HomeMy WebLinkAboutContract 60450CSC No. 60450
OIL ANll GAS I�EASE
THG STAT� OI+ TEXAS §
§
COUNTY OF TARRANT §
THIS AGREEMENT ("Lease"} is made anci entered into as of the date l�erein spaci�ed by and
between CTTY OT' I+ORT WORTH, a home a�le municipal coipo�•ation o� the State of Texas,
(hereinafter referred to as "Lessar"), and, TOTAL�NERGIES E&P USA BARNETT 1, LLC, a
Delaware limited liabilxiy company, {he�•einafter r�fe�-�ed to as "Lessee").
WITNESSETH:
l..
GRANTING CLAUSE
Lessor, in consideration af a cash bonus in lfand paid, of the royalties herein pravided, a�id of the
agreements of L�ssee hez•einafter contained, hereby grants, leas�s, and iets exclusiveiy �nto Lessee for the
sole puz•pose af investigating, �xploring, drilling, operating, and praducing oil and/or gas from the lazad
leased hereunder, together with any liquid or gaseous substances prad�ced ux associatian with oil and gas,
the following described land situated in the City of Fort Wart�, Texas deseribed in Exhibit "A" attached
hereto (the "Ieased premises").
All tnineral substances and mine�•al rights ather than oiI and gas (and all other liquid or gaseous
minerals produced in association with oil or gas) are ex�ressly reserved to Lessor and excepted fram this
Lease. These reserved minerai �•ights incl�de, but are �ot liznited to, the rights to lignite, coal and sulfua•
not p�•oduced as a coznponent of oil and gas.
For the purpose oi determiniug the axnount of any payment hereunder, said leased premises shall
be deerr�ed to contain 0.4629 acres, whet�er actually containui�; mor� or less.
2.
PRIMARY T�12M
Subjec� to the othe�- provisions herein contained, this Lease shall be for a tet•rrz of two (2) years
fi-am the dake of tije not�rial acknawledgment of Lessor's execution of this insh�meni (hereinafter called
OFFICIAL REGORD
� CITY SECRETARY Haney St
FT. WORTH, TX
"pz-irna�y iertn"} ��td so long thereaftez' as ail, gas or other minerals granted herein are produced from the
leased premises o�� lands pooled therewith, in paying quanfities, o�� operations are in progress thei•eon as
hereinafter provided, and the royalties a�•e paid as pravided herein. For the purposes a� this Lease, the
term "ope�•ations" �eans az�y af the follawing; drilling, testing, compleiing, reworking, recompleting,
deepening, plugging back, or repairing of a well in search for ar in the endeavor to obtain prod�ction of
oil or gas, so long as such operations are cart•ied out witl� due diligence with no cessation of �no�•e tifan
ninety (94) consecutive days.
3.
DELAY RENTALS
This is a paid-up tease and na delay �'entals are due, Upon termination, Lessee sha11 prepare,
execute and deliver to Lessor a recordable reiease covering the leased p�-emises in accordance with this
Lease. Lessee may at any time or times execute and deliver �a Lessor, a releasc o�' releases of this Lease
as to all or any part of the leased premises, and thereby be retieved of all obligatio�s as to the released
land or intarest, except for the indemni�catior� obligat�ons described in Paragraph 16 and the plugging
obligations of this Lease.
4.
ROYALTIES
NOTWITHSTANDING ANY OTHER RQYALTY PROVIS��N T� TH�
CONTRARY, ALL R4YALT�ES DUE AND PAYABLE UNDER TH�S LEASE ON GAS
PRODUCED OR RECOVERED FROM THE LEASED PREMI5ES SHALL BE
COMPUTED BASED UPON THE HOUSTON SHIP CHANNEL INDEX PRICE MINUS
TWO CENTS PER MMBTU REGARDLE�S OF WHERE LESSEE'S SHAR� OF GAS
�R OTHER HYDROCARBONS PRODUCED UNDER THE LEASE �S AVA�LABLE
FOR SALE OR YS SOLD OR DELIVERED AND SUCH ROYALTIES MAY NOT
UNDER ANY CIRCUM�TANCES BE OFFSET OR R�D[TCED BY ANY POST
PRODUCTION COSTS, EXPENSES, CHARGES OR DED[TCTIONS OF ANY
AMOUNT, HIND OR NATURE, INCLUDING BY WAY OT ILLUSTRAT�ON BUT
N�T L�M�TATZON, COSTS OR EXPENSES FOR GATHERZNG, TREATMENT,
PROCESSING, TRAN�P�RTATION, PIPELINE CHARGES AND EXPENSE�,
COMPR��SION OR MARKETING. HOUSTON 5HIP CHANN�L INDEX PRICE
SHALL REFER TO THE PRICE PUBLISHED MONTHLY SY MCGRAW HILL IN
INSIDE F.E.R,C.'S GAS MARKET REPORT UNDER TH� HEADING "MONTHLY
B�DWEEK �POT GA5 PR�CES, �AST TEXAS, HOU�TON SH�P CHANNEL INDEX"
FOR THE FIRST DAY OF THE MONTH OF DELIVERY. IN THE EVENT
2 Haney St
PUBL�CAT�ON Or THE FOREGOING REPORT CEAS�S, OR IN'THI, GOOD FAITH
BELIEF OF ��THER THE C�TY OR LESS�E, SI7PPORTED BY AN UNAFFILIATED
THIItD PARTY 4PINION, THE INDEX �S BE�NG ART�F�C�ALLY MANIPULAT�D
4R IS FUNDAMENTALLY UNRELIABL�, THE CITY AND LESSEE �HALL
PROMPTLY MEET AND CONFER IN GOOD FAI'I`H TO AGREE UPON A
SUBSTANTIALLY COMPARABLE PUBL�SHED INDEX FOR CURRENT ON-SHORE
SPOT GAS PRICES BEING PAID BY PURCHASERS TAK�NG DEL�V�RY Or GAS
IN THE H4USTON-SFAUMONT TEXAS AREA.
Lessee shati pay to Lessor th� following xoyalties, wk�iclti �hall be free of ail costs af any kind,
including, but not limited to, casts of gaihering, production, iransportation, �•eati�g, campresszan,
dehydz•ation, processing, marketing, trucking or ather expense, directIy or indirectly incu�-red by Lessee,
whe�her as a direci clnarge ar a z'educed p�'ice or otiterwise. In this re�ard, Lessee agrees to bear c�ne
hundred percent (100%) of ali casts a�id expenses incurred in t•enderizag hydrocarbons produced on or
ft•om the leased premises marketable and delivering the same into the purchaser's pipeline iar immediate
�ianspot�tation to an end user or storage facilily. Additionally, said royalties shall nevej� be�r, either
d�reetiy or indirectly, under any circur�astances, the casts or expenscs (incl�din� depreciation) to
consh�uct, repair, renovate or operate any pipeIine, plant, or other faeilities n�• equipzne�i used in
connectian with the treating, separation, ext��action, gathering, processing, ret'ining, c�mpression,
transpo�•iin�, m�nu�'acturing or marketing af hydrocarbons produced from the Ieased premises or lands
pooied ttte�'ewith,
A. On oil, gas {including flared gas) and casinglfead gas, together with any ather liquid or
gaseous hydrocarbans recovered by Lease operations {s�ch as ir� drips or separators) twenty-%ve p�rcent
(25%} nf ali royalt�es due and payable under this Lease on gas produced ar recovered from the Ieased
premises based upon the Houston Ship C�an�el �ndex Price minus two cents pe�� MMBTU is to be
delivered free af eost to the credit of the Lessor into pipeliz�es, gathering lines, bar�es o�• other facilities
ta which tIie we11s and tanks on the property rr�ay be connected. T�essar shall aiways have the righY, at
any time and from time to time, upan reasonable written notice to Lessee, to take Lessor's share oi oil,
gas and processed liquids izt kind. Lessar may elect ta take Lessor's gas in kind at the weil, or at the
point of d�liv��-y w��ere Lessee deIivecs T,essee's gas to any third party. If gas is praeessed, Lesso�� may
3 Haney St
elect to take Lessor's sha�-e of the residue gas at�-ibutable to p�-oduction from th� leased premises, ai the
same paiait of deliveiy w�ere Lessee recei�es its sl�are ai residue gas or has its share of residue gas
delivered to a third party, Lesso�• may elect to ha�ve its rayalry shar� of processed liquids stored in tanlcs
at the plant or delivered into pipelin�s on the same �asis as Lessee's share of liq�ids is storea or
delivered. Lessor shall reimburse Lessee for all reasonable costs incurred by Lessee in instalIing,
apez'ating or maintaining additianal �acilities necessa�'y for Lessor's royalty gas and p�•aeessed liquids to
be separately metered, accounted %r, and delivered to a third party, but Lessar s�aIl not be chargecl for
any expense in the production, gathering, dehydration, separation, COII7�}i�SSI0I1, t�ansportatian,
h•eatment, processing or starage af Lessar's share of gas and �rocessed liquids.
