HomeMy WebLinkAbout20052642.tiff Thomas B. Croke,III
Laura L. Croke
3932 West 18th Street Lane
Greeley, CO 80634
Telephone (970)330-2660
Cell Phone (970)396-8347
Fax (970)330-2657
E-Mail TCroke(a)aol.com
July 27, 2005
Board of County Commissioners
Weld County, Colorado
915 10th Street
P.O. Box 758
Greeley, CO 80632
Re: Assignment of OIL AND GAS LEASE- SE 1/4,/4, S22, T5N, R61W
Dear Commissioners:
Enclosed are copies of the following:
1. WELD COUNTY OIL AND GAS LEASE covering SE ''A Section 22,
T5N-R61 W, dated July 9, 2003, between Weld County, Colorado as
Lessor and El Camino Resources/Raymund A. Tonella as Lessee.
2. RESOLUTION adopted by the BOARD OF COUNTY
COMMISSIONERS, WELD COUNTY, COLORADO, dated July, 9,
2004.
3. ASSIGNMENT dated July 27, 2005, between El Camino Resources/
Raymund A. Tonella as Assignor, and Thomas B. Croke, III, and Laura L.
Croke, JTWROS, as Assignees, for the oil and gas lease set forth in 1.
above.
Article 9. ASSIGNMENTS—requires the approval of the Lessor, Weld County,
Colorado, of any Assignment(s)by Lessee, El Camino Resources/Raymund A. Tonella.
Per Article 9. A., please provide Lessee with written approval of Lessee's Assignment of
Lessee's entire leasehold interest in the subject lease to Thomas B. Croke, III, and Laura
L. Croke, JTWROS, whose address is 3932 West 18`h Street Lane, Greeley, CO 80634.
2005-2642
/e-002/6
Per Article 10., please provide Lessee with written approval of Lessee's Assignment of a
Two and One Half Percent(2 1/2%) OVERRIDING ROYALTY in the subject lease to El
Camino Resources, Inc., a Colorado corporation, whose address is 20153 Cottontail
Road, Morrison, CO 80465.
Your prompt attention to this request would be greatly appreciated.
Sincerely, `/
Thomas B. Croke, III Laura L. Croke
cc: El Camino Resources, Inc. /Raymund A. Tonella
David G. Ebner, Esq.
1 1111111111111111 1111111 11111111111111111111111 11'1!iii
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ASSIGNMENT
THIS ASSIGNMENT ("Assignment") is dated July 27, 2005, and is made from El
Camino Resources, Inc., a Colorado corporation, and Raymond A. Tonella, a natural person,
whose collective address is 20153 Cottontail Road, Morrison, Colorado 80465 (collectively, "El
Camino"), as assignors, to Thomas B. Croke,III, and/or Laura L. Croke, husband and wife,
JTWROS, whose address is 3932 West 18th Street Lane, Greeley, Colorado 80634 ("Crokes"),
as assignees.
For$100 and other good and valuable consideration,the receipt and sufficiency of which
are hereby acknowledged, El Camino hereby sells, assigns, transfers, grants, bargains and
conveys all of its right, title and interest in and to the following lease to Crokes:
Lessor: Weld County, Colorado
Lessee: El Camino Resources /Raymond A. Tonella
Date: July 9, 2003
Recorded: Reception No. 3096557 (Weld County)
Description: Township 5 North. Range 61 West, 6th P.M., Weld County, Colorado
Section 22: SE/4
RESERVING, however, to El Camino Resources, Inc. (and not to Raymond A. Tonella) a
two and one half percent (2 1/2 %) of 8/8ths overriding royalty interest (subject to proportionate
reduction based both on the percentage leasehold interest being assigned and on the percentage of the
fee oil and gas estate covered by the lease) on all oil, gas and other leased substances produced,
saved and sold under the terms of the lease. This reserved overriding royalty interest shall be free of
all costs of drilling,completing,equipping and operating,but shall bear its proportionate share of all
post-wellhead costs(including,without limitation,separation,treatment,gathering and compressing
costs), as well as all severance, production and other taxes of every type and nature applicable
thereto.
This Assignment is made subject to the following terms and conditions:
1. Crokes shall furnish to El Camino all material information concerning each well drilled
on lands covered by the lease consistent with common industry practice, including, without
limitation, well logs, drill stem tests, production tests and daily drilling reports delivered by mail,
together with copies of all material documents filed with and received from governmental agencies.
