HomeMy WebLinkAboutContract 48810CIYY SECRETA� �� Q f G
CONTRACT N0. { J �
OIL AND GAS LEASE
THE STATE OF TEXAS §
§
COUNTY OF TARItANT §
THIS AGREEMENT (°Lease") is made and enteced into as of the date herein specified by and
between- CITY OF FORT WORTH, a home rule mt►nicipal coi•poration of the State of Texas located
within Tari•ant, Denton, a�ld Wise Counties, Texas, (hereinafter referced to as "Lessor"), and, Vantage
Fort Worth Energy, LLC, a Delaware Limited Liability Company (hereinafter i•efecred to as
"Lessee").
WITNESSE'I'H:
1.
GRANTING CLAUSE
Lesso�•, in consideration of a cash bonus in hand paid, of the royalties llerein provided, and of the
agreements of Lessee heceinafter contained, hereby grants, leases, and lets exclusively unto Lessee for the
sole purpose of investigating, exploring, drilling, operating, and producing oil and/or gas fi•om the land
leased heceunder, togethec with any liquid or gaseous substances produced in association with oil and gas,
the following desccibed land situated in the City of Fort Worth, Texas described in Exhibit "A" attached
hereto (the "leased premises").
All mineral substances and mineral rights othec than oil and gas (and all other liquid or gaseous
minerals pr•oduced in association with oil oi• gas) are expressly ►•esecved to Lessor and excepted fi•om this
Lease. These reserved mineral cights include, but are not limited to, the rights to lignite, coal and sulfiir
not pi•oduced as a component of oil and gas.
For the pui•pose of determining the amount of any bonus oi• other payment hereunder, said leased
pretnises shall be deemed to coutain 0.164 acres, whether achially containing more or less.
a=. _—_, - _ -
2. �FFICIAL R��ORp
PRIMARY TERM �«' ;�'"^��.��..��
5
Subject to tlie othei• provisions herein contai�ied, this Lease shall be foi• a term of;�wo�(�2)��yeai's�'�"9 ��
i
1 OIL AND GAS LGASG — 53U4 Rudd Street #A
fi•om the date of the �iotarial aclalowledgment of Lessor's e�ecution of this instcu►nent (hereinaftec called
"primary term") and so long thereafter as oil, gas or other minecals granted hecein are pcoduced fi•om the
leased premises o►• lands pooled therewith, in payiug c�uzntities, or opei•ations are in pi'ogress thereon as
hereinafter provided, and the royalties ace paid as p�•ovided herein. Foc the purposes of this lease, the term
"operations" means any of the following: drilling, testing, completing, reworlcing, cecompleting,
deepe�iing, plugging bacic, or i•epaii•ing of a well in searcli foi• or in tlie endeavor to obtain pi•oduction of
oil or gas, so long as such opecatious ace cacried out witl� due diligenee with no cessation of more than
nii�ety (90) consecutive days.
3.
D�LAY R�NTALS
This is a paid-up lease and iio delay centals ace due. Upon termination, Lessee shall pcepare,
execute and deliver to Lessor a recordable celease covering the leased premises in accordance with this
Lease. Lessee may at any time oi• times execute and delivei• to Lessoi•, a release or celeases of tltis Lease
as to all or any part of the leased pcemises, and thereby be �•elieved of all ob(igations as to the released
land or i�ltei•est, except for the i�ldemnificatio» obligations desci•ibed in Pai•agcaph 16 and the plugging
obligations of this Lease.
�t .
ROYALTI�S
Lessee shall pay to Lessoi• the fo(lo�ving i•oyalties, �vliich shall be fi•ee of all costs of any Icinci,
it1CIlIC�lllg, bi►t ilot limited to, costs Of �c1i�181'lilg, E�i•oduction, tcaiisportation, treati►�g, C011l�('ESS1011,
CjellyCll'ai1011, (�1'OCOSSillg, 111c1CIC8it11�, trucking or other eapense, dicectly oc indirectly i��cui'1'eCj �y Lessee,
whether as a direct charge or a redt�ced price or other�vise. In this regard, Lessee agcees to bear otie
hundred pei•cent (100%) of all costs aud expe�lses incuri•ed in rendecing hydrocai•bons produced o�l or
fi•om the leased pcemises macketable and delivering the same into the pucchaser's pi�eline for immediate
transportation to an end user or storage facitity. Additionally, said coyalties sl�all nevec beac, either
directly or indi�•ectly, u�ider any ciccumstances, tlie costs oi• e�penses �IIICIUCI111�T de��reciation) to
� O[L AND GAS LEASH— 5304 Rudd Strcet #eA
constcuct, repair, renovate or opecate any pipeline, E�lant, or otl�ec facilities oc equipment used in
connection with the treating, separation, extj•action, gathecing, processing, refining, compression,
transporting, manufactucing or marketing of hydrocarbons produced fi•oni tl�e leased premises or lands
pooled tliel•ewith.
A. On oil, gas (including flared gas) and casinghead gas, togethec «�ith any other liquid or
gaseotts hydi•ocacbo�ls r•ecovered by Lease operatio»s (such as in di•ips or sepai•atocs) t«�enty-�ve
pei•ce�lt (25%) of the pcoceeds of the sale or of the mai•ket value t(ieceof, �vhiclievec is highei•. Such
proceeds of oil, gas and casinghead gas, together with any other iiquid or gaseous hydrocarbons
recovered by Lease opecations, is to be deliveced fi•ee of cost at the well or to the credit of the Lessor
into pipelines, gathering lines, bacges or other facilities to which the wells and tanks on the propecty
n�ay be connected. Lessor shall always have the right, at any time and fcom time to time, upon
reasonable wcitten notice to Lessee, to take Lessoc's share of oil, gas and processed liquids in kind.
Lessor may elect to take Lessoc's gas in kind at the well, or at tl�e point of deliveiy whece Lessee
delivers Lessee's gas to airy third pacty. If gas is processed, Lessor tnay elect to take Lessor's sl�are of
the residue gas attcibutable to production fi•om the leased premises, at the same point of delivery where
Lessee receives its sl�are of residue gas of• has its share of residue gas delivered to a third party. Lessor
may elect to l�ave its coyalty share of processed liquids stored in tanks at tlle plant or delivered into
pipelines on the same basis as Lessee's share of liquids is stored or delivered. Lessor shall reimbucse
Lessee for all reasonable costs incucred by Lessee in installing, operating or maintaining additional
facilities necessacy for Lessor's royalty gas and processed liquids to be separately metered, accounted
for, and delivered to a third party, but Lessor sl�al( not be charged for any e�:pense in the pcoduction,
gathering, dehydration, separation, compression, tcanspo��tation, tceatment, processing oc storage of
Lessor's share of gas and processed (iquids.
B. On products, twenty five perceut (25%) of the gcoss market value or proceeds of sa(e
theceof, whichevec is highec.
C. On residue gas or gas i•emaining aftec separatioi�, e�tciction oi• processi�lg opei•ations,
3 OIL AND GAS LCASti—>30�1 Rudd Street #A
hventy five percent (25%) of the proceeds of sale or of the market value thereof, ���hichever is higher.
D. For purposes of this Paragraph 4, the term "marlcet value" shall mean for gas �nd
products therefi•om (i) tl�e gross price at whicll gas or products tl�erefcom ace sold pursuant to a Gas
Contract, as defined below, that is ratified by Lessoc according to Paragcaph G below or (ii) if not sold
pursuatlt to a Gas Coiitract, as defined below, rati�ed by Lessoi• and Lessee, the tlighest gcoss E�rice
reasonably obtainable for the quantity of gas or pcoducts available for sale, through good faith
negotiations for gas or products produced fi•om the leased pr•emises at the place ���here such gas or
product is available for sa(e on the date of such a contract with adequate provisions foc redetermination
of price at intecvals of no less fi•equency than one (1) yeac to ensure that the production is bei»g sold foc
no less than the current �nacket price. Included witl�in the de�nition of "Market Value" as used herein is
the presuinptio» that Gas Contracts that ace ratified by Lessor ace arms-length contracts with purchasers
who are not affiliates of Lessee. An "af�liate" includes, but is not limited to, the parent cotnpany or a
subsidiary of Lessee, a corporation or other entity having comnion ow�iership with Lessee, a partner or
joint ventucer of Lessee with respect to the ownership or operation of the processing plant, a corporation
or other entity in which Lessee owns a ten percent or greatec interest, o�• any individual, corporation or
other entity that owns a ten percent or greater intecest in Lessee. In no event shall ��111Ai�lcet value" ever
be less than the amount actually received by the Lessee foc the sale of hydrocarbons.
