HomeMy WebLinkAbout961182Form 3110 -2
(September 1973)
(formerly 3120 -19)
Nome Richard A. Peterson
Street Box 8
cit
state Douglas, WY 82633
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: State: Wyoming County: Lincoln
ti t/
T 26 N, R 111 W, 6th Prin Mer "COMMITTED T C3. p 1,._.0 T
Sec 6: Lot 2, E1/2SW1/4
f. /600.P
Containing a total of
Effective date of lease: NOV 1 1977
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF ,D,I N .G T7
LEASE Ii0R I
(Sec. 17 Noncompetitive Public ponl in e e)
Act of February 25, 1920 (41 StatI3117170s ainen8 d 0 !S.C. 181
RECEIVED
CHEYENNE, 'Nit 0M'! iG
119.89 acres
RECEIVED 9/28/2011 at 2:51 PM
RECEIVING 961182
BOOK: 773 PAGE: 407
JEANNE WAGNER
LINCOLN COUNTY CLERK, KEMMERER, WY
263)
r'"‘
3 977
W 5977
(Se
LANDS IN OFFER WERE NOT WITHIN
A KNOWN GEOLOGIC STRUCTURE ON
OCT 2 7 1977
c71NG Area Geologist
For the Director
U.S. Geological Sur,
Annual Rental 120.00
This lease is issued to the successful drawee pursuant to his "Simultaneous Oil and Gas Entry Card" application filed
under 43 CFR 3123.9, and is subject to the provisions of that application and those specified on the reverse side
hereof.
THE UNITED STATES OF AMERICA
CERTIF'
to be a true and comparative -npy
of the official records ca)
AUG k9 Ott
BUREAU OF LAI MANAGE
(Signature of Signing Officer)
Chief, Oil
Gas Section
(Title)
OCT 3 1 191?
(Date)
s 1. ":eF.rt a/ ie to s granted the
ate 115,P 'fight and privilege to or, ta,, mine. extract, remove.
and dispose of all he oil and gas deposits, except helium gas,
in the lands leased, together with the right to construct and
maintain (hereupon. all works, buildings, plants, waterways,
roads, telegraph or telephone lines, pipelines, reservoirs. tanks,
pumping stations. or other structures necessary to the full enjoy-
ment thereof. fora period of 10 years, and so long thereafter as
oil or gas is produced in paying quantities; subject to any unit
agreement heretofore or hereafter approved by the Secretary of
the Interior, the provisions of said agreement to govern the lands
subject (hereto where inconsistent with the terms of this lease.
Sec. 2. The lessee agrees:
ta) Bands. (I) To file any bond required by this lease and
the current regulations and until such 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 32 per acre an.
nual rental but not less than $1,000 nor more than $10.000,
upon the inclusion 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 main
tain at all times thereafter as required by the lessor a bond in
the penal sum of 310,000 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 or the lease is accepted. (5) Until a
general lease bond is filed to furnish and maintain a bond in
the penal sum of not less than 51,000 in those cases in which
bond is required by law for the protection of the owners of sur-
face tights. In lieu of any of the bonds described herein, the
eC rte., ,`file such other bond as the regulations may permit.
'5) d r ,nit plan.— Within 30 days of demand,
the leased 1,104 is committed to an approved unit or coop
a alive plan and uch 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 11, United States.
(d 0`el/o. —(1) To drill and produce all wells decessdy to
protect the leased and from drainage by wells on lands not the
property et the 'essor, or lands al the United States leased at a
lower royai,l rate. or es to .:rich the royalties and rentals are
paid into different f ds than ars (hose 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 lull 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.
lormity with any system of well spacing or production allotments
affecting the field or area fn which the leased lands ere 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) Rental, and royalties. —(1) To pay rentals and royalties
in amounts or value of production removed or sold from the
the leased lands as follows:
Rental,, —To 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) If the lands are wholly or partly within the known goo•
logic structure of a producing oil or gas field:
(i) Beginning with the first lease year after 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, 52 per acre or fraction of an acre.
(ii) 11 this lease is committed to an approved coop.
e ative 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.
,Ninimun; •ey,tlty.— Commencing with the lease year begin-
ning 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 during the year if lass than 51
per acre. and the prescribed minimum royalty of 51 per acre,
provided that it this lease is unitized, the minimum royalty shall
be payable only on the participating acreage and rental shall be
payable on the nonparticipating acreage as provided in subpara.
graph (5)1)1) above.
Ro on production, (1) To pay the lessor 121/2 percent
royalty on the production removed or sold from the leased lands
computed in accordance with the Oil and Gas Operating Regula•
bons 00 CFR Pt. 221).
