HomeMy WebLinkAbout20122585.tiff RESOLUTION
RE: APPROVE REQUEST TO WAIVE BID PROCEDURE CONCERNING SMALL TRACT
OIL AND GAS LEASE, ACCEPT OFFER TO LEASE MINERAL ACRE, AND
AUTHORIZE CHAIR TO SIGN - BONANZA CREEK ENERGY OPERATING
COMPANY, LLC
WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to
Colorado statute and the Weld County Home Rule Charter, is vested with the authority of
administering the affairs of Weld County, Colorado, and
WHEREAS, Bonanza Creek Energy Operating Company, LLC, 5601 Truxtun Avenue,
Suite 210, Bakersfield, California 93309, has requested that the bidding procedure be waived
according to the policy as set forth in the Weld County Code for parcels less than five acres, on
the following described mineral acres:
Section 35, Township 5 North, Range 63 West of
the 6th P.M., Weld County, Colorado
WHEREAS, on September 17, 2012, Bonanza Creek Energy Operating Company, LLC,
offered to lease the above described mineral acres, containing 3.27 mineral acres, more or less,
in the amount of THREE HUNDRED THIRTY THREE AND 54/100 DOLLARS ($333.54), and
the Board deemed it advisable to continue the matter to September 24, 2012, to allow additional
time to review payment amount, and
WHEREAS, on September 24, 2012, the Board was presented with a explanation
indicating the County's mineral interest of 25.5%, and
WHEREAS, following review, Board finds that the lease offer from Bonanza Creek
Energy Operating Company, LLC, in the amount of THREE HUNDRED THIRTY THREE AND
54/100 DOLLARS ($333.54), is acceptable, with the further terms and conditions being as
stated in said Small Tract Oil and Gas Lease, a copy being attached hereto and incorporated
herein by reference.
NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of
Weld County, Colorado, that the request of Bonanza Creek Energy Operating Company, LLC,
to waive the bidding procedure on an Oil and Gas Lease concerning the above described
mineral acres, be, and hereby is, granted.
c rig to 664°^9z.Q
Creek. A°Nj42 CC:hi/442a Creek- 2012-2585
/D' /9-/v2 LE0249
WAIVE BID PROCEDURE - BONANZA CREEK ENERGY OPERATING COMPANY, LLC
PAGE 2
BE IT FURTHER RESOLVED by the Board that the offer of Bonanza Creek Energy
Operating Company, LLC, to lease mineral acres, as hereinabove stated, be, and hereby is,
accepted.
BE IT FURTHER RESOLVED by the Board that the Chair, be, and hereby is, authorized
to sign said Small Tract Oil and Gas Lease.
The above and foregoing Resolution was, on motion duly made and seconded, adopted
by the following vote on the 24th day of September, A.D., 2012.
BOARD OF COUNTY COMMISSIONERS
WELD COUNTY, COLORADO
ATTEST: • ` �/;
Sean P. Conwa, , Ch it
Weld County Clerk to the .a{ I' �
- _ "Pir illlam F. Garcia, Pro-Tkm BY: awytt,Deputy Clerk to the Board'
+ara Kirkmeyer I
APP A •
David E. Long
my Attorney c a-ad al.2vev ,ou1r
Douglas RademacheF
Date of signature: /G/6
2012-2585
LE0249
WELD COUNTY OIL AND GAS LEASE
(Small Tract)
THIS AGREEMENT, made and entered into this ALtdcday of by-- , 20 j Z , by and
between WELD COUNTY, COLORADO, a political subdivision of the State of Colorado acting by and
through the Board of County Commissioners of the County of Weld, 1150 O Street, P.O. Box 758,
Greeley, CO 80632, hereinafter called Lessor, and:
Bonanza Creek Energy Operating Company, LLC
5601 Truxtun Avenue, Suite 210
Bakersfield, CA 93309
hereinafter called Lessee.
WITNESSETH, that Lessor, for and in consideration of the sum of $333.54, cash in hand paid,
the receipt of which is hereby acknowledged, and the covenants and agreements hereinafter described,
has granted, demised, leased and let, and by these presents does grant, demise, lease and let
exclusively unto the said Lessee, the land hereinafter described, with the exclusive right for the purpose
of mining, exploring by geophysical and other methods, and operating for and producing therefrom; oil
and all gas of whatsoever nature or kind, with rights of way and easement for laying pipe lines, and
erection of structures thereon to produce, save and take care of said products, all that certain tract of land
situated in the County of Weld, State of Colorado, described as follows, to wit:
Township 5 North, Range 63 West, 6t" P.M.
