HomeMy WebLinkAbout880362.tiff RESOLUTION
RE: AUTHORIZATION OF OIL AND GAS LEASE COVERING CERTAIN PROPERTY
OWNED BY WELD COUNTY, COLORADO, LOCATED IN SECTION 23,
TOWNSHIP 8 NORTH, RANGE 61 WEST OF THE 6TH P.M. , WELD COUNTY,
COLORADO
WHEREAS, the Board of County Commissioners of Weld County,
Colorado, pursuant to Colorado statute and the Weld County Home
Rule Charter, is vested with the authority of administering the
affairs of Weld County, Colorado, and
WHEREAS, Weld County, Colorado, is the owner of vast acres of
mineral lands located in Weld County, Colorado, and
WHEREAS, a portion of said mineral acres not currently leased
was put up for bid to lease, and
WHEREAS, Petroleum Energy Corporation, 1625 Broadway, Suite
1480 , Denver, Colorado 80202 , submitted the high bid to lease 640
net mineral acres, more or less, described to-wit:
Section 23 : All, Township 8 North, Range 61
West of the 6th P.M. , Weld County, Colorado
WHEREAS, Weld County desires to accept the high bid offer
submitted by Petroleum Energy Corporation to lease the above
described mineral acreage for FIFTEEN AND NO/100 DOLLARS ($15 .00)
per net mineral acre, for a total sum of NINE THOUSAND SIX HUNDRED
AND NO/100 DOLLARS ($9 ,600 .00) , together with a rental fee of ONE
DOLLAR ($1 .00) per net mineral acre, which lease is to run for a
period of three (3) years , commencing May 18 , 1988 , and ending at
12:00 noon on May 18 , 1991 , unless otherwise held, as stated in
the lease agreement which is attached hereto and incorporated
herein by reference.
NOW, THEREFORE, BE IT RESOLVED by the Board of County
Commissioners of Weld County, Colorado, that the high bid offer of
Petroleum Energy Corporation, 1625 Broadway, Suite 1480 , Denver,
Colorado 80202 , be , and hereby is, accepted for a period of three
(3) years with the total sum being as above listed.
L�,oas a
880362
•
Page 2
RE: OIL & GAS LEASE - PETROLEUM ENERGY CORP.
The above and foregoing Resolution was, on motion duly made
and seconded, adopted by the following vote on the 18th day of
May, A.D. , 1988 .
t71BOARD OF COUNTY COMMISSIONERS
ATTEST: WEL COUNTY, COLORADO
Weld County lerk and Recorder /Hp event
and Clerk to the Board Gene R. Brantner, Chairman
Le://,
C.W. Kir•y, P o-Tem
Deputy Count4L-y4)
erk
APPROVED AS TO FORM: Ja•que e on
" "97L0 Go . ' c
County At o ney IFh
Frank uchi
880362
Parcel #1
AR-214214`
WELD COUNTY OIL AND GAS LEASE -
Containing 640 acres, more or less; •
Containing 640 net mineral acres, more or less:
THIS LEASE AGREEMENT, dated this 18th day of May , 1988 , made and entered , bd
into by and between WELD COUNTY, COLORADO, a political subdivision of the STATE OF COLORADO, acting by and
through the BOARD OF COUNTY COMMISSIONERS OF TEE COUNTY OF VELD, for its respective interests, c/o BOARD OF
COUNTY COMMISSIONERS, VELD COuDiff CENTENNIAL CENTER, 915 10TH STREET, GREELEY, CO 50631, hereinafter called
Lessor, and:
.:-Petroleum Energy Corporation, 1625 Broadway, Suite 1480, Denver, Colorado 80202 x
• �
O
•
hereinafter called Lessee: Zhi
• N
tri
WITNESSETE 1/4O
tTJ
WHEREAS, said Lessee has applied to.lessor for an oil and gas lease covering.the land herein described,' H
`mod has; paid a filing fee in the amount of $10.00, plus a bonus consideration of $ 15.00 - per mineral tai
'-acre, fixed by Lessor as an additional consideration for the granting of this lease, and Lessee agrees to Z w
pay an annual .rental of $ 640.00 , computed at the rate of $ 1.00 , per mineral acre or (.1-03
. fraction thereof-pin—rear. r ao
tri
WHEREAS, all the requirements relative to said application have been duly complied .with and- said x
• 131
application has been approved and allowed by Lessor; !r ••
un
• N
. .rrui(2.,.~in_consideration -of-Ate'-the agreements herein, -on the part-of Lessee to be paid, kept and PI
n
performed, Lessor does lease exclusively to Lessee for the sole and only purpose of drilling for, C)
development of and•production of oil and gas, or either of them, thereon and therefrom with the right to own t7
all oil:and. so_.produced and saved- t erefrumi.and mot reserved as royalty by Lessor under-the terms of P o
this .lease,.together with rights-of-way,-easements and servitudes for pipelines, telephone and.telegraph •
O
lines,.tanks and fixtures for producing and caring:.for -suchTprodnct,.and:housing and boarding employees,-and t o
any and all rights and privileges necessary' or the exploration ant operation`of said'lamd for oil and gas, d
the followirg described-3aad---sitmsted..in ..the .County of,Weld, State:of Colorado, :and:-acre-particularly O
described as follows: OE-`
DESCRIPTION OF LAND SECTION TOWNSHIP RANCE O co
All 23 8N 61W •
•
TO HAVE AND TO HOLD said land, and all the rights and.privileges granted hereunder to lessee until-the.
