HomeMy WebLinkAboutContract 44778 (2)CITY C TARY �c L� Q_
CONTRACT NO.
SUBSURFACE WELLBORE LICENSE AGREEMENT
This Subsurface Wellbore License Agreement ("Agreement") is hereby made and entered
into by and between the City of Fort Worth, a home rule municipal corporation organized under the
laws of the State of Texas and acting by and through Fernando Costa, its duly authorized Assistant
City Manager (the "City"), and XTO Energy, Inc., a(n) Delaware Corporation acting by and through
Edwin S. Ryan Jr., its duly authorized Senior Vice President, Land Administration (the
"Company").
The following statements are true and correct and constitute the basis upon which the City of
Fort Worth has executed Agreement.
A. Company, wishes to drill a subsurface horizontal wellbore through City owned
property from a gas well to a unit.
B. The City has reviewed Company's request and agrees to grant Company a license
and right of way to use a portion of city owned property, known as Meacham Airport, as set out in
Exhibit "A" ("Subsurface Tract") in order to drill a wellbore in accordance with the terms and
conditions of this Agreement.
Agreement
1. GRANT OF RIGHTS.
Subject to the terms and conditions set forth in this Agreement, the City of Fort Worth grants
Company, a subsurface wellbore license and right-of-way to provide Company ingress to and egress
from, and the right to use and occupy, the subsurface of the Subsurface Tract for one (1) wellbore(s)
to drill across, through and under the subsurface of the Subsurface Tract as to the depths and
location described in Exhibit A with a hundred (100) foot margin of elTor. This Agreement is
applicable to the Slaughter Heights Unit 2H well only.
Subsequent to the drilling of the well for which this Agreement is being granted, Company
shall provide to City an as -built survey limiting the Agreement area for the one (1) wellbore to that
area described by a cylinder having a radius of five (5) feet with the radius point being the center of
the wellbore (pipe) and whose length is determined by the horizontal (plan view) measurement of
the pipe through and under the City's Subsurface Tract as shown in Exhibit A. Thereafter, the
license granted herein shall be restricted solely to the wellbore of said well. Company shall deliver
to City an as -built survey of the wellbore within ninety (90) days of the completion of construction
across the Subsurface Tract as decribed herein.
It is understood and agreed that this Agreement is a subsurface wellbore license agreement
and right-of-way only and in no way grants or conveys any part of the underlying fee simple estate
of any lands owned by the City. Company shall have no right to use the surface of the tract of land
for any purpose. This Agreement does not convey the right to produce the oil, gas or other minerals
OFFICIAL RECORD
CITY SECi2ETAK'tId,T.p rr rr,� ``II
SUBSURFACE WELLBORE LICENSE AGREEMENT - XTO ENERGY, INC. - SLGtR1�! �'Iw
.Eell Ei1 E D SEP 0 9 1015
under the tract of land. City reserves the right to use any and all subsurface outside of the
Agreement area on properties owned by the City.
Notwithstanding the use of the term "grant" hereinabove set forth, the City does not warrant
the title to the subsurface license and right-of-way herein granted to the Company.
2. NONEXCLUSIVE
This Agreement and all rights granted to Company herein are strictly nonexclusive. The
City reserves the right to enter into and grant other and future licenses and other authorizations for
use of the Subsurface Tract to other Persons and entities in accordance with applicable law and as
the City deems appropriate; provided, however, that as to grants of subsequent licenses for use of
the Subsurface Tract that are solely within the discretion of the City, if a dispute arises as to priority
of the use of the Subsurface Tract, the City will resolve such dispute in a manner that does not result
in unreasonable interference with Company's operations for the purposes provided for herein. This
Agreement does not establish any priority for the use of the Subsurface Tract by Company or by any
present or future licensees or other permit holders. In the event of any dispute as to the priority of
use of the Subsurface Tract, the first priority shall be to the public generally, the second priority to
the City in the performance of its various functions, and thereafter, as between licensees and other
permit holders, as determined by the City in the exercise of its powers, including the police power
and other powers reserved to and conferred on it by the State of Texas.
