Loading...
HomeMy WebLinkAbout15562 ORD - 05/28/1980jkh:5-28-80;1st AN ORDINANCE AUTHORIZING EXECUTION OF OIL AND GAS LEASES AS FOLLOWS: (1) A FIVE-YEAR LEASE ON 157.579 ACRES LOCATED BETWEEN GREENWOOD DRIVE AND CHAPMAN RANCH ROAD (GREENWOOD LANDFILL) FOR A CASH BONUS OF $50 PER ACRE, A ROYALTY OF 1/5 AND A DELAY RENTAL OF $10 PER ACRE, TO AMINOIL USA, INC. OF HOUSTON; (2) A THREE-YEAR LEASE ON 113.01 ACRES LOCATED JUST BELOW WESLEY SEALE DAM AND ALONG THE NORTHEAST SIDE OF THE NUECES RIVER FOR A CASH BONUS OF $101.76 PER ACRE, A ROYALTY OF 1/5 AND A DELAY RENTAL OF $15 PER ACRE TO HARRY H. CULLEN OF HOUSTON; AND (3) A THREE-YEAR LEASE ON 435.35 ACRES INCLUDING THE GIRL SCOUT CAMP PORTION OF LAKE CORPUS CHRISTI STATE PARK AND ADJOINING PROPERTIES FOR A CASH BONUS OF $61.10 PER ACRE, A ROYALTY OF 21% AND A DELAY RENTAL OF $3 PER ACRE TO JOHN R. THOMPSON OPERATING, INC. OF ABILENE, TEXAS, ALL AS MORE FULLY SET FORTH IN THE LEASE AGREEMENTS, A SUBSTANTIAL COPY OF EACH BEING ATTACHED HERETO AND MADE A PART HEREOF, MARKED EXHIBITS "A", "B", AND "C"; 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 authorized to execute oil and gas leases as follows: (1) A five-year lease on 157.579 acres located between Greenwood Drive and Chapman Ranch Road (Greenwood Landfill) for a cash bonus of $50 per acre, a royalty of 1/5 and a delay rental of $10 per acre, to Aminoil USA, Inc. of Houston; (2) A three-year lease on 113.01 acres located just below the Wesley Seale Dam and along the northeast side of the Nueces River for a cash bonus of $101.76 per acre, a royalty of 1/5 and a delay rental of $15 per acre to Harry H. Cullen of Houston; and A three-year lease on 435.35 acres including the Girl Scout Camp portion of Lake Corpus Christi State Park and adjoining properties for a cash bonus of $61.10 per acre, a royalty of 21% and a delay rental of $3 per acre to John R. Thompson Operating, Inc. of Abilene, Texas, (3) all as more fully set forth in the lease agreements, a substantial copy of each being attached hereto and made a part hereof, marked Exhibits "A", "B" and "C". 15562 • MICROFILMED AUG 29 ma • • SECTION 2. The necessity to authorize execution of the aforesaid lease agreements at the earliest practicable 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 that such emergency and necessity exist, 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 thug. ,day of May, 1980. ATTEST: 1 ecret ry APPROVED THIS THE 28th DAY OF MAY, 1980: J. BRUCE AYCOCK, CITY ATTORNEY By Assistant Cit OF CORPUS CHRISTI, TEXAS OIL AND GAS LEASE • AGREEMENT, made and entered into the day of 19 80 , by and between the City of Corpus.Christi whose post office address is Box 9277, Corpus Christi, Texas, 78408, having executive right for August J. Folda, a widow; Emilie Folda McClain and husband, Richard K. McClain, hereinafter called lessors (whether one or more), and Aminoil USA, Inc. ' hereinafter called lessee: 1. WITNESSETH: That the said lessors, for and in consideration of seven thousand eight hundred seventy-eight and 95/100 Dollars ($7,878.95) cash in hand paid, receipt of which is hereby acknowledged, and of the covenants and agreements hereinafter contained on the part of lessee to be paid, kept and performed, has granted, demised, leased and let, and by these presents does grant, lease and let unto the said lessor for the purpose and with the exclusive right of exploring, drilling, and operating for, producing, and owning oil and gas and of laying pipe lines and of building tanks, telephone lines, power stations and other structures thereon to produce, save, treat and take care of said products, and housing its employees, subject to limitations contained herein, all that certain tract of land situated in the County of Nueces, state of Texas, described as follows, to -wit: 157.579 acres, more or less, out of Lots 3 and 6, Section 14, BOHEMIAN COLONY LANDS, Nueces County, Texas, according to map or plat recorded in Vol. A, Page 48, Map Records of Nueces County, Texas, and described by metes and bounds as follows, to wit: Beginning at a point in the southeast boundary line of Greenwood Drive for the most northerly corner and point of beginning of this tract whence the common corner of Lots 6 and 7, Section.14, and Lots 1 and 2, Section 15, of said Bohemian Colony Lands bears north 61° 30' west 30 ft.; Thence, south 61° 30' east at a distance of 2,610 ft. pass the common corner of Lots 2, 3,-6 and 7 of said Section 14 a total distance of 5,200.4 ft. to a 5/8 inch iron rod set in the northeast boundary line of Chapman Ranch Road for the most easterly corner of this tract; Thence, south 29° 00' west with the northwest boundary line of Chapman Ranch Road, parallel to the centerline thereof and 50' distance therefrom, -measured at right angles thereto, 1,320 ft. to a 5/8 inch iron rod set for the most southerly corner of this tract; Thence, north 61° 30' west at a distance of 2,590.3 ft. pass the common corner of Lots 3, 4, 5 and 6 of said Section 14, a total distance of 5,200.3 ft. to a 5/8 inch iron rod set in the southeast boundary line of Greenwood Drive for the most westerly corner of this tract; Thence, north 29° east with the south- east boundary line of Greenwood Drive parallel to the centerline thereof and 30' distance therefrom, measured at right angles thereto, 1,320.0 ft. to the poing of beginning. • 2. For the purpose of determining the amount of any money payment hereunder, said land shall be considered to comprise 157.579 mineral acres, even though it actually comprises more or less, subject to paragraph 9. 