HomeMy WebLinkAbout961179000393
RECEIVED 9/28/2011 at 2:35 PM
RECEIVING 961179
BOOK: 773 PAGE: 393
JEANNE WAGNER
LINCOLN COUNTY CLERK, KEMMERER, WY
Form .120 -7
(February 1068)
WITNESSETH:
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
OIL AND GAS LEASE
(COMPETITIVE PUBLIC DOMAIN LANDS) 11/1 40606
THIS 'DENTURE OF LEASE. entered into, as of AUG T973
the UNITED STATES OF AMERICA, through the Bureau of Land Management. hereinafter
Diamond Shamrock Corporation
P. 0. Box 631
Amarillo, TX 79173
hereinafter called the lessee, under, pursuant, and subject to the terms and provisions of the Act of February 25, 1920.
(41 Stat. 437), as amended, (30 U.S.C. Sec. 181 et sea), hereinafter referred to as the Act, and to all reasonable regu-
lations 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 he:.:eof.
Sec. 1. Rights of lessee. That the lessor, in consideration or rents and royalties to be paid, and the conditions and
covenants to be observed as herein set forth, does hereby grant and lease to the lessee the exclusive right and privi-
lege to drill for, mine, extract, remove, and dispose of all the oil and gas deposits, except helium gas, in or under the
following- described tracts of land situated in the field:
Opal
T 22 N, R 112 W, 6th Prin Mer, WY
Sec 9: SANE', SE1/4NW4
Sec 10: SW' NWT
containing 160.00 acres, more or less, to
works, buildings, plants, waterways, roads, telegraph or
Lions, or other structures necessary to the full enjoyment
as oil or gas is produced in paying quantities; subject to
Secretary of the Interior, the provisions of said agreement
with the terms of this lease occur.
Sec. 2. In consideration of the foregoing, the lessee
agrees:
(a) Bonds (1) To maintain any bond furnished by
the lessee as a condition for the issuance of this lease.
(2) To furnish prior to beginning of drilling
operations and maintain at all times thereafter as
required by 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 upon
compliance with the terms of this lease, unless a bond
in that amount is already being maintained or unless
such a bond furnished by an operator of the lease is
accepted, or unless a bond has been filed under
43 CFR 3126.1 applicable to this lease.
(b) Cooperative or unit plan. Within thirty (30) days
of demand, or, if the leased land is committed to an
approved unit or cooperative plan and such plan is
terminated prior to the expiration of this lease, within
thirty (30) days of demand made thereafter, to subscribe
.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 in-
cluded herein as the Secretary of the Interior may then
determine to be practicable and necessary or advisable,
i Land Office and Serial Number
Wyoming
by and between
called the lessor, and
gether with the right to construct and maintain thereupon all
telephone lines, pipelines, reservoirs, tanks, pumping star
thereof, for a period of five (5) years, and so long thereafter
any unit agreement heretofore or hereafter approved by the
to govern the lands subject thereto where inconsistencies
which plan shall adequately protect the rights of all
parties in interest, including the United States.
(c) Wells. (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 conformity 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.
(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 amount or value of production removed or
sold from the leased lands as set forth in the rental and
royalty schedule attached to and made a part hereof.
(2) It is expressly agreed that the Secretary
of the Interior may establish reasonable minimum values
for purposes of computing 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 pro-
duction shall be due and payable monthly on the last
day of the month next following the month in which
produced. When paid in amount of production, such
royalty products shall be delivered 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 be 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 of the month next following the month in which
produced nor be 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 op 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 purpose of encouraging the
the greatest ultimate recovery of oil or gas and in the
interest of conservation of natural resources, it is
necessary, in his judgment, to do so in order to promote
development, or because the lease cannot be success-
fully operated under the terms fixed herein.
(e) Payments. Unless 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 lands capable of producing oil or gas in paying
quantities, the failure to pay rental on or before the
anniversary date shall automatically terminate the
lease by operation of law. However if the time for
payment falls on a day in which the proper Land Office
to receive payment is closed, payment shall be deemed
timely if made on the next official working day.