2. El Camino warrants title to the lease from and against the claims of all persons claiming
by,through, or under El Camino, but not otherwise.
3. This Assignment binds and inures to the benefit of El Camino and Crokes,together with
their respective successors and assigns.
1111 11111 111111111111 11111111 III 1111111111111
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IN WITNESS WHEREOF, the parties have executed this Assignment.
ASSIGNORS: ASSIGNEES:
EL CAMINO RESOURCES, INC. Thomas B. Croke, III
By: ises.
Raymond onella, President Thomas B. Croke, III
Laura L. Croke
Raymond A. To ells, individually
aura L. Croke
STATE OF COLORADO )
) ss.
COUNTY OF
This instrument was acknowledged before me on July ,2005,by Raymond A. Tonella,
individually and as President of El Camino Resources, Inc., a Colorado corporation.
My commission expires:*Woes--
%'S°04
Notary Public
WENDY SUE HANSON
STATE OF COLORADO ) NOTARY PUBLIC
ss. STATE OF COLORADO
COUNTY OF WELD ) MY COMMISSION EXPIRES 4/1612008
tit
This instrument was acknowledged before me on July X 7, 2005, by Thomas B. Croke, III, and
Laura L. Croke. PcOE
FFt e�
OQi ,tpRY s
= z : o : o =
My commisibri expires: r )!? °
''i'''/i f&ilO1 ttG Notary Public
RESOLUTION
RE: AUTHORIZE OIL AND GAS LEASE COVERING CERTAIN PROPERTY OWNED BY
WELD COUNTY, COLORADO -SE1/4, S22, T5N, R61 W
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, Colorado, is the owner of vast acres of mineral lands located
in Weld County, Colorado, and
WHEREAS, the Department of Purchasing was authorized to solicit bids for lease of a
portion of said mineral acres not currently leased, and
WHEREAS, El Camino Resources, Inc., do Raymund A. Tonella, 20153 Cottontail
Road, Morrison, Colorado 80465, submitted the high bid to lease 159.0 net mineral acres, more
or less, described to-wit:
SE1/4 of Section 22, Township 5 North, Range 61
West of the 6th P.M., Weld County, Colorado
WHEREAS, Weld County desires to accept the high bid offer submitted by El Camino
Resources, Inc., do Raymund A. Tonella to lease the above described mineral acreage for
$10.00 per net mineral acre, for a total sum of$1,590.00, together with an annual rental fee of
ONE DOLLAR ($1.00) per net mineral acre,which lease is to run for a period of three (3) years,
commencing July 9, 2003, and ending at 12:00 noon on July 8, 2006, unless otherwise held, as
stated in the lease agreement 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 high bid offer of El Camino Resources, Inc., do Raymund A.
Tonella be, and hereby is, accepted for a period of three (3)years.
2003-1840
LE0216
OIL AND GAS LEASE- SE1/4, S22, T5N, R61W
PAGE 2
The above and foregoing Resolution was, on motion duly made and seconded, adopted
by the following vote on the 9th day of July, A.D., 2003.
BO OF COUNTY COMMISSIONERS
WEL UNTY, COLORADO
ATTEST: gel /,s^S,,lit
��- vid E. L ng, Ch it
Weld County Clerk to -. ----\1\
1861 ( 4, ''?.:; __'. .
7 3 V = R bert D. den, Pro- em
BY: =�/[. t z .rte
Deputy Clerk to the l , '
�� }
. J. eile
AP AST r.F RM: ` 1,--; )/A-t---
William
Jliai �
ounty Attome
e4_
Glenn Vaal►
Date of signature: yew
2003-1840
LE0216
•
WELD COUNTY OIL AND GAS LEASE #41
6�
Containing 159.— .0 acres,more or less:
Containing 159.0 net mineral acres,more or less:
_dayof .20 _ made and
WELD
cal subdivision of the STATE OF
entered into by and between WELD COUNTY. COLORADO, a P
COLORADO,acting by and through the BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF WELD,
for its respective interests,do BOARD OF COUNTY COMMISSIONERS, 915 10TH STREET,P.O.BOX 758,and:
GREELEY,CO 80632, hereinafter called Lessor, Ra
hereinafter called Lessee: WITNESSETH
WHEREAS.said Lessee has applied to Lessor for an oil and gas lease coved and herein described,
plus a bonus consideration of;J __per mineral acre,
andfix has paida filing fee indi the amount erof;ion for an annual
rental ed by lesser as n additional co considerationeofhe granting of this ieaper mineral e: ecre or
o thereof per
of;�.!5dl_.--�computed at the rate of; �
year,and the following consideration:
WHEREAS, all the requirements relative to said application have been duly complied with and said
application has been approved and allowed by Lessor;
THEREFORE, in consideration of the agreements herein, on the part of Lessee to be paid, kept and
performed,Lessor does lease exclusively to Lessee for the sole and only purpose of drilling for.development
of and production of oil and gas,or either of them,thereon and therefrom eS� with the right ms toof this lease all , and gas
so produced and saved mtherefrom
ae not r servpi at royalty by and all d us and
with rights-of-way,easements and servitudes for pipelines,telephone and telegraphlines,
any��e�fixtures for
producing and caring for such product, and housing and boarding employ privileges necessary for the exploration and operation of said land for oil and gas,the following described land
situated in the County of Weld,State of Colorado,and more particularly described as follows:
�5R�.G°
RlPT N OF LAND SFr-_'IiON TOWNSHIP _Bid-- I q(t,6Q
W l
SE 1/6 22 SN 6 10`
TO HAVE AND TO HOLD said land,and all the rig Is and privileges granted hereunder to Lessee until
the
20_Q¢_as primary
and
hour of twelve he o'clock noon gas,the r day of quantities from said land or Lessee
is long thereafter oil and bona
or either of them, pr operations paying said land, subject to the terms and
itiontlyengaged in bone fide drilling or reworkingshalb e ifthereisnodelay
conditions herein. Drilling or reworking operations shall be deemed to be diligently performed
or cessation thereof for a greater period than sixty consecutiveera comm days ence an d a during sion inp writing
is
sn or granted
by lessor; e that while such drilling orIs reworkiin forceng operations
of production of oil and gas or either of them,or that
extension re thereof in is commencedor this within
is t force by upon cessation of production for the purpose of re-establishing
the such reworking is that such days doextension
the same,and provided further that such production is commenced during such primary term or any
thereof,or while this lease is in force by reason of such drilling or reworking operations or other production.
EXPLORATION - Lessor reserves the right to conduct exploration on the leased land provided such
exploration does not interfere with rights granted herein.
I1111111111111111111111II1111111111111III11111IIII1111 LE0216
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mum o
E
In consideration of the premises, the parties covenant and agree as follows: — o
ao°C
1. RENTAL-If this lease is extended for an additional term as provided for in the EXTENSION paragraph n Y
hereof,Lessee shall pay to Lessor the sum of One Dollar(81.00)per acre for the land covered hereby as =ti!+
delayed rental for the term of the extension. Rentals set at the time of established production shall be rag o
paid during the remaining life of this lease, annually, in advance, on or before each anniversary date =s C
hereof. There shall be no refund of unused rental. • 3 MEMo
2. ROYALTY-Lessee shall account for any and all substances produced on the leased land and Lessee =$
shall pay to Lessor as royalty, in addition to the rentals provided, but except for products used on the d'
eN
leased land,unavoidably lost or flared on the leased land,with approval of Lessor,the following: amour g
ego
A. On oil, 12.5% of the oil produced and saved from the leased land. —2 o
8
At the option of Lessor, and with sixty (80)days'notice to Lessee, Lessor may take its royalty oil _ o
In kind,In which event Lessee shall deliver such royalty oil to Lessor on the leased land,free of cost =C tc
or deduction,into the pipelines or storage tanks designated by Lessor,but Lessee shall not in such - as
case be required to provide free tankage for any such oil for a longer period than one month after the mom e
same is run Into tanks. With sixty(60)days'notice to Lessee,Lessor may cease taking oil royalty _a N
in kind. When paid in cash, the royalty shall be calculated upon the fair market value of the oil at
the well which shall not be deemed to be less than the price actually paid to Lessee at the well by
the purchaser thereof;and in no event shall the royalties be based upon a market value at the well
less than the posted price In the field for such oil,or In the absence of a posted price In the field for
such oil, upon a market value at the well less than the prevailing price received by other producers
in the field for oil of like grade and gravity at the time such oil is run into pipelines or storage tanks.
B. On gas, including casing head gas or other gaseous substance, 12.5% of the fair market value
at the well or of the price received by Lessee at the well,whichever is greater, of all gas produced
and sold from the leased land or utilized off the land by Lessee. A copy of all contracts for sale of
gas shall be furnished to Lessor. Where gas is sold under contract that has been approved by
Lessor,the fair market value of such gas for determining the royalties payable hereunder shall be the
price at which such gas is sold under such contract. No approval by Lessor of the terms of any such
agreement shall operate to make Lessor a party thereto or obligate It thereunder in any way. At the
option of Lessor, and with sixty (60) days' notice to Leases, Lessor may take its royalty in kind.
With sixty(60)days'notice to Lessee,Lessor may cease taking gas royalty in kind.
C. All costs of marketing the oil and/or gas produced shall be borne by Lessee and such costs shall
not directly or indirectly reduce the royalty payments to Lessor. Except that marketing costs for
Lessor's in-kind royalty shall be borne by Lessor.
D. If Lessor owns a lesser Interest in the oil and gas deposits of the above-described land than the
entire and undivided fee simple estate,then the royalties and rentals herein provided shall be paid
to Lessor only in the portion which its Interest bears to the whole and undivided fee, but no refund
of any bonus consideration shall be made by Lessor hereunder.
3. RECORDS-Lessee agrees to keep and to have In possession complete and accurate books and records
showing the production and disposition of any and all substances produced on the leased land and to
permit Lessor,at all reasonable hours,to examine the same,or to furnish copies of same to Lessor upon
request along with purchaser's support documentation. Lessor will not be unreasonable with requests.
All said books and records shall be retained by Lessee and made available in Colorado to Lessor for a
period of not less than five years.
4. MEASUREMENTS - All production shall be accurately measured using standards established by the
American Gas Association (AGA)and/or the American Petroleum Institute(API)and all measuring
Oil and Gas Lease
Page 3
devices shall be tamper proof as nearly as possible. Oil royalties due within the terms of this lease
shall be calculated on actual and accurate measurementswithin
API standards unless a different
means of measurement, subject to Lessor's approval, is led.
5. PAYMENTS AND REPORTS-All payments and reports due hereunder shall be made on or before
the day such payments and reports are due. Nothing in this paragraph shall be construed to extend
the expiration of the primary term hereof.
Oil royalty payments and supporting documents shall be submitted prior to the last day of the month
following each month's sale of production,and gas royalty payments and supporting documents shall
be submitted prior to the last day of the second month following each month's sale of production.
All payments shall be made by cash, check, certified check, or money order. Payment having
restrictions,qualifications,or encumbrances of any kind whatsoever shall not be accepted a herein.sor.
A penalty for a late payment shall be charged as set forth in the PENALTIES paragraph
6. PENALTIES-A penalty shall be Imposed for,but not limited to late payments,improper payments.
operational deficiencies,violation of any covenant of this lease,or false statementsand
made ittocLessor. 4
srm
Penalties shall be determined by Lessor unless otherwise provided for bymay be •
of, but not limited to, interest, fees, fines, andlor lease cancellation. A penalty schedule shall be
prepared by Lessor and shall become effective immediately after public notice. Said schedule may
be changed from time to time after public notice.
7. LAW -The terms and conditions of this lease shall be performed and exercised subject to all laws,
rules, regulations, orders, local ordinances or resolutions applicable to and tbindIng upon the
administration lands and minerals Dorado. Violations shall by the County of e result and penalties o laws, )es and regulations
as provided for by
governing oil and gas operations
law or as set forth in the aforementioned schedule or shall,at the option of Lessor,result in default as
provided hereinafter.
8. SURRENDER-Lessee may at any time,by paying to Lessor all amounts then due as provided herein, •
surrender this lease Insofar as the same covers all or any portion of the land herein leased and be
relieved from further obligations or liability hereunder with respect to the land so suerendered;provided
s of
that approximately
partial surrender(40) orca orllation of this lease or Governmental lot correll be spondfing to ts a thaniguous
se section;
providefurth forty ( )
provided further that this surrender clause and the option herein reserved to Lessee shall ceas court
e and
become law Lessee,
absolutely inoperativer an assignee of either to enforc and e this Iwith lease,or any of Institution of its terms expny suit In ressed
of implied.by In no. ase sr a l anry su ien
cr seti n case shall any surrendersd tectoon effective
the surface rights of the leased landde full .