3. TERM.
This Agreement shall become effective on the date as of which both parties have executed it
("Effective Date") and shall expire at 11:59 P.M. CST twenty (20) years from the last date of
notarial acknowledgement unless terminated earlier as provided herein.
4. FEES AND PAYMENTS TO THE CITY.
On or prior to the Effective Date, Company shall pay the City as compensation for its use of
the Subsurface Tract for the term of this Agreement the sum of Twenty -Eight Thousand Six
Hundred Sixty -Three Dollars and One Cent, $28,663.01 ("License Fee"). Company hereby
acknowledges and agrees that the amount of this License Fee is non-refundable and constitutes just
and reasonable compensation to the City for Company's use of the Subsurface Tract.
5. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND REGULATIONS.
Company, at its sole cost and expense, shall comply at all times with all applicable federal,
state and local laws, rules, regulations and safety standards in connection with Company's activities
hereunder.
6. INDEMNIFICATION.
Company, its successors and assigns, shall and hereby does indemnify and hold harmless
City, its officers, directors, agents, contractors, servants, employees, successors and assigns, from
and against all liability, claims, demand, fine, damages, suits, actions, costs and expenses of
SUBSURFACE WELLBORE LICENSE AGREEMENT - XTO ENERGY, INC. — SLAUGHTER HEIGHTS 2H Page 2 of 10
whatsoever nature (including reasonable attorneys' fees) to persons or property caused by or arising
out of any of Company's operations hereunder or otherwise relating to the subsurface wellbore
license and right-of-way, except where such claims result from the acts, omissions and negligence of
City, its officers, directors, agents, contractors, servants or employees.
7. DEFAULTS.
The occurrence at any time during the term of this Agreement of one or more of the
following events shall constitute an "Event of Default" under this Agreement:
7.1. Failure to Pay License Fee.
An Event of Default shall occur if Company fails to pay any License Fee on or before
the respective due date.
7.2. Breach.
An Event of Default shall occur if Company materially breaches or violates any of
the terms, covenants, representations or warranties set forth in this Agreement or fails to
perform any obligation required by this Agreement.
7.3. Bankruptcy, Insolvency or Receivership.
An Event of Default shall occur if Company (i) files a voluntary petition in
bankruptcy; (ii) is adjudicated insolvent; (iii) files any petition or fails to contest any petition
filed against it seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under any laws relating to bankruptcy,
insolvency or other relief for debtors; (iv) seeks, consents to or acquiesces in the
appointment of any trustee, receiver, master, custodian or liquidator of Company, any of
Company's property or any revenues, issues, earnings or profits thereof; (v) makes an
assignment for the benefit of creditors; or (vi) fails to pay Company's debts generally as they
become due.
7.4. Violations of the Law.
An Event of Default shall occur if Company violates any existing or future federal,
state or local law or any existing or future ordinance, rule or regulation of the City.
7.5 Failure to Complete Construction
An Event of Default shall occur if Company fails to complete construction of the
subsurface wellbore within one (1) calendar year from the execution of this Agreement.
SUBSURFACE WELLBORE LICENSE AGREEMENT - XTO ENERGY, INC. — SLAUGHTER HEIGHTS 2H Page 3 of I0
8. UNCURED DEFAULTS AND REMEDIES.
8.1. Notice of Default and Opportunity to Cure.
If an Event of Default occurs in accordance with Section 7.1 on account of
Company's failure to pay the License Fee or in accordance with Section 7.5 on account of
Company's failure to timely complete construction of the subsurface wellbore, such Event of
Default shall be deemed an Uncured Default and the City shall have the right to terminate
this Agreement immediately upon provision of written notice to Company. If an Event of
Default occurs for a reason other than for failure to pay the License Fee or failure to timely
complete construction, the City shall provide Company with written notice and shall give
Company the opportunity to cure such Event of Default. For an Event of Default which can
be cured by the immediate payment of money to the City, Company shall have thirty (30)
days from the date it receives written notice from the City to cure the Event of Default. For
any other Event of Default, Company shall have sixty (60) days from the date it receives
written notice from the City to cure the Event of Default. If any Event of Default is not
cured within the time period specified herein, such Event of Default shall, without further
notice from the City, become an "Uncured Default" and the City immediately may exercise
the remedies provided in Section 7.2.