hour.of twelve o'clock noon on. the 18th day of May , 19 91 as primary.tem, and so long -
thereafter.-as oil•an&gas,-.:ar-either of them, -islproduced:in--paying quantities_fsom=said land or Lessee:is
diligently .engaged in bona fide drilling or reworking operations on said land, subject to the terms and
conditions herein. Drilling or reworking operations shall be deemed to be diligently performed if there is
no delay or cessation thereof for a greater period than sixty consecutive days unless an extension in
writing is granted by Lessor; provided that such drilling or reworking operations axe commenced during said
primary term or any extension thereof or while this lease is in force by reason of production of oil and gas
or either of them, or that such reworking is commenced within sixty days upon cessation of -production- for
the purpose of re-establishing the same, and provided further that such production is commenced during such
/,,E9P//g 880362 -
(Rev.:"11/86)
primary term or any extension .thereof, or while 'this lease is in force:by reason of such drilling or
reworking operations or other production.
EXPLORATION —Lessor reserves the right to conduct exploration on :the leased :land provided such j td
exploration dots not interfere with_rights granted herein. O �,
s
In consideration of the premises, the patties covenant and agree as follows: u: v
1. RENTAL - If this lease is extended for :an additional term as ':provided for in the. FXNEION n
:paragraph hereof, Lessee shall during such extended period pay to lessor an annual rental at double the rate
above specified for the land covered hereby. The rental in effect at the time production is established y e)
shallshall not be increased due to the term of this lease being extended by such production. Rentals set at the g
time of-established production shall be paid during the remaining life of this lease, 'annually, in aaivau e, N
~
on or before each anniversary date hereof. There shall be no refund of unused rental. t4
tT1
2. ROYALTY - Lessee stall account for any and all substances produced on the leased land and LesseeCO;d
shall to Lessor as royalty in addition to the rentals provided, but except forproducts used on the o
pay y� P H un
leased land, unavoidably lost or flared on the leased land, with approval of Lessor, the following: td\
H
(.4
(a)(a) On oil, 1211% of the oil produced_and saved from the-leased Land_ n O3
r o0
to
At the option of Lessor, and with sixty (60) days' notice to Lessee, Lessor may take its
royalty mil in kind, in which event Lessee shall deliver such royalty oil to Lessor on the leased land, In
e' se
free of cost or deduction, into the pipelines or storage tanks designated by Lessor, but Lessee shall
not in such-case be required to_provide free tankage for. any such oil fora longer period than oner;IIN
month after the same is run into tanks. With sixty '(60) days' notice to Lessee, Lessor ray cease n
taking oil royalty in.kind. When paid in cash, the royalty shall,be calculated upon the fair market
value of the cil at the well which shall not.be deemed to be less than the price actually paid to kg.m.
