HomeMy WebLinkAbout931095
RECEIVED 7/9/2007 a
RECEIVING # 931095
BOOK: 665 PAGE: 98
JEANNE WAGNER
LINCOLN COUNTY CLERK, KEMMERER, WY
>M
LEASE NO. VoJ '00379
PARCEL NO. OTC
Form Approved by the Board
and Effective January 6, 1998
FUND Common School
STATE OF
OIL AND GAS
WYOMING
LEASE FORM
QJ1'fj·1}91D
'i'... -'.. ~ r~ r...:,."'ì
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
Lane Lasrich
, as lessee.
WITNESSETH:
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 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:
87.41 Acres
Lots 10,14
Section 7, Township 22 North, Range 117 West 6th P.M.
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 and 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 and Investments or his designated
representative as soon as practicable after their discovery.
County
Lincoln
Total Acres
87.41
Advance Rental $
88.00
1/1
, !
($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, buildings, plants,
-7 waterways, roads, communication lines, pipe lines, reservoirs, tanks, pumping stations, or other
facilities necessary to the proper conduct of operations thereunder.
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, 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 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, exec~tors, 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 August , 20~ A.D.
LESSOR, STATE OF WYOMING,
'.I' S
-'. '
:.;: : \.
-. .
to" .
0'.
-.". .
'0/ . .
/0.,
1,1' ,····,'··t,
,..~~\-,., \...r;': U,~~"
./:~:::~ ~~~r~J": .. f'
. ,..
Address: 2597 E¡:¡sr Rricigpr Rluci
City: Sandy State :Utah
(Zip) R40Q3
Telephone ( 801) 942-0525
.. .
. . , ~ ~ " : ,
OIL AND (
Section 1. THE LESSEE AGREES:
(a) BOND. To furnish a bond with an approved corporate surety company authorized to
transact business In the State 01 Wyoming. or such other surety as may be acceptable to the
lessor, In the penal sum as required by the current rules of the State Board 01 Land
Commissioners, conditioned upon the payment of all rentals and royalties accruing to the
lessor under the terms hereof, and upon the lull compliance 01 all other terms and conditions
01 this lease and the rules and regulations relating thereto, and also conditioned on the
payment 01 all damages to the surface and Improvements thereon where the lease covers
lands the surface 01 which has been sold or otherwise leased. Such bond or bonds lurnished
prior to the development 01 the lands contained In this lease may be increased in such
reasonable amounts as the lessor may decide upon commencement 01 drilling operations and
after the discovery 01 011 or gas.
(b)PAYMENTS. To make all payments accruing hereunder to the Office 01 State Lands and
Investments, 122 West 25th Street. Cheyenne, Wyoming 62002-0600.
(c)RENTALS. Prior to the discovery 01 011 or gas in paying quantities to pay the lessor in
advance. beginning with the effective date hereol, an annual rental 01 $1.00 per acre or
lractlon thereol.
After the discovery 01 011 or gas In paying quantities to pay the lessor in advance beginning
with the first day 01 the lease year succeeding the lease year in which actual discovery was
made, an annual rental 01 $2.00 per acre or lractlon thereol, unless changed by agreement.
Such rental so paid for anyone year shall be credited on the royalty lor that year.
Annual rentals on all leases shall be payable in advance lor the first year and each year
thereafter. No notice 01 rental due shall be sent to the lessee. If the rental Is not paid on or
before the date It becomes due, notice 01 delault will be sent to the lessee, and a penalty 01
$0.50 per acre for late payment will be assessed.
The lessee Is not legally obligated to pay either the rental or the penalty, but If the rental and
penalty are not paid within thirty (30) days after the notice 01 delault has been received. the
lease will terminate automatically by operation 01 law. Termination 01 the lease shall not
relieve the lessee 01 any obligation Incurred under the lease other than the obligation to pay
rental or penalty. The lessee shall not be entitled to a credit on r.oyalty due for any penalty
paid for late payments 01 rental on an operating lease.
