HomeMy WebLinkAbout20051359.tiff Af4efn MEMORANDUM
TO: Board of County Commissioners April 4, 2005
COLORADO FROM: Jacqueline Hatch
SUBJECT: USR-1488 File Pit/ Farfrumwurkin LLP
The applicants for USR-1488, Jon File and Kenneth and Judith Schell have submitted
the attached documentation and have addressed the items pertaining to
1. Prior to scheduling a Board of County Commissioner Hearing.
A. The applicant has addressed Section 22-5-100.A of the Weld County Code
states "oil and gas exploration and production should occur in a manner which
minimizes the impact to agricultural uses and the environment and reduces the
conflicts between mineral development and current and future surface uses."
Section 22-5-100.B of the Weld County Code states "...encourage cooperation,
coordination and communication between the surface owner and the mineral
owner/operators of either the surface or the mineral estate." Section 22-5-
100.6.1 of the Weld County Code also states "new development should be
planned to take into account current and future oil and gas drilling activity to the
extent oil and gas development can reasonably be anticipated." The applicant
shall either submit a copy of an agreement with the property's mineral
owner/operators stipulating that the oil and gas activities have been adequately
incorporated into the design of the site or show evidence that an adequate
attempt has been made to mitigate the concerns of the mineral owner/operators.
Drill envelopes can be delineated on the plat in accordance with the State
requirements as an attempt to mitigate concerns. The plat shall be amended to
include any possible future drilling sites. (Department of Planning Services)
B. The applicant shall submit a traffic study to the Department of Public Works and
the Colorado Department of Transportation for review. Evidence of approval
shall be submitted in writing to the Department of Planning Services.
(Department of Public Works)
C. The applicant shall provide the Department of Public Works and the Department
of Planning Services with information regarding the method proposed, for
conveying the material across County Road 3 '/<. (Departments of Public Works
and Planning Services)
D. The applicant shall provide current evidence that the facility has an adequate
water supply (i.e., well or community water system). (Department of Public
Health and Environment)
•
2005-1359 >
(7,4;,,,,
MEMORANDUM
TO: Jacqueline Hatch, Planner DATE: March 17, 2005
WI I DC FROM: Donald Carroll, Engineering Administrator ,
•
COLORADO SUBJECT: USR-1488, File Pit 112
This is in response to your email dated March 9, 2005, asking if the Weld County Public Works Department
has reviewed the traffic study and the conveyor system. The traffic study provided for the File Pit was received
January 1, 2005. This study was prepared by LSC Transportation Consultants.
The traffic study report shows that the intersection at State Highway 52 and WCR 3.25 is not a signalized. It
currently operates at a good level of service (LOS) at "C" or better for all movements during both morning and
evening peak hours. With the addition of site-generated traffic, this intersection is expected to continue to
operate at a good LOS, which is acceptable.
In responding to the conveyor system question, I have not received a construction drawing detail of the
conveyor system over WCR 3.25.
have sent a road improvements agreement to the applicant and have not received a signed copy or
comments in return.
All the above items are an update to the request on the status of USR-1488.
pc: USR-1488
M:\PLANNING-DEVELOPMENT REVIEW\USR-Use by Special Review\USR-1488-A.DOC
Page 1 of 1
Jacqueline Hatch
From: Nice-Idler, Gloria [Gloria.Nice-Idler@DOT.STATE.CO.US]
,t: Wednesday, March 30, 2005 3:12 PM
To: Jacqueline Hatch
Subject: RE: File Pit
I would have to so, yes.
From: Jacqueline Hatch [mailto:jhatch@co.weld.co.us]
Sent: Wednesday, March 30, 2005 1:24 PM
To: Hice-Idler, Gloria
Subject: RE: File Pit
So are they all set?
._..__...._....__------
From: Hice-Idler, Gloria [mailto:Gloria.Hice-Idler@DOT.STATE.CO.US]
Sent: Wednesday, March 30, 2005 10:06 AM
To: Jacqueline Hatch
Subject: RE: File Pit
I almost let this one get away. Their study indicates that nothing needs to be done at this location as a result of their plan.
Frow: Jacqueline Hatch [mailto:jhatch@co.weld.co.us]
S Wednesday, March 16, 2005 1:18 PM
To: Hice-Idler, Gloria
Subject: File Pit
Gloria,
Just wondering if you have had a chance to review the traffic study for the File Pit located south of Highway 52 on both sides of
CR3 1/4?
THANKS!
Jacqueline
03/30/2005
FILE PIT 112 CROSSING Page 1 of 1
Jacqueline Hatch
From: Donald Carroll
t: Friday, March 25, 2005 2:56 PM
To: Jacqueline Hatch
Subject: FW: FILE PIT 112 CROSSING
From: Peter Wayland [mailto:pwayland@weilandinc.com]
Sent: Friday, March 25, 2005 2:49 PM
To: Donald Carroll
Cc: bowlitz@aol.com
Subject: FILE PIT 112 CROSSING
Don,
Attached is a drawing of the proposed crossing. Please review and provide comments. We will send copies of the drawing
following your approval.
We will provide grading plan and design details for culvert etc. following agreement on overlay thickness and prior to recording
final plat.
If this horizontal layout is acceptable, please contact Jacqueline Hatch with your approval—this is now the final piece needed to
schedule commissioners hearing
Thanks
«FILE 112-ACCESS-CROSSING.pdf»
Peter Wayland
Weiland, Inc.
525 3rd Avenue, Suite 211
Longmont, CO 80501
303.532.0951 ph
303.532.0953 fax
03/25/2005
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STA 3+90.65
--' END ASPHALT\
V u - SCALE
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z 'STOP SIGN (CROSSING TRUCKS)
GRAVEL ROAD
iik
496 R=40 �
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_ 175' �OO+q
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STOP SIGN PROPOSED CMP
VEHICLE TRACKING CONTROL
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REVISIONS FILE PIT 112 PROPOSED SITE ACCESS
Wnvitnn�W2 If ilacngi;eer Inc.
USE BY SPECIAL REVIEW AND CROSSING
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WELD COUNTY oRAW1, lie'
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FARFRUMWURKIN LLLP �' CTW PEW mrz3ms lore
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W S I Weiland. Inc.
Environmental & Engineering
January 20, 2005 Environmental Support for;
• Transportation
• Land Development
Jacqueline Hatch, Planner
Weld County Planning and Zoning • Mining
P.O. Box 758
Greeley, CO 80632 • Industry
Re: Special Review Permit, Administrative Review,
Case Number: USR-1488.
Basis for conditional approval, Part 1; B, C, and D; submittal of traffic study,
conveyance of mined materials across Weld County Road 3 '/4, and applicant
evidence of adequate water supply.
Dear Ms. Hatch:
Pursuant to addressing Weld County comments for the Special Review Permit,
Administrative Review, the applicant would like to address the submittal of a traffic
impact study for the site, the proposed method for conveying mined materials across
WCR 3 '/4, and provide evidence of adequate water supply for the site with this letter and
attachments.
A Traffic Impact Study (TIS) for File Pit 112 dated November 1, 2004, has been
completed by LSC Transportation Consultants, Inc. The TIS has been submitted to Don
Carroll at Weld County Public Works and Gloria Hice-Idler at CDOT Region IV in
Greeley.
In regard to the conveyance of mining products; after mining the West Pit of the File Pit
112 property, mining will continue with operations in the East Pit. With the start of mining
operations on the east side of WCR 3 '/4, the operator will be required to transport mined
materials to the west side of WCR 3 '/4.
At this time, the applicant proposes to construct a crossing approximately %mile north of
the intersection of SH-52 and WCR 3 '/4. The crossing configuration will meet all
requirements of the current Colorado State Highway Access Code. In addition, the
access road will be paved for a minimum distance of 300-feet on each side of WCR 3 '/4
in order to provide an adequate measure of vehicle tracking control, preventing the build-
up of mud, gravel, or other debris tracked from the site. The proposed site access road
on the west side of the site will come straight into the work area, past the proposed scale
house and parking facility. On the east side of WCR 3 '/4, the proposed site access road
10395 Colfax Ave.. Suite 350, Lakewood. CO 80215
ph 303-436-0951 fax 303-436-0953
W I Weiland. Inc.
Environmental & Engineering
will immediately turn north and parallel WCR 3 '/4 at a distance of 70-feet from edge of
pavement (EOP) on WCR 3 'A to EOP on the site access road. Please see the
enclosed figure for the Proposed Site Access Roads.
A flagman will be supplied to monitor the crossing during hours of operation as a safety
measure for north and southbound vehicles on WCR 3 '/<. The applicant would like to
leave open the option to provide an engineered overhead conveyance structure to
transport mine materials from the east side of WCR 3 ''Ato the west side of WCR 3 'A.
In regard to supply of onsite water, the applicant would like to report the location of an
onsite water tap on the west side of the site. As evidence that this tap exists, a scanned
copy of a recent bill for this tap is provided with this submittal.
Please feel free to address any questions you may have regarding this proposal to either
Peter Wayland or myself at the address and phone number provided.
Sincerely,
TVA. GC_..C . �? .
William C. Klawitter, P.E.
cc: Don Carroll, Weld County Public Works
10395 Colfax Ave.. Suite 350. Lakewood. CO 80215
ph 303-436-0951 fax 303-436-0953
) )
YAP 1.FUND
•
•, �"' - EXISTING EDGE Of ASPHALT
\ y ---- - _ N PROPOSED EDGE OF ASPHALT
. i `~- a ....._....._....... PROPOSED GRAVEL ROAD
— • • —PROPOSED PIT BOUNDARY
•
END ASPHALT
•
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REVISIONS USE BY SPECIAL REVIEW PERMIT PROPOSED SITE
MOM
. M• r„viro,.,, emntal%any" FILE PIT 112 ACCESS ROADS
— WELD COUNTY \•so DRAWN ' iv
ow. ...wo. . . FARFRUMWURKIN,LLLP `...W Mw PRY f"1/20105 la`$HEETM
MS
— PLEASE RETURN TOP PORTION WITH-YOUR PAYMFNT—
Last payment received 12/20/2004 16.30
Left Hand Water District — P.O. Box 210— Niwot, CO 80544-0210 — Phone 303-530-4200 — www.lefthandwater.dst.co.us
Account Number: Date bill mailed: Service from: Service to: Number of days: Due date.:
3026 02 12/31/2004 10127/2004 12/29/2004 63 01/21/2005
Previous reading: Present reading: Units used: Description: Amount due:
0 0 0 .00
f your passant readiag is a Q your accoint was estimated
WATER BASIC FEE 16.30
WATER USAGE .00
ACTIVATION FEE .00
SHUTOFF CHARGE .00
MISCELLANEOUS .00
.00
�� -- TOTAL CURRENT CHARGES 16.30a�
Service address: Pr- • �,-- - Total amount due: i► 1G'+0 \
—.--- mportant information:
Your Water Usage Rate is: 300 See Table Below /�
300 RESIDENTIAL 330 DUAL SYSTEM 310 COMMERCIAL b
joi
'L15
/
1st 4,000 2.6B 1st 4,000 2.68 3.70 ALL USAGE / 7
/ / ,A ')
Next 16000 3.35 Next 8,000 3.35
Next 30.000 4.19 Over 12,000 5.50 320 MULTIPLE HOUSING / !
J
Over 50.000 5.24 �,
3.70 ALL USAGE Ca
WATER(1000 GAL) — —
2000 —_
1-1
—SEE REVERSE SIDE FOR IMP)RIAw INbral,HM IUT{Aa ' Ain "" may in - Jul Aug -Sep- Od Nov
I 'd BLL0-404-E0E dli r3AId Jo Aldldd dBa =ao SO 02 uel
03/02/2005 WED 13:26 FAX fJ 001/001
Left Hand Water District
March 2, 2005
Farfrumwurkin, LLLP
FAX: 303-404-0778
Re: 6268 WCR 3W
85 33 11
TO WHOM IT MAY CONCERN:
The property located at the above address or legal
description is within the "SERVICE AREA" of Left Hand
Water District . The tap fee for the above named property
has been paid. This entitles one commercial unit to
receive water service at this location.
if you have further questions regarding this matter, you
may contact me at the District office.
Sincerely,
/ate._
Kim Lane
Administrative Assistant
Left Hand Water District
P.O. Box 210 Niwot, CO 80544-0210 re Phone 303-530-4200 Fax 303-530-5252 ti wwwlefthandwaterdst.co.us
FARFRUMWURKIPI, LLLP
11811 Upham Street, #12
Broomfield, CO 80020
Phone: 303-404-3225
Fax: 303-404-0778
E-Mail: BOWLITZ@aol.com
February 1, 2005
Jacquelyn Hatch
Weld County Planning
918 10tt' Street
Greeley, CO 80631
Dear Ms. Hatch,
I wanted to take the time to make sure we have all of the conditions completed, so we could
be put on the calendar for the County Commissioners hearing. I have addressed each issue
you raised per your 2/14/05 e-mail and they are as follows:
Issue A.
There needs to be clarification regarding oil and gas operators Vs. Oil and Gas Mineral
Interests. The state statute requires notification of all oil and gas Mineral Interests. All mineral
interest owners do not have surface rights to drill. Only the oil and gas Operators for a given
lease have surface rights to drill. There are three oil and gas Operators for recorded leases
with the USR Permit Area. They are:
Texas Tea
Patina Oil & Gas Corporation
Encana Energy Resources Inc.
Bill Crew (Certified Landman) has drafted a letter on our behalf clarifying this issue along with
an updated list as of 3/1/05 (see attached). It is our position, since the other interest owners
rights are in the existing wells operated by Texas Tea, Patina and EnCana, that we only need
agreements with the operators of the mineral lease and no one else. This is why Rancho
Partnership LTD. and Cheyenne Oil Properties have never responded to our certified letters.
We have surface agreements with Texas Tea, Patina and EnCana. EnCana has since
requested that we create a new surface agreement which will better address their future needs
on all of our properties, not just the mining area. EnCana has given us a proposal whereby all
future wells will be drilled from only two locations on the property, in the center of the SW and
SE quarter section (see attached). Both locations are outside of our planned excavation area.
We are in agreement with this proposal and are currently finalizing wording to allow this. In
your last email you stated:
"The applicant shall either submit a copy of an agreement with the property's mineral
owner/operators stipulating that the oil and gas activities have been adequately incorporated
into the design of the site or show evidence that an adequate attempt has been made to
mitigate the concerns of the mineral owner/operators. Drill envelopes can be delineated on
the plat in accordance with the State requirements as an attempt to mitigate concerns. The
plat shall be amended to include any possible future drilling sites. (Department of Planning
Services)"
Based on the attached documentation, it is our position that we have made an adequate
attempt to mitigate the concerns of the mineral owners/operators.
Issue B.
Peter spoke with Don Carol and it is his understanding that the traffic study has been
approved. Can you verify this for me.?
Issue C.
Peter also asked Don about conveying materials across Weld County Rd 3 1/4 and it was his
understanding that Don is OK with our plan. Could you please verify?
Issue D.
Since the planning commission denied our request to use the restroom facilities at the house,
which we had planned to use as an office on the East side of WCR 3.25, we have leased this
home to Ralph Nelson and will not be using it for an office. Enclosed is a letter from Left Hand
Water District stating that the existing water tap on the West side of WCR 3.25 (currently used
for watering livestock) is capable of supplying enough water for the scale house (commercial
use).
Based on the information given herein and attached documentation, we are requesting a
hearing with the Weld County Commissioners as soon as possible.
Sincerelly
KL—k
JI n P. File
Manager
FARFRUMWURKIN LLLP
Jacqueline Hatch
-mom: Peter Wayland [pwayland@weilandinc.com]
ant: Friday, January 14, 2005 11:56 AM
fo: Jacqueline Hatch
Subject: File Pit 112 Agreements
FDF iGF i4 FGF FGF iDF fOF
•
Encana -1.pdf(77 Encana-2.pdf(41 Encana-3.pdf(39 Kerr-McGee.pdf Patina.pdf(54 KB) Texas Tea - 1.pdf Texas Tea- 2.pdf
KB) KB) KB) (103 KB) (35 KB) (321 KB)
Jacqueline,
Please find attached Agreements for File Pit 112 USR Application. This is at least one
agreement for each mineral lease holder for the permit area. KP Kauffman is outside the
proposed permit area.
«Encana -1.pdf» «Encana - 2.pdf» «Encana -3 .pdf» «Kerr-McGee.pdf»
«Patina.pdf» «Texas Tea - 1.pdf» «Texas Tea - 2 .pdf»
Peter Wayland
Weiland, Inc.
10395 W. Colfax, Suite 350
Lakewood, CO 80215
ph. 303 .436 .0951
fax. 303 .436.0953
1
SURFACE DAMAGE AGREEMENT
THIS AGREEMENT,dated effectively this 18th day of March 2003 is made
by and between the undersigned,FARFRUMWURXIN,LLLP,a Colorado Limited
Liability Limited Partnership, whose address is 11811 Upham Street#12 Broomfield,
CO 80020,heroin called"OWNER"and En Cana Energy Resources Inc.,950-17s
Street,Suite 2600 Denver,Colorado 80202,herein called"EnCana";
WHEREAS,OWNER represents that they are the surface owners and in
possession of an interest in part or all of the surface estate for the following described
lands in Weld County,Colorado,said land herein called"LANDS",to wit:
Townshin 2 North Range 68 West,6th P.M,
Section 32:SWNW
WHEREAS,EnCana has or will acquire certain leasehold interests in the oil and
gas mineral estate in the LANDS and proposes to conduct drilling and subsequent
production operations on the LANDS;and
WHEREAS,OWNER and EnCana desire to minimize any surface damage to the
LANDS and to reach an agreement regarding such surface damage.
