HomeMy WebLinkAboutContract 34077Chase Bank
C/O Paul Midkiff
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.PLORATION LTD.
September 18, 2006
City of Fort Worth Mineral Asset Manager
Fort Worth, Texas 76102
Via: Hand Delivered 9-15-2006
Re: Approval of Participation in Pooled Unit —Sansom Park Pooled Unit
140.3849 Acres-Buck Sansom Park
Dear Paul,
Enclosed please find a survey of the proposed Sansom Park Pooled Unit which includes
140.3849 acres which was leased from the City of Fort Worth by Keystone Exploration,
Ltd. in November of 2005. The lease provides for City approval of the pooled unit and
this letter shall represent the request to approve the pooled unit.
The attached survey shows total acres in the pooled unit of 290.6308 and the city park
acreage is 140.3849 which compute to a 48.5% ownership of the city in their portion of
royalties in the pooled unit. This is slightly lower than the 50% limitation as stated in the
lease. However, the addition of surrounding acres allowed the maximization of the lateral
lengths and increased the number of wells from one or two to five wells that could be
drilled on the entire property. The city will now participate in three more wells which
should be more productive.
Please review the enclosed survey and indicate the city approval of the pooled unit with
letter from you and/or city to Keystone Exploration, Ltd.
Sincerely,
� ��s!�?�,��
Thomas B. Blanton
President --�-�=- _ -- - ---_
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Cc: Adexco Production Company 7'����t� u��i��L��,1y�t�f
Terry McClure, Attorney 3 � .
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Keystone Exploration, Ltd. 100 East 15`� St. Suite 630 Fort Worth, Texas 76102 j
Tel.(817)626-0319 Fax.(817)624-1690
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.PLORATION LTD.
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Agreed to above description of Sansom Park Pooled Unit this the ��ay of-�pt���l��
2006.
Lessor:
City of Fort Worth
By; /�i—� icY`
Assistant City Manager
Approved as to Form and Legality:
By• � G!.!�'
ssistant Cit Attorney
Date
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Contract Authorization –C-21120
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Keystone Exploration, Ltd. 100 East 15`� St. Suite 630 Fort Worth, Texas 76102 2
Tel.(817)626-0319 Fax.(817)624-1690
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EXPRO ENGINEERING, INC.
SANSOAI PARK POOLED UNIT N0. 3—H
SURFACE HOLE LOCATION
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UT. = 32'48'50.389' N
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APPROXIMATE 290.6308 ACRE UNIT
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r� 1. COORDINATES SHOWN ARE BASED ON TEXAS STATE 1w� JI �
N PLANE COORDINATE SYSTEM OF 1927, TEXAS NORTH
.= CENTRAL ZONE dc ARE BASED ON MONUMENT 'CARRICO' . J. W�]� j� EXPRO
r- (� = a4�,z».��o, x= z,ozz,s4z.000) . A-1596 �'� s�orisoi
�p 2. LATtTUDE de LONGRUDE ARE NAD 27 GEOGRAPHIC 12�� BOTTO�
O 3. ALL LEASE dc TRACT INFORMATION SHDWN HEREON „ � Y= 4
I IS OONE 50 BY DEED RECORD INFORMAl10N ONLY �� ' e X= 2
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SERVICES: LAND SURVEYING/LOCATIDNS/PIPELWES/IAAPPING GPS/GIS I HA�'�Sj�V'j ;li?��r�j�+ll/�����i1���
710 BUFFALO STREEf, SU17E 407, CORPUS CHRfSTI, TE 784A1 '✓J b L ClS`:',A.0 � �n!S y
PHONE: (361) 881 — 8044 FAX: (361) 881 — 8340 -_
www.frontiersurveying.com 3 ��;5!' �� �;i ��-'� �' ':' _
Copyright m 2006 All Rights Reserved p �.: .. ,
Page 1 of 2
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 11/1/2005
DATE: Tuesday, November 01, 2005
LOG NAME: 30BUCKSANSOMGAS REFERENCE NO.: **C-21120
SUBJECT:
Approve Acceptance of Lease Agreement with Keystone Exploration, Ltd., for Natural Gas Drilling
under 140.3849 Mineral Acres, More or Less, of City-Owned Property Known as the Buck Sansom
Park, Located in Tarrant County, Texas
RECOMMENDATION:
It is recommended that the City Council approve the acceptance of a lease agreement for natural gas
drilling under 140.3849 mineral acres, more or less, of City-owned properties known as the Buck Sansom
Park located in Tarrant County with Keystone Exploration, Ltd., for a two-year term.
DISCUSSION:
On February 8, 2005, (M&C L-14029) Fort Worth City Council authorized the conversion of dedicated
parkland known as Buck Sansom Park for the purpose of subsurFace drilling and extraction of natural
gas. On May 17, 2005, (M&C G-14798) Fort Worth City Council authorized City staff to advertise a
request for proposals from private companies to drill for natural gas under City-owned property known as
the Buck Sansom Park further described in Exhibit "A" (See Attachment). The total available acreage is
140.3849 mineral acres, more or less.
A Request for Bid Proposals (RFP) was advertised for three consecutive weeks in the Commercial
Recorder, published on August 18, 25 and September 1, 2005.
The following sealed bids for the gas lease were received and opened on September 8, 2005.
Bidders
Keystone Exploration, Ltd
XTO Energy Inc.
Lease Bonus/Acre
$3,300.00
$2,711.00
Total Lease Bonus % Royaltv
$463,270.17 25
$380,583.47 25
The bids received were evaluated by staff and the City's mineral asset management consultant, JPMorgan
Chase. 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.
City staff and JPMorgan Chase determined, based upon the proposal content, that the Keystone
Exploration, Ltd. bid is the overall best bid.
In accordance with the Alternative Assets Agency Account Agreement between JPMorgan Chase and the
City (City Secretary Contract 29698), JPMorgan Chase will serve as the depository of the lease bonus
revenue until the City requests wire transfer of the funds. The net transfer to the City, less administrative
and legal fees, is estimated to be $440,106.66 more or less.
It is anticipated that the lease bonus and royalty proceeds will be deposited in the City's Park Improvement
http://www.cfwnet.org/council�acket/Reports/mc�rint.asp 12/4/2006
Page 2 of 2
Fund to complete the Master Plan for Buck Sansom Park.
The Property is located in COUNCIL DISTRICT 2, Mapsco 47 V, Z.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that the Engineering Department is responsible for the collection of funds due
the City under this agreement.
TO Fund/AccountlCenters FROM Fund/Account/Centers
C188 446100 080188900030 $440,106.66
Submitted for City Manager's Office by:
Originating Department Head:
Additional Information Contact:
Marc Ott (8476)
A. Douglas Rademaker (6157)
A. Douglas Rademaker (6157)
http://www.cfwnet.org/council�acket/Reports/mc�rint.asp 12/4/2006