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Home My WebLink About08415 ORD - 04/12/1967• JKH:2-6-67 AN ORDINANCE AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE, FOR AND ON BEHALF OF THE CITY OF CORPUS CHRISTI, AN OIL AND GAS LEASE ON 100.12 ACRES OF LAND OUT OF TRACTS 13 AND 14 OF THE WILLIAM J.RJBERTSON TRACT, NUECES COUNTY, TEXAS, AND AN ADJOINING TRACT DESCRIBED AS FARM LOT NO. 1 IN SECTION 15, IN THE BOHEMIAN COLONY LANDS, A SUBDIVISION IN NUECES COUNTY, TEXAS, AS SHOWN IN THE MAP RECORDS IN THE OFFICE OF THE COUNTY CLERK OF NUECES COUNTY, TEXAS, SAID LEASE TO BE WITH JERRY B. LEE FOR A -YEAR PERIOD, BEGINNING APRIL 5, 1967, AND ENDING APRIL 4, 1970, 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 AGREEMENT, A COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF. WHEREAS, THE CITY COUNCIL HAS HERETOFORE ADOPTED SPECIFICATIONS AND CULYMADE PUBLICATION AS REQUIRED BY CHARTER AND RECEIVED BIDS ON JANUARY 25, 1967; 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, 15 THE BID OF JERRY B. LEE FOR A PRIMARY TERM OF THREE (3) 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, AND TO DELIVER THE SAME, AN 'I OIL AND GAS LEASE COVERING 100.32 ACRES OF LAND, OUT OF TRACTS 13 AND 14 OF THE WILLIAM J. ROBERTSON TRACT, NUECES COUNTY, TEXAS, AND AN ADJOINING TRACT DESCRIBED A5 FARM LOT No. 1, IN SECTION 15, IN THE BOHEMIAN COLONY LANDS, A SUBDIVISION IN NUECES COUNTY, TEXAS, AS SHOWN IN THE MAP RECORDS IN THE OFFICE OF THE COUNTY CLERK OF NUECES COUNTY, TEXAS, SAID LEASE TO BE WITH JERRY B. LEE, COVERING A THREE -YEAR PERIDD BEGINNING APRIL 5, 1967, AND EXPIRING APRIL 4, 1970, FOR A CASH BONUS OF $$1,050, THE RECEIPT OF WHICH IS ACKNOWLEDGED BY THE CITY, IN ADDITION TO ALL OTHER CONSIDERATIONS SET OUT IN SAID LEASE FORM, A COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF. 8415 f• • OIL AND GAS LEASE THE STATE OF TEXAS COUNT? OF' M ECES A#a11., THIS AGREEMENT made this TH day of JUXNM 1967, between the City of Corpus Christi, Lessor, and Jmy B« Lea 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: 100.32 acres consisting of one tract of approximately 32.32 acres of land out of Tracts 13 and 14 of the William J. Robertson Tract, Nueces County, Texas, more particularly described in the Deed from Joe Hroch, Sr. and wife to the City of Corpus Christi, dated May 16, 1957, and an adjoining tract of approximately 68 acres and more particularly des - cribed as Farm Lot No. 1 in Section 15, in the Bohemian Colony Lands, a Subdivision in Nueces County, Texas as shoym in the Map Records in the Office of the County Clark of Nueces County, Texas, and described in a Deed from Joe Hroch, Sr. and wife to the City of Corpus Christi, dated April 1, 1957• The entire area being leased by the City being approximately 100.32 acres of land. NOtwithotanding any other nrovizign of this least, g operations or other operations by the Lessee, or his assigns, under authority of this lease shall be conducted within one hundred feet (100') of West Side Sewage Treatment Plant which shall include an area of not ex- ceeding 25 acres as designated by the City, including all buildings, struc- tures, valves, settling beds and other facilities used in the operation of said plant, and being in general that area lying between Greenwood Drive and the lire parallel to the centerline of Greenwood Drive and 820' there =som and bounded on the Northeast by Saratoga Road and on the Southwe.3z by a line paral- lel to the centerline of Saratoga Road a distance of 1320' from z3aid centerline. In the event a resurvey of said land shall reveal the existence of eNcess ardor vacant lands lying adjacent to the lands above described and the Lessor, his heirs or assigns, shall Any virtue of his ownership of the lands above des- cribed, 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 acreage hereinabove mentioned. 2. Subject to the other provisions herein contained, this lease shall be for a term of three (3) 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 con- netted; Lessee may from time to time purchase any royalty oil in its possession, paying the market price therefore prevailing for the field where produced or. 