(f) Contracts for disposal of products. To file with
the Oil and Gas Supervisor of the Geological Survey
not later than thirty (30) days after 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
be construed 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 a mini-
mum valuation and in accordance with the Oil and Gas
Operating Regulations.
(g) Statements, plats, and reports. At such times
and in such form as the lessor may prescribe, to furnish
detailed statements showing the amounts and quality
of all products removed and sold from the lease, the
proceeds therefrom, and the amount used for production
purposes or unavoidably lost; a plat showing develop-
ment work and improvements on the leased lands; and
a report with respect to stockholders, investments,
depreciation, and costs.
(h) Well records. To keep a daily drilling record,
a log, and complete information on all well surveys
and tests in form acceptable to or prescribed by the
lessor of all wells drilled on the leased lands,
2
uu0394
and an acceptable record of all subsurface investiga-
tions affecting said lands, and to furnish them, or
copies thereof, to the lessor when required. All in-
formation obtained under this paragraph, upon the request
of lessee, shall not be open to inspection by the public
until the expiration of the lease.
(i) Inspection. To keep open at all reasonab�l
times for the inspection of any duly authorized officer
of the Department, the leased premises and all wells,
improvements, machinery, and fixtures thereon and all
books, accounts, maps and records relative to operations
and surveys or investigations on the leased lands or
under the lease. All information obtained pursuant
to any such inspection, upon the request of the lessee,
shall not be open to inspection by the public until the
expiration of the lease.
(j) Diligence, prevention of waste, health and safety
of workmen. To exercise reasonable diligence in drill-
ing and producing the wells herein provided for unless
consent to suspend operations temporarily is granted by
the lessor; to carry on all operations in accordance with
approved methods and practices as provided in the Oil
and Gas Operating Regulations, having due regard for
the prevention of waste of oil or gas or damage to
deposits or formations containing oil, gas, or water
or to coal measures or other mineral deposits, for con-
servation of gas energy, for the preservation and con-
servation of the property for future productive operations,
and for the health and safety of workmen and employees;
to plug properly and effectively all wells drilled in
accordance with the provisions of this lease or of any
prior lease or permit upon which the right to this lease
was predicated before abandoning the same; to carry
out at expense 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 have the right to enter on the property 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) Taxes and wages, freedom of purchase. To
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 here-
under, or other rights, property or assets of the lessee;
to accord all workmen and employees complete freedom
of purchase, and to pay all wages due workmen and em-
ployees at least twice each month in the lawful money
of the United States.
(1) Equal Opportunity clause. During the perform-
ance of this contract the lessee 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 during em-
ployment, without regard to their race, creed, color, or
national origin. Such action shall include, but not be
limited to the following: employment, upgrading,
demotion, or transfer; recruitment or recruitment ad-
vertising; layoff or termination; rates of pay or other
forms of compensation; and selection for training,
including apprenticeship. The lessee agrees to post
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 that all qualified applicants will
receive consideration for employment 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 con-
tract or understanding, a notice to be provided by
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
SURFACE DISTURBANCE STIPULATIONS
OIL AND GAS LEASE
1 Notwithstanding any provision of this lease to the
contrary, any drilling, construction, or other operation
on the leased lands that will disturb the surface there-
of or otherwise affect the environment, hereinafter
called "surface disturbing operation," conducted by
lessee shall be subject, as set forth in this stipu-
lation, to prior approval of such operation by the Area
Oil and Gas Supervisor in consultation with appro-
priate surface management agency and to such rea-
sonable conditions, not inconsistent with the purposes
for which this lease is issued, as the Supervisor may
require to protect the surface of the leased lands and
the environment.
2. Prior to entry upon the land or the d:.sturbance of
the surface thereof for drilling or other purposes,
lessee shall submit for approval two (2) copies of a
map and explanation of the nature of the anticipated
activity and surface disturbance to the Area Oil and
Gas Supervisor and will also furnish the appropriate
surface management agency named above, with a copy
of such map and explanation.
