HomeMy WebLinkAboutResolution - 1049 - Oil & Gas Lease - MPT&NM Inc - 24.036 Acres, Sec 17 Block D5 EL&RR, RR Co Survey - 03/11/1982RESOLUTION 1049 - 3/11/82
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RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
4
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 oil and gas
lease between the City of Lubbock and Mobil Producing Texas and New Mexico,
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 herein in detail.
Passed by the Council this 11th day of March , 1982.
'4�k
BILL McALISTER, MAYOR
ATTEST:
Evelyn Gagfga, City/So r: otary-Treasurer
APPROVED AS TO CONTENT:
7t) e" I C e --Fel>6 J
Denzel Pe ifull, D ector of Public Services
APPROVED AS TO FORM:
Susan M. Horton, Assistant City Attorney
J�,jk'f n RS 88 REV. - GEN.
.
THIS AGREEMENT made this 11th day of
County of Lubbock
herein called lessor (whether one or morel, and
r�- 1tESOLUTION 104 3/11/82
PAID-UP LEASE ,fTY rCRETARY-TPEASIJ PEF CO 7444(10-73)
OIL, GAS AND MINERAL LEASE
March 19 82 between The City of Lubbock,
Mobil Producing Texas
Box 633, Midland, Texas 79702
of Lubbock, Texas
New Mexico Inc. Post Office Address)
lessee:
1. Lessor, in consideration of
Ten and No/100---------------------------------- ollare li
10. 00
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in hand paid, receipt of which is here acknowledged, and of the royalties herein provided and of the agreements of the lessee herein contained, hereby grants, leasee and lets
exclusively unto lessee the land covered hereby for the purpose of investigating, exploring, prospecting, drilling, mining )including pit and strip mining) and operating for and
producing oil, gas, sulphur, fissionable material and all other minerals (whether or not similar to those mentioned), injecting gas, waters, other fluids and air into subsurface strata,
establishing and utilizing facilities for the disposition of salt water, laying pipe linea, storing oil, building roads, bridges, tanks, power lines, telephone lines and any other structures
and things thereon to produce, save, take care of, treat, process, store and transport said minerals and other products manufactured therefrom, and housing and otherwise caring
for its employees, together with such rights and easements in said land necessary or useful in lessee's oil, gas and mineral operations on said lend and adjacent land and with the
right of ingress and egress to and from said land for such purposes serosa any adjacent and contiguous lands of lessor by use of existing roads or otherwise. The land covered
hereby (including but not limited to all of lessor's future, remainder and reversionary rights therein 1, herein called "said land," is located in
Lubbock Texas
County, ,and is described as follows:
See Exhibit "A" Attached
Lessor hereby acknowledges receipt of all delay rentals due and payable hereunder
during the entire primary term hereof, and that this lease-is`a--fully paid up lease for
and during the three (3) year primary term provided for herein.
and includes not only the land specifically described above but also all land, if any, contiguous to or adjoining said land and owned or claimed by lessor by limitation, prescription,
possession, reversion or unrecorded instrument or as to which lessor has a preference right of acquisition. For the purpose of calculating the rental payments hereinafter provided
for, said land is estimated to com rise 24.03 6
P scres, whether it actually comprises mor��p��D� three (3 )
2. Subject to the other provisions herein contained, this lease shall remain in force for a term of 1% 1 &� years from this date (called "primary term"1 and as long thereafter
as oil, gas, sulphur, fissionable material or other mineral is produced frq $aid land or land with which said land is pooled.
