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1992)
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
OFFER TO LEASE AND LEASE FOR OIL AND GAS
S~ri~ No.
W 3WV 1626:?6
-00j. 75
'he undersigned (reverse) offers to lease all or any of the lands in Item 2 that are available for lease pursuam to the Mineral Leasing Act of 1920, as amended and supplemented (30 U.S.C. 181
t seq.), the Mineral Leasing Act for Acquired Lands of 1947, as amended (30 U.S.C. 351-359), the Anorney General's Opinion of April 2, 1941 (40 Op. Atty. Gen. 41), or the
Name
Street
City, State, Zip Code
READ INSTRUCTIONS BEFORE COMPLETING
S EWI'LE CRAIG
5897 S FULTON WA Y
GREENWOOD VILLAGE, CO 801113719
This application/offer/lease is for: (Check only One) ~ PUBLIC DOMAIN LANDS
Surface managing agency if other than BLM:
Legal description of land requested: *Parcel No.:
*SEE ITEM 1 IN INSTRUCTIONS BELOW PRIOR TO COMPLETING PARCEL NUMBER AND SALE DATE.
T. R. Meridian State
Future rental payments must be made
on or before the anniversary date to:
Minerals Management Service
Royalty Management Program
P.O. Box 5640
.... Denver, ~0_ 80217 ............
[] ACQUIRED LANDS (percent U.S. interest
Unit/Project
*Sale Da~e (m/d/y): / __ / __
County
Amount remitted: Filing fee $
RECEIVED 7/5/2005 at 1:51 PM
RECEIVING # 909716
BOOK: 590 PAGE: 175
JEANNE WAGNER
LINCOLN COUNTY CLERK, KEMME~ER, WY
Rental kc $
I)O NOT WRITE BELOW THIS LINE
Total acres applied for
Total $
Land included in lease:
T. 0220N
Sec. 020
ALL',
R. l130W
Meridian
06~rh state W'Y'
County
Lineohi
Torn/ acres in lease 640.000
Rental retained $
7his lease is issued granting the exclusive right Io drill for, mine, extract, remove and dispose of all the oil and gas (except helium) in the lands described in Item 3 together with the right to build
nd maintain necessary improvements thereupon for the term indicated below, subject to renewal or extension in accordance with the appropriate leasing authority. 'Righta~ granted are subject to
pplicable laws. the terms, conditions, and attached stipulations of this lease, the Secretary of the Interior's regulations and formal orders in effect as of lease issuance, and to ~;egulations and formal
~rders hereafter promulgated when not inconsistent with lease rights granted or specific provisions of this lease.
4OTE: This lease is issued to the high bidder pursuant to his/her duly executed bid or nomination form submitted under 43 CFR 3120 ~nd is subject to the provisions of tlmt bid or
rumination m~d tho~e specified on this form.
?ype and primary term of lease: TH T
t'
3 Noncompetitive lease (ten years) by / 4/~~~~~)~
JUN 0 1 2005
retttrn recorded docttment to:
Burnett Oil Company - Laud Dept.
Burnett Plaza - Suite 1500
801 Cherry St.-Unit//9
EFFECTIVE DATE OF LEASE
4. (a) Undemigaed certifies that (1) offeror is a citizen of the United States; an association of such citizens; a municipality; or a corporation organized under the laws of the United States or of any
State or Ten-itory thereof; (2) all parties holding an interest in the offer are in compliance with 43 CFg 3100 and the leasing authorities; (3) offeror's chorgeable interests, direct and indirect, in each
public domain and acquired lands separately in the same Stile do not exceed 246,080 acres in oll ,~d gas leases (of which up to 200,000 aa-es may be in oil and gas uptiom), or 300,000 acres in
leases in each leasing District in Alaska of which up to 200,000 acres may be in options, (4) offeror is not considered a minor under the laws of the State in whleh the lands covered by this offer are
located; (5) offeror is in compliance with qualifications concerning Federal coal lease holdings lXovided in sec. 2(aX2XA) of the Mineral Leasing Act; (6) offeror is in compliance with reclamatiun
requirements for all Federal oil and gas le,~e holdings as required by sec. 17(g) of the Mineral Leasing Act; and (7) offeror is not in violation of sec. 41 of the Act.
