HomeMy WebLinkAbout908717t4¸
: State of. Wyoming
Oil and'Gas LeaSe
Lease # 04-00544
'Parcel: .... 592 - ·
Fund: CS
This indenture of lease entered into by and between the State of Wyoming, acting by and through its Board of Land Commissioners
as LESSOR, and the following as LESSEE:
Zinke & Trumbo, Inc.
Section 1. PURPOSE. The LESSOR, in consideration of the rents and royalties to be paid and the covenants and agreements to be
kept and performed by the LESSEE, does hereby grant and lease to the LESSEE, the exclusive right to ddll for, mine, extract,
remove,, and dispose of all the oil, gas and associated hydrocarbon substances and gaseous substances and elements produced
therewith, including sulphur, hydrogen sulfide, sulphur dioxide, nitrogen, carbon dioxide and helium, which may be produced from the
following described land, to wit:
,, Desc: All
Sec: 36 Township: 19 North Range: 116West 6th P.M.
Acres: 640 County:. Lincoln Advanced Rental: $ 64Q00
Together with the right of ingress and egress and the dght to use so much of the surface of said lands as is necessary to construct
and maintain thereupon all works, building, plants, waterways, roads, communication lines, pipe lines, reservoirs, tanks, pumping
stations, or other facilities necessary to the proper conduct of operations there under.
Section 2. TERM OF LEASE. This lease shall become effective on the day and year set out below and shall remain in effect for a
primary term of fNe (5) years and for so long thereafter as leased substances may be produced from the lands in paying quantities.
This lease may also be extended beyond its primary term in the absence of production of leased substances as may be provided by
the statutes of the State of Wyoming and the regulations of the Board of Land Commissioners adopted pursuant thereto. Provided,
however, if drilling, completion, testing or reworking operations are being diligently conducted, either during the primary term or during
any extension thereof, this lease shall continue in full force and effect so long as such operations are being conducted and so long
thereafter as oil or gas may be produced in paying quantities, This lease may be relinquished or terminated at an earlier date as
herein provided.
Section 3. If the LESSOR owns an interest in °il and gas in said land less than the entire fee simple estate, then the royalties and
rentals to be paid LESSOR shall be reduced proportionately.
Section 4. LESSEE expressly represents that, if an individual, LESSEE is a citizen of the United States, or has declared an
intention to become a citizen, and is over 19 years of age-and if a corporation, is duly qualified to transact business in Wyoming.
Section 5. This lease is issued under the authority COnferred by Title 36, W.S. 1977 as to the State and School Lands, and Title
11, W.S. 1977 as to Farm Loan lands, and shall be subject to, and operations by LESSEE hereunder shall be conducted in
compliance with the specific lease terms se[ out on the reverse of this lease, and with all applicable state statutory requirements and
the regulations issued thereunder, including those providing for: the leasing of State or Farm Loan Lands for oil and gas; the
conservation of oil and gas; and the regulation of security transactions.
Section 6. HEIRS AND SUCCESSORS IN INTEREST. It is covenanted and agreed that each obligation hereunder shall extend
to and be binding upon, and every benefit thereof shall inure to the heirs, executors, administrators, successors of, or assigns of the
respective parties hereto.
Section 7. SOVEREIGN IMMUNITY. The State of Wyoming and the lessor do not waive sovereign immunibj by entering into this
lease, and specifically retain immunity and all defenses available to them as sovereigns pursuant to Wyoming Statute %39-104 (a)and
all other state laws.
IN WITNESS WHEREOF, this lease has been executed by LESSOR and LESSEE to become effective on the 2nd day of October
2004 A.D.
LESSOR, STATE OF WYOMING, Acting by and through its Board of Land Commissioners.
LESSEE: Zinke & Trumbo, Inc.
Address: 1202 East 33rd Street
City:. Tulsa State: OK Zip: 74105
Phone_( 918 ) -_,~,A"3~5096 ~'
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Before any~d~ding, ddlling c~struction, building construction or other ~h mo~ng activiti~ ~men~, ~lans for such c'" '
(including ~st ~ s~m~r pdor appr~al by the Offi~ of State Lands and Inv~ents or his d~ignat~ representati~
The Coll~i~ d F~sils fr~ this land is pr~ib~. Any f~sils found on this land must ~ s~uar~ by the finder and g~n to ~e
O~ce ~ State Lands and In~nts or his d~ign~ r~r~t~ as s~ as pra~i~ble ~er the dis~.
