HomeMy WebLinkAbout937321
and Effective Janu.ry 6. 1998
ì:) ~ .ð ~,c, V s: n ~ VLYJ..L.I.'4 \:I' Parcel # 152
OIL AND GAS LEASE Fund Code: SR
00\)439
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. P'lTRPOSE. The LESSOR, in consideration of the rents and royalties to be
paid and the covenants and agreements to be kept and performed by the LESSEE, does hereby
grant and lease to the LESSEE, the exclusive right to drill for, mine, extract, remove, and
dispose of all the oil, gas and associated hydrocarbon substances and gaseous substances and
elements produced therewith, including sulphur, hydrogen sulfide, sulphur dioxide, nitrogen,
carbon dioxide and helium, which may be produced from the following described land, to wit:
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County: Lincoln
Tract 46 (formerly NW Sec 8) Resurvey Township: 22 North Range: 119 West of the 6th P.M.
Acres: 160.01
$161.00
($1.00 per acre or fraction thereof)
Together with the right of ingress and egress and the right to use so much of the
surface of said lands as is necessary to construct and maintain thereupon all works,
building, plants, waterways, roads, communication lines, pipe lines, reservoirs, tanks,
pumping stations, or other facilities necessary to the proper conduct of operations there
under.
Section 2. TERM OF LEASE. This lease shall become effective on the day and year set
out below and shall remain in effect for a primary term of five (5) years and for so long
thereafter as leased substances may be produced from the lands in paying quantities. This
lease may also be extended beyond its primary term in the absence of production of leased
substances as may be provided by the statutes of the State of Wyoming and the regulations of
the Board of Land Commissioners adopted pursuant thereto. Provided, however, if drilling,
completion, testing or reworking operations are being diligently conducted, either during
the primary term or during any extension thereof, this lease shall continue in full force
and effect so long as such operations are being conducted and so long thereafter as oil or
gas may be produced in paying quantities. This lease may be relinquished or terminated at
an earlier date as herein provided.
Section 3. If the LESSOR owns an interest in oil and gas in said land less than the
entire fee simple estate, then the royalties and rentals to be paid LESSOR shall be reduced
proportionately.
Section 4. LESSEE expressly represents that, if an individual, LESSEE is a citizen of
the United States, or has declared an intention to become a citizen, and is over 19 years of
age-and if a corporation, is duly qualified to transact business in Wyoming.
Section 5. This lease is issued under the authority conferred by Title 36, W.S. 1977
as to the State and School Lands, and Title 11, W.S. 1977 as to Farm Loan lands, and shall
be subject to, and operations by LESSEE hereunder shall be conducted in compliance with the
specific lease terms set out on the reverse of this lease, and with 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
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Lessee Signature: ~L ...-?' ~¡ '7'.Q!.d /v'" By'
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City:---L&ß State:_~ Zip:.J2-..z/;~
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Director~! r""
State Lands and
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""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 #
152 13
104
4
57
94
RECEIVED 3/3/2008 at 1:45 PM
RECEIVING # 937321
BOOK: 688 PAGE: 439
JEANNE WAGNER
K KEMMERER, WY
LINCOLN COUNTY CLER , .
Oil AND GAS TER!
Section 1. THE lESSEE AGREES:
(a) BONO. To furnish a bond with an approved corporate surety company authorized to transact
business in the State of Wyoming, or such other surety as may ba acceptable to the lessor, in the
penal sum as required by the current rules of the State Board of lend Commissioners,
conditioned upon the payment of all rentals and royalties accruing to the lessor under the tenns
hereof, and upon the full compliance of all other tenns and conditions of this lease and the rules
and regulations relating thereto, and also conditioned on \he payment of all damages to the
surface and improvaments thereon where the laass covers lands the surface of which has baen
sold or otherwise leased. Such bond or bonds furnished prior to \he development of the lands
contained In this lease may ba increased in such reasonable amounts as the lessor may decide
upon commencement of drilling operetions and after the discovery of oil or gas.
(b)PAYMENTS. To make all payments accruing hereunder to the Office of State lands and
Investments, 122 West 25th Street, Cheyeme, Wyoming 82002-0600.
(c)RENTALS. Prior to the discovery of oil or gas in paying quantities to pay the lessor in
advance, begiming with the effective date heraof, an annual rental of $1.00 per sera or fraction
thereof.