(b) Undersigned agrees that signature to this offer constitutes acceptance of this lease, including all terms, conditions, and stipniatiuns of which offeror has been given notice, and any amendment
or separate lease that may include any land described in this offer open to leasing at the time this offer was filed but omitted for any reason from this lease. The offeror further agrees that this offer
cannot be withdrawn, either in whole or in pm-t, unless the withdrawal is received by the proper BLM State Office before this lease, an amendment to this lease, or a sep,~cate lease, whichever covers
the land described in the withdrawal, has been signed on behalf of the United Sates.
This offer will be rejected and will afford offeror no priority if it is not properly completed and executed in accordance with the regulations, or if it is not accompanied by the required
payments. 18 U.S.C. See. 1001 makes it a crime for any person knowingly and wfllfislly to make to any Department or agency of the United States any false, fictitious or fraudulent statoments
or representations its to any matter within its jurisdiction.
Duly executed this . day of , 19 __
(Signature of Lessee or Attorney-in-fact)
Sec. 1. Rentals--Rentals shall he paid to proper office of lessor in advance of each lease year.
Annual rental rates per acre or fraction thereof are:
(a) Noncompetitive lease. $1.50 for the first 5 years: thereafter $2.00;
(b) Competitive lease, $1.50; for the first 5 years; thereafter $2.00;
(c) Other, see attachment, or
as specified in regulations at the time this lease is issued.
If this lease or a portion thereof is comrmtted to an approved cooperative or unit plan which
includes a well capable of producing le. ased resources, and the plan contains a provision for
allocation of production, royalties shall be paid on the production allocated to this lease. However,
annual rentals shall continue to be due at the rate specified in (a), CoL or (c) for those lands
not within a participating area.
Failure to pay annual rental, if due, on or before the anniversary date of this lease (or next
official working day if office is closed) shall automatically terminate this lease by operation of
law. Rentals may he waived, reduced, or suspended by the Secretary upon a sufficient showing
by lessee.
Sec. 2. Royalties--Royalties shall be paid to proper office of lessor. Royalties shall be computed
in accordance with regulations on production removed or sold. Royalty rates are:
(a) Noncompetitive lease, 12~A %;
Co) Competitive lease, 12sA%;
(c) Other. see attachment; or
as specified in regulations at the time this lease is issued.
Lessor reserves the fight to specify whether royalty is to be paid in value or in kind, and the
right to establish reasonable minimum values on products after giving lessee notice and an
opportunity to he heard. When paid in value, royalties shall he due and payable on the last day
of the month following the month in which production occurred. When paid in kind, production
shall he delivered, unless otherwise agreed to by lessor, in merchantable conthhon on the prermSes
where produc.~ without cost to lessor. Lessee shall not be required to hold such production
in storage heyond the last day of the month following the month in which production occurred,
nor shall lessee he held liable for loss or destmctinn of royalty oil or other products in storage
from causes beyond the reasonable control of lessee.
Minimum royalty in lieu of rental of not less titan the rental which otherwise would he required
for that lease year shall he payable at the end of each lease year beginning on or after a discovery
in paying quantities. This minimum royalty may he waived, suspended, or reduced, and the
above royalty rates may be reduced, for all or portions of this lease if the Secretary determines
that such action is necessary to encourage the greatest ultimate recovery of the leased resources,
or is otherwise justified.
An interest charge shall he assessed on late royalty payments or underpayments in accordance
with the Federal Oil and Gas Royalty Management Act of 1982 (FOGRMA) (30 U.S.C. 1701).
Lessee shall he liable for royalty payments on oil and gas lost or wasted from a lease site when
such loss or waste is due to negligence on the part of the operator, or due to the failure to comply
with any rule, regulation, order, or citation issued under FOGRMA or the leasing authority.