E. This Lease is intended to covec only oil and gas, but some other substances (including
heliun� and sulphur) may be produced necessarily with and incidental to the pcoduction of oil or gas
fi•om the leased premises; and, in such event, this Lease sl�all also cover all such other substances so
produced. On all such substances so produced under and by virtue of the terms of this Lease, Lessor
shall receive a royalty of twenty five percent (25%) of all such substances so produced and saved, same
to be delivei•ed to Lessoi•, fi•ee of all costs; or, at Lessor•'s election, Lessoc's twenty five percent (25%) of
such substances shall be sold by Lessee with Lessee's poction of such substances and at the same profit
realized by Lessee for its portion of such substances.
F. All i•oyalties he►•einabove pcovided sha(I be payable in cash (unless Lessor elects to ta(ce
� 011. AND GAS LrASG — 530�1 Rudd Su'eet ItA
such royalty oil or gas in kind) to Lessor within siaty (60) days following the �rst conunercial sale of
production and thereaftec no more than siaty (60) days after the e�id of the montil follo�ving the month
during which production takes place. S��bject to the provisions of Paragcaph 10 oi' this Lease
concecning shut-in «ells, royalties shall be paid to Lessoc by Lessee and/or its assigns or by the product
purchaser for oil and/or gas. Upon the failure of any party to pay Lessor the royalty as provided in this
paragrapli, Lessor may, at Lessor's option, elect to tei•mi�late this Lease by sending �vi•itten notice to
Lessee. Lessee shall then l�ave thirty (30) days fi•om tl�e date of service of such ��n•itten notice in which
to avoid tecmivation of this Lease by making oc causing to be made the propec coyalty paymet�t or
payments that shou(d ha��e been paid. If such royatty payment is not made on or befoce the expication of
the 30-day period, or written approval is »ot obtained fcom Lessor to defec such pay�nent, Lessor m�y
elect to terminate this Lease by filing a Notice of Termination «�ith the Cotuity Clerlc in the county
where tlie leased pi•emises are located. The effective date of said tei•mi�lation shall be the dlte said
Notice of Termination is filed ���ith the said County Clerk.
G. Lessee agcees that it will not enter into any contcact foc the sale, delivery, tcansporting or
processing of gas produced fi•om the leased �x�emises �vhich shall eatend moce than t���o (2) years fi•om
the effective date of such sales contcact unless such co�rtcact has adequate provisions for cedetermination
of price at intervals of no less fi•equency than one (1) year to e�isuce that pcoduction fi•om this Lease is
not being sold for less than tlie then curretrt market value. At least thicty (30) days pcior to the delivery oc
the execution of any contract for the sale, delivery, tcansporting or processing of gas produced from the
leased �remises, Lessee shall provide Lessoc ��ith a complete copy of eacll pcoposed contract foi• the
purcliase, transpo►�tation and/or processing of sucli gas that Lessee inte�lds to execute (each a"Gas
Contract"), whereupon, Lessor shall have fifteen (15) days within �vl�ich to either ratify such Gas
Contract or notify Lessee in writing that it does not approve of such Gas Contract, including a statemeut
of the ceasons that Lessor does not approve of such Gas Contract (Lessor's failure to respond within the
�fteen (15) days eitl�er by rati�cation or by ���ritten notice that it does not appcove of the proposed Gas
Co�rtcact shal( be deemed to be Lessor's rati�cation of such Gas Contcact). If Lessoc ratifies the Gas
5 O[L ANU GAS LGASG — 530-4 Rudd Strcet ttA
Conti•act, Lessor shall be deemed bound by tl�e tei•ms of such Gas Conti•act (and, at Lessee's optio»,
Lessor shall execute such Gas Contract as a party thereto) and the gas or pcoducts therefi•oiu sold
pucsuant to such Gas Coirtcact shall be deemed sold at macket value based on the gcoss price stated
therein. Lessee shall not lmend or modify an}� material terms of a Gas Contract ratified by Lessor
withoirt the prior ��vritten consent of Lessoc. lf Lessor does not appcove of a Gas Contract, Lessee shall
consult �vith Lessor in aii effort to agree to the terms of the proposed G1s Contcact, and if the other pacly
or parties to the Gas Contract agcee to the changes or modifications to the Gas Contcact which are
proposed by Lessor in ocder for Lessoc to ratify such Gas Contract, then Lessor sl�all be deemed to have
cati�ed such Gas Cont�•act (and, at Lessee's option, Lessoi• shall eaecute such Gas Cont►•act as amended
and modified, as a party thereto). If Lessoi• and Lessee camiot agi•ee on t{ie terms of a Gas Contcact that
are acceptable to the other party or pacties thereto, Lessee may elect to eaecute such Gas Contract and
sell, deliver, transpoi�t and process gas according to the terms theceof, subject to the other terms of this
Pacagi•aph 4 concecni�lg tlle payme�rt of Lessor's i•oya(ty o�i gas and pi•oducts thei•e fi•om, including tl�e
right of Lessor to take its share of gas in kind. In tl�e event Lessor e(ects to take and sepacately dispose
of its coyalty shai•e of gas, the pacties shal( entec into a�nutually acceptable bala�lcing agceement
providing for (a) the right of an under pf•oduced pacty to make up an imbalance by taking up to 150
percent of its share of production and (b) an obligation to settle any itnbalance remaiuing after depletion
in casl�, based on tlie pi•oceeds received by the ovecE�i•oduced party tivlien tlle imbalance ���as ci•eated, ai•
if the ove�•produced pacty's gas was used but not sold, based on the n�arl:et value of the gas �vhen
imbalance was created.
H. In tile eveiit Lessee enters i�rto a gas pucchase contcact which contains what is couimo�lly
referred to as a"take or pay provision" (sudi provision meani�ig that the gas pucch�ser agrees to take
delivery of a specified minimum volume or quantiiy of gas over a specified term at 1 specified price oc
to make minimum periodic payments to the pcoducec for gas not taken by the purchaser) and the
purchaser ��nde�• such gas purchase contract makes pay�nent to Lessee by virtue of such p�n•chasec's
faihu•e to take deliveiy of such minimum volume or quantity of gas, then Lessor shall be entitled to
� OLL AND GAS LGAS13 — 530=} Kudd Smaet 11A
twenty five percent (25%) of all such sums paid to Lessee or producer under the "pay° provisions of
such gas purchase contcact. Such coyalty payments shall be due and o�i�ing to Lessoc within thirty (30)
days after the receipt of such payments by Lessee. If the gas purchasec "makes up" such gas «�ithi�i tl�e
period called foc in the gas contcact and Lessee is cequired to give such ptu•chaser a credit foc gas
previously paid for but not taken, then Lessor shall not be entitled to roya(ty on such "make up" gas. If
Lessee is not producing any quantities of gas fi•om the leased premises but is receiving payments under
the "pay" poi�tion of such "take or pay" gas purchase contcact provision, such payments shall »ot relieve
Lessee of the duty to make shut-in royalty payments if Lessee desires to continue this Lease, but such
"take or pay° royalty payments shall be applied as a credit against any shirt-in royalty obligatio�� of dle
Lessee. Lessor shall be a third-party beneficiary of any gas pncchase contcact and/oc transportatio►�
agreement entered into between Lessee and any pui•chasei• and/or transpo►�tei• of Lessoc's g�s,
irrespective of any provision of said contracts to the cotrtcacy, and such gas purchase contract and/or
trauspoctation agreement will e�pressly so provide. Further, Lessoc sh111 be entitled to twenty-�ve
percent (25%) of the value of any beneiits obtained by or granted to Lessee fi•om any gas piu•chaser
and/or transpoi�tei• for the amendment, modification, eatension, alteration, consolidation, tcansfe►•,
cancellation oi• settlement of any gas purchase contract and/oi• transportation agreement.
