HomeMy WebLinkAbout961177Fong 3120-19
(4 -1158)
(September 1966)
UNITED STATES
DEPARTMENT OF THE INTERIOR
JAN
BUREAU OF LAND MANAGEMENT A M
7181gfi !11I ,tl ?i14I5Iv
LEASE FOR OIL AND GAS 4
(Sec. 17 Noncompetitive Public Domain Lease) y
Act of February 25, 1920 (41 Stat. 437), as amended (30 U.S.C. Secs. 181 -263)
F. C. Grigsby
P. O. Box 2347
Name Casper, Wyoming 82601
Street
City
State
ZIP Code
This oil and gas lease is issued for a period of ten (10) years to the above -named lessee pursuant and subject
to the provisions of the Mineral Leasing Act and subject to all rules and regulations of the Secretary of the
Interior now or hereafter in force, when not inconsistent with any express and specific provisions herein, which
are made a part hereof.
Lands included in the lease: Parcel No. 423
Containing a total of 650._19 acres
This lease is issued to the successful drawee pursuant to his "Simultaneous Oil and Gas Entry Card" appli-
cation filed under 43 CFR 3123.9, and is subject to the provisions of that application and those specified on the
reverse side hereof.
T. 26 N., R. 112 W., 6th Prin. Mer., Wyoming
Sec. 1: Lots 1,2,3,4,5,6,7, SW'NE1/4,
SW4, WkSE
Effective date of lease: FEB. 1 19.6.8
0.
JAN. 18 1468
(Date)
Ilu iii of .ac
Lands in lease were not
within a known Geologic
Structure on date of
lease issuance.
RECEIVED 9/28/2011 at 2:27 PM
RECEIVING 961177
BOOK: 773 PAGE: 384
JEANNE WAGNER
LINCOLN COUNTY CLERK, KEMMERER, WY
Annual Rental
THE UNITED STATES OF AMERICA
By 4 2 Z�� J �l� l I TC_ 1
(Signature of Signing Officer)
ACTING ASSISTANT MANAGER, OIL GAS
For the Director
U. S. Geolagical Survey
(Title)
W 10611
(Serial Number)
Lincoln Co.
P 4
325.50
000384
to be a true and corntaaraiive copy
of the official rec,. t; s. or file
2 on
BUREAU OF LA D MA
I l
S. tine 1. Ri,gr.• of The lessee is granted the
exclusive right and privilege to drill for, mine, extract. remove,
n
n of all the ail and ;a deposits, except helium gas,
in the lands leased, together with the right to construct ane
a' Lain thereupon, all ivories, buildings, plants, waterways,
roads, telegraph or telephone lines, pipelines, reservoirs, tanks,
pumping stations, or other structures necessary to the full enjoy.
m nt /hereof, for period of 10 years, nod no long Iheroefice 3s
oil or ;as is produced in paying quantities: •ibiec: to any ::nit
agreement heretofore or hereafter approved by 'ilia Secretary o1
the Interior, the provisions of said agreement ;over, the lands
subject thereto where inconsistent with the terms of this lease.
Sec. 2. The lessee agrees:
(a) Bondi life any bond required by this lease and the
currant regulations and until oh bond is filed not to enter on
the land under this lease. (2) To maintain any bond furnished
by the lessee as a condition for the issuance of this lease. (3)
To furnish a bond in a sum double the amount of $2 per acre on•
rual rental, but not Tess than $1,000 nor more than $5,000,
upun the i nclusion of any part of the leased land within the
known geologic structure of a producing oil or gas field. (4)
To furnish prior to beginning- of drillinG operations and maim
tain at all times thereafter' required be the lessor a bond in
the penal sum of $10,000 with approved corporate surety, or
with deposit of united States bonds as surety therefor, conditioned
r ^on compliance with the terms of this lease, unless a bond in
in amount is already being maintained or unless such a bond
urnished by an operator of the lease is accepted, (5),.Up(i( a
general lease bond is filed to furnish and maintain a, bond "in
the penal sure of not less than $1,000 in those cases in which
a bond is required by law for the protection or the owner's Wade
face rights. In lieu of any of the bonds described herein, the
lessee may file such other bond as the regulations may permit.
