HomeMy WebLinkAboutContract 38651 3oc�s
SUBSURFACE WELLBORE LICENSE AGREEMENT
This Subsurface Wellbore License Agreement ("Agreement") is hereby made and entered into by and
between the CITY OF FORT WORTH, a home rule municipal corporation organized under the laws of the
State of Texas and acting by and through Fernando Costa, its duly authorized Assistant City Manager, and
Chesapeake Exploration, L.L.C., ("Company), an Oklahoma limited liability company, P. O. Box 18496,
Oklahoma City, Oklahoma 73154, acting by and through Henry J. Hood, Senior Vice President — Land and
Legal & General Counsel.
The following statements are true and correct and constitute the basis upon which the City of Fort
Worth has executed Agreement.
A. Company, wishes to drill a subsurface horizontal wellbore through City owned property from
a gas well to a unit.
B. The City has reviewed Company's request and agrees to grant Company a license and right
of way to use a portion of city owned property, as set out in Exhibits A, B, C, and D (Subsurface Tract) in
order to drill a wellbore in accordance with the terms and conditions of this Agreement.
Agreement
1. GRANT OF RIGHTS.
Subject to the terms and conditions set forth in this Agreement the City of Fort Worth grants
Company, a subsurface wellbore license agreement and right-of-way to provide Company ingress to and egress
from, and the right to use and occupy, the subsurface of the Subsurface Tract for four (4) wellbore(s) to drill
across, through and under the subsurface of the Subsurface Tract as to the depths and location described in
Exhibits A, B, C and D with a hundred (100) foot margin of error. This agreement is applicable to the White
Lake Hills 5H, 6H, 7H, and 8H well(s) only.
Subsequent to the drilling of the wells for which this Agreement is being granted, Company shall
provide to City an as-built survey limiting the Agreement area to ten (10) feet in width for the four (4)
wellbore(s) which pass through and under City's Subsurface Tract. Thereafter, the license agreement
granted herein shall be restricted solely to the wellbore of said well(s). Company shall deliver to City an as-
built survey of the wellbore within ninety (90) days of first production from said well.
It is understood and agreed that this Agreement is a subsurface wellbore license agreement and
right-of-way only and in no way grants or conveys any part of the underlying fee simple estate of any lands
owned by the City. Company shall have no right to use the surface of the tract of land for any purpose. This
subsurface license agreement does not convey the right to produce the oil, gas or other minerals under the
tract of land. City reserves the right to use any and all subsurface outside of the wellbore license agreement
on properties owned by the City.
Notwithstanding the use of the terms "grant" hereinabove set forth, the City does not warrant the title
to the subsurface license agreement and right-of-way herein granted to the Company.
2. TERM.
This Agreement shall become effective on the date as of which both parties have executed it
("Effective Date") and shall expire at 11:59 P.M. CST twenty (20) years from the last date of notarial
acknowledgement unless terminated earlier as provided herein.
3. FEES AND PAYMENTS TO THE CITY.
On or prior to the Effective Date, Company shall pay the City as compensation for its use of the City
property for the term of this Agreement the sum of One Hundred Sixty-Six Thousand, Two Hundred Forty-
Four Dollars and No Cents, $166,244.00 ("License Fee"). Company hereby acknowledges and agrees that
the amount of this License Fee constitutes just and reasonable compensation to the City for Company's use
of the City property.
4. COMPLIANCE WITH LAWS ORDINANCES, RULES AND REGULATIONS
Company, at its sole cost and expense, shad comply at all times with all applicable federal, state and
local laws, rules. regulations and safety standards in connection with Company's activities hereunder.