Lessee at the well by:the purchaser thereof; 'and`in no event shall the royalties be based upon a market 9d O
value at the well less than the posted::'price in the field for such oil, or in the absence of a posted •. p
price in the field fcr such oil, upon a market value at the well less than the prevailing price
received by other producers in .the..field for oil of like grade and gravity at the time such oil is run CJ
into pipelines or storage tanks. n
O N
(b) -On gas;"including casinghead gas or other gaseous substance ,'12_% •.of the fair market
no
value at the well or of`the price received by Lessee at the well, whichever is. greater,. of all gas C) O3
produced and sold from the leased land or utilized off the land by Lessee: A copy'of all contracts for
sale of gas shall be furnished to Lessor. Where gas is sold under contract that has been approved by
Lessor, the fair market value of such gas for determining the royalties payable hereunder shall be the
price at which such gas is sold under such contract. No approval by Lessor of the terms of any-such
agreement shall operate to make Lessor a party thereto:or obligate it thereunder in any way. At the
option of Lessor, and with sixty (60) days•" notice to Lessee, Lessor may take-its royalty in kind.
With sixty (60) days'. notice-to Lessee, Lessor may cease.taking gas royalty in kind.
(c) All costs of .marketing_:the.. oil::r•and/ar:gas produced.shall::be :borne by.Lessee and,:such costs
shall not directly or indirectly reduce the royalty payments..to Lessor. ";Except that marketing. costs
for Lessor's ire-kind.royalty-shall borne by Lessor.
, (d) If Lessor owns a lesser-interest in the oil and gas deposits of the above-described land than
the entire and undivided fee simple estate, `.then the royalties and rentals herein provided shall be
paid to 'Lessor only in the portion which its interest bears to the whole and undivided fee, but no
refund of any bonus consideration shall be made by Lessor hereunder.
880362
to 11/RAN
a
primary term or any extension thereof, or while this lease is in force by reason of such drilling or _
reworking operations or other production.
EXPLORATION — lessor reserves the right to conduct exploration on :the leased land provided such '-=J tb
exploration does not interfere with rights granted herein. o
I--, N
N l0
In consideration of the premises, the parties covenant and agree as follows: to
1. RENTAL - If this lease is extended for _an additional term as '.provided for in the. EXTENSION n
:paragraph hereof, Lessee shall during such extended period pay to lessor an annual rental at double the rate 1-C o
above specified for the land covered hereby. The rental in effect at the time production is established z N3
shall not be increased due to the term of this lease being extended by such production. Rentals set at the 2 a
time of established production shall be paid during the remaining life of this lease, annually, in adveu..e, to
h7 '-'
on or before each anniversary date hereof. There shall be no refund of unused rental. te As
to
2. 'ROYALTY - Lessee stall account for any and all substances prodded on the leased land and Lessee shall pay to Lessor as royalty, in addition to the rentals provided, but except for products used on the y 0
\
leased land, unavoidably lost or flared on the leased land, with approval of Lessor, the following: te N
zW
(a) On the oil produced.and saved from the leased land. r
_. oil, 12�% of to CO
At the option of Lessor, and with sixty (60) days' notice to Lessee, Lessor may take its 2d r
royalty oil in kind, in which event Lessee shall deliver such royalty oil to Lessor on the leased land, u:
el e
free of cost or deduction, into the pipelines or storage tanks designated by Lessor, but Lessee shall
not in such case be required to.provide free tankage for any such oil for a longer period than one te
N
month after the same is run into tanks. With sixty (60) days' notice to Lessee, Lessor may cease 00
taking oil royalty in kind. When paid in cash, the royalty shall be calculated upon the fair market ;,y
value of the oil at the well which shall not.be deemed to be less than the price actually paid to 0
Lessee at the well by.ihe purchaser thereof; and in no event shall the royalties be based upon a market 20 0
value at the well less than the posted price in the field for such oil, or in the absence of a posted 0te
price in the field fcr such oil, upon a market value at the well less than the prevailing price ti
received by other producers in the.field for oil of like grade and gravity at the time such oil is run 0
: into pipelines or storage tanks. - n
O N
0
(b) On gas, 'including casioghead gas or other gaseous substance, 12'x, . of the'fair market C] o
value at the well or of the price received by Lessee at the well, .whichever is. greater,. of all gas 0 co
produced and sold fromthe leased land or utilized off the land by Lessee. A copy of all contracts for
sale of gas shall be furnished to Lessor. Where gas is sold under contract that has been approved by
Lessor, the fair market value of such gas for determining the royalties payable hereunder shall be the
price at which such gas is sold under such contract. No approval by Lessor of the terms of any such
agreement shall operate to make Lessor a party thereto or obligate it thereunder in any way. At the
option of Lessor, and with sixty (60) days' notice to Lessee, Lessor may take its royalty in kind.
With sixty (60) days'. notice to Lessee, Lessor may cease.taking gas royalty in kind.
(c) All costs of marketing..the oil=and/or:gas produced shall be borne by.Lessee and..such costs
shall not directly or indirectly reduce the royalty payments.. to Lessor. Except that marketing costs
for Lessor's in-kind royalty shall be borne by Lessor.
(d) If Lessor owns a lesser interest in the oil and gas deposits of the above-described land than
the entire and undivided fee simple estate, then the royalties and rentals herein provided shall, be
paid to Lessor only in the portion which its interest bears to the whole and undivided fee, but no
refund of any bonus consideration shall be made by Lessor hereunder.
8802(32
3. RECORDS - Lessee agrees to keep and to have in possession complete and accurate books and records
showing the production and disposition of any and all substances produced on the leased land and to permit
Lessor, at all reasonable hours, to examine the same, or to furnish copies of same to lessor upon request
along with purchaser's support documentation. Lessor will not be unreasonable with requests. All said
books and records shall be retained by Lessee and made available in Colorado to .Lessor for a period of not
less than five years.
ni td
4. MEASUREMENTS - All production shall be accurately measured using standards established by the o
American Gas Association (AGA) and/or the American Petroleum Institute (API) and all measuring devices shall rF""'
�o
be tamperproof as nearly as possible. Oil royalties due within the terms of this lease shall be calculated m
on actual and accurate measurements within API standards unless a different means of measurement, subject to - z [r7
Lessor's approval, is provided. CJ
0
5. PAYMENTS & REPORTS - All payments and reports due hereunder shall be made on or before the day y� 2
such payments and reports are due. Nothing in this paragraph shall be construed to extend the expiration of
the primary term hereof. h] r
CI a.
Oil royalty payments and supporting documents shall be submitted prior to the last day of the' pi
1/40
month following each month's sale of production, and gas royalty payments and supporting documents shall be t7g
submitted prior to the last day of the second month following each month's sale of production. Hui
• tt]
H
All payments shall be made by rneh, check, certified check or money order. Payments having z\
restrictions, qualifications, or encumbrances of any kind whatsoever shall not be accepted by Lessor. A n COrl
penalty for a late payment shall be charges as set forth in the PENALTIES paragraph herein.
7J
7y r
6.. PENALTIES - A penalty.shall be .imposed-for, butlnotlimited to late payments, improper payments, to
e, ..
operational deficiencies, violation of any covenant of this lease, or false statements made to Lesser.
Penalties shall be determined by Lessor unless otherwise provided for by law and may be in the form of, but tTi N)
not limited to, ireerest, fees, fines, and/or lease cancellation. A penalty schedule shall be prepared by n
Lessor and shall become effective immediately after public notice. Said schedule-may he changed from time
O
C7
to time after public notice. t9-UT
330
7. LAW - The terms and-coeditions of this lease shall be performed and exercised subject to all laws, o
rules, regulations, orders, local ordinances or resolutions -.applicable to and binding upon the td 0
administration.of ..lands. and mineral.- ,caned by the. County .of Weld, and to laws, .rules and regulations Ci
governing oil and gas operations in Colorado.. Violations shall result:.in penalties as.provided for by 00 w
...or as set -List"!..in:the aforementioned schedule or-shall, .a n,
t the..option of.Lessor, result in def lt as .
0
provided hereinafter. n o
Ono
8. SURRENDER Lessee may at any time, by paying to Lessor all amounts then due as providedherein,.
surrender this lease insofar as the same covers all or any portion of the land herein leased and be relieved
from further obligations or liability hereunder with respect to the land so surrendered; provided that no
partial surrender or cancellation of this lease shall be for less than contiguous tracts of approximately
forty (40) acres or Governmental lot corresponding to a quarter-quarter section; provided further that this
surrender clause and-:the option :herein reserved, to.Lessee-.shall..,cease and becom absolutely inoperative
• immediately and concurrently with the -institution of any suit many court of law by Lessee, Lessor or any
: assignee of either to enforce this lease, or any of its terms expressed or implied. In no case shall any
surrender be effective until Lessee shall have rade full provision for conservation of the leased products
and protection of the surface rights of the leased land.