3. The royalties to be paid by lessee are: 3 1 [�
(a) on oil and other liquid hydrocarbons saved at the well, of that produced and saved from said land, same to be delivered at the wells or to the credit of lessor
in the pipeline to which the wells may be connected. Lessor's interest in either case shall bear its proportion of any expenses for treating oil to make it marketable as crude. Lessee
may, at its option, from time to time purchase any royalty oil or liquid hydrocarbons, paying the market price therefor prevailing for the field where produced for oil or liquid
hydrocarbons of like kind and quality on the date of purchase and lessee may sell any royalty oil or liquid h11 d6rocerbons in its possession and pay lessor the price received by lessee
for such oil and/or liquid hydrocarbons computed at the well;
Ib) on gas and casinghead gas produced from said land:
ill when sold or used by lessee for the extraction of gasoline or other products therefrom,29dKXVXACof the market value at the well of the gas so sold or used, provided
that the market value shall not exceed the net amount realized by lessee from the sale of gas and extracted products, including gasoline and residue gas ("net amount realized"
being defined as proceeds received by lessee from the sale less all cost and expenses incurred by lensee from the mouth of the well through sale, excluding normal field separation
expense which lessee alone shall bearl. In the event the gas is processed in a plant in which lessee owns an interest, lessee may include as expense amortization of its investment
in pipelines. the plant and its facilities plus a reasonable rate of return thereon. The use by lessee of all or any part of the extracted products, including gasoline and residue
gas, for its own account shall for the purposes hereof be deemed a sale at the market price prevailing at the plant at the time of use by leasee, provided, however, if the price of
any product, gasoline or gas is regulated by any governmental agency, market price of such product, gasoline or gas for the purposes of computing royalty on such product,
gasoline or gas used by lessee shall not be in excess of the price permitted by such regulations. If a refund of a Portion of the proceeds derived from the sale of gas may be
required under any order, rule or regulation of the Federal Power Commission or other governmental agency having jurisdiction thereof, net amount realized shall be calculated
on the basis of the unsuspended and/or unconditional certificated price for such gas which lessee receives. Leasee may hold without interest the portion of any proali bject
to possible refund until the amount of refund, if any.is determined by final unappealable order of the Federal Power Commission or other governmental agency; �/ -
(2) when used by lessee for any purpose other than the extraction of gasoline or other products therefrom and those permitted by numbered paragraph 7,2Mt of the
market value at the mouth of the well of such gas or casinghead gas, provided, however, that leasee shall in no event be required to determine and change market value more
forthan once every calendar year. Changes made shall be prospective only. If the price of gas or casinghead gas is regulated by any governmental agency, the market value
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purposes of computing royalty hereunder shall not be in excess of the price permitted by such regulations;
4c) on fissionable material and all other minerals mined or marketed, one-tenth either in kind or value at the well or mine, at lessee's election, except that on sulphur mined
and marketed the royalty shall be One Dollar (61.00) per long ton; and
(d) If lessee drills a well on said land or on land pooled therewith, which well is capable of producing oil or gas in paying quantities but such well is not being produced and
this lease is not being maintained otherwise as provided herein, this lease shall not terminate, whether it be during or after the primary term (unless released by lessee► and it
shall nevertheless be considered that oil or gas to paying quantities is being produced from the land covered by this lease. When the lease is continued in force in this manner,
lessee shall pay or tender as royalty to the parties who at the time of such payment would be entitled to receive royalty hereunder if the well were producing or deposit to their
credit in the depository bank as hereinafter provided a sum equal to one -twelfth of the amount of the annual rental payable in lieu of drilling operations during the primary term
on the number of acres subject to this lease at the time such payment is made for each calendar month, or portion thereof, during which said well is situated on said land, or on
land pooled therewith, and this lease is not otherwise maintained, or this lease is not released by lessee as to the land on which or the horizon, zone. or formation in which the well
is completed. The first payment of such sum shall be made on or before the first day of the calendar month after expiration of ninety (90) days from the date the lease is not other-
wise maintained for all accruals to such date and thereafter on or before the first day of each third calendar month for all accruals to each such date. Lessee's failure to pay or
tender or to properly or timely pay or tender any such sum as royalty shall render lessee liable for the amount due but it shall not operate to terminate this lease.
