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HomeMy WebLinkAbout877408 .ro~,r, SS PAID-UP Rocky I~ountain 198s ~,.,d.u,..v. ,sss~ OIL AND GAS LEASE THIg AGREEMENT, made and entered into this 23rd day or August , · 2001 , by ar~d be~een Ire~e ~aviisJn ~homas, a Widow of 7700'Ginger Blossum Drive, Citrus Heights, CA 935.6.b. c~..,~t,,~_~\ , hereinafter called lessor (wh,ther one or more), and Centex Energy Company whose address is 1645 Cou~ Place, Suite 212 Denver, CO 80202 , hereinafter called lessee: WITNESSETH: 1. That lessor, for and in consideration of TEN AND MO~ dollars ($ 10.00+ ) In hand paid, receipt of which is hereby acknowledged, and of the agreemen~ qf lessee hereinafter set fodh, hereby grants, demises, leases and lets exclusively unto lessee the lands described below for the purpose of investigating, prospect rig,: exploring (by geophysical and other methods), drilling, mining, operating for and producing o[I or gas, or both (as defined below), together with the right to construct and maintain p~pelines, telephone and electric lines, tanks, ponds, roadways, plants, equipment, and structures thereon to produce, save and take care of said oil and gas (which right shall include specifically a right-of-way and easement for ingress to and egress from said lands by lessee, or its assignees, agents or permittees, necessa~ to or associated with the construction and maintenance of such pipelines, telephone and electric lines, tanks, pond~, roadways, plants, equipment, and structures on said lands to produce, save and take care of the oil and gas), and the exclusive right to inject air; gas, water, brine and other fluids from any source into the subsurface strata, and any and all other rights and privileges necessa~, incident to, or convenient for the economical operation of sa~ land, alone or conjointly with neighboring land, for the production, saving 'and taking care.of oil and gas and the injection of air, gas, water, bri'ne and other fluids Into the subsurface strata, said lands Being situated in the County of Lincol~ , State of Wyoming . described as fo rews; .td:~ TO~SHIP 26 NORTH~ ~NGE 113 WEST, et" P.M. 877[ 08 Section 28: Resurvey Lot 50 , And containing 463.49 acres, more or less. In addition to the land d~scribed above, lessor hereby grants, leases and lets exclusively unto lessee, to the Same extent as If specifically described, lands which are owned or claimed by lessor by one of the following reasons: (.1) afl lands and rights acquired or retained by lessor by avulsion, accretion, reliction or othe~ise as the result of a change In the boundaries or centerline of ahy river or stream traversing or adjoining the lands described above; (2) all dparian lands and rights which are or may be Incident, appudenant, related or attributed to lessor In any lake, stream or river traversing or adjoining the lands described above by vidue of lessor's ownership of the land described above; (3) all lands Included in any road, easement Gl right-of-way travels ng or adjoining the lands described above which are or may be incident, appudenant, related or attributed to lessor by viaue of lessor's ownership of the land described above; and (4) all strips or tracts of land adjacent or contiguous to the lands described above owned or acquired by lessor through adverse possession or other similar statutes of the state In which the lands are Iocated. The term oii as used in this lease shall be interpreted to Include any liquid hydrocarbon substances which occur naturally in the eadh, including drip gasoline or other naturai condensate recovered from gas without resort to manufacturing process. The term gas as used in this lease shall be interpreted to include any substance, either combustible or noncombustible, which is produced in a natural state from the each and which maintains a gaseous or rarified state at ordina~ temperature and pressure conditions, including but not limited to helium, nitrogen, carbon dioxide, hydrogen sulphide, coal bed methane gas, casinghead gas and sulphur. Subject to the other provisions herein contained, this lease shall remain in force for a term of Five (5) years from October 29~ 2001 (prima~ term) and as long thereafter as oi~ and gas, or either of them, is produced from the leased premises or drilling operations are continuously prosecuted. For purposes of this lease, a well completed for the production of coalbed methane gas shall be deemed to be producing gas under this lease at all times when dewatedng of the coal seams from which the coalbed methane gas will be produced is occurring. For purposes of this lease, "drilling operations" shall include operations for the drilling of a new well and operations for the reworking, deepening or plugging back of a well or hole or other operations conducted in an effo~ to establish, resume or re-establish production of oil and gas; drilling operations shall be considered to be "continuously prosecuted" if not more than one hundred twenty (120) days shall elapse be~een the completion and abandonment of one well 0r hole and the commencement of drilling operations on another well or hole; drilling operations shall be deemed t0 be commenced for a new well at such time as lessee has begun the construction of the wells~te location or the road which provides access to the wellsite location; and drilling operations shall be deemed to be commenced with respect to reworking, deepening, plugging back or other operations conducted In an effod to resume or re-establish production of oil and gas at such time as lessee has the requisite equipment for such operations at the wellsite. 