HomeMy WebLinkAbout927434
OIL
AND:Q~) LEAS E I"'arcel H'I ÖU
. Fund Code: CS
This indenture of lease
and through its Board of Land
000503
entered into by and between the State of Wyoming, acting by
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 th~ 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:
Z il
ì7
31
County:
Lot 5 Section: 31 Resurvey Township: 24 North Range: 117 West of the 6th P.M.
Lincoln Acres: 40.00
$40.00
($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 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 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 contin~e 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 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
, ,?;7.Ár,4?Pl't!;""-?.f ¿-¿ t! 1('
Lessee s,gnatur~' dM;,i. ~ 4f/.
Address: .....t..lcJ/ ~~ _ xL.
City: ¿;;/4'ffi State: /·t-Ý Zip: ý'"27/,f'
Phone: / - J ó;l .' £S" 6 ' ~J /.J,'?'
By'
þ.:.."...
,~\ {j~. .,(
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.
RECEIVED 3/8/2007 at 9:24 AM
RECEIVING # 927434
BOOK: 650 PAGE: 503
JEANNE WAGNER
LINCOLN COUNTY CLERK, KEMMERER, WY
~f.!L.!\U..~' ~ ;.~.rl.J.~J::.._
. 03;G:~¡ 43,:~ 000504
~'i-III!I1'''' ft:L!¡SSEE AGREES:
~~fl9rW,fo'umish a bond with an approved corporate surety company authorized 10 transact
businp,ss 10 the Slale of Wyoming, or such olher surety as may be acceptable to the lessor, in the
penal sum as requored by the current rules of the Stale Board of Land Commissioners,
conditioned upon the payment of all renlals and royallies accruing to the lessor under Ihe terms
hereof, anå upon Ihe full çorrpllançe of all other terms and conditions of this lease and the rules
and regulations relating thereto, and also conditioned on the payment of all damages to the
surface and Improvements thereon where Ihe lease covers lands the surface of which has been
sold or otherWIse leased. Such bond or bonds fumished prior to the development of the lands
contained in this lease may be Increased in such reasonable amounts as the lessor may decide
upon cornmencemenl of drilling operalions and after Ihe discovery of oil or gas.
(b)PAYMENTS. To make all payments accruing hereunder 10 the Office of State Lands and
Investments, 122 West 25th Streel, Cheyenne, Wyoming 82002-0600.
(c)RENTALS. Pnor 10 Ihe discovery of oil or gas in paying quantities 10 pay the lessor in
advance, beginning with the effective date hereof, an annual rental of $1.00 per acre or fraction
Ihereof.
After the dIscovery of oil or gas in paying quantities 10 pay the lessor in advance beginning with
the first day of the lease year succeeding Ihe lease year in which actual discovery was made, an
annual rental of $2.00 per acre or fraction thereof, unless changed by agreement. Such ranlal so
paid for anyone year shall be credited on Ihe royalty for that year.
Annual rentals on all leases shall be payable In advance for the first year and each year
thereafter. No nolice of renlal due shall be sent to the lessee. If the rental is not paid on or
before the date il becomes due, notice of default will be senlto Ihe lessee, and a penally of $0.50
per acre for late paymenl will be assessed.
The lessee 15 not legally obligaled to pay either the rental or the penalty, but if the rental and
penally are not paid within thirty (30) days after Ihe noUce of defaull has been received, the lease
Wllltermnate automatically by operation of law. TerminaUon of Ihe lease shall not relieve the
lessee of any obligation incurred under the lease other than the obligaUon to pay rental or
penalty. The lessee shall not be enlitled to a credit on royalty due for any penalty paid for late
payments of renlal on an opera ling lease.
(d)ROY AL TIES. The royalties 10 be paid by lessee are:
(i) On oil, one-slxlh of thaI produced, saved, and sold from said land, the same to be delivered
at the wells or to the credit of lessor into the pipe line to which the wells may be connected.
