HomeMy WebLinkAbout908782 RECEIVED 5/31/2OO5 at 10:57 AM
RECEIVING # 908782
BOOK: 586 PAGE: 540
JEANNE WAGNER
LINCOLN COUNT~ CLERK, KEMMEREI:,., WY
PAID-UP OIL AND GAS LEASE
0054 0
THIS AGREEMENT, made and entered into this22nd day el March, 2005, by and between .David B. Brady, individually and as Trustee of the David
B. Brady Trust dated June 16, 1998, 1133 Olvera Way, Las Ve,qas, NV 8912R, hereinafter called lessor (whetherone ormore), and Hanson ~
Strahn Inc., P.O. Box 3020, Cheyenne, WY 82003, hereinafter called lessee:
WITNESSETH:
1. That lessor, for and in consideration of- -Ten- dollars ($ '10.00' ) in hand paid, receipt of which is hereby acknowledged, and of the agreements of lessee hereinafter
set forth, hereby grants, demises, leases and lets exclusively unto lessee the la,nd.s described below for the purpose of investigating prospecting ex Iorin (by eoh sica and other
,me!hods), .dnlhn9~ .... m~mn~ o, perat qg for and producing oil or gas, or both (as aei'med below), together with the rinht~, to construct a~d ,,,o,.~,:,,.~o~-'~- v,p=,,.~,t~pnone~"^~:~^- ~ ..... -g Pana y'"' e~ectr c ..... nes,
tanks, ponas, roaaways p~an[s equipment, and structures thereon to produce, save and take care of sad oil and gas (which right shall include specifically a right-of-wa and easement
for ingress to and egress from said lands by lessee, or its assignees, agents or permit!ees: n, ecessa, ry Io or associate,d with the construction and maintenance of such i ~tines tee hone
and. ele, c!nc' lines,' !,anks., .pgnd. s, roadways pla. n!s .,equipment, and structures on said lanas [o proauce, save and take care of the oil and onas'~,, and- ,-~"' ............. :,.,..,,,.,v,:, ,,u.t~'P'-tu ~n' 'ecl" atr' p as
wat,er,,or!neanoomer~u~as, ~ro.m. any s,o,urce tn[,o me subsurface strata andanyanda other rights and pr v eaesnecessarv incden t ......... ~^-,, .......:- ~ : 9 ;
· ' ' ' · . . '#, . ~, ~ ~*UHVC;H CH[ lO/ tile ~conomlca operation o!
Sa~d lann, a~one or conjointly w~m neignoonng ~and, mr the production, saving and takmg care of od and gas and the injection of air, gas, water, brine, and other fluids nfo the
subsurface strata, said lands being situated in the County of Lincoln, State of Wyominq, described as follows, to-w t:
See Exhibit "A" attached hereto and made a part hereof.
In addition to the land described above, lessor herebygrants, leases and lets exclusively unto lessee, to the same extent as if specifically described, lands which are owned or
claimed by lessor by one of the following reasons: (1) all lands and rgh{s acquired or retainedby lessor by avulsion, accretion, reliction or otherwise as the result of a change in the
boundaries or centerline of any river or stream traversing or adjo n ng the ands desc,ribed above; (2) all riparian lands and rights which are or may be incident, appudenant, related or
attributed to lessor in any lake, stream or river traversing or adjoining the lands descrined above by virtue of lessor's ownership of the land described above; (3) all lands included in any
road, easement or right-of-way traversing or adjoining the lands described above which are or may be incident, appudenant, related or attributed to lessor by virtue of lessor's ownership
of the land described above and (4)all strips or tracts of and adjacent or contiguous to the lands described above owned or acquired b lessor throu h adv
similar statutes of the state n wh ch the lands are located· Y g erse possession or other
less· For the purpose of calculating paymenls provided for herein, it shall be deemed that the lands covered by this lease contain 117.64 acres, whether there actually be more or
The terra oil as used in this lease shall be interpreted to nc ude any liquid hydrocarbon substances which occur naturall in the earth, including drip asoline or other natural
condensate recovered from gas without resort to manufactur og process. The term gas as used in this lease shall be interprete~to include any substance, eilger combustible or non-