B. Oz� paroducts, twe�ty �ve percent {25%) a� alt �•oyalties due and payable under this Lease
an gas praduced or recovered from the leased premises based upon tl�e Hausion Ship Char�nel It►dex
Price minus two ce�ts per MMBTU.
C. On r�sidue gas or gas remaining after separatio��, exn�act�on or processing operations,
twenty fi�e percent {25%) o� aii z•oyalties due and payable uncier this Lcase on gas produced ar
recovered from the Ieased premises based upon tha Houston Ship Channel Index Pr.ice :tx�inus two cents
per MMBTU.
D. This Lease is intend�d ta caver only oii a�id gas, but some ot�er substances (including
halium and sulphur} nnay be prod�ced necessarily wit� and incidental to tha produGtion of oit or gas
from the leased p��emises; and, in such event, this Lease s��all also cnve�' all such nthe:r substances so
produced. On all such substances sa produced under and by virtue af the terms of this Lease, Lessor
shall receive a i•ayalry of twenty �`ive perc�nt (2S°/u) of a11 such substanees so produced and saved, same
to be delivered to �.essor, free of all costs; or, at �,essox's electiozi, Lessor's fwenty fve percent (2S%) of
such subs�anees shall be sold by Lessee with Lass�e's portion of such substaz�ces a�d at ttze sa�ae profit
reatized by Lessee %r its portion of such substances.
E. All �-oyalties hereinabove provided shall be payable in cash (unless Lessor elects to take
such rayalfy oi1 or gas in kind} to Lessor witl�in sixty (60) days following the first commez•cial sale of
4 Haney St
praductian and thereafter no more than sixty (60) days after the end of ttie manth fol[owi�}g the month
during vvluch p�•oductian ta�Ces plac�. Subject to the pravisions o� �aragraph �0 0� this I.ease
concerning shut-in wells, rayalties sha11 be paid to Lessar by Lessee andlor its assigns o�• by the product
purchase�� fo�� oil andlor gas. Upon the failure of any parry to pay Lessor tl�e royalty as �rovided in this
paragraph, Lessor may, at Lessar's option, eIect to terminate this Lease by sending w�•itten notice ta
Less�e. Lessee shall then have thirty (30) days from the date of service of such wa•it�en natice in which
to avaid terrnination of this Lease by making or causing to be made tlie proper royalty payrr�ent or
payments that should have been paid, If such royalty payment is not made on ar i�efare the expiration of
the 30-day pex•iod, ar written approval is not obtained frozzz Lessor to defer s�ch paya�aent, Lesso�• may
eiect to terminate this Lease by filing a Notice af Termination with the Ca�nty Cle��k in the county
where the leased premises are lacated. The effective date of said termination shali be the date s�id
Natice of Termination is fiied vviYh the said Counfy Clerk.
F. In the event Lessee enters into a gas purc�ase contract which contains what is commonly
re%n�ed to as a°take or pay provision" (such provision meaning that the gas purchaser agrees to take
delivery of a specified minimum vol�zme or quantity of gas over a specified te��m at a specified price o��
fo make minimum periodic paym�nts to th� produc�r far gas n4t takeii by the purchas�rj and the
purchaser under such gas purcl�ase contract xnakes payment to Lessee by virtue of such purchdser's
failure ta take delivery of such minimum valume or quantity of gas, tl�en Les�or shall be entitled to
twenty five percent {25°/n) of aii sucif sums paid to Lessee or producer under the "pdy" pravisions oi
such gas purchase contract. Such royalYy paymenYs sha11 be due and owing to Lessar within thirty (30}
days after the receipt oi such payments by Lessee. If the gas pu�'chaser "makes up" such gas within the
period called for in the gas conn�act and Lessee is required to give sueh purchase�- a credit for gas
�reviously paid for but not taken, then Lessor shall not be entitled to royalty on sucl� "make up" gas. If
Lessee is nat producing any qua�ititi�s of gas fro�n tl�e leased pi•emises but is i'eceiving payments under
the "pay" portion af such "take a�• pay" gas purchase cont�•act pra�vision, such payments shail not relieve
Lessee �f tlae duty tn ma�Ce sl�ut-in roy�lty payzzxe�ats if Lessee desires io eontinue thzs Lease, but suck�
� S{aiaey St
"take or pay" z•c�yalty p�yane�ts shaif be applied as a credit against any sl�ut-in rayalty obiigation of tlfe
Lessee. Lessar shall be a third-party bene�ciary of any gas purchase cont�act and/or �'ansportatiorz
a��'eement entered into between Lessee anci any purchase�• andlor transporter of Lesso�-'s gas,
ir�•espective of any pz•ovision of said cor�tracts to the contra�y, and suc� gas purc��ase conh•act and/or
�ransportation agreement will expressly so pro�ide. �'urther, T,essor shall ba entitled to tweniy-five
perceut {25%} of the value of any beneiits obtained by or granted to Lessee from any gas purchaser
and/o�' transporter �oz' the amendtnent, modi�ication, extensi4n, alteration, consolidation, transfer,
cancellation or settlert�ent nf any gas p�rchase cant�act and/or t�-ansportation agreement.
G. Lessee agrees tl�at befo�-e any gas produced from the Ieased prEmises is used or sold off
the leased p�•emises, it witl be run, fiee af cast ta Lessor, tl�rough an adequate oil and gas separa#or of a
co��ventional rype o�• equipmez�t at least as efficient, ta the end that alI liqufd hydracarbons �•ecoverable
from the gas by such xneans will be recovered and Lessor praperly compensated therefor.
H. Auy payment of royaity or sl�ut-in gas r�yalty hereunder paid to Lessor in excess of the
amount actually due to the Lessor shall nevertheless become #he properiy of the Lessor if Lessee does
not make written ��equest to Lessor �or z�eimbursement within one (1) y�a�� from tl�e date that Lessar
received the erroneo�s payment, it being agreed and expressly unde�•stood betweei� the parties �ereto
that Zessor is no# the collecting agent for any othe�- royalty owner under the lands covered hereby, and a
determination a�' tha name, inferesi ownership and w�ereabouts of any �erson entitled to any paymei�t
whatsoever uc�der the terzns l�ereo� shall be the sole responsibili�y of Lessee. It is fu�-ther expressly
agreed and �znderstood that: (i) this provisian shall in no way diminish the obligatian of Lessee ta :rn�ake
full and punctual payments of a1l amounts due to Lessor ar to any othe�- person under the terms anci
provzsions of this Lease, and (ii} any oveipayments made to the Lessor under any �rovisions of this
T,ease sk�all z�ot be ez�titled to be offset against �uture a�nounfs payable to parties hereunder.
T. The terins of this Lease rr�ay not be acnended by any divisian a�•cler and the signing of a
divisian o�-der by any minerat owner may i�ot be rt�ade a pr�i-�q�aisite to paymant af royalty hereundez'.
6 Haney St
J. O�I, gas oz• pa'oducts tz�ay be solc� tn a subsidia�y or af�"itiate of Lessee provided #hat sucli
saies shall never reduce or he �he basis for a reduction in the royalties payable under this Lease, whether
directly or indirectly, as a reduced price or otherwise.
