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HomeMy WebLinkAbout948759RCI.CIVIIVh # y46/0 y Producers 88 PAID-UP BOOK: 729 PAGE: 188 Rocky Mountain 1989 OIL AND GAS LEASE JEANNE WAGNER (Paid-Up Rev. 1996) LINCOLN COUNTY CLERK, KEMMERER, WY THIS AGREEMENT, made and entered into this 1st day of September 2008, by and between ANNE L. BAGLEY, a/k/a ANNIE BAGLEY, a/k/a ANNIE L. BAGLEY ("Bagley"), a single person of Kemmerer, Wyoming, ROBERT BERNARD FOX and JOY S. FOX (collectively, "Fox"), husband and wife, of Kemmerer Wyoming, hereinafter called lessor (whether one or more), and GARY-W ILLIAMS PRODUCTION COMPANY hereinafter called lessee: WITNESSETH: f,°.®e 88 1. That lessor, for and in consideration of TEN dollars ($10.00) in hand paid, receipt of which is hereby acknowledged, and of the agreements of lessee hereinafter set forth, hereby grants, demises, leases and lets exclusively unto lessee the lands described below for the purpose of investigating, prospecting, exploring (by geophysical and other methods), drilling, mining, operating for and producing oil or gas, or both (as defined below), together with the right to construct and maintain pipelines, telephone and electric lines, tanks, ponds, roadways, plants, equipment, and structures thereon to produce, save and take care of said oil and gas (which right shall include specifically a right-of-way and easement for ingress to and egress from said lands by lessee, or its assignees, agents or permittees, necessary to or associated with the construction and maintenance of such pipelines, telephone and electric lines, tanks, ponds, roadways, plants, equipment, and structures on said lands to produce, save and take care of the oil and gas), and the exclusive right to inject air, gas, water, brine and other fluids from any source Into the subsurface strata, and any and all other rights and privileges necessary, incident to, or convenient forthe economical operation of said land, alone or conjointly with neighboring land, for the production, saving and taking care of oil and gas and the injection of air, gas, water, brine, and other fluids into the subsurface strata, said lands being situated in the County of Lincoln, State of Wyoming, described as follows, to-wit: See Exhibit A, attached hereto and made a part hereof. In addition to the land described above, lessor hereby grants, leases and lets exclusively unto lessee, to the same extent as if specifically described, lands which are owned or claimed by lessor by one of the following reasons: (1) all lands and rights acquired or retained by lessor by avulsion, accretion, reliction or otherwise as the result of a change in the boundaries or centerline of any river or stream traversing or adjoining the lands described above; (2) all riparian lands and rights which are or may be incident, appurtenant, related or attributed to lessor in any lake, stream or river traversing or adjoining the lands described above by virtue of lessor's ownership of the land described above; (3) all lands included in any road, easement or right-of-way traversing or adjoining the lands described above which are or may be incident, appurtenant, related or attributed to lessorby virtue of lessor's ownership of the land described above; and (4) all strips or tracts of land adjacent or contiguous to the lands described above owned or acquired by lessor through adverse possession or other similar statutes of the state in which the lands are located. For the purpose of calculating payments provided for herein, it shall be deemed that the lands covered by this lease contain 1,828.48 acres, whether there actually be more or less. The term oil as used in this lease shall be interpreted to Include any liquid hydrocarbon substances which occur naturally in the earth, including drip gasoline or other natural condensate recovered from gas without resort to manufacturing process. The term gas as used in this lease shall be interpreted to include any substance, either combustible or non- combustible, which is produced in a natural state from the earth and which maintains a gaseous or rarified state at ordinary temperature and pressure conditions, including but not limited to helium, nitrogen, carbon dioxide, hydrogen sulphide, coal bed methane gas, casinghead gas and sulphur. Subjectto the other provisions herein contained, this lease shall remain in force for a term of five (5) years from this date (herein called "primary term") and as long thereafter as oil and gas, or either of them, is produced from the leased premises or drilling operations are continuously prosecuted. For purposes of this lease, a well completed for the production of coalbed methane gas shall be deemed to be producing gas under this lease at all times when dewatering of the coal seams from which the coalbed methane gas will be produced is occurring. For purposes of this lease, "drilling operations" shall Include operations for the drilling of a new well and