HomeMy WebLinkAbout20122930.tiff WELD COUNTY ATTORNEY'S OFFICE
1861 1150 0 STREET
P . O. BOX 758
GREELEY, CO 80632-0758
\ Ic \t
WEBSITE : www. co.weld . co . us
PHONE : (970) 336-7235
G U(�I T Y FAX : (970) 352-0242
October 11 , 2012
Carrizo Oil & Gas, Inc .
Craig E. Wiest, CPL
Land Manager-Western US
500 Dallas Street, Suite 2499
Houston, Texas 77002
RE : Letter dated September, 20, 2012
Hemberger 2-26-34-8-60 Well
Section 26 , Township 8 North, Range 60 West
Weld County, Colorado
Dear Mr. Wiest:
This letter is written to inform you and Carrizo Oil & Gas, Inc . that in the event mineral interests
are discovered as a result of the drilling of the above-described well, it will be necessary for the
company to enter into a lease agreement with the Board of County Commissioners of Weld
County, Colorado on behalf of Weld County.
A copy of the policies and procedures concerning Lease Agreements with the County is
enclosed, as well as a copy of the bidding procedures.
If you have any questions or comments, please call me at 970-356-4000 ext 4394 .
You truly,
ep anie L. Arries
Assistant Weld County Attorney
Pc : E. Gesick, Clerk to the Board Office
dOenerttimi 62,tte , d2) 2012-2930
/&- 15 -c9'0icL LEa a3 tak — t
WELD COUNTY CODE
Sec. 2-2-70. Mineral leasing policy.
A. The County owns mineral rights for approximately forty thousand (40,000) acres. On
November 19, 1986, the Board of County Commissioners adopted the following mineral leasing
policy by resolution:
1. The term of the leasing period shall be a maximum of three (3)years.
2. There shall be a continuation of the sealed bid process with the amendment that the
top two (2) bidders and any other bidder within ten percent (10%) may participate in an
auction.The opening of the sealed bids and the auction shall be held on the same day.
3. A bid bonus of at least Four Hundred dollars ($400.00), per acre, shall be the minimum
amount required.
4. There shall be a continuation of the requirement for certified funds.
5. Where there is a conflict concerning the ownership of the lease, the owner of the lease
shall provide evidence of ownership.
6. Royalty interest in the production to be paid to the County shall be at least twenty
percent (20%). Specific amount of royalty interest shall be set by the Board of County
Commissioners prior to the bidding process.
7. Royalty interest in the production to be paid to the County shall be twenty percent
(20%) when bidding is waived on small parcels under five (5) acres, with a minimum of a
Four Hundred dollar ($400.00) royalty bonus, per acre.
B. On August 29, 1985, the Board of County Commissioners adopted the following policy for
extending the terms of all mineral leases. The Board will extend the terms of all mineral leases in
which it is the Lessor according to the following conditions:
1. No lease term will be extended for more than six (6) months from the original expiration
date as contained in the mineral lease.
2. The Lessee shall pay to the Lessor the sum of one-third (%3) of the original bonus, with a
minimum bonus of ten dollars ($10.00) per acre.
3. The Lessee must pay to the Lessor the sum of one dollar ($1.00) per acre leased as
delayed rental for the term of the extension.
4. The royalty will remain the same as in the original lease. (Weld County Codification
Ordinance 2000-1; Weld County Code Ordinance 2007-6; Weld County Code Ordinance
2009-2)
INSTRUCTIONS TO BIDDERS
The Weld County, Colorado, Oil and Gas Lease will be used as the bid form. Please note the Weld County Oil
and Gas Lease contains a signature sheet which must be signed and notarized.
1. Bids may be found on our website www.co.weld.co.us listed under the Purchasing Dept. Please send
a courtesy email or fax to let us know if you are intending to bid on the leases. (see form on website)
2. Bidder must fill in name and address of lessee in the introductory paragraph of the Weld County Oil
and Gas Lease.
3. Bidder must complete the first paragraph following "WITNESSETH" of the Weld County Oil and Gas
Lease, writing the dollar amount for the bonus amount of the Oil and Gas Lease on a per mineral acre
basis.