2. The lessee shall deliver to the credit of the lessor as royalty, free of cost, in the pipe line to which lessee may connect its wells the equal one-eighth (1/8) pa~ all oil produced and saved from the leased premises, or lessee may from time to time at its option purchase any royalty oil in its possession, paying the market price thereof prevailing for oil of like grade and gravity in the field where produced on the date of purchase. The lessee shall pay lessor, ~ ~yal~, on gas, including casinghead gas or other gaseous substances, produced from the leased premises and sold or used off the premises or used in the ~anufacture ,of gasoline or other products, the market value at the well of one-eighth (1/8) of the gas sold or used, provided that on gas sold the royalty shall be one-eighth (1/8) of the amount realized from such sale. The amount realized from the sale of gas shall be the price established by the gas sales contract entered into In good faith by lessee and a gas purchaser for such term and under such conditions as are customa~ in the indust~. Price shall mean the net amount received by lessee after giving effect to applicable regulato~ orders and after appliqat on of any applicable price adjustments specified in such contract or regulato~ orders. In the event lessee compresses, treats, purifies or dehydrates such gas (whether on or off the leased premises) or transpogs gas off the leased premises, lessee in computing royalty hereunder may deduct from such price a reasonable charge for each of such functions performed. ' 3. This is a paid-up lease and all cash consideration first recited above and annual rentals have been paid to lessor in advance to kee~ this lease in full force and effect throughout the pdma~ term. In considera0on of the payment of such cash consideration and advance annual rentals, lessor agrees that lessee shall not be obligated, except as othe~ise provided herein, to commence or continue any operations during the prima~ term. Lessee may at any time or times during or a~er the prima~ term surrender this lease as to all or any poffion of the land described above, and as to any strata or stratum, by delivering to lessor or by filing of record a release or releases, and be relieved of all obligations therea[ter accruing to the acreage surrendered. 4. Any payments required to be made to iessors pursuant to this lease, other than the payment of royalties, may be paid by lessee to the lessor or to lessor's credit in the Direct to Lessor , at Address listed above '(or its successor or successors, or any bank with which it may be merged or consolidated, or which succeeds to its business assets'et any pa~ thereof, by purchase or othe~ise) which shall continue as the depository regardless of changes In the ownership of sa~d land or the oil and gas. All such payments may be made by cash, check or draft, mailed or delivered on or before the due date for that payment. Any payments so made shall be binding on the heirs, devisees, executors, administrators, and personal representatives el lessor and on lessor's successors in interest or on lessor's assigns. 5. If, at the expiration of the prima~ term of this lease, oil or gas is not being produced from the leased premises but lessee is then engaged in drilling operations, this ~ease shall continue in force so long as drilling operations are continuously prosecuted; and if production of oil or gas results from any such drilling operations, this lease shall continue in force so long. as oil or gas shall be produced from the leased premises. If, after the expiration of the prima~ term of this lease, production on the leased premises should cease for any cause, this lease shall not terminate if lessee Is then engaged in drilling operations, or within one hundred twenty (120) days aRer each such cessation of production commences or resumes drilling operations, and this lease shall remain in force so long as drilling operations are continuously prosecuted, and Jf production results therefrom, then as long thereafter as oil or gasis produced from the ieased premises. 