operations for the reworking, deepening or plugging back of a well or hole or other operations conducted in an effort to establish, resume or re-establish production of oil and gas; drilling operations shall be considered to be "continuously prosecuted" if not more than one hundred twenty (120) days shall elapse between the completion and abandonment of one well or hole and the commencement of drilling operations on another well or hole; drilling operations shall be deemed to be commenced for a new well at such time as lessee has begun the construction of the wellsite location or the road which provides access to the wellsite location; and drilling operations shall be deemed to be commenced with respect to reworking, deepening, plugging back or other operations conducted in an effort to resume or re-establish production of oil and gas at such time as lessee has the requisite equipment for such operations at the wellsite. 2. The lessee shall deliver to the credit of Bagley as royalty, free of cost, in the pipe line to which lessee may connect its wells the equal sixteen percent (16%) of all oil produced and saved from the leased premises, or lessee may from time to time at its option purchase any royalty oil in Its possession, paying the market price thereof prevailing for oil of like grade and gravity in the field where produced on the date of purchase. The lessee shall pay Bagley, as royalty, on gas, including casinghead gas or other gaseous substances, produced from the leased premises and sold or used off the premises or used in the manufacture of gasoline or other products, the market value at the well of sixteen percent (16%) of the gas sold or used, provided that on gas sold the royalty shall be sixteen percent (16%) of the amount realized from such sale. The amount realized from the sale of gas shall be the price established by the gas sales contract entered into in good faith by lessee and a gas purchaser for such term and under such conditions as are customary in the industry. "Price" shall mean the net amount received by lessee after giving effect to applicable regulatory orders and after application of any applicable price adjustments specified in such contract or regulatory orders. In the event lessee compresses, treats, purifies or dehydrates such gas (whether on or off the leased premises) or transports gas off the leased premises, lessee in computing royalty hereunder may deduct from such price a reasonable charge for each of such functions performed. As to any payments owed to lessor under this lease, lessor hereby acknowledges and agrees that: (i) Bagley shall be paid all royalties, including shut-in royalties, if any, and all bonus and rentals, if any, under this lease that become due and payable during her life time ; and (ii) Fox shall have no interest in and shall not be paid any bonus, rentals or royalties under this lease during Bagley's lifetime, however, upon and after Bagley's death, lessee shall pay all royalties, bonus and rentals under this lease to Fox. Bagley and Fox, their heirs, devisees, personal representatives, administrators, assigns and successors hereby indemnify, waive, release, discharge and hold harmless lessee from any claims, demands, suits, actions, awards, fines, judgments, losses, liabilities, costs, expenses, fees, penalties, or any other damages, including without limitation court costs, expertwitness fees and reasonable attorney's fees caused by the allocation of payments under this lease as set forth in this paragraph 2. 3. This is a paid-up lease and all cash consideration first recited above and annual rentals have been paid to Bagley in advance to keep this lease in full force and effect throughout the primary term. in consideration of the payment of such cash consideration and advance annual rentals, lessor agrees that lessee shall not be obligated, except as otherwise, provided herein, to commence or continue any operations during the primary term. Lessee may at any time or times during orafter the primary term surrender this lease as to all or any portion of the land described above, and as to any strata or stratum, by delivering to lessor or by filing of record a release or releases, and be relieved of all obligations thereafter accruing to the acreage surrendered. 4. Any payments required to be made to lessor pursuant to this lease, other than the payment of royalties, may be paid by lessee direct to Bagley All such payments may be made by cash, check or draft, mailed or delivered on or before the due date for that payment. Any payments so made shall be binding on the heirs, devisees, executors, administrators, and personal representatives of lessor and on lessor's successors in interest or on lessor's assigns. 5. If, at the expiration of the primary term of this lease, oil or gas is not being produced from the leased premises but lessee is then engaged in drilling operations, this lease shall continue in force so long as drilling operations are continuously prosecuted: and if production of oil or gas results from any such drilling operations, this lease shall continue in force so long as oil or gas shall be produced from the leased premises. If, after the expiration of the primary term of this lease, production on the leased premises should cease for any cause, this lease shall not terminate if lessee is then engaged in drilling operations, or within one hundred twenty (120) days after each such cessation of production commences or resumes drilling operations, and this lease shall remain In force so long as drilling operations are continuously prosecuted, and if production results therefrom, then as long thereafter as oil or gas is produced from the leased premises. 6. If at any time, either before or after the expiration of the primary term of this lease, there is a well capable of producing oil or gas on lands covered by this lease, or on other lands with which lands covered by this lease are pooled or unitized, but the well is shut-in, whether before or after production therefrom, and this lease is not being maintained otherwise as provided herein, this lease shall not terminate (unless released by lessee) and it shall nevertheless be considered that oil or gas is being produced from lands covered by this lease during all times while the well is so shut-in. Lessee shall use reasonable diligence to market the oil orgas capable of being produced from such shut-in well, but shall be under no obligation to market the oil or gas under terms, conditions or circumstances which, in lessee's judgment exercised in good faith, are unsatisfactory. When the lease is continued in force in this manner, lessee shall pay or tender to Bagley or Bagley's successors or assigns, an amount equal to $1.00 per year per net mineral acre covered by the lease. Such payments shall be made on or before the shut-in royalty payment date, as defined below, next occurring after the expiration of one hundred twenty (120) days from the date the well was shut-in, unless prior to such date oil or gas from the well is sold or used or the lease is otherwise maintained as provided herein. In like manner, on or before each succeeding shut-in royalty payment date while such well remains shut-in, lessee shall make payment of shut-in royalty in the same amount and manner. The term "shut-in royalty payment date" shall mean the anniversary date of this lease. Any shut-in royalty payment may be made by cash, draft or check, mailed or tendered on or before the shut-in royalty Horn i foib- in na%r nr Tanriar nr nrnnnriv nav nr tender. anv such sum shall render lessee liable for the amount due but it shall not operate to terminate the lease. vaaa'a V y V Nw v y ..,y " " " , oo~, ,oa~o iv uvevi .o ono~u•o upv,, Vnpl auvn vi a na legato, winvn iessu is mmHg iu accept irom me offering party, lessor hereby agrees to notify lessee in writing of said offer immediately, Including in the notice the name and address of the offeror, the price offered and all other pertinent terms and conditions of the offer. Lessee, for a period of fifteen (15) days after the receipt of the notice, shall have the prior and preferred right and option to purchase the lease or part thereof or interest therein covered by the offer at the price and on the terms and conditions specified in the offer. All offers made up to and including the last day of the primary term of this lease shall be subject to the terms and conditions of this paragraph 14. Should lessee elect to purchase the lease pursuant to the terms hereof, it shall so notify lessor in writing by mail, telefax, or telegram priorto expiration of said fifteen (15) day period. Lessee shall promptly thereafter furnish to lessor the new lease for execution by lessor along with lessee's sight draft payable to lessor in payment of the specified amount as consideration for the new lease, such draft being subject to approval of title according to the terms thereof. Upon receipt thereof, lessor shall promptly execute said lease and return same along with the draft through lessor's bank of record for payment. 15. In the event lessor considers that lessee has not compiled with all its obligations hereunder, either express or implied, lessor shall notify lessee in writing, spelling out specifically in what respects lessee has breached this lease. Lessee shall then have sixty (60) days after receipt of said notice within which to meet or commence to meet all or any part of the breaches alleged by lessor. The service of said notice shall be precedent to the bringing of any action by lessor on said lease for any cause, and no such action shall be brought until the lapse of sixty (60) days after service of such notice on lessee. Neither the service of said notice nor the doing of any acts by lessee aimed to meet all or any of the alleged breaches shall be deemed an admission or presumption that lessee has failed to perform all its obligations hereunder. This lease shall never be forfeited or cancelled for failure to perform in whole or in part any of its implied covenants, conditions, or stipulations until a judicial determination Is made that such failure exists and lessee fails within a reasonable time to satisfy any such covenants, conditions, or stipulations. 16. All express and implied covenants of this lease shall be subject to all federal and state, county or municipal laws, executive orders, rules and regulations, and lessee's obligations and covenants hereunder, whether express or implied, shall be suspended at the time or from time to time as compliance with such obligations and covenants is prevented or hindered by or is in conflict with federal, state, county, or municipal laws, rules, regulations or executive orders asserted as official by or under public authorityclaiming jurisdiction, or Act of God, adverse field, weather, or market conditions, inability to obtain materials in the open market or transportation thereof, wars, strikes, lockouts, riots, orother conditions or circumstances not wholly controlled by lessee, and this lease shall not be terminated in whole or In part, nor lessee held liable in damages for failure to comply with any such obligations or covenants if compliance therewith is prevented or hindered by or is in conflict with any of the foregoing eventualities. The time during which lessee shall be prevented from conducting drilling or reworking operations during the primary term of this lease, under the contingencies above stated, shall be added to the primary term of the lease. 17. Lessor hereby warrants and agrees to defend the title to the lands described above, and agrees that the lessee, at its option, shall have the right at any time to pay for lessor, any mortgage, taxes or other liens existing, levied or assessed on or against the above described lands in the event of default of payment by lessor and be subrogated to the rights of the holder thereof, and lessor hereby agrees that any such payments made by lessee for the lessor may be deducted from any amounts of money which may become due the lessor under the terms of this lease. 18. This lease and all its terms, conditions, and stipulations shall extend to and be binding on all successors in interest, in whole or in part, of said lessor or lessee. 19. With respect to and for the purpose of this lease, lessor, and each of them if there be more than one, hereby release and waive the right of homestead. WHEREOF witness our hands as of the day and year first above written. ANNE L. BAGLE ~RO~ERT BENRNA ARD FOX i' J O STATE OF I r~~ . ) COUNTY OF _ r~ t u h ) ss. , ,tint.~.C79 On this day of 200--~, before me personal appeared be the person described in, and who executed the foregoing instrument, and who acknowledged to met at he executed the same as his Ofree act and deed, including the release and waiver of the right of homestead. Given under my hand and seal this t h day of vL~ My commission expires: \ ~'j C7 Not ry Public Y (1 JFAM STATE OF 12 n )SS. OF COUNTY OF \ Y\ ' C) ) On this 10-\h-day of V 0 r j r1 ~ 20,x 1 M►'Ca~Ion Eapkes person described in, and who executed the foregoing instrument, and who acknowledged to me that she exe 1119 PER SullalTy apple, waiver of the right of homestead. cuted the same as her Given under my hand and seal this 10 day of - FAJC,~ N My commission expires: ~'Y h~ . 1~j atjr 1 STATE OF LEY, to me known to be the free act and deed, including the release and Notary Public STATE OF rJjFANNWE .ist/5li COUNTY OF P, On this 'x~4h day of 20 1 0 before me m described in, and who executed the foregoing instrument, and who acknowledged to me that she the right of homestead. executed he sae as her Given under my hand and seal this day of 0 Jv,) My commission expires-V \S ~c1 \ 1 Notary Public 5 AT€ OF jearea uuT ZJ. FVX MffTMown to be theperson act and deed, including the release and waiver of t:OUNTYv; :`•e~ uNCO i! { STA1FOF fdyOa ton rxplRl ~~j EXHIBIT A 90 Attached hereto and made a part hereof that certain Oil and Gas Lease dated September 1, 2008, by and between ANNE L. BAGLEY, a/k/a ANNIE BAGLEY, a/k/a ANNIE L. BAGLEY, a single person, ROBERT BERNARD FOX and JOY S. FOX, husband and wife, as Lessors, and GARY-WILLIAMS PRODUCTION COMPANY, as Lessee. Township 22 North, Range 117 West. 6`h P.M.. Section 1: Lots 7, 8 and 12, and Resurvey Tract 53, and Resurvey Tract 54, and Resurvey Tract 55 Sections 1 & 12: Resurvey Tract 51, and Resurvey Tract 52 Section 12: Lots 2, 3, 4, and 5, NE'/4SWI/a and SI/2SWI/a and Resurvey Tract 50 Sections 12 & 13: Resurvey Tract 49 Section 13: Lots 2 and 3, EV2SEI/a, and Resurvey Tract 48 Section 11: SIhSEI/a Section 14: NWI/4NEI/a, NEI/4NWI/a Township 22 North, Range 116 West, 6"' P.M. Sections 6 & 7: Resurvey Tract 47 Section 7: Sections 7 & 18: Resurvey Tract 46A Resurvey Tract 46 containing 1,828.48 acres, more or less. Lincoln County, Wyoming ANNE L. BAGLEY` ROBERT BERNARD FOX n4i'll "sck- JOY S.