combustible, which is produced in a natural state from the earth and which mainlains a gaseous or rarified state at ordinary temperature and pressure cond tons ncluding but not limited
~o helium, nitrogen, carbon dioxide, hydrogen sulfide, coal bed methane gas, casinghead gas and sulphur· '
Subject to the other provisions herein contained, this lease sha rema n in force for a term el four (4) years from April 22 2005 herein cai ed
ther,ea~.er as. oil a,n,d ~as, ,or either of !he,.m., is ~oroduced from [he leased premises or drilling operations are continuous .., ,',rosecuted ~-r --:''-~ ........... "primary ,t, erm") ,an, d.as long
· . .~ ~. · ,~ pu, vo~a u, tn u ease, a well comple[eo [or the
prooucuon ut coa~peo memane gas snail De oeemed to be produc ng gas under this lease at all times when dewatenng of the coal seams ~m which the coalbed methane gas will be
produced is occurring. For purposes of this lease, "drilling operations" shall include operations tot the drilling of a new well and o era,ions for the rework~n
of a wel,I o,r..h, ole.or oth,e,r operati.ons ,coqd, ucte.d i0 an effort to establish, resume or re-establish production of oil and oas' drill~- o ..... ' ........... g_, d..e. epen, l,ng .or plugg,!ng bac, k
prosecu[eo ir not more [nan one nunoreo, twenty (120) days shal elapse between the completion and. abandonment of o~r{e ~e or'~oleP"":'""'"~and the o.,~,commencementU~ ~;uns~uereOof dn]hng["°' ~e operations"C°nunu°uSlYon
another welt or hole; drilling operations shall be deemed to be commenced for a new well at such time as lessee has begun/he construction ut the wells.re location or the road which
provides access to the wellsi/e location; and drilling operations shall be deemed to be commenced with respect to reworking, deepening lu n back or oth r ' '
an effort to resume or re-establish production of oil andgas at such times as lessee has the requisite equipment for such operations at the ~vPell~ ge operat,ons conducted in
2. The lessee shall deliver to the credit of the lessor as roya fy, free of cost, in the pipeline to which essee may connect ts wells the equal one-eighth (1/8) part of all oil p. roduced
and saved from the leased premises or lessee may from t me to time at its option purchase any royalty oil in its possession, paying the market price thereof prevailing for oil of like grade
and gray ty n the field where produced on the date of purchase.
The lessee shall pay lessor, as royalty, on gas, including casinghead gas or other gaseous substances, produced from the leased premises and sold or used off the premises or
used in the manufacture of gaso ne or otherproducts the market va ue at the well of one-e ghth (1/8,) of the gas sold or used rovided that on a
1/8 ' ' ' the re all shall be o
( ) of ,,he amount reahzed from such sale. The amount realized from the sale f ' .d. P~ s s, old y ne-ei hth
.. o gas shall be the price estabhshed b [he oo oales co ' ' ' g
gas purchaser for such term and under such conditions as are customary in 'ndH~frv "Pri,-o" .~.*~ .......... Y · ~ .... ntrac[ en!erea. ~,nto ~n good faith by lessee and a
orders and after application of any applicable )r ce ad us,men,s sr, ccifie~ in th~erl--~-'~'~'." '";~.," .... ,,,,..*.... ~.~ ne~ amo.u.n~?celveu py ~essee aR~r g!wng effect lo ap licable re ula/o
(whether on or off,he leased premi~s)or tra'nsF'orts'gas off the'J~"ased n'reSmUi~hesC.'l~.~'~mUl~i~°~,.e~r~:. ~l~n.?.'l;.~e~v.~'~!-I~s~s~e co, ,mpresses,, treats purifies or.de!ydrates sguch
such functions performed ~' ' ' * H a muyamty H:,~U,tmJt¢/ li~dy UeUUC[ ,rom SUCh price a reasonable charge for each of
3. This is a paid-up lease and all cash consideration first rec ted above and annual rentals have been paid to lessor in advance to keep th s lease in full force and effect throughout
the primary term. tn consideration of the payment of such cash consideration and advance of annual rentals, lessor agrees [hat lessee shall not be obligated except as otherwise
provided herein, to commence or continue any operatons during the pr mary term. Lessee may at any time or times during or after the primary term surrender this lease as to all or any