(h) Coop•ewrier or unit p(,o. Wi thin 30 days of dealt.,
or, if the leased land is committed 10 an approved unit, ac coop-
erative plan and such plan is terminated prior to the expiration
of this lease, within 30 days of demand made thereafter, to sub-
scribe to and to operate under such reasonable cooperative or
unit plan for the development and operation of the area, field,
or pool, or part thereof, embracing the lands included herein as
the Secretary of the Interior may then determine to be practicable
and necessary or advisable, which plan shall adequately protect
the rights of all parties in interest. including the United States.
(c) IF'e14. —(1) To drill and produce all wells necessary to
protect the leased land from drainage by wells on lands not the
property of the lessor, or lands of the United States leased at a
lower royalty rate, or as to which the royalties and rentals are
paid into different funds than are those of this lease; or in lieu
of any part of such drilling and production, with the consent. of
the Director of the Geological Survey, to compensate. the lessor
in full each month for the estimated loss of royalty through
drainage in the amount determined by said Director; (2) at the
election of the lessee, to drill and produce other wells in con-
formity with any system of well spacing or production allotments
affecting the field or area in which the- leased lands are situated,
which is authorized and sanctioned by applicable law or by the
Secretary of the Interior; and (3) promptly after due notice in
writing to drill and produce such other wells as the Secretary of
the Interior may reasonably require in order that the leased
premises may be properly and timely developed and produced in
accordance with good operating practice.
(d) Rentals and royalties. (1) To pay rentals and royalties
in amounts or value of production removed or sold from, the,
the leased lands as follows:
Re ads. pay the lessor in advance an annual rental at
the following rates:
(a) If the lands are wholly outside the known geologic struc-
ture of a producing oil or gas field:
(i) For each lease year a rental of 50 cents per acre
or fraction of an acre.
(b) It the lands are wholly or partly within the known geo-
logic structure of a producing oil or gas field:
(i) Beginning with the first lease year alter 30 days'
notice that all or part of the land is included in
such a structure and for each year thereafter,
prior to a discovery of oil or gas on the lands
leased, $2 per acre or fraction of an acre.
(ii) If this lease is committed to an approved coop-
erative or unit plan which includes a well capable
of producing oil or gas and contains a general
provision for allocation of production, the rental
prescribed for the respective lease years in sub•
paragraph (a) of this section, shall apply to the
acreage not within a participating area.
,Ilininrrne royalty with the lease year begin.
ding on or after a discovery on the leased land, to ,pay the lessor
in lieu of rental, a minimum royalty of $1 per acre or fraction
thereof at the expiration of each..lease year, or the,, difference
between the actual royalty paid ddridg the; year if: less' Chan 41
per acre, and the prescribed minimum royally of $1. per. acre,
provided that if this leasei'is unitized, the minimum riayalty shall
be payable only on the participating acreage and rental shall be
payable on the nonparticipating acreage as provided in subpara•
graph (13(ii) above,
Rnyulry on Production. pay the lessor 121/ percent
royalty on the production removed or sold from the leased lands
computed in accordance with the Oil and Gas Operating Regula•
lions (30 CFR Pl. 221).
(2) It is expressly agreed that the Secretary of the Interior
may establish reasonable minimum values for purposes of nom•
petting royalty on any or all oil, gas, natural gasoline, and other
products obtained from gas, due consideration being given to the
highest price paid for a part or for a majority of production of
like quality in the same field, to the price received by the lessee,
to posted prices, and to other relevant matters and, whenever
appropriate, after notice and opportunity to be heard.
(3) When paid in value, such royalties on production shall be
due and payable monthly on the last day of the calendar month
next following the calendar month in which produced. When
paid amount of production, such royalty products shall be de-
livered in merchantable condition on the premises where produced
without cost to lessor, unless otherwise agreed to by the parties
hereto, at such times and in such tanks provided by the lessee as
reasonably may he required by the lessor, but in no case shall
the lessee be required to hold such royalty oil or other products
in storage beyond the last day al the calendar month next fol-
lowing the calendar inonlh in which produced nor he responsible
or held liable for the loss or destruction of royalty oil or other
products in storage from causes over which he has no control.
(4) Rentals or minimum royalties may be waived. suspended
or reduced and royalties on the entire leasehold or any portion
thereof segregated for royalty purposes may be reduced if the
Secretary of the Interior, finds that, for the, purposes of encour-
aging the greatest ultimate recovery of oil or gat and in th
interest of conservation of naturaF resources, it is necessary, in
his judgment, to do so in order to promote development. or be-
cause the lease cannot be succossfulrnoperated .under the terms
fixed herein.
