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HomeMy WebLinkAbout961183Form 3110 -2 (January 1978) Name Street City State Zip Code Claudia S. Arata 224 West Ludwig Road Fort Wayne, Indiana 46825 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: T 26 N, R 111 W, 6th Prin Mer Sec 6: Lots 3, 4, 5, 6, 7, SANE SE W sE14 7: WiE% Effective date••of'lea;g: AUG 1 1979 CERTIFIED to be a true and comparative copy of the official records on file 2f BUREAU OF LAND MANAGE UNITED STATES y 7 lr r1 DEPARTMENT OF THE INTERi1bRi BUREAU OF LAND MANAGEMENL 3 G t t 1(3 LEASE FOR OIL AND GAS 1/4 11 J •1 V (Sec. 17 Noncompetitive Public Domaidi,L'ease� Act of February 25, 1920 (41 Stat. 437), as amended (80 181-263) Wyoming W 67176 County: Lincoln 000409 (Serial Number) Lands in offer were not within a known geologic siruc'u..,-! o,i J IJ,Jr 1 81 A ting Areh f eologis For the Director- U. S. Geological Survey Containing a total of 491.29 acres Annual Rental 492.00 This lease is issued to the successful drawee pursuant to h s "Simultaneous Oil and Gas Entry Card" application filed under 43 CFR 3112, and is subject to the provisions of that application and those specified on the reverse side hereof. THE UNITED STATES OF AMERICA Chief, Oil Gas Sec-i-n JUL. 2 0 1979 (Title) (Date) 0)0 i RECEIVED 9/28/2011 at 2:54 PM RECEIVING 961183 BOOK: 773 PAGE: 409 JEANNE WAGNER LINCOLN COUNTY CLERK, KEMMERER, WY 000410 Sac. I. Right, of lure. —The lessee is granted the exclusive right a d privilege to drill for, mi., extract, remove, end dispose of all the oil and gas, deposits, except helium gas, in the lands leased, together with the right to construct and maintain thereupon, ell works, buildings, plants, waterways, roads, telegraph or telephone lines, pipelines, reservoirs. tanks, pumping stations, or other structures necessary to the full enjoy- ment thereof, for a 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 thereto where inconsistent with the terms of this lease. S.. 2. The lessee agrees: (e) Bondi. —(1) To file any bond required by this lane and the current regulations and until such bond is filed net to rule, 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 sum double the amount of $2 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 OS field. (4) To furnish prior to beginning of drilling operations and mein tain et ell 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 bond in that amount is already being maintained or unless such a bond furnished by an operator of the lease is accepted. (5) Until a general lease bond is tiled l0 fumish end maintain a bond in the penal sum of not less then $1,000 in those cases in which bond is required by )ew for the protection of the owners of sear. face rights. In lieu of any of the bonds described herein, the lessee may file such other bond as the regulations may permit. (b) Cooperative or anti plan. Within 30 days of demand, or, it the leased land is committed to an approved unit or coop- entive 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 °pent. under such reasonable cooperative unit plan for the development end 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 d necessary or advisable, which plan shell adequately protect the rights of ail parties in interest, Including the United Slain. (e) WeIG. —(1) To drill and produce all wells necessary to protect the leased land fmni ....Why wells on lands not the property of the lessor, or lands of the United States leased et a lower royalty rate, or es to which the royalties and rentals ere 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 Ins of royalty through drainage in the amount determined by said Director; (2) at the election of the lessee, to drill and produce other wells )n con lenity with any system of well spacing or production ellotmenb affecting the field or area in which the leased Inds 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 end produce such other wells as the Secretary of the Interior may reasonably require in order that the lead premises may be properly and timely developed and produced in accord.nc. 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 Inds +s follows: Rentals. —To pay the lesser in advance an annual rental at the following rates: (a) If the Inds are wholly outside the known geologic struc- ture of a producing ail or gas field: 0) For each loos year a rental of 11.00 per acre or traction of n rare. (b) If the lands are wholly or partly within the known geo- logic structure of a producing ml or gas field: (U notice Beginning all or first part of the year and is included in such structure and for each year thereater, prior to 1 discovery of oil or gas on the Inds lend. 52 per acre or fraction of an acre. (it) If this lase is committed to .n approved coop- erative or unit plan which includes a well capable of producing oil or gas and contains general provision for allocation of production, the rental prescribed for the respective lease years in sub. paragraph reg t notwithinh area. Minimum to the a� Minimum royalty.