HomeMy WebLinkAbout928486
STATE -- WYOMING Lease ~ U/-UUlt'-"
Parcel # 170
OIL AND GA~'1 ~E,:ASE Fund Code:~'CS
This indenture of lease entered into by and between the State of Wyoming, acting by
and through its Board of Land Commissioners as LESSOR, and the following as LESSEE:
and Effective Janua
,
-'00669
Craig Settle
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:
Tract 61 (formerly SENE Sec 26) Resurvey Township: 26 North Range: 115 West of the 6th P.M.
County: Lincoln
Acres:, 40.00
'$40.00.
($1. 00 per acre or frac'tion 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 la~d 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 trans,act bµs;iness ~n 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 WYO~, Actin~ and through its
L."ee Signatur:, C' 5 :~ J'7iif B .
Address: :)139 r J' I- ù \ tcn \/" C\ \/
. " ,Vlc!., '
city:Grt.'l1)~C\ li1tate: ffi Zip: 2011l-3'.::¡¡g
Phone: ~~ _. Q03-' c- <¿¡I
Resource issue: Elk crucial winter range
Directo:¡::'
State La~ds/~
\-.'::¡
~Jf.,,:;, .;,
~?Jt::i;"~~;: ,'/,' .
"This lease is issued subject to and conditioned upon lessee's acknowledgement and agreement that any exploration and development activities
undertaken shall:
'etum recorded document to:
Jurnett Oil Company- Land Dept.
Jurnett Plaza - Suite 1500
101 Cherry St. - Unit #9
!ort Worth TX 76102-6881
1) avoid human activity in elk crucial winter range from November 15 to April 30; or
2) shall be subject to approval by the Director of the Office of State Lands & Investments, Director approval will be subject to consultation with
Wyoming Game & Fish Department to consider alternative practices/plan of development that will nrnvirt.. ..¡mil... ....,n"rce protection and mitigation:
RECEIVED 4/17/2007 at 9:17 AM '
RECEIVING # 928486
BOOK: 654 PAGE: 669
JEANNE WAGNER
LINCOLN COUNTY CLERK, KEMMERER, WY
.....-? . -"7 Ii t._
?II (\ND Qr;s. TER..
Secti~n 1. T~E ~ESSEEAGREE0928486 000670
(a) BOND. To lumish a bond with an appro<ed corporate surety company authorized to transact
business in the State 01 Wyorring, or such olher surety as may be acceplable to the lessor, in the
penal sum as reqUIred by Ihe current rules 01 the Slate Board 01 Land Commissioners,
cond¡'lc;\~1 upo"lhe paymenl 01 all rentals and royallles accruing to Ihe lessor under the terms
herCl\i. ana upon the lull cOfT'4)liance 01 all olher lerms and conditions 01 this lease and the rules
and rti~ulallons relallng Iherelo, and elso conditioned on the payment 01 all damages 10 the
surface and improvements t~ereon where the lease covers lands the surface 01 which has been
sold or olhelWlse leased. Such bond or bonds lumlshed priOr 10 Ihe development ollhe lands
conlalned in this lease may be increased In such reasonable amounls as Ihe lessor may decide
upon corrmencement 01 drilling operations and after Ihe discovery 01 oil or gas,
(b)PAYMENTS. To make all payments accruing hereunder to the Office 01 Slate Lands and
Investmenls, 122 West 251h Slreel, Cheyenne, Wyoming 82002.()6()O,
(c)RENTALS. Prior 10 Ihe discovery 01 oil or gas in peying quantities to pay the lessor In
advance, beginning with Ihe ellective date hereol, an annual renlal 01 51,00 per acre or lraction
Ihereof.
Aller the discovery of oil or gas in paying quantities to pay the lessor In advance beginning with
Ihe firsl day of the lease yaar succeeding the lease year In which actual discovery was made, an
annual renlal 0152,00 per acre or fraction Ihereol, unless changed by agreement. Such renlal so
paid lor anyone year shall be credlled on the royalty lor thai year,
Annual renlals on all leases shall be payable In advance lor Ihe first year and eacn year
thereafter. No nollce of renlal due shall be senllo the lessee. lithe rental is nol pa' J on or
belore the data II becomes due, notice 01 delault will be senl to Ihe lessee, and a penalty of 50.50
per acre lor late paymenl will be assessed.
