HomeMy WebLinkAbout910216.tiff •
A
A
2 214 35
RESOLUTION
RE : AUTHORIZATION OF OIL AND GAS LEASE COVERING CERTAIN PROPERTY OWNED BY WELD
COUNTY , COLORADO , LOCATED IN SECTION 15 , TOWNSHIP 7 NORTH , RANGE 63 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 , Wilbanks & Associates , Inc . , 1860 Lincoln Street , Suite 800 ,
Denver , CO 80295 , submitted the high bid to lease 160 . 00 net mineral acres , more
or less , described to -wit :
NE / 4 of Section 15 , Township 7 North , Range 63
West of the 6th P . M . , Weld County , Colorado
WHEREAS , Weld County desires to accept the high bid offer submitted by
Wilbanks & Associates , Inc . to lease the above described mineral acreage for
$ 25 . 00 per net mineral acre , for a total sum of $ 4 , 000 . 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 March 20 , 1991 , and ending at 12 : 00 noon
on March 20 , 1994 , 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 Wilbanks & Associates , Inc . , 1860
Lincoln Street , Suite 800 , Denver , CO 80295 be , and hereby is , accepted for a
period of three ( 3 ) years with the total sum being as above listed .
B 1294 REC 02245358 03 / 28 / 91 12 : 45 0 . 00 1 / 010 910216
F 1009 MARY ANN FEUEERSTEIN CLERK & RECORDER WELD CO , CO
Page 2
RE: OIL AND GAS LEASE - WILBANKS & ASSOCIATES, INC.
The above and foregoing Resolution was, on motion duly made and seconded,
adopted by the following vote on the 27th day of March, A.D. , 1991.
ATTEST: Pia% BOARD OF COUNTY COMMISSIONERS
WELD COUNTY, LOR 0
Weld County Clerk to the Board
. Gordo acy, irman
�'� "I
a-
'� Clerk to the B� Geor Ken edy, Pro-T em
4" :#" ;11 ' ‘
d`" P AS TO FORM: ./...,de
Constance L. Harbert
....„___- G(�
ounty Attorney C. W. Kirby
b t,o-A4
W. H. Webster
B 1294 REC 02245358 03/28/91 12: 45 “0. 00 2/010
F 1010 MARY ANN FEUERSTEIN CLERK & RECORDER WELD CO, CO
910216
Parcel =12
HELD COUNTY OIL AND GAS LEASE
Containing 160 acres, more or less;
Containing 160 net mineral acres,, more or less: ,,�
"LIS LEASE AGRLEMINT, dated this p( / 7n `day of l/y-1�/�./V-tE l.. , 1941 / , made and entered
into by and tecween GELD COUNTY, CCLGRADO, a political sutcivision cf the STATE OF CGLORADO, acting by and
through the ECARD OF COUNTY COMMISSIONERS OF TP1 COUNTY OF GELD, for its respective interests, c/o BOARD OF
COUNT`-' CClT.ISSIONERS, WELD COUNT': CENTENNIAL CENTER, °'-_` 10TH STRELT, CREELZI, CC 50631, hereinafter tailed
Lessor, and:
Wijbanks & Associates, Inc.
1860 Lincoln St., Suite 800
Denver, CO 80295
hereinafter called Lessee:
WITNESSETE
UTEREAS, said Lessee has applied to Lessor for an oil and gas lease covering the lard herein described,
and has paid a filing fee in the amount of S10.00, plus a bonus consideration of $ 25.00 per mineral
acre, fixed by Lessor as an additional consideration for the granting of this lease, and Lessee agrees to
pay an annual rental of $ 160.00 , computed at the rate o£ $ 1.00 , rer mineral acre or
fraction thereof per year.
WhMREAS, all the requirements relative to said application have been duly complied with and saia
application has been approved and allowed by Lessor;
THEREFORE, in consideration of the agreements herein, on the part of Lessee to be paid, kept and
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 then, thereon and therefrom with the right to own
all oil and gas so produced and saved therefrom and not reserved as royalty by Lessor under the terms of
this lease, together with rights-of-way, easements and servitudes for pipelines, telephone and telegraph
lines, tanks and fixtures for producing and caring for such product, and housing and boarding employees, and
any and all rights and privileges necessary for the exploration and operation of said land for oil and gas,
the following described land situated in the County of Weld, State of Colorado, and more particularly
described as follows:
DESCRIPTION OF LAND SECTION TOWNSHIP RANCE
NE1 15 7N 63W
TO HAVE AND TO HOLD acid land, and all the rights and privileges granted hereunder to Lessee until the
�
hour of twelve o'clock noon on the 4-7th day of . 1Q/1.th , 19434 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 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 ur reworking operations ara 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
B 1294 REC 02245358 03/28/91 12: 45 X0. 00 3/010
F 1011 MARY ANN FEUERSTEIN CLERK & RECORDER WELD CO, CO
(Rev. 11/86) 910 216
primary term or any extension thereof, or while this lease is in force by reason of such drilling or
reworking operations cr other production.
