HomeMy WebLinkAbout937333
and Effective January 6, 1998
ro;» ... .no....&.:I V ¿" n... V.&.·....... .... ~ Parcel # 177
OIL AND GAS LEASE Fund Code: CS
00\)475
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:
County: Lincoln
Acres: 701.26
$702.00
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:
Lfr.
I
Lots 1-14:NW:N2SW Section: 36 Township: 26 North Range: 119 West of the 6th P.M.
($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
effective on the 2nd day of, February,
been
2008
executed by LESSOR and LESSEE
A.D. ""
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to become"'
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LESSOR, STATE OF ~qMINg, Acting ~y and through its
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Lessee Signature: t~""""";-:-~~¿~ð-~ By
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Address:~.£;Z d,.v/.<-¿..;,::¡;ÿ7f Þy'
City:---.d::þtÆ State :ß<Þ/ Zip:-.fi //;f'"
Phone : -_-.L'~d_Z ~~. n - ~ -...i?;LL7
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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 #
177 14
4
103
RECEIVED 3/3/2008 at 2:00 PM
RECEIVING # 937333
BOOK: 688 PAGE: 475
JEANNE WAGNER
LINCOLN COUNTY CLERK, KEMMERER, WY
OIL AND GAS TER
000476
Section 1. THE LESSEE AGREES:
(a) BOND. To furnish a bond with an approved corporata suraty 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 CUIT80t rules of the State Board of Land Commissioners,
condKioned 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 rulas
and regulations relating thereto, end also conditioned on the payment of all demages to the
surface and improvements thereon where the lease covers lands the surface of which has been
sold or otherwise leased. Such bond or bonds furnished prior to the development of the lands
contained in this lease may be increased in such reasonable amounts es the lessor may decide
upon commencement of drilling operations and after the discovery of oil or gas.
(b) PAYMENTS. To make ell payments accruing hereunder to the Office of State Lands end
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, begiming with the effective dete hereof, an annual rental of $1.00 per acre or fraction
thereof.
After the discovery of 011 or ges in paying quanllties to pay the lessor in advance beginning with
the first day of the lease year sucœading the lease year in which actual discovery was mede, an
annual rental of $2.00 per acre or fraction thereof, unless changed by agreement. Such rental so
paid for eny one year shall be credited on the royalty for that year.
Annual rentals on all leases shall be payable in advance for tha 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 $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 terminate automatically by operation of law. Termination of the lease shall not relieve the
lessee of any obligation incurred under the lease other than the obligation to pay rental or
penalty. The lessee shell not be entitled to a credit 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 ere:
(i) On oil, one-sixlh of that produced, seved, and sold from said land, the same to be delivered
at the walls or to the credit of lessor into the pipe line to which the walls may be connected.
(ii) On ges, Inctuding casingheed gas or other hydrocarbon substances, produced from said
land saved and sold or used off the premises or in the manufacture of gasoline or other products
therefrom, the market value at the wall of one-sixth of the gas so sold or used, provided thet on
gas sold at the walls, 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, 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 shell be
considered as a deductible Item; provided, however, that the allowance for the cost of extraction
may exceed two-thirds of the amount or value only on approval of the lessor and in no event shell
the price for gas, or natural gasoline, be less than thet received by the United State of America for
its royalties from the seme field.
(v) Natural gas and oil actually used for operating purposes upon the land end, except es to the
ultimate sale thereof, gas or liquid hydrocarbons raturned to the sand for stimulating the
production of oil or secondary recovary purposes shall 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 cherge on the premises whera produced, or, etthe 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 end 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 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 dastruction of royelty oil so stored from causes
beyond his control.
The free storage of oil, as herain provided, shall apply only as long as the said oil is the properly
of the lessor.
(I) MEASUREMENTS OF PRODUCTION. To gauge, measure and correct for temperature ell
production from said lands in conformance with the rules and regulations adopted by the Board of
Land Commissioners and raport 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 walls operated by the lessee, his operator,
or sub-lessee on other lends, which shall be opened at all times for the inspection 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 tamperatures of ell oil NIl 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 returned to tha sand.
(g) MONTHLY PAYMENTS AND STATEMENTS. Unless the time of payment is otherwise
extended by the Office of Stale 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 stataments tharewith showing in
detail the quantity and quality of the production (per well if raquired where practical) from the land
hereby leased, and the quantity and quality of the production (per 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 8E DRILLED. To drill and operate effectively all wells necassary to reasonably
offset wells upon and production from adjoining lands.
To drill such addillonal walls 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 aach
well drilled by the lessee on the lends herein leased, showing the strata and character of the
formations, water sands and mineral deposits penatrated 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 each wall 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 information as may be possessed by the lessee on the walls,
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, and reports shall be submitted in duplicate and the Office
of State Lends and Investments may waive such reports as conditions may warrant.
(j PRODUCTION. To operate the walls upon the land herein leased in a competent and efficient
menner in an endeaVOf 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 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 ectual
operation.
No production agreements limiting, restricting, prorating, or otherwise affecting the
naturalproductlon from said land shall be entered into by the lessee, nor shell the lessee limit
restrict, or prorata the natural production from said land in any way or in any even~ except with
the consent in writing of the lessor first had an obtained.