Tha lessee Is nollegally Obligated 10 pay either the renlal or the penally, but II the rental and
penalty are nol paid wilh,n Ihirty (30) days aller Ihe nollce 01 delault has been recelved,lhe lease
willlermnate automatically by operallon of law. Termination 01 the lease shall nol rel;ðve the
lessee 01 any Obligallon Incurred under the lease other than the Obllgallon to pay rental or
penalty. The lessee shall nol be entitled to a credit on royalty due for any penalty paid lor lale
payments 01 renlal on an operallng lease.
(d)ROYAL TIES, The royalties to be paid by lessee are:
(i) On oil, one-sixlh ollhat produced, saved, and sold Irom said land, the same to be delivered
at the wells or to Ihe credit 01 lessor inlo Ihe pipe line to which the wells may be connected,
(ii) On gas, including casinghead gas or other hydrocarbon substances, produced Irom said
land saved and sold or used olllhe premises or In the manufacture 01 gasoline or other products
therefrom, the market value allhe well alone-sixth 01 the gas so sold or used, provided that on
gas sold at the wells, Ihe royalty shall be one-slxlh 01 the amount realized Irom such sale.
(iii) On all olher hydrocarbons of vatue and gaseous subslances and elements produced or
extracted, 'nctuding propane, bulane, sulphur, nilrogen, carbon dioxide, and helium, at such
royalty as shall be mutually delermlned 10 be fair and reasonable,
(iv) For royalty purposes on gas and natural gasoline the value shall be as approved by Ihe
lessor, and In the delerminatlon 01 the value of natural gasoline Ihe laIr cost 01 extracllon shall be
considered as a deductible item; provided, however, Ihat the allowance for Ihe cosl 01 e;Jtractlon
may exceed two-Ihirds 01 the amount or value only on approval 01 the lessor and In no event shall
Ihe pnce lor gas, or natural gasoline, be less than that received by Ihe United Slate of An""ica lor
its royalties from the same field,
(v) Natural gas and oil aclually used lor operating purposes upon the land and, except as to the
ultlmale sale Ihereof, gas or liquid hydrocarbons retumad 10 the sand lor stlmutatlng the
produclI,.,n clo:' or secondary recovery purposes shall be royally Iree. ,
(e) I' ¡SP0SITION OF ROYAL TV OIL AND GAS, To deliver to the lessor, or 10 such Indll/ldual,
fmn C' ::orporatlon ã:; the lessor ",ay daslgnale, all royalty 011, gas, or other kindred hydrocarbons,. '
free of charge on the premises where produced, or, al the optlonoflhe l~sSor,end¡¢lIé,Y,Q'tsald '.
royallles in kind, the lessee ugrees 10 pay the lessor-the flaldmi;rl<el prjCIl or Ílalu¡j~1.1i'iOyalty ".
oil, gas, or olher kindred hydrocarbons produced and'sailed: :;, ". .,ò h, . ,:,'
When the lessor elects 10 leke its royally 011, gas, or other hydrocarbons In kind such as Oil, gas,
or other kindred hydrocarbons shall be good merchanlable 011, gas, or other kindred
hydrocarbons. The lessee shall il necessary lumish storage lor royalty oillree 01 charge lor thirty
(30) days after Ihe end of the calendar month In which the 011 is produced, upon Ihe leased
premises, or al the such place as the lessor and the lessee may mutually agree upon, provided,
that the lessee shall nol be held liable lor loss or destruction 01 royalty 011 so stored lrom causes
beyond his control.
The Iree slorage 01 oil, as herein provided, shall apply only as long as Ihe said ollis the property
ollhe lessor.
(I) MEASUREMENTS OF PRODUCTION. To gauge, measure and correct lor temperature all
production Irom said lands in conlormance with the rules and regulations adopled by the Board 01
Land Convnissioners and report said production to the lessor In accordance therewith.
To keep books, records, and reports pertaining to the production Irom the land herein 1'.18;ed as
well as those pertaining to the production from oflsel wells operated by Ihe lessee, his operator,
or sub-lessee on other lands, which shall be opened al all limes lor Ihe inspecllon ", any duly
authorized agent 01 the lessor.