5. INDEMNIFICATION.
COMPANY, ITS SUCCESSORS AND ASSIGNS, SHALL AND HEREBY DOES INDEMNIFY AND
HOLD HARMLESS CITY, ITS OFFICERS, DIRECTORS. AGENTS, CONTRACTORS, SERVANTS,
EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM AND AGAINST ALL LIABILITY, CLAIMS,
DEMAND, FINE, DAMAGES, SUITS, ACTIONS, COSTS AND EXPENSES OF WHATSOEVER NATURE
(INCLUDING REASONABLE ATTORNEYS' FEES) TO PERSONS OR PROPERTY CAUSED""B-Y OR
ARISING OUT OF ANY OF COMPANY'S OPERATIONS HEREUNDER OR OTHERWISE RELATING TO
THE SUBSURFACE WELLBORE LICENSE AGREEMENT AND RIGHT-OF-WAY, EXCEPT WHERE SUCH
Subsurface Wellbore Agreement— White Lake Hills 1
CLAIMS RESULT FROM THE ACTS, OMISSIONS AND NEGLIGENCE OF CITY, ITS OFFICERS,
DIRECTORS, AGENTS, CONTRACTORS, SERVANTS OR EMPLOYEES.
6. DEFAULTS.
The occurrence at any time during the term of this Agreement of one or more of the following events
shall constitute an "Event of Default" under this Agreement:
6.1. Failure to Pay License Fee.
An Event of Default shall occur if Company fails to pay any License Fee on or before the
respective due date.
6.2. Breach.
An Event of Default shall occur if Company materially breaches or violates any of the terms,
covenants, representations or warranties set forth in this Agreement or fails to perform any obligation
required by this Agreement.
7. UNCURED DEFAULTS AND REMEDIES.
7.1. Notice of Default and Opportunity to Cure.
If an Event of Default occurs on account of Company's failure to pay the License Fee in
accordance with Section 6.1, such Event of Default shall be deemed an Uncured Default and the City
shall have the right to terminate this Agreement immediately upon provision of written notice to
Company. If an Event of Default occurs for a reason other than for failure to pay the License Fee, the
City shall provide Company with written notice and shall give Company the opportunity to cure such
Event of Default. For an Event of Default which can be cured by the immediate payment of money to
the City, Company shall have thirty (30) days from the date it receives written notice from the City to
cure the Event of Default. For any other Event of Default, Company shall have sixty (60) days from
the date it receives written notice from the City to cure the Event of Default. If any Event of Default is
not cured within the time period specified herein, such Event of Default shall, without further notice
from the City, become an "Uncured Default" and the City immediately may exercise the remedies
provided in Section 7.2.
7.2. Remedies for Uncured Defaults.
Upon the occurrence of an Uncured Default, the City shall be entitled to exercise, at the
same time or at different times, any of the following remedies, all of which shall be cumulative of and
without limitation to any other rights or remedies the City may have:
7.2.1. Termination of Agreement.
Upon the occurrence of an Uncured Default, the City may terminate this Agreement.
Upon such termination, Company shall forfeit all rights granted to it under this Agreement,
and, except as to Company's unperformed obligations and existing liabilities as of the date of
termination, this Agreement shall automatically be deemed null and void and shall have no
further force or effect. Company shall remain obligated to pay and the City shall retain the
right to receive License Fees and any other payments due up to the date of termination.
Company shall remove the Subsurface Wellbore from and restore the City Property as and
when requested by the City. The City's right to terminate this Agreement under this Section
7.2.1 does not and shall not be construed to constitute any kind of limitation on the City's
right to terminate this Agreement for other reasons as provided by and in accordance with
this Agreement; provided, however, that Company may not abandon the Subsurface
Wellbore without the approval of the Texas Railroad Commission or successor agency or
other regulatory authority with jurisdiction, if such action without such approval is prohibited at
the time by applicable federal or state law or regulation.
7.2.2. Legal Action Against Company.
Upon the occurrence of an Uncured Default, the City may commence against
Company an action at law for monetary damages or in equity, for injunctive relief or specific
performance of any of the provisions of this Agreement which, as a matter of equity, are
specifically enforceable.
8. INSURANCE.
Company shall procure and maintain at all times, in full force and effect, a policy or policies of
insurance to provide coverages as specified herein, naming the City as an additional insured and
covering all public risks related to the use, occupancy, condition, maintenance, existence or location of
the City. The insurance required hereunder may be met by a combination of self-insurance, primary
and excess policies.