NOW,THEREFORE,in consideration of ten dollars and other valuable
consideration,the sufficiency of which is hereby acknowledged,the parties agree as
follows:
1. Prior to commencement of drilling operations,EnCaoa shall pay OWNER the
following sum as full settlement and satisfaction of all damages growing out of,incident
to,or in connection with the usual and customary exploration,drilling and completion
operations,unless otherwise specifically provided herein:
Two Thousand Five Hundred Dollars($2,500.00)for the wellsite located on the
LANDS in which OWNER owns the surface estate,together with any lands used for
roads purposes,pi. lines and Bowlines in connection with the wellsite.
IL by reason directly resulting from the operation of EnCana,there is damage to
crops,real or personal property upon the LANDS which is not associated with the usual
and customary drilling operations,such as(but not limited to)damage to livestock,
structures,buildings,fences,culverts,cement ditches,irrigation systems,and natural
water ways,such damage will be repaired or replaced by EnCana,or EnCana will pay
reasonable compensation to OWNER for such additional damage.
D. If requested by OWNER,prior to heavy equipment operations on each
wellsite,EnCaoa's representative will meet and consult with OWNER(or
OWNER's representative)as to the location of the wellsite,arrrss roads,
and flowline.
E. In conducting operations on the LANDS,EnCana shall:
A. Limit the size of each wellsite to approximately 375 feet by 350 feet
during the original drilling and completion operations and shall limit
the future site to be no more than 1/13 acre during other periods.The
existing access road will be used for the drilling operations and
permanent access until OWNER has constructed new roads fix_::....,,
future lakes and subdivisions(which EnCana agrees not co :•''111p `�
development of the properties covered under the original =ZOwA Ay%
EnCana shall have the right to access their wellsite over nesN
which shall be a minimum of 30 feet in width.
vG:oo'.
0L`be.
,c0
vs. ��I
Nelsen 12-32J Well
Page 2
B.Separate the top soil at the urns of excavation of pits so that the top soil and
subsurface soil may be placed back in proper order as nearly as possible.
C. Reclaim the wellsite as nearly as practicable to its original condition and if the
locations am in pasture,reseed the location with native gasses.Weather permitting;
reclamation operations shall be completed within three months following drilling and
subsequent related operations,unless EnCana and OWNER mutually agree to
postponement because of crop or other considerations.
D. Use its best efforts to keep the well site free of weeds and debris.
4. OWNER agrees to waive the minimum thirty-day written notice requirement
described in the Notice Letter provided by EnCana to OWNER when it initially gave
notice of its intent to drill on the LANDS.
5. When the word"EnCana"is used in this Agreement,it shall also mean the
successors and assigns of EnCana Energy Resources Inc.,including but not limited to its
employees and officers,agents.affiliates,contractors,subcontractors and/or purchasers.
6. This agreement shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties.
OWNER agrees to waive any timing restrictions to drill this well contained in
any of the original vesting oil and gas Iraws.
AGREED TO AND ACCEPTED AS OF THE DATE FIRST WRITTEN ABOVE.
OWNER:
STATF DO
F UMWURRIN.rLIP V._}
R0 '..us.. wr3
appeared fr ` the"mil e
Jo File,Managing Partner
Tax I.D.Number et ets instrument.
oc „bt . )e the sane.
ppt.•
4 k
ENCANA F.NFRG RESOURCES INC.
By: d-
i. Al
. "111 11•• ?S!" ' • ?" Vcir 1 rr, y t\.. (JrS,r t . T
STATE OF COLORADO )
) ss.
COUNTY OF WELD )
This Memorandum is made and entered into this 18th day of March, 2003, by and between
FARFRUMWURKIN, LLLP, a Colorado Limited Liability Limited Partnership, whose address is
11811 Upham Street, #12, Broomfield, CO 80020, ("SURFACE OWNER") and EnCana Energy
Resources Inc., 950-17th St., Suite 2600, Denver, Colorado 80202 ("ENCANA").
As of the date described above, SURFACE OWNER and ENCANA entered into a
Surface Damage Agreement (the "Agreement") providing for the use of the surface of the land
described below by ENCANA in connection with certain oil and gas operations and the
compensation to Surface Owner for all damages (except as provided for in the "Agreement") to
the surface of the land associated with the drilling, testing, completion, pumping, operation and
maintenance of the wellsite to be located in:
Township 2 North, Range 68 West, 6th P.M.
Section 32: SWNW-Nelson 12-32J Well
Weld County, Colorado
This Memorandum of Surface Damage Agreement is executed by SURFACE OWNER
and ENCANA and placed of record in Weld County, Colorado for the purpose of placing all
persons on notice of the existence of the Surface Damage Agreement. A true and complete copy
of the Surface Damage Agreement is available from ENCANA to any person with an interest in
the above described land.
F UMWURKIN,t,LLP
Jon Fil6 Managing artner
ENCANA ENERGY RESOURCES INC.
By:
J. Bra kik
deso4n it
ACKNOWLEDG - `
STATE OF COLORADO )
) ss.
COUNTY OF WELD )
The for • nt was acknowledged before me this IT Ilay of April, 2003, by
Jon File, M `f? i : `: FARFRUMWURKIN LLLP, A Colorado Limited Liability Limited
Partners ; C TA
[SEAL] i
S )/7
ATAOB L' .e40 Notary Public
My comnu
1hCarmlmbnEiplaeeek2 06
STATE OF COLORADO )
t Lt'1 Of) ) ss.
COUNTY OF DENVER )
^ Tti
The foregoing instrument wal ackirvAiedged before me this „ day of
(Zo(t ' , 2003, by i* J. 5('Q (iv\ of EnCana Energy
Resources Inc.
[SEAL]
Aq 9;G� N ublic
My commission expires, N.
ti
/ ' i
r� q t-%.••
3/4% fo
%�F •OP Cotp
lb Commission EK'res 1182009
ENCANA TM
October 29, 2004
Jon File
Farfrumwurkin, LLLP
1 181 1 Upham Street, #I2
Broomfield, Colorado 80020
Re: Gravel Pit T2N-R68W Section 32: W1/2 W1/2
Dear Jon,
We have received your recent request to relocate EnCana's pipeline in approximately two
years after the proposed gravel pit has been completed and the lands restored and
reclaimed, to the approximate proposed route, in the sketch map you have provided (a
copy of which is attached hereto).
It is EnCana's policy to modify and reroute our pipelines to allow for the surface
development as long as the modifications and reroute do not interfere with the ability of
EnCana to flow natural gas through the pipeline in question. We also require that the
developer/owner of the lands pay, in advance, for all costs associated with the requested
modification and relocation of the pipeline, including a 15% administration and overhead
charge. We would require an exact survey of the proposed route, subject to approval by
EnCana, prior to construction, complete with surface staking of the centerline and off-
sets, with fills,cuts, utility line crossings, and road crossings all plainly indicated.
Any agreement is subject to final approval and acceptance of the management of EnCana
and neither the proposals of EnCana or counterproposals of Farfrumwurkin shall be
construed to be offers or acceptances nor shall the parties be deemed to have entered into
an agreement with respect to the subject matter hereof until a definitive written
agreement is executed by all parties.
Should you have any questions, please feel free to call me at any time or you may call
Dale Hayhurst directly at 720-685-8513. Thank you.
Sincerely,
EnCana Energy Resources Inc. ��I � '
r�_
Dena Lund
DJ Basin Field Superintendent
Attachment: Proposed relocation route sketch map
EnCana Energy Resources Inc.
1313 Denver Avenue. Fort Lupton,Colorado 80621
303-659-7740 Fax 303-857-1259
Discription of new pipeline location. Beginning at a point 25' West of
the West line of Weld County Rd. 3 '/4 and 50' South of the 1/2 Section line
where the existing pipeline is now h cated, thence traveling North along
3 1/4 Rd 865', thence West to a point 25' East of the East line of the
abandon Railroad thence Southwes:following a course parrell to
the Railroad to a point approximately 5' North of the 1/2 Section
line where the existing pipeline now stands.
West li e of Section 32
,� sa
et
et
ca
// X oil well;
•
•
X
Proposed new location
865'North of theta Section tine
•
et
a
0
0
1/2 Section fine 32 gN 6SW
Existing Pit elino location 1
AGREEMENT TO MINE WITHIN 200 FEET OF A PERMANENT MAN-MADE STRUCTURE
THIS AGREEMENT dated and made effective this 1st day of November 2004 is made between
Farfrumwurking LLP,with an address of 1163 Oakhurst Drive,Broomfield,CO,herein called
"OWNER"and Kerr-McGee Gathering LLC,with an address of 1999 Broadway,Suite 3600,Denver,CO
80202,herein called"KMG";
WHEREAS,OWNER represents that it is the surface owner and are in possession of an interest in part or
all of the surface estate for the following described lands in Weld County,Colorado to wit:
Township 2 North,Range 68 West,6's PM
Section 31:SE/4
Section 32:SW/4
Weld County,Colorado
WHEREAS,KMG owns an eight inch(8')natural gas pipeline,known as the"292-8"(the
"PIPELINE"),on said property;and
WHEREAS,OWNER has submitted an application to the Colorado Mining Land Reclamation Board to
mine gravel on said property.
NOW THEREFORE,
I. KMG agrees to allow OWNER to mine within 25 ft of the existing PIPELINE
2. Owner will not encroach upon KMG's PIPELINE and related easement rights,as stated in
OWNER's letter to KMG,dated October 1,2004
3. OWNER agrees to abide by the Guidelines for Design and Construction Activities on or near
Kerr-McGee Gathering,LLC and Kerr-McGee Rocky Mountain Corporation Pipelines and
Related Facilities attached hereto as Exhibit A.
4. OWNER agrees to compensate KMG for the actual cost to repair any damages to the PIPELINE
and any related facilities caused by mining activities undertaken by OWNER or OWNER's
contractors.
IN WITNESS WHEREOF,The Grantors have executed this agreement en on thedate set forth above.
=/11:A,
IN LLP KERB-McGEE GA l� / G
LLC:2 O
T��^_''�_Ii/ ���-1
JO P.FILE,Manager David Howell,Wattenberg Asset Manager
for Kerr-McGee Rocky Mountain Corporation,
Manager of Kerr-McGee Gathering LLC
ACKNOWLEDGEMENTS
STATE OF COLORADO
)ss,
COUNTY OF The foregoing instrument was acknowledged before me this\-141\day\day of November, +_•7-r 1:1w,‘
.s,`
JOHN FILE as General Partner of Farfrumwurking LLP,on behalf of said company. ••••••••,Cj�Y�tr
:/ OTAgL'y tJ
r
•
Witness my hand and official seal ' y�• 3
Notary
�1 i
•
My Commission expires: Notaryy ublic r',°A V°
.• 'p
1 VBl- G�
�� OPPr
STATE OF COLORADO ) \,. COL_
ss. /CormirbtFa*03/242006
COUNTY OF The foregoing instrument was acknowledged before me this 14 day of November,21 t,..•:...,`
David Howell as Wattenberg Asset Manager for Kerr-McGee Rocky Mountain as manager__-1: ' LIG,`,,
McGee Gathering LLC,on behalf of said corporation. f G 61-A' \' 't
cWitness my hand and official seal d�,ttl 1j�
My Commission expires: Notary Public ` r1iN94.VB1-%C;�•�'
, l;
law r..,.,:..Y.,ew nen..w,.
p Exhibit A
'n Attached to and made a pan of tlutt certain Agreement to Mine W iNin 200 Feet 4f a Permanent
ir
Man-Made Structure made between Farfrumwurkin LLP and Kerr-McGee Gathering LLC,dated
November 1st 2004
General Guidelines for Design and Construction Activities On or Near
Kerr- McGee Gathering LLC and Kerr- McGee Rocky Mountain Corporation
Pipelines and Related Facilities
This list of design, construction and contractor requirements, including but not limited to the following, is for the design and
installation of foreign utilities or improvements on Kerr McGee Gathering LLC (KMG) right-of-way (ROW). These are not
intended to, nor do they waive or modify any rights KMG may have under existing easements or ROW agreements. For
information regarding KMG's rights and requirements as they pertain to the existing easements, please reference existing
easements and amendments documents.This list of requirements is applicable for KMG facilities on easements and in road
rights of ways only. Encroachments on fee property should be referred to the Land 8 ROW Department.Any reference to KMG
in the below requirements is meant to include and apply to any Kerr McGee entity.
Design
• KMG shall be provided sufficient prior notice of planned activities involving excavation,blasting,or any type of construction
on KMG's ROW or near its facilities.This is to determine and resolve any location,grade or encroachment problems and
allow for the protection of KMG's facilities and the general public.This prior notification is to be made before the actual
work is to take place.
• The encroaching entity shall provide KMG with a set of drawings for review and a set of final construction drawings
showing all aspects of the proposed facilities in the vicinity of KMG's ROW. The encroaching entity shall also provide a set
of'as-built drawings'and submit to KMG,showing the facilities in the vicinity of KMG's ROW upon completion of the work.
• Only facilities shown on drawings reviewed by KMG will be approved for installation on KMG's ROW. All drawing revisions
that affect facilities proposed to be placed on KMG's ROW must be approved by KMG in writing.
• KMG shall approve the design of all permanent road crossings.
• Any repair to surface facilities following future pipeline maintenance or repair work by KMG on it's'prior rights'ROW will be
at the expense of the developer or landowner. In addition, any repair to surface facilities following future pipeline
maintenance or repair work by KMG on replacement ROW granted to relocate KMG facilities will also be done at the
expense of the developer or landowner unless expressly addressed in surface use agreements and approved in writing by
KMG.
• The depth of cover over the KMG pipelines shall not be increased or reduced nor surface modified for drainage without
KMG's written approval.
• Construction of any permanent structure within KMG pipeline easement is not permitted without written approval by KMG.
• Planting of shrubs and trees is not permitted on KMG pipeline easement without written approval by KMG.
• Irrigation equipment i.e.backfiow prevent devices,meters,valves,valve boxes,etc.shall not be located on KMG easement
without written approval by KMG.
• Foreign utility installations,IE,distribution gas,oil and gas gathering,water,electric,telephone,cable and sewer lines,etc..
may cross perpendicular to KMG's pipeline within the ROW,provided that a minimum of eighteen inches(181 of vertical
clearance is maintained between KMG pipeline(s)and the foreign utility.Any installation by a foreign utility with less than
18'of vertical separation is not allowed without written approval by KMG. In no case will vertical separation be less than
12'whether written or not.Constant line elevations must be maintained across KMG's entire ROW width,gravity drain lines
are the only exception and must be approved in writing. Foreign line crossings below the KMG pipeline must be evaluated
by KMG to ensure that a significant length of the KMG line is not exposed and unsupported during construction. Foreign
line crossings above the KMG pipeline with less than 18'of clearance must be evaluated by KMG to ensure that additional
support is not necessary to prevent settling on top of the KMG natural gas pipeline.A KMG representative must be on site
during any crossing activities to verify clearance depths and to assure the integrity and support of the KMG facility. All
installations of foreign crossings done by boring and or jacking require the KMG facility to be exposed to verify clearances.
• Foreign utilities shall not run parallel to KMG pipelines within the KMG easement without written permission by KMG.A
minimum of 10.0 feet of horizontal separation must be maintained in parallel installations whether the foreign utility is
placed within the KMG easement or adjacent to the KMG easement.Any deviation from the 10.0'horizontal requirement
must be approved in writing by KMG and an"as built survey provided to KMG after installation.
• The foreign utility should be advised that KMG maintains cathodic protection on its pipelines and facilities. The foreign
utility must coordinate their cathodic protection system with KMG's. At the request of KMG,foreign utilities shall install(or
allow to be installed)cathodic protection test leads at all crossings for the purposes of monitoring cathodic protection
interference. The KMG CP technician and the foreign utility CP technician shall perform post construction CP interference
testing. Interference issues shall be resolved by mutual agreement between foreign utility and KMG. All costs associated
with the correction of cathodic protection interference issues on KMG pipelines as a result of the foreign utility crossing
shall be borne by the foreign utility for a period of one year from date the foreign utility is put In service.
• The developer shall understand that KMG whether specifically required per federal law,or by company standard,will mark
the routing of it's underground facilities with aboveground pipeline markers and test leads and maintain those markers and
test leads. Markers will be installed at every point the pipeline route changes direction and adequate markers will be
installed on straight sections of pipeline to insure,in the sole opinion of KMG,the safety of the public,contractor,KMG
personnel and KMG facilities.
• On all foreign utility crossings and f or encroachments,metallic foreign lines shall be coated with a suitable pipe coating for
a distance of at least 10 feet on either side of the crossing.
Page 1 of 3 Revision 3/01/2004
General Guidelines for Design and Construction Activities On or Near
Kerr- McGee Gathering LLC and Kerr- McGee Rocky Mountain Corporation
Pipelines and Related Facilities
• AC Electrical lines must be installed in conduit and properly insulated.
• On all foreign pipelines,DOT approved pipeline markers shall be installed so as to indicate the route of the foreign pipeline
across the KMG ROW.
• No power poles,light standards,etc.shall be installed in the KMG easement without written approval by KMG.
• KMG installs above ground appurtenances at various locations that are used in the operation of its facilities.Kerr McGee
will install protective enclosures at the above ground appurtenances to protect them from outside damage.The design and
placement of these above ground appurtenances and protective enclosures is done at KMG's sole discretion,and may
exceed any regulatory requirements.
Construction
• If KMG will be relocating KMG facilities for any entity,grading in the new KMG ROW shall be+1-6 inches before KMG will
mobilize to complete the relocation. Final cover after the completion of the project will not be less than 48'nor more than
72'.All cover that exceeds 72'or less than 48'will be approved in writing by KMG.Cover during all construction activities
will NEVER be less than 36' unless approved in writing and a KMG representative is on site during the time cover is
reduced.
• The entity requesting relocation shall survey top of pipe after installation but before backfill to determine proper final
elevation of KMG facilities. The entity requesting relocation is solely responsible for the final depth of cover over the
relocated KMG facility.My deviation from cover requirements as outlined above will be corrected at the sole expense of
the entity requesting relocation.
• Contractors shall be advised of KMG's requirements and be contractually obligated to comply.
