HomeMy WebLinkAbout937319
and Ef fective January 6. 1998
u ....no....&.:I VJ.· n... V.L'........J...~ Parcel # 139
OIL AND GAS LEASE Fund Code: CS
00ð433
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:
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:
z I
NESW:NWSE Section: 10 Resurvey Township: 21 North Range: 115 West of the 6th P.M.
'tJ
County: Lincoln
Acres: 80.00
$80.00
($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. LESSEEexpr~ssly represents that, if an individual, LESSEE is a citizen of
the United States, or has declared an intention to become a citizen, and is over 19 years of
age-and if a corporation, is duly qualified to transact business in Wyoming.
Section 5. This lease is issued under the authority conferred by Title 36, W.S. 1977
as to the State and School Lands, and Title 11, W.S. 1977 as to Farm Loan lands, and shall
be subject to, and operations by LESSEE hereunder shall be conducted in compliance with the
specific lease terms set out on the reverse of this lease, and with all applicable state
statutory requirements and the regulations issued thereunder, including those providing for:
the leasing of State or Farm Loan Lands for oil and gas; the conservation of oil and gas;
and the regulation of security transactions.
Section 6. HEIRS AND SUCCESSORS IN INTEREST. It is covenanted and agreed that each
obligation hereunder shall extend to and be binding upon, and every benefit thereof shall
inure to the heirs, executors, administrators, successors of, or assigns of the respective
parties hereto.
Section 7. SOVEREIGN IMMUNITY. The State of Wyoming and the lessor do not waive
sovereign immunity by entering into this lease, and specifically retain immunity and all
defenses available to them as sovereigns pursuant to Wyoming Statute 1-39-104 (a) and all
other state laws.
IN WITNESS WHEREOF, this lease has been executed by LESSOR and LESSEE .to become
effective on the 2nd day of, February, 2008 A.D.
LESSOR, STATE OF WYOMING, Acting by and through its
. ~ ..z:-..z¿~
Lessee Slgnature: ~......¥ ¿e:;¿~_~,~h. ~"'" ~ By:
~-----;--~/T /- -
Address: ",Pð/ ¿~ d//,Y-_
City: 6~ØW State:_á/f/ZiP:_~?/~
Phone :-___~---...d¿Z~~~~/
'!
",.,
"
~i ¡
***Stipulations apply to this lease. The following numbers correspond to the stipulations printed with the
oarcels offered with this auction. The stioulations can also be referenced online at slf-web.state.wv.us.***
ParcellD Stipulation #
139 5
4
103
RECEIVED 3/3/2008 at 1 :43 PM
RECEIVING # 937319
BOOK: 688 PAGE: 433
JEANNE WAGNER
LINCOLN COUNTY CLERK, KEMMERER. WY
OIL AND GAS LEASE TERMS
00ð434
Section 1. THE LESSEE AGREES:
(a) BOND. To furnish a bond with en approved corporate surety company authorized to
transact business in the State of Wyoming. or such other surety es may be acceptable to the
lessor, In the penal sum as required by the current rules of the State Board of Land
Commissioners, conditioned upon the payment of all rentals and royalties accruing to the
lessor under the terms hereof, and upon the full compliance of all other terms and conditions
of this lease and the rules and regulations relating thereto, and also conditioned on the
payment of all damages to the surface and improvements thereon where the lease covers
lands the surfa~ of which has been sold or otherwise leased. Such bond or bonds furnished
prior to the development of the lands conteined in this lease may be increased in such
reasonable amounts as the lessor may decide upon commencement of drilling operations and
after the discov8f)l 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 82002-0600.
(c)RENTALS. Prior to the discovery of oil or gas in paying quantities to pay the lessor in
advance, beginning with the effective date hereof, an annual rental of $1.00 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 dey of the lease year succeeding the lease year in which actual discovery was
mede, en annuel rental of $2.00 per acre or frection thereof, unless chenged by agreement.
Such rental so paid for anyone year shall be credited on the royalty for that year.
Annual rentals on all leases shall be payable in advance for the first year and each 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 penalty of
$0.50 per ecre for late payment will be assessed.
The lessee is not legally obligated to pay either the rental or the panalty, but if the rental and
penelty are not paid within thirty (30) deys after the notice of default has been received, the
lease will terminate automaticelly by operation of law. Termination of the lease shall not
relieve the lessee of eny obligation incurred under the lease other than the obligation to pay
rental or penalty. The lessee shall not be entitled to a credit on royalty due for any penalty
paid for late payments of rental on an oparating lease.
(d)ROY AL TIES. The royalties to be paid by lessee are:
(I) On oil, one-eighth of 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 cesinghead ges or other hydrocarbon sUbstences, produced from said
lend saved and sold or used off the premises or in the manufeclure of gasoline or other
products therefrom, the merket value at the well of one-eighth of the ges so sold or used,
provided thet on gas sold et the wells, the royalty shall be one-eighth of the amount realized
from such sale.