Section 35: The following two parcels of land:
1. A strip of land 25 feet in width being 25 feet on the east side of the west section line of said
Section 35;
2. A tract in the SW% of Section 35 more particularly described as follows: Considering the West
line of Section 35 to bear N 0°17'19" East and with all other bearings contained herein relative
thereto; thence Beginning on the West line of said Section 35 from which point the Southwest
section corner bears S 0°17'19" West a distance of 1,326.75 feet; thence S 0°17'19" East a
distance of 514.33 feet; thence 200.63 feet along the arc of a curve to the left whose radius is
1,004.93 feet; central angle is 11°26'20" and whose chord bears N 6°39'20" East a distance of
200.3 feet; thence N 0°56'10" East a distance of 315.0 feet; thence N 89°03'50" West a distance
of 25.77 feet, more or less, to the Point of Beginning:
and containing 3.27 acres, more or less.
1. It is agreed that the lease shall remain in force for a term of three (3) years from this date
and as long thereafter as oil or gas of whatsoever nature or kind is produced from said leased premises
or on acreage pooled therewith, or drilling operations are continued as hereinafter provided. If, at the
expiration of the primary term of this lease, oil or gas is not being produced on the leased premises or on
acreage pooled therewith but Lessee is then engaged in drilling or re-working operations thereon, then to
this lease shall continue in force so long as operations are being continuously prosecuted on the leased
premises or on acreage pooled therewith; and operations shall be considered to be continuously N
prosecuted if not more than ninety(90) days shall elapse between the completion or abandonment of one
well and the beginning of operations for the drilling of a subsequent well. If after discovery of oil or gas on g),
said land or on acreage pooled therewith, the production thereof should cease from any cause after the
primary term, this lease shall not terminate if Lessee commences additional drilling or re-working
operations within ninety (90) days from date of cessation of production or from date of completion of dry
hole. If oil or gas shall be discovered and produced as a result of such operations; at or after the
expiration of the primary term of this lease, this lease shall continue in force so long as oil or gas is
produced from the leased premises or on acreage pooled therewith.
3876599 Pages: 1 of 5
09/27/2012 02:18 PM R Fee:$0.00 3\Bonanza\OGL-Weld County-BCO Small Tract-35-5n-63w.doc
Steve Moreno,
t�Clerk and
Recorder
.� Weld County, CON W `
lIII FAY+I OH Yl hl lY�rIY1lYLI YYTY i �I�i5 ITl�IT "III (Revised 1/2012)
LEO2LI r
2. This is a PAID-UP LEASE. In consideration of the down cash payment, Lessor agrees
that Lessee shall not be obligated, except as otherwise provided herein, to commence or continue any
operations during the primary term. Lessee may at any time or times during or after the primary term
surrender this lease as to all or any portion of said land and as to any strata or stratum by delivering to
Lessor or by filing for record a release or releases, and be relieved of all obligation thereafter accruing as
to the acreage surrendered.
3. In consideration of the premises the said Lessee covenants and agree to pay Lessor
twenty percent (20%) of the proceeds received by Lessee, payable monthly, for the oil, gas and other
hydrocarbons produced and saved from the leased premises.
4. Where gas from a well capable of producing gas is not sold or used, Lessee may pay or
tender as royalty to Lessor One Dollar per year per net mineral acre owned by Lessor and covered by this
lease, such payment or tender to be made on or before the anniversary date of this lease next ensuing
after the expiration of 90 days from the date such well is shut in and thereafter on or before the
anniversary date of this lease during the period such well is shut in. If such payment or tender is made, it
will be considered that gas is being produced within the meaning of this lease.
5. If said Lessor owns less than the entire oil and gas fee simple estate in the above
described lands, then the royalties (including any shut-in gas royalty) herein provided for shall be paid to
the said Lessor only in the proportion which Lessor's interest bears to the entire oil and gas mineral fee
simple estate.
6. Lessee shall have the right to use, free of cost or royalty, gas, oil and water produced on
said land for Lessee's operations thereon, except water from the wells of Lessor.
7. When requested by Lessor, Lessee shall bury Lessee's pipe lines below plow depth.
8. No well shall be drilled nearer than 200 feet to any occupied building on said premises
without the written consent of Lessor.