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 -sixth of the gas so sold or used, provided that on gas sold at the wells the royalty shall be one -sixth of the amount realized _'rem 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 th,: primary term, .oay as royalty one Thousand Three and 20/100 ($1,003.20) 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 oper- ations hereunder, and the royalty on oil and gas shall be computed after de- ducting 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 -2- I• • a matter of law from any and all state of Texas severance taxes on oil and gas, and no deductions shall be msde 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 only with any other '_and, 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 particular unit involved, but in no event less than .,$1,003.20 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.5tate National 3°nk 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 Lum of Five Hundred One and 601100 Dollars (,$501.60), (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 payc_er_ts or tenders annually the commencement of drilling operations may be further de- ferred 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 craft 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 suc.:eaded by another Bank, or for any reason fail or refuse to accept rental, L;;ssee shall not be held in default for failure to make such payment or tender of -3- 0 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 be treated as comprising 100.32 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 lard 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 data 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 fait of or draining. the leased premises, Lessee ao ees to drill such offse. wells as a reasonably prudent operator would drill under the same or simi- lar circu=tances. -4- ? :.essee s_= _ have __ an." __— " --- 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 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 assign- ment Of this lease as to.a segregated portion of said land, the rentals pay- able hereunder shall be apportionable as between the several leasehold own= ers ratably according-to the surface area of each, and default in rental payment by one shall not affect the rights of other leasehold owners here- under. If six or more parties become entitled.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 tart, 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 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 the en- tire 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- -5- 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 is prevented by any such cause from conducting drilling or rewo-rxing 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. 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 , 1967 City Attorney THE STATE OF TEXAS COUNTY OF NUECES By Herbert W. Whitney City Manager LESSOR imi Be LMS LESSEE BEFORE ME, the undersigned authority, on this day perscra - -y a - peared HERBERT W. WHITNEY, City Manager of the City of Corpus Chr'st_, 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 day of , 1967. THE STATE OF TEXAS COUNTY OF NUECES Notary Public in and for Nueces County, Texas BEFORE ME, the undersigned authority, on this day personally ap- peared des- LBE , known to be to be the pe °son whose s name is ubscribed 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 , 1967• Notary Public in and for Kuecas Cou:_ty, Tessa. -6- • THAT THE FOREGOING ORDINANCE WAS READ FOR THE FIR T TIME AND PASSED TO ITS SECOND READING ON THIS THE DAY OF 19_L I , BY THE FOLLOWING VOTE: DR. MCIVER FURMAN ri JACK BLACKMON PATRICK J. DUNNE DR. P. JIMENEZ, JR. G1L KEN MCDANIEL RONNIE SIZEMORE WM. H. WALLACE THAT THE FOREGOING ORDINAN E AS READ FOR E6N.TIME AND P ED TO ITS THIRD READING ON THIS THE DAY OF 19, BY THE FOLLOWING VOTE: DR. MCIVER FURMAN C JACK BLACKMON PATRICK J. DUNNE DR. P. JIMENEZ, JR. KEN MCDANIEL RONNIE SIZEMORE WM. H. WALLACE fG THAT THE FOREGOING ORDINANCE WAS READ FOR THE THIRD T dE AND PASSED FINALLY ON THIS THE DAY OF /�.1J�f_ �9�L BY THE FOLLOWING VOTE: 4 a ak ATTEST: JACK BLACKM N _ a-vL.0 v DR. P. JIMENEZ, JR. KEN MCDANIEL BONNIE SIZEMORE V r PASSED AND APPROVED, THIS THE DAY OF , 19(1 /. APPrO D AS -TO DAY OF NTAI�OR -' THE CITY OF CORPUS CHRISTI, TEXAS a' s February 91 1967 k _ ,l+Ar. Lela,dl G Bw'rwsj Mancg� Classified Department C"m Christi Caller -limes H2O N.:6roadway Carus Christi, Texas wo Dear Hk. Barnsst ,_• tierewitl is a copy;Of an ordinance authatizlng the .leasing of ' ' 1Eiti:2 acres of land (West Side Sewer Pant Property } -to Jerry Kindly publish, February 15; February 17 and April 7, 1967, , l_I owYn8 th seeand � read We II I not i fy Y our offioe fo d third , k Irk .9 regarding then xate. , The rea n,for the long delay to the third reading Is beeau*e of the, Chas ter provision that leases Can not be earimoded during the ma'atariunrr. 1 l* this w111 not: cause you any argot inconvenlengs. Sind erely, To Ray Mr Clty'5ecretary TRKJIh . Drciastara =- 1t, t I =