HomeMy WebLinkAbout871526.tiff 1
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RESOLUTION
RE: APPROVE REQUEST OF TRANSCONTINENT OIL COMPANY TO WAIVE
BIDDING PROCEDURE CONCERNING OIL AND GAS LEASE AND ACCEPT
OFFER TO LEASE MINERAL ACRES
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, Transcontinent Oil Company has requested that the
bidding procedure be waived concerning an Oil and Gas Lease on the
following described mineral acres :
A 30 foot wide strip along the south side of
the NE$ , Section 13 , Township 5 North, Range
64 West of the 6th P.M. , Weld County, Colorado
WHEREAS, after review, the Board found that Transcontinent
Oil Company did show good cause for waiving the bidding procedure
on said Oil and Gas Lease, and
WHEREAS, Transcontinent Oil Company is offering to lease the
above described mineral acres, containing 1 .80 mineral acres , more
or less, and -
WHEREAS, the Board finds that the lease offer from
Trancontinent Oil Company in the amount of TWO HUNDRED AND NO/100
DOLLARS ($200 .00) , is acceptable, with the further terms and
conditions being as stated in said Oil and Gas Lease, a copy being
attached hereto and incorporated herein by reference.
NOW, THEREFORE, BE IT RESOLVED by the Board of County
Commissioners of Weld County, Colorado, that the request of
Transcontinent Oil Company, 621 17th Street, Suite 1201 , Denver,
Colorado 80293 , to waive the bidding procedure on an Oil and Gas
Lease concerning the 1 .80 mineral acres, be, and hereby is ,
approved.
BE IT FURTHER RESOLVED by the Board that the offer of
Transcontinent Oil Company, as hereinabove stated, be, and hereby
is, accepted.
871526
Z0I2ll — a 1�►; �ect- TamSCon-bnen`
Page 2
RE: WAIVE BID - TRANSCONTINENT OIL COMPANY 64-5-13
The above and foregoing Resolution was , on motion duly made
and seconded, adopted by the following vote on the 7th day of
December, A.D. , 1987 .
U BOARD OF COUNTY COMMISSIONERS
ATTEST: u -le�° WELD COU TY, LORADO
11
Weld County Jerk and Recorder
and Clerk to the Board Gor o a , airman
BY: \ (7-m rum i C. . Kir y, Per -Tem
Deputy County lerk N
APPROVED A \ TO FORM: ene R. Bran ner
EXCUSED DATE OF SIGNING - AYE
7ys� a�: Jagquelne Johnson
County o ey �f' 11r 0"„t tf;
Frank llamagtichi
871526
AR.124796
WELD COUNTY OIL AND GAS LEASE
Containing 1.80 acres, more or less;
Containing 1.80 net mineral acres, more or less:
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THIS LEASE AGREEMENT, dated this 7th day of December , 1987 , made and entered t...)
into by and between WELD COUNTY, COLORADO, a political subdivision of the STATE OF COLORADO, acting by and N N
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through the BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF WELD, for its respective interests, c/o BOARD OF O
COUNTY COMMISSIONERS, WELD COUNTY CENTENNIAL CENTER, 915 10TH STREET, GREELEY, CO 80631, hereinafter called x
Lessor, and: 3/0 hi n
Transrontinent Oil Comnanv '4G
621 17th St. . Ste. 1201
Denver. CO 80793 • N
hereinafter called Lessee: 'p
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WITNESSETH • F,
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WHEREAS, said Lessee has applied to Lessor for an oil and gas lease covering the land herein described, till::
and has paid a filing fee in the amount of $10.00, plus a bonus consideration of $ 200.00 pgntgiugrgl; Z N
stag:, fixed by Lessor as an additional consideration for the granting of this lease, and Lessee agrees to r).;;;
pay an annual rental of $ 1.80 , computed at the rate of $ 1.00 , per mineral acre or t� J
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fraction thereof per year.
