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HomeMy WebLinkAbout937978 OIL AND GAS LEASE 000070 This Oil and Gas Lease ("Lease") is made effective the ~ day of Febnwy . 2008, by and between Jeanne Reed Esterholdt whose address is P.O. Box 128 Cokeville. WvomÎnl! 83114 ("Lessor", whether one or more) and Fitzsimmons, LLC. whose address is 2201 Cabin Court Gillette, WY 82718 ("Lessee"). WTINESSETH, For and in consideration of TEN DOLLARS, the covenants and agreements contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged. Lessor does hereby grant, demise, lease and let exclusively unto said Lessee, with the exclusive rights for the purposes of mining, exploring by geophysical and other methods and operating for and producing thereftom oil and all gas of whatsoever nature or kind, and laying pipelines, telephone and telegraph lines, building tanks, plants, power stations, roadways and structures thereon to produce, save and take care of said products and the exclusive surface and subsurface rights and privileges related in any manner to any and all such operations, and any and all other rights and privileges necessary, incident to, or convenient for the operation alone or conjointly with neighboring land for such purposes, all that certain tract or tracts of land situated in LINCOLN. Wyoming, described as follows, to-wit: 1. SEE EXHIBIT "A" ATTACHED TO AND MADE A PART HEREOF FOR DESCRIPTIVE PURPOSES and co ltainin2 23.58 acres, more or less, (the "Premises"). 1. It is agreed that this Lease shall remain in force for a tenn of five (5) years ftom this date ("Primary Tenn") and as long thereafter as oil or gas of whatsoever nature or kind is produced ftom the Premises or on acreage pooled or unitized therewith, or operations are continued as hereinafter provided. If, at the expiration of the Primary Tenn, oil or gas is not being produced ftom the Premises or on acreage pooled or unitized therewith but Lessee is then engaged in driUing, reworking or other operations calculated to obtain or restore production from the leased premises thereon, then this Lease shall continue in force so long as such operations are being continuously prosecuted. Operations shall be considered to be continuously prosecuted if not more than One Hundred Eighty (180) days shall elapse between the completion or abandonment of one well and the beginning of operations for the drilling of a subsequent well. If after discovery of oil or gas on the Premises or on acreage pooled or unitized therewith, the production thereof should cease ftom any cause after the primary tenn, this Lease shall not tenninate if Lessee commences additional drilling, reworking operations within One Hundred Eighty (180) days ftom date of cessation of production or ftom date of completion of dry hole, completion or workover operation. If oil or gas shall be discovered and produced as a result of such operations at or after the expiration of the Primary Tenn, this Lease shall continue in force so long as oil or gas is produced ftom the Premises or on acreage pooled or unitized therewith. 2. This is a PAID-UP LEASE. In consideration of the payltlent made herewith, Lessor agrees that Lessee shall not be obligated, except as otherwise provided herein, to commence or continue any operations during the primary tenn. Lessee may at any time or times during or after the Primary Tenn surrender this Lease as to all or any portion of the Premises and as to any strata or stratum, by delivering to Lessor or by filing for record a release or releases, and be relieved of all obligations thereafter accruing as to the acreage sl,llTelldered. 3. The royalties to be paid by Lessee are: (a) On oil and other liquid hydrocarbons, ONE-SlXm (I/611>¡ of that produced and saved ftom said land, the same to be delivered at the wells, or to the credit of Lessor into the pipeline to which the wells may be COMected; Lessee may fi'om time to time purchase any royalty oil in its possession, paying the market price therefpre prevailing for the field where produced on the date of purchase; (b) on gas and tþe constituents thereof produced ftom said land and sold or used off the premises or in the manufacture of products thereftom, the market value at the well of ONE-SIXTH (J/6t1o} of the product sold or used. On product sold at the wel~ the royalty shall be ONE-SlXm (1/6~ of the net proceeds realized ftom such sale. All royalties paid on gas sold or used off the premises or in the manufacture of products thereftom will be paid after deducting ftom such royalty Lessors proportionate amount of all post-production costs, including but not limited to gross production and severance taxes, gathering