— Commencing with the lease year begin- ning on or alter a discovery on the leased land, to pay the lessor M lieu of rental, a minimum royalty of $1 per acre or fraction thereof at the expiration of each lease year, or the difference behveen the actual royalty paid during the mu if Ins than $1 per acre, end the prescribed minimum royalty of $1 per acre, provided that if this lease (s unitized, the minimum royalty shall be payable only on the participating acreage end rental shell be pueblo on the nonparticipating acr..ge as provided in subpara- graph (b)liil above. Royalty on production. —(1) To pay the lessor 125i patent royalty on the production removed or sold from the leased Inds computed )0 accordance with the Oil and Gas Operating Regula- tions (30 CFR Pt. 221). (2) It is expressly agreed that the Secretary of the 1 „ter)or may establish reasonable minimum slum for purposes of com- puting royalty on ray or all oil, gas, natural gasoline, and other prducb obtained from gas, due cons)deret)n being given to the highest price paid for part or for majority f production of like quality in the same field, to the price received by the lessee, to posted price, d to other relevant matters end, whenever appropriate, after notice and opportunity to be heard. (3) When paid in value, such ramifies on production shell be due and payable monthly on the last day of the slender month next following the calendar month in which produced. When paid in amount of production, such royalty p!dacb shall be de- livered in merchantable condition on the premise where prodoeed without cast to lessor, unless othewse agreed to by the parties hereto, at such times and in such tanks provided by the lessee es reasonably may be required by the lessor, but in no case shall the lessee be required to hold such royalty o)1 or other products in storage beyond the last day of the calendar month next fol- lowing the Mender month in which produced nor be responsible or held noble for the loss or destruction of royalty oil or other products )n storage from cause over which he has no control. (4) Rentals or minimum royalties may be waived, suspended Of reduced and royalties on the entire leasehold or any portion thereof segregated for royalty purpose may be reduced if the Secretary of the Interior finds that, for the purpose of encour- aging the greatest ultimata recovery of oil or gas and in the interest of conservation of natural resource, It is necessary, (n his judgment, to do so in order to promote development, or be. cause the lease cannot be successfully operated under the terms fixed herein. (e) Paymend. —Unless otherwise directed by the Secretary of the Interior, to make rents!. royIty, or other payments to the lessor, to the order of the Bureau of land Management at the places well on the in leased Iands le CFR 3102.2. producing oil for here ges n paying quantities, the failure to pay rental on or before the anniversary date shall eutom.tislly terminate the lease by opera- tion of law. However, if the time for payment falls on a day in which the proper office to receive payment is closed, paymnt shall be deemed timely if made on the next official working dry. (5) Coe meta for ddporal l rodoru. —TO fife with the Oil and Gas Supervisor of the Geo Survey not later then 30 day attar 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- strued as modifying any of the provisions of this lease, including, but not limited to, provisions relating to gas waste, taking royalty )n kind, and the method of computing royalties due as based on minimum valuation and in accordance with the Oil and Gas Operating Reguletions. (g) Statement', plat' and reports. —At such time and in such form es the lessor may prescribe, to furnish detailed state- ments showing the amounts end quality of all products removed and sold from the lease, the proceeds therefrom, and the amoun used for production purposes or unevoid.bly lost; a plat showing development work god improvemenb on the leased lands; and report with respect to stockholders, (nvniments, depreciation and costs. (h) Well rerordr. —To keep s daily drilling record, log, and complete inlormsvmn on all well surveys nd tests in form accepta- ble to or' prescribed by the lessor of all wells drilled on the LEASE TERMS leased lands, and an sccepteble record of all subsurface inves- tigations affecting said lands, and to famish them, or copies thereof, to the lessor when required. All information obtained under this paragraph. upon the request of lessee, shell not be 0900to inspection by the public until the expiration of the lease. (i) Inspection. —To keep open at all reasonable 'times for the inspection of any duly euthorized officer of the Department, the leased premises and all wells, improvements, machinery, and fixtures thereon and all books, accounts, maps and records rela- tive to operations end 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 o n to inspection by the public unlit the expiration of the lease. li) Diligence, prevention of acre, health and sec /err of workmen.