HomeMy WebLinkAbout937325
and Sf ftlctivtl January 6. 1998
....................... "'... ......"'................ Parcel # 164
OIL AND GAS LEASE Fund Code: CS
000451
This indenture of lease entered into by and between the State of Wyoming, acting by
and through its Board of Land Commissioners as LE~SOR, 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 Tract 131 A-B (formerly E2SE See 13) Resurvey Township: 25 North Range: 119 West of the 6th P.M.
(;
County: Lincoln
Acres: 80.64
$81.00
($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 Landp, 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
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***Stipulations apply to this lease. The following numbers correspond to the stipulations printed with the
Darcels offered with this auction. The stiDulations can also be referenced online at slf-web.state.wv.us.***
ParcellD Stipulation #
164 104
RECEIVED 3/3/2008 at 1 :55 PM
RECEIVING # 937325
BOOK: 688 PAGE: 451
JEANNE WAGNER
LINCOLN COUNTY CLERI< . IERER, WY
OIL AND GAS TERII
Section 1. THE LESSEE AGREES:
(e) BOND. 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 be acceptable to the lessor, in the
penal sum as required by' the current rules of the Stata 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 Ihis lease end the rules
and regulations relating \herato, and also conditioned on the payment of all damages to the
surface and improvements thereon where the lease covers lands the surface of which has been
sold or otherwisa leesed. Such bond or bonds furnished prior to the developmant of the lands
contained in this lease may be inaeased in such reasonabla amounts as the lessor may decide
upon commencement of drilling operations and after the discovery of oil or ges.
{b)PAYMENTS. To make all payments aœruing hereunder to the Office of State Lands and
Investments, 122 West 25th Streel Cheyeme, Wyoming 82002-0600.
{c)RENTALS. Prior to the disoovery of oil or gas in paying quantities to pay the lessor in
advance, beginning with the effective dale hereof, an annual rental of $1.00 par acre or fraelion
thereof.
After the discovery of oil or gas in paying quantities to pay the lessor in advance beginning with
the first day of the leasa year succeeding the lease year in which aelual discovery was made, an
annual rental of $2.00 per acre or fraction thereof, unless changed by agreement Such rental so
paid for anyone year shall be aedlted on the royalty for that year.
Annual rentals on all leases shall be payable in advance for the first year and each yaar
thereafter. No notice of rental due shall be sent to the lessee. If tha 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 $0.50
per acre for late payment will be assessed.
The lessee is not legally obligated to pay either the rental or the penalty, but if the rental and
panalty are not paid within thirty (30) days after the notice of default has been received, the lease
will tennlnate automatically by operation of law. Tenninatlon of the lease shall not relieve the
lessee of any obligation incurred under the lease other then the obligation to pay rental or
penalty. The lessee shall not be entitled to a credil on royalty due for any penalty paid for late
payments of rental on an operating lease.
(d)ROYALTIES. The royalties to be paid by lessee are:
(i) On 011, one-sixth of that produced, saved, and sold from said land, the sama to be delivered
at the wells or to the credit of lessor into the pipe line to which the wells may be conneeled.
(II) On gas, including casinghead gas or other hydrocarbon substances, produced from said
land saved and sold or used off tha premises or in the manufacture of gasolina or other 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 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 dioxide, and helium, et such
royalty as shall be mutually datennined to be fair and raasonable.
(iv) For royalty purposes 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 be
considered as a deductible Item; provided, however, Ihatlhe allowance lor the cost of extraelion
may exceed two-thirds 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 lor operating purposes upon the land and, except as to the
ultimate sale thereof, gas or liquid hydrocarbons raturned to the sand for stimulating the
produelion 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,
frae 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 royalty oil frae of charge lor thirty
(30) days after the end of the calendar month in which the oil is produced, upon the lee sed
premises, or at the such place as the lessor and the lessee may mutually agree upon, provided,
that the lessee shell not be held liable lor loss or destruction of royalty oil so stored from causes
beyond his control.
The free storaga of oil, as herein provided, shall apply only as long as the said oil is the property
of the lessor.
(!) MEASUREMENTS OF PRODUCTION. To gauge, measure and correel for temperature all
production from said lands in confoonance with the rules and regulations adopted by the Board of
Land Commissioners and report said production to tha lessor in accordance therewith.
To keep books, records, and reports partaining to the production from tha land herein leased as
well as those pertaining to the production from offset wells operated by the lessee, his operator,
or sub-lessee on other lands, which shall be opened at all times for the inspeelion of any duly
authorized agent 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 land herein leasad, 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 maka payment on or befora 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 produelion (per well if required where practical) from tha land
hereby leased, and the quantity end quelity of the production (per well where practical) from offset
wells upon cornering or contiguous lend operated by tha lessee, his oparator or sub-lessee and
such other infonnetion es may be called for in the fonn or report prescribed by lassor.
(h) WELLS TO BE DRILLED. To drill and operata affectively all wells necessary to raasonably
offset wells upon end produelion from adjoining lands.
To drill such additional wells at such timas or places as are necessary and essantialto.the
propar 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 Ionn approved by the lessor, of each
well drillad by the lessee on the lands herein leesed, showing the strata and charaeler of the
fonnations, water sands and mineral deposits panetrated by the drill, amount of casing, size and
whare Sal 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 Ionn prascribed by the lessor, at the and of eech thirty (30) day
period while each well is being drilled.
To file annually, or at such times as the lessor may raquire, maps showing the development of
the structure and the location of all wells, pipe lines and other works used In conneelion 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 wells,
production or operations of others on lands on the same geologic structure that may ba of
importance in effecting proper devalopment and operation of the lands herein leased, as may be
called for by the lessor. All logs, maps, and reports shall be submitted in duplicate and the otflCS
of State Lends and Investments may waive such reports as conditions may warrent.
O>PRODUCTION. To operate the wells upon the land herein leased in a competent and efficjent
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 theraunder 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 inaeasing produelion on lands herein leased other than those in
common use shall first be presanted to the lessor for approval before being put into actual
operation.
No produelion agreements limiting, restricting, prorating, or otherwise affecting tha
naturalproduction from said land shall be entered into by the lessee, nor shall tha lessee limit,
restrict, or prorate the natural produelion from said land in any way or in any event, excapt with
the consent in writing of the lessor first had 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 tha lassae is
unabla 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 pennission 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 oparations is in affect, tha lessee shall
continue to pay the annual rental of $2.00 par acre or fraction thereof provided by (c) above, and
this leese shall remain in effect as though oil or ges was being produced from said lands.
(1)DILlGENCE-PREVENTION OF WASTE. To exercise reasonable diligence in drilling,
producing, and operating of wells on the land 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, heving due regard for
the prevention of weste 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 the
property for Mure productiva 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 pennission of the lessor, not to drill any well within two hundred (200) feet of any of
,.1&;... ...-'.."...,
the outer boundaries of the land covered hereby, unless to st drainage by wells
drilled on lands adjoining lass then 200 feet from the proP""1 """. ",ereof; to conduel all
operations subject to the inspection of the lessor; to carry out at the lessee's expense all
reasonabla orders end requirements of the lessor relativa to the prevantion of weste and
presarvation of the property and the health and safety of workmen including the replanting end
reseeding of drilling sites and other areas disturbed by drilling operations and on failure of the
lessaa so to do the lessor shall hava the righl together with other recourse herein provided, to
entar on the property to repair damage or prevent waste at the lessee's expensa; to abide by and
confonn to valid applicable regulations prescribed to reimburse the owner of the surface, if other
than the lessor, or lessea of grazing rights thereof for actual damages thereto and injury to
improvements tharaon, provided, that the lessee shall not be held responsible for aels of
providence or aelions 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 and employees complete fraedom of purchase, and to pay all wages due workmen and
amployees in confonnance 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 p<emises, except with the consent in writing
of the lessor first hed and obtained.
All ov8lTiding royalties to be valid, must have the approval of the Board or by the Office of State
Lands and Invastments when authority to do so hes been dalegated by the Board and will be
recorded with the lease. Tha Board reserves the right of disapproval of such ov8lTiding royalties
when in its opinion they become excessive and hance are detrimental to tha proper development
of the leased lands.
(o)DELlVER PREMISES IN CASE OF FORfEITURE. To deliver up the leased premises, with all
pennanent improvaments thereon, in good ordar and condition in cese of forfeiture of this lease,
but this shell not be construed to
prevent the ramoval, alteration or renewal of aquipment and improvements in tha ordinary
course of operations.
Seelion 2. THE LESSOR EXPRESSLY RESERVES:
(a) Tha right to laase sell, or otherwise dispose of the surface of the land ambraced within this
lease under existing laws or laws hereefter enacted, and in eccordance with the rulas of the
Board of Land Commissions insofar as tha suñace is not necessary for the usa of the lessee in
the conduct of operations hereunder.