and transportation costs ftom the Wellhead to the point of sale, treating, compresæon, and processing. On product sold at the well, the royalty shall be ONE-SIXTH (1/6110) of the net proceeds realized from such sale, after deducting ftom such royalty Lessor's proportionate amount of all of the above post-production costs and expenses, if any. 4. Where gas ftom a well capable of producing gas is not sold or used after the expiration of the Primary Tenn, Lessee shall payor tender as royalty to Lessor at the address set forth above One Dollar per year per net mineral acre, such payment or tender to be made on or before the anniversary date of this Lease next ensuing after the expiration of ninety (90) days ftom the date such well is shut in and thereafter on or before the anniversary date of this Lease during the period such well is shut in. 5. If Lessor owns a lesser interest in the Pren}ises than the entire and undivided fee simple estate therein, then the royalties (including any shut-in gas royalty) herein provided for shall be paid Lessor only in the proportion which Lessor's interest bears to the whole and undivided fee. . 6. Lessee shall have the right to use, ftee of c6st, gas, oil and water produced on the Premises for Lessee's operations thereon, except water ftom the wells of Lessor. 7. When requested by Lessor, Lessee shall bury Lessee's pipeline below plow depth. 8. No well shall be drilled nearer than 200 feet to the house or barn now on the Premises without written consent of Lessor. 9. Lessee shall have the right at any time to remove all machinery and fixtures (including casing) Lessee has placed on the Premises. 10. The rights of the Lessor and Lessee hereunder may be assigned in whole or part. No change in ownership of Lessor's interest (by assignment or otherwise) shall be binding on Lessee until Lessee has been furnished with notice, consisting of certified copies of all recorded instruments or documents and other information necessary to establish a complete chain of record title from Lessor, and then only with respect to payments thereafter made. No other kind of notice, whether actual or constructive, shall be binding on Lessee. No present or future division of Lessor's ownership as to different portions or parcels of the Premises shall, operate to enlarge the obligations or diminish the rights of Lessee, and all Lessee's operations may be conducted without regard to any such division. If all or any part of this Lease is assigned, no leasehold owner shall be liable for any act or omission of any other leasehold owner. II. Lessee, at its option, is hereby given the right and power at any time and ftom time to time as a recurring right, either before or after production, as to all or any part of the Premises and as to anyone or more of the fonnations thereunder, to pool or unitize the leasehold estate and the mineral estate covered by this Lease with other land, lease or leases in the immediate vicinity for the production of oil and gas, or separately for the production of either, when in Lessee's judgment it is necessary or advisable to do so, and irrespective of whether authority similar to this exists with respect to such other land, lease or leases. Likewise units previously formed to include fonnations not producing oil or gas, may be refonned to exclude such non-producing fonnations. The fonning or refonning of any unit shall be accomplished by Lessee executing and filing of record a declaration of such unitization or refonnation, which declaration shall describe the unit. Any unit may include land upon which a well has theretofore been completed or upon which operations for drilling have theretQfore been commenced. Production, drilling, reworking or dewatering operations or a well shut in fbr want of a market anywhere on a unit which includes all or a part of this Lease shall be treated as if it were production, drilling, reworking or dewatering operations or a well shut in for want of a market under this Lease. In lieu of the royalties elsewhere herein specified, including shut-in gas royalties, Lessor shall receive royalties on production from such unit only on the portion of such production allocated to this Lease. In addition to the foregoing, Lessee shall have the right to unitize, pool, or combine all or any part of the Premises as to one or more of the fonnations thereunder with other lands in the same general area by entering into a cooperative or unit plan of development or operation approved by any governmental authority and, ftom time to time, with like approval, to modifY, change or tenninate any such plan or agreement and, in such event, the tenns, conditions and provisions