6. I~ at any time, either before or after the expiration of the prima~ term of this lease, there is a well capable of producing oil or gas on lands covered by this lease, ~ ~x ~t~x~r [anA~ m[th v~hleh I*.ndn covered bv thi~ lease are pooled or unitized, but the well is shut-in, whether before or after production therefrom, and this lease is ~ot being maintained et ~e~ se as provided herein, this lease shall not terminate (unless released by lessee) ano It snarl nevermeless De consl~ereO that ~i( or ~a8 i~ boln9 produced from lands covered by th~s lease during a~( times whi~e the well Is so shutJn. Lessee shall use reasonable diligence to market the oil or gas capable of being produced from such shutdn welk but shal~ be under no obligation to market the oil or gas under terms, conditions or circumstances which, in lessee's judgment exercised in good faith, are unsafisfacto~. When the lease is continued in force in this manner, lessee shall pay or tender to the lessor or lessor's successors or assigns, an amount equal to $1.00 per year per net mineral acre covered by the lease. Such payments shall be made on or before the shut-in royalty payment date, as defined below, next occurring a~r the expiration of one hundred twenty (120) days from the date the well was shut-in, unless prior to such date oil or gas from the well is sold or used or the lease is othe~ise maintained as provided herein. In like manner, on or before each succeeding shut-in royalty payment date while such well remains shut-in, lessee shall make payment of shut- in royalty in the same amount and manner. The term "shut-in royalty payment date"shall mean the anniversa~ date of this lease. Any shut-in royal~ payment may be made by cash, draft or check, mailed or tendered on or before the shut-in royalty date. Lessee's failure to pay or tender, or properly pay or tender, any such sum shall render lessee liaNe for the amount due but it shall not operate to terminate the lease. 7. If lessor owns a lesser interest In the above described land than the entire and undMded fee simple estate therein, then the royalties, Including shut-in royal~, herein provided shall be paid to lessor only in the propo~ion which lessor's interest bears to the whole and undivided fee. Any interest in production from the lands described ' herein to which the interest of lessor may be subject shall be deducted from the royalty herein rescued. 8. Lessee shall have the right to use, free of cost, gas, oil and water produced on said land for its operation thereon, except water from wells and rese~oirs of lessor. Lessee shall have the right at any time to remove all machine~ and fixtures placed oh said premises, including the right to draw and remove casing. 9. Lessee shall pay to lessor reasonable amounts for damages caused by its operations to growing crops on said land. When requested by lessor, lessee shall bu~ its pipelines which traverse cultivated lands below plow depth. No well shall be drilled nearer than ~o hundred (200) feet to a house or barn now on said premises, without written consent of lessor, Lessee shall have the right at any time (but not the obligation), to remove all improvements, machine~, and fixtures placed or erected by lessee on said premises, including the right to pull and remove casings, 10. Lessee is hereby given the right and power at any time and from time to time as a recurring right, either before or after production, as to all or any pad of the land described above and as to any one or more o~ the formations hereunder, to pool or unitize the ~easehoid estate and the mineral estate covered by this lease with other land, lease or leases in the immediate vicinity for the production of oil and gas, or separately for the production of either, when in lessee's judgment it is necessa~ or advisable to do so, and ~rrespecfive of whether authority similar to this exists with respect to such other land, lease or leases. Likewise, units previously formed to include formations Bet pFoduciHg o(I or ~as ms~ ~e reformed ,o 6xc,ude such Do~-p[od~cJB./or~BtiOB$.~; --['](~] {~:~ ~(]'? ' The ,ofm]R~ or fe[orm,Hg of shy uRi,~shal,/_:~o 8R~omnl~shed]::.:: ~ ~:] by lessee executing and filing Of record a declaration of such unitization or reformation, w~iich declaration shall describe the unit. Any unit may include land upon which a well has heretofore been completed or upon which drilling operations have been commenced. Production, drilling or reworking operations or a well shut-in for any reason anywhere on a unit which includes all or a part of this lease shall be treated as if it were production, drilling or reworking operations or a well shut-in under this lease. In lieu of the royalties elsewhere herein specified, lessor shall receive od production from the unit so pooted royalties only on the podion of such production allocated to this lease; such allocation shall be that proportion of the unit production that the total number of surface acres covered by this lease and included in the unit bears to the total number of surface acres in such unit. 11. Lessee shall hage