I. Lessee agrees that before any gas prod�wed fcom the leased �n•emises is used oc sold off
the leased premises, it will be run, fi•ee of cost to Lessor, through an adequate oil and gas sepacator of a
co�iventional type or equipment at least as efficient, to the end that all liquid hycii•ocarbons i•ecoverable
fi•om the gas by such means will be recovered and Lessoc properly com�ensated therefor.
J. Any payment of royalty or shut-in gas coyalty hereunder paid to Lessor in excess of the
amount actually due to the Lessor shall nevertlieless become the property of tl�e Lessoi• if Lessee does
not make written i•equest to Lessor for reimbursement �i�ithi�i one ( I) year fi•om the date that Lessoi•
received the erroneous payment, it being agceed and expressly understood between the parties hereto
that Lessoc• is not the collecting agent foc any othec royalty o��mei• undec tlie lands covered hereby, a�id a
determination of the na�ne, intecest ownership and wheceabouts of any pecson entitled to any payment
•� OIL AND GAS LtiASG — 530=4 Itudd Street #A
whatsoever under the terms heceof shall be the sole cesponsibility of Lessee. It is further expressly
agceed and understood that: (i) t{iis pi•ovision shall in no ���ay diiiiii�ish the obligation of Lessee to ma(ce
fiill and punctual payments of all amo�u�ts due to Lessor oc to any other person undec the terms and
provisions of this Lease, and (ii) any ovecpayments made to the Lessoc under any pcovisions of this
Lease shall not be entitled to be offset against futuce amounts payable to parties hereunder.
IC. The tecros of this Lease n�ay not be amended by any division order and the signing of a
division order by any mineral o�i�ner may not be made a pcerequisite to payment of coyzlty heceunder.
L. Oil, gas or products ►nay not be sold to a subsidiary or affiliate of Lessee as defi��ed
het•ei�i without the Lessol•'s prioi• wi•itte�l pei•mission.
M. Lessee shall pay Lessoi• i•oyalty on all gas pi•oduced fi•om a«�ell o�l tlle leased pi•emises
and sold or used off the leased premises, regardless of wl�ether or not such gas is produced to the credit
of Lessee or soid �uldec a contract e�ecuted by or binding on Lessee. Should gas be sold under a sales
contract not binding on Lessee, Lessor's coyalty ��vill be calculated based on the higliest price paid for
any of the gas produced fi•om the well fi•om which such gas is produced. I�i no e��ent will the price paid
Lessor for Lessor's share of gas be less than the price paid Lessee foc Lessee's share of gas.
5.
POOLING
Lessee, upon ti�e prior «�citten consent of Lessor which shall �iot be unreasonably withheld, is
{iereby given the right to pool oc combine tlie acceage coveced by this Lease or• any poi•tion theceof as to
oil and gas, or either of them with any other land, lease or leases iu the itmnediate vicinity thereof to the
exteirt hereinafter stipulated, when it is necessaiy oc advisab(e to do so in order to properly esE�lore, or
develop, produce a�id opei•ate said leased pcemises i�i compliance witll the sp�ci�lg i•ules of tlie appcopciate
lawfi�l airthority, or when to do so would promote the consecvation of oil and gas in and under and that
uiay be produced fi•om said pre�nises. In the absence of field rules, units pooled for oil and gas hereunder
shall not e�ceed the acreage provided for cetained acreage tracts in Section 7. Lessee, under the provisions
hereof, may pool oc combine aci•eage coveced by tliis Lease oi• aiiy portion thereof as above pcovideci as to
g OIL ANU GAS Lf:ASE — 530=t Rudd Street 1/A
oil in any one or more stcata and as to gas in any one or more strata. The units formed by pooling as to
any stratiun oi• stcata need not conform in size oc a►'ea �a�ith tlie unit oc units into which the Lease is pooled
or combined as to any other stratum or strata, and oil units need not conform as to area ���ith gas units.
The pooling in one or more instances shall not exhaust the cights of the Lessee heceundec to pool this
Lease or poi�tions thereof into other units. Lessee shall iile foc recoccl in the appropriate cecords of the
county i❑ which the leased pcemises are situated an instrument describing the pooled acreage as a pooled
unit. In this regard, Lessee shall provide Lessor with a copy of any and all docume��ts filed ���ith any
regulatory authority or recorded in the cecords of any county within thicty (30) clays of filing such
documents. Upon the recoi•dation of the unit in the coiuity records aiid t(ie timely furilishi�lg of tlie co��ies
required herein to Lessor the unit shall be effective as to all parties hereto, their heirs, successors, and
assigns, irrespective of whether or not the u�lit is likewise effective as to all other ownecs of sucface,
mineral, coyalty or other rights iu land ii�cluded in such unit. Lessee may at its election e�ercise its
pooling option before or aftec commencing opecations for or completing an oil or gas well on the leased
premises, and the pooled unit may include, but it is not requiced to include, land or leases upon which a
well capable of producing oil or gas in paying c�uantities has theretofore been completed oc upon ��hich
opei•ations for tl�e di•illing of a well for oil or gas have thecetofore been commenced. I�i the eve�it of
operations for dri(ling on or production of oil or gas fi•om atry part of a pooled unit which includes all or a
portion of the laud covered by this Lease, such operations shall be considered as operations foc dri((ing on oc
production of oil a�id gas fi•om la»d covered by this Lease wllethec or not tlle well or wells be located on
tiie premises covei•ed by this Lease and in such event opei•atio�is for drilling shall be deeined to have been
commenced on said land within t(�e meaning of this Lease. For the purpose of computing the royalties to
which owners of royalties and payments out of production and each of them shall be entitled on
production of oil and gas, or either of them, there shall be allocated to the land coveced by this Lease and
included iu said unit (or to each sepat•ate tcact within the u»it if tl�is Lease covers separate tracts within the
�u�it) a pro rata poi�tion of the oil a�id gas, or eithec of them, pi•oduced fi•otn the pooled unit. Royalties
hereundei• shall be computed on ti�e poi•tion of such production, �vhether it be on oil a�id gas, or eithei• of
9 oii. ��Nn cns Lrnsr - ssoa Ii��dd sc�e�� un
them, so allocated to the land covered by this Lease and included in tl�e unit just as illOtl�Il such
production were fi�om such land. The production fi•om an oil well �i�ili be considered as production fi•om
this Lease or oil pooled unit fi•om which it is producing and not as production fi•om a gas pooled unit; and
pi•oductioti fi•om a gas well wiil be considei•ed as pi•oduction fi•om tliis Lease or gas pooled unit fi•om ���hicll
it is producing and not fi•om a�l oil pooled unit. The formation of any imit hei•eundec sl�all not Ilave tlle
effect of changiug tl�e owuership of any delay rentai or slurt-in production coyalty which may become
payable under this Lease. If tliis Lease now or hereaftec covers separate tcacts, no pooling oc unitizatioii
of royalty interest as betwee�l any such sepacate tcacts is i�itendeci or shall be implied oi• result mei•ely
fi•om the inclusion of such sepacate tcacts within this Lease but Lessee shall nevertheless have the right to
pool as provided above witll co�lsequent allocation of p�•oduction as Ix•ovided above. As iised in tllis
paragraph, the words "separate ti•act" mean any tcact with ►•oyalty ownersliip differing, now or hereaftei•,
eithec as to parties or amounts, fi•om that Zs to any other pact of the leased premises. Not«�ithstanding
anything to the contraiy therein above, no tuiit may be formed that is con�prised of less than 50% of the
leased premises.
6.