4. Bidder must sign as lessee and have notarized. (Last page of the Weld County Oil and Gas Lease)
5. Bidder must return EACH bid in a separate envelope and must show name and mailing address in the
upper left hand corner of the envelope with bid number and lease number. (Do not write bid amount on
envelope)
6. A bid of at least$400.00 per acre shall be the minimum amount required.
7. Certified checks or cashier's check for the bonus amount of bid must accompany the sealed bids.
Other forms of security will not be accepted. A filing fee of $10.00 must also accompany the sealed
bid. This may be certified check, cashier's check or cash. The check for the bonus amount will be
returned to the unsuccessful bidders immediately after the awarding of the bid. The $10.00 for the
filing fee is kept by Weld County.
8. There shall be a continuation of the sealed bid process with the amendment that the top two bidders
and any other bidder within 10% of the top bid shall participate in an auction. The opening of the
sealed bids will take place in the Purchasing Dept at 8:30 am and the auction shall be held the same
day during the Board of Commissioners meeting held at 9:00 am. If an auction is held on a parcel of
land the higher bidder may give a company check or personal check for the difference between the
written bid and oral bid.
9. The term of the leasing period shall be for 3 years.
10. Where there is a conflict concerning the ownership of the lease, the owner of the lease shall provide
evidence of ownership.
11. Errors sometimes occur in the listing, though every effort is made to avoid them. The Board is not
liable for any inconvenience or loss caused by errors which may occur.
12. The Board of Weld County Commissioners reserves the right to reject any or all bids, to waive any
informalities in bids, and to accept the bid that, in the opinion of the Board, is to the best interests
of the Board and of the County of Weld, State of Colorado. The Board of Weld County
Commissioners shall give preference to resident Weld County bidders in all cases where the bids
are competitive in price and quality.
13. Checks are to be made payable to the Board of Weld County Commissioners.
RECEIVED
WELD COUNTY
COMMISSIONERS
CERTIFIED MAIL/RETURN RECEIPT REQUESTED
September 20, 2012
� �ci LC/itc r`%mot .
The Board of County Commissioners of Weld County / / -
1150OSt. !�< < � Ltf , ,:� -ct/
Greeley, CO 80632 ,- , :r (n(
Re: Ilemberger 2-26-34-8-60 Well
Section 26, Township 8 North, Range 60 West
Weld County, Colorado
Gentlemen:
Our company is in the process of forming a drilling and spacing unit on the above-
described lands for the drilling of the captioned "horizontal" well in the Niobrara Formation.
Upon approval by the Colorado Oil and Gas Conservation Commission, a drilling unit of
approximately 640.00 acres will be established, inclusive of the lands in which you have a lease
or other working interest. We are soliciting your participation in the well or wells to he drilled in
this unit.
You have the option to participate in unit operations. This will require you to: (1) enter
into an operating agreement with us, thereby "pooling" your interest; and (2) pay your
proportionate share of the costs of drilling and operating wells. The working interest owned by
you would translate into a .3781% interest in the initial well. As you can see by the attached cost
estimate, the projected cost to drill, complete and equip this well is $3,795,794.00, of which your
participation share would be $14,351.90. If you elect this option, please mark where indicated
below, and return this letter to me. Upon receipt, we will send you a joint operating agreement
to review and execute. On a going forward basis, you will be entitled to a share of production
revenues, as well as being responsible for your share of lease operating expenses, as provided in
the joint operating agreement.
Please be aware that drilling wells, especially the horizontal well being proposed for this
drilling unit, carries substantial risk as to whether the initial drilling and completion investment
will be recovered. If you do not agree to participate as outlined above, we are entitled to be
compensated for this risk, which we are willing to undertake. Should you decline to participate,
including by failing to respond to this letter, your working interest will be subject to a non-
consent penalty as provided under C.R.S. 34-60-116(7) until such time as your proportionate
share of costs, plus penalties. are recovered. At that time, you would then be converted to a
regular working interest owner as described above. You are therefore strongly encouraged to
obtain competent legal counsel to assist you in reviewing this letter and making an informed
decision.
As we intend to commence the drilling of this well soon, time is of the essence and your
prompt response is requested. Please make the desired selection and return one (1) executed
original of this letter to the undersigned no later than thirty (30) days from receipt of this offer.
If we do not receive your response by such date, you will be deemed to have elected to not
participate in the drilling of the well.
If I can answer any questions, please do not hesitate to contact me at (713) 358-6458.
Sincerely,
Y r My, 'I,
Craig E.W1Qaf,CPL
Land Manager-Western US
I will participate in the Hembergcr 2-26-34-8-60 well and upon receipt of an invoice
agree to pay my proportionate share of the drilling and completion costs.
I will not participate in the I lemberger 2-26-34-8-60 well.