9. Lessee shall have the right at any time to remove all of Lessee's machinery and fixtures
placed on said premises, including the right to draw and remove casing.
10. The rights of Lessor and Lessee hereunder may be assigned in whole, or in part, upon
payment of a $25.00 fee and written consent of the Board of Weld County Commissioners, such consent
shall not be unreasonably withheld. No change in ownership of Lessor's interest (by assignment or
otherwise) shall be binding on Lessee until Lessee has been furnished with notice, consisting of certified
copies of all recorded instruments or documents and other information necessary to establish a complete
chain of record title from Lessor, and then only with respect to payment thereafter made. No other kind of
notice, whether actual or constructive, shall be binding upon Lessee. No present or future division of
Lessor's ownership as to different portions or parcels of said land shall operate to enlarge the obligations
or diminish the rights of Lessee, and all Lessee's operations may be conducted without regard to any
such division. If all or any part of this lease is assigned, no leasehold owner shall be liable for any act or
omission of any other leasehold owner.
11. Lessee, at its option, is hereby given the right and power at any time and from time to
time as a recurring right, either before or after production, as to all or any part of the land described herein
and as to any one or more of the formations hereunder, to pool or unitize the leasehold estate and the
mineral estate covered by this lease with other land, lease or leases in the immediate vicinity for the
production or oil and gas, or separately for the production or either, when in Lessee's judgment it is
necessary or advisable to do so, and irrespective of whether authority similar to this exists with respect to
such other land, lease or leases. Likewise, units previously formed to include formations not producing oil
or gas may be reformed to exclude such non-producing formations. The forming or reforming of any unit
3876599 Pages: 2 of 5
Steve Moreno, Clerk and 09/27/2012 02:18 PM R Fee:$0.00 3onanza\OGL-Weld County-BCO Small Tract-35-5n-63w.doc
ill I?iI Pi etrII104G40,114LT'1CIP11.1 x,414 III
(Revised 1/2012)
•
shall be accomplished by Lessee executing and filing of record a declaration of such unitization or
reformation, which declaration shall describe the unit. Any unit may include land upon which a well has
theretofore been completed or upon which operations for drilling have theretofore been commenced.
Production, drilling or reworking operations or a well shut in for want of a market anywhere on a unit
which includes all or a part of this lease shall be treated as if it were production, drilling or reworking
operation or a well shut in for want of a market under this lease. In lieu of the royalties elsewhere herein
specified, including shut-in gas royalties, Lessor shall receive on production from the unit so pooled
royalties only on the portion of such production allocated to this lease; such allocation shall be that
proportion of the unit production that the total number of surface acres covered by this lease and included
in the unit bear to the total number of surface acres in such unit. In addition to the foregoing, lessee shall
have the right to unitize, pool or combine all or any part of the above described lands as to one or more of
the formations thereunder with other lands in the same general area by entering into a cooperative or unit
plan of development or operation approved by any governmental authority and, from time to time, with
like approval, to modify, change or terminate any such plan or agreement and, in such event, the terms,
conditions and provisions of this lease shall be deemed modified to conform to the terms, conditions and
provisions of such approved cooperative or unit plan of development or operation and, particularly, all
drilling and development requirements of this lease, express or implied, shall be satisfied by compliance
with the drilling and development requirements of such plan or agreement, and this lease shall not
terminate or expire during the life or such plan or agreement. In the event that said above described
lands or any part thereof shall hereafter be operated under any such cooperative or unit plan of
development or operation whereby the production therefrom is allocated to different portions of the land
covered by said plan, then the production allocated to any particular tract of land shall, for the purpose of
computing the royalties to be paid hereunder to Lessor, be regarded as having been produced from the
particular tract of land to which it is allocated and not to any other tract of land; and the royalty payments
to be made hereunder to Lessor shall be based upon production only as so allocated. Lessor shall
formally express Lessor's consent to any cooperative or unit plan of development or operation adopted by
Lessee and approved by any governmental agency by executing the same upon request of Lessee.
12. All express or implied covenants of this lease shall be subject to all Federal and State
laws, executive orders, rules or regulations, and this lease shall not be terminated, in whole or in part, nor
Lessee held liable in damages, for failure to comply therewith, if compliance is prevented by, or if such
failure is the result of, any such law, order, rule or regulation.