O Payment,. otherwise directed by the Secretary
of the Interior, to make rental, royalty, or other payments to the
lessor, to the order of the Bureau of land Management at the
places mentioned in the regulation 43 CFR 3102.2. If there
is no well on the leased (ands capable of producing oil or gas
in paying quantities, the failure to pay rental o n or before the
anniversary date shall automatically terminate the lease by opera.
lion of law. However, if the time for payment falls on a day in
which the proper office to receive payment is closed, payment shall
he deemed timely if made 011 the next official working day.
(f) Contracts for disposal of prodnur. To file with the
Oil and Gas Supervisor of the Geological Survey not later than
30 days offer the effective date thereof any contract, or evidence
of other arrangement, for the sale or disposal of oil, gas, natural
gasoline, and other products of the leased land; Provided. That
nothing in any such contract or other arrangement shall he con-
strued as modifying any of the provisions of this lease, including,
but not limited to, provisions relating to gas waste, taking royalty
in kind, and the method of computing royalties due as based on
minimum valuation and in accordance with the Oil and Gas
Operating Regulations.
(0) St,aementr, plat., mid reporn. At such times and in
such form as the lessor may prescribe to furnish detailed state
ments showing the amounts and quality of all products remover
3 E SSE TERMS
and sold from the tease, the proceeds theref rom, and the amount
used for production purposes or unavoidably lost; a plat showing
development work d improvements on the leased lands; ant
report with respect to stockholders, investments, depreciation
and costs.
(h) Biel) r,. d•. keep a ally drilling record, a log, and
complete information an v:11 nett surveys and tads in dorm accepts•
hie to or prescribed by the lessor of all wells drilled on the
leased lands. and an a coprabie record of all subsurface ves
tigations affecting said and to furnish them, or copies
thereof, to the lessor when required. All information obtained
under this paragraph, upon the request of lessee, shall no: be
open t o inspection by ;he public until the expiration of the
lease.
(i) l To keep open at all reasonable times for
the i nspection of any duly authorized officer of the Department,
the leased premises and all wells, improvements, machinery, and
fixtures, thereon andpa(1 books„ eccounts,•iiiaps and records r ela•
tive ):o operations•and 'seireeys 4.•iiivh's'tigati on the leased
lands or under ,the „lease.. ,All information obtained pursuant to
any sach;.ingdection', upon thou. request of the lessee, shall not be
open to mspectiod Gy the public, until the. elipjati`n of, the
lease. J
(j) Diligence. prevention of waste, health and saes; o
:n.kmen. exercise r easonable diligence in drilli an
producing the wells herein provided for unless consent to suspend
operations temporarily is granted by the lessor; to carry on all
.9peratjons, in accordance with approved methods and practice
:et provided in the Oil and Gas Operating Regulations, having
due regard for the prevention or waste f oil or gas or damage
tdi dyppsits'er" formations containing oil, gas, or Water or to
coal measures 'or other mineral deposits, for conservation of gas
energy;, or Ibe preservation and conservation of the property for
future prodUbtive'uderatidnS, and for the health and safety of
workmen.pnd. employees;., .10 plug properly and effectively all
,we in taccordhuec with the provisions of this leash or
of any prior lease or permit upon which the right to this lease
was based before abandoning the same; to carry out at expanse
of the lessee all reasonable orders of the lessor relative to the
matters in this paragraph, and that on failure of the lessee so
to do the lessor shall shall have the right to enter on the pop.
erty and to accomplish the purpose of such orders at the lessee's
cost: Provided. That the lessee shall not be held responsible
for delays or casualties occasioned by causes beyond lessee's
control,
(k) Eaves and "mgr.. a. freedom of pun pay when
due all taxes lawfully assessed and levied under the laws of the
State or the United States upon improvements, oil, and gas
produced from the lands hereunder, or other rights, property,
on assets of the lessee; to accord 311 workmen and employees
complete freedom of purchase, and to pay all wages due work.
men and employees at least twice each month in the lawful
money of the United States.