3. It is agreed that this lease shall remain in force for a term of five (5) years from this date, said term being hereinafter called "Primary Term," and as long thereafter as either oil or gas is produced from said land by lessee subject to termination provisions as hereinafter provided. 4. The royalties to be paid Lessors in accordance with their interest are (a) on oil, or oil well gas from a well defined by Texas Railroad Commission as an oil well, a one-fifth (1/5) subject to one -sixteenth (1/16) non participating overriding royalty interest of that produced and saved from said land, the same to be delivered at the wells or to the credit of Lessors 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 a one-fifth (1/5) subject to one sixteenth (1/16) non -participating overriding royalty interest of the gas or oil so sold or used. Lessors in accordance with their interest, reserve the right, at their option, to at any time take their share of the oil and/or gas, and associated liquids, in kind, all delivered at the wellhead. 5. If operations for drilling a well are not commenced on said land on or before the 28th day of Mav , 19 81 , this lease shall terminate as to both parties, unless lessee on or before that date shall pay or tender by the check or draft of lessee, and delivered or mailed to Petroleum Superintendent, P. 0. Box 9277, Corpus Christi, Texas, 78408, the sum' of $10.00 per acre, which shall operate as rental and cover the privilege of deferring commencement of operations for the drilling of a well for twelve (12) months, from said date. In like manner, and upon like payments or tenders annually, the commencement of such operations may be further deferred for like periods of the same number of months successively during the primary term. The cash bonus is to be considered for this lease according to its terms and shall not be allocated as mere delay rental for any period. By the terms "operations for drilling" and "drilling operations" is meant the actual drilling into the earth in a bonafide attempt to discover oil'and/or gas and not merely the placing of materials and/or equipment on the land. During the primary term, any portion of or all the lands herein above described as subject to this lease shall be held under this lease only by the -2- • payment of delay rentals or royalty payments; provided, however, that upon the expiration of the primary term, said lease will terminate, save as to the number of acres allocated by the Railroad Commission of Texas for each well from which oil or gas in paying quantities is being produced. 6. 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 judgement 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 bis royalty interest therein bears to the total acreage so pooled in the particular unit involved. 7. If at the expiration of the primary term, oil and/or gas is not being produced on said lands or 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 in paying quantities of oil or gas, then said lease will terminate, save as to the number of acres allocated by the Railroad Commission of Texas for such well or wells. 8. 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. 9. Lessor does not warrant the title to said land and it is agreed that if Lessor owns an interest in said land more or less than the entire fee simple estate, then the royalties to be paid Lessor shall be increased or reduced propor- tionally. -3 • 10. Upon expiration or termination of this lease, or portion thereof, Lessee shall provide Lessor a written release of all Lessee's rights or interest in the minerals so expiring or terminating. 11. A one acre drill site shall be designated by the City of Corpus Christi in City of Corpus Christi Drilling Block Number 1671 and the City of Corpus Christi shall designate a route of engress and egress for said drill site. Lessee shall pay for damages caused by all operations to growing crops on said land. 12. The Lessee will be responsible for damages resulting from the Lessee's acts, negligence, and/or wrongful conduct of operations. Nothing in the lease granted the Leasee is intended to absolve the Lessee of this legal obligation. 13. 