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HomeMy WebLinkAbout877487 PARTIAL ASSIGNMENT OF OIL AND GAS RIGHTS (Wellbore Only) THIS PARTIAL ASSIGNMENT OF OIL AND GAS RIGHTS (Wellbore Only), hereinafter called the "Assignment" is made by and between TEXACO EXPLORATION AND PRODUCTION INC., a Delaware corporation, with a mailing address of 4601 DTC Blvd, Denver, Colorado 80237 ("Texaco"), and CABOT OIL & GAS CORPORATION., with a mailing address of 600 17TM Street, Suite 900 North, Denver, Colorado 80202 ("Cabot"). RECITALS A. The parties hereto have previously entered into that certain Wetlbore Farmout Agreement dated December 10, 1999 between Texaco (successor in interest to Marathon Oil Company), as Farmor, and Cabot, as Farmee, wherein Cabot agreed to, and did drill the Ferdinand Federal # 10-18 well (hereinafter called the "Well") located in the NWXA of Section 18, Township 22 North, Range 112 West of the 6th P.M., Lincoln County, Wyoming; and B. Texaco states, but does not warrant, that due to Texaco's ownership of leasehold rights committed to that certain federal "Unit Agreement for the Development and Operation of the Shute Creek Unit Area, Courity of Lincoln, State of Wyoming No. 14-08-0001 - 14188," dated May 1, 1974, as amended; that certain companion "Unit Operating Agreement, Shute Creek Unit Area, County of Lincoln, State of Wyoming," dated May 1, 1974; that certain "Pooling, Agreement, Shute Creek Unit ~Area", dated May 1, 1974, as amended, (collectivelY referred to as the "Unit Agreements"), it is currently the own.er of certain rights to production from the Frontier and Dakota formations as a result of its o ~wnership or leasehold interest in Federal Lease WYW-0310649, insofar and only' insofar as it covers the following described lands (the "Lease"), situate in Lincoln County, Wyoming: Township 22 North, Range 112 West, 6th P.M. Section 18: Lot 5, NE/4NW/4 C. Cabot drilled and completed the Well as a producing well and has thereby earned, pursuant to the'Wellbore Farmout Agreement, the interests assigned hereby. NOW, THEREFORE, in consideration of the sum of Ten and more Dollars ($10.00+) and other good and valuable c~0nsideration, the receipt and sufficiency of which is hereby acknowledged, Texaco does hereby assign, transfer, release, remise and quitclaim, without representation or warranty of title, express or implied, unto Cabot, its successors and assigns, an undivided one hundred percent (100%) of all of Texaco's right, title and interest in and to the wellbore of the Well and the production thereI¥0m, limited, however, to all horizons in the wellbore from the surface down to the stratigraphic equivalent of 11,900 feet as encountered in the Well, RESERVING AND EXCEPTING unto Texaco all other rights and interests of Texaco in and to all of the oil and gas leases covered by the Unit Agreements. THIS ASSIGNMENT IS SUBJECT TO, and Cabot accepts it subject to, the f~llowing terms, ,. covenants and conditions: 1. Texaco shall be entitled to an overriding royalty in and to all production from the Well, and "the proceeds therefrom, equal to the difference between the burdens existing as of December 10, 1999, and twenty and no one-hundredths percent (20.00%) of all (8/Sths) oil, gas and other hydrocarbons produced, saved and marketed from the Well. Such overriding royalty shall be free and clear of all costs and expenses of every kind and nature, except ad valorem taxes, production taxes, severance taxes, and excise taxes, including conservation taxes. If the Lease covers less than the entire Drilling and Spacing Unit, Or if Texaco's interest in said Lease covers less than the entire and undivided fee simple mineral estate in the land covered by the Lease, then said overriding royalty reserved herein shall be reduced proportionately. 2. The interests assigned to Cabot hereby are subject to, and Cabot agrees to assume, its proportionate share, equal to the interest so assigned, of all burdens, resei'vations, agreements and instruments of every kind and nature-(including, but not limited to, the Unit Agreements and the Wellbore Farmout Agreement) with respect to the Well or production therefrom existing as of December 10, 1999, or which may affect operations or burden production from the Well in the future as a result of the Unit or the expansion or contraction of the participating area(s) which includes the Well. 3. Cabot agrees to and shall assume a proportionate share of all costs and expenses of operation of the Well and associated facilities (including, but not limited to, tangible and intangible well adjustments pursuant to the terms of the Unit Agreements, the cost~~ of plugging and abandonment and restoration Of the surface), which are attributable to the interests assigned hereunder. 4. It is expressly understood and agreed that the interests conveyed to Cabot may be increased or decreased by the creation, expansion or contraction of participating areas within the shute Creek Unit Area, and thereby Cabot's share of production from the Well and its proportionate share of the costs and eXPenses of operating, maintaining and developing the Well may increase or decrease. 