this c 1) Equ the Opportunity lessee rl ii•' During the performance of
agrees as follows:
(1) The lessee will not discriminate against any employee
or applicant for employment because of race, creed,. color, or
national origin. The lessee will take affirmative action to ensure
that applicants are employed, and that employees are treated Jar.
ing employment, without regard M their race, creed, color, or
national origin. Such action shall i nclude, but not be limited to
the following: employment. upgrading, demotion, or transfer;
recruitment or recruitment advertising; layoff or termination;
hates of pay or other forms of compensation; and selection for
training, including apprenticeship. The lessee agrees to par: in
conspicuous places, available to employees and applicants for
employment, notices to be provided by the contracting officer
setting forth the provisions of this nondiscrimination clause.
(2) The lessee will, in all solicitations or advertisements
for employees placed by or on behalf of the lessee, state `hat
all qualified applicants will receive consideration for employ-
ment without regard to race, creed, color, or national origin.
(3) The lessee will send to each labor union or representative
of workers with which he has a collective bargaining agreement
or other contract or understanding, a notice, to be provided by
the agency contracting officer, advising the labor union or work.
representative of the lessee's commitments under Sec •ion
202 of Executive Order No. 11246 of September 24..1965, and
shall post copies of the notice in conspicuous places available
to employees and applicants tor employment.
(4) The lessee will comply with all provisions of Executive
Order No. 11246 of September 24, 1965, and of the rules, regu-
lations, and relevant orders of the Secretary of Labor.
(5) The lessee will furnish all information and reports re.
quired by Executive Order No. 11246 of September 24, 1965, and
by the rules, regulations, and orders of the Secretary of Labor,
or pursuant thereto, and will permit access to his books, records,
and-, accounts ,by the :contracting agerecy and the •Secretary of
Labor ter purposes of investigation to ascertain compliance with
such roles, regulations, and orders. r.
r.:(6) In the event of the' lessee's nohmmpl with the non
discrimination clauses of this contract or with any of such rues,
regulations, or orders, this contract may be cancelled, terming led
or suspended in whole. pc in pac•-and the lessee may be declared
ineligibM fdriher' Government contracts in accordance nth
procedures authorized in Executive Order No. 11246 of September
24, 1965, and such other sanctions may be imposed and remedies
invoked as provided in Executive Order No. 11246 of September
2 4, 1965, or by rule, regulation, or order of the Secretary of
Labor, or as otherwise provided by law.
(7) The lessee will include the provisions of Paragraphs (1)
through (7) in every subcontract or purchase order unless x
empted by rules, regulations, or orders of the Secretary of Labor
issued pursuant to Section 204 of Executive Order No. 11246 of
September 24, 1965, so that such provisions will be binding noon
each subcont or odor Thn lessee will take such action
with respect to any subcontract or purchase order as the con
trading agen may direct as a means of a forcin such pr 'Vi
sion including sanctions for noncompliance: Provided, haw:r,,
Tha in the event the lessee becomes involved in, or is threatened
with, litigation with a subcontractor or vendor as a result of such
direction by the contracting agency, the lessee may request the
United States to enter into such liti Io prot th e interests
of the United States,
On) Asiign ment n7 ill .nvd gas lease ar inte.est rtereiin.—
As required by applicable law, to file for approval by the lessor
any instrument of transfer made of thi lease or any interest
therein, including assignments of record title, operating agree
penis and subleases, working or royalty interests, within 90
days from the date of final execution thereof.
(n) Pipelines to prn'char: or 0005 at reasonable refer
.tnel :ri,hncr rim :era: nn. —if owner, or operator, o r
of controlling interest in any pipeline or of any company ope ate
in same which may be operated accessible TO the oil or
gas derived from lands under this lease, to accept and convey and,
if a purchaser of such products to purchase at reasonable rates and
without discrimination the oil or gas of the Government or or any
citizen or company not the owner of any pipeline, operating e
lease or purchasing or selling oil, gas, natural gasoline, or other
products under the provisions of the act, or under the provisions
of the act of August 7, 1947 (61 Stat. 913, 30 U.S.C. sec. 351).
(0) (.ands• patented wish nil and gas deposits reserved to
;hr U,ndnnd Srarrs, T o comply with all statutory requirements
and been or shall n hereafter e lands embraced
be disposed of'underthe laws reserving
to the United States the deposits of oil and gas therein, subrect
to such conditions as r or may hereafter be provided by the
laws reserving'such oil or gas.