EXPLORATION - Lessor reserves the right to conduct exploration on the leased land provided such
exploration does not interfere with rights granted herein.
In consideration of the premises, the parties covenant and agree as follows:
1. RENTAL - If this lease is extended for an additional term as provided for in the EXTENSION
paragraph hereof, Lessee shall during such extended period nay to :essor an annual rental at double the rate
above specified for the land covered hereby. The rental in effect at the time production is established
shall not be increased due to the term of this lease being extended by such production. Rentals set at the
time of established production shall be paid during the remaining life o£ this lease, annually, in advance,
on or before each anLiversar date hereof. :here sh,.'.l be no r-`•.ne cf unu3c,! rental.
2. ROYALTY - Lessee stall account for any ana all substances produced on the leased land and Lessee
shall pay to Lessor as royalty, in addition to the rentals provided, but except for prcducts used en the
leased land, unavoidably lost or flared on the leased lard, with approval of Lesser, the following:
(a) On oil, 1,14A of the oil produced and saved from the leased land.
At the option of Lessor, and with sixty (60) days' notice to Lessee, Lessor may take its
royalty oil in kind, in which evert 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
month after the same is run into tanks. With sixty (60) days' notice to Lessee, Lessor may cease
taking oil royalty in kind. When paid in cash, the royalty shall be calculated upon the fair market
value o£ 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 evert shall the royalties be based upon a market
value at the well less than the posted price in the field for such oil, or in the absence of a posted
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
into pipelines or storage tanks.
(b) On gas, including casinghead gas or other gaseous substance, 12'-.4 of the fair market
value at the well or of the price received by Lessee at the well, whichever is greater, of all gas
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 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.
B 1294 REC 02245358 03/28/91 12:45 ,“0. 00 4/010
F 1012 MARY ANN FEUERSTEIN CLERK & RECORDER WELD CO, CO
(Rev. 11/86)
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 lane 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 raid
books and records shall be retained by Lessee and made available in Colorado to Lessor for a period of not
less than five years.
4. MEASURIZENTS - All proeuction shall be accurately measured using standards established by ahe
American Gas Association (AGA) and/or the Anerican Petroleum Institute (API) and all measurtng devices shall
be tamperproof as nearly as possible. Oil royalt es cue within the terms of this lease shall be calculated
on actual and accurate measurements within API standards unless a different means of measurement, subiect to
Lessor's approval, is provided.
5. PAYMENTS Et FF:ORTS - All payments are: reports cilia hereunder Gall be mace en or he_fore the day
such payments ana reports are due. Nothing in this paragraph shall be construee to extend t`e expiration of
the primary term hereof.
Oil royalty payments and supporting eocuments shall be submitted prior to the last day of the
month following each month's sale of production, and gas royalty payments and supporting documents shall be
submitted prior to the last day of the second month following each month's sale of production.
All payments stall be made by cash, check, certified check or money order. Payments having
restrictions, qualifications, or encumbrances of any kind whatsoever shall not be accepted by Lessor. A
penalty for a late payment shall be charges as set forth in the PENALTIES paragraph herein.
6. PENALTIES - A penalty shall be imposed for, but not limited to late payments, improper payments,
operational deficiencies, violation of any covenant of this lease, or false statements made to Lessor.
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
Lessor and shall become effective immediately after public notice. Said schedule may be changed from time
to time after public notice.
7. LAW - The terms and conditions of this lease shall be performed and exercised subject to all laws,
rules, regulations, orders, local ordinances or resolutions applicable to and binding upon the
administration of lands and minerals owned by the County of Weld, and to laws, rules and regulations
goveraing oil and gas operations in Colorado. Violations shall result in penalties as provided for by law
or as set forth in the aforementioned schedule or shall, at the option of Lessor, result in default as
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 lard 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 o£ 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 ana become absolutely inoperative
immediately and concurrently with the institution of any suit in any court of law by Lessee, Lessor or any
assignee o£ 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.
B 1294 REC 02245358 03/28/91 12: 45 X0.00 5/010
F 1013 MARY ANN FEUERSTEIN CLERK & RECORDER WELD CO, CO
(Rev. 11/86) .
