HomeMy WebLinkAbout16193 ORD - 04/15/1981jkh:4-15-81;lst
AN ORDINANCE
AUTHORIZING EXECUTION OF AN OIL AND GAS LEASE FOR A TERM
OF THREE YEARS, ON 470 ACRES AT THE INTERNATIONAL AIRPORT,
FOR A CASH BONUS OF $36,124.20, AN ANNUAL DELAY RENTAL OF
$4,700, AND A 20 PERCENT ROYALTY, TO KELLY BELL OF MIDLAND
TEXAS, ALL AS MORE FULLY SET FORTH 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 470 acres at the International Airport,
for a cash bonus of $36,124.20, an annual delay rental of $4,700 and a 20%
royalty, to Kelly Bell of Midland, Texas, all as more fully set forth in the
lease agreemeht, 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 introductionand take effect and be in full force and effect from and
after its passage, IT IS ACCORDINGLY,S0 ORDAINED, this the1., day of
April, 1981.
ATTEST:
41�
C y ecretary MA 0
APPROVED: THE TY OF CORPUS CHRISTI, TEXAS
/r•
15TH DAY OF APRIL, 1981:
J. BRUCE AYCOCK, CITY ATTORNEY
By
Assistant Cjp 'ttorney
MICROFILMED
SEP 2 71984
r.
OIL AND GAS LEASE
THIS AGREEMENT, made and entered into the 15th day of April,
1981, by and between the City of Corpus Christi (hereinafter "Lessor"),
whose post office address is Box 9277, Corpus Christi, Texas 78408,
and Kelly Bell (hereinafter "Lessee"), whose address is 619 West Texas,
Suite 104, Midland, Texas 79701,
WITNESSETH:
1. That the said Lessor, for and in consideration of Thirty -
Six Thousand One Hundred Twenty Four and 20/100 Dollars ($36,124.20)
cash in hand paid, the 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
Lessee 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, an undivided one-half (1/2) mineral interest in all that certain
tract of land situated in the county of Nueces, state of Texas, described
as follows:
470 acres of land being all of Farm Block Number 23
of the J.C. Russell Farm Blocks, Nueces County, Texas,
as shown on map or plat of record in Volume 3, Page 53,
Map Records of said county. Also being the same land
described in deed from F.B. Sechrist, et al. to the
City of Corpus Christi, dated the 22nd day of June, 1957,
and recorded in the Deed Records of said county in
Volume 780, Page 87.
2. For the purpose of determining the amount of any money
payment hereunder, said land shall be considered to comprise 235 mineral
acres (hereinafter "Net City Lands"), 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
Lands, 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 qas,
oil or other substance from a well defined by the Texas Railroad Commission
as a gas well, produced from the Net City Lands 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 its option,
to at any time take its share of the oil, oil well qas, gas well qas
and associated liquids in kind, all delivered at the wellhead.
5. If production of oil or gas is not obtained on said land
on or before the 15th day of April, 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 Lessor in care of Petroleum Superintendent, P.O. Box 9277, Corpus
Christi, Texas, 78408, the sum of $20.00 per Net City Lands acre, which
shall operate as rental and cover the privilege of deferring the production
of oil or qas 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 ail or gas" means production of oil or gas in paying quantities.
During the Primary Term, any portion of or all the Net City
Lands hereinabove 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 qas 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
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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, 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 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 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 such operations
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
obligations 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 the 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 Net City Lands,
and it is agreed that if Lessor owns an interest in said Net City Lands
more or less than the entire fee simple estate, then the royalties to paid
Lessor shall be increased or reduced proportionally.
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a�iyp. uyr.;w:
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 Avia-
tion Administration Regulations or Corpus Christi Airport Zoning Regula-
tions.
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, 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 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
as of the_date first above written.
ATTEST: CITY OF CORPUS CHRISTI, TEXAS
City Secretary
APPROVED AS TO LEGAL FORM:
day of , 1981
City Attorney
BY:
R. Marvin Townsend
City Manager
APPROVED:
BY:
LESSOR
Department Head
THE STATE OF TEXAS
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 acknowledged to me that he executed the same
for the purposes and consideration therein expressed, and in the capaci-
ty 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
THE -STATE OF TEXAS
COUNTY OF
BEFORE ME, the undersigned- authority, on this day personally
appeared KELLY BELL, 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 as
his free act and deed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the
day of , 1981.
-5-
Notary Public
Corpus Christi, Texas
/S 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.
Respectfully,
MAYOR
THE CITY- F CORPUS CHRISTI, TEXAS
The Charter rule was suspend; by the following vote:
Luther Jones
Edward L. Sample
Dr. Jack Best
Jack K. Dumphy
Leopoldo Luna
Betty N. Turner
Cliff Zarsky
The above ordinance was passe by the following vote:
Luther Jones
Edward L. Sample �ak�
Dr. Jack Best
a
Jack K. Dumphy
Leopoldo Luna
Betty N. Turner
Cliff Zarsky