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HomeMy WebLinkAbout08293 ORD - 12/21/1966• vMP:10131166 AN ORDINANCE AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE, FOR AND ON BEHALF OF THE CITY OF CORPUS CHRISTI, ANN OIL, GAS AND MINERAL LEASE ON LOTS 9 AND 10, SECTION. 21, FLOUR BLUFF AND ENCINAL FARM AND GARDEN TRACTS, NUECES COUNTY, TEXAS, TO LEONARD R. SAYERS, FOR A YEAR TERM, ALL AS MORE FULLY SET FORTH IN THE LEASE, A COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF, IN ACCORDANCE WITH THE BID OF SAID LEONARD R. SAYERS, FOR THE CASH CONSIDERATION OF $515, IN ADDITION TO ALL OTHER CONSIDERATIONS SET OUT IN THE AFORESAID LEASE, PLUS THE PUBLICATION COSTS AS PROVIDED BY CHARTER. WHEREAS, THE CITY COUNCIL HAS HERETOFORE ADOPTED SPECIFICATIONS AND DULY MADE PUBLICATION AS REQUIRED BY CHARTER AND RECEIVED BIDS ON OCTOBER 26, 1966; AND WHEREAS, THE BID MOST ADVANTAGEOUS TO THE CITY, AFTER CONSIDERA- TION 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 LEONARD R. SAYERS 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 IS HEREBY AUTHORIZED AND DIRECTED TO EXECUTE, FOR AND ON BEHALF OF THE CITY, AN OIL, GAS AND MINERAL LEASE OF 40 ACRES OF LAND ON LOTS 9 AND 10, SECTION 21 OF THE FLOUR BLUFF AND ENCINAL FARM AND GARDEN TRACTS, NUECES COUNTY, TEXAS, FOR A PRIMARY TERM OF FIVE (5) YEARS., A COPY OF WHICH LEASE IS ATTACHED HERETO AND MADE A PART HEREOF, FOR THE CASH CONSIDERATION OF $515, RECEIPT OF WHICH IS AC- KNOWLEDGED BY THE CITY, IN ADDITION TO ALL OTHER CONSIDERATIONS SET OUT IN SAID LEASE. 8293 OIL, GAS AND MINERAL LEASE THE STATE OF TEXAS 1 COUNTY OF NUECES j THIS AGREEMENT MADE THIS DAY OF NOVEMBER, 1966, BETWEEN THE CITY OF CORPUS CHRISTI, LESSOR, AND LEONARD R. SAYERS LESSEE, WITNESSETH: 1. LESSOR IN CONSIDERATION OF TEN DOLLARS ($10.00) CASH IN HAND PAID AND OTHER GOOD AND VALUABLE CONSIDERATION, OF THE ROYALTIES HEREIN PRO- VIDED, AND OF 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: LOTS N0s. NINE (g) AND TEN (10), SECTION N0. TWENTY -0N€ (21) OF THE FLOUR BLUFF AND ENCINAL FARM AND GARDEN TRACTS OF NUECES COUNTY, TEXAS, AS SHOWN BY MAP OR PLAT OF SAID SUBDIVISION OF RECORD IN VOLUME A. PAGE 43, OF THE MAP RECORDS OF NUECES COUNTY, TEXAS, TO WHICH REFERENCE IS HERE MADE. THE PARTIES HERETO KNOW THAT THE LESSOR OWNS NO MORE THAN ONE -HALF (1/2) OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER SAID LAND AND ALL PAYMENTS PROVIDED HEREIN OTHER THAN THE ONE -SIXTH (16TH) ROYALTY PROVIDED IN PARAGRAPH 'I HEREOF SHALL BE PAYMENT IN FULL FOR SAID ONE -HALF (1/2) OIL, GAS AND MINERAL INTEREST. I AND CONTAINING 40 ACRES, MORE OR LESS. IN THE EVENT A RESURVEY OF SAID LAND SHALL REVEAL THE EXISTENCE OF EXCESS AND/OR VACANT LANDS LYING ADJACENT TO THE LANDS ABOVE DESCRIBED AND THE LESSOR, HIS HEIRS, OR ASSIGNS, SHALL, BY VIRTUE OF HIS OWNERSHIP OF THE LANDS ABOVE DESCRIBED, HAVE PREFERENCE RIGHT TO ACQUIRE SAID EXCESS AND/OR VACANT LANDS, THEN IN THAT EVENT THIS LEASE SHALL COVER AND INCLUDE ALL SUCH EXCESS AND/OR VACANT LANDS WHICH THE LESSOR, HIS HEIRS, OR ASSIGNS, SHALL HAVE THE PREFERENCE RIGHT TO ACQUIRE BY VIRTUE OF HIS OWNERSHIP OF THE LANDS ABOVE DESCRIBED AS AND WHEN ACQUIRED BY THE LESSOR; AND THE LESSEE SHALL PAY THE LESSOR FOR SUCH EXCESS AND/OR VACANT LANDS AT THE SAME RATE PER ACRE AS THE CASH CONSIDERATION PAID FOR THE ACRE- AGE HEREINABOVE MENTIONED. 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 -SIXTH 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 CONNECTED; LESSEE MAY FROM TIME TO TIME PURCHASE ANY ROYALTY OIL IN ITS POSSESSION, 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 SUBSTANCE, PRODUCED FROM SAID LAND AND SOLD OR USEDOFF THE PREMISES OR IN THE MANUFACTURE OF GASOLINE OR OTHER PRODUCT THEREFROM, THE MARKET VALUE AT THE WELL OF ONE -SIXTH OF THE GAS SOLD OR USED, PROVIDED THAT ON GAS SOLD AT THE WELLS THE ROYALTY SHALL BE ONE -SIXTH 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 UNE HUNDRED DOLLARS ($i100.00) 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. LESSEE SHALL HAVE FREE USE OF OIL AND GAS FROM SAID LAND, FOR -2- i 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 settlements. 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 only 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 proper- ly develop and operate said premises, provided that no unit so created shall exceed 320 acres in area. If gas 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 the amount of his acreage placed in the unit or his royalty interest therein bears to the total acreage so pooled in the parti- cular unit involved. 