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HomeMy WebLinkAbout91-85 RESOLUTIONF• SCANNED RESOLUTION NO. 91-85 A RESOLUTION AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A DRILLING LEASE WITH QUAPAW OIL AND GAS, INC. FOR CITY PROPERTY NEAR LAKE SEQUOYAH. BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF FAYETTEVILLE, ARKANSAS: That the Mayor and City Clerk are hereby authorized and directed to execute a drilling lease with Quapaw Oil and Gas, Inc. for City property near Lake Sequoyah. A copy of the lease authorized for execution hereby is attached hereto marked Exhibit "A" and made a part hereof. PASSED AND APPROVED this 20th day of August , 1985. APPROCJGG�f�c/ By: o'ck,,x(T E$ FLY � A �s:1a / `.. t -7J `�• ( \a ��• CUi.ti 1:1 lerk /` 1 Sea Mayor Ps AMERICAN ASSOOATION OF PETROLEUM LANDMEN APPROVED FORM A.A.P.L. NO. 680 MAY BE ORDERED DIRECTLY FROM THE PUBUSHER KRAFTBILT PRODUCTS BOX 800 TULSA, OK 74101 AAPL FORM 680 OIL AND GAS LEASE (ARKANSAS—SMUT-IN AND POOLING CLAUSES) THIS AGREEMENT made and entered into this {r/714 day of City of Fayetteville MICROFILMED 19 r7,< by and between hereinafter called Lessor, whose address is P.O. Drawer F. Fayetteville, AR 72702 and Quapaw Oil and Gas_ Inc - P D Rnx.1R9Z, Fay . AP 72702 hereinafter called Lessee. WITNESSETH: " I. That Lessor, for and in consideration of the sum of ten ($10) OvC Dollars in hand paid, and of the covenants and agree- ments hereinafter contained to be performed by the Lessee, does hereby grain, demise. lease and let unto said Lessee the hereinafter described land, for she purpose of carrying on geological. geophysical and other exploration work, and the drilling and operating for, producing and saving all of the oil, gas. and other hydrocarbons. all that certain tract of land, together with any reversionary rights therein, situated in the County of Washington State of Arkansas, and described as follows: SEE ATTACHED EXHIBIT "A" (Legal Description) Lease Provisions: * Authorization for the drilling of only one well on the legally described property. * The drilling area is to be enclosed with cyclone fencing. * The drilling site is subject to approval by the Fayetteville Parks and Recreation Advisory Board. containing 55 acres, more or less, and also, in addition to the above described land, any and all strips or parcels of land, other than those constituting regular governmental subdivisions, adjoining or contiguous to the above described land and owned or claimed by LESSOR, all of the foregoing land being hereinafter referred to as "leased premises." It is the intention of the LESSOR herein that the leased premises cover and include all lands owned or claimed by LESSOR in the above numbered governmental section or sections together with any and all accretions thereto whether or not herein accurately and completely described. 2. This Lease shall remain in force for a primary term of 'one (1 Fears and as long thereafter as oil, gas or other hydrocarbons is produced from said leased premises or from lands pooled therewith. 3. Lessee shall deliver, free of cost, to Lessor at the wells, or to the credit of Lessor in the pipeline to which the wells may be connected, the equal one-eighth part of all oil and other liquid hydrocarbons produced and saved from the leased premises. or at Lessee's option, to pay Laser for suck one-eighth royalty the market price at the well for such oil and other liquid hydrocarbons of like grade and gravity prevailing on the day such oil and other liquid hydrocarbons are run from the lease stock tanks. 4. Lessee shall pay Lessor one-eighth of the proceeds received by Lessee at the well for all gas (including all substances contained in such gas) produced from the leased premises and sold by Lessee. If such gas is used by Lessee off t he leased premises or used by Lessee for the manufacture of casinghead gasoline or other product s, Lessee shall pay Lessor one-eighth of t he prevailing marker price at the well for the gas so used. S. If a well capable of producing gas or gas and gas -condensate in paying quantities located on the leased premises (or on acreage pooled or consolidated with all or portion of the leased premises into a unit for the drilling or operation of such well) is at any time shut in and nn gas or gas - condensate therefrom is sold or used off the premises or for the manufacture of gasoline or other products. nevertheless such shut-in well shall be deemed to be a well on the leased premises producing gas in paying quantities and this lease will continue in force during all of the time or times while such well is so shut in, whether before or after the expiration of the primary term hereof. Lessee shall use reasonable diligence to market gas or gas -condensate capable of being produced from such shut-in well but shall be under no obligation to market such products under terms. conditions or circumstances which. in Lessee's judgment exercised in good faith, arc unsatisfactory. Lessee shall be obligated to pay or tender to Lessor within 43 days after the expiration of each period of one year in length (annual period) during which such well is so shut in, as royalty, an amount equal to the annual delay rental herein provided applicable to the interest of Lessor in acreage embraced in this lease as of the end of such annual period and included within the confines of a pooled unit declared under the terms hereof or created by order. rule or regulation of any governmental authority; provided that. if gas nr gas -condensate from such well is sold or used as aforesaid before the end of any such annual period, or if, at the end of any such annual period, this lease is being mains aincd in force and effect otherwise than by reason of such shut-in well, Lessee shall not be obligated to pay or ander, for that particular annual period. said sum of money. Such payment shall be deemed a royalty under all provisions of this lease. Such payment may be made or tendered to Lessor or to Lessor's credit in the designated depository bank in the manner prescribed for the payment of delay rentals. Royalty ownership as of t he last day of each such annual period as shown by Lessee's records shall govern the determination of the party or parties entitled to receive such payment. 6. 1f operations for the drilling of a well for oil or gas are not commenced on said land on or before one year from the date hereof, this Lease shall terminate as t0 both parties, Lessor's Depository Bank Bank at , or its successors, which Bank and its successors are the Lessor's agent and shall continue as the Depository for any and all sums payable under this Lease regardless of changes of ownership in said land, or in the oil and gas, or in the rentals to accrue hereunder, the sum of Dollars which shall operate as a rental f 0 r . a shut-in we All payments or tenders may be paid by check or draft of the Lessee or any Assignee thereof, mailed or delivered on or before the rental paying date. either directly to Lessor or to the Depository Bank, and it is understood and agreed that the consideration first recited hereinabove, covers not only t he privileges granted to the date when said first rental is payable, but also the Lessee's option of extending that period as aforesaid, and any and all other rights conferred herein. 7. If at any time prior to t he discovery of oil or gas on t his land, and during the term of this lease, the Lessee shall drill a dry hole or holes on this land, this Lease shall not terminate prov ided operations for t he drilling of a well shall be commenced before the next ensuing rental pay ing date, or provided that the Lessee begins or resumes the payment of rentals in the manner and amount hereinabove provided for, and in chis event the paragraphs hereof governing the payment of rentals, and the manner and effect thereof, shall continue in force. S. Lessee hereby is given the right at its option, at any time and whether before ear after production. to pool for development and operation purposes all or any pan or parts of leased premises or rights therein with any other land in the vicinity thereof, or with any leasehold, operating or other rights or interests in such other land so as to create units of such size and surface acreage as Lessee may desire but containing not more than forty-five (41) acres; provided, however, a unit may be established hereunder containing not more than 640 acres plus 10% acreage tolerance if unitized only as to gas rights or only as to gas and gas -condensate, except that units pooled for oil or oil and gas for or in conjunction with repressuring, pressure maintenance, cycling and secondary recovery operations or any one or more of same, may be formed to include not more than 320 acres. If at any time larger units are required under any then applicable law, rule, regulation or order of any governmental authority for the drilling. completion or operation of a well, or for obtaining maximum allowable from any contemplated, drilling or completed well, any such unit may be established or enlarged to conform to the size specified by such law, rule, regulation or order. Each unit shall be created by Lessee's recording a declaration of Pooling containing a description of the unit so created. Operations on any part of any lands so pooled shall, except for the payment of royalties, be considered operations on leased premises under this lease, and, notwithstanding the status of a welt at the time of pooling, such operations shall be deemed to be in connection with a well which was com- menced on leased premises under this lease. The term "operations' as used herein shall include, without limitation, the ,following: commencing. construction of roadways, preparation of drillsite, drilling, testing, completing, reworking, recompleting. deepening, plugging back, repressurmg, pressure maintenance, cycling, secondary recovery operations, or the production of oil or gat, or the existence of a shut-in well capable of producing oil or gas. There shall be allocated to the portion of leased premises included in any such pooling such proportion of the actual production from all lands so pooled as such portion of leased premises, computed on an acreage basis, bears to the entire acreage of the lands so pooled. The production so allo- cated shall be considered for the purpose of payment or delivery of royalty to be the entire production for the portion of leased premises included in such pooling in the same manner as though produced from such portion of leased premises under the terms of this lease. L 4 9. If' the Lessor owns a lesser interest in the above-described land than the entire and undivided mineral estate therein, then the royalties and rentah"hereln provided for shall be, paid the said Lessor only in the proportion which his interest bears to the whole and undivided mineral estate. Then shall be no relationship between the amount of rentals paid hereunder and the amount of royalties which may be paid on production. 