HomeMy WebLinkAbout800579.tiff RESOLUTION
RE: AUTHORIZATION FOR CHAIRMAN TO SIGN RATIFICATION AND JOINER -
THE MARLIN OIL COMPANY
WHEREAS, the Board of County Commissioners of Weld County,
Colorado, pursuant to Colorado statute and the Weld County Home
Rule Charter, is vested with the authority of administering the
affairs of Weld County, Colorado, and
WHEREAS, a ratification and joiner of The Marlin Oil
Company has been presented to the Board of County Commissioners
of Weld County, Colorado, and
WHEREAS, the Board has studied said ratification and
joiner and deems it advisable to authorize the Chairman of
said Board to sign the same.
NOW, THEREFORE, BE IT RESOLVED by the Board of County Com-
missioners of Weld County, Colorado that the Chairman of said
Board be, and hereby is, authorized to sign the ratification
and joiner of The Marlin Oil Company.
The above and foregoing Resolution was, on motion duly made
and seconded, adopted by the following vote on the 4th day of
February, A.D. , 1980.
BOARD OF COUNTY COMMISSIONERS
WELD COUNTY, COLORADO
(Aye)
C. . irby, C irman
Pa. .P• ex (Aye)
Leonard L. Roe, Pro-Tem
(Aye)
Norman Carlson
(Aye)
L Dunbar / r
• G __ Aye)
it 1/4%1 t4 e K. teinmark
ATTEST: 2
t ?tc s'r� r • w.,
tea.,' :.6-_x: �✓'���'t�
Weld County lerk and Recorder
and--E erk to the Board
B � Deputy Coun C erk
APPROVED AS TO FORM:
County Attorney
800579
/ LE-6Of DATE PRESENTED: FEBRUARY 6, 1980
/ /, //(O i c r.r.SZ.(', _ a
RATIFICATION AND JOINDER
In consideration of the execution of the Unit Agreement
and Plan of Unitization For the Development and Operation
of the New Windsor Field (Secondary Recovery) Unit Area,
Weld County, State of Colorado, dated
and in consideration of the execution or ratification by other
working interest owners, the undersigned hereby expressly
ratifies, approves and adopts said Unit Agreement as fully
as though the undersigned had executed the original instrument.
This Ratification and Joinder shall be effective as to the
undersigned 's interest in any lands and leases or interests
therein, and royalties presently held or which may arise
under existing agreements or other interests in unitized
substances, covering any lands within the Unit Area in which
the undersigned may be found to have an oil or gas interest.
This Ratification and Joinder shall be binding upon the
undersigned, its heirs, devisees, assigns or successors
in interest.
EXECUTED this 4th day of January 19 80
CHAIPN N, BOARD OF/'OUNTY COMMISSIONERS
WELD COUNTY, COLORADO
STATE OF `1n
SS. ATTEST:
County of ) COUNTY AND, RDER AND CLERK TO THE
BOARD
The foregoing instrument 1134-ac w edged eforeume, unty Notary
Public, this 4th day of February 19 0 by c. w. K;r
Chairman Board of County Commissioners. W d County. Colorade' •
WITNESS MY OFFICIAL HAND AND SEAL.
MY COMMISSION EXPIRES : May 21 1QR1
Notary Pu lic
(S E A L)
TELEPHONE 573-1921
M;nNFS
Vert"
THE MARLIN OIL COMPANY trtal1
DENVER CLUB BUILDING - _=
516 17TH STREET
DENVER,COLORADO 80202 .CA9
January 4, 1980 �ofo.
Dear Interest Owner:
The Marlin Oil Company is in the process of unitizing
the New Windsor Field, preparatory to instigating a secondary
recovery operation. Enclosed is a copy of the Unit Agreement
for your review.
The formula for dividing up the proceeds of the unit
oil takes into consideration both the oil in place under each
tract and the strategic location of each well in the reservoir
and its productive capability.
There is no question in my mind that this project will
not only increase daily production, but also increases the total
amount of oil we recover. Everyone will have to benefit from
this program in the long run, and I feel we have set up partici-
pation on as equitable a basis as humanly possible.
Marlin owns all of the working interest in the proposed
unit and is paying all expenses of the project.
Also enclosed are two copies of a Ratification and
Joinder. Please sign one copy, have your signature notarized,
and return it to our office. A self-addressed, stamped envelope
is enclosed for your convenience.
I will answer any questions you may have. Your coopera-
tion will be mutually beneficial among all of us.
Ve truly yours,
`191, d//K�
Jim Sny er
President
JS/mf
Encs.
/ / ,,
•
UNIT AGREEMENT AND PLAN OF UNITIZATION
FOR THE DEVELOPMENT AND OPERATION
OF THE
NEW WINDSOR FIELD (SECONDARY RECOVERY) UNIT AREA
COUNTY OF WELD
STATE OF COLORADO
THIS AGREEMENT, entered into as of the day of
, 19 , by and between the parties sub-
scribing, ratifying or consenting hereto ;
WITNESSETH :
WHEREAS, in the interest of the public welfare and to
promote the conservation and increase the ultimate recovery
of oil, gas and associated minerals from the New Windsor Field
in Weld County, State of Colorado, and to protect the rights
of the owners of interest therein, it is deemed necessary
and desirable to enter into this Agreement unitizing the Oil
and Gas Rights in and to the Unitized Formation covered
hereby in order to effect a secondary recovery, pressure
maintenance or other tertiary or enhanced recovery program
as hereinafter provided ;
NOW THEREFORE, in consideration of the premises and of
the mutual covenants and agreements herein contained, it is
agreed as follows :
ARTICLE 1
DEFINITIONS
As used in this Agreement, the terms hereinafter set
out shall have the following meaning :
1. 1 Unit Area, shall mean the lands described by Tracts
in Exhibit "A", and shown on Exhibit "B", as to which this
Agreement becomes effective and to which it may be extended
as provided herein.
1. 2 Unitized Formation, shall mean that subsurface
portion or portions of the Unit Area commonly known or
described as follows :
The Sussex Sand member of the Pierre Shale, Upper
Cretaceous age and which was encountered between the
depths of 4318 feet and 4322 feet in
the Marlin No. 1 Brownell located in the NE*NEI of
Section 35, Township 7 North, Range 67 West, Weld
County, Colorado.
1. 3 Unitized Substances, shall mean all oil, gas, gaseous
substances, condensate, distillate, and all associated and con-
stituent liquid or liquefiable hydrocarbons within or produced
from the Unitezed Formation.
1. 4 Working Interest Owner, shall mean any party hereto
holding an interest in Unitized Substances by virtue of a
lease, operating agreement, fee title or otherwise, which in-
terest is chargeable with and obligated to pay or bear, either
in cash or out of production or otherwise, all or a portion
of the cost of drilling, developing, producing and operating
the Unitized Formation.
1. 5 Royalty Owner, shall mean any party hereto who owns
a right to or interest in any portion of the Unitized Sub-
stances or proceeds hereof other than a working interest.
The Owner of oil and gas rights that are free of lease or
other instrument conveying the working interest rights to
another shall be regarded as a Working Interest Owner to
the extent of a seven-eighths (7/8ths) interest in and to
such oil and gas rights, and as a Royalty Interest Owner
to the extent of the remaining one-eighth (1/8th) interest
therein.
1. 6 Surface Owner, shall mean any party who owns a
right to or interest in any portion of the surface of lands
hereunder. A Surface Owner may also be a Royalty Owner
under definitions herein contained .
1 . 7 Tract, shall mean each parcel of land described
as such and given a Tract Number in Exhibit "A".
1. 8 Unit Operating Agreement, shall mean an agreement
which will be entitled "Unit Operating Agreement, New Windsor
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Field, Weld County, Colorado", which may hereafter be executed
by and between Working Interest Owners who are parties to
this Agreement, should such Working Interest Owners determine
the necessity therefor.
1. 9 Unit Operator, shall mean The Marlin Oil Company,
unless the Working Interest Owners, pursuant to the Unit
Operating Agreement, shall hereafter designate a different
Working Interest Owner, the purpose of the Operator being to
develop and operate the Unitized Formation.
1. 10 Tract Participation, shall mean the percentage of
Unitized Substances produced from the Unitized Formation which
is allocated to a Tract under this Agreement .
1. 11 Unit Participation, of each Working Interest Owner
shall mean the sum of the percentages obtained by multiplying
such Working Interest Owner's fractional working interest in
each Tract by the Tract Participation of such Tract .
1. 12 Outside Substances, shall mean all substances ob-
tained from any source other than the Unitized Formation.
1. 13 Oil and Gas Rights, shall mean the right to explore,
develop and operate lands within the Unit Area for the pro-
duction of Unitized Substances or to share in the production
so obtained or the proceeds thereof.
ARTICLE 2
EXHIBITS
2. 1 Exhibits. Attached hereto are the following exhibits
incorporated herein by reference.
2. 1. 1 Exhibit "A", is a schedule describing each Tract in
the Unit Area and showing its Tract Participation.
2. 1. 2 Exhibit "B", is a map of the New Windsor Field, show-
ing the boundary lines of the Unit Area and Tracts thereon.
2. 1. 3 Exhibit "C", is a form of Indemnity Agreement re-
quired for tracts to enter the Unit if the ownership thereof
is not fully subscribed to this Agreement.
2. 2 Reference to Exhibits. Whenever in this Agreement
reference is made to any of said Exhibits, such reference shall
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mean said Exhibits as originally attached hereto; or if the
same have been revised, it shall mean the latest revision
thereof.
2. 3 Exhibits Considered Correct. Said exhibits for all
purposes of this Agreement shall be considered as true and
correct unless and until they are revised or corrected as
herein provided.
2. 4 Correcting Errors. The shapes and descriptions of
the respective tracts have been established using the best
information available. In the event it subsequently appears
that any Tract should, because of diverse royalty or working
interest ownership on the effective date hereof, be divided
into more than one Tract, or that any mechanical miscalculation
has been made, Unit Operator may correct such mistake by re-
vising the exhibits to conform to the facts . Each such re-
vision of exhibits, if made after. this Agreement becomes
effective, shall be effective at 7 :00 A. M. on the first day
of the calendar month next following the filing of the exhibit
relating thereto. Any such revision made prior to the effective
date hereof shall be effective on the effective date.
2. 5 Filing Revised Exhibits. If and when the exhibits,
or any revision thereof, are revised pursuant to this Agree-
ment, Unit Operator shall certify and file the revised exhibits
for record in Weld County, Colorado.
ARTICLE 3
CREATION AND EFFECT OF UNIT
3. 1 Oil and Gas Rights Unitized. Subject to the terms
and conditions of this Agreement, all the Oil and Gas Rights
of the Royalty Owners in and to the lands described in
Exhibit "A" and all of the Oil and Gas Rights of the Working
Interest Owners in and to said lands are hereby unitized
insofar as said respective Oil and Gas Rights pertain to the
Unitized Formation, all to the same extent, as if the Unitized
Formation had been included in a single lease executed by all
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the Royalty Owners, as Lessors, in favor of all the Working
Interest Owners, as Lessees, and as if said lease had been
subject to all of the terms and conditions of this Agreement.
3. 2 Personal Property Excepted. Working Interest Owners
except from the terms and provisions of this Agreement, and
hereby sever from said lands, for all purposes, all the various
items of personal property which are lease and well equipment
owned by Working Interest Owners, which may be or may here-
after become located in or on the lands or in the wells on
the lands affected hereby.
3. 3 Amendment of Leases. Each lease, sublease, or contract
relating to the exploration, drilling, development, or operation
for oil or gas of lands committed to this Agreement, which, by
its terms might expire prior to the termination of this Agreement,
is hereby amended and extended beyond any such term so provided
therein so that it shall be continued in full force and effect
for and during the term of this Agreement. Provisions, in
addition to term, are hereby amended to the extent necessary
to make them conform to the terms and provisions of this Agree-
ment, but otherwise are to remain in full force and effect.
3. 4 Continuation of Leases and Term Royalties. Operations,
including drilling operations, conducted with respect to the
Unitized Formation on any part of the Unit Area, or production
from any part of the Unitized Formation, shall, except for the
purpose of determining payments to Royalty Owners, be considered
as operations upon or production from each Tract, and such
operations and production shall continue in force and effect
each lease or term royalty interest just as if such operations
had been conducted and a well had been drilled on and was
producing from each such Tract. Each such lease and term royalty
interest shall remain in force and effect so long as this
Agreement remains in force and effect.
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3. 5 Titles Unaffected by Unitization. Nothing herein
shall be construed to result in the transfer of title to the
Oil and Gas Rights covered hereby between the parties hereto
or to Unit Operator, other than the right to exercise such
Oil and Gas Rights and to share in the Unitized Substances or
the proceeds therefrom to the extent and manner herein provided.
3. 6 Injection Rights. Royalty Owners hereby grant unto
Working Interest Owners the right to inject into the Unitized
Formation any substances in whatever amounts the Working
Interest Owners deem expedient, including the right to place
and maintain injection wells on the Unit Area and to use
producing or abandoned oil or gas wells for said purpose.
ARTICLE 4
PLAN OF OPERATIONS
4. 1 Unit Operator. Working Interest Owners have, as
of the effective date of this Agreement, designated The Marlin
Oil Company as Unit Operator. Unit Operator shall have the
exclusive right to develop and operate the Unit Area for the
production of Unitized Substances. Such operations shall be
conducted in conformity with the provisions of this Agreement,
and if subsequently entered into, the Unit Operating Agreement.
In the event of any conflict between such agreements, this
Agreement shall govern.
4. 2 Lien of Unit Operator. Unit Operator shall have a
lien upon the interests of Working Interest Owners in the Unit
Area to the extent provided in the Unit Operating Agreement.
4. 3 Operating Methods. To the end that the quantity of
Unitized Substances ultimately recoverable may be increased
and waste prevented, Working Interest Owners shall, with
diligence and in accordance with good engineering and pro-
duction practices, engage in the following methods of operation :
As soon as practicable after the effective date hereof, the
Unit Operator shall make necessary arrangements for commence-
ment of secondary recovery, pressure maintenance, or other
tertiary or enhanced recovery operations within the Unit Area
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and the use or construction of necessary plants and facilities
therefor, in order that such operations may be initiated within
a reasonable time after such facilities are ready for operation.
4. 4 Change of Operating Methods. Such other methods of
operation as may from time to time be determined by Working
Interest Owners to be feasible, necessary or desirable to
efficiently and economically increase the ultimate recovery of
Unitized Substances may be conducted by Unit Operator. Nothing
herein contained shall prevent Working Interest Owners from dis-
continuing or changing in whole or in part any particular method
of operation if, in their opinion, such method of operation is
no longer in accord with good engineering or production practices.
ARTICLE 5
TRACT PARTICIPATION
5. 1 Tract Participation. The Tract Participation of each
Tract is shown in Exhibit "A" and has been computed as follows :
Beginning at 7 :00 A. M. on the effective date hereof, i. e. ,
January 1, 1979, the Tract Participation of each Tract shall be
that proportion of the Unitized Substances produced from the
Unitized Formation which is equal to the ratio that the cumulative
oil produced from each Tract as of said effective date bears to
the cumulative oil produced from all Tracts comprising the Unit
Area, and the amount of acreage in the Tract as it bears to the
total acreage included within the Unit Area. The proportion of
these factors to the final participation factors being as follows :
80% Cumulative Production as of Effective Date
20% Tract Acreage in proportion to Unit Acreage
Oil produced from the Unitized Formation from wells plugged
and abandoned before the effective date hereof have been con-
sidered in arriving at the total of cumulative oil produced
from a Tract or Tracts, where applicable.
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5. 2 Relative Tract Participation. Whenever the Unit
Area is enlarged or reduced, the revised Tract Participation
of the respective Tracts included within the Unit Area prior
to such enlargement or reduction shall remain in the same
ratio one to another.
ARTICLE 6
ALLOCATION OF UNITIZED SUBSTANCES
6. 1 Allocation to Tracts. All Unitized Substances
produced and sold shall be apportioned among and allocated
to the several tracts within the Unit Area in accordance with
the respective Tract Participation. The amount of Unitized
Substances so allocated to each Tract, and only that amount,
regardless of whether it be more or less than the amount of
the actual production of Unitized Substances from the well
or wells, if any, on such Tract shall, for all intents, uses
and purposes, be deemed to have been produced and sold from
such Tract .
6. 2 Distribution Within Tracts. The Unitized Sub-
stances allocated to each Tract shall be distributed among,
or accounted for to, the parties entitled to share in the
production from such Tract in the same manner, in the same
proportions, and upon the same conditions as they would have
participated and shared in the production from such Tract,
or in the proceeds thereof, had this Agreement not been
entered into, and with the same legal force and effect .
6. 3 Taking Unitized Substances in Kind. The Unitized
Substances allocated to each Tract shall be delivered in
kind to the respective parties entitled thereto by virtue
of the ownership of Oil and Gas Rights therein or by
purchase from such owners, and each of said parties shall
take in kind or separately dispose of its share of Unitized
Substances so delivered to it . Such parties shall have the
right to construct, maintain and operate within the Unit
Area all necessary facilities for that purpose, provided
the same are so constructed, maintained and operated as not to
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interfere with operations carried on pursuant hereto. Any
extra expenditures incurred by Unit Operator by reason of
the delivery in kind of any portion of the Unitized Sub-
stances shall be borne by the party receiving the same in
kind.
6. 4 Failure to Take in Kind. To the extent that any
party entitled to take and receive in kind any portion of
the Unitized Substances shall fail to take or otherwise
adequately dispose of the same currently as and when
produced, then so long as such conditions continue, Unit
Operator, as agent and for the account and at the expense of
such party may, in order to avoid curtailing the operation
of the Unit Area, dispose of such production on a day-to-day
basis, in any reasonable manner Unit Operator sees fit, and the
account of such party shall be charged therewith as having
received same. The proceeds, if any, of the Unitized Sub-
stances so disposed of by Unit Operator shall be paid to the
party entitled thereto.
6. 5 Responsibility for Royalty Settlements . Any party
receiving in kind or separately disposing of all or part of
the Unitized Substances allocated to any Tract, or receiving
the proceeds therefrom if the same is sold or purchased by
Unit Operator, shall be responsible for the payment of, and
shall indemnify all other parties, including Unit Operator,
against any liability for any and all royalties, overriding
royalties, production payments and any and all other payments
chargeable against or payable out of such Unitized Substances
or the proceeds therefrom.
Payments heretofore made respecting Unitized Substances
produced from Unitized Formation after
at 7 :00 A. M. shall be adjusted against Tract Participation
allocations hereunder, with the accounts of both Working
Interest Owners and Royalty Owners to be hereafter readjusted
accordingly.
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6. 6 Royalty on Outside Substances. If any Outside
Substances injected into the Unitized Formation by liquefied
petroleum gases, and/or natural gases, and the Unitized
Substances subsequently produced contain such liquefied
petroleum gases, and/or natural gas, as determined by
fractional analysis or such other tests as applicable, the
Working Interest Owners shall have the right to recover all
such hydrocarbons, or their equivalent value, from the
Unitized Substances produced or removed from the Unit Area,
without payment of royalty thereon.
ARTICLE 7
USE OR LOSS OF UNITIZED SUBSTANCES
7. 1 Use of Unitized Substances. Unit Operator may use
as much of the Unitized Substances as it deems necessary for
the operation and development of the Unit Area, including
but not limited to the injection thereof into the Unitized
Formation.
7. 2 Royalty Payments. No royalty, overriding royalty,
production or other payments shall be payable upon or with
respect to Unitized Substances used or consumed in the
operation of development of the Unit Area or which may be
otherwise lost or consumed in the production, handling,
treating, transporting or storing of Unitized Substances.
ARTICLE 8
TRACTS TO BE INCLUDED IN UNIT
8. 1 Percentages of Commitment Required. On and after
the effective date hereof and until the enlargement or re-
duction thereof, the Unit Area shall be composed of the
following Tracts, listed in Exhibit "A" which corner, adjoin
or are contiguous to each other :
8. 1. 1 Each Tract as to which Working Interest Owners
owning One Hundred Percent (100%) of the Working Interest have
signed or ratified this Agreement and Royalty Owners owning
Eighty Percent (80%) or more of the royalty interests have
signed or ratified this Agreement ; and
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8. 1. 2 Each Tract as to which Working Interest Owners
owning One Hundred Percent (100%) of the working interest have
signed or ratified this Agreement and Royalty Owners owning
less than Eighty Percent (80%) of the royalty interest have
signed or ratified this Agreement, and as to which (a) all
Working Interest Owners in such Tract join in a request for
the inclusion of such Tract in the Unit Area, and further as
to which (b) Seventy-five Percent (75%) of the combined voting
interests of Working Interest Owners in all Tracts which meet
the requirements of Section 8. 1. 1 vote in favor of the in-
clusion of such Tract .
8. 1. 3 Each Tract as to which Working Interest Owners
owning less than One Hundred Percent (100%) of the working
interest have signed or ratified this Agreement, regardless
of the percentage of royalty interest therein that is
committed hereto, and as to which (a) the Working Interest
Owner who operates the Tract and all of the other subscribing
Working Interest Owners in such Tract have joined in a re-
quest for inclusion of such Tract in the Unit Area and have
executed and delivered an indemnity agreement identical in
form to the Agreement attached hereto as Exhibit "C" in-
demnifying and agreeing to hold all other parties to this
Unit Agreement harmless from and against any and all claims
and demands that may be made by the nonsubscribing owners in
such Tract on account of the inclusion of the same in the
Unit Area.
8. 2 Subsequent Commitment of Interest to Unit . After
the effective date of this Agreement, the commitment hereto
of any interest in any Tract within the Unit Area shall be
upon such terms and conditions as may be negotiated by
Working Interest Owners and the owner of such interest .
8. 3 Revision of Exhibits. In the event any of the Tracts
described in Exhibit "A" fail to qualify for inclusion in the
Unit Area, Unit Operator shall recompute, using the original
basis of computation, the Tract Participation of each of the
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qualifying Tracts and shall revise Exhibits "A" and "B" accord-
ingly. Said revised exhibits shall be effective as to the
effective date hereof .
ARTICLE 9
TITLES
9. 1 Removal of Tract from Unit Area . In the event a
Tract ceases to have sufficient Working Interest Owners or
Royalty Owners committed to this Agreement to meet the con-
ditions of Article 8 because of failure of title of any party
hereto, such Tract shall be eliminated from the Unit Area as
of the first day of the calendar month in which such failure
of title is finally determined ; provided, however, that a
Tract shall not be removed from the Unit Area if, within
Ninety (90) Days of the date of final determination of the
failure of title, Working Interest Owners and Royalty Owners
become parties to this Agreement in sufficient numbers to
meet the qualifying provisions of Section 8. 1 . 1 or the Tract
otherwise qualifies under the provisions of Section 8. 1 . 2,
8. 1. 3, or 8. 2.
9. 2 Revision of Exhibits. In the event any Tract is
eliminated from the Unit Area because of failure of title
pursuant to the provisions of this Article, Unit Operator
shall recompute the Tract Participation of each of the Tracts
remaining in the Unit Area and shall revise Exhibits "A"
and "B" accordingly. Said revised exhibits shall be effective
as of the first day of the calendar month in which such failure
of title is finally determined.
9. 3 Working Interest Titles. If title to a working
interest fails, the rights and obligations as between the
Working Interest Owners in respect thereto shall be governed
by the Unit Operating Agreement or, if none then exists, by
separate agreement between the Working Interest Owners .
9. 4 Royalty Owner Titles. If title to a royalty interest
fails, but the Tract to which it relates is not eliminated from
the Unit Area, the party whose title failed shall not be entitled to
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share hereunder in respect to such interest.
9. 5 Production Where Title in Dispute. If the title or
right of any person claiming the right to receive in kind all
or any portion of the Unitized Substances allocated to a Tract
is in dispute, Unit Operator at the discretion of Working
Interest Owners shall either :
9. 5. 1 Require that the person or persons to whom such
Unitized Substances are delivered or to whom the proceeds
thereof are paid, furnish security for the proper accounting
therefor to the rightful owner or owners in the event the
title or right of such person or persons shall fail in whole
or in part, or
9. 5. 2 Withhold and market the portion of the Unitized
Substances with respect to which title is in dispute, and
impound the proceeds thereof until such time as the title
or right thereto is established by a final judgment of a
court of competent jurisdiction or otherwise to the satis-
faction of Working Interest Owners, whereupon the proceeds
so impounded shall be paid to the person or persons right-
fully entitled thereto.
ARTICLE 10
EASEMENT OR USE OF SURFACE
10. 1 Grant of Easements. The parties hereto, to the
extent of their rights and interests, hereby grant to Unit
Operator the right to use as much of the surface of the land
within the Unit Area as may be reasonably necessary for the
operation and development of the Unit Area hereunder.
10. 2 Use of Water. Unit Operator shall have free use
of water from the Unit Area for operations hereunder, in-
cluding, but not limited to, the right to drill, complete,
and produce water wells to any depth except water from
Surface Owners ' wells, private lakes, ponds, or irrigation
ditches unless Surface Owner grants written permission for
such use.
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10. 3 Surface Damage. Unit Operator shall pay the rightful
owners for damages to growing crops, timber, fences, improve-
ments and structures on the Unit Area resulting from operations
hereunder.
ARTICLE 11
ENLARGEMENTS OF UNIT AREA
11. 1 Enlargements of Unit Area. The Unit Area may be
enlarged to include acreage reasonably proved to be productive
under such terms and conditions as determined by the Working
Interest Owners, including but not limited to, the following
and if the acreage qualifies as provided in Article u :
11. 1. 1 The participation to be allocated to the acreage
added to the Unit Area shall be based on all available in-
formation to the end that a reasonable and fair participation
shall be so allocated.
11 . 1. 2 There shall never be any retroactive allocation
or adjustment of operating expenses or of interest in the
Unitized Substances produced, or proceeds thereof, by reason
of an enlargement of the Unit Area ; provided, however, this
limitation shall not prevent an adjustment of investment by
reason of such enlargement .
11. 1. 3 In the event of an enlargement of the Unit Area,
Unit Operator shall, subject to Section 5. 2, recompute the
Tract Participation of each Tract within the Unit Area as
enlarged and shall revise Exhibits "A" and "B" accordingly.
11 . 1. 4 The effective date of any enlargement of the
Unit Area shall be 7 :00 o 'clock A. M. on the first day of
the calendar month following compliance with conditions for
enlargement as specified by Working Interest Owners, approval
of the enlargement of the Unit Area by the appropriate
governmental authority, if required, and the recording of
revised Exhibits "A" and "B" in the records of Weld County,
Colorado.
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ARTICLE 12
TRANSFER OF INTEREST
12. 1 Agreement is a Covenant . All of the terms and pro-
visions of this Agreement shall extend to, be binding upon and
inure to the benefit of the respective heirs, devisees, legal
representatives, successors and assigns of the parties hereto,
and shall constitute a covenant running with the lands, leases
and interests covered hereby.
12. 2 Effect of Transfers. Any transfer, assignment or
conveyance of all or any part of any interest owned by any
party hereto with respect to any Tract shall be made expressly
subject to this Agreement . No such transfer, assignment or
conveyance shall be binding for any purpose upon any party
hereto other than the party so conveying the same, until the
first day of the calendar month next succeeding the date of
receipt by Unit Operator of a certified copy of the recorded
instrument evidencing such change in ownership.
12. 3 Waiver of Rights to Partition. Each party hereto
covenants that, during the existence of this Agreement, such
party shall not resort to any action at law or in equity to
partition the Unit Area or the facilities used in development
or operation thereof and to that extent waives the benefits
of all laws authorizing such partition.
ARTICLE 13
RELATIONSHIP OF PARTIES
13. 1 No Partnership. The duties, obligations and
liabilities of the parties hereto are intended to be several
and not joint or collective, and nothing herein contained
shall ever be construed to create an association, trust or
impose a partnership duty, obligation or liability with regard
to any one or more of the parties hereto. Each party hereto
shall be individually responsible for its own obligations as
herein provided.
13. 2 No Sharing of Market . Nothing in this Agreement
shall be construed as providing, directly or indirectly, for
any cooperative refining or joint sale or cooperative marketing
of Unitized Substances.
- 15 -
13. 3 Royalty Owners Free of Costs. It is understood
and agreed that this Agreement shall never be construed as
imposing upon any Royalty Owner any obligation to pay for
any development or operating expense unless such Royalty
Owner is obligated to pay for same by the terms of agree-
ments existing before the execution of this Agreement .
13. 4 Information to Royalty Owners. Each Royalty
Owner shall be entitled to all information in possession of
Unit Operator to which such Royalty Owner is entitled by
his existing agreement with any Working Interest Owner with
the express stipulation that if, by reason of this Agreement,
such information is not available, the nearest approximation
or equivalent of such information shall be made available.
ARTICLE 14
LAWS AND REGULATIONS
14. 1 Laws and Regulations. This Agreement shall be
subject to the conservation laws of the State of Colorado,
and to all other applicable federal, state and municipal
laws, rules, regulations and orders.
ARTICLE 15
FORCE MAJEURE
15. 1 Force Majeure. All obligations of each party
hereto, except for the payment of money, shall be suspended
while said party is prevented from complying therewith, in
whole or in part, by strikes, fire, war, civil disturbances,
acts of God, federal, state or municipal laws, orders or
regulations, inability to secure materials or other causes
beyond the reasonable control of said party; provided,
however, that performance shall be resumed within a reason-
able time after such cause has been removed ; and provided
further that no party shall be required against its will to
adjust or settle any labor dispute. This Agreement or the
leases or other interests subject hereto shall not be ter-
minated by reason of suspension of unit operations due to
the aforesaid causes.
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ARTICLE 16
EFFECTIVE DATE
16. 1 Date Agreement to Become Operative. This Agreement
shall become binding upon each party who executes or ratifies
it as of the date of execution or ratification by such party
and shall become operative at 7 :00 o 'clock A. M. on a certain
date following:
(a) the filing of at least one counterpart of this
Agreement for record in the records of Weld County, Colorado,
by Unit Operator, and
(b) the filing of a Certificate of Effectiveness
by Unit Operator with the Clerk and Recorder of Weld County,
Colorado, which certificate shall designate the date when
this Agreement becomes operative;
and provided, further, that if (a) and (b) are not accomplished
on or before December 31, 1980, this Agreement shall ipso facto
terminate on said date (hereinafter called "termination date")
and thereafter be of no further force or effect unless Working
Interest Owners owning a combined Unit Participation of at
least Ninety Percent (90%) have decided to extend said ter-
mination date for a period not to exceed six (6) months. If
said termination date is so extended and (a) and (b) above
are not accomplished on or before said extended termination
date, this Agreement shall ipso facto terminate on said ex-
tended termination date and thereafter be of no further
force or effect.
ARTICLE 17
TERM
17. 1 Term. The term of this Agreement shall be for and
during the time that Unitized Substances are produced in paying
quantities and as long thereafter as drilling, reworking or
other operations are prosecuted without cessation of more than
Ninety (90) consecutive days, unless sooner terminated by
Working Interest Owners in the manner hereinafter provided.
- 17 -
17. 2 Termination by Working Interest Owners. This
Agreement may be terminated by Working Interest Owners owning
Ninety Percent (90%) Unit Participation whenever such Working
Interest Owners determine that unit operations are no longer
profitable, feasible or in the interest of conservation.
17. 3 Effect of Termination. Upon termination of this
Agreement, the further development and operation of the Unit
Area as a Unit shall be abandoned, unit operations shall cease,
and thereafter the parties hereto shall be governed by the
terms and provisions of the leases and contracts affecting the
separate Tracts just as if this Agreement had never been
entered into.
17. 4 Salvaging Equipment Upon Termination. If not other-
wise covered by the leases unitized under this Agreement,
Royalty Owners hereby grant Working Interest Owners a period
of twelve (12) months after termination of this Agreement in
which to salvage, sell distribute or otherwise dispose of the
personal property and facilities used in connection with unit
operations.
ARTICLE 18
COUNTERPART
18. 1 Multiple Copies. This Agreement may be executed
in any number of counterparts, no one of which needs to be
executed by all parties, or may be ratified or consented to
by separate instrument, or separate signature pages, in
writing, specifically referring hereto or clearly identifying
this Agreement, and shall be binding upon all parties who have
executed such a counterpart, ratification, signature page or
consent, with the same force and effect as if all parties
had signed the same document.
Also the failure of all listed or otherwise identified
Working Interest Owners and Royalty Owners, or any of them, to
commit their respective interests to this Agreement, shall not
invalidate this Agreement as to those persons or parties who do
- 18 -
commit their interests hereto, by one or more of the methods
hereinabove stated.
18. 2 Joinder in Dual Capacity. It shall not be necessary
for parties owning both working interest and royalty interests
to execute this Agreement in both capacities in order to commit
both classes of interests. Execution hereof by any such party
in one capacity shall also constitute execution in the other
capacity.
ARTICLE 19
GENERAL
19. 1 Amendments Affecting Working Interest Owners. Amend-
ments hereto relating wholly to Working Interest Owners may be
made if signed by the Working Interest Owners owning Ninety
Percent (90%) Unit Participation.
19. 2 Successors and Assigns. The terms and provisions
hereof shall be covenants running with the lands and Unitized
Substances covered hereby, and shall be binding upon and inure
to the benefit of the respective heirs, successors and assigns
of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this
agreement upon the respective dates indicated opposite their
respective signatures.
WORKING INTEREST OWNERS
THE MARLIN OIL COMPANY
Date Signed : 12/13/79 By /i>
Pre Present
Date Signed:
By
- 19 -
OVERRIDING ROYALTY OWNERS
Date Signed :
Date Signed :
Date Signed :
Date Signed :
ROYALTY INTEREST OWNERS
Date Signed :
Date Signed :
Date Signed :
Date Signed :
STATE OF COLORADO )
) SS.