(Ii) On gas. including casinghead gas or other hydrocarbon substances, produced from said
land saved and sold or used off the premises or in Ihe manufacture of gasoUne or other products
therefrom, the market value at the well of one-sixth of Ihe gas so sold or used, provided that on
gas sold at the wells, the royalty shall be one-sixth of the amount realized from such s~le.
(ili) On all olher hydrocarbons of value and gaseous substances and elemenls produced or
extracted, including propane, butane, sulphur. nitrogen, carbon dioxide, and helium, at such
royalty as shall be ",.dually detem1lned to be fair and reasonable.
(iv) For royally purposes on gas and natural gasoline Ihe value shall be as approved by the
lessor, and in the detem1lnation of the value of natural gasoline Ihe fair cost of exlraclion shall be
considered as a deductible ilem: provided, however, that the allowance for the cost of e:<II'action
may exceed two-Ihords of the amount or value only on approval of the lessor and In no event shall
the price for gas, or natural gasoline. be less than that received by Ihe United Slale of America for
lis royalties from Ihe same field.
(v) Natural gas and 011 actually used for operating purposes upon Ihe land and, except as to the
uilimè 'e sale thereof, gas or liquid hydrocarbons returned to the sand for stimulaling the
prodn.llon of 011 or secondary recovery purposes shall be royally free.
(e) DISPOSITION OF ROYAL TV OIL AND GAS. To deliver to the lessor, or to such individual,
firm or corporation as the lessor may designale, all royalty 011, gas, orolher kindred hydrocarbons,
free of charge on the premises where produced, or, at the option of the lessor, and in lieu of said
royalties in kind, Ihe lessee agrees to pay the lessor the field market price or value of all royalty
011. gas, or other kindred hydrocarbons produced and saved.
When the lessor elects to take Its royally oil, gas, or other hydrocarbons in kind such as oil, gas,
or other kindred hydrocarbons shall be good merchantable oil, gas, or other kindred
hydrocarbons. The lessee shall if necessary furnish storage for royalty oil free of charge for thirty
(30) days after Ihe end of the calendar month in which the oil Is produced, upon the leased
premises, or at the such place as Ihe lessor and the lessee may mutually agree upon, provided,
thatlhe lessee shall not be held liable for loss or deslruction of royalty oil so stored from causes
beyond his conlrol.
The free slorage of oil, as herein provided, shall apply only as long as the said oil is Ihe property
of the lessor.
(f) MEASUREMENTS OF PRODUCTION. To gauge, measure and correct for lemper.'ture all
production from said lands In conformance with the rules and regulations adopted by the duard of
Land Commissioners and report said production to the lessor In accordance therewith
To keep books, records, and reports pertaining to Ihe produclion from the land herein I~ased as
well as those pertaining to the production from offsel wells operated by the lessee, his operalor,
or sub-lessee on olher lands, which shall be opened at all times for the inspection of "ny duly
authorized agent of the lessor.
To furnish the lessor with original pipe line reports showing the day, month, year, amount,
gravities, and tempera lures of all 011 run and wilh monlhly reports showing the month, year,
amount, and price of all gas and natural gas gasoline and olher products produced and sold from
the land herein leased, and Ihe amount of gas returned 10 the sand.
(g) MONTHLY PAYMENTS AND STATEMENTS. Unless the time of payment is olherwise
extended by the Office of State Lands and Inveslments to make payment on or before the
Iwentlelh (20th) day of Ihe calendar monlh succeeding the month of produclion and removal and
saie of oil and gas from saId land, and to furnish sworn monthly statements therewilh showing In
detail the quantity and quality of the production (per well if required where practical) from the land
hereby leased. and the quanlity and qualily of the prOduction (per well where practical) from offset
wells upon cornerong or contiguous land operated by the lessee, his operator or sub-leMee and
such olher information as may be called for in the form or report prescribed by lessor.
(h) WELLS TO BE DRILLED. To drill and operate effectively all wells necessary to re~sonably
offset wells upon and production from adjoining lands.