Subsurface Wellbore Agreement—White Lake Hills 2
8.1. Primary Liability Insurance Coverage.
• Commercial General Liability:
$1,000,000 per occurrence, including coverage for the following: (i) Premises Liability; (ii)
independent contractors; (iii) products/completed operations; (iv) personal injury; (v)
contractual liability; (vi) explosion, collapse and underground property damage.
• Property Damage Liability:
$10,000,000 per occurrence
• Automobile Liability:
$1,000,000 per accident, including, but not limited to, all owned, leased, hired or non-owned
motor vehicles used in conjunction with the rights granted under this Agreement
• Worker's Compensation:
As required by law; and, Employer's Liability as follows:
$1,000,000 per accident.
8.2. Revisions to Required Coverage.
At the reasonable recommendation of the City's Risk Manager, the City may at any time revise
insurance coverage requirements and limits required by this Agreement. Company agrees that within
thirty (30) days of receipt of written notice from the City, Company will implement all such revisions
requested by the City. The policy or policies of insurance shall be endorsed to provide that no material
changes in coverage, including, but not limited to, cancellation, termination, non-renewal or amendment,
shall be made without thirty(30) days' prior written notice to the City.
8.3. Underwriters and Certificates.
Company shall procure and maintain its insurance with underwriters authorized to do business
in the State of Texas and who are acceptable to the City in terms of solvency and financial strength.
Within thirty (30) days following adoption of this Agreement by the City Council, Company shall furnish
the City with certificates of insurance signed by the respective companies as proof that it has obtained
the types and amounts of insurance coverage required herein. In addition, Company shall, on demand,
provide the City with evidence that it has maintained such coverage in full force and effect.
8.4. Deductibles.
Deductible or self-insured retention limits on any line of coverage required herein shall not
exceed $1,000,000 in the annual aggregate unless the limit per occurrence, or per line of coverage, or
aggregate is otherwise approved by the City.
8.5. No Limitation of Liability.
The insurance requirements set forth in this Section 8 and any recovery by the City of any sum
by reason of any insurance policy required under this Agreement shall in no way be construed or
effected to limit or in any way affect Company's liability to the City or other persons as provided by this
Agreement or law.
9. COMPANY AS INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Company shall operate as an independent contractor as to all
rights and privileges granted by this Agreement, and not as an agent, representative or employee of the City.
Company shall have the exclusive right to control the details of its business and other operations necessary or
appurtenant to the transportation of Gas in accordance with the terms and conditions of this Agreement, and
shall be solely responsible for the acts and omissions of its officers, agents, servants, employees, contractors
and subcontractors. Company acknowledges that the doctrine of respondeat superior shall not apply as
between the City and Company, its officers, agents, employees, contractors and subcontractors. Company
further agrees that nothing herein shall be construed as the creation of a partnership or joint enterprise between
the City and Company.
10. ASSIGNMENT PROHIBITED.
Company may not assign or otherwise transfer any of its rights or obligations under this Agreement
unless specifically authorized in writing by the City, which authorization shall not be unreasonably withheld.
Subsurface Wellbore Agreement—White Lake Hills 3
11. NOTICE.
Notices required pursuant to the provisions of this Agreement shall be conclusively determined to have
been delivered when (i) hand-delivered to the other party, its agents, employees, servants or representatives, or
(ii) received by the other party by United States Mail, postage prepaid, return receipt requested, addressed as
follows:
To THE CITY: To COMPANY:
City of Fort Worth Chesapeake Exploration, L.L.C.
Manager, Gas Lease Program Attn: Henry J. Hood, Sr. Vice President-
Planning and Development Department Land and Legal & General Counsel
1000 Throckmorton Street P. O. Box 18496
Ft. Worth, TX 76102 Oklahoma City, OK 73154
Either party, by notifying the other party hereto in the manner provided in this paragraph, may designate a
different address for receipt of subsequent notices.
12. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and shall inure to the benefit of the City and the Company and
their respective successors and assigns.
13. NON-DISCRIMINATION COVENANT.
Company shall not discriminate against any person on the basis of race, color, national origin, religion,
handicap, sex, sexual orientation or familial status in the receipt of benefits from Company's business
operations, in any opportunities for employment with Company or in the construction or installation of the
Subsurface Wellbore.
