HomeMy WebLinkAboutContract 34400 CITY SECRETARY
CONTRACT NO
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EXHIBIT "B"
OPERATIONS RESTRICTIONS
Attached to and made a part of that certain Oil and Gas Lease dated
2006, (the "Lease") between The City of Fort Worth ("Lessor /"City") and
, ZA—--L =L("Lessee"), covering the lands described in Exhibit A. This Exhibit
B incorporates by reference all terms defined in the Lease.
ARTICLE I
GENERAL SURFACE PROVISIONS
1.01. General. The provisions of this Article I shall be applicable to all operations to
develop the Minerals beneath the Leased Premises, as defined in the Lease, as required to be
conducted within multiple Operations Sites defined as well locations on the Lease surface.. For
purposes of this Exhibit B, Lessee and any other party conducting operations shall be referred to
collectively as "Operator." The Operator shall comply with all provisions of the City's Gas Drilling
Ordinance and any other applicable federal, state and city laws, rules, ordinances or regulations.
A Site Survey shall be attached to this Exhibit "B" indicating the wells sites, fracture pit
location and well access roads to be installed and used by the Operator. No other locations or access
roads may be installed or used by the Operator without the prior written consent of the Lessor and the
submittal of a new site survey.
1.02. Litter. Operator shall not cause, suffer, or allow any amounts of trash or litter to be
placed upon the Leased Premises, except for litter placed in permanent trash containers on the
Operations Sites pursuant to Article 3.10 below.
1.03. Pipelines, Roads and other Facilities. Other than on the Operations Sites and access
roads as indicated on the Site Survey, Operator shall not construct any pipelines (including the depth
of same), pits, roads, and other aboveground and underground facilities (collectively, "Facilities")
without the prior written consent of Lessor. Operator shall locate its Facilities only on the Operations
Sites and those other areas of the Leased Premises specified in writing by Lessor. Any Facilities
approved by Lessor and constructed by Operator shall be constructed and maintained by Operator in
accordance with industry standards for equivalent facilities. Operator shall access the Operations
Sites only by using existing roads or ways present on the Leased Premises as indicated on the Site
Survey, except unless otherwise designated by the Lessor. Operator shall use reasonable efforts to
prevent all persons engaged in operations from operating vehicles and equipment on any part of the
Leased Premises other than upon the Operations Sites and Facilities approved by Lessor or upon
existing roads or ways.
1.04. Other Activities. Operator shall cause each person entering the Leased Premises on
Operator's behalf to refrain from carrying on any activities except those reasonably necessary to
operations. Operator shall cause each such person to refrain from using for recreation any part of the
Leased Premises. Lessor shall have the right to exclude from the Leased Premises any individual or
entity who has violated this provision, and Operator shall notify any such individual or entity that
he/she or it will not be allowed to enter or remain upon the Leased Premises.
1.05. Damage to Roads or Ways. Any damages to roads or ways on the Leased Premises
caused by Operator's activities upon the Leased Premises, including without limitation operations
conducted within the Operations Site and activities related to accessing the Operations Site, shall be
promptly repaired by Operator, so as to return such roads or ways to their prior condition insofar as
reasonably practicable. Operator shall provide the City with a Road Maintenance Agreement and
Bond as required by the City's Gas Drilling Ordinance.
1.06. Indemnification. All operations conducted on the Lease Premises shall be at the sole
risk and expense of the Operator.;
OPERATOR AGREES TO DEFEND, INDEMNIFY AND HOLD THE CITY, ITS
OFFICERS,AGENTS SERVANTS AND EMPLOYEES, HARMLESS AGAINST ANYAND ALL
CLAIMS, LAWSUITS,ACTIONS, COSTS AND EXPENSES OF ANY KIND, INCLUDING, BUT
Pagel f$�.