Area Oil a p4y{ G r�qp�s Su�q rviso�'
1d111re .l �hJ `+V {4 +:'i i;;. ,rP
000395
P. 0. Box 2.25S
Casper, a II9 iS2)
Management Agency (Warne and address) DLstrk Manager
of Bureau o'f Lca'. n d Mani .em u
P.O. Box 1088
1+
An environmental analysis will be made by the Geo-
logical Survey in consultation with the appropriate
surface management agency for the purpose of assuring
proper protection of the surface, the natural resources,
the environment, existing improvements, and for
assuring timely reclamation of disturbed lands
3. Upon completion of said environmental analysis,
the Area Oil and Gas Supervisor shall notify lessee
of the conditions, if any, to which the proposed
surface disturbing operations will be subject.
Said conditions may relate to any of the following:
(a) Location of drilling or other exploratory or
developmental operations or the manner in
which they are to be conducted;
(b) Types of vehicles that may be used and areas
in which they may be used; and
(c) Manner or location in which improvements
such as roads, buildings, pipelines, or other
improvements are to be constructed.
F
to of the. off o� l a l compare sots a N G copy
Form 3109 -5 (May:4.073)
U.S. Government Printing Officet1979' -7$4- 260/2257 Region g
f)
000396
If a producing well is obtained, the operator will be expected to minimize
the visual impact of permanent surface facilities, particularly in the
vicinity of routes and sites used for outdoor recreation. The plan to
provide feasible measures to achieve this goal must be approved by the
Geological Survey.
Well service roads shall be no wider than 12 feet and the number of service
roads will be kept to a minimum. A. well service road plan will be
submitted to the Rock Springs District Manager, Bureau of Land Management,
for approval.
CERTIFIED
to be a true and comparative copy
of the official records on file
.‘2'29 011
BUREAU OF LA i M N ENT
Form 1140 -3
(May 1968)
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
EQUAL OPPORTUNITY IN EMPLOYMENT
CERTIFICATION OF NONSEGREGATED FACILITIES
By the submission of this bid or offer and /or by entering
into this contract, the bidder, offeror, lessee, subcon-
tractor, or applicant certifies that he does not maintain
or provide for his employees any segregated facilities
at any of his establishments, and that he does not permit
his employees to perform their services at any location,
under his control, where segregated facilities are main-
tained. He certifies further that he will not maintain or
provide for his employees any segregated facilities at
any of his establishments, and that he will not permit
his employees to perform their services at any location,
under his control, where segregated facilities are main-
tained. The bidder, offeror, applicant, or subcontractor
agrees that a breach of this certification is a violation
of the Equal Opportunity clause in this contract. As
used in this certification, the term "segregated facil-
ities" means, but is not limited to, any waiting rooms,
work areas, rest rooms and wash rooms, restaurants and
NOTICE TO PROSPECTIVE SUBCONTRACTORS OF REQUIREMENT
FOR CERTIFICATIONS OF NONSEGREGATED FACILITIES
A Certification of Nonsegregated Facilities, as required
by the May 9, 1967, order (32 F.R. 7439, May 19, 1967)
on Elimination of Segregated Facilities, by the Secretary
of Labor, must be submitted prior to the award of a sub-
contract exceeding $10,000 which is not exempt from the
000397
Bid, offer or contract number or
other identification:
other eating areas, time clocks, locker rooms and other
storage or dressing areas, parking lots, drinking foun-
tains, recreation or entertainment areas, transportation,
and housing facilities provided for employees which are
segregated by explicit directive or are in fact segregated
on the basis of race, creed, color, or national origin,
because of habit, local custom, or otherwise. He further
agrees that (except where he has obtained identical
certifications from proposed subcontractors for specific
time periods) he will obtain identical certifications from
proposed subcontractors prior to the award of subcon-
tracts exceeding $10,000 which are not exempt from the
provisions of the Equal Opportunity clause; that he will
retain such certifications in his files; and that he will
forward the following notice to such proposed subcon-
tractors (except where the proposed subcontractors have
submitted identical certifications for specific time
periods):
provisions of the Equal Opportunity clause. The certi-
fication may be submitted either for each subcontract or
for all subcontracts during a period (i.e., quarterly,
semiannually, or annually).
In accordance with 41 CFR 60, as amended May 19, 1967, and Executive Order No. 11246 of September 24, 1965, this
certification is applicable to all bids, offers, contracts and subcontracts as well as agreements with applicants who
are themselves performing federally assisted contracts, which may exceed $10,000 and are not exempt from the provi-
sions of the Equal Opportunity clause of the Order.