RECEIVED 5~26~2005 at 10:47 AM
RECEIVING # 908717
BOOK: 586 PAGE: 279
JEANNE WAGNER
LINCOLN COUNTY CLERK, KEMMERER, WY
OIL AND GAS TERMS
SecUon 1. THE LESSEE AGREES:
(a) BOND. To furnish a boad with an approved corp(xate sorely company autherized to b'ansant business in f~ St~e(f
State Boerd of Land C~, con(f~,Joned ufxm the pa~m~ent of a rentats and rayalles acc~ng tol~e kms~r undw
de',etapment of the lands cont~ned in this lease may he inoreased in such mas~ ammmts as Um lessa- ~ ~
(b)PAYMENTS. To m~e al pa'pne~ts asoruing be~eu~ to the Of~ ~' State La~ a~d In~mrds, 122V~ 256~
Sheet, Cbe~nne, W'/o~ng 820024To00.
(c)RENTALS. Prk~' to the nisco,,~ry of oil or gas in pal, ing quanflbes to pay the k~,sor in advance, beginning with the
effectNe date hereof, an ananal rental of $1.00 per ac~e or frac~on thereof.
Altor tbe discoYe~3' of al or gas in p~ng quam~lles to pay tbe lessa~ in ad,mnce beginning with tbe fi~ day of the lease
year succeeding the lease yeor in which actual niscove~y was made, an annual rental of SZ00 pa' aere a' ~ractinntlmmd,
unless changed by agreement. Such rentat so paid for any one yeer sh,~ be cre~ted on Um royat~/for that ~/.ar.
dne shal he sent to the lessee. If the rental is not p~'d on or he{ore Ihe date it hecomes due, no~ce of defadt wi~ be sent
to the lessee, and a penalty of $0.50 per ac~'e foHete payment wtl be assessed.
The lessee is nof legaly oUigaed to pay eithor the m~al or the penatty, but if the re~al and ~ ~ ~ p~ ~n
thirty (30) days after the n~ce of ~au# has bee~ mcehed, the lea~e wil terrninate automaic~ by ope~a6on of law.
Te~mina0on of the lease shal ant relieve Lbe k~,see of any o{:diga§on incerx~d onda' the lease ntber than ihe ob41ga~o~ to
pay rental or penalty. The lessee shal not be eroded to a a-edit on roTalty due for any penalty paid for late payments Of
(d)EOYALTIES. The royalhes to be paid by lessee are:
(i) On nil, one-sixth of Ihat produced, saved, and sold ftorn said land, the same to be deliveced at tbe wetls er to the
c~redil of lessor into the pipe line to whleh the we~s may he connected.
off the prm'~ises w in the manufactore of gasoine or o~a' ixoducts the-ofmm, the rra-ke{ value at the wal of one. sNh Of
the gas so sdd or used, prov=,ded that on gas sd, d at the weis, the royalty shal ~ one. sixth of the a~cmnt realized from
reasonable.
('w} Fa- royalty puq:mses on gas and naoral gasdine the ~ue shal ~ ~ appro,ed by the lessoc and in the
detem~na6on of the value of natLral gasotne the f~ cost of extranUon shal he mnsibersd as a deductJMe item; prodded,
lessor and in no e'~ent sha~[ the pdce ~or gas, or natural gasdine, be less than ttat rec~Ned by the United Sta~ ~,N.m~a
for its royar~es frorn the sate rmtd.
gas er ~uid hydroca-bons ~umed to the sand f~ st~rtfatmg the pmducUon of o~ or secondary recovery purposes shal
be rotary free.
(e) DISPOSITiON OF ROYN.TY OIL ANO GAS. To de~ to the lesser, or to such ind~duat, 6tm er coq~ as ~e
or, at the option of the lessor, and in lieu of said roTalbes in kind, tbe lessee agrees to pay lbe lessa- the field ma-ket Fice
When the lessor elects to take its rayalty oa, gas. a- o~l.er h~.~mcarlxms in ki~d such as oa, gas, or o~hw idndred
hydmcarb°~ shall he 9ond merchantable all, gas, or (Xher I~ed hydrocatx~s. '[~e lessee shall if nec~ fornish
storage tot royalty oil f~ee of charge fer thid7 (30) days ~e~- the end of the calendar month in which the ~ is pmdtzced,
inssee shall not he betd liable fer loss or destn~ctle~ of roTalt¥ (~ so stored from causes heyond his contsd.
The h-ee sterage of oil, as herein ffoV~ed, shal appty onl7 as leng as the s,-.~:l oil is the ixupedy of the lessor.
(f) MF~UREMENTS OF PRODUCTION. To gauge, measure and correct for tomporature al pm~ from ~
lands in conformance wi~h the rules and regula6ons adopted by lhe ~:~rd of Land ~ and raperk saki
produc~on to the lessor in accordance (heewith.
To keep beoks, rec~ds, and repods pertaining to tbe pmduc'don from the land hereln leased as we~ as thase ped~ii~3
opened at all Umes for the inspectiofl of any duly anthedzed agent of the lessar.