NOT LIMITED TO, THOSE FOR PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED
DAMAGE OR LOSS TO OWNER'S BUSINESS AND ANY RESULTING LOST PROFITS)
AND/OR PERSONAL INJURY, INCLUDING DEATH, THAT MAY RELATE TO, ARISE OUT
OF OR BE OCCASIONED BY (i) OPERATOR'S BREACH OF ANY OF THE TERMS OR
PROVISIONS OF THIS AGREEMENT OR (ii) ANY NEGLIGENT ACT OR OMISSION OR
INTENTIONAL MISCONDUCT OF OPERATOR, ITS OFFICERS, AGENTS, ASSOCIATES,
EMPLOYEES, CONTRACTORS (OTHER THAN THE CITY) OR SUBCONTRACTORS,
RELATED TO THE DEVELOPMENT OF MINERALS BENEATH THE LEASED PREMISES
OR THE PERFORMANCE OF THIS AGREEMENT, EXCEPT THAT THE INDEMNITY
PROVIDED FOR IN THIS PARAGRAPH SHALL NOT APPLY TO ANY LIABILITY
RESULTING FROM THE SOLE NEGLIGENCE OF THE CITY OR ITS OFFICERS,AGENTS,
EMPLOYEES OR SEPARATE CONTRACTORS, AND IN THE EVENT OF JOINT AND
CONCURRENT NEGLIGENCE OF BOTH THE OPERATOR AND CITY, RESPONSIBILITY,
IF ANY, SHALL BE APPORTIONED COMPARATIVELY IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS. NOTHING HEREIN SHALL BE CONSTRUED AS A
WAIVER OF THE CITY'S GOVERNMENTAL IMMUNITY AS FURTHER PROVIDED BY
THE LA WS OF TEXAS
1.07. Cutting of Fences. Operator shall not cut any fence lines or remove or relocate any
fence posts located upon the Leased Premises without the prior written consent of Lessor, and any
such actions shall be taken only in accordance with reasonable instructions of, and in coordination
with, Lessor.
1.08. Water Rights. Except as otherwise provided herein or in the Lease, Operator shall
have no right of use of private empoundments of fresh water from ponds, lakes, rivers or streams, or
other surface waters, located upon the Leased Premises.
1.09. Caliche. Operator shall have no right under this Lease to remove or extract from the
Leased Premises caliche, sand or gravel for use in connection with the activities and operations to be
conducted pursuant to this Lease.
1.10. Drilling Mud and Saltwater Disposal. Operator shall not dispose of drilling mud or
saltwater in, on, under or upon the Leased Premises. If the site is located within 600 feet of any
Protected Use, as defined by the City's Gas Drilling Ordinance, the Operator shall use a closed loop
mud system as required by the Ordinance.
1.11. Survey. Upon the expiration of the primary term, or, if this lease is maintained
beyond the primary term by continuous development, upon the expiration of the continuous
development period, Lessee shall deliver to Lessor a survey showing the location of the Operations
Sites, and all roads and pipelines then located on the Leased Premises and shall prepare and deliver to
Lessor a Release in recordable form, releasing Lessee's right to use any other portion of the surface
of the Leased Premises not designated as a road, Operation Site or pipeline located on the survey.
ARTICLE II
SURFACE PROVISIONS FOR G&G OPERATIONS
2.01. Application to G&G Operations. The provisions of this Article II shall be applicable to
all geological and geophysical operations ("G&G Operations") conducted by Operator upon the
Leased Premises.
2.02. G&G Operations. All G&G operations shall be conducted in conformance with the
City's adopted Gas Drilling Ordinance and any other applicable federal, state and city laws, rules,
ordinances or regulations. At all times Operator shall consult with and keep Lessor informed as to
the nature, timing and scope of all G&G Operations to be conducted upon the Leased Premises.
2.03. Specific Limitations on G&G Operations. In connection with proposing any G&G
Operations, Operator shall comply with the following restrictions:
(a) All G&G Operations conducted upon the Leased Premises shall be conducted
in a manner so as to reasonably limit and reduce their impact upon and disturbance of the use
and enjoyment of the Leased Premises, including its residential developments;
Page 2
(b) No shot holes shall be located within 600 feet of any building, residence or
water well; and
(c) No G&G Operations may be conducted upon any portion of the Leased
Premises that is wet to the extent that light vehicles would leave ruts or tracks in the soil.
(d) No explosives will be used. Seismic will be done only by "thumper"
procedures. Lessee's right to conduct seismic surveys on the Leased Premises shall be limited
to the primary term of this Lease, and thereafter Lessee must obtain Lessor's written consent
prior to conducting any seismic survey.
