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HomeMy WebLinkAbout923844 Fora Appxoveô by th. BOAXd Lease # 06-00721 Parcel # 598 Fund Code: CS This indenture of lease entered into by and between the State of Wyoming, acting by and through its Board of Land Commissioners as LESSOR, and the following as LESSEE: And &tt.ct1ve JanuAry 6. 199. STATE OF WYOMING OIL AND GAS LEASE 000534 Tourmaline Exploration Company, LLC Section 1. PURPOSE. The LESSOR, in consideration of the rents and royalties to be paid and the covenants and agreements to be kept and performed by the LESSEE, does hereby grant and lease to the LESSEE, the exclusive right to drill for, mine, extract, remove, and ;.dispose of all the oil, gas and associated hydrocarbon substances and gaseous substances and elements produced therewith, including sulphur, hydrogen sulfide, sulphur dioxide, nitrogen, carbon dioxide and helium, which may be produced from the following described land, to wit: ./ G L f'1 Lot 8 Section: 5 Township: 20 North Range: 119 West of the 6th P.M. ¿" '-...--} County: Lincoln Acres: 33.89 $34.00 ($1.00 per acre or fraction thereof) Together with the right of ingress and egress and the right to use so much of the surface of said lands as is necessary to construct and maintain thereupon all works, building, plants, waterways, roads, communication lines, pipe lines, reservoirs, tanks, pumping stations, or other facilities necessary to the proper conduct of operations there under. Section 2. TERM OF LEASE. This lease shall become effective on the day and year set out below and shall remain in effect for a 8rimary term of five (5) years"and for so long thereafter as leased substances may be produced from the lands in paying quantities. This lease may also be extended beyond its primary term in the absence of production of leased substances as may be provided by the statutes of the State of Wyoming and the regulations of the Board of Land Commissioners adopted pursuant thereto. Provided, however, if drilling, completion, testing or reworking operations are being diligently conducted, either during the primary term or during any extension thereof, this lease shall continue in full force and effect so long as such operations are being conducted and so long thereafter as oil or gas may be produced in paying quantities. This lease m~y be relinquished or terminated at an earlier date as herein provided. Section 3. If the LESSOR owns an interest in oil and gas in said land less than the entire fee simple estate, then the royalties and rentals to be paid LESSOR shall be reduced proportionately. . Section 4~ LESSEE 'expres'sly rep~e~sents that,'· if an individual,1LESSEE is a 'citizen of the United States, or has declared an intention to become a citizen, ~nd is over 19 years of age-and if a corporation, is duly qualified to transact business in Wyoming. Section 5. This lease is issued under the authority conferred by Title 36, W.S. 1977 as to the State and School Lands, and Title 11, W.S. 1977 as to Farm Loan lands, and shall be subject to, and operations by LESSEE hereunder shall be conducted in compliance with the specific lease terms set out on the reverse of this lease, and with all applicable state statutory requirements and the regulations issued thereunder, including those providing for: the leasing of State or Farm Loan Lands for oil and gas; the conservation of oil and gas; and the regulation of security transactions. Section 6. HEIRS AND SUCCESSORS IN INTEREST. It is covenanted and agreed that each obligation hereunder shall extend to and be binding upon, and every benefit thereof shall inure to the heirs, executors, administrators, successors of, or assigns of the respective parties hereto. Section 7. SOVEREIGN IMMUNITY. The State of Wyoming and the lessor do not waive sovereign immunity by entering into this lease, and specifically retain immunity and all defenses availablè to them as sovereigns pursuant to Wyoming Statute 1-39-104 (a) and all other state laws. IN WITNESS WHEREOF, this lease has been executed by LESSOR and LESSEE to become effective on the 2nd day of, October, 2006 A.D. ---" -..--.....,. LESSOR, STATE OF WYOMING, Acting by and through its Board of Land By: 9 Address: Cit y: A / -Æ' %........... Zip: ,fô /.