To furninh lhe less~ with original pibe line raports shewing the day, n'er~h, year, ormunL grav~es, and temporatunesd
(g) MONTHLY PAYMENTS AND STATEMENTS. Unless the ~ of paymant is othenvise extended by ~he C hT.,c e of
State Lands and Inveslments to make payn'ent an or betore lhe twen§eth (20th) day of the calenda- n~nlf~,~ rT,~=,wtqg ihe
showing in be{al the quantity and quarry of the ~oduc6on (per we~ if required where prac6cal) fram the land hereby
leased, and the quantt[y and qualt7 of the production (pe~ well whore praclleat) fram offset walls upon corne3~ or
tonn or re, pod prescribed by lessor.
(h) WELLS TO BE DRILLED. To d.dl and opa'ate effec'd~y al we&s necessary to reasonebty offseq wetls upon and
To drill such adni6onel wells at such ti, nes or planes as are nenessory and asnendal to ihe pr(q~er de~ekq)ment and
commef'cial produc§on of Ihe oi and gas content of s;~id land.
(i)L0(3 OF ~11 S AND REPOR'P& To keep = lng. in Ihe form appeo~ed by the lessar, of each ~ml dried bylhe tssee
To fie prngmss reports, in the form prescribed by Ihe less~, a the e~d of each thkty (30) day period wMe each wel is
To fie annu~y, or at such limes as the lessor may req~e, maps showing the be~epmant of the slrdctu~e and the
To m~e such ofha' reporto palaining to the produc~on and operalJons by the k~,see on said land, and repol such ~
and In~,me~s may wake such reports as ceadi~3ns may wa-canL
(~)PRODUCTION. To upa-ate the weis upoa tbe lamd bemin leased in a cempe~e~t and et~cinof manner in an mdea~r
the~eundor bY wals apa'ated bY the lessee er otha's on cen"enng or conUgumJs lands Lo these leased heroin. Al p~3ns ~r
methods fer tbe porpose of sl~mula6ng or inc,'easing ixoduc~m on lands hemifl k~r.~.(i nthor than those in cerrrnon use
shal first he presented to the lessa' for approval before bebg pnt into actuat uperaJon.
m m any ev~d~ excep~ with the consent in w~ng of the lessor first bed an ol:~a~,ned.
the lime any such suspension of epe~aJons is in effect, Ihe lessee shal continue to pay the annuad rental of $2.00 per acre
er fl-action thereof provided by (c) alx~e, and this leaan sl,,M remain in effect as though ol or gas was being pmdmed fmm
sad lan~
(I)DILIGENCE-PRE'VENllON OF WASTe. To exa'dne ~ ~4genne in dr~ng, producing, and upe'ai~ of weis
on the ~ co. md hereby, urless cmsent to saspaxl uperatms tenlx~ady is grmtod by the less~C to can7 on al
regad ~ the prm,efl~an of wasle of ol and gas, or tbe enlranne of water 1~ the el or gas bearing sands er strata to the
an~ to the heaffi and salety of v~kTnen and emplo,Res; to plug secu~/in an approved ma?mr any wei betom
abandori~ [ and nnt to abafxl~ any w~ wilhout bemission of'lbe lessor, no~ to dill any wd wilhin hvo handred (L~0)
[eet of any oi' ~he outm' houndapes of the land co~ered hereby, unless to pretoct against drainage by we~s drilled on lands
adjoining less than 200 feel from the prupefl'/lines the-eof; to co~duct al obera~ons subject to the ins~d~ t~lhe ~
ae.~ preservatfen of tbe prof~Ly and the health a, KI ~ety of workmen indudng the reqlarddng and reseeding of ddlling
(m)TAXES NNID WAGES-FREEDOM OF PURCHASE. To pay, when due al taxes lawfuly assessed a~l leqmd under
the laws of Ibe State of Wy~'ing upon improvements, ~ and gas produced from the ~ hereunder, er other fights,
prope~/or assets of lhe lessee, to ascord al wffkmen and empleyee~ mmp,i~.e ~-eedom of perchase, and to pay all
wnges due wovkn~n and ~ in cooformanne wilh the laws of tbe Sta~ of Wyoning.
(n)ASSIGNMENTS OF LF_Jt, SE4:~RODUCT1ON .~EEMENTS_ Not to as~gn tt~s lease or any ~t~'est therein, nor
whe~ authai~ to do so has bee~ niE~legated by Ihe Boan:l and wil be fa:ordeal wilh the inase. The Boa'd resents Ihe
~kJM o~ disapproval of such o'~en'ining rotaries when in its upinion they hecome excesave and henne are de~iTental to the
proper devek~nl of the leased lands.
