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MEMORANDUM OF OIL AND GAS LEASE
STATE OF TEXAS §
§ KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF TARRANT §
BE IT REMEMBERED that on the day of -� • 2008, 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, c/o Director, Department of
Engineering, 1000 Throckmorton Street, Fort Worth, Texas 76102, hereinafter called
"(LESSOR)"; and CHESAPEAKE EXPLORATION, L.L.C., an Oklahoma limited liability
corporation, 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 L�day of 2008.
LESSOR: LESSEE:
CITY OF FORT WORTH CHESAPEAKE EXPLORATION,L.L.C.,
An Oklahoma limited liability corporation
VIA
fil 71,
By: Fersta" e!r zA _ By:Cli fJ.lerrwitt
Title:Assistant City Manager Its:Land Manager I„1 R
ATTEST:
City Secretary
Contract Authorisation
Date
APPROVED AS TO FORM AND LEGALITY:
r
Assistant City OoJrney v
Date:
OFFICIAL RECORD
1 CITY SECRETARY
FT.WORTH,TX
ACKNOWLEDGEMENTS
THE STATE OF TEXAS §
COUNTY OF §
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 �� �ay of ,
2008.
Notary Public,State of Texas
My Commission Expires: Q
Commission Number: DOln
�•'""•�aH_ HEiTIELANE
_ MY COMMISSION EXPIRES
Jury 28,2011
STATE OF OKLAHOMA §
COUNTY OF OKLAHOMA §
This instrument was acknowledged before me this of Au t 2008,
by Cliff J.Merritt as Land Manager of Chesapeake Exploration,L.L.C.on b&Mf of said
corporation.
Not Public,State of Oklahoma
#07004805
My Commission Expires: o,�I fl.051t5"
Commission Number:
OFFICIAL RECORD
CITY SECRETARY
FT.WORTH,TX
2
Page 1 of 2
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 7/29/2008
DATE: Tuesday, July 29, 2008
LOG NAME: 30MARINE PARK REFERENCE NO.: L-14609
SUBJECT:
Authorize Execution of a Lease Agreement with Chesapeake Exploration, LLC, with a Bonus
Amount of $131,997.60 and a Twenty-Five Percent Royalty for Natural Gas Drilling under Marine
Park Located at 303 Northwest 20th Street
RECOMMENDATION:
It is recommended that the City Council authorize execution of a lease agreement with Chesapeake
Exploration, LLC, with a bonus amount of $131,997.60 and a twenty-five percent royalty for natural gas
drilling under 10.8 acres, more or less, of City-owned properties located in Tarrant County, Texas, known as
Marine Park located at 303 Northwest 20th Street for a two-year primary term.
DISCUSSION:
On April 29, 2008, (M&C L-14522) Fort Worth City Council authorized the conversion of dedicated
parkland known as Marine Park for the purpose of subsurface drilling and extraction of natural gas.
On February 19, 2008, (M&C L-14472) Fort Worth City Council authorized City staff to advertise a request
for proposals from private companies to drill for natural gas under 5,422 estimated mineral acres of City-
owned properties, including 500 acres of miscellaneous parcels and right of way. Marine Park is located at
303 Northwest 20th Street. Acceptance of this lease agreement will reduce the approved 500
miscellaneous mineral acres of City-owned parcels by 10.8 net mineral acres, more or less.
A request for bid proposals (RFP) for Marine Park was advertised for three consecutive weeks in the Fort
Worth Star-Telegram, published on May 15, May 22, and May 29, 2008.
The following sealed bid for the gas lease was received and opened on June 5, 2008:
Bidder Lease Bonus/Acre Total Lease Bonus Percent Royalty
Chesapeake Exploration, LLC $12,222.00 $131,997.60 25
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 First Amendment to City Secretary Contract No. 29698, Alternative Assets Agency
Account Agreement with JPMorgan Chase and the City, 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 from
JPMorgan Chase is estimated to be $125,397.72, 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
http://apps.cfwnet.org/council_packet/Reports/mc_print.asp 9/12/2008
Page 2 of 2
property of 700 acres or more, the City has established an option of either a three 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.
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 2, Mapsco 62K.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that the Engineering Department is responsible for the collection and deposit
of funds from this agreement.
TO Fund/Account/Centers FRO:" Fund/Account/Centers
C282 446100 801929990100 $131,997.60 C282 5XXXXX 801929990100 $6,599.88
Submitted for City Manager's Office by: Fernando Costa (8476)
Originating Department Head_ A. Douglas Rademaker (6157)
Additional Information Contact: Jean Petr (8367)
http://apps.cfwnet.org/council_packet/Reports/mc_print.asp 9/12/2008