the right to unitize, pool, or combine all or any part of the land described above as to one or more of the formations thereunder with other lands in the same general area by entering into a cooperative or unit plan of development or operation approved by any governmental authority and, from time to time, with like approval, to modify, change.or terminate any such plan or agreement and, in such event, the terms, conditions, and provisions of this lease shall be deemed modified to conform to the terms, conditions, end provisions ef such approved cooperative or unit plan of development or operation and particularly, ali drilling and development requirements of this lease, express or implied, shall be satisfi_ed by compliance with the drilling and development requirements of such plan or agreement, and this lease shall not terminate or expire dudng the life of such plan or agreement. In the event that the land described above or any part thereof shall hereafter be operated under any such cooperative or unit plan of development or operation whereby the production therefrom is allocated to different portions of the land.covered by said plan, then the production allocated to any padicular tract of land shall, for the purpose of computing the royalties to be paid hereunder to lessor, be regarded as having been produced from the particular tract of land to which it is allocated and dot'to any other tract of land; and the royalty payments to be made hereunder to lessor shall be based upon production only as so allocated. 12. If the estate of either party hereto IS assigned or sublet, and the privilege of assigning or subletting in whole or in part is expressly allowed, the express and implied covenants hereof shall extend to the sublessees, successors and assigns of the parties; and in the event of an assignment or subletting by lessee, lessee shall be relieved and discharged as to the leasehold rights so assigned or sublet from any liability to lessor thereafter accruing upon any of the covenants or conditions of this lease, either express or implied. No change in Ownership of the land, royalties, or other payments, however accomplished, shall operate to enlarge the obligations or diminish the rights of lessee or require separate measuring or installation of separate tanks by lessee. Notwi(hstanding any actual or constructive knowledge of or notice to lessee, no change in ownership of said land or of the right to receive royalties or other payments hereunder, or of any interest therein, whether by reason of death, conveyance or any other matter, shall be binding on lessee (except at lessee's option in any particular case) .until one hundred twenty (120) days after lessee has been furnished written notice thereof, and the supporting information hereinafter referred to, by the pady claiming as a result of such change in ownership or interest. Such notice shall be supported by original and certified copies of all documents and other: instruments or proceedings necessary in lessee's opinion to establish the ownership of the claiming party. 13. In the Interest of conservation, the protection of reservoir pressures and recovery of the greatest ultimate yield of oil and/or gas, lessee shall have the right to combine the leased premises with other premises in the same general area for.the purpose of operating and maintaining repressuring and recycling facilities, and for such purpose may locate such facilities, including input wells, upon leased premises, and no royalties shall be payable hereunder upon any gas used for repressuring and recycling operations benefiting the leased premises. 14. If lessor, during the primary term of this lease, receives a bona fide offer from a third party to purchase from lessor a lease covering any or alt of the substances covered by this lease and covering all or a portion of the land described herein, with such lease to become effective upon expiration of this lease, which lessor is willing to accept from the offering party, lessor hereby agrees to notify lessee in writing of said offer immediately, including in the notice the name and address of the offeror, the price offered and all other pertinent terms and conditions of the offer. Lessee, for a period of fifteen (15) days after the receipt of the notice, shall have the prior and preferred right and option to purchase the lease or pad thereof or interest therein covered by the offer at the price and on the terms and conditions specified in the offer. Alt offers made up to and including the last day of the primary term of this lease shall be subject to the terms and conditions of this paragraph 14. Should lessee elect to purchase the lease pursuant'to the terms hereof, it shall so notify lessor in writing by mail, telefax, or telegram prior to expiration of said fi[teen (15) day period. Lessee shall promptly thereafter furnish to lessor the new lease for execution by lessor along with lessee's sight draft payable to lessor in payment of the specified amount as consideration for the new lease, such draft being subject to approval of title according to the terms thereof. Upon receipt thereof, lessor shall promptly execute said lease and return same along with the draft through lessor's bank of record for payment. 