To lumlsh the lessor with ortginal pipe line reports showing Ihe day, month, year, amount,
gravities, and temparalures of all 011 run and wilh monthly reports showing the month, year,
amount, and price 01 all gas and natural gas gasoline and other products produced and sold lrom
Ihe land herein leased, and the amount 01 gas returned 10 the sand,
(g) MONTHLY PAYMENTS AND STATEMENTS. Unless the time 01 paymenl is olherwlse
extended by the Office of State Lands and Investmenls \0 make paymenl on or be,lore the
twentieth (20th) day 01 the calendar month succeeding the month of producllon and removal and
sale of olt and gas from said land, and 10 lurnish swom monthly statements therewith showing in
delall the quanllty and quality ollhe production (per welt il required where practical) Ironllhe land
hereby leased, and the quantily and quallly of the production (per well where practical frorn ollset
welts upon comenng or contiguous land operated by Ihe lessee, his operator or sub·leusee and
such other Information as may be called.for in the lorm or report prescribed by lessor,
(h) WELLS TO BE DRILLED. To drill and operate ellectively all wells necessary to reAsonably
ollsel wells upon and produclion from adjoining lands,
To drilt such addillonal wells at such times or places as are necessary and essential to Ihe
proper developmenl and commercial production ollhe 011 and gas contenl 01 said land.
(I)LOG OF WELLS AND REPORTS, To keep a log, In the lorm approved by Ihe lessol, 01 each
well drilled by the lessee on the lands herein leased, showing the strata and character 01 the
lormatlons, water sands and mineral deposits penetrated by the drill, amounl of casing, ,; ze and
where sel, and such other Inlormation as Ihe tessor may require which log or copy thereol shall
be lumlshed to Ihe lessor,
To file progress reports, in the lorm prescribed by the lessor, al the end 01 each thirty (30) day
period while each well is being drtlled,
To ;','e a",,,,.II)', or at such limes as the lessor may require, maps showing the development of
tho S'¡, cture bnd the location 01 all wells, pipe lines and other works used In connection with the
opera:,ons of the lessee upon said land.
To make such olher reportr, pertaining to the producllon and operations by the lessee on said
land, and report such olher Inlormation as may be possessed by the lessee on the wells,
production or operations 01 others on lands on the same gaologlc structure that may be 01
if11)ortance In ellecting proper development and operation ollhe lands herein laased, as may be
called lor by Ihe lessor. All logs, maps. and reports shall be submitted In duplicate and Ihe Office
01 Slate Lands and Inveslmenls may waive such reports as conditions may warrant.
mPRODUCTION. To operale the wells ùpon the land herein laased In a compelent and effident
manner in an endeavor to recover alllhe 011 and gas econorrically possible Irom said land and to
prevenl Ihe under drainage ollhe 011 and gas thereunder by wells operated by Ihe lessee or
others on cornering or conllguous lands 10 those leased herein. All plans or methods for the
purpose 01 stimulating or Increasing production on lands herein leased other than those In
common use shall flral ba presented to ¡he lessor lor approval belore being' put into actual
operallon,
No production agreemenls limiting, reslricting, prorating, or otherwise allecllllg the
naturalproduction from said land shall he entered Into by the lessee, nor shall the les! H limit,
reslrlct, or prorate the natural production Irom said land in any way or In any event, except with
Ihe consent,n writing 01 tha lessor firsl had an obtained.
(k)SUSPENSION OF OPERATIONS. Should any well drilled upon lands covered by ti,l. lease
oblaln producllon 01 oil, gas, or olher hydrocarbons in paying quantities and IItheússee is
unable to establish a satisfactory market lor Ihe 011, gas or hydrocarbons produced from ;aid well,
Ihe lessee may apply lor and the lessor may grant permission lor the suspension 01 production
operations until such times as a sallslactory market lor the product Irom said well can be
developed. During the lime any such suspension of operations Is In effect, Ihe lessee shall
continue 10 pay Ihe annual renlal 01 52.00 per acre or lraclion Ihereof provided by (c) above, and
