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HomeMy WebLinkAbout876192 Determination - Approval -. Certification Pursuant to the authority vested in the Secretary of the Interior under Section 17(j) of the Mineral Leasing Act of 1920, as amended '(74 Stat. 784; 30 U.S.C. 226(j)), and delegated to the authorized officer of the Bureau of Land Management, I do hereby: A. Determine that the Federal leases as to the lands co~mc~itted to the attached agreement cannot be independently developed and operated in confortaity with the well-spacing program established for the field or area in which said lands are located, and that consummation and.approval of the agreement will ~e in the public interest. Approval of this agreement does not warrant or certify that the operator thereof and other holders of operating rights hold legal or equitable title to those rights in the subject leases which are committed hereto. B. Approve the attached communitization agreement Covering all of Section 8, T. 20 N., R. 112 W., Lincoln County, Wyoming, as to natural gas and associated liquid hydrocarbons producible from the Dakota Formation. This approval~wiii become invalid should the public interest requirements under section 3105.2-3(e) not be met. C. Certify and determine that the drilling, producing, rental, minimum royalty and royalty requirements of the Federal leases cOmmitted to said agreement are hereby established, altered, changed, or revoked to conform with the terms and conditions of the agreement. Chief, ~servo~anagement Group Effective: Auqust 24, 1999 (~;;~'~'"~ ~"~'~ COMMUNITIZATION AGREEMENT ~' · Contract No. THiS AGREEMENT, entered into as of the 24th day of August ;1999 by and between the parties subscribing, ratifying, or consenting hereto, such parties being hereinafter referred to as "parties hereto." WITNESSETH: WHEREAS, the Act. of February 25, 1920 (41 Stat. 437), as amended and supplemented, authorizes communitization or drilling agreements communitizing or pooling a Federal oil and gas lease, or any portion thereof, with other lands, whether or not owned by the United States, when separate tracts under such Federal lease cannot be independently developed and operated in conformity with an established well-spacing program for the field or area and such communitization or pooling is determined to be in the public interest; and WHEREAS, the parties hereto own working, royalty or other leasehold interests, or operating' rights under the oil and gas leases and lands subject to this agreement which cannot be independently developed and operated in conformity with the well-spacing program established for the field or area in which said lands are located; and WHEREAS, the parties hereto desire to communitize and pool their respective mineral interests in lands subject to this agreement for the purpose of developing and producing communitized substances in accordance with the terms and conditions of this agreement: NOW, THEREFORE, in consideration of the premises and the mutual advantages to the parties hereto, it is mutually covenanted and agreed by and between the parties hereto as follows: 1. The land covered by this agreement (hereinafter referred to as "Communitized Area") is described as follows: ' Township 20 North, Range 112 West Section 8: All containing 640 acres, and this agreement shall include only the Dakota Formation underlying said lands and the natural gas and associated liquid hydrocarbons, hereinafter referred to as "Communitized Substances," producible from such formation. 2. Attached hereto, and made a part of this agreement for all purposes, is Exhibit "A", a plat designating the Communitized Area and Exhibit "B", designating the operator of the Communitized Area and showing the acreage, percentage and ownership of oil and gas interests in all lands within the Communitized Area, and the authorization, if any, for communitizing or pooling any patented or fee lands within the Communitized Area. 3. All matters of operation shall be governed by the operator under and pursuant to the terms and provisions of this agreement. A successor operator may be designated by the owners of the working interest in the Communitized Area, and four (4). executed copies of a designation of successor operator shall be filed with the Authorized Officer of the Burearu of Land Management.. 4. Oper&tor shall furnish the Seqretary of the Interior, or his authorized representative, with a log and history Of any well drilled on the Communitized Area, monthly reports of operations, statements of oil and gas sales and royalties and such other reports as are deemed necessary to compute~ monthly the royalty due the United States, as specified in the applicable oil and gas regulations. 