8.2. Remedies for Uncured Defaults.
Upon the occurrence of an Uncured Default, the City shall be entitled to exercise, at
the same time or at different times, any of the following remedies, all of which shall be
cumulative of and without limitation to any other rights or remedies the City may have:
8.2.1. Termination of Agreement.
Upon the occurrence of an Uncured Default, the City may terminate this
Agreement. Upon such termination, Company shall forfeit all rights granted to it
under this Agreement and, except as to Company's unperformed obligations and
existing liabilities as of the date of termination, this Agreement shall automatically
be deemed null and void and shall have no further force or effect. Company shall
remain obligated to pay, and the City shall retain the right to receive License Fees
and any other payments due up to the date of termination. Company shall remove the
subsurface wellbore from and restore the Subsurface Tract as and when requested by
the City. The City's right to terminate this Agreement under this Section 8.2.1 does
not and shall not be construed to constitute any kind of limitation on the City's right
to terminate this Agreement for other reasons as provided by and in accordance with
this Agreement; provided, however, that Company may not abandon the subsurface
wellbore without the approval of the Texas Railroad Commission or successor
agency or other regulatory authority with jurisdiction, if such action without such
approval is prohibited at the time by applicable federal or state law or regulation.
SUBSURFACE WELLBORE LICENSE AGREEMENT - XTO ENERGY, INC. — SLAUGHTER HEIGHTS 2H Page 4 of 10
8.2.2. Legal Action Against Company.
Upon the occurrence of an Uncured Default, the City may commence against
Company an action at law for monetary damages or in equity, for injunctive relief or
specific performance of any of the provisions of this Agreement which, as a matter of
equity, are specifically enforceable.
9. INSURANCE.
Company shall procure and maintain at all times, in full force and effect, a policy or
policies of insurance to provide coverages as specified herein, naming the City as an
additional insured and covering all public risks related to the use, occupancy, condition,
maintenance, existence or location of the City. The insurance required hereunder may be met
by a combination of self-insurance, primary and excess policies.
9.1. Primary Liability Insurance Coverage.
• Commercial General Liability:
$5,000,000.00 per occurrence, $10,000,000.00 aggregate, including coverage for
the following: (i) Premises Liability; (ii) independent contractors; (iii)
products/completed operations; (iv) personal injury; (v) contractual liability; (vi)
explosion, collapse and underground property damage, (vii) underground
resources damage, (viii) independent contractors protective liability; and (ix)
broad -form property coverage.
• Property Damage Liability:
$10,000,000.00 per occurrence
• Automobile Liability:
$1,000,000.00 per accident, including, but not limited to, all owned, leased, hired
or non -owned motor vehicles used in conjunction with the rights granted under
this Agreement
• Worker's Compensation:
As required by law; and, Employer's Liability as follows:
$1,000,000.00 per accident.
9.2. Revisions to Required Coverage.
At the reasonable recommendation of the City's Risk Manager, the City may at any
time revise insurance coverage requirements and limits required by this Agreement.
Company agrees that within thirty (30) days of receipt of written notice from the City,
SUBSURFACE WELLBORE LICENSE AGREEMENT - XTO ENERGY, INC. — SLAUGHTER HEIGHTS 2H Page 5 of 10
Company will implement all such revisions requested by the City. The policy or policies of
insurance shall be endorsed to provide that no material changes in coverage, including, but
not limited to, cancellation, termination, non -renewal or amendment, shall be made without
thirty (30) days' prior written notice to the City.