By: __
WELL LOCATION MAP HEMBERGER
26-34-8-60 PAD
v c.
PPS 26964
State Hwy 14 N 88°46'15" E 5276.25' (C) N 00°30'03" E
Horizonal ' 75.00'+Lateral TD \
650 FNL
n963 FEL 9300' j.----- Duell ET AL#1-26
71 LAT:40.63891 -- (D&A)
o LON:-104.05263 Approximate
0
Location
•__-___— __ __.___._ _ •___ w w
m
eJ b
O
O c0
V c-
w .-
O
ao ? Co
o
0 z
Co • N M
0 0 j in
O Z F w
N W
- @ 0
O
Ce p o
N _i O
o i Landing Point yo z
650 FSL 983 FEL o
7 LAT:40.62792 N
LON:-104.05295 i�
Nemberger
2-26-34-8-60 N 53°15'41" E 703.35'
Surfil: 241 FSL 1546 ce Location
FEL (True N (N 54°11'42"E)
o
undaE Elev 4873.7s
LAT:40.62679 A' 1.4
— ---- Duell B#1 (P&A)
Ground Elev 4874.6 .� 300' — Approximate
♦ Location
♦
LON.-104.05501cip, ♦ If 's•}}'"N 88i ‘P °45'03" E 2653.89' N 88°48'20" E 2641.01' Alum.Cap
Alum_Cap Alum.Cap (Basis of Bearings) PIS 22097
PI.S 26602 I'I.S 30462
Proposed Access —
SURVEYOR'S STATEMENT _NOTES
The undersigned hereby states that the well location shown
hereon was staked on the ground based on existing 1 )Horizontal(NAD 83)and vertical(NAVD 88)datum is based on the
E monumentation and/or physical evidence found in the field and Leica Geosystems SmartNet of Colorado.
' is correct to the best of my knowledge,information and belief. 2.)All directions,distances,and dimensions shown hereon are based on coordinates
from the"Colorado coordinate system of 1983 north zone"(article 52 of title 38,C.R.S.).
.008818811//////i, 3.) All section line dimensions shown hereon are based on field measurements of
l evidence he o�pp0•REBi /to indicated. Refer to land sisting monuments urvey plats deposited in Weldund in tCou tl�unless otherwise
aN.. .��gA80/p4-•.0 4.)Physical features shown hereon are for graphical representation only.
• /3/12 ' •� 5.)See Form 2A for visible improvements within 400'of wellhead.
re �jY2O9 6.)Distances to nearest section lines are measured perpendicularly.
_ G .7 7.)This is not a land survey nor land survey plat.
North 8.)Date of Survey 4/3/12; Date of Drawing 5/3/12.REV 0
9 • c PDOP Reading 2_5 Instrument Operator: Marc Woodard
°'Q�HAL„�AN�t°° ' CARRIZO OIL & GAS, INC
,�. IA..
oA`;,,•0 )V�♦ HEMBERGER 2-26-34-8-60
stltp,,.-•••••
0 1000 2000 SL SW1/4 SE1/4 SEC.26 T8N R6OW
a a I LAND SURVEYING AND MAPPING
Graphic Scale in Feet LAFAYETTE-WINTER PARK HL TD NE1/4 NE1/4 SEC.26 T8N R6OW
1"=1000' Ph 303 666 0379 Fx3036656320 6th PM WELD COUNTY COLORADO
Version May 2012
cse w a r es Oa at WIN,INC. AFE WORKSHEET
Well Name:Hemberger 2-26-34-8-60 Date: 9/16/2012
Prospect: Niobrara AFE No.:
MASTER ACCOUNT SUB Drilling Int. Completion Int. Total
INTANGIBLES(Drlg,Compl.&Werkover) ACCT 185 170
Location,Pits,Roads&Cleanup 101 $5 350 $5 350
Rig Move-MIRU,RDMO 102 505,626 585 625
Spudder Rig 099
Orlq Contractor Day Work 10 DAYS 27162$IDAY 103 5325,944 5325944
Drip Contractor Footage FT SIFT 104
Drilling Contractor-Turnkey 105
Completion Rig DAYS $IDAY 106 52O500 520.500
Drilling and Potable Water,Water Well,Water Hauling 107 512 382 5428 512 810
Drilling Mud,Fluid&Chemicals 108 553 500 $53 500
Bits.Reamers,Stabilizers&Down hole Tools 109 523 005 51 605 524 610
Cement&Cement Services 110 540600 540 660
Mud Logging-Palen Ill
Cased Hole Logging.Perforating&Services 112 51.873 $1 873
Casing Tools&Crews-Drive Hammer 113 536,350 536 350
Directional Tools 8.Services 114 5110,556 5118 556
Formation Eval.-DST,Testing,Cony Core 116
Tubular inspection - 117 $3.852 53.852
Equipment Rental 118 535.191 5428 335 619
Contract Labor&Services 119 010,804 550003 560604
Well site Consultants 120 521,600 50 000 90600