Ihis lease shall remain in effecl as Ihough 011 or gas was being produced Irom said lar,ds,
(I)DILlGENCE-PREVENTiON OF WASTE. To exerdse reasonabla dlligance In drilling,
producing, and operating 01 wells on the land covered hareby, unless consent to suspend
operations le~arily is granled by Ihe lessor: to carry on all operations hereunder In a good and
workmenllke manner in accordance wilh approved methods and practice, having due regard lor
the prevention of wasle 01 oil and gas, or Ihe enlrance 01 waler 10 Ihe 011 or gas bearing sands or
strala 10 the deslructlon or Injury 01 such deposits, Ihe preservation and conservation ollhe
property for luture productive operetlons end 10 the health and salety 01 workmen and er '.¡¡Ioyees:
to plug securely In an approved manner any well belore abandoning ii, and not 10 abandon any
well without permss,on ollhe lessor, not 10 drill any well within two hundred (200) leel 1)1 any 01
Ihe outer boundaries 01 the land covered hereby, unless Ie nst drainage by wells
drilled on lands adjoining less than 200 leet Irom the property lines Ihereol: 10 conduct all
operetions subject to the Inspection 01 Ihe lessor; 10 carry out at the lessee's expense all
reasonable orders and requirements 01 Ihe lessor relative 10 Ihe prevention of waste and
preservation 01 the property and Ihe health and salety 01 workmen Indudlng Ihe replanling and
reseeding 01 drilling sites and other areas dlslurbed by drilling operations and on lallure ollhe
lessee so 10 do Ihe lessor shall have Ihe right. togelher with other recourse herein provided, 10
enter on Ihe property 10 repair damage or prevenl waste al the lessee's expense; to abide by and
conform to v~lid ~pplieablê rêaulalion~ Þrê~eribêd to rêimbu,cê the Ollllle' ollhe sur/ace, :1 olher
Ihan the lessor, or lessee 01 grazing rights thereof lor actual damages therelo and Injury 10
Improvemenls Ihereon, provided, that the lessee shall nol be held responsible lor acts 01
providence or actions beyond his control.
(m)TAXES AND WAGES·FREEDOM OF PURCHASE. To pay, when due all taxes lawfully
assessed and levied under Ihe laws ollhe Slate 01 Wyoming upon improvements, 011 and gas
produced Irom the land hereunder, or other rights, property or assets ollhe lessee, to accord all
workmen and employees cOf11)lele Ireedom 01 purchase, and 10 pay all wages due workmen and
employees In conlormance with the laws 01 the Stale 01 Wyoming.
(n)ASSIGNMENTS OF LEASE·PRODUCTION AGREEMENTS. Not 10 assign this lease or any
Interest therein, nor sublelany portion 01 the leased premises, excepl with the consent In writing
01 the lessor first had and oblalned,
All overriding royalties to be valid, must have the approval of the Board or by the Office 01 Stale
Lands and Inveslments when authority to do so has been delegaled by Ihe Board and will be
recorded wilh the lease. The Board reserves the nght 01 disapproval 01 such overriding royallles
when In its opinion they become excessive and hence are detrtmenlallo the proper development
ollhe leased lands.
(o)DELlVER PREMISES IN CASE OF FORFEITURE, To deliver up \he leased premises, with all
permanenllmprovements thereon, In good order and condllion in case ollorfeiture of Ihls lease,
bullhls shall not be construed to
prevenl the removal, alteration or renewal of equlpmenl and improvements In the ordinary
course of operations.
Section 2, THE LESSOR EXPRESSLY RESERVES:
'L (a) Therighi tò lease sell, or otherwise dtspose 01 the surface 01 thè'lan'ditinbraced'Wlthln this
lease under existing laws or laws hereafter enacted, and in accordance with Ihe rules ollhe
Board 01 Land Commissions Insolar as the surface is not necessary lor the use 01 the lessee in
the conduct 01 operations hereunder,
(b)The righllo lease, sell, or otherwise dispose 01 olher mineral or subsurface resources not
covered by the lease, In accordance wilh the applicable laws and the rules ollhe Board 01 Land
Commissioners.
(c)From the operation 01 this lease, Ihe surface lands heretolore granled lor righls-ol-way and
easements and reserves the righl to granl such olher rights-of-way and easements as provided by
Ihe statutes 01 the State 01 Wyoming, as long as such rights-ol-way and easements do not conflict
wilh the operations lor 011 end gas on Ihe land herein leased.
