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HomeMy WebLinkAbout07544 ORD - 04/07/1965BJw:2/15/65 AN ORDINANCE AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE FOR AND ON BEHALF OF THE CITY, AN OIL AND GAS LEASE ON 10.243 ACRES, MORE OR LESS, LOCATED IN NUECES COUNTY, TEXAS, AT THE SAVAGE LANE WATER RESERVOIR AND PUMP STATION, WITH BELL & DANSFIELL OF CORPUS CHRISTI, FOR A FIVE -YEAR PERIOD, BEGINNING APRIL , 1965, AND EXPIR- ING FIVE YEARS HENCE, FOR A CASH BONUS IN ADDITION TO ALL OTHER CONSIDERATION SET OUT IN THE LEASE FORM TO BE PAID IN ADVANCE, ALL AS MORE. FULLY SET OUT IN THE LEASE AGREE- MENT, A COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF. WHEREAS, THE CITY COUNCIL HAS HERETOFORE ADOPTED SPECIFICATIONS AND DULY MADE PUBLICATION AS REQUIRED BY CHARTER AND RECEIVED BIDS ON FEBRUARY 10, 1965; AND WHEREAS, THE BID MOST ADVANTAGEOUS TO THE CITY, AFTER CONSIDER- ATION OF ALL BIDS SUBMITTED, AND DETERMINED AS THE HIGHEST AND BEST BIDDER SUBMITTING A BID ON THE BASIS PRESCRIBED IN THE NOTICE FOR BIDS, IS THE BID OF BELL & DANSFIELL FOR A PRIMARY TERM OF FIVE (5) YEARS: NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. THE CITY MANAGER 1S HEREBY AUTHORIZED AND DIRECTED TO EXECUTE, FOR AND ON BEHALF OF THE CITY, AND TO DELIVER THE SAME, AN OIL AND GAS LEASE COVERING 10.243 ACRES OF LAND, MORE OR LESS, LOCATED AT THE SAVAGE LANE WATER RESERVOIR AND PUMP STATION, MORE PARTICULARLY DESCRIBED AS FOLLOWS: 10.243 ACRES OF LAND, COMPOSED OF THAT TRACT OF 5 ACRES DESCRIBED IN VOLUME 232, BEGINNING AT PAGE 592, OF THE DEED RECORDS OF NUECES COUNTY, TEXAS, AND SOUTHWEST PORTION OF BLOCK 19, OF THE J. C. RUSSELL FARM TRACTS, AND THAT 5.243 -ACRE, TRACT DESCRIBED IN VOLUME 303, BEGINNING AT PAGE 312, OF THE DEED RECORDS OF NUECES COUNTY, TEXAS; ALL OF THE SAID 10.243 ACRES BEING SITUATED IN CORPUS CHRISTI, NUECES COUNTY, TEXAS. SAID LEASE TO BE WITH BELL & DANSFIELL, OF CORPUS CHRISTI, TEXAS, COVERING A FIVE -YEAR PERIOD, BEGINNING APRIL , 1965, AND EXPIRING FIVE YEARS HENCE, FOR A CASH BONUS OF $281.68, THE RECEIPT OF WHICH IS ACKNOWLEDGED BY THE CITY, ALL OF WHICH TERMS ARE MORE FULLY SET FORTH IN THE LEASE AGREEMENT, A COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF. 7544 OIL AND GAS LEASE THE STATE OF TEXAS COUNTY OF NUECES THIS AGREEMENT made this day of April, 1965, between the City of Corpus Christi, Lessor, and BELL 4; DaNxriELL OF CORPUS CHRISTI, T6XA3s Lessee, W I T N E S S E T H: 1. Lessor, in consideration of Ten Dollars ($10.00) in cash in hand paid and other good and valuable consideration, of the royalties herein provided, and on the agreements of Lessee herein contained, hereby grants, leases and lets exclusively unto Lessee for the purpose of investigating, exploring, prospecting, drilling and mining for and producing oil and gas, laying pipe lines and building tanks, to produce, save, take care of, treat, transport, and own said products, the following described land in Nueces County, Texas, to -wit: 10.243 acres of land, composed of that tract of 5 acres described in Volume 232, beginning at Page 592, of the Deed Records of Nueces County, Texas, and Southwest portion of Block 19, of the J. C. Russell Farm Tracts, and that 5.243 -acre tract described in Volume 303, be- ginning at Page 312, of the Deed Records of Nueces County, Texas; all of the said 10.243 acres being situated in Corpus Christi, Nueces County, Texas. Notwithstanding any other provision of this lease, no drilling operations or other operations by the Lessee, or his assigns, under authority of this lease shall be conducted on the surface of the land hereby leased nor within three hundred feet (300') of the land hereby leased. 2. Subject to the other provisions herein contained, this lease shall be for a term of five (5) years from this date (called "primary term ") and as long thereafter as oil, gas or other mineral is produced from said land hereunder. 3. The royalties to be paid Lessor are (a).