HomeMy WebLinkAbout937323
and if fect1ve January 6, 1'98
.... · ~..&.:I "'"." n. "'................. '-J Parcel # 162
OIL AND GAS LEASE Fund Code: SR
OOV445
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:
2- Pt. Tract 123 Lots 19:20 Section: 5 Resurvey Township: 25 North Range: 119 West of the 6th P.M.
ir':
r ¿of
)---
../
County: Lincoln
Acres: 41.38
$42.00
($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 expr~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~~~ ~¿;c~
Le,see Slgnature'_~T~ ~ B .
Address: '¿f?~V~~ 'I'k~
City:_& &~ State :_ß:-£. ~ip:~7~
Phone :___--L~ ..-'.-1 z..:~ c. { r'~ff
C9nun:i,,~,!3ioners .
í ~ ~\,,,i,f.:·:· ~, "......,
\',
'.'
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 #
162 5
67
104
57
RECEIVED 3/3/2008 at 1 :54 PM
RECEIVING # 937323
BOOK: 688 PAGE: 445
JEANNE WAGNER
LINCOLN COUNTY CLERK, KFMMERER, WY
OIL AND GAS TER/\
Section 1. THE LESSEE AGREES:
(a) BOND. To fumish a bond with an approved corporate surety company authorized to transact
businass in the State of 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 of Land Commissioners,
condKioned upon the payment of all rantals and royalties accruing to the lessor under the tenns
hereof, and upon the full compliance of all other terms and conditions of this lease and the rules
and regulations releting thereto, end also conditioned on the payment of all damages to the
suñace and improvements thereon where the lease covers lands the suñace of which has been
sold or otherwise leased. Such bond or bonds fumished prior to the development of the lands
contained in this lease may be increased in such reasonable amounts as the lessor may decide
upon commencement of drilling oparations and after the discovery of 011 or gas.
(b)PAYMENTS. To make all payments accruing hereunder to the Office of State Lands and
Investments, 122 West 25th StreeL Cheyenne, Wyoming 82002-0000.
(c)RENTAlS. Prior to the discovery of oil or gas in paying quantities to pay the lessor in
edvance, 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 day of tha lease year succeeding the lease year in which actual discovery was made, an
annual rentel of $2.00 par acre or fraction thereof, unless changed by agreemenl Such rental so
paid for any one year shall be credited on tha royalty for that yaar.
Annual rantals on all leasas shall be payabla 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 it becomes due, notice of default will be sent to the lessee, and a penalty of SO.50
per acre for late payment will be assessed.
The le88ee Is not legally obligated to pay either the rental or the penalty, but if the rental and
panalty are not paid within thirty (30) days after the notice of default has been received, the lease
willtennlnate automatlcelly by operation of law. Tennination of the lease shall not relieve the
lessea of any obligation incurred under the lease other than the obligation to pay rental or
penally. The le88ee shall not be entitled to a credit on royalty due for any penalty paid for late
payments of rental on an oparating lease.
(d)ROYAl TIES. The royalties to be paid by lessee are:
(i) On oil, one-sixth of that produced, saved, and sold from said land, the same to be delivared
at the wells or to the ...edit of lessor into the pipe line to which the wells may be connactad.
(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 manufacture of gasoline or othar products
therefrom, the market value at the well of one-sixth of the gas so sold or used, provided that on
gas sold at the wells, the royalty shall be one-sixth of the amount realizad from such sale.
(iii) 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 tha
lessor, and in the detennination of the value of natural gasoline the fair cost of extraction shall be
considared as a deductibla item; provided, however, that the allowance for the cost of extraction
may excead two-thirds of the amount or value only on approval of the lessor and in no avant shell
the price for gas, or natural gasoline, be Ie.. 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 retumed to the sand for stimulating the
production of oil or secondary recovery purposes shall be royalty fraa.
(e) DISPOSITION OF ROYAlTY OIL AND GAS. To deliver to the lessor, 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 whare produced, or, at the option of the lessor, and in lieu of said
royalties in kind, the lessee agrees to pay the lassor the field market price or value of all royalty
oil, gas, or other kindred hydrocarbons produced and saved.