(e) Lessee shall furnish Lessor with a copy of all data and information obtained
from seismic surveys, including interpretations of the data and shall provide Lessor with
reasonable access to Lessee's employees or contractors involved in the interpretation of the
data.
2.04. G&G Restorations. Operator shall promptly plug all shot holes and coring holes
drilled in connection with the G&G Operations with good and sufficient bentonite plugs, and shall
restore, to the extent reasonably practicable, the surface of the Leased Premises to the same condition
as existed before such G&G Operations. All such holes shall be drilled and plugged so as to avoid
damage to any aquifers. In the event Operator fails to restore the Leased Premises following G&G
Operations, Operator shall reimburse Lessor for the reasonable costs incurred by Lessor in
performing such restoration.
ARTICLE III
SURFACE PROVISIONS FOR OPERATIONS
3.01. Application to Operations. The provisions of this Article III shall be applicable to all
operations conducted by Operator upon the Leased Premises.
3.02. Pipelines and Other Lines. Operator shall not install any permanent pipelines on the
Leased Premises except those utilized to gather, handle and market production from a Well located
upon the Leased Premises and producing from the Leased Premises, without prior written consent not
to be unreasonably withheld.. Operator shall cause all pipelines, electrical lines and telephone lines
constructed either by it, or by any third party acting (a) at its request, (b) in concert with Operator, or
(c) pursuant to Lease with Operator, even if said party is considered a common carrier, upon the
Leased Premises that are of a Permanent Nature and which are in excess of one hundred fifty (150)
feet in length to be buried at least three (3) feet below the surface of the earth. Operator shall cause
stakes to be placed at each point where a Transmission Route crosses beneath a road or fence and
shall furnish Lessor a plat reflecting the location of all Transmission Routes located upon the Leased
Premises and which are subject to this Section 3.2. All pipeline installation shall require an easement
and FAA approval prior to installation on any part of the airport property. Placement of any pipelines
shall not obstruct airport surfaces or imaginary control surfaces associated with airport surfaces as
determined by the City. All permanent pipeline installation shall be subject to relocaton based on
airport infrastructure improvements or changes and FAA requirements.
3.03. Gates. Lessor shall possess the unqualified right to deny erection of a gate or gates
upon the Leased Premises, except to provide for access to the Operations Site. Any gate erected shall
conform to existing gates upon the Leased Premises as to construction materials, construction
methods, paint colors, and other technical specifications presently employed upon the Leased
Premises. If there are no existing gates, any gates installed by the Operator shall conform to the
City's Gas Drilling Ordinance. All gate access codes must be provided to the Department of Aviation
for staff access during or as a result of an airport emergency.
3.04. Operations Sites Appearance. Operator shall maintain the Operations Sites in a neat
and orderly fashion including all equipment and materials located thereon in compliance with the
City's Gas Drilling Ordinance. Operator shall remove all casing, tubing, pipe, equipment and other
materials within one hundred eighty (180) days of the cessation of its active use in connection with
operations. In no event shall Operator place upon an Operations Site any structures or equipment,_
CIT( �N(-Mkly
Page 3 � J �f I�La.
including without limitation structures of a permanent nature, which exceed twenty feet (20) in
height, except for drilling, completion and workover rigs which may exceed that height if necessary.
Operator shall comply with all height restrictions as required by the Federal Aviation Administration,
included, but not limited to, the FAA 7460-1 response. Operator must notify the airport manager in
writing at least 48 hours prior to raising any rigs or cranes. No rigs or cranes may be raised without
prior notification and the City's consent.
Operator shall comply with the City's drainage requirements and no installation of facilities
shall interfere with the existing drainage patters of the Leased Premises. Operator shall comply with
all operations and environmental laws, rules and regulations.
3.05. Discharges. Operator shall not purposefully discharge any oil, condensate, saltwater,
or any substance used in drilling or production onto the Leased Premises under any circumstances.