{b)The right to laase, sell, or o!harwise disposa of othar minaral or subsurface rasourœs not
covered by the lease, in accordance with tha applicable laws and the rules of the Board of Land
Commissioners.
{c)From the operation of this lease, the surface lends heretofore grented for rightlH>f-way and
easements and reserves tha right to grant such other rightM-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 action would impair the lesso(s reservad right to taka its royalty gas in kind and to purchase
all other ges allocated to the leased lands a provided in Section 3{e)below.
{e )The right to alter or modify the quentity and rate of production to the end thet waste may be
aliminated or that produelion may confonn to the lessee's fair shere of allowable production under
any system of State or National curtailmant and proration authorized by law.
{!)In addition to its right to take its royalty gas in kind, the lessor rasarves the right and option to
purchase all other gas produced for sele or use off the leesed lands. This option shall be
exercisad only if the Board finds that the lessee hes 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 thet
one or more Intrastate purchasers (I.e., purchasers who will usa, consume, or sell the gas for usa
or consumption entirely within the Steta of Wyoming) are willing and abla to purchasa 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 waiva this option and pannit an interstate sale if II 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 the lessee. As a condition to such waiver,
a satisfactory agreament may be entered into by which the production of its royalty gas may be
deferred until it can be produced and sold lor consumption and use entirely within the State of
Wyoming.
Section 3. APPRAISAL OF IMPROVEMENTS. The lessee shall have the right subjeel to the
provisions of Title 36, as to State and State School Lands, and Title 11, es to Stata Loan and
Investmants Board Lands, W.S. 1977, to remova any Improvements owned by lessee within a
reasonable time aftar tha tannination of this leasa. Lessee agrees that any such improvements
not ramoved within a reasonable time after tennination of this leesa shall be disposed of pursuant
to the above statutes.
Seelion 4. FORFEITURE CLAUSE. The Board shall hava the powar and authority to cencel
leases procured by fraud, deceit, or misrepresentations, or for the use of the lands lor unlawful or
illegal purposes, or for tha violation of the covenants of tha leese, upon propar proof thereof, in
tha avent 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 the Board of
Land Commissioners and in forœ on the date heraof, the lessor shall sarve notice of such falllr8
or default either by personal service or by certified or registered mail upon the lessee, and W such
failure or default continues for a parlod of thirty (30) deys after the service of such notice, than
and in that event the lessor may, at its option, daclare a forfeiture and cancel this lease,
whereupon all rights and privilegas, obtained by the lessee hereundar shall tenninate and cease
and the lessor may ra-anter and take possession of said premises or any part thereof. Thesa
provisions shall not be construed to prevent the exercise by lessor any legal or equitabla remedy
which the lessor might otherwise have. A waiver of any particular cause or forfeitura shell not
prevent the cancellation and forfeiture of this laase by any other cause of forfaiture, or for the
sama cause occurring at any other time.
Seelion 5. RELINQUISHMENT AND SURRENDER. This leese may be relinquished and
surrendered to lessor as to all or any legal subdivision of said lends as follows:
(a) If no operations have been conducted under the lease on the land to be relinquished, tha
lessee shall file with the State Land Board and State Loan and Investmant Board, a written
relinquishment or surrender, duly signed and acknowledged and stating therein thet no operations
heve bean conducted on the land. Tha relinquishment so filed shall become affective on the date
end hour of receipt thereof in the office of the Director or at some later date, if such be so
specified by the lessee therein. If the said relinquishment fails to state that no operations heve
been conducted, the effective date of relinquishment shall be the date the relinquishmant is
approved by the Board.
(b) If oparations have bean conductad under tha lease on land proposed to be relinquished, the
lassee shall give sixty (GO) days notica and shall fila with the Director a written relinquishment or
surrender duly acknowledged and stating therein that operations have bean conducted on the
land. The relinquishment shall not become effeelive until the land and the wells thereon shall
have bean placed in condition acceptable to lessor and shall have been approved by the Stala Oil
and Gas Supervisor.
All rentals becoming due prior to a surrender or ralinquishment becoming effective, shall be
payable by lessee unless payment thereof shell be waived by lessor. A relinquishment having
become effeelive there shall be no recourse by lessee and the lease as to the relinquished lands
may not be reinstated.
STATE OF WYOMING
)
) §
)
ùOð453
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:
L [/LN-V6. --tiL E-t CVfJC
Notary Public
My commission expires: ..5 ¡ -¿ul Ð7
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