10. 1f the estate of either party hereto is assigned, and the privilege of assigning in whole or in part is hereby expressly allowed, the toventnts hereof shall extend to their heirs, executors. administrators, successor or assigns, but no change in the ownership of the land or the minerals in and under the same or assignment of rentals or royalties shall be binding on Lessee unless Lessee shall have been furnished ninety (90) days before payment hereunder of such rentals or royalties, with certified copies of recorded instruments showing evidence of title; and k is hereby agreed that in the event this lease shall be assigned as to a part or as to parts of the land and the assignee or assignees of such pan or parts shall fail or make default in the payment of the propor- tionate part of the rents due from him or them, such default shall not operate to defeat or affect this lease insofar as it covers any part or parts of said land upon which Lessen or any assignee of Lessee shall make due payment of said rental. If six or more parties become entitled to rentals or royalties here- under, Lessee may withhold payment thereof unless and until furnished with a recordable instrument executed by all of such parties designating an agent to receive payment for all. 11. Lesser shall have the right to use. free of cost. gas, oil and water found on said land for its operations, except water from the wells of the Lessor. When required by the Lessor, the Lessee shall bury its pipelines below plow depth and shall pay reasonable damages for injury by reason of its operations to growing crops on said land. No well shall be drilled nearer than 200 feet to any house or barn or other structure on said premises as of the date of this Lease without the written consent of the Lessor. Lessee shall have the right at any time during. or after the expiration of this Lease to enter upon the property and to remove all machinery, fixtures, and other structures placed on said premises, including the righr to draw and remove all casing, but the Lessee shall be under no obligation to do so. 12. Notwithstanding anything contained in this Lease to the contrary, it is expressly agreed that if rhe Lessee shall commence operations as pro- vided herein at any time while this Lease is in force, this Lease shall remain in force and its terms shall continue so long as such operations are prose- cuted, and if production results therefrom. then as long as production is maintained. 13. If within the primary term of th is Lease production an the leased premises shall cease from any cause, this Lease shall not terminate provided operations for the drilling of a well shall be commenced on or before the next ensuing rental paying date, or provided Lessee begins or resumes the payment of rentals in the manner and amount hereinbefore provided. If, after the expiration of the primary term of this Lease, production on the leased premises should cease from any cause, this Lease shall not terminate provided Lessee commences operations for additional drilling or reworking within sixty days from such cessation, and this Lease shall remain in force during the prosecution of such operations and if production results therefrom, then as long as production is maintained. 14. Lessee may at any time surrender or cancel this Lease in whole or in part by delivering or mailing such release to the Lessor, or by placing such release of record in the proper County. In case this Lease is surrendered or cancelled as to only a portion of the acreage covered thereby, then all payments and liabilities thereafter accruing under the terms of this Lease as to the portion cancelled shall cease, and any rentals thereafter paid may be apportioned on an acreage basis. As to the portion of the acreage not released, the terms and provisions of this Lease shall continue and remain in full force and effect for all purposes. 15. All provisions hereof, express or implied, shall be subject to all Federal and State Laws and the orders, rules and regulations of all governmental agencies administering the same, and t his Lease shall not in any way be terminated wholly or partially, nor shall the Lessee be liable in damages for failure to comply with any of the express or implied provisions hereof if such failure accords with any such laws, orders. rules or regulations. Should the Lessee be prevented during the last year of the primary term hereof from drilling a well hereunder by the order of any constituted authority having jurisdiction. or if Lessee shall be unable during said period to drill a well hereunder due to the equipment necessary in the drilling thereof not being available for any cause, the primary term of t his Lease shall continue until one year after said order is suspended or said equipment is available, but the Lessee shall con- tinue to make delay rental payments as hereinabove provided for during such extended time. 16. Lessor hereby warrants and agrees to defend the title to the land herein described and agrees that the Lessee, at its option, may pay or dis- charge in whole or in part any taxes, encumbrances, or other liens existing, levied or assessed against the above-described lands, and in the event Lessee exercises such option, it shall be subrogated to the rights of any holder or holders thereof and may reimburse itself by applying any royalty or rentals accruing hereunder to the amount of any such encumbrance, tax or other lien paid by Lessee. 