HomeMy WebLinkAbout20020362.tiff t ,
RESOLUTION
RE: APPROVE REQUEST TO WAIVE BID PROCEDURE CONCERNING OIL AND GAS
LEASE AND ACCEPT OFFER TO LEASE MINERAL ACRE - PATINA OIL AND GAS
CORPORATION
WHEREAS, the Board of County Commissioners of Weld County, Colo,ado, 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, Patina Oil and Gas Corporation, 1625 Broadway, Suite 2000, Denver,
Colorado 80202, has requested that the bidding procedure be waived according to the policy as
set forth in the Weld County Administrative Manual for parcels less than five acres, on the
following described mineral acres:
Part of the NE%NE% of Section 35, Township 5
North, Range 66 West of the 6th P.M., Weld
County, Colorado
WHEREAS, Patina Oil and Gas Corporation is offering to lease the above described
mineral acres, containing 2.19 mineral acres, more or less, and
WHEREAS, the Board finds that the lease offer from Patina Oil and Gas Corporation in
the amount of TWO HUNDRED AND NO/100 DOLLARS ($200.00), is acceptable, with the
further terms and conditions being as stated in said Oil and Gas Lease, a copy being attached
hereto and incorporated herein by reference.
NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of
Weld County, Colorado, that the request of Patina Oil and Gas Corporation, to waive the
bidding procedure on an Oil and Gas Lease concerning the above described mineral acres, be,
and hereby is, granted.
BE IT FURTHER RESOLVED by the Board that the offer of Patina Oil and Gas
Corporation to lease mineral acres, as hereinabove stated, be, and hereby is, accepted.
2002-0362
LE0018_a
Poi pct
WAIVE BID PROCEDURE - PATINA OIL AND GAS CORPORATION
PAGE 2
The above and foregoing Resolution was, on motion duly made and seconded, adopted
by the following vote on the 11th day of February, A.D., 2002.
BOARD OF COUNTY COMMISSIONERS
1/ ���� WE(LLDD COUNTT, COLORADO
ATTEST: � 7rcd /�'U�%� :••I~ NYC... 1/61.6-c
�► a +ern Vaad, ClTdtr
Weld County Clerk to th o-
r 1861 it_ O 4 �L _ •
cQ c� r �l David E. Lo ., Pro-T:m
BY: 0-9°
4-,
ro• I.a ;, .fa�
Deputy Clerk to the M. J. eeeile
APPROVED O M: " V! X/Ft-✓
Tam H. Jerke
County tor ey (�. �
Robe . Masden
Date of signature: /a7
2002-0362
LE0018
381 WELD COUNTY OIL AND GAS LEASE
(Small Tract)
THIS AGREEMENT, made and entered into this 8th day of January , 2002 , by and
between WELD COUNTY, COLORADO, a political subdivision of the State of Colorado acting by and
through the Board of County Commissioners of the County of Weld, 915 10th Street,P.O.Box 758,Greeley,
CO 80632, hereinafter called Lessor, and:
Patina Oil & Gas Corporation, 1625 Broadway, Suite 2000, Denver, C0 80202
hereinafter called Lessee.
WITNESSETH,that Lessor,for and in consideration of the sum of$ 10 and more ,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:
Section 35 Township 5 North, Range 66 West of the 6th P.M., Weld County, Colorado:
See Exhibit "A" attached hereto and made a part hereof
and containing 2. 19 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 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 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 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 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 one-
eighth (1/8)of the proceeds received by Lessee, payable monthly, for the oil, gas and other hydrocarbons
produced and saved from the leased premises.
11111111111 1111111 1111 111111 111 1111111 111 VIII IIII IIII
2929381 03/01/2002 02:04P JA Suki Tsukamoto M:\CTBICTBFORMised 11 LGAS
1 of 6 R 0.00 D 0.00 Weld County CO (Revised 11/200A g Eye/e
Oil and Gas Lease - Small Tract
Page 2
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. 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 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
I��III111111111111Ilia 111111 III 1111111 III 11111 IIII M:ICTBICTBFGRMSIFOGILGAS
2929381 03/01/2002 02:04P JA Suki Tsukamoto (Revised 1112000)
2 of 6 R 0.00 0 0.00 Weld County CO
Oil and Gas Lease - Small Tract
Page 3
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 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.
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.
I IIIIII VIII IIIIIII IIII IIIIII III IIIIIII III VIII IIII IIII
k' isukarnoto
2929381 002: M:\CTB\CTBFORMs\FOOILGAs
3 of 6 R 0.00 D 0.00 Weld County CO (Revised 11/2000)
Oil and Gas Lease - Small Tract
Page 4
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.
BOARD OF COUNTY COMMISSIONERS
�/ ��� WEL OUNTY, CpLO DO
d6�"airy l/Jl//
ATTEST:
Chair, Board of Co missioners O°%// ra-
Weld County Clerk to�'j B>� • /
•
1861 ._
CfeZZ By: 6/
lsry9yi
Deputy Clerk t.
111W\\--
'
ATilEST: . :' LESS/PATINA & GAS CORPORATION
` 2�. "fufl�
.1}avi J. Kornder, Secretary
David W. Si le, Vice President
STATE OF COLORADO
) ss
COUNTY OF WELD
The foregoing instrument was acknowledge.,,-•- ..rni,ethis // -day of __
20 U .1 y.Y PV
Witness my hand and official seal. O C •
DONNA J. A
7 BECHLER
N tary Public F !,P '
Mr eat*bin 14200$
My Commission Expires:
111111111111 1111111 IIII 111111 III 1111111 111 111111111
4 of 61 R 0.002002 02:04P JA Suki D 0.00 Weld County CO
ukamolo
M:\CTB\CTSFORMSIFOOILGAS
(Revised 11/2000)
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this j day
of January, 2002, by David W. Siple as Vice President of Patina Oil & Gas
Corporation.
Witness my hand and official seal. y;/ /
My Co s 6.o ires: ` iPublc
� p
I IIIIII VIII IIIIIII IIII IIIIII IIIRill I119I IIII IIII
2929381 0310112002
5 of 6 R 0.00 D 0.00 Weld County CO
Exhibit"A"
Attached to and made a part of that certain Oil & Gas Lease
dated January 8, 2002, by and between Weld County,
Colorado, Lessor and Patina Oil & Gas Corporation, Lessee
Township 5 North. Range 66 West. 6th P.M.
Section 35: A triangular tract or parcel of land located in the NE/4NE/4 more
particularly described as follows:
Beginning at a point which is 102 feet North and 134 feet South 88°57'
West of what purports to be the northeast corner of said Section 35, said
point being the intersection of the south line of the County Road as it now
exists on the north said Section 35 with the northerly boundary line of The
Denver, Laramie and Northwestern Railway Company's right of way and
is 50 feet northwesterly of and at right angles to the center line of said
Railway Company's route as located through, over and across said Section
35; thence South 88°57' West 780.5 feet along the South line of said
County Road to a point; thence South 6°19' West 244.7 feet to a point on
said northern boundary line of right of way; thence North 72°19' East 50
feet from and parallel to said center line 848.1 feet to the place of
beginning.
Including any and all lands owned or claimed by Lessor adjacent or
contiguous to the land described hereinabove and not under lease as of this
date.
11111111111i 11111 IIII lilt III IIIIIII III 1111111111111
2929381
R 0.002002 0 0.002:04P JA i ukamoto
Weld County
PATINA
OIL&GAS CORPORATION
1625 Broadway, Suite 2000
Denver, Colorado 80202
(303) 389-3600
(303) 389-3680 Fax
January 25, 2002
Weld County Attorney's Office I I
Attn: Bruce T. Barker 1g1"'
915 Tenth Street
ci;
P. O. Box 758- IAN 2 8 2001 1,'
Greeley, CO 80632
,-I.0N COUNTY
EY'S OFFICE
Re: Proposed Lease of County Owned Minerals
Township 5 North, Range 66 West, 6th P.M.
Section 35: Part of NE''hNE''h
Weld County, Colorado
Dear Mr. Barker:
Enclosed is Patina Oil & Gas Corporation's ("Patina") check in the amount of $200.00
representing the bonus for a lease covering Weld County's minerals under the captioned land.
The lease was signed by Patina and sent to Weld County for signature on January 9, 2002.
Please return the executed lease to my attention.
Thank you for your assistance in this matter.
Very truly yours,
PATINA OIL & GAS CORPORATION
Debra Allen-Wittke
Landman
DAW/kkp
2002-0362
LE'bel2
PATNA
OIL&GAS CORPORATION
1625 Broadway, Suite 2000
Denver, Colorado 80202
(303) 389-3600
(303) 389-3680 Fax
January 18, 2002
Weld County Attorney's Office
Attn: Bruce T. Barker 0 C�7�
915 Tenth Street J]" •
P. O. Box 758 I! ,IAN 2 1 2001 If
Greeley, CO 80632 �L
ORNEYCOUNTY
Re: Proposed Lease of County Owned Minerals Al r S OFFICE
Township 5 North, Range 66 West, 6th P.M.
Section 35: Part of NE''ANEY
Weld County, Colorado
Dear Mr. Barker:
In response to your letter of January 16, 2002, this is to advise that Patina Oil & Gas Corporation
is agreeable to paying a $200.00 bonus for a lease covering Weld County's minerals under the
captioned land. I have requested a check from our accounting department and will send it to you
after our next check run on January 24th or 25th.
Thank you for your assistance in this matter.
Very truly yours,
PATINA OIL & GAS CORPORATION
Debra Allen-Wittke
Landman
DAW/kkp
(6I7seiif Q8e11d2
4.
4 WELD COUNTY ATTORNEY'S OFFICE e; 4sity
915 TENTH STREET
P.O. BOX 758
GREELEY, CO 80632
WEBSITE: www.co.weld.co.us
PHONE: (970) 336-7235
C. FAX: (970) 352-0242
COLORADO January 16, 2002
Debra Allen Wittke, Landman
Patina Oil & Gas Corporation
1625 Broadway, Suite 2000
Denver, CO 80202
Re: Proposed Lease of County Owned Minerals
Dear Ms. Wittke:
This letter is in response to a letter which you send to the Weld County Clerk to the Board, dated
January 9, 2002, regarding a proposed lease for minerals in Part of the NE'/4NE'/4 of Section 35-
5-66. Included with your letter were two signed originals.
Your letter offers to lease the minerals for $75.00 per net mineral acre. Please be aware,
however, that Section 2-2-70 A.7. of the Weld County Code requires that there be a $200.00
minimum royalty bonus for small tracts where bidding is waived. I figure that this sum will be
approximately $91.33 per net mineral acre for this lease. A copy of the Code section is enclosed.
I assume that Patina is still interested in this lease for that price, but please confirm in writing.
I have reviewed Requirement 6 of the DOTO enclosed with your letter and concur that the intent
of the original deed and correction was to retain the minerals for Lot 4 in Weld County's name.
Please feel free to call me if you have any questions or if I may be of further assistance. I may be
reached at (970) 356-4000, ext. 4390.
Sincerely,
Bruce T. Barker
Weld County Attorney
Enc.
pc: Clerk to the Board
Any local government that is a funding agency for law enforcement offices and/or departments which are
members of the Weld County Task Force may recommend to the Committee on Disposition of Forfeited
Property any individual for service on said committee. Said recommendation shall be made no later than
sixty(60)days prior to the termination of each two-year term. (Weld County Codification Ordinance 2000-
1)
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 of at least ten dollars($10.00)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 twelve and one-half
percent(12.5%). 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 twelve and one-half percent
(12.5%)when bidding is waived on small parcels under five(5)acres,with a minimum of a two-hundred-
dollar royalty bonus for the parcel.
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(?)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)
Sec.2-2-80. Uneconomical oil and gas wells.
A. By resolution on November 19, 1986,it is the policy of the Board of County Commissioners that the
25
PATNA
OIL&GAS CORPORATION
1625 Broadway, Suite 2000
Denver, Colorado 80202
(303) 389-3600
(303) 389-3680 Fax
January 9, 2002
Clerk to the Board
Weld County
P.O. Box 758
Greeley, CO 80632-7075
RE: Offer to Lease
Township 5 North, Range 66 West, 6th P.M.
Section 35: Part of NE/4NE/4
Weld County, Colorado
Ladies and Gentlemen:
A check of the Weld County records has revealed that Weld County owns an unleased
mineral interest in the NE/4NE/4 of Section 35, Township 5 North, Range 66 West.
Patina Oil & Gas Corporation ("Patina") recently drilled the Schank J 35-2 oil and/or gas
well in the NW/4NE/4 of Section 35, and designated the N/2NE/4 as the 80-acre unit for
Codell production. Weld County's unleased tract falls within the unit.
Patina hereby offers to lease Weld County's minerals for $75.00 per net mineral acre.
being the same consideration we paid the Schank family for leases covering their mineral
interest in the N/2NE/4. Enclosed are duplicate originals of your oil and gas lease form
(small tract) which have been completed and signed on behalf of Patina.
Enclosed for your information are copies of pertinent pages from the Clanahan, Tanner.
Downing& Knowlton Drilling and Division Order Title Opinion dated August 30, 2001,
(the "DOTO") covering the N/2NE/4 of Section 35. The description we used for the
enclosed oil and gas lease is shown as Tract 4 in the DOTO. The minerals under Tract 3
in the DOTO are also owned by Weld County and are covered by an oil and gas lease
dated July 13, 1983, from Weld County to W. G. Van Bebber. Apparently there has been
some question as to the accuracy of these legal descriptions as noted by our attorney in
Requirement 2 of the DOTO. In order to cover all of the lands owned by Weld County in
the NE/4NE/4 of Section 35, we have added a form of Mother Hubbard clause to the
Exhibit "A" attached to the lease.
Please review Requirement 6 of the DOTO and advise us of Weld County's intention
with regard to the recited correction deed. If it was Weld County's intention to merely
correct the legal description and not convey its mineral interest, and if this lease proposal
meets with our approval, please sign the enclosed lease and return same to my attention
Le OO/#'
•
and Patina will immediately send you a check in the amount of$164.25,representing the
full consideration for this lease.
If you have any questions or would like to discuss this lease offer,please call me at 303-
389-3648.
Very truly yours.
PATINA OIL & GAS CORPORATION
Debra Allen Wittke
Landman
;i,
lia
Clanahan Tanner
Downing 8. Knowlton
A Professional Corporation•Attorneys at Law
August 30, 2001
Patina Oil & Gas Corporation Gary Younger
1625 Broadway, Suite 2000 Direct Line: 720-359-9517
Denver, CO 80202 e-mail: gyounger@ctdk.com
Attn: Ms. Allen-Wittke
Landman
Re: DRILLING AND DIVISION ORDER TITLE OPINION
Schank J35-1 and 35-2 Wells
Ladies and Gentlemen:
Pursuant to your request, we have examined the materials listed below and based
upon that information we submit this Drilling and Division Order Title Opinion covering
the following described lands:
LANDS COVERED BY OPINION
Township 5 North, Range 66 West. 6th P.M.
Section 35: N/2NE/4
containing 80.00 acres, more or less
Weld County, Colorado
All recording references are to the records of the Clerk and Recorder of Weld County,
Colorado.
TITLE MATERIALS EXAMINED
1. Abstract of Title No. 64388 prepared by the Greeley Abstract Company,
covering the records of the Clerk and Recorder of Weld County, Colorado, insofar as they
affect the subject lands, from inception of the records to November 11, 1908 at 2:15 p.m.
2. Abstract of Title No. 15162 prepared by the Weld County Abstract and
Investment Company, covering the records of the Clerk and Recorder of Weld County,
Colorado, insofar as they affect the subject lands, from the filing of the Mortgage recorded
in Book 265, Page 411 on November 5, 1908 to January 31, 1910 at 4:50 p.m.
(00308429.DOC;l)
730 17th Street Suite 500 Tel: 720-359-9500
Denver, Colorado Fax: 720-359-9501
80202-3580 a-mail: ctdk@ctdk.com
otee Pr
Patina Oil & Gas Corporation
July 6, 2001
Page 2
3. Abstract of Title No. 141287 prepared by the Transamerica Title Insurance
Company, covering the records of the Clerk and Recorder of Weld County, Colorado,
insofar as they affect the subject lands except the parcels of land described in deeds
recorded in Book 325, pages 67 and 68, from January 31, 1910 at 4:50 p.m. to September
10, 1973 at 7:45 a.m.
4. Abstract of Title (the number is unreadable) prepared by the Weld County
Abstract and Investment Company, covering the records of the Clerk and Recorder of Weld
County, Colorado, insofar as they affect (i) the subject lands, except various rights-of way
and easements described therein, from April 16, 1964 at 7:45 a.m. to November 4, 1964 at
7:45 a.m. and (ii) the parcels of land described in deeds recorded in Book 325, pages 67 and
68 and a parcel of land described in the deed recorded in Book 251, Page 158, from
inception of the records to November 4, 1964 at 7:45 a.m.
5. Title Update dated July 26, 2001, prepared by Douglas Campbell covering the
subject lands for the period of time from November 1, 1964 to July 26, 2001 at 7:00 a.m.
6. Copies of Lease Nos. 1, 2, 3, 4, 5, 6, 7 and 8 tabulated below.
TRACTS
In this opinion, tracts are defined as follows:
Tract 1: All of:
Township 5 North. Range 66 West. 6th P.M.
Section 35: N/2NE/4;
&C i g O less and except Tract 2, Tract 3 and Tract 4.
Tract 2: A tract of land located in the NE/4 of the NE/4 of Section 35, Township 5
North, Range 66 West of the Sixth (6th) P.M. more particularly described as
follows:
Considering the East line of the NE/4 of the NE/4 of said Section 35 as
S je? bearing North 00°00' East with all bearings relative thereto;
commencing at a point 2222.25 feet North and 30.00 feet West of the
East Quarter Corner of said Section 35; thence South 70°35' West,
797.19 feet; thence North 11°45' West, 258.49 feet, more or less, to
the center of the Evans Town Ditch; thence following the center of
the Evans Town Ditch North 67°01'20" East, 651.88 feet; North
88°59'50" East, 85.26 feet; South 69°13'10" East, 81.15 feet; South
84°24' East, 43.11 feet to a point 30.00 feet West of the East line of
the NE/4 of the NE/4 of Section 35; thence South 00°00' West, 210.81
feet to the point of beginning.
(00308429.DOC;1)
Patina Oil & Gas Corporation
July 6, 2001
Page 3
Tract 3: A strip of land 100 feet in width, being 50 feet wide on each side of the
center line of the Denver, Laramie and Northwestern Railway as located,
surveyed and staked out over and across the N/2 of the NE/4, Section 35,
Township 5 North, Range 66 West of the 6`° P.M., said center line being more
fully described as follows:
Beginning at a point on the West line of said N/2 of the NE/4, 438
feet more or less North of the Southwest corner thereof; thence
Northeasterly on a curve to the left with a radius of 11459 feet, a
distance of 258.7 feet; thence North 72°19' East 2598.3 feet to a point
on the North line of said N/2 of the NE/4, 145.6 feet West of the
Northeast corner thereof, a total distance of 2857 feet, said strip of
land containin5 6 akres more or less.
Tract 4: A triangular tract or parcel of land situate in the NE/4 of the NE/4 of Section
35, Township 5 North, of Range 66 West of the 6th P.M., and more
particularly described as follows:
Beginning at a point which is 102 feet North and 134 feet South
88°57' West of what purports to be the northeast corner of said
Section 35, said point being the intersection of the south line of the
County Road as it now exists on the north of said Section 35 with the
northerly boundary line of The Denver, Laramie and Northwestern
Railway Company's right of way and is 50 feet northwesterly of and
at right angles to the center line of said Railway Company's route as
located through, over and across said Section 35; thence South 88°57'
West 780.5 feet along the South line of said County Road to a point;
thence South 6°19' West 244.7 feet to a point on said northern
boundary line of right of way; thence North 72°19' East 50 feet from
and parallel to said center lee_
848.1 feet to the place of beginning,
said tract of land contain' g 2.19acres more or less.
NOTE: The legal descriptions of Tracts 3 and 4 given above have been deemed
inaccurate and impossible by a survey of Tracts 3 and 4 conducted
subsequent to their initial conveyance. See Requirement 2 below.
OWNERSHIP
Based upon the title materials examined, and subject to the exceptions, comments,
and requirements set forth herein, we find title to the subject lease and lands, as of July 20,
2001 at 7:00 a.m., to be owned and encumbered as follows:
Surface Ownership
i00308429.DOC;1i
Patina Oil & Gas Corporation
July 6, 2001
Page 9
Mineral Ownership
Tract 1,
Owner Inkiest
Barbara Ann Cox 16.666667%
Constance M. Peace 16.666667% 2
Carol L. Brunz 16.666666% 8
Bonnie Kuntz 10.00 0% 3
Daniel C. Schank .000000% 4
Gary T. Schank 10.000000% 5
Sandra Elder 10.000000% 6
Northwest Bank Colorad N.A., 10.000000% 7
formerly United Bank Greeley
National Association, stee of the
Linda Glidewell rust, formerly
know as the Li Schank Trust
Teaet 2.
Owner Interest Lease
Todd A. Amen 50.000000% unleased
50.000000% Lulcu���
Tract 3:
Owner Interest Lease
Weld County 100.000000% See
Require-
ment 8
Tract 4:
(00308429.DOC;1(
Patina Oil & Gas Corporation
July 6, 2001
Page 10
Owner Interest Lease
Weld County 100.000000% unleased
Tract 1
Working Net Revenue
Owner Interest Interest Lease
Patina Oil & Gas Corporation 100.000000% 82.500000% 1-8
(100.00% WI x 82.50% RI)
Barbara Ann Cox 2.916 7% R 1
(16.67% MI x 17.5% R)
Constance M. Peace 2.916667% R 2
(16.67% MI x 17,5% R)
Carol L. Brunz 2.916666% R 8
(16.66% MI x 17.5% R)
Bonnie Kuntz 1.750000% R 3
(10.00% MI x 17.5% R)
Daniel C. Schank 1.750000% R 4
(10.00%MI x 17.5% R)
Gary T. Schank 1.750000% R 5
(10.00% MI x 17.5% R)
Sandra Elder 1.750000% R 6
(10.00%MI x 17.59/ )
Northwest Ba Colorado, N.A., 1.750000% R 7
formerly U ' ed Bank of Greeley
National ssociation, Trustee of the
Linda idewell Trust, formerly
kno n as the Linda Schank Trust
( .00%MI x 17.5% R)
100.000000% 100.000000% - -
(00308429.DOC;1)
Patina Oil & Gas Corporation
July 6, 2001
Page 40
surveys on file with the Bureau of Land Management in Washington, D ring
the right-of-way that is flanked by the alternate sectio referred to in this
requirement. As a less desirable altemativ ay wish to rely upon a surface
inspection, a review of surve master title plats maintained by the Colorado
State Office of th of Land Management, or information obtained from local
citiz a ermine whether the subject lands are or were traversed by a railroad
ght-ofyway.
2. On December 19, 1963, a survey of Tract 4 and a part of Tracts 3 was
performed at the request of Henry F. Markus (the surface owner of Tracts 3 and 4 at this
time). The survey was recorded on February 10, 1964, Book 507, Reception No. 1428760.
The surveyor found the descriptions of Tracts 3 and 4 originally containecyn the deeds
creating these tracts dated August 28, 1909, recorded on February 28, 1?1Q..1n Book 325, c
Page 67 (Tract 3) and dated January 17, 1910, recorded on February 28, 1k0 in Book 325,
Page 68 (Tract 4) to be "physically and mathematically incompatible."`-These original
descriptions were used in subsequent deeds conveying Tracts 3 and 4 until the survey was
performed in 1963. The surveyor provides what is characterized as a more accurate legal
description of Tract 4 and the relevant part of Tract 3. After the performance of the survey,
Henry Markus conveyed the surface estate in the surveyed lands and subsequent surface
owners used the legal description in the survey when making conveyances of the surface
estate of Tract 4 and the relevant part of Tract 3. The recorded survey contains the
following description:
A tract of land lying in the NE/4 of Section 35, Township 5 North, Range 66
West and the SE/4 of Section 26, Township 5 North, Range 66 West of the 6th
P.M. in Weld County, Colorado, being more particularly described as
follows:
Considering the North line of the NE/4 of said Section 35 to bear North
89°49'20" West and with all bearings contained herein relative thereto:
Commencing at the northeast corner of said Section 35; Thence North
89°49'20" West along said North line 73.05 feet to the southeasterly Right-of-
Way line of the abandoned Denver, Laramie, and Northwestern Railroad,
said point being the True Point of Beginning;
Thence North 72°19'00" East along said southeasterly Right-of-Way 76.67
feet;
Thence North 00°00'00" West 64.71 feet;
Thence South 88°57'00" West 914.50 feet;
Thence South 06°19'00" West 354.03 feet to said southeasterly Right-of-Way;
Thence North 72°19'00" East along said southeasterly Right-of-Way 923.94
feet to the True Point of Beginning.
(00308429.DOC;1)
Patina Oil & Gas Corporation
July 6, 2001
Page 41
Said tract contains 4.394 acres including Public Road Rights-of-Way.
It should be noted that the legal description in the recorded survey cannot be
substituted for original legal descriptions of Tract 3 and 4 (contained in the original deeds)
since the recorded survey only relates to a portion of Tract 3. In addition, it should be
noted that none of the conveyances using the legal description in the survey involve the
mineral estate (see Requirement 6) since Weld County had reserved all mineral interests in
Tracts 3 and 4 prior to the performance of the survey. However, the surveyor's finding that
the original descriptions of Tracts 3 and 4 (contained in the original deeds) are "physically
and mathematically incompatible" raises doubt as to accuracy the of the original legal
descriptions of Tracts 3 and 4 and thus raises doubt as to the acreage of mineral ownership
in the subject lands that has been assigned to Weld County in this opinion.
REQUIREMENT: In order to insure that you have an accurate legal description of
Tracts 3 and 4, you should perform your own survey of Tracts 3 and 4.
Book 491, Reception No. 1417726, Henry F. Markus obtained surface ownership to Tract
and 4. Through a series of subsequent conveyances, Tracts 3 and 4 were divided in the
sub-tracts described under Ownership (Tracts 3/4-A to 3/4-G). The majority f these
conveyances were based on the re-survey performed at the request of Henry rkus (Book
507, Reception No. 1428760, see Requirement 2) instead of the original 1 al descriptions
(contained in the original deeds) of Tracts 3 and 4. We are unable to ermine whether a
particular sub-tract is part of Tract 3 or Tract 4, or whether such s -tract is part of both
Tract 3 and Tract 4.
In addition, it appears that Tracts 3 and 4 contain nds that are outside the subject
lands. Unquestionably, the subtracts contain lands t t are not part of the subject lands.
However, we are unable to distinguish when th egal descriptions are referring to the
subject lands and when they are referring to la s outside the subject lands. Therefore, we
have given the legal descriptions of Tracts nd 4 and the subtracts as they appear in the
deeds that create such tracts. Finally, w re unable to determine whether Henry F. Markus
conveyed all of his interests in the rface of Tracts 3 and 4. Thus, we are not certain
whether the list of sub-tracts in s opinion comprise all of Tracts 3 and 4 and, similarly,
we are not certain whether th ist of surface owners of Tracts 3 and 4 is a complete list.
R R MENT• ou should survey the lands contained in Tracts 3 and 4 in order
to (i) reconc' what was conveyed in the original deeds for Tracts 3 and 4 with the
conveys es of the sub-tracts using the re-survey in Book 507, Reception No.
14287 , (ii) determine which parts of Tracts 3 and 4 and the sub-tracts are part of
t subject lands and which are outside of the subject lands and (iii) conclusively
etermine the number of sub-tracts contained in Tracts 3 and 4 and the surface
_—ownership of Tracts 3 and-4.--
(00308429.DOC;1)
Patina Oil & Gas Corporation
July 6, 2001
Page 42
acre basis because we do not know the acreage of Tracts 1 and 2. In addition, there i
uncertainty as to the acreage listed in this opinion for Tracts 3 and 4 (see Requirement 2
REQUIREMENT: You should determine the acreage of Tracts 1,2,3 and . Once such
determination has been made, contact us and we will update this o ' ion.
