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Home My WebLink AboutContract 37575 CITY SECRETARY "'OI 47-R,- CT NO. x-15�75 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 a 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 JSL%y of 2008. LESSOR: LESSEE: CITY OF FORT WORTH CHESAPEAKE EXPLORATION, L.L.C., An Oklahoma limited liability corporation . �L By: ��r�,ecal��asT By: C iff J. erritt Title: Assistant City Manager Its: Land Manager µ ATTEST: f N�N kAtV�&�� Ldq Qvl City Secretary 14 Contract Authoriaatio>a Date APPROVED AS TO FORM AND LEGALITY: By. � f Assistant City A orney Date: ✓� OFFICIAL RECORD CITY SECRETARY FT.WORTH,TX 1 0 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 day of , 2008. Notary Public, State o Texas My Commission Expires: O Commission Number: Do,6 Qc3nr9/—�7 a,.: HETTIE LANE `', c` MY COMMISSION EXPIRES July 26,2011 STATE OF OKLAHOMA § COUNTY OF OKLAHOMA § This instrument was acknowledged before me this of L , 2008, by Cliff J. Merritt as Land Manager of Chesapeake Exploration, L.L.C. on t4lf of said corporation. �F..:tom•...r, Nota ublic, State of Oklahoma S::ao Y• , My Commission Expires::N=:ExP p5j5"' z Z. Commission Number: P �rrgpnaunn"�- OFFICIAL RECORD CITY SECRETARY 2 FT.WORTH,TX EXHIBIT "A" (Sunset Hills Park) Tract 1 A 0.36 acre tract of land out of the Rector Collins Survey, Abstract Number 351, as described in that certain Warranty Deed recorded in Volume 4004, Page 214, Deed Records, Tarrant County, Texas, and described by metes and bounds as follows: COMMENCING at the Southwest corner of Lot 10, Block 8, North Meadowbrook Estates, 2 n Filing, an addition to the City of Ft. Worth according to the revised plat of same recorded in Volume 388-24, Page 50, Deed Records, Tarrant County, Texas; THENCE North 297.5 feet to the point of BEGINNING of the tract herein described; THENCE North 106.0 feet; THENCE South 89° 47' E 142.5 feet; THENCE South 0° 16' W 106.0 feet; THENCE North 890 47' W 142.0 feet to the point of beginning of the tract herein described, and containing 0.36 acres of land. Tract 2 A 1.0 acre tract of land out of the Rector Collins Survey, Abstract Number 351, as described in that certain Warranty Deed recorded in Volume 4004, Page 215, Deed Records, Tarrant County, Texas, and described by metes and bounds as follows: BEGINNING at the Southwest corner of Lot 10, Block 8, North Meadowbrook Estates, 2 n Filing, an addition to the City of Ft. Worth according to the revised plat of same recorded in Volume 388-24, Page 50, Deed Records, Tarrant County, Texas; THENCE North 297.5 feet; THENCE South 890 47' E 142.0 feet; THENCE South 00 16' W 309.0 feet; THENCE North 890 47' W 140.55 feet; THENCE North 11.5 feet to the point of beginning and containing 1.0 acres of land. Tract 3 A 6.24 acre tract of land out of the Rector Collins Survey, Abstract Number 351, as described in that certain Warranty Deed recorded in Volume 3456, Page 557, Deed Records, Tarrant County, Texas, being more particularly described by metes and bounds as follows: BEGINNING at a point at the Southwest corner of that certain tract deeded to C.C. Gumm Jr., Deed recorded in Volume 1510, Page 345, in the Deed Records of Tarrant County, Texas, said point being by description, 2173 0/10 feet North of the Southeast corner of the Rector Collins Survey, said point is 48- 5/10 feet North 00 25' East of the Northeast corner of Lot 1, Block 16, Meadowbrook Estates addition and 11-5/10 feet South 00 25' West and 36-2/10 feet South 89° 45' West of the Southwest corner of Lot 1, Block 2, Ryanwood Addition; THENCE North 00 25' East with the East line of the Rector Collins Survey and the East line of the C.C. Gumm Tract, at 44-0/10 feet passing 10-85/100 feet East of an iron rod in the West line of a road, in all a distance of 414-9/10 feet to a point for corner, from whence an iron rodFOF:FICIAL 5' 30" West 11-4/10 feet; RECORD ECRETARY3 ORTH, TX r THENCE South 89° 45' 30" West at 44-0/10 feet an iron rod, in all a distance of 657-2/10 feet to an iron rod for corner; THENCE South 0° 12' East at 403-5/10 feet passing an iron rod, in all a distance of 415-0/10 feet to a point in the South line of the C.C. Gumm Tract of land; THENCE North 89° 45' East with the South line of Gumm Tract, a distance of 652-8/10 feet to the POINT OF BEGINNING, and containing 6-24/100 acres of land more or less, of which 0.292/1000 acres is within the road along the South and East sides of the above described tract. END OF EXHIBIT "A" OFFICIAL RECORD CITY SECRETARY FT.WORTH,TX 4 City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 7/29/2008 DATE: Tuesday, July 29, 2008 LOG NAME: 30SUNSET HILLS REFERENCE NO.: L-14613 SUBJECT: Authorize Execution of a Lease Agreement with Chesapeake Exploration, LLC, with a Bonus Amount of $100,988.80 and a Twenty-Five Percent Royalty for Natural Gas Drilling Under Sunset Hills Park Located at 7017 Ellis Road RECOMMENDATION: It is recommended that the City Council authorize execution of a lease agreement with a bonus of $100,988.80 and a twenty-five percent royalty for natural gas drilling under 7.6 acres, more or less, of City- owned properties located in Tarrant County, Texas, known as Sunset Hills Park located at 7017 Ellis Road to Chesapeake Exploration, LLC, for a two-year primary term. DISCUSSION: On April 29, 2008, (M&C L-14524) Fort Worth City Council authorized the conversion of dedicated parkland known as Sunset Hills 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. Sunset Hills Park is located at 7017 Ellis Road. Acceptance of this lease agreement will reduce the approved 500 miscellaneous mineral acres of City-owned parcels by 7.6 net mineral acres more or less. A request for bid proposals (RFP) for Sunset Hills Park was advertised for three consecutive weeks in the Fort Worth Star-Telegram, published on May 15, 22, and 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 % Royalty Chesapeake Exploration, LLC $13,288.00 $100,988.80 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 Number 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 $95,939.36 more or less. The City has established a Minority Women Business Enterprise (MMIBE) participation goal of 3 percent http://apps.cfwnet.org/council_packet/Reports/mc_print.asp 9/12/2008 Page 2 of 2 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. 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 4, Mapsco 80B. 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 C282 446100 801929990100 $100,988.80 C282 5XXXXX 801929990100 $5,049.44 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