toP°rti°nthe acreage°f the landsurrendereddescribed above, and as to any strata or stratum, by delivering {o lessor or by filing of record a release or releases and be relieved of all obligations/hereafter accruing
4. Any payments required to be made to lessors pursuant to this lease, other than the payment of royalties, may be paid by lessee to the lessor or to lessor's credit in the
.D. IRECT TO LESSOR Bank, at (or its successor or successors, or any bank with which it may be merged or
consolidated or which succeeds to ts business assets or any part thereof, by purchase or otherwise) which shall continue as the dep0sito regardless of changes in the ownershi of
said land or the oil and ~as. All such payments may be made by cash checker draft, mailed or delivered on or before the due date for th)aTpa men, Any payments so made shai~be
binding on the heirs, der sees, executors, administrators, and personal representatives of lessor and on lessor's successors in interest or on lesso~ assigns,
5. If, at the expiration of the primal/term of this lease o or gas is not be ng produced from the leased premises but lessee s then en a. e '
,c~o~n..tln~u~e_!,n_f_orce .... s_o. lo,,n~ as dn, lllng.o.perat!,ons, are c.ontinuously prosecuted; and f production el oil or gas results from an,,. such dr . ...... ul.,~,,~uun~,g~':g~--d l,n~.drl!llng~n~s ease°P`era"tl°ns:'thiSsnall con hue lea. seth [orceShallso
lU.~t ~,:~ u, ut gas snail De proouceo item [ne leaseo premises. If, after the expiration of the primary term of this lease, production on ~e leased premises should cease for any cause
this lease shall not terminate if lessee s then engaged in dr ng operations, or within one hundred twenty (120) da s after each such cessation of reduction commences or resume~
isdrillingproduced°perati°ns'from theandleasedthis leaSepremises.Sha I remain in force so long as drilling operations are continuously prosecuted, an~Yif production resu ts therefrom, ~en as long thereafter as oil or gas
6. If at any time either before or after the exp ration of the primary term of this lease, there is a well capable of producing oil or gas on the lands covered by this lease, or on other
lands with which lands covered by this lease are pooled or un t zed, but the well is shut-in, whether before or after production therefrom, and th s lease is not being maintained otherwise
as provided herein, this lease shall not term hate (unless released by lessee) and it shall nevertheless be considered that oil or gas is being produced from lands covered by this lease
du{mng .all times while the. well is so shut-in. Lessee sha I use reasonable diligence to market the oil or gas capable of bein reduced from u '
?!~=a~[?_to__m_ a, rket the ,oll or gas u, nde, r te,~,s, c,onditions,or circ, umstances which, in lessee's judgment exercised in oood fait~! aPre ........... s_! ch,,,s~u[-!,n w, ell, bu., sha{l, be u, nde. r no
i!~ U~,l~, manml?~, lesse`e s.nalt pay o,r ?neet [o [ne lessor or lessors successors or assigns an amount enual to ~:1 00 ~er ..... 7. .... ,,,_,?_.!,_~_m?_u~umy. when, the.tea,se Is con.0.un,ueo in ~orce
' · "' '" ' ~'~°' F~' .~ 1.1.~,:-,i acre covereu Dy [ne lease, buci~ payments
sna~ De mane on or De[ore [ne ShUt-in royalty payment date, as defined below, nexl occurring after Ihe expiration o~'one hundred twenty (120) days from the date the well was shut-in
unless prior to such date oil or gas from the well is sold or used or the lease is otherwise maintained as provided herein· In like manner on or before each succeedi_n~q shut-in royalt~
payment date while such well remains shut- n, essee shall make payment of shut-in royalty in the same amount and manner. The term "shut-n royalty payment date shall mean the
anniversary date of this lease· Any shut-in royalty payment may be made by cash, draft or check, mailed or tendered on or before the shut-in royalty date· Lessee's failure to pay or
tender, or propedy pay or tender, any such sum shal/render lessee liable for the amount due but it shall not operate to terminate the lease.
