HomeMy WebLinkAbout927435
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STATE
OIL AND
WYOMING
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Lease ~ U {-UU1 t'u
Parcel # 179
Fund Code: CS
This indenture of lease
and through its Board of Land
000506
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 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:
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Lot 8 Section: 30 Resurvey Township: 23 North Range: 117 West of the 6th P.M.
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County: Lincoln
Acres: 46.59
$47.00
($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 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 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 a¡l 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 through its
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Lessee Signature: ~h-4 . ~/24~¿,;' Á~/ By:
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City: c£&ðé State: ¿i/Y Zip: /f(L7/,f
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Before any road, building, drilling pad construction, building construction or other earth moving activities commence, plans for such activities (including maps);rtiust 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 safeg'uarded 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 9:49 AM
RECEIVING # 927435
BOOK: 650 PAGE: 506
JEANNE WAGNER
LINCOLN COUNTY CLERK, KEMMERER, WY
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, O~2t'i'435 0005
1f.Gli'tn:t'Ht'II;t.¥SEE AGREES: 07
..~ a!Jrro. 'MuMIsf\ a bond with an approved corporate surety cOl11>any authorized to transact
business in the State of Wyoming, or such other surety as may ba acceptable to the lessor, in the
penal sum as required by the current rules of the State Board of Land Corrmissioners,
conditioned upon the payment of all rentals and royalties accruing to the lessor under the terms
hereof, and upon the full c~liance of all other lerms 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 Il11>rovements thereon where the lease covers lands the surface of which has been
sold or otherwise leased. Such bond or bonds fumlshed prior to the development of the lands
contained in this lease may be Increased in such reasonable amounts as the lessor may decide
upon corrmencement of drilling operations and after the discovery of oil or gas.
(b)PAYMENTS. To make all payments accruing hereunder to the Office of State Lands and
Investments, 122 West 25th Street. Cheyenne. Wyoming 82002.Q600.
(c)RENTALS. Prior to the discovery of oil or gas in paying quantities to pay the lessor In
advance, beginning with tha effective date hereof, an annual rental of 51.00 per acre or fraction
thereof.
After the discovery of oil or gas in paying quantities to pay the lessor In advance beginning with
the first day of the lease yaar succeeding the lease year In which actual discovery was n>ade, an
annual rental of 52.00 per acre or fraction thereof, unless changed by agreement. Such rental so
paId for anyone year shall be credited on the royally for that year.
Annual rentals on all leases shall be payable in advance for the first year and euch year
thereafter. No notice of rental due shall be sent to the lessee. If the rental Is not paid on or
before the date II becomes due, notice of defaull will be sent to the lessee, and a penally of 50.50
per acre for late payment will be assessed.
The lessee is not legally obligated to pay ellher the rental or the penally, but if the rental and
penally are not paid within thirty (30) days after the nolice of defaull has been received, the lease
WIll terminate automatically by operation of law. Termination of the lease shall not relieve the
lessee of any obligation incurred under the lease other than the obligation to pay rental or
penally. The lessee shall not be entitled to a credit on royally due for any penally paid for late
payments of rental on an oparating lease.
(d)ROYAL TIES. The royalties to be paid by lessee are:
(i) On oil, one-sixth 01 that 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 the manufacture of gasoline or other products
therefrom. the market value at the well of one-sixth of the gas so sold or used, provided that on
gas sold at the wells, the royally shall be one-sixth of the amount realized from such sale.
(Iii) On all other hydrocarbons of value and gaseous substances and elements produced or
extracted, including propane, butane, sulphur, nitrogen, carbon dioxide, and helium, at such
royally a. shall be rrutually determined to be fair and reasonable.
(iv,1 -or royally purposes on gas and natural gasoline the value shall be as approved by the
lesso... and in the determination of the value of natural gasoline Ihe fair cost of extraclion shall be
considered as a deduclible item: provided, however, that the allowance for the cosl of extraclion
may exceed two-thirds 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 the United State of America for
ils royallies from the same field.
