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