5,
POOLING
Lessee, upon the priar written consent of Lessor r�v�ic�� sh�ii not be unz•easonably with�eid, is
he�•eby �iven ihe right to pool o�• combine th� acreage covered by this Lease or any pa�-tion thereof as ta
oil and gas, or either of them with any other land, le�se ar leases in t►�e immediate �icini#y thereof to the
extent hereinafter stipulated, when it is necessary or advisable to do so in order to praperIy explore, or
develop, produce and operate said leased premises iai co�npliance with the spacing rules of the apprapriate
lawfi�l au�hority, or when ta do so wauld promote the coi�servation of ail and gas in and under and that
may be p�•oduced from said premises. In the absence of field r•utes, units pooled for oil and gas hereunder
shall not excced the acreage provid�d for retained acreage tracYs in Paragraph 7. I,essee, unde�• the
provisions t�ereof, znay pool oz• cozzzbine acreage covered by tllis Lease or any partian thereof as above
provided as to ail in auy one or more sirata and as to gas in any one or more st��ata. The units formed by
pooli�ig as to any s�ratum or sh•ata need not conform iu size or area with the unit or units into which the
Lease is pooled or co�nbined as to any ather st�afurn or straia, and oil units n�ed not conform as to area
with gas u�its. The poolin� in one oz• more instances sl�all not exlaaust ihe �-ights of ihe Lessee hereu�ider
to pool this Lease or portions thereof into oYlier units. Lessee shall file fo�- record in the appropriate
i•ecords of tlie county in which #he leased �remises are siti.�ated a�i instc�ument describing the pooled
acreage as a pooled �t�ii. In t�is z•egard, Lessee shall provide Lessor wit�� a copy of any at�d all dacu�nents
filed with any reguiatory aut�ority or recorded in the records of any county within thirty (30j days oi
�iing such documents. Upon the recordatian of the unit in �he county recards and the timely furnishing of
the capies required herein to Lessor tife unit shail be effective as to ail paities hereto, t�eir heirs,
successors, and assigns, ia7espective of whet(�er ar nat the unit is likewise effective as to alI other awners
of sux•face, mineral, z•oyaity or othe�• rights i�� ia��d ineluded in such unit. Lessee inay at its election
7 Haney St
exercise its paoling option before a�• after cornmencing o�eraiians far or completing an ail or gas well on
the leased pre:mises, and the paaled unit may include, but it is noi �•equired to include, land or leases upon
which a well capable of producing ail or gas in paying quantities has theretofoi•e bcen campleted or upon
which a�erations for tl�e drilling of a well for oil or gas have theretofore been commenced. In the event
of operatioz�s for dz•illi�g on oz• p�•aductio� of oil o�• gas frotn a�y part af a pooled unit which includes all oz•
a po�-tion of the land covered hy this Lease, such operatians sl�all be considered as operations for drilling on
or producrion of oil and gas from land covered by this Lease w�ether or not the we11 0�• wells be located
on the premis�s covec•ed by this Lea�e and in such event aperations for drilling sha11 be deemed to have
been commenced on said land within the :meaning o£ this Lease. For the purpase of coznputing the
royalties ta which awners of �-oyalties and payments out of produciion and each af them shall be eniitied
on production of oil and gas, or eitlier of them, there shall be allocated #o the land covered by this Lease
and included an said un�t (or to each separate �•act within the �nit i� this Lease cavez�s separate t�•acts
within the unit) a pro rata portion of the oil and gas, or either of tham, praduced fr•om the pooled unit.
Royalties hereunder shall be computed on the portian of s�ch p�-oduction, whether it be on oil and gas, or
either of them, so allacated to the land covered by this Lease and included in the unit just as though such
productio�a we�•e fram such land. The production fi•om an aiI well will be considered as prod�:ction from
this Leas� ��• oiI paoled unit from whicl� it is producing and not as prociuctiata from a gas pooled unit; and
produciion fi�om a gas weli wiil be considered as production from this Lease or gas pooled unit from which
it is producing and not from an oil pooled unit. The formation of any unit Isereunder shall not have the
effect af changing the ar�vnersiiip o� any delay rental or shut-in production royalty rrvlfich may became
payabie under this T.ease. Ii t��is Lease now or hereafter covers separate tracts, no paoling ar unitization
af royalry interest as between any such separate tracts is intended ar shali be irripiied or result me��ely
from the inclusion of such separate tracts within this Lease but Lessee shall nevertheless have the right to
pool as provided abave with consequent al[ocation oF production as pi•avided above. As useci ii� this
paragx�aph, the words "separate h�act" mean any t�•act vwiti� royaliy awuership differing, now ar hereafter,
eithe�- as ta parties oz' a�ou��ts, fronn tlaat as to any athez' pairt of t�e leased pz'enntses. Notwithstandt�g
Heney St
anythi��g ta the contt'�ry therein abava, no unit may be farmed that is comprised of less than 50% ot'tl�e
Ieased premises.
6.
CONTINUOUS DRILLING
At the expiration of the p�-imary term this Lease shall rezz�ain in fiiil force and effecY far sa long as
Lessee is conducting Continuous Drilling Operations (as herein defined). Lessee shall be considered io be
engag�d in Cantinuo�s Driliing Operations at the expiration oi the p��irnary term if: {1} Lessee is then
engaged in drilting operat�ons on the leased premises or lands pooled the�•evvith o�• (2) Lessee has completed a
well as a producer or as a d�y hole within ane hundred tweniy (120) days priar to the expiration of the
pri�nary term. Lessee also shall l�e conside�•�d to be engaged in Continuous Driifing Operations for so long
thereai�er as Lesse� conducts drilli.ng opez•ations on fhe leased premises, or lands �ooled therewith, with due
diligence and with inter��ls of no mor� than one hundred twenty {120) days between the date of completion
o� one vt+ell and the date of commencement of drilling operat�ons on an additional well, "Co�npletior�" shalI
be considered to be the date af �•elease of the cornpletion rig for a completed well, but in no event more t�an
one hundred twenty (120) days failawi_t�g tlae z•elease o� tha drilling rig. In the case of a diy hole,
"completion" slfail be considered to be the date af release of the drilling rig. "Cotntnencement" shall be the
actuai spud date Qf a wel[. Co�itinuo�s Drilling Operatians shall be deemed to have ceased upnn tlte failu�'e of
Lessee to co�aamenCe dritling operations an an additional well within such one huncired twenty (120) day
period. When the Continuous Drilliz�g �perations cease, the provisions of Paragraph 7 will be applicable.
'7.
I2ETAINED ACREAGE
A. Vertical Wells
At the expiration of the prirnai-y term oi� this Lease or upnn the termination of the continuaus
d�'illing progc'am set for�h in Paragraph 6, each non-horizont�l we11 drilled he�•eo� capable of produeing in
paying quantit�es vwiil ho1c3 only farty (40) acres for any formation from #he su�-face to the base of the
Bainett 5hale formation. As to deptl�s below the base of the Ba�•nett Shale Formation, the proration unit
shali be the minimuxn size ��ecessazy to obtaiza t��e z�naximt�m p�•oduction allowable. If the praration unit
9 Haney St
for a we11 corr►pletec� bel�w tk�e base of t�e Barneit Shale Formatioi� is larger tha�� 40 acres, tlie well may
maintain the Lease as to %rmations above the base of the Barnett Shale Forzz�atinxx as to �ot more than 40
acres. All other acreage except that included in a p�-oration unit or pooled �nit as described above wilt
cease to be cove�•ed by tl�is Lease and wiIl be released. To the extent passible, eacl� sucii p��oration unit will
be in the shape of a square, witl� the bot�om ai ihe well in tha center. F�t�iher, it is undez�stood and ag�•eed
that Lessee shall earn depths as to eacl� proration unit or pooled unit only frorri the surface dowt� a dept�
which is the stratigraphic equi�vaient to a d�pth of on� f�uudred feet (100') below the deepest p��oducing
formation i�� such weil which is capable of producing oil or gas in paying quantities at the expiratian of
the primary term of this Lease or upon the teimination oF khe continuaus ct�-iE[ing program sei foz�th in
Pa�•agraph 6, This Lease wii� terminate at sueh time as to all depths below such depths as to each
�•espective proration unzt or poo�ed unzt. Z�produetian should the�•eaft�r cease as to acreage included in a
proration unit or pooled unit, this Leas� will terminate as to s�cla acreage unless Lessee carnmences
reworki��g o�• additional drilling operations on such acreage within ninety (90) days thereafter and
cantinues such reworking or additional drilling operaiions until commercial production is restored
thereon, pravided that if mo�•e tl�an ninety (90) days elapse between the abandonment of such well as a
diy hole and the commencement oi actual driliing operatio�s fo�• an �ddit#onal well, or mare than ninety
(90) days pass since the commencement af reworking operations without the �•estoration of cnmtnercial
production, this Lease shall terminate as to the applicable proration unit or pooled unit.
At any iim€e ar times that this Lease terminates as to a1i or any portion of the acreage of the Ieased
pre�nises, Lessee shall promptly execute and record in the office af the Caunfy Clerk in the County
where the leased premises are located, a proper release of such tenninated acreage and shall furz�isk�
execu€ted cauntarparts of �ach such release to Lessor at t�e address shown in Paragraph I9 hereof.
