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HomeMy WebLinkAbout14454 ORD - 08/16/1978jkh:8- 16 -78; 1st TEXAS: AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A LEASE AGREEMENT BETWEEN THE CITY OF CORPUS CHRISTI AND HAROLD KAFFIE FOR THE EXPLORATION OF THE MINERALS, SUBJECT TO THE LIMITA- TIONS CONTAINED IN SAID LEASE AGREEMENT, BENEATH THE SURFACE OF THAT TRACT OF LAND DESCRIBED AS THE GEISTMAN 92.2 -ACRE TRACT ON THE CORPUS CHRISTI INTERNATIONAL AIRPORT, AND BEING FOR A PRIMARY TERM OF THREE (3) YEARS, A SUBSTANTIAL COPY OF WHICH LEASE AGREEMENT IS ATTACHED HERETO 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 Harold Kaffie 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 Geistman 92.2 -acre tract on the Corpus Christi International Airport, more particularly described as follows: All that certain tract or parcel of land situated in Nueces County, Texas and more particularly described as being the South 100.0 acres of land out of Farm Block Numbered 22 of the J. C. Russell Farm Blocks, as shown on map thereof recorded in Volume-3, page 53 of the Map Records of Nueces County, Texas, being the same tract of land conveyed by Adolph J. Meurer and wife, Lena Meurer, to A. J. Geistman.and Purcell L. Geistman by deed dated February 6, 1951, and recordee in Volume 504, page 323 of the Deed Records of Nueces County, Texas; SAVE AND EXCEPT that portion (7.8 acres) conveyed by A. J. Geistman, et al, to the West Point Co -Operative Gin Company by deed dated November 24, 1954, and recorded in Volume 664, page 597 of the Deed Records of Nueces County, Texas. said lease being for a primary term of three (3) years, on the basis of a cash bonus of Two Hundred Ten and No /100 Dollars ($210.00), comment- ing with the date of execution of the said Lease Agreement, all as more fully set forth in the said Lease Agreement, 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 MICROFILM JUL 081980� 14454 ti 0 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_24 day of August, 1978. ATTEST: City Secretary APP VED: DAY OF AUGUST, 1978: J. BRUCE AYCOCK, CITY ATTORNEY By Assistant C torney :Ir CITY OP-CQPJJS CHRISTI, TEXAS OIL AND GAS LEASE THE STATE OF TEXAS X COUNTY OF NUECES X DESCRIPTION: All that certain tract of parcel of land situated in Nueces County, Texas and more particularly described as being the South 100.0 acres of land out of Farm Block Numbered 22 of the J. C. Russell Farm Blocks, as shown on map thereof recorded in Volume 3, page 53 of the Map Records of Nueces County, Texas, being the same tract of land conveyed by Adolph J. Meurer and wife, Lena Meurer, to A. J. Geistman and Purcell L. Geistman by deed dated February 6, 1951, and recorded in Volume 504, page 323 of the Deed Records of Nueces County, Texas; SAVE AND EXCEPT that portion (7.8 acres) conveyed by A. J. Geistman, et al, to the West Point Co- Operative Gin Company by deed dated November 24, 1954, and recorded in Volume 664, page 597 of the Deed Records of Nueces County, Texas. THIS AGREEMENT made this 16th day of August, 1978, between the City of Corpus Christi, Texas, Lessor, and Harold Kaffie, Lessee. W I T N E S S E T H 1. Lessor, in consideration of Nineteen Thousand Three Hundred Sixty - Two Dollars ($19,362.00) (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 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, twenty -two and one - half percent (22.5 %) 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 twenty -two and one -half percent (22.5 %) of the gas or oil so sold or used. Lessor reserves the right, at his option, to at any time take his twenty -two and one -half percent (22.5 %) i of .,d 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 often 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 the primary term, pay as royalty ten dollars ($10.00) per acre, per year, and upon such payment it will be con- sidered 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 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 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. 8. 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 so long as Lessee is prevented by say 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 Administration 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 Lessees rights or interest in the minerals so expiring or terminating. 12. Lessee is prohibited from drilling on or any access to the surface of the above described land, CITY Ot CORPUS CHRISTI By City Secretary R. Marvin Townsend LESSOR City Manager APPROVED: day of , 1978 By City Attorney LESSEE THE STATE OF TEXAS j( 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 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 l ' Notary Public r Nueces County, Texas Corpus Christi, T s day of 19 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, MAYOR THE C14 OF: RP ISTI, TEXAS The Charter rule was suspended by he 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