To drill such additional wells at such limes or places as are necessary and essenl,al to the
proper developmenl and commercial production of the oil and gas content of said lanè.
(i)LOG OF WELLS AND 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 character of the
formations, water sands and minerai deposits penetrated by the drill, amount of casing, size and
where set, and such other information as Ihe lessor may require which log or copy thereof shall
be furnished to the lessor.
To ,;Ie prog.eis reports, in the form prescribed by the lessor, at the end of each thirty (30) day
perleo while ~ach well is being drilled.
To fiie annually, or al such limes as the lessor may require, maps showing Ihe development of
the structure and the localion of all wells, pipe lines and olher works used in conneclion with the
operallons of the lessee upon said land.
To make such other reports pertaining to the prOduction and operations by Ihe lessee on said
land, and report such olher Information as may be possessed by the lessee on the wells,
production or operations of olhers on lands on the same geologic structure that may be of
importance in effecting proper development and operaUon of Ihe lands herein leased, as may be
called for by Ihe lessor. AJllogs, maps, and reports shall be submitted in duplicale and the Office
of State lands and Investments may waive such reports as conditions may warrant.
O)PRODUCTlON. To operate Ihe wells upon the land herein leased In a competent and efficient
manner in an endeavor 10 recover all tho oil and gas economically possible from said land and to
prevent the under drainage of Ihe oil and gas thereunder by wells operated by the lessee or
others on cornering or contiguous lands to those leased herein. All plans or methods for the
purpose of slimulating or increasing production on lands herein leased other than those in
COlTVTlOn use shall first be presenled 10 the lessor for approval before being put Into actual
operalion.
No production agreemenls limiting, restricting, prorating, or otherwise affecling the
naturalproduction from said land shall be entered into by the lessee, nor shall the lessee limit,
reslrlct. or prorate the natural production from said land in any way or in any event, except with
the consenlln writing of the les.or lirsl had an obtained.
(k)SUSPENSION OF OPERATIONS. Should any well drilled upon lands covered by t!,is lease
oblain prOduclion of oit, gas, or other hydrocarbons In paying quanlities and if the lessee is
unable to eslabtish a satisfactory markel for the oil, gas or hydrocarbons prOduced from said well,
Ihe lessee may apply for and the lessor may granl permission for the suspension of pi oduction
operations unlit such limes as a salisfactory market for Ihe product from said well can be
developed. During Ihe lime any such suspension of operalions is in effect, the lessee shall
conlinue to pay the annual rental of $2.00 per acre or fraction Ihereof provided by (c) above, and
this lease shall remain In effect as Ihough oil or gas was being produced from said lands.
(I)DILlGENCE·PREVENTlON OF WASTE. To exercise reasonable diligence in drilling,
producing. and operating of wells on the land covered hereby, unless consent to suspend
operations lemporarily is granled by Ihe lessor: to carry on all operations hereunder in a good and
workmanlike manner In accordance wilh approved methOds and practice, having due regard for
the prevention of waste of 011 and gas, or the entrance of weter 10 Ihe oil or gas bearing sands or
Slrata to the destruction or Injury of such deposils, the preservation and conservation of the
property for future produclive operations and 10 the health and safety of workmen and employees;
10 plug securely In an approved manner any well before abandoning ii, and not to abandon any
well wilhout pem1lsslon of Ihe lessor, not 10 drill any well within Iwo hundred (200) feet of any of
Ihe outer uoundaries of the land covered hereby, unless to .' _._ _. _~_.. .51 drainage by wells
drilted on lands adjoining less than 200 feet from the property lines thereof; 10 conducl all
operalions subject 10 Ihe Inspection of Ihe lessor; to carry out at the lessee's expense all
reasonable orders and requirements of the lessor relalive to Ihe prevention of wasle and
preservation of Ihe property and the heailh and safety of workmen Including the replanting and
reseeding of drilling sites and olher areas dislurbed by driillng operalions and on failure of the
lessee so to do the lessor shall have the righi, together with olher recourse herein provided, to
enter on the property to repair damage or prevenl waste at the lessee's expense; to abide by and
conform to valid applicablê rêgulaliont prêteribêd 10 rêimburse the owner o/Ihe surlace, II olher
than the lessor, or lessee of grazing rights thereof for actual damages Iherelo and Injury 10
ifT1)l'ovemenls Ihereon, provided, that the lessee shall not be held responsible for acts of
providence or actions beyond his control.