• The continued integrity of KMG's pipelines and the safety of all individuals in the area of proposed work near KMG's
facilities are of the utrrwst importance. Therefore,contractor must meet with KMG representatives prior to construction to
provide and receive notification listings for appropriate area operations and emergency personnel. KMG's on-site
representative will require discontinuation of any work that, In his or her opinion,endangers the operations or
safety of personnel,pipelines or facilities.
• The Contractor must expose all KMG pipelines prior to crossing to determine the exact alignment and depth of the
lines. A KMG representative must be present.
• The use of probing rods for pipeline locating shall be performed by KMG representatives only, to prevent unnecessary
damage to the pipeline coating. A KMG representative shall do all line locating.
• Notification shall be given to KMG at least 72 hours before start of construction. A schedule of activities for the duration of
the project must be made available at that time to facilitate the scheduling of KMG's work site representative. Any
Contractor schedule changes shall be provided to KMG immediately.
• Heavy equipment will not be allowed to operate directly over KMG pipelines or in KMG ROW unless written approval is
obtained from KMG. Heavy equipment shall only be allowed to cross KMG pipelines at locations designated by KMG.Haul
roads will be constructed at all crossings. The haul roads will be constructed using lightweight equipment. The existing
depth of cover over the pipeline must be verified.Cover will be added such that a total of 8'of fill exists over the pipeline
and extends a minimum of 10' on each side of the pipeline. Depth of cover will then taper as required for equipment
access.Steel plates may be used for load dissipation only if approved in writing by KMG.
• Contractor shall comply with all precautionary measures required by KMG,at its sole discretion to protect its pipelines.
When inclement weather exists,provisions must be made to compensate for soil displacement due to subsidence of tires.
• Excavating or grading which might result in erosion or which could render the KMG ROW inaccessible shall not be
permitted unless the contractor agrees to restore the area to its original condition and provide protection to KMG's facility.
At no time will cover be reduced to less than 36'without written approval by KMG and a KMG representative on site.
• A KMG representative shall be on-site to monitor any construction activities within twenty-five(25)feet of a KMG pipeline or
aboveground appurtenance. The contractor shall not work within this distance without a KMG representative being on
site. Contractor shall use extreme caution and take any appropriate measures to protect KMG facilities.
• Ripping is only allowed when the position of the pipe is known and not within ten(10)feet of KMG facility. KMG personnel
must be present.
• Temporary support of any exposed KMG pipeline by Contractor may be necessary if required by KMG's on-site
representative. Backfill below the exposed lines and 12' above the lines shall be replaced with sand or other selected
material as approved by KMG's on-site representative and thoroughly compacted in 12'lifts to 95%of standard proctor dry
density minimum or as approved by KMG.'s on-site representative. This is to adequately protect against stresses that may
be caused by the settling of the pipeline.
• No blasting shall be allowed within 1000 feet of KMG's facilities unless blasting notification is given to KMG Including
complete Blasting Plan Data. A pre-blast meeting shall be conducted by the organization responsible for blasting.
KMG shall be indemnified and held harmless from any loss,cost of liability for personal injuries received,death caused or
property damage suffered or sustained by any person resulting from any blasting operations undertaken within 500 feet of
Page 2 of 3 Revision 3/01/2004
General Guidelines for Design and Construction Activities On or Near
Kerr- McGee Gathering LLC and Kerr- McGee Rocky Mountain Corporation
Pipelines and Related Facilities
its facilities. The organization responsible for blasting shall be liable for any and all damages caused to KMG's facilities as
a result of their activities whether or not KMG representatives are present. KMG shall have a signed and executed Blasting
Indemnification Agreement before authorized permission to blast can be given.
No blasting shall be allowed within 200 feet of KMG's facilities unless blasting notification is given to KMG a minimum of
one week before blasting. The organization responsible for blasting must complete Blasting Plan Data. KMG shall review
and analyze the blasting methods. A written blasting plan shall be provided by the organization responsible for blasting
and agreed to in writing by KMG. A written emergency plan shall be provided by the organization responsible for blasting.
KMG shall have a signed and executed Blasting Indemnification Agreement before authorized permission to blast can be
given. A pre-blast meeting shall be conducted by the organization responsible for blasting.
• Any contact with any KMG facility,pipeline,valve set,etc.shall be reported immediately to KMG. If repairs to the pipe are
necessary,they will be made and inspected before the section is re-coated and the line is back-filled.
• KMG personnel shall install all test leads on KMG facilities.
Local Kerr-McGee Gathering LLC Representation:
Manager of Construction 8 Facilities Engineering: Kevin R.Osif,P.E. Phone: 303 655-4307
Facilities Engineer: Joseph E.Sanchez,P.E. Phone: 303 655-4319
Foreman 1: James Phillips Phone: 303 655-4343
Foreman 1: Rick Noffsinger Phone: 303-655-4326
Emergency Contacts:
On call supervisor Phone: 303-559-4001
Kerr McGee 24 hour emergency number Phone: 303-659-5922
One Call Emergency Phone: 800-922-1987
Page 3 of 3 Revision 3/01/2004
M NING AGREEMENT
THIS AGREEMENT, effe:;tive this 5th day of November, 2004 is made and
entered into by and between the undersigned, FARFRUMWURKIN LLLP whose
address is 11811 Upham St#12 Broomfield,Colorado 80020, hereinafter referred to as
"MINE OPERATOR"and PATINA.OIL& GAS CORPORATION whose address is
1625 Broadway,Suite 2000 Denver Colorado 80202, herein referred to as"PATINA";
WHEREAS, MINE OPEIATOR represents that, subject to approval of a
mining plan and permit from tie State of Colorado, Weld County, and other
governmental bodies having jurisdi:tion in such matters,they shall be granted the right
to mine the gravel underlying the surface of the land in part of the following described
property to wit:
Township 2 North Range 68 West,6th P.M.
Section 31: E of i he SE',4
Weld County,Colorado
Hereinafter referrr d to as(the"LANDS")
WHEREAS, MINE OPERATOR also represents that it has the express written
consent from the Surface Owner's, Kenneth L. and Judith Ann Schell to conduct such
mining operations.
WHEREAS, PATINA represents that it owns certain leasehold interests in the
oil and gas mineral estate in and uider the LANDS.
WHEREAS, MINE OPERATOR desires to develop the gravel minerals on
portions of the LANDS.
AND WHEREAS, PATI6 A'S leasehold interest may establishes rights to explore,
drill,produce,operate, maintain and access the well(s) and related production facilities
that maybe located on the LANDS,
NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged,the parties agree a.follows:
1. The MINE OPERATOR agrees not to excavate or mine the areas
known as the 'Drilling Windows" allowed by the State of Colorado
Oil and Gas C inservation Commission pursuant to Rule 3I8A.a.(I).
The two (2) drilling windows on the Lands measure 400 feet by 400
feet centered in the NEJ4SEJ4 and SE/4SE/4 of Section 31,
Township 2 N:Oh,Range 68 West,6th P.M.
2. Subject to PATINA's approval from Schell, The MINE
OPERATOR Trees to provide a minimum forty (40') wide access
or right-of—wry corridor from the nearest public road to each
Drilling Window for future access road(s) and pipeline(s) that may _
N ppRr be constructer and installed by PATINA.
R
The MINE OPERATOR shall clearly indicate and label the specific r.C.,, __,,
;4't • location and boundaries of the Drilling Windows, or rights-of-way, 0-..r""'•��
`U:P on the minin plats and plans prior to their being presented f t TAR'N y
p
s,�pUe�,;oq consideration and approval of the appropriate governing bodies willrt OP GCS' prior to recc rding in the State of Colorado and Weld County N p U B L l G
Colorado me(rds. ,•
OF
This agreement shall br binding upon and inure to the benefit of the heirs,
successors and assigns of the parties.
IN WITNESS WHEREOF,The p:irties have accepted and executed this Agreement on the date set
forth a..ve.
FARFRUMWURKIN LLLP
14
J n P.File,Manager
PATINA OIL &GAS CORPO RATION
/,
By:
avid W Ie,Vice Pre ident
A:IKNOWLEDGEMENTS
STATE OF COLORADO
) :s.
COUNTY OF rmUti.rd _
cc�
The foregoing instrument was acknowle iged before me this J day of November,2004,by
Witness my hand and official seal
My commission expires: $ )<.)'1/.3t.).;`;
99
Notary ic : c` pf O T A R O
PP
STATE OF COLORADO ) "*J9r CO\-Q
) ss.
CITY AND COUNTY OF DENVER)
The foregoing instrument was acknowledged before me this ay of November,2004,by
Witness my hand and official seal
My commission expires: '.A i /v:..
"`ay N OgT
<` OAP G . Notary Pu Gc
tr.. .O 01-1.:o
9rC.. . c, U�'P
C?. C
V
MINING AGREEMENT
THIS AGREEMENT,dated effectively this 15th day of November 2004 is made by
and between the undersigned,FARFRUMWURKIN LLLP whose address is 11811 Upham St
#12 Broomfield CO 80020,hereinafter referred to as"OWNER"and Texas Tea of Colorado,
LLC 601 16"'St.,C-344,Golden,CO 80401,herein called"TEXAS TEA";
WHEREAS,OWNER represents that they are the surface owners and in
possession of an interest in part or all of the surface estate for the following described
lands in Weld County,Colorado,said land herein called"LANDS",to wit:
Township 2 North Range 68 West,6th P.M.
Section 32:S W t/a,W1/2 of the N W t/a and the Nr/z of the SE rA
WHEREAS,Texas Tea has acquire certain leasehold interests in the oil and gas
mineral estate in the LANDS;and
WHEREAS,OWNER wishes to develop the gravel minerals on said property.
NOW,THEREFORE, in consideration of ten dollars and other valuable consideration,
the sufficiency of which is hereby acknowledged,the parties agree as follows:
1.The OWNER agrees not to mine any closer than 15'from any flow line.
2.The OWNER agrees to repair any permanent man made facility owned by TEXAS
TEA,damaged directly by OWNER mining operations,
3.Per that agreement dated 3/24/04,OWNER has the right to elevate the Nelson#1A
and the Nelson#5 well.OWNER will mine up to 30%of the gravel surrounding each well at one
time,replacing that material as they go so that no more than 30%of the ground is disturb at any
given time,staying at least 75 feet away from the same.Once the surrounding ground is
compacted,the wells may be elevated and the surrounding ground filled in to final grade.The
reservoir upon completion,will be located at least 150'away from each well.
IN WITNESS WHEREOF,The Grantors have executed this Agreement on the date set forth above.
ion rFi nle e ral er
FA�.FRUM WURKIN LLLP
STATE.OF COLORADO
) ss.
COUNTY OF
The foregoing'instrument ,;,;wledged before me this j_day of 72 DV• ,2004,by Witness my hand My commission e� -��'•KsIC�f.�iS,I,ttl
?e' +OTAR/ � '
Ay lr
t •t
No Pu c
•, �iJBUC •� l
IN WIT 4l•: HERE 4318; •e Grantors have executed this Agreement on the date set forth above.
11‘, OF CCA• ?
•
Bob Parker for
TEXAS TEA of Colorado LLC
STATE OF COLORADO
COUNTY OF
The foregoing instrument was acknowledged before me this Li day of,Z.:472--: ,2004,by
Witness my hand and official seal
My comrn '' ' WaitilLd
, •
TA/ '.9 t�' Notary Publi
r'I try.' f'UBUC • �:
t 4 'O�r
tt,,\OF Ca __—
ay CAmmsSh1 Fni 1''n^YS
, Feb 26 04 09:23p 3032739620 3032739620 P. d
FR0P1 : Michael L. Blake, P.C. PHONE IC. 3037907219 Feb. 26 2004 0B:25i1M P1
AGREEMENT FOR
gLUGGING ANDABANDONMENT OF
OIL AND GAS WELL
THIS AGREEMENT FOR PLUGGING AND ABANDONMENT OF OIL AND GAS
WELL is made this day of February,2004,by and between Texas Tea of Colorado,LLC,a
Colorado limited liability company whose address is 601 16th Street PMBC-344,Golden,Colorado
80401 (hereinafter"Texas Tea"),and FARFRUMWURKIN,LLLP, a Colorado Limited Liability
Limited Partnership whose address is 11811 Upham Street, #12, Broomfield, Colorado 80020
(hereinafter"Ownu").
RECITALS
•
WHEREAS,Texas Tea is the owner of that certain oil and gas well known as the Nelson
#2 Well(heeinafertLc"War)situate in the NW 1/4/SW IN,Section 32,Township 2 North,Range
68 West,County of Weld,State of Colorado(hat:Mater the"Land")and is the Lessee of the or7 and
gas lease pertaining thereto(hereinafter the tease"),ail as rate fully described in Exhibit"A
attached hereto and made a part hereof and
WHEREAS,Owner is the surface owner of a portion of the Land and desires to develop its
portion of said Land;and
WHEREAS,Owner desires to have Texas Tea permanently take the Well out of production
and to plug the Well in order to further develop said Land,and Texas Tea agrees to take the Well
out of production and to plug the Well;
NOW'I'HERF.FORE,in consideration of the tangoing premises and the mutual covenants
and agreements herein stated,and other good and valuable consideration,the sufficiency of which
is hereby acknowledged,the parties hereto agree as follows:
1. Payment of Consideration. Owner shall pay to Texas Tea the sum of Forty Thousand
and 00/100 Dollars(140,000.00) in cash, check or certified funds contemporaneously with the
execution of this Aly..,rnc.,t,as consideration for the agreements of Texas Tea hereunder. Said
funds shall be considered earned movies of Texas Tea upon payment and nonrefundable.
2. P&A of the Wag. Upon sixty(60)days written notice from FARFRUMWURKIN
LLLP requesting the same,Texas Tea agrees to permanently plug and abandon die Well under Texas
Teas bonds and/or permits,including but not limited to the following work:plugging and pemmican
abardoome t of the Welt;disconnecting,capping off and removing any towlines from the Well as
necessary following all Colorado Oil and Gas Conservation Commission rCOGCC")and county
policies and regulations related to plugging and pemoaweaa abandonment of the Well,and removing
the equipment to be retained by Texas Ten(collectively the"P&A work").Texas Tea shall also clean
up any envirmmnensal damage caused during the plugging and abandonment of the Well;the site
surface reclamation of the Wells,and Bowlines following all Colorado Oil and Gas Conservation
Commission("COGCC')(coileaively the"Site Reclamation").Texas Tea stall obtain all necessary
Feb 26 04 09:24p 3032739620 3032739620 p, 2
FROM : Michael L. Blake, P.C. PHONE NO. : 3037907219 Feb. 26 2004 00:26RM P2
permits, licenses and approvals for the P&A work and the Site Reclamation. Owner shall pay
directly,or munediately reimburse Texas Tea for,all coats of the P&A work. Such costs of the P&A
wort:shall be competitively bid,and the parties hereto shall agree in advance of the P&A work on
the contractor to be used for the P&A work. Texas Tea shall pay the cost of the Site Reclamation.
Notwithstanding the foregoing.in no neat shall Texas Tea be required to begin the P&A work prior
to February 28,2005.
3. Rck,cation of Fa ihities. In the event that it is determined by FARFRUMWURKIN's
engineers that an oil and gas collection line or road Deeds to be relocated or an oil and gas well needs
to be elevated to accommodate FARFRUMWURKIN reservoirs and gravel mine,
FARFRUMWURKIN will give Texas Tea not less than one(1)year's written notice of its intention
to do so and not less than thirty(30)days written notice of the beginning of any such work. The
parties agree to cooperate in scheduling and the scope of any such work. Any such work desired to
be performed by FARFRUMWURKIN shall be done at FARFRUMWURKIN's sole cost and
expense trough a qualified contractor selected by FARFRUMWURK.IN with Texas Tea's approval,
such approval not being unreasonable withheld Any replacement of and gas collection line shall
be of high strength poly pipe or other material approved by.Taos Tea equal to or greater than the
diameter and strength of the collection line it replaces. In the event that any roads are relocated,
FARFRUMWURKIN shall beep reasonable access open to any of Texas Tea's existing wells,and
shall replace any road moved with a road of similar quality to the road replaced.
FARFRUMWURKIN shall restore the ground surrounding any elevated wells to their pre-existing
condition and replace any corroded or damaged pipes or fittings at the well head with new parts to
prevent future failure of any well that is elevated.
4. Reservoirs. Texas Tea agrees to not contest the application of FARFRUMWURKIN
for a 112 Mining Permits or other applicable permits as required to construct its reservoirs on the
Property. The boundaries of any reservoir constructed by FARFRUM W URIUN shall not be located
any closer that a minimum of one hundred-fifty(150)feet from any of Texas Tea's wells or closer
than those distances from any of Texas Tea's oil and gas facilities on the Property as allowed by
applicable state and federal statures and/or regulations.
5. The Well,the Lease and all equipment at the Well shall
remain the sole property of Texas Tea.
6. Operation of the Well Prior to the P&A work. Texas Tea may continue to operate
and maintain the Well in a reasonable operator manner and retain all proceeds therefrom until the
beginning of the P&A work in accordance withrecognized industry standards and in full compliance
with applicable leasesllaws, rules and regulations of appropriate local, state, and federal
governmental authorities. Such operation and maintenance of the Well shall not unreasonably
interfere with Owner's,wits successors or assigns,use of the surface and subsurface.of the Lands,
and Owner's use of the surface and subsurface of the Lands shall not=reasonably interfere with
Texas Tea's operation and maintenance of the Well.
2
Feb 26 04 09:24p 3032739620 3032739620 p. 3
FROM : Michael L. Blake, P.C. PMOME N0. : 303799721.9 Feb. 26 2904 00:27PM P3
7. Permanent Abandonment Upon completion of the P&A work hereunder,Texas Tea
agrees that is shall never use or reopen either of the Well or drill another well on the that portion of
the Land currently owned by Owner or otherwise we the surface of that portion of the Land
cw entry awned by Owner in the (mute without the express written consent of Owner. Not
withstanding the foregoing.nothing in this Agreement shrill be construed expressly or by implication
to prevent Tens Tea from drilling an additional well or wells on other portions of laths covered by
the Lease or from operating its caning oil and gas wells and related facilities located on those lands
covered by the [mace. Additionally,FARFRUMWURKIN shall not interfere with Texas Tea's
continued operation of its other oil and gas operations conducted on the Land or under the Lease,
including but not limited to interference with Texas Tea's relationships with gove oriental agencies.