After the discovery of oil or gas in paying quantities to pey tha lessor in advance beginning with
the first day of \he lease year succeeding the lease year in which actual discovery was made, an
annual rental of $2.00 per acre or fraction thereof, unless changed by agreement. Such rental so
paid for any one year shall ba credited on the royalty for thet year.
Annual rentals on all leases shall ba payable in advance for the first year and each year
thereafter. No noties of rental due shall be sent to tha lesses. If the rental is not paid on or
bafore the date it becomas due, notice of default will ba sent to the lessee, and a penalty of $0.50
per acre for late payment will ba 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 noties of default has besn received, the laase
will tenninate automatically by operation of law. Tennhiation of the lease shall not relieve the
lesses of any obligation incurred under the lease other than the obligation to pay rental or
penalty. The lessee shell not ba entitled to a credit on royalty due for any penalty paid for late
payments of rental on an operating lease.
(d)ROYAL TIES. The royallies to be paid by lessee are:
(i) On oil, one-sixth of that produced, saved, and sold from said land, the same to be delivered
at the walls or to \he credit of lessor into the pipe line to which the walls may ba connected.
(ii) On gas, including casinghead gas or other hydrocarbon substaness, produced from said
land saved and sold or used off \he premises or in the manufacture of gasoline or other products
therefrom, the market value at \he wall of one-sixth of the gas so sold or used, provided that on
gas sold at the walls, the royalty shall ba one-sixth of the emount realized from such sale.
(Iii) On all other hydrocarbons of value and gaseous substances and elements produced or
extracted, including propane, butane, sulphur, nitrogen, carbon dioxida, and helium, at such
royalty as shall be mutually detennined to be fair and reasonable.
(iv) For royalty purposas on gas and natural gasoline the value shall be as approved by the
lessor, and in the detennination of the value of natural gasoline the fair cost of extraction shall ba
considered as a deductible item; provided, however, that the allowanes for tha cost of extraction
may exceed two-thirds of the amount or value only on approval of the lessor and in no event shall
the pries for gas, or natural gasoline, ba 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 sala thereof, gas or liquid hydrocarbons returned to the sand for stimulating the
production of oil or secondary recovery purposes shall be royally frae.
(a) DISPOSITION OF ROYALTY Oil AND GAS. To dalivar to tha lassor, or to such individual,
finn or corporation as the lessor may designate, all royalty oil, gas, or other kindred hydrocarbons,
free of charge on the premises where produced, or, atlhe option of the lessor, and in lieu of said
royalties in kind, the lesses agrees to pay the lessor the field market price or value of all royalty
oil, gas, or o\her kindred hydrocarbons produced and seved.
When \he lassor elects to take its royalty oil, gas, or other hydrocarbons in kind such as oil, gas,
or other kindred hydrocarbons shall be good merchanteble oil, gas, or othar kindred
hydrocarbons. The lessee shall if necessary furnish storage for royalty oil fres of charge for thirty
(30) days after \he end of the calendar month In which Ihe oil is produced, upon the leased
premisas, or at \he such place as tha lessor and the lessee mey mutually agree upon, provided,
that tha lessee shall not ba held liable for loss or destruction of royalty oil so storad 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, maasure and correct for temperature all
production from said lands in confonnance with the rules and regulations adopted by the Board of
Land Commissioners and report said production to the lessor in accordance therewith.
To kesp books, records, and reporta pertaining to the production from \he land herein lessed as
wall as those pertaining to tha production from offset walls operated by the lessee, his operator,
or sub-lessee on other lands, which shall ba opened at all times for tha inspection of any duly
authorized agent of the lessor.
To furnish the lassor 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 \he amount of gas returned to the sand.
(g) MONTHLY PAYMENTS AND STATEMENTS. Unless the tima of peyment is otherwise
extended by \he 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 to furnish sworn monthly statements therewith showing in
detail the quantity and quality of the production (per wall if required where practical) from the land
hereby leased, and \he quantity and quality of \he production (per wall where prac\ical) from offsat
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 fonn or report prescribed by lessor.
(h) WELLS TO BE DRILLED. To drill and operate effectively all walls necessary to reasonably
offset walls upon and production from adjoining lands.
To drill such edditional walls at such times or places as are necessary and essential to the
proper developmant 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
wall drilled by the lessee on the lands herein leased, showing the strata and character of the
fonnations, water sands and mineral deposits penetrated by the drill, amount of casing, size and
where set, and such other infonnation as the lessor may require which log or copy thereof shall
be furnished to the lessor.
