HomeMy WebLinkAbout12827 ORD - 10/01/1975MLM:vp:9 /30/75:lst
AN ORDINANCE
AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE
A LEASE AGREEMENT BETWEEN THE CITY OF CORPUS CHRISTI
AND MAJOR ENERGY COMPANY, INC., OF CORPUS CHRISTI FOR
THE PURPOSE OF INVESTIGATING, EXPLORING, PROSPECTING,
DRILLING AND MINING FOR AND PRODUCING OIL AND GAS
BENEATH THE SURFACE OF THAT TRACT OR PARCEL OF LAND
DESCRIBED AS 65.5 ACRES OF LAND BEING THE SAME LARD
DESCRIBED IN A CERTAIN DEED DATED AUGUST 14, 1934, FROM
ARTHUR C. JONES TO THE CITY OF CORPUS CHRISTI, RECORDED
IN VOLUME 105, AT PAGES 153 -154 OF THE DEED RECORDS OF
SAN PATRICIO COUNTY, TEXAS, OWNED BY THE CITY OF CORPUS
CHRISTI, ADJACENT TO LAKE CORPUS CHRISTI, AND BEING FOR
A TERM OF SIX MONTHS, COMMENCING WITH THE DATE OF EXECU-
TION OF THE SAID OIL AND GAS LEASE, A SUBSTANTIVE COPY
OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF; AND
DECLARING AN EMERGENCY.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI,
SECTION 1. That the City Manager be and he is hereby authorized
and directed, for and on behalf of the City of Corpus Christi, to execute
an Oil and Gas Lease between the City of Corpus Christi, as Lessor, and
Major Energy Company, Inc. of Corpus Christi, as Lessee, for the purpose of
investigating, exploring, prospecting, drilling, mining and operating for
and producing gas and gaseous substances beneath the surface of that tract
or parcel of land described as follows:
65.5 acres of land being the same land described in a
certain deed dated August 14, 1934, from Arthur C. Jones
to the City of Corpus Christi, Texas, recorded in Vol.
105, at pages 153 -154, of the Deed Records of San Patricio
County, Texas,
said lease being for a term of six (6) months, on the basis of a cash bonus
of $25.00 per acre and the royalty of 3/16, commencing with the date of
execution of the said Oil and Gas Lease, all as more fully set forth in the
Lease, a substantial copy of which is attached hereto and made a part
hereof, marked Exhibit "A ".
SECTION 2. The necessity to authorize the execution of the afore-
said Oil and Gas Lease in order that proposed operations on the parcel or
tract of land described hereinabove may be commenced without delay creates
a public emergency and an imperative public necessity requiring the suspension
of the Charter rule that no ordinance or resolution shall be passed finally
on the date of its introduction but that such ordinance or resolution shall
be read at three several meetings of the City Council, and the Mayor having
12827
declared such emergency and necessity to exist, and having requested the
suspension of the Charter rule and that this ordinance be passed finally
on the date of its introduction and take effect and be in full force and
effect from and after its passage, IT IS ACCORDINGLY SO ORDAINED, this
the � - day of October, 1975.
ATTEST:
1::&eee4
1�
C y Secretary MAY
THE CITY OF CORPUS CHRISTI,
APPROVED:
J° DAY OF OCTOBER, 1975:
/V—.►J °&4 Ci y Attorney
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OIL AND GAS LEASE
THE STATE OF TEXAS Z
COUNTY OF NUECES X
DESCRIPTION: 65.5 acres of land being the same land described
in a certain Deed dated August 14, 1934, from Arthur C. Jones
to the City of Corpus Christi, Texas, recorded in Volume 105,
at pages 153 -154, of the Deed Records of San Patricio County,
Texas.