...7. !f t.e,s, sor o.?:'p:s .a lesser !hr`ere,? n the a, bove.de~c, ribed. 3nd. cthe, r, than !he, sntir, e e. nd undivided fee simple estate, therein then ", .....
pr. owoe,<~ ,s,na,l ee pale.to le.ssor only ~n [ne propel.on which ~essors in[ems[ Dears [o the WhOle and undivided fee An- in'~r~': .... ~, .. [n.e ro,y??s. !nc!ud~ngshu[-in royalty herein
· ! ~ ~:~[ ~n p,uuucuon [rom [ne lanes ~escribed herein to wl~ ch the
~nieres[ or ~essor may oe subject shall be deducted from the royalty herein reserved.
8. Lessee shall have the right fo use, free of cost gas, oil and water produced on sa d and for ts operaton thereon, except water from wells and reservoirs of lessor. ~essee
shall have the right at any time to remove all much nery and iix,utes placed on said premises, including the right to draw and remove casing.
9. Lessee shall pay to lessor reasonable amounts for damages caused by its operations to growing crops on said land. When requested b~ lessor lessee shall bury its pipelines
which traverse cultivated lands below plow depth. No well shall be tlr,lied nearer than two hundred (200) feet to a house or barn now on said premises, wi{hunt written consent of lessor
pullLesseeand shallremovehaVecasings·the right at any time (but not the obi,gat on), to remove ali improvements, machinery, and fixtures placed or erected by essee on said premises, including the right t~
10. Lessee is hereby given the right and power at any time and from time to time as a recurring ri hr, either before or after production, as to all or any part of the land described
above and as to any one or more of the formations hereunder, to pool or unitize the leasehold estate an~the mineral estate covered by this lease with other and, lease or leases in the
immediate vicinity for the production of oil and gas, or separately for the production of either, when in lessee's 'ud men/it is necessa or ' '
s~u,??_ ~i? !o_ th!s ex,.~.ts w~t?s.~ec! to such.oth~.r ~an.,~, ~ease o, ~eases. Ukew~se units previous y formal to~nc~ude formations ~ot .~%~v~..ap??_o so. and.,rres~.ecfiw. ,of whether
. t.l~ .u?p,u,uu,,c~n,g ~or,mat, i,ons. 1.ne. rormln~) or rerormlog oi any un t shall be accomplished by lessee executin,~ and ~-- ~ ......... ~,_ , ,..~.~.u, u,r gas. ma,~, ue relo.rmea to exclude
· · - u ,,,,.~ u~ ~o~.u~u ~ uut;l~ra[ion or SUCh unitization or reformation which
oeclarauon snail oescrloe [ne unit. Any unit may nclude land upon which a well has heretofore been completed or upon which drilling operations have been commenced. Pro,:l'uct on
drilling or reworking operations or a well shut-in for any reason anywhere on a unit which includes all or a part of this lease shall be treated as if it were reduction drilling or reworkin~
operations or a well shut-in under this lease. In lieu of the royalties elsewhere herein specified, lessor shall receive on production from the unit so oole]royalties ~nly on/he podion of
such production allocated to this lease; such allocation shall be that proportion of the unit production that the total number of surface acres covereaPby this lease and included in the unit
bears to the total number of surface acres in such unit·
osos?a2; ,0 0 5 4 i
1 i. LesSee shall have the r ght to un t ze, pool, or combine all or any part of the land described above as to one or more of the formations thereunder with other lands n the same
general area by entering into a cooperative or unit plan of development or operation approved by any governmental authority and from time to t me, with I ke approve to mod fy change
or terminate any such plan or agreement and, in such event, the terms, conditions, and provisions-of this lease shall be deemed modified to conform to the ter~s conditions and
provisions of such approved cooperative or un t p an of development or operation and particularly, all drilling and development requirements of this lease ex ,ess or'implied shill be
satisfied by compliance wi h the drilling and development requirements of such plan or agreement, and this lease shall not terminate or expire during the liie o~uch plan or a~'reement
In the event that the land described above or any part thereof shall hereafter be operated under any such cooperative or unit plan of development or operation whereby the productio~
therefrom is allocated to different port ohs of the [and covered by said plan, then the production allocated to any particular tract of land shall for the purpose of computing the royalties to
be paid hereunder to lessor, be regarded as hay ag been produced from the padicular ,act of land to which it ~s allocated and not to any oiher tract of land; and he royalty payments to
be made hereunder to lessor shall be based upon production on y as so alloca[ed.