9.3. Underwriters and Certificates.
Company shall procure and maintain its insurance with underwriters authorized to do
business in the State of Texas and who are acceptable to the City in terms of solvency and
financial strength. Within thirty (30) days following adoption of this Agreement by the City
Council, Company shall furnish the City with certificates of insurance signed by the
respective companies as proof that it has obtained the types and amounts of insurance
coverage required herein. In addition, Company shall, on demand, provide the City with
evidence that it has maintained such coverage in full force and effect.
9.4. Deductibles.
Deductible or self -insured retention limits on any line of coverage required herein
shall not exceed $1,000,000.00 in the annual aggregate unless the limit per occurrence, or
per line of coverage, or aggregate is otherwise approved by the City.
9.5. No Limitation of Liability.
The insurance requirements set forth in this Section 8 and any recovery by the City of
any sum by reason of any insurance policy required under this Agreement shall in no way be
construed or effected to limit or in any way affect Company's liability to the City or other
persons as provided by this Agreement or law.
10. COMPANY AS INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Company shall operate as an independent
contractor as to all rights and privileges granted by this Agreement, and not as an agent,
representative or employee of the City. Company shall have the exclusive right to control the
details of its business and other operations necessary or appurtenant to the construction and
operation of the wellbore in accordance with the terms and conditions of this Agreement, and shall
be solely responsible for the acts and omissions of its officers, agents, servants, employees,
contractors and subcontractors. Company acknowledges that the doctrine of respondeat superior
shall not apply as between the City and Company, its officers, agents, employees, contractors and
subcontractors. Company further agrees that nothing herein shall be construed as the creation of a
partnership or joint enterprise between the City and Company.
11. ASSIGNMENT PROHIBITED.
Company may not assign or otherwise transfer any of its rights or obligations under this
Agreement unless specifically authorized in writing by the City, which authorization shall not be
unreasonably withheld.
SUBSURFACE WELLBORE LICENSE AGREEMENT - XTO ENERGY, INC. — SLAUGHTER HEIGHTS 2H Page 6 of 10
12. NOTICE.
Notices required pursuant to the provisions of this Agreement shall be conclusively
determined to have been delivered when (i) hand -delivered to the other party, its agents, employees,
servants or representatives, or (ii) received by the other party by United States Mail, postage
prepaid, return receipt requested, addressed as follows:
To THE CITY: To COMPANY:
City of Fort Worth
Attn: Gas Lease Program Manager
Planning and Development Department
1000 Throckmorton Street
Ft. Worth, TX 76102
XTO Energy, Inc.
Attn: Edwin S. Ryan Jr.
810 Houston Street
Fort Worth, Texas 76102
Either party, by notifying the other party hereto in the manner provided in this paragraph, may
designate a different address for receipt of subsequent notices.
13. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and shall inure to the benefit of the City and the
Company and their respective successors and assigns.
14. NON-DISCRIMINATION COVENANT.
Company shall not discriminate against any person on the basis of race, color, national
origin, religion, handicap, sex, sexual orientation or familial status in the receipt of benefits from
Company's business operations, in any opportunities for employment with Company or in the
construction or installation of the subsurface wellbore.
15. NO WAIVER.
The failure of the City to insist upon the performance of any term or provision of this
Agreement or to exercise any rights that the City may have, either under this Agreement or the law,
shall not constitute a waiver of the City's right to insist upon appropriate performance or to assert
any such right on any future occasion.
16. GOVERNING LAW AND VENUE.
This Agreement shall be construed pursuant to and in accordance with the laws of the United
States of America and the State of Texas. If any action, whether real or asserted, at law or in equity,
arise out of the terms of this Agreement or Company's use of Subsurface Tract, venue for such
action shall lie exclusively in state courts located in Tarrant County, Texas or the United States
District Court for the Northern District of Texas, Fort Worth Division.
