYLOR JO ::1 ' . �? Notary Public, Scare of Tcxae My Commission Expires Notary Public, State Texas �t}'' June 19, 2004 N. 1 1 �Ti�i�,Y� �1IV6 fit_'. it wo's lA iN&-toAu STATE OF iJ5f*S § COUNTY OF J� eC § This instrument was acknowledged before me on the day of t4qc, 54— 2003, by DONALD F. TODD, as President of CONSTELLATION GROUP LTD., on behalf of said Constellation Group LTD. Nota# Pub ' , State of T-v m wA SN/N¢?aeV 9 DIVERSE ENERGY INVESTMENTS B. Travis Basham, Manager STATE OF TEXAS § COUNTY OF NARRiS § This instrument was acknowledged before me on the (p day of AuGu s j , 2003, by B. TRAVIS BASHAM, as Manager of DIVERSE ENERGY INVESTMENTS, on behalf of said Diverse Energy Investments. JO ANA KE3SLER Notary Pu lic, State of Texas MY COMMISSIOM EXPIRES s ... FeWuny 1Z 2004 10 ESTACA O EXPLO/RRAATION 1982-1 LTD. B Y• Randy Rodgers General Partner STATE OF TEXAS § / § COUNTY OF ! § This instrument was acknowledged before me on the day of Gf lit 2003, by RANDY RODGERS, as General Partner of ESTACADO EXPLORATIO 1982-1 LTD., on behalf of said Estacado Exploration 1982-1 Ltd. ha I Notary Public, State of Texa ' MELINDA M. JOHNSTON ° Notary Pubiic, State of Texas *: += My Commission Expires NOVEMBER 10, 2003 11 RECTOR OIL LTD. By: Rector TPI, Inc. r rtner By: ndr . Rector, Vice President STATE OF TEXAS § COUNTY OF TARRANT § This instrument was acknowledged before me on the 'day of , 2003, by ANDREW C. RECTOR, as Vice President of Rector TPI, Inc., General P er of RECTOR OIL LTD., on behalf of said Rector Oil Ltd ao�-p,o EVELYN J KYLE. f NOTARY PUBLIC cap, 6 ` State of Texas of Comm. Exp. 02-13-2005 / /j FA 110 SUM ► .�.MR 12 Armina F. Brackeen STATE OF TEXAS COUNTY OF TARRANT This instrument was acknowledged before me on the -�" day of ��,/a , , 2003, by ARMINA F. BRACKEEN. C'4� k � 0& otary Public, State of Texas TALM OOX MY COMMISSION EXPIRES December 31, M 13 STATE OF TEXAS § COUNTY OF TARRANT § This instrument was acknowledged before me on the S day of z , 2003, by BOBBY G. BRACKEEN. aalz Nota'rytfublic, State of 1exas MARGARET L. NETTLETON NotaryPublic, State of Texas MY Commission Expires August 13, 2006 Igllp� 14 Gretchen Denny STATE OF TEXAS § COUNTY OF TARRANT § This instrument was acknowledged before me on the day of , 2003, by GRETCHEN DENNY. Notary MARY L. MAHANAY NOTARY PUBLIC STATE OF TEXAS MY COMM, Exp. 07-20-2006 15 Fl®r Wfth6i�i Donnafly STATE OF TT&X" Ck'o § COUNTY OFra,.'aRa § This instrument was acknowledged before me on the 5" day of lea 3t , 2003, by R. WILLIAM DONNALLY. �r• Notary Public, State of Texfts 00 v WAYNE WUM NOTARY PUBLIC, STATE OF OW MY COMMISSION E)"ES 04-22.88 V OSydn E. Nibl • Y NVe(C' DEBRA MULKEY STATE OF TEXAS § * * Notary Public, State of Texas = _ �oFn.� My Commission Ezp 09-17-06 § COUNTY OF TAYLOR § _•••• ••••••••••••••••••••••••••••� This instrument was acknowledged before me on the T 'day of , 2003, by SYDNEY E. NIBLO. Notary Public, State of Texas 17 T. A. Hillin STATE OF TEXAS § § COUNTY OF § This instrument was acknowledged before me on the by T. A. HILLIN. 1 day of (� , 2003, Notary Public, State of 18