12. If the estate of either party hereto is assigned or sublet, and the privilege of assigning or subletting in whole or in part is expressly allowed the express and implied covenants
hereof shall extend to the sublessees, successors and assigns of the parties; and'in the event of an assignment or subletting, by lessee, lessee shall I~e relieved and dischar ed as to the
leasehold rights so assigned or sublet from any liability to lessor thereafter accruing upon any of the covenants Or cond~tons of this lease, either express or replied ~o change in
ownership of the'land, royalties, or other payments, however accomplished, shell operate to enlarge the obligations or diminish the rghts of lessee or require se araie measuring or
installation of separate tanks by lessee. Notwithstanding any actual or constructive knowledge of or notice to lessee, no chane in ownership of said and or o~the right to receive
royalties or other payments hereunder, or of any interest therein, whether by reason of death, conveyance or any other matter, sh'~a~ be binding on lessee (except at lessee's option in any
padicular case) until one hundred twenty (120) days after lessee has been furnished wdtten notice thereof, and the supporting information hereinafter referred to by the party claiming as
a result of such change in ownersh p or interest. Such notice shall be supported by original and certified copies of all documents and other instruments or ~'roceedings necessary in
lessee's opinion to establish the ownership of the claiming pady.
13. In .the ,,q!~.rest cf co,~,se.r,,at[on, th~ protucti0n of ~eservoir pressures' ~nd race.very of the .gre.at.est ultimate yield of o and/or as, I~ssee shall have the right to combine the
leased premises w~th other premises In the same general area for the purpose of operating and maintaining rep,assuring and recycling l~cilities, and for such purpose may locate such
~ar}ir~i~j~ including input wells, upon leased premises, and no royalties shall be payable he,auntie, upon any gas used for rep,assuring and recycling ope,aliens benefiting the leased
14. If lessor, during the primary term of th s lease, receives a bona fide offer from a third pady to purchase from lessor a lease covering any or a of the substances covered by this
lease and covering all or a port on otthe land described herein, with such lease to become effective upon expiration of this lease, which lessor is wiltin to accept from the offering party
lessor hereby agrees to notify essee in writing of said offer immediately, including in the notice the name and address of the offeror, the price offere~ and all other pedinent terms an~
conditions of the offer. Lessee, for a pared of'fifteen (15) days after the receipt of the notice, shall have the rio, and preferred right and option to purchase the lease or part thereof or
interest therein covered bY the offer at the price and on the terms and conditions specified in the offer. All offP~rs made uP to and including the last da of the prima~ term of this lease
shall be subject to the terms and conditions of this paragraph 14. Should lessee elect to purchase the lease pursuant to the terms hereof it shall so notify lessor in wribng by mail telefax
or telegram prior to expiration of sa d fifteen (15) day period. LesSee shall promptly thereafter furnish to lessor the new lease for executio~ by lessor along with lessee's s~ght draft' ayabl~
to lessor in payment of the specified amount as consideration for the new lease such draft bain sub'ect to a''
shall rom ti execute satd lease and retur am g I pp.,oval of title according to the terms thereof U on rece~ t th
P P Y ' n s e along with the draft through le~'sor's bank of record for payment . P 'p ereo~ lessor
15. In the event essor considers that essee has not complied with all its obligations hereunder, either ex ress or m lied, lessor shall notify lessee in writing setting out specificall
in what respects lessee has breached this lease Lessee shal/then have sixty (60) days after receipt of sai~notice w t~ n which to meet or commence to me~t all or an art of they
breaches alleged bv lessor. The service of said n~tice shall be precedent to the bringin,', of an,, action b- le~'' ...... ~-' ,,, ........... ... Y
~f~eeffmSei~tYan(6a0cl~Ys~oanfter service o.! sa,ch .n.otice on, les,se?. Neither the service of sa~d noti~ nor the ~oi~'~f%~r~%~;t~,~e~U~e'~'~i~ae~ls,e2 a_nd ,no.such actio, ,n. sha!! be brought until the
u~ mat SUCh [a ~ure exists eno essee fails within a reasonable time to satisfy any such
covenants, conditions, or stipulations.
