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RESOLUTION
RE: AUTHORIZE SUSPENSION OF OIL AND GAS LEASE COVERING CERTAIN PROPERTY
OWNED BY WELD COUNTY, COLORADO - W1/2 NE1/4, S18, T7N, R66W
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, Weld County is the owner of vast mineral lands located in Weld County,
Colorado, and
WHEREAS, pursuant to paragraph #16 of the Lease approved on December 7, 2005, by
Resolution #2005-3587, Petro -Canada Resources (USA) Inc., submitted a request to suspend the
lease of 80.0 net mineral acres, more or less, described to -wit:
W1/2 NE1/4 of Section 18, Township 7 North,
Range 66 West of the 6th P.M., Weld County,
Colorado, and
WHEREAS, after review, the Board deems it advisable to approve said request, submitted
by Petro -Canada Resources (USA) Inc., to suspend the lease on the above -described mineral
acreage, for a period of one year, commencing March 18, 2009, and ending March 17, 2010, a
copy of which is 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 submitted by Petro -Canada Resources (USA) Inc., to suspend
the lease on the above -described mineral acreage, for a period of one year, commencing
March 18, 2009, and ending March 17, 2010, be, and hereby is, granted and approved.
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:48p Weld County, CO
13818397 of 3 R 0.00 04/08/2009 D0.0012Steve Moreno Clerk & Recorder
2009-0665
LE0232
hc"e d� I l 3 /ot
RE: AUTHORIZE SUSPENSION OF OIL AND GAS LEASE COVERING CERTAIN PROPERTY
OWNED BY WELD COUNTY, COLORADO - W1/2 NE1/4, S18, T7N, R66W
PAGE 2
The above and foregoing Resolution was, on motion duly made and seconded, adopted by
the following vote on the 18th day of March, A.D., 2009.
BOARD OF COUNTY COMMISSIONERS
\W4DpUNTY�6pLORADO
ATTEST:
Weld County Clerk to the
BY:
AP
ounty Attorney
Deputy Clerk
the Board
M:
illiam F. Garcia, Chairman
XCUSED
Douglas Rademacher, Pro -Tern
cc) iP
Sean P. Conway
c (0(C/1
arbaKirkmeyer
David E. Long
C
111111MBE III 111111III 1111111Mil III 1III 2009-0665
3615397 04/08/2009 12:45P Weld County, CO LE0232
2 of 3 R 0.00 D 0.00 Steve Moreno Clerk & Recorder
WELD COUNTY ATTORNEY'S OFFICE
915 TENTH STREET
P.O. BOX 758
GREELEY, CO 80632
WEBSITE: www.co.weld.co.us
PHONE: (970) 336-7235
FAX: (970) 352-0242
March 2, 2009
Maria S. Gillman
Regional Landman
Petro -Canada Resources (USA), Inc.
Suite 600, 999 18`° Street
Denver, CO 80202
RE: Letter of January 16, 2009
Dear Ms. Gillman:
The Board of County Commissioners of Weld County has received your letter of January 16,
2009, regarding PCR Lease No. 102008.000, for property located in the WNE of Section 18-7-
66.
Enclosed is the check in the amount of $240 which you sent with your letter. Section 16 of the
lease allows for one year of suspension prior to having to pay that cost. Consequently, I will
recommend to the Board that it suspend the lease as requested for one (1) year. You will then
need to request another extension at the end of that year and send in a check then for $240. You
will need to do that procedure every year thereafter that if you wish to have the suspension
continue.
Please call me at (970) 356-4000, extension 4390, if you have any questions or need additional
information.
Sincerely, -7
i
uce- Barker
Weld County Attorney
Enclosure
pc: Esther Gesick
1111111 11111 111111 11111111111 III 1111111111 11111 11111111
3615397 04/08/2009 12:45P Weld County, CO
3 of 3 R 0.00 D 0.00 Steve Moreno Clerk & Recorder
2009-0665
PETROi-CANADA RESOURCES'(USA)INC.
OPER'ATINGACCOUNT',A AL
,
99,48th $reet, Suite 600
penve5tolorado 80202
,(303}297-2300
EXACT.452+ dolsO
TWO HUNDRIID FORTY DOL
THE
ORDER
OF ?.
WELD COUNTY BOARD OF pOUN
COMMISSIONERS
WELD COUNTY CENTENNIAL CENTER
915 10TH ST
GREELEY, CO 80632
WELLS FARGO BANK GRAND JUNCTION
„,L'pran4 jonctlon, Colorado
CHECK
50428
-<,-
VENDOR Nta' ^
CHECK DATE
, PA,gK'k%ACTLY
......,7,02098
Jan -15-2009``
$240.00
AUTH0)BTECTRIGNATURE
Mari S. Gillman
Regional Landman
Petro -Canada Resources (USA) Inc.
Suite 600, 999 18th Street
Denver, CO 80202
Telephone: (303) 350-1179
Facsimile: (303) 297-7708
January 16, 2008
Ms. Esther Gesick
Clerk of the Board
Weld County Board of Commissioners
915 10th St.