9. sion for
conservator of the leased products
9. ASSIGNMENTS-
A: Lessee,with prior written consent of Lessor, shall have the right to assign the entire leasehold
interest of said Lessee in all or part of the land covered hereby, but not less, however, than
contiguous tracts of approximately forty (40) acres or Governmental lot corresponding to a
quarter-quarter section for any partial assignment,and for approval of such assignment Lessor
shall make an assignment charge in an amount to be determined by Lessor. Prior to written
approval by Lessor of assignment of this
herein.Lessee
aa (assignor)
shallall not not
be reeve mof ils
obligations under the terms and conditions
of
this lease.
B. If any assignment of a ion of the land covered hereby shall be approved,a new lease shall
be issued to the assignee covering the assigned land,containing the same terms shall beand
conditions
released and
as this lease,and limited as to term as this lease is limited,and the assignor assigned.
I
discharged from all further obligations and liabilities as to IIIIII I'll) that
'll"I' IIIIII III IIIII IIII IIII
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C. Lessee shall notify Lessor of all assignments of undivided percentage or other interests. Said
interests will not be recognized or approved by Lessor,and the effect of any such assignments
will be strictly and only between the parties thereto,and outside the terms of this lease: and no
dispute between parties to any such assignment shall operate to relieve Lessee from performance
of any terms or conditions hereof or to postpone the time therefor. Lessor shall at all times be
entitled to look solely to Lessee or his assignee shown on its books as being the sole owner
hereof, and for the sending of all notices required by this lease and for the performance of all
terms and conditions hereof.
D. Although not binding on Lessor,all instruments of every kind and nature whatsoever affecting this
lease should be filed with the Lessor.
10. OVERRIDING ROYALTY-Any and all reservations or assignments or overriding royalties shall be
subject to approval by Lessor. The total of said overriding royalties shall not exceed five percent(5%),
including any overriding royalty previously provided for unless production exceeds a monthly average
of fifteen(15)barrels per day or ninety thousand cubic feet of gas per day(90 MCF/D). In the event
production drops to this amount or less,any overriding royalties which exceed five percent(5%)may
be suspended. Lessor's approval of a reservation or assignment of an overridng royalty shall not bind
pLessor for ayment of said overriding royalty and shall not ayment of royalties to lessor as provided by ROYALTY paragraphsiieve � any of its obligations for
herein.
11. OFFSET WELLS-Lessee agrees to protect the leased land from drainage by offset wells located on
adjoining lands not owned by Lessor,when such drainage Is not compensated for by counter-drainage.
It shall be presumed that the production of oil and gas from offset wells results in drainage
rinageefrro other
leasedland,unless Lessee demonstrates to Lessor's satisfaction,by engineering,geological,
data,that production from such offset well does not result in such drainage,or that the drilling of a well
or wells on the leased land would not accomplish the purposes of protecting the deposits under the
leased land. Lessor's decision as to the existence of such drainage shall be final,and Lessee shall
comply with Lessor's order thereon or surrender this lease as to any such undeveloped acreage as
designated by Lessor.
12. DEVELOPMENT-Upon discovery of oil and gas or either of them on the leased land, Lessee shall
proceed with reasonable diligence to develop said land at a rate and to an extent commensurate with
the economic development of the field in which the leased lend lies.
13. POOLING CLAUSE-Lessee may at any time or times pool any part or all of said land or lease or any
stratum or strata with other lands and leases,stratum or strata,in the same field so as to constitute a
spacing unit to facilitate an orderly or uniform well-spacing pattern or to comply with any order,rule,
or regulation of the State or Federal regulatory or conservation agency having jurisdiction. Such
pooling shall be accomplished or terminated by filing of record a declaration of pooling,or declaration
of termination of pooling, and by mailing or tendering a copy to Lessor, or to the depository bank.
Drilling or reworking operations upon or production from any part of such spacing unit shall be
considered for all purposes of this lease as operations or productions from this lease. Lessee shall
allocate to this lease the proportionate share of production which the acreage in this lease included
in any such spacing unit bears to the total acreage in said spacing unit.
14. UNITIZATION - COMMUNITJZATION - in the event Lessor permits the land herein leased to be
included within a communitization or unitization agreement, the terms of this lease may be deemed
to be modified to conform to such agreement. When only a portion of the land under this lease is
o committed by an 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
mterm of this lease. The terms of the lease on that portion remaining in the unit shall be deemed to be
w modified to conform to such agreement. Non-producing leases shall terminate on the first anniversary
= date of the lease following the termination date of the unit or part thereof modifying the lease, but in
o no event prior to the end of the primary term of the lease or the extension term of the lease.
111111111111 HIM 111 HUH MilIII 11111 IIII IIII
cc
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15. PRODUCTION-Lessee shall,subject to applicable laws.regulations and orders,operate and produce
all wells upon the leased land so long as the same are capable of producing in paying quantities,and
shall operate the same so as to produce at a rate commensurate with the rate of production of wells
on adjoining lands within the same field and within the limits of good engineering practice,except for
such times as there exist neither market nor storage therefor, and except for such limitations on or
suspensions of production as may be approved in writing by Lessor. Lessee shall be responsible for
adequate site security on all producing properties.
16. SHUT-IN WELLS-If 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, Lessor may grant Lessee
suspension of his obligations to produce hereunder until a suitable market for such gas can be found,
and during any such suspension period,it shall be deemed that gas Is being produced hereunder in
paying 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 forf eit to maximum
r
except for the shut-in royalty paid for the year during which the well begins produ
ction. The extension of the lease,due to the existence of a shut-inherein. The granting
wl be five
of years
any s beyond
rther extensions the
eaten ion
term as described in the EXTENSION paragraph
hall
be at the sole option of Lessor.
17. OPERATIONS-No exploration,drilling or 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 kd eep a through, log of
e depth
each well drilled hereunder,showing by name or description the formations passe
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
abandonment of any well drilled hereunder,shall file in the office of Lessor a complete and correct log
of such well,together with 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 riled with the Oil and Gas Conservation Commission
of Colorado,the requirements of this paragraph for such information may be satisfied by such filing
ng
with said Commission,except for copies of the reports as are required by the following pa g ph•
provided that all such information is immediately available to Lessor. Any proprietary information so
submitted shall not be subject to public inspection under Colorado law.
Lessee shall bury pipelines below plow depth. Lessee shall set and cement sufficient surface casing
to protect the fresh water web of the area. ner of the tion
18. N each drill site at least two weeks prior to commencing drilling operations thereon OTIFICATION-Lesse shall notify Lessor and the surface lessee or surface .vLessee shall
Lessor before commencing to plug and abandon any well by copy of Lessee's request for approval or
sundry notice of intent to plug and abandon.
19. BONDS-Lessee shall be liable for all damages to the surface of the land, livestock,growing crops,
water wells,reservoirs,or improvements caused by Lessee's operations on said land. 14o operations
shall be commenced on the land hereinabove described unless and until Lessee sshall hapae yment
filed a
good and sufficient bond with Lessor,in an amount to be fixed by Lessor, with
such damages as may be caused by Lessee's operations on said land and to assure compliance
all the terms and provisions of this lease, the laws of the State of Colorado, and the rules and
regulations thereto appertaining. A bond may be held in effect for the life of production of any well.
20. SETTLEMENT-Lessee shall not remove any machinery,equipment or fixtures placed on said lad,
other than drilling equipment, nor draw the casing from any well unless and until all payments
obligations currently due Lessor under the terms of this lease shall have been paid or satisfied. Any
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machinery.equipment or fixtures left on this land for a period of more than six(6)months after the
expiration hereof, shall automatically become the property of Lessor.
21. OTHER DISCOVERY-Should Lessee discover any valuable products other than oil and gas,on or
within the leased land, Lessee shall within seven(7)days report such discovery to Lessor, in which
event Lessee and Lessor may negotiate a provision for production of such discovery.
22: WATER-This lease does not grant permission,express or implied,to Lessee for water exploration,
dulling,or establishing water wells without the written permission of the surface owner. If Lessor is the
surface owner,said permission shall not be unreasonably withheld. If Lessee desires to establish or
adjudicate any water right for beneficial use on the leased land,any such adjudication or application
shall be In the name of Lessor if Lessor is the surface owner. The same shall apply to any non-
tributary water rights established on the leased land which may be put to beneficial use off said land.
23. DEFAULT-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 governing 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
of 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 within 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 this paragraph without further action by Lessor,or further
notice to Lessee.
24. EXTENSION-If Lessee fails to make discovery of oil and gas,or either of them,in paying quantities
during the primary term hereof, or during drilling operations commenced during the primary term
hereof, Lessee may make written application to Lessor for an extension of this lease. The granting
of such extension shall be at the sole option of Lessor,according to the following conditions:
A. No lease term will be extended for more than six(6)months from the original expiration date.
B. That 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.
C. 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.
D. That the royalty will remain the same.
25. HOLD HARMLESS-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 ope ts ns
violation
on this leased land or by conditions created thereby, or based upon any any statute,
ordinance,or regulation.