< ~ Phone i 561- 9/7- all-<. *-Stipulation applies to this lease as applied from October 2006 Parcel List*** :::::;:*:::::::::¡:;;: t:¡:¡N'i·:I~lt :·;~:~¡ RECEIVED 10/30/2006 at 11 :54 AM RECEIVING # 923844 BOOK: 638 PAGE: 534 JEANNE WAGNER LINCOLN COUNTY CLERK, K~M:~¡~ff-ER, WY , : ·":':;;!;:;'~~>;\i') OIL AND GAS TERMS 03;:;384l1 Section 1. THE LESSEE AGREES: (a) BOND. Tofumish a bond with an epproved corporate surety compeny IIUIhorizedtotransacl business in the State of Wyoming, or such other surety as may be acceptable to the lessor, in the penal sum as required by the aJmInI rules of the State Board of UnI Commissioneß, conãllioned upon the payment of atf rentals IWId royalties accruing to the lessor under the terms hereof. and upon the full compliance of atf other terms IWId conditions of this '- and the RIles IWId regul8Iions retating thereto, and also oonditioned on the payment of atf damages to the surface and improvements thereon when! the lease covers lands the surface of which hils been sold or otherwise leased. Such bond or bonds furnished prior to the development of the lands mntained in this '- may be increased in such reasonabla amounts as the lessor may decide upon comme.lC8meI'1t of drilling operations and aIIer the di~ of oil or gas. (b)PAYMENTS. To make all payments acauing hereunder to the Office of Slate Lends and investments, 122 Wast 25th Street, Cheyenne. Wyoming B2002-œoo. (e)RENTAlS. Prior to the di~ of oil or gas in paying quantllies to pay the lessor in 8<Mn:e, beginning with the eIr8ctiYe date hereof, an annuat rentel of 51.00 per acre or fnIction thereof. Alter the <Iisc<MIry of 011 or gas in paying quantllles to pay the lessor in advance beginning with the IIrst day of the '- year succeeding the lease yeer in which ectueI di~was made, an annuat rental of $2.00 per acre or fraction thereof. unless chengad by egraM18nt. Such rantBI!IO paid for any ana year shall be credited on the royalty for the! year. AmueI rentels on ell leases shall be payable in edvence for the IIrst year and each year therIIefter. No notice of rentel due shell be sant to the lessee. If the rental is not paid on or before the dele II becomes due, notice of default will be sant to the lessee. IWId e penalty of SO.50 per acre for late payment will be essessed. The lessee is not legally obfigated to pay ~ the rental or the penalty, but if the rental and penalty In not paid within thirty (30) days after the notice of defauft has been receNed, the '- witt t""'*- autometicaIly by operation of 1_. Tennination of the Ieese shalf not retieve the lessee of any obligation incurred under the 1_ other then the obfigation to pay rentel or penelty. The lessee shell not be entllled to a aedll on royalty due for any penalty peid for late payments of rental on an operating lease. (d)ROYAl TIES. The royalties to be paid by lessee In: (i) On oil, one-sixth of the! pmduced, saved, and sold frnm said land, the same to be delivered at the _lis or to the aedll of lessor into the pipe line to which the _Ns may be connected. (ü) On gas, including casinghead gas or other hydrocarbon substences. produced frnm said land S8Y8d IWId sold or.- 011 the premises or in the manufacture of gasoline or other products Ihererrom, the """"81 value at the well of ona-sixth of the gas so sold or used. provided thai on gas sold 81 the wells, the royalty shall be one-sixth of the amount "",Iized frnm such sale. (m) On all other hydrocarbons of velue and gaseous substances end alements produced or extracted, including propene, butane, sulphur, nitrogen, carbon dioxide, and heli..... at such royalty as shell be mutually -.nined to be fair and reason_. (iv) For royalty pu<poses on gas and natural gasoline the value shall be as epproved by the lessor. and in the detennination of the value of natural gesoline the fair cost of extraction shell be consi~ es a deductible lIem; provided, oo-ver, that the allowance for the cost of extraction may exceed lwtHhirds of the amount or value only on approval of the lessor and in no 8V8II shell the price for gas, or netunoI gasoline, be less than thai received by the United ~ of AmerIca for its royalties frnm the """'" field. (v) NeItnI gas and oil actually used for operating pu<poses upon the IIWId and, except as to the ultimate sale thereof, gas or liquid hydrocarbons returned to the sand for stimulating the pro<b;tion of oil or secondary recovery purposes shall be royalty free. (e) DlSPOSmON OF ROYAlTY OIL AND GAS. To deliver to the lessor. or to such Individual. firm or corporation as the lessor may designate. all royalty oil, gas, or other kindred hydrocarbons, free of charge on the pnIITIÏses where produced, or. at the option of the lessor. and in lieu of said royalties in kind. the lessee agrees to pay the lessor the field markat price or value of all royalty oil, gas. or other kindred hydrocarbons produced and S8Y8d. When the lessor elects to lake its royalty oil, gas. or other hydl ocatboo 0$ in kind such es oil, gas. or other kinchd hydrocarbo, IS shan be good merchentable oil. gas. or other kindred hydrocarbons. The lessee shell if necessary furnish storage for royalty oil free of charge for thirty (30) days after the end of the celender month in which the oil is produced, upon the leased premises. or at the such place as the lessor end the lessee may mutually agree upon. provided. thai the lessee shall not be held liable for loss or destruction of royalty oil so stored frOII1 causes beyond his control. The free storage of oil, as hen!in provided, shall apply only as long as the said oil is the pro I!!1y of the lessor. (f) MEASUREMENTS OF PRODUCTION. To gauge, measure and correct for hÏmperatunt all pro<b::tion from said lends in