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HomeMy WebLinkAbout13791 ORD - 06/15/1977• JRH:hb:6 /14/77 AN ORDINANCE AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE A LEASE AGREEMENT BETWEEN THE CITY OF CORPUS CHRISTI AND OMEGA MINERALS, INC., C/O RONALD CHACHERE, 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 LAND 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 90 DAYS, 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, TEXAS: SECTION 1. That the City Manager be and he is hereby authorized and directed, for and on behalf of the City of Carpus Christi, to execute an Oil and Gas Lease between the City of Corpus Christi, as Lessor, and Omega Minerals, Inc., c/o Ronald Chachere, of Corpus Christi, as Lessee, for the purpose of investigating, exploring, prospecting, drilling, min-In ve 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 ninety (90) days, on the basis of a cash bonus of $12.50 per acre and the royalty of 3 /16th, 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 aforesaid 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 "'C1?0Fj1Mt,D. 13`7;31 �►►► 7 in 90 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 baying 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 afte to passage, IT IS ACCORDINGLY SO ORDAINED, this the 1 day of , 1977. ATTEST: MAYOR THE CITY OF CORPUS CHRISTI, TEXAS APPROPED: 1977: J. BRIICE AYC CR, CITY ATTORNEY By /& &�� Assistant Ci orney OIL AND GAS 'LEASE THE STATE OF TEXAS X 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 , 1977, between the City of Corpus Christi, Texas, Lessor and Omega Minerals, Inc., c/o Ronald Chachere, of Corpus Christi, Texas, Lessee, W I T N E S S E T H: 1. Lessor, in consideration of Eight Hundred Eighteen and 75/100 Dollars ($818.75) (There shall be a cash bonus minimum of Twelve and 50 /100 Dollars ($12.50) per acre for a ninety -day duration primary term, or a minimum Fifty Dollars ($50) 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 termination of the primary term unless (a) drilling operations and subse- quent 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 - eights (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 less than three - sixteenths of eight - eighths (3/16th 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 /16th) of the gas well gas, and associated liquids, in kind, all delivered at the wellhead. 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 sever- ance 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 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 320 acres plus a tolerance of ten percent (10%) 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) 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. -2- 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 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 than engaged in drilling or reworking operations thereon, the lease shall remain in force sixty (60) consecutive days, and if they result in the production of oil or gas so long there- after 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 or draining the leased premises, Lessee agrees to drill such offset wells as a reasonable prudent operator would drill under the same or similar circumstances; provided, however, that should Lessee be unable to obtain a surface location on other lands leased herein, then Lessee shall be excused from any and all liability or obligation 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 obli- gations 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. S. Lessor hereby warrants and agrees to defend the title to said land and agrees that Lessee at its option may discharge any tax, -3- 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 sane 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 lase 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 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 uotwith- standing. 10. That all operations on the herein described lease surface comply with the requirements of the City of Corpus Christi's Land Drilling Ordinance No. 8879 with the exception of drilling block density and uniti- zation 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 OF CORPUS CHRISTI City Secretary APPROVED: DAY OF , 1977: J. BRUCE AYCOCK, CITY ATTORNEY By Assistant City Attorney By R. Marvin Townsend, City Manager LESSOR -4- ATTEST: OMEGA MINERALS, INC. Ronald L. Chachere LESSEE THE STATE OF TEXAS X COUNTY OF NUECES X 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 fore- going 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 , 1977. Notary Public in and.for Nueces County, Texas THE STATE OF TEXAS X COUNTY OF NUECES X BEFORE ME, the undersigned authority, on this day personally appeared RONALD L. CHACHERE, of the OMEGA MINERALS, INC., known to me to be the person and officer whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of the said OMEGA MINERALS, 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 , 1977. Notary Public in and for Nueces County, Texas Corpus Christi, xas jSd-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 CITY OF CORPUS CHRISTI, TEXAS The Charter rule was suspended by the following vote: Jason Luby Eduardo de Ases 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 I