5. In the event the Well is brought within a participating area, and such participating area expands, contracts, or is combined with another participating area such that the interest conveyed in the Well increases or decreases, Cabot and Texaco agree to stipulate and file of record an instrument to reflect the revision in the parties' respective interests in the Well to effectuate the intent of the Wellbore Farmout Agreement and this Assignment, including, without limitation by enumeration, Section 4, above. Such instrument shall contain substantially the same terms as those set forth herein, In no event, however, shall the provisions of this section apply to changes in Texaco's working interest in and to the Well which are not attributable to acreage which Texaco owned aLthe time of the Wellbore Farmout Agreement. 6. In the event the Well is brought within a participating area and such participating area expankls, contracts, or is combined with another participating area, Cabot shall bear' one hundred percent~ (100%) of the charges debited to Texaco for the interests assigned to Cabot in the Well pursuant to Articles 13.3 and 13.4 of the Shute Creek Unit Operating Agreement, which are in excess of the credits to Texaco for the interests assigned to Cabot in the Well. 7. This Assignment is made and accepted without any representation or warranty or covenant of any kind, either express or implied. 8. Texaco and Cabot recognize and acknowledge that Texaco owns leasehold interests which are committed to the Shute Creek Unit Area and which may be also currently included in the Frontier Formation Participating Area "C" for the Unit. The parties hereto agree that in no event shall the rights conveyed to Cabot hereunder in any way entitle Cabot to receive allocation of any oil, gas or other hydrocarbons produced from any well now or hereafter located within the Shute Creek Unit. However, this Assignment does not preclude Cabot from acquiring other rights in the Shute Creek Unit by virtue of separate and distinct arrangements or instruments. 9. Texaco reserves a call on all oil and gas attributable to the interest assigned to Cabot hereunder, or the exclusive and continuing option to purchase such oil and gas. Under such call on the oil, Texaco, or its designee, shall have the option to purchase the oil produced and saved from the interests so assigned at a price no lower than the average of the posted price and applicable premiums being paid by Texaco Trading & Transportation and BP Amoco for oil of the same gravity, grade and quality produced in the particular field on the date said oil is received by Texaco. Such call on, or the option to purchase the oil, may be exercised by Texaco, or its designee, on each one-year anniversary of each well's initial production date by providing Cabot with at least thirty (30) days' written notice prior to each annual date, and shall extend for so long as the Well is producing. Under such call on gas, Texaco, or its designee, shall have the option to purchase the gas produced and saved from the interest so assigned at a price no lower than the h~dex Price paid for gas in the particular field, less all gathering and transportation fees required to get the gas to a mainline hub; and such call on or the option to purchase such gas shall extend for the same period of time and may be exercised in the same manner as the call on oil. 10. Subject to the call reserved above, Texaco and Cabot each expressly reserve the right, at any time and from time to time, to take in kind or otherwise dispose ,of their proportionate shares of all oil, gas or other, hydrocarbons produced from the Well 11. Texaco reserves all rights and interests not expressly assigned herein to Cabot. The rights and interests transferred to Cabot hereunder are nonassignable and nontransferable without the written consent of Texaco, and any such assignment or transfer without such written consent shall be of no force and effect in assigning or transferring to the assignee or transferee any of such rights and interest or vesting in such assignee or transferee any claim, right or cause of action against Texaco.. Texaco's consent will not be unreasonably Withheld. 12. The terms, covenants and conditions hereof shall be binding upon and shall inure to the benefit of Texaco and Cabot, and their respective successors and assigns, and any such terms, covenants and conditions shall be covenants running with the leasehold interests in the lands herein described and the interests in production from the wellbore of the Well herein assigned and with each transfer or assignment of said leasehold interests in the land or interests in production from the wellb~re of the Well. EXECUTED on the dates appearing with the respective signatures below, but effective for ' all purposes, from February 2, 2000. TEXACO EXPLORATION AND PRODUCTION INC. Date: CABOT OIL & GAS CORPORATI. ON Date: ~/od. I ~ ~. aot By ~ Name ~'t'~,~, ~'. ~ ~ Its Attorney-in-Fact -4- STATE OF COLORADO ) CITY AND ) SS. COUNTY OF DENVER ) The foregoing instrument was acknowledged before me by M. J. Davis, as Attorney-in-Fact for Texaco Exploration and Production Inc., this /~'/~ day of DC_4:6 ~)e P-.._ ,2001. Witness my hand and official ~eal. Notary Public My Commission Expires: STATE OF COLORADO ) CITY AND ) SS. COUNTYOF ~e},ve,._ ) The foregoing instrument was acknowledged before me by .-~-~ ,- J". /'/~,,',~ , as Attorney-in-Fact for Cabot Oil & Gas Corporation, this Ir,'/. day of /Vo ,,e,,, ]. ,,- ,2001. Witness my hand and official seal. $otaYQ/yryP, i Z'. My Commission Expires: ~ SI;ATE OF -5-