(p) Reserved or segregated /rn,dr. If any of the land in.
eluded in this lease is embraced in a reservation or segregated
for any particular purpose. to conduct operations thereunder in
conformity with such requirements as
t' be made Director, Bureau of Land Management, Inc the protection and
use of the land for the purpose for w hich it was reserved
segregated, so far as may be consistent with the use of the land
for the purpose of this lease which latter shall be regarded as
the dominant use unless otherwise provided herein or. separately
sti pulated.
(q) Protection of surface, natnrol resources and improve.
menus. take such reasonable steps as may be needed to pre-
vent operations from unnecessarily: (1) Causing or contributing
to soil erosion or damaging any forage and timber growth thereon,
U.S. GOVERNMENT PRINTING OFFICE :1966 -0- 221 -526
(2) polluting the waters of reservoirs, springs, streams or wells,
(3) damaging crops, including forage, timber, or improvements
of a u fa r or (4) damaging range improvements whether
owned by the Unit States or by its grazing permittees or lessees;
and upon conclusion of operations, so far os can reasonably be
done, to restore the surface to its former condition. The lessor
may prescribe the steps to be taken nod restoration to be made
with respect to lands of the United States and improvements
thereon.
(r) Ore „/ding royal :fur. Not to create overriding royalties
in excess of five percent except as otherwise authorized by the
regulations.
I (s) D:/Irrr premir, in rases of far /ertnre. To deliver up
to the lessor in good order and condition the and leased includ-
ing all improvements which are necessary for the preservation of
Producing wells.
Sec. 3. The lessor reserves:
(a) ;rnrerr5 and nghLrof•,vai. The right to permit for
join) or r several use easements of rights-ot.way, including ease-
ments in tunnels upon, through, or in the lands leased, occupied.
or used as may be necessary or appropriate to the working of
the same o of, other lands, containing the deposits described in
dhe act,: a n d the tfek and ,6bipmetit of;prdducts thereof by
or der authority of the Government, its lessees or permittees,
and for other public purposes
(b) Dixpmitinn of snrfnre The right to lease, sell, or other
wise dispose of the surface of the leased lands under existing
law or laws hereafter enacted, insofar as said surface is not
necessary for the use of the lessee in the extraction and removal
f the oil and gas therein, or.to dispose of any resource in such
bands•which will not unreasonably interfere with operations under
this lease
(c) 'Tioropo /i and lair prier. Full power and authority fo
promulgate and enforce all orders necessary to i nsure the sale
of the production of the leased lands to the United States and to
the public at reasonable prices, to protect the interests of the
United Slates, to prevent monopoly, and to safeguard the public
welfare.
(d) He lion.. Pursuant to Section 1 of the act as amended,
the ownership of helium and the r ight to extract or have it ex•
treated from all gas produced under this lease, subject to such
rules and regulations as shall be prescribed by the Secretary of
the Interior. If the lessor elects to take the helium, the lessee
shall deliver all or any portion of gas containing the same to t
lessor, in the manner required by the lessor, at any point on the
leased premises, or, if the area is served at the time of production
by a gas gathering system owned or operated by the lessee, at
any point in that system specified by the lessor, for extraction of
the helium by such means as the lessor may provide. The residue
shall be returned to the lessee, with no substantial delay in the
delivery of the gas produced from the well to the owner or our
chaser thereof. Save for the value of the helium xtracted, the
lessee shall not suffer a diminution of the value of the gas pro-
duced from the well, or Toss otherwise, including any expense
caused solely by the requirement of the delivery of the gas to
permit the extraction of helium, for which he is not reasonably
compensated. The lessor reserves the right to erect, maintain,
and n
operate any and all reduction works necessary for extraction
include in any contract premises The lessee further agrees to
sale gas from the lands subject to
this lease provisions setting forth that the lessor owns, and re-
es the right to extract or have extracted, any helium in the gas
sold, and that the lessor may take,the gas from a pipeline carrier
or any other gasgathering gygtem and ,extract the helium and
return the gas to the owner thereof, without delay other than that
caused by the extraction process; save for the value of the helium,
the owner shall not suffer any diminution of the value of the gas
from which helium has been extracted, or any other loss arising
from the extraction of helium, including any expense caused solely
by the requirement of the delivery of the gas to permit the ex.
traction of helium, for which he is not reasonably compensated.