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, 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. CITY OF CORPUS CHRISTI, TEXAS BY: R. Marvin Townsend City Manager LESSOR ATTEST: City Secretary APPROVED AS TO LEGAL FORM: day of , 1980 BY: City Attorney LESSEE —4— • • TBE 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 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 , 1980. Notary Public, Nueces County, Texas THE STATE OF TEXAS X COUNTY OF HARRIS BEFORE ME, the undersigned authority, on this day personally appeared of Amino' US Inc., known to me to be the person whose name is subscribed to the foregoing instru-, ment and acknowledged to me that he executed the same for the purposes and considera— tion therein expressed, and in the capacity therein stated and as the act and deed of said corporation. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of 1980. Notary Public, Harris County, Texas OIL AND GAS LEASE AGREEMENT, made and entered into the day of 19 80 , by and between the City of Corpus Christi whose post office address is Box 9277, Corpus Christi, Texas, 78408, hereinafter called lessor (whether one or more), and Harry H. Cullen hereinafter called lessee: 1. WITNESSETH: That the said lessor, for and in consideration of a Seven Thousand Seven Hundred Forty -Nine and 95/100 Dollars ($7,749.95) cash in hand paid, receipt of which is hereby acknowledged, and of the convenants and agreements hereinafter contained on the part of lessee to be paid, kept and performed, has granted, demised, leased and let, and by these presents does grant, lease and let unto the said lessee for the purpose and with the exclusive right of exploring, drilling, and operating for, producing, and owning oil and gas and of laying pipe lines and of building tanks, telephone lines, power stations and other structures thereon to produce, save, treat and take care of said products, and housing its employees, subject to limitations contained herein, all that certain tract of land situated in the County of San Patricio, state of Texas described as follows, to wit: 113.01 acres of land out of the Miguel, Pedro, Juan, and Nepomecena Delgado Grant, San Patricio, Texas, being the same land described in deed dated October 2, 1941, from J. 'M. McMurrey to the City of Corpus Christi, Texas, and wiich deed is recorded in Volume 129, Page 198, of the Deed Records of San Patricia County, Texas, save and ex- cept an undivided one-half mineral interest in said acreage. 2. For the purpose of determining the amount of any money payment hereunder, said land shall be considered to comprise 56.505 mineral acres, even though it actually comprises more or less, subject to paragraph 9. 3. It is agreed that this lease shall remain in force for a term of three (3) years from this date, said term being hereinafter called "Primary Term," and as long thereafter as either oil or gas is produced from said land by lessee subject to termination provisions as hereinafter provided. 4. 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, a one-fifth (20%) 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 he co nectcd; (b; on ;cc, oll, or ether ..::bc_..: 'from . sell dcfl=cd by the Texas Railroad 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 a one-fifth (20%) of the gas or oil so sold or used. Lessor reserves the right, at his option, to at any time take his share of the oil and/or gas, and associated liquids, in kind, all delivered at the wellhead. 5. If operations for drilling a well are not commenced on said land on or before the 28th day of Nay , 1981, this lease shall terminate as to both parties, unless lessee on or before that date shall pay or tender by the check or draft of lessee, and delivered or mailed to Petroleum Superintendent, P. 0. Box 9277, Corpus Christi, Texas, 78408, the sum of $15.00 per net city acre, which shall operate as rental and cover the privilege of deferring commencement of such operations for the drilling of a well for twelve (12) months, from said date. In like manner, and upon like payments or tenders annually, the commence- ment of such operations may be further deferred for like periods of the same number of months successively during the primary term. The cash bonus is to be considered for this lease according to its terms and shall not be allocated as mere delay rental for any period. By the terms "operations for drilling" and "drilling operations" is meant the actual drilling into the earth in a bonafide attempt to discover oil and/or gas and not merely the placing of materials and/or equipment on the land. During the primary term, any portion of or all the lands herein above described as subject to this lease shall be held under this lease only by the payment of delay rentals or royalty payments; provided, however, that upon the expiration of the primary term, said lease will terminate, save as to the number of acres allocated by the Railroad Commission of Texas for each well from which oil or gas in paying quantities is being produced and said lease shall also terminate as to all formations below the deepest formation from which oil and/or gas is being produced in paying quantities. 