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WHEREAS, all the requirements relative to said application have been duly complied with and said a'
application has been approved and allowed by Lessor; 71 N
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THEREFORE, in consideration of the agreements herein, on the part of Lessee to be paid, kept and O
performed, Lessor does lease exclusively to Lessee for the sole and only purpose of drilling for,
development of and production of oil and gas, or either of them, thereon and therefrom with the right to own o
all oil and gas so produced and saved therefrom and not reserved as royalty by Lessor under the terms of o
this lease, together with rights-of-way, easements and servitudes for pipelines, telephone and telegraph pi o
lines, tanks and fixtures for producing and caring for such product, and housing and boarding employees, and b
any and all rights and privileges necessary for the exploration and operation of said land for oil and gas, n
the following described land situated in the County of Weld, State of Colorado, and more particularly o
described as follows: o
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DESCRIPTION OF LAND SECTION TOWNSHIP RANGE
A 30 foot wide strip along the south
side of the NE1 13 5 North 64 West
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 7th day of December , 19 90 as primary term, and so long
thereafter as oil and gas, or either of them, is produced in paying quantities from said land or Lessee is
diligently engaged in bona fide drilling or reworking operations on said laud, 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 are 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
87 1526
-26
(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
exploration does not interfere with rights granted herein.
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In consideration of the premises, the parties covenant and agree as follows:
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1. RENTAL - If this lease is extended for an additional term as provided for in the EXTENSION J
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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 0 'b
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shall not be increased due to the term of this lease being extended by such production. Rentals set at the FCC n
time of established production shall be paid during the remaining life of this lease, annually, in advance, o
on or before each anniversary date hereof. There shall be no refund of unused rental. Z f-'
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2. ROYALTY - Lessee shall account for any and all substances produced on the leased land and Lessee h] J
shall pay to Lessor as royalty, in addition to the rentals provided, but except for products used on the C rn
leased land, unavoidably lost or flared on the leased land, with approval of Lessor, the following: t9
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(a) On oil, 12k% of the oil produced and saved from the leased land. H
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At the option of Lessor, and with sixty (60) days' notice to Lessee, Lessor may take itsn co
royalty oil in kind, in which event Lessee shall deliver such royalty oil to Lessor on the leased land,
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 • F,
month after the same is run into tanks. With sixty (60) days' notice to Lessee, Lessor may cease 4,
taking oil royalty in kind. When paid in cash, the royalty shall be calculated upon the fair market
value of the oil at the well which shall not be deemed to be less than the price actually paid to
Lessee at the well by the purchaser thereof; and in no event shall the royalties be based upon a market 0O
value at the well less than the posted price in the field for such oil, or in the absence of a posted �7
price in the field fcr such oil, upon a market value at the well less than the prevailing price trim
received by other producers in the field for oil of like grade and gravity at the time such oil is run Pi 0
into pipelines or storage tanks. $ o
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(b) On gas, including casinghead gas or other gaseous substance, 12k% of the fair market t7
value at the well or of the price received by Lessee at the well, whichever is greater, of all gas0 to
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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 O
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Lessor, the fair market value of such gas for determining the royalties payable hereunder shall be the O Cm
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.
(Rev. 11/86) 871526
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. N H
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4. MEASUREMENTS - All production shall be accurately measured using standards established by the NJ
American Gas Association (AGA) and/or the American Petroleum Institute (API) and all measuring devices shall
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be tamperproof as nearly as possible. Oil royalties due within the terms of this lease shall be calculated � Cl
on actual and accurate measurements within API standards unless a different means of measurement, subject to o
Lessor's approval, is provided. 8'
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5. PAYMENTS & REPORTS - All payments and reports due hereunder shall be made on or before the day r.