(iii) On all other hydrocarbons of value and gaseous substances end 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 of natural gasoline the fair cost of extraction shall
be considered as a deductible item; provided, however, thet the allowance for the cost of
extraction may exceed two-thlrds 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 its royalties 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 stimuleting the
production of oil or secondary recovery purposes shell be royalty free.
(e) DISPOSITION OF ROYAL TV OIL AND GAS. To deliver to the lessor, or to such
individual, firm or corporation as the lessor may designate, all royalty 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 royalties in kind, the lessee agrees to pay the lessor the field market price
or value of all royalty 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 royelty oil free of charge for
thirty (30) days after the end of the calendar month in which the oil Is 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 of royalty oil so stored
from causes beyond his control.
The free storage of oil, as herein provided, shall apply only as long as the said oil is the
property of the lessor.
(I) 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
Board of .Land Commissioners and report said production to the lessor In accordance
therewith.
To keep books, records, end reports pertaining to the production from the land herein leased
es well as those pertaining to the production from offset wells operatad by the lessee, his
operator, or sub-lessee on other lands, which shall be opened at all times for the inspection of
any duly euthorized egent of the lessor.
To furnish the lessor with original pipe line reports showing the day, month, year, amount,
gravities, and temperatures of all oil run and with monthly reports showing the month, year,
amount, and price of all gas and natural gas gasoline and other products produced and sold
from the lend herein leased, and the amount of gas returned to the sand.
(g) MONTHLY PAYMENTS AND STATEMENTS. Unless the time of payment Is otherwise
extended by the Office of State lands and Investments to make payment on or before the
twentieth (20th) day of the calendar month succeeding the month of production and removal
and sale of oil and gas from said land, and 10 furnish sworn monthly statements therewith
showing in detail the quantity and quality of the production (per well if required where
practical) from the land heraby leased, and the quantity and quality of the production (par well
where practical) from offset wells upon cornering or contiguous land operated by the lessee,
his operator or sub-lessee and such other information as may be called for in the form or
report prescribed by lessor.
(h) WELLS TO BE DRILLED. To drill and operate effectively all wells necessary to
reasonably offset wells upon end 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 of the oil and gas content of said land.
(i)LOG OF WELLS AND REPORTS. To keep a log, in the form approved by the lessor, of
each well 'drilled by the lessee on the lands herein leased, showing the strata and character of
the formations, water sands and mineral deposits panetrated by the drill, amount 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 eech well is being drilled.
To file annually, or at such times as the lessor may require, maps showing the development
of the structure end the location of ell wells, pipe lines and other works used In connection
with the operations of the lessee upon said land.
To make such other reports pertaining to the production end 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 of others on lands on the same geologic structure that may be of
importance In effecting proper development and operation of the lands herein leased, as may
be called for by the lessor. All logs, maps, end reports shall be submitted in duplicate end the
Office of State Lands and Investments may waive such reports as conditions may warrant.
O)PRODUCTION. To operate the wells upon the land herein leased in a competent and
efficient manner In an endeavor to recover all the oil and gas economically possible from said
land and to prevent the under drainage of the oil and gas thereunder by wells operated by the
lessee or others on cornering or contiguous lands to those leased herein. All plens 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 actuel operation.
No production agreements limiting, restricting, prorating, or otherwise affecting the
neturalproduclion from seld 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 hed 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
lessee is unable to establish a satisfactory market for the oil, gas or hydrocarbons produced
from said well, the lessee may epply for and the lessor may grant permission for the
suspension of production operations until such times as a satisfactory market for the product
from said well can be developed. During the time any such suspension of operations is in
effect, the lessee shall continue to pay the annual rental of $2.00 per acre or fraction thereof
provided by (c) above, and this lease shall remain in effactas though oil or gas wes being
produced from said lends.
(I¡DILlGENCE-PREVENTION OF WASTE. To exercise reasonable diligance in drilling,
producing, and operating of wells on the lend covered hereby, unless consent to suspend
oparations 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 for the prevention of waste of oil and gas, or the entrence of water to the oil or gas
bearing sands or strata to the destruction or injury of such deposits, the preservation end
conservation of the property for future productive operations and to the health and safety of
workmen and employees; 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 eny 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 lends adjoining less than 200 feet from the
property lines thereof; to conduct all operations subjact to 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 waste and preservation of the property and the health end 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 of grazing rights thereof
for actual damages thereto end injury to improvements thereon, provided, that the lessee shell
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 improvements, oil and gas
produced from the land hereunder, or other rights, property or assets of the lessee, to accord
all workmen end employees complete freedom of purchase, and to pay all weges 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 with the consent in
writing of the lessor first hed and obtained.
All overriding royalties to be valid, must have the approvel of the Board or by the Office of
Stete Lands end Investments when authority to do so has been delegated by the Board and
will be recorded with the lease. The Board reserves the right of disepproval of such overriding
royalties when In its opinion they become excessive and hence ere detrimental to the proper
development of the leesed lands.
