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HomeMy WebLinkAbout933683 OIL AND GAS LEASE This Oil and Gas Lease ("Lease") is made effective the -.:r!:.. day of SeDtember. 2007, by and between liorman M. Harrower. a married man dealinll in bissole and seoarate orooertv. whose address is 8374 County Road 6 Soutbwèst StewartviUe. Minnesota 55976 Lessor", whether one or more) and Fitzsimmons, LLC. whose address is 2201 Cabin Court Gillette, WY 82718 ("Lessee''). WITNESSE1H, For and in consideration ofTEN DOLLARS, the covenants and agreements contained herein, and other good and valuable consideration the receipt and Ifficiency of which are hereby acknowledged, Lessor does hereby grant, demise, lease and let exclusively unto said Lessee, with the exclusive rights for the purposes of ining, exploring by geophysical and other methods and operating for and producing thereftom oil and all gas of whatsoever nature or kind, and laying pipelines, telephone and legraph lines, building tanks, plants, power stations, roadways and structures thereon to produce, save and take care of said products and the exclusive surface and subsurface gltts and privileges related in any manner to any and all such operations, and any and all other rights and privileges necessary, incident to, or convenient for the operation one or conjointly with neighboring land for such purposes, all that certain tract or tracts ofland situated in LINCOLN. Wyoming, described as follows, to-wit: SEE EXHIBIT "A" ATTACHED TO AND MADE A PART HEREOF FOR DESCRIPTIVE PURPOSES. ¡d containinlt 6011.00 acres, more or less, (the "Premises"). I, It is agreed that this Lease shall remain in force for a term of five (5) years ftom this date ("Primáry Tenn") and as long thereafter as oil or gas of whatsoever nature or kind is oduced ftom the Premises or on acreage pooled or unitized therewith, or operations are continued as hereinafter provided. If, at the expiration of the Primary Term, oil or gas is not Jing produced ftom the Premises or on acreage pooled or unitized therewith but Lessee is then engaged in drilling, reworking or other operations calculated to obtain or restore 'oduction ftom the leased premises thereon, then this Lease shall continue in force so long as such operations are being continuously prosecuted. Operations shall be considered to be Intinuously prosecuted if not more than One Hundred Eighty (180) days shall elapse between the completion or abandonment of one well and the beginning of operations for the drilling , a subsequent well. If after discovel)' of oil or gas on the Premises or on acreage pooled or unitized therewith, the production thereof should cease ftom any cause after the primary rID, this Lease shall not tenninate if Lessee commences additional drilling, reworking operations within One Hundred Eighty (180) days ftom date of cessation of production or ftom lte of completion of dry hole. completion or workover operation. If oil or gas shall be discovered and produced as a result of such operations at or after the expiration of the Primary :nn, this Lease shall continue in force so long as oil or gas is produced ftom the Premises or on acreage pooled or unitized therewith. 2. This is a PAJD..UP LEASE. In consideration of the payment made herewith, Lessor agrees that Lessee shall not be obligated, except as otherwise provided herein, to commence continue any operations during the primary tenn, Lessee may at any time or times during or after the Primary Tenn surrender this Lease as to all or any portion of the Premises and as any strata or stratum, by delivering to Lessor or by filing for record a release or releases, and be relieved of all obligations thereafter accruing as to the acreage surrendered. 3, The royalties to be paid by Lessee are: (a) On oil and other liquid hydrocarbons, ONE-SIXTH (1/6~ of that produced and saved ftom said land, the same to be delivered at the wells, or to the credit of Lessor into the peline to which the wells may be conneçted; Lessee may ftom time to time purchase any royalty oil in its possession, paying the market pòce therefore prevailing for the field where oduced on the date of purchase; (b) on gas and the constituents thereof produced ftom said land and sold or used off the premises or ill the manufacture of produc~ thereftom, the arket value at the well of ONE-SIXTH (1/6") of the product sold or used. On product sold at the well, the royalty shall be ONE-SIXTH (1/6") of the net proceeds realized ftom such Ie. All royalties paid on gas sold or used off the premises or in the manufacture of products thereftom will be paid after deducting ftom such royalty Lessors proportionate amount of all 1st-production costs, including but not limited to gross production and severance taxes. gathering and transportation costs ftom the wellhead to the point of sale, treating, compression, .d processing. On product sold at the well, the royalty shall be ONE-SIXTH (l/6~ of the net proceeds realized ftom such sale, after deducting ftom such royalty Lessor's proportionate 10unt of all of the ¡¡bove post-production costs and expenses, if any, 4. Where gas ftom a well capable of producing gas is not sold or used after the expiration of the Primary Tenn. Lessee shall payor tender as royalty to Lessor at the address set rth above One Dollar per year per net mineral acre, such payment or tender to be made on or before the anniversary date of this Lease next ensuing after the expiration of ninety (90) ys ftom the date such well is shut in and thereafter on or before the anniversary date of this Lease during the period such well is shut in. 5. If Lessor owns a lesser interest in the Premises than the entire and undivided fee simple estate therein, then the royalties (including any shut-in gas royalty) herein provided for all be paid Lessor only in the proportion which Lessor's interest bears to the whole and undivided fee, 6, Lessee shall have the right to use, ftee of cost, gas, oil and water produced on the Premises for Lessee's operations thereon, except water ftom the wells ofLessoL 7. When requested by Lessor, Lessee shall bury Lessee's pipeline below plow depth. 