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HomeMy WebLinkAbout927427 and Effective Janul STATE OIL AND WYOMING GAS, LEASE Lease '11- U7-U01JlJl Parcel # 195 Fund Code: SR 000,482 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: Fitzsimmons, 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, ~hich may be produced from the following described land, to wit: :) i W2 Section: 29 Township: 23 North Range: 118 West of the 6th P.M. W2 Section: 32 Township: 23 North Range: 118 West of the 6th P.M. j ~7' ~. 2_, County: Lincoln Acres: 640,00 $640.00 ($1.00 per acre or fraction thereof) Together with the ~ight 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 ~n effect for a primary 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 provid~d by the statutes of the State of Wyoming and the regulations of the Board of Land Commissiopers 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 anp 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 may 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 expressly represents that, if an individual, LESSEE is a citizen of the United States, or has declared an intention to become a citizen, and 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 available 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, February, 2007 A.D. LESSOR, STATE OF WYOMING, Acting by and hY¿.,r-,'/I7'07 """-:-., ¿L t! .6j' Lessee Signature: _.$, ,-L.. ~~~ -¢" c¿ · . / 7" Address: ,..[20/ ~..{/;"J ~."~/ City: ¿{'/,!r.~ State: IvY Zip: ý'¿//j? Phone: / -, ({ 7 - 6'^Ç If ~ if /..rf .¡ By: Resource issue: Moose crucial winter range and fossils f RECEIVED 3/8/2007 at 9:18 AM RECEIVING # 927427 BOOK: 650 PAGE: 482 JEANNE WAGNER LINCOLN COUNTY CLERK, KEMMERER, WY "This lease is issued subject to and conditioned upon lessee's acknowledgement and agreer 3) avoid human activity in moose crucial range from November 15 to April 30; or 4) in the alternative, exploration and development activities shall be subject to approval by the Director of the Office of State Lands and Investments, subject to the Director's consultation with the WGFD regarding alternative practices and/or plans of development which provide similar resource protection and mitigation. 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 & 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 & Investments or his designated representative as soon as practicable after their discovery. 0.i~ _6NQ.\:::5 J..L1 Secllon 1.'THE LESSEEAGREE:l'\( &..)0....,,,. ..;Þ..... 000,183 (a) BOND. To fumish a bond Wllh ~ÑI.,srfMtØ'V~ty cOO'f)any authorized to transact busll'ess In the Slale 'Of Wyoming, or such ather surety as may be acceptable 10 the lessor, in the penal sum as reqUired by the current rules of the Slale Board of Land Commissioners, conditioned upon the payment of all rentals end royellles accruing 10 the lessor under the lerms hereof, and upon the full COf1l)lianCe of all other terms and conditions of this lease and the rules and regulations relaUng thereto, and also conditioned on Ihe paymenl of all damages to Ihe surface and Improvements thereon where Ihe lease covers lands the surface of which has been sold or otherwose leased. Such bond or bonds fumlshed prior to the development of the lands cantained in this lease may be increased in such reasonable amounls as the lessor may decide upon carrmencement of drilling operallons and after the discovery 'Of oil or gas. (b)PAYMENTS. To make all payments accruing hereunder to the Office of Stale Lands and Investments, 122 West 251h Street. Cheyenne, Wyoming 82002.0600. (c)RENT ALS. Pnor to the discovery 'Or oil 'Or gas in paying quanlilies to pay the lessor In advance, beginning wilh Ihe effective dale hereof. an annual rental of 51.00 per acre or fraclion thereof. After Ihe discovery of oil or gas in paying quantities 10 pay the lessor In advance beginning with Ihe first day of the lease year succeeding the lease year in which actual discovery was I1'8de, an annual rental of 52_00 per acre or fraction thereof, unless changed by agreement. Such I J 1tal so paid for anyone year shall be credited an the royally for thai year. Annual rentals on all leases shall be payable In advance for Ihe first year and each year thereafter. No nolice of rental due shall be sent to the lessee. If the rental is not paid on or before the date it becomes due, notice of defaull will be sent to the lessee, and a penalty'~1 50.50 per acre for late payment will be assessed. The lessee is not legally obligated to pay either the rental or the penally, but if the rental and penally are not paid wilhin