5. The Communitized Area shall be developed and operated as an entirety, with the understanding and agreement between the parties hereto that all Communitized Substances, as defined in Article 1 above, produced therefrom shall be allocated among the tracts comprising said area in the proportion that the acreage interest of each tract bears to the entire acreage interest committed to this agreement. All proceeds, 8/8ths, attributed to unleased Federal, State or fee land included within the Communitized Area are to be placed in an interest earning escrow or trust account by the designated operator until the land is leased or ownership is' established. 6. The royalties payable on Communitized Substances allocated to the individUal leases comprising the Communitized Area and the rentals provided for in said leases shall be determined and paid on the basis described in each of the individual leases. Payments of rentals under the terms of leases subject to this agreement shall not be affected by this agreement except as provided for under the terms and provisions of said leases or as may herein be otherwise provided. 'Except as herein modified and changed, the oil and gas leases subject to this agreement shall remain in full force and effect as originally made and issued. It is agreed that for any Federal lease bearing a sliding or step scale rate of royalty, such rate shall be determined separately as to production from each communitization agreement to which such lease may be committed, and separately as to any noncommunitized lease production, provided, however, as to leases where the rate of royalty for gas is based on total lease production per day, such rate shall be determined by the sum ',of all communitized production allocated to such a lease plus any noncommunitized lease production. 7. There shall be no obligation on the lessees to offset any well or wells completed in the same formation as covered by this agreement on separate component tracts into which the Communitized Area is now or may hereafter be divided, nor shall any lessee be required to measure separately Communitized Substances by reason of the diverse ownership thereof, but the lessees hereto shall not be released from their obligation to protect said Communitized Area from drainage of Communitized Substances by a wetl or wells which may be drilled offsetting said area. 8. The commencement, completion, continued operation, or production of a well or wells for Communitized Substances on the Communitized Area shall be construed and considered as the commencement, completion, continued operation, or production on each and all of the lands within and comprising said Communitized Area, and operations or production pursuant to this agreement shall be deemed to be operations or production as to each lease committed hereto. 9. Production of Communitized Substances and disposal thereof shall be in conformity with allocation, allotments, and quotas made or fixed by any duly authorized person or regulatory'body under applicable Federal or State statutes. This agreement shall be subject to all applicable Federal and State laws or executive orders, rules and regulations, and no party hereto shall suffer a forfeiture or be liable in damages for failure to comply with any of the provisions of this agreement if such compliance is prevented by, or if such failure results from, compliance with any such laws, orders, rules or regulations. 10. The date of this agreement is August 24, 1999 and it shall become effective as of this date or from the onset of production of Communitized Substances, whichever is earlier upon execution by the necessary parties, notwithstanding the date of execution, and upon approval by the Secretary of the Interior or by his duly authorized representative, and shall remain in force and effect for a period of 2 years and for as long as Communitized Substances are, or can be, produced from the Communitized Area in paying quantities: Provided, that prior to production in paying quantities from the Communitized Area and upon fulfillment of all requirements of the' Secretary of the Interior, or his duly authorized representative, with respect to any dry hole or abandoned well, this agreement may be terminated at any time by mutual agreement of the parties hereto. This agreement shall not terminate upon cessation of production if, within 60 days thereafter, reworking or drilling operations on the Communitized Area are commenced and are thereafter conducted with reasonable diligence during the period of nonproduction. The 2-year term of this agreement will not in.itself serve to extend the term of any Federal lease which would otherwise expire during said period. 11. The covenants herein shall be construed to be covenants running with the land with respect to the communitized interests of the parties hereto and their successors in interests until this agreement terminates and any grantl transfer, or conveyance of any such land or interest subject hereto, whether voluntary or not, shall be and hereby is conditioned upon the assumption of all obligations \\deny_f p0 t\data\land\dwjones\helwigsec8dakotaca,doc 2 T heri~under by the grantee, transferee, or other successor in interest and as to Federal land shall be subject to approval by the Secretary of the Interior, or his duly authorized representative. 