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Home My WebLink AboutContract 39849 CITY �"T rjY .-4��1 I Y Y,,V s NO. MEMORANDUM OF OIL AND GAS LEASE STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF TARRANT § BE IT REMEMBERED that on the _2L-_ day of F F t32y A 2010, a Paid Up Oil and Gas Lease was made and entered into by and between the CITY OF FORT WORTH, a home rule municipal corporation of the State of Texas, 1000 Throckmorton Street, Fort Worth, Texas 76102, hereinafter called "(LESSOR)"; and CHESAPEAKE EXPLORATION, LLC, P.O. Box 18496, Oklahoma City, Oklahoma 73154, hereinafter called ("LESSEE"), where LESSOR hereby grants, leases and lets exclusively to LESSEE for the purpose of exploring for, developing, producing and marketing oil and gas, together with any liquid or gaseous substances produced in association therewith, from the following described land situated in Tarrant County, Texas,to-wit: SEE EXHIBIT"A"ATTACHED HERETO AND MADE A PART HEREOF Subject to the other provisions therein contained, said lease provides for a primary term of two (2) years, from the date thereof, and as long thereafter as oil or gas or other substances covered therein are produced in paying quantities from the leased premises or from lands pooled therewith, or this lease is otherwise maintained in effect pursuant to the provisions therein. An Executed copy of said Oil and Gas Lease is in the possession of LESSEE at its address indicated above. Executed this the a day of Ff_-- 2vAV, 2010. LESSOR: LESSEE: CITY OF FORT WORTH CHESAPEAKE XPLORATION, LLC , a a Oklahom '&i1ted liability company By: By: Clt f J . Merritt Title: Assistant City Manager Its: L a z Manager ATTEST: pAcr� ®R� DO\ �° %0 VP d City Secretary p l`0 o� a Id °o 00 APPROVED AS TO FORM AND LEGALITY: °`'Opp°° �Y b��Cr By "'-A' 00 .�-��— Assistant City ey L— I tto �� 2 /` � Contract AuthoriaatioA Date: ;J J oa I l b ..pI Date OFFICIAL RECC RD CITY SECRET AIRY FT. UVOPTH TX 1 ACKNOWLEDGEMENTS THE STATE OF TEXAS § COUNTY OF TARRANT § BEFORE ME, the undersigned notary public, on this day personally appeared , known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged that (s)he has executed the same for the purposes and consideration therein expressed. GIVEN under my hand and seal of office this day of r 2010. f (Notary Public, State of Texas My Commission Expires: Commission Number: STATE OF OKLAHOMA § COUNTY OF 44ahbym § BEFORE ME, W UY r�, firs, �i1 the undersigned notary public, on this day personally appeared_Cliff J. Merritt- Land Manager known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged that (s)he has executed the same for the purposes and consideration therein expressed. GIVEN under my hand and seal of office this day of , 2010. eA I 12 0,A Tald tary u lic, tate of Oklahoma PVFtEN TQ'' 'My Commission Expires: a # Commission Number: 08010055 _ 1n1 E P.70/1�,�, O`re` 7 EXHIBIT A 74.97959871 acres, more or less, better described as follows: Block 1, in the North Holly Plant Addition, an addition to the City of Fort Worth, Tarrant County, Texas, being part of the J.M.C. Lynch Survey, Abstract Number 955, Tarrant County, Texas, as described in that certain Plat recorded in Volume A, at Page 3611, Tarrant County, Texas. Block 1, in the South Holly Plant Addition, an addition to the City of Fort Worth, Tarrant County, Texas, being part of the J.M.C. Lynch Survey, Abstract Number 955, Tarrant County, Texas, as described in that certain Plat recorded in Volume A, at Page 3612, Tarrant County, Texas. SAVE AND EXCEPT: Lots 9, 10, 11, 12 & 13, Block 5 and Lots 6, 7 & 8. Block 2, of the Crawford Addition, and addition to the City of Fort Worth, Tarrant County, Texas, being a part of the George Shields Survey, Abstract Number 1402, as described in that certain Plat, recorded in Volume 204, Page 104, Tarrant County, Texas. (Holly Water Treatment Plant) 3 Page 1 of 2 City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 1/12/2010 DATE: Tuesday, January 12, 2010 REFERENCE NO.: L-14910 LOG NAME: 06HOLLY WATER TREATMENT PLANT SUBJECT: Approve Acceptance of