5. There is a break in the chain of title to Tract 4. ct 4 was owned of record
by Alfred H. Law under a Decree of Heirship dated June 9 42, recorded on September 8,
1942 in Book 1095, Page 413. The title materials ex ned do not include a conveyance
out of Alfred H. Law covering these lands. Ther er, Tract 4 was covered by a treasurer's
deed dated September 30, 1947, recorded October 1, 1947 in Book 1212 Page 331,
conveying Tract 4 to P.H. Ferch (as c1a ' ed and corrected by in a quit claim deed from
Weld County dated April 24, 1968 orded on April 29, 1968 in Book 594, Reception No.
1515838 (see Requirement 6)).
R IR E • For complete assurance of title, it would be necessary to either
obtain a claim deed from Alfred H. Law, or his successors or assigns, or to
instit quiet title proceedings against Alfred H. Law and his successors and
a 'gns. Alternatively, you may choose to take a business risk and rely upon the
treasurer's deed covering Tract 4 and the passage of time to resolve any claims
6. By a treasurer's deed dated September 30, 1947, recorded on October 1, 1947
in Book 1212, Page 331, Tract 3 was conveyed to P.H. Ferch. This instrument reserved to
Weld County "all oil, gas and other minerals therein or thereunder." It is unclear whether
this instrument also conveys Tract 4. The deed references the original deed creating Tract
4 but does not give the legal description of Tract 4 when describing the conveyance. A
quitclaim deed from Weld County dated April 24, 1968, recorded on April 29, 1968 in
Book 594, Reception No. 1515838, conveys Tract 4 to Roy Lundvall (the surface owner of
Tract 4 at the time of the deed) so as to correct the error in the legal description of the
conveyance in Book 1212, Page 331. The quitclaim deed does not include a mineral
reservation by Weld County.
While we have listed Weld County as the mineral owner of Tract 4, this conclusion
is not free of doubt. It is unclear what effect the quitclaim deed in Book 594, Reception
No. 1515838 had on the mineral ownership of Tract 4. It is our opinion that the quitclaim
deed merely corrected the legal description in the conveyance in Book 1212, Page 331 and
thus the mineral reservation contained in such conveyance applies to Tract 4. However,
an argument can be made that since the quitclaim deed did not include a mineral
reservation, Roy Lundvall obtained Tract 4 in fee without any reservations. Through a
series of subsequent conveyances, Roy Lundvall's interest in Tract 4 has been conveyed to
(00308429.DOC;1)
Patina Oil & Gas Corporation
July 6, 2001
Page 43
the surface owners listed herein under Ownership. Thus, it is possible that the current
surface owners of Tract 4 could claim to have rights in the minerals of Tract 4.
REOUIREMENT: For complete assurance as to the mineral ownership of Tract 4,
you should obtain a quitclaim deed from Roy Lundvall, or his successors or assigns,
or institute quiet title proceedings against Roy Lundvall and his successors and
assigns.
7. Thtfulluwing unreleased oil and gas leases appear of record:
a. Dated: October 13, 1976
Recorded: November 10, 1976
Book 781, Reception No. 1703 1
Lessor: Harry H. Schank and Margie thank
Lessee: Colton & Colton
Land Covered: Tract 2
Primary Term: One Year
Present Record Owner: Colton & Colton 0%)
b. Dated: November 20 981
Recorded: November , 1981
Book 95 , Reception No. 1875503
Lessor: Tom . Schank and Harry H. Schank
Lessee: En gy Oil, Inc.
Land Covered: act 1
Primary Term: wo Years
Present Record Owner: Energy Oil, Inc. (100%)
REOUIREMENT: You should o ain and record a release of these leases from the
present record owner. T release should be recorded in Weld County.
Alternatively, you may c ose to accept a business risk and conduct a surface
examination of all of t lands covered by the leases and any lands pooled or
unitized therewith, an satisfy yourselves that the leases have not been extended by
production or oper ions on any of the lands. If you choose to rely on a surface
examination, yo hould obtain a copy of the leases in order to verify that no lands
other than the bject lands are covered by the leases.
8. e following unreleased oil and gas leases appear of record:
Dated: July 13, 1983
Recorded: July 19, 1983
Book 1002, Reception No. 1933945
•
j00308429.DOC;1l
Hello