S. Indemnification.
a. Texas Tea agrees to indemnify,defend and hold harmless Owner,its affiliates,
members,managers,employees,agents,mpresentaives,assigns and successors from and against
any and all claims,liabilities,losses,costs and expanses(ircliting,without limitation,court costs
and reasonable attorneys fees)that are attributable to the Well and other assets described herein and
that are based upon was or omissions which arise prior to the completion of the MA work and the
Site Reclamation (inclml ng,without limitation,liability for damage to property,or injury to or the
death of any person arising prior to the completion of the P&A work and Site Reclamation).
b. Owner awes to indemnify,defend and bold harmless Texas Tea,its affiliates,
members,managers,employees,agents,representatives;assigns and successors from and against
any and all claims,liabilities,losses,costs and a menses(including,without limitation,court costs
and reasonable attorneys'fees)that are attributable to the Well and other assets described herein and
that ate based upon acts or omissions wbiclljarise after the completion of the P&A work and the Site
Reclamation,including but not limited to damage caused by Owner,it assigns,agents,contractors,
successors,or representatives(and including,without limitation liability for damage to property,or
injury to or the death of any person arising after the completion of the P&A work and Site
Reclamation).
9. Entire Agreement. This Agreement and exhibits thereto constitutes the entire
understanding between the parties with respect to the subject matter hereof and all prior agreements,
whether written or oral,arc merged herein. This Agreement shall nor be amended except upon
agreement in writing duly executed by both panics.
10. Waiver. The failure of either party to this Agreement to insist upon the performance
of any of the terms and conditions of this Agreement,or the waiver of any breach of any of the terms
and conditions of this Agreement,shall not be construed as thereafter waiving any such terms and
conditions,but the same shall continue and remain in full force and effect as if no such forbearance
or waiver had occurred.
3
1
/1
Feb 26 04 09: 24p 3032739620 3032739620 p. 4
•
FROM : Michael L. Blake. P.C. PHONE NO. : 3037907219 Feb. 26 2004 0B:27AM P4
11. Force Ma cure.
a. IC bemuse of force majeure, either party is unable to carry out its non-
financial obligations wader this Agreement,and if the party affected by the face rnajeure promptly
gives to the other party written notice of the force majeure,the obligation of the party giving the
notice shall be suspended to the extent made necessary by the force majeure and during its
continuance, provided the effect of the force majeure is eliminated insofar as possible with all
dispatch.
b. The term"force majeure"shall mean any cause or causes which materially
prevail the performance of the obligations arising under this Agreement and which arc not
reasonably within the control of and are without the Snit or negligence of the non-performing party,
and shall include,without limitation by enumeration,acts of God,act of public enemy,blockades,
ins ateetioos,riots,disnrdera,civil disenbances,fins,explosions,norms.lightning,wind,perils of
the sea,floods,landslides,boycotts,sabotage,embargoes,acts of military authorities,acts of local,
state of federal.agencies or legislative and regulatory bodies,curt actions.arrests or restraints.
c. The parties shall use all reasonable means of avoiding the occurrence of any
of the foregoing items of force majeure. Nothing contained hectic.shall be construed so as to require
a party to settle any strike or labor dispute in which it may be involved.
12. l ga. Any notice provided for or concerning this Agreement shall be in writing
and be deemed sufficiently given when sent by certified or registered mail if sent to the respective
address of each party as set forth herein above.
13. Attorney Fees. In the event that any action is filed or an arbitration is held in relation
to this Agreement,the successful party in the action or arbitration shall be entitled to its reasonable
attorneys fees and costs related to such action.
14. ltelatigpship of the Parties. The relationship of the parties to this Agreement is
limited to the purposes and transactions contained herein in accordance with the terms of this
Agreement. Nothing contained herein shall be construed to create a general partnership,a limited
partnership,a joint venture,or any other similar relationship between the parties.
15. ,gs. paragraph headings are used solely for convenience of reference only and
shall not affect the construction of any provision of this Agreement.
16. Severalg illy. Should any provision of this Agreement or the Assignments be held to
be void or unenforceable,the remaining provisions shall remain in full force and effect,to he read
and construed as if the void or unenforceable provisions were deleted.
17. Govcr)ing Law. This Agreement shall be governed by the laws of the State of
Colorado.
4
Feb Q6 04 09: 25p 3032739620
• JVJL 2JJ V(_V
FROM Michael 1. Blake. P.C. PHONE N0. 3037907219 Feb. 26 200a 00:2BRm PS
1*. cape. The panics,and each of them,represent and%savant that they arc in good
standing and duly quit to conduct blasmess a the Sat of Colorado and their respective
reptesanatives executing this Agreement below am fully empowered to do so;the execution and
pafoema000 of this Agmemeot and the tormcta orears Jasod hereby have been duly and validly
authorized and constitute bedmg obligations of the patties
19. Successor and Assigns. The tarns,coseyaots,and conditions hereof bind and inure
to the benefit of the panics hereto and their respective successors and assigns.
20. Reeosdine Me noteadant. The patties hereto agree that a memorandum of this
Aped meat suitahk for molding may be recorded by Owner at the office of the Oak and Recorder
for the County of Weld upon execution otitis Agreement by the parties.
21. FeesinuleSrentnres Facsimile signatures of this Agreement shall have the same
force and effect as otigimi signatures.
IN WIINt& WHEREOF, the parties hereto have caused this Agreement to be duly
executed in multiple aaaterpwfs,when taken together,shell constitute a single imv ins,by their
respective rgweseatatives tkmmto tidy authorized,as of the day and year Best written above.
TEXAS TEA OF COLORADO,LLC FARFRIJMWURKIIV,LI I P
1
By. By:
Robot Parker.Manager Title: �n � f ti
ed L'er J / 2RietE/t Did hereby appear and subscribed and sworn to before me this .7SG(,
day of
2004
Pji t `K'r'• Sy.el hand and official seal.My commission expires: /—ai a- 0 S _
sz
. .�,• �pTgR� •c�1� (
STATE OF OIA n 0)
I 9 j°UBUC .
• N v fj • Ne Public
• o �
tF COL
A1v�....' T•i+• .;, /e- Did hereby appear and subscribed and sworn to before me this n?S6Q day of
Cif! 2r,P,,2004 S
, -•y.. hand and official seal.My �_ ...
�\\.y. . Y �i II, commission apices: -I` S _ �I ,`ir if 14
dad.i .lea) /--�//�w - � o
•
f (!!((..� 1T�ObIiC•
405:l '°UBUC S
lleel��C0t t-f
My Commssbn Expires 0112112005
•• 26 04 09: 25p 3032739620 3032739620 p. 6
FROM : Michael 1. Blake, P.C. PHONE tA. : 3037907219 Feb. 26 2004 Of3:281M P6
EXHIBIT"A"
LEASE AND PROPERTY DESCRIPTIONS
Attached to and Made a Part of that certain Option Agreement for Sale and Purchase of Oil
and Gas Leases and Well by and between Texas Tea,LLC, and FARFRUM W URYCTN,LLLP dated
February ,2004.
WELD COUNTY.STATE OF COLORADO
TOWNSHIP 2 NORTH.RANGE 68 WEST.WELD COUNTY.COLORADO
WELL NAMES: Nelson#1,#1A,#2,#3,44,
LEASE INFORMATION:
LESSOR: Ray L Nelson& Margaret E.Nelson.husband&wife
LESSEE: Martin J.Freedman
LEASE DATED: May 6, 1976
RECORDED Book:766 Page: 1688170
DESCRIPTION: Township 2 North Range 68 West,6th P M
Section 31: E/2NE/4 lying south and east of the railroad right-of-way,
containing 2 acres,more or less.
Toua ship 2 North.Range 68 West.6th Pl
Section 32:W2NW/4,SW/4,N/2SE/4 except beginning at E. I/4 corner of
section,then W. along the centerline of section 14843',then S.25° 46'E.
1460.8',then N. 89° 2T E. 866.4',thence N. 0° 45'W. 1306.0' to point of
beginning.
Limited in depth from surface of the earth to the base of the Shannon
formation. Rancho Partnership,Ltd.,expressly reserved all right,title
and interest in and to the wells and spacing units for the Nelsen"E"Unit
#1 & #2 we%in that certain Agreement,Assignment and Bill of Sale
between itself and Robert D. Reed dated December 20, 1995 and
recorded February 7, 1996,at Reception No.2475427,B-1531, P-281,
Weld County, Colorado, Clerk and Recorder and in that certain
Agreement,Assignment and Bill of Sale between itself and Cheyenne Oil
Properties dated August 3, 1995 and recorded August 29, 1995, at
Reception No.2453244,B-1508,P-797,Weld County,Colorado,Clerk
and Recorder.
6
AMENDMENT AGREEMENT
THIS Agreement ("Agreement") is made this 27th day of February, 2004, by and between
FARFRUMWURKIN, LLLP (FFW) a Colorado Limited Liability Limited Partnership, whose address is
11811 Upham Street, Unit #12, Broomfield, CO 80020, hereinafter referred to as "Surface Owner"
and TEXAS TEA OF COLORADO, a Colorado Limited Liability Company, whose address is 601 16th
Street, PMBC-344, Golden, CO 80401, hereinafter referred to as "Lessee".
For in consideration of $10,000.00, the receipt of which is hereby acknowledged, the parties hereto
stipulate and agree as follows:
This agreement is made and becomes a part of that certain agreement dated 2/27/04 "Agreement for
rlugging and Abandonment of Oil and Gas Well" (PA).
Everything in said PA agreement will remain the same except for the closing date of said PA, in
exchange for a non-refundable deposit of $10,000.00. Both parties agree that the closing date shall
be extended to 3/28/04, at which time FARFRUMWURKIN, LLLP shall pay the remaining $30,000.00
balance and the agreement shall
be final. ) �/� Ft �uR r�� d"� 4j
7Ufl. n- 1 >(:)./L c.� �j-L <�-xx{� , CLc� ^1r-„ -�,,:.-w�/ .-k . .
TEXAS TEA OF CO179IRA O, LLC :: M;u;
i1LLLP
Robert Parker, Manager Jon P. File, Managing Partner
Subj: (no subject)
Date: 2/23/05 12:55:07 AM Mountain Standard Time
From: BOWLITZ
To: mike,tucker_@encana.com
File: FARFRUMWURKINSDA6.doc (56320 bytes)DL Time (28800 bps): < 1 minute
Mike
Here is a copy of the amended agreement. I tried to include all of the key elements.
Where are we on the letter to Weld County?
Jon
p„a,r,,.,r., id iMK America Online- ROW! 1T7
SURFACE USE AGREEMENT
THIS SURFACE USE AGREEMENT ("Agreement") is made and entered into this
day of , 2005, by and between ENCANA OIL & GAS (USA)
INC. ("EnCana") with an address of 370 17th Street, suite 1700, Denver, Colorado 80202
and Farfrumwurkin, L.L.L.P., a Colorado limited liability limited partnership ("Surface
Owner") with an address of 11811 Upham Street, Box 12, Broomfield, Colorado, 80020,.
EnCana and Surface Owner may be referred to herein as a "Party", or collectively as the
"Parties".
A. Surface Owner has the right to permit, enter, explore, mine and reclaim
the surface estate for the sand and gravel reserves within that certain tract of land more
particularly described on Exhibit A attached hereto and incorporated herein by reference,
being all or a portion of the SW/4, N/2SE of Section 32, Township 2 North, Range
68West, Weld County, Colorado, which is hereinafter referred to as the"Property".
B. Surface Owner plans to develop the surface of the property. Such
development shall include, but is not limited to a gravel mine known as the "File Pit 2".
C. EnCana currently operates one or more oil and gas wells ("Existing
Wells") and has the right to develop its oil and gas leasehold estate by drilling additional
wells on the Property subject to all of the terms and conditions of that oil and gas lease
Dated May 6, 1976. Pursuant to paragraph 3 of exhibit "A" of the Lease which states "
Lessee is aware of the value of the land and agrees to, subject to conforming to the
spacing rules set out by governmental regulations agencies, contact lessor for his
approval prior to drilling operations; etc." ("Future Wells" and together with the Existing
Wells, the "Wells"); and
D, EnCana warrants and represents that it owns or controls all of the mineral
estate covered under the Ray L. Nelson Lease, except for that portion as described as,
from the surface of the earth to the base of the Shannon formation and this agreement
shall control all of that portion owned by EnCana.
E. This Agreement sets forth the Parties' rights and obligations regarding the
relationship between the development of the Property by Surface Owner and EnCana's
operation and development of its oil and gas leasehold estate, such rights and obligations
to be binding upon the Parties' hereto, and the Parties' respective heirs, successors, and
assigns.
NOW THEREFORE, in consideration of the covenants and mutual promises set
forth in this Agreement, including in the recitals, the Parties agree as follows:
1. Oil and Gas Operations Areas.
a. EnCana agrees to limit its oil and gas operations conducted in connection
with the Existing Wells and Future Wells, including but not limited to, drilling,
completion, and maintenance of wells and equipment, production operations, workovers,
1
well recompletions and deepening's, fracturing, twinning, the drilling of replacement
wells and the location of associated oil and gas production facilities to those locations
depicted on Exhibit B and identified as "Oil and Gas Operations Areas". Said area is
depicted as a 300' x 350' rectangle, located in the center of the SW '/4 and the SE % of
Section 32 as shown on Exhibit B. All production facilities, structures and new wells
shall be located within the Structure Location Area which is defined as an area _' x
' as shown on Exhibit B.
b. Surface Owner shall have the right to mine sand/gravel on the Property
and within each of the Oil and Gas Operations Areas identified on Exhibit B, subject to
the following: In the event Surface Owner elects to commence mining operations within
any Oil and Gas Operations Area, Surface Owner shall provide written notice to EnCana
at least 60 days prior to the commencement of any such operations identifying the area
where such operations are to be conducted. In the event Surface Owner elects to mine
sand/gravel in an Oil and Gas Operations Area which does not contain an Existing Well
or production facility as of the date Surface Owner provides notice of its intent to conduct
sand/gravel mining operations, Surface Owner agrees to conduct its mining operations in
the affected area in such as manner as to complete such operations as quickly as
reasonably practicable using sound mining operation practices. Upon completion of
mining operations in an area that does not contain an Existing Well or production facility,
Surface Owner shall fill, level and compact the area and shall, as reasonably practical,
return the affected area to the condition it existed prior to the commencement of such
operations. In the event Surface Owner elects to mine the gravel/sand in an Oil and Gas
Operations Area that has one or more Existing Wells or existing production facilities at
the time Surface Owner provides notice to EnCana, Surface Owner shall perform its
mining operations as follows: Mining within the affected area shall be conducted by
excavating a single pie shaped area of gravel and aggregate and thereafter backfilling and
compacting each area with overburden or other suitable material prior to excavating the
next pie shaped area; provided, however, that in no event shall Surface Owner mine
within seventy five (75) feet of any Existing Well head or within fifty (50) feet of any
existing production facilities and provided further that in no event shall more than one
eighth circle segment of the pie shape be excavated at any one time. Excavation in the Oil
and Gas Operations Area will be coordinated with EnCana in a mutually acceptable
manner so as to avoid conflict with or interruption of EnCana's oil and gas operations
and to ensure there is an appropriate safety plan and interim procedures. Surface Owner
will bear the costs associated with the mining operation, including permanent or
temporary rerouting and replacement of access roads, and flow lines and utility lines in
order to prevent interruption of production from any affected well. In addition, Surface
Owner and its successor and assigns shall indemnify and hold EnCana harmless from any
and all damages, loss and liability, caused by Surface Owner's mining operations within
an Oil and Gas Operations Area. However, with regard to the Nelson 12-32 well, which
Surface Owner has allowed EnCana to locate within 45 feet of the original 111 mine,
Surface Owner shall be allowed to continue to conduct its mining operations adjacent to
said well provided such operations shall maintain a minimum distance of 45' South of
said well and 75' in all other directions of said well. Surface Owner agrees to pay for any
damage it causes to any facility owned by EnCana resulting from Surface Owner's
mining operations.
2
c. EnCana shall, subject to the terms and conditions herein and the oil and
gas lease Dated May 6, 1976, have the right to drill more than one well with attendant
facilities within each of the structure location Areas and to deepen, recomplete or twin
any well that is drilled. Wells may also be drilled from the SE 'A that produce from
adjoining properties so long as a portion of the production will be paid under the current
lease and the wells are located within the structure location area.
d. EnCana has the right to locate, build, repair and maintain tanks,
separators, dehydrators, compressors and all other associated oil and gas drilling and
production equipment and facilities within the structure location area. However all new
structures etc. will be located as close to the existing tanks and separators as is practical
using sound engineering practices.
e. Surface Owner shall not plat any surface property line within the Structure
Location Areas. No temporary or permanent building structure, shall be located within
the Oil and Gas Operations Areas or within 150' of any well.
f. Except for the pipeline and flowline easements, access and the Oil and
Gas Operations Areas and Structures Location Areas identified in this Agreement,
EnCana shall not use the surface of the Property except in cases of emergencies.
g. In exchange for EnCana allowing Surface Owner to relocate one of
EnCana's pipelines and to elevate the Nelson 12-32 well to better accommodate Surface
Owner's planned reservoir, Surface owner agrees to pay $40,000.00 of the directional
drilling cost for the Nelson 13-32 well upon the completion of the drilling of the 13-32
well.
h. Surface Owner is scheduled to receive royalties on the Nelson lease on
July 31, of 2012. There are (4) wells that will need to be directional drilled after the 13-
32. Which are the 14-32, 23-32, 24-32 and the 33-32. Surface owner hereby agrees to pay
$40,000.00 for each of the 14-32, 23-32, 24-32, and the 33-32 wells that is directional
drilled between July 1, 2014 and July 31, of 2016 out of the royalties received from each
well provided all five wells are completed by July 31, 2016.
i. Surface Owner has existing water wells, and plans to construct more such wells
into the upper water table as defined as from the surface of the earth to a depth of 50 feet.
