HomeMy WebLinkAboutContract 37589 CITY SECRETARY
CONTRACT NO.
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 fhe 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 theff`�diay of 2008.
LESSOR: LESSEE:
CITY OF FORT WORTH CHESAPEAKE EXPLORATION, L.L.C.,
An Oklahoma limited liability corporation
C �
By / erhando L'osTa By: Cliff J. erritt
Title: Assistant City Manager Its: Land Manager
ATTEST: L` 1 qss:�--
J
Contract uthorization
City ecretary _ v
Date
APPROVED AS TO FORM AND LEGALITY:
B
Assistant Ci A rney
Date:
OFFICIAL RECORD
CITY SECRETARY
1 FT.WORTH,TX
ACKNOWLEDGEMENTS
THE STATE OF TEXAS §
COUNTY OF §
BEFORE ME, the undersigned notary public, on
this day personally appe ed -�n„ .�r�a--Co• _. , 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 lJr day of ,
2008.
HETIE LANE
Y COM,i;SSIOEX
EXPIRES
July 2MNotary Public, State of Texas
My Commission Expires:
Commission Number: ao
STATE OF OKLAHOMA §
COUNTY OF OKLAHOMA §
This instrument was acknowledged before me this gDo of "�- , 2008,
by Cliff J. Merritt as Land Manager of Chesapeake Exploration, L.L.C. on b if of said
corporation.
Nota Public, State of Oklahoma
#07004605•°:
My Commission Expires:=_N;EXP.05115111,�_
Commission Number:
OFFICIAL RECORD
2 CITY SECRETARY
FT. WORTH, TX
EXHIBIT "A"
(NE Landfill)
90.344 acres, more or less, located in the W. Trimble Survey, A-1521, and the P. Witt Survey,
A-1656, Tarrant County, Texas, being more particularly described in the following two tracts:
Tract 1: 85.994 acres, more or less, out of the P. Witt Survey, A-1656, Tarrant County, Texas,
and being the same lands more particularly described by that certain General Warranty Deed
dated March 17, 1967, from J.C. Gamewell and wife, Maude Gamewell, to the City of Fort
Worth, recorded in Volume 4384, Page 104, Deed Records of Tarrant County, Texas.
Tract 2: 4.35 acres, more or less, out of the W. Trimble Survey, A-1521, Tarrant County, Texas,
and being the same lands more particularly described by that certain Special Warranty Deed
dated March 17, 1967, from J.C. Gamewell and wife, Maude Gamewell, to the City of Fort
Worth, recorded in Volume 4384, Page 107, Deed Records of Tarrant County, Texas.
END OF EXHIBIT "A"
OFFICIAL RECORD
3 CITY SECRETARY
FT. WORTH, TX
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 5/20/2008
DATE: Tuesday, May 20, 2008 REFERENCE NO.: L-14557
LOG NAME: 30NELANDFILL2
SUBJECT:
Approve Acceptance of Lease Agreement with Chesapeake Exploration, L.L.C., with a Bonus Amount of
$938,274.98 and a 25 Percent Royalty for Natural Gas Drilling Under Northeast Landfill 2 Located at 6991
Randol Mill Road
RECOMMENDATION:
It is recommended that the City Council approve the acceptance of a lease agreement in the amount of
$938,274.98 for natural gas drilling under 90.41 acres more or less of City-owned properties located in
Tarrant County. Texas, known as Northeast Landfill 2 to Chesapeake Exploration, L.L.C., for a two-year
primary term.
DISCUSSION:
On October 11, 2005, (M&C G-21078) Fort Worth City Council authorized the acceptance of a lease
agreement for natural gas drilling under the Northeast Landfill property located at 6991 Randol Mill Road
with Dale Resources, L.L.C., for a two-year term.A A The lease was subsequently acquired by
Chesapeake Exploration, L.L.C.A A Due to lack of compliance with the lease terms, this lease was
released (Instrument No. D207424443) on November 26, 2007 and has been re-bid.
A request for bid proposals (RFP) for Northeast Landfill 2 was advertised for three consecutive weeks in
the Fort Worth Star-Telegram, published on December 21 and 27, 2007, and January 3, 2008,
The following sealed bid for the gas lease was received and opened on January 10, 2008:
Bidder Lease Bonus/Acre Total Lease Bonus % Royalty
Chesapeake Exploration, L.L.C. $10,378.00 $938,274.98 25%
The bid received was evaluated by staff and the City6ETMs mineral asset management consultant,
JPMorgan Chase.A A In addition to the lease bonus rate and royalties paid to the City, the bidders€TMs
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.A A The net
transfer to the City less administrative and legal fees is estimated to be $919,509.48 more or Iess.A A
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.A A 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.A A Chesapeake Exploration, LLC has committed to the 3 percent M/WBE
participation goal as required.A A A A
Logname: 30NELANDFILL2 Page 1 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 4, Mapsco 66K and 66F.
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.A A
FUND CENTERS:
TO Fund/Account/Centers FROM Fund/Account/Centers
P195 446100 052195005100 $919,509.48
CERTIFICATIONS:
Submitted for City Manager's Office by: Fernando Costa (8476)
Originating Department Head: A. Douglas Rademaker (6157)
Additional Information Contact: Jean Petr (8367)
ATTACHMENTS
1. 30NE LANDFILL 2.pdf (Public)
Logname: 30NELANDFILL2 Page 2 of 2