14. NO WAIVER.
The failure of the City to insist upon the performance of any term or provision of this Agreement or to
exercise any rights that the City may have, either under this Agreement or the law, shall not constitute a waiver
of the City's right to insist upon appropriate performance or to assert any such right on any future occasion.
15. GOVERNING LAW AND VENUE.
This Agreement shall be construed pursuant to and in accordance with the laws of the United States of
America and the State of Texas. If any action, whether real or asserted, at law or in equity, arise out of the terms
of this Agreement or Company's use of City propertyy, venue for such action shall lie exclusively in state courts
located in Tarrant County, Texas or the United States District Court for the Northern District of Texas, Fort Worth
Division.
16. SEVERABILITY.
If any provision of this Agreement is held to be invalid, illegal or unenforceable by a final order entered
by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired. For purposes of this Agreement, a court order shall be final only to the extent
that all available legal rights and remedies pertaining to such order, including, without limitation all available
appeals, have been exhausted. In such an event, the City and Company agree that they shall amend or have
amended this Agreement to comply with such final order entered by a court of competent jurisdiction.
17. FORCE MAJEURE.
In the event Company's performance of any of the terms, conditions or obligations required by this
Agreement is prevented by a cause or event that is not within Company's reasonable control, Company's non-
performance shall be deemed excused for the period of such inability. Causes or events that are not within the
Company's control shall include, but not be limited to, acts of God, strikes, sabotage, riots or civil disturbances,
failure or loss of utilities, explosions and natural disasters.
18. HEADINGS NOT CONTROLLING.
Headings and titles, that are used in this Agreement are for reference purposes only and shall not be
deemed a part of this Agreement.
19. ENTIRETY OF AGREEMENT.
This Agreement, including the schedule of exhibits attached hereto and any documents incorporated
herein by reference, contains the entire understanding and agreement between the City and Company as to the
matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and
void to the extent in conflict with the terms and conditions of this Agreement. This Agreement shall not be
amended unless agreed to in writing by both parties and approved by the City Council of the City.
EXECUTED and effective as of the later date below:
Subsurface Wellbore Agreement—White Lake Hills 4
CITY OF FORT WORTH: Chesapeake Explor i n'L.L.C. 9td
By: By: /.'' ;;rA4
Name: Name: Henry J.�o� r. Vice President
Assistant City Manager - Land and Leg,& General Counsel
Date: 5- 2.7109 Date: S- (L� -09
ATTEST:
City Secretary
APP OVED AS TO F07 AND
LEGALITY:
B y:: u
Assistant City Attorney
M&C:
ACKNOWLEDGMENTS
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, K,T7-,,2 /�a;r e, the undersigned notary public, on this day
personally appeared�_�� � ®STg known to me to be the person whose name is
subscribed to the foregoing instrument and, that (s)he has executed the same for the purposes and
consideration therein expressed.
GIVEN under my hand and seal of office this J day of 2009.
Notary's �ubric �anf
or the State of Texas
My Commission Expires: HETTIELANE
`* MY COMMISSION EXPIRES
Commission Number: aO ' ll
T— July 26,2011
P
STATE OF OKLAHOMA §
COUNTY OF OKLAHOMA §
BEFORE ME, -?5rer4c.. L . �o6KS iy the undersigned notary public, on this day personally
appeared Henry J. Hood, Senior Vice President - Land and Legal & General Counsel of Chesapeake
Exploration, L.L.C. on behalf of said limited liability company, who is known to me to be the person whose
name is subscribed to the foregoing instrument and acknowledged to me that he executed that instrument for
the purposes and consideration therein expressed, and inI that capacity therein stated.
GIVEN under my hand and seal of office this l� day of I r�_, 2009.
Notary's Public in an tate of Oklahoma
.`a.LJpy ,
pTARjy1do';
My Commission Expires:
Commission Number: tp'EXPAV211+1=5
F
Subsurface%Ajellbore Agreement—White Lake Hills 5
EXHIBIT A
REGISTERED PROFESSIONAL SURVEY S
City of Fort Worth hER1ERT SNorth Tract •
V.12871, P.510 LAND SURVEYORS LP.