Sec. 3. Bonds--A bond shall be tiled and maintained for lease operations as required under
regulations.
Sec. 4. Diligence, rate of development, unitization, and drainage--Lessee shall exercise reasonable
diligence in developing and producing, and shall prevent unnecessary damage to, loss of, or
waste of leased resources. Lessor reserves right to specify rates of development and production
in the public interest and to require lessee to subscribe to a cooperative or unit plan, within 30
days of notice, if deemed necessary for proper development and operation of area, field, or pool
embracing these leased lands. Lessee shall drill and produce wells necessary to protect leased
lands from drainage or pay compensatory royalty for drainage in amount determined by lessor.
Sec. 5. Documents, evidence, and inspection--Lessee shall f'de with proper office of lessor,
not later than 30 days after effective date thereof, any contract or evidence of other arrangement
for sale or disposal of production. At such times and in such form as lessor may prescribe, lessee
shall furnish detailed statements showing amounts and quality of all products removed and sold,
proceeds therefrom, and amount used for production purposes or unavoidably lost. Lessee may
be required to provide plats and schematic diagrams showing development work and
improvements, and reports with respect to panics in interest, expenditures, and depreciation
costs. In the form prescribed by lessor, lessee shall keep a daily drilling record, a log, information
on well surveys and tests, and a record of subsurface investigations and furnish copies to lessor
when required. Lessee shall keep open at all reasonable times for inspection by any authorized
officer of lessor, the leased premises and ali wells, improvements, machinery, and fixtures thereon,
and all books, accounts, maps, and records relative to operations, surveys, or investigations
on or in the leased lands. Lessee shall maintain copies of all contracts, sales agreements, accounting
records, and documentation such as billings, invoices, or similar documentation that supports
costs claimed as manufacturing, preparation, and/or transportation costs. All such records shall
he maintained in lessee's accounting offices for f~ture audit by lessor. Lessee shall nmintain
required records for 6 years aher they are generated or, if an audit or investigation is underway,
until released of the obligation to maintain such records by lessor.
During existence of this lease, information obtained under this section shall be closed to
inspection by the public in accordance with the Freedom of Information Act (5 U.S.C. 552).
Sec. 6. Conduct of operatioas--Lessee shall conduct operations in a manner that minimizes adverse
impacts to the land. air, and water, to cultural, biological, visual, and other resources, and to
other land uses or users. Lessee shall take reasonable measures deemed necessary by lessor to
accomplish the intent of this section. To the extent consistent with lease rights granted, such
measures may include, but are not limited to, mndifieafion to siting or design of facilities, timing
of operations, and specification of interim and final reclamation measures. Lessor reserves the
right to continue existing uses and to authorize future uses upon or in the leased lands, including
the approval of easements or rights-of-way. Such uses shall be conditioned so as to prevent
unnecessary or unreasonable interference with rights of lessee.
Prior to disturbing the surface of the leased lands, lessee shall contact lessor to be apprised
of procedures to be followed and modifications or reclamation measures that may be necessary.
Areas to he disturbed may require inventories or special studies to determine the extent of impacts
to other resources. Lessee may be required to complete minor inventories or short term special
studies under guidelines provided by lessor. If in the conduct of operations, threatened or
endangered species, objects of historic or scientific interest, or substantial unanticipated
environmental effects are observed, lessee shall hnmediately contact lessor. Lessee shall cease
any operations that would result in the destruction of such species or objects.
Sec. 7. Mining operations--To the extent that impacts from mining operations would be
substantially different or greater than those associated with normal drilling operations, lessor
reserves the right to deny approval of such operations.
Sec. 8. Extraction of helium--Lessor reserves the option of extracting or having extracted helium
from gas production in a manner specified and by means provided by lessor at no expense or
loss to lessee or owner of the gas. Lessee shall include in any contract of sale of gas the provisions
of this section.
Sec. 9. Damages to property--Lessee shall pay lessor for damage to lessor's improvements,
and shall save and hold lessor harmless from all claims for damage or harm to persons or property
as a result of lease operations.