B. Horizontal Wells
It is expressly u��c€e�•sinod ar�d agreed that, subject ta the other terms, provisions and limitatians
contained in this Lease, Lessee shall have the right to d�•iil "horizont�� welis" under the leased premises,
or lands pooled therewitl�. The term "horizontal w�ll" or "hot•izontally d�-ilied well" shall :tx�ea� any weli thaY
� O �ianey $t
is c�rilled with one or more horizantai drdinholes hdving a horizontal drainhoie displacement of at least five
hundt'ed eighty-five {S$S} feet. For the pu�pases of furtl�ei• defning the tenn "horizontal wells" and
"horizontaiiy drilled" referenca is rnade to the defir�itions co��tained within �tatewide Rule 85, as
promulgated by the Railroad Commission af Texas, whic� definitions are incorporated he�ei�i for all
puzposes.
Tn tl�e event c�f a�y partial termination o� the i,ease as provic�ed in Paragraph 7A, then, witl�
regard to a well which is a horizantal well or a horizontally drilled well, Lessee shall be entitled to z'etain
all sands and I�orizons at all de�ths from the surface down to a depth which is the sn�atigraphic equivalent of
a depth oF one hundred (100) �eet below the base of the deepest producing farmation in such well which is
capable ofp�-aducing oil or gas in paying quantities, but only in a spacing �nit the area nar �uznber o�acres
of which are equal to the area ot� number of acres determined by adding twenty (20) aci-es %r each %ve-
��undred eighiy-five {S8S) feet horizontally drilled ta the original forty (40) acres deemed to be a pro�•atian
unit %r each vertical well. Eac�� such tract az•out�d each �orizontaIiy drilled well shall b� as nearly in the
shape of a square or a rectangle as is practical with the boundaries of the tract including the entire
horizantal drainhole and the I�terai boundaries of such tract being approxitnately equal distance from such
drai.nhole and paralIel lher�to.
Ti production should thereafter cease as to ac�•eage included in a proratian unit or pooled uiiit, this
Lease will terminate as to such acreage unless T,essee commenc�s reworking or additional driilin�
operations on such acreage within ninety (90) days thereafter and contii�ues such ��eworking or additioilal
drillir�g operations until commercial production is restored thereon, pro�ided that if more than n�nety (90)
days pass betw�en the abandorzmen� of such well and tk�e commencement af achzal drilling operatians far
an adciitional well, or mo��e than ninety (90) days pass since the cammencement n£ reworking operations
without the restoration af commercial production, the Lease shalI terminate as to �h� applicable pro��ation
UTllt.
At any time o�' iimes that t�is Lease terminates as to a11 or any portioZ� of the dcreage of the leased
premises, T.essee shall pror�ptly execute and record in fhe o£fice oF the Couuty Clerk i�i ti�e Couuty where
� 1 Haney St
the leaseci pz•err�ises are lncated, a pz•opex• release o� such terminated ac�•eage and shall furnish executed
co�nterparts of each such release to Lessor at the addrass shown in Parag��apl� 19 hereof.
S.
OFFS�T �BL�GAT�ONS
In t��e event a well or wells prociucing oil or gas should be brought in on la�id within 330 feet fram
any boundary of the leased premises, Lessee a�ees within sixty (6Q) days fram cammencement of
produc�ian f��om such well or weIls to commence tlie actual d�•illing of an offset well ar wells ozx tl�e
leased p��emises; pro�ided that the well o�- wells which are to be offset a�-e producing in paying quantities and
have been perforaYed and fraced within 330 feet of the leased premises; or Lessee s�all release to Lessar free
of this Lease the offse�ting tract of at least one �iundred twenty {120} acres.
9.
FORCE MAJEURE
A. T�ie term "fnrce majeuz•e" as used herein shali mean and include: requisition, o��der,
regulation, or control by governmental au�hority or commission; exercise of i�ghts ar priority or control
by governmental authority for national defense or wa�� purpose resui�ing in delay in obtaining or inability to
obtain eithe� rnaterial, equipment or means of �ranspartation normally necessaiy in prospeeting ar drilling
foa� oil, gas or ather mineral granted herein, or in producing, ha��dli��g or transporting saz�r�e fi-om the leased
premises; war, scarcity of or delay in obtaining matetials o�- equipment; Iack of labor or rneans oi'
�t•at�sportatiou af labar or materials; acts of God; insurrection; flood; snike; or other t�ings beyond the
control of Lessee. The term "force majet�re" shall not include lack of markets %r productior� or any other
events affecting only tlie econorr�ic or financial aspects of drilling, developznent or productioz� o�• t�e
inabiiiry to conform to city, state or federal regulatians.
B. Notwithstanding any other provisions of tl�is Lease, but subject to the conditions
hereitaafter set forth in this Paragraph 9, should Lessee be prev�nted by "force majeure" as defined above,
from canducting d�-illi«g oz• rewo��king ope:rations ox�, o�• pz•oduczng oil, gas az• othar mine�•al frc��n, the leased
p��emises, such failu�-e shall not constitute a ground for tl�e tez�rzzinatian of tl�is Lease ox• subject said Les,�ee to
darr�ages therefoz; and the peiiod of time duiing whicl� Lessee is so p�-e�enied shall not be counted agaitast
� � Ha��ey Sf
Lessee, but t��is Lcase shali Ue ext�nded for a pe��iod of tirr►e ec�ual to t��at during which such Lessee is so
prevented from eonducting sucl� drilling o�� reworkit�g operations c�n, ar producing oil, gas ar othei• minerai
fi•ozzz, such ieased premises p�•ovided, hor�vever, fhat in no �vent vvill the prima�•� fe�� be extended unless
Lessee has begun the actuai drilling oi a well prior ta the data of the expiratian of the primary term. Ail
ofthe pravisions ofthis pa��agraplf are subject to each of#he foiiowi��g express conditions:
The ierms and co��ditions of this paragraph shall not �xtend beyond the �xpiration date of any law,
Oi'(��I', rule, or regutation iuvoked under this paragraph, and shall be applicable and effective an[y during
the following periods:
(1} If the force majeure shall accur during the primary term of this Lease, it shall not
operate to extend this Lease znnre thaz� twn (2) cnnsecutive years beynnd the
expiration of the primary term.
{2) If the force majeure shall occu�• durizag a one k�undred twenty (120) day d�•illiaag or
reworkit�g period provided for in Paragraphs 6 and 7 hereof, after the primary term
laas axpirad, then it shatl nat operate to extend the L�ase more than two {2)
successive years beyond the expiration of such one hundred twenty {120) day
period.
(3) In no event will the primary ierm be extended unless Lessee has begun the act�zal
drilling of a welt prior to the date of the expi�-ation of the prirr�ary term.
C. None of the pravisians of this pai�agraph sl�ali ever be or become effcctive and applicable
unless Lessee shall, within a reasonable time (not to exceed sixty (60) days in any e�ent) after occurrenee of
t�e clain�aed event of force zzzajeure abave referred to, notify the Lessoi•, in w�•iting, of such occurcenee
with full pa�-ticulars thereof.
D. Tlae terms of this paragraph do not apply to monetary payments due under the terms of thi�
Lease.
10.
SHUT-�N GAS W�L�. PRO'VIS�ONS
If at any titne after the expiration of the primary term while there is a gas weli on the leased
premises oz• land pooled therewith wifich is capable of producing gas it� paying �uantities, but the
13 Haney St
production thereof is shut-in or s�spe�ided %�� any reason, and if this Lease is not then continued ir� foi�ce
by snz�ae othex' p�'o�vision hereof, then this Lease s�al1 ne�ertheless co�itin�e in farce as to such well and the
pooled unit ar praration unit allacated to it �o�• a period of sixty (6Q} days fi�om t�e date such well is shut-in
ar at #he end of the primaiy term, whichever is the later date. Befare the expiratiori of any such sixty {60)
day period, Lessee or a�iy Assignee hereunder may pay o�� tender to the Lessor a shut-in royalty equal to
One Thousand Dollars {$1,000.00) per shut�in gas well and if such payment ar tender is timely made, fhis
Lease shall continue in force but only as to said well oz• wells and the proz•ation unit or tlie pooled unit
aliocatcd to it or them and ii shall be considered �hat �as is being produceci fz•onra said well or we11s iu
payitlg quantities for one {I) yea�• from the date such well or wells are shut-in, and in like manner one, and
only one, suhsequent shut-in royalry payment znay be made or tendered and it will be co��sidered that gas is
being produced fi•om said well or wells in paying quantities for such� additional one {I) year pEriod as �vell.