When the lessor elacts to take its royalty oil, gas, or other hydrocarbons in kind such as oil, gas,
or othar kindred hydrocarbons shall be good merchantable oil, gas, or other kindred
hydrocarbons. The lessee shall if nece..ary fumish storage for royalty 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 agrea upon, providad,
that the lessee shall not be held liable for 1088 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 corract 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 keep books, records, and reports pertaining to the production from the land herein leased as
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
authorized agent of the lessor.
To fumish the lessor with original pipe lina 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 land herein leased, and the amount of gas retumed to the sand.
(g) MONTHLY PAYMENTS AND STATEMENTS. Unless the time of payment is othelWise
extended by the Office of State Lands and Investments to make payment on or before the
!wantleth (20th) day of the calendar month sucœading the month of production and removal and
sale of oil and gas from said land, and to fumish sworn monthly statements therewith showing in
detail the quantity and quality of tha production (per well if required where practical) from the land
hereby leased, and the quantity and quality of the production (per well where practical) from offset
wells upon comerlng or contiguous land operatad by the le88ee, his operator or sub-lessee and
such other infonnation as may be called for in the fonn or raport prescribed by lessor.
(h) WELLS TO BE DRILLED. To drill and operata effectively all wells necessary to raasonably
offset wells upon and production from adjoining lands.
To drill such additional wells at such times or places as are necessery 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 fonn approved by the lessor, of each
well drilled by the lessee on the lands herein leased, showing the streta and character of the
fonnations, water sands and mineral deposits penetratad by the drill, amount of casing, size and
where set, and such other information as tha lessor may require which log or copy thereof shall
be fumished to the lessor.
To file progre.. reports, In the form prescribed by the lessor, at the end of each thirty (30) day
period while each well is being drilled.
To file annually, or at such times as the lessor may requira, maps showing the development of
the structure and the location of all 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 and operations by the lessee on said
land, and report such other infonnation as may be possassed by the lessee on the wells,
production or operations of others on lands on the same geologic structure that may be of
importance In effacting proper development and operation of the lands herein leased, as may be
called for by the lassor. All logs, maps, and reports shall be submittad in duplicate and the Office
of State Lands and Investments may waive such reports as conditions may warrant.
ü)PRODUCTION. To operate the wells upon thaland herein leased in a competent and efficient
mllnner 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 plans or methods for the
purpose of stimulating or lnaeasing production on lands herein laasad other then those in
common use shall first be presented to the lessor for approval before being put into actual
operation.
No production agreements limiting, reslricting, prorating, or oth9lWise affecting the
naturalproductlon from said land shell be entered into by the lessee, nor shell the lessee limit,
restrict, or prorate the natural production from said land in any way or in any evenL except with
the consent in writing of the lessor first had an obtained.
(k)SUSPENSION OF OPERATIONS. Should any well drlllad 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 apply for and the lessor may grant pennisslon 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 affect, 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 effact as though oil or gas was being produced from said lends.
(I)DllIGENCE-PREVENTION OF WASTE. To exercise reasonable diligence in drilling,
producing, and operating of wells on the land covered hereby, unless consent to suspend
operations temporarily is granted by the lessor; to cany on all operations hereU1der 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 weter to the oil or gas bearing sands or
strata to the destruction or injury of such deposits, the preservation and conservation of the
property for Mure productive operations and to the health and safely of workmen and employees;
to plug securaly in an approvad manner any well before abandoning iL and not to abendon any
well without permission of the lessor, not to drill any well within two hundred (200) feet of any of
-·····'....n
the outer boundaries of the land covered hereby, unless to snlrà'1r\age by wells
drilled on lands adjoining less than 200 feet from the pro~_.., ....__ _.~raof; 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 weste 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, togather with other recourse herein provided, to
entar on the property to repair damage or prevent waste at the lessee's expanse; to abide by and
contonn to valid applicable regulations prescribed to reimburse the owner of the suñace, if other
than the lessor, or lessee of 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 of the Stale 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 and employees complete freedom of purchase, and to pay all wages due workmen and
employees in conformance with the laws of tha 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 velid, must have the approval of the Board or by the Office of State
Lands and Investments when authority to do so has been dalegated by the Board and will be
recorded with the lease. The Board reservas the right of disapproval of such ovelTiding royalties
when in its opinion they become excessive and hence are delrimental to the proper development
of the leased lands.
(o)DElIVER PREMISES IN CASE OF FORFEITURE. To deliver up the leased premises, with all
pennanent improvements thereon, in good order and condition in case of foñeiture 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.
Saction 2. THE LESSOR EXPRESSLY RESERVES:
(a) The right to lease sail, or otherwise dispose of the suñaœ of the land embraced within this
lease under existing laws or laws hereafter enacted, end in accordance with the rules of the
Board of Land Commissions insofar as the surface is not necessary 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 subsuñace 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 suñace lands heretofore granted for rights-of-way and
easements and raservesthe 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 oonfIict
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 action would impair the lessor's reserved right to take its royalty gas in kind and to purchase
all other gas allocated to the leesed lands a provided in Saction 3(e)below.
(e)The right to alter or modify the quantity and rate of production to the end that waste may be
eliminated or that production may conform to the lessee's fair shere of allowable production under
any system of State or National curtailment and proration authorized by law.
(1)1n addition to its right to take its royalty gas in kind, the lessor reservasthe 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 trensport the gas into interstate commerce and that
one or more intrastate purchasers (I.e., purchasers who will usa, 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 lessea as those offered by
the interstate purchaser. The Board shall waivathis option and pennit an interstate sale if it finds
thet no intrastate purchaser is willing and able to purchase the gas upon tenns which are
reasonably comparable to and at least as favorable to the lessee. As a condition to such waiver,
a satisfactory agreement mey be entered into by which the production of its royalty gas may be
deferred until it can 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 subject to the
provisions of Tille 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 ownad 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 tennination of this lease shall be disposed of pursuant
to the above statutes.
Section 4. FORFEITURE CLAUSE. The Board shall heve the power and authority to cancel
leases procured by fraud, deceit, or misrepresantations, or for the use of the lands 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 peñonnance or observance of any of the tenns,
covenants, and stipulations hereof, or of the ganeral regulations promulgated by the Board of
Land Commissioners and in force on the date hereof, the lessor shell serve notice of such failure
or default ei/her by personal service 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 foñeiture and cancel this lease,
whereupon all rights and privilages, obtained by the lessee hereunder shall tenninate and cease
and the lessor may re-enter and take possession of said premises or any part thereof. These
provisions shall not be 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 foñelture shall not
prevent the cancellation and foñeiture of this lease by any other cause of foñeiture, or for the
same cause occulTing at any other time.
Saction 5. RELINQUISHMENT AND SURRENDER. This lease may be relinquished and
surrendered to lessor as to all or any legal subdivision of said lands as follows;
(a) If 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 acknowtadgad and stating therein thet no operations
have been conductad on the land. The relinquishment so filad shall become effactiva on the date
and hour of receipt thereof in the office of the Dlractor or at some laler date, if such be so
specified by the lessee therein. If the said relinquishment fails to state that no operetions have
been conductad, the effective date of relinquishment shall be the date the relinquishment is
approvad by the Board.
(b) If operations have been conducted undar the lease on land proposed to be relinquished, the
lessee shall give sixty (60) days notica and shall file with the Diractor a written relinquishment or
surrender duly acknowtadged and stating therein that operations have been conducted on the
land. The relinquishment shall not becoma effective until the land and the wells thereon shall
have been placed in condition acceptable to lessor and shell have been approved by the State Oil
and Gas Supervisor.
All renlals 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 heving
become effective thera shall be no recourse by lessee and the lease as to the relinquished lands
may not be reinstated.
000447
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:
~C~-b~~~
Notary Public
My commission expires: 5/ Z-le./ Ð c¡