(d)ROYAL TIES. The royalties to be paid by lessee are:
(i) On 011, one-elghth 01 that produced. saved, and sold lrom 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 manulacture 01 gasoline or other
products therefrom, the market value at the well 01 one-eighth 01 the gas so sold or used,
provided that on gas sold at the wells, the royalty shall be one-eighth of the amount realized
from such sale.
(ill) 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
royalty as shall be mutually determined to be fair and reasonable.
(iv) For royalty purposes on gas and natural gasoline the value shall be as approved by the
lessor, and In the determination of the value 01 natural gasoline the fair cost of extraction shall
be considered as a deductible Item; provided, however. that the allowance for Ihe cost of
extraction may exceed two-thirds 01 Ihe amounl 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
States 01 America for Its royalties Irom the same field.
(v) In cases where natural gas Is produced and the natural gas gasoline extracted therefrom
only one royalty shall be paid. except In Ihe event the residue or dry gas shall be marketed II
shall then constitute a separate commodity and a royalty shall be paid thereon as above
provided.
(vi) Natural gas and oil actually used lor operating purposes upon the land and, except as to
the ultimate sale thereof, gas or liquid hydrocarbons returned to the sand for stimulating the
production 01 oil or secondary recovery purposes shall be royally Iree.
(e) DISPOSITION OF ROYALTY OIL AND GAS. To deliver to the lessor, or to such
Individual, firm or corporation as the lessor may designate, all royalty oil. gas. or other kindred
hydrocarbons, free 01 charge on the premises where produced; or, at the option 01 the lessor.
and In lieu 01 said royalties In kind, the 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 011, gas. or other hydrocarbons In kind such as oil,
gas, or other kindred hydrocarbons shall be good merchantable 011, 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 ollis produced, upon the
leased premises, or at 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 destruction 01 royally oil so stored
from causes beyond his control.
The Iree storage of oil, as herein provided, shall apply only as long as the said ollis the
property of Ihe lessor.
(I) MEASUREMENTS OF PRODUCTION. To gauge. measure and correct lorterrperature all
production from said lands In conformance with the rules and regulations adopted by the
Board 01 Land Commissioners and report said production to the lessor In accordance
therewith.
To keep books, records, and reports pertaining 10 the production Irom the land herein leased
as well as those pertaining to the production Irom offset wells operated by the lessee, his
operator, or sub-lessee on other lands, which shall be open at all times lor the Inspection by
any duly authorized agent 01 the lessor.
To lumlsh the lessor with original pipe line reports showing the day. month, year, amount.
gravities, and temperatures 01 all 011 run and with monthly reports showing the monlh, year,
amount, and price 01 all gas and natural-gas gasoline and other products produced and sold
Irom the land herein leased, and the amount 01 gas returned to the sand.
(g) MONTHLY PAYMENTS AND STATEMENTS. Unless the time 01 payment Is otherwise
extended by the Office 01 State Lands and Investments, to make payment on or belore the
twentieth (20th) day 01 the calendar month succeeding the month 01 production and removal
and sale 01 oil and gas from said land. and to lumlsh sworn monthly statements therewith
showing In detail the quantity and quality 01 the production (per well If required where
practical) from the land hereby leased, and the quantity and quality 01 the production (per well
where practical) Irom offset wells upon cornering or contiguous land operated by the lessee.
his operator or sub-lessee and such other inlormatlon as may be called lor In the lorm 01
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 additional wells at such times or places as are necessary and essential to the
proper development and commercial production 01 the 011 and gas content 01 said land.
(i}LOG OF WELLS AND REPORTS. To keep a log, In the lorm approved by the lessor. 01
each well drilled by the lessee on the lands herein leased. showing the strata and character of
the lormatlons. water sands and mineral deposits panetrated by the drill, amount 01 casing,
size and where set. and such other Inlormatlon as the lessor may require which log or copy
thereol shall be lumlshed to the lessor.
To file progress reports, in the form prescribed by the lessor, at the end of each thirty (30)
day pertod while each well is being drilled.
To file annually, or at such times as the lessormay require, maps showing the development
of the structure and the location of all wells, pipe lines and other works used in connection
with the operations 01 the 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,
production or operations 01 others on lands on the same geologic structure that may be 01
Importance 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 submitted in duplicate and the
Office of State Lands and Investments may waive such reports as conditions may warrant.