GPO 842 -662
to be a true and comparative copy
of the official records on file
6 AU 9 11
BligAU OF LAN MANAGEM
OVER
NOT
OVER
PERCENT
OF
ROYALTY
OVER
NOT
OVER
PERCENT
OF
ROYALTY
50
CV N co
.,„"7.
130
150
19
50
60
150
200
20
60
70
200
250
21
70
80
250
300
22
80
90
300
350
23
90
110
350
400
24
110
130
400
25
Form
(February
(f< b)
RENTALS AND ROYALTIES FOR OIL AND GAS LEASES
SCHEDULE "A"
RENTALS. To pay the lessor in advance on or before the
first day of the month in which the lease issues a rental at
the following rates:
a. If the lands are wholly outside the known geologic
structure of a producing oil or gas field: 50 cents per
acre or fraction thereof for each lease year.
b. On leases wholly or partly within the geologic structure
of a producing oil or gas field:
1. If not committed to a cooperative or unit plan which
includes a well capable of producing oil or gas and
contains a general provision for allocation of pro-
duction beginning with the first lease year after
30 days' notice that all or part of the land is in-
cluded in such a structure and for each year there-
after, prior to a discovery of oil or gas on the lands
herein, $2 per acre or fraction thereof.
ROYALTY ON PRODUCTION. To pay the lessor the following
royalty on production removed or sold from the leased lands.
1. When the average production for the month in barrels
per well per day is:
2. On gas, including inflammable gas, helium, carbon
dioxide and all other natural gases and mixtures
thereof, and on natural or casinghead gasoline and
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
NONCOMPETITIVE
SCHEDULE "B" COMPETITIVE
NOTICE
The average production per well per day for oil and gas shall be
determined pursuant to 30 CFR, Part 221, "Oil and Gas Operating
Regulations."
In determining the amount or value of gas and liquid products produced,
the amount or value shall be net after an allowance for the cost of tO be
manufacture. The allowance for cost of manufacture may exceed two- d thirds of the amount or
Secretary of the Interior.
000398
2. On the lands committed to an approved cooperative
or unit plan which includes a well capable of pro-
ducing oil or gas and contains a general provision
for allocation of production, for the lands not with-
in the participating area an annual rental of 50 cents
per acre or fraction thereof each lease year following
discovery.
MINIMUM ROYALTY. To pay the lessor in lieu of rental at
the expiration of each lease year after discovery a minimum
royalty of $1 per acre or, if there is production, the difference
between the actual royalty paid during the year and the pre-
scribed minimum royalty of $1 per acre, provided that on
unitized leases, the minimum royalty shall be payable only
on the participating acreage.
ROYALTY ON PRODUCTION. To pay the lessor 12 percent
royalty on the production removed or sold from theleased lands.
other liquid products obtained from gas; when the
average production of gas per well per day for the
month does not exceed 5,000,000 cubic feet, 12 -l /2
percent; and when said production of gas exceeds
5,000,000 cubic feet, 16 -2/3 percent of the amount
or value of the gas and liquid products produced,
said amount or value of such liquid products to be
net after an allowance for the cost of manufacture.
MINIMUM ROYALTY. To pay the lessor in lieu of rental at
the expriation of each lease year after discovery a minimum
royalty of $1 per acre or, if there is production, the difference
between the actual royalty paid during the year and the pre-
scribed minimum royalty of $1 per acre, provided that on
unitized leases, the minimum royalty shall be payable only
on the participating acreage.
RENTALS. To pay the lessor in advance on or before the
first day of the month in which the lease issued and for each
lease year thereafter prior to a discovery of oil or gas on the
leased lands, an annual rental of$2 per acre or fraction thereof.
CERTIFIED
a true 'and comparative copy
the official records on file'
CERTIFIED
to be a true and comparative copy
of the official records on fi e
2 '2011.
BUREAU OF LAN NAG
the agency contracting officer, advising the labor
rnion or workers' representative of the lessee's
commitments under Section 202 of Executive Or-
der No. 11246 of September 24, 1965, and shall post
copies of the notice in conspicuous places available
to employees and applicants for employment.
