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HomeMy WebLinkAbout16825 ORD - 01/20/1982AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A MINERAL LEASE FOR DRILLING BLOCK 1599, A 32.32 ACRE TRACT AT THE WESTSIDE SEWER PLANT, TO FORNEY AND COMPANY, AS LESSEE, FOR A THREE YEAR PRIMARY TERM, A CASH BONUS OF $1800, AN ANNUAL DELAY RENTAL OF $323.20 AND A 20 PER- CENT ROYALTY, ALL AS MORE FULLY SET FORTH IN THE LEASE AGREEMENT, A SUBSTANTIAL COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HERE- OF, 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 and he is hereby authorized to execute a mineral lease for drilling Block 1599, a 32.32 acre tract at the Westside Sewer Plant to Forney and Company, as lessee, for a three year primary term, a cash bonus of $1800, an annual delay rental of $323.20 and a 20 percent royalty, 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. That upon written request of the Mayor or five Council Members, copy attached, to find and declare an emergency due to the need of executing the aforesaid lease so that drilling can begin at the earliest practicable date, such finding of an emergency is made and declared requiring suspension of the Charter rule as to consideration and voting upon ordinances or resolutions at three regular meetings so that this ordinance is passed and shall take effect upon first reading as an emergency this the 02D day of January, 1982. ATTEST: Cy 'Secreta'r - MAYOR THEV ITY OF CORPUS CHRISTI, TEXAS AppitIrgilL --DAY OF JANUARY, 1982 .7/3riPik.4k- ruce Aycock, C y Attorney 16825 SEP 2 8 1984 MICROFILMED OIL AND ';AS LEASE AGREEMENT, made and entered into the 20th day of January, 1982, 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 Forney & Company, hereinafter called Lessee, whose address is P. O. Box 2602, Corpus Christi, Texas 78401. 1. WITNESSETH: That the said Lessors, for and in consideration of One Thousand Eight Hundred and No/106 Dollars (0,800.00) cash in hand paid, re- ceipt 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 for, and producing oil and gas, subject to limitations contained herein, all tnat certain tract of land situated in tne County of Nueces, State of Texas, described as follows, to wit: Beginning at the southeast corner of said tract 14 of tne Wm. J. Robertson Tract for the southeast corner of this tract; Thence N 60 deg. 57' W along and with the south boundary line of said tract 14, a distance of 550 feet to a point for the southwest corner of this tract; Thence N 29 deg. 30' E, a distance of 2560 feet to a point in the south line of State Highway No. 357 (Saratoga Road) for the northwest corner of this tract; Thence S 60 deg. 57' E along and with the south boundary line of State Highway No. 357 (Saratoga Road). a distance of 550 feet to a point for the northeast. corner of this tract; Thence in a southwesterly direction along and with the east boundary line of said Tracts 13 and 14, a distance of 2560 feet to the place of beginning. And containing 32.32 acres of land; 2. For the purpose of determining the amount of any money payment here- under, said land shall be considered to comprise 32.32 mineral acres, even though' it actually comprises more or less, subject to. paragraph 10. Ex b. 'lir :.; 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 and 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 (207). 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 (207.) 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 20th day of January, 1983, 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 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. 6. 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 uhich oil or gas in paying quantities is being produced. 7. Lessee is hereby given the right and power to unitize or combine the land covered by this lease or any portion thereof, subject to compliance with the requirements for City Drilling Blocks, 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 360 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. 8. 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. 9. 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 as- signs, 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. 10. 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 pro- portionally. 11. 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. 12. Nothing in the lease granted the Lessee will serve as the right to lay pipelines or operate drilling rigs from the surface of the above described land. 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 ' covenent 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 :.; 1 CITY OF CORPUS CHRISTI, TEXAS BY: Ernest M. Brlones LESSOR Acting City Manager APPROVED AS TO LEGAL FORM: day of , 1982 BY: CITY ATTORNEY LESSEE THE STATE OF TEXAS X COUNTY OF NUECES BEFORE ME, the undersigned authority, on this day personally appeared Ernest M. Briones, Acting City Manager of the City of Corpus Christi, Texas, known to me to be the person whose name is subscribed to the foregoing instru- ment and acknowledge 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 , 1982. Notary Public, Nueces County, Texas THE STATE OF TEXAS X' COUNTY OF BEFORE ME, the undersigned authority, on this day personally appeared . for Forney & Company, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to be 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 , 1982. Notary Public Corpus Christi xas ...20 day of 5 9a2 - TO THE MEMBERS OF THE CITY COUNCIL Corpus Christi, Texas For the reasons set forth in the emergency clause of the foregoing ordinance or resolution, an emergency exists requiring suspension of the Charter rule as to consideration and voting upon ordinances or resolutions at three regular meetings; 1/we, therefore, request that you suspend said Charter rule and pass this ordinance or resolution finally on the date it is introduced, or at the present meeting of the City Council. Respectfully, Council members Respectfully, MAY THE CITY OF CORPUS CHRISTI, TEXAS The above ordinance was passed by the foll wing vote: Luther Jones Betty N. Turner Jack K. Dumphy Bob Gulley Herbert L. Hawkins, Jr. Dr. Charles W. Kennedy Cliff Zarsky 16825