EnCana agrees to keep the ground and underlying water tables and more specifically the
ground water described above, free from contamination from all of their oil and gas
operations including drilling, treating, collecting, transporting, processing tank batteries,
pipelines and connected facilities. EnCana further agrees to require their contractors,
subcontractors. agents and or assigns and any other company that has a working
relationship with EnCana to abide by this Paragraph 1.i. In the event there is a discovery
of a release or spill, that could cause harm to the underlying water table, EnCana agrees
to take immediate action as necessary, to correct the cause and clean up any contaminated
soils so that no further damage occurs and to return the ground to its original condition,
maintaining compliance with applicable local, State and Federal rules and regulations
pertaining to spillage or operation of an oil and gas facility.
2. Access to the Oil and Gas Operations Areas.
3
a. Access to each of the Oil and Gas Operations Areas shall be along the
routes depicted on Exhibit B.
b. Access to an Oil and Gas Operations Area may be changed by mutual
agreement of Surface Owner and EnCana; provided however, all costs and expenses of
such relocations shall be borne by the party which requests the relocation. EnCana shall
be assured of uninterrupted access to all the Oil and Gas Operations Areas and no such
access may be closed to EnCana until an acceptable replacement or alternate pipeline and
access route is available for use.
c. Surface Owner shall keep the portions of access roads jointly used by both
Surface Owner and its subdivision occupants and EnCana in good condition and repair
until such roads are dedicated to the local jurisdiction; provided, however, if EnCana
causes damage to a road that is jointly used by both EnCana and Surface Owner or its
subdivision occupants and which is constructed to the specifications in section 2.e.(I),
EnCana agrees to promptly repair any damage it may cause resulting from its use of the
access roads at its sole expense.
d. No party shall unreasonably interfere with the use by the other of an
access road.
e. Construction and Width of Access Roads.
(1) Access roads or portions of access roads that are jointly used by
EnCana and Surface Owner shall be thirty (30) feet or more in width and
Surface Owner shall construct or improve all paved or improved joint
access roads so as to withstand the weight of oilfield equipment.
Specifically, Surface Owner shall construct the roads so that they can be
used to withstand the weight of 104,000 pounds and 26,000 pounds per
axle.
(2) Access roads or portions of access roads that are used exclusively by
EnCana shall be thirty (30) feet in width and EnCana shall install and
maintain any such road to those federal, state and local regulations and
standards that apply to oil and gas operations. Any such exclusive access
road shall be installed and maintained at EnCana's sole expense. All roads
or drill sites when in use, shall have a clean gravel base or be used only
when the ground is dry, to prevent tracking of mud or debris onto the
pavement.
3. Pipelines, Flowlines and Pipeline Easements.
a. Pipeline easements shall be at the locations identified on Exhibit B, and
pipelines shall be installed, at the sole Expense of EnCana, at minimum depths of forty-
eight (48) inches below the surface of the ground.
b. Locations of pipelines and pipeline easements may be changed by mutual
agreement of the parties; provided, however, all costs and expenses of such relocations
shall be borne by the party which requests the relocation. hi the event that Surface Owner
requests the relocation of a pipeline or flowline, EnCana shall provide Surface Owner
with a written estimate of the relocation costs which Surface Owner shall thereafter
promptly remit to EnCana. The payment shall be adjusted up or down upon completion
4
-- of the work, after an itemized statement is provided to Surface Owner. However, in the
event the estimate is considered unreasonable by Surface Owner, in Surface Owner's sole
discretion, Surface Owner shall have the right to obtain competing bids for the work to be
performed from other qualified contractors that are well known in the industry of Surface
Owner's choosing. In the event Surface Owner's contractor's bid is less than the
estimated relocation costs provided by EnCana, Surface Owner shall be entitled to have
the work performed at the lower cost and by its contractor, or EnCana's contractor may
agree to perform the work at the cost set forth in Surface Owner's contractor's bid. hi the
event EnCana's contractor elects not to perform the work pursuant to the independent
contractor bid, the work shall be preformed by the lowest bidder as chosen by Surface
Owner. Both parties agree to cooperate in the relocation of pipelines and oil and gas
facilities if it is determined by Surface Owner that the relocation is in the best interest of
the future development of the property. This includes the pipeline running East to West
along the '/ Section line.
c. All current and future Pipeline easements shall be depicted on Exhibit B
and shall be fifty (50) feet in width during original construction activities and thirty (30)
feet in width for all other operations, maintenance and transportation activities. Flowline
easements shall be thirty (30) feet in width for all operations. All current pipeline
easements shall be shown on Exhibit B with the appropriate Weld County reception
number in place.
d. Surface Owner shall be entitled to reserve the right to cross the pipeline
easements at approximately right angles, and Surface Owner shall also have the right to
install and maintain access on such easements for utility lines, including those for water,
gas, sewer, electric, telephone, cable, television and fiber optic and other pipelines that
travel along the pipeline easements provided for herein; provided however, i) any new
underground facilities which travel along a pipeline easement identified herein shall be
located a distance horizontally of at least ten (10) feet from parallel existing pipelines; ii)
any new underground facilities shall have at least twenty- four (24) inches of vertical
clearance between such new facility and a pipeline provided for herein; However with
regard to sewer and drain lines that cannot be raised or lowered due to the grade required
for water flow, exceptions shall be allowed and Surface Owner and EnCana agree to
work together to address each others request if such circumstance should ever arise and
iii) any overhead power lines shall be at least twenty (20) feet above the ground. Surface
Owner shall, in addition, pay EnCana all reasonable costs and expenses that EnCana
incurs to encase its existing pipelines and flow lines to the extent that such pipelines and
flowlines underlie any new street or road provided all encasing is fully completed at the
time that Surface Owner commences construction of any street and/or road if such street
or road intersects with any of the EnCana's pipelines and flow lines.
e. EnCana currently has pipelines in existing Oil and Gas Operations Areas as set
forth in Exhibit B. Easements will be provided to EnCana for any such pipelines, if
easements have not already been granted.
f. Surface Owner shall maintain a minimum ground cover of 48 inches over
pipelines and flowlines in the conduct of its operations and its construction activities on
the Property.
5
4. Subdivision Plat. Surface Owner shall identify the Oil and Gas Operations Areas,
Structure Location Areas and all access and pipeline easements on any future subdivision
plats and applications for development that it files with a local jurisdiction, which shall
include restrictions stating that no temporary or permanent buildings shall be located,
constructed or installed within the Oil and Gas Operations Areas or Structure Location
Areas as identified on Exhibit B. Surface Owner shall record any such subdivision plat
in the Office of the Clerk and Recorder of Weld County or other appropriate jurisdiction.
5. Governmental Proceedings.
a. Surface Owner Will Not Object. Surface Owner agrees that it will not
object in any forum to the use by EnCana of the surface of the Property consistent with
this Agreement and the terms and conditions of the Lease dated May 5, 1976 and hereby
waives any such right to object. Surface Owner further agrees that it will provide such
other written approvals and waivers which are reasonably requested by EnCana and
consistent with this Agreement.
b. EnCana Will Not Object. EnCana agrees that it will not object in any
forum to Surface Owner's to annexation, zoning, rezoning, platting, replatting,
subdividing, or other development of the Property to the extent such annexation, zoning,
rezoning, platting, replatting, subdividing, or other development of the Property is
consistent with this Agreement.
6. Notices of Hearings. Surface Owner shall provide EnCana with written notice not
less than thirty (30) days before each hearing for consideration of a plat application or
other land use application for the Property or portions of the Property that include the Oil
and Gas Operations areas, Structure Location areas or pipeline easements, that is to be
held before the County or other local jurisdiction.
7. Notice to Homeowners Builders and/or Future Sand and Gravel Mining Permit
Holders. Surface Owner shall furnish all builders, developers and Future Sand and
Gravel Mining Permit Holders which purchase all or any portion of the Property and each
person or entity who proposes to enter into a contract to purchase a lot which is adjacent
to or any part of which is within an Oil and Gas Operations Area or a pipeline easement,
with a plat that shows the locations of the Oil and Gas Operations Areas, access routes,
and pipeline easements. In addition, Surface Owner shall provide written notice to all
such purchasers that includes the following information:
a. there may be ongoing oil and gas operations and production on the
surface of the Property within the Oil and Gas Operations Areas, pipeline
easements and access routes;
b. there are likely to be wells drilled and oil and gas production
facilities constructed and installed within the Structure Location Areas and flow
lines and pipelines constructed and maintained on the Property;
c. heavy equipment will be used by EnCana from time to time for oil
and gas drilling and production operations and such operations may be conducted
on a 24-hour basis; and
6
d. homeowner associations and buyers of individual lots or homes will
be subject to and burdened by all of the covenants, conditions and waivers made
by or placed upon Surface Owner in this Agreement.
8. Notice of Oil and Gas Operations. EnCana shall provide Surface Owner with
notice of drilling operations and subsequent well operations in accordance with COGCC
rules and regulations.
9. Notice of Construction Activities by Surface Owner. Surface Owner will notify
EnCana prior to commencement of any dirt work, grading or other surface construction
activities it will be conducting in the Structure Location Area. If requested by EnCana,
Surface Owner shall meet with EnCana representatives at the Property to locate existing
flow lines, gathering lines or pipelines and to coordinate proposed surface construction
activities with current and prospective oil and gas operations.
10. EnCana Mitigation. EnCana agrees that it will install and maintain at its sole cost
and expense such fences, gates and locks around the wells and production facilities as are
required by the COGCC. Surface Owner may upgrade fences, gates and locks at its
expense and with the consent of EnCana, which consent shall not unreasonably be
withheld, and provided that such fences, gates and locks comply with COGCC and local
regulations.
11. Authority to Execute Agreement. The undersigned represent that they have the
full right and authority to enter into this Agreement and bind each respective party hereto
regarding the terms and conditions set forth herein with respect to the surface rights or oil
and gas interests or oil and gas leasehold interests that each respective Party owns in the
Property, as applicable.
12. No Waiver of Rights. EnCana does not waive the rights it has pursuant to its oil
and gas interests to explore for, drill and produce the oil and gas for the Property or for
ingress and egress to the Oil and Gas Operations Areas and Structure Location Area,
subject, however, to the terms and conditions of this Agreement and the oil and gas lease
Dated May 6, 1976.
13. No Waiver of Rights. Surface Owner does not waive any rights it has to develop
the surface of the land except as specifically provided for in this Agreement.
14. Successors and Assigns. This Agreement and all of the covenants in it shall be
binding upon the personal representatives, heirs, successors and assigns of all of the
parties and the benefits of this Agreement shall inure to their personal representatives,
heirs, successors and assigns. This Agreement and all of the covenants in it shall be
covenants running with the land.
15. Recording. EnCana shall record a Memorandum of this Agreement with the
Clerk and Recorder of Weld County and provide evidence to Surface Owner of the
recording.
16. Governing Law. The validity, interpretation and performance of this Agreement
shall be governed and construed in accordance with the laws of the State of Colorado
without reference to its conflicts of laws provisions.
7
17. Severability. If any part of this Agreement is found to be in conflict with
applicable laws, such part shall be inoperative, null and void insofar as it conflicts with
such laws; however, the remainder of this Agreement shall be in full force and effect. In
the event that any part of this Agreement would otherwise be unenforceable or in conflict
with applicable laws due to the term or period for which such part is in effect, the term or
period for which such part of this Agreement shall be in effect shall be limited to the
longest period allowable which does not cause such part to be unenforceable or in
conflict with applicable laws.
18. Notices. Any notice or other communication required or permitted under this
Agreement shall be given in writing either by; i) personal delivery; ii) expedited delivery
service with proof of delivery; iii) United States mail, postage prepaid, and registered or
certified mail with return receipt requested; or iv) prepaid telecopy or fax, the receipt of
which shall be acknowledged, addressed as follows;
Surface Owner: Farfrumwurkin, L.L.L.P.
11811 Upham Street, Box 12
Broomfield, Colorado, 80020
Attn: Jon File, Managing Partner
EnCana: EnCana Oil & Gas (USA) Inc.
Attention: DJ Land Department
370 17th Street, Suite 1700
Denver, Colorado 80202
Notices shall be effective upon receipt and any party may change an address by notice to
the other parties.
19. Incorporation of Exhibits. Exhibit A and Exhibit B are incorporated into this
Agreement by this reference.
20. Entire Agreement. This Agreement sets forth the entire understanding among the
parties and supersedes any previous communications, representations or agreements,
whether oral or written. No change of any of the terms or conditions herein shall be valid
or binding on any party unless in writing and signed by an authorized representative of
each party.
21. Counterpart Executions. This Agreement may be executed in counterparts, each
of which shall be deemed an original.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed
by a duly authorized representative, to be effective on the date and year first written
above.
8
FARFRUMWURKIN, L.L.L.P.
By: Jon P. File, General Partner of Party of Five, LLLP,
the General Partner of Farfrumwurkin, LLLP
ENCANA ENERGY RESOURCES, INC.
By: Byron R. Gale as Attorney in Fact for EnCana
Energy Resources, Inc.
ACKNOWLEDGEMENTS
STATE OF COLORADO
) ss.
COUNTY OF
The foregoing instrument was acknowledged before me this day of
, 2005, by Jon P. File as General Partner of Party of Five, LLLP, the
General Partner of Farfrumwurkin L.L.L.P..
My Commission expires:
Witness my hand and official seal.
Notary Public
STATE OF COLORADO )
) ss.
9
-- COUNTY OF DENVER
The foregoing instrument was acknowledged before me this day of
2005, by Byron R. Gale as Attorney-in-Fact for ENCANA
ENERGY RESOURCES INC., and he executed the within and foregoing instrument and
acknowledged the said instrument to be free and voluntary act and deed of said
corporation for the uses and purposes therein set forth.
IN WITNESS WHEROF, I have hereunto set my hand and affixed my official seal the
day and year first written above.
My Commission expires:
Witness my hand and official seal.
Notary Public
•
10
SURFACE USE AGREEMENT
THIS SURFACE USE AGREEMENT ("Agreement") is made and entered into this
day of , 2005, by and between ENCANA OIL & GAS (USA)
INC. ("EnCana") with an address of 370 17th Street, suite 1700, Denver, Colorado 80202
and Farfrumwurkin, L.L.L.P. ("Surface Owner") with an address of 11811 Upham Street,
Unit 12, Broomfield, Colorado, 80020, Jon File, Managing Partner. EnCana and Surface
Owner may be referred to herein as a"Party", or collectively as the "Parties".
A. Surface Owner has the right to permit, enter, explore, mine and reclaim
the surface estate for the sand and gravel reserves within that certain tract of land more
particularly described on Exhibit "A" attached hereto and made a part hereof, being all or
a portion of the SW/4, N/2SE of Section 32, Township 2 North, Range 68West, Weld
County, Colorado, which is hereinafter referred to as the "Property".
B. Surface Owner's right to mine the sand and gravel and reclaim the surface
estate is subject to the rights of the oil and gas leasehold estate, all or a portion of which
is owned by EnCana.
C. Surface Owner plans to develop the surface of the property as part of a
gravel mine known as the "
D. EnCana currently operates one or more oil and gas wells ("Existing
Wells") and has the right to develop its oil and gas leasehold estate by drilling additional
wells on the Property ("Future Wells" and together with the Existing Wells, the "Wells");
and
E. This Agreement sets forth the Parties' rights and obligations regarding the
relationship between the development of the Property by Surface Owner and EnCana's
operation and development of its oil and gas leasehold estate, such rights and obligations
to be binding upon the Parties' successors and assigns.
NOW THEREFORE, in consideration of the covenants and mutual promises set
forth in this Agreement, including in the recitals, the Parties agree as follows:
1. Oil and Gas Operations Areas.
a. EnCana agrees to limit its oil and gas operations conducted in connection
with the Wells, including but not limited to, drilling, completion, and maintenance of
wells and equipment, production operations, workovers, well recompletions and
deepenings, fracturing, twinning, the drilling of replacement wells and the location of
associated oil and gas production and drilling equipment and facilities and also the
location and drilling of oil and gas wells that produce from and drain the Property as well
as lands which are pooled or communitized with the Property and/or are directionally or
horizontally drilled to bottomhole locations outside the Property, to those locations
depicted on Exhibit "B" and identified as "Oil and Gas Operations Areas". In
consideration of EnCana agreeing to limit its operations to the Oil and Gas Operations
Areas, Surface Owner agrees to pay 100% of any incremental directional drilling costs
that may be incurred for a well drilled from each Oil and Gas Operations Area.