(4) The lessee will comply with all provisions
of Executive Order No 11246 of September 24, 1965, and
of the rules, regulations, and relevant orders of the
Secretary_ of Labor.
(5) The lessee will furnish all information and
reports required 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 agency and the Secretary
of Labor for purposes of investigation to ascertain
compliance with such rules, regulations, and orders.
(6) In the event of the lessee's noncompliance
with the nondiscrimination clauses of this contract or
with any such rules, regulations, or orders, this contract
may be cancelled, terminated or suspended in whole or
in part and the lessee may be declared ineligible for
further Government contracts in accordance with pro-
cedures authorized in Executive Order No. 11246 of
September 24, 1965, and such other sanctions may be
imposed and remedies invoked as provided in Execu-
tive Order No. 11246 of September 24, 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 pur-
chase order unless exempted by rules, regulations, or
orders of the Secretary of Labor issued pursuant to
Section 204 of Executive Order No. 11246 of Sep-
tember 24, 1965, so that such provisions will be binding
aeon each subcontractor or vendor. The lessee will
take such action with respect to any subcont :act or
purchase order as the contracting agency may direct
as a means of enforcing such provisions including
sanctions for noncompliance: Pros. ed. however. That
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 litiagtion to protect the interests of
the United States.
On) Assignment of oil and gas lease or interest
therein. As required by applicable law, to file for
approval by the lessor any instrument of transfer made
of this lease or any interest therein, including assign-
ments of record title, operating agreements and
subleases, working or royalty interests, within ninety
(90) days from the date of final execution thereof.
(n) Pipelines to purchase or convey at reasonable
rates and without discrimination. If owner, or operator,
or owner of a controlling interest in any pipeline or
of any company operating the 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 of any citizen or company not the owner
of any pipeline, operating a lease or purchasing or sell-
ing 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. 351).
(o) Lands patented with oil and gas deposits re-
served to the United States. To comply with all
statutory requirements and regulations thereunder, if
the lands embraced herein have been or shall hereafter
be disposed of under the laws reserving to the
United States the deposits of oil and gas therein,
subject to such conditions as are or may hereafter be
provided by the laws reserving such oil or gas.
(p) Reserved or segregated lands. If any of the
land included in this lease is embraced in a reservation
3
000399
or segregated for any particular purpose, to tonne
operations thereunder in conformity with such require
ments as may be made by the Director, Bureau of Land
Management, for the protection and use of the land for
the purpose for which it was reserved or 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 stipulated.
(q) Protection of surface, natural resources. and im-
provements. The lessee agrees to take such reason-
able steps as may be needed to prevent operations on
the leased lands from unnecessarily: (1) causing or
contributing to soil erosion or damaging crops, including
forage, and timber growth thereon on Federal or non
Federal lands in the vicinity; (2) polluting air and water;
(3) damaging improvements owned by the United States
or other parties: or (4) destroying, damaging or removing
fossils, historic or prehistoric ruins, or artifacts; and
upon any partial or total relinquishment or the cancel-
lation or expiration of this lease. or at any other time
thereto when required and to the extent deemed neces-
sary by the lessor to fill any pits, ditches and other
excavations, remove or cover all debris and so tar as
reasonably possible, restore the surface of the leased
land and access roads to their former condition, includ-
ing the removal of structures as and if required. The
lessor may prescribe the steps to be taken and res-
toration to be made with respect to the leased lands
and improvements thereon whether or not owned by the
United States.
(r) Overriding royalties. Not to create overriding
royalties in excess of five percent except as otherwise
authorized by the regulations.
(s) Deliver premises in case of forfeiture. To
deliver up to the lessor in good order and condition
the land leased including all improvements which are
necessary for the preservation of producing wells.
Sec. 3. The lessor reserves:
(a) EasenrenIS (MI r gi -or -n ay. The right to
permit for joint or several use easements or rights
of -way, including easements in tunnels upon, through,
in the lands leased. occupied, or used as may be
necessary or appropriate to the working of the same or
of other lands containing the deposits described in the
Act, and the treatment and shipment of products thereof
by or under authority of the Government, its lessees or
permittees, and for other public purposes.
