HomeMy WebLinkAboutContract 37670 F'TA� b
MEMORANDUM OF OIL AND GAS LEASE
STATE OF TEXAS §
§ KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF TARRANT §
BE IT REMEMBERED that on the &qQ� 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.
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Executed this thecW day of , 2008.
LESSOR: LESSEE:
CITY OF FORT WORTH CHESAPEAKE EXPLORATION, L.L.C.,
An Oklahoma limited liability corporation
V�10, 4-�_
By: Fe-z-har.d., Co /-a By: Ch fJ. Nlafritt
Title: Assistant City Manager Its: Land Manager
ATTEST: ,
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Contract Authoriaatioa
City Secreta
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Date
APPROVED AS TO FORM AND LEGALITY:
By _
Assistant City orney
T, 1 -'d
Date:
OFFICIAL RECORD
CITY SECRETARY 1
FT.(NORTH,TX
ACKNOWLEDGEMENTS
THE STATE OF TEXAS §
COUNTY OF /a►^ron7` §
BEFORE ME, ffeTTie- ,Gape- the undersigned notary public, on
this day personally appeared���-naic �l'osTa , 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 of Texas
My Commission Expires: 0?-A4
Commission Number: HETTIE LANE
^••, `.
MY COMMISSION EXPIRES
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STATE OF OKLAHOMA §
COUNTY OF OKLAHOMA §
This instrument was acknowledged before me this 15-0' of a , 2008,
by Cliff J. Merritt as Land Manager of Chesapeake Exploration, L.L.C. on b alf of said
corporation.
No Public, State of Oklahoma
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My Commission Expires t #07004905'`
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Commission Number:
OFFICIAL RECORD
CITY SECRETARY 2
FT.WORTH,TX
EXHIBIT "A"
(Lincoln Park)
Lots 1-27, Block 53, Lots 1-6, 24-30, Block 54, Lots 1-24, Block 74, Lots 1-11, 16-24, and the West 75
feet of Lot 15, Block 174, MG Ellis Addition, an addition to the City of Fort Worth, Tarrant County,
Texas, being part of the L. Cohen Survey, Abstract 297, as described in that certain plat, recorded in
Volume 63, Page 18, Plat Records, Tarrant County, Texas.
END OF EXHIBIT "A"
3
Page 1 of 2
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 5/20/2008
DATE: Tuesday, May 20, 2008
LOG NAME: 30LINCOLNPARK REFERENCE NO.: L-14554
SUBJECT:
Authorize Execution of Lease Agreement with Chesapeake Exploration, L.L.C., with a Bonus
Amount of $254,084.22 and a 25 Percent Royalty for Natural Gas Drilling Under Lincoln Park
Located, at 2922 Lincoln Avenue, Just East of Angle Avenue
RECOMMENDATION:
It is recommended that the City Council authorize the execution of a lease agreement with a bonus of
$254,084.22 and a 25 percent royalty for natural gas drilling under 15.1466 acres, more or less, of City-
owned properties located at 2922 Lincoln Avenue in Tarrant County, Texas, in what is known as Lincoln
Park to Chesapeake Exploration, L.L.C., for a two-year primary term.
DISCUSSION:
On January 15, 2008, (M&C L-14461) Fort Worth City Council authorized the conversion of dedicated
parkland known as Lincoln 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 Lincoln Park. Lincoln Park is located at 2922 Lincoln Avenue.
A request for bid proposals (RFP) for Lincoln Park was advertised for three consecutive weeks in the Fort
Worth Star-Telegram, published on January 31, February 7, and 14, 2008.
The following sealed bids for the gas lease were received and opened on February 21, 2008:
Bidder Lease Bonus/Acre Total Lease Bonus Royalty_
Chesapeake Exploration, L.L.C. $16,775.00 $254,084.22 25 Percent
XTO Energy, Inc. $15,111.00 $228,880.28 25 Percent
The bids received were 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 bidders' 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 less administrative and legal fees is estimated to be $249,002.54, 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
http://apps.cfwnet.org/council�acket/Reports/mc_print.asp 9/29/2008
Page 2 of 2
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 2, Mapsco 62A and 62B.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that the Engineering Services Department is responsible for the collection
and deposit of funds due the City under this agreement. The Parks and Community Services Department
will be responsible for further distribution of the funds deposited according to the current financial policy.
TO Fund/Account/Centers FROM Fund/Account/Centers
C282 446100 801929990100 $249,002.54
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 9/29/2008