Sec. 10. Protection of diverse interests and equal opportunity--Lessee shall: pay when due all
taxes legally assessed and levied under laws of the State or the United States; accord all employees
complete freedom of purchase; pay all wages at least twice each month in lawful money of the
United States; maintain a safe working environment in accordance with standard industxy practices;
and take measures necessary to protect the health and safety of the public.
Lessor reserves the right to ensure that production is sold at reasonable prices and to prevent
monopoly. If lessee operates a pipeline, or owns controlling interest in a pipeline or a company
operating a pipeline, which may be operated accessible to oil derived from these leased lands,
lessee shall comply with section 28 of the Mineral Leasing Act of 1920.
Lessee shall comply with Executive Order No. 11246 of September 24, 1965, as amended,
and regulations and relevant orders of the Secretary of Labor issued pursuant thereto. Neither
lessee nor lessee's subcontractors shall maintain segregated facilities.
Sec. 11. Transfer of lease interests and relinquishment of lease--As required by regulations,
lessee shall fde with lessor any assignment or other transfer of an interest in this lease. Lessee
may relinquish this lease or any legal subdivision by t-ding in the proper office a written
relinquishment, which shall he effective as of the date of filing, subject to the continued obligation
of the lessee and surety to pay all accrued rentals and royalties.
Sec. 12. Delivery of prenUSes--At such time as all or portions of this lease are returned to lessor,
lessee shall place affected wells in condition for suspension or abandonment, reclaim the land
as specified by lessor and, within a reasonable period of time. re~nove equipment and
improvements not deemed necessary by lessor for preservation of producible wells.
Sec. 13. Proceedings in case of default--lf lessee fails to comply with any provisions of this
lease, and the noncompliance continues for 30 days after written notice thereof, this lease shall
be subject to cancellation unless or until the leasehold contains a well capable of production
of oil or gas in paying quantities, or the lease is committed to an approved cooperative or unit
plan or communitization agreemeni which contains a well capable of production of unitized
substances in paying quantities. This provision shall not he construed to prevent the exercise
by lessor of any other legal and equitable remedy, including waiver of the default. Any such
remedy or waiver shall not prevent later cancellation for the same default occurring at any other
time. Lessee shall be subject to applicable provisions and penalties of FOGRMA (30 U.S.C. 1701).
Sec. 14. Heirs and successors-in-interest--Each obligation of this lease shall extend to and be
binding upon, and every benefit hereof shall inure to the heirs, executors, administrators,
successors, heneficiaries, or assignees of the respective parties hereto.
WYW162676
MULTIPLE MINERAL DEVELOPMENT STIPULATION
Operations will not be approved which, in the opinion of the authorized officer, would
unreasonably interfere with the orderly development and/or production from a valid existing
mineral lease issued prior to this one for the same lands.
TH~S STIPULATION APPLIES TO ALL PARCELS
LEASE NOTICE NO. 1
WI62676
00178
Under Regulation 43 CFR 3101 ~ 1-2 and terms of the lease (BLM Form 3100-11), the authorized officer may require
reasonable measures to minimize adverse impacts to other resource values, land uses, and users not addressed in
lease stipulations at the time operations are proposed. Such reasonable measures may include, but are not limited to,
modification of siting or design of facilities, timing of operations, and specification of interim and final reclamation
measures, which may require relocating proposed operations up to 200 meters, but not off the leasehold, and
prohibiting surface disturbance activities for up to 60 days.
The lands within this lease may include areas not specifically addressed by lease stipulations that may contain special
values, may be needed for special purposes, or may require special attention to prevent damage to surface and/or
other resources. Possible special areas are identified below. Any surface use or occupancy within such special areas
will be strictly controlled or, if absolutely necessary, prohibited. Appropriate modifications to imposed restrictions
will be made for the maintenance and operation of producing wells.
1. Slopes in excess of 25 percent.
2. Within 500 feet of surface water and/or riparian areas.
3. Construction with frozen material or during periods when the soil material is saturated or when watershed
damage is likely to occur.