15. In the event lessor considers that lessee has not complied with all its obligations hereunder, either express or implied, lessor shall notify lessee in writing, setting out specifically in what respects lessee has breached this lease. Lessee shall then have sixty (60) days after receipt of said notice within which to meet or commence to meet all or any part of tile breaches alleged by lessor. The service of said notice shall be precedent to the bringing of any action by lessor on said lease for any cause, and no such action shall be brought until the lapse of sixty (60) days after service of such notice on lessee. Neither the service of said notice nor the doing of any acts by lessee aimed to meet all or any of the alleged breaches shall be deemed an admission or presumption that lessee has failed to perform all its obligations hereunder. This lease shall never be forfeited or cancelled for failure to perform in whole or In pad anyof its imp ed covenants, conditions, or stipulations until a judicial determination is made that such failure exists and lessee fails within a reasonable time tO satisfy any such covenants, conditions, or stipulations. 16. All express and implied covenants of this lease shall be subject to all federal and state, county or municipal laws, executive orders, rules and regulations, and lessee's obligations and covenants hereunder, whether express or implied, shall be suspended at the time or from time to time as compliance with such obligations and covenants is prevented or hindered by or is in conflict with federal, state, county, or municipal laws, rules, regulations or executive orders asserted as official by or under public authority claiming jurisdiction, or Act of God, adverse field, weather, or market conditions, inability to obtain materials in the open market or transportation thereof, wars, strikes, lockouts, riots, or other conditions or circumstances not wholly controlled by lessee, and this lease shall not be terminated in whole or in part, nor lessee held liable in damages for failure to comply with any such obligations or covenants if compliance therewith is prevented or hindered by or is in conflict with any of the foregoing eventualities. The time during which lessee shall be prevented from conducting drilling or reworking operations during the primary term of this lease, under the contingencies above stated, shall be added to the primary term of the lease. 17. Lessor hereby warrants and agrees to defend the title to the lands described above, and agrees that the lessee, at its option, shall have the right at any time to pay for lessor, any mortgage, taxes or other liens existing, levied or assessed on or against the above described lands in the event of default of payment by lessor and be subrogated to the rights of the holder thereof, and lessor hereby agrees that any such payments made by lessee for the lessor may be deducted from any amounts of money which may becqme due the lessor under the terms of this lease. 16. This Iease and all its terms, conditions, and stipulations shall extend to and be binding on all successors ih interest, in whole or in part, of said lessor or lessee. 19. With respect to and for t'~e purpose of this lease, lessor, and each of them if there be more than one, hereby release and waive the right of homestead. WHEREOF witness our han[:ls a~, of the day and year first above written. Irene Pavlisit] Thomas, a Widow Personally appeared h'ene Pavlisin Thomas -- ; to me known Io be the Idenfical person , described in and who executed the within and foregoing instrument of writing and acknowledged to me that S he duly executed the same as her free and votuntary act and deed, including the release and waiver of the right of homestead, and In the capacity stated therein, IN WITNESS'WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year last above written. My Commission Expires: C~i, /,,.~' ~,~ i~~ ~-~1~ COMM. # 1227955 ~I~i~ Notory PubHc-Co/Ifomla STATE of ~ ~-.~,/ SACRAMENTO COUNTY COUNTY of ~ ACKNOWLEDGEMENT-CORPORATE BEFOEE ME, the undersigned, a Notary Public, in and for said County and State, on this day of Personally appeared ,200 .... . , , ~o me personally known, who being by me duly sworn, did say that he Is Ihe of And that the seal affixed to said inslrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its board of Directors, and said acknowledged said instrumenl to be the free act and deed of said corporation. IN WITNESS WHEREOF, I have hereunlo set my hand and affixed my notarial seal the day and year last above written. My Commms on Expires: Notary Public: Address: