HomeMy WebLinkAbout20100056.tiff RESOLUTION
RE: APPROVE REQUEST TO WAIVE BID PROCEDURE CONCERNING OIL AND GAS
LEASE, ACCEPT OFFER TO LEASE MINERAL ACRE, AND AUTHORIZE CHAIR TO
SIGN - ENCANA OIL AND GAS (USA) INC.
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, EnCana Oil and Gas (USA) Inc., 370 17th Street, Suite 1700, Denver,
Colorado 80202, 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:
That Portion of Lot 4, Block 5, Town of Erie, being
located in the SE1/4 of Section 18, Township 1
North, Range 68 West of the 6th P.M., Weld County,
Colorado
WHEREAS, EnCana Oil and Gas (USA) Inc. is offering to lease the above described
mineral acres, containing .043 mineral acres, more or less, and
WHEREAS, the Board finds that the lease offer from EnCana Oil and Gas (USA) Inc., in
the amount of TWO HUNDRED AND NO/100 DOLLARS ($200.00), 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 EnCana Oil and Gas (USA) Inc., to waive the bidding
procedure on an Oil and Gas Lease concerning the above described mineral acres, be, and hereby
is, granted.
BE IT FURTHER RESOLVED by the Board that the offer of EnCana Oil and Gas (USA)
Inc., 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.
2010-0056
LE0021
(�C . c.i,v,i C ( oK.IG� X1740
WAIVE BID PROCEDURE - ENCANA OIL AND GAS (USA) INC.
PAGE 2
The above and foregoing Resolution was, on motion duly made and seconded, adopted by
the following vote on the 11th day of January, A.D., 2010.
1 BOARD OF COUNTY COMMISSIONERS
-. 4 E(L,b ELD COUNT COLORADO
ATTEST:
teal ,( 4, i`7 o glas demache C air
Weld County Clerk to the Bo 1� M
a
"�( r " rbara Kirkmeye ro-Tem
,
BY� GLl1 �l 1 (� l (. �.
Depu y Cle to the Board
Sean P.Tay
c
• iam F. Garcia
ounty Attorney cL
David E. Long
Date of signature: 1(13 I/b
2010-0056
LE0021
COpyl
WELD COUNTY OIL AND GAS LEASE
(Small Tract)
THIS AGREEMENT, made and entered into this 30th day of October, 2009, 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, 915 10th Street, P.O. Box 758, Greeley, CO
80632, hereinafter called Lessor, and EnCana Oil & Gas (USA) Inc., 370 17th St., Suite 1700, Denver, CO
80202, hereinafter called Lessee.
WITNESSETH, that Lessor, for and in consideration of the sum of$200.00, 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 pipelines, 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:
Section 18, Township 1 North, Range 68 West of the 6th P.M., Weld County, Colorado, more particularly
described as follows:
Township 1 North, Range 68 West, 6t° P.M.
Section 18: That portion of Block 5, Lot 4, Town of Erie, located in the SE/4
and containing 0.043 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 Ea
and as long thereafter as oil or gas of whatsoever nature or kind is produced from said leased premises
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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 a
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 a
prosecuted if not more than ninety (90) days shall elapse between the completion or abandonment of one far._,
well and the beginning of operations for the drilling of a subsequent well. If after discovery of oil or gas on
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.
2. This is a PAID-UP LEASE. In consideration of the down cash payment, Lessor agrees a
that Lessee shall not be obligated, except as otherwise provided herein, to commence or continue any c
operations during the primary term. Lessee may at any time or times during or after the primary term 1 r.
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 mint;
to the acreage surrendered.
PURPORTED COPY Page 1 of LEOC 2/
3. In consideration of the premises the said Lessee covenants and agree to pay Lessor
one-sixth (1/6) 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 pipelines 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. 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 __c
part of this lease is assigned, no leasehold owner shall be liable for any act or omission of any other i
leasehold owner. _ `:
11. Lessee, at its option, is hereby given the right and power at any time and from time to —c
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 Em.:
mineral estate covered by this lease with other land, lease or leases in the immediate vicinity for the 2
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 —
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. a
Production, drilling or reworking operations or a well shut in for want of a market anywhere on a unit a,
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
Page 2 of 4
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.
—c
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 mmmC
such default or failure, Lessor shall, before making any such cancellation, send to Lessee by certified _4
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 thirty (30) 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 thirty (30) days after the mailing of such notice, and if Lessee does
not request a hearing on such notice within thirty (30) days, this lease will terminate and be canceled by —
operation of the paragraph without further action by Lessor, or further notice to Lessee. c
16. All of the provisions of this lease shall be binding upon the successors and assigns of =e
Lessor and Lessee.
r
Page 3 of 4
17. Lessee shall not conduct operations of any kind upon the surface of the lands herein
described without the express written consent of Lessor.
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 sig -d this agreement, the day and year first above written.
ATTEST: 73 •
Weld County Clerk to the ar. , '%BOARD OF COUNTY COMMISSIONERS
>f � I VELD COUNTY, COLORADO
18.rr i 0a/y•A ` 1 (y'
Deputy Cler o the B it ,te-
'i .tea -v Chair, Board of Co my Commissioners
" " 1"-" JAN 1 i 2010
LESSEE:
EnCana Oil & USA) Inc.
Ricardo D. Gallegos, Attorney-in-Fact/_ ,
STATE OF COLORADO ) ...i'
COUNTY OF WELD :• (jTAR
The foregoing instru ntiwas2gl ledged efore me this ' day Of ctt,vu a.R+A ,20 Id .
Witness my hand and official se dj`•.,PUBt-IG:`O
Notary Publics OF
a
mu rnmmiscicn EX,AieS Mat 15.?010
My Commission Expires:
ire—
Nom
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N
STATE OF COLORADO ) ACKNOWLEDGMENT,CORPORATION e
)ss ac
COUNTY OFF DENVER ) t
On this i 5t day of ��W 'a t ,in the yyear 2009 ,before me personally appeared Ti:
iC4rSo D, Czi I ler known to me to be the A4Ivrnc{-in- 13cr of ice cc
EnCana Oil&Gas(USA) Inc.,the corporation that is described in and!that executed the within instrument,and N
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acknowledged to me that such corporation executed the same. ira—
,�,. ..�\ �{ aa o
(Notary Se \\,JAC/cS\fit Notary Signature V `-j "a� r a "� _ccp
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Q.Q�OTgR y�iL tttl Printed Name of Notary. Vl N I
_� � I Notary Public for the State of a is r
I I _ •1 ii Residing at.310 I-1.1-51- SIc nap pQ.,.trer C,0 a� ' s^t
yj) • : 5 My commission expires 3I D J Z 13
III9•It -\GPP 9O- _M
, INNOF:OLQer
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MY
•mi CCillmi sion Expires 03/25/2013 Page 4 of 4 o?0jD -005
AKE'.RS & ASSOCIATES TLC John K.H.Akers,Jr.
\nur .\ Counselors at Lair
lakersQekers-lawfirm.com
neis
7730 E.Belleview Ave.,Suite 102 Barbara Griswold
Greenwood Village,CO 80111 bgriswold@akers-lawfirm.com
Office:720.488.0835 Licensed in Colorado and California
Fax:303.796.8191
Of Counsel:
Stanley L.Grazis
sgrazis@akers-lawfirm.com
DRAFT September 16, 2009
Ms.Lesley Ann Hall
Land Coordinator, DJ Basin
EnCana Oil&Gas(USA)Inc.
