HomeMy WebLinkAboutResolution 4368-10-2014 i
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A Resolution
NO. 4368-10-2014 '
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AUTHORIZING THE EMPLOYMENT OF MOSES, PALMER, AND HOWELL,
L.L.P., AS OUTSIDE LEGAL COUNSEL TO ADVISE THE CITY ON LEGAL
ISSUES RELATED TO OIL AND GAS MINERAL LEASES AND GAS MARKETING
AND AUTHORIZING PAYMENT OF COUNSEL FEES
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WHEREAS, the City has entered into approximately 581 oil and gas leases for 11,366 mineral
acres it owns; and
WHEREAS, the City has recently conducted audits of its oil and gas leases with Chesapeake
Operating, Inc. and XTO Energy, Inc.; and
WHEREAS, as a result of the audits of the oil and gas leases, legal issues regarding gas
marketing provisions have arisen which require outside legal counsel with expertise in this area of oil j
and gas law; and
WHEREAS, because of the extraordinary complexity of this area of law, the City Manager and
the City Attorney recommend that the City retain outside legal counsel with knowledge and expertise in
matters involving oil and gas mineral leasing specific to gas marketing clauses; and
WHEREAS, the law firm of Moses, Palmer and Howell, L.L.P., possesses the required
knowledge and expertise in oil and gas mineral leasing and gas marketing.
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NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FORT WORTH, TEXAS,THAT:
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The City is authorized to retain the law firm of Moses, Palmer and Howell, L.L.P., as outside
legal counsel pursuant to Chapter VI, Section 3, of the City Charter to advise the City on oil and gas
lease terms and conditions regarding gas marketing.
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ORTWO T
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Resolution No.4368-10-2014
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The City is hereby authorized to compensate Moses, Palmer and Howell, L.L.P., for its advice
and representation on oil and gas mineral leasing and gas marketing in an amount up to $3,000.00. '
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Adopted this 14th day of October, 2014.
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ATTEST:
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By: _____ _ �0 °z
Mary Kayser ere ry Off*,o of
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ORT WORT !
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City of Fort Worth, Texas
Mayor and Council Communication
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COUNCIL-.ACTION Approved on 1071:4/2014 = Resolution No4368=10=2014
DATE: Tuesday, October 14, 2014 REFERENCE NO.: G-18335
LOG NAME: 120ILGASLEASE
SUBJECT:
Adopt Resolution Authorizing Employment of Moses, Palmer and Howell, L.L.P., as Outside Counsel to
Advise the City on Oil and Gas Mineral Lease Provisions Related to Gas Marketing, and Authorizing
Payment of Counsel Fees in an Amount Not to Exceed $3,000.00 (ALL COUNCIL DISTRICTS)
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RECOMMENDATION:
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It is recommended that the City Council adopt the attached resolution authorizing employment of Moses,
Palmer and Howell, L.L.P., as outside counsel to advise the City on oil and gas mineral lease provisions
related to gas marketing, and authorizing payment of counsel fees in an amount not to exceed $3,000.00. i
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DISCUSSION.: f
The City has currently entered into approximately 581 oil and gas mineral leases for the 11,366 mineral
acres that it owns. In the past year, the City has conducted two intensive audits, one with Chesapeake
Operating, Inc., and one with XTO Energy, Inc. During these audits, certain legal issues arose which
require expertise in oil and gas mineral leasing, including gas marketing contracts to affiliates. The City
Council authorized the hiring of Ralph Duggins with the law firm Cantey Hanger, L.L.P., as an expert on oil
and gas issues to represent the City against Chesapeake Operating, Inc., and total E&P (USA) Inc. Mayor
and Council Communication (M&C G-18047) and Resolution No. 4253-10-2013), however, Mr. Duggins ,
has a conflict of interest and cannot advise the City on this particular matter.
The City Manager and the City Attorney agree that, because of the extraordinary complexity of this area of
law it is necessary to retain outside legal counsel with significant knowledge in oil and gas mineral leasing
to ensure that the City' s interests are protected. Moses, Palmer and Howell, L.L.P., has experience in a
wide range of legal matters, including oil and gas mineral leasing and gas marketing, and has agreed to i
advise the City. Chapter VI, Section 3 of the City Charter requires the City Council to approve the retention
of any outside legal counsel for assistance to the City Attorney. Accordingly, it is recommended that the
City Council adopt the attached resolution authorizing the retention of Moses, Palmer and Howell, L.L.P.,
to advise the City on these issues. It is also recommended that the City Council authorize payment of up
to $3,000.00 in counsel fees. Payment of the counsel fees shall be made from gas lease revenues.
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FISCAL INFORMATION /CERTIFICATION: j
The Financial Management Services Director certifies that funds are available in the FY2015 operating
budget, as appropriated, of the General Fund. j
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FUND CENTERS:
TO Fund/Account/Centers FROM Fund/Account/Centers
GG01 539120 0062050 $3,000.00
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Logname: 120ILGASLEASE Page 1 of 2
CERTIFICATIONS:
Submitted for City Manager's Office by: ALL ACMs (6222) i
Originating Department Head: Sarah Fullenwider (7623)
Gerald Pruitt (7616)
Additional Information Contact: Christa Reynolds (8984)
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Logname: 120ILGASLEASE Page 2 of 2