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HomeMy WebLinkAbout14452 ORD - 08/16/1978ikh:8- 16 -78; 1st TEXAS: AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A LEASE AGREEMENT BETWEEN THE CITY OF CORPUS CHRISTI AND " CANUS PETROLEUM, INC., FOR THE EXPLORATION OF THE MINERALS, SUBJECT TO THE LIMITATIONS CONTAINED IN SAID LEASE AGREEMENT, BENEATH THE SURFACE OF THAT TRACT OF LAND DESCRIBED AS THE CECILIA KELLY 128.315 ACRE TRACT ON THE CORPUS CHRISTI INTERNATIONAL AIRPORT, AND BEING FOR A PRIMARY TERM OF THREE YEARS, A SUB- STANTIAL COPY OF WHICH LEASE AGREEMENT IS ATTACHED HERE- TO AND MADE A PART HEREOF, MARKED EXHIBIT "A "; 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 lease agreement between the City of Corpus Christi and Canus Petroleum, Inc. for the exploration offthe minerals, subject to the limita- tions contained in said Lease Agreement, beneath the surface of that tract of land described as the Cecilia Kelly 128.315 -acre tract on the Corpus Christi International Airport, more particularly described as follows: A tract or parcel of land in Nueces County, Texas, out of Lot 7 of the Margaret Kelly Subdivision, according to the map thereof recorded in Volume 8, page 40, of the Map* Records of Nueces County, Texas, said Lot 7 having been conveyed to Cecilia Kelly by the will of Margaret Kelly, probated March 25, 1944•, in Nueces County Probate Court under Cause No. 4300, said tract-more particularly described by metes and bounds as follows: Beginning at the NW corner of said Lot No. 7, a point in the center of Kosar Road and in the South Line of Farm Block 23 of the Russell Farm Blocks; Thence S 890 -35' -20" East along the North Line of said Lot 7, and the South Line of Farm Blocks 23 and 22, a. distance of 2131.06 feet to a point for corner in the center of Kosar Road, and the Northeast corner of said Lot 7; Thence South along the East Line of said Lot 7 a distance of 2371.28' to a point for corner; Thence in a Westerly direction along a curve to the right, said curve having a radius of 1100' and a central angle of 290 -40' 33" a distance of 569.73' to the end of said curve; Thence N 890 -34'. -10" West tangent to the aforesaid curve a distance of 648.90' to the beginning of a curve to the left; Thence in a Westerly and Southerly direction along said curve whose radius is 905.37' and whose central angle is 900 -00' a distance of 1422.15' to a point for corner; Thence N 890 -34' -10" West a distance of 50' to a point in the West line of said Lot 7 and in the center of Farm -to- Market Road 763; Thence N 00 -25' -50" East along the West line of Lot 7 a distance of 3,421.21' to the place of beginning and containing 128.315 acres of land. MICROFILM 14452 pip n e) ,��(� said lease being for a primary term of three (3) years, on the basis of a cash bonus of $60 per acre and a royalty of 1/5 of 5 /5ths, commencing with the date of execution of the Oil and Gas Lease, all as more fully set forth in said Lease, a substantial copy of which is attached hereto and made a part hereof, marked Exhibit "A ". SECTION 2. The necessity to execute a Lease Agreement as herein - above described creates a public emergency and an imperative public neces- sity 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 that such emergency and necessity 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 16 day of August, 1978. ATTEST: 'City -Secretary APPROVED: 16th DAY OF AUGUST, 1978: J. BRUCE AYCOCK, CITY ATTORNEY By r Assistant Ci orney OIL AND GAS LEASE THE STATE OF TEXAS X COUNTY OF NUECES X DESCRIPTION: A tract or parcel of land in Nueces County, Texas, out of Lot 7 of the Margaret Kelly Subdivision, according to the map thereof recorded in Volume 8, page 40, of the Map Records of Nueces County, Texas, said Lot 7 having been conveyed to Cecilia Kelly by the will of Margaret Kelly, probated March 25, 1944, in Nueces County Probate Court under Cause No. 4300, said tract more particularly described by metes and bounds as follows: Beginning at the NW corner of said Lot No. 7, a point in the center of Kosar Road and in the South Line of Farm Block 23 of the Russell Farm Blocks; Thence S 890 -35' -20" East along the North Line of said Lot 7, and the South Line of Farm Blocks 23 and 22, a distance of 2131.06 feet to a point for corner in the center of Kosar Road, and the Northeast corner of said Lot 7; Thence South along the East Line of said Lot 7 a distance of 2371.28' to a point for corner; Thence in a Westerly direction along a curve to the right, said curve having a radius of 1100' and a central angle of 290 -40' 33" a distance of 569.73' to the end of said curve; Thence N 890 -34! -10" West tangent to the aforesaid curve a distance of 648.90' to the beginning of a curve to the left; Thence in a Westerly and Southerly direction along said curve whose radius is 905.37' and whose central angle is 900 -00' a distance of 1422.15' to a point i for corner; Thence N 890 -34' -10" West a distance of 50' to a point in the West line of said Lot 7 and in the center of Farm -to- Market Road 763; Thence N 00 -25' -50" East along the West line of Lot 7 a distance of 3,421.21' to the place of beginning and containing 128.315 acres of land. THIS AGREEMENT made this 16th day of August, 1978, between the City of Corpus Christi, Texas, Lessor, and Canus Petroleum, Inc., Lessee. W I T N E S S E T H i 1. Lessor, in consideration of Seven Thousand Six Hundred Ninety -Eight and 90/100 Dollars ($7,698.90) (There shall be a Cash Bonus Minimum of $50.00 per acre and $10.00 per 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 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 termi- nation 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 • r Y.. . ! r� 1, 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 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 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 acre. Where gas from a well producing gas only is not sold or used, Lessee may, for a maximum of two (2) years beyond primary term, pay as royalty ten dollars ($10.00) per 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 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 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 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. 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 operations 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 producing 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 circumstances. 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 recgrded 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 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. S. 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 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 bo 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. 9. There shall be no drilling in violation of Federal Aviation Administrat Regulations or Corpus Christi Airport Zoning Regulations. 10. Lessee shall provide compensation for damage to surface, crops and improvements which may be caused by mineral exploration or operations. 11. Upon expiration or termination of this lease, or portion thereof, Lessee shall provide Lessor.a written release of all•Lesseea rights or interest in the minerals so expiring or terminating. . ATTEST: City Secretary APPROVED: day of ,1978 City Attorney THE STATE OF TEXAS �( COUNTY OF NUECES CITY OF CORPUS CHRISTI By R. Marvin Townsend LESSOR City Manager By LESSEE 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 acknowledge 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 Nueces County, Texas a, x. ;', Ia ,- Corpus Christi, Te /� v day of , 19 /0 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 no 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, THE CIT� OF CO RISTI, TEXAS The Charter rule was suspended by 4e following vote: Gabe Lozano, Sr. Bob Gulley David Diaz Ruth Gill Joe Holt Tony Juarez, Jr.- Edward L. Sample The above ordinance was passed Gabe Lozano, Sr. Bob Gulley David Diaz Ruth Gill Joe Holt Tony Juarez, Jr. Edward L. Sample 144 3L: ,V.