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 Flom AO ��1 """.`."w��'"��.'.."'�"Dollars ($40.00 ), (herein called rental), which shall cover the privilege of deferring commence- ment of drilling operations for a period of twelve (12) months. In like manner and upon like payments or tenders annually the commencement of drill- ing operations may be further deferred for successive periods of twelve (12) months each during the primary term. The payment or tender of rental may - 3 - 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 aliocated as mere rental for a period. Lessee may at any time execute and deliver to Lessor or to the depository above name or place of record a release or releases covering any portion or portions 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 release or releases. In this connection the above described premises shall be treated as comprising 40 acres, whether there be more or less. By the term "operations for drilling" and "drilli ona 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 equip- ment 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 - 4 - 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 similar circumstances. 7. Lessee ahAll have the right at any time during or within six 4,6) 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 surface, 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, suc- cessors and 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 as- signment 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 entitled to royalty here- under, 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 - 5 - rentals and royalties accruing 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 1/2 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 covenant 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 obtain or to use equipment or material, or by opera- tion of force majeure, any Federal or State law or any order, rule or regulation of governmental authority, then while so prevented through no fault of Lessee, Lessee's obligation to comply with such covenant shall be suspended, and Lessee shell not be liable in damages for failure to comply therewith; and this lease shell be extended while and so long as Lessee -is prevented by any such cause from conducting drilllpg or rework- ing operations 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. IN WIMSS WHEREOF, this instrument is executed in duplicate on the date first above written. CITY OF CORPUS CHRISTI ATTEST: a City Secretary Herbert W. Whitney City Manager APPROVED AS TO LE FORM THIS DAY OF 0 , 1966: LESSOR Laksm A. Sky= City A o LESSEE THE STATE OF TEXAS COkTM OF NUECE.S BEFORE ME, the undersigned authority, on this day personally ap- peared HERBERT W. WH1=, 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 - 6 - and consideration therein expressed, and in the capacity therein stated and as the act and deed of said City. GIVEN UNDER MY HM AND SEAL OF OFFICE, this the day of , 1966. Notary Public in and for Nueces County, Texas THE STATE OF TEXAS EFOR COUNTY OF BEFORE ME the undersigned authority, on this day personally ap- peared LVKM 40 SAVES , 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 NY HAND AND SEAL OF OFFICE, this the day of , 1966. Not Public in and for , O51 &§ CWWVO Texas THAT THE FOREGOING ORDINANCE WAS READ FOR THE F�RAT TIME SAND PASSED TO ITS SECOND READING ON THIS THE _ DAY OF 19--lL, BY THE FOLLOWING VOTE: DR. MCIVER FURMAN JACK BLACKMON PATRICK J. DUNNE 0 DR. P. JIMENEZ, JR. /A KEN MCDANIEL,L� RONNIE SIZEMORE Z/1 C WM. H. WALLACE THAT THE FDREGOING ORDINA A3 READ FOR T $ OND TIME AND P SS�D TO ITS THIRD READING ON THIS THE DAY OF , �9�, BY THE FOLLOWING VOTE: J ZDR. MCIVER FURMAN JACK BLACKMON ! Li( _1 1 PATRICK J. DUNNE DR. P. JIMENEZ, JR. KEN MCDANIEL RONNIE SIZEMORE WM. H. WALLACE THAT THE FOREGOING ORDINANCE WAS READ FOR THE THIRD TIAL AND PASSED FINALLY ON THIS THE �/A DAY OF ��O�p���2/ , �9_, BY THE FOLLOWING VOTE: DR. MCIVER FURMAN JACK BLACKMON PATRICK J. DUNNE DR. P. JIMENEZ, JR. KEN MCDANIEL 17� RONNIE SIZEMORE WM. H. WALLACE PASSED AND APPROVED, THIS THE DAY OF ATTEST- CI Y S C ETA Y APPRO D AS TO LEGAL FORM T4 S DAY OF 19 � CITY ATTORNEY 0 MAY Pro -Tem THE CITY OF CORPUS CHRISTI, TEXAS