1
b. Surface Owner reserves the option to mine the sand/gravel within each of
the Oil and Gas Operations Area. Surface Owner shall give EnCana written notice at least
60 days prior to the commencement of operations in the Oil and Gas Operations Areas. In
the event Surface Owner elects to mine the gravel in an Oil and Gas Operations Area that
has no existing well or production facility at the time of Surface Owner's notice to
EnCana, Surface Owner shall conduct its mining operations in such area as quickly as
reasonably practicable and, upon completion of such mining operation, shall fill, level
and compact the area to match the Oil and Gas Operations Area as depicted on Exhibit
"B". In the event Surface Owner elects to mine the gravel/sand in an Oil and Gas
Operations Area that has one or more existing wells or production facilities at the time of
Surface Owner's notice to EnCana, Surface Owner shall conduct such mining by
excavating pie shaped wedges of gravel and aggregate and thereafter backfilling and
compacting the area with overburden or other suitable material prior to excavating the
next pie shaped area; provided, however, that in no event shall Surface Owner mine
within eighty (80) feet of any existing wellhead or fifty (50) feet of any production
facilities and provided further that in no event shall more than one eighth circle segment
of the pie shape be excavated at any one time. Excavation in the Oil and Gas Operations
Area will be coordinated with EnCana in a mutually acceptable manner so as to avoid
conflict with or interruption of EnCana's oil and gas operations and to ensure there is an
appropriate safety plan and interim procedures. Surface Owner will bear the costs
associated with the mining operation, including permanent or temporary rerouting and
replacement of access roads, and flowlines and utility lines in order to prevent
interruption of production from any affected well. In addition, Surface Owner and its
successor and assigns shall indemnify and hold EnCana harmless from any and all
damages, loss and liability, including attorney's fees incurred as a result of Surface
Owner's operations in an Oil and Gas Operations Area.
c. EnCana shall continue to have the right to drill more than one well with
attendant facilities within each of the Oil and Gas Operations Areas and to deepen,
recomplete or twin any well that is drilled, as well as to drill directional and horizontal
wells that produce from and drain the Property or lands other than the Property.
d. EnCana has the right to locate, build, repair and maintain tanks,
separators, dehydrators, compressors and all other associated oil and gas drilling and
production equipment and facilities only within the Oil and Gas Operations Areas.
e. Surface Owner shall not plat any surface property line within the Oil and
Gas Operations Areas; no temporary or permanent building, structure, or other
improvement shall be constructed or installed by Surface Owner within the Oil and Gas
Operations Areas. The Oil and Gas Operations Area shall be for the exclusive use of oil
and gas drilling and production operations.
f. Except for the pipeline and flowline easements, access and the Oil and
Gas Operations Areas identified in this Agreement, EnCana shall not use the surface of
the Property except in cases of emergencies.
2
2. Access to the Oil and Gas Operations Areas.
a. Access to each of the Oil and Gas Operations Areas shall be along the
routes depicted on Exhibit B.
b. Access to an Oil and Gas Operations Area may be changed by mutual
agreement of Surface Owner and EnCana; provided however, all costs and expenses of
such relocations shall be borne by the party which requests the relocation. EnCana shall
be assured of uninterrupted access to all the Oil and Gas Operations Areas and no such
access may be closed to EnCana until an acceptable replacement or alternate pipeline and
access route is available for use.
c. Surface Owner shall keep the portions of access roads jointly used by both
Surface Owner and its subdivision occupants and EnCana in good condition and repair
until such roads are dedicated to the local jurisdiction; provided, however, if EnCana
causes damage to a portion of a road that is jointly used by both EnCana and Surface
Owner or its subdivision occupants and which is constructed to the specifications in
section 2.e.(1), EnCana agrees to promptly repair any damage which it may cause which
is a direct result of its use of the road.
d. No party shall unreasonably interfere with the use by the other of an
access road.
e. Construction and Width of Access Roads.
(1) Access roads or portions of access roads that are jointly used by
EnCana and Surface Owner shall be thirty (30) feet or more in width and
Surface Owner shall construct or improve all paved or improved joint
access roads so as to withstand the weight of oilfield equipment.
Specifically, Surface Owner shall construct the roads so that they can be
used to withstand the weight of 104,000 pounds and 26,000 pounds per
axle.
(2) Access roads or portions of access roads that are used exclusively by
EnCana shall be thirty (30) feet or more in width and EnCana shall install
and maintain them to those state and local standards that apply to oil and
gas operations.
3. Pipelines, Flowlines and Pipeline Easements.
a. Pipeline easements shall be at the locations identified on Exhibit "B", and
pipelines shall be installed at depths of approximately forty-eight (48) inches below the
surface of the ground.
b. Locations of pipelines and pipeline easements may be changed by mutual
agreement of the parties; provided, however, all costs and expenses of such relocations
shall be borne by the party which requests the relocation. hi the event that Surface Owner
requests the relocation of a pipeline or flowline, EnCana shall provide Surface Owner
with a written estimate of the relocation costs which Surface Owner shall thereafter
promptly remit to EnCana. The payment shall be adjusted up or down upon completion
of the work and after an itemized statement is provided to Surface Owner.
3
c. Pipeline easements shall be fifty (50) feet in width during construction
activities and thirty (30) feet in width for all operations, maintenance and transportation
activities. Flowline easements shall be thirty (30) feet in Width for all operations.
d. Surface Owner shall be entitled to reserve the right to cross the pipeline
easement at approximately right angles, and Surface Owner shall also have the right to
install and maintain access to such easements for utility lines, including those for water,
gas, sewer, electric, telephone, cable, television and fiber optic and other pipelines that
travel along, but not within, the pipeline casements provided for herein; provided
however, i) any new underground facilities which travel along a pipeline easement
identified herein shall be located a distance horizontally of at least ten (10) feet from
parallel existing pipelines; ii) any new underground facilities shall have at least twenty-
four (24) inches of vertical clearance between such new facility and a pipeline provided
for herein; and iii) any overhead power lines shall be at least twenty (20) feet above the
ground. Surface Owner shall, in addition, pay EnCana all costs and expenses that EnCana
incurs to encase its pipelines and flowlines to the extent that such pipelines and flowlines
underlie any street or any other road either in advance of or at the time that Surface
Owner commences construction of any street and/or such other road, at the place where
the EnCana pipelines and flowlines intersect with any street or such other road.
e. Surface Owner shall grant the pipeline easements (for production from the
Property and/or other lands) to EnCana at the time EnCana requests them and at no cost
to EnCana.
f. Surface Owner shall maintain a minimum ground cover of 48 inches and
not more than 72 inches over pipelines and flowlines in the conduct of his operations and
its construction activities on the Property.
4. Subdivision Plat. Surface Owner shall identify the Oil and Gas Operations Areas
and all access and pipeline easements on its subdivision plats and in all applications for
development that it files with a local jurisdiction, and the plats shall include restrictions
that no property lines, and no temporary or permanent buildings, structures, or other
improvements shall be located, constructed or installed within the Oil and Gas Operations
Areas. Surface Owner shall record the subdivision plat in the Office of the Clerk and
Recorder of Weld County and provide written evidence to the Oil Companies within
fifteen (15) days of recording.
5. Waiver of Surface Damage Payments. Surface Owner hereby waives all surface
damage payments pursuant to any present or future Colorado Oil and Gas Conservation
Commission ("COGCC") rule or regulation or local regulation, state statute, common law
or prior agreement for each and every well and related wellsite that is drilled within an
Oil and Gas Operations Area and for each production facility and access and pipeline
easement. EnCana or its lessees or assignees may provide a copy of this Agreement to the
COGCC or to any local jurisdiction, person or entity or any court of law as evidence of
this waiver.
4
6. Waiver of Setbacks and Other Requirements. Surface Owner understands and
acknowledges that the COGCC has rules and regulations that apply to the distance
between a wellhead and public roads, production facilities, building units and surface
property lines, among other things. Surface Owner hereby waives all setback
requirements in COGCC Rule 603, or any successor rule or amendment to the COGCC
setback rules, and to any other state or local setback requirements, or other requirements
or regulations, that are or become inconsistent with this Agreement or that would prohibit
or interfere with the rights of EnCana or its lessees and assignees to explore for and
produce the oil and gas in accordance with this Agreement. Surface Owner understands,
and shall notify parties who purchase all or portions of the Property from Surface Owner,
that EnCana may cite the waiver in this section 6 in order to obtain a location requirement
exception or variance under COGCC rules or from a local jurisdiction.
7. Governmental Proceedings.
a. Surface Owner Will Not Object. Surface Owner agrees that it will not
object in any forum to the use by EnCana of the surface of the Property consistent with
this Agreement and hereby waives any such right to object. Surface Owner further agrees
that it will provide such other written approvals and waivers which are reasonably
requested by EnCana and consistent with this Agreement, including, but not limited to,
all approvals and waivers to drill a well or to conduct oil and gas operations on the
Property because of any law or regulation, including any local ordinance and regulations
of the COGCC, and including, for example, waivers to state and local setback
requirements and to any setback requirements from a surface property line or for an
exception location.
b. EnCana Will Not Object. EnCana agrees that it will not object in any
forum to a request by Surface Owner to annex, zone, rezone, plat or replat all or any
portion of the Property to the extent such request is consistent with this Agreement.
8. Notices of Hearings. Surface Owner shall provide EnCana with written notice not
less than thirty (30) days before each hearing for consideration of a plat application or
other land use application for the Property or portions of the Property that is to be held
before the County or other local jurisdiction.
9. Notice to Homeowners Builders and/or Future Sand and Gravel Mining Permit
Holders. Surface Owner shall furnish all builders, developers and Future Sand and
Gravel Mining Permit Holders which purchase all or any portion of the Property and each
person or entity who proposes to enter into a contract to purchase a lot which is adjacent
to or any part of which is within 350 feet from an Oil and Gas Operations Area or a
pipeline easement, with a plat that shows the locations of the Oil and Gas Operations
Areas, access routes, and pipeline easements. In addition, Surface Owner shall provide
written notice to all such purchasers that includes the following:
a. there may be ongoing oil and gas operations and production on the
surface of the Property within the Oil and Gas Operations Areas, pipeline
easements and access routes;
5
b. there are likely to be wells drilled and oil and gas production
facilities constructed and installed within the Oil and Gas Operations Areas and
flowlines and pipelines constructed and maintained on the Property;
c. heavy equipment will be used by EnCana from time to time for oil
and gas drilling and production operations and such operations may be conducted
on a 24-hour basis; and
d. homeowner associations and buyers of individual lots or homes will
be subject to and burdened by all of the covenants and waivers made by Surface
Owner in this Agreement, including, but not limited to those covenants and
waivers; i) prohibiting the location of any building, structure, or other
improvement within the Oil and Gas Operations Areas; ii) waiving objections to
the drilling of wells, the construction of facilities, and the conduct of oil and gas
operations on the Property consistent with this Agreement; and iii) waiving
objections to the setback requirements under the rules of the COGCC or any local
jurisdiction.
10. Notice of Oil and Gas Operations. EnCana shall provide Surface Owner with
notice of drilling operations and subsequent well operations in accordance with COGCC
rules and regulations.
11. Notice of Construction Activities by Surface Owner. Surface Owner shall
provide EnCana with thirty (30) days written notice prior to commencement of any dirt
work, grading or other surface construction activities they will be conducting on the
Property. If requested by EnCana, Surface Owner shall meet with EnCana representatives
at the Property to locate existing flowlines, gathering lines or pipelines and to coordinate
proposed surface construction activities with current and prospective oil and gas
operations.
12. Impact Mitigation.
a. EnCana Mitigation. EnCana agrees that it will install and maintain at its
sole cost and expense such fences, gates and locks around the wells and production
facilities as are required by the COGCC. Surface Owner may upgrade fences, gates and
locks at its expense and with the consent of EnCana, such consent not to be unreasonably
withheld, and provided that such fences, gates and locks comply with COGCC and local
regulations.
b. Surface Owner Mitigation. Surface Owner shall bear all costs and
expense to install such noise and visual impact mitigation measures it desires or the
County or other local jurisdiction requires at or around the Oil and Gas Operations Areas
which are in excess of or in addition to those measures which are required by COGCC
regulations for areas which are not high density; provided, however, EnCana shall have
reasonable discretion to veto or protest the types and locations of impact mitigation
measures in order to allow for safe oil and gas operations.
13. Authority to Execute Agreement. Each party represents that it has the full right
and authority to enter into this Agreement with respect to the surface rights or oil and gas
interests or oil and gas leasehold interests that it owns in the Property, as applicable.
6
14. No Waiver of Rights. EnCana does not waive the rights it has pursuant to its oil
and gas interests to explore for, drill and produce the oil and gas for the Property or for
ingress and egress to the Oil and Gas Operations Areas, except as specifically provided in
this Agreement.
15. Successors and Assigns. This Agreement and all of the covenants in it shall be
binding upon the personal representatives, heirs, successors and assigns of all of the
parties and the benefits of this Agreement shall inure to their personal representatives,
heirs, successors and assigns. This Agreement and all of the covenants in it shall be
covenants running with the land.
16. Recording. EnCana shall record a Memorandum of this Agreement with the
Clerk and Recorder of Weld County and provide evidence to Surface Owner of the
recording.
17. Governing Law. The validity, interpretation and performance of this Agreement
shall be governed and construed in accordance with the laws of the State of Colorado
without reference to its conflicts of laws provisions.
18. Severability. If any part of this Agreement is found to be in conflict with
applicable laws, such part shall be inoperative, null and void insofar as it conflicts with
such laws; however, the remainder of this Agreement shall be in full force and effect. In
the event that any part of this Agreement would otherwise be unenforceable or in conflict
with applicable laws due to the term or period for which such part is in effect, the term or
period for which such part of this Agreement shall be in effect shall be limited to the
longest period allowable which does not cause such part to be unenforceable or in
conflict with applicable laws.
19. Notices. Any notice or other communication required or permitted under this
Agreement shall be given in writing either by; i) personal delivery; ii) expedited delivery
service with proof of delivery; iii) United States mail, postage prepaid, and registered or
certified mail with return receipt requested; or iv) prepaid telecopy or fax, the receipt of
which shall be acknowledged, addressed as follows;
Surface Owner: Farfrumwurkin, L.L.L.P.
11811 Upham Street, Unit 12
Broomfield, Colorado, 80020
Attn: Jon File, Managing Partner
EnCana: EnCana Oil & Gas (USA) Inc.
Attention: DJ Land Department
370 l7`h Street, Suite 1700
Denver, Colorado 80202
Notices shall be effective upon receipt and any party may change an address by notice to
the other parties.
7
20. Incorporation of Exhibits. Exhibits A and B are incorporated into this Agreement
by this reference.
21. Entire Agreement. This Agreement sets forth the entire understanding among the
parties and supersedes any previous communications, representations or agreements,
whether oral or written. No change of any of the terms or conditions herein shall be valid
or binding on any party unless in writing and signed by an authorized representative of
each party.
22. Counterpart Executions. This Agreement may be executed in counterparts, each
of which shall be deemed an original.
IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to be
executed by a duly authorized representative, to be effective on the date and year first
above written.
FARFRUMWURIC1N L.L.L.P. ENCANA ENERGY RESOURCES
INC.
By: By:
Name: Name: Byron R. Gale
Its: its: Attorney-in-Fact
8
ACKNOWLEDGEMENTS
STATE OF COLORADO
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
, 2005, by Jon File individually and on behalf of Farfrumwurkin
L.L.L.P. as its Managing Partner.
My Commission expires:
Witness my hand and official seal.
Notary Public
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this day of
2005, by Byron R. Gale as Attorney-in-Fact for ENCANA
ENERGY RESOURCES INC., and he executed the within and foregoing instrument and
acknowledged the said instrument to be free and voluntary act and deed of said
corporation for the uses and purposes therein set forth.
IN WITNESS WHEROF, I have hereunto set my hand and affixed my official seal the
day and year first written above.
My Commission expires:
Witness my hand and official seal.
Notary Public
9
YOUNG LAW FIRM, L.L.C.
Attorneys at Law
November 16, 2004
Jon File
Farfrumwurkin, L.L.L.P.
11811 Upham St., Unit 12
Broomfield, Colorado 80020
Re: Drilling Rights and Future Oil Well Locations in the
NW '4, SW '/4 and SE 'A of Section 32 2N 68W
Dear Jon:
Per your request, I have reviewed the Oil and Gas Lease dated May 6, 1976
between Martin J. Freedman and Ray L. Nelson, as well as correspondence between
Farfrumwurkin, LLLP and EnCana Energy Resources, Inc. It is my understanding, based
on the correspondence and other materials, that EnCana is disputing your authority to
determine the placement of new wells,to be drilled on the subject property.
Pursuant to the lease, EnCana is entitled to drill on the surface of the land into the
~ spacing units (bottom hole locations) specified by OGCC rules and regulations, however,
their ability to do so is limited by the terms of the Oil and Gas Lease of 1976. Your lease
contains a unique provision found in Exhibit A, Section (b)(3) where it states that,
"Lessee is aware of the value of the surface of the land and agrees to, subject to the
spacing rules set out by governmental regulating agencies,contact Lessor for his
approval prior to drilling operations; said approval, however, shall not unreasonably be
withheld." This provision is clearly intended to keep the land available for use at its
highest and best use while permitting drilling in areas which do not affect or minimizes
the economic impact on the surrounding land.
This clause clearly references "spacing rules" and is not intended to address
surface locations. Therefore even though there may be five (5) surface locations in each
quarter section, this does not mean that the Lessee is allowed to drill a well in each
location at its discretion. Rather the Lessee may be allowed to drill a well into each
spacing unit from an area chosen by Lessor that does not diminish the value of the land
more than an amount equal to the royalties the mineral owners would receive.
The clause operates in a manner that requires the Lessee to first comply with the
spacing rules set out by governmental regulating agencies, and then Lessee is required to
obtain the Lessor's approval to drill on the land, which approval shall not be
unreasonably withheld. In other words,this clause prohibits the Lessee from simply
picking a spot to drill inside the drilling window and then seeking the land owners
1450 SOUTH HAVANA STREET I SUITE 412 I AURORA I COLORADO 180012
TELEPHONE: (303)309-3014 1 FACSIMILE: (303)309-3994
approval to drill there, but rather the Lessee is required to determine what the spacing
unit is and then obtain the land owners permission to drill on the subject area of land.
Given the above, and in my opinion, you, as the land owner, have the authority to
determine the location of any new well heads to be drilled on the property based on a
determination of the value of the land on which the well head is to be placed. Thus, if
EnCana proposed a well head on land which has a higher economic use when compared
to the value the land would have if used for drilling (essentially royalties), then you have
the right to determine the placement of the proposed well head within an area that will
minimize the economic impact the well would have on the value of the land. This
interpretation is consistent with the Lease, and in my opinion, you would be acting
reasonable in denying permission to drill in an area that has a higher and better use.
It is important to note that the Lease does not require that the Lessor provide the
most economically viable drilling site to the Lessee. Instead, the Lessee is required to
drill in areas that minimize the economic impact of the drilling operations on the land.