conformance with the rules IWId regul8lions adopted by the IIoe'd of Land CommIssioners IWId report said pro<b::tion to the lessor in accordence therewith. To keep books, records, and reports pertaining to the pro<b::tion frnm the IIWId herein '-I as well as those pertaining to the production frnm oIfsat wells operated by the lessee. his operIIIor, or sub-Iessee on other lands, which shell be opened at all times for the inspection of any duty IIUIhorized agent of the lessor. To furnish the lessor with original pipe line reports showing the day, month. year, amount, gravities, and temperatures of ell oil run and with monthly reports showing the month, year, amount, and price of all gas and natural gas gasoline and other products produced and sold frnm the land hen!in leased, and the amount of gas relumed to the sand. (g) MONTHLY PAYMENTS AND STATEMENTS. Unless the time of payment Is otherwise extended by the 0IfIce of State Lends and InvesIments to make payment on or before the _ieth (20th) day of the ceIendar month succeeding the month of pro<b::tion and removal and sale of oil and ges from said land, and to furnish sworn monthly _ements therewith showing in detail the quantity and quality of the production (per well if required when! practIceI) from the land hereby leased, and the quentity and quality of the production (per well when! ndicaI) from oIIseI wells upon cornering or contiguous land operated by the lessee, his operator or sub-Iassee and such other information es may be called for in the form or report presaibed by lessor. (h) WELLS TO BE DRILLED. To drill and operate effectively all _lis necessary to reasonably oIfset wells upon and production frnm adjoining lands. To drill such additionaf _lis at such times or places as In necessary and SSMntial to the proper development and commercial pro<b::tion of the oil and gas confant of said land. (i)LOG OF WELLS ANO REpoRTS. To keep a log, in the form approved by the lessor, of each well drilled by the lessee on the lands herein leased. showing the strata and chanJcter of the formations. water sends and mineral deposits penetrated by the drill, amount of casing. size and when! set, end such other information as the lessor may require which log or copy thereof shall be furnished to the lessor. To file progress reports, in the form prescribed by the lessor, at the and of each thirty (30) day period while each _II is being drilled. To file annually. or at such times as the lessor may require, maps showing the development of the sInJcIure and the location of all wells, pipe lines IWId other works used in connection with the operations of the lessee upon said land. To make such other reports pertaining to the production and operations by the lessee on said land, and report such other information as may be possessed by the lessee on the wells, production or operations of others on lands on the same geologic structure thai may be of importance in effecting proper development and operation of the lands herein leased, as may be called for by the lessor. All logs, maps, and reports shall be submitted in dupllcete and the Otfice of State Lands and Investments may waive such reports as condllions may warrent. O>PROOUCTION. To operate the wafls upon the lend herein leesed in a competent end allicient manner in an endeavor to recover all the oil and gas economically possible frnm said lend and to preV8r1I the under drainage of the oil and gas th-...der by wells operated by the lessee or others on cornering or contiguous lends to those leased herein. All plans or methods for the purpose of stimufating or increasing production on lands herein leased other than those in """,",on use shall first be prllsanted to the lessor for approval before being put into actuat operation. No production ~ ~s limillng, restricting, prorating, or otherwise ellacltng the naturalproduction frnm said land shall be entered into by the lessee, nor shall the lessee limit, restrict, or prorate the netunoI production frnm said land in any way or in any event, except with the consent in writing of the lessor first had en obtained. (k)SUSPENSION OF OPERATIONS. Should any _II drilled upon lends covered by this lease obtain production of oil, gas, or other hydrocarbons in paying quantities and if the lessee is unable to est_sh a satisfactory market for the oil. gas or hydrocafbot oS pro<1Jced from said_. the lessee may apply for and the lessor may grant permission for the suspension of production operations until such limes liS a salisfactory market for the product frnm said _II œn be developed. During the time any such suspension of operations is in et'fect, the lessee shell continue to pay the annual rental of $2.00 per acre or fraction thereof provided by (e) above, end this lease shall remain in effect as though oil or gas was being produced frnm said lands. (I)DlLlGENCE-PREVENTION OF WASTE. To axe<clse reasonable diligence in drilling. producing, end operating of wells on the lend covered hereby, unless consent to suspend operations temporarily is grented by the lessor; to carry on all operations hereIX1der in a good and wa1<manlike mar..