No salt water disposal wells shall be allowed on the Leased Premises. Prior to commencing
production from any Well on the Leased Premises, the tanks and other storage vessels shall be
enclosed by a compacted earthen berm of sufficient height to contain any discharge which might
occur. In the event that there is a discharge, Operator shall take actions and make notifications as
required by Federal, State, and local rules and regulations. The affected area shall be restored to its
original condition insofar as reasonably practicable. Operator agrees that such restoration shall
include correction of any erosion damage and removal of any contaminated soil, and replacement
with uncontaminated soil, regardless of whether the discharge occurred through its negligence or
otherwise.
3.06. Operations Sites Restoration. Within one hundred eighty (180) days, weather
permitting, of the completion and equipping by Operator of a well as a producing well or the
plugging and abandonment thereof, and unless Operator commences the drilling of another well
within one hundred eighty (180) days of the completion and equipping by Operator of a well as a
producing well or the plugging and abandonment thereof, Operator, at its sole cost and expense,
shall:
(a) remove from the Operations Sites upon which such well is located all
unnecessary surface equipment, flow lines and tankage, all drilling mud, chemical mud,
saltwater, surface oil and other materials;
(b) remove all materials stored in any earthen pits, together with any contaminated
soil, and refill any such pits; and
(c) remove from such Operations Sites all caliche, return the Operations Sites to
its original contour as nearly as is practicable, and replow and replant such Operations Sites;.
provided, however, should such Well be completed and equipped as a producing Well, then
such portion of the Operations Site as is necessary for the operation and maintenance of such
Well may retain its original caliche and/or be otherwise surfaced for use as a producing Well
site.
The site shall be restored in compliance with any state laws and the City's Gas Drilling Ordinance.
3.07. Operations Site Restorations. Lessor may require Operator to restore all or any portion
of the surface of the Operations Sites, as nearly as practicable, after use thereof is discontinued.
3.08. Noise Attenuation. Operator shall exercise reasonable efforts to control the noise level
resulting from operations upon the Leased Premises, and if required by the Lessor, conform to the
Gas Drilling Ordinance standards for noise levels.
3.09. Permanent Structures and Equipment. Operator shall cause all tank batteries and other
surface equipment located upon an Operations Site to be maintained in good repair and all such items
which are of a permanent nature to be painted to blend in with the surrounding landscape and shall be
installed, maintained and repainted as required by the City's Gas Drilling Ordinance. All equipment
shall be painted a color which blends in with the surrounding landscape and shall be repainted as
required by the City's Gas Drilling Ordinance.
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3.10. Litter. Operator shall construct and place permanent trash containers at the Operations
Site. Operator shall cause each trash container constructed and placed by it upon the Operations Site
to be serviced, maintained and emptied at least weekly, if necessary.
3.11. Time and Location of Operations. Operator shall conduct all drilling and completion
Operations within the boundaries of the Operations Sites as identified on the Site Survey and if
required by the Lessor, during times in compliance with the City's Gas Drilling Ordinance or as
required by the City during special events on the airport or by the FAA during a state or national
emergency where the FAA has closed or restricted access to all or part of the airport.
3.12. Safety Equipment. Operator shall install and utilize all safety equipment reasonably
necessary in accord with industry standards and in compliance with the City's Gas Drilling
Ordinance, including emergency shut-off valves, on the Operations Sites.
3.13. Landscaping. Operator shall comply with the landscape requirements of the City's
Gas Drilling Ordinance, unless otherwise waived in writing by the Lessor.
3.14. Electricit . All electricity needed for Lessee's operations, including any electrical
equipment used by Lessee, will be obtained at the sole cost and expense of Lessee.
3.15. Inspection. The City and its Gas Inspectors shall have the right to enter the Leased
Premises at any time to inspect for compliance with the terms of this agreement and the City's Gas
Drilling Ordinance.
ARTICLE IV
GENERAL PROVISIONS
4.01. Compliance. In the event that Lessor notifies the Operator in writing that the
Operator is not in compliance with the agreement, Operator shall have ten days after receipt of said
notice to comply with the terms of this agreement, unless said noncompliance is related to health and
safety, in which the Operator must remedy and comply within 24 hours of said notice. The service of
said notice and the failure of the Operator to comply within the stated time frame shall not be a
condition precedent to any action by the Lessor for any cause hereunder.
4.02. Interpretation. In the event of any dispute over the meaning or application of any
provision of this Agreement, this Agreement shall be interpreted fairly and reasonably, and neither
more strongly for or against any party, regardless of the actual drafter of this Agreement.