(2) It is expressly agreed That the Secretary of the Interior
may establish reasonable minimum values for purposes of ccm-
eating 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,
M posted prices, and to other relevant matters and, whenever
appropriate, alter notice and opportunity to be heard.
(3) When paid in value, such royalties on production shall be
duo and payable monthly on the last day of the calendar month
next following the calendar month in which produced. When
paid in amount or 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 be required by the lessor, but in no case shall
Me lessee be required to hold such royalty oil or other products
in storage beyond the last day of the calendar month next fol-
lowing the calendar 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 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 purpose of encour-
aging 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 be-
cause the lease cannot be successfully operated under the terms
fixed herein.
tel Payrne.nt'. 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
as no well on the leased lands capable of producing oil or gas
n paying quantifies, the failure to pay rental on or before the
anniversary date shall automatically terminate the lease by opera•
tion of law. However, it the time for payment falls on a day in
which the proper office to receive payment is closed, payment shall
be deemed timely it made on the next official working day,
(f) Contract; /or di,po,al of prodnuu. To file with the
Oil and Gas Supervisor of the Geological Survey not later than
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 con
sussed 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 rnethod of computing royalties due as based an
minimum valuation and in accordance with the 0il and Gas
Operating Regulations.
(4) Ti.armrr. r,, plan in
n an repnrr:. such times and such farm as the tensor may prescribe, to furnish detailed state
ments showing the amounts and quality of all product removed
and sold from the lease, the proceeds therefrom, and the amount
used f r production purposes or unavoidably lost; a plat showing
development work and improvements on the leased lands; and a
report with respect to stockholders, investments, depreciation
LEASE TERMS
and costs.
(h) 0"r l: o, d, -Tu keep a daily drilling record, a log, and
complete information on all well surveys and tests in form accepta•
ble to or prescribed by the lessor of all wells drilled on the
leased lands, and an acceptable record of all subsurface invest
tigations affecting said lands, and to furnish them, or copies
thereof, to the lessor when required. All information obtained
under this paragraph, upon the request of lessee, shall not be
open 1e inspection by the public until the expiration of the
lease.
0) Inspection. —To keep open at all reasonable 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 rela-
live 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 wane, health and IeIy l
vn kmen. exercise reasonable diligence in drilling 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 practice
as provided in the Oil and Gas Operating Regulations, having
due regard for the prevention of waste of oil or gas or damage
10 deposits or formations containing oil, gas, or water or to
coal measures or other mineral deposits, for conservation of gas
energy, for the preservation and conservation of the property for
future productive operations, and for the health and safety of
workmen and empl oyees; to plug properly and effectively all
wells drilled in a c cordance with the provisions f this lease or
of any prior lease or permit upon which the right to this lease
s based before abandoning the same; to carry out at expense
of the lessee all reasonable orders of the lessor relative to the
matters 'n this paragraph. and that on failure of the lessee so
to do the lessor shall have the right to enter on the prop
erly 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) Tares and wage,, 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 hereunder, 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 work.
men and employees at least twice each month in the lawful
money of the United States.
(I) Equal Opportunity clause.— During the performance 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 dur-
ing employment, 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 advertising; 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 employ.
ment without regard to race, creed, color, or national origin.
The lessee will send to each labor union or representative
of workers witwhch he has a colle vebargainin ageement
or other contract or understanding, a notice, to be provided by
the agency contracting officer, advising the labor union or work-
ers' representative of the lessee's commitments under Section
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 for employment.
Order Non e l
11246 of September with all
r24 1965, provisions of
and of the rv.n, eg
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, n d 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 non.
discrimination clauses of this contract or with any of 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
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
24, 1965, or by rule, regulation, or order of the Secretary of
Labor, or as otherwise provided by law.
throug 7 in every will
subcontract or purchase order ex
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 upon
each subcontractor or vendor. The lessee will take such action
with respect to any subcontract or purchase order as to con.
tracting agency may direct as a means of enforcing such provi-
sions including sanctions for noncompliance: Provided, however,
That in the event the lessee becomes involved fn, 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 litigation to protect the interests
of the United States.
(m) Assignment of oil and gas lease or interet therdm—
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 assignments of record title, operating agree-
ments and subleases, working or royalty interests, within 90
days from the date of final execution thereof.
(n) Pipeline to purchase or convey at reasonable 00000
and without dinrriminanon. —If owner, or operator, or owner
of a controlling interest in any pipeline or of any company operat-
ing 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 selling oil, gas, natural gasoline, or other
products under the provisions of the act, br under the provisions
of the act of August 7, 1947 (61 5tat. 913, 30 U.S.C. sec. 351).