OjPRODUCTION. To operate the wells upon the land herein leased In a competenl and
efficient manner In an endeavor to recover all the oil and gas economically possible Irom said
land and to prevent the undue drainage of the 011 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 stimulating or Increasing production on lands herein leased other
than those In common use shall first be presented to the lessor for approval before being put
Into actual operation.
No production agreements limiting, restricting, 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 01 the lessor first had and obtained.
(k}SUSPENSION OF OPERATIONS. Should any well drilled upon lands covered by this
lease obtain production 01 oil, gas, or other hydrocarbons In paying quantities and If the
lessee Is unable to establish a satisfactory market for the 011, gas or hydrocarbons produced
from said well, the lessee may apply lor and the lessor may grant permission for the
suspension of production operations until such time as a satisfactory market for the product
from said well can be developed. During the time any such suspension of operations Is in
effect, Ihe lessee shall continue to pay the annual rental of $2.00 per acre or fraction thereof
pro~lded.,~y_~C)_~~~~~:~~d this lease shall remain In effect as though 011 or gas was being
~SE TERMS
00'1)099
(I)DILlGENCE-PREVENTION OF WASTE. To exercise reasonable diligence In drilling,
producing, and operating 01 wells on the land covered hereby, unless consent to suspend
operations temporarily 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 regard lor
the prevention 01 waste of 011 and gas. or the entrance of water to the 011 or gas bearing sands or
strata to the destruction or injury of such deposits. the preservation and conservation of the
property for future productive operations and to the health and safety 01 workmen and e""",oyees;
to plug securely In an approved manner any well before abandoning It, and not to abandon any
well without permission of the lessor. not to drill any well within two hundred (200) feet of any of
the outer boundaries of the land covered hereby, unless to protect against drainage by wells
drilled on lands adjoining less than 200 feet from the property lines thereof; to conduct all
operations subject to the Inspection 01 the lessor; to carry out at the lessee's expense all
reasonable orders and requirements of the lessor relative to the prevention of waste 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 waste at the lessee's expense; to abide by and
conform to valid applicable regulations prescribed to reimburse the owner of the surface, if other
than the lessor. or lessee 01 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 01 the State of Wyoming upon Improvements. 011 and gas
produced from the land hereunder, or other rights. property or assets of the lessee, to 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 Wyorring.
(n}ASSIGNMENTS OF LEASE-PROOUCTION AGREEMENTS. Not to assign this lease or any
Interest therein, nor sublet any portion olthe leased premises, except with the consentin writing olthe lessor first
had and obtained.
All overriding royallles to be valid. must have the approval 01 the Board or by the Office 01 State Lands and
Investments when authority to do so has been delegated by the Board and will be recorded with the lease. The Board
reserves the right 01 disapproval of such overriding royallles when in Its opinion they become excessive and hence are
delrimental to the proper development 01 the leased lands.
(o)DELlVER PREMISES IN CASE OF FORFEITURE. To defiver up the leased premises, with an permanent
Improvements thereon, In good order and condition In case 01 forfeiture 01 this lease, but this shall not be construed to
prevent the removal, alteration or renewal 01 equipment and Improvements In the ordinary course 01 operations.
Section 2. THE LESSOR EXPRESSLY RESERVES:
(a) The right to lease, sen, or otherwise dispose 01 the surface 01 the land embraced within this lease under existing
laws or laws hereafter enacted, and In accordance with the rules olthe Board 01 Land Commissioners Insolar as the
surface Is not necessary lor the use 01 the lessee In the conduct 01 operations hereunder.
(b)The right to lease, sen, or otherwise dispose 01 other mineral or subsurface resources not covered by the lease, In
accordance with the applicable laws and the rules 01 the Board of land Convnissioners.
(c)From the operation 01 this lease, the surface lands heretofore granted for rights-of-way and easements and
reserves the right to grant such other rlghts-ol-way and easements as provided by the statutes of the State of Wyoming,
as long as such rlghts-o'.way and easements do not conflict with the operations for 011 and gas on the land herein
leased.