6. 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 judgement 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 an 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 -2- 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. 7. If at the expiration of the primary term, oil and/or gas is not being produced on said lands or 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 in paying quantities of oil or gas, then said lease will terminate, save as to the number of acres allocated by the Railroad Commission of Texas for such well or wells and said lease shall also terminate as to all formations below the deepest formation from which oil and/or gas is being produced in paying quantities. 8. 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 pay- ment for all. 9. Lessor does not warrant the title to said land and it is agreed that if Lessor owns an interest in said land more or less than the .entire fee simple estate, then the royalties to be paid Lessor shall be increased or reduced proportionally. 10. Upon expiration or termination of this lease, or portion thereof, Lessee shall provide Lessor a written release of all Lessee's rights or interest in the minerals so expiring or terminating. 11. All drill sites, access roads, and surface equipment such as separators, compressors, flowlines, and tank batteries will be located at points to be agreed .upon by the City of Corpus Christi Division of Petroleum Inspection and the Lessee and.will be installed and maintained in such way necessary to protect the quality of the water in the Nueces River. -3- 12. Prior to drilling each well on the herein described lease, a performance bond of $5,000 will be posted and maintained to insure proper well plugging and surface cleanup upon the expiration or termination of this lease. 13. The use of earthen pits for reserve mud, drilling,mud, test returns and the like shall not be permitted. Earthen pits may be used for storage of fresh water, drill cuttings and cement returns only and must be backfilled and leveled upon the completion of drilling operations. 14. A dual controlled, fluid operated blowout preventer shall be used for all drilling or completion operations involving the use of drill pipe or tubing after the surface casing has been set. 15. Each storage tank or tank battery, as the case may be, shall be surrounded by an earthen firewall located at such a distance from the tanks and of sufficient height to hold and retain at least one and one-half times the maximum capacity of such storage facilities. 16. The Lessee will be responsible for damages resulting from the Lessee's acts, negligence, and/or wrongful conduct of operations. Nothing in the lease granted the Lessee is intended to absolve the Lessee of this legal obligation. 17. 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, 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 Secretary CITY OF CORPUS CHRISTI, TEXAS BY: -4- R. Marvin Townsend City Manager LESSOR APPROVED AS TO LEGAL FORM: day of , 1980 BY; City Attorney LESSEE APPROVED: LOWER NUECES RIVER WATER SUPPLY DISTRICT • Secretary President 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 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 BAND AND SEAL OF OFFICE, this the day of , 1980. Notary Public, Nueces County, Texas THE STATE OF TEXAS X COUNTY OF NUECES X BEFORE ME, the undersigned authority, on this day personally appeared DON EMERY COX, President, Lower Nueces River Water Supply District, 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 District. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of , 1980. Notary Public, Nueces County, Texas OIL AND GAS LEASE AGREEMENT, made and entered into the day of 19 80, by and between the City of Corpus Christi whose post office address is Box 9277, Corpus Christi,. Texas, 78408, hereinafter called lessor (whether one or more), and John R. Thompson Operating, Inc. hereinafter called lessee: - 1. WITNESSETH: That the said lessor, for'and in consideration of Sixteen Thousand Six Hundred Fifty -Eight and 89/100 Dollars ($16,658.89) cash in hand paid, receipt of which is hereby acknowledged, and of the cove- nants and agreements hereinafter contained on the part of lessee to be paid, kept and performed, has granted, demised, leased and let, and by these presents does grant, lease and let unto the said lessee for the purpose and with the exclusive right of exploring, drilling and operating for, producing, and owning oil and gas and of laying pipe lines and of building tanks, tele- phone lines, power stations and other structures thereon to produce, save, treat and take care of said products, and housing its employees, subject to limitations contained herein, all that certain tract of land situated in the County of San Patricio, State of Texas, described as follows, to -wit: TRACTS ONE AND TWO: 130.7 acres being described in deed