Lease Agreement with Chesapeake Exploration, LLC in the Amount of $388,094.40 for Natural Gas Drilling under 74.979 Acres of City-Owned Properties Known as Holly Water Treatment Plant Located at 1050 Fournier Street (COUNCIL DISTRICT 9) RECOMMENDATION: It is recommended that the City Council approve the acceptance of a lease agreement for natural gas drilling under 74.979 acres more or less of city-owned properties known as Holly Water Treatment Plant to Chesapeake Exploration, LLC in the amount of$388,094.40 for a two-year primary term. DISCUSSION: A Request for Bid proposals (RFP) for Holly Water Treatment Plant was advertised for three consecutive weeks in the Fort Worth Star-Telegram, published on September 24, October 1 and 8, 2009. The following sealed bid for the gas lease was received and opened on October 15, 2009. Bidder Lease Bonus/Acre Total Lease Bonus Percent Rovaty l Chesapeake Exploration, LLC $5,176.00 $341,520.77 25.00 Percent TO Energy, Inc. $3,711.00 $244,857.72 25.00 Percen At the time the bid for the Holly Water Treatment Plant was advertised, it was understood that the mineral acreage was 65.9816 acres and the bid offer was made based on that acreage. Subsequent to receiving bids, it was determined that the treatment plant property consisted of a total of 76.116 acres, with a total net mineral acreage of 74.979 acres. Chesapeake Exploration, LLC has agreed to pay the same bonus rate for the additional mineral acreage. The bid received was evaluated by staff and the City's Mineral Management Consultant, Midkiff Oil and Gas. In addition to the lease bonus rate and royalties paid to the city, the bidder's drilling plan, reputation, financial status, project team and compliance history were also evaluated. Timely award and execution of this lease will allow for inclusion of these properties in the drilling unit currently being formed. In accordance with the City's Mineral Management Consulting Agreement, City Secretary Contract Number 37980, the net transfer to the city is estimated to be $380,332.52 more or less. The City has established a Minority Women Business Enterprise (M/WBE) participation goal of three percent on city-owned property of 40 acres or more without an investment goal. On leases of city-owned property of 700 acres or more, the city has established an option of either a three precent M/WBE goal or the inclusion of an M/WBE investor. Chesapeake has committed to meet or exceed the three percent M/WBE goal established by the city. http://apps.cfwnet.org/ecouncil/printmc.asp?id=12842&print-true&DocType=Print 1/13/2010 Page 2 of 2 Revenues received from this lease shall be deposited according to the Financial Management Policy Statements, which currently direct the bonus and royalty for Water and Sewer assets 50 percent to Water and Sewer Capital Projects Fund, 25 percent to the Fort Worth Permanent Fund and 25 percent to the Utility Street Reconstruction Capital Improvement Projects Fund. The property is located in COUNCIL DISTRICT 9, Mapsco 76B and 76G. FISCAL INFORMATION /CERTIFICATION: The Financial Management Services Director certifies that the Planning and Development Department is responsible for the collection and deposit of funds due the City. FUND CENTERS: TO Fu nd/Accou nt/C enters FROM Fund/Account/Centers P245 446100 601149990100 $194,047.20 P245 531260 601149990100 $3,880.94 P245 446100 601149990300 $97.023.60 P245 531260 601149990300 $1,940:47 T124 446100 060124099901 $97,023.60 T124 531260 060124099901 $1,940.47 f'COTIFICATIONS: . "1%1 Submitted for City Manager's Office by: Fernando Costa (6122) Originating Department Head: Susan Alanis (8180) Additional Information Contact: Jean Petr (8367) ATTACHMENTS 1. Accounting Info.Pdf (CFW lntemal) 2. Exhibit 1.pdf (Public) http:)'/apps.cfwnet.org/ecouncil/printmc.asp?id=12842&print—true&DocType=Print 1/13/2010 MAYOR AND COUNCIL COMMUNICATION MAP Holly Water Treatment Plant 450 0 VH tTTLEMENT WEST ROSEDALE e _ 101 H TEX kS W TER CAV ul s IN 0 2,875 5,750 11,500 Feet DETAIL SHOWING THE PROJECT LOCATION I i i I i i i I (NOT TO SCALE)