- in eccordence with epproved methods and practice, having due regen:! for the prevention of waste of oil and gas, or the entrance of water to the 011 or gas bearing sands or strata to the destnJctlon or injury of such deposlls, the prllservation and conservation of the prnperty for Mure productive operations and to the health end safely of wor1<men end employees; fo plug securely in en approved manner any well before abandoning it, and not to abandon any well without permission of the lessor. not to drill any _II within two hundred (200) feel of any of ': ~j:~i~ili;¡~~~i!~[~: " 000535 the outer boundaries of the land covered hereby. unless to protect ageinst drainage by _lis drilled on lands adjoining less then 200 feet frnm the property lines thereof; to conduct all operations subjeå to the inspection of the lessor, to carry out at the lessee's expense an "",sonable orders and requirements of the lessor retative to the prevention of waste and preservation of the property and the health and .-y of _ including the replanting and reseeding of drilling slles IWId other areas disturbed by drilling operations and on failure of the lessee so to do the lessor shall haw the right. together with other recourse herein provided. to enter on the property to repair damage or prevent waste at the lessee's expense: to abide by IWId confarm to valid applicable regulations prasc:ribed to raimb<ne the CMner of the surface. if ~ than the lessor. or lessee of grazing rights thereof for actu8I damages _0 and injury to improvements thereon, provided, thai the lessee shall not be hefd responsible for ects of providence or ections beyond his control. (m)TAXES AND WAGES-FREEOOM OF PURCHASE. To pay. when due all taxes lawfully assessed and levied under the 1_ of the S_ of Wyoming upon impmvements, oil and gas produced frnm the land hereunder. or other rights, property or assets of the lessee, to ea:ord all _ and employees complete freedom of purchaae. IWId to pay atf wages We WOI1<men and employees in conformance with the 1_ of the State of Wyoming. (n)ASSIGNMENTS OF LEASE-PRODUCTlON AGREEMENTS. No! to assign this lease or any interest -." nor sublet any portion of the Ieøsed premises, except with the consent in writing of the lessor first had IWId obIaIned. All overriding royalties to be valid. must haw the approval of the Board or by the 0IfIce of State Lends and Investments when authority to do SO hils been delegated by the Board and will be recordecf with the lease. The Board reserves the right of disapproval of such overriding royalties r' when in its opinion they become excessive and hence In cIeIrimentaI to the proper deveIopmenI of the leased lands. (o)DELIVER PREMISES IN CASE OF FORFEITURE. To defiver up the leased premises, with an permanent improvements thereon. in good order and condition in case of forfaiture of this _. but this sheA not be construed to prevent the removal, alteration or ..-t of e<JJiprnenIlWId impmvements in the ordinary cane of operations. Section 2. THE LESSOR EXPRESSLY RESERVES: (a) The right to lease sell, or otheIwise dispose of the surface of the land embraced within this leass under existing 1_ or 1_ hereatter enacted. and in accordence with the RIles of the Board of Land Commissions insofar as the surface is not necessary for the use of the lessee in the conduct of operations hereunder. (b)The right to lease, sail, or otherwise dispose of other minerai or subsurface resourœs not covered by the lease. in accordence with the applicable 18ft and the rules of the Board of land Commissioners. (e)From the operation of this '-, the surface lends heretofore granted for rights..of-way and easaments and reserves the right to grant such other rights..of-way IWId __ as provided by the statutes of the State of Wyoming, as long as such rights-<>f-way and __ do not conIIIct with the operations for oil and gas on the lend herein leased. (d)The right to refuse to commit the leased lends to a..,1I plan of development If the Board finds such action would impair the Iessor's reserved right to lake its royalty gas in kind and to purdWM all other ges allocated to the leased lands a provided in Section 3(e)below. (e)The right to alter or modify the quantity and rate of production to the end that waste may be alimlnated or that production may confarm to the Iessee's fair share of allowable production under any system of State or National aJrtaIlment IWId proration authorized by 1_. (f)1n addition to its right to take its royalty gas in kind, the lessor reserves the right and optton to purchase all other gas produced for sale or ..... off the leased lends. This option shen be exercised only if the Board finds thai the lessee has receNed and Is willing to accept a bona fide oller frnm a purcha_ who inlands to sail or lransport the gas into interstate commerce and thai one or more intrastate purchasers (I.e.. purchasers who will use. consume. or sail the gas for..... or consumption antirely within the S_ of Wyoming) are wiAing and able to purchaae the gas upon terms reasonably comparable to and at least as favorable to the lessee es those offered by the interstate purchaser. The Board shall waive this option end permll an int...