HomeMy WebLinkAbout880092.tiff AR2131288
RESOLUTION
N OU RE: APPROVE REQUEST OF WILLIAM G. CREWS, ON BEHALF OF SNYDER OIL
o COMPANY, TO AMEND LEASE ON SECTION 27 , TOWNSHIP 4 NORTH,
ri p RANGE 64 WEST OF THE 6TH P.M. , WELD COUNTY, COLORADO
U
WHEREAS, the Board of County Commissioners of Weld County,
of Colorado, pursuant to Colorado statute and the Weld County Home
cfl Rule Charter, is vested with the authority of administering the
o a affairs of Weld County, Colorado, and
in-w
o WHEREAS, the Board did, by Resolution dated August 5 , 1987,
w approve an Oil and Gas Lease with Snyder Oil Company, covering
'dig certain mineral acres located in the W} , Section 27, Township 4
o North, Range 64 West of the 6th P.M. , Weld County, Colorado, and
.. w
'" WHEREAS, William G. Crews, on behalf of Snyder Oil Company,
W has requested that certain amendments be made to said lease, and
o
co u
o z WHEREAS, after study and review, the Board finds that good
r4 w cause exists to amend said lease.
NE
o ' NOW, THEREFORE, BE IT RESOLVED by the Board of County
] Commissioners of Weld County, Colorado, that said Oil and Gas
co
o w Lease be, and hereby is, amended as follows :
N 114
z 1 . Delete the following from Section 8 (SURRENDER) : "provided
N P4 that no partial surrender or cancellation of this lease shall be
for less than continguous tracts of approximately forty (40) acres
w N or Governmental lot corresponding to a quarter-quarter section; "
oa, 2 . Delete Section 9 (ASSIGNMENTS) in its entirety and replace
o with a new section 9 (ASSIGNMENTS) which reads as follows :
ri rIo
14 w 9 . ASSIGNMENTS: The rights of Lessor and Lessee hereunder
may be assigned in whole or in part. No change in ownership
of Lessor' s interest (by assignment or otherwise) shall be
binding on Lessee until Lessee has been furnished with
notice, consisting of certified copies of all recorded
instruments or documents and other information necessary to
establish a complete chain of record title from Lessor, and
then only with respect to payment thereafter made. No other
kind of notice, whether actual or constructive, shall be
binding upon Lessee. No present or future division of
Lessor' s ownership as to different portions or parcels of
said land shall operate to enlarge the obligations or
diminish the rights of Lessee, and all Lessee ' s operations
may be conducted without regard to any such division. If all
or any part of this lease is assigned, no leasehold owner
880092
Page 2
RE: AMEND LEASE - SNYDER OIL COMPANY
c u shall be liable for any act or omission of any other
leasehold owner.
NO
o 3 . Delete Section 10 (OVERRIDING ROYALTY) in its entirety.
Ca
a o 4 . Delete Section 19 (BONDS) in its entirety.
03
o W BE IT FURTHER RESOLVED by the Board that the aforementioned
a amendments be, and hereby are, retroactive to August 5, 1987 .
0
The above and foregoing Resolution was, on motion duly made
vz and seconded, adopted by the following vote on the 8th day of
February, A.D. , 1988 .
~ W BOARD OF COUNTY COMMISSIONERS
o a ATTEST: letAIA-4 b WEL OUNTY, COLORADO
co U
co z Weld Cqu 1* And Recorder
• H and Cl k t� ' e $ord Gene R. Brantner, Chairman
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.M, APPR VED S 3'O thORM: Ja.que
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to o County Attorney , !+'
CO CV Fran Yamaguchi
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880092
WILLIAM G. CREWS, CPL
OIL AND GAS
1223 28TH AVENUE.SUITE 2
• _ -- GREELEY COLORADO 50631
'� 1 - (303)351-0733 GREELEY
I - _ I ti; - (303)659-7710 DENVER
January 25, 1988
JAN251988
Clerk to the Board of x ,!K
Weld County Commissioners 27z/2._
Centennial Building
915 10th. Street
Greeley, CO 80631
This is to request a hearing on Wednesday, January 27 at 9:00 a.m. before the
Board of Weld County Commissioners for the following:
1. Request amendment, on behalf of The Robert W. Gerrity Company and
Snyder Operating Partnership L.P. , of Weld County Oil and Gas Tease dated
August 5, 1987 covering portions of the W', of Section 27, Township 4 North,
Range 64 West.
