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HomeMy WebLinkAbout14146 ORD - 01/25/19780 JKH:vp;1/24/78:lst TEXAS: AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A 3 -YEAR MINERAL LEASE WITH MOBIL OIL COMPANY FOR THE LEASE OF 50% OF THE MINERALS UNDER A 470 -ACRE TRACT AT THE AIRPORT, AS MORE FULLY DESCRIBED IN THE LEASE, A SUBSTANTIAL COPY OF WHICH IS ATTACHED HERETO, MARKED EXHIBIT "A ", 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 to execute a 3 -year mineral lease with Mobil Oil Company for the lease of 50% of the minerals under a 470 -acre tract at the Airport, as more fully described in the lease, a substantial copy of which is attached hereto, marked Exhibit "A" and made a part hereof. • SECTION 2. The necessity to authorize the City Manager to execute the aforesaid lease at the earliest possible date 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 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 0S ' day of January, 1978. ATTEST: City Secretary MAYOR THE CITY OF CORPUS CHRISTI, TEXAS APPROVED: G� DAY OF JANUARY, 1978: J. BRUCE AYCO/CK, CITY ATTORNEY BY: Assistant Cit A orney MICROFILMED JUL 0 71998 �4�4� OIL AND GAS LEASE THE STATE OF TEXAS p COUNTY OF NUECES DESCRIPTION: 470 acres of land being all of Farm Block Number 23 of the J. C. Russell Farm Blocks, Nueces County, Texas, as shown on map or plat of record in Volume 3, Page 53, Map Records of said county. Also being the same land described in deed from F. B. Sechrist, et al to the City of Corpus Christi, dated the 22nd day of June, 1957, and recorded in the Deed Records of said county in Volume 780, Page 87. THIS AGREEMENT made this day of 1978, between the City of Corpus Christi, Texas, Lessor and Lessee. NITNESSETH: 1. Lessor, in consideration of Forty -Seven Thousand Two Hundred Thirty -Five Dollars ($47,235.00) (there shall be a cash bonus minimum of $50.00 per net city acre and $10.00 per net city acre annual delay rental for a three -year primary term, 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 exclu- sively 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 termination 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 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 one -fifth of five-fifths (1 /5th of 5 /5ths) of that produced and saved from the net city 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 Failroad Commission as a gas well, produced from the net city land and sold or used off the premises, the market value at the well of no less than one -fifth of five - fifths (1 /5th of 5 /5ths) of the gas or oil so sold or used. Lessor reserves the right, at his option, to at any time take his one -fifth (1 /5th) of the gas well gas, and associated liquids, in kind, all delivered at the wellhead. For (a) and (b) above, there shall be a minimum annual royalty of ten dollars ($10.00) per net city acre. Where gas from a well producing gas only is not sold or used, Lessee may, for a maximum of two (2) years beyond the primary term, pay as royalty ten dollars ($10.00) per net city acre, 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 two (2) years beyond the primary term. 4. Lessee is hereby given the right and power to unitize or combine the land covered by this lease or any portion thereof provided that in no event will such a unit contain less than 50% of the gross minerals underlying said tract, 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, and upon notifying Lessor, provided that no unit for gas so created shall exceed 360 acres or be less than 320 acres in size. If production is found on the pooled acreage, it shall be treated as if production is had from this lease, as to the land so pooled, 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 ten dollars ($10.00) per net city acre in any one year. Any non - unitized minerals will expire at the end of the primary term, but they may be held for the balance of the primary term by the payment of ten dollars ($10.00) per acre delay rental. -2- 5. If prior to discovery of oil or gas on said land Lessee shall 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 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 opera- tions therein, the lease shall remain in force sixty (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 pro- ducing oil or gas in paying quantities should be brought in on adjacent land not pooled with the lands covered by this lease 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 circum- stances. 6. 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 obligation 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. 7. 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 sub - rogated 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. -3- • 8. Should Lessee be prevented from complying with any express or implied covenant of this lease, from conducting drilling or reworking opera- tions thereon or from producing oil or gas therefrom by reason of strike, by operation of force 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 conducting 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. IN WITNESS WHEREOF, this instrument is executed in duplicate on the date first above written. ATTEST: CITY OF CORPUS CHRISTI By City Secretary R. Marvin Townsend City Manager LESSOR APPROVED: day of 1978 Harold Zic , Director of Finance J. Bruce Aycock, City Attorney MOBIL OIL CORPORATION By Assistant City Attorney By LESSEE THE STATE OF TEXAS d COUNTY OF NUECES 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. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of . 1978. Notary Public in and for Nueces County, Texas J Corpus Christi, Texas &g =day of , 19_1-- TO THE MEMBERS OF THE CITY COUNCIL Corpus Christi, Texas For the reasons set forth in the emergency clause of the foregoing ordinance, a public emergency and imperative necessity exist for the suspension of the Charter rule or requirement that po ordinance or resolution shall be passed finally on the date it is introduced, and that such ordinance or resolution shall be read at three meetings of the City Council; I, therefore, request that you suspend said Charter rule or requirement and pass this ordinance 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 W.c. Eduardo de Ases T� David Diaz Ruth Gill Bob Gulley Gabe Lozano, Sr. Edward L. Sample The above ordinance was passed by the following vote: Jason Luby _ Eduardo de Ases David Diaz Ruth Gill Bob Gulley Gabe Lozano, Sr. Edward L. Sample J-414-6