13. Lessor does not warrant title to the leased premises, but it shall, upon request, allow
Lessee access to such abstracts and other title papers as it has in its files. Lessee shall have the right at
any time to redeem for Lessor, by payment, any mortgages, taxes or other liens on the above described
lands in the event of a default of payment by Lessor, and be subrogated to the rights of the holder
thereof.
14. Lessee shall indemnify Lessor against all liability and loss, and against all claims and
actions, including the defense of such claims or actions, based upon or arising out of damage or injury,
including death, to persons or property caused by or sustained in connection with operations on this
leased land or by conditions created thereby, or based upon any violation of any statute, ordinance or
regulation.
15. Upon failure or default of Lessee to comply with any of the terms and provisions hereof
including but not limited to the failure to comply with laws, rules and regulations covering Colorado oil and
gas operations, Lessor is hereby authorized upon notice and hearing, as hereinafter provided, to cancel
this lease as to all of the leased land so claimed or possessed by Lessee hereunder. In the event of any
such default or failure, Lessor shall, before making any such cancellation, send to Lessee by certified
mail, to the post office address of said lessee as shown by the records of Lessor, a notice or intention to
cancel for such failure or default, specifying the same, stating that if within forty-five (45) days from the
date of mailing said notice, Lessee shall correct such failure or default, no cancellation will be made. If
such failure or default is not corrected with forty-five (45) days after the mailing of such notice, and if
Lessee does not request a hearing on such notice within forty-five (45) days, this lease will terminate
3876599 Pages: 3 of 5
09/27/2012 02:18 PM R Fee:$0.00 S\Bonanza\OGL-Weld County-BCO Small Tract-35-5n-63w.doc
Steve Moreno..t�Clerk Mandl Recorder�.� Weld County,
ClO�W,`
ItIII t11'�r�il WrI�7Yti YT5YII 64114Yi 1%1 YYh RIMY 11III (Revised 1/2012)
and be canceled by operation of the paragraph without further action by Lessor, or further notice to
Lessee.
16. All of the provisions of this lease shall be binding upon the heirs, personal
representatives, successors and assigns of Lessor and Lessee.
17. Lessee shall not conduct operations of any kind upon the surface of the lands herein
described without the express written consent of Lessor, such consent shall not be unreasonably
withheld.
18. Neither party shall be responsible for delays or failures in performance resulting from acts
or occurrences beyond the reasonable control of such party, including, without limitation: fire, explosion,
power failure, flood, earthquake or other act of God; war, revolution, civil commotion, terrorism, or acts of
public enemies; any law, order, regulation, ordinance, or requirement of any government or legal body or
any representative of any such government or legal body; or labor unrest, including without limitation,
strikes, slowdowns, picketing or boycotts. In such event, the party affected shall be excused from such
performance (other than any obligation to pay money) on a day-to-day basis to the extent of such
interference (and the other party shall likewise be excused from performance of its obligations on a day-
to-day basis to the extent such party's obligations relate to the performance so interfered with).
IN WITNESS WHEREOF, Lessor has hereunto signed and caused its name to be signed by the
CHAIR, BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF WELD, with the seal of the
office affixed, and Lessee has signed this agreement, the day and year first above written.
ATTEST:
Weld County Clerk to the Board BOARD OF COUNTY COMMISSIONERS
WELD COUNTY, COLORADO
By f 63 C
Deputy C rd Chair, Board of County Commission
atr SEP 2 4
1861c CLESSEE:
�, p '.,rt;� Bonanza Creek Energy Operating Company, LLC
By: C,
Name: R. Michael McPhe idge
Title: Vice President/Land
3876599 Pages: 4 of 5
09/27/2012 02:18 PM R Fee:$0.00
Steve Moreno, Clerk and to wic h Forme �l+iEI+Nlii,64 I,Nr,,IJtI4iifr;N IN Il III
[acknowledgment attached]
r ' 4. -O758S-
C:\Dnve_C\Files from old computer\CAZFILES\Bonanza\OGL-Weld County-BCO Small Tract-35-5n-63w.doc
(Revised 1/2012)
ACKNOWLEDGMENT
State of California )
County of Kern )
On August 2, 2012 before me, Monica L. Ward-Keller, Notary Public, personally appeared R. Michael
McPhetridge, who proved to me on the basis of satisfactory evidence to be the person$$whose name$;
is/ace subscribed to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their authorized capacityfiesi, and that by his/her/their signaturef$ on the instrument
the personfs3, or the entity upon behalf of which the personfsl acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
/ � "",o� M0NICA L. WAR0-KELLER
Signature Lfrallm"d—/411ti ` Commission A:
1818259
z �x Notary Public -California I
z ,,,, Kern County
My Comm.Expires Oct 20,2012
Type of Document:
Weld County Oil and Gas Lease, (Small Tract) between Weld County, Colorado, Lessor and Bonanza Creek Energy
Operating Company, LLC, Lessee affecting lands lying in Sec. 35,Township 5 North, Range 63 West, 6th PM,
containing 3.27 acres more or less.