of this Lease shall be deemed modified to conform to the tenns, conditions, and provisions of such approved cooperative or unit plan of development or operation and, particularly, all drilling and development requirements of this Lease, express or implied, shall be satisfied by compliance with the drilling and development requirements of such plan or agreement, and this Lease shall not tenninate or expire during the life of such plan or agreement. In the event that the Premises or any part thereof, shall hereafter be operated under any such cooperative or unit plan of development or operation whereby the production thereftom is allocated to different portions of the land covered by said plan, then the production allocated to any particular tract of land shall, for the purpose of computing the royalties to be paid hereunder to Lessor, be regarded as having been produced ftom the particular tract of land to which it is allocated and not to any other tract of land; and royalty payments to be made hereunder to Lessor shall be based upon prolluction only as so allocated. Lessor shall fonnally express Lessor's consent to any cooperative or unit plan of development or operation adopted by Lessee and approved by any governmental agency by executing the same upon request of Lessee. 12. All express or implied covenants of this Lease shall be subject to all Federal and State Laws, Executive Orders, Rules or Regulations, and this Lease shall not be terminated, in whole or in part, nor Lessee held liable in damages, for failure to comply therewith if compliance is prevented by, or if such fàilure is the result of, any such Law, Order, Rule or Regulation. Any delay or interruption caused by storm, flood, acts of terrorism, act of God or other event of force ml\Ïeure shall not be counted against Lessee. If, due to the above causes or any cause whatsoever beyond the control of Lessee, Lessee is prevented ftom conducting operations hereunder, such time shall not be counted against Lessee, and this Lease shall be extended for a period of time equal to the time Lessee was so prevented, anything in this Lease to the contrary notwithstanding. 13. Lessor hereby warrants and agrees to defend the title to the Premises and agrees that Lessee shall have the right at any time to redeem for Lessor, by payment, any mortgages, taxes or other liens on the Premises, in the event of default of payment by Lessor, and be subrogated to the rights of the holder thereof, and the undersigned Lessors, for themselves and their heirs, successors and assigns, hereby surrender and release all right of dower and homestead in the Premises, insofàr as said right of dower and homestead may in any way affect the purposes for which this Lease is made, as recited herein. 14. Should anyone or more of the parties named as Lessor herein fail to execute this Lease, it shall nevertheless be binding upon all such parties who do execute it as Lessor. The word "Lessor," as used in this Lease shall mean anyone or more or all of the parties who execute this Lease as Lessor. All the provisions of this Lease shall be binding on the heirs, successors and assigns of Lessor and Lessee. 15. If at anytime within the primary tenn of this lease and while the same remains in force and effect, Lessor receives any bona fide offer, acceptable to Lessor, to gnmt an additional lease covering all or part of the aforesaid lands, Lessee shall have the continuing option by meeting any such offer to acquire such lease. Any offer must be in writing, and must set forth the proposed Lessee's name, bonus consideration and royalty consideration to be paid for such lease, and include a copy of the lease fonn to be utilized which form should reflect all pertinent and relevant terms and conditions of the lease. Lessee shall have fifteen (15) days after receipt, ftom Lessor, of a complete copy of any such offer to advise Lessor in writing of its election to enter into an oil and gas lease with Lessor on equivalent tenns and conditions. If Lessee fails to notifY Lessor within the aforesaid fifteen (15) days period of its election to meet any such bona fide offer, Lessor shall have the right to accept said offer. 16. Except as otherwise provided herein, at the end of the primary term of this Lease, this Lease shall terminate and Lessee shall promptly release this Lease as to all acreage lying outside of the spacing units established by the Wyoming Oil and Gas Conservation Commission or any other governmental agency having jurisdiction for each well located on the leased premises or lands spaced therewith which is producing gas or water. 