(m)TAXES AND WAGES-FREEDOM OF PURCHASE. To pay, when due all taxes lawfully
assessed and levied under the laws of the Slale of Wyoming upon Improvements, 011 and gas
prOduced from Ihe land hereunder, or other rights, property or assets of the lessee, 10 accord all
workmen and employees complete freedom of purchase, and to pay all wages due workmen and
employees In conformance with the laws of the State of Wyoming.
(n)ASSIGNMENTS OF LEASE-PRODUCTION AGREEMENTS. Not to assign this lease or any
inlereslthereln, nor sublel any portion of Ihe leased premises, except with the consent In wrlling
of the lessor first had and obtained.
All overriding royalties to be valid, musl have Ihe approval of the Board or by the Office of Slale
Lands and Inveslmenls when authority to do so has been delegated by the Board and will be
recorded with the lease. The Board reserves the right of disapprovat of such overriding royalties
when In its opinion they become excessive and hence are detrimental 10 the proper development
of the leased lands.
(o)DELIVER PREMISES IN CASE OF FORFEITURE. To deliver up Ihe leased premses. wilh all
permanent Improvemenls thereon, in good order and condition in case of forfeilure of Ihis lease,
bullhls shall not be construed to
prevent the removal, alleratlon or renewal of equipment and Improvements in the ordinary
course of operations.
Section 2. THE LESSOR EXPRESSLY RESERVES:
(a) The right to lease sell, or otherwise dispose of the surface of the land embraced within Ihls
lease under existing laws or laws hereafter enacled, and in accordance with the rules of the
Board of Land Commissions Insofar as the surface Is not necessary for Ihe use of Ihe lessee In
Ihe conduct of operations hereunder. .
(b)The right to lease, sell, or otherwise dispose of olher mineral 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 operalion of this lease, Ihe surface lands heretofore granted for rights-of-way and
easements and reserves the righlto grant such other rights-of-way and easements as provided by
the statutes of the State of Wyoming, as long as such rights-of-way and easements do not conflict
with Ihe operations for oil and gas on the land herein leased.
(d)The right 10 refuse 10 commll.the leased lands to a unit plan of development if Ihe Board finds
such aclion would impair the lesso~s réserved rlghlto take Its royalty gas in kind and 10 purchase
all other gas allocated to Ihe leased lands a provided in Section 3(e)below.
(e)The righl to alter or modify the quantity and rate of production to the end that waste may be
eliminated or Ihat produclion may conform to the lessee's fair share of allowable produclion under
any syslem of State or Nationat curtailment and proration authorized by law.
(f)ln addition to Its righlto take Its royalty gas in kind, the lessor reserves the right and opllon to
purchase all other gas produced for sale or use off the leased lands. This option shall be
exercised only If Ihe Board finds that the lessee has received and Is willing 10 accept a bona fide
offer from a purchaser who intends to sell or transport Ihe gas into Interslate commerce and thai
one or more intrastate purchasers (i.e., purchasers who will use, consume, or sell the gas for use
or consumplion entirely within the Slate of Wyoming) are willing and able to purchase Ihe gas
upon terms reasonably comparable 10 and at least as favorable 10 the lessee as Ihose offered by
Ihe interstate purchaser. The Board shall waive this option and permll an inlerstate sale if II finds
that no intrastale purchaser Is willing and able to purchase the gas upon terms which are
reasonably comparable to and alleast as favorable to the lessee. As a condlllon to such waiver.
a sallsfactory agreement may be enlered into by which the production of Its royalty gas may be
deferred until il can be produced and sold for consumption and use entirely within the State of
Wyoming.