To file progress reports, in the fonn prescribad by the lessor, at the end of each thirty (30) day
period while each wall is being drilled.
To file annually, or at such times as the lassor may require, maps showing the development of
the structure and \he location of all walls, 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 and operations by the lessee on said
land, and report such other infonnation as may be possessed by the lessee on the walls,
production or operetions 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 ba
called for by the lessor. All logs, maps, and reports shall be submitted in duplicale and lhe Office
of State Lands and Investments may waive such reports as conditions may warrant.
(j)PRODUCTION. To operate the walls upon \he land herein leased in a competent and efficient
manner in an andeavor to recover all the oil and gas economically possible from said land and to
prevent the under dreinage of the oil and gas thereunder by walls 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 incraasing production on lands herein leased other than those in
common use shall first ba presented to the lessor for approval before being put into actual
operation.
No production agreements limiting, restricting, prorating, or otherwise affecting the
naturalproduction from said lend shall ba entered into by \he lessee, nor shall \he lessee limit,
restrict, or prorete the natural production from said lend in any way or in any event, except with
the consent in writing of the lessor first had an obtained.
(k)SUSPENSION OF OPERATIONS. Should any wall drilled upon lands covered by this lease
obtain production of oil, gas, or other hydrocarbons in paying quantities and if the lessae is
unable to establish a satisfectory mar1œt for the oil, gas or hydrocarbons produced from said well,
the lessee may apply for and the lessor may grant pennlssion 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 acra or fraction thereof provided by (c) above, and
this lease shall remain in effect as though oil or gas was baing produced from said lands.
(I)DILlGENCE-PREVENTION OF WASTE. To exercise reasonable diligence in drilling,
producing, and operating of walls on the land covered hereby, unless consent to suspend
operations temporarily is granted by the lessor; to cany 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 entrance of water to the oil or gas bearing sands or
strata to the destruction or injury of such deposits, the preservation and conservation of \he
property for future productive operations and \0 the health and safety ofworkmen and employees;
to plug securely in an epproved manner any wall before abandoning it, and not to abandon any
wall without permission of the lessor, nol 10 drill any wall within two hundred (200) faet of any of
- - ~ .~..;¡¡;"
the outer boundaries of the land covered hereby, unless to st drainage by walls
drilled on lands adjoining less than 200 feet from the proptt"y ""'" IIlereof; to conduct all
operations subject to the inspection of the lessor; to cany out at the lessee's expanse all
reasonable orders and requirements of the lessor relative to the prevention of waste and
preservation of the property and the health and sefety 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 \he lessor shall have the right, together with other recoursa herein provided, to
anter on the property to repair damage or prevent waste at the lessee's expense; to abide by and
confonn to valid applicable regulations prescribad to reimburse the owner of the surface, if other
than the lessor, or lessee of grazing rights thereof for actual damages thereto and injllf)' to
improvements thereon, provided, that the lessee shall not ba held responsible for acts of
providence or actions beyond his control.
(m)TAXES AND WAGES-FREEDOM OF PURCHASE. To pay, when due alllexes lawfully
essessed and levied under the laws of tha State of Wyoming upon improvemenls, oil 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 10 pay all wages due workmen and
employees in conformance with the laws of the State of Wyoming.
(n)ASSIGNMENTS OF LEASE-PRODUCTION AGREEMENTS. Not to assign this lease or any
interest therein, nor sublet any portion of the leased premises, except with the consent in writing
of the lessor firsl had and obtained.
All overriding royalties to be valid, must have the approval of the Board or by the Office of State
Lands and Investments when authority to do so has been delegated by the Board and will ba
recorded with the lease. The Board reservas the right of disapproval of such overriding royalties
when in its opinion they becoma excessive and hence are detrimental to \he proper devalopment
of the leased lands.
(o)DELIVER PREMISES IN CASE OF FORFEITURE. To deliver up the leased premises, with all
pennanent improvemants thareon, in good order and condition in case of forfeiture of this lease,
but this shall not be construed to
prevent the removal, altaration or renewal of equipment and improvements in the ordinary
course of operations.
Section 2. THE LESSOR EXPRESSLY RESERVES:
(a) Tha right to lease sell, or otherwise dispose of the surface of \he 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 surfece is not necessery for the use of the lessee in
the conduct of operations hereunder.