4.03. No Third Party Rights. The provisions and conditions of this Agreement are solely for
the benefit of the Lessor and the Operator , and any lawful assign or successor of the Operator and
are not intended to create any rights, contractual or otherwise, to any other person or entity.
4.04. Severability. If any provision of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any
way be affected or impaired.
4.05. Force Majeure. It is expressly understood and agreed by the parties to this Agreement
that if the performance of any obligations hereunder is delayed by reason of war; civil commotion;
acts of God; inclement weather, governmental restrictions, regulations, or interferences; fires; strikes;
lockouts, national disasters; riots; material or labor restrictions; transportation problems; or any other
circumstances which are reasonably beyond the control of the party obligated or permitted under the
terms of this Agreement to do or perform the same, regardless of whether any such circumstance is
similar to any of those enumerated or not, the party so obligated or permitted shall be excused from
doing or performing the same during such period of delay, so that the time period applicable to such
design or construction requirement shall be extended for a period of time equal to the period such
party was delayed.
4.06. Venue and Jurisdiction. If any action, whether real or asserted, at law or in equity,
arises on the basis of any provision of this Agreement, venue for such action shall lie in state courts
located in Tarrant County, Texas or the United States District Court for the Northern District of
Page 5
Texas — Fort Worth Division. This Agreement shall be construed in accordance with the laws of the
State of Texas.
4.07. Notices. All written notices called for or required by this Agreement shall be addressed
to the following, or such other party or address as either party designates in writing, postage prepaid, or
by hand delivery:
4.08. Captions. Captions and headings used in this Agreement are for reference purposes
only and shall not be deemed a part of this Agreement.
4.09. Assignment and Successors. Operators may not assign, transfer or otherwise convey
any of its rights or obligations under this Agreement to any party without the prior written consent of
the City, which consent shall not be unreasonably withheld or delayed, conditioned on (i) the prior
approval of the assignee or successor and a finding by the City Council that the proposed assignee or
successor is financially capable of completing [the project] and (ii) the proposed assignee or
successor has executed a written agreement with the City under which it agrees to assume all
covenants and obligations of [other party] under this Agreement, in which case such assignee or
successor shall thereafter be deemed "[definition of other party" for all purposes under this
Agreement.
4.10. Independent Contractor. It is expressly understood and agreed that Operator shall
operate as an independent contractor in each and every respect hereunder and not as an agent,
representative or employee of the City. Operator shall have the exclusive right to control all details
and day-to-day operations relative to the [nature of project] and shall be solely responsible for the
acts and omissions of its officers, agents, servants, employees, contractors, subcontractors, licensees
and invitees. Operator acknowledges that the doctrine of respondeat superior will not apply as
between the City and Operator, its officers, agents, servants, employees, contractors, subcontractors,
licensees and invitees. Operator further agrees that nothing in this Agreement will be construed as
the creation of a partnership or joint enterprise between the City and Operator.
4.11. Compliance with Laws, Ordinances, Rules and Regulations. This Agreement will be
subject to all applicable federal, state and local laws, ordinances, rules and regulations, including, but
not limited to, all provisions of the City's Charter and ordinances, as amended.
4.12. Governmental Powers. It is understood that by execution of this Agreement, the City
does not waive or surrender any of it governmental powers.
EXECUTED and effective as of the date of the notarial acknowledgment of the Lessor's
execution.
LESSOR: OPERATOR:
MF WOR CHESAPEAKE OPE TING,INC By:
Marc Ott, Assistant Ci anager Gary S. Dunlap
Vice President, Land—Southern Division
ATTEST: -
City Secretary
APPROVED AS TO FORM AND LEGALITY:
Assistant City Attorney
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BASIS OF BEARINGS:
AN EXHIBIT SHOVRNG
POW FOUR SEVENS OIL COMPANY, LTD.
FORT WORTH SPINKS AIRPORT LEASE
CRT of FORT wOm
TANbWT/JOHNSON COUNTY,TERAS
NOVEIIN7R S 300E
CW F10NI O 2006 615-1 LOMO-019
ti.10o NUMEl1 2005001-11