Company Supervision&Labor 121 _ $3 000 $3.000
Marine Transportation-Boats.etc 122
Open Hole Logging 123
Mud,Cuttings and Fluid Disposal 124 552002 $52,502
Dock Charges 125
nsurance-DEE.Comp Liability.Umbrella Liability 126 510520 57.000 517,520
Overhead 127 57000 57.000 514.000
Unanticipated Major Exp.(Fishing etc) 128
Diesel Fuel 130 537,200 53.600 541.000
Drillsite and Surface Damage Payments 131 55000 55000
Formation Stimulation Pumping 133 51280000 51280000
Frac Water.Storage Tanks.Trmtsfer and Misc.Frac Expense 134 5226647 $226647
Flowback and Disposal 135 582.167 582167
Materials and Supplies 138 04.013 54.013
Legal.Title Work 145 525000 525 000
Permits(Fees&Related Costs).Surveys 148 55 350 55.350
Environ.lAnalyses.Consulting.Incident Clean-u0 149
Miscellaneous 190
Abandonment 197
Contingency 75°5, 199 568 517 5127410 0155.926
TOTAL INTANGIBLES IOrIg.Compl,&WorkoverI $982.071 $1826.200 $2,808,280
MASTER ACCOUNT SUB Drilling Tan. Completion Tan, cap rn Total
TANGIBLES(DrIg.Comp(.&WOMover) ACCT 161 171 pro 172 ilpn
ConductorlD.P Ft@$ Ft 201
sae-OO 017 Surface 1 400 Ft@$ 2544 Ft 202 535.622 535.622
,.-70.L_ Pneteculrner 6357 Ft@$ 2455 Ft 203 5156.035 5156.038
Liner Fl@$ Ft 204
Liner Ft@$ Ft 204
a r 2nsv.I'd Production 5720 Ft@$ 1319 Ft 205 $69,711 569711
Tieback FlW$ Ft 206
Tubing P1@1 Ft 207 578 554 528,954
Csg.Access.-Float Equip_,Liner Hge,etc 206 5265223 5265 223
Compl.Equip-Packers.Nipples.etc 209
Cog.Hd.Drilling Spool,etc 210 59202 59202
0mas Tree-Tubing Hd.&Upper Section 211 518025 518020
Miscellaneous 232
Contingency 75 v. 299 541 537 52348 $43.884
TOTAL TANGIBLES IDrItI..Comp(..&Wnrkoverl 5595356 $31.302 $626660
Artificial Lilt Equipment 201 5101 650 5101.650
Rods,Pump and Accessories 217 530.051 538051
Separation Equipment 203 511 342 511 342
Oil Treating EquipmentlHeale I Treater 204 530 174 830 174
Gas Treating E qulpmenliDehydrator 205
Tanks 206 551,953 561,953
On Lease Metering and Measurement 207 $21.828 521 820
Electrical Equipment and Installation 208
Compressor 209
Ftowlines and Gathering Lines in Carrizo 210 55 074 49 074
Consultants,Engineering,Sue Labor and Overhead 211 531 400 531 400
TruckslHauling Cranes.Boats and Barge Rentals 212
Buildings and Sound Barriers 213
Location and Roads 234 03210 $3.210
Chemicallnfeclion Equipment and Corrosion Control 216 52 729 52729
Tank Battery Piping and Valves 218 515 211 536211
Marine Equipment and Structures 219
Surface Pump 220
Environmental,Safely and Permits 249 516.050 516050
Miscellaneous 290
Contingency 5 51 299 $17.104 517.184
TOTAL TANGIBLES(PRODUCTION EQUIPMENT) $360,854 $360054
TOTAL TANGIBLES AND INTANGIBLES $1,577,430 $1,857,510 $360,854 33,795,794
T:9 pVcn J2o12 1002
A RIVIZO OIL m cas INC- PARTNER AFE WORKSHEET
Date 9/16/2012 WELL NAME Hemberger 2-26-34-8-60 Drilling
AFE# PROSPECT Niobrara Completion
Niobrara PROS#: Prod Equip
COUNTY Weld Workover
Spud Date 1/11/2012 STATE Colorado Supplement
Completion 3/20/2013 OPERATOR Carrizo Oil &Gas
Carrizo WI (%): 50.00 AFE Category: Drill/Compl/Equip Expend Type: Capital
Region: Niobrara REG18 Op Area: Niobrara Shale 45 Coord Sys: NAD 83
Permitted Field(s): 0.00
Surface X: 3,401,048 Bottom Hole X: 3,400,820 TD(MD): 10,520
Location:
Surface Y: 1,474,477 Bottom Hole Y: 1,478,860 TD(TVD): 6,342
Survey and Abstract: I E.J. Grabowski 22097
COSY 'Total Well Cost: $3,795,794
Drilling: $1,577,430 'Run Prod Casing: $431,259 (Completion $1,857,510 'Facilities: $360,854
*Running production casing is a sub cost of drilling cost.