17. Lessee shall pay fur all damage to roads, fences, improvements and growing crops caused by its operations hereunder, and will fill and level any pits and mounds, remove all board roads and board road materials, level and fIll all ruts, and restore the surface of the ground as near to its original condition as is l'\:8Sonably practical within a reasonable period of time after cessation of operations at each well location on the leased premises. 18. Lessee Is hereby given the option of extending the primary term of this lease for an additional term of Five (5) years from the expiration of the original primary term. This option may be exercised in relation to all (but no less than all) of the land covered by this lease by Lessee, its successors or assigns, on or befure the expiration of the primary term by paying the sum of Seventy Five dollars ($75.00) per net mineral acre to Lessor or to Lessor's credit in the depository named in this lease. Should this option be timely exercised as herein provided, it shall be considered for all purposes as though this lease originally provided for a term often (10) years. All of the provisions of this lease related to the payment of shut-in royalties shall apply equally to this payment, including, but not limited to, the provisions regarding changes of ownership. RECEIVED 4/2/2008 at 2:37 PM RECEIVING # 937978 BOOK: 691 PAGE: 70 JEANNE WAGNER LINCOLN COUNTY CLERK, KE......_. .ER, WY IN WITNESS WHEREOF, this instrument is executed as of the date first above written. 00007j. .~~, ~ «~~)~\t¡ ;' ". Jeannè-'Reed Esterholdt \,....,"--~....>.. STATE OF d~ COUNTYOF ~~ } UNIFORM ACKNOWLEDGEMENT ss. } BEFORE ME, the undersigned authority, a Notary Public, on this day personally appeared Jeanne Reed Esterholdt . to me known to be the person(s) who executed this within and foregoing instrument, and acknowledged to me that he/she executed the same. . _/y)~ l' ¡J . Given under my hand and official seal, this the ~day of ~'d----' 2008. MyCommJ,,;onExpu= II- .P,-Q.bl/ Jt~ X.:At~ =bli~~ V;Z;~~r EXHIBIT" A" 000072 ATTACHED TO AND MADE A PART OF THAT CERTAIN OIL, GAS AND MIN£RAL LEASE DATED FEBRUARY 26, 2008 BETWEEN, JEANNE REED ESTERBOLDT AS LESSOR, AND FITZSIMMONS LLC. AS LESSEE. Township 25 North. R!tn2e 119 We~t. 6th P. M. That part of Tract 61 and 62 of Township 25 North, Range 119 West, 6th P. M., Lincoln County, Wyoming described as follows: Beginning at comer No.2 of Tract 129 where is found a concrete tack set in Highway 30N with 2" 1P&BC witness comers set Westerly and Southerly; thence South 87°42' East,458.00 feet to a point; thence South 10°11' East, 407.90 feet to a point; thence South 83°31' West, 954.30 feet, more or less, to the East right-of-way line of the Oregon Short Line Railroad; thence North 09°37' West, 537.00 feet, more or less, along the said right-of-way line to the North line of said Tract 61; thence South 89°47' East, 103.00 feet along the said North line to a point; thence continuing South 89°47' East, 405.00 feet, more or less, along the said North line to the place of beginning; each point being marked by a 2" galvanized steel pipe 30" long with brass cap appropriately inscribed. LESS AND EXCEPT: 2.00 acres, more or less, deeded to the State Highway Commission of Wyoming and described as Parcell on that certain Quit Claim Deed recorded in Book 127, Page 318 of the Photostatic Records, Lincoln County, Wyoming. That part of Tract 129 Of Township 25 North, Range 119 West, 6thp. M., Lincoln County, Wyoming described as follows: Beginning at Comer No.4 of Tract 62; thence North 450.0 feet along the East line of said Tract 129 to a point; thence West 287.4 feet to a point; thence South 450.0feet to a point; thence South 12°02' West 388.2 feet to a point; thence South 02°08' West 980.5 feet to a point on the South line of said Tract 129 South 89°47' East 405.0 feet to Comer No.2 of said Tract 129; thence North 1360.92 feet, more or less, along the East line of said Tract 129 to the comer of beginning; each point being marked by a 2" galvanized steel pipe with brass cap appropriately inscribed. That part of Lot 8 of Section 27, Township 25 North, Range 119 West, 6th P. M., Lincoln County, Wyoming described as follows: Beginning at said Comer No.4 of Tract 62; thence South 89052' East 51.5 feet along the South boundary of said Lot 8; thence Northerly 450.8 feet along the West right-of-way line of Highway 30 North; thence West 70.5 feet to a point on the West line of said Lot 8 which is identical with the East line of said Tract 129; thence South 450.0 feet along the said West line of Lot 8 to the place of beginning; all in accordance with the map prepared and filed for record in the Office of the Clerk of Lincoln County, Wyoming.