CONTINUOUS DRILLING
At the espication of the primaiy term this Lease shall cemain in fiill force and effect for so long as
Lessee is co�iducting Conti�iuous Drilling Opei•ations (as hei•ein defined). Lessee shall be considered to be
engaged i�i Continuous Dcilling Operations at the expii•ation of the pcima�y tet'lll if: (1) Lessee is the�l
engaged in drilling operations on the leased premises oc lands pooled therewith or (2) Lessee has completed a
well as a producer or as a d►y hole «itl�in one hundred nventy (120) days prior to the eapiratio» of the
prima�y term. Lessee also sl�all be considered to be engaged in Continuous Drilling Operations foc so long
thereafter as Lessee conducts dcilling opecations on the leased premises, or lands pooled therewith, with due
diligence and witli inteivals of no moi•e than one hu�ldced twe�lty (120) days behveen tl�e date of completio�i
of one «�ell and the date of cotmnencemeiit of dcilling opei•ations o�l a�i additioilal �velL "C011lO�0i1011" sllall
be consideced to be tiie date of celease of the completion cig foi• a completed �vell, btit in iio event moi•e tha�l
1 � 011. AND GAS LEASG — 530={ Rudd Street #A
one hundred riventy (120) days follo�ving the release of the dcilling rig. [n the case of a ciry hole,
"completion" shall be considered to be the date of release of the drilling rig. "Commence�nent" shall be the
actual spud date of a we1L Continuous Dcilling Operations shall be deemed to have ceased upon the failuce of
Lessee to co�mnence drilling operations on an additiona( ��ell within such one I11111CIPed t�uenty (120) day
period. When t(ie Contiuuous Drillin� Operatious cease, t1�e provisions of Paragraph 7 wil( be applicab(e.
7.
R�TAINED ACR�AG�
A. Vei•tical Wells
At the expiration of the pri�na�y term of this Lease or upon tl�e termination of the continuous
dcilliug progcam set forth in Pacagcaph 6, each non-horizontal we(1 drilled heceon capable of pcoducing in
paying quantities will ho(d only focty (40) acres for any focmation fi•om the surface to the base of the
Barnett Sl�ale formation. As to depths below the base of the Barnett Shale Formation, tt�e procation unit
shall be the minimum size necessacy to obtain the maximum pcoduction allowable. If the proration iuiit
for a well completed below the base of tl�e Bariiett Shale Formation is lai•ger tha►140 aci•es, tlie well ma}�
maintai�i the Lease as to formations above the base of the Barnett Shale Formation as to not moce thai� 40
acces. All othei• acreage except that included iii a pi•oration ui�it oc pooled unit as desci•ibed above will
cease to be covered by this Lease and «�ill be released. To the este»t possible, each such proration unit «�ill
be in the shape of a square, with the bottom of tlle we(1 in the center. Further, it is understood and agreed
that Lessee shall earn depths as to each proratio�i unit or pooled unit o��ly fi•om the surface do�vn a depth
which is the stcatigraphic ec�uivalent to a depth of one hundred feet (100') below the deepest producing
formation in such well which is capable of producing oil or gas in paying quantities at the eapication of
tlie p►•imaty tecm of this Lease oi• upon the termi�lation of t(le continuous di•illing pi•ogcam set foi•th i�i
Paragraph 6. This Lease wiil terminate at such time as to all depths below such depths as to each
respective proration unit or pooled unit. If production sl�ould thereafter cease as to acreage included in 1
proration unit or pooled unit, this Lease will terminate as to such acreage tmless Lessee commences
11 OIL AND GAS I.I�ASE — i30-4 Rudcl Street ttA
ceworking oc additional drilling operations on such acreage within ninety (90) days thereafter and
continues such reworking or additio»al dcilling opecations until C011ltilel'CIc�I E)1'OCIUCitOil is restored
theceon, provided that if more than iiii�ety (90) days elapse bet���een the aba►ldonment of such «�ell as a
dty hole and the commencement of actual drilling operations foi• an additional well, or moce tha�i iiinety
(90) days pass since the coinmencement oi' cewocking operations withotrt the cestocation of com�nercial
production, this Lease shall terminate �s to the applicable proration unit or pooled unit.
At any time or times that this Lease terminates as to all oc any portion of the acreage of the leased
premises, Lessee shall promptly eaecute and record in the office of the County Clerk in the County
where the leased premises are located, a proper release of such terminated acreage and shall furnish
executed counterparts of each such release to Lessor at the address shown in Paragraph 19 hereof.
B. Horizontal Wells
It is expressly tulderstood and agreed that, subject to the other tecros, provisions and limitations
contained in this Lease, Lessee shall have the right to drill °horizontal wells° undec the leased premises,
or lands pooled therewith. The tecm "horizontal well" or "hocizontally drilled well" shall mean any well that
is drilled with one or more horizontal drain(ioles having a horizoi�tal cirainhole displacement of at least five
hundred eighty-five (585) feet. Foc the purposes of fui•thec defiiiing the tel•m "horizontal wells" and
"horizontally drilled" reference is made to the definitions contained «�ithin Statewide Rule 86, as
promulgated by the Railroad Commission of Texas, which de�nitions are incorporated herein for all
purposes.
In the event of any partial ter►ninatiou of the Lease as provided in Paragcaph 7A, tl�en, with
regacd to a wetl which is a horizontal well or a l�orizontally drilled well, Lessee shall be entit(ed to retain
all sands and horizons at all depths fi•om the surface down to a depth �vhich is the stratigcaphic equiv�lent of
a depth of one hundced (100) feet below the base of the deepest pcoducing formation in such well which is
capable of producing oil or gas in paying quantities, but only in a spacing imit the area or niunber of acces
of which are equal to the acea or numbec of acces determined by adding twenty (20) acres foc each five-
hundred eighty-five (585) feet horizontally drilled to the original forty (40) acres deemed to be a I�rocation
�� OIL AND GAS LGASC — 530d Rudd Street #A
unit for each vectical «�ell. Each such tcact acotmd each horizontally drilled well sha(1 be as nearly in the
shape of a square or a rectangle as is practical with the boundaries of the tcact including the eirtire
horizontal dcainhole and the lateral boiu�daries of such tcact being approaimately equal distance from such
dcainhole and parallel thereto.
If �n•oduction should thereafter cease as to acreage i�icluded in a ln•oration unit oc poo(ed unit, this
Lease will terminate as to such acreage unless Lessee com�nences reworl:ing or additioiial dcilling
operations on sucl� acreage within ninety (90) days thereafter and continues such reworking or additional
drilling operations until commeccial production is cestored theceon, provided that if more than ninety (90)
days pass between tl�e abandonment of such well aud the commencement of actual dcilling operations for
au additional well, or moce than uinety (90) days pass since the commencement of reworking ope�•ations
without the restoration of commercial production, the Lease sl�all tecminate as to the applicable proration
At any time or times that this Lease tecminates as to all or any portion of the acreage of the leased
premises, Lessee shall promptly eaecute and record in the office of the County Clerk in the County «�hece
the leased pcemises ace located, a pcoper release of such terminated aci•eage and sh111 fui•nish eaect�ted
countecparts of each such release to Lessor at the address shown in Paragcaph 19 hereof.
8.
OFFS�T OBLIGATIONS
In the event a well or wells producing oil or gas should be brouglrt in on tand within 330 feet fi•om
any boundary of the ieased pi•emises, Lessee ag►•ees wit(�in sixty (60) days fi•om conuneucement of
production fi•om such well or wells to commence the actual dcilling of an offset «�ell or wells on the
leased premises; provided that the well or wells whidi are to be offset ace pi•oducing in paying quantities and
have been pei•focated and fi•aced within 330 feet of the leased pcemises; or Lessee shall release to Lessor fi•ee
of this Lease the offsetting tract of at least one hundred twenty (l 20) acces.
13 o►I. nn� cns 1_r:nsr: - s3o:� iz��a�t s�rt�� nr�
9.
FORC� MAJ�UR�
A. The term "force majeure" as used herein shall mean anci include: requisition, ocder,
regulation, or control by governmental authority or commission; eaercise of rights or priority or control
by govel•nmental authority for national defe�lse oi• wac pucpose i•esulting in delay in obtai�iing ol• inability to
obtain eit(ler material, equi�meirt or means of trans�ot�tation normally necessacy in prospecting or drilling
fol• oil, gas or otl�ei• inineral gi•anted Ilerein, oc in pi•oducing, l�andlillg or tcansporting sarne fi�oin the leased
pcemises; wa�•, scaccity of oc delay in obtaining materials or equipment; lacic of labor or means of
transpoctation of labor or materials; acts of God; insurrection; flood; strike; or other things beyond the
control of Lessee. Tf�e tecm "force majeure" shall �iot include lack of mackets for production or any other
eve�lts affecting oiily the econo�nic oi• financial aspects of di•illi�ig, developmeilt oi• pcoduction o►• tlie
inability to conform to city, state or federal regulations.