(k)SUSPENSION OF OPERA TrONS. 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 apply for and the lessor may grant pe<mission for the suspension of production
operations until such times as a satisfactory market for tha product from said wall can be
developed. During the time any such suspension of operations is in effect, the lessea shell
continue to pay the annual rental of $2.00 per acre orfrection thereof provided by (c) above, and
this lease shall remain in effect as though oil or gas was baing produced from said lands.
(I)DILIGENCE-PREVENTION OF WASTE. To exarcise reasonable diligence in drilling,
producing, and operating of walls on the land covared 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 the
property for future productive operations and to the health and safaty ofworkmen and employees;
to plug securely in an approved manner any wall befora abandoning it, and not to abandon any
well without permission of the lessor, not to drill any well within two hundred (200) feet of any of
tha outer boundaries of the land covered hereby, unless te 1st drainage by walls
drilled on lands adjoining less than 200 feet from the property lines thereof; to conduct all
operalions subject to tha inspection of the lessor; to cany out at the lessee's expense all
reasonable orders and requirements of the lessor relative to the prevenllon of waste and
praservation of the property and the health and safety of workmen including the replanling 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 repeir damage or prevent waste at the lessee's expense; to abide by and
conform to valid applicable regulations prascribed to reimburse the owner of the surface, if other
then the lessor, or lessee of grazing rights thereof for actual dameges there!o 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 pey, 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 assals of the lessee, to aCC9rd all
workmen and employees complete freedom of purchase, and to pay all wagas due workmen and
employees in conformance with the laws of the State of Wyoming.
(n)ASSIGNMENTS OF LEASE-PRODUCTlON AGREEMENTS. NoIto assign this lease or any
interest therain, nor sublet any portion of the leased premises, axcept with the consent in writing
of the lessor first hed and oblained.
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 be
recorded with the lease. The Board reserves the right of disapproval of such overriding royalties
when in its opinion they become excessive and hence are detrimental to the proper development
of the leased lands.
(o)DELNER PREMISES IN CASE OF FORFEITURE. To deliver up the leased premises, with all
permenent improvements thereon, in good order and condnion in case of forfeiture of this lease,
bulthis shell not be construed to
prevent the removel, 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 suñace of the land embraced within this
lease under existing laws or laws hereafter enactéd, and in accordance with the rules of the
Board of Land Commissions Insofar as· the suñace 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 subsurface resources nol
covered by the lease, in accordance with the applicable laws and the rules of the 80ard of Land
Commissioners.
(c)From the operation of this lease, thesuñace lands heretofore granted for rights.<Jf-way and
easements and raserves the right to grant such other rights-of-way and easements as provided by
the staMes of the State of Wyoming, as long as such rights.<Jf-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 BoanI finds
such action would impair the lessor's reSBfVed right to take its royalty gas in kind and to pIJXhese
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 and that waste may 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 authorized by law.
(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 shell 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 intands to sell or transport 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) ara willing and able to purchase the gas
upon terms reasonably comparable to and at least as favorable to the lessee as \hose offered by
the interstate purchaser. Tha Board shall waive this option and permit an interstate sale if K finds
that no Intrastate purchaser is willing and able to purchase the gas upon terms which ere
reasonably comparable to and atleasl as fevorable to the lessee. As a condition to such waiver,
a satisfactory agreement may 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 Tilie 36, as to State and State School Lands, and Tille 11, as to State Loan end
Investments Board Lands, W.S. 1977, to remova any improvements owned by lessee within a
raasonable time after the termination of this lease. Lessee egrees 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 freud, deceit, or misrepresentations, 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 tha performance 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 force on the date hereof, the lessor shall serve notice of such failure
or default either by personal service or by certified or registered mail upon the lassee, and if such
failure or default continuas 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,
whareupon all rights and privileges, obtained by the lessee hereunder shall terminate and œase
and the lessor may ~nter and take possession of said premises or any pert thereof. These
provisions shall not be construed 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 foñeiture, or for the
same cause occurring at any other time.
Section 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 leese on the land to be ralinquished, the
lassee 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 that no operations
heve been conducted on the lend. The ralinquishmentso filed shall become effecIiva on \he dale
and hour of receipt thereof in the ofIice 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 have
been conductad, the effectiva date of ralinquishment shall be the date the relinquishment is
approved by the Board.
(b) If operations have been conducted under the lease on land proposed to be relinquished, \he
lassee shall giva sixty (60) days notice and shall file with tha Director a written relinquishment or
surrender duly acknowledged and stating therein that operations have been conducted on the
land. The relinquishment shall not become effactive until the land and tha wells thereon shall
have been placed in condition acceptable to lessor and shall have been approved by the SIaIa Oil
and Gas Supervisor.
All rentals becoming due prior to a surrender or relinquishment becoming effective, shall be
payable by lassee unless payment thereof shall be waived by lessor. A relinquishment having
become effactive thera shall be no recourse by lessee and the lease as to the relinquished lands
may not be reinstated.
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STATE OF WYOMING )
) §
COUNTY OF CAMPBELL )
Before me on the 28th day of February, 2008, John 1. 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:
~~~'-~~_QAJ
Notary Public
My commission expires: 8 / Z- /.¿! Ð c¡