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Page 1 of 2
� • • -_,
� . • •, • , •
DATE: Tuesday, January 15, 2008
LOG NAME: 30CROWLEY ROW
REFERENCE NO.: L-14452
SUBJECT:
Approve Acceptance of Lease Agreement with Chesapeake Exploration, L.L.C., for Natural Gas
Drilling under 1.861 Acres, More or Less, of City -Owned Properties Located in Tarrant County,
Texas, known as Crowley Road Right -of -Way
RECOMMENDATION:
It is recommended that the City Council approve the acceptance of a lease agreement for natural gas
drilling under 1.861 acres, more or less, of City -owned properties located in Tarrant County, Texas, known
as Crowley Road Right -of -Way, to Chesapeake Exploration, L.L.C.
DISCUSSION:
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 3,651 estimated mineral acres of City -
owned properties, including 500 acres of miscellaneous parcels and right of way. This property is located
at the Northwest corner of the Crowley Road and Sycamore School Road intersection. Acceptance of this
lease agreement will reduce the approved 500 miscellaneous mineral acres of City -owned parcels by
1.861 net mineral acres, more or less.
A request for bid proposals (RFP) for Crowley Road Right -of -Way was advertised for three consecutive
weeks in the Fort Worth Star -Telegram, published on November 8, 15 and 22, 2007.
The following sealed bid for the gas lease was received and opened on November 29, 2007.
Bidder Lease Bonus/Acre Total Lease Bonus Ro al
Chesapeake Exploration, L.L.C. $7,847.00 $14,603.27 25 Percent
The bid received was 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.
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 $13,873.09, more or less.
The City has established a Minority Women Business Enterprise (M/WBE) participation goal of 3 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 3 percent M/WBE goal or the inclusion
of an M/WBE investor. This lease is less than 40 acres therefore no M/WBE participation goal is required.
http://apps.cfwnet.org/council�acket/Reports/mc�rint.asp 4/30/2008
Page 2 of 2
Revenues received from this lease will be administered in accordance with the current City Council Policy
on Gas Well Revenues.
The Property is located in COUNCIL DISTRICT 6, Mapsco 104 R.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that the Engineering Department is responsible for the collection and deposit
of funds due the City under this agreement.
TO Fund/Account/Centers FROM Fund/Account/Centers
C223 446100 201929990100 �13,873.09
Submitted for Ciiy Manager°s Office by_
Originating Department Head:
Additional Information Contact:
Marc A. Ott (8476)
A. Douglas Rademaker (6157)
Jean Petr (8367)
http://apps.cfwnet.org/council�acket/Reports/mc�rint.asp 4/30/2008