(o)DELlVER PREMtSES 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 improvements in the ordinary course of operations.
Section 2. THE LESSOR EXPRESSLY RESERVES:
(a) The right to lease sell, or otherwise dispose of the surface of the land embraced within
this lease under existing laws or laws hereafter enacted, and in accordance with the rules of
the Board of Land Commissions insofar as the surface is not necessary for the use of th"
lessee in the conduct of operations hereunder.
(b)The right to lease, sell, or otherwise dispose 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 operation of this lease, the surface lands heretofore granted for rights-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 not conflict with 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 ection would impair the lessor's reserved right to take its royalty gas in kind and to
purchase all other gas allocated to the leased lands a provided in Section 3(e)below.
(e)The right to alter or modify the quantity and rate of production to the end that weste mey
be eliminated or that production may conform to the lessee's fair share of allowable production
under any system of State or National curtailment and proration euthorized by lew.
(1)1n addition to its right to take its royalty gas in kind, the lessor reserves the right and option
to purchase all other gas produced for sale or use off the leased lands. This option shall be
exercised only if the Board finds that the lessee has received and is willing 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 will 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 favorable to the
lessee as those offered by the interstate purchaser. The Board shall waive this option and
pennlt an interstete sale if it finds that no intrastete purcheser 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 satisfectory agreement may be entered into by which
the production of its royally gas may be deferred until it cen 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 subjaclto the
provisions of Title 36, as to State and State School lands, and Title 11, as to State Loan and
Investments Board Lands, W.S. 1977, to remove any improvements owned by lessee within a
reasonable time 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 pursuant to 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 lends 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 stipulations hereof, or of the general regulations
promulgeted by the Board of Lend Commissioners and in force on the dete hereof, the lessor
shall serve notice of such failure or default either by personal S8fVice 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, then and in that event the lessor may, at its option,
declare a forfeiture and cancel this lease, whereupon ell rights and privileges, obtained by the
lessee hereunder shall tenninete and ceese and the lessor mey re-enter end teke possession
of said premises or any part thereof. These provisions shall not be oonstrued 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 time.
Section 5. RELINQUISHMENT AND SURRENDER. This lease mey be relinquished and
surrendered to lessor as to all or any legal subdivision of said lends as follows:
(a) If no operetions have been conducted under the leese on the lend to be relinquished, the
lessee shall file with the State Land Boerd and State Loan and Investment Boerd, a written
relinquishment or surrender, duly signed and acknowtedged and stating therein that no
operations have been conducted on the lend. The relinquishment so filed shall become
effective on the date and hour of receipt thereof in the office of the Diraclor or e\ some leter
date, if such be so specified by the lessee therein. If the said relinquishment falls to state that
no operations have been conducted, the effective date of relinquishment shall be the date the
relinquishment is approved by the Boerd.
(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 e written
relinquishment or surrender duly acknowledged and stating therein that operations have been
oonducted on the land. The relinquishment shall not become effective until the land and the
wells thereon shall have been placed in condition acceptable to lessor and shall heve been
approved by the Stete 011 and Gas Supervisor.
All rentals becoming due prior to a surrender or relinquishment becoming effective, shall be
payable by lessee unless payment thereof shall be waived by lessor. A relinquishment having
become effective there shall be no recourse by lessee and the leese es to the relinquished
lands may not be reinstated.
STANDARD CULTURAL REaOURCES
ThIs parcel Is known to conl8ln certain prehlstoriclhlstortclculturallNatlve Amertcan or
pioneer family resources and Is subject to W.S. 38-1-114 through 118 and the Rulee of the
Board of Land Commlssionere, Chapter 18 Section 3{h) and as such, lessee/operator
should conflnn the 10caUon of such resources with the Wyoming State HIstortc
Preservation Office (SHPO) prtor to any surface disturbing acUvlUes. Development plans
on this parcel may be restrtcted or prohibited unless the lessee andlor operator and the
Office of State Lands and Investments, In consultaUon with the SHPO, agree upon an
acceptable plan for the mitlgaUon of possible Impacts to the known resources pursuant to
the protecUon of those resource values. Compliance failure with this sUpulaUon will result
In loss of lease and potential acUon at law.
ùOð435
STATE OF WYOMING )
) §
COUNTY OF CAMPBELL )
Before me on the 28th day of February, 2008, John L. Kennedy, Manager of
Fitzsimmons, LLC personally appeared in his capacity as known to me to be the identical
person whose name is subscribed to the foregoing instrument, and acknowledged to me
that he executed the same as free and voluntary act and deed, and as the free and
voluntary act of the corporation, for the uses, purposes and consideration therein set forth.
Witness hand and official seal:
tk·w~tk~r0--.
Notary Public
My commission expires:
:5 / ¿L¿ J 0 c¡
, ,