Lessee shall not be entitled to recaver any shui-in royalty payments fiom the fizture sale af gas.
Should such shut-in royalty payments nat be made in a timely mar►ner as provided in this parag�'aph, it will
be consid�red For all purposes tlaat thez'e is no productian and no excuse for delayed production of gas
fram any such well or wells, and unless there is then in effect ot�er preservation provisians of this Lease,
this Lease sl�all t�rminate. Lessee sl�ali pay or �ender dircctly to the L�ssor at the address as shown in
Paragraph 19 a�1 s�ut-i� royalty pa�rnents as required by this Lease.
1l.
INFORMATION, ACCESS AND REPORT�
A, Lessnz' s�all lia�e free access at all times to a11 wells, tanks, and other equipment that
services wells unde�- t��e Ieased premises, includi.ng driliing r�velis, and Lessee agrees to furnish Lessor, or
Lessor's nominee, currently and promptIy, upon wriiten request, with . ful� well infarmation includi��g
cores, c�ttings, samples, Iogs (including Schlumberger and other electrical Iogs), capies at�d �•esults of
d�viatior� tests and direetional and seis�nic surveys, and the results of all drill stem tests and other tests of
other kind or cha��acter that may be tnade of wells orti th� leased premises. Lessor or Lessor's nami��ee shall
be fut��ished with and have fi-ee access at all times to Lessee's books and records relative to tl�e produciion
14 Haney St
and sale of aii, gas or other �ninerals fi•om fite leased premises, including repo�ts of every kind and
cltaracter to governmental authoz'ities, State or Federal. Lessor sl�all hava th� ri�ht at its eleciio�i ta
er►iploy gaugers or instali meters to gauge or measure the productian of all minerats produced from the
leased premises, and L�sse� a�•ecs ta prepa�•e and deliver to Lessor or Lessor`s gauger or naminee d�plicate
�un or gauge ticke#s for a11 minerais �•exnoved from the prernises. Lessee sha11 furnish to Lessor daily
driiling reports on each weIl drilied.
B. Less�e shall furnish to Lessor, within a reasoi�abl� time af��r its �xecution, a copy of any
gas purcl�ase conh•act or transportation agreement ente��eci into in connection wiYh the leased px•emises, or if
there is already a gas purchase contract or �ransportation agreement in effect due to Lessee's o�erations in
the field, then a copy of that eontract. Furthermore, a copy of any amendments ta the gas purchase conn-act
o�' transportation agY'eement shall be furnished said Lessar vvithin thirty {3Q) days a#�e�' execution thereaf;
and on request of Lessor and without cos� to the Lessor, Lessee shall furnish Lessor a copy of the
following reports: care recard, core analysis, well comple�ion, battom hoIe pressure measuretnent,
directional survay records, electrical and inductior� suiveys and iogs, gas and oil ratio reports,
paleontological r�ports p�rtaining ta the paleantalagy of the formations encountered in the drilling of any
wells on the leased premzses, a�d all othez• reports which pertain to the dz•iliing, co:cz�pleting or operating of
the wells located on the leased premises. Such information shall be solely for Lessor's use, and Lessor
shall in good faith attempt to kee� same co�iidential for tweive (12} months after receipt.
C. Lesse� sha11 advise Lessor i�� writing of the location of each well to be drilled upon tlae
leased prennises or on lar�d ponled therewit� nn nr befnra thirty (30) days prior io coznamencexnent nf
aperations, and shail advise Lesso�� in wriiing the date of completion andlo�- abandonment of each weIl
drilled on the leased premises or on la�d pooled t�erewith within thirty (30) days after compietion oc
abandonment.
15 Haney St
12.
PRCSERVATION OI' ECOLOGY OF LEAS�D PREMIS�S
Any ov�rflows ar �•eleases affecting the leased pr�tnis�s, includi��g, but not limited to, salt wate�•,
znud, ct�emical, or nil sl�ail be z•eported innnaed�htely to Less��•. Lessee shall not use hny whter in, �n or
under the Ieased premises witha�t the prior wri�en consen� of the Lessor.
13.
REMOVAL OF EpUIPMENT
Lessee shall have tlie ��ight at any time during or withir� six (6) mon#hs after the expiration of this
Lease (bu� not t�xereafter) fo r�rr�ove all prape��ty and fixtures placed by Lessee an the leased premises,
ir�cluding the right to draw and remove all casing. This paragraph shall not apply t� equipment ar casing on
or in an oil or gas well capable of praducing in paying q�aiitities, but Lessee shall be paid reasonable
sal�vage value for any s�tch casing or equipment. It is contemplated that Lessee may dri1l across and through
lands covered by this agz•eement w�ere p�•oduciio�a is noi obtained or ceases. Whe�•e the casing o�• pipeli�e
plaeed ar laid tluough such non-producing lands is n�cessary to �he productioii oi a well or wells loeated an
other lands covered by this Lease, or lands pooled the�-ewith, it is expressly understood and agreed that
Lessor wili make no demand that such casing, pipelines or other equipment necessary for the praducrion af a
well or wells drillec� by Lessee be renr�oved as long as such casing, pipelines and other equipzz�ent is z�ecessary
for tiie production of a producing well or wells drilled by Lessee.
14.
ASSIGNABILITY BY LESSEE
This Lease may be assigned in whole or in part by T.essee and the provisions shall extend to the
heirs, executo�s, adminisn•ators, successors and assigns of the parties hereto; provided, however, that any
such� �ssignment by Lessee shall require the prior written consent of Lessor. All n'ansfe�'s hy Lessee
{including assigntnents, sales, subleases, overriding �•oyalty coz�veyances, o�• pz•aductio� payztzeni
ai�rangements) musi be recorded in the cou�3ty where the leased pr�mises are located, anct the recorded
transfei• ar a copy ce�tified ta by the County Cle��k af the cour�ty where ti�e ��ansfer is reeorded must be
delivered to the Lessor within sixty (60) c�ays of the executian date. Eve�y t��a��sferee sl�all succeed to a11
1 b xa��ey sa
rights and be s�bject ta a1t obligat�o��s, iiabilities, and per�atties owed to tlie Lessor by the original Lessee or
any prinr �rans£eree o� the Lease, incl�ding any iiabilit�es to the �.essor for unpaid royalt�es. Na such
transfer shatl release the Lessee (or at�y subseque��t transf�ror) from any abiiga�ian hereunder.
I5.
N� WARRANTY
This Lease is gi�en and granted without warranty of title, express o�- irriplied, in law os� in equity.
Les�or agrees that Lessee, at I.essee's aptian, may purclzase o�• discharge, in whole or in part, any tax,
mort�age or other lien upon the leased premises and tt�ez•eupon be subrogatecl ta the right of the halder
thereof, and may appiy ��oyalties accruing hereunder towa��d satisfying same or reimbu��sing Lessee. Tt is
also agreed that if Lessar owns an interest in the oil and gas under ihe leased premises less than tlie entire
£ee si�mple estate therein, the ��oyalties to be paid Lessor sha31 be r•ed�ced proportionateIy, but in no event
sha11 the s�ut-in royalty amoun� for a gas well, as p�•avided for in Pa�•agrapk� 10 hereof, be reduced.
16.
INDEMNITY
LESSEE SHALL EXPRESSLY RELEASE AND DISCHA.RGE, ALL CLA.�MS,
DEMANDS, ACTIONS, 3UDGM�NTS, AND EX�CUTIONS WHICH IT EVER HAD, OR NOW
HAS OR MAY HAVE, OR ASSIGNS MAY HAVE, OR CLAIM TO HAVE, AGAINST THE
LESSOR OR ITS DFPARTMENT�, AG�NTS, OFF�CERS, SERVANT�, SUCC��SORS,
ASSIGNS, SPONSORS, VOLUNT�ERS, OR EMPLUYEES, CREAT�D BY, OR ARCSING OUT
OF PERSONAL INJURFES, KNOWN OR UNKNOWN, AND INJIIRI�S TO PROPERTY, R�AL
OR PERSONAL, OR IN ANY WAY INCIDENTAL TO �R IN CONNECTIQN WITH THE
PERFORMANCE OF THE WO1tK FERFORM�D BY THE L�SSEE. TH� L�SSEE SHALL
FULLY D�F�ND, PROT�CT, INDEMNII`Y, AND HOLD HARMLESS THE LESSOR, YTS
DEPARTMENTS, AGENTS, OFFICERS, SERVANTS, EMPLOYE�S, SUCCESSORS, ASSIGNS,
SPONSOR,�, OR VOLUNTEERS FROM AND AGAINST EACH AND EVERY CLAIM,
DEMAND, OR CAUSE UF ACTION AND ANY AND ALL LIABILITY, DAMAGES,
OBLIGAT�ONS, JUDGM�NTS, LOSS�S, FINES, P�NALTIES, COST�, F��,S, AND
17 x��cy sc
�XPENSES INCUIt1tED �N n�FFNSE OF THE LESSOR, ITS DEPARTMLN"�'S, AGENTS,
OrFICERS, SERVANTS, OR EMPLOYEES, INCLUDING, WITHOUT LIMITATION, THC
PAYNLENT OF BONUS AND/OR ROYALTIES REGARDING OWNERSHIP OI' THE
LESSOR'S MINERAI.. INT�REST OF THE LEASED �'it�MIS�S WHICH MAY �3L MA.1)E OR
ASS�RT�D BY LESSEE, ITS AG�NTS, ASSIGNS, OR ANY TI�IRD PARTI�S ON ACCOUNT
OF, ARISING OUT OF, OR IN ANY WAY INCIDENTAL TO OR IN CONNECTION WITH
THE OWN�RSHIP AN)J TITLE OF THE M�IV�RAL IlVTEREST OF THE LESSOR UND�R
TH�S LEASE.
THC L�SSEE SHALL FULLY DEF�ND, PROTECT, INDEMNIFY, AND HOLD
HARMLESS TH� L�SSOR, ITS D�PARTMENTS, AGENTS, OTFICERS, ,SERVANTS,
�MPLOYELS, SUCCES50RS, ASSIGNS, SPONSORS, Ol�. VOLUNTEERS FROM AND
AGAINST EACH AND �VERY CLAIM, DEMAND, OR CAUSE OF ACTION AND ANY AND
ALL LIABILITY, DAMAGES, OI3LIGATIONS, J[JDGMENTS, LOSSES, FINLS, PENALTIES,
CUSTS, FEES, AND EXPENSES iNCURRED IN DEFENSE OF THE LE�SOR, ITS
nEPARTMENTS, AGENTS, OFF�CERS, SERVANTS, OR EMPLOYE�S, �NCLUDING,
WITHOUT LTMITATION, PERSUNAL TNJURY�� AND DEATH IN CONN�CTION
THEREWITH WHICH MAY I3E MAllE OR ASBERTED BY LESSEE, ITS AGENTS, ASBIGNS,
OR ANY THIRD PARTTE� �N ACCOUNT OF, ARISING OUT OF, OR IN ANY WAY
INC�DENTAL TO OR �.N CONNECTiON W�TH THE PERFORMANCE OF THE WORK
P�RFORM�D BY THE LESSEE UNDER THIS LEASE.
THE LESSEE AGREES TO INllEMNIFY AND HOLD HARMI.ESS THE LESSOR, ITS
OF�+ICERS, AG�NTS, SERVANTS, EMPLOYEE�, ,SUCCESS�RS, ASSIGNS, SPON��RS, OR
VOLUNTEERS �ROM ANY LIAB�L�T�ES OR DAMAG�S SU�r�RED AS A R�SULT OF
CLATMS, DEMANDS, COSTS, OR JLIDGMENTS AGAINST TH� LESSOR, TTS
D�PARTMENTS, �TS Urr�C�Rs, AGENTS, SERVANTS, OR EMPLOYEES, CREATED BY,
OI2 ARI�ING OUT O� THE ACTS OR OMISSIONS OF TH� L�SSOR OCCURRING ON TH�
1 g Haney St
DRILL SIT� OR QP�RATIQN SITE IN THE COURSE AND SCDP� QT INSPECTING AND
PERN1iTTZNG THE GAS WELLS INCLUDING, BUT N�T L�MIT�ll TO, CLA,�MS AND
DAMAGES ARISING IN WHOL� OR IN PART rROM TtIC N�GLIG�NC� Or THE LESSOR
OCCURRING ON TH� DRILL SIT� QR OP�RATION SIT� IN THE C()URS� AND ,SCOPE
O�' iNSPECTING AND PEItM�TTING THE GAS 'W�LLS. IT IS UNDERSTOOD AND
AGREED THAT THE rNDEMNYTY PROVIDED FOR IN THTS PARAGRAPH TS AN
INDEMNITY EXTENDED BY THE LESSEE TO INDEMNIFY AND PItOTECT LESSOR
AND/OR �TS DE�'ARTM�NTS AGENTS QFI'ICERS SERVANTS OR �MPLOY�ES FRQM
TH� CONSEOUENCES �F THE N�GLIGENC� OF THE LESSOR ANDIO�t ITS
I}EPARTMENTS AGENTS OFFICERS �ERVANTS OR EMPLOYEE� WH�THER THAT
NEGLIGENC� IS THE SOLE OR CONTRiBUTING CAUSE OF 'rHE RFSULTANT INJURY
DEATH ANDIOR DAMAG�.
17.
INSURANCE
Lessee shall pz•nvide or cause ta be provided t�e insurance described i� the City of �oz-t Worth
Gas Ordinance for each well drilled under the teims of this L�ase, with such insurance to continue until
the we11 is abandoned and t�e site resfored. Such insurance shalt provide that Lessor sl�all be a co-
insured, witho�t cost, and that said insurance cannot be canceled or terminated without thirty {30} days
prior noiice �o T,essor and ten (10) days notice to Lessor foz• nonpayment of premi�zns.
I S.
RELEAS�S REQUIR�D
Within thirty (30) days after the partial �ermination of this Lease as provided t�nder any of the
te��ms and pro�isions of t��is Lease, Lessee shall deliver to Lessar a plat showing the praduction units
d�signated by Lessee, copi�s of logs showing depths to be retained within each unit, and a fi�1ly executed,
reoordable release p:ropez•ly describing by metes and baunds the lands and depths to be z•etainad by Lessee
around each producing we11. If this Lease terzninates in i�s entirety, the�� Lessee shall delive�• a compiete,
fully executed, recordable release to Lessor within tl�ix•ty (30) days, Ii sucli release complies with tlae
� 9 Haney St
requ�rements of this pat�agrdph, Lessor sha11 record such release. If Lessee fails to deiiver a release
compIying with ihe require�nents of this paragraph within t�airiy (30) days af�er L�ssor's demand therefor,
then Lessee sh�ll pay Lessor an amount equal to Five Dollars ($5.00) per acre per day foz• each acre o�the
leased premi�es that sho�ld ha�ve been released, begiiming with #he 30t(� day after the date of Lessor's
request and continuing until such release has been executed and delivered to Lessor. It is agreed that
actual damages to Lessor for Lessee's failure to deliver such release are difficult to ascertain with� an�
certainty, and t�at the payments herein provided are a reasonable estimate of such damages and shall be
considered liquidated daznages and not a penalty. Pu��thermare, Lessor is hereby autl�ariz.ed to execute
and file oi record an affidavit sta�ing that this Lease has expired and the reason therefor, and such
affidavit shall canstitute prima facie evicience of the expiration of this Lease ar any part of this Lease.
19.
NOTIC�S
A. Notifications Required. Lessee shall advise Lesso�- in writing of the Iocation of eaeh
welt tn be drilled upon the leased pr�mises ar on land pooled therewith on or befo��e thirty (30) days prior
to commencement of operations, and shall advise I,essot' in writin� af the date af corr�pletion and/or
abandonment of each weil drilled on the Ieased premises or an land poaled t�erevvith r�vithin thi�•ty {30)
days �fter completion or abandonment, Sueh notice shail include fu�-nishing �I�e Lessor a copy of the
applicable completian o�� plu�ging repor� files3 with any gaveirimental or regulatory agency and a plat or
map showing the lacation oi the weil an this Lease or laz�ds pooled therevvith.
Repoi�ts are atso to be made monthly, to include (1) narne of well, total rz�oz�thly production and
total pz•oduct saIes and (2) lease acti�ity report ta include drilling, testing, fracing, completing, �-eworking,
�-ecompleting, plugging back, repairing and abandonment of #he well and (3) complisnce with the
Minority/Women Business Enterprise {MWBE} Goal o�0°/a �'or leases over 40 ac�•es.
B. Al[ notices, infarmation, le�ters, sut�veys, repo�ts, �naterial, �nd all oYhe�• dacu�ents,
x•equired or permitted to be sent to Lessot� by Lessee shall be sent by certiiied United States tz�ail, postage
prepaid, return xeceipt z•equired, to the following address:
2a Haney St
City of �'ort Worth
Property Management Depai�ent
200 Texas Sh�eet
�'ort Wo�-th, Texas '76IO2
C. Ai[ notices required a�• pei�mitted to be seni to Lessee by Lessor shall be sent to Lessee by
cetti�Zed United States mail, �ostage p�'epaid, retui� �•eceipt �•equested to fhe follawing address:
TotalEnergies E&P Bar�eii USA, LLC
301 Cotnmerce Sheet, Suite 3700
Foit Worth, Texas 76102
D. Service of natices, and other docuinents, I�ereuncier is carr�plete upon deposit of the mailed
material in a post a�ce ar official depositazy �nder tl�e care and custady of the Unit�d States Postal Service,
in a postpaid, properly addressed and certified wf'app�r.
E. Any pariy hereto shall l�ave the i�ght to change the name or address oi tl�e pei-son or
pe�•sans requi�•ed to �•eceive notiees, and other documents, by so notifying the other party in wt-iting.
20.
BREACH BY L�SSEE
I.essee shail conduct Lessee's operaEians in sn7ct compliance with all of the terms and provisions of
this Lease and with all applicable local, state and fedez•al rules and the z•eguiatzons of any regulato�y body
having jurisdiction of such operations including, but not limited to, alI local, sta�e and federal environm�ntal
r�les and regulations and applicable city ordinances.
In the event Lesso�• considez•s fhat operatians are not, at any time, being conducted in co�pliance
with this Lease, oz• any inn�plied covenant of this Lease, Lessox• shall notify Lessee in writing o� the �acts
relied upon as constituting a breach of any express or implied covenant o�' obligation of T,essee hereunder
and, Lessee, if in default, shall have sixty {b0) days after receipt of such notice in whic� to commence
compliax�ce witlt its abligations hereu��da�'. Failure on the pai� af Lessee to timely commence efforts to recti�'y
any suelt breach and to exercise diligence in z•ennedying any such breac� shall operate as a£ar�eiture o�'this
Lease as to the portion thereaf aff�cted by such br�ach; provided that if I..essee, in goac� iaith, disputes any
alleged gra�tnds of breach set forth in such notice, Lessee may, within said sixty (60) day periad, institute a
Declaratoiy Judgment Action in any Disn�ici Court in a county where aIl or part of the aaid leased
21 Haney Sc
pre�nises are located q�estioning whet�e�• it has in fact breached any express o�• irnp�ied covenant nf this
T,ease, thereby staying any �'or%itur� durii�g the pendency of such aeiion. How�ver, in the event that
Lessar obtains a final judicial ascei�tain�nent in any such proceeding that Lessee is in breach of any
co�venant hereaf, �xpress o�• implied, then it is ag�•eed fl�at Lessoz• shall be entitled to a decz•ee pz•avidix�g �ox•
cancellaiian or fo�•feiture aF the Lease in th� event such breach is not rectified or commenced in good Faith
to be rectified Uy Lessee within thiriy (30) days fi-om the date such decree becomes final.
Zl.
L�CATION OF DRILIaING ACT�TY, PIPELINrS AND EQU�PMENT
Na drilling or othei• acti�ity shall be cor�ducted on the suriace of ti�e leased premises and no
roacis, elect�•ic lines, pipelines, equipment, or otf�ei• s�ructures si�ali be placed on the surface of tl�e leased
premises.
22.
CDMPLIANCE WITH LAWS
Lessee shall comply with all applicable rt�tes, reg�lations, ordinances, staiutes and othe�� laws in
connection with any dritling, producing or other operations under the terms of tt�is Lease, i�icluding,
without Iimitation, the oil and gas weil �•egulations oi the City af Fort Wo��th,
f�dcPl
CONFLICT OF INT�R�ST
Lessee represents that I.essee, its officers, and its directois a�•e noY employees or o��ce�•s of the
City of Fort Worth ��or is Lessee (its officers and directars} acting on behalF of any such of�icer or
employee of the City of Foi� Worth.
24.
TERMS
Aii of the terms and provisions of t�is Lease shall extend to and be binding upon the heirs,
executors, administrators, successors anc� authorized assigns of the pa�ties hereto.
2S.
I-�l►il—lil� �I:[ei7�il-�Ii� 1:�►1i �
This Lease states the entire cont�-act between the pdrties, and no representation or promise, verbal
�� i3aney 8€
or w��itten, on l�elfalf of eithe�- pariy shalt be bincii��g unless contained herein; aifd this Lease shali be
binding u�on each party executin� the sarne, regardless of whethe�• ox• not e�ecuted by alt nwners of the
above desc�•zbed land o�• by all pe�•sans above r�amed as "Lessor", and, x�o�withstanding �he inclusion
above of atl�er narnes as "Lessor", this te�-m �s used in this Lease shal[ meau and refer anly to such pa�•ties
as execute #his Lease and their successors in interest.
26.
CAPTIONS
The captions to the vart•ious paz•agrapk�s of the Lease are for conv�nience only, to be used
pz•imarily ta mare readily Iocate speciiac p�-ovisians. They shail not be considered a part of tl�e Lease, nor
sliall they be used to interpret any of the Lease provisions.
27.
COUNTERPARTS
Ti�is Lease may be executed in multiple cou��terparts, each of whieh shail be deemed an original,
with the same effect as if the signature t�ereto and hereYo were upan ti�e sanne instrur�nent. A signature
received via faesi�niie or elech•onicaliy via email s��all be as le�ally binciing for alI purposes as an original
signature.
28.
iNTERYItETATTON
in the e�ent of any dispute over t�e meaning oz• application of any provision of this Lease, this
Lease shall be interpreted fairiy and reasonably, and neither moz•e stz•o�gly foz� or against any party,
�•egardless of the actual drafter of this Lease.
29.
NQ THIRD PARTY RiGHTS
The pro�+iszo�ts ar�d conditions of t��is Lease are solely for the beneiit of the Lessor and the
Lessee, and any lawiul assi�n or successor of lhe LEssee and are not intended to c�•eate any rights,
conn�actual ar otheiwise, to a��y other pe��son or entity.
2� Haney St
30.
S�VERAB�L�TY
If any g�rovision of this �,ease shall be held to be invalid, illegai ar unenforcea�le, ihe validity,
legality and enforceability of the ��emaining p�•ovisions shall not in any way be affected or im�aired,
3l.
VENUE AND JURISDICTION
If any action, whetlier real ar asserted, at law ar in equity, arises on the basis af any provisian of
this Lease, venue £or such aciion s}�all lie in staie co�rts iocated in Tarrant Couniy, Taxas or th� Unit�d
States District Co�rt for the Nortliern District of Texas — Fort Wo�th Division T��is Lease sha11 be
canstrued in accardance with tE�e laws af the State af Texas.
K3��!
IND�PENDENT CONTRACTOR
It is expressly understood and agreed that Lessee shaii aperate as an independent contz•actox• in
each and eve�y respect hereundez• and not as an agent, representative or employee of the Lessar. T,essee
shall have the excl�sive right to conh�ol all detaiIs and,day-to-day operations relat�ve to this Lease and alE
Exhibits and sltati he solely �•esponsible for the acts and omissions of its off�cers, agents, servants,
eznplayees, contractoxs, subcoz�traetors, licensees and invitees. Lessee ac�nawledges tk�at the docirine of
respo�rdeat sasper•io1• will not appiy as between tlae Lessor and Lessee, its officers, agents, seivants,
employees, coniractors, subcontractors, iicensees and invitees. Lessee furthe�- agrees that nothing in this
Lease wiil be consh�ued as the creatio�i oi a partnership ot• joint enteaprise between the Lessor and Lessee.
33.
GOVERNMENTAL POW�RS
It is undei•staod that by execution of this I.ease, the Lessor daes not waive or surrender any o£ its
gove�•n�ne��tal powers.
[SIGNATURES ON FOLLOWING PAGE]
2� Haney St
EXECLITED and effective as of tl�e date of the notarial acknot�vledgment af the Lessor's execu�ion.
LESSOR:
CITY OF FORT WORTH
�dif-CL l��,�
❑s��an�r�,h,dcff(Sep ,2.7i3 - Coi�
Dana Bur�hdaff
Assistant City Manager
APPROVED AS TO �ORM AND LEGALITY:
� ���^��
Assistant City At#orney
CONTRACT COMPT,TANCE MANAGER:
By signing, I acknowledge that i arn responsible £oz•
tiie manitoring and adminish-atian of this contract,
includ�xlg ensurring all perfoxxnance and repo��ting
req�irements.