thirly (30) days after the natice '01 delaull has been received, Ihe lease WIll termnate automatically by operaUon 01 law. Termination 01 the lease shall not re,ieve the lessee 01 any obligalion incurred under the lease other than the obllgaUon to pay rontal or penally. The lessee shall not be enUtled to a credit on royally due lor any penally paid lor late payments of rental on an operallng lease. (d)ROYAL TIES. The royalties to be paid by lessee are: (i) On oil, one-sixth 'Of that produced, saved, and sold Iram said land,lhe same to be delivered at the wells or to the credil 01 lessor inlo the pipe line 10 which Ihe wells may be cannected. (ii) On gas, including casinghead gas or other hydrocarbon substances, produced from said land saved and sold or used off Ihe premises or in the manulacture 01 gasoline or olher products therefrom. Ihe market value at the well alone-sixth 01 the gas so said or used, providej Ihal on gas sold al the wells, Ihe royally shall be one-sixth 01 the amount realized from such s~le. (Iii) On all other hydrocarbons of value and gaseous subslances and elements produced or extracted, including propane, bulane, sulphur, nitrogen, carbon dioxide, and helium, al such rayally as shall be mutually determined 10 be lair and reasonable. (iv) For rayally purposes on gas and natural gasaline the value shall be as approveri by the lessor, and in the delermlnaUon 01 Ihe value 01 natural gasoline Ihe fair cosl 01 exlraction shall be considered as a deductible Item: provided, however, that the allowance for the cosl 01 extraction may exceed two-thirds 01 Ihe amounl or value only on approval 01 the lessor and In no event shall Ihe price lor gas, or natural gasoline, be less Ihan that received by the Unlled State of America for Its royal!i!!s !rOf'1 the same field. (v) "alu,al ;l8S and oil actually used lor operallng purposes upon the land and, except as to the ullim"t, sale Ihereof, gas or liquid hydrocarbons relumed to the sand lor slimulating the production 01 ail or secondary recovery purposes shall be royally Iree. (e) DISPOSITION OF ROYAL TV OIL AND GAS. To deliver to the lessar, or to such individual, firm or corporation as the lessor may designate, all rayalty oil, gas, or other kindred hydrocarbons, free 01 charge on Ihe premses where produced, or, at the option 01 the lessor, and in lieu 01 said royallies In kind, the lessee agrees to pay the lessor the field market price or value 01 all royalty oil, gas. or olher kindred hydrocarbons produced and saved. When Ihe lessor elects 10 lake its royally oil, gas, or other hydrocarbons in kind such as oil, gas, or other kindred hydrocarbons shall be goad merchantable oil, gas, or ather kindred hydracarbons. The lessae shall if necessary furnish storage for royalty oil Iree of charge for thlriy (30) days after the end 01 the calendar month In which the 011 Is produced, upon the leased premises, 'Or at Ihe such place as the lessor and the lessee may mutually agree upon, pravlded, that Ihe lessee shall not be held liable for loss or destruction 01 royalty oil so stared from causes beyond his control, The Iree storage 01 all. as herein provided, shall apply only as long as the said oil Is the property of the lessor, (I) MEASUREMENTS OF PRODUCTION. To gauge, measure and correct for lemper.,l-Jre all production Irom said lands in conformance wilh the rules and regulations adopled by the Board 01 Land COITV11Issloners and reporl said production to the lessor In accordance therewith. To keep books, records, and reports pertaining 10 the production from the land herein I'Jsed as well as those pertaining to the production Irom offset wells operated by Ihe lessee, his operator, or sub-lessee on olher lands, which shall be opened al all limes lor the Inspection of any duly aulhorlzed agenl 01 the lessor. To furnish the lessor with original pipe line reports shOwing the day, rronth, year, arrount, gravities, and te~ralures 'Of all oil run and wilh monthly reports shOwing the month, year, amount, and price '01 all gas and natural gas gasoline and other producls produced and .'old from the land herein leased, and the amount 01 gas retumed to the sand. Ig) MONTHLY PAYMENTS AND STATEMENTS. Unless the time 01 payment is othel\\lÌse extended by Ihe Office of State Lands and Investmenls to make paymenl on or belore the twentieth (20th) day of the calendar month succeeding the rronlh of production and removal and sale 01 oil and gas from said land, and to fumlsh sworn rronthly statements therewith sr,owing In detail the quantity and quality of the production (per well il