<on oil, one- eighth of that produced and saved from said land, the same to be delivered'at the wells or to the credit of Lessor into the pipe line to which the wells may be con- nected; Lessee may from time to time purchase any royalty oil in its possession, 1 paying the market price therefor prevailing for the field where produced on the date of purchase; (b) on gas, including casinghead gas or other gaseous sub- stance, produced from said land and sold or used off the premises or in the manufacture of gasoline or other product therefrom, the market value at the well of one - eighth of the gas so sold or used, provided that on gas sold at the wells the royalty shall be one - eighth of the amount realized from such sale; where gas from a well producing gas only is not sold or used, Lessee may, for a maximum of three (3) years beyond the primary term, pay as royalty One Hundred ($100.00) Dollars per well per year, and upon such payment it will be considered that gas is being produced within the meaning of Paragraph 2 hereof for such period, not exceeding three years beyond the primary term. Lessee shall have free use of oil and gas from said land, for all operations hereunder, and the royalty on oil and gas shall be computed after deducting any so used. Lessor shall have the privilege at his risk and expense of using gas for stoves and inside lights in the principal dwelling thereon out of any surplus gas not needed for operations hereunder. Lessor is exempt as a matter of law from any and all state of Texas severance taxes on oil and gas, and no deductions shall be made for severance taxes in royalty settle- ments. 4. Lessee is hereby given the right and power to pool or combine the land covered by this lease or any portion thereof for gas or oil with any other land, lease or leases located adjacent to or contiguous with, when in Lessee's judgment it is necessary or advisable to do so in order to properly develop and operate said premises, provided that no unit for gas so created shall exceed 320 acres in area and no unit for oil shall exceed 4O acres in area. If production is found on the pooled acreage, it shall be treated as if production is had from this lease, whether the well or wells be located on the premises covered by this lease or not. In lieu of the royalties elsewhere herein specified, Lessor shall receive on production from a unit so pooled only such portion of the royalty stipulated herein as -2- the amount of his acreage placed in the unit or his royalty interest therein bears to the total acreage so pooled in the particular unit involved, but in no event less than $1,000.00 in any one year. 5. If operations for drilling are not commenced on said land on or before one year from this date the lease shall terminate as to both parties unless on or before such anniversary date Lessee shall pay or tender to Lessor or to the credit of Lessor in Corpus Christi State National Bank at Corpus Christi, Texas (which Bank and its successors are Lessor's agent and shall continue as the depository for all rentals payable hereunder re- gardless of changes in ownership of said land or the rentals) the sum of One Hundred Dollars ($100.00), (herein called rental), which shall cover the privilege of deferring commencement of drilling operations for a period of twelve (12) months. In like manner and upon like payments or tenders annually the commencement of drilling operations may be further deferred for successive periods of twelve (12) months each during the primary term. The payment or tender of rental may be made by the check or draft of Lessee mailed or delivered to said Bank on or before such date of payment. If such Bank (or any successor Bank) should fail, liquidate or be succeeded by another Bank, or for any reason fail or refuse to accept rental, Lessee shall not be held in default for failure to make such payment or tender of rental until thirty (30) days after Lessor shall deliver to Lessee a proper recordable instrument,. naming another Bank as Agent to receive such payments or tenders. The down cash payment is consideration for this lease according to its terms and shall not be allocated as mere rental for a period.' Lessee may at any time execute and deliver to Lessor or to the depository above named or place of record a release or releases covering any portion or por- tions of the above described premises and thereby surrender this lease as to such portion or portions and be relieved of all obligations as to the acreage surrendered, and