(Rev. 11/B6) 88036
9. ASSIGNMENTS -
(a) Lessee, with prior written consent of Lessor, shall have the right to assign the entire
leasehold interest of said Lessee in all or part of the land covered hereby, but not less, however, -
_than contiguous tracts of approximately forty (40) acres or Governmental lot corresponding to a
quarter-quarter section for any partial assignment, and for approval of such assignment Lessor shall
make an assignment charge in an--amount to be determined:.by Lessor. Prior to written approval by Lessor hi td
of assignment of this lease, Lessee (assignor) shall not be relieved of its obligations under the terms o
and conditions herein. An assignment shall not extend the tern of this lease. r r
kID
J
- (b) If any assignment of a portion of the land covered hereby shall be approved, a new lease by
shall be issued to the assignee covering the assigned land, containing the same terms and conditions as t9
xn
this lease, and limited as to term as this lease is limited, and the assignor shall be released and rC
0
discharged from all further obligations and liabilities as to that portion so assigned. w ro
1-1
z �
(c) Lessee shall notify Lessor of all assignments of undivided percentage or other .interests. N)
Said interests will not be recognized or approved by Lessor, and the effect of any such assignments M
will be strictly and only between the parties thereto, and outside the terms of this lease: and no pi w
dispute between parties to any such assignment shall operate to relieve Lessee from performance of any h o
terms or conditions hereof or to postpone the time therefor. Lessor shall at all times be entitled to y to
look solely to Lessee or his assignee shown en its books as being the sole owner hereof, and for the t41-,--,3
sending of all notices required by this lease and for the performance of all terns and conditions z
hereof. n co
t-1 co
(d) Although not binding on Lessor, all instruments of every kind and nature whatsoever affecting x
this lease should be filed with the Lessor. to
an
Ln
10. OVERRIDING ROYALTY Any and all'reservations or assignments or overriding royalties shall be r
subject to approval by Lessor. The total of said overriding royalties shall not exceed five percent (5%), nn
including any overriding royalty previously provided for unless production exceeds a monthly average of
fifteen (15) barrels per day or ninety thousand cubic feet of gas per day (90 MCF/D). In the event that
production drops to this amount or less, any overriding royalties which exceed five percent (5%) may be hi 0
suspended. Lessor's approval of a reservation or assignment of an overriding royalty shall not bind Lessor o
for payment of said overriding royalty and shall not relieve Lessee of any of its obligations for payment of N o
royalties to Lessor as provided by. ROYALTY paragraphs herein. C7
C�
11. OFFSET WELLS - Lessee agrees..to protect the leased land from drainage by offset wells located on ,F)t':
adjoining lands not owned by Lessor, when such drainage is not compensated for by counter-drainage. It O
o
shall be presumed that the production of oil and gas from offset wells results in drainage from the leased 0 co
land, unless Lessee demonstrates to Lessor's satisfaction, by engineering, geological, or ether data, that
production from such offset well does not result in such drainage, or .that the drilling of a well or wells
on, the leased land would not accomplish the purposes of protecting the deposits under the leased land.
Lessor's decision as to the existence of such drainage shall be final, and Lessee shall comply with Lessor's
order thereon or surrender this lease as to any such undeveloped acreage as designated by Lessor.
12. DEVELOPMENT - Upon discovery of oil:and -gas or either of them on the leased land, Lessee shall
proceed with reasonable -diligence to develop said land at a:'-rate and to an extent commensurate with the
economic development of the field in which the leased land lies.
.'. 13. POOLING CLAUSE - Lessee ray at any time or times pool any part or all of said land and lease or
any stratum or strata with other lands and leases, stratum or strata, in the samefield so as to constitute
a spacing unit to facilitate an orderly or uniform well-spacing pattern or to comply with any order, rule,
or regulation of the State or Federal regulatory or conservation agency having jurisdiction. Such pooling
880362
(Rev. 11/86)
shall be accomplished or terminated by £ilir.F, of record a declaration of pooling, or declaration cf
termination of pooling, and by mailing or tendering a copy to Lessor, or to the depository bank. Drilling
•
or reworking operations upon er production from any part of such spacing unit shall be considered for all
purposes of this lease as operations or productions from this lease. Lessee shall allocate to this lease _
the proportionate share of production which the acreage in this lease included in:'my such spacing unit
bears to the total acreage in said spacing unit.
h1 b1
14. UNITIZATION - C0MMUNITI2AT20N - In the event Lessor permits the land herein leased to be included o
within a communitization or unitization agreement, the terms of this.lease may be deemed to be modified to r r
conform to such agreement. When only a portion of the land under this lease is committed by an agreement, k
Lessor may segregate the land and issue a separate lease for each portion not committed thereunder; the term
of such separate lease shall be limited as to the original term of this lease. The terms of the lease ontzi
that portion remaining in the unit shall be deemed to be modified to conform to such agreement. N:10
Nonproducing leases shall terminate on the first anniversary date of the lease following the termination o
date of the unit or part thereof modifying the lease, but in no event prior to the end of the primary term Z F,
a
of the lease or the extension term of the lease. N
1,1 N
pia
15. 'PRODUCTION - lessee shall, subject to applicable laws, regulations and orders, operate and produce C a
all wells upon the leased land so long as the same are capable of producing in paying quantities, and shall f1
operate the same so as to produce.at a.rate commensurate with the rate of production of wells on adjoining. 7:I
o
lands within the same field and within. the limits of good. engineering practice, except for such times as- lzi
there exist neither market nor storage therefor, and except for such limitations on or suspensions n£ Z w
production as may be approved in writing by Lessor. Lessee shall be responsible for adequate site security m
on all producing properties. ti CO
Pi
PZI
16. SRUT'ZN"%EL15' If Lessee shall complete a'well on the leased land productive of gas and Lessee is N
unable to produce such gas due to a lack of suitable market therefor, Lessor may grant Lessee suspension of an
n
his obligations to produce hereunder until a, suitable market for such gas can be found, and during any such c
71 m
suspension period, it -shall be deemed that gas is being produced hereunder in paying quantities. Except, C)
however, that beginning on the anniversary date next, of the year of an extension of the lease by reason of 0
a shut-in well, Lessee shall pay to Lessor a shut-in royalty equal to $2 per acre of the lease per annum in d
addition to the annual rental. The minimum amount of such shut-in royalty payment shall be $240. Each o
year's shut-in royalty'.shill le forfeited:to lessor except for the shut-in royalty paid for the year during .
0
a
which the well begins production. The maximum
extension of the lease, due to the existence of a shut-in gi o
well,-Shall be- five years beyondJthe:extension•term.as_described in-,the.tTI SIGN paragraph-herein. ".The d
granting of try further extensions-shall be at the sole option.nf Lessor. 00
Cu,
17. CPERATIONE - No expleratioa, drilling or-production operation, including permanent installations, o
shall be within 200 feet of any existing building or other improvement, including water well or reservoir, o o
without-the written permission of the owner of said improvements. Lessee shall keep a correct log of each
well drilled hereunder, showing by name or description the formations passed through, the depth at which
each formation was reached, the number of feet of each size casing set in each well, where set, and the
total depth of each well drilled. Lessee, within thirty (30) days after the completion or abandonment of
any well drilled hereunder, stall file in the office of Lessor a complete and correct log of such well,
.,..-together with a copy-of the electric log and the:radioactivity log of the well when-such-logs, or either of
them,'. -are run; and also a copy of all- drill stem test' resultsi core recordsand analyses, record of
'perforations and initial production tests, if any. If any of the information required by this paragraph is
contained in reports required to be filed with the Oil and Gas Conservation Commission of Colorado, the
requirements of this paragraph for such information may be satisfied by such filing with said Commission,
except for copies of the reports as are required by the following paragraph, and provided that all such
information is immediately available to Lessor. Any proprietary information so submitted shall not be
subject to public inspection under Colorado law.
88036?
(Rev. 11/86)
Lessee shall bury pipelines below plow depth. lessee shall set and cement sufficient surface
casing to protect the fresh water wells of the area.