dated January 8, 1931, from Wallace D. Wade, et ux, to Central Power and Light Company, recorded in Volume 98, Page 384 of the Deed Records of San Patricio County, Texas; save and except an un- divided one-half mineral interest in said acreage. TRACT THREE: BEGINNING at the North corner of 64.6 acres de- scribed as TRACT ONE in said deed; THENCE North 34 degrees, 42 min. East, approximately 2700' to the Northeast boundary of an 832 acre tract of land described in a mineral deed from Wallis D. Wade to Magnolia Petroleum Company, dated April 19, 1926, and recorded in Vol. _, Page , Oil and Gas Lease Records, Nueces County, Texas; THENCE South 58 degrees, 13 min. East along the Northeastern boundary of said 832 acre tract approximately 3142' to a point for the East corner of said tract -and this survey; THENCE South 35 degrees, 05 min. West, approximately' 1140' to the East corner of the 66.1 acre tract described as TRACT TWO in said 130.7 acre deed; THENCE North 55 degrees, 13 min. West, 1800' to a point being the North corner of said 66.1 acre tract; THENCE South 34 degrees, 42 min. West, 1600' to a point in the Northeast line of said 64.6 acre tract; THENCE North 55 degrees, 13 min. West, 1342' to the point of hEGINNI G, containing 194.7 acres, more or less, save and except an undivided one-half mineral interest in said tract. TRACT FOUR: 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, Pages 153- 154, of the Deed Records of San Patricio County, Texas. TRACT FIVE: 40.07 acres of land being the same land described in a certain Deed dated July 28, 1941, from B. M. Estes, Trustee, to the City of Corpus Christi, Texas, recorded in Volume 128, Page 455 of the Deed Records of San Patricio County, Texas. TRACT SIX: 4.38 acres of land being the same land described in a certain Deed dated December 17, 1934, from Arthur C. Jones to the City of Corpus Christi, Texas,,recorded in Volume 105, Page 515 of the Deed Records of San Patricio County, Texas, 2. For the purpose of determining the amount of any money payment hereunder, said land shall be considered to comprise 272.65 mineral acres, even though-:it.actually.comprises:more•or.,less,.subjeet'to paragraph 9. 3. It is agreed that this lease shall remain in force for a term of three (3) years from this date, said term being hereinafter called "Primary Term," and as long thereafter as either oil or gas is produced from said land by lessee subject to termination provisions as hereinafter provided. 4. Theroyaltiesto be paid Lessor are (a) on oil, or oil well gas from a well defined by Texas Railroad Commission as an oil well, twenty-one -- percent (21%)of:tha't produced and saved from the.net city land, -the sapie' 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 the net city land and sold or used off the premises, the market value at the well of twenty-one percent (21%) -„:of the gas or oil so sold or used. Lessor reserves the right, at his option, to at any time take his share of oil and/or gas, -- and associated liquids, in kind, all delivered at the wellhead. 5. If operations for drilling a. well are not commenced on said land on or before the 28th day of May , 19 81 , this lease shall terminate as to both parties, unless lessee on or before that date shall pay or tender by the check or draft -of lessee, and delivered or mailed to Petroleum Superintendent, P. 0. Box 9277, Corpus Christi, Texas, 78408, the sum of Three Dollars ($3.00) per net city acre, which .shall operate as rental and cover the privilege of deferring commencement of operations for the drilling of a well for twelve (12) months, from said date. In like manner, and upon like payments or • tenders annually, the commencement of such operations may be further deferred - -for k: -period — -f t Fa^ -r.r—..r of =nth: _ ccccrjvel :du i g tt:c primary— term. rimar;term. The cash bonus is to be considered for this lease according to its terms _2- and shall not be allocated as mere delay rental for any period. By the terms "operations for drilling" and "drilling operations" is meant the actual drilling into the earth in a bonafide attempt to discover oil and/or gas and not merely the placing -of materials and/or equipment on the land. During the primary term, any portion of or all the lands herein above described as subject to this lease shall be held under this lease only by the payment of delay rentals or royalty payments; provided, however, that upon the expiration of the primary term, said lease will terminate, save as to the number of acres allocated by the Railroad Commission of Texas for each well from which oil or gas in paying quantities is being produced and said lease shall also terminate as to all formations below the deepest formation from which oil and/or gas is being produced in paying quantities. 