(d)The righl to reluse 10 commit Ihe leased lands to a unll plan 01 development if Ihe Board finds
such action would Impair Ihe lesso~s reserved right 10 lake Its royalty gas in kind and to purchase
all other gas allocaled to the leased lands a provided In Section 3(e)below,
(e)The right to alter or modify the quantity and rate 01 production to Ihe end Ihel waste may be
eliminated or that production may conlorm 10 the lessee's lair share 01 allowabte production under
any system 01 Slate or National curtailment and proration authorized by law,
(1)ln addition to Its righl to lake lis royalty gas In kind, the lessor reserves Ihe righl and option to
purchase all olher gas produced lor sale or use offlhe leased lands. This option shall be
exercised only II the Board finds that Ihe lessee has received and Is willing 10 accept a bona fide,
oller Irom a purchaser who Intends 10 sell or lransport the gas Into Interslale commerce and that
one or more Jnlrastate purchasers (I.e., purchasers who will use, consume, or sell the gas lor use
or consumption enllrely wilhin the State 01 Wyoming) are willing and able to purchase Ihe gas
;, upon terms reasonably cOl\"4>arable to and alleas! as favorable to Ihe lessae as Ihose ollered by
. the inlerslale purchaser. The Board shall waive Ihis opllon and permll an interstale sale il il finds
Ihat no Intrastate purchaser Is willing and able to purchase the gas upon terms which are
reasonably comparable to and at least as lavorable to the lessee, As a condition to such waiver,
a sallslactory agreement may be entered Inlo by which the production ollis royalty gas may be
delerred until It can be produced and sold lor consumption and use entirely wilhin Ihe Stale of
Wyoming.
Seclion 3. APPRAISAL OF IMPROVEMENTS. The lessee shall have the right subject 10 the
provisions 01 Tille 36, as to Slale and Slate School Lands, and Tille 11, as to Slate Loan and
Investments Board Lands, W,S. 1977, 10 remove any Improvements owned by lessee within a
reasonable time after the larminatlon 01 this laase. Lessee agrees thai any such improvemenls
nol removed within a reasonable time after termination 01 this lease shall be disposed 01 pursuant
to the above statutes,
Section 4, FORFEITURE CLAUSE, The Board shall have the power and authority 10 cancel
leases procured by lraud, deceit, or misrepresentallons, or lor the use ollhe lands lor unlawful or
Illegal purposes, or lor the violallon ollhe covenanls 01 the lease, upon proper prool thereol, In
the evenl ~hal the lessee shall'delault In the performence or observance of any 01 the tarms,
covenants, and stipulations hereol, or 01 the general regulations promulgaled by Ihe Board 01
Land Commissioners and In lorce on the date hereol, the lessor shall serve notice 01 such lallure
or delault either by personal service or by certified or registered mall upon the lessee. and II such
failure or delault continues lor a period 01 thirty (30) days alter the service 01 such notice, then
and in that evenl the lessor may, at lis option, declare a forfeilure and cancel this lease,
whereupon all rights and privileges, Obtained by the lessee hereunder shalllermlnale and cease
and the lessor may re-enter and take possession 01 said premises or any part thereol. These
provisions shall not be construed 10 prevent the exercise by lessor any legal or equllable remedy
which the lessor might otherwise have, A waiver 01 any particular cause or lorfeiture shall not
prevent the cancellallon and lorfalture 01 this lease by any other cause ollorfeiture, or lor the
same cause occurring at any other lime.
Section 5, RELINQUISHMENT AND SURRENDER. This lease may be relinquished and
surrendered 10 lessor as to all or any legal subdivision 01 said lands as loIlows:
(a) II no operations have been conducted under the lease on Ihe land 10 be relinquished, the
lessee shall file with the State Land Board and Stale Loan and Investment Board, a written
relinqulshmenl or surrender, duly signed and adcnOVo4edgad and slaling therein that no operations
have been conducted on the land. The relinquishment so filed shall become effective on \he date
and hour 01 receipt thereolln Ihe office ollhe Director or at some later dale, II such be .so
specified by Ihe lessee therein, If the said relinquishment falls to stale thaI no operations have
been conducted, the effective date 01 relinqulshmenl shall be the date the relinquishment is
approved by Ihe Board,
(b) If operations have been conducted under Ihe lease on land proposed to be relinquished, the
lessee shall give sixty (60) days nolice and shall file with the Director e written relinquishmenl or
surrender duly acknowledged and stating therein that operations have been conducted on the
land. The relinquishment shall not become effective untillhe land and Ihe wellS thereon shall
have been placed In condition acceptable to lessor and shall have been approved by the Slate Oil
and Gas Supervisor,
All rentals becoming due prior to a surrender or relinquishment becoming effective, shall be
payable by lessee unless paymenllhereof shall be waived by lessor, A relinqulshmenl having
become effective there shall be no racourse by lessee and the lease as 10 the relinquished lands
may not be relnslated,
IT I11JU
2 Z 8 j J LfiG2
::; , ;r;; ;'..J,;~~lMn
""" '
.. ;: " ""! =:':~. 't J. S