D.R.T.C.T. 0EASLEY
T •SAND •TOPOGRAPHIC
•CONSTRUCTION SURVEYING
OX 8873 817-429-0194
FORT WORTH, TEXAS 76124 FAX 817— —
Mite Lace Me 5H
White Lake Hills 5H — 954 horizontal feet.
MD: 2264'
TVD: 22�7.51'
9$4
MD: 4252'
TVD: 3981.05'
City of Fort Worth
South Tract
V.12871, P.510
D.R.T.C.T.
Exhibit Of
White Lakes Hills 5H
Subsurface Easement Across
300 0 150 300 600 City of Fort Worth South Tract
Prepared 4 February 2009 CHESAPEAKE OPERATING, INC.
1 inch = 300 ft. \
WLH 5H Surbsurface Esmt Exhibit.dwg
EXHIBIT B
REGISTERED PROFESSIONAL SURVEY S
City of Fort Worth hERIBERT S.North Tract
V.12871, P.510 0LAND SURVEYORS LP.
D.R.T.C.T. E S SLE"
„ T •SAND •TOPOGRAPHIC
•CONSTRUCTION SURVEYING
OX 8873 817-429-0194
FORT WORTH, TEXAS 76124 FAX 817— —
White Lake Hills 6H — 791 horizontal feet.
MD: 2747'
TVD: 2710.07'
Mite Lake HNIe 6HJ
MD: 5815'
City of Fort Worth TVD: 5373.11'
South Tract
VA 2871, P.510
D.R.T.C.T.
Exhibit Of
White Lakes Hills 6H
Subsurface Easement Across
300 a 150 300 600 City of Fort Worth South Tract
Prepared 4 February 2009 CHESAPEAKE OPERATING, INC.
1 inch = 300 ft.
WLH 6H Surbsurface Esmt Exhibit.dwg
EXHIBIT C
REGISTERED PROFESSIONAL SURVEY S
City of Fort Worth hERIBERT SNorth Tract J. LAND
SURVEYORS
��W�p�+
V.12871. P.51 o LAND SURVEYORS LP.
D.R.T.C.T. 0EASLEY J T • LAND •TOPOGRAPHIC
•CONSTRUCTION SURVEYING
OX 8873 817-429-0194
FORT WORTH, TEXAS 76124 FAX 817-
White Lake Hills 7H — 962 horizontal feet.
MD: 2430'
White Lake Hills 7H
TVD: 2395.66'
B2. e MD: 4736'
TVD: 4485'
City of Fort Worth
South Tract
V.12871, P.510
D.R.T.C.T.
Exhibit Of
White Lakes Hills 7H
Subsurface Easement Across
300 0 150 300 600 City of Fort Worth SouthTract
Prepared 4 February 2009 CHESAPEAKE OPERATING, INC.
1 inch = 300 ft.
WLH 7H Surbsurface Esmt Exhibit.dwg
EEI
REGISTERED PROFESSIONAL SURVEY S
City of Fort Worth EI`IBE01\T S.
North Tract
V.12871, P.510 LAND SURVEYORS LP.
D.R.T.C.T. EASLEY
•LAND •TOPOGRAPHIC
•CONSTRUCTION SURVEYING
OX 8873 817-429-0194
FORT WORTH, TEXAS 76124 FAX 817—
White Lake Hills 8H — 907 horizontal feet.
MD: 2370'
TVD: 2342.68'
\(
`Mfitte Lace HNIe 8H MD: 5291'
fTVD: 5112.73'
City of Fort Worth
South Tract
V.12871, P.510
D.R.T.C.T.
Exhibit Of
White Lakes Hills 8H
Subsurface Easement Across
300 0 t50 300 600 City of Fort Worth South Tract
Prepared 4 February 2009 CHESAPEAKE OPERATING, INC.
1 inch = 300 ft.
WLH 8H Surbsurface Esmt Exhibit.dwg