4. If operations for drilling are not commenced on said land or on land pooled therewith on or before one year from the date hereof, this lease shall terminate as to both parties
unless on or before suh date lessee shall pay or tender 4or make a bona fide attempt to pay or tender) to lessor or the credit of lessor in
Yexa s commerce sank at Lu b boc�C r Texas
thesumof Twenty=four and 04/100
24 , Of{- Dollars
(s - -1'fherim ,called "rental"), which shall cover the privilege of deferring commencement of drilling operations for a period of twelve (12) months. In like ,
manner and upon like payment -or tender, annually, the commencement of drilling operations may be further deferred for successive periods of twelve (12) months, each during
the primary te'tm.' The payme or, tepder of rental under this peregra h and of royalty under Paragraph 3 on any well which is not being produced, hereinafter referred to as
shut-in teyaltt'yy may be a byy check or draft of lessee mailed or delivered to the parties entitled thereto or to said bank on or before the date of payment. Such bank and its
successors arL-idssor's agent and shalf-contiAue as depository for all rental and shut-in royalty pa able hereunder regardless of changes in ownership of said land, rental or shut-in
royalty. Yf 9ucb bank for any, successor blink) should fail, liquidate or be succeeded by another bank or for any reason fail or refuse to accept rental or shut-in royalty, lessee
sshhallnaot-be teld in deiWt for failure -to "make such payment or tender of rental or shut-in royalty until thirty (30) days after the party or parties entitled thereto shall deliver to
W P� - =dl. le instrument patgjng another bank as agent to receive such payment or tender. If lessee shall make a bona fide attempt on or before any payment date to
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or deposit cental to a party or,parties entitled thereto, according to lessee's records, or to a party or parties who, prior to such attempted payment or deposit, have given
leasee notice in dscordanct with eubaeque i provisions of this lease of their right to receive rental, and if such payment or deposit shall be ineffective or erroneous in any regard,
this lease sitalf.SAt-terminate but shall be maintained in the same manner as if such erroneous or ineffective rental payment or deposit had been properly made, provided that the
erroneous or ineffectlre_rental pa�rbent or deposit be corrected within thirty (30) days after receipt by lessee of written notice by such party or parties of such error accompanied
by such inatrp+nentL-ss,'$$re;rieeessaYy io enable lessee to make proper, payment. Failure to make proper payment or deposit of delay rental as to any interest in said land shall
not affect this lease as t 6ny fnter@bt therein as to which proper payment or deposit is made.
5. Leasee is heleby, granted th6'right and power at any time and from time to time to pool or unitize this lease, the land covered by it or any part thereof with any other land,
lease, leasee, mineral estates or parts thereof for the production of oil, gas, or any other minerals. The unit may include either off or gas )including condensate) or any other
mineral and may be limited to one or more subsurface strata. Units pooled for oil hereunder shall not exceed forty (40) acres in surface area plus a tolerance of ten percent (10%)
thereof and units pooled for gas (including condensate) hereunder shall not exceed six hundred forty (640) acres in surface area plus a tolerance of ten percent (10%1 thereof,
provided that if any Federal or State law. Executive order, rule, or regulation shall prescribe or permit a spacing pattern for the development of the field or allocate a producing
allbwable on acreage per well, then any such units may embrace as much additional acreage as may be so prescribed, permitted or as may be used in such allocation or allowable.
Lessee shall file written unit designations in the county in which the premises are located. The unit shall become effective on the date provided in the designation or, if the designa-
tion makes no such provision, it.shall become effective upon the date it is filed for record. A unit established hereunder shall be valid and effective for all purposes of this lease
even though there may be mineral, royalty or leasehold interests in lands within the unit which are not effectively pooled or unitized. Such units may be designated any time
either before or after the completion of a well or wells or production therefrom and lessee may reduce, enlarge, modify or dissolve such unit or units at any time prior to the dis-
covery of oil, gas or other minerals on the pooled acreage, or, after discovery of same, at any time subsequent to the cessation of production thereof, by filing a written declaration
--
to 8 h -effect in the same county. Drilling operations and production on any part of the pooled acreage shall be treated as if such drilling operations
was from the land described in this lease whether the well or wells be located on the and cove g gpooe were upon shall
such production
all red by this lease . not. The entire acreage pooled into a unit shall al treated for
purposes, except the payment of royalties on production from the pooled unit, as if it were included in this lease. In lieu of the royalties herein provided, lessor shall receive on
E from a unit so pooled only such portion of the royalty stipulated herein as the amount of his acreage placed in the unit or his royalty interest therein on an acreage
basis bears to the total acreage so pooled in the particular unit involved.