10. All express and imp ed covenants of this lease shall be subject to all federal and state, county or municipal laws, executive orders rules and regulations and lessee's
obligations and covenants hereunder whether express or implied, shall be suspended at the time or from time to time as corn liance w th such ob i~ations and covenants i~ prevented or
hinoered by or is in conflict with federal, state, county, or municipal laws, rules, regulations or executive orders asseded as of~ al by or under public authority claiming 'urisdiction or Act
of God, adverse field, weather, or market conditions, inability to obtain materials in the open market or transportation thereof, wars, strikes lockouts riots or ot~er conditlons or
circumstances not wholly controlled b,y lessee, and this lease shall not be terminated in whole or in pad, nor lessee held liable in damages for faiPure to co~ply ~ith any such obfl aliens
or covenants if compliance the,aw th ~s prevented or hindered by or is in conflict with any of the foregoin eventualities The time dudng which lessee she be prevented from conducting
drilling or reworking operations during the primary term of this lease, under the contingencies above state~, she be added to the primary term of this lease.
17. Lessor hereby warrants and aarees to defend the title to the lands described above, and agrees that lessee, at its o lion shall have the right at any time to a for lessor any
mortgage, taxes or other liens existing, ~'~vied or assessed on or against the above described lands in the event of default oppay~ent by lessor and be subrogated ~ the rights ~'f the
holder thereof, and lessor hereby agrees that any such pnyments made by lessee for the lessor ma be deducte
the terms of this lease Y d from any amounts of money which may become due the lessor under
18. This lease and all its terms, conditions, and stipulations shall extend to and be binding on all successors in interest, in Whole or in part, of said lessor or lessee.
19. With respect to and for the purpose of this lease, lessor, and each of them if there be more than one, hereby release and waive the right of homestead.
WHEREOF witr~s our hands as of the day,a~d year first above written.
David B. Br/4a~,-ihclivi~dually and a§ Tru~ee of the David B. Brady Trust dated June 16, 1998
On this /,c~ dayof ~ ~ ,2005, before me personally appeared David B. Brady to me known to be the
person(s) described in and who executed t~ fo?ego ng nstrument, and who acknowledged to me that he execut~-d the same as hi.._.~s free act and deed, including
the release and waivei'of the r ght of homestead.
Given under my hand and seal this
My commission expires:/~)_/,:~,~¢~
f~ NOTARY PUBLIC~¢i~
NEVADA
~ ~-~r~"'~.~' County Of Clark ~
~ .. ~ CHARLES HERMAN
~ No ~-63927-1 ~
~ My Appointment Expires Nov 12 2~7
EXHIBIT "A"
00542
Attached to and made a part of that certain Paid-Up Oil and Gas Lease dated March 22, 2005,
by and between David B. Brady, individually and as Trustee of the David B. Brady Trust dated
June 16, 1998, as Lessor, and Hanson & Strahn, Inc., as Lessee.
Township 26 North. Range 112 West. 6th P,M,
Section 19: S1/2SE1/4, SE1/4SW1/4 less a highway tract more fully described in
Book 21, Page 143, of the Register of the Deed, Lincoln County, Wyoming
containing 117.64 gross acres
Lincoln County, Wyoming
This oil and gas lease is subject and inferior to that certain 'oil and gas lease dated April 2,
1997, executed for a primary term of four (4) years, as recorded in Book 397PR, Page 140, in
the Lincoln County Clerk and Recorder's office. Lessor hereby covenants and agrees not to
modify, amend or extend said prior lease.
Signed forAidentification: /f
Dav~d'B. Brady, individually a~'~d as Trustee of the
David B. Brady Trust dated June 16, 1998