City & County of Denver)
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EXHIBIT "A"
New Windsor Field
Sussex Sand Unit
Weld County, Colorado
TRACT TOTAL UNIT
NO. DESCRIPTION PARTICIPATION
1 N'SEk, SE'SE' Section 27 , T7N-R67W 39 .37247%
2 SASE1/4 Section 27 , T7N-R67W- 3 .32811%
3 S'NEk, NW'NE' Section 34, T7N-R67W c4' 12.343037,
4 NE4NE' Section 34, T7N-R67W 19 .816317,
5 NZSW4 Section 26, T7N-R67W 5.5274970
6 NW-WW1/4 Section 35, T7N-R67W 11. 11999%
7 NEkNW-1/4 Section 35, T7N-R67W 4.441197,
8 SW'NW' Section 35, T7N-R67W 2.62284%
9 SEkNW' Section 35, T7N-R67W 1.42857%
100.000007,
R67W
27 26
.SE ® SW ® O �
IDenny y,Denny runner)
I • • I
Donny3 Donny2
7
'NE Q ® NW ® Di
Canal3 Bro•no 111,
• • • X •
' Canal 2 y Eaton-Law
Windsor- •
' TO Canal ) ® O'
t •
Canal? Conall Eaton•Lo• '
34 . . . •AW ■ 33
EXHIBIT "B"
MARLIN OIL COMPANY
NEW WINDSOR FIELD
WELD COUNTY, COLORADO
0 2000 4000 6000 8000
SCALE IN FEET
LEGEND
• PRODUCER (SUSSEX)
DRY & ABANDONED
TEMPORARILY ABONDONED
♦ PRODUCER P&A
. MOUNIT BOUNDARY
ai TRACT NUMBER
/At NOTE: ONLY SUSSEX WELLS SHOWN
EXHIBIT C
UNIT AGREEMENT, NEW WINDSOR FIELD
(SECOND RECOVERY) WELD COUNTY,
COLORADO
INDEMNITY AGREEMENT
KNOW ALL MEN BY THESE PRESENTS, THAT :
WHEREAS, less than One Hundred Percent (100%) of the owners
of interests in the working interest in Tract No. as
described in the above Unit Agreement have, with respect thereto,
executed or ratified that certain Agreement entitled "Unit
Agreement and Plan of Unitization For the Development and
Operation of the New Windsor Field (Secondary Recovery) Unit
Area, County of Weld, State of Colorado" ; and
WHEREAS, the undersigned constitute all of the subscribing
working interests owners in such tract ; and
WHEREAS, subparagraph 8. 1. 3 of Paragraph 8. 1 of said Unit
Agreement provides that said tract will be eligible for in-
clusion in said unit, as initially constituted, if the under-
signed execute and deliver the following Indemnity Agreement ; and
WHEREAS, the undersigned desire to have said tract included
in said unit;
NOW, THEREFORE, in consideration of the inclusion of said
tract in said unit with less than One Hundred Percent (100%)
of the working interest therein committed thereto, the under-
signed hereby agree to indemnify and hold all other parties
to said Unit Agreement harmless from and against any and all
claims and demands that may be made by the nonsubscribing
working interest owners, their successors or assigns, in such
tract on account of the inclusion of said tract in said unit, or
on account of the operation thereof on the basis prescribed by
said Unit Agreement ; it being understood, however, that any
liability arising hereunder shall be borne by the undersigned
in the respective proportions in which the working interest of
each in said tract bears to the total working interest therein
of all the undersigned, and that this Agreement shall in no wise
inure to the benefits of any person, firm or corporation that
is not a party to said Unit Agreement.
This Indemnity shall become null and void with respect to
any obligations arising hereunder subsequent to the date upon
which One Hundred Percent (100%) of the working interest in said
Tract No. becomes committed to said Unit Agreement.
IN WITNESS WHEREOF, each of the undersigned has executed
this instrument on the date set forth below opposite its signature.
Date
Date
ATTEST : By
Its :
TELEPHONE 573-1921
THE MARLIN OIL COMPANY
DENVER CLUB BUILDING
518 17TH STREET
DENVER,COLORADO 80202
December 14, 1979
Dear Interest Owner:
Please find enclosed a copy of an Application filed by
Marlin Oil today with the Oil & Gas Commission requesting
approval to establish a unit in the New Windsor Field,
Weld County, Colorado, for the purpose of secondary re-
covery operations.
The Unit Agreement and signature page will be forwarded
within the next couple of weeks for your review.
Ve truly ours,
Carr
President
ks
Encls.
v re
alio
a '
THE OIL AND GAS CONSERVATION COMMISSION .
OF THE STATE OF COLORADO,NE�� te1N1Y C li v--2ND^.
CI( r` '
IN THE MATTER OF THE ) D�' 1 �o' '
APPLICATION OF THE MARLIN )
OIL COMPANY, AS UNIT
OPERATOR OF THE NEW WINDSOR ) GREELEY• cots)
FIELD UNIT, WELD COUNTY,
COLORADO, IN BEHALF OF ALL )
INTERESTED PARTIES FOR AN
ORDER FROM THE OIL AND GAS ) CAUSE NO.
CONSERVATION COMMISSION OF
THE STATE OF COLORADO ) ORDER NO.
APPROVING A UNIT AGREEMENT
COVERING THE SUSSEX SAND )
FORMATION IN THE NEW WINDSOR
FIELD, WELD COUNTY, COLORADO, )
AND FOR AN ORDER AUTHORIZING
WATER INJECTION INTO THE )
SUSSEX SAND FORMATION IN
SAID UNIT AREA )
APPLICATION
COMES NOW, the Applicant, The Marlin Oil Company, by its
undersigned attorney, and pursuant to 1973 CRS Sec. 34-60-118,
respectfully requests the Oil and Gas Conservation Commission
of the State of Colorado to enter an order approving a unit-
ization agreement covering the Sussex Sand formation in the
New Windsor Field, Weld County, Colorado, and providing for
unit operations thereon, which order to authorize was in-
jection and flooding operations in said Field, as hereinafter
proposed. In support of this Application, Applicant states that :
I
A. Applicant is the working interest owner controlling
in excess of eighty percent (80%) of all oil and gas leases
covering the following lands, as to the Sussex Sand, to-wit :
TOWNSHIP 7 NORTH, RANGE 67 WEST, 6th P. M.
Weld County, Colorado
Section 26 : NlSW*
Section 27 : SE
Section 34 : NE
Section 35: NW
containing 560. 00 acres, more or less, and
hereinafter referred to as the "Unit Area".
B. Applicant is proposing a plan of unitization for
said lands to all interested parties (as defined in Rule 516)
on the terms and conditions set forth in the Unit Agreement
which is marked "Exhibit 1", attached hereto, and incorporated
herein by reference.
C. Said Unit Area and the applicable oil and gas leases
are described in Exhibit "A" to the said Unit Agreement. The
Unit Area is graphically mapped on Exhibit "B" to that agree-
ment showing the area involved in the plan of unitization and
the wells (including drilling wells, plus dry and abandoned
wells) located therein.
D. Pursuant to said Unit Agreement, Applicant has been
designated as the Unit Operator for such proposed unit, and
in such capacity Applicant is authorized to represent all
parties to said Unit Agreement in seeking approval thereof.