B. Nori�vithstanding any other provisions of this Lease, but subject to the conditions
hei•einaftei• set forth in this Pai•agraph 9, should Lessee be preve�lted by "force majeui•e" as deCined above,
fi•om conducting drilling or i•eworking operations on, or pi•oduci�ig oil, gas or otllei• mi�leral fi•om, tlle leased
premises, such failure sl�all vot constitute a grotuid for the termivation of tliis Lease or subject said Lessee to
damages therefore; and the period of time during which Lessee is so prevented shall not be counteci against
Lessee, but this Lease shall be e�.tended for a E�eriod of time equal to that during which such Lessee is so
pl•evented fi•om conducting such di•illing oc i•eworking opei•ations o�l, OI' �l'OCIL1C111� OtI, �TaS OP Oill@1' i111I1@I'aI
fi•om, such leased premises pcovided, however, that in no event will the primacy term be eatended unless
Lessee has begun the actual drilling of a well prior to the date of the expiration of tl�e primary term. All
of the pi•ovisions of tliis paragi•apli are stibject to each of the follo�ving eapress coiiditio�is:
The terms and conditions of this paragcaph shall not eatend beyond the eapication date of any la«�,
oi•der, rule or cegulation invoked undei• tl�is pacagraph, and shall be applicable and effective only
during the follo«�ing periods:
(1) If the focce majeure shall occur during the primary term of tl�is Lease, it shall not
14 Oli. r�NU GAS LGASG — 530-{ Rudd Strect #A
opecate to eatend this Lease mol•e tlian hvo (2) consecutive years beyoud the e���ication oi�
the prima►y term.
(2) If the force maje�n•e shall occur during a one liundred twenty (120) day dcilling
or ceworking period provided for in Pacagraphs 6 and 7 hereof, after the primary tecm has
expired, then it shall not operate to eatend the Lease more than t«�o (2) successive years
beyond the expiration of such one hwidred tw�enty (120) day periods.
(3) In no event will the primary tecm be eatended unless Lessee has begiui the
actual drilling of a well prior to the date of the expiration of the prima►y tecm.
C. None of the provisions of this paragraph shall ever be or become effective and applicable
unless Lessee shall, within a reasonable time (not to eaceed sixty (60) days in any event) after occurrence of
the claimed event of force majeure above refe�•red to, notify tl�e Lessor, in writing, of such occurrence
with full particulars thereof.
D. The tei•ms of this paragcapli do not apply to monetary payments due under the terms of this
Lease.
10.
SHUT-IN GAS WELL PROVISIONS
If at any time after the espiration of the primary term while there is a gas well on the leased
pl•emises or land pooled there«�ith wllicl� is capable of pcoducing gas in paying quantities, but the
production tl�eceof is shut-in or suspended for any reason, and if this Lease is not tllen continued in force
by some other provision hereof, tlien this Lease sh111 neve►�theless continue in force as to such well and the
pooled wiit or procation unit allocated to it for a period of si�ty (60) days fi•om the date such well is shut-in
or at the elld of the primaiy term, wliiclleve►• is the later date. Befo►•e the e�piration of airy sucll si�ty (60)
day period, Lessee oc any Assignee hereunder may pay o�• tendec to the Lessor a shut-in royalty ec�ual to
Five Thousand Dollars ($5,000.00) per shut-in gas ��ell aild if such payment oc tendec is timely made, tl�is
Lease shall continue in force but otily as to said well oc �vells and the proration tmit or the pooled unit
allocated to it or them and it shall be considered that gas is being produced fi•o�u slid well oi• �vells in
1 S OIL AND GAS L.GASG — 530d Rudti Street #A
paying quantities for one (l) year fi•om flle date such well or wells are shut-in, and in lilce manner one, and
only one, subsequent shut-in i•oyalty payme�rt may be made or tendei•ed and it ���ill be considei•ed that gas is
being produced fi•om said «�ell or wells i�i paying quantities foc sucli additional o�ie (1) yeac period as well.
Lessee shall not be entitled to cecover any shut-in royalty payments from the firture sale of gas.
Should such shut-in royalty payments not be made in a ti►nely man�iec as pi•ovided in this sectio�i, it will be
consideced foe all purposes that there is no production and no eacuse for delayed production of gas fi•om
any such well or wells, and tuiless there is tl�eti in effect othec presecvation provisions of this Lease, t(�is
Lease sl�all terminate. Lessee shall pay or tendec directly to the Lessor at the address as sho���n in
Paragcaph 19 all shut-in royalty payments as requiced by this Lease.
11.
INI'ORMATION, ACC�SS AND R�PORTS
A. Lessor shall have fi•ee access at all times to all �vells, tanlcs, and other equipment that
services wells tuider the leased premises, including drilling ���elis, and Lessee agcees to fiu•nish Lessor, or
Lessor's nominee, currently and promptly, upon written cequest, with fi�ll well information including
cores, cuttings, sarnples, logs (including Schhunbecger and other electrical logs), copies and results of
deviation tests and dicectional and seismic siuveys, and the results of all drill ste►n tests and other tests of
other kind or character that may be made of wells oil the leased pi•emises. Lessoi• oi• Lessoi•'s nominee shall
be fiu•nished with and have fi•ee access at all times to Lessee's books and records relative to the pcoduction
and sale of oil, gas or other minecals from the leased premises, including reports of every ki»d and
chacacter to governmental authorities, State or FederaL Lessor shall have the right at its election to
employ gaugers or install metecs to gauge or measure the production of all minerals produced fi•o►n the
leased premises, and Lessee agrees to pi•epace and deliver to Lessoi• or Lessoi•'s gaugei• oc nomi�iee dt�p(icate
run or gauge tickets for all mi�tei•als i•emoved fi•om the premises. Lessee sliall furnish to Lessoi• daily
drilling reports on each well drilled.
B. Lessee shall fi�rnish to Lessor, �vithin a reasonable time aftec its e::ectrtion, 1 copy of any
gas pucchase coirtcact or transpoi�tation agreement entered into in connection �vith the (eased pcemises, or if
1� O[L AND GAS LrASt: — 530-4 Rudd Street NA
thece is already a gas pucchase contract or transportation agreement in effect due to Lessee's operations in
the tield, theii a copy of tliat co�rtcact. Fui�tlierinoi•e, a copy of a�iy ame�ldments to the gas pui•cllase contract
or ti•anspo►�tation agreeiuent shall be fui•iiished said Lessoi• �vithin tl�irty (30) days after eaecutioii thereof•,
and on request of Lessor and �vithout cost to the Lessor, Lessee shall furnish Lessor a copy of the
follo�vi�ig i•epoi•ts: core record, coce analysis, �vell comp(etioli, bottom hole pressure measw•ement,
directioiial s�u•vey cecords, electcical a�id i11CIl1Cit011 slu•veys and logs, gas and oil i•atio ceports,
pa(eontological i•eports pertainiug to the pa(eontology of t(ie focmations encounteced in tlie di•illiug of aiiy
«�ells on the leased pcemises, and all other reports �vhich pe��tain to the drilling, comp(eting or operating of
the we((s located on the (eased premises. Sucl� information shall be solely for Lessor's use, and Lessor
sllall in good faith attempt to keep same co���dei�tial for h�velve (12) montl�s after ceceipt.
C. Lessee shall advise Lessoc ili ��rciti�ig of the locatio�i of each well to be di•illed u��on the
leased premises or on land pooled therewith on or befoce thirty (30) days �rior to commencement of
operations, and shatl advise Lessor in writing the date of completion aiid/or abandonment af each well
drilled on the leased premises or on land pooled tllecewith �vithin thi►�ty (30) days after completion or
abandonment.
12.
PRCS�RVATION OF �COLOGY OF L�AS�D PI�MIS��
Any overflows or releases affecting the leased preulises, including, but not liinited to, salt
water, mud, chernical, or oil shall be i•eported iri�unediately to Lessor. Lessee shall not use any
water in, on or under the leased premises ��ithout the prior written consent of the Lessor.
13.