—To 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 M accordance with approved methods and practice as provided in the Oil and Gas Operating Regulations, having due regard for the prevention of waste of all or gas or damage to deposits or formations containing oil, gas, or water or to coal measures or other mineral deposits, for conservation of ps energy, for the preservation end conservation of the property for future productive operations, and for the heath d 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 based before abandoning the same; to carry out at expense of the lessee sit 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 prop. e ery 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) Taxer and age', freedom of purchase. —To pay when due ell taxes lawfully assessed and levied under the laws of the State or the United Stale: 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 ell wagas due work- man and employees at least twice each month in the lawful money of the United Slates. this con the lessee ag uring the follows performance of (I) Equal Opportunity clause. During the performance of this lease, the lessee agrees as follows: (1) The lessee will not discriminate against any employee o applicant for employment because of race, c c religion, sex, or national origin. The lessee will take af- firmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, 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 terrolnetion; roles of pay or other forms of compensation; and selection for train- ing, 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 Equal. Opportunity chrome. (2) The lessee will, in rU solicitations or advertise- ments for employees placed by or on behalf of the lessee, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, ea or national origin. (3) The lessee will send to each labor union or repre- sentative of workers with which he has a collective bargain- ing agreement er other Contract or understanding, a notice, to be provided by the agency contracting officer, advising the labor union or workers' representative of the lessee's commitments under this Equal Opportunity clause, and shall post copies of the notice in conspicuous places available to employees and applicants for employment. ep (4) The lessee will comply with all provisions of Iraelion Of helium, for which he is not reasonably comment d. Executive Order No. 11246 of September 24, 1965, as amend- it s further agreed that any rights reserved vested In the lessor ed, and of the rules, regulations, and relevant orders of the under this paragraph shall also run to any agent or assignee of Secretary of Labor. the lessor or any purchaser of the rights Of the lessor. (5) The lessee will furnish all information and reports (a) Taking royalties. -All nghb pursuant to section 36 required by Executive Order No. ,e 246 regulations, 01 September 21, of the act to take royalties 1° amount or in value of production. 1065 1965 as amended and p er the rules, regulation e, ed orders UI Ca,.o nit rights pursunt to section 40 of the act to of the Secretary of Lab pursuant thereto, th d ❑1 pro a of s ng, end lease or operate valuable water wells. mil access to his books, sec ds, d is by e tatting agency and the Secretary of Labor for purposes o investigation to ascertain compliance with such rules, regu- ations, and orders. (6) in 'the ergo of the lessee's noncompliant with the Equal Opportunity clause of this contact o with any of the said ales, regulations, or orders, this contract may be cancelled terminated or suspended in whole or in part and the contractor may be declared ligible for further Government contracts in accordance with procedures author- ized in Executive Order No. 11246 of September 24, 1965, as emended, arid such other sanctions may be imposed and remedies invoked s provided in Executive Order No, 11246 of September 24, 1965, as amended, or by rule, regulation, or ,der of the Secretary of Labor, or as otherwise provided by law. (7) The lessee will include the provisions of para- graphs (1) through (7) in every subcontract or purchase order mile.. exempted by rules, regulations, or orders of the Secretary of tabor issued pursuant to Section 204 of Execu- tive Order No. 11246 of September 24, 1965, as amended, o Out such provisions will be binding upon each subcon- tractor or endor. The lea will take such action with aspect to any subcontract or purchase order as the con- tracting agency may direct as a means of enforcing such provisions including s nctioesfor noncompliance: Provided, how r, That in the event the lessee becomes involved ,e or is threatened with, litigation with subcontractor or vendor a n result of such direction by the cntr.cting agency, the lessee may request the United States to enter into such litigation to protect the interests of the United States. (m) Arrignment of oil and gar lea,. or interest therein.