6. Lessee is hereby given the right and power to unitize or combine the land covered by this lease or any portion thereof for gas with any other land, lease or leases located adjacent to or contiguous with, when in Lessee's judgement 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 160 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. 7. If at the expiration of the primary term Lessee has drilled holes on said lands then the lease shall remain in force for ninety (90) consecutive days and if drilling operations are commenced within said ninety (90) days, then the lease shall remain in effect for so long as drilling operations are continued with- out a cessation of more than ninety (90) days. After the expiration of such drilling operations, said lease will terminate, save as to the number of acres allocated by the Railroad Commission of Texas for such well or wells and said lease shall also terminate as to all formations below the deepest formation from which oil and/or gas is being produced in paying quantities. -3- 8. 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. 9. Lessor does not warrant the title to said land and it is agreed that if Lessor owns an interest in said land more or less than the entire fee simple estate, then the royalties to be paid Lessor shall be increased or reduced proportionally. 10. Upon expiration or termination of this lease, or portion thereof, Lessee shall provide Lessor a written release of ali Lessee's rights or interest in the minerals so expiring or terminating. 11. All drill sites, access roads, and surface equipment such as separators, compressors, flowlines, and tank batteries will be located at points to be agreed upon by the City of Corpus Christi Division of Petroleum Inspection and the Lessee and will be installed, fenced, painted and maintained in such way as to blend into the landscape and protect the quality of water in Lake Corpus Christi. 12. Drilling from surface locations within the Girl Scout Camp and State Park shall be prohibited during the months of June, July, and August of each year. An exception to this requirement may be granted by the City of Corpus Christi Division of Petroleum Inspection. in unusual circumstances. 13. Prior to drilling each well on the herein described lease, a performance bond of $5,000 will be posted and maintained to insure proper well plugging and surface cleanup upon the expiration or termination of this lease. 14. The use of earthen pits for reserve mud, drilling mud, test returns and the like shall not be permitted. Earthen pits may be used for storage of fresh water, drill cuttings and cement' returns only and must be backfilled and leveled upon the completion of drilling operations. • 15. A dual controlled, fluid operated blowout preventer shall be used for all drilling or completion operations involving the use of drill pipe or tubing after the surface casing has been set. 16. Each storage tank or tank battery, as the case may be, shall be surrounded by an earthen firewall located at such a distance from the tanks and of sufficient height to hold and retain at least one and one-half times the maximum capacity of such storage facilities. 17. No firearms will be taken on the herein described lease by any agent, servant or employe of Lessee. 18. Lessee agrees to maintain all existing roads and parking areas that are located on the leased property and utilized for drilling and producing operations in original or improved condition as determined by the City of Corpus Christi Division of Petroleum Inspection. 19. The Lessee will be responsible for damages resulting from the Lessee's acts, negligence, and/or wrongful conduct of operations. Nothing in the lease granted the Lessee is intended to absolve the Lessee of this legal obligation. 20. 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, 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 Secretary CITY OF CORPUS CHRISTI, TERAS BY: -5- R. Marvin Townsend City Manager LESSOR APPROVED AS TO LEGAL FORK: day of , 1980 City Attorney LESSEE BY: • APPROVED: MOWER NUECES RIVER WATER SUPPLY DISTRICT Secretary President TETE 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 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 BAND AND SEAL OF OFFICE, this the day of 1980. Notary Public, Nueces County, Texas THE STATE OF TEXAS X COUNTY OF NUECES X BEFORE ME, the undersigned authority, on this day personally appeared DON EMERY COX, President, Lower Nueces River Water Supply District, 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 District. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of 1980. Notary Public, Nueces County, Texas Corpus Christi, Texas 02VAA. day of , 19 Pb 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, MAY The Charter rule was suspended Luther Jones Edward L. Sample Dr. Jack Best David Diaz Jack K. Dumphy Betty N. Turner Cliff Zarsky E C OF CORPUS CHRISTI, TEXAS by the following 0 at vote: The above ordinance was passed by the following vote: Luther Jones Edward L. Sample Dr. Jack Best David Diaz Jack K. Dumphy Betty N. Turner Cliff Zarsky adrd ay- 1556°K: