HomeMy WebLinkAboutContract 60454CSC N o. 60454
O�L AND GAS LEAS�
THE STAT� OF TEXAS §
§
COUNTY OF TARRANT §
THIS AGREEM�NT ("Lease") zs �r�aade and antered into as oi the date herein specified by atxd
between CITY OT TORT WORTH, a home rulc municipat corporation of the State o� Texas,
{�erei�afte�• :refei�red to as "Lessflr"), and, TOTALENERGIES E&P USA BAItNETT 1, LLC, a
Delaware limited liability com�any, {hereinaft�r referred to as "Lessee"}.
WITNESS�TH:
1.
GRANTTNG CLAUS�
Lesso�•, in consideration of a cash bonus in hand �aid, of the rayalties l�erein provided, and of the
ag�•eements of Lessee hereinafter contained, hereby grants, leases, and lets exclusivcly unto Lessee %r the
sflle purpose of investigating, exploring, drilling, operating, a��d producing oi! and/or gas fiorn the land
leased hereund�r, tagether with any liquid or gaseous substances praduced in association with oil and gas,
the fallawing described land situat�d in the City of Fait Warth, Texas described in Exhibit "A" attached
hereto (the "leased premises").
All mineral subsiances and minerai rights other than oil a�1d �as (and all other liquid or gaseaus
minerals produeed in association witk� oil or gas) are expressly reser�ed to Lessor and excepted frozn this
Lease. These z•eserved �iine�•al rights include, but are not limited to, the rights to lignite, coal and sulfur
not produced as a component of oil and gas.
For the p�zrpose of determining the acnount of a�y paytnent hereuuder, said leased premises shali
be deemed ta cantain 0.1837 act•es, whei�aer actually containing more or less.
�
PI2IMARY TERM
�ubject to tlie other provisians herein coniained, this Lease slfali be for a tertn of two (2) years
from the date of the natarial acknowledgtn�nt of' Lessor's execution of this instrument (t�areinafte:r called
OFFICIAL RECORD
CITY SECRETARY
1 C{andley I]r
FT. WORTH, TX
"primazy term°) and so lon�; thereafter as oil, g�s or otl�er minerals g��auted herein are produced fiam the
leased premises or laz�ds pooled therewith, in paying quantities, or operations are in pra�n•ess thereon hs
hareinafter pro�ided, a�id the royalties are paid as provided herei�i. �o�� t�e pu�poses of this Lease, the
term "operations" rneans any of ihe faliowing: drilling, testing, completing, reworking, recampletir�g,
d�epening, plugging bac�, or repairin� of a well in sea��ch for or in the endeavor to abtain production of
oil nr gas, so Iong as such operations are cai•ried out with due diligence wit� no cessation of more than
ninety (90} cansecutive days.
3.
DELAY R�NTALS
Tliis is a paid-up lease and no delay renials are due. i7pon terminatian, Lessee shall �repare,
execute and delxver to Lessar a recordable 1•�lease covering the leased premises in accordance with this
Lease. Lessee may at any time oi- times execute and deliver to Lessor, a release or releases of this Lease
as to all or any part of the leased premises, and thereb� be relieved of aIl obligations as to #he released
land or in#e�•est, except for tha indemnificaiian obligatinns described ii� Paragraph I6 and the plugging
obIig,ations of this Lease.
4.
RQYALT�ES
NOTWITHSTANDING ANY OTHER ROYALTY PROV�S�ON TO THE
CONTRARY, ALL ROYALTIE� DUE AND PAYABLE UNDER THIS LEASE ON GA5
PRODUCED QR RECOVERED FR�M THE LEASED PREMISES SHALL BE
COMPUTED BASED UP�N THE HOUSTON SHIP CHANNEL INDEX PRICE MINUS
TWO CENTS PER MMBTU REGARDLE�� OF WHERE L�SSE�'� SHARF OF GAS
OR OTHER HYDROCARBONS PRQDUCED UNDER THE LEASE IS AVAILABLE
FOR SALE QR IS SOLD OR DEL�VERED AND SUCH ROYALTIES MAY N4T
UNDER ANY C�RCUM�TANCES BE OFFSET OR REDUCED BY ANY PO�T
PRODUCT�ON COSTS, �XP�N�ES, CHARGES OR DEDUCT��N� OF ANY
AMOUNT, HIND OR NATURE, INCLUDING BY WAY OF �LLUSTR.ATION BUT
NOT LIMITATION, COSTS OR EXPENS�S FOR GATHERING, TREATMENT,
PROCESSING, TRANSPORTAT�4N, P�PEL�NE CHARGES AND EXPEN�ES,
COMPRESSI4N 4R MARKETING. HOUSTON SHIP CHANNEL INDEX PRICE
SHALL REFER TO THE PRICE PUBLI�HED MONTHLY BY MCGRAW H�LL �N
INSIDE F.E.R.C.'S GA� MARKET REPORT UND�R THE H�AD�NG "MONTHLY
BIDWEEK SPOT GAS PRICES, EAST TEXAS, HOUSTON SH�P CHANNEL INDEX"
FOR THE FIRST DAY OF THE MONTH OF DELIVERY. IN THE EVENT
Z xana�cy vr
PUBLICATION OF THE FOREGOING ItEPORT CEASES, OR IN THF GOOD TAITH
BELIEF OF �ITHER THE CITY OR LE�SEE, SUPP4RT�D BY AN UNAFFXLIAT�D
THIRD PARTY OPINION, TH� INDEX IS BEZNG ART�F�C�ALLY MAN�PULATED
OR �S FUNDAMENTALLY UNREL�ABLE, THE CITY AND LESSEE �HALL
PROMPTLY MEET AND CONFER IN GOOD FAI'I`H TO AGREE UPON A
SUBSTANTIALLY COMPARASLE PUBLISHED INDEX FOR CURR�NT QN-SH4RE
SP4T GAS PRICES BEING PAID BY PURCHASERS TAK�NG DFLIVERY OF GAS
xN TKE HOUST�N-BEAUMONT TEXAS AItEA,
Lessee shall pay to Lessor the following royaities, vv��ich shall be free of all cosks of any kind,
including, but noi limited to, costs a� gathering, prnduction, transportation, h-eating, compressian,
dehydration, processing, marketing, tr�cking or other expense, directIy or indirectly incurred by Lessee,
wheti�ei- as a direct cl�arge or a reduced price or otherwise. In this rega�•d, Lessee agrees to bear ane
hundred percent (lU0%} of all co�ts and expenses incurred in rendering hyd��acarbons produced o�� or
fz•om the leased premises marketable and delivering the sam� into the purchaser's pipeline for immediate
i�ansportation to an end user or storage facility. Additionally, said royaities shall never bear, either
directly or indirectly, under any circumstances, the costs or �xpenses (including depreciation) to
const�•uct, repair, renovate c�r operate any pipeli�ae, plant, or ather faci�ities or equipment used in
connectio� with the t�•eating, separation, extraciion, gathering, processing, refining, compression,
trans�arting, manufacturing or marketing of hydrocarbons produced from the leased premises or lands
pooled therewith.
A. On oil, gas {including flared gas} a��d casi �ghead gas, tagetk�er with any other liquid or
gaseous hydrocarbons recovered �y Lease operatians (s�zch as in drips ar separators) twenty-fve pereent
(25%) oi all royal�ies due and payable under this Lease on gas produced or recavered from the leased
premises based upon the Houston SI�i� Channel Index Price rninus two cenfs per MMBTU is to be
delivered free of cost fo tlie credit of the Lessar into pipelines, gathering lines, baz•ges or ot�er facilities
to which tlae wells and tan.ks on the property ara�aay be connected. I.,essor shali always have the right, at
any ti�ne and fram titne to time, u}�on reasonable writ�en notice to Lessee, to take Lessor's share of oil,
gas and processed liquids in kind. Lesso�� may elect to take Lessor's gas in kind at the well, ar at the
point of deli�eiy where Lessee delivers Lessee's gas to any third party, If gas is �rocessed, Lessor may
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eiect to take Lessor's sl�are of the residue gas attributable to production fi�om the leased p�•emises, ai the
same point of delivery where Lessee receives its share af residue gas oz' I�as its share af residue gas
deiivered to a thi�•d paz�ty. Lessor znay elect to have its rayalty si�are o�processed Iiquids stored in tanks
at the plant oi• delivered inta pipelines on the same basis as Lessee's sha��e af liquids is stored oz•
delivei•ed. Lessor sha11 reimburse Lessee for all reasonable costs incu�•�•ed by Lessee in installing,
operating or maintainittg additional faeilities necessary for Lessor's royalty gas and praces�ed liquids to
be separately metared, accounted for, and delivered to a third part,y, but Lessor shall not b� charged for
any expense in the production, gathering, de�ydration, separation, compression, tz�ansportation,
t��eatment, processing or s�arage of L�ssor's share of gas and pracessed liqurds.
B. O� pz�oducts, twenty �ve percent (25°/a) af all royalties due and payable under this Lease
an gas produced or recavered from the leased prernises based upon the Hauston Ship Chany�el �ndex
Price minus two cents pe�• MMBTU.
C. Qn �•esidue gas or gas remaining after separatint�, extraction or processing operations,
tweniy five percent (25%} of all rnyalties d�ze and paya�le under this Lease on gas produced or
recovered fiom the leased premises hased upon the Houston Ship Cl�annel Index �'rice minus tiwa cenfs
per MMBTU.
D. This Lease is intendeti to cover only oi� and gas, but some other s�bstances {includiug
heliu;n an�d sulphu�•) miay be produced necessarily with and incidental to the production of oil or gas
frozzz i�ae leased pretnises; and, in such �vent, this Lease shall aiso cover all such other substances so
praduced. On all s�ch substances sa produced under and by virtue of th� te�-�r►s of this Lease, Lessor
shall receive a rayalty of tweniy �ve percent (25%) o� all such substances so produced and saved, same
to be delivez•ed to Lessor, free of all casts; or, at �,essor's alection, Lessor's twenty fi�e percent (25%) of
such substances shall be sold by Lessee with Lessee's partion of such substances and at the same prafit
realized by Lessee for its poition of such substances.
E. All royalties hereinabave pravided s��all be �ayable ii� cash {unless Lessor elects tn take
sucEt royalty oil or gas in kind) to Lesso�• within sixty (GU) d�ys following t�te �rsi cotaamercial sale at'
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pi'oductio�� and ihereaf�er na more than sixty (b0) days after the end o£ the znoatth following the month
during which production takes �1ace. Subject to the pz•ovisio��s of Paragraph 10 oi th'ss Lease
concei�nin� shut-in r�vells, royaities shall be paid to Lessor by Lessee a�id/or its assi�ns or by the praduct
purchaser for oii andlor gas. �Tpon the failure of any party ta pay Lessor the �•oyaity as provided in this
pa��agrapl�, Lessor may, at Lessor's option, elect to tertninate this Lease by sending written notice to
I�essee. Lessee sha11 then ltat�e t�irty (30) days frotn the date of service of such written notice in which
ta avoid tez•mination oi this Lease by making or causing to be made the prope�• �•oyalty payment or
paym�nts that should have been paid. If such royalty payment is not made on o�• before the expiration of
the 30-day period, or written appro�val is not obtained from Lessor to defer such payrrient, Lesso�� may
elect to terminate this Lease by filin� a Notice of Termination with the Ca�nty Clerk in the county
w�te�•e the leased premises are Iocated. The effective date of said terminatian shall be the date said
Notice of Termination is filed with the said County Clerk.
F. In the avent Lessee enters into a gas purchase contract wl�ich contains what is commoniy
referred to as a"take or pa� provision" (such provision meai�ing fi�at the gas purchaser a�re�s to take
delivery of a speci%ed rninim�m �aiume or quantity oi gas over a speei�cd tertn at a speci�ed prica or
�o make minimum periodic payments to the producer for gas not taken by the purehaser) and the
purchaser unde�• such gas purchase cot�iract tnakes paynr�ent to L�ssee hy virtue of such purchaser's
failu�•� to Yake delivezy of sucl� minimum volume or quan�ity of gas, then Lessor sha11 be entitied ia
tvventy �i�ve perce►at (25%) oi all such sums paid to Lessee o�� produeer u��der the "pay" pravisions of
such gas purchase con�ract. Such royalty payments shall be due and awing to Lessor withii� thirty (30)
days after the �•eceipt af such payments by Lessee. If the gas purchaser "makes up" such gas within the
period called far in the gas cozat�•act and Lessee is ��equired to give s�ch purchaser a credit �oz• gas
previously paid foz� but nat taken, then Lessor shali not be entitled to royalty on such "make up" gas. If
Lessee is nat praducing any quantities of gas from tl�e Ieased premises but is receiving paym�nts under
the "pay° portion of suci� "take oi• p�ty" gas p�rchase eontract p�'ovision, such paynnez�ts shall not relieve
Lessee of the duty to make sl�ut-in royalty payments if Lessee deszres to conti��ue this Lease, but such
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"take or pay" royalty payinents shatl be appliec� as a credit a�ainst any sttut-in �-oyalty obligation of tlfe
Le�see. Lessor shall be a third-party be��e�icia�y of any gas pu��clfase contract and/o�• transportatian
agreement en�ered into batwe�n Lessee and any purchaser ancl/or transporter af I,esso�•'s gas,
irres�ective of any provision of said cflntracts to the conn•ary, and such gas purchase contract andlor
t►-ansportatioi� agreement will expressly so provide. Further, Lessor shail be entitled to twenty-five
percent {2S%) of the value o�' any benetits abtained by o�- granted to Lessee fi•am any gas purchaser
aiidlar h-ausporter for t�e amendment, modification, exlension, alteraiioza, consoiidation, transfer,
cancellation or set#lement of aiiy gas purchase cantract and/or t�ransportation agreement.
G. Lessee agrees that before any gas produced froxn the leased premises is used or sald off
the leased pre:mises, it will be run, free of cost to Lessor, through an adeyuate ail and gas sepa�•ator of a
conventional type or equipment at least as efficient, to the end that a11 Iiquid hydraca�•bons recoverable
fi•am the gas by such means will be racovered and I,essor prap�rly compensated therefor.
H. Any payzzzent of royalty or shut-in gas royalty ifereunder paid to Lessor in excess of tlis
amounf actually due to the Lessor shall ne�ertheless become the propei•ty af t�e Lessor if Lessee dnes
not make written request to Lessor for reimbursement within one (1) year fi'ort� the date that Lessor
received the erroneous payment, it being agread and expressly understond betweeji the pa�ties hereto
that Lessor is not the coiiecting agettt far any ot�er royalty awner under the lands covered hereby, and a
detert�ination of the name, interest awnership and whereahouts of any person entitled to any paytnent
whatsaever under the terms hereof shall be the sole respansibility of Lessee. It is further expressly
agreed and understaod that: {i) this provision sha�l in no way diminish the abligatian of Lessee to make
full and punctuai payznents of all atnounts due to Lessor or to any other person under tlie Yerms and
pravisions of this I.,ease, and (ii) any overpayments made to the Lesso�• under any pravisions of this
Lease shall not be entitled to be offset against fiature amo�nts payable to parties hereunder,
T. T��e terms of this Lease may not be amencied by azry divisiof� arder and the signing of a
division o�-der by any miiieral owner may nat be rnacie a prez•equisite to payment oF royalty hereunde�•.
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J. Oii, gas oz' p�•oducts nnay be sold to a subsiciiary or af�Iiate of Lessee provic�ed that sucl�
sales shall never reduce or be the basis for a reduction in the royalties payable under this Lease, whethez•
di��ectly or indirectly, as a reduced price ar othe��wise.
5.
POOLING
Lessee, upan the pz•ioz• �rrit�e� consent of Lessor which shall i�ot be �nreasonably withheld, is
hereby given the right to pool or combine the acreage covered by this Lease or any portion the�'eaf as to
oil and gas, or either of them witl� atty other land, lease or leases in the imtnediate vicinity thereaf to the
extent h�reinaf�e�• stipulated, when it is �ecessary or advisable ta do sa in orde;• to properly explore, or
de�elop, produce and operate said leased premises in campliance with the spacing rules of the approp�•iate
lawful authority, o�' when ta da so wauld promote the conser�ation of oil and gas in and under and that
may be produced from said premises. In the absence of field rules, units pooled for oil and gas hereunder
shalt nat excecd the acreage provided �o�• �•etained ac�•eage tracts in Pa�•agraph 7. Lessee, under the
provisions i�ereof, t�nay paol ar cornbine acreage covered by this Lease or any portion thereof as above
provided as to oil in any one or more strata and as to gas in any one or more shata. The units �ormed by
pooling as to ai�y stratum or snata ��eed not confqr�n in size ar area witt� #he unit or units inta wl�ich th�
Lease is paaled or cornbined as ta any other stratum o�• �t�ata, and oil units need not conform as to area
r�vith gas units. T�e pooling in one or more instai�ces shall not exhaus� t��e righis of the Lessee hereunder
to pool this Lease or portions thereof into other units. Lessee shall file for recard in the appropriate
reeords of the county in which the leased premises are situated an instruz�nent describing th� pooled
ac�•eage as a pooled unit. Ir� this regard, Lessee shall provide Lessol- with a copy af any and all documents
�led with any regulatory authority or �-ecorded in the recore�s af any county within thirty {30) days of
filing such dacurnents. Upon the recordation of the unit in the county records and the timely fui-�ishing af
the capies required herein to Lessor the unit si�all be effective as t4 all pa�-ties hereto, t��eir laezz�s,
successors, and assigns, ii�espective of whether or not the unit is likewise effeeiive as to all other own�rs
of s�rface, mi�feral, z•oyalty or otl�er righ�ts iz� land a�acluded in such unit. Lessee may at its election
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exez•cise its pooli�tg option before or after commez�cing operaiions �a�• or campleting an ail ox• gas well oz�
�he Ieased premises, and the pooled unit may include, �]Ut 1� 15 IlOt TEC�UI1�d t0 SriC�IiC�E, land o�� leases upon
wl��ch a well capable of p�-oducing oii o�• gas in paying quantities has theretofore been compieted ar npon
whzch ope�•ations �or the d�•iiling of a well for oii or gas have thex•eto�'oz•e been commenced. �n tlie event
oi operations for drilling �n or production af oil or gas fi•om any pari oi a paoled uni� wliich includes all nr
a portion of the land covered by this Lease, such operat{o��s shall be considered as operstio��s fo�• cirilling on
or produc�ion of oil and gas fiom land covered by this Lease whether or nat the r�vell or we31s be Iacated
on ihe prernises covered by this Lease anci in s�ch event opez•ations for drilling s�all be deez�aed to �aave
been comme��ced on said land witlain the meaning of this T,ease. For the puipose of co�nputing the
royaities to which owne��s of royalties and payments out of production and each of them sha11 be entitled
ort pz•oduction of oil and gas, or eithet• o� them, there shall be allacated to the land cavei�ed �y this Lease
and included ii� said unit (ar to each sapa�•ate h•act within ihe unit ii' this Lease cavers separate t�acts
within the unit) a pro rata po�tion of the oil and gas, or either af thetn, p��oduced fram the pooled unit.
Royalties hereunder shall be computed on the portion oi such production, whether it be on oil and gas, or
either of them, so allacated ta the land cov�red by tf�is Lease and included in the unif just as tho�gh such
production were frorzz such land. The production fi•ot� an ail well wiil be considered as production fiom
this Lease or ail pooied unit from which it is producing and not as production from a gas pooled unit; and
production from a gas well will be co�sidered as production fioYn this Lease o�• gas �ooled unit fiom which
it is p�•oducing and not from an oi1 paoled unit. The foz�nation af any unit hereunder sha11 not have Yhe
effect of changing the owne�•sk�ip nf any delay rental nr shut�itz pz•oduction z•oyalty w��ich inay become
payable under this Lease. If this Lease naw ar hereafter covers separate tracts, no pooling or unitization
of royalty interest as between any such separate tracts is intended o�• shali be implied o�• result merely
from the inclusion af such s�parate t�acts within tifis Lease but Lessee sha11 nevertheless have the right to
pool as p��avided above witi� consequent al�ocatioz� af px•oduciian as p�•ovided abova. As used in tt��s
paragraplt, the words "separate t�'act" zrrxeatt atty t�'act wit� rayaliy ow�e�'ship diffez'i�t�, now nz' laereaftez',
either as to parties or amoui�ts, from that as to any other part of the leased pr�misas. Notwithsta��ding
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anything to the canh•ary therein above, no ui�it may be fai-�ned that is comprised af Iess than 50% af tl�c
leased pz-atnises.
6.
CONTINUOUS DRILLING
At the expiration of the primary teim tl�is Lease shall remain ii� fi�ll force and effeet for so long as
Lessee is canducting Continuous Drilling Ope��ations (as herein defined). Lessee shail be considered to be
engaged in Coniinuous Drilling Operations at the expiration o� the primaiy term if: (1} Lessee is then
engaged in driIling operatians on the leaseci premises or lands paoled therewitl� ar (2) Lessee has comple�ed a
well as a produeer or as a diy �ole within one hundred twenty {120) days prior to the expiration of the
primaxy terrm�. Lessee also shail be conside�•ed to be engaged in Con�inuous D�•illing O�e�•atia�s far so tong
thereafter as Lessee conducts dz•i]lir�g ope�•a�ions on the leased p�•emises, or lands pooled therewith, wit� due
diligence and with intervais of no more than ane huudred twenry {120) days between the date of compietion
of oiie well and the date of commencement of drilling operatians on an additionai weli. "Completion" shail
be consiciered to be the date af release of the completion rig for a completed well, but ui no event more than
one hundred twenty (120) days following t�1e release of ti�e drilling rig. In the case of a dry hole,
"completion" shall be considered to be the date of release of the drilling �ig. "ConvnencemenC" shali be the
actual s��zd date of a well. Can�inuous Drilling Operatians sl�all be deemed to have ceased upon the faiiu�-e of
Lessee to cammence drilling operations on an additianal well within such one huiidred twenty (12p) day
perioci. When #he ContinunUs Drilling Operatinz�s cease, the pz•ovisions nf Par��x•apk� 7 will he �pplicable.
7.
RETAINED ACREAGE
A. Veriical Wclls
At the expiration of the primary teim of t�is Lease or upoi� th� termination of the continuous
driiling program set foi�th in Paragraph 6, eaci� non-horizontat well drilied hereon capabie of producing it�
paying quantities wili hold o��ly %rty (40) acres for ai�y formation fram tha surface to the base of the
Ba��nett Shale fo��rz�ation. As to depths below the base of the Barnett S�al� Formation, the proration unit
s��all be the minimu�za size �xecessazy to obtain tl�e r�axinnuzz� p�•aductian allowable. I�the pro�•ation unii
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for a well corrzgieted below the base of the Barnat� Shale �'ormation is la��ger than 40 acres, the well may
maii�tain the Lease as to formations above the base of the Barnett Siiale Farmation as to not more tl�an 40
acres. Aii other acreage except that included in a proration t�nit o�• pooled unit as desc�•ibed above wilt
cease to be covered by t�is Lease anc� will be released. To the extent possible, each sucit proration unit witl
be in the shape of a square, with the bottom of the well in the center, Further, it is uncierstood and a�•eed
tl�at Lessee shall eain depths as to eac� proratio�i unit or pool�d unit only frorz� tl�e sut�£ace down a depth
w�ieh is t�e stz•atigraphic equivalent to a depth of one hund�•ed feet (100') belaw the deepest producing
fnrmatian in such well which is capable o�' produci��g ail or gas in paying quantities at the expiration of
the primary term of this Lease or upon the termination o� the cantinuous drilling program set forth in
Pa�•agrapl� 6. This Lease will te�•minate at such tirr►e as to all depths betow suck� depths as to each
respective proratzon unit or pooled unit. If praductian should thereafte�- cease as to acreage inci�ded in a
proration unit or pooled unit, this Lease will ter►ninate a� to such acreage ui�less Lessee commences
reworking oi• additional drilling operations on such acreage within ninety {90) days thereafter and
continues such reworking ar additional cirilling aperations �ntil commercial producti�n is zestoared
tl�ereorn, provided that if �n�'e t�an ninety (90) days elapse batween the abandonment of such well as a
dry hole and the commencement of actual drilling operations far an additional well, or more than ninety
(90) days pass since the co�nmencetnent of reworking aperations withaut the restoration of commet•cial
prod�ction, this Lease shall terminate as ta the applicable pz•oratioxx unit or pooled unit.
At any time or times thai this Lease tez't�ai�.�ates as to all o�' any portiou of the acreage oi th� leased
premis�s, Lessee shall promptly execute and recard in the of%ce of the County CEerlc in the Caunty
where the leased premises are located, a praper release af such tei7ninated acceage and shaIi �urnish
executed couEtterparts of eacli such release to Lessor at the add�•ess s��ovvn in Paragz•aph 19 he��eof.
B. Horizarttal Wells
It is expressly undez'stood at�ci ag�'eed that, subject to tlle oiher terms, provisions and limitations
contained in th�s Leas�, Lassee shall have the right to drill "horizontal wells" under the leased premises,
or lands pooled therewith. The term "hoj�izantal well" or "hoj-izontally d�•if[ed well° shall mean any we11 that
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is drilled witl� one o�- more horizontal drainholes having a ho�•izontsl drainitole displacemeitt of at least five
hundred eighty-five (585} feet, For the puiposes af fui�her defining the term "horizontal vvells" and
"horizontally d�•illed" refe�e��ce is �ade to tt�e definitions contained within Statewide Rul� $6, as
promulgated by tlie Rail��oad Commission of Texas, which definitions are inearpo��ated herein for all
purposes.
In the event of any partial termination of �he Lease as provided �n Pa�•agrap� 7A, ther�, with
rega;d to a well which is a horizontal well or a horizontally d�-illed wcll, T.essee shall be entitled to retain
all sands and horizons at ail depths from the surface down to a depth which is the stratigraphic eq�ivalent af
a deptli of one hundred (�OQ) feet below the base af the deepest producing �'ox•mation in such well w�ich is
capable of p�•aciucing nil o�• gas in paying quantities, but only in a spacing unit tlie area or i�umber af acres
of w��ich are equai to the area or number of acres determined by adding twenty (20} ac��es for eacl► five-
hundred eighty-five (585} feet ho��izaaitally drilled to the original farty (4Q) acr�s deemed to be a proration
unit far �ach vertical weil. Each such tract around each hoz•izor�ially d�•iiled well shall be as nearly in ihe
shape o� a square o�• a rectangle as is practical with the boundaries of the �ract including the entire
horizontal drainhole and the lateral boundaries af such n�act being approximately ec�ual distance frotn such
d�•ainhola and parallel thereto.
If p�•aduction should thereafler cease as ta acraage included in a p��oraiion unit or pooled �nit, thi5
Lease will te�-minate as to such acreage unless Lessee comm�nces reworking or additional driiling
operations on suc�� acreage within ninety (90) days thereai'ter and continues such reworking or additional
drilling aperations until commercial �roduction is restored thereon, provided that if more than ninety (90}
days pass beYwe�n the abandonment of'such well and the comme�eezrxent of acival drilding opera�ions for
an additior�al well, n�• nnn�•e than ninety (90} days pass since th� carnmencem�nt of r�working operations
without the restoration of commercial production, the Lease shall terminate as to the applic�ble proration
unit.
At any time or titnes that this Lease terminates as ta all o�• any po�•tion of the acreage of the leased
premises, Lessee shall pron�ptly execute anci record in the affice of the Caunty Clerk in the County where
I � HandEcy t�r
tl�e Ieased premises are located, a proper release of such tern�inated acreage and shall fumisiz executed
counte�parts of each such release ta Lessox at the add�•e�s sl�own i� Parag�•ap�i 19 iae�•eof
$.
OFFSET QBLIGATIONS
�i-i the event a well oi- wells produci�sg oiI or gas should be brought in on land within 330 feet from
any boundaiy of the leased premises, Lessee agrees within sixty {6a) days f�•om commencement of
production from such well ar wel�s ta cornmence the acYuai drilling of an offset well or wells on the
leased premises; pravided that the well or wells whicl� are to b� offset are producin� in paying quan�ities and
have been perForated and fraced within 330 feet af the leased premises; or Lessee shall release to Lessor free
of this Lease fhe offsetting tract of at least ane hundr�d tweniy (120) acres.
9.
FORCE MA,]EUR�
A. The te��m "farce majeu�•e" as used h�rein shall mean and inc�ude; r�quisition, order,
x•egulaiion, nr cantrol by �overnmental authox•ity o�• cUznmission; exercise �f �•ights or prinrity or cn�trnl
by gavernmental autho�-�ty %r national defense or war purpose resulting in delay in obtaining or inabiiity to
obtain either materisl, equipme�rt or means of t�ansportation normally necessary in praspecting or drilling
far oil, gas or ather mineral granted hereiu, or in producing, handling or transporting same from the lsased
premises; war, scarcity of or delay in obtaining materials ar equipment; lack of labor or rrieans oi
n�a�sportatian �f Iabor or mate�-ials; acts af God; insurrectian; flood; s�i�ike; or othe�- things beyand the
control of Lessee. The terrn °force majeure" shali r�at inelude lack of markets for production or any otlier
events affecting only the economic o�� financial aspects of drilling, de�velopmenf or production o�• the
inability to canform to city, state or federal regulations.
B. Notwitifstanding any othe�- provisions of this Lease, but subject to the conditions
hereinafter set forth in this Paragraph 9, slfould Lessee be prevented by "farce majeure" as defined above,
fi•om conducting drilling ar rewarking operations on, or producing ail, gas or o#her mineral fi•om, tlie leas�d
precnises, sucif failure shail not constituie a�ound far the t�rrninatian of this Lease or subject said Lessee to
darr�ages tlxerefor; ax�d t�e pezxnd o� time during w�ich �.e,ssee is so p�•eve►�ted sl�all z�nt be counted against
� 2 Ha3idley [7r
Lessee, but this Lease s��all be extended for a�eriQd of tinie equal to thal during rvl�ich such �,essee is sa
�revented from conducting such drillin�; or rer�varking opet'at[otts on, or prQducing oil, gas a�- other minei�al
£�•o�n, such leased premises provided, hawever, that in no e�ent will the primary term be extended unless
Lessee has begun the actual drilling of a weil prior to t�e date of the expiration of the prima�•y tertn. �11
of the pra�isions of this paragraph are subj ect to each of the following exp�•ess conditions:
The terms at�d co�diiions of this paragraph shall not extend beyand the expiration date af any law,
order, rule, or regulation invoked under this paragraph, and shall be applicable and effective aniy dtzring
the fallowing periads:
(1) If the �arce majeuz•e s�all occur during the primary term of this Lease, it shall not
operate to extend this Lease more than #wo (2} consecu�ive years beyond lhe
expiratian af the primary term.
(2) Tf the force majeure shail occur during a one hundred fwenty (120} day drillin� or
reworking period provided fai• in Paragraphs 6 and 7 hereof, after the primary tetm
has expiz•ed, then it shall not operate to extend the Lease more ihan two (2)
successive years beyond the expiration af such one h�ndred twenty (120) day
period.
{3) Tn no eve�rt will the primary term be extended unless Lessee has begun fh� act�zai
drilling of a well prior to the daYe of the expix•atian of ihe primary term.
C. None af the provisions of tl�is paragrapli shall ever be or become effective and applicable
unless �.essee sha11, witliin a reasanable time (i�ot to exceed sixty (60} days in any event) afte�- occurrence of
the ctaimed event of force znajeuz-e above refeired to, noiify the Lessor, in writing, of such occurrence
with fuIl particulars thereo£
D. The terms of this para�aph do not appl� to xnonetary paynaents due under tt�e terrns of this
L�ase.
10.
�HUT�IN GAS VVELL PROVISIONS
If at any time after the expiration of the prima�y term while there is a gas well on the leased
premise� oz• land pooled therer�vith whicl� is capable of producing gas in paying q�antities, but the
� � Handley �r
produetion thereof is s��ut-in or st�spended fc�r any reason, and if this Lease is nat tl�en continued in force
by some other pro�ision hereof, then this Lease shail xiet�e�theiess conti��ue i�i fa�-ce �s to such well and tife
pooled unit or p��oratian unit allocatec� to it for a period oi sixty (b0) days fi•am the date sucl� well is shut-in
or at the ei�d of the prinnazy ierm, whichever is the later date. Before t�e expiration of any such sixty (60)
day pet•iod, Lessee ar any Assignee lfereunder may pay o�� tender to the Lessor a shut-i�� royalty equal io
One Thausaiid Dolla��s ($1,000.00) per shut-iz� gas well and if such payment or tender is timely made, this
Lease shall continue in force but only as to said weii ar we11s and the proration unit or the pooled unit
allocated to it o�• thenn and it shall be considered that gas is being px•oduced fi-orn said well or wells in
paying quantities for oj�e {1) year fi•orn the date sucia weil or we11s are shut-in, and in like manne�• ane, and
only one, s�bsequent shut-in royalty payznent may be made ar tendered and it will be considered that gas is
being produced fi•om said well ar wells in paying quantities for such addiiional one (1) ycar period as well.
Lessee sliall not be entitled to recover any shut-in royalty pay�nents from t�e fiiture sale of gas.
Should such shut-in royalty payrnents not be made in a timely maruier as provided in this parag�•aph, ii will
be conside��ed for all purposes l�iat thez•e is no productian and no excuse for delayed production of gas
from any such weil or wells, and unless there is then in e£fect other preser�+ation pz•ovisions of this Lease,
this Lea�e shall terminate. T�essee shall pay or teaider diractly ta the Lessor at dte address as shawn in
Pa�•a�aph 19 all shut-in royalty payments as required by this L�ase.
11.
INFORMATION ACCESS AND REPORTS
A. Lessor shall have free access at atl iiznes to ail wells, tanks, and other equipment that
services wells under the leased p�'emises, including drilling welts, and Lessee agrees to fu�'t�ish Lessor, or
Lessor's nominee, currez�tly and promptly, upon written request, vvifh firll well int'oimation includitig
coz•es, cuttiz�gs, samples, logs (including Schlumbcrger and oil�er elec�rical logs), copies a��c� results af
deviation t�sts and directional and seis�nic suiveys, and t�e results oi all driIl stem tests and other tests o£
other kind or charactei• that may be r�ade of wells nn the leased pre�nises. Lessor or Lessor's n�minee sllall
be furnished witli and have fi•ee aecess ai all times to Lessee's books and records �•elaiive t� the �raduction
1 � Handley L7r
and sale of oil, gas or oth�r mincrals f�•om the leased premises, i�icludii�g ��eports of eveiy kind and
character to governmental authorities, State or �'�deraI. Lessor sha1L i�ave the right at its election to
e:�x�ploy gaug�rs or iustail meters to gauge or measure tl�e production o� aii znix�erals p�•oduced fi�om the
leased premises, and Lessee a�ees ta prepare and delivex• io Lessor or Lessor's gauger or nominee duplicate
run or gauge tickets far ail mit�erals rennoved from the premises. Lessee shall furnish ta Lessor daily
d�•illing reports o�i aach wcll d�-illed.
B. Lessee sha11 fut�nish to Lessor, withi�t a reasonable time after its execution, a copy of any
gas purchase contract or iransportation agreement etatet�ed into in connection with the leased prernises, or if
there is already a gas �u�•chase cantract or transportation agree�nent in effect due to Lessee's operations in
the field, �hen a copy of that conri�act. Furthermore, a capy of any amendments to the gas purchase contract
or trar�sportation agreement shall be furnished said Lassor within thirty (30j days after execution thereaf;
and on request af Lessot• and witt�out cost to the Lessor, Lessee shall fi�rnish Lessor a copy o� the
�oilowing x•eports: core record, core analysis, well completion, bottom �ale pressure measurement,
directional suivcy r�cords, electrieal and inductian suiveys and Iogs, gas and oil z-atio repo��ts,
paleontological reports pertaining to the paleontology o� the fornnat�ons ei�countered in the driiiing of any
wells o�Z the leased premises, and all otl�er x'eparts which pertain to t�e di-illing, completing or operating of
the wells located on the leased pi•emises. Such information shali be solely for Lessor's use, and Lessor
shall in good faith a�tempt to keep same confidential for twelv� (12) months afte�• receipt.
C. Lessee shall advise Lessar in writing of the iocatior� nf each well to be drilled �pon the
leased premises or on land paoled thez'ewiil� on or before thirty {30) days prior to commencement af
operatinns, and shall advise Lessor in writing the date of completion and/ar abandoi�ment o� each well
drilled on tlie leased premises oc on land pooled therewith withiu thirty (30} days aftez• compl�tion or
abandonment.
1 5 Il�ndley C)r
f`�
PR�SLRVATION Or ECOLOGY QF L�ASEn PTt�MISES
Any overflows or rele�ses affecting the leased premises, ineluding, but ��ot limited to, salt water,
mud, chemical, or oil sI�a1I be reported itnmeciiat�ly to Lessor. Lessee shall nat use azay water in, on or
under the leased prennises without the prior written consent of the Lessor,
I3.
REMOVAL OF �QUIPMENT
Lessee shall l�ave the right at any time during o� wit�i:� six (6) mo�iths after the expiraEion af this
Lease (but not thereafter) to remove ali property and fixtures placed by Lessee an the leased premises,
including the right to ciraw az�d remove all casing. ihis pa��agraph sl�all not apply ta equi�ment or casing on
or in an aii oz• gas well capable of producing in paying quat�tities, but Lessee shall be �aid reasonable
salvage value fa�- any sueh casing or equipment. �t is cot�tefnplated that Lessee may dt�ill across and th�rough
Iand� covered by this ag�•eement where p�•oduction is not obtaitted or ceases. Whe�'e tiae casing a�• pipeline
placed or laid through suc�� non-producing lands is necessa�y to the praductzoz� af a well o�- wells located on
other lands covered by this Lease, or lands pooled tE�erewith, zt is expressly unde��stood and agreed that
Lessor will make no dernand #hat such casing, pipelit�es o�• other equipment necessary fa�• tl�e production o£a
well ar wells drilled by Lessee be removed as long as such casing, pipelines and ather eq�upnne�at is necessary
far the produclian of a pt•aducing well ar welis d�-illed by Lessee.
14.
ASSIGNAB�L,�TY BY LESSEE
This Lease may be assigned in whole or in part by Lessee and the provisions shall extend to tiie
heirs, executars, administrators, successors and assigns of the parties liereto; provided, hawever, that any
such assi�nmeni by Lessee shall require the prior w�•it�en conseni of Lessor, All #�•ansfers by Lessee
(including assignments, saies, subleases, ovsrrid'uig royalty convayances, or production payment
arrangernents} �ust be z•ecoz•ded i�i the c�unty where the leased premises a�•e Iocated, and the recorded
transfer or a copy certif�ed to by the County Clet�k of tl�e county wltet'e the h'a��sfe�- is i�ecorded must 6e
delivez'ed to the Lesso�� within sixty (60) days of t�e execution date. Every h�ansferee sha11 succeed to all
1 6 ��andf�Y vr
rigl�ts anc� be subject to al[ obligations, Iiabiiities, and �enalties owecl to tite Lessor by the original T.essee or
any prior tra��sferee of the Lease, including a��y liabilities to the Lessor for unpaid royalties. Na sucl�
hansfer shall t�elease the Lessee (ar any subsequent h�ansferor} f��o�n any obligatioi� hereunder.
1S.
NO WARRANTY
This Le�se is given and granted without warranty of title, exp�•ess or irnplied, in law oz� iz� equity.
Lessor agr�es that Less�e, at Lessee's optio�, rz�ay purchase or dischar�e, in whole or in part, any tax,
rzzoz�tgage or othe�• lien upon #he Ieased premises and thereupon be subrogated to the right of the holder
thereof, and may apply royalties accruing l�ereunder towa�•d satisfying same ar reimbursing Lessee. It is
also agreed that if Lessor owns an interesY in the oil and gas uncle�' t�e ieased premis�s less fhan the enti�-e
fee simple estate therein, the royalties to be paicl Lessor shall be reduced p�-aporlionately, but in no event
shail the sl�ut-it� royalty atnount for a gas well, as provided for in Paragraph 10 hereof, be redueed.
16.
IND�MNITY
LESSEE SHAI�L �XPRE�SLY R�L�ASE AND llISCHARGE, ALL CLAIMS,
DEMANDS, ACTIONS, JUDGMENTS, AND EXECUTION,� WkIICH IT EVCR HAD, OR NOW
HAS OR MAY HAVE, OR ASS�GNS MAY KAVE, OR CLAIM TO HAVE, AGAINST TH�
LES�OR Olt ITS DEPART1ViENTS, AGENTS, OI'I+IC�RS, S�RVANTS, SUCCESSORS,
ASSIGNS, SPON�ORS, VOLUNTEERS, OR EMPLOYEES, CREATED BY, OR ARISING OUT
OF PERSONAL INJURIES, KNOWN OR UNKNOWN, AND INJiTRI�S TO PROPERTY, REAL
QR PERSONAL, QR IN ANY WAY INCIDENTAL TO OR IN C4NNECT�ON WITH TH�
PERFORMANCE OF THE WORK PERFORNIED BY THE LESS�E. THE L�SSEE SHALL
T'ULLY D�FEND, PROT�CT, iNDEMNIFY, AND HOLD HARMi�E�S THE LESSCIR, ITS
DEPARTNI�NTS, AGENTS, OFFICERS, SERVANTS, EMPLOYEES, SUCC�SSC}RS, ASS�GNS,
SPONSORS, OR VOL�TNTEERS TROM AND AGA�NST EACH AND EVERY CLATM,
DEMAND, QR CAUSE OT ACTIDN AND ANY ANn A.LL L�ABILZTY, DAMACGES,
OBL�GAT�ONS, JUDGM�NTS, LOSSES, FINES, PENALTI�S, COSTS, T��S, AND
�'r HandEey Dr
�XPENSES �NCURRED lN DE�'�NSE OT' TH� LESSOR, ITS D�PARTMENTS, AGENTS,
OFF�C�RS, S�RVANTS, OR �MPLOYC�S, INCLUDING, WITHQUT LIMITATION, THE
PAYNIENT OP BONUS AND/OR ROYALTIES R�GARDING OWNERSH�Y OP TH�
LES,SOR'S MIN�RAL �NTEREST OT THE L�ASED PR�MISE� WHICH MAY 13E MAI}E OR
ASSERT�D BY LESS��, ITS AG�NTS, ASSIGNS, OR ANY THIRD PARTIES �N ACCOUNT
OF, ARISING OIIT Or, OR IN ANY WAY INCIDENTAL TO OR IN CONNECTYON WrTH
THE OWNERSHIP AND T�TLE OF THF MINERAL INTEREST OF THE LESSOR UNDER
TH�S L�ASE.
THE LESS�E SHALL FULLY DEFEND, PROTECT, IND�MNI�Y, AND HOLD
HARMLESS THE LE�SOR, ITS DEPARTMENTS, AGENTS, OFF�CERS, S�RVANT�,
EMPLOYEES, SUCCESS�RS, ASSIGNS, SPONSORS, OR VOLUNTEERS FROM AND
AGATNST �ACH AND �VERY CLAIM, DEMAND, OR CAUSE OF ACTION AND ANY AND
ALL LIABILITY, DAMAGEB, 0�3LIGATIONS, .IUDGMENTS, LQSS�S, F�NES, PENALTIES,
COSTS, FEES, AND EXFENSES INCURRED IN D�k'ENSE OF THE LESSOR, TTS
DEPARTMENTS, AG�NTS, 4FF�CERS, SERVANTS, OR �MPLOY�ES, INCLUDING,
WITHOUT LIMITATION, PERSONAL INJ[JRIES AND DEATH IN CONNECTIQN
TFIEREWITH WHICH MAY BE MADE OR ASSERTED BY LESSEE, �TS AGENTS, ASSIGNS,
OR ANY THIRD PARTIE� ON ACCOUNT OF, ARISING OUT O�', OR IN ANY WAY
INCIDENTAL TO OR IN CONNECT�ON 'VVITH THE PERFORMANC� Or THE WORK
PERFORMLD �3Y THE LE�SE� �C.INDER THIS L�ASE.
THE LESS�E AGREES TO INDEMNIFY AND HOLD HARML�SS TH� LESSOR, ITS
O�'FICERS, AGENTS, SERVANT�, EMPLOY��S, SUCCESSORS, ASSZGNS, SPONSORS, OR
VQLUNTE�RS FROM ANY LIABTL�TXES OR DAMAGES SUFFER�D AS A R�SULT OF
CLAIMS, D�MANDS, COSTS, OR J[7DGMENTS AGAINST THE LFSSOR, ITS
l)EPARTM�NTS, ITS OFIE�CERS, AGENTS, SERVANTS, OR EMPLOYETS, CItEATED BY,
OR ARISTNG OUT OF THE ACTS OR OMISSIONS OI{ THE LESSQR OCCURRING ON TH�
1 g Handley T]r
DRILL SIT� OR OFERATION SITE IN THE C�I]RSE AND SCO�'� OF INSP�CTING AND
PERMITTING TH� GAS WELLS �NCLUDING, BUT NOT LIMITED TO, CLAIMS AND
DAMAGES ARISING YN WHOL� OR IN PART rROM THL N�GLIGENCE QF THE L�S�OR
UCCURRING ON THE DRILI� SI'TE OR �PERATION S�T� IN THE COURSE AND SCOPE
OF INSPECTING AND P�RN]�TTiNG THE GAS WELLS. IT IS UNDERSTOOD AND
AGR��D THAT THE �ND�MNITY PROVID�D FOR IN THIS PARAGRAPH IS AN
INDEMNiTY EXT�ND�D BY TH� L�SSEE TO INDEMNIFY AND PROTECT LESSOR
ANDIOR ITS DEPARTM�NTS, AGENTS, O�i+,�C,ERS,,, SERVANTS, OR EMPLOI'E�� I+'ROM
THE CONSEOiJENCES OF TH� NEGLTG�NCE DI+ THE LESSOR ANDIOR ITS
DEPARTMENTS, AGENTS,_OFFICERS, SERVANTS, OR �MPLOYC�S, WE�TT��R THAT
NEGLYG�NC� TS THC SOLE OR CONTRIRUTING CAUSE Or THE RESULTANT IN�URY
DEATH, ANll10R DAMAG�.
I7.
INSUR.ANC�
Lessee shall pravide ar cause to be provided tlae insurance described in the City af Fort Worth
Gas Ordinance for each well drilled under the tei-ms of this Lease, with such insurance to cant�nue untii
t�e well is abandoned and the site restored. Such insu�•ance shall provide t�at Lessot� shall be a co-
insured, without cost, a►�d that said insura�}ce catu►ot be canceled or ierzzzinaied wit�out �hia-ty (30) days
prior natice ta Lessar and Yen {�0) days notice to Lessor fo�• nongaym�nt of premiums.
18.
RELEAS�S R�OUiRED
Within t�irty (30} days after tha partial t�i�nivaiio�� of this Lease as provided under any of the
terms and provisions of this Lease, Lessee shall deliver to Lesso�• a plat shawing the prod�ctioz� units
designated by Lessee, copies of logs sl�owing depths to be retained within each unit, and a fuliy executed,
recordable release properly describing by metes and bounds the lands atad depths to be retained by Lessee
around each producing well. If this Lease Yerminates in its eniirety, tl�en L�ssee shall deliver a complete,
fully executed, recordable release ta Lesso�• withiz� thirty (30) days. If sucl� release complies with the
� 9 Ha�idley Dr
z•equiz�ements of this pa��agrapl�, Lessor shall record such release. If Lessee fails to deliver a reIease
cornplying with the requi�•ements of this paragraph within tlairty (30) days after Lessor's demand therefor,
the�i Lessee shaIi pay Lessor an arzaount equal to �'ive Doiia�-s ($5.00) per acre per day fo�• each acre of tl�e
leased premises that should have been �-eleased, begiiming with the 30th day after the data of Lessor's
request and continuing until such release has beez� executed and delivered to Lessor. Ii is ag�•eed that
actual dama�es to Lessor foz• Lessee's fail�re to deliver such relesse are diif�cult to ascertain with any
certainty, and that the payments herein provided are a reasonable estimate of s�ch daznages and shall be
considered Iiquidated damages and not a penalty. Furthermare, Lessoz• is hereby a�thorized to execute
and file oi record an affidavit stating that this Lease has expired and the reason therefor, and such
affidavit shall constitute p�-imd facie evide��ce of the expiration of tifis Lease ar any part of this Lease.
19.
N�TICrS
A. Noti�cations Required. Lessee shall advise Lessor in writing af the location af eact�
v;+eIl ta be drilled upon tl�e leased premises ar on land pooled therewith on or be�are thi�-ty (30) days prior
to commencement of operations, aiad shall advise Lessar in wz•iting of the date of completion and/or
abandonment of eacl� well drilled on the leased pa'e:mises or on land paoled therewith within thirty (30}
days ai�er completion or abandonrnen�. Such notice sh�il include fu����shing the Lesso�• a copy of the
applicable completion oa� plugging �-epart filed with any go�ernmental or zegulatory age�cy and a plat or
map showing the location of the we11 oi� this Lease ar lands paaled tl���•ewith.
Reparts are alsa to be made monih�y, ta include (1) naxne of well, total monthly productian and
total product sales and (2) lease activity report to include drilling, tes�ing, fracing, completing, �•ewnrking,
recompleting, pl�zgging baek, repairing and abandonment of the �vell a�d {3) cntnpliance with the
Minarity/Women Business Enterpi7se (MWBE) Goal of 0% fox� leases over 40 acres.
B. AlI notices, infoi7nation, ietters, surveys, z•eports, mat�rial, and all other docUments,
required or �ermitted to be sent to Lesso� by T.essee shall be sent by certified U�iited States mail, pastage
prepaid, retu�•�� �•eceipt required, to the foliowiifg address:
20 Hai�dley Dr
City o�F�z•t Worih
Froperty Management Deparhnent
200 Texas Sn'eet
Fax-t Wo��th, Texas 76102
C. AIl notices required or permitted to be sent to Lessee by Lessor sha11 be se�t to Lessee by
certified United States mail, postage �repaid, retu��i receipt t•equested to the follawi�Sg address:
TotalEnergies E&P BarnetE US.�, LLC
301 Commerce Street, Suite 3700
k'ort Wart�1, Texas 76102
D. Service of notices, and other dacuments, hereut�der is complete upon deposit of the mailed
material in a post office or officiaE d�posiYoiy under the care and custody of the United States Postal Service,
in a postpaid, properly add�•essed and cartified wrapper.
E. Any party hereto shall have the right to change the name or address of the person or
persons required to receive notices, and other documents, by so notifying the other paz�y in vv�-iting.
Z0.
SREACH BY LESSEE
Lessee shall conduct Lessee's o�erations in strict compliance with all of t��e ierms and provisions of
this Lease and with all applicable Iocai, state and federal rules and the regulations of any regulatory body
ha�ving jut•isdictioza af sunh ope��ations including, but not limited to, all local, state and federal en�iranmentai
rules and reguiations and appiicabte city ordinances.
In the event Lessor considers that operatians az•e not, at atay time, being conducted in complianee
with this Lease, ar any implied covenant o� this Lease, Lessor shall notify Lessee in wrifing of tl�e iacts
relied upor� as constituting a breach nf any express o�- impIied cavenant or obligation of Lesse� he�•eunder
and, Lessee, if in defa�alt, slfall have sixty (60) days afte�• receipt of such notice in wl�ic�a to corz�tnence
compliance with its obligations hereunder. Failur� an the part af Lessee to t�tnely comtnence efforts to rectify
any such breach and to exe�•cise diligence in z'emedying any suc�� breach shall operate as a forfeiture of this
Lease as to the poz�iion thereaf affected by such breacli; provided that if Lessee, in good faith, disputes at�y
aileged grounds of b�'each set forth in such �iotice, Lessee may, within said sixty (60) day periad, institut� a
Declaz'atoiy Ju�gment Action in any District Cou�-t in a county where aIl or part af the s�id leased
2 � Handley I)x
pz'ezt�ises a�'e located yu�stionii�g wl�ether it has iii fact breached any e�cpress c�r iznplieci covenant of this
Lease, the��eby staying any %rfeifure du�•ing the pendez�cy o£ such action. However, in tl�e event that
Lessor obtains a�nal judicial asce��tain��ent in a��y such proceeding thai Lessee is in breach of any
cove�iant heaeof, express or implied, then it is agreed that Lesso�• s1ia1l be entitled to a decree providing %r
cancellation or forfeiture of the Lease in tlie e�ent such breacl� zs noi z•ectified or commenced in gaod faith
to be rectiiied by Lessee within thirty (30) c�ays from the date such decree becomes final.
21.
LOCATION Or DR�LLING ACTIVITY, ��PEL�NES AND EOUIPMENT
No drilling or otl�er activity shall be conducted an the surface of the leased premises and no
roads, elect�•ic lznes, pipalines, eguip�nent, or other shuctures shall be placeci an the surface of the leased
premises.
22.
COMPLIANCE WITH LAWS
Lessee shall comply with all applicabie rules, regalatio�ns, ordinances, stalutes and other laws in
connection with any d�-ilIing, producing or other operations under the terms of this Lease, including,
without Iimitation, t��e oil and gas weli regulations of the City of Fort Vdorth.
23.
CONFLICT OF �NTEREST
Lessee xepresents that Lessee, its offcers, and its directors a�•e nat emplayees or officers of the
City oi �ort Waith nor is Lessee (its office�•s and directors) actit�g on behali of any such officer or
employee of the City of ForY Worth,
24.
TERMS
All of the tez-�ns and pro�visions o� t�is Lease shall extend to and be binding upon tlie heirs,
executors, adrninish'aiors, successors at�d autho��ized assigus of the patties hereto,
25.
�NTIRE AGR��M�NT
This Lease states the entire con�t•aci between the parties, and no ��epresentation o�• promise, verbal
22 Hasidley �r
or wri�ten, on behali of either party sl�a1l be bindiug uniess contait�ed iterei��; a��d this Lease slzalI b�
binding upon eac� pai�.y executing the sa��ne, regardless of w��ether or not executed by atl owners of the
above described land or by all persons above named as "Lessor", and, notwithstanding the inclusion
above of other names as "Lessor", this term as used in this Lea�e shall raean and �•efer only to such pai•ties
as execute tl�is Lease and their successors in interest.
26.
CAPTIDNS
The captio�s to ttte va�•ious paragraphs of tlie Lease are for convenience only, to be used
pa•imarily to more readily locate specific provisions. They shall not be considered a part o£ t�e Lease, noz•
shali they be used to inte�pret any of the Lease pravisions,
��1�
COUNTERPARTS
T�is Lease may be executed in multiple counterpazts, eac� o��whic�� shall be deemed an ariginal,
with t�►e same effect as if the signature tl�ereto and laereio were upon the sarne insE��ument. A signa#ure
received via facsi:�xzile or elec�anically via email shall be as legaily binding for all puiposes as an original
signature.
28.
INTERPRETATION
In the event of any dispute over the meaning ar application o£ any provisioii oi this Lease, this
Lease shall be inteipr�ted fai�•ly and reasonably, and neither more st�angly for or against any pa��ty,
:regardless of the actual drafter oF this Lease.
29.
NO THIRD �'ARTY R�GHT�
Tk�e pr�visians at�d condi�ions of this Leasc are sotely for the benefit of the Lessor and th�
Lessee, and any lawful assign or successor of the Lessee and are not intended ta create any rights,
conn�actual or atherwise, to any othec person o�� entity.
�3 Handley Dr
30.
S�VE��YLITY
Tf any pravision of this Lease shall be held to be invalid, illegai or unetif�rceable, the validiry,
legality and enforceabiiity of the remaining pi•ovisians si�all not in any way be affected ar impaired.
K��
VENUE AND JURISDICTION
If any action, wheth�r real or asserted, at law or in equity, arises on the basis of any provisior� of
this Lease, venue foz' such action shall lie in state courts located in Tarrani County, Texas or tl�e Unit�d
States Disnict Court for the Northern District of Texas — Fort Worth Division. This Lease sha11 be
cons�rued in aecordance with the laws of the State a�' Texas.
�z.
INDEPENDENT CONTRACTQR
It is expressly understood and agreed ihat Lessee shail operate as au independent co�ih�actor in
each and every respect heraunder anci not as an agent, representati�e o�� employee of the Lessor. Lessee
shall have the cxclusive �-ight to co�trol all details and day-to-day o�erations relative to thzs Lease and alt
Exhibits and shall be solely responsible for t�e acts and omissions of its of�cers, agents, servants,
employees, canhacto�•s, subcantractoz•s, licensees and invitees. L�ssee acknowIedges that the doctrine of
f�espo��deat super�ior will not apply as between the Lessor and Lessee, its of�cers, agents, se�vants,
amployees, con�ractors, subcontractors, licensees and in�itees. Lessee fui•ther ag�•ees that nothit�g in this
Lease will be cons�rued as t�e creatian of s parinersl�ip or joint enterprise between the Lessor and Lessee.
33.
GOVERNMENTAL POWERS
It is understood that by execution o£this Lease, ti�e Lessor does not waive or surrender any of its
governmental powers.
[STGNATURES ON FOLI,OWING PAGE]
2� F�andley Dr
EXECUTED and effective as of the date of the notarial acknowiedgmei�t of the Lcssar's execution.
L�SSOR:
CITY OF FORT WORTH
D1� BYh 0
Dana 9urhhdoff (Sep 2�, 2623 15�17 C�1}
Dana Burghdoff
Assistar�t City Manager
APl'ROVED AS TU FORM AND LEGALITY:
C�..E� u/�f?�„�
Assiskant City �ttorney
CONTRACT COMF'LIANCE MANAGER:
By signing, T acla�owledge that I am respansible for
the monitoring and admi��ish'ation of this conh'act,
including ensuring all pei�formance and reporting
require�nents.
IF.,�'r��Yk��i2� 14':�
Mark Brown
Lease Manager
LESSEE:
TOTALENERGX�S E&P USA BARNETT 1, LLC
����
Brett Austin
Vice �resident - Land
ATTEST:
�,�.� � ��
L
.Tam�ette S. Goodall
City Sec�•etary
M&C L-14889
Fo� 1295: n/a
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OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
25 Iiandley Dr
EXHI�3IT A
0.1$37 acre of land, mare or less, being the rigl�t-af way out of Tt•act 1-�3, out of the R. Collins 5urvey,
Abstract 351, Ta�7a�it Coui�ty Te�as, and being more particula�-iy tiescriUed by metes and bounds i�� that
certain deed dated 7une 7, 1963, by and between �red A. Tomamichel and wife, Mag�ie L. Toz�aamiclael,
ds Grantar, and City oiFort Wort1�, a municipal cotporatian of Tarrant County, Texas, ds Graniee,
recorded ir� Volume 3832, Fage 426, of the Deed Reco��ds of Tartant County, Texas.
(HANDLEY DR, TRACTS NL 1307 A.NI) NL 1034}
(LANCAST�R-CANUCKS MI�'A UN�T)
�� Handley Br
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