— As required by applicable law, to file for approal by the lessor any instrument of transfer made of this lease or tiny interest therein, including essigmments of record title, operating agree ants end subleases, working or royalty interests, within 90 days from the dale of final execution thereof. (n) Pipeline, to purrha,e Or convey al reasonable rarer and without disrrimination. —If owner, or operator, or owner of a controlling interest in any pipeline or of ny company operat- ing the same which may be operated accessible to the oil or g as derived from Inds under this (ease, to accept and convey and, if a purchaser of such prducs to purchase at reasonable rates and without discrimination the oil or gee 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, or under the provisions of the act of August 7, 1947 (61 Stet. 913, 30 U.S.C. sec. 351). (o) Lands patented with oil and gas drp aid ewe d so the United States. —To comply with d1 statutory requirements and reputations thereunder, if the Inds embraccd heroin hem 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 egregated !and,. —If any of the Ind in- cluded in this lease is embraced in a reservation or segregated for any particuler 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 0e of the land for the purpose for which it was reserved or segregated, so far as may be consistent with the use of the lend for the purpose of this lease which letter shall be regarded as the dominant use unless otherwise provided herein or separately stipulated. (q) e Protection of surface, natural esourcer, and improve. The less. agrees to take suc reasonable a able steps as y be n eded to prevent operations on the leaned Inds from on. necessarily: (1) causing or contributing to soil erosion or dam. aging crops, including forage, and timber growth thereon or on non -Federal lands in the vicinity; (2) polluting air star, (3) damaging Improvements owned by the United Stales dr parties; or (4) destroying, damaging or removing fossils, h tic Or prehistoric ruins, or a'ilacb and upon any partial or total relinquishment or the c ncellat(on or expiration of this lease, or et any other time prior thereto when required and la the extant deemed necessary by the lessor to fill any pits, ditches and other excavations, remove or cover all debris, end so far es reason•61y 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 slaps 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. Antigoiller and objects of hi,roric When American 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 lase, the item(s) or condition(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 Melt'. in excess or five percent except as otherwise authorized by the regulations. (s) Deliver premises in catet of /orfeitore. —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. Sac. 3. The lessor reserves: (a) Ea,emenu and rrghrt.o/ -way. —The right to permit for joint or several use easements or rights.of.way, including ease- ments in tunnels upon, through, or in the lends leased, occupied, or used as may be necessary or appropriate la the working of the same or of other lends containing the deposits described in the act, and the treatment and shipment of products thereat by or under authority of the Government, its lessees or permittees, and for other public purposes. (b) Dirpmttion of rear /an. The right to lease, sell, or other- wise dispose of the Surface of the leased lands under existing law or laws hereafter enecte4, 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 (n such lends which will not unreasonably interfere with operations under this lease. (e) Monopoly and fair prises. —Full power and authority to promulgate and enforce all orders necessary to insure the wale 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 Slat., to prevent monopoly, and to safeguard the public welter.. (d) Hrliam Pursuant to Section 1 of the act es amended, the ownership of helium and the right to extract or have )t ex- tracted from ail 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 IM some to the lessor, in the manner required by the lessor, at any point on the leased premises, or, if the eras 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 residua 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 Wee of the helium extracted, the