required where practical) lrom Ihe land hereby leased. and Ihe quanlity and quality 01 the production (per well where practical) from affsel wells upon cornering or conliguous land aperaled by Ihe lessee, his operalor or sub-lessee and such other inlarmatlon as may be called lor in Ihe farm or report prescribed by lessor. (h) WELLS TO BE DRILLED. To drill and operate effectively all wells necessary to reasonably offset wells upon and production from adjoining lands. To drill such addilional wells at such times or places as are necessary and essential to the proper developmenl and corrmerclal productlan of the all and gas conlent 01 said land. (i)LOG OF WELLS AND REPORTS. To keep a log, In Ihe form appraved by the lessor, 'Of each well drilled by Ihe lessee on the lands herein leased, shOwing Ihe strata and character 'Of the farmations, water sands and minerai deposits penetrated by the drill, amount 01 casing, size and where set, and such other information as the lessor may require which log or copy thereof shall be fl.:,'~ISIIt:;::t to the lessor. To ";'1 progress reports, in the form prescribed by the lessor, at the end 01 each thirty (30) day perioo while each well IS being drilled. To file annually, or at such times as Ihe lessor may require, maps shOwing the development 01 the structure and the location 01 all wells, pipe lines and other works used In conneclion with the operations 01 Ihe lessee upon said land. Ta make such other reports perlalning 1'0 Ihe production and operations by the lessee on said land, and report such other Infarmatian as may be possessed by the lessee on the wells, production or operations 01 olhers on lands on the same geologic slructure that may be 01 importance In effecting proper developmenland operation 01 the lands herein leased, as may be called lor by Ihe lessor. All logs, maps, and reporls shall be submitted in duplicate and the Office of State Lands and In~eslments may waive such reports as conditions may warrant. UjPRODUCTION. To operate Ihe wells upon the land herein leased In a c~tent and efficient manner in an endeavor to recover all the oil and gas economically possible from said land and to prevent the under drainage 01 the oil and gas thereunder by wells operated by Ihe lessee or others on cornering or conliguous lands to Ihose leased herein. All plans or methods lor the purpose of slimulating or increasing productlan on lands herein leased olher than those In convnon use shall firsl be presented to the lessor for approval belore being put inl J actual operalion. No production agreements limiting, reslrlcting, prorating, or othel\\lÌse affecllng the naturalproduclion from !iBid land shall be entered Into by Ihe lessee, nor shall the lessee limit, reslnct. or prorale the natural production from said land In any way or In any event, excepl with the consent In wrlling 'Of the lessor first had an obtained. (k)SUSPENSION OF OPERATIONS. Should eny well drilled upon lands covered by this lease oblain produclion 01 oil, gas. or olher hydrocarbons In paying quanlllles and II the lessee is unable to establish a satislactory market far Ihe oil, gas or hydrocarbons produced fram said well, the lessee may apply for and the lessor may grant permission for the suspension 01 productian operallans until such limes as a satisfactory market for the product from said well can be developed. During the lime any such suspension 01 operations Is in effect. the lessee shall continue 10 pay the annual renlal 0152.00 per acre or lraclian thereal provided by (c) abave, and this lease shall remain In effect as though 011 or gas was being produced fram said lands. (I)DILIGENCE-PREVENTION OF WASTE. To exercise reasonable diligence In drilling, producing, and 'Operating 01 wells on the land cavered hereby, unless cansenl 1'0 suspend operations telf1X)larily is granted by the lessor; ta carry on all operøllons hereunder in a good and workmanlike manner In accordance with approved methods and practice, having due r ~;¡ard for Ihe prevention of waite 01 oil and gas, or the entrance 01 water 10 Ihe ail or gas bearing sands or strata 10 the destruction or injury '01 such deposits, the preservatlan and conservatlan 'Of Ihe property lor future productive operations and to the health and safety of worI<men and en' JIoyees: ta plug securely In an approved manner any well belore abandoning It, and not to abandon any well wilhout permsSlon 01 the lessor, not 10 drill any well within two hundred (200) leet of any 01 the outer baundarles 01 Ihe land covered hereby, ur,less t insl drainage by wells drilled an lands