(o)DELIVER PREMISES IN CASE OF FORFEITURE. To de~ up the leased premises, w{th al permanent
improvwnents thereon, in good order and condition in case of tod~ere of this leane, but Ibis shal r~ be construed to
pre~ent the rem~, nitera6on or renewal of equipment and improvements in !he or~rmary co~se of operations.
Se~Jon Z THE LESSOR EXPRESSLY RESERVES:
(a) ~e hght to lease se~. or otbenvlee nispose of tbe surfane of the land embraced within this lease under existing bws
{b}The dght to lease, sel. or ahe~wise nispose d ntber mineral or subsmfane resoerces not co.~emd by tbe lease, in
(c)Fromthe operatJon of this lease, the sudace lands heretofore p'~'ded for rights-of-way and easements and resenes
(d)The right to refase to commit tbe leaned lands to a onit plan of development if the 8oord finds such actim v,~dd krp~
b'~e lessor's rasened ~ht to tal',e its royait'/gas in k~d and to porchase all o~r gas allecaed to the leased lands a
p~ in ~ectton 3(e)below.
(e)Tbe right to alt~' er mo~f'/the quanfit7 and rate of ~oduc6on to the ertl that waste may be etk~natod er that
producfio~ may contorm to the le~see's fair share of alowat~le i[~oducUon ander any s)stom of State er Nal~[~al cutadmat
(f}ln adff~on to its fight to t~e its royalty gas in kir~l, Um lessor reda'yes fl~e ~:JJ~t and up6on to purchase al nther gas
produced for sale or use off tbe leased lands. This of~ofl shal he exa'cised onty if the Boa'd finds that the lessee has
receNed ar~l is w~ing to acce~t a ix~a rx~e offw from a perchase- whe intends to se~ or ~ransp~rt the gas into interstate
cemmerce and U',at one or rmm kdrastae perchasms (i.e., porchasem who wil ase, co~-.,ume, or sell the 9as for use er
corts~m~on en~y within the State of W'~o~tog) a~e wiling a~l able to porchase the gas upon terms reasonably
cornparaUe to and at least as fa~ral:le to the lessee as these offwed by the intwstate pL~chase-. The Board shal w-~e
terms which are reasonat~ onrrparal~ to axl at least as fa~xable to the lessee. ~ a cond~ to such waiveq a
Secf~ 3./~PRN S/~. OF IMPROVEMENTS. ~e lessee .fl~all ha~e the fight su~ect to the provisle~qs of Td~e 36, a~ to
State and State Schonl Lands, and Tdle 11, as to State Loan a~d Investments Boord Lands, W.S. 1977, to remme aly
in~provements owned by inssee wit~ a reaso~",able lima altor tbe tem~ineben of this lease. Lessee ag~e~ that any s~ch
improvements not removed within a masoreble t~me attor terr~nation of this inase shal he nislx~,-~,~l of pursuant to tbe
Sectinn 4. FORFEITURE ClJ~JSE. ~ Board ~ ha~e the powor and auffio~7 to cancd leases p~ocu~ by ~raud,
of Land CommissJoee~s and in frxce on the flare hereof, the less~,' shal sa'ye nofine of such fallore or befault eitha, by
personal se~ or by cedified or rm.~stored mai upon the lesnee, and if such fallore or defau~ co~inues tot a period of
lessor may re-entw and take POSneSSiO~ of s~fl Ixe~ ~ any part thereof. These provisions shal not be consl~ueq to
p~e~ent the exercise by lesser any legal or eq[Jtaple ~medy which the lesser ~ght o{hecwine ha'~. A wa~ of any
Section 5. REU NQUlSHMENT AND SURRENDER. This lease may he relinguished and surrandered to lesser as ~ al
or any legal sub(fPAsi3n of said lands as folows:
(a) If on operations ha~e bees~ onnducted under the lease on the land to he retnguished, the lessee shal fie with the
Sta~e Land Boa'd and Skate Loan and Im~estment Board, a wrk~tan ralngu~hn'ent or SUfTendefl ddy signed and
.%gecified by the lessee thaein. If the s,3id mting~P~hmont falle to state that ne opefal~ons ha~e been conducted, the
effeclJ~e date of rermquishment shal he Ibe dae the retnquinhmant is approved by ihe Boord.
(b) If upeaeom here been conducteq onde~ the lease on land p~-uposed to he rermq~ished, the i~ssee shall gi~e six~
we~s thereon sl~tl ha'~e heen placed in condiben aCCel~.alxle to insser and shal ha,m been appm,~ed by fche State Oi and
Gas
M n.wdals beceritng due ~ to a surmnde' or relingulehment beonn~ng effecUve, shall he payable by lessee unless
pa'frent thereof shal be waived by lessor. A rsqnquishment h~ng become effecl~e the~e shal he ~o recoerse bylessee