THIS AGREEMENT made this day of , 1975, between the
CITY OF CORPUS CHRISTI, TEXAS, Lessor, and Major Energy Company. Inc.,
of Corpus Christi, Texas, Lessee,
W I T N E S S ETA :
1. Lessor, in consideration of One Thousand, Six Hundred Thirty -seven
and 50/100 - - - - - - - - Dollars ($ 1,637.50 - - - ) (There shall be a
Cash Bonus Minimum of Twenty Five and no /100 Dollars ($25.00) per acre for a 6 -month
duration primary term, or a minimum Fifty Dollars ($50.00) per acre cash bonus
for a one -year primary term, either from this date) in cash in hand paid and
other good and valuable consideration of the royalties herein provided, and the
agreements of Lessee herein contained, hereby GRANT, LEASES and LETS exclusively
unto Lessee the above described land for the purpose of investigating, exploring,
prospecting, drilling and mining for and producing oil and gas, subject to the
limitations contained herein,
2: Subject to other provisions, this lease shall expire at the termina-
tion of the primary term unless (a) drilling operations and subsequent oil and /or
gas production has commenced on this lease or (b) provided for in paragraph 4
hereunder. Drilling operations meaning the actual drilling into the surface and /or
in this case actual reentry operations into a formerly plugged and abandoned well.
3. The royalties to be paid Lessor are (a) on oil, or oil well gas from
a well defined by Texas Railroad Commission as an oil well, no less than three -
sixteenths of eight - eighths (3/16th of 8 /8ths) of that produced and saved from said
land, the same to be delivered at the wells or to the credit of Lessor into the
pipeline to which the wells may be connected; (b) on gas, oil, or other substance
from a well defined by the Texas Railroad Commission as a gas well, produced from
said land and sold or used off the premises, the market value at the well of no
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less than three - sixteenths of eight - eighths (3 /16ths of 8 /8ths) of the gas or oil
so sold or used. Lessor reserves the right, at his option, for any well with a
surface or bottom hole location on herein described lease, to at any time take
his three - sixteenths (3 /16ths) of the gas well gas, and associated liquids, in
kind, all delivered at the wellhead. Lessor further reserves the right, at his
option, to take the remaining thirteen - sixteenths (13 /16ths) of the gas well gas,
and associated liquids at the wellhead, all at the competitive price for other
gas well gas produced and sold in the area, but the price of this gas not to
exceed $1.50 per mcf. 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 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 or oil with any other
land, lease or leases located adjacent to or continguous with, when in Lessee's
judgment it is necessary or advisable to do so in order to properly develop and
operate said premises, and upon notifying Lessor, provided that no unit for gas
so created shall exceed 320 acres plus a tolerance of ten percent (107) in area
and no unit for oil shall exceed 40 acres plus a tolerance of ten percent (10 %)
in area. If production is found on the pooled acreage, it shall be treated as
if production is had from this lease but only as to lands covered hereby and,
Included in any pooled unit or units. 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 of his royalty interest therein bears to the total acreage so pooled
in the particular unit involved, but in no event less than One Hundred Dollars
($100.00) per year. That unitization of any part of'the mineral lease with other
minerals will only serve to hold, beyond the primary term, that portion unitized,
and the portion that is not in the unit released back to the Lessor upon expiration
of the primary term.
5. That any surface use of lease herein described be agreed to by the
Lower Nueces River Water Supply District.
6. If prior to discovery of oil or gas on said land Lessee should drill
a dry hole or holes on lands pooled herewith or if after discovery of oil or gas
the production thereof should cease from any cause, this lease shall not terminate
-2-
if Lessee commences additional drilling or reworking operations within sixty (60)
days thereafter. If at the expiration of the primary term, oil, gas or other
mineral is not being produced on lands pooled herewith but Lessee is then engaged
in drilling or reworking operations thereon, the lease shall remain in force'si-cty
(60) 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 paying quantities should be brought in on adjacent land
t
not pooled with the lands covered by this lease and within 467 feet or or draining
the leased premises, Lessee agrees to drill such offset wells as a reasonable y
prudent operator would drill under the same or similar circumstances; provided," �
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however, that should Lessee be unable to obtain a surface location on other land
leased herein, then Lessee shall be excused from any and all liability or obliga-
tion to drill such offset well, provided that within thirty (30) days thereafter'
Lessee seeks and obtains the written permission from the owners of the surface of
the lands leased herein for the purpose of drilling and producing such well.