12. It is agreed between the parties hereto that the Secretary of the Interior, or his duly authorized representative, shall have the right of supervision over all fee and State mineral operations within the Communitized Area to the extent necessary to monitor production and rrteasurement, and assure that no avoidable loss of hydrocarbons occurs in which the United States has an interest pursuant to applicable oil and gas regulations of the Department of the Interior relating to such production and measurement. 13. This agreement shall be binding upon the parties hereto and shall extend to and be binding upon their respective heirs, executors, administrators, successors, and assigns. 14. This agreement may be executed in any number of counterparts, no one of which needs to be executed by all parties, or may be ratified or consented to by separate instrument, in writing, specifically referring hereto, and shall be binding upon apl parties who have executed such.a counterpart, ratification or consent hereto with the same force and effect as if all parties had signed the same document. 15. Nondiscrimination: In connection with the performance of work under this agreement, the operator agrees to comply with apl of the provisions of Section 202(1) to (7) inclusive, of Executive Order 11246 (30 F.R. 12319), as amended, which are hereby incorporated by reference in this agreement. IN WITNESS WHEREOF, .the parties hereto have executed this agreement as of tt~e day and year first above written and have set opposite their respective names the date of execution. operator and Workinq Interest Owner ,CABOT OIL & GAS CORPORATION Name: ¢')bhn S. Muire Title: A~torney-in-Fact Date: 'f'l Ioo Other Workinq Interest Owners Marathon Oil C~m~y Name: .E,H, Dauernheim Title Oil &'Gas Exploitation Manager, Rocky Mountain Regior Date: ~j~-//~ ~' O ~ Belco Energy 1 L..P. BY: Name: Title: Date: i:\land\dwjones\helwigsecSdakotaca.doc 3 hereunder by the grantee, transferee, or other successor in interest, and as to Federal la.nd shall be subject to approval by the Secretary of the Interior, or his duly authorized representative. 12. It is agreed between the parties hereto that the Secretary of the Interior, or his duly authorized representat ve, shall have the right of supervision over all fee and State mineral operations within the Communitized Area to the extent necessary to monitor production and measurement, and assure that no avoidable loss of hydrocarbons occurs in which the United States has an interest pursuant to applicable oil and gas regulations of the Department of the Interior relating to such production and measurement. 13. This agreement shall be binding upon the parties hereto and shall extend to and be binding upon their respective heirs, executors; administrators, successors, and assigns. 14. This agreement may be executed in any number of counterparts, no one of Which needs to be executed by all parties, or may be ratified or consented to by separate instrument, in writing, specifically referring hereto, and shall be binding upon all parties who have executed such,;a counterpart, ratification or consent hereto with the same force and effect as if all parties had signed the same document. 15. Nondiscrimination: In connection with the performance of work under this agreement, the operator agrees to comply with all of the provisions of Section 202(1) to (7) inclusive, of Executive Order 11246 (30 F.R. 12319), as ~amended, which are hereby incorporated by reference in this agreement. IN WITNESS WHEREOF, the parties hereto have executed this agreement as of tl~e day and year first above written and have set opposite their respective names the date of execution. Operator and Workinq Interest Owner CABOT OIL & GAS CORPORATION Other Workinq Interest Owners Marathon Oil Company BY: Name: Title Date: i:\[and\dwjones\helwigsecSdakotaca.doc .3 Na~ei Date:. .~.&J.~ Amoco Production Company By: Name: Title: Date: STATE OF COLORADO COUNTY OF ARAPAHOE' " The~ f.,or..e.q?ing instrument was acknowledged before me, thud Notary Public, this ~- day of /~/¥ ,Vv, , ~vlrP by John S. Muire, known to me to be~,~.n~.~i~l~t%ct of Cabot Oil & Gas'-~orporation and who acknowledged to me that he executed same as,~ ff.,l~.t~:~j~a~ act and deed on behalf of said Corporation for the uses and purposes therein set forth. ~ ;-v' .',~-% '~ . wITNEss mY hand and °fficial seal thc day and year last above ~[4t~..~, _ . C, _.&/~'~)'¢~0~ (.~ L~, · ~.'¢~_,~ ' · ,(;J, ,E~,?,?~,~ro,~ ~otary,P~blc . STATE OF lill/Commis.q~ ~,lali.