3876599 Pages: 5 of 5
09/27/2012 02:18 PM R Fee:$0.00
Steve Moreno, Clerk and Recorder, Weld County, CO
Itlllli iP'MP .' iiiid,AiWJNM14141Ids+ lIIIII
Esther Gesick
From: Bruce Barker
Sent: Tuesday, September 18, 2012 1:36 PM
To: Commissioners; CTB
Cc: Monica Mika
Subject: FW: Small Tract Oil and Gas Lease- Bonanza Creek Energy Operating Company, ...
See the below explanation from Cyndy Zeren about that Small Tract Oil and Gas Lease with Bonanza from yesterday that
is continued to Monday. I agree with her calculations. Very rare that the County got less than 100%, but it happened
every once in awhile. We will revise the Reso to show 25.5%of 3.27, and $333.54 as being the correct amount.
Bruce T. Barker, Esq.
Weld County Attorney
P.O. Box 758
1150"O" Street
Greeley, CO 80632
(970) 356-4000,ext.4390
Fax: (970) 352-0242
Confidentiality Notice: This electronic transmission and any attached documents or other writings are intended only for
the person or entity to which it is addressed and may contain information that is attorney privileged and confidential, or
otherwise protected from disclosure. If you have received this communication in error, please immediately notify
sender by return e-mail and destroy the communication. Any disclosure, copying, distribution or the taking of any action
concerning the contents of this communication or any attachments by anyone other than the named recipient is strictly
prohibited.
From: Cazeren(iaol.com [mailto:Cazeren@laol.com]
Sent: Tuesday, September 18, 2012 12:27 PM
To: Bruce Barker
Subject: Re: Small Tract Oil and Gas Lease - Bonanza Creek Energy Operating Company, ...
Bruce: I just left you a voice message explaining that I think the bonus calculation is correct since the County only owns
25.5% of the minerals underlying this 3.27 acre tract(3.27 x .255 x 400 = 333.54). Let me know if you have any questions
concerning these calculations. Thanks.
In a message dated 9/18/2012 10:00:47 A.M. Mountain Daylight Time, bbarkeraco.weld.co.us writes:
Cyndy:
The attached Small Tract Oil and Gas Lease was considered by the Board of County Commissioners
yesterday. The Board continued the matter to Monday, September 24, 2012, because the bonus amount
is incorrect. As you know, the Board has set a minimum amount of$400m per acre. The tract is 3.27
acres in size. Therefore, the bonus should be $1,308. The County received from you a check in the
sum of$333.54. The remainder of$974.46 will need to be remitted to the County in order for the
Board to approve the lease next Monday.
1
Please disregard the third and fourth paragraphs in the Resolution, as they are both incorrect.
Please send the additional amount to the Board before next Monday. Feel free to call me at the below-
stated number if you have any questions or wish to discuss.
Bruce T. Barker, Esq.
Weld County Attorney
P.O. Box 758
1150 "O" Street
Greeley, CO 80632
(970) 356-4000, ext. 4390
Fax: (970) 352-0242
utigs.
Confidentiality Notice: This electronic transmission and any attached documents or other writings are
intended only for the person or entity to which it is addressed and may contain information that is
attorney privileged and confidential, or otherwise protected from disclosure. If you have received this
communication in error, please immediately notify sender by return e-mail and destroy the
communication. Any disclosure, copying, distribution or the taking of any action concerning the
contents of this communication or any attachments by anyone other than the named recipient is strictly
prohibited.
2
BONANZA CREEK EN£R6Y, INC. CHECK NO. 2 5 4 1
410 17TH STREET, SUITE 1500 • DENVER,CO 80202 • (720)440-6100
12O7-AP-34 06/26/12 CKREQO62612 333 . 54 0 . 00 333 . `_
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1O41_2 WELD COUNTY CLERK OF THE BOARD O7/O2/12 333 . '
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