.18. NOTIFICATION - Lessee shall notify Lessor and the surface lessee or surface owner of the location
of each drill site at least two weeks prier to ,commencing drilling operations thereon. Lessee shall notify
Lessor before commencing to plug and abandon any well by copy of Lessee's request for approval or sundry
notice of intent to plug and abandon.
hi td
19. BONDS - Lessee shall be liable for all damages to the surface of the land, livestock, growing o
crops, water wells, reservoirs, or improvements caused by Lessee's operations on said land. No operations F. io
•
shall be commenced or. the landhereinabove described unless and un til Lessee shall have filed a good and
m
sufficient bond with Lessor, in an amount to be fixed by Lessor, to secure the payment for such damages as X M
may be caused by Lessee's operations on said land and to assure compliance with all the terms and provisions 7d n
of this lease, the laws of the State of Colorado, and the rules and regulations thereto appertaining. A F4 o
bond may be held in effect for the life of production of any well. a' N
z �
20. SETTISIIENT - Lessee shall not remove any machinery, equipment or fixtures placed on said land, „i
other than drilling equipment, nor draw the casing from any well unless and until all payments and Q1/4O
obligations .currently due Lessor under the terms of this lease shall have been paid or satisfied. Any LA
machinery, equipment or fixtures. left. on this land .for, a period of more than six (6) months after the to o
expiration hereof, shall automatically become the property of Lessor.
y to
H
Z
$1. OTHER DISCOVERY - Should Lessee discover any valuable products, other than oil and gas, on or
within the leased land, Lessee shall within seven (7) days report such discovery to Lessor, in which event n m
Lessee and lessor may negotiate:a -provision for production of such discovery. • [I
to
22. WATER - This lease does not grant permission, express or implied, to Lessee for water exploration, an ,,
drilling, or establishing water wells without the written permission of the surface owner. If Lessor is the N
surface owner, said permission shall mot be unreasonably withheld. If Lessee desires to establish-or
.,adjudicate any water right for beneficial use on the leased land, any such adjudication or application shall
be in the name of Lessor if lessor is the surface owner. The same shall apply to any nontributary water d
rights established on the lessen land which may be put to beneficial use off said land. na
23. , DEFALZT - Upon failure or default of Lessee to comply with any of the terms and provisions 'hereof g
including but not..limited to the Failure to comply.with laws, rules'.and regulations governing Colorado oil ti
and gas operations, Lessor is hereby authorized upon notice and hearing,-:as .hereinafter provided, to cancel n
this lease as..to..all of the leased lane so claimed cr possessed by Lessee hereunder. In.the event of any o rn
such default or failure, Lessor shall, before making any such cancellation, send to Lessee by certified
mail, to the post office address 'of said lessee as shown by the records of Lessor, a notice of intention to n o
cancel for such. failure or default, specifying the same, stating that if within thirty (30) days from the ' o0
date of mailing said notice, Lessee shall correct such failure er default, no:cancellation will be made. If
such failure'.or default is not corrected within.ahirty (30) days after the mailing of such notice, and if
Lessee does not request a bearing on such notice within thirty (30) days, this. lease will terminate and to
cancelled by operation of this paragraph without further action by Lessor, or further notice to Lessee.
24. EXTENSION If Lessee fails to make discovery' of oil -and gas, or either of them, in paying
r quantities during the primary term-hereof, or during drilling operations commenced during the primary term
hereof, Lessee may make written application to Lessor for an extension.,of this lease for a term equal to the
primary term as to all' of the mineral acres covered hereby (excluding any mineral acres theretofore
surrendered as in the SURRENDER Paragraph provided,. or assigned as in the ASSIGNMENTS Paragraph provided).
The granting of such extension shall be at the sole option of Lessor at double the rental for the primary
term hereof.
Copy_ 11/651
25. FOLD HAESII.ESS - Lessee shall indemnify Lessor against all liability and loss, and against all .
claims and actions, including the defense of such claims or actions, based upon or arising out of damage or
injury, including death, to persons or property caused by or sustained in connection with operations on this
leased land or by conditions created thereby, or based upon any violation of any statute, ordinance, or
regulation.