Further evidence to support this contention, and as shown by the performance of the lease
to date, the fact that all existing wells on the subject parcel located west of Weld County
Road 3 ''A were located in or next to wetland areas, with one being placed outside of the
drilling envelope clearly establishes the intent of the parties to the original lease was to
preserve the value of the land. Therefore, I believe that you are acting reasonable in
withholding certain drilling sites, based upon the determination that the land has a higher
and better use.
The land at issue is within your proposed development, indicating that the land
has a higher and better use than that of being simply an oil well site. Based on this fact
alone, I believe you are justified in denying access to the proposed well sites.
It is my understanding, however, that you desire to work with EnCana to allow
them to drill new wells provided these wells are located in such a manner as to minimize
the economic impact to your land and your development. Since EnCana already has two
existing wells located in the center of the quarter sections which you do not intend to
purchase, perhaps you could allow EnCana to directional drill the number of wells
allowed in each quarter section from the drilling window located in the center of the
quarter sections, keeping the rest of the property open for development. This would
allow EnCana to meet the requirements of Section (b) (3) and keep the intent of that
provision in tact.
Yours very truly,
7: 4._
James E. Young
1450 SOUTH HAVANA STREET[ SUITE 412 1 AURORA I COLORADO 180012
TELEPHONE: (303)309-3014 I FACSIMILE: (303)309-3994
�) yio g
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SR rtanucritS eel'AID UP 1688170/0 S, L. Sheht., Jr., Recoedt �' ...
1 U an.6.ao,No.2 Rae, No. ........ w
OIL AND GAS LEASE 3- 1
6th day of May .I .by and between :,
^ AGREEMENT.Matte and entrrrtl Into the }.
Ray_l Nelson and Margaret E, Nelson, his wife. —
i Route 1, Box 210 Erie Colorado ODS16 ,nenlnafrr riled teeear(whethr nor or mnrc)nd
t whose post office address n DewVa Co O de
1 Martin J. Freedman whose post ofnte address isd25_.Clntrelhan4 Rid trftnor ,nettFlnrr led Le•see,
0. Ten and More DOLLARS
WI TNESSE.t h.That the Lessor,for and In consideration of demised,
cash in hand ord.the receipt of which 1+hereby acknoe,lease and
nod the covenants and agreements hereinafter contained,has described.
with the
0 leased and let. and reclusive right for the by presents mining,esplorina by geophysical and other methods,andhe operating ki Lessee.the
producing otherefrom nil and-slices of
•
t— purposed, n
whatsoever nature or Flnd.with rights of way and easements for dune pipe lines,rid erection of structures thereon to produce.save and take care
Weld
te
co of said products.all al certain tract of land situated In the Counts'of
OD Colorado ,described as follows,to-wit:
NO state of
r-1
• SEE EXHIBIT "A" ATTACHED HERETO AND MADE PART HEREOF.
•
In
a
O
O and rnntalnint 256 more or less. Ont Year from May 6 1976 -
O ; Is>ater d :sea: this tzar. that: remain in ,n,-, ,., a .e.. -+ / $X_4 Ir.'!" !hit date sad as a thereaner as oil or gas of whatsoever
nature or kind is produced from said Masud premises or onn....pooled therewith,or drilling operations are continued as hereinafter provided.
ut
If,at the t•hen enga of the primary lrmnrhl this
^pfratlon oil
+thereon,Inn l being
h s leartishallced ,contin leased
ue{n 1 race+o hint if s or on rprrael +are heine contlnu'
Jesse secat ed on t In drilling a re-working and orations shall he considered to be continuously prosecuted if not
a more
ee ninety e on the leased•slh emew'• er on na pooled therewith, ore
than it of days+nail a Pox between the said a o or enrage pooled therewith.the produ the ction(thereof shong of uldatease s for the
from aniy usf e
•"t aft eohe p well. to•fret discovery eshall l no or tan on land or n acreage
r't subsequent
the ssa'inn of yproductionN om date terminateo if Lessee
ton of dry hocea additional adrilling
1 tl Ise remarking
and prodc within aIrwltlnf ssuch sopera-
* date or sew
• d tine at or.der the expiration or ce the primary term of this h•r•this lease shall continue in torte s+long moil ore gas d prodvrta from the leased
p, opera-
* premise+raT on acreage pooled therewith.
ept as other-
2. This d a 0, cP LEASE. In rag Unuc Uan of the down rash operations during the primary term. Lure move at any timertlmes bP sdurint orgated.e after the pri-
mr provided herein. hi rpmmcocad or r• any
se term surrender Nu lease ns to all or any portion of via land and a to any strata or......m be delivering lessor or by filing for record ep a
• release or releases.and be relieved of all obligation thereafter acovine as to the acreage surrendered.
2. In nmdderatfon of the premises the rid Lessee covenants and agrees:
•
t 1•t.To deliver to the credit,.I lessor.free of cost.in she pipe line to which Let,ee may connect wells on said land,the equal rave-eighth
II Oil Part of all oil produced and saved from the leased premises. ace ss
god.To pay Lessor one-eighth li/el of the troll proceed*each rear.payable nuarter P.for the gat.from each well where gas only is
a sed oil the premise'. and if used in the manufacture of gasoline a e valty of one-eighth 11/e),payable
• bona, while the same prevailing shin[ u
its.t theteorfr market rate for gas,
• monthly oyal Td. Par tenor on gas produced prod from env cod writ and used off the premise'or in tth manufactureil of ga rate or env other product
a royalty r col one-eighth ale tlei e proceeds,ci g is mouth..1 or mar •t the prevailing market rate
.. Where gas from royalty a well capable of producing der.gas is not sold or used,Lessee h may pay or tender th royalty to thedateo royalty owners one
o e erimier nsuing after the per net
f 90 days frod m the dateesucheh payment or tender well Is Our in and thereafter on or before e on or before he anniversary a date of this haw during the
• cod such well is shut In. If such payment or tender is made,it will be considered that gas Is being produced within the mewling of this lease.
pots S. If said Lessor owns• less interest in the above described land than the entire and undivided lee
ehimch leroa Lessor'se estate
therrein.ilivn n bears tothe
royalties
(including ray shot-in gas r^yalty)herein provided for shall be paid the Lessor only m the pro w
acid undivided fee. onnn,except water from
• h. lesser shall have the eight to use,free of cost,gas.oil and water produced raid land for Lessee's operation the ten
the sr-lb.-4 hen ur-
requested by Led_'. el
T. When see shall bury Lessee's pipe line below plow depth.
A. No well 0 snail be drilled nearer than 200 feet to the hex or barn now on r+d premises w-nh.mp written consent of Lew.._
9. bear shall pay for damages caused by Leasers operations to growing crops on said land. _.
sag. le+we shall have the right at any time to remove all machinery and fixtures placed on said premise•, including the nil draw and
re a I canna.
I. The rights of Lessor and Leaser hereunder may be assigned in whole or part. No change in ownership of Lessor's ir.terest Ibs assignment
I or otherwise)shall be binding on hewer until Lessee has been furnished with notice.consisting of certified copies of all recorded instruments
or
documents and other information necessary to establish a compile dam of record title from Lessor.and then only tun'ilith it a to l ymen
sh s
thereaft-r made. No other kind of notice,whether actual or constructive.shall be binding on Lessee. No or
Lessor's
• erip as to dillrent portions or parcels of said land shall operate to enlarge the obligations or diminish the rights of Lessee,and all Lessee's •
s
rations may be conducted without retard to• y such division. If all or nv part of this lea.is assigned.no leasehold owner than be liable fur
a^ ^
• ♦no . ler,a of any oion. s hereb given to - s a recvrr
12. I, •r t.at its onon,is herebyco the right rut power at any time and from or time a +rat pL eitherunitize
It ze or altePror
•n to all m any Dot of the Land described herein awl as to any one le more of the formations herelaity sdrt,to pool or sin the i gse-
• oe s estate and the d estate covered this I bear with other It lease ce iris ior the immediatet vicinity ire the irrespective
production of oil and gas,
sea.....ly for thewithproduction Teepee(
of either.when In ,lease Judgment It is Likewise.eceansrY re advisablevfo lu d i cod derma ti n col whHhar•nm^li lr
simgas,mar ty et r fortetomince to n n Diner cing,sort ti Mare, fongorunits previously of any undit
to shall bbe formations not Lessee eedag oil or
and filing id yrecirdta de exclude claration of non-producing u,lttl atioafor r reformation,which whichadeclaration(shall describes th unit.
accomplishedAny u may include land upon l
which • well has theretofore been cc-mottled or upon which operations for drilling have theretofore been commenced. Production.drilling or re-
working operations nr•well shut in for want of a market anywhere on a unit which includes all or a part of thta kale shall be treated as 1f it were in for want ol a fled,Including(shut-in sea royalti s of es. Lessor shall receive p market de lieu
of the royalties elsewhere herein sped-
production from the unit so pooled royaltroyaltiesiy on on the portion of such produt ktn• •Ilocated to this Mose:such allocation shall be that proportion of the unit production that the total number of surface acres covered by this tear
and included in the unit bears to the total number of surface acres in such unit. In addition to the foregoing,Lesser shall have the right to sodUse.
f the pool.or
enterring int or any a prativethe above or lan of des elopment ndssato or one peration more approved b formations ny R vermenW lh other a thorityands nd.In
t the ie general
me to time, -
with like approval. to modify.change or terminate any such plan or agreement nd,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 deweopment or •
operation and,particularly,all drilling and development requirements of this least,express or implied,shall be satisfied by compliance with the
defiling and development requirements of such plan or agreement.and this lease shall not terminate or metre during the life of such plan or agree-
n ment. In the event that said above described lands or any pan thereof,shall herealsee be operated under any such cooperativethen the produc-
tion taof
developmnt or operation whereby the production therefrom r allocated to different portions of the land covered by mid plan,
al:acated to any particular tract of land shall,for the purpose of computing the royalties to be paid hereunder to Lessor,be retarded as having
been produced from the particular tract of land to which It it allocated and not to my other tract of land:end the royalty payments to he made
hereunder so tensor shall be based upon production only as so allocated. Lessor shall formally eapiese Lessor's consent to any cooperative or unit
ental y plan of I I eMI 1 epress we implied operation adopted cevenanta of this leasead s all be subject to all Fedeproved by any r l and StatecLaws.Executive g the same upon request of Orden,Rules or egulatop•�nd
this lease shall not be terminated.in whole or Its part,nor Lease held liable in damages,for failure to comply therewith,if compliance is prevented
by.of if such!Allure is the result of,any rich Law,Order.Rule or Regulation,
- 14. Lessee hereby wanann and agrees to defend the title to the lands herein described,and agrees that the lessee shall have the right at any
time to redeem for Lesson bl Payment,any mortgages, taxes or otter hens on the Suave dscnbed land..in the red of*tetra of payment by
Leanne and be subrogated to the rights of the holder thereof,and the undersigned Lesson,for themselves and their helm r+ceet on and aaigras,
hereby surrender and release all right of dower and homestead In the presorts described herein.insofar as said right of dower and homestead may
In ray way affect the purposes for which this lease Is made.at recited herein.
IS. Should any one or more of the parties hereinabove named as Lessor fail to execute this lease,it shall nevertheless be binding upon all
such parties who do execute it as Leiner. The word''Lessor:'as used in this lease,shall mean any one or more or all of the parties who execute
this lease as Lessor. All the provisions of this lease shall be binding on the heirs.successors and animas of Lefler and Lewes,
IN WITNESS WHEREOF,this instrument bexecutedaa of the date first above written,
..),/{
, 1 le -. .TI. ')Jc 3lL ,,1' 2
. , w 3`i -3 /Lc 11
41
1688170 •
66 J-3
• ,�� EXHIBIT "A"
Ray L. Nelson, et ux
i , P. Description:
,I I - Tewnshi 2 North Ran e 68 West Weld Count Colorado
Section 31: ERNE, lying 5 & C of RR ROW, containing 2 acres, morn or
I less. , 44 ac TC9,
. ,1 Section 32: 5W;; WOW; lying 5 & C or RR ROW containing
more or less; N}5E} except beginning at E } cornet of
section, then S along centerline
89D 866 4',
a of section
•Lhen
then 5 25D 4619 C 1460.8', then
,. N OD ASM W 1306.0' to P08.
< - - n, Notwithstanding anything to the contrary contained ae herein, the following •
pr _
- - provisions are agreed to by both lessor a d
~� - 1. All Royalthereby y previsions of "one—eighth (1/0)^ contained herein,
' aro hereby amended to be "fifteen per cent (15%)".
j .
.t . - I 3. Losses is aware of the value of t`ee sue acecifgsurface of ttellahe ndeandut by ..
e,l agrees to, subject to conforming
governmental regulating agencies, contact Lessor for his approval .,,
prior to drilling operations; said approval, however, shall not
r• to tank
unreasonably be wltnneld. This provision shall also apply
battery sites and pipeline right—of—ways.
t may be
• 1 A. No drilling operations (or completions thereof)Nmayaberoncf conducted upon •
' the surface of the land from March let through �T.
' .- year without the written consent of Lasso r.
1
I •
Signed for Identification:
} itr 11� f�•
Ray L. elson
1 .,� Margaret No
` s +
• ,0 r
i
•
•
•
_. . a. . .*+r.
4.
l• 60V1IO
s •
- 41.
G6
• •
i - EXHIBIT "R"
Ray L. Nelson, et ux
: s
P. Description:
ald t.t . •
Tovnshi . 2 North C,lan o ly lying hot tofNRB now,n contain ingd2 acres, more or
I
-i Section 31: C.N'
loss.
• Section 32: So or lying 518 exceptpR ROW,beginningn at i ESI corner of
y more on less; WO al,
•'; section, then W along centerline of section 1484.5•,
then 5 250 46M E 1460.8', then N 890 22M E 866.4', then
N 00 45M W 1306.0' to POB.•4 •
.......• P. Notwithstanding anything to the contrary contained herein, the following
. provisions aro agreed to by both Lessor and Losses:
•. contained herein,
1. All Royalty provisions of "ono—eightn (1/8)" •
aro horeby amended to be "fifteen per cent (15%)".
,
4I 3. Lease is aware or the value of the surface of the land and •
agrees to, subject to conforming to the spacing rules set out by .
governmental regulating agencies, contact Lessor for his approval to
'j - prior to drilling operations= said approval, however, shall not
9 unreasonably be withneld. This provision shall also apply
f
1 _ battery sites and pipeline right—of—ways.
1 4. No drilling operations (or completions thereof) may be conducted upon
the surface of the land from March lot through November 1st of any •.� .
year without the written consent of Lessor.
( •
Signed for Identific�tlon:
, le '
T
f l 7 • / c .C•� ..
Ray
, �L..�{Jolson
Margaret Nelson'
a
•r I
•
.. .
YOUNG LAW FIRM, L.L.C.
Attorneys at Law
January 5, 2005
Jon File
Farfrumwurkin, L.L.L.P.
11811 Upham Street. Unit 12
Broomfield, Colorado 80020
Via Facsimile: (303) 404-0778; Original to Follow Via U.S. Mail
Re: EnCana Oil & Gas, Inc.
Surface Damage Agreement
Dear Jon:
I am writing to address your concerns regarding statements made by Mike Tucker
from EnCana regarding the interpretation of the Surface Damage Agreement.
Specifically, you asked me to review the Surface Damage Agreement and address
assertions made by Mr. Tucker regarding the scope of the no contest clause pertaining to
future development of your properties.
I have reviewed the Surface Damage Agreement in light of Mr. Tucker's
comments that EnCana is only prohibited from objecting to development on LANDS as
that term is defined in the Surface Damage Agreement, and I disagree. Based on my
review, it is my opinion that EnCana is prohibited from objecting to any development of
property which is subject to the original Oil and Gas leases under which EnCana is
operating.
When EnCana clearly defined the land subject to the agreement, and indicated
that further reference to the land subject to the agreement would be identified as the term
"LANDS." Thus, in order for Mr. Tucker's interpretation to be correct, the term LANDS
must appear within the prohibition on objecting to development contained in
subparagraph E (A). The term LANDS, however, is not used in this subparagraph as
defining which property EnCana is prohibited from objecting to future development on.
A reading of the subparagraph at issue evidences the intent of EnCana, to not
contest"the development of the properties covered under the original lease." This
language is clear, unambiguous, and easily distinguishable from the term "LANDS" as
used in the Surface Damage Agreement. Moreover, the fact that the term LANDS is used
in the preface to subparagraph E (A), it evidences the intent that the parties agreed to
extend the non-contest clause to property other than the land subject to the Surface
Damage Agreement.
1450 SOU rHI HAVANA STREET I SUITE 412 I AURORA I COLORADO 180012
TELEPHONE: (303)309-3014 I FACSIMILE: (303) 309-3994
In short, subparagraph E (A) prohibits EnCana from contesting development not
only on the LANDS as defined in the Surface Damage Agreement, but also from
contesting development on all other property not within the term LANDS as defined in
the Surface Damage Agreement, but which is included in and subject to the original Oil
and Gas Lease. Please call me if you have any questions.
Yours very truly,
James E. Young
1450 Sou ni HAVANA S[REEF SUITE 412 I AURORA I COLORADO 180012
TELEPI IONE: (303) 309-30141 FACSIMILE: (303)309-3994
LAND AD-11N 72O9563 J35 Li.iS:�.w Knee icgn �. •rum
Act 3 0 3 �rc7
`/ sboe3
SURFACE DAMAGE AGREEMENT
THIS AGREEMENT,dated effectively this 18th day of March 2003 is made
by and between the undersigned,FARFRUMWURRIN,LLLP,a Colorado Limited
Liability Limited Partnership,whose address is 11811 Upham Street#I2 Broomfield,
CO 80020,herein called"OWNER"and EnCana Energy Resources Inc.,950-17t
Street,Suite 26(10 Denver,Colorado 80202,herein called"EnCana";
WHEREAS,OWNER represents that they are the surface owners and in
possession of an interest in part or all of the surface estate for the following described
lands in Weld County,Colorado,said land herein called"LANDS",to wit:
Township 2 North Rattle 68 West,6th P.M.