17. Lessee hereby is given the right to acquire for its own benefit, deeds, leases, or assignments covering any interest or claim in leased premises which LESSEE or any ocher party contends is outstanding and not covered hereby and even though such outstanding interest or claim be invalid or adverse to LESSOR. In the event the validity of this lease be disputed by LESSOR or by any other person, then, for the period such dispute remains undisposed of: LESSEE shall be relieved of all obligations hereunder to explore or develop leased premises; all royalties, rentals, or other payments which would otherwise accrue shall be suspended for such period; and this lease automatically shall be extended for an additional period equal to the duration of such period. 18. The undersigned hereby release and relinquish all rights of dower, curtesy and homestead in the premises herein described. insofar as said righr of dower, curtesy and homestead may in any way effect the purposes for which this lease is' made as ' ed herein. 19. This Lease and all its terms, conditions and stipulations shill extend to a nding on -. sory/1rystittlle///ff said Les r Lessee. aa IN WITNESS WHEREOF this Lease is executed as of the dare first ina a i44..144tte - A,,, 1." STATE OF MKR105RS COUNTY OF W RS µ /KC WA/ Before me SOCIAL. SECURITY Y SS. (INDIVIDUAL — ARKANSAS) D 4v A Sfur{*Igv PI/it-key R, p e /t s h' N 1 whose nome4 subscri d to the foregoing instrument, and ocknowledged to me thattse executed the same for the purposes and considerations therein expressed, including the relinquishment .of dower, homestead and curtesy. Given under my hand orad seal of office this �.g day of sdS`e'n�%r,n.1�- 19 �S. • My commission expires:-/ _ /�/'y .Y t tb ` Notary Public /'/ r County, Arkansas, on this day o Notary Public in and for rsonolly appeared known to me to be the persons STATE OF s COUNTY OF On this day of 19 Personally appeared his wife, known to me to be the persons whose names ore subscribed to the foregoing free and voluntary act and deed for the purposes and consideration therein mentioned homestead. In witness whereof I hove hereunto set my hand and official seal. My commission expires: (JOINT — ARKANSAS/ before me the undersigned Notary Public in and for sold County and State, and STATE OF } COUNTY OF On this doy of 5S. instrument and acknowledged that they executed the same as their and set forth, including the relinquishment of dower, curtesy and 19 before me the acting, within and for said County and State, appeared in person the within -named and Notary Public (CORPORATION — ARKANSAS) undersigned Notary Public, duly commissio i fi ualified and me personally well known, who stated that they were the President and Secretary of a corporation and were duly authorized in their respective capacities to execute the foregoing instrument for and in the name and further stated and acknowledged that they hod so signed, executed and delivered said foregoing instrument for the con therein mentioned and set forth. In testimony whereof, I have hereunto set my hand and official seol this 19 My Commission Expires: day of es Us: sax ' 1 to corporation, d purposes This Instrument Prepared By Notary Public Address ret tr. .+.m a.mu veil „ mV la nl sr 'I Lunu„>rm..•Lo al fn, ukmu two, EXHIBIT "A" All those parts of Sections 8 and 17 in Township Sixteen (16) North Range Twenty-nine (29) West of the Fifth Principal Meridian in Washington County, Arkansas, contained within the boundary more particularly described as follows, to -wit: Beginning at the southeast corner of the Northeast 1/4 of Section 17, thence in a northerly direction to the southeast corner of the North 666 feet of the Southeast 1/4 Northeast 1/4 of Section 17; thence in a westerly direction on and along a line parallel to the North boundary of said Southeast 1/4 Northeast 1/4 to the centerline of the West Fork of White River; thence North with the centerline of said river to a point in the Southeast 1/4 Southeast 1/4 of Section 8, said point being the intersection with the middle of the channel of White River; thence in- asoutheasterly direction up the channel of White River to the intersection of a diagonal line between the Northeast corner and the Southwest corner of the Southeast 1/4 Southeast 1/4 Southeast 1/4 of Section 8; thence in a northeasterly direction to the northeast corner of the Southeast 1/4 Southeast 1/4 Southeast 1/4 of Section 8 containing 55 acres more or less. 4 ,r`1 • QUAPAW OIL & GAS, INC. P. 0. BOX 1892 FAYETTEVILLE, ARKANSAS 72702 September 9, 1985 Mr. James N McCord Office of City Attorney P.O. Drawer F Fayetteville, -AR 72702 DearMr. McCord: Enclosed is the Oil an -d Gas lease with the revisions you requested. If you have further questions, just call (card enclosed). Otherwise, we will be looking for a signed lease in the mail. Sincerely, (74ner Normas Pervis Lease Representative: Enclosure NP;rk 91,