adjoining less than 200 leet Iron1 Ihe praperty lines thereol; to conduct all operations subjecl to Ihe Inspection of the lessor; to carry out at the lessee's expense all reasonable orders and requirements 01 Ihe lessor relative to Ihe prevention 01 wasle and preservalion of Ihe property and Ihe health and salety 'Of workmen including Ihe replanting and reseeding of drilling sites and other areas disturbed by drilling operations and on failure 'Of the lessee so to do the lessar shall have the right. logelher with other recourse herein provided, to enler on the properly to repair damage or prevent waste at the lessee's expense; to abide by and conform 10 valid applicablê rêQulaliont ørêteribêdlo rèÎmburu Iha owner ollhe sur/ace, :I olher than the lessor, or lessee of grazing rights thereof lor actual damages therelo and injury to improvements thereon, provided, thai the lessee shall not be held responsible lor acts 01 providence or acllons beyond his control. (m)TAXES AND WAGES-FREEDOM OF PURCHASE. Ta pay, when due all taxes lawfully assessed and levied under the laws of the State 01 Wyoming upon Improvements. oil and gas produced from the land hereunder, or olher rights, property or assels 01 Ihe lessee, to accord all workmen and emplayees complete freedam of purchase, and 1'0 pay all wages due workmen and employees in conformance with the laws 01 the Slate 01 Wyoming. (n)ASSIGNMENTS OF LEASE-PRODUCTION AGREEMENTS. Not 1'0 assign this lease or any interest therein, nor sublet any portion of the leased premises, except with the consenl in wriling 01 the lessor first had and obtained. All overriding royalties to be valid, must have the approval of the Board or by the Office '01 State Lands and Investmenls when autharlty to do so has been delegated by the Board and will be recorded with the lease. The Board reserves the nghl of disapproval 01 such overriding royalties when In its opinion they become excessive and hence are detrimental 10 the praper development of the leased lands. (o)DELlVER PREMISES IN CASE OF FORFEITURE. Ta deliver up the leased premises, with all permanent Improvements thereon, In good order and condition in case 01 lorfeiture of this lease, but this shall not be construed 10 prevent the removal, alteration or renewal 'Of equipment and Improvements in the ordinary course of operations. Section 2. THE LESSOR EXPRESSLY RESERVES: (a) The right ta lease sell, or 'Otherwise dispose of the surface '01 the land embraced within this lease under existing laws or laws hereafter enacted, and In accordance with the rules 'Of the Board 01 Land Commissions insolar as the surface is nat necessary lor the use of the lessee In the conduct of operations hereunder. (b)The right to lease, sell, or otherwise dispose 01 other minerai or subsurface resources not covered by the lease, In accordance with the applicable laws and the rules of the Board of Land Commissioners. (c)From the operation 01 this lease. the surface lands heretofore granled lor rights-of-way and easements and reserves the right 10 grant such other rights-of-way and easements as provided by the statutes 01 the Stale 01 Wyoming, as long as such rights-ol-way and easements do not conflict with the operations lor oil and gas on the land hereIn leased. (d)The right to reluse to commit Ihe leased lands to a unit plan 01 development il the Board finds such action would impair thè lessor's reserved right to take Its royalty gas In kind and 10 purchase all other gas allocated to the leased lands a pro\IÌded in Section 3(e)below. (e)The righlto aller or modify the quantity and rate 01 production to the end that waste may be eliminated or that production may conlorm to the lessee's lair share 01 allowable produclion under any system 01 State or Natlonel curtailment and proration authorized by law. (1)ln addition to liS right to take Its royally gas in kind, the lessor reserves the right and optlan to purchase all other gas produced lor sale or use off the leased lands. This option shall be exercised only II the Board finds that the tessee has received and Is willing to accept a bona fide offer Irom a purchaser who Intends to sell or tn¡onsport the gas Inta Inlef1ltale cOrM'IBrce and Ihat one 'Or more Intrastate purchasef1l (I.e., purchasers who will use, consume, or sell the gas for use or consumption entirely within the Stale 01 Wyoming) are willing and able to purchase the gas upon terms reasonably comparable to and at least as favorable to the lessee as those offered by the Interstate purchaser. The Board shall waive this optlan and permit an interstale sale If