� : '�---.,o*?_�s
Mark Brown
Loase Manager
LESSEE:
TOTAL�N�RGIES �&P USA BARN�TT 1, LLC
�i�
�G
Brett Austin
Vice President - Land
ATTEST:
44p44aQqIl
�apF F�°°�°°r��d
P �� o �O��I�d
l.g
Ovo o=d
°°Q*°°oa oo *�
� A .h�a�� aab TEX ASoQ �
�na0004
.Tannette S. Gaodali
City Sccretary
M&C L-14889
Form 1295: n/a
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
25 Haney St
�XHI�3IT A
0.4629 acres, mo�•e or less, be�ter described in the following ih��ee (3) tracts:
.2626 acres of land, �no�•e or less, being a portion of Lot 12, Block 2, Oaklawn tn Handley
Addition, out oi'the �. G. Jennings Survey, Absiract 843, an additian to the City o�Fort Wozih,
Tarrant Caunty, Texas, according ta that certain plat �-eco��ded in Volume 661, Page 542, of the
Plat Recoxds o£ Tarrant County, Texas and being mare particularly desc�•ibed by metes and
bounds in that certain deed dated June 14, 1982, by and beir�veen Britt T. Scarborough, as
Grantor, and The City of Fort Worth, a municipal corparatian of Tarrant County, Texas, as
Grantee, and i•ecarded iri Valume 7321, Page I665, o� the Deed Records of Ta�-rant County,
Texas; and a poz-tion of Lot l 2, Block 2, Oaklawn to Handley Addition, out of the S. G. Jennin�s
Survey, Abst�•act 843, an addition to the City of Fort Worth, Tar�•ant County, Texas, accordrng to
that cerfain plat record�d in Valume 661, Page 542, of the Plat Records of Tar�-ant County, Te�as
and being mnre particularly described by metes and bounds in that certain deed dated June 17,
1982, by and between Kevin D. Brown and wife, Nancy K. Brown, as Grantor, and The City of'
Fort Worth, a munici�al corporation of Tarrant County, Texas, as Grantee, and recorded in
Volume 7309, Page 938, of the D�ed Records ofTarrant County, Texas; and a portian of Lot 13,
Block 2, Oaklawn to Handley Addi�ion, aut of the S. G. Jennings �ur�ey, Abstaract 843, an
add�tion to the City of Fort Wo�•th, 'Caz-rant Cou�ty, Texas, according to ihat ce�•tain �Iat recorded
in Valu�ne b61, Page 542, of the Plat Records of Tarrant County, Texas and being mare
particularly desc��ibed by metes and bounds in that certain deed dated July 6, 1982, by and
b�tw�en Phil Ulm�r, Dorath�r Ulmer Ray anci Peggy Ultner Crawford, as Granfior, and The City
af Fort Worth, a municipal corporation o� Tatxanfi County, Texas, as G��antee, and recorded in
Volunne 7328, Page 726, of the Deed Records c�f Tarrant County, Texas; and a portion of Lot 14,
Block 2, Oaklawn io Handley Addition, out of ihe S. G. Jennings Survey, Abstract 843, an
addition tio the City of Fo�� Worth, Tarrant Coun�r, Texas, according ta that certain plat recorded
in Volume 661, Page 843, af the Plat Recards oi Tarrant County, Texas and being more
particula�'ly descxibed hy �zetes a�d bounds in tha� cerfain deed dated October I4, I9$2, by anci
between Ga�y L. and K. Dell Rabbins, as Grantor, and Tne City of Fort Worth, a municipal
corporation of Tarrant Coun�,y, Texas, as Grantiee, and recarded in Volume 7394, Page 2212, a�
the Deed R�cords of Ta�•rant County, Texas.
(HAYNZE ST, TRACT NL 1319}
(LANCASTER MIPA 3H UNIT}
.0984 acres of land, �nore or less, being a portion af Lot 10, Black 2, Oak Lawn to Handley
Addition, aut af the ,�. G, Jennings ,��ivey, Absh�act 8�3, accozding to that ceariain plat recorded
in Vo�ume b6�, Page 5�2, of the �'lat Records of Tarrant County, Texas and being more
particulaz•iy d�scribed by m�tes and bounds in that certain deed dated June 10, 1982, by and
between Timothy R, Wright, as G�•antor, and City of Fori Worth, a municipal corporation nf
Tarrant County, Texas, as Grantee, and recorded in Volume 731 p, Page 2014, a� the Deed
Records af Tarra.nt County, Texas.
(HAYNIE ST, TRACT NL 1320)
{LANCAST�R MIPA 3H UNIT)
2S Haney St
0.1019 acres of land, rnore o�• less, being a portzon of Lot 8, Block 2, Oak Lawn to Handley
Acidition, out of the �. G. J'ennings Suzvey, Abstract 843, according io that certain plat reeorded
in Volume 661, Page 542, of the Plat Records of Ta�-�ant County, Texas and being more
particularly described by m�tes and bounds in that certain deed dated 4ctober 5, 1982, by ar�d
between Martha Robbins and daughter po�-othy Robbins, sale su�•viving heirs of J. B. Robbins,
deceased, as G��antor, and City of Fort Wo��ih, a municipal corporation of Tarrant County, Texas,
as Grantee, and recorded in Volume 7392, Page 1687, ofthe Deed Records of Tarrant County,
Te�as.
(HAYNIE ST, TItACT NL 1321}
(LANCASTER MIPA 3H UNIT)
27 xan�y s<
1/11/22, 8:34 AM
CITY COUNCIL AGENDA
�'C� RT �'�`U RT I I
_�_
COUNCIL ACTION: Approved As Amended on 11/17/2009 -Amendment is Highlighted in Yellow
Create New From This M&C
DATE: 11/17/2009 REFERENCE NO.: L-14889 LOG NAME: 06ADMIN LEASES
CODE: L TYPE: NON-CONSENT PUBLIC HEARING: NO
SUBJECT: Authorize Administrative Approval and Execution of Leases for Natural Gas Drilling Under
City-Owned Properties of Five Acres or Less in Size
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to approve and execute leases
for natural gas drilling under City-owned properties that are five acres or less in size.
DISCUSSION:
On January 18, 2007, (M&C G-15588) Fort Worth City Council authorized the City Manager to
approve and execute leases for natural gas drilling under City-owned non-park properties that are two
acres or less in size.
From time to time, the City is asked to lease isolated City-owned properties in various locations that
are five acres or less. City staff is recommending that gas leases for these properties be
administratively approved for natural gas drilling leases after evaluation of the gas company's drilling
plan, reputation, financial status, project team and compliance history by staff and the City's mineral
asset management consultant, Midkiff Oil and Gas. The leases would be executed through an
internal administrative process involving the Planning and Development Department, the City
Attorney's Office and the City Manager's Office.
The purpose of this change is to allow staff to negotiate and expedite processing of small leases in
order to ensure that the City is not excluded from units due to the time necessary for City Council
review.
Requirements and guidelines to be followed in determining eligibility for inclusion in the Administrative
Gas Lease Process are as follows:
City-owned property five acres or less;
No surface use of any kind;
No identified adverse impact to the surrounding neighborhood;
Compliance with the City's gas drilling ordinance;
Minimum bonus to be determined by current market rate;
Minimum royalty of 25 percent;
The distribution of lease bonus and royalties will be in accordance with the revenue distribution
policy approved by the City Council; and
No M/WBE goal will be required due to the size of the parcels.
The lease will be presented to City Council for consideration prior to execution for any City owned
�'����I� properties under five acres if opposition to conversion is expressed by citizens in the
affected neighborhood or a Council Member requests such consideration.
FISCAL INFORMATION/CERTIFICATION:
The Financial Management Services Director certifies that this action will have no material effect on
M&C Review
apps.cfwnet.org/council_packet/mc_review.asp? I D=12668&cou ncildate=11 /17/2009 1/2
1/11/22, 8:34 AM
City funds.
TO Fund/Account/Centers
Submitted for City Manager's Office by_
Originating Department Head:
Additional Information Contact:
ATTACHMENTS
M&C Review
FROM Fund/Account/Centers
Fernando Costa (6122)
Susan Alanis (8180)
Jean Petr (8367)
apps.cfwnet.org/council_packet/mc_review.asp? I D=12668&cou ncildate=11 /17/2009 2/2