Section 32:SWNW
WHEREAS,EnCana has or will acquire certain leasehold interests in the oil and
gas mineral estate in the LANDS and proposes to conduct drilling and subsequent
production operations on the LANDS;and
WHEREAS,OWNER and EnCana desire to minimize any surface damage to the
LANDS and to reach an agreement regarding such surface damage.
NOW,THEREFORE,in consideration of ten dollars and other valuable
consideration,the sufficiency of which is hereby acknowledged,the parties agree as
follows:
I. Prior to commencement of drilling operations,EnCana shall pay OWNER the
following sum as full settlement and satisfaction of all damages growing out of,incident
to,or in connection with the usual and customary exploration,drilling and completion
operations,unless otherwise specifically provided herein:
Two Thousand Five Hundred Dollars($2,500.00)for the wellsite located on the
LANDS in which OWNER owns the surface estate,together with any lands used for
roads purposes,pipelines and(towlines in connection with the welisite.
If,by reason directly resulting from the operation of EnCana,there is damage to
crops,real or personal property upon the LANDS which is not associated with the usual
and customary drilling operations,such as(but not limited to)damage to livestock,
structures,buildings,fences,culverts,cement ditches,irrigation systems,and natural
water ways,such damage will be repaired or replaced by EnCana,or EnCana will pay
reasonable compensation to OWNER for such additional damage.
D. If requested by OWNER,prior to heavy equipment operations on each
wellsite,EnCana's representative will meet and consult with OWNER(or
OWNER's representative)as to the location of the wellsite,access roads,
and flowline.
E. In conducting operations on the LANDS.EnCana shall:
A. Limit the size of each wetlsite to approximately 375 feet by 350 feet
during the original drilling and completion operations and shall limit
the future site to be no more than 1/8 acre during other periods.The
existing access road will be used for the drilling operations and
permanent access until OWNER has constructed new roads for _:._f,1r�'-�
future lakes and subdivisions(which EnCana agrees not ' "-� :::;arc
i� b1A 'HL\:.
development of the Properties covered under the original ';� O
EnCana shall have the right to access their wellsite over - road
t.
which shall be a minimum of 30 feet in width. ;1
1 Bl
coy-
.
Nelson 1232)Well
Page 2
B.Separate the top soil at the time of excavation of pits so that the top soil and
subsurface soil may be placed back in proper order as nearly as possible.
C. Reclaim the wellsite as nearly as practicable to its original condition and if the
locations are in pasture,reseed the location with native grasses.Weather permitting;
reclamation operations shall be completed within three months following drilling and
subsequent related operations,unless EnCana and OWNER mutually agree to
postponement because of crop or other considerations.
D. Use its best efforts to keep the well site free of weeds and debris.
4. OWNER agrees to waive the minimum thirty-day written notice requirement
described in the Notice Letter provided by EnCana to OWNER when it initially gave
notice of its intent to drill on the LANDS.
5. When the word"EnCana"is used in this Agreement,it shall also mean the
successors and assigns of EnCana Energy Resources Inc.,including but not limited to Rs
employees and officers,agents,affiliates,contractors.subcontractors and/or purchasers.
6. This agreement shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties.
OWNER agrees to waive any tinting restrictions to drill this well contained in
any of the original vesting oil and gas leases.
AGREED TO AND ACCEPTED AS OF TILE DATE FIRST WRITTEN ABOVE.
OWNER: $TATF I_..+ . DU
rr+i
• ^ < , }
FARFRUMWURKIN,LLLP �
� � t
pT �
� R'•.,
P.0 wane%
thy appeared be = maim 'FtE
Jo/File,Managing Partner • otitis:. instrument,Taz ID.Number )exec WM.
G k
ENCANA ENERG RESOURCES INC.
By: _
mool N�r.
Page 1 of 1
Subj: FW:
Date: 2/17/05 2:37:47 PM Mountain Standard Time
From: Mike.Tucker@encana.com
To: BOWLITZ@aol.com
File: Document.pdf (195735 bytes) DL Time (28800 bps): <2 minutes
,Sent from the Internet(Details)
Jon,
Attached is a rough platting of pad sites within the two areas we have
been discussing as operations areas. Give me a call when you receive
these and we will discuss.
Thanks,
MLT
Original Message
Q71)
From: Tucker, Mike
Sent: Thursday, February 17, 2005 2:33 PM
To: Tucker, Mike
Subject:
•
Thursday, February 17, 2005 America Online: BOWLITZ
_ r
y ? 150' radius from wells
Low Density Boundry
350' radius from existing well
High Density Boundry
\ nks
Blown up view of the
SW 1/4 Battery site Wells 50' ma
x• Apart `
1
Structure Location Ar-a
150' x 200'
rx
x 150 radio from existing well
Low sity Soundry
x 350 radius from existing well
High Density
75Co terSif
sigh Noir xxx
xx
Structure Local roe �,/
X X 150 x 700' 6 �/L/�`
X // p�
Structure Location Ar:r 1�(. i)-7//c_ .y^
150'x700' FARFRUMWURKIN LLLP
11811 Upham St. # 12
Broomfield Co 80020
contact Jon P. File
Section 32 2N 68W
iti V`" ...pi-- ,A'
'!�3�" `,•(� ' Structure Location Ar
, ,., 1' ii' #+.,t f, r,. 150' x 200'
a x G •
V •ai # •
. .
, 'r1>•„A "'..�! l3-2- ♦ 1-i.., .ititt
1 4 ir���!,,jy( .f u ¢� t
,.
a -J� � it � ��l��� ib.Y���
byy ., t �'..:;L
T'� S Z .-! a .}
t)'' ' (11)
iM.. aH;�• it-u'1 . .
' y, J(� a f
J.La arC rnrra. ' rO '.4 i'
a i' + X 1 S from nd'Ong well
ilf
X 1s0'polp Iron exlsOn vx.0 rat'44 High Density eoi •ry
liri i� F°
ktf :' ►
' t :�" y ' 1 Struewre Loa
rRk !�l *F ? { F 151'x200'
!0.::t: ' f. _• v
Structure Locs on
!wax zoos71-1 FARFRUMWURKII
X
11811 Upham St. #
/ iti Broomfield Co 801
contact Jon P. FllE
Section 32 2N 68V
,,, 124 ,1A,
1-7 16 s-
J
UPDATED LIST OF MINERAL OWNERS AND MINERAL LESSEES
(Filly Ridge)
Subject Property:
Township 2 North, Range 68 West. 6th P.M., Weld County. CO
Section 32: SW%,
Crews &Zeren, LLC, a mineral title company, states that to the best of its knowledge the
following is a true and accurate list of the names and addresses of the mineral owners and mineral
leasehold owners having an interest in the Subject Property, based upon the real property records
of Weld County, Colorado, as verified through February 20, 2005. A photocopy or facsimile of this
list shall for all purposes be a valid as the original hereof.
Dated this 1st day of March, 2005.
CREWS & ZEREN
By: William G. Crews, CPL
Certified Professional Landman #3477
Mineral Owners Mineral Leasehold Owners:
Farfrumwurkin, LLLP Encana Energy Resources Inc.
11811 Upham Street, #12 950 17th Street, Ste. 2600
Broomfield, CO 80020 Denver, CO 80202
Rancho Partnership Ltd.
1600 Stout Street, Ste. 750
Denver, CO 80202
Cheyenne Oil Properties
107 N. 4th Street, Ste. 209
Ponca City, OK 74601-4528
Texas Tea of Colorado, LLC
1355 So. Boulder Rd., #F-187
Louisville, CO 80027
Crews de Zeren,LLC
Mineral Title Services
P.O. Box336337 (970)351-0733
Greeley, CO 80633-0606 Page 1 of 1 Fax(970)351-0867
CREWS & ZEREN, LLC
Petroleum Land Consultants
March P.O. Box 336337
2, 2005
Greeley, CO 80633
(970) 351-0733
Jon File Fax (303)484-2110
Farfrumwurkin, LLLP info@crews-zeren.com
11811 Upham Street, #12
Broomfield, CO 80020
Re: Mineral Lessees
SW'A-32-2n-68w
Dear Mr. File:
This letter is to clarify the leasehold status of the referenced property. As you will note
on the Updated List of Mineral Owners and Mineral Lessees for this parcel, Encana
Energy Resources Inc.; Rancho Partnership Ltd.; Cheyenne Oil Properties and Texas
Tea of Colorado, LLC are all shown as leasehold owners.
Encana operates the deeper wells on the property, and Texas Tea operates the shallow
wells. Cheyenne Oil and Rancho are non-operating working interest owners, which
means that they have designated the two operators as having authority to make all
operating decisions on their behalf. Under these circumstances, if Rancho or Cheyenne
wish to drill other wells, they must act through Encana or Texas Tea.
Please let me know if the above does not adequately address the leasehold ownership.
Cordially,
William G. Crews, CPL
enclosure - updated mineral ownership list
WGC/mm
fc: Peter Wayland - Weiland, Inc.
SEP-30-2004 11:d4AAi FROM-WEILAND INC
3034360953 T-290 P 001/002 F-135
LIST OF MINERAL OWNERS AND MINERAL LESSEES
(Schell)
Subject Property:
Township 2 North, Range 68 West,6''P.M.
Sections 31: Lots A and B of Recorded Exemption No. 1467-31-4-RE1775, being a part of the
SE'/.
Minco LLC, a mineral title company, states that to the best of its knowledge the following
is a true and accurate list of the names and addresses of the mineral owners and mineral
leasehold owners having an interest in the Subject Property,based upon the real property
records of Weld County,Colorado, as same were verified at September 10, 2004. A facsimile or
photocopy of this list shall,for all purposes, be as valid as the original hereof
Dated this 17*day of September, 2004.
MINCCOO LW
By:William G. Crews, CPL
Certified Professional Landman#3477
Mineral Owners: Mineral Leasehold Owners:
✓Jack Hein and Ruth G. Hein /Kerr-McGee Rocky Mountain Corp.
Rt. 2, Box 219 1999 Broadway, Suite 3600
Erie, CO Denver,CO 80202
(Last known address at 1972)
,}Patina Oil& Gas Corporation
/Kenneth L. Schell and Judith Ann Schell 1625 Broadway, Suite 2000
`r7 833 Cola State Highway 52 Denver, CO 80202
Erie, CO 80516
94TincoLGC
(ineraP it(eServices
P.O. Bo x336337 (970)351-0733
Gentry, CO 80633-0606 Pagel of 1 Tat(970)351-0867
BOCC Exhibit F
contains 2 sheets of oversized maps
File Gravel Pit Special Review
(Mining Operation) Application
Extraction Plan Map
and Special Review Plat Map
Please see original file
Page 1 of 4
Carol Harding
From: Gregory Balmes [balmesco@msn.com] ,: s' !
Sent: Tuesday, May 17, 2005 12:27 PM EXHIBIT
To: Carol Harding I_
Subject: Docket#: 2005-37 U
U5l2 1 8
May 17, 2005
To: The Weld County Board of Commissioners
From : The Homeowners of Centennial Ponds and Reflection Bay
Re: Docket #: 2005-37 Permit # M-2003-045 & M-2003-060
To whom it may concern :
We would like to strongly object to the proposed issuance of another
mine permit to be located on WCR 3.25 just north of Hwy. 52 to a Mr.
John File, better known as FARFRUMWURKIN.
We have put up with a pile of dirt from one mine by Lafarge, at the
southeast corner of CR 3.25 and 16.5 for over 3 1/2 years and it is not
done yet. We were promised 6 months. CR CR 3.25 has just been
repaved and we find it most appalling to just get our road back and now
find there is a possibility that we may not be able to use it again due to
this new mine.
We also have active mining north of 16.5 and CR 3.25 with a new mine
right on 16.5. And we now have a large pile of dirt ( 1 mile long and
15'-20' high just being a big dust blower)
The truck traffic is supposed to be routed onto CR 3.25 then onto Hwy.
52. Due to the volume of traffic on Hwy. 52 already, any trucks
attempting to make a left hand turn onto Hwy. 52 will all but close
down current residence use of CR 3.25 to the south. We understand
that it is common practice for the petitioner to pay for their own traffic
study. But the traffic study done is seriously flawed and incomplete.
Westbound traffic on Highway 52 crests a hill approximately 1,200 feet
east of CR 3.25. At 50 mph it takes approximately 15 seconds for traffic
to reach 3.25. At 60 mph it is closer to 12 seconds. This time frame
5/17/2005
Page 2 of 4
barely allows enough time for a passenger vehicle to get to the
acceleration lane, let alone an 80,000 pound semi trying to start off
from a dead stop going uphill.
It seems to us that the decision to grant this permit has already been
made as the road has been widened at Hwy. 52 and CR 3.25 and an
acceleration lane added for eastbound traffic turning off of CR 3.25.
This is not your first encounter with the applicant nor will it probably be
your last so please bear with us on this next statement. Without
permission or permit, dirt work for a subdivision was started and
completed on an agricultural parcel of this property. The subdivision
request was denied and now the owner of this property wants to mine it
to recoup his costs. Then he plans to sell storage rights for water for the
40' hole he will create by mining this property and then try to get a
Town to annex the property for homes.
The applicant has constructed a building that looks as if it is to be used
as a machine storage facility and appears to have worked on his septic
leach field, according to the county without the benefit of a permit. And
,-. if you really want to see where your signs are announcing your meeting,
you will have to look behind the fence posts and gate that it is hidden
behind to see it.
We also would like to say that we live within 500 feet of this proposed
mine and have never been notified of a meeting about this from the
County. And we find it objectionable that is approved to advertise in the
Fort Lupton Press, instead of the Erie Review or the Longmont Daily
Times Call. It just seems that people don't want us to really know what
is going on.
We understand that a landowner has certain rights as to use of their
land, however, this land was purchased as a farm. He has the right to
farm this land and we fully support his right to do that. We would not
object to a subdivision. But to be able to disrupt our quality of life and
damage the value of our property with a mine for 6 years, to that we do
object.
What about our rights? Our rights to use roads we are taxed for. Our
rights to the country setting we paid for. Bear in mind that we are not
complaining about things that were here before we were. We are
5/17/2005
Page 3 of 4
complaining about things that are happening now, after we have moved
in. Things that will effect our lives negatively and not positively. Our
rights to clean air and being able to sleep until a reasonable hour.
We could see this mine happening if we were in short supply of
aggregate. If it was for the good of everyone involved, instead of just
one entity. But when we put the rights to make money over the rights
of people, we are making a mistake.
We ask if the applicant will be doing the mining himself or if someone
like LaFarge will be doing the mining? What is his expertise in operating
a mine and what is his record of reclaiming property?
There is a solution that LaFarge is using that we would like to see
explored. To the west of this proposed mine is one operated by Asphalt
Specialties, if a deal could be reached for them to mine this property
and belt transport the material to their site to the west, then the truck
traffic would be routed onto Hwy. 52 with no impact to residential
properties.
Also, we will be asking the Assessor to re-evaluate our taxes due to the
damage that is being done to our road access and to our rural setting.
For the life of us, we cannot understand that when a farm is removed
from production and becomes a mine, why it is still taxed as "ag"
property. Is it not a commercial operation and should be taxed as thus?
This is what we are asking for:
1) No trucks can leave the yard between the hours of 7:00 am and
8:00 am.
2) The hours of operation are to be from 6:00 am to 6:00 pm, Monday
- Friday.
3) That the permit is for a period of 5 years and is not renewable.
4) That at the end of 5 years the property must be reclaimed with no
stored piles of dirt or
aggregate.
5/17/2005
Page 4 of 4
5) That the aggregate must be mined in sections until the aggregate in
that section is exhausted.
Then that section must be reclaimed before the next section is
actively mined.
Please bear in mind that this project can be done in 3 years or less. It
is our opinion that the applicants choose not to use sufficient resources
of men, money or equipment to get this done. There is no reason that
someone like a LaFarge could not do it and we see no reason that this
applicant cannot do the same.
Thank you for your time in listening to our concerns.
Respectfully,
The Homeowners of Centennial Ponds and Reflection Bay
5/17/2005
BOARD OF COUNTY COMMISSIONERS' SIGN POSTING
CERTIFICATE
THE LAST DAY TO POST THE SIGN IS (72A f) 16 THE SIGN SHALL BE
POSTED ADJACENT TO AND VISIBLE FROM A PUBLICALLY MAINTAINED ROAD RIGHT-
OF-WAY. IN THE EVENT THE PROPERTY BEING CONSIDERED FOR A SPECIAL REVIEW
IS NOT ADJACENT TO A PUBLICALLY MAINTAINED ROAD RIGHT-OF-WAY, THE
DEPARTMENT OF PLANNING SERVICES SHALL POST ONE SIGN IN THE MOST
PROMINENT PLACE ON THE PROPERTY AND POST A SECOND SIGN AT THE POINT AT
WHICH THE DRIVEWAY (ACCESS DRIVE) INTERSECTS A PUBLICALLY MAINTAINED
ROAD RIGHT-OF-WAY.
I, Jacqueline Hatch, HEREBY CERTIFY UNDER P LTIES OF PERJURY THAT THE SIGN
WAS POSTED ON THE PROPERTY AT LEAST EN/ DAYS BEFORE THE BOARD
OF COMMISSIONERS HEARING FOR t`;S -( y `D IN THE AGRICULTURAL
ZONE DISTRICT.
p" c 6CL)C L./k/' 4 rz if
Jacqueline Hatch
Signature of Person Posting Sign
STATE OF COLORADO
) ss.
COUNTY OF WELD
The foregoing instrument was subscribed and sworn to me this< ? day of , 2005.
WITNESS my hand and official seal.
4J ( J 1(2/4
Notary Public BILLIE J. MOORE
NOTARY PUBLIC
�/ jay,,t STATE OF COLORADO
/ / � i
My Commission Expires:
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