R�MOVAL OF EQUIPMENT
Lessee shall have the cight at any time during or �vithin si� (6) months aftet• the elpiration of this
Lease (but �iot thei•eafter) to i•emove all �r•operty and fixtw�es p(aced by Lessee on the leased pr•emises,
includi�lg the cight to dra�v
and remove all casing.
�� O[L AND GAS LEASE— 530�4 Rudd Street #A
This paragcaph shall not apply to equipment a• casing on or in an oil oc gas well capable of producing in
paying quantities, but Lessee sliall be paid i•easonable salvage value for any such casing or equipment. 1t is
contemplated that Lessee may drill across and through lands covered by tllis agceement whei•e production is
not obtained or ceases. Where the casing or piE�eline placed or laid thcough such non-producing lands is
necessa�y to the production of a well or wells located on other lands covered by this Lease, or lands pooled
therewith, it is eapressly understood and agceed that Lessoc will mal:e no demand that such casing, pipelines
or otl�er enuipment necessaiy for die production of a welt or wells drilled by Lessee be removed as long as
such casing, pipelines and other equipment is necessaiy foc tlle pi•oduction of a producing well or wells
drilled by Lessee.
14.
ASSIGNABILITY BY L�SS�E
This lease may be assigned in whole or in part by Lessee aud the provisions shall extend to the
heirs, eaecutocs, administi•ators, successors and assigns of the parties hei•eto; pi•ovided, howevei•, that any
such assign�nent by Lessee shall requice the prioc wcitten consent of Lessor. All tcansfecs by Lessee
(including assignments, sales, subleases, ovecriding royalty conveyances, or pcoduction payment
arrangements) must be recorded in the county where the lease premises are located, and t(ie recorded tcansfer
oi• a copy certified to by tlle County Clei•k of the county where tl�e transfei• is recorded must be delivered to
the Lessor within siaty (60) days of the execution date. Eveiy transferee shall succeed to �ll rig(�ts and be
subject to all obligations, liabilities, and penalties owed to the Lessor by the original Lessee oc any prior
transferee of tl�e Lease, including any liabilities to the Lessor for unpaid roya(ties. No such tcansfer shall
celease the Lessee (or any subsequent transferor) fi•om any obligation hereunder.
f��
NO WARRANTY
This Lease is given aud gca�ited without �varraniy of title, e�pi•ess or implied, in law or in equity.
Lessor agrees that Lessee, at Lessee's option, may pin•chase or discharge, 111 WIlOIe OI' ill �art, any ta�,
�noi�tgage oc other lieu upon the leased premises and thereupon be subrogated to the eight of the ho(der
� g OIL ANU GAS Lt:r�Sti — 530� Rud<f Strcet #A
thereof, and may a�ply royalties accruing hereundei• to�vard satisfying same oi• ►•eimbui•si�ig Lessee. It is
also agreed that if Lessoc o��lns an interest in the oil and gas under the leased premises less than the entire
fee simple estate thel•ein, the �•oyalties to be paid Lessor shall be i•educed propoi�tionately, but in no event
shall the shut-in royalty amoinrt for a gas well, as pcovided for in Paragraph 10 hereof, be ceduced.
1G.
IND�MNITY
L�SSE� SHALL �XPR�SSLY REL�AS� AND DISCHARG�, ALL CLAIMS,
D�MANDS, ACTIONS, JUDGM�NTS, AND �X�CUTIONS WHICH IT �V�R HAD, OR NOW
AAS OR MAY HAV�, OR ASSIGNS MAY HAV�, OR CLAIM TO HAV�, AGAINST THI;
L�SSOR OR ITS D�PARTM�NTS, AG�NTS, OFrIC�RS, S�RVANTS, SUCC�SSORS,
ASSIGNS, SPONSORS, VOLUNT��RS, OR �MPLOY��S, CREAT�D 13Y, OR ARISING OUT
OF P�RSONAL INJURI�S, KNOWN OR UNKNOWN, AND INJURI�S TO PROP�RTY, R�AL
OR P�RSONAL, OR IN ANY WAY INCIDENTAL TO OR IN CONN�CTION WITH TH�
PERFORMANC� OF TH� WORK P�RFORM�D BY TH� L�SS��. TH� L�SS�� SHALL
FULLY D�FEND, PROT�CT, IND�MNIFY, AND HOLD HARML�SS TH� L�SSOR, ITS
D�PARTM�NTS, AG�NTS, OFFIC�RS, S�RVANTS, �MPLOY��S, SUCC�SSORS, ASSIGNS,
SPONSORS, OR VOLUNT��RS FROM AND AGAINST �ACH AND �V�RY CLAIM,
D�MAND, OR CAUS� OF ACTION AND ANY AND ALL LIABILITY, DAMAG�S,
OBLIGATIONS, JUDGMENTS, LOSS�S, rIN�S, P�NALTI�S, COSTS, F��S, AND
�XPENSES INCURRED IN D�FENSE OF THC L�SSOR, ITS DEPARTMENTS, AGENTS,
OFFIC�RS, S�RVANTS, OR �MPLOY��S, INCLUDING, WITHOUT LIMITATION, TH�
PAYMENT OF BONUS AND/OR ROYALTI�S R�GARDING OWN�RSHIP OF THC
L�SSOR'S MIN�RAL INT�R�ST OF TH� L�ASED PR�MIS�S WHICH MAY B� MAD� OR
ASS�RT�D BY LESSEE, ITS AG�NTS, ASSIGNS, OR ANY THIRD PARTIES ON ACCOUNT
OF, ARISING OUT OF, OR IN ANY WAY INCIDENTAL TO OR IN CONN�CTION WITH
1 � OIL AND GAS LEASG — 530-1 Rudd Strect #A
TH� OWN�RSHIP AND TITL� OF TH� MIN�RAL INT�R�ST OT TH� L�SSOR UND�R
THIS L�AS�.
THE L�SS�E SHALL FULLY D�F�ND, PROT�CT, IND�MNIFY, AND HOLD
HARMLESS TH� L�SSOR, ITS D�PARTMENTS, AG�NTS, OFrIC�RS, S�RVANTS,
�MPLOY��S, SUCC�SSOItS, ASSIGNS, SPONSORS, OR VOLUNT�ERS FROM AND
AGAINST �ACH AND EV�RY CLAIM, D�MAND, OR CAUS� OF ACTION AND ANY AND
ALL LIABILITY, DAMAG�S, OBLIGATIONS, JUDGM�NTS, LOSS�S, rINE5, P�NALTI�S,
COSTS, F��S, AND �XP�NS�S INCURR�D IN D�F�NS� OF THr L�SSOR, ITS
DEPARTM�NTS, AG�NTS, OFFICERS, SrRVANTS, OR �MPLOYE�S, INCLUDING,
WITHOUT LIMITATION, P�RSONAL INJURI�S AND D�ATH IN CONN�CTION
THER�WITH WHICH MAY B� MAD� OR ASS�RTED BY L�SSE�, ITS AG�NTS, ASSIGNS,
OR ANY THIRD PARTI�S ON ACCOUNT OF, ARISING OUT OF, OR IN ANY WAY
INCID�NTAL TO OR IN CONNECTION WITH TH� PERFORMANCE OI+ TH� WORK
P�RFORMED BY TH� LESS�� UNDER THIS L�AS�.