(v) Natural gas and oil actually used for operating purposes upon the land and, except as to the
ultimate sale thereof, gas or liquid hydrocarbons returned to the sand for stlrrulating the
production of oil 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 corporalion as the lessor may designate. all royally oil, gas, or other kindred hydrocarbons,
free of charge on the premises where produced, or, at the option of the lessor, and In lieu of said
royallles In kind, Ihe lessee agrees to pay the lessor the field market price or value of all royally
oil, gas. or other kindred hydrocarbons produced and saved.
When the lessor elects to take its royalty 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 the end of the calendar month in which the 011 Is produced, upon th~ lðased
premises, or al the such place as the lessor and the lessee may mutually agree upon, provided,
that the lessee shall not be held liable for loss or deslruclion of royalty oil so stored from causes
beyond his conlrol.
The free storage 01 oil, as herein provided, shall apply only as long as the said oil is the property
of the lessor.
(f) MEASUREMENTS OF PRODUCTION. To gauge, measure and correct for temperature all
production from said lands in conformance with the rules and regulations adopted by the IJoard of
Land Corrmissioners and report said production to the lessor in accordance therewith,
To keep books, records, and reports pertaining to the production from the land herein lðased as
well as those pertaining to the production from offset wells operated by the lessee, his operator,
or sub-lessee on other lands, which shall be opened at all limes for the Inspection of any duly
authonzed agent of the lessor.
To furnish the lessor with original pipe line reports showing the day, month, year, amount,
gravities, and tel11>eratures of all 011 run and with monthly reports showing the mor.th, year.
amount, and price of all gas and natural gas gasoline and other products produced and !.old from
the land herein leased, and the amounl of gas returned to the sand,
(g) MONTHLY PAYMENTS AND STATEMENTS. Unless Ihe time of payment Is olherwise
extended by the Office of State Lands and Investments to make payment on or beiore the
twenlieth (20th) day of the calendar month succeeding the month of production and removal and
sale of oil and gas from said tand, and to fumish sworn monthly statements therewith showing in
detail the quanlity and quality of the production (per well if required where practical) from the land
hereby leased, and the quantity and quality oflhe production (per well where practical) frL'", offset
wells upon cornering or conliguous land operated by the lessee, his operalor or sub-lessee and
such other information as may be called for on the form or report prescribed by lessor.
(h) WELLS TO BE DRILLED. To drill and operate effectively all wells necessary 10 reasonably
offset wetis upon and production from adjoining lands.
To drill s~ch ~dditional wells at such times or places as are necessary and essential to the
prope. development and convnercial produclion of the oil and gas content of said land.
(i)LOG OF WELLS AND REPORTS. To keep a 10g,In the form approved by the lessor, of each
well drilled by Ihe lessee or the lands herein leased. showing the strata and character of the
formations, water sands and minerai deposlls penetrated by the drill, amounl of casing, size and
where set, and 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 end of each thirty (30) day
period while each well is beIng drilled.
To file annually. or at such times as the lessor may require, maps showing the development of
the structure and the location of all wells, pipe tines and other works used in connection with Ihe
operations of Ihe 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.
produclion or operations of others on lands on the same geologic structure that may be of
il11>ortance 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 submitled In duplicate and the Office
of State Lands and Investments may waive such reports as conditions may warranl.
O)PRODUCTlON. To operate the wells upon the land herein leased In a cOl11>etent and effiCIent
manner in en endeavor to recover all the oil and gas economically posslbte from said land and to
prevent the under drainage of the oil and gas thereunder by wells operated by the Ipssee or
others on cornen~ or contiguous lands to those leased herein. All plans or methods for the
purpose of stirrulatlng or increasing production on lands herein leased other than I,hose In
corrmon use shall first be presented to the lessor for approval before being put Into actual
operation.
