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HomeMy WebLinkAbout16028 ORD - 02/11/1981jkh:2-10-81;lst I AN ORDINANCE AUTHORIZING EXECUTION OF AN OIL AND GAS LEASE FOR A TERM OF THREE YEARS, ON 388.6 ACRES, LOCATED AT THE INTERNATIONAL AIRPORT, BEING THE RAND MORGAN TRACT, FOR A CASH BONUS OF $217.63 PER ACRE, A ROYALTY OF 1/5 AND A DELAY RENTAL OF $20 PER ACRE, TO KELLY BELL OF MIDLAND, TEXAS, ALL AS MORE FULLY SET FORTH IN THE LEASE AGREEMENT, A SUBSTANTIAL COPY OF WHICH 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, TEXAS: SECTION 1. That the City Manager be authorized to execute an oil and gas lease for a three-year term on 388.6 acres, located at the Inter- national Airport, being the Rand Morgan Tract, for a cash bonus of'$217.63 per acre, a royalty of 1/5 and a delay rental of $20 per acre, to Kelly Bell of Midland, Texas, all as more fully set forth in the lease agreement, a substantial copy of which is attached hereto and made a part hereof, marked Exhibit "A". SECTION 2. The necessity to authorize execution of the aforesaid lease agreement 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 the // day of February, 1981. ATTEST: ty Secretary APQVED: / DAY OF FEBRUARY, 1981: J. BRUCE AYCOCK, CITY ATTORNEY 16628 THE OF CORPUS CHRISTI, TEXAS MLG O.ILMED SEP 2 71994 OIL AND GAS LEASE AGREEMENT, made and entered into the 11th day of February, 1981, 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 Kelly Bell hereinafter called lessee: 1. WITNESSETH: That the said lessors, for and in consideration of Eighty Four Thousand Five Hundred Seventy One and 02/100 Dollars ($84,571.02) 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 pipelines 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:. 388.6 acres of land out of the G. C. and S. F. R. R. Survey, A-818 and the R. Ward Survey, A-1014, Nueces County, Texas, and being the same land described in deed from R. Morgan to the City of Corpus Christi, dated the 28th day of September, 1957, and recorded in the Deed Records of said County in Volume 788, Page 532. 2. For the purpose of determining the amount of any money payment hereunder, said land shall be considered to comprise 388.6 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, 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 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 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, oil well gas, gas well gas, and associated liquids, in kind, all delivered at the wellhead. 5. If production of oil and/or gas is not obtained on said land on or before the llth day of February, 1982, 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 $20.00 per acre, which shall operate as rental and cover the privilege of deferring the production of oil ' and/or gas for twelve (12) months, from said date. In like manner, and upon like payments or tenders annually, the commencement of such production 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. The term "production of oil and/or gas" means production of oil and/or gas in paying quantities. 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. 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 388.6 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. 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 accom- plished, 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. 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. There shall be no drilling in violation of Federal Aviation Admin- istration Regulations or Corpus Christi Airport Zoning Regulations. 12. Lessee shall provide compensation for damage to surface, crops and improvements which may be caused by mineral exploration or operations. 13. 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. 14. 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 there- with; 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 con- trary notwithstanding. IN WITNESS WHEREOF, this instrument is executed in duplicate on the date first above written. ATTEST: City Secretary APPROVED AS TO LEGAL FORM: CITY OF CORPUS CHRISTI, TEXAS BY: R. Marvin Townsend WI City Manager Lessor day of , 1981 BY: City Attorney THE STATE OF TEXAS X COUNTY OF NUECES X 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 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 , 1981. Notary Public, Nueces County, Texas Corpus Christ' Texas le / day of 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. The Charter rule was Luther Jones Edward L. Sample Dr. Jack Best Jack K. Dumphy Leopoldo Luna Betty N. Turner Cliff Zarsky Respectfully, MAYOR suspended Pre HE CITY4CORPUS CHRISTI, TEXAS by the following vote: The above ordinance was passe by the following vote: Luther Jones /�1 Q� Edward L. Sample 05,41. Dr. Jack Best Jack K. Dumphy Leopoldo Luna Betty N. Turner Cliff Zarsky 16028