It is further agreed that any rights reserved vested in the lessor
under this paragraph shall also run to any agent or assignee of
the lessor or any purchaser of the rights of the lessor.
(e) Taking of royalties. rights pursuant to section 36
of the act to take royalties in amount or in value of production.
(I) Conog, —All rights pursuant to section 40 of he act to
purchase casing, and lease or operate valuable water wells.
Sec. 4. Drilling producing r ',rict/05a. I t is agreed that
the rate of prospecting and developing and the quantity and
rate of production from the lands covered by this lease shall be
subject to control in the public interest by the Secretary of the
Interior, and in the exercise of his judgment the Secretary
may lake into consideration, among other things, Federal laws.
State laws, and regulations issued thereunder, or lawful agree
menus among operators regulating either :trilling or production, or
both. After unitization, the Secretary of the Interior, or any
person, committee, or State or Federal officer or agency so
authorized in the unit plan, may alter or modify hunt time to
time, the rate of .prospecting. and development and the quantity
and rate of production ATM .ahe Idols covered by this lease.
Sec. 5. Surrender and termination of /hue. The lessee
may surrender this lease or any legal subdivision thereof by filing
in the proper land office a written relinquishment, in triplicate,
which shall be effective as of the date of filing subject to the con-
tinued obligation of the lessee and his surety to make payment of
all accrued rentals and royalties and to place all wells on the land
to be relinquished in condition for .suspension or abandonment in
accordance with the applicable lease terms and regulations.
Sec. 6. Purchase of materials, o termination of
lease Upon the expiration of this lease, or the earlier terming•
lion thereof pursuant to the last preceding section, the lessee
shall have the privilege at any time within a period of 90 days
thereafter of removing from the premises all machinery, equip-
ment, tools, and materials other than improvements needed for
producing wells. Any materials, tools, appliances, machinery,
structures, and equipment subject to removal as above provided
which are allowed to remain on the leased lands shall become
the property of the lessor on expiration of the 90 -day period or
such extension thereof as may be granted because of adverse
climatic conditions throughout said period: Provided, That the
lessee shall remove any or all of such properly where so directed
by the lessor.
Sec 7. Proreedings in mire of d. /mdt. If the lessee shall
not comply with any Of the provisions of the act or the regula-
tions thereunder or of the lease, or shall make default in the
performance or observance of any of the terms hereof (except
that of payment of annual rental which results i n the automatic
termination of the lease),: arld•'such default shall continue for a
period of 30 days after seance of written notice thereof by the
lessor, this lease may be canceled by the Secretary of the Interior
accordance with section 31 of the act, except that if this lease
covers lands known to contain valuable deposits of oil or gas,
the lease may be canceled only by judicial proceedings in the
,manner provided in section 31 of the act: but this provision shall
not be construed to prevent the exercise by the lessor of any
legal or equitable remedy which the lessor might otherwise have.
Upon cancellation of this lease, any casing, material, or
equipment determined by the lessor to be necessary for use in
plugging or preserving any well drilled on the leased land shall
become the property of the lessor, A waiver of any particul
cause of cancellation and forfeiture shall not prevent the can-
cellation and forfeiture of this lease for any other cause of
cancellation and forfeiture, or for the same cause occurring at
any other time.
agreed Heir, that each obligatio hereun
der t shell e further
extend to and
be
bnding upon, and every benefit hereof shall inure to, the heirs,
executors, administrators, sd'ccessors. or assigns of the respective
parties hereto.
Sec. 9. Gnl,ow /w( imenert II is alsoi Purlher'a4rged' that
no Member of, r,'Delegate 'to,. Congress, or' Commis
sinner, after his, election or appointment, or either before or
after he has qualified and during his continuance in office, and
that no officer, agent, or employee of the Department of the
Interior, except as provided in 43 CFR 7.4(m((1), shall be ad-
mitted to any share or part in this lease or derive any benefit
that may therefrom; and the provisions of Sec. 3741 of
the Revised ri Statutes of the United States, as amended (41
U.S.C. Sec. 22) and Secs. 431, 432, and 433, Title 18 U.S.
Code, relating to contracts, enter into and form a part of this
terse so far as the same may be applicable.
000385