6. If, prior to discovery of oil, gas or other minerals on said land or land pooled therewith, lessee should drill and abandon a dry hole or holes thereon, or if, after discovery
of oil, gas or other minerals, the production thereof should cease from any cause, this lease shall not terminate if lessee commences reworking or additional drilling or mining
operations within sixty 1601 days thereafter, or Iif it be within the primary term) commences or resumes the ayment or tender of rentals or commences operations for drilling,
mining or reworking on or before the rental paying date next ensuing after the expiration of three (3) months from date of completion and abandonment of said dry hole or holes
or the cessation of production. If a dry hole is completed and abandoned at any time during the last fifteen (15) months of the primary term and prior to discovery of oil, gas or
other mineral on said land or land pooled therewith, no rental payment or operations are necessary in order to keep the lease in force during the remainder of the primary term.
If, at the expiration of the primary term, oil, gas or other mineral is not being produced on said land or land pooled therewith but lessee is then engaged in operations for drilling,
mining or reworking any well or mine thereon, this lease shall remain in force so long as drilling, mining or reworking operations are prosecuted I whether on the same or different
wells or mines) with no cessation of more than sixty (60) consecutive days and, if they result in production, so long thereafter as oil, gas or other mineral is produced from said
land or land pooled therewith. In the event a well or wells producing oil or gas in paying quantities should be brought in on adjacent land and within three hundred thirty 1330)
feet of and draining the leased premises, lessee agrees to drill such offset wells as a reasonably prudent operator would drill under the same or similar circumstances. The judgment
of the lessee, when not fraudulently exercised, in carrying out the purposes of this lease shall be conclusive.
7. Lessee shall have free use of oil, gas and water from said land, except water from lessor's wells and tanks, for all operations hereunder, including repressuring, pressure
maintenance,cycling and secondary recovery operations and the royalty shall be computed after deducting any so used. Lessee shall have the right at any time during or after the
expiration of this lease to remove all property and fixtures placed by lessee on said land, including the right to draw and remove all casing. Unless otherwise expressly provided
herein, the only limitations on lessee's use of the surface (including sub -surface, air space and any materials constituting a part of the surface estate) of said land for any operations
required or permitted under this lease are: (1) leasee shall conduct such operations in a non -negligent manner and 121 lessee shall not use more of the lateral surface than is
reasonably necessary in connection therewith. Any additions to, changes or relocations of lessee's facilities made at lessor's request shall be at lessor's cost and expense. No well
shall be drilled within two hundred feet (200 ft.) of any residence or barn now on said land without lessor's consent. Lessor shall have the privilege, at his risk and expense, of
using gas from any gas well on said land for stoves and inside lights in the principal dwelling thereon out of any surplus gas not needed for operations hereunder.
8. The rights of either party hereunder may be assigned in .whole or in Part as to said land or any mineral or subsurface interval or any depth thereunder and the provisions
hereof shall extend to the heirs, executors,. administrators, successors and assigns, but no change or division in ownership of the land, rentals or royalties, however accomplished,
shall operate to enlarge the obligations or diminish the rights of lessee. No. such change or division in the ownership of the land, rentals or royalties shall be binding upon lessee
for any purpose until such person acquiring any interest hes furnished lessee with the instrument or instruments, or certified copies thereof, constituting his chain of title from
the original lessor. In the event of an assignment of this lease as to a segregatedortionof said land, the rentals or shut-in royalty payments payable hereunder shall be apportioned
as between the several leasehold owners ratably according to the surface area ofeachand default in payment by one shall not affect the rights of other leasehold owners hereunder.