(d)The right to refuse to commit the leased lands to a unit plan 01 development II the Board finds such action would
Impair the lesso(s reserved right to take its royalty gas in kind and to purchase all other gas allocated to the leased
lands as provided In Section 2(~below.
(e)The right to alter or modify the quantity and rate 01 production to the end that waste may be eliminated or that
production may conlonn to the lessee's fair share 01 allowable production under any system of State or National
curtailment and proration authorized by law.
(~In addition to its right to take its royalty gas In kind. the lessor reSef\1e5 the right and option to purchase all othe< gas
produced lor sale or use off the leased lands. This option shall be exercised only lithe Board finds that the lessee has
received and Is wining to accept a bona fide offer from a purchaser who Intends to sell or transport the gas Into
Interstate commerce and that one or more Intrastate purchasers (I.e.. purchasers who wi use, consume. or sell the gas
for use or consumption entirely within the State of Wyoming) are willing and able to purchase the gas upon tenns
reasonably comparable to and at least as lavorable to the lessee as those offered by the Interstate purchaser. The
Board shall waive this option and permil an interstate sale lilt finds that no Intrastate purchaser Is willing and able to
purchase the gas upon tenns which are reasonably comp¡nble to and at least as favorable to the lessee. As a
condition to such waiver, a satisfac\oly agreement may be entered into by which the production of its royally gas may
be deferred until n can be produced and sold lor consumption and use entirely within the State 01 WyomIng.
Section 3. APPRAISAL OF IMPROVEMENTS. The lessee shall have the righ~ subject to the provisions of Tille 36, as
to State and State School Lands, and Tltie11, as to State loan and Investment Board Lands, W.S. 1971, ID remove any
Improvements owned by lessee within a reasonable time after the tennlnation 01 this lease. Lessee agrees that any
such Improvements not removed within a reasonable time after termination olthis lease shall be disposed ofpursuantto
the above statutes.
Section 4. FORFEITURE CLAUSE. The Board shall have the power and authority ID cancel leases procured byfraud,
deceit, or misrepresentations, or for the use 01 the lands for unlawful or Illegal purposes, or lor the violation 01 the
covenants 01 the lease, upon proper proof thereol, In the event that the lessee shail delaun In the performance or
observance of any 01 the tenns. covenants, and stipulations hereol, or 01 the general regulations promulgated by the
Board 01 Land Commissioners and in lorce on the date hereol, the lessor shall serve notice of such failure or delaun
either by personal service or by certified or registered mall upon the lessee, and II such lailure ordefaWtcontinues for a
period 01 thirty (30) days after the service 01 such notice, then and In that event the lessor may, at its option, declare a
forfeiture and cancel this lease, whereupon ail rights and privileges, obtained by the lessee hereunder shail terminate
and cease and the lessor may re-enter and take possession of said premises or any part thereof. These provisions
shail not be construed to prevent the exercise by lessor any legal or equitable remedy which the lessor rrightotherwlse
have. A waiver 01 any particular cause or forfeiture shall not prevent the cancellation and forfeiture olthls lease by any
other cause ollorfelture, or lor the same cause occurring at any other time.
Section 5. RELINQUISHMENT AND SURRENDER. This lease may be relinquished and surrendered to lessor as ID
ail or any legal subdivision 01 said lands as follows:
(a) II 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 written relinquishment or surrender, duly signed and
acknowledged and stating therein that no operations have been conducted on the land. The relinquishment so filed
shail become effective on the date and hour 01 receipt thereof In the oflice of the Director or at some laIe< date, II such
be so specified by the lessee therein. lithe said relinqulshmentfalls to state that no operations have been conducted,
the effective date 01 relinquishment shall be the date the relinquishment Is epproved by the Board.
(b) II operations have been conducted under the lease on land proposed ID 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 refinqulshment shall not become effective until the land
and the wells thereon shall have been placed in condition acceptable to lessor and shall have been approved by the
State 011 and Gas Supervisor.
All rentals becoming due prior ID a surrender or relinquishment becoming effective, 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 lease as to the relinquished lands may not be reinstated.
.~