(WELL LIE I AILS
Total Drl Days: 12 'Vert Sect: 4377 (Frac Stgs: 16
COMMENTS:
Drilling Costs include:Drill and complete Niobrara horizontal with an estimated 4,300'lateral in 12 days. Original interntion is to not drill well as pilot,
but if intention changes,a supplemental AFE will be written for the extra$600,000 pilot associated costs. Completion Costs include swellable packer
and sleeve completion system, 16 stage frac job,flow back,tubing,packer, rental jet pump,456 pump jack w/gas driven engine,tanks and facilities.
Compressors and gas sales pipelines are not included.
PARTNER APPROVAL
Company:
Approved By:
Title:
Date:
Note: See attached insurance election form to be executed and returned with this AFE.
Elect to not to acquire my/our proportionate share of non-consent interest that may become available in this operation
FAILURE BY ANY PARTY TO COMPLETE AND RETURN ITS EXECUTED INSURANCE ELECTION FORM SHALL BE DEEMED AN ELECTION
BY SUCH PARTY TO BE COVERED BY CARRIZO'S INSURANCE COVERAGE FOR COMPREHENSIVE GENERAL PUBLIC LIABILITY,
UMBRELLA LIABILITY AND OPERATOR'S EXTRA EXPENSE,WITH MINIMUM LIMITS SPECIFIED IN THE GOVERNING JOA,SUBJECT TO
THE TERMS OF SUCH POLICIES, INCLUDING APPLICABLE DEDUCTIBLE.
Version May 20t
Carrizo Oil K Gas , Inc - Contact Page 1 of 1
s -- -Z.01 .-
CA AR/Z°
09 l 28 NASDAQ 2 a�.an9 - 0 . 2 'i
2012 CRZO 6J
Corporate Office Barnett Field Office Marcellus Field Office
, J D I to 2,416 6 : 8 S 4tnA . e 1 421 549
Hesstcr IX 210n2 Mansfield 1X :9E:9EID3 Montrose PA 1 ,9301
Ins: f' h r a 4 ,774Q4:5 Inn 2; EDMD49
I _ 1 8 1 , k ar .. 4 8 , f of : 4 .
,,,
Posz
O1§1V. EMAIL CONTACTStat .
� � .z " •"--" . INVESTOR RELATIONS.
irra _ Richard Hunter, V. P . of Investor Relations
'n X Phone. (713) 328-1031
HR INQUIRIES.
Michelle Bailey
Email hr( crzo net for resume submissions .
•
, "*" Phone- (713) 328-1000
Yps' x r `
ROYALTY OWNER RELATIONS
�° All royalty owner questions should be addressed to LandOwnerRelationsl&crzo net or by calling
, Land Owner Relations at (877) 341 -2699.
n.. BILLING INQUIRIES
All joint interest billing questions , vendor invoices or 1099 questions should be addressed
�, .,.. ...., to AccountsPayablena crzo. net or by calling 713-358-6467 . The fax number is (713) 358-
. • p� 6437 . Please note this line does not handle royalty owner or lease bonus related questions.
S.14
-44
VENDOR INQUIRIES
If you are a salesperson and would like to be placed on the vendor's list, please submit your
company information . contact information and brochure to info( crzo . net and add Vendor's List on
a
'P �- • " the subject line.
, ., ALL OTHER INQUIRIES
^ . - For additional information , please contact us at info(aTcrzo . net
L1.1PLOY (- L MAIL AC.:CESS .
https //owa . crzonet/owa
9/28/7012
Hello