TH� L�SS�� AGR�ES TO IND�MNII+Y AND HOLD HARML�SS TH� L�SSOR, ITS
OFFIC�RS, AGENTS, SERVANTS, EMPLOY��S, SUCC�SSORS, ASSIGNS, SPONSORS, OR
VOLUNT�ERS TROM ANY LIABILITI�S OR DAMAG�S SUFF�It�D AS A R�SULT OF
CLAIMS, D�MANDS, COSTS, OR JUDGMENTS AGAINST TH� L�SSOR, ITS
DEPARTM�NTS, ITS OFFICERS, AG�NTS, S�RVANTS, OR EMPLOY�ES, CR�ATED BY,
OR ARISING OUT OF THE ACTS OR OMISSIONS OF TH� L�SSOR OCCURRING ON TH�
DRILL SIT� OR OPERATION SIT� IN TAE COURS� AND SCOP� OF INSP�CTING AND
P�RMITTING TH� GAS W�LLS INCLUDING, BUT NOT LIMITED TO, CLAIMS AND
DAMAG�S ARISING IN WHOLE OR IN PART FROM TH� N�GLIGENC� OF TH� L�SSOR
OCCURRING ON TH� DRILL SIT� OR OPERATION SIT� IN THC COURS� AND SCOP�
Or INSP�CTING ANll P�RMITTING TH� GAS W�LLS. IT IS UND�RSTOOD AND
AGR��D THAT TH� IND�MNITY PROVID�D rOR IN THIS S�CTION IS AN IND�MNITY
20 O[L AND GAS LEASFi — 5304 Rudd Street iEA
�XT�ND�D BY TH� L�SSE� TO IND�MNIFY AND PROT�CT L�SSOR AND/OR ITS
D�PARTM�NTS, AG�NTS, OTFIC�RS, S�RVANTS, OR �MPLOY��S rROM THC
CONSEQU�NC�S OF TH� N�GLIG�NCE OF THE L�SSOR AND/OR ITS D�PARTM�NTS,
AG�NTS, OFFIC�RS, S�RVANTS, OR �MPLOY��S, WH�TH�R THAT N�GLIG�NC� IS
THC SOLE OR CONTRIBUTING CAUSE OF TA� R�SULTANT INJURY, D�ATH, AND/OR
DAMAGE.
17.
INSURANC�
Lessee shall provide or cause to be provided the insurance described in the City of Foct Worth
Gas Ordivance for each well drilled uuder the terms of this Lease, such insurance to contiru�e until the
well is abandoned and the site restoi•ed. Such insurance sl�all pcovide tliat Lessoc shall be a co-insured,
without cost, and that said insurance can �lot be canceled or tei•minated without thii•ty (30) days pcior
notice to Lessor and ten (10) days notice to Lessoc for nonpayment of premiums.
fE:�
RELEAS�S R�QUII2ED
Within thirty (30) days after tl�e partiat termination of this Lease as provided under any of the
terms and provisions of this Lease, Lessee sliall deliver to Lessor a plat showing the �1'OCIl1Cit011 L1111tS
designated by Lessee, copies of logs showing depths to be retai►�ed «�ithin each unit, and a fi�lly eaecirted,
recocdable i•elease p►•operly desci•ibing by metes and bou�ids the lands a�id depths to be retained by Lessee
ai•ound each pi•oducing welL If this Lease terminates in its entirety, then Lessee shall de(iver a complete,
fiilly executed, recordable release to Lessoc within thirty (30) days. If such release complies «�ith the
requirements of this section, Lessor shall record such release. If Lessee fails to delivec a release
complying with the requicements of this section ���ithin thicty (30) days after Lessor's demand therefore,
then Lessee shall pay Lessor an amount equal to Five Dollars ($5.00) per acre pec day for elch acre of the
leased premises that should have been released, beginning with the 30th day after the d�te of Lessor's
21 OI1. AND GAS LEASG—?30�4 Rudd Street 11A
rec�uest and continuing until such celease has been e�ecuted aud delivered to Lessor. It is agceed that
actual damages to Lessor for Lessee's failuce to deliver such release are difficult to ascei•tain �vitl� any
cei�tainty, and that the payments lierein provided ai•e a i•easonable estimate of such damages and sllall be
consideced liquidated damages and not a penalty. Fucthermore, Lesso►• is hereby authocized to etecute
and file of record an affidavit stating that this Lease has e�pired and the ceaso�i thei•efoi•, and sucll
affidavit shall constitute prima facie evidence of the e�pication of this Lease oi• any part of this Lease.
19.
NOTIC�S
A. Noti�cations Required. Lessee shall advise Lessor in writing of the location of
each well to be drilled upon the leased premises or on land pooled therewith on or before thirty
(30) days prior to commencement of operations, and shall advise Lessor in writing the date of
completion and/or abandoiunent of each well drilled on the leased premises or on land pooled
therewith within thirty (30) days after compietion or abandomiient. Such notice shall include
furnishing the Lessor a copy of the applicable completion or plugging report filed with any
governmental or regulatory agency and a plat or map sho��ing the location of the well on this
Lease or lands pooled therewith.
Reports are also to be made monthly, to include (1) name of well, total monthly
production and total product sales and (2) lease activity report to inciude drilling, testulg, fi•acing,
coinpleting, reworking, recompleting, plugging back, repairing and abandomnent of the well and
(3) compliance with the Minority/Women Business Enterprise (MWBE) Goal of _% for leases
over 40 acres.
B. All notices, infocmation, lettei•s, sucveys, i•epocts, material, and 111 othec docunients,
required or permitted to be sent to Lessor by Lessee sha(l be sent by certified United States mail, postage
�repaid, i•eturn i•eceipt required, to the fo(lo�ving address:
22 ot�. n�.n cns �r:nsr: - s3o=t iz��dd s«��� +En
City of Fort Worth
Attention: Property Management Deparhuent
1000 Throckmorton Street
Foi�t Worth, Texas 76102
C. All notices required or permitted to be sent to Lessee by Lessor shal( be sent to Lessee by
cei�tified United States mail, p�stage prepaid, return receipt requested to the follo�ving �ddress:
Varitage Fort Woi�th Energy, LLC
116 Inverness Drive East, Suite 107
Englewood, CO 80112
D. Sei•vice of notices, and otlier documents, hereu�lder is complete upon deposit of the mailed
material in a post office or official depositoiy under the care and custody of the United States Postal Service,
in a postpaid, properly addressed and certified wcapper.
E. Any party hereto shall have the right to change the name or address of tl�e person or
persons required to receive notices, and other documents, by so notifying the other party in writing.
20.
BR�ACH BY L�SS��
Lessee shall conduct Lessee's operations in strict compliance with all of the terms and provisions of
this Lease and with all applicable (ocal, state and fedecal rules and the regulations of any cegulatoiy body
having ju�•isdictioii of such opei•ations i�icluding, but �iot liinited to, al( loca(, state a�ld fedei•al enviconmental
rules and regulations and applicable city ordinances.
In the event Lessor considers that operations are not, at any time, being conducted in compliance
with tl�is Lease, or any implied covenant of tl�is Lease, Lessor shall notify Lessee in ���citing of tlie facts
relied upon as constituting a bceach of any express or implied covenant or obligation of Lessee l�ereundec
and, Lessee, if in defatilt, shall have siaty (60) days after receipt of such notice in which to commence
compliance with its obligations hereuuder. Flilure on tl�e part of Lessee to timely commence efforts to rectify
any such breach and to eaercise diligence in remedying any such bceach shall operate as a forfeituce of this
Lease as to tlle poi•tioii thei•eof effected by sucli bi•each; pro��ided that if Lessee, in good faith, disputes aiiy
23 OIL AND GAS LGASG— 530=4 Rudd Street 1{A
alleged grounds of breach set forrth in such notice, Lessee may, «�ithin said si�ty (60) day period, institute a
Declaratoiy Judgment Actiou il� any Disti•ict Couct in a cou�ity wliei•e all oi• part of the said leased
pcemises are located questioning whether it has in fact bceached any eapcessed or implied covenant of this
Lease, theceby staying any forfeiture during the pendency of such action. Howevec, in the event that
Lessor obtains a�nal judicial ascertainment in any such proceeding that Lessee is in breach of any
covenant hereof, express or implied, then it is agreed that Lessor shall be entitled to a decree providing for
cauceilation oi• forfeitt�i•e of tlle Lease in the eve�lt such bi•each is not i•ecti�ed oi• commenced i�l good faitll
to be rectified by Lessee within thii�ty (30) days fi•om date sttch decree becomes final.
21.
LOCATION OF DRILLING ACTIVITY, PIP�LIN�S ANll �OUIPM�NT
No drilling or other activity shall be conducted on the stu•face of the leased premises and uo
roads, electcic lines, pipelines, equipment, or other stcuctures shall be placed on the surface of the leased
premises.
22.
COMPLIANC� WITH LAWS
Lessee shall comply witli all applicable rules, cegulations, o�•dinances, statutes 1nd othec laws i�i
connection WIfIl any dritling, producing or other operations under the ter�ns of this Lease, including,
without limitation, the oil and gas well cegulations of the City of Fort Wo�•th.
23.