$,~ COUNTY OF The forecjoing instrument was acknowledged before me, the undersigned Notary Public, this ~ day of , ~ by , known to me to be the of Marathon Oil Company, and who acknowledged to me that he executed same as his free and voluntary act and deed on behalf of said Corporation for the uses and purposes therein set forth. WITNESS my hand and official seal the day and year last above written. STATE OF TEXAS § Notary Public COUNTY OF DALLAS § ~ BEFO~E~ me, theundersigned, aNotaryPublicinandforsaidCountYand State, onthis~th dayof~. ~ personally appeared Gary Byrd, Vice President - Land of BELCO ENERGY CORP., a Nevada corporatio~ ' successor by merger to Belco Operating Corp., a Delaware corporation, acting as General Partner of BELCO E~ERG"~i ' L.P., a Delaware Limited Partnership; formerly known as Belco Energy L.P., a Delaware Limited Partnership, and on behalf of said partnership, to me known to be the identical person who subscribed the name of the maker thereof to the foregoing instrument and acknowledged to me that he executed the same as his free and voluntary act and deed and as the free and voluntary act and deed of such corporation, for the uses and purposes therein set forth. Given under my hand and seal the day and year last above written MY Commission expires02,10,03 ;:::::.., :: -"~'-;? ......... ~.7 ~ :...:Notary Public i d for State of Texar i:':¥:i: '" ~ ~-~".)t BelcO ~ Corp. BY: Name: S. D. Blossom " Title: At toY'ney- :[ n- Fact Date; dune 22, 2000 Amoco Production Company Name: Title: Date: STATE OF COLORADO COUNTY OF ARAPAHOE The foLego~ng ~nstrument was acknowledged before me, the undersigned Notary Public, this ~J' day of /°~'zf~ , ~ by John S. Muire, known to me to be the~ttorney-in-Fact of Cabot Oil & Ga~-~'orporation and w" ~- ho acknowi~'dged to me that he executed same ~'oluntary act and deed on behalf of said Corporation. . fo rtheusesand purposes therein set fortF~3;~' WITNESS my hand and official seal the daY and year last [~bov~. written. STATE OF COUNTY OF ~Commission Ex~irea The foregoing instrument was acknowledged before me, the undersigned Notary Public, this ~ day of , ~ by , known to me to be the of Marathon Oil Company, and who acknowledged to me that he executed same as his free and voluntary act and deed on behalf of said Corporation for the uses and purposes therein set forth. WITNESS my hand and official seal the day and year last above written. Notary Public STATE OF COUNTY OF * ~- The foregoing instrument was acknowledged before me, the undersigned Notary Public, this ~ day of , ~ by , known to me to be the of Belco Energy 1 L.P., and who acknowledged to me that he executed same as his free and voluntary act and deed on behalf of said Corporation for the uses and purposes therein set forth. WITNESS my hand and official seal the day and year last above written. Notary Public \\denv_fp01\data\land\dwjones\hetwigsecSdakotaca.doc 4 "-,~,~.", Belco-E-F~r-gy Corp. ElY: Name: ' ' Title: Date: Amoco Production Company BY: Name: Title: Date: STATE OF COLORADO COUNTY OF ARAPAHOE The foregoing instrument was acknowledged before~l~C~:~Lersigned Notary Public, this ~ day of /P~. ~ by John S Muire, known to r'~l~.~l~'~/.~tto.~le,)-in-Fact of Cabot Oi & Ga~ Cor oration WI~ESS my hand and official seal the day and year la~~Uen~ , STATE OF ~ ~ ~ ~,~ CO~TYOF ~4~ The foregoing inst[~ment was acknowledged before me, 'the undersigned-Nora. Public, this /~ {&day of ~1 , Z~ by ~,)~, 5~ ~~ - , known to.me to be theb,'t ¢C~l' ~./~i'/~h ~;f Marathon Oil gompany, and who acknowledged to me that he executed same as his free and vo(unta~ act and deed on behalf °f said C°rP°rati°n f°r the uses and purp°Ses therein set f°~h' WI~ESS my hand and official seal the day an~~~~~z CO~TY OF , .- . ~ _. . The foregoing instrument was acknowledged before me, the undersigned Nota~ Public, this day of , ~ by , known to me to be the of Belco Energy 1 L.P., and who acknowledged to me that he executed same as his free and voluntaw act and deed on behalf of said Corporation for the uses and purposes therein set foAh. WITNESS my hand and official seal the day and year last above written. Notary. Public \\denv_fp01\data\land\dwjones\helwigsecSdakotaca.doc 4 STATE OF TEXAS § COUNTY OF:. DALLAS § ...... .~. 58 ]'  BEFORE me, the undersigned, a Notaw Public in and for said County and State, on this Cth of~~ day personally appeared Ga~ Byrd, Vice President - Land of BELCO ENERGY CORP., ~ Nevada c successor by merger to Belco Operating Corp, a Delaware corporation,, and on behalf of said corporation, to me known to be the identical person who subscribed the name of the maker thereof to the foregoing instrument and acknowledged to me that he executed the same as his free and volunta~ act and deed and as the free and volunta~ act and deed of such corporation, for the uses and purposes therein set fodh. Given under my hand and seal the day and year last above written 02/10/03 ,/.,.?, uyoou~,ss,o.