No produclion agreements tlmitlng, restricling, prorating, or otherwise affecting the
natural production from said land shall be entered Into by the lessee, nor shall the lessee limit,
restrict, or prorate the natural production from said land In any way or in any event, except with
the consent In writing of the lessor first had an obtained.
(k)SUSPENSION OF OPERATIONS. Should any well drilled upon lands covered by this lease
obtain production of Oil, gas, or other hydrocarbons In paying quantities and If the IIIssee Is
unable to establish a satisfactory market for the oil, gas or hydrocarbons produced from said well,
the lessee may apply lor and the lessor may grant permission for Ihe suspension of produclion
operations until such limes as a salisfactory market for the product from said wel! can be
developed. During Ihe time any such suspension of operations Is In effect, the les..ee shall
continue to pay the annual rental of 52.00 per acre or fraction thereof provided by (c) a~ove, and
this lease shall remain In effect as though 011 or gas was being produced from said lands.
(I)DILlGENCE-PREVENTION OF WASTE. To exercise reasonable diligence In drilling,
producing, and operating of wetis on the land covered hereby, unless consent to suspend
operations tel11>Drarily is granted by the lessor: to carry on all operations hereunder in a good and
workmanlike manner in accordance with approved methods and practice, having due ro!)ard for
the prevention of waste of oil and gas, or the entrance of water to the oil or gas bearing sands or
strata to the destruction or Injury of such deposits, the preservalion and conservation of the
property for future productive operations and to the health and safety of worIcmen and en-pIoyees:
to plug securel:' in an approved manner any well before abandoning It, and not to abandon any
well \'.,Ihout permission of Ihe lessor, not to drill any well wilhin two hundred (200) feet of any of
the outer boundaries of the land covered hereby, unless alnst drainage by wells
drilled on lands adjoining less than 200 feet from Ihe property lines thereof: to conducl all
operations subject 10 the Inspection of the lessor: to carry out at the lessee's expense all
reasonable orders and requirements of the lessor relative to the prevention of wasle and
preservation of the property and the health and safety of workmen InCluding the replanting and
reseeding of drilling sites and other areas disturbed by drilling operations and on failure of the
lessee so to do the lessor shall have the right, together with other recourse herein provided, to
enter on the property to repair damage or prevent wasle at the lessee's expense: to abIde by and
conform 10 valid aøølicablê 'êoulations ørê~eribM 10 rêimburu Ihe OWl'\er ollhe sur/eee, :1 other
than the lessor, or lessee of grazing rights thereof for actual damages thereto and injury to
Improvements thereon, 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 State of Wyoming upon Il11>rOvements, oil and gas
produced from the land hereunder, or other rights, property or assels of the lessee, to accord all
workmen and el11>loyees cOl11>lete 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
Interest therein, nor sublet any portion of the leased premises. except wilh Ihe consent In writing
of the lessor first had and obtained.
All overriding royalties to be valid, rrust have the approval of the Board or by the Office of State
Lands and Investments when authority to do so has been delegated by the Board and will be
recorded with Ihe lease. The Board reserves the right of disapproval of such overriding royalties
when In its opinion they become excessive and hence are detrimental to the proper development
of the leased lands.
(o)DELlVER PREMISES IN CASE OF FORFEITURE. To deliver up the leased premises, with all
permanent Improvements thereon, in good order and condition In case of forfeiture of this lease,
but this shall not be construed to
prevent the removal, alteration or renewal of equipment and il11>rOvements 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 this
lease under existing laws or laws hereafter enacted, and in accordance wilh the rules of the
Board of Land Corrmissions Insofar as the surface is not necessary for the use of the lessee in
the conduct of operations hereunder. .
(b)The righlto lease, sell, or otherwise dispdse of other 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 rtghts-of-way and
easements and reserves the right to 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 nol conflict
wilh the operations for oil and ,gas on the land herein leased.