CONFLICT OF INT�REST
Lessee cepresents that Lessee; its officers and di�•ectors, are not employees oc officecs of the City
of Fort Worth noi• is Lessee (its of�cers and directors) acting on behalf of any such officer oc employee of
the City of Fort Woi�th.
24.
T�RMS
All of the te►•ms and pcovisions of this Lease sha(1 e�tend to a�id be bi�lding upo�l the heirs,
24 0l� ANU cns Lr:t�se-s3o:� u���ia s«eer �Et�
executors, administrators, successo►•s and authoi•ized assigns of the pacties l�ereto.
25.
�NTIR� AGR��M�NT
Tllis Lease states the entire contcact betwee�i the pacties, and no repi•esentation or• promise, verba(
or written, on bel�alf of either party shall Ue binding i�nless contained herein; aud this Lease shall be
binding upon each party executing the same, regardless of whether or not executed by all owners of tlie
above described land or by all peisons above named as "Lessor", and, notwithstanding the inclusion
above of other names as "Lessor", this term as used in this Lease sl�all mean and cefer only to such parties
as eaecute this Lease aud their successors in interest.
2G.
CAPTIONS
The captio�ls to the vacious pacagraplis of the Lease ace foi• convenience o»ly, to be used
primarily to more readily locate specific provisions. They sl�all not be cousideced a pai�t of the Lease, noc
s}�all they be used to intei•pret any of the Lease pi•ovisioi�s.
27.
COUNTERPARTS
This Lease may be e�ecuted in multi�le countei•parts, each of which shall be deemed an oi•iginal,
with the same effect as if the sig�iat�u•e thereto and l�ereto were upon the same instrunlent.
28.
INTERPR�TATION
In the event of any dispute over the meaning or application of any provision of this Lease, tllis
Lease shall be interpreted fairly and reasol�ably, and neither more strongiy for or agai��st any E�arty,
regardless of the actual drafter of this Lease.
29.
NO THIRD PARTY RIGHTS
The provisions and conditions of this Lease are solely for the benefit of the Lessor and the
25 OtL AND GAS LtiASG — 5304 Rudd Street tlA
Lessee, and any lawful assign or successor of the Lessee a�lci are iiot intended to ci•eate 111y rights,
cont�•actual or otherwise, to any other person or entity.
30.
S�V�RABILITY
If any provision of tllis Lease shall be held to be invalid, i((egal or unenforceable, tl�e validity,
legality and enforceability of the i•emaiiiing pi•ovisions shall not i�i any way be affected oi• impaii•ed.
31.
V�NU� AND JURISDICTION
If any action, whetliei• i•eal o►• assected, at law oi• i�i equity, acises on tlle basis of any provisio�l of
tliis Lease, venue for such action s(�all lie in state coui•ts located in Taci•a�lt County, Texas oi• the Uiiited
States Dish•ict Court foi• tlie Northecn District of Texas — Fort Worth Division. This Lease sllall be
constcued in accoi•da�lce with the laws of the State of Texas.
32.
INDEP�NDENT CONTRACTOR
It is eapcessly understood and agreed that Lessee shall operate as an independent contcactor in
each and every respect hereunder and not as an agent, representative or employee of the Lessor. Lessee
shall have the exclusive right to control all details and day-to-day operations celative to this Lease and all
Exhibits and s(iall be solely i•esponsible for the acts a�ld �IIIISSIOIIS of its officei•s, age�lts, sei•vants,
employees, contractors, sttbcontcactors, licensees atid invitees. Lessee acknowledges that the doctrine of
r�espo��deat st��e��ior will i�ot apply as between the Lesso�• a�id Lessee, its of�cers, age�its, secvaTits,
employees, contractors, subcoirtcactors, licensees and invitees. Lessee fui�ther agcees that nothing in this
Lease will be construed as the ci•eatio�i of a partiiersllip or joint enter•�cise between tlie Lessoc a�ld Lessee.
33.
GOVERNMCNTAL POW�RS
It is widerstood that by execution of tl�is Lease, the Lessor does not waive or surcendec any of it
governmental po���eis.
2� OlL AND GAS I.EASG — 53Q4 Rudd Street #A
EXECUTED and effective as of the date of the notarial acknowledgment of the Lessor's e�ecution.
L�SSOR:
CITY Or rORT WORTH
� ��_�
By: �.P�--,�'�' L
Assistant City Manager
APPROVED AS TO FORM AND LEGALITY:
By: � i �C �-�� '-� `�,�,'' (r
S�, Assis � nt City Atto � ey �
,`
i° N2�SiN ��rr c_�F��L. �t'�;✓c cS
Date:
LCSS��: VANTAG� FORT WORTH �N�RGY, LLC
A Dela���are Limited LiaUility Corporation
Date: �� �p , �-���
-�
ATTEST: -- = �
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ity Secr •y ,�
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27 OlL AND GAS LEASG — i30-1 Rudd Strce[ JEA
THE STATE OF TEXAS
COUNTY OF TARRANT
BEFORE ME, the undersigned, a Notaiy Public, on this day personally appeaced Jesus J. Chapa,
Assistant City Mailager of the City of Fort Woi�th, a home-rule �nunicipal coi•poi•ation of the State of
Texas, known to me to be tlie pe�son whose name is subscribed to the focegoing instrument and, tl�at lie
has executed the same for the pui•poses and considei•ation thei•ei�i expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this ;�% day of ` is. t;t1- 2016.
[S�A,�,] �lr,� �'1l \ J�_i,�%�.,�.I,hLX�i Notary Public in and for the .-�:~�__: ____� -.�.�,. _~ •.,....',�'..`-°` �._
"""""��, LINDA M. HIRRLINGER
�_State of Texas ; :''�F"'.p�o'',
:` �; Z.�'��! �:= Notary Pubhc, Stafe of Texas
!; -:��•..r�.�P; Comrn. Explres 02 02-2018
My Commission Expires: ('�4.� �� �� �.���' '� i`'%;F��F�s��'� Notary ID 12414474•6
„�������
l i V1GtGt (/1� �- I-�6 � ��/� � c; Print Name of Notacy Public Here '.
��
THE STATE OF �,��
COUNTY OF �1��
BEFORE ME, the undei•signed, a Notai•y Public, on this day peisonal(y appeared W. Woi•tli
Carlin, Vice President — Land, of Vantage Fort Woi�th Energy, LLC, a Delawace Limited Liability
Coi•poration, known to me to be the pei•son whose name is subsccibed to the foi•egoing insti•ument and,
that l�e has executed the same for the purposes and consideration therein expressed.
GIVEN LTNDER MY HAND AND SEAL OF OFFICE this f, �� day of ���':i_-, 2016.
[SEAL] (,� � / �. DOROTHEA R WIRE
�' q �� '/� ,/C%L�sz_, Notar Public in and for the NOTARY PUBLIC
X ��BC� � (�� Y r/ STATE OF COLORADO
State of C�Tt 1't NOTARY ID # 19�J8400Q384
Iu1Y COMMISSION EXPIRES MARCH 04, 2018
MyCommissionExpires: U;���-������h'
�'�oRo`�/}��l�l �� PrintName ofNotaty Public Here
�FFICIAL itEC�R�
[�ii F���3'.�.�i�i��
�'I'. W�RT�1, Tk
28 OIL ANll GAS I.IiASIi-5304 Rudd StreetNA
�XHIBIT A
Tcact 1:
0.1 G4 acres, more or less, out of the D. Dulaney, A-41 l, Tarcant County, TeYas, and being the East 40
Feet of Lot SB, Block 13, Waltei• Vdilli Additioti, an addition to the City of Foi•t Woi•tli, Tari•ant County,
Texas, accoi•dil�g to tlle Revised Plat recorded in Volu�ue 38&K, page 2l l, Plat Records, Tarcant County,
Texas, and being the same lands more particulacly described in that cectain Wacranty Deed dated August
6, 1968, fi•om Fam�i Willi and Herma�i 1. Willi, to the City of Fort Wortll, cecoi•ded in Vol�une 4609, Page
899, Deed Records, Tarrant County, Te�as.
(CFTW 5304 Rudd Street #A)
(ROSEDALE WEST UNIT)
2g OIL AND GAS LGASG — 530�4 Rudd Sh'eet �RA