4. Within 500 feet of Interstate highways and 200 feet of other existing rights-of-way (i.e., U.S. and State
highways, roads, railroads, pipelines, powerlines).
5. Within 1/4 mile of occupied dwellings.
6. Material sites.
GUIDANCE:
The intent of this notice is to inform interested parties (potential lessees, permittees, operators) that when one or
more of the above conditions exist, surface disturbing activities will be prohibited unless or until the permittee or the
designated representative and the surface management agency (SMA) arrive at an acceptable plan for mitigation of
anticipated impacts. This negotiation will occur prior to development and become a condition for approval when
authorizing the action.
Specific threshold criteria (e.g., 500 feet from water) have been established based upon the best information
available. However, geographical areas and time periods of concern must be delineated at the field level (i.e.,
"surface water and/or riparian areas" may include both intermittent and ephemeral water sources or may be limited to
perennial surface water).
The referenced oil and gas leases on these lands are hereby made subject to the stipulation that;the exploration or
drilling activities will not interfere materially with the use of the area as a materials site/free use permit. At the time
operations on the above lands are commenced, notification will be made to the appropriate agency. The name of the
appropriate agency may be obtained from the proper BLM Field Office.
THIS NOTICE APPIJES TO Al J. PARCELS
LEASE NOTICE NO, 2
BACKGROUND:
00179
The Bureau of Land Management (BLM), by including National Historic Trails within its National Landscape
Conservation System, has recognized these trails as national treasures. Our responsibility is to review our strategy
for management, protection, and preservation of these trails. The National Historic Trails in Wyoming, which
include the Oregon, California, Mormon Pioneer, and Pony Express Trails, as well as the Nez Perce Trail, were
designated by Congress through the National Trails System Act (P.L. 90-543; 16 U.S.C. 1241-1251) as amended
through P.L. 106-509 dated November 13, 2000. Protection of the National Historic Trails is normally considered
under the National Historic Preservation Act (P.L. 89-665; 16 U.S.C. 470 et seq.) as amended through 1992 and the
National Trails System Act. Additionally, Executive Order 13195, "Trails for America in the 21s~ Century," signed
January 18, 2001, states in Section 1: "Federal agencies will...protect, connect, promote, and assist trails of all types
throughout the United States. This will be accomplished by: (b) Protecting the trail corridors associated with
national scenic trails and the high priority potential sites and segments of national historic trails to the degrees
necessary to ensure that the values for which each trail was established remain intact." Therefore, the BLM will be
considering all impacts and intrusions to the National Historic Trails, their associated historic landscapes, and all
associated features, such as trail traces, grave sites, historic encampments, inscriptions, natural features frequently
commented on by emigrants in journals, letters and diaries, or any other feature contributing to the historic
significance of the trails. Additional National Historic Trails will likely be designated amending the National Trails
System Act. When these amendments occur, this notice will apply to those newly designated National Historic
Trails as well.
STRATEGY:
The BLM will proceed in this objective by conducting a viewshed analysis on either side of the designated centerline
of the National Historic Trails in Wyoming, except, at this time, for the Nez Perce Trail, for the purpose of
identifying and evaluating potential impacts to the trails, their associated historic landscapes, and their associated
historic features. Subject to the viewshed analysis and archaeological inventory, reasonable mitigation measures
may be applied. These may include, but are not limited to, modification of siting or design of facilities to
camouflage or otherwise hide the proposed operations within the viewshed. Additionally, specification of interim
and final reclamation measures may require relocating the proposed operations within the leasehold. Surface
disturbing activities will be analyzed in accordance with the National Environmental Policy Act of 1969 (P.L. 91-
190; 42 U.S.C. 4321-4347) as amended through P.L. 94-52, July 3, 1975 and P.L. 94-83, August 9, 1975, and the
National Historic Preservation Act, supra, to determine if any design, siting, timing, or reclamation requirements are
necessary. This strategy is necessary until the BLM determines that, based on the results of the completed viewshed
analysis and archaeological inventory, the existing land use plans (Resource Management Plans) have to be
amended.