'rJ td
•
26. CONDEMNATION - If the leased land shall be taken in any condemnation ~
proceeding, this lease shall N H
automatically terminate as of the date of taking. The award for such condemnation shall be paid to Lessor, O J
except for any specific award(s) paid to Lessee for severed oil and gas reserves, in which event
POI
XXXXXXXXXXX of such specific sward(s) shall be paid to lessor in lieu of royalty lost py virtue of the ;d n
condemnation. Improvements shall be removed by Lessee per terms in the SErromn NT Paragraph herein. If K
only a portion of the leased land is taken by condemnation, Lessor may, at its option, terminate this lease Z N
F-'
or terminate only that portion of the lease so taken. z a
1-4
27. ERRORS - Every effort is made by Lessor to avoid errors in all procedures including but not t4
limited to auction listings and lease preparation.. lessor shall not be liable for any inconvenience or loss td
caused by errors which may occur. Lessee shall notify Lessor immediately upon discovery of any errors or 'd
(n
discrepancy whatever. \
H
Z
28. ARCHAEOLOGY - Lessee shall not destroy, disturb, mar, collect, remove or.alter any prehistoric or
historic resources of any kind on Weld County lands as provided by law. These resources include but are not . N
limited to all artifacts of stone, wood or metal, pictogrAram structures, and bones. A discovery- of tt
anything of prehistoric or historic nature shall be reported to Lessor or the State of Colorado
.f Archaeologist immediately. O'
m ..
UT
-
29. DEFINITIONS - M Ni
(a) "Gas" as used herein shall mean all gases (combustible and noncombustible), including but not Pa
limited to all gaseous.hydrocarbons,.gaseous compounds,..carbon dioxide, and helium. t9 +n
Z7 O
(b) "Oil and gas" as used herein shall include all substances produced as by-products therewith, t 0O
including but not limited to sulfur.
CJ
(c) "Paying quantities" as used herein shall mean and refer to quantities of oil and gas cr of . O J
either.of to-pay for the current cost of producing same.
O
no
30. - :METES AND ASSIGNS'.-. The,benefits and oblig.tin"a of this-.lease.shall inure to'and be binding upon 0 o0
the heirs, 7Fgal representatives,.successors or assigns of lessee; but no sublease or assistant= hereof, or
of any interest herein, shall be binding upon Lessor until the same has been approved by Lessor as explained
in the ASSIGNI2ETS' paragraph provided.
31. WARRANTY OF TITLE - Lessor does not warrant title to the leased premises, but it shall, upon
request, allow Lessee access to such abstracts and other title papers as it has in its files. There shall
be no obligation on Lessor's part to purchase new or supplemental or other title papers nor to do any
curative work..in connection with .title 'to the..subject. lands. . All abstracts of title, whether new or
'supplementary, obtained by Lessee and covering the subject lands shall become the :property of and be
delivered to Lessor.after Lessee has completed its title examination and curative work, subject, however, to
the right of Lessee to use such abstracts upon request at any time during the term of the lease.
•
88u382
(Rev. 11/86)
IN WITNESS WHEREOF, lessor has hereunto signed and caused its name to be signed by the BOARD OF COUNTY . .
COMMISSIONERS OF THE COUNTY OF WELD, with the seal of, the office affixed, and Lessee has signed this
agreement, the day and year first shove written. ..
POARD OF corm COMMISSIONERS h] td
WELD LT1TY, COLORADO o H
Ea ea
� t6 �� h
N l0
H J
ATTEST Pd t 'Lt t) ` k' o
Weld CmuntV-Cl)erk and Recorder S { - z a
and Clem Xto(tqe Board,, /^,— - N gbt------.)
� � . ' x , U
LESSEE: P of um Ene C o ation z �
n co
rco
Rob Jul ander, Vice President x H
STATE OF COLORADO ) el .Lyi
.
Ss. xl nN
COUNTY OF WELD ) O
, 61
q The foregoing instrument vas acknowledged before me this /j,-, day. o£ , 0-E,
Z
VI 0
Witness my hand and official seal. �/ O
My Commission Expires: ./77(41Y---7A-4C-A-' 17., /,:t67/ - nO ao
0
no
o 00
ryi
(� Notary Public
` , .V i,r, /�7s
te
Z ii a n �,- / p//
R
Rr
n� 74
8.B'.C,':;:,.5
(Rev. 11/86)
Hello