2. Request amendment, on behalf of Silverado Oil, Inc. , Cache
Exploration, Inc. , and Conquest Oil Company, of Weld County Oil and Gas Tease
dated December 19, 1985 covering portions of the Sk of Section 12, Township 5
North, Range 65 West.
3. Request waived-bid paid-up oil and gas lease from Weld County
covering less than two total acres in NW;NW; of Section 5, Township 4 North,
Range 65 West (Lots in Herrington's Addition, Town of LaSalle) . This is
basically a continuation of a previous request.
I will have met with Tom David concerning all three requests prior to the
meeting on January 27.
Your scheduling of my appearance before the Board will be sincerely
appreciated.
Cordially,
William G. Crews, CPL
cc: Thomas David, Esq.
County Attorney
Weld County
FaC/mm
880092
January 26, 1988 WILLIAM G. CREWS, CPL
.,. Ry...� OIL AND GAS
1�P31. 11A11 David _ 1223 28TH AVENUE. SUITE 2
County Attorney GREET EY COI GRADE)80631
Weld County - (303)351 0733 GREELEY
- O031 659-7/TO DENVER
Centennial l Building
910 10th. Street
Greeley, CO 80631
tear Tan:
RE: Oil and (as Lease dated August 5, 1987
County/Snyder Operating Partnership L.P.
Parts of SW' and SW;NW;-Gec. 27-4n-64w
Recorded in Book 1167 under Rec. No. 2111307
As shown on the attached plat, the parcel covered by the captioned learn is
irregular and does not cover, by itself, one legal spacing unit . The Robert
W. Gerrity Company will take an assignment of County Tracts Al and A2 fran
Snyder and will create a pooled unit consisting of the E=,SE: of Section 27 for
Codell and Niobrara production. Snyder will continue to awn the remainder of
the County lease and rw(xive an assignment of the Lehfeldt et al. leases from
Gerrity insofar as they cover Tracts B1 and B2. Snyder will need to pool the
W;SW; to create a drilling unit, and Snyder or its assigns will have to pool
either the W=,NW or S;NW; to legally drill this acreage. Snyder, in its
assignment to Gerrity, will reserve an overriding royalty equal to the
difference between the burdens on the County lease and the total burdens on
the Lehfeldt et al. leases. . .approximately 8.5% which is in excess of the
amount permitted under the lease if production does not exceed certain daily
amounts.
In reviewing the County lease, the Gerrity/Snyder acreage trade and pooling
are not possible without a lease amendment. The right divide the lease
acreage and to assign less than a 40-acre tract is expressly prohibited, and,
in the race of the proposed overriding royalty reservation, such reservation
is effectively prohibited since most Codell/Niobrara wells will drop below 15
barrels of oil or 90 MCF of gas per day within a few months of first
production.
Also, the County lease is not an "unless" lease. The lease requires a rental
even if production ensues, and does not forfeit if a rental is not paid or is
not timely paid. The rental should be payable until the lease is drilled, but
not thereafter.
Additionally, a bond might be necessary if the E%,SW1/2 were first pooled and a
well then drilled on the Lehfeldt lands. Once pooled, operations on any lands
within the pooled area are operations on lands covered by the County lease,
and it would seem that the bond requirement, although not intended to be
applicable, would apply.
Another onerous clause is that dealing with shut-in gas royalty. It calls for
a minimum shut-in gas royalty of $240, not proporationately reduced. If
Gerrity were to drill a well on lands into which small Tract Al and A2 had
been pooled and the well were shut-in, Gerrity would be liable for $240 per
880092
January 26, 1988
Tam David
Page 2
year on the 10.9 involved acres. This is an average of $22 per acre or tore
than twenty times the normal rate. This is a heavy burden for an operator who
has no control over being shut-in by his purdhhaser.
To eliminate these problems, I suggest that the Commissioners pass a
resolution, applicable to any lease on this form (Rev. 11/86) along the lines
of the proposed resolution attached to this letter.
Once adopted, a copy of such resolution could be sent to each operator
requesting, for example, approval of an assignment, and the operator would
need take no further action, thus sparing the County the time and expense of
amending each lease as a similar problem arises.
Please let me know if any additional information is needed. The
Commissioners' consideration of such a resolution will be sincerely
appreciated.