Section 3. APPRAISAL OF IMPROVEMENTS. The lessee shall have the right subjeclto the
provisions of Tille 36, as to State and Slate Schoot lands, and Tille 11, as to State Loan and
Investments Board lands, W.S. 1977, to remove any Improvements owned by lessee wilhln a
reasonable time after the tem1lnation of this lease. Lessee agrees Ihal any such IfT1)I'ovemenls
not removed within a reasonable lime after tem1lnation of this lease shall be disposed of pursuant
to Ihe above statutes.
Section 4. FORFEITURE CLAUSE. Tho Board shall have the power and authority to cancel
leases procured by fraud, deceit, or misrepresentations, or for Ihe use of the lands for unlawful or
illegal purposes, or for Ihe violalion of Ihe covenants of the lease, upon proper proof Ihereof, In
the evenl that the lessee shall default In Ihe performance or observance of any of the terms,
covenanls, and stipulallons hereof, or of the general regulations promutgated by the Board of
Land Commissioners and in force on the date hereof, Ihe lessor shall serve notice of such failure
or default either by personal service or by certified or reglslered mall upon the lessee, and If such
failure or default continues for a period of thirty (30) days aller the service of such nolice, then
and in that event the lessor may, al Its opllon, declare a forfeiture and cancel this lease,
whereupon all rights and privileges, obtained by Ihe lessee hereunder shalllerminale and cease
and the lessor may re-enter and lake possession of said premises or any part thereof. These
provisions shall not be conslrued to prevent the exercise by lessor any legal or equitable remedy
which the lessor might otherwise have. A waiver of any particular cause or forfeilure shall not
prevenl the cancellallon and forfeiture of Ihis lease by any other cause of forfeiture, or for Ihe
same cause occurring at any other time.
Section 5. RELINQUISHMENT AND SURRENDER. This lease may be relinquished and
surrendered to lessor as to all or any legal subdivision of said lands as follows:
(a) If no operations have been conducted under the lease on Ihe land to be relinquished, Ihe
lessee shall file with the Slate Land Board and State Loan and Investment Board, a wrllten
rellnquishmenl or surrender, duly signed and acknO'Medged and slaling Ihereln that no operations
have been conducted on the land. The relinquishment so filed shall become effeclive on the date
and hour of receipt Ihereof In the office of the Director or at some laler dale. if such be so
specified by the lessee Iherein. If the said relinquishment fails to slale that no operations have
been conducted, the effecUve date of relinquishment shall be the date the relinquishment Is
approved by Ihe Board.
(b) If operaUons have been conducted under the lease on land proposed to be rellnquished,lhe
lessee shall give sixty (60) days notice and shall file with Ihe Director a wrillen relinquishment or
surrender duly acknowiedged and stating therein that operalions have been conducted on Ihe
land. The relinquishment shall not become effeclive until the land and the wells thereon shall
have been placed in condition acceplable to lessor and shall have been approved by Ihe Slate Oil
and Gas Supervisor.
All rentals becoming due prior to a surrender or relinquishment becoming effective, shall be
payable by lessee unless payment thereof shall be waived by lessor. A relinquishmenl having
become effecllve there shall be no recourse by lessee and the lease as to the relinquished lands
may not be reinstated.
1-
"
IT tJU
9 Z 8 3 J LOQ2
(~ , ) \ '-1
¡ '; .:~
. :,~;::; ,1\ N
, j :'-:1 .,),~·/l :::
STATE OF WYOMING )
COUNTY OF CAMPBELL ~ ss O~Zt743~i:
000505
Before me on the 2nd 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 volW1tary act and deed,
and as the free and volW1tary act of the corporation, for the uses, purposes and
consideration therein set forth. Witness my hand and official seal:
C I' . 'fu
. ../VL""L~~L CL.I\..1LJ
Notary Public
My commission expires: 8/ ¿ LJ I 09
-- -,~_..- ----.- ",