-e sale if II finds that no intrastate ~ is willing IWId able to purchase the gas upon terms which In reasonably ~ to and at least as favorable to the lessee. h a condition to such waive'. a satisfactory IIQI8M*1I may be entered into by which the pro<b::tion of its royalty gas may be deferred until II œn be produced IWId sold for consumpIIon and ..... entirely within the State of Wyoming. Saction 3. APPRAISAL OF IMPROVEMENTS. The lessee shaA haw the right subject to the provisions of nle 36, as to State and State School Lands, and nle 11, as to S_ Loan and Investments Board Lends. W. S. 1977, to remove any improvements owned by lessee within a reasonable lime after the termination of this 1_. Lassee agrees that any .such impmvements not removed within e reasonable time after termination of this lease shall be disposed of pu"IIU8r't to the _ statutes. . Section 4. FORFEITURE CLAUSE. The Board shan have the"power anctaulhority to cenceI leases procured by fraud, deceit, or ,nl..ep. _lIaitons, or for the use of the lends formIwNU or illegat purposes. or for the violation of the covenants of the '-. upon proper proof thereof. in the event that the lessee shall default in the perfoo n,Sloce or observance of any of the t"""". covenants. end stipulations hereof, or of the general regulations promulgated by the Board of land Commissioners and in force on the dele hereof, the lessor shall serve notice of such failure or default either by personal service or by certified or registered mail upon the lessee. end if such failure or defaun continues for a period of thirty (30) days after the service of such notice, than end in that event the lessor may. at lis option. declare a forfeiture and cancel this lease, whereupon all rights and privilages, obtained by the lessee hereunder shall terminate and cease and the lessor may re-enter and take possession of said premises or any part thereof. These provisions shall not be construed to prevent the exerdse by lessor any Iegat or equitable remedy which the lessor rnIght otherwise have. A waiver of any particufer cause or forfeiture shall not prevent the cencellation and forfeiture of this lease by any other cause of forfeiture. or for the """'" cause occurring at any other time. Saction 5. RELINQUISHMENT AND SURRENDER. This lease may be retinquished and surrendered to lessor es to all or any legal subdivision of said lends as follows: (a) If no operations haw been conducted under the lease on the land to be relinquished, the lessee shall file with the State Land Board end State Loan and 1nves1ment Board. a written relinquishment or surrender, duly signed and admowIedged and stating therein thai no operations have been conducted on the 11WId. The relinquishment so filed shall become eIfective on the data and hour of receipt thereof in the office of the 0Irect0r or et """'" later dele. if such be so specified by the lessee therein. If the said retinquishment feils to state thai no operations have been conducted, the efJactive date of relinquishment shall be the dete the retinquishment is approved by the Board. (b) If operations have been conducted under the 1_ on land proposed to be relinquished. the lessee shell give sixty (60) days notice and shall file with the Director a written relin<µshment or sun'8r1der duty acknowledged and stating -., thai operations have been conducted on the land. The relinquishment shall not become ellacltve until the land end the _lis thereon shall have been placed in condition acceptable to lessor and shell have bean appR:M!d by the Slate Oil and Gas Supervisor. All rentals becoming due prior to a SlJmInder or relinquishment becoming eIr8ctiYe, shall be payable by lessee ..... payment thereof shall be waived by lessor. A retinquishment having become effective there shall be no recourse by lessee and the lease as to the retinquished lands may not be reinstated. o HJ b 11 ~ ~ U £ t 4- 3~a 90102 ~:1tt¡¿JL~:jìÇMN , c! ¡iJ Î\.\ .. $;' '1 ¡l-"!',." 0 ~ ,. ~~ ¡" r.....: ..':-t'.':Lt;:;z,. v r:!\< :·;:r 'v:.;·; .;; O~;¿384/l :~:::~:~;: 000536 STIPULATION APPLIES TO PARCEL NOS. 589. 590. 591. 592. 593. 594. 595. 596. 597 and 598 Before any road, building, drilling pad construction, building construction or other earth moving activities commence, plans for such activities (including maps) must be submitted for prior approval by the Office of State Lands and Investments or his designated representative. The collection of fossils from this land is prohibited. Any fossils found on this-land must be safeguarded by the finder and given to the Office of State Lands and Investments or his designated representative as soon as practicable after their discovery.