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HomeMy WebLinkAbout16992 ORD - 04/14/1982AN ORDINANCE AUTHORIZING A MINERAL LEASE WITH TREDUN OIL COMPANY, INC. COVERING 241.785 ACRES AT THE INTERNATIONAL AIRPORT FOR A PRIMARY TERM OF THREE YEARS; 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 241.785 acres in the South Central area of the International Airport with Tredun Oil Company, Inc., as lessee, for a three-year primary term, for a cash bonus of $18,617.44, an annual delay rental of S2,417.85 and a 25% 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 for the immediate and efficient utilization of the City's resources which demands the prompt attention of the Council, 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 measure this the day of April, 1982. ATTEST: Ci Secretary APPEW: AP- DAY OF APRIL, 1982: J. BRUCE AYCOCK, CI,Y 'ATTORNEY 9 Ags By 1E992 MA OR E CITY OF CORPUS CHRISTI, TEXAS sEp 28i984 vila00-%9" OIL AND GAS LEASE AGREEMENT, made and entered into the 14th day of April, 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 Tredun Oil Company, Inc., hereinafter called Lessee, whose address is 2218 First City Tower, 1001 Fannin, Houston, Texas 77002. 1. WITNESSETH: That the said Lessors, for and in consideration of Eighteen Thousand Six Hundred Seventeen and 44/100 Dollars ($18,617.44) 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 Lessee for the purpose and with the exclusive right of exploring, drilling for, and producing oil and gas, subject to limitations contained herein, the following described land in Nueces County, Texas, to wit: Tract I All that certain tract or parcel of land situated in'Nueces County, Texas and more particularly described as being the South 100.0 acres of land out of Farm Block Numbered 22 of the J. C. Russell Farm Blocks, as shown on map thereof re- corded in Volume 3, page 53 of the Map Records of Nueces County, Texas, being the same tract of land conveyed by Adolph J. Meurer and wife, Lena Meurer, to A. J. Geistman and Purcell L. Geistman by deed dated February 6, 1951, and recorded in Volume 504, page 323 of the Deed Records of Nueces County, Texas. Tract II A tract or parcel of land in Nueces County, Texas, being out of Tract No. 10 of the Margaret Kelly Subdivision, as shown by the map of said Subdivision recorded in Volume 8, page 40, Map Records of Nueces County, Texas, and being particularly described by metes and bounds as follows: Beginning at the Northeast Corner of Said tract 010, said point being at the intersection of Kosar Road and Farm - to -Market Road #763 and also being in the South line of Farm Block #23 of the J. C. Russell Farm Blocks; Thence S 00 25' 50" W along the East line of said tract #10 and the center line of Farm -to -Market Road 0763 a distance of 1181.76' to a point for corner; Thence N 430 11' 10" W a distance of 1632.32' to a point in the North line of said tract #10 and in the centerline of Kosar Road; Thence East along the North line of said tract #10 at 1088.32' pass the Northeast corner of Section 05, Range V of the H. L. Kinney Sectionized_Land; Thence S 89° 35' 20" E along the North line of tract #10 a distance of 37.70' to the place of beginning, and con- taining 15.274 acres of land less a strip of land 40' EX/1. 79' wide off of the entire East side deeded by J. A. Kosar to the County of Nueces on July 5, 1941 and recorded in Volume 308, page 632 of the Deed Records of Nueces County, Texas and less also a strip of land 30' wide off of the North side deeded to Nueces County March 23, 1953 and recorded in Volume 601, page 435 of the Deed Records of Nueces County, Texas, leaving net acreage, herein con- veyed, of 13.470 acres of land. Tract III A tract or parcel of land in Nueces County, Texas, out of Lot 7 of the Margaret Kelly Subdivision, according to the map thereof recorded in Volume 8, page 40, of the Map Records of Nueces County, Texas, said Lot 7 having been conveyed to Cecilia Kelly by the will of Margaret Kelly, probated March 25, 1944, in Nueces County Probate Court under Cause No. 4300, said tract more particularly described by metes and bounds as follows: Beginning at the NW corner of said Lot No. 7, a point in the center of Kosar Road and in the South line of tam Block 23 of the Russell Farm Blocks; Thence S 89° 35' 20" East along the North line of said Lot 7, and the South line of Farm Blocks 23 and 22, a distance of 2131.06 feet to a point for corner in the center of Kosar Road, and the Northeast corner of said Lot 7; Thence South along the East line of said Lot 7 a dis- tance of 2371.28' to a point for corner; . Thence in a Westerly direction along a curve to the right, said curve having a radius of 1100' and a cen- tral angle of 290 40' 33" a distance of 569.73' to the end of said curve; Thence N 89° 34' 10" West tangent to the aforesaid curve a distance of 648.90' to the beginning of a curve to the left; Thence in a Westerly and Southerly direction along said curve whose radius is 905.37' and whose central angle is 900 00' a distance of 1422.15' to a point for corner; Thence N 890 34'-10" West a distance of 50' to a point in the West line of said Lot 7 and in the center of Farm - to -Market Road 763; Thence N 00 25' 50" East along the West line of Lot 7 a distance of 3,421.21' to the place of beginning and con- taining 128.315 acres of land. 2. For the purpose of determining the amount of any money payment hereunder, said land shall be considered to comprise 241.785 mineral acres, even though it actually comprises more or less, subject to paragraph 10. 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 and hereinafter provided. 4. The royalties to be paid Lessor are (a) on oil, or oil well gas from a well defined by the Texas Railroad Commission as an oil well, a one-fourth (257,) 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 a one-fourth (257,) 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 14th day of April, 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 which 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 portiin 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 50 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 parti- cular 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 assigns, but no change or divisions in ownership of the land or royalties, however ac- complished, 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 hereby warrants and agrees to defend the title to said land and agrees that Lessee at its option may discharge any tax, mortgage or other lien upon said land and in event Lessee does so, it shall be subrogated to such lien with the right to enforce same and apply royalties accruing hereunder toward satisfying same. Without impairment of Lessee's rights under the warranty in event of failure of title, it is agreed that if Lessor owns an interest in said land less than the entire fee simple estate, then the royalties to be paid Lessor shall be reduced proportionately. 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 80 expiring or terminating. 12. There shall be no drilling within 150 ft. of the proposed Airport Terminal building or in violation of Federal Aviation Administration Regula- tions or Corpus Christi Airport Zoning Regulations. 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 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 APPROVED AS TO LEGAL FORM: day of , 1982 CITY OF CORPUS CHRISTI, TEXAS BY: Edward A. Martin City Manager LESSOR BY: CITY ATTORNEY LESSEE THE STATE OF TEXAS X COUNTY OF NUECES X BEFORE ME, the undersigned authority, on this day personally appeared EDWARD A. MARTIN, 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 acknowledge to me that he executed the same for the purposes and con- sideration 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 X BEFORE ME, the undersigned authority, on this day personally appeared for Tredun Oil Company, Inc., 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, T xas, 1/ day of , l9& TOTHE 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, Respectfully, Council Members MAYOR THE CI OF CORPUS CHRISTI, TEXAS 2' The above ordinance was passed by the folliring vote: Luther Jones , Betty N. Turner Jack K. Dumphy Bob Gulley Herbert L. Hawkins, Jr, Dr. Charles W. Kennedy Cliff Zarsky 16992