8. No well shall be drilled nearer than 200 feet to the house or barn now on the Premises without written consent of Lessor. 9. Lessee shall have the right at any time to remove all machineI)' and fixtures (including casing) Lessee has placed on the Premises. m The rights of the Lessor and Lessee hereunder may be assigned in whole or part. No change in ownership of Lessor's interest (by assignment or otherwise) shall be binding on iSsee until Lessee has been furnished with notice, consisting of certified copies of all recorded instruments or documents and other information necessary to establisb a complete chain record title ftom Lessor, and then only with respect to payments thereafter made. No other kind of notice. whether actual or constructive, shall be binding on Lessee. No present or ture division of Lessor's ownership as to different portions or parcels of the Premises shall operate to enlarge the obligations or diminish the rights of Lessee, and all Lessee's operations iy be conducted without regard to any such division. If all or any part of this Lease is assigned, no leasehold owner shall be liable for any act or omission of any other leasehold owner. I L Lessee, at its option, is hereby given the right and power at any time and ftom time to time as a recurring right, either before or after production, as to all or any part of the emises and as to anyone or more of the fonnations thereunder, to pool or unitize the leasehold estate and the mineral estate covered by this Lease with other land, lease or leases in the mediate vicinity for the production of oil and gas, or separately for the production of either, when in Lessee's judgment it is necessary or advisable to do so, and iIrespective of whether thority similar to this exists with respect to such other land, lease or leases, Likewise units previously fonned to include formations not producing oil or gas, may be refonned to elude such non-producing fonnations. The fonning or refonning of any unit shall be accomplished by Lessee executing and filing of record a declaration of such unitization or ronnation, which declaration shall describe the unit. Any unit may include land upon which a well has theretofore been completed or upon which operations for drilling have :retofore been commenced. Production, drilling, reworking or dewatering operations or a well shut in for want of a market anywhere on a unit which includes all or a part of this Lease IÜl be treated as if it were production, drilling, reworking or dewatering operations or a well shut in for want of a market under this Lease. In lieu of the royalties elsewhere herein ecified, including shut-in gas royalties, Lessor shall receive royalties on production ftom such unit only on the portion of such production allocated to this Lease. In addition to the :egoing. Lessee shall have the right ro unitize, pool, or combine all or any part of the Premises as to one or more of the fonnations thereunder with other lands in the same general area entering into a cooperative or unit plan of development or operation approved by any governmental authority and, ftom time to time, with iike approval, to modifY, change or tenninate y such plan or agreement and, in such event, the tenns, conditions and provisions of this Lease shall be deemed modified to confonn to the tenns, conditions, and provisions of such proved cooperative or unit plan of development or operation and, particularly, all drilling and development requirements of this Lease, express or implied, shall be satisfied by mpliance with the drilling and development requirements of such plan or agreement, and this Lease shall not tenninate or expire during the life of such plan or agreement. In the event it the Premises or any part thereof, shall hereafter be operated under any such cooperative or unit plan of development or operation whereby the production thereftom is allocated to [erent portions of the land covered by said plan. then the production allocated to any particular tract of land shall. for the purpose of computing the royalties to be paid hereunder to iSsor, be regarded as having been produced fi'om the particular tract of land to which it is allocated and not to any other tract of land; and royalty payments to be made hereunder to ssor shall be based upon production only as so allocated, Lessor shall fonnally express Lessor's consent to any cooperative or unit plan of development or operation adopted by Lessee d approved by any governmental agency by executing the same upon request of Lessee. 12, All express or implied covenants of this Lease shall be subject to all Federal and State Laws, Executive Orders, Rules or Regulations, and this Lease shall not be tenninated, in lole or in part, nor Lessee held liable in damages, for failure to comply therewith if compliance is prevented by, or if such failure is the result of, any such Law. Order, Rule or :gulation. Any delay or interruption caused by stonn, flood, acts of terrorism, act of God or other event of force majeure shall not be counted against Lessee, If. due to the above causes any cause whatsoever beyond the control of Lessee, Lessee is prevented from conducting operations hereunder, such time shall not be counted against Lessee, and this Lease shall be tended for a period of time equal to the time Lessee was so prevented, anything in this Lease to the contrary notwithstanding, 13. Lessor hereby warrants and agrees to defend the title to the Premises and agrees that Lessee shall have the right at any time to redeem for Lessor. by payment, any mortgages, ¡es or other liens on the Premises. in the event of default of payment by Lessor, and be subrogated to the rights of the holder thereof. and the undersigned Lessors, for themselves and :ir heirs, successors and æsigns, hereby surrender and release all right of dower and homestead in the Premises, insofàr as said right of dower and homestead may in any way affect the rposes for which this Lease is made, as recited herein. 14. Should anyone or more of the parties named as Lessor herein fail to execute this Lease, it shall nevertheless be binding upon all such parties who do execute it as Lessor. The )rd "Lessor," as used in this Lease shall mean anyone or more or all of the parties who execute this Lease as Lessor. All the provisions of this Lease shall be binding on the heirs, ~ceSsors and assigns of Lessor and Lessee. IS. If at anytime within the primary tenn of this lease and while the same remains in force and effect, Lessor receives any bona fide offer, acceptable to Lessor, to grant an ditionallease covering all or part of the aforesaid lands, Lessee shall have the continuing option by meeting any such offer to acquire such lease. Any offer must be in writing, and must : forth the proposed Lessee's name, bonus consideration and royalty consideration to be paid for such lease, and include a copy of the lease fonn to be utilized which fonn should reflect p¡;:rtinent and relevant tenns and conditions of the lease. Lessee shall have fifteen (15) days after receipt, ftom Lessor, of a complete copy of any such offer to advise Lessor in writing its election to enter into an oil and gas lease with Lessor on equivalent tenns and conditions, If Lessee fails to notifY Lessor within the aforesaid fifteen (15) days period of its election meet any such bona fide offer, Lessor shall have the right to accept said offer, 16, Except as otherwise provided herein, at the end of the primary tenn of this Lease, this Lease shall terminate and Lessee shall promptly release this Lease as to all rcage lying outside of the spacing units established by the Wyoming Oil and Gas Conservation Commission or any other governmental agency having jurisdiction for each :lllocated on the leased premises or lands spaced therewith which is producing gas or water. 17. Lessee shall pay for all damage to roads, fences, improvements and growing crops caused by its operations hereunder, and will fill and level any pits and mounds, nove all board roads and board road materials, level and fill all ruts, and restore the surface of the ground as near to its original condition as is reasonably practical within a lSonable period of time after cessation of operations at each well location on the leased premises. 18. Lessee is hereby given the option of extending the primary tenn of this lease for an additional tenn of Five (5) years ftom the expiration of the original primarytenn. is option may be exercised in relation to all (but no less than all) of the land covered by this lease by Lessee, its successors or assigns, on or before the expiration of the mary tenn by paying the sum of Seventy Five dollars ($75.00) per net mineral acre to Lessor or to Lessor's credit in the depository named in this lease. Should this option be 1ely exercised as herein provided, it shall be considered for all purposes as though this lease originally provided for a tenn often (10) years. All of the provisions of this lease ated to the payment of shut-in royalties shall apply equally to this )a,nt!en!.. includin~ but not limited to, the8rovisions regarding changes of ownership. KEcEIVEu 10/3/2007 at 1 :20 AM RECEIVING # BOOK: 674 J 000266 933683 PAGE: 266 : WAGNER IN WITNESS WHEREOF, this instrumcnt is cxecuted as ofthc datc first above written. ~~7?v ~~ Norman M. Harrower, a married man dealing in his sole and separate property. " 000267 STATEOF.fi1111fgIÆ,5/)'T.éJ } ss. COUNTY OF Mœ¿/~£ } UNIFORM ACKNOWLEDGEMENT BEFORE ME, the undersigned authority, a Notary Public, on this day personally appeared ,¡(/tl/ /YJA-AJ ~~ /JtI/é'£ <. known to be the person(s) who execl,lted this within and foregoing instrument, and acknowledged to me that helshe executed the same. . tome Given un~er my hand and official seal, this the I D'tl\.. day of 'S E PTE rYl ¿ 6o<? . 2007. My Commission Expires: J - 3 I-I 0 :::1{ff~t- ~~~~ =~ $5 -C;~b WENDY M. RISIUS NOTARY PUBLIC - MINNESOTA My Commission Expires Jan. 31, 2010 EXIllBIT 4' A't 000268 ATTACHED TO AND MADE A PART OF THAT CERTAIN OIL. GAS AND MINERAL LEASE DÁTED SEPTEMBER 7. 2007 BETWEEN, NORMAN M. HARROWER, A MARRIED MA DEALING IN IDS SOLE AND SEPARATE PROPERTY AS LESSOR, AND FITZSIMMONS LLC. AS LESSEE. Township 2S North. Ranl!e 119 West. 6th P. M. Section 33: Tract 46 Section 32: Tract49 Townshio 24 and 2S North. Ranl!e 119 West. 6th P. M. Section 6: Tract 108. a part of Tract 109 and a part of Tract 107 being that part lying West of the Union Pacific Railroad right of way. All of the aforesaid containing 608.00 acres, more or less, Being more particularly described in that certain Warranty Deed dated March 8, 1983 from S. Reed Dayton and wife, Lois T. Dayton to Nonnan M. Harrower as recorded in Book 199, Page 287 of the Photo Records of Lincoln County, Wyoming.