II
A. In connection with the "Exhibit 1" proposed plan
of unitization, Applicant hereby requests the Commission to
(a) adopt and approve the New Windsor Field Unit Agreement,
Exhibit 1 to this Application, as being in the public in-
terest for conservation, to protect correlative rights,
and as reasonably necessary to increase ultimate recovery
and to prevent waste of oil and gas, (b) authorize the
further development and operation of the New Windsor Field
Unit Area as defined and shown in Exhibit "B" to said Unit
Agreement (Exhibit 1) as a single Sussex Sand unit under the
terms and provisions of said Unit Agreement, all in accord-
ance with the applicable orders, rules and regulations of
. the Commission, and (c) approve water injection and water
flooding operations for secondary recovery of oil and oil
associated hydrocarbons from the Sussex Sand, utilizing
as intake wells such existing wells within the area as
may be designated by the Applicant at the hearing on this
Application.
B. Applicant 's operations will be conducted pursuant
to the terms and provisions of the Unit Agreement (Exhibit 1) .
- 2 -
C. A full description of the particular operations
for which Applicant seeks approval is as follows :
(1) The New Windsor Field is located in Section 26,
27, 34, and 35, Township 7 North, Range 67 West, in Weld
County, Colorado, and is situated on the steeper flank of
the Denver-Julesburg Basin. The Sussex sand discovery well
was the California Company - No. 1 Victor Denny, NEtSEl of
Section 27, completed in March, 1957. After treating
perforations at 4273 ' - 82 ' with 750 gallons of sand-oil,
the well initialled at 100 barrels of oil per day and cut
1 percent water with a gas-oil ratio of 364 cubic feet per
barrel of oil. Drilling to date has established Sussex
oil and minor gas production from some 12 wells at an
average depth of 4300 ' . At present only 8 wells are pro-
ducing from the Sussex and one from the deeper Lyons zone.
Wells are generally completed by setting casing through the
producing zone and perforating selectively. Initial treat-
ment has generally been by sand frac. All wells were
initially completed with installation of pumping equipment
and production rates have never been restricted. The
Sussex sand, Cretaceous in age, is medium gray, very fine
to fine-grained, moderately hard, calcareous and glauconitic
with good porosity and fair permeability within the field
proper.
(2) The New Windsor Field was discovered and initially
developed in the late 1950's and by 1970 had recovered 113, 716
barrels of Sussex oil, 13, 116 mcf of gas and 36, 432 barrels
of water. Then in 1974 and 1975 a redevelopment program was
initiated and a total of 9 wells were activated. By
January 1, 1979, the cumulative primary recovery was 219 ,716.
barrels of Sussex oil. Approximately 20 - 25 pounds per
square inch gauge gas pressure was noted on individual casing-
heads during a field inspection in January, 1979. No recent
individual well production tests or bottom hole pressure
surveys have been conducted. Primary oil production has
- 3
declined since June, 1976 from 2781 to 830 barrels per month
for December 1978. This represents a decline of 30 percent
per year which, when projected from January, 1979, indicates
future economical primary recoverable of 20, 000 barrels.
Future oil recovery from a water injection program is
estimated to amount to 823, 000 barrels of stock tank oil.
This volume of oil was obtained by planimetering an isopach
map within the anticipated flood pattern (40 acre spacing)
and utilizing accepted engineering fundamentals to calculate
recovery. Experience has shown that the usual range of areal
efficiency is between 70 and 90 percent, and the vertical
efficiency between 60 and 80 percent. The range of the
product of the two, therefore, is in the order of 40 to 70
percent, with a median of about 55 percent.
D. Applicant believes, and therefore alleges, that
for the benefit of the public interest, for conservation,
to protect correlative rights, for the prevention of waste
and because additional oil would be recovered by Applicant's
plan of operations, as set forth herein, the Commission should
enter an order approving the Unit Agreement (Exhibit 1) for
the New Windsor Field Unit Area and the waterflood secondary
recovery operations proposed, and should make such findings
and enter such further orders as the Commission may deem
proper or advisable.
Applicant believes and states that unit operation
as requested herein is reasonably necessary to increase
ultimate recovery of oil and gas, and the value of additional
recovery will considerably exceed any additional cost incident
to such unit operations.
E. Pursuant to the requirements of Rule 403, a copy
of this Application has been given in person or mailed by
first class mail to each owner of record of the reservoir
involved within 1/2 mile of the proposed injection wells
and to all owners of interest within the unit boundary.
- 4 -
Attached hereto as Exhibit 2 is a list showing all owners of
interest to whom a copy of this Application has been mailed
or hand-delivered. Also, as Exhibit 3 is a plat showing the
ownership of lands within 1/2 mile of the intake wells.
F. Pursuant to the requirements of Rule 401 the follow-
ing additional exhibits are attached :
Exhibit 4 : The logs of the proposed intake wells
within the unit area.
Exhibit 5: A description of the casing or proposed
casing program for each well in the Unit
Area that is to be used as an intake well.
Exhibit 6 : The proposed method for testing casing
before use for injection of each well
within the Unit Area which may be used
as an intake well.
Exhibit 7 : A statement as to the source of the water
and the estimated amounts to be injected
daily.
WHEREFORE, Applicant respectfully requests :
1. Approval of the Unit Agreement for the New Windsor
Field Unit Area attached hereto as Exhibit 1 pursuant to
CRS 173, 34-60-117, et seq.
2. An order providing for unit operation of the Unit
Area on the terms and conditions set forth in said Exhibit 1,
pursuant to CRS 1973, 34-60-118, et seq.
3. Approval of the proposed waterflood secondary
recovery project pursuant to Rule 401 and the foregoing
statutes.
4. That this matter be set down for hearing at the
January- 21, 1986 meeting of the Commission.
5. That notice of such hearing be given as required
by law.
6. Such other findings, conditions and orders as the
- 5 -
Commission shall deem just and proper.
THE MARL 02L COMPANY "--)
BYs ttoineq • -.
J
6., ' ' "I__ ' (1 --17
arles A. Redpat , Jr.
Applicant 's Address :
1507 Denver Club Building
Denver, Colorado 80202
- 6 -
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