such payments and reports are due. Nothing in this paragraph shall be construed to extend the expiration of rn
the primary term hereof. ty
Oil royalty payments and supporting documents shall be submitted prior to the last day of the I-3 ta
month following each month's sale of production, and gas royalty payments and supporting documents shall be HO1
submitted prior to the last day of the second month following each month's sale of production. Z
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All payments shall be made by cash, check, certified check or money order. Payments having [Pi
restrictions, qualifications, or encumbrances of any kind whatsoever shall not be accepted by Lessor. A r,
penalty for a late payment shall be charges as set forth in the PENALTIES paragraph herein. N
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6. PENALTIES - A penalty shall be imposed for, but not limited to late payments, improper payments, 'v
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operational deficiencies, violation of any covenant of this lease, or false statements made to Lessor. n0
Penalties shall be determined by Lessor unless otherwise provided for by law and may be in the form of, but
not limited to, interest, fees, fines, and/or lease cancellation. A penalty schedule shall be prepared by t9
Lessor and shall become effective immediately after public notice. Said schedule may be changed from time 7J O
to time after public notice. o
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7. LAW - The terms and conditions of this lease shall be performed and exercised subject to all laws, b
rules, regulations, orders, local ordinances or resolutions applicable to and binding upon the n
administration of lands and minerals owned by the County of Weld, and to laws, rules and regulations St).
governing oil and gas operations in Colorado. Violations shall result in penalties as provided for by law o
or as set forth in the aforementioned schedule or shall, at the option of Lessor, result in default as p co
provided hereinafter.
8. SURRENDER - Lessee may at any time, by paying to Lessor all amounts then due as provided herein,.
surrender this lease insofar as the same covers all or any portion of the land herein leased and be relieved
from further obligations or liability hereunder with respect to the land so 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 become absolutely inoperative
immediately and concurrently with the institution of any suit in any 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 made full provision for conservation of the leased products
and protection of the surface rights of the leased land.
871526
(Rev. 11/86)
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 N
make an assignment charge in an amount to be determined by Lessor. Prior to written approval by Lessor v
of assignment of this lease, Lessee (assignor) shall not be relieved of its obligations under the terms ui cm
and conditions herein. An assignment shall not extend the term of this lease.
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(b) If any assignment of a portion of the land covered hereby shall be approved, a new lease ,C o
shall be issued to the assignee covering the assigned land, containing the same terms and conditions as N
this lease, and limited as to term as this lease is limited, and the assignor shall be released and Z NI
discharged from all further obligations and liabilities as to that portion so assigned.
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(c) Lessee shall notify Lessor of all assignments of undivided percentage or other interests. C rn
Said interests will not be recognized or approved by Lessor, and the effect of any such assignments o
will be strictly and only between the parties thereto, and outside the terms of this lease: and no H
dispute between parties to any such assignment shall operate to relieve Lessee from performance of any ti
terms or conditions hereof or to postpone the time therefor. Lessor shall at all times be entitled to 2 In
look solely to Lessee or his assignee shown en its books as being the sole owner hereof, and for the n ;;;
sending of all notices required by this lease and for the performance of all terms and conditions M
hereof.
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(d) Although not binding on Lessor, all instruments of every kind and nature whatsoever affecting a+
this lease should be filed with the Lessor. Sti N
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10. OVERRIDING ROYALTY - Any and all reservations or assignments or overriding royalties shall be O
subject to approval by Lessor. The total of said overriding royalties shall not exceed five percent (5%), 6
including any overriding royalty previously provided for unless production exceeds a monthly average of 21
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fifteen (15) barrels per day or ninety thousand cubic feet of gas per day (90 MCF/D). In the event that £ o
production drcps to this amount or less, any overriding royalties which exceed five percent (5%) may be td c,
suspended. Lessor's approval of a reservation or assignment of an overriding royalty shall not bind Lessor d
for payment of said overriding royalty and shall not relieve Lessee of any of its obligations for payment of
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royalties to Lessor as provided by ROYALTY paragraphs herein. O
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11. OFFSET WELLS - Lessee agrees to protect the leased land from drainage by offset wells located on nO w
adjoining lands not owned by Lessor, when such drainage is not compensated for by counter-drainage. It
shall be presumed that the production of oil and gas from offset wells results in drainage from the leased
land, unless Lessee demonstrates to Lessor's satisfaction, by engineering, geological, or other 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 may 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 same field so as to constitute
a spacing unit to facilitate an orderly or uniform well-spacing pattern or to comply with any order, rule,
or regulation of the State or Federal regulatory or conservation agency having jurisdiction. rSuch pooling
(Rev. 11/86) 871526
shall be accomplished or terminated by filing of record a declaration of pooling, or declaration of
termination of pooling, and by mailing or tendering a copy to Lessor, or to the depository bank. Drilling
or reworking operations upon or production from any part of such spacing unit shall be considered for all
purposes of this lease as operations or productions from this lease. Lessee shall allocate to this lease
the proportionate share of production which the acreage in this lease included in any such spacing unit
bears to the total acreage in said spacing unit.
14. UNITIZATION - COMNUNITIZATION - In the event Lessor permits the land herein leased to be included ti] W
within a communitization or unitization agreement, the terms of this lease may be deemed to be modified to KNJFa
conform to such agreement. When only a portion of the land under this lease is committed by an agreement, -i -
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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 on
that portion remaining in the unit shall be deemed to be modified to conform to such agreement. 7i f]
Nonproducing leases shall terminate on the first anniversary date of the lease following the termination fC o
date of the unit or part thereof modifying the lease, but in no event prior to the end of the primary term Z Ni
of the lease or the extension term of the lease. Z N
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15. PRODUCTION - Lessee shall, subject to applicable laws, regulations and orders, operate and produce [�]
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all wells upon the leased land so long as the same are capable of producing in paying quantities, and shall by
operate the same so as to produce at a rate commensurate with the rate of production of wells on adjoining
lands within the same field and within the limits of good engineering practice, except for such times as H Ni
there exist neither market nor storage therefor, and except for such limitations on or suspensions of H fa
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production as may be approved in writing by Lessor. Lessee shall be responsible for adequate site security Z
on all producing properties. n 00
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16. SUUT-IN WELLS - If Lessee shall complete a well on the leased land productive of gas and Lessee is F,
unable to produce such gas due to a lack of suitable market therefor, Lessor may grant Lessee suspension of NJ
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his obligations to produce hereunder until a suitable market for such gas can be found, and during any such
suspension period, it shall be deemed that gas is being produced hereunder in paying quantities. Except,
however, that beginning on the anniversary date next, of the year of an extension of the lease by reason of C)
a shut-in well, Lessee shall pay to Lessor a shut-in royalty equal to $2 per acre of the lease per annum in
addition to the annual rental. The minimum amount of such shut-in royalty payment shall be $240. Each -01
year's shut-in royalty shall be forfeited to Lessor except for the shut-in royalty paid for the year during Pd o
which the well begins production. The maximum extension of the lease, due to the existence of a shut-in
well, shall be five years beyond the extension term as described in the EXTENSION paragraph herein. The Mc)
granting of any further extensions shall be at the sole option of Lessor.
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17. OPERATIONS - No exploration, drilling or production operation, including permanent installations, 0(11
shall be within 200 feet of any existing building or other improvement, including water well or reservoir, o
without the written permission of the owner of said improvements. Lessee shall keep a correct log of each (2O1,
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, shall file in the office of Lessor a complete and correct log of such well,
together with a copy of the electric log and the radioactivity log of the well ;den such logs, or either of
them, are run; and also a copy of all drill stem test results, core records and analyses, record of
perforations and initial production tests, if any. If any of the information required by this paragraph is
contained in reports required to be filed with the Oil and Cas 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.