thereafter the rentals payable hereunder shall be reduced in the proportion that the acreage covered hereby is reduced by said re- lease or releases. In this connection the above described premises shall -3- be treated as comprising 10.243 acres, whether there be more or less: By the term "operations for drilling" and "drilling operations" is meant the actual drilling into the earth in a bonafide attempt to discover oil, gas or other minerals and not merely the placing of materials and /or equipment on the land. 6. if prior to discovery of oil or gas on said land Lessee should drill a dry hole or holes thereon, or if after discovery of oil or gas the production thereof should cease from any cause, this lease shall not termi- nate if Lessee commences additional drilling or re- working operations within sixty (60) days thereafter or (if it be within the primary term) commences or resumes the payment or tender of rentals on or before the rental paying date next ensuing after the expiration of three months from date of comple- tion of dry hole or cessation of production. If at the expiration of the primary term oil, gas or other mineral is not being produced on said land but Lessee is then engaged in drilling or re- working operations thereon, the lease shall remain in force so long as operations are prosecuted with no cessation of more than thirty (30) consecutive days, and if they result in the production of oil or gas so long thereafter as oil or gas is produced from said land. In the event a well or wells producing oil or gas in pay- ing quantities should be brought in on adjacent land and within 467 feet of or draining the leased premises, Lessee agrees to drill such offset wells as a reasonably prudent operator would drill under the same or simi- lar circumstances. 7. Lessee shall have the right at any time during or within six (6) months of the expiration of this lease to remove all property and fixtures placed by Lessee on said land, including the right to draw and remove all casing. Lessee shall bury all pipe lines 36 inches below the surYace, and no well shall be drilled within two hundred (200) feet of any structure on said land without Lessor's consent. 8. The rights of either party hereunder may be assigned in whole or in part and the provisions hereof shall extend to the heirs, successors and -4- assigns, but no change or divisions in ownership of the land, rentals, or royalties, however accomplished, shall operate to enlarge the obligations or diminish the rights of Lessee. No sale or assignment by Lessor shall be binding on Lessee until Lessee shall be furnished with a certified copy of recorded instrument evidencing same. In event of assignment of this lease as to a segregated portion of said land, the rentals payable hereunder shall be apportionable as between the several leasehold owners ratably according to the surface area of each, and default in rental payment by one shall not affect the rights of other leasehold owners hereunder.. If six or more parties become entit3ed to royalty hereunder, Lessee may withhold payment thereof unless and until furnished with a recordable instrument executed by all such parties designating an agent to receive payment for all. 9. Lessor hereby warrants and agrees to defend the title to said land and agrees that Lessee at its option may discharge any tax, mortgage or other lien upon said land and in event Lessee does so, it shall be subrogated to such lien with the right to enforce same and apply rentals and royalties aogruing hereunder toward satisfying same. Without impairment of Lessee's rights under the warranty in event of failure of title, it is agreed that if Lessor owns an interest in said land less than the entire fee simple estate, then the royalties and rentals to be paid Lessor shall be reduced proportionately. 