(b)The right to lease, sell, or otherwise dispose of other mineral or subsurfece resources not
covered by the lease, in accordance with the applicable laws and the rules of \he Board of Land
Commissioners.
(c)From the operation of this lease, the surface lands heretofore grented for rights-<lf-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 es such rights-<lf-way and easements do not conflict
with the operations for oil and gas on the land herein leased.
(d)The right to refusa 10 commit \he leased lands to a unil plen of development if the Board finds
such action would impair the lessor's resarVed right 10 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 tha quantity and rate of production to the end that waste may ba
eliminated or that production may confonn to the lessee's fair shere of allowable production under
any system of State or National curtailment and prorallon authorized by law.
(1)1n addition to its right to take its royalty gas in kind, Ihe lessor reserves the right and option 10
purchase all other gas produced for sale or use off the leased lands. This option shall ba
exercised only if the Board finds that the Jesses has received and is willing to accepl a bona fide
offer from a purchaser who intends to sell or transport the gas into inlerstate 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 10 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 pannit an interstate sale if it finds
that no intrastate purchaser is willing and able to purchase the gas upon tenns which are
reasonably comparable to and at least as favorable to \he lessee. As a condition to such waiver,
a satisfactory agreement may ba antered into by which \he production of its royelty gas may ba
deferred until it can be produced and sold for consumption and use entirely within the Stale of
Wyoming.
Section 3. APPRAISAL OF IMPROVEMENTS. The lessee shall have the right subject to the
provisions of Tille 36, as to State and State School Lands, and Tille 11, as to State Loan and
Investments Board Lands, W.S. 1977, to remove any improvements owned by lessee within a
reasonable time after the tennination of this Jease. lessee agrees that any such improvements
not removed within a reasonable time efter termination of this lease shall ba disposed of pursuant
to the above statutes.
Section 4. FORFEITURE CLAUSE. The Board shall have the pawsr and authority to cancel
leases procured by fraud, deceit, or misrepresentations, or for the use of the lands for oolawful or
iIIagal purposes, or for the violation of the covenants of \he lease, upon proper proof thereof, in
the event that the lessee shall default in the perfonnance or observance of any of the terms,
covenants, and stipulations hereof, or of the general regulations promulgated by \he Board of
land Commissioners and in force on the dete hereof, the lessor shall serve notice of such failure
or default either by personal service or by certified or registered mail upon the lessee, and if such
failure or default continues for e 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 all rights and privileges, obtained by the lassee hereunder shalltenninate and œese
and the lessor may re-enter and take possession of said premises or any part thereof. These
provisions shall not ba construed to prevent the exercise by lessor any lagal or equitable remedy
which the lessor might otherwise have. A waiver of any particular cause or forfeiture shall not
prevent the canesllation and forfeiture of this lease by any other cause of foñeilure, or for \he
same cause occurring at any other time:
Section 5. RELINQUISHMENT AND SURRENDER. This lease may ba relinquished and
surrendered to lessor as to all or eny lagal subdivision of said lands as follows:
(a) If no operations have bean conducted under the lease on the land to be relinquished, \he
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 thai no operations
have been conducted on the land. The relinquishment so filed shall bacome effective on the date
and hour of receipt thereof in the office of the Dirac\or or at some later dale, if such be so
specified by the lessee therein. If the said relinquishment fails to state that no operetions have
been conducted, the effective date of relinquishment shall be the dale \he relinquishment is
approved by the Board.
(b) If operetions have bean conducted under the lease on land proposed to be relinquished, the
lessee shall give sixty (60) days noties and shall file with the Dirac\or a wriIIen relinquishment or
surrender duly acknowledged and stating therein that operations have besn conducted on Ihe
land. The relinquishment shall not become effective until the land and the walls thereon shall
have been placed in condition acceptable to lessor and shall have bean approved by the State Oil
and Gas Supervisor.
All rentals becoming due prior to a surrender or relinquishment becoming effective, shall ba
payable by lessee unless payment thereof shall ba waived by lessor. A relinquishment having
become effactivethere shall be no recourse by lessee and the lease as to the relinquished lands
may not be reinstated.
õOð441
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:
r~~rtGG fudA~
Notary Public
My commission expires: .5 J ¿L¿ J &g
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