26. CONDEMNATION-If the leased land shall be taken in any condemnation proceeding,this lease shall
automatically terminate as of the date of taking. The award for such condemnation shall be paid to
Lessor, except for any specific award(s)paid to Lessee for severed oil and gas reserves, in which
o event of such specific award(s)shall be paid to Lessor in lieu of royalty lost by virtue
of the condemnation. Improvements shall be removed by Lessee per terms in the SETTLEMENT
paragraph herein. If only a portion of the leased land is taken by condemnation, Lessor may, at its
0 option,terminate this lease or terminate only that portion of the lease so taken.
rce
I "'I'I'lII' II'I III'I"II�'lll'�' III'll I�I I'II"III IIII
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Oil and Gas Lease
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27. ERRORS-Every effort is made by Lessor to avoid
i errorsn in
liable all
lfor eny
procedures
obut
inconvenience o t or limited
to auction listings and lease preparation.
oss
caused-by errors which may occur. Lessee shall notify Lessor immediately upon discovery of any
en-ors or discrepancy whatsoever.
28. ARCHAEOLOGY-Lessee shall not destroy,disturb,mar,collect, remove or alter any prehistoric or
historic resources of any kind on Weld County lands as provided by
law. These re cesres,Ira bones. include,ci deut but
b
are notlimited to,all artifacts of stone,wood or metal,pictographs,
of anything of prehistoric or historic nature shall be reported to Lessor or the State of Colorado
Archaeologist immediately. -
29. DEFINITIONS-
A. "Gas"as used herein sha8 mean all gases(combustible and noncombustible,including but not
limited to a0 gaseous hydrocarbons,gaseous compounds,carbon dioxide,and helium.
B. 'Oil and gas" as used herein shall include all substances-produced as by-products therewith,
including But not limited to sulfur.
C. "Paying quantities"as used herein shall mean and
dresfen same.
antities of oil and gas or of either of
them sufficient to pay for the current cost of producing
30. HEIRS AND ASSIGNS-The benefits and obligations of this lease shall inure to and be binding upon
the heirs, legal representatives, successors or assigns o sor seebut
no sublease
e has been approved assignment
hereof, or of any interest herein,shall be binding uponuntil the
Les by
Lessor as explained In the ASSIGNMENTS'paragraph provided.
31. WARRANTY OF TITLE - 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 fi1eS. There
to do shall
ll
be no obligation on Lessor's part to purchase new or supplemental or other title papers
norcurative work in connection with title to the subject lands. All abstracts of title, whether new or
supplementary,obtained by Lessee and covering the subject lands shall become the property of and
be delivered to Lessor after Lessee has completed its title examination
at any curative
work,
term ofsubject,
the
however,to the right of Lessee to use such abstracts upon request time during
lease. •
IN WITNESS WHEREOF,Lessor has hereunto signed and caused its name to be signed by the CHAIR
BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF WELD,with the seal of the office affixed,and
Lessee has signed this agreement,the day and year first above written.
ATTEST: / '�"'fff �j f ,, _ "' BOARD OF COUNTY COMMISSIONERS
� �� WE COUNTY,COLORADO
Weld County Clerk to the
rtwt -11O
.� Chair,Board of County Comm ors
•
David E. Long (07/09/20 3)
By:
Deputy Clerk to the B• •_ •�� ESSEE:
04 KR) CeS OIL.
111111 II III III 1111111 III 1111111 111111 III IIIII
r868 ovie 2003 12:09P Weld County, CO
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Co Oil and Gas Lease
Page 8
60
3 STATE OF COLORADO )
) ss
COUNTY OF WELD
A-u.ta_A ,2012`
Theforegoinginstrumentwasacknowledgedbefordmethis �� day
Witness my hand and officltsiti"r sends3 s^!ss!umro9
0iLa�
Notary Public 1 **A .
t CP
My Commission Expires: i Ni tlIO v% '
:
end latir
1111111 11111 "I 1111111 NI 111110111111 III 11111 IIII IIII •
3096668 08/18/2003 12:0W Weld County, CO
8 of B R 0.00 D 0.00 Steve Moreno Clerk&Recorder
•
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