370 17th Street, Suite 1700
Denver, Colorado 80202
Re: Erie Champlin 33-18 Well Erie Champlin 42-18 Well
T1N, R6RW, 6thPM TIN,R6RW, 6th PM
Section 18: SE/4SE/4 Section 18: NE/4NE/4
Erie Champlin 34-18 Well Weld County, Colorado
TIN, R68W 6th P M
Section 18: SE/4SE/4
DRILLING AND DIVISION ORDER TIT),F.OPINION
covering
Township 1 North,Range 68 West,6th Principal Meridian
Section 18: E/2
Weld County, Colorado
Containing 320.0 acres±
LIMITED TO the Codell,Niobrara and J-Sand Formations'
The above-described lands and depths are referred to herein as the "subject lands"
I See Additional Comment and Requirement No. 10 below.
L&GCS/
EnCana Oil& Gas(USA)Inc.
DRAFT Drilling and Division Order Title Opinion
TIN,R68W, 6th P.M. Sec. 18: E/2
Page 5 of 98
Tract 1(t
Township 1 North, Range 68 West, 6a'Principal Meridian
Section 18: Those portions of Block 4,Lots 13 and 14, Town of Erie,
that are located in the SE/4 of Section 18
Containing 0.0861 acres",more or less
Tract 17
Township 1 North Range 68 West, 60'Principal Meridian
Section 18: Those portions of Block 4,Lots 15 and 16,Town of Erie,
that are located in the SE/4 of Section 18
Containing 0.0861 acres12,more or less
Tract 1R
Township 1 North Range 6R West, 6th Principal Meridian
Section 18: Those portions of Block 5,Lots 1 —3, 5—8 and 10,Town
of Erie,that are located in the SE/4 of Section 18
Tract 19
Township 1 North Range 68 West 60'Principal Meridian
Section 18: That portion of Block 5,Lot 4,Town of Erie,
that is located in the SE/4 of Section 18
Containing 0.0430 acres13,more or less
'I See Additional Comment and Requirement No.4 below.
U See Additional Comment and Requirement No.4 below.
13 See Additional Comment and Requirement No.4 below.
EnCana Oil &Gas (USA)Inc.
DRAFT Drilling and Division Order Title Opinion
TIN, R68W, 6th P.M. Sec. 18: E/2
Page 21 of 98
Tract 11
All Depths
Name WI
EnCana Oil& Gas(USA)Inc. 100.000000% 87.500000% G
Estate of Greg A. Mitchell, Deceased27 12.500000% (LOR) G
Total 100.000000% 100.000000%
Tract 14
All Depths
Name WI rIBI OGI
EnCana Oil &Gas (USA)Inc. 100.000000% 87.500000% G
Marty A. Rowe 12.500000% (LOR) G
Total 100.000000% 100.000000%
Tract 16
Laura Esterman 100.000000% 100.000000% Unleased
Tract 17
Matthew A. Boardwell and
Pamela G. Boardwell 100.000000% 100.000000% Unleased
Tract 19
Weld County, Colorado 100.000000% 100.000000% Unleased
27 See Additional Comment and Requirement No. 14 below.
CONTEX ENERGY COMPANY
621 17th Street,Suite 1020
Northern Office:
Denver,Colorado 80293-2501 P.O.Box 627
Dickinson,ND 58602
Phone(303)623-3444 Phone(701)225-5507
Fax(303)623-1523 Fax(701)483-5498
Gary Butler,President Dennis W.Meschke,Vice President
December 21, 2009
Weld County, Colorado
915 I 0d' St.
P.O. Box 758
Greeley, CO 80632
RE: EnCana Lease Offer
Township 1 N., R. 68W., 6th P.M.