~xP,.~s .(' ~' ~n' COUNTY OF The foregoing instrument was acknowledged before me, the undersigned Notary Public, this day of ., __ by , known to me to be the of Amoco Production Company, and who acknowledged to me that he executed same as his free and voluntary act and deed on behalf of said Corporation for the uses and purposes therein set forth. WITNESS my hand and official seal the ~lay and year last above written. Notary Public \\denv_fp0 l\data\land\dwjones\helwigsec8dakotaca.doc 5 STATE OF 5 S C. COUNTY OF The foregoing instrument was acknowledged before me, the undersigned Notary Public, this day of , ~ by · , known to me to be the of Belco Energy Corp,, and who acknowledged to me that he executed same as his free and voluntary act and deed on behalf of said Corporation for the Uses and purposes therein set forth. WITNESS my hand and official seal the day and year last' above written. Notary Public STATE OF J.~.Z./~-~ COUNTY OF /h'~4.A,t ,'o'J Th foregoing instrument was ackn wled ed before me the unders ned N ' - ",..~~'r)/'- - rj.~ __ ~ .. ~ ,. n,.9. g , 'g qtary Public,. this c.~ day 'of ~, ~OrJt..by ,3 ~0.. t~.zo.x_f,t.,/m . , known to me to be the ~'//b.t~.~,~a--zA&-o',',',l,~ Amoco Prb'duction Company, and who acknowledged to me that he executed same as his free an}] voluntary aCt and deed on behalf of said Corporation for the uses and purposes therein set forth. WITNESS my hand and official seal the day and year last above written. . Notary Public \\denv_fp0 l\data\land\dwjones\helwigsecSdakotaca.doc 5 !7:: ; · ::~:::, :.:i EXHIBIT "A" PLAT OF THE COMMUNITIZED AREA COVERING-: TOWNSHIP 20 NORTH, RANGE 112 WEST SecHon 8: ALL DAKOTA FORMATION LINCOLN COUNTY, WYOMING TRACT 1 TRACT ~ 320.00 Acres 320.00 Acres USA #W-0321.435 USA #W-38884 HELWlG FEDERAL ~31-8 8 A~IOC:C) PROO CAiiIC)I' Oa~3 Wl-tr~(EY 8Ulll~ FF..D£RAL ~11-8 HE]V/tO ~30-8 L.20208 EXHIBIT B Attached to and made a part of that Communitization Agreement dated October 1, 1999, by and among Cabot Oil & Gas Corporation, Operator, Belco Energy 1 L.P., Marathon Oil Company and Belco Operating Corp. as Non-Operators, and the United States of America by and through the Bureau of Land Management, covering: Township 20 North, Ran.qe 112 West Section 8: All Operator of Communitized Area: CABOT OIL & GAS CORPORATION Description of Leases committed: TraCt No. 1 Lease Serial No.': W-0321435 Lessor' United States of America Lessee(s) of record: Amoco Production Company-80% Marathon Oil Company-20% Effective Date: January 1, 1966 Term of Lease: HBP Recording Data: 9/8/66, Bk 75, Pg 350 Lincoln County, WY Number of Acres: 320.00 Pooling Clause: Federal Lease Description: T20N-R 112W Sec. 8:W/2 Name and Percent Royalty Owners: United States of America 100.00000% *Name and Percent **Belco Energy 1 L.P. 84.92000% WI Owners: Cabot Oil & Gas Corporation 7.22222% Marathon Oil Company 7.00000% **Belco Operating Corp. .85778% · Name and Percent Carl W. Klaenhammer 1.00000% ©RRI Owners (1): Key Production Company, Inc. 2.50000% Thomas J. Boland .25000% Michael R. Boland .25000% **Amoco Production Company 7.291112% *All Working Interests shown are: Subject to payout (APO) of the Hellwig Federal 31-8 well, pursuant to that certain Faimout Agreement dated June 15, 1992, by and between Marathon Oil Company and Equitable Resources Energy Company, Balcron Oil Division, (predecessor in interest to Cabot Oil & Gas Corporation), wherein Marathon retained an overriding royalty interest in the Hellwig 15ederal #31-8 wellbore prior to payout. **The Amoco Production Company overi~iding royalty interest, the Belco Energy 1 LP. and the Belco Operating Corp. working interests, as shown, are: Before payout (BPO) interests, pursuant to that certain Farmout Contract dated dated May 1, 1992, as amended, by and between Amoco Production Company, Belco Energy 1 L.P. and Belco Operating Corp. The Amoco Product on Company overriding royalty interest burdens the working interests of Belco Operating Corp. (99% of the burden) and Belco Energy 1 L.P. (1%) only. Tract No. 2 Lease Serial No.: W-38884 Lessor: United States of America Lessee of Record: Cabot Oil & Gas Corporation Effective Date: April 1, 1973 Term of Lease: HBP Recording Data: 2/6/1980, Bk 163, Pg 261 Lincoln County, WY Number of Acres: 320.00 Pooling Clause: Federal Lease Description: T20N-R 112W Sec. 8:El2 Name and Percent Royalty Owners: United States of America 100% Name and Percent Cabot Oil & Gas Corporation 100% WI Owners: Name and Percent Key Production Company, Inc. 2.5% ORRI Owners (1): Rupert H. Stanley and Carrie M. Sullivan, Trustees of the Family Trust under the Buck Stanley Revocable Trust dated Febi~uary 7, 1984 2.0% ' Donna V. Hellwig 0.5% RECAPITULATION No. of Acres Percentage of Interest Tract No. Committed in Communitized Area "1. 320.00 50% 2. 320.00 50% ... ' 640.0 100% \\denv_fpOl\data\land\dwjones\he[wigfedcaexb.doc 2