It finds that no intrastate purchaser Is willing and able to purchase Ihe gas upon terms which are reasonably camparable ta and at least as favorable 1'0 the lessee. As a condilion to such waiver, a satlslactary agreement may be entered Into by which the produclion of lis royally gas may be deferred until It can be produced and sold for consumption and use entirely wilhin Ihe Slate 01 Wyoming. Section 3. APPRAISAL OF IMPROVEMENTS. The lessee shall have Ihe right subject ta the pravlslons 01 Title 36, as to Slate and Slate School Lands, and Title 11, as to State Loan and Investments Board Lands, W.S. 1977, to remove any Improvements owned by lessee within a reasonable time after the termination of this lease. Lessae agrees thai any such Improvements not removed within a reasonable time alter terminalion of this lease shall be disposed of pursuant 1'0 the above statutes. Seclion 4. FORFEITURE CLAUSE. The Board shall have the power and authority 10 cancel leases procured by fraud, deceit, or misrepresentations, or for the use of the lands lor unlawful or Illegal purposes, or lor the vlolatlan of the covenants 01 Ihe lease, upon proper proof thereof, in the event thai the lessee shall delault in the performance or observance 01 any 01 the terms, covenants, and stipulations hereol, or 'Of Ihe general regulations prorrulgated by the Board 'Of Land CollY11issioners and In force on the date hereaf, the lessor shall serve notice '01 such failure or delault either by personal service or by certified or registered mall upon the lessee, and if such failure or default continues lor a period of thirty (30) days aller the service of such notice, then and in thai event the lessor may, al its option, dedare a lorfeiture and cancel this lease, whereupon all rlghls and privileges, obtained by Ihe lessee hereunder shalllerminate and cease and the lessar may re-enter and take possession 01 said premises 'Or any part thereol. These provisions shall not be canstrued 10 prevent the exercise by lessor any legal or equitable remedy which the lessor might otherwise have. A waiver 01 any particular cause or forfeilure shall not prevent the cancellation and lorfelture 01 Ihis lease by any alher cause 01 forfeiture, or for Ihe same cause occurring at any olher time. Seclion 5. REliNQUISHMENT AND SURRENDER. This lease may be relinquished and surrendered 10 lessor as to ali or any legal subdivision 01 said lands as lollaws: (a) If no 'Operations have been conducted under the lease on the land to be relinquished, the lessee shall file with Ihe State Land Board and State Loan and Investment Board, a wrllten relinquishment 'Or surrender, duly signed and acknOwiedged and staling therein thai na operations have been conducted on the land. The relinquishment so filed shall become effective on the date and hour 'Of receipt thereol In the office 01 the Director or at some later date, if such be so specified by the lessee therein. If the said relinquishment falls to state that no operations have been conducted, the effective date of relinquishment shall be the date the relinquishment Is approved by the Board, (b) If operatlans have been conducted under the lease an land proposed to be rellnquished,the lessee shall give sixty (60) days nalice and shall file wilh the Dlrectar a written relinquishmenl or surrender duly acknowiedged and stating Ihereln that operations have been conducted on the land. The relinquishment shall not become effective untillhe land and the wells thereon shall have been placed in condllian acceptable to lessor and shall have been approved by the State Oil and Gas Supervisor. All rentals becoming due prior 10 a surrender or relinqulshmenl becoming effeclive, shall be payable by lessee unless paymentlhereof shall be waived by lessor. A relinquishment having become effective there shall be no recouf1le by lessee and Ihe lease as to the relinquished lands may not be reinstated. h IT ld8 9 Z g 3 j 1,002 ~: ¡;! ~~ :.: ,;. j~:~ J _1\ t,; I .., ! t, . J. t ¡ '_ ¡ ~. -0' ,\- '. ~ ~. -,' STATE OF WYOMING I) ) ss COUNTY OF CAMPBELL ) o ~Z";·.Af:-b'~) ~t~ tl 000,;18·4 I Before me on the 2n~ day of February ,2007, John L. Kennedy, Manager of Fitzsimmons, LLC personally appeared in his capacity as known to me to be the identical person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same as free and voluntary act and deed, and as the free and voluntary act of the corporation, for the uses, purposes and consideration therein set forth. Witness my hand and official seal: ê '~\.'\.A~~~ ~ ClJ,-L Notary Public My commission expires: 5/ ¿Lit I 0 '7