7. The right of either party hereunder may be assigned in whole or in
part and the provisions hereof shall extend to the heirs, successors and assigns,
but no change or divisions in ownership of the land 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.
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.
8. 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 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 entire fee simple estate, then the royalties to be paid Lessor
shall be reduced proportionately.
9. 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 strike, by operation of force
-3-
majeure or by 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 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 conduct-
ing drilling or reworking 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.
10. That all operations on the herein described lease surface comply
with the requirements of the City of Corpus Christi's Land Drilling Ordinance
#8879 with the exception of drilling block density and unitization provisions.
This will include the requirement that a permit be obtained and that the bonding
and insurance provisions be complied with.
IN WITNESS WHEREOF, this instrument is executed in duplicate on the
date first above written.
ATTEST:
City Secretary
APPROVED AS TO LEGAL FORM:
day of 1975
CITY OF CORPUS CHRISTI
By:
R. Marvin Townsend
City Manager LESSOR
MAJOR ENERGY COMPANY, INC.
By:
City Attorney LESSEE
Ronald L, Chachere, Its duly authorized
Attorney -in -Fact
SORRELL, ANDERSON & SORRELL
THE STATE OF TEXAS X 600 Petroleum Tower
COUNTY of NUECES X Corpus Christi, Texas 78401
BEFORE ME, the undersigned authority, on this day personally appeared
R. MARVIN TOWNSEND, City Manager of the City of Corpus Christi, Texas, 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, and in the capacity therein stated and as the act and deed
of said City.
1975. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of
Notary Public, Nueces County, Texas
-4-
THE STATE OF TEXAS ;
COUNTY OF NUECES I
BEFORE ME, the undersigned authority, on this day personally
appeared Ronald L. Chachere, attorney in fact for Major Energy Company,
Inc., known to me to be the person whose name is subscribed to the fore-
going instrument and acknowledged to me that the same was the act of the
said Major Energy Company, Inc., a corporation, and that he executed the
same as the act of such corporation for the purposes and consideration
therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day
of October, 1975.
Notary Public in and for Nueces county,
Texas
CORPUS CHRISTI, TEXAS
DAY Or-9=2,) , 1 g,Lc
TO THE MEIISM OF THE CITY COUNCIL
COPPUS CHRISTI, TEXAS
FOR THE REASONS SET FORTH IN THE EMERGENCY CLAUSE OF THE FOREGOING
ORDINANCE, A PUBLIC EMERGENCY AND IMPERATIVE NECESSITY EXIST FOR THE SUSPEN-
SION OF THE CHARTER RULE OR REQUIREMENT THAT NO ORDINANCE OR RESOLUTION SHALL
BE PASSED FINALLY ON THE DATE IT IS INTRODUCED, AND THAT SUCH ORDINANCE OR
RESOLUTION SMALL BE READ AT THREE MEETINGS OF THE CITY COUNCIL; 1, THEREFORE,
REQUEST THAT YOU SUSPEND SAID CHARTER RULE OR REQUIREMENT AND PASS TNIS ORDI-
NANCE FINALLY ON THE DATE IT IS INTRODUCED, OR AT THE PRESENT MEETING OF THE
CITY COUNCIL.
RESPECTFULLY,
MAYOR
THE CITY OF CORPUS CHRISTI, TEXAS
THE CHARTER RULE WAS SUSPENDED BY THE FOLLOWING VOTE:
JASON LUBY
DR. BILL TIPTON
EDUARDO DE ASES
RUTH GILL
BOB GULLEY
GABE LOZANO, SR.
EDWARD L. SAMPLE
THE ABOVE ORDINANCE WAS PASSED BY THE F L WING VOTE:
JASON LUBY
DR. BILL TIPTON
EDUARDO DE AGES
RUTH GILL
BOB GULLEY
GAGE LOZANO, SR.
EDWARD L. SAMPLE