Any assignment shall, to the extent of such assignment; relieve and discharge lessee of any obligations hereunder and if lessee or assignee of part or parts hereof shall fail or
make default in payment of the proportionate part of the rentals or shut-in royalty- payments due from such lessee or assignee or fail to comply with any other provision of the
tmyelt sua default shall not affect this lease insofar as it covers a part of said lands upon which lessee or any assignee thereof shall make payment of said rentals or shut-in
y p yments. If six or more parties become entitled to royalty .hereunder, lessee may withhold payment thereof unless and until furnished with a recordable instrument
execu by ell such parties designating an'agent to receive payment for all.
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Attached to
dated March 11, 1982,
as follows:
EXHIBIT "A"
and made a part of Oil, Gas and Mineral Lease
and covering 24.036 acres, more or less, described
TRACT ONE: Microwave Station Site:
Beginning at a point in the present South Right of Way Line of
the highway which is 2055 feet North of the Southeast corner of Section
17, Block D-5, Lubbock County, Texas.
Thence South in the East line of Section 17 a distance of 100 feet;
Thence West 950 feet;
Thence North 1069 feet to a point in the present South Right of Way
Line of the highway;
Thence Southeasterly along the South Right of Way Line of the
highway, a distance of 1356.99 feet to the place of beginning, containing
12.747 acres of land;
TRACT TWO: Reservoir Site:
Beginning at the Southeast corner of Section 17, Block D-5,
Lubbock County, Texas;
Thence North in the East line of Section 17, a distance of
350 feet;
Thence West 550 feet;
Thence South 350 feet to a point in the South line Section 17,
Block D-5;
Thence East along the South line of Section 17, a distance of
550 feet to the place of beginning, containing 4.419 acres of land.
TRACT THREE:
A tract of land out of Section 17, Block D-5, EL & RR, RR Co.
Survey, Lubbock County, Texas. More fully described as follows:
Beginning at a point in the East line of said Section 17, said
point being 100.0 feet South of the intersection of the East line of
said Section 17, and the Southwesterly Right of Way Line of U. S. Highway
84;
Thence West a distance of 181.9 feet to a point, said point
being in the Southwesterly Right of Way line of the widen Right of Way
line of U. S. Highway 84 as now established by the Texas State Highway
Department;
Thence South 240 17' East a distance of 317.66 feet to a point;
Thence South 0° 15' West a distance of 32.6 feet to a point;
Thence South 89° 49' East a distance of 50.0 feet to a point
in the East line of said Section 17;
Thence North 00 15' East along East line of said Section 17,
a distance of 320.7 feet to the Point of Beginning, containing .81 acre
of land.
TRACT FOUR:
A tract of land out of Section 17, Block D-5, EL & RR, RR Co.
Survey, Lubbock County, Texas. More fully described as follows:
Beginning at -_a point -in, -the Southwesterly --Right of Way Line of
U. S. Highway 84, said point being North 440 15' West a distance of
1356.99 feet of the intersection of the Southwesterly Right of Way Line of
U. S. Highway 84 and the East line of said Section 17;
Thence North 440 15' West along the Souhtwesterly Right of Way
Line of U. S. Highway 84, a distance of 3214.01 feet to point in the North
line of said Section 17;
Thence North 89° 45' West along the said North line of said
Section 17; a distance of 112.2 feet to a point;
Thence South 44° 15' East along a line 80.0 feet from and
parallel to the present Southwesterly Right of Way Line of U. S. Highway
84, a distance of 3378.21 feet, plus or minus, to.a point in the West line
of a 12.747 acre tract of land shown hereinabove as Tract I;
Thence North a distance of 112 feet, more or fess, to the Point
of Beginning, containing 6.06 acres of land.
ENGINEERS CALCULATION SHEET
e
FOR
LOCATION
SUBJECT
TILAcT our o >" S gEG. t 7,
BI.K. D5, ct^ ep- ize. I o. Survey,
Al- ID,ovv.pG
JOB OR AUTH. NO.
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