The use of this lease notice is a predecisional action, necessary until final decisions regarding surface
disturbing restrictions are made. Final decisions regarding surface disturbing restrictions will take place
with full public disclosure and public involvement over the next several years if BLM determines that it is
necessary to amend existing land use plans.
.GUIDANCE:
The intent of this notice is to inform interested parties (potential lessees, permittees, operators) that when any oil and
gas lease contains remnants of National Historic Trails, or is located within the viewshed of a National Historic
Trails' designated centerline, surface disturbing activities will require the lessee, permittee, operator or, their
designated representative, and the surface management agency (SMA) to arrive at an acceptable plan for mitigation
of anticipated impacts. This negotiation will occur prior to development and become a condition for approval when
authorizing the action.
THIS NOTICE APPLIES TO ALL PARCELS
WYW162676
00180
TIMING LIMITATION STIPULATIONS - TLS
No surface use is allowed during the following time period(s). This stipulation does not apply to
operations and maintenance of production facilities.
(1) Nov 15 to Apr 30;
On the lands described below:
(2) as mapped on the Kemmerer Field Office GIS database;
For the purpose of (reasons):
(3) protecting big game crucial winter range.
Any changes to this stipulation will be made in accordance with the land use plan and/or the regulatory
provisions for such changes. (For guidance on the use of the stipulation, see BLM Manual 1624 and 3101 or FS
Manual 1950 and 2820.)
,-0018
WYW162676
CONTROLLED SURFACE USE STIPULATION - CSU
Surface occupancy or use is subject to the following special operating constraints.
(1) Surface occupancy or use within crucial big game winter range will be restricted or prohibited unless the
operator and surface managing agency arrive at an acceptable plan for mitigation of anticipated impacts. This
plan may include development, operations, as well as the number, location, and maintenance of facilities;
On the lands described below:
(2) as mapped on the Kemmerer Field Office GIS database;
For the purpose of:
(3) limiting winter access, protecting habitat quality, and preventing the loss of crucial big game winter range.
Any changes to this stipulation will be made in accordance with the land use plan and/or the regulatory
provisions for such changes. (For guidance on the use of the stipulation, see BLM Manual 1624 and 3101 or FS
Manual 1950 and 2820.)
/162676
NOTICE TO LESSEE
Provisions of the Mineral Leasing Act (MLA) of 1920, as amended bv the Federal Coal Leasin~
Amendments Act of 1976, affect an enri .ry's qualifications to obtain an oil and~as lease. Section 2(a)(2)(A~
of the MI.A, 30 U.S.C. 201 (a)(2)(A), requires that any enti .fy that holds and ~as held a Federal coal lease
for 10 years beginn/ng on or after Au~mm 4, 1976, and who is not producing coat in commercial quantifies
from each such lease, cannot qualify for the issuance of any other lease granted under the MLA.
Compliance bv coal lessees with Section 2(a)(2)(A) is explained in 43 CFR 3472.
In accordance xvith the terms of this oil and gas lease, with respect to compliance by the initial lessee with
qualifications concerning Federal coal lease holdings, all assignees and transferees are hereby notified that
this oil and gas lease is subject to cancellation if: (1) the initial lessee as assignor or as transferor has falsely
certified compliance with Section 2(a)(2)(A), or (2) because of a den/al or disapproval by a State Offick
ora pending coal action, i.e., arms-length assignmenL, relinquishment,, or log/cal mining unit the Mt/al lessee
as assignor or as transferor is no longer in compliance with Section 2(a)(2)(A). The assi~ee, sublessee
or transferee does not qualify as a bona fide purchaser and, thus, has no r/ghts to bona fide'purchaser
protection in the event of cancellation of th.is lease due to noncompliance with Section 2(a)(2)(A).
Information regarding assignor, sublessor or transferor compliance w/th Section 2(a)(2)(A) is contained
in the lea.se case file as well as in other Bureau of Land Management records available throuo_.h the Slate
Office issuin~ this lease. -