Greeley, CO 80631
RE: Weld County Oil & Gas Lease dated December 7, 2005
T7N-R66W; Section 18: WNE ("Lease")
Weld County Lease number 2005-3587
Weld Co., CO
PCR Lease No. 102008.000
Dear Esther:
Thank you for your time on the telephone last week to discuss Petro -Canada's ("PCR") request for "suspension of
obligation" pursuant to paragraph 16 of the captioned Lease.
As we discussed, PCR drilled the Drake 18-12 & 18-13 ("the Wells") wells in October of 2008, and completed both
as producers in November. We currently have no market for our gas as the closest Gas Gathering line is
approximately a mile and a half away. We have been diligently working with the gas purchaser (DCP Midstream)
since November in an effort to get the Wells hooked up to begin selling gas. DCP is having difficulty obtaining the
necessary ROW for their gathering lines and are currently in discussion with the City of Thornton to obtain as
easement for the gathering line.
Based on the above circumstances, PCR hereby requests a suspension of our obligation to produce gas under the
terms of the Lease until a suitable market can be can be found, and further, pursuant to paragraph 16, it shall be
deemed that gas is being produced under the Lease in paying quantities.
In accordance with the above, and pursuant to paragraph 16 of the Lease, enclosed please find PCR's check number
50428 in the amount of $240.00 in accordance with the minimum requirement for the shut in royalty.
Please let us know the Board's decision at your earliest convenience. If you have any questions, please feel free to
call me.
Sincerely,
1
Mari S. Gillman
Regional Landman
Petro -Canada Resources (USA), Inc.
Cc: Karen Shafer
Oil and Gas Lease
Page 5
agreement, Lessor may segregate the land and issue a separate lease for each portion not committed
thereunder; the term of such separate lease shall be limited as to the original term of this lease. The
terms of the lease on that portion remaining In the unit shati be deemed to be modified to conform to such
agreement. Non -producing leases shall terminate on the first anniversary date of the lease folloof wing
the
the
termination date of the unit or part thereof modifying the lease, but in no event prior to the
primary term of the lease or the extension term of the lease. icable iand rs, rate and produce
15. Pall wells upon the leased land so lODUCTION - Lessee shall, ong as to thelsamee are capable ofnproducing in paying quantities, and
shall operate the same so as to produce at a rate commensurate with the rate
of f wfells
on
on
adjoining lands within the same field and within the limits of good engihte P� m
times as there exist neither market nor storage therefor, and except for such limitations on or
b n for
suspensions of production as may be approved in writing by Lessor. Lessee shall be responsr
adequate site security on all producing properties.
18. SHUT-IN WELLS - N Lessee shall complete a well on the leased land productive of gas and Lessee is
unable to produce such gas due to a lack of suitable market therefor, Lessormay found,
t W d see
suspension of his obligations to produce hereunder until a suitable market for such u ereunder In paying
during any such suspension period, it shall be deemed that gas is being prod
quantities. Except, however, that beginning on the anniversary date next, of the year of an extension of
the lease by reason of a shut-in well, Lessee shall pay to Lessor a shut-in royalty equal to $2.00 per acre
of the lease per annum In addition to the annual rental. The minimum amount of such shut-in royalty
payment shall be $240. Each year's shut-in royalty shall be forfeited to Lessor except for the shut-in
royalty paid for the year during which the well begins production. The maximum extension of the lease,
due to the existence of a shut-in well, shall be five years beyond the extension term as described in the
EXTENSION paragraph herein. The granting of any further extensions shall be at the sole option of
Lessor.
17. OPERATIONS - No exploration, drilling Cr production operation, including permanent installations, shall
be within 200 feet of any existing building or other improvement, including water well or reservoir, without
the written permission of the owner of said improvements. Lessee shall keep a correct log of each well
drilled hereunder, showing by name or description the formations passed through, the depth at which each
formation was reached, the number of feet of each size casing set in each well, where set, and the total
depth of each well drilled. Lessee, within thirty (30) days after the completion or
abandonmentwell, ny well
with
drilled hereunder, shall file in the office of Lessor a complete and correct log of such
a copy of the electric log and the radioactivity log of the well when such logs, or either of them, are run;
and also a copy of all drill stem test results, core records and analyses, record of perforations and initial
production tests, if any. If any of the information required by this paragraph is contained in reports
required to be filed with the Oil and Gas Conservation Canrdsslon of Colorado, the requirements of this
paragraph for such information may be satisfied by such filing with
such information for
copies
of the reports as are required by the following paragraph, pu
blic
ublis
immediately available to Lessor. Any proprietary information so submitted shall not be subject
inspection under Colorado law.
Lessee shall bury pipelines below plow depth. Lessee shall set and cement sufficient surface casing to
protect the fresh water wells of the area.
18. NOTIFICATION - Lessee shall notify Lessor and the surface lessee or surfacethereon. ownar oe f the shall location f
each drill site at least two weeks prior to commencing drilling operationserequest fee shall val notify
Lessor before commencing to plug and abandon any well by copy
of or
sundry notice of intent to plug and abandon.
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:14P Weld County, CO
5 of 8 R 0.00 D 0.00 Steve Moreno Clerk & Recorder
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