Cordially,
William G. Crews, CPL
Agent for The Robert W. Gerrity Company and
Snyder Operating Partnership L.P.
MC/min
880092
LEHFELDT/WELL COUNTY UNITE
SW 1/4 & W 1/2 NW 1/4
SECTION 27, TA N. , R64 W.
D
A : LEHFELDT (GERRITY)
/ / Ai : COUNTY (SNYDER)
/ / Az : COUNTY (SNYDER)
/ / B : COUNTY (SNYDER)
/ / C1
/ / / B1 : LEHFELDT (GERRITY)
/ / / B2 : LEHFELDT (GERRITY)
// / c2/ / C : COUNTY (SNYDER)
i / / / / CI : LEHFELDT (GERRITY)
/ ,/ / / ,/ / C2 : LEHFELDT (GERRITY)
,/ /�/, C/ ,
/ / D : OTHER
/ / / / /
/ i i / , /
/ / / / / /,
• / / / / / 27
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/ / / / //,/ / /
▪ /// ///,/ �/ //// B1
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/// ////// ///,/ /////
,/ //,//7 // / / //// ,
• / / / / ,
4/7/%/7/7 ////// //// // / / Gilmore Canal
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/ / / / //// / /, /, 7, /
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/ 7 / 7 / / / / / ,A2 /
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E"AWN BY: pediGRAPHICS
'SPARED BY: W. CREWS 880092
RESOLUTION
RE: APPROVE REQUEST OF WILLIAM G. CREWS TO AMEND ALL WELD COUNTY OIL AND GAS
LEASES ON FORM (REV. 11/86)
WHEREAS, the Board of County Commissioner 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 ("runty, Colorado, and
WHEREAS, the above cited lease form contains cla'msns which are
inapplicable to situations when a Weld County lease covers more or legs than
one single spacing unit, or which cause lessee unnecessary problems as a
result of such clang- which are not deemed to be in the best interest of both
lessor and lessen, and
WHEREAS, after review, the Board of County Commissioners found that good
cause exists for amending all Weld County oil and gas leases on form (Rev.
11/86) .
NOW, THEREFORE, BE TT RESOLVED by the Board of Weld County Commissioners
that the following amendments be, and are hereby, approved as to all such Weld
County oil and gas leases:
1. Add the following to unnumbered paragraph two, which begins "WHEREAS,
said Tcssan has applied to Lessor for an oil and gas lease. . . ,": " Such
annual rental shall not be due for any year during which lessee shall have
commenced a well on the lands covered by this lease, or on lands pooled
therewith, and shall not be due during the time any well is producing
(including shut-in wells) upon lands covered hereby or lands pooled
therewith".
E . Delete the following from Section 8 (SURRENDER) : "provided that no
partial surrender or cancellation of this lease shall be for less than
contiguous tracts of approximately forty (40) ac:ae5 or Governmental lot
corresponding to a quarter-quarter section;"
/. Delete Section 9 (ASSIGNMENTS) in its entirety and replace with a new
Section 9 (ASSIGNMENTS) which reads as follows:
9. ASSIGNMENTS. The rights of Lessor and 'lessee hereunder may be
assigned in whole or in part. No change in ownership of Lessor's interest (by
assignment or otherwise) shall be binding on Lessee until Lessee has been
furnished with notice, consisting of certified copies of all recorded
instruments or documents and other information necessary to establish a
complete chain of record title from Lessor, and then only with rebpuLL to
payment thereafter made. No other kind of notice, whether actual or
constructive, shall be binding upon lessee. No present or future division of
Lessor's ownership as to different portions or parcels of said land shall
operate to enlarge the obligations or diminish the rights of lessee, and all
lessee's operations may be conducted without regard to any such division. If
all or any part of this 1pasa is assigned, no leasehold owner shall be liable
for any act or omission of any other leasehold owner.
g: Delete Section 10 (OVERRIDING ROYALTY) in its entirety.
880092
_5:-- "Delete the following from Section 16 (SHUT-IN WELLS) : "in addition to the
annual rental."
6. Delete the following sentence from Section 16 (SHUT-IN WELLS) : "The
minimum amount of such shut-in royalty shall be $240".
9 7. Delete Section 19 (BONDS) in its entirety.
All amendments above described shall be retroactive to the effective date
of each involved leasn.
The above and foregoing Resolution was, on motion duly made and seconded,
adopted by the following vote on the _ day of January, 1988.
880092
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