10. Should Lessee be prevented from complying with any express or implied convenant of this lease, from conducting drilling or reworking operations thereon or from producing oil or gas therefrom by reason of scar- city of or inability to bbtain or to use equipment or material, or by opera- tion of force majeure, any Federal or State law or any order, rule or regu- lation of governmental authority, then while so prevented through no fault of Lessee, Lessee's obligation to comply with such covenant shall be sus- pended, and Lessee shall not be liable in damages for failure to comply therewith; and this lease shall be extended while and so long as Lessee -5- is prevented by any such cause from conducting drilling or reworking opera- tions on or from producing oil or gas from the leased premises and the time while Lessee is so prevented shall not be counted against Lessee, anything in this lease to the contrary notwithstanding. A IN WITNESS WHEREOF, this instrument is executed in duplicate on the date first above written. ATTEST: CITY OF CORPUS CHRISTI City Secretary APPROVED AS TO LEGAL FORM THIS DAY OF , 1965 City Attorney THE STATE OF TEXAS 0 COUNTY OF NUECES By Herbert W. Whitney City Manager LESSOR FOR LESSEE • OM f► I NSF)ELL BEFORE ME, the undersigned authority, on this day personally ap- peared HERBERT W. WHITNEY, City Manager of the City of Corpus Christi, Texas, known to me to be the person whose name is subscribed to the foregoing in- strument and acknowledged to me that he executed the same for the purposes and consideration therein expressed, and in the capacity therein stated and as the act and deed of said City. GIVEN UNDER MY- -HAND AND.. SEAL OF OFFICE, this the , 1965 >r. THE STATE OF TEXAS COUNTY OF NUECES day of Notary Public in and for Nueces County, Texas BEFORE ME, the undersigned authority, on this day personally ap- peared , known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of , 1965. -6- Notary Public in and for Nueces County, Texas 1 THAT THE FORE ING ORDINANCE FINALLY ON THIS THE DAY OF FOLLOWING VOTE: DR. MCIVER URMAN JACK BLACKMON PATRICK J. DUNNE DR. P. JIMENEZ, JR. KEN MCDANIEL RONNIE SIZEMORE WM. H. WALLACE PASSED AND APPROVED, THIS THE APPROVED AS TO LEGAL FORM THIS % C DAY OF �C i , 194) : ATTORNEY DAY OF T M1.AND,PASSED BY THE THE CITY OF CORPUS CHRISTI, TEXAS r4 PAS D[TO THAT FOREGOING READING ORDINANCE DAY OF F 1T1 AND 19 0 , BY THE FOLLOWING VOTE: "''''���TTT���TTT JAMES L. BARNARD JAMES H. YOUNG JACK R. BLACKMON JOSE R. DELEON M. P. MALDONADO W. J. ROBERTS W. H. WALLACE, JR. THAT THE FOREGOING ORDINA TO ITS THIRD READING ON THIS THE BY THE FOLLOWING VOTE: AS READ FOR DAY OF JAMES L. BARNARD JAMES H. YOUNG JACK R. BLACKMON JOSE R. DELEON M. P. MALDONADO W. J. ROBERTS LLACE TIME ANDiPAS�S[D ,19 THAT THE FOREG FI LY ON THIS THE THE F. OWING VOTE: DAY OF ATTEST: E AND 19 JAMES L. BARNARD JAMES H. YOUNG JACK R. BLACKMON JOSE R. DE M. ALDONADO . J. ROBE 5 W. H. WALLACE, PASSED APPROVED, THIS THE DAY OF y BY SECRETARY APPROVED AS TO LEGAL FORM THIS / 5- DAY OF 2t/- CITY ATTORNEY SED 9 MAYOR THE CITY OF CORPUS CHRISTI, TEXAS February 18, 1965 Corpus Chrieti Ca11er -T10es Classified Department 820 N. Broadway .Corpus Christi, Texan cant /teen: Herewith is a first reading and gas lease first 10,243-acres ordinance authorizing an oil which I ;ease on land with and on 'thank' you to publish lebrua Hell & baosfie116_. or about April 8, 1965. iT 22, Wa will ' 26, 30�d not`be.able to do the third ay period because of the prohibition to in the u hence, it is expected in_tha City sual 04 4h3 =d 7• _ We` wilt call youethehv the pew City-Council co. rter; reeding of this ordin vote after ancb.: the second nary truly Yours,: TRIC:mem Eric/. T. RAY Kring City Secretary February 19, 1965 Bell & Dansiiell 1224'Vau6n Plaza Corpus Christi, Texas Gentlemens This will advise that an ordinance was read for the first ` time Wednesday, February'17, 1965, and - passed to the second reading by the. City Council, authorizing the City Manager '.-to execute an oil and gas lease with your company on 10.243 acres of land, more or lees, at the Savage Lane Reservoir ` pump Station. The.aecond reading will be done at our next regular meeting- on February 24, but due to a' Charter restriction the third and final reading cannot be done until after the Apiil 6 City Election. The ordinanco and lease is being published in the local news- paper Re required by the City Charter; and for all intents and purposes it may be considered a•consumouted deal. " • An invoice covering the cost of publication will be forwarded to you when the matter is completed: Very truly yours, T. P..y Kring City Secretary