(Rev. 11/86) 871526
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. N i..,
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19. BONDS - Lessee shall be liable for all damages to the surface of the land, livestock, growing Ln to
crops, water wells, reservoirs, or improvements caused by Lessee's operations on said land. No operations by
shall be commenced on the land hereinabove described unless and until Lessee shall have filed a good and
sufficient bond with Lessor, in an amount to be fixed by Lessor, to secure the payment for such damages as K
may be caused by Lessee's operations on said land and to assure compliance with all the terms and provisions y, N
of this lease, the laws of the State of Colorado, and the rules and regulations thereto appertaining. A 2 N
bond may be held in effect for the life of production of any well. ,p
20. SETTLE1MNT - Lessee shall not remove any machinery, equipment or fixtures placed on said land, Cn
other than drilling equipment, nor draw the casing from any well unless and until all payments and
obligations currently due Lessor under the terms of this lease shall have been g paid or satisfied. Any H N
machinery, equipment or fixtures left on this land for a period of more than six (6) months after the [�7
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expiration hereof, shall automatically become the property of Lessor. WW1
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21. OTHER DISCOVERY - Should Lessee discover any valuable products other than oil and gas, on or M
within the leased land, Lessee shall within seven (7) days report such discovery to Lessor, in which event �y
Lessee and Lessor may negotiate a provision for production of such discovery.
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22. WATER - This lease does not grant permission, express or implied, to Lessee for water exploration, xl to
drilling, or establishing water wells without the written permission of the surface owner. If Lessor is the n
surface owner, said permission shall not be unreasonably withheld. If Lessee desires to establish or O
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
rights established on the leased land which may be put to beneficial use off said land. o
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23. DEFAULT - Upon failure or default of Lessee to comply with any of the terms and provisions hereof d
including but not limited to the failure to comply with laws, rules and regulations governing Colorado oil C1
and gas operations, Lessor is hereby authorized upon notice and hearing, as hereinafter provided, to cancel O m
this lease as to all of the leased land so claimed cr possessed by Lessee hereunder. In the event of any `
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such default or failure, Lessor shall, before making any such cancellation, send to Lessee by certified 0 0
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mail, to the post office address of said lessee as shown by the records of Lessor, a notice of intention to O
cancel for such failure or default, specifying the same, stating that if within thirty (30) days from the
date of mailing said notice, Lessee shall correct such failure or default, no cancellation will be made. If
such failure or default is not corrected within thirty (30) days after the mailing of such notice, and if
Lessee does not request a hearing on such notice within thirty .(30) days, this lease will terminate and be
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
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.
871526
(Rev. 11/86)
25. BOLD HARELESS - 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 er 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.
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26. CONDENHATION - If the leased land shall be taken in any condemnation proceeding, this lease shall N F-'
automatically terminate €s of the date of taking. The award for such condemnation shall be paid to Lessor, J J
except for any specific award(s) paid to Lessee for severed oil and gas reserves, in which event O\ V)
of such specific award(s) shall be paid to Lessor in lieu of royalty lost by virtue of the
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condemnation. Improvements shall be removed by Lessee per terms in the SEIILENENT Paragraph herein. If p
only a portion of the leased land is taken by condemnation, Lessor may, at its option, terminate this lease K o
or terminate only that portion of the lease so taken. Z
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27. ERRORS - Every effort is made by Lessor to avoid errors in all procedures including but not
limited to auction listings and lease preparation. Lessor shall not be liable for any inconvenience or loss p; to
caused by errors which may occur. Lessee shall notify Lessor immediately upon discovery of any errors or pa rn
9
discrepancy whatever. F'
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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 Z U1
limited to all artifacts of stone, wood or metal, pictographs, structures, and bones. A discovery of n co
anything of prehistoric or historic nature shall be reported to Lessor or the State of Colorado tr11
Archaeologist immediately.