SUBSURFACE WELLBORE LICENSE AGREEMENT - XTO ENERGY, INC. — SLAUGHTER HEIGHTS 2H Page 7 of 10
17. SEVERABILITY.
If any provision of this Agreement is held to be invalid, illegal or unenforceable by a final
order entered by a court of competent jurisdiction, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired. For purposes of this Agreement,
a court order shall be final only to the extent that all available legal rights and remedies pertaining to
such order, including, without limitation all available appeals, have been exhausted. In such an
event, the City and Company agree that they shall amend or have amended this Agreement to
comply with such final order entered by a court of competent jurisdiction.
18. FORCE MAJEURE.
In the event Company's performance of any of the terms, conditions or obligations required
by this Agreement is prevented by a cause or event that is not within Company's reasonable control,
Company's non-performance shall be deemed excused for the period of such inability. Causes or
events that are not within the Company's control shall include, but not be limited to, acts of God,
strikes, sabotage, riots or civil disturbances, failure or loss of utilities, explosions and natural
disasters.
19. HEADINGS NOT CONTROLLING.
Headings and titles, that are used in this Agreement are for reference purposes only and shall
not be deemed a part of this Agreement.
20. ENTIRETY OF AGREEMENT.
This Agreement, including the schedule of exhibits attached hereto and any documents
incorporated herein by reference, contains the entire understanding and agreement between the City
and Company as to the matters contained herein. Any prior or contemporaneous oral or written
agreement is hereby declared null and void to the extent in conflict with the terms and conditions of
this Agreement. This Agreement shall not be amended unless agreed to in writing by both parties
and approved by the City Council of the City.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
SUBSURFACE WELLBORE LICENSE AGREEMENT - XTO ENERGY, INC. — SLAUGHTER HEIGHTS 2H Page 8 of 10
EXECUTED and effective as of the later date below:
CITY OF FORT WORTH
By:
Fernando Costa
Assistant City Manager
Date: 3/4 .3
APPRO
By: II
\S(, Mc 1),Asslstant
M&C: L-15609
D tSoTcORM AND LEGALITY:
y Attorney
XTO Energy, Inc.
By: ic Lf.
Edwin S. Ryan Jr.
Sr. VP - Land Administration
Date: �/ 2�/►3
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
SUBSURFACE WELLBORE LICENSE AGREEMENT - XTO ENERGY, INC. — SLAUGHTER HEIGHTS 2H Page 9 of 10
ACKNOWLEDGEMENTS
THE STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersigned, a Notary Public, on this day personally appeared Fernando
Costa, Assistant City Manager of the City of Fort Worth, a home -rule municipal corporation of the
State of Texas, known to me to be the person whose name is subscribed to the foregoing instrument
and, that he has executed the same for the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this Wt day ofJirk,c.Qi-J ,
2013.
[SEAL!
°1,;%2' EVONIA DANIELS
`� �= Notary Public, State of Texas
i /\ . My Commission Expires N
July 10, 2017 *
I
My Commission Expires:
THE STATE OF TEXAS
COUNTY OF TARRANT
Adivte-J
ary Pub is in and for the
e of Texas
Print Name of Notary Public Here
§
BEFORE ME, the undersigned, a Notary Public, on this day personally appeared
Edwin S. Ryan Jr., Sr Vice President, Land Administration, on behalf of XTO Energy, Inc., a(n)
Corporation, known to me to be the person whose name is subscribed to the foregoing instrument
and, that he has executed the same for the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this Z� day of 1iiyt.8r-
2013.
cs{: ,,, DEBORAH Q PEARSON _
[SEAL: STA OFT $
*Co m. Exp.01HW2016 _
My Commission Expires:
Notary Public in and for the
State of
Print Name of Notary Public Here
SUBSURFACE WELLBORE LICENSE AGREEMENT - XTO ENERGY, INC. — SLAUGHTER HEIGHTS 2H Page 10 of 10
599.581 ACRES OF A BILLED
826.9043 ACRE MEACHAM LEASE
1/2" IRF,
Lot 1 Bik, 3
Washington Heights Addition
Vol. 204 Pg. 72
7
Cabinet A, Slide 2447
Inst. No. D195162760
Meacham Lease
(XTO Energy Inc.)