(o) (and f parented with it and gar deposits reserved to
id: United Storm comply with II statutory requirements
and regulations shall hereafter
n be disposed of under
thereunder, lands b the laws r
been
t 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) Referred or se gregated land.,, —If any of the land
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 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.
(5) Protection of scar /are, nettled enoorce', and improve-
ments. The lessee agrees to take such reasonable steps as may
be needed to prevent operations on the leased lands from u•
necessarily: (I) causing or contributing to soil erosion or dam.
aging crops, including forage, and timber growth thereon or on
Federal or non Federal lands in the vicinity; (2) polluting air
and water; (3) damaging improvements owned by the United States
r other parties; or (4) destroying, damaging or removing fossils,
c or prehistoric ruins, or artifacts and upon any partial or
relinquishment or the cancellation or expiration of this
or at any other time prior thereto when required and to
extent deemed necessary by the lessor to fill any pits, ditches
and other excavations, remove or cover all debris, and no far as
reasonably possible, restore the surface of the leased land and
access roads to their former condition, including the removal of
structures as and if required. The lessor may prescribe the steps
to be taken and restoration to be made with respect to the leased
lands and improvements thereon whether or not owned by the
United States. Antiquates end object, of historic value.
When American antiquities or other objects of historic or scienti-
fic interest including but not limited to historic or prehistoric
ruins, fossils or artifacts are discovered in the performances of
this lease, the item(s) or eondition(s) will be left intact and
immediately brought to the attention of the contracting officer or
his authorized representative.
(r) Overriding royalties. —Not to create overriding royalties
in excess of five percent except as otherwise authorized by the
regulations.
(s) Deliver premise in ruses of for /enure. —To deliver up
to the lessor in good order and condition the land leased includ.
ing all improvements which are necessary for the preservation of
Producing wells.
Sec. 3. The lessor reserves:
(a) Easement, and rtghtr -of -wa —The right to permit for
joint or several use easements or rights•oI.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 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.
(5) Disposition of cur /rare. —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
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.
(0) Monopoly and fair prices. —Full power and authority to
promulgate and enforce all orders necessary to insure 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 States, to prevent monopoly, and to safeguard the public
welfare.
(d)' Helium. Pursuant to Section 1.. of the act as amended,
the ownership of helium and the right .to extractor have it ex.
traded 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 pur-
chaser thereof. Save for the value of the helium extracted, the
lessee shall not suffer'a diminution of the value of the gas pro.
duced from the well, or loss otherwise, 'eluding any expense
paused 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 operate any and all reduction 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 re.
serves 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, 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 royaties, —All rights pursuant to section 36
of the act to take royalties in amount or in value of production.
(1) Casing. —All rights pursuant to section 40 of the act to
purchase casing, and lease or operate valuable water wells.
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 this lease shall he
subject to control in the public interest by the Secretary of the
Interior, and in the exercise of his judgment the Secretory
may take into consideration, among other things, Federal Taws,
State laws, and regulations issued thereunder, or lawful agree-
ments 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
time, the rate of prospecting and development and the quantity
and rate of production from the lands covered by this lease.
S. 5. Surrender and terminalion of lean. —The lessee
may surrender this lease or any legal subdivision thereof by tiling
M the proper land office a written relinquishment, in triplicate,
which shall be effective as of the date of filing subject to the con•
tinned 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.
See. 6. Purcham of materials, etc., en termination of
lease. —Upon the expiration of this lease, or the earlier termina-
tion 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 property where so directed
by the lessor.
Set. 7. Proceedings in rase of default. —it 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 in the automatic
termination of the lease), and such default shall continue for a
period of 30 days after service of written notice thereof by the
lessor, this lease may be canceled by the Secretary of the Interior
M 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 fn
plugging or preserving any well drilled on the leased land shall
become the property of the lessor. A waiver of any particular
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.
Sac. 8. Heirs end sureeiois -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 heirs,
executors, administrators, successors, or assigns of the respective
parties hereto.
Sec. 9. Unlawful interea —It is also further agreed that
no Member of, tot Delegate to, Congress, or Resident Commis•
stoner, 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 7.41a((1), shall be ad-
mit ed to any share or part in this lease or derive any benefit
the may arise therefrom; and the provisions of Sec. 3741 of
1' vised Statutes of the United States, as amended (41
iec. 22) and Secs. 431, 432, and 433, Title 18 U.S.
elating to contracts, enter into and form a pert of this
lease .0 ter as the same may be applicable.
000408