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29. DEFINITIONS - ,p
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(a) "Gas" as used herein shall mean all gases (combustible and noncombustible), including but not n
limited to all gaseous hydrocarbons, gaseous compounds, carbon dioxide, and helium. 0
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(b) "Oil and gas" as used herein shall include all substances produced as by-products therewith, o
including but not limited to sulfur. - p
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(c) "Paying quantities" as used herein shall mean and refer to quantities of oil and gas or of c;
either of them sufficient to pay for the current cost of producing same. n
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30. HEIRS AND ASSIGNS - The benefits and obligations of this lease shall inure to and be binding upon - p
the heirs, legal representatives, successors or assigns of Lessee; but no sublease or assignment hereof, or 2 mo
of any interest herein, shall be binding upon Lessor until the same has been approved ty Lessor as explained
in the ASSIGNMENTS' paragraph provided.
31. WARRANTY OF TITLE - Lessor does not warrant title to the leased premises, but it shall, upon
request, allow Lessee access to such abstracts and other title papers as it has in its 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.
(Rev. 11/86) 871526
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 above written.
BOARD OF COUNTY COMMISSIONERS
WELD COUNTY, OLO - rq td
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ATTEST: Se .pr lanCrw 7:1 (")
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Weld County)CIl�{ �;( [Sd )Eeaorder- - y 0
and Clerk tejSc S�$rd" .-�. Jac uelin Johnson - Excused date of sinning z
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(Rev. 11/86) 871526
COGSWELL AND WEHRLE
ATTORNEYS AND COUNSELORS AT LAW
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
ONE UNITED SANK CENTER TELEPHONE 303 961.2130_
IT00 LINCOLN STREET. SUITE 3500 TELECOPIER: 303 632-2150
DENVER,COLORADO 50203
•
November 19, 1987
Southmark Acquisitions, Inc.
P.O. Box 3549
Midland, Texas 79702
Attn: Ms. Brenda Hughes
DRILLING TITLE OPINION
Lohr No. 13-1 Well
Weld County, Colorado
Gentlemen:
LANDS COVERED BY OPINION
Township 5 North, Range 64 West, 6th P.M.
Weld County, Colorado
•
Section 13: NEa
Containing 160.00 acres, more or less
TITLE DATA EXAMINED
' 1 . Tract indices of Transamerica Title Insurance Company, Greeley,
Colorado from inception of title to November 4, 1987 at 7:00 a.m.
2. Records of the Weld County, Colorado Clerk and Recorder, Greeley,
Colorado insofar as same pertains to the captioned lands from inception of title
to November 4, 1987 at 7:00 a.m.
3. Judgment docket records maintained by Stewart Title of Greeley,
Colorado, posted current through November 4, 1987.
4. Civil claims index maintained by the District Court, Weld County,
Colorado, posted current through November 4, 1987.
5. Records of the County Treasurer of Weld County, Colorado,
pertaining to the subject lands.
871526
OGSWELL AND WEF. .<LE
Southmark Acquisitions, Inc.
00744
November 2, 1987
Page 2
•
•
OWNERSHIP
For convenient reference, we have segregated the subject lands into the
following tracts: •
TRACT 1 : A 30-foot wide strip of land off the entire south side of the
N E4 of Section 30, containing 1 .8 acres, more or less.
TRACT 2: All of the NE's except Tract 1 described above, containing
158.2 acres, more or less.
Each interest tabulated below is an undivided interest and has been
proportionately reduced where appropriate.
Based upon the title data examined, and subject to the exceptions,
comments, and requirements set forth herein, we find title to the captioned
lands and the leases tabulated herein as of November 4, 1987 at 7:00 a.m. to
be owned and encumbered as follows:
TRACT 1 SURFACE
Owner Interest
Weld County All
TRACT 2 SURFACE
Owner Interest
Margaret S. Lohr and '
Ralph Lohr, as joint
tenants All
TRACT 1 MINERALS
Owner Interest Lease
Weld County All Unleased
TRACT 2 MINERALS
Owner Interest Lease
Margaret S. Lohr and
Ralph Lohr, as joint
tenants All A
871526
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