James Wallace
A-1605
38th Street
2
3
4
N 87°48'10" E
20
19
18
17
581.35
TVD
6828.33'
TMD
7049.14'
i
i3
IN
0
IQ
n
10
IO2
m
5
N
WTW Properties, Inc.
D207347984
201 N. 38th St.
TVD
4265.90'
TMD
4324.95'
LICENSE AREA
DISTANCE
William. B. Tucker, Sr.
11_1 c1 F
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 8/20/2013
DATE: Tuesday, August 20, 2013 REFERENCE NO.: L-15609
LOG NAME: 06MEACHAM SUB -SURFACE L/A
SUBJECT:
Authorize Execution of a Subsurface Wellbore License Agreement with XTO Energy, Inc., in the Amount of
$28,663.01 for One Subsurface Wellbore Across the City -Owned Property Known as Meacham Airport
(COUNCIL DISTRICT 2)
RECOMMENDATION:
It is recommended that City Council authorize the execution of a Subsurface Wellbore License Agreement
with XTO Energy, Inc., for one subsurface wellbore across City -owned property known as Meacham
Airport in the amount of $28,663.01.
DISCUSSION:
XTO Energy, Inc., has requested a Subsurface Wellbore License Agreement across City owned property
known as Meacham Airport. The Subsurface Wellbore License Agreement is for one wellbore pipe from
the Slaughter Heights 2H well across the Meacham unit to the XTO's Slaughter Heights unit in order to
develop the minerals within Slaughter Heights unit. The Slaughter Heights 2H wellbore will remain
unperforated while passing through the Meacham Unit.
Per the terms of the Subsurface Wellbore License Agreement, XTO Energy, Inc., will pay the City $49.25
per linear foot for 581.99 linear feet of wellbore pipe for a total cost of $28,663.01 for a 20 year term. No
surface use of the property will be granted.
The property is located in COUNCIL DISTRICT 2, Mapsco 48T.
FISCAL INFORMATION / CERTIFICATION:
The Financial Management Services Director certifies that the Planning and Development Department is
responsible for the collection and deposit of funds due the City under this Agreement.
FUND CENTERS:
TO Fund/Account/Centers
P240 446300 551929990100
T125 446300 055125099901
CERTIFICATIONS:
Submitted for Citv Manaaer's Office bv:
Oriainatina Department Head:
Additional Information Contact:
ATTACHMENTS
1. Meacham SS.odf (Public)
FROM Fund/Account/Centers
$14.331.51
$14,331.50
Fernando Costa (6122)
Randle Harwood (6101)
Jean Petr (8367)
D. J. Harrell (8032)
Logname: 06MEACHAM SUB -SURFACE L/A Page 1 of I
MAYOR AND COUNCIL COMMUNICATION MAP
Meacham Airport Subsurface Wellbore License Agreement
B m.
01 Mk lid
FORT WORTH
581.99 Linear ft of Unperforated
Wellbore Across the
Meacham Aiport Property
fl -II ! e tt
1S
Copyright 2013 City of Fort Worth. Unauthorized reproduction is a violation of applicable laws.
This product is for informational purposes and may not have been prepared for or be suitable for
legal, engineering, or surveying purposes. It does not represent an on -the -ground survey and
represents only the approximate relative location of property boundaries. The City of Fort Worth
assumes no responsibility for the accuracy of said data.
General Location
Proposed
Subsurface Wellbore
OMeacham Airport Boundary