(b) Disposition 0/ sup /act. The right to lease,
sell, or otherwise 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 of the oil and
gas therein, or to dispose of any resource in such lands
which will not unreasonably interfere with operations
under this lease.
(c) 11!onopo/t and fair prices. Full power and
authority to promulgate and enforce all orders neces-
sary to insure the sale of the production of the leased
lands to the United States and to the public at reason-
able prices, to protect the interests of the United
States, to prevent monopoly, and to safeguard the public
welfare.
(d) Helium. The ownership of helium and the right
to extract or have extracted 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 the 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 purchaser thereof. Save
for the value of the helium extracted, the lessee shall
not suffer a diminution of the value of the gas produced
from the well, or loss otherwise, including any expense
caused solely by the requirement of the delivery of the
Sec. 4. Drilling and producing restrictions. It is agreed
that the rate of prospecting and developing and the
quantity and rate of production from the lands covered
by tnis ..lase 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 take into
consideration, among other things, Federal and State
laws, and regulations issued thereunder, or lawful
agreements among operators regulating either drilling
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, from time to tiine, the rate of pros-
pecting and development and the quantity and rate of
production from the lands covered by this lease.
Sec. 5. Surrender and termination of lease. The lessee
may surrender this lease or any legal subdivision thereof
by filing in the proper Land Office, a written relinquish-
ment in triplicate, which shall be effective as of the
date of filing subject to the continue/ 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, etc.. on termination
of lease. Upon the expiration of this lease, or the
earlier termination thereof pursuant to the last preceding
DIAMOND SHAMROCK CORPORATION
By
gas to permit the extraction of helium, for which he is
not reasonably compensated. The lessor reserves the
right to erect, maintain and operate any and all reduc-
tion works necessary for extraction of helium on the
leased premises. The lessee further agrees to include
in any contract of sale of gas from the lands subject to
this lease provisions setting forth that the lessor owns,
and reserves 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 gas gathering
system 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, in-
cluding 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.
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. All rights pursuant to
Sec. 36 of the Act, to take royalties in amount or in
value of production.
(f) Casing. All rights pursuant to Sec. 40 of the
Act to purchase casing, and lease or operate valuable
water wells.
ATTEST:
Signature of Lessee; Executive
Vice President
(Signature of Lessee) Assistant
Secretary
section, the lessee shall have the privilege at any time
within a period of ninety (90) days thereafter of removing
from the premises all machinery, equipment, 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 expira-
tion 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 such property where so directed
by the lessor.
Sec. 7. Proceedings in case of default. If the lessee
shall not comply with any of the provisions of the Act
or the regulations thereunder or of the lease, or make
default in the performance or observance of any of the
terms hereof (except that of payment of annual rental
which results in the automatic termination of the lease)
and such default shall continue for a period of
thirty (30) days after service of written notice thereof
by the lessor, this lease may be canceled by the Sec-
retary of the Interior in accordance with Sec. 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 Sec. 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 particular cause of
forfeiture shall not prevent the cancellation and for-
feiture of this i.ease for any otner cause of forfeiture,
or for the same cause occurring at any other time.
Sec. 8. Heirs and successors in interest. It is further
agreed that each obligation hereunder shall extend to
and be binding upon, and every benefit hereof shall
inure to, the neirs, executors, administrators, suc-
cessors, or assigns of the respective parties hereto.
Sec. 9. l.'nlau /ul interest. It is also further agreed that
no Member of, or Delegate to, Congress, or Resident
Commissioner, ;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(a)(1), shall be admitted to any
share or part in this lease or derive any benefit that
may arise therer..rom; and the provisions of Sec. 3741
of the Revised Statutes of the United States,
(41 U.S.C. Sec. 22) as amended, and Secs. 431, 432, and
433, Title 18 U.S.C., relating to contracts, enter into
and form a part of this lease so far as the same may
be applicable.
Chief, DIV i
Gas Section
ftU!. 24f
THE UNITED STATES OF :AMERICA
(Signing Officer)
(Title)
(Date)
000 840 14