Sec. 18: That portion of Block 5, Lot 4, Town of Erie, located in the SE
0.043 acres, m/I
Weld County, Colorado
To Whom It May Concern:
On behalf of EnCana Oil & Gas(USA)Inc., an offer to lease your oil and gas rights under the
above-described lands as part of EnCana's drilling program in the E2 of Section 18 is as follows:
1 $200.00 flat fee bonus consideration
2 Three(3)year primary term
3 1/6 royalty
Certain changes from your lease form were made as follows:
• Paragraph 3, royalty changed from 20%to 1/6
• Paragraph 16, heirs and personal representatives were deleted as successors and assigns
EnCana has executed the enclosed lease and submitted the required $200.00 payment under Weld
County's small tract policy. Provided you are in acceptance, please execute the lease in front of a
notary public where indicated by the red x's and return the original in the enclosed prepaid
envelope. Upon receipt, the fully executed original lease will be forwarded to Weld County for
recording. The copy is yours to keep for your records.
If you have any questions, you can reach me at(303) 623-3444, ext. 216 or by email at
mike(c4contexenergy.com. Thanks for your consideration.
e ards
ita
Mike Jone
Consulting Landman
Contex Energy Company, on behalf of EnCana Oil &Gas (USA) Inc.
/Enclosures—Signed OGL and $200.00 check
i
QpOTES RECEIPT DATE /-7-i0 NO. 85223 \
p Q m RECEIVED FROM —_ r�.� !}�_.._ ���
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WO DUE f ORDER I I BY 't_:
:r200T RECEFOI+( :Y 8K808
Esther Gesick
From: Esther Gesick
Sent: Thursday, January 07, 2010 12:59 PM
To: Mike Jones
Cc: Sharon Kahl; Esther Gesick
Subject: Small Tract Lease (SE4, S18, T1 N, R68W-0.043 acres m/I)
Mike,
I received your Small Tract Lease in today's mail. I will list this matter on the Monday(1/13/10)Agenda for
consideration by the Board, at 9:00 a.m., and you are welcome to attend if you desire; however,your presence is not
required. Once the lease is signed it will be sent to recording and then the original returned to you. If you have any
questions, please don't hesitate to contact me.
Thanks and have a nice day!
Esther E. Gesick
Deputy Clerk to the Board
Weld County, Colorado
915 10th Street
Greeley, CO 80631
(970)356-4000 X4226
(970)352-0242 (fax)
From: Esther Gesick
Sent: Friday, October 30, 2009 3:13 PM
To: Esther Gesick
Subject: RE: Weld County Oil and Gas Interest
Mike,
Paragraph A.7 deals with small tract parcels, and the minimum is$200.00. All you need to do is fill in the amount and
legal description on the first page, and then have your signature notarized. Once I receive the signed lease and check, I
will list this on the next available Agenda, so the timing is entirely up to you.
Have a great weekend!
Esther E. Gesick
Deputy Clerk to the Board
Weld County, Colorado
915 10th Street
Greeley, CO 80631
(970)356-4000 X4226
(970)352-0242 (fax)
From: Esther Gesick
Sent: Friday, October 30, 2009 2:08 PM
To: 'Mike Jones'
Cc: Esther Gesick
Subject: RE: Weld County Oil and Gas Interest
Hi Mike,
1
Thanks for sending the information; I will establish a file for this parcel. The Small Tract Lease form and associated policy
are attached (see paragraph A.7). Please let me know if you have any questions or if you need anything further.
Have a great weekend!
Esther E. Gesick
Deputy Clerk to the Board
Weld County, Colorado
915 10th Street
Greeley, CO 80631
(970)356-4000 X4226
(970)352-0242 (fax)
From: Mike Jones [mailto:mike@contexenergy.com]
Sent: Friday, October 30, 2009 10:59 AM
To: Esther Gesick
Subject: Weld County Oil and Gas Interest
Esther,
Pursuant to our conversation on Wednesday, October 28, enclosed please find excerpts from the subject title opinion that
highlights Tract No. 19 that Weld County owns the minerals under. As we discussed please send me the lease form and
procedures for tracts under five (5)acres that Weld County uses for oil and gas leases.
Thanks for your consideration.
Mike Jones
Consulting Landman
Contex Energy Company, on behalf of EnCana Oil &Gas(USA) Inc.
(303)623-3444, ext. 216
2
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