lessee shall not suffer a diminution of the slue of the gas pro- duced from the well, or loss 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 operate any and all reduction works necessary for extraction of helium on the leased premises. The lessee further agrees (o include (n any contract of sale of gas from the Inds subject to this lease provisions setting forth that the lessor owns, and re- serves the right to extract or hue 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 exmf the helium end return the gas to the owner thereof, without delay other then that used 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 hes been extracted, or any other loss arising from the extraction of helium, including any expense caused solely by the r u(rement of the delivery f 'she gas to nil the ex- awe. 4. Drilling and producing rudictionr. —It js egred that the rote of prospecting and developing and the quantity and rate of production from the lands covered by this lease shall be subject to control )n the public interest by the Secretary of the Interior, end )n the exercise of his judgment the Secretary may take into consideration, among other things, Federal laws, State laws, and regulations issued thereunder, er lawful agre- menb'among operators regulating either drilling or production, or both. After unification, 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 end the quantity and rate of production from the lands covered by this lase. Sec. 5. Sovender and termination of lean. —The lessee may surrender this lease or .0y legel subdlvrs thereof by filing rn the proper lad office written relinquishment, in triplicate, which shall ba effective as of the deter of filing subject to the con- tinued obligation of the lessee and his surety to make payment of all .oc d rentals end royalties and to place all walls on the land to be relinquished in condition far suspension or abandonment in mundane. with the applicable less. terms and regulations. See. 6. Purcbare of m terial+, etc., on termination lean. —Upon the expiration of this lease, or the earlier lerm)n lion thereof pursuant to the bat preceding section, the lessee shell have the privilege at ray time within period of 90 d.yr 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 remould as One provided which are allowed to remain on the leased lands shall beams the property of the lessor on Whalen of the 90 -day period 0 such extension thereof as may be tented because of adwnr climatic conditions throughout said period: Provided, That tl lessee shall remove any or all of such property where so direct. by the lessor. Sac. 7. Proceeding,. in ran of de /awls. —If the lessee slid not comply with any of the provisions of the act or the regal. (ions thereunder or of the lease, or shall make default in th perform.. or observance of any of the terms hereof (excel (hat of payment of annual rental which results in the automat( termination of the tease), and such default shall continue for period of 30 drys after service of written notice thereof by lh lessor, this lease may be canceled by the Secretary of the Intern in accordance with section 31 of the act, except that if this feu covers /ands known to contain valuable deposits of oil or go the lease may be canceled only by judicial proceedings in tt manner provided in section 31 of the act; but this provision she not be construed to prevent the exercise by the lessor of n legal or equitable remedy which the lessor might otherwise h.v Upon anceltalron of this lease, any casing, material, equipment determined by the lessor to be necessary for use plugging or preserving any well drilled on the leased land she become the property of the lessor. A waiver of any portico! cause of cancellation and forfeiture shell not prevent the ca collation and forfeiture of this lane for any other cause cancellation and forfeiture, or for the ame cause occurring any other time. Sec. 8. Heirs and ,wccuror,-in- inlrre,t. —It is funk .greed that each obligation hereunder shall extend to and binding upon, end every benefit hereof shall )pure to, the he( executors, adminislretors, successors, or essjgns of the rasped parties hereto. Su. 9. Unlawful inter*.!. —It is also further .greed U no Member f, 6r Delegate to, Congress, or Resident Comm sionef, eller his election or appointment, or either before after he has qualified and during his continuance in office, a that no officer. agent, or employee of the Department of 1 Interior, except as provided in 43 CFR 7.44.)(1), ,hit be e miffed to any share or part in this lase or derive any bens Hut may .rise therefrom;. and the provisions of Sec. 3741 the P Stahrtei or the United States, as .mended U.S. 12) and Sea. 431, 432, and 433, Title 18 U. Cods g to contents, enter into end form pert of b lease e the same may be applicable. GPO B45 -5