(d)The right to refuse to commit the leased lands to a unit plan of development if the Board finds
such action would Impair the lessø~s reserved right to take Its royalty gas in kind and to purchase
all other gas allocated to Ihe leased lands a provided in Section 3(e)below.
(e)The right to alter or modify the quantity and rate of production 10 the end that waste may be
eliminated or that producllon may conform to the lessee's fair share of allowable production under
any system of State or National curtailment and proralion authorized by law.
(f)ln addition to its right to 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 opllon shall be
exercised only If the Board finds that the lessee has received end is willing to accept a bona fide
offer from a purchaser who Intends to sell or transport the gas Inlo interstate corrmerce and that
one or more Intrastate purchasers (i.e., purchasers who will use, consume. or sell the gas for use
or consumption enlirely within the State of Wyoming) are willing and able to purchase the gas
upon terms reasonably cOl11>arable to and at least as favorable to the lessee as those offered by
the interstate purchaser. The Board shall waive this option and permit an interstate sale if It finds
that no Intraslate purchaser is willing and able to purchase the gas upon terms which are
reasonably comparable to and at least as favorable to the lessee. As a condition to such waiver,
a sallsfactory agreement may be enlered Into by which the production of its royalty gas may be
deferred until It 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 subject to the
provisions of Title 36, as to State and State School Lands, and Tille 11, as to State Loan and
Investments Board Lands, W.S. 1977, to remove any Il11>rovements owned by lessee within a
reasonable lime after the termination of this lease. Lessee agrees that any such improvements
not removed within a reasonable time after termination of this lease shall be disposed of purwanl
10 the above statutes.
Section 4. FORFEITURE CLAUSE. The Board shall have the power and authority to cancel
leases procured by fraud, deceit. or misrepresentations, or for the use of the lands for unlawful or
Illegal purposes, or for the violation of the covenants of the lease, upon proper proof thereof, In
the event that the lessee shall default In the performance or observance of any of the terms,
covenants, and slipulatlons hereof. or of the general regulations promulgated by the Board of
Land Commissioners and In force on the date hereof, the tessor shall serve notice of such failure
or default either by personal service or by certified or registered mail upon the lessee, and if such
failure or default continues for a period of thirty (30) days after the service of such notice, Ihen
and In that even' the lessor may, at Its option, declare a forfeiture and cancel this lease,
whereupon all rights and privileges, 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 exercise by lessor any legal or equitable remedy
which the lessor might otherwise have. A waiver of any particular cause or forfeiture shall not
prevent the cancellation and forfeiture of this lease by any other cause of forfeiture, or for the
same cause occurring at any other lime.
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 the land to be relinquished, the
lessee shall file with the State Land Board and State Loan and Investment Board, a wrilten
relinquishment or surrender, duly signed and acknO'oMedged and stating therein that no operalions
have been conducted on the land. The relinquishment so flied shall become effective on the date
and hour of receipt thereof In 'he office of the Director or at some later dale, If such be so
specified by the lessee therein. If the said relinquishment fails 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 operations have been conducted under the lease on land proposed to be relinquished, the
lessee shall give sixty (60) days notice and shall file with the Director a written relinquishment or
surrender duly aCknowledged and stating therein that operations have been conducted on the
land, The relinquishment shall not become effective until the land and the wells thereon shall
have been placed In condilion acceptable to lessor and shall have been approved by the State Oil
and Gas Supervisor.
All rentals becoming due prior to a surrender or relinquishment becoming effecllve, shall be
payable by lessee unless payment thereof shall be waived by lessor. A relinquishment having
become effective there shall be no recourse by lessee and the tease as 10 Ihe relinquished lands
may not be reinstated.
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09Ztì~~ÀtfE OF WYOMING )
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COUNTY OF CAMPBELL )
000508
Before me on the 2nd day of February, 2007, John 1. 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:
(~0LA~&tlu~a,~
Notary Public
My commission expires:
6 /2 -'-C / 0'1
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