7/ 6Z/ to
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 Lesser
of assignment of this lease, Lessee (assignor) shall not be relieved of its obligations under the terms
and conditions herein. An assignment shall not extend the term of this lease.
(b) If any assignment of a portion of the land covered hereby shall be approved, a new lease
shall be issued to the assignee covering the assigned land, containing the same terms and conditions as
this lease, and limited as to term as this lease is limited, and the assignor shall be released and
discharged from all further obligations acd liabil ties as to thft portion 3C assigned.
(c) Lessee shall notify Lessor of all assignments of undivided percentage or other interests.
Said interests will not be recognized cr approved by Lessor, and the effect of any such assignments
will be strictly and only between the parties thereto, and outside the terms of this lease: and no
dispute between parties to any such assignment shall operate to relieve Lessee from performance of any
terns or conditions hereof or to postpone the time therefor. Lessor shall at all times be entitled to
look solely to Lessee or his assignee shown en its books as being the sole owner hereof, and fcr the
sending of all notices required by this lease and for the performance of all terns and conditions
hereof.
(d) Although not binding on Lessor, all instruments of every kind and nature whatsoever affecting
this lease should be filed with the Lessor.
10. OVERRIDING ROYALTY - Any and all reservations or assignments or overriding royalties shall be
subject to approval by Lessor. The total of said overriding royalties shall not exceed five percent (5%),
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
suspended. Lessor's approval of a reservation or assignment of an overriding royalty shall not bind Lessor
for payment of said overriding royalty and shall not relieve Lessee of any of its obligations for payment of
royalties to Lessor as provided by ROYALTY paragraphs herein.
11. OFFSET WELLS - Lessee agrees to protect the leased land from drainage by offset wells located on
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 deronstrates 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 nor 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. Such pooling
B 1294 REC 02245358 03/28/91 12: 45 X0. 00 6/010
(Rev. 11/86) F 1014 MARY ANN FEUERSTEIN CLERK & RECORDER WELD CO, CO
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 depositor,' bank. Drilling
or reworking operations upon or production from any part of such apacing unit shall be ccrsidered 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. UNITIZATICN - COMMUN''_.TZATION - Ir. the eve.-:c Lessor permits the land herein leased co be included
within a communitizatien or unitization agreement, the terms of this lease may be deemed to be modified to
conform to such agreement. When only a portion cf the land under this lease is committed by an agreement,
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 terns of the lease on
that portion remaining in t`.e unit shall be deemed to to modified to conform to such agreement.
Nonoredreing lenses ahall te^:anate on the First an::-crsar' dote c: the leasr- follow' the teamna"rr
date of tte unit or part thereof modifying the lease, but in no event prior to the end of the pritar' term
of the lease or the extension term of the lease.
15. PRODUCTION - Lessee shall, subject to applicable laws, regulations and orders, operate and produce
all wells upon the leased land so long as the same are capable of producing in paying quantities, and shall
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
there exist neither market nor storage therefor, and except for such limitations on or suspensions of
production as may be approved in writing by Lessor. Lessee shall be responsible for adequate site security
on all producing properties.
16. SRUT-III WELLS - If Lessee shall complete a well on the leased land productive of gas and Lessee is
unable to produce such gas due to a lack of suitable market therefor, Lessor may grant Lessee suspension of
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
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
year's shut-in royalty shall be forfeited to Lessor except for the shut-in royalty paid for the year during
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
granting of any further extensions shall be at the sole option of Lessor.
17. OPERATSCNS - No exploration, drilling or production operation, including permanent installations,
shall be within 200 feet of any existing building or other improvement, including water well or reservoir,
without the written permission of the owner of said improvements. Lessee shall keep a correct log of each
well drilled hereunder, shoving 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 when such logs, or either cf
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 Ss
contained in reports required to be filed with the 011 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.
B 1294 REC 02245358 03/28/91 12: 45 X0.00 7/010
F 1015 MARY ANN FEUERSTEIN CLERK 6 RECORDER WELD CO, CO
(Rev. 11/86) / Oz) /�,
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 anal the surface lessee or surface owner of the location
of each drill site at least two weeks prior 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.
19. BONDS - Lessee shall be liable for all damages to the surface of the land, livestock, growing
crops, water wells, reservoirs, or improvements caused by Lessee's operations on said land. No operations
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
may be caused by Lessee's operations on said land and to assure compliance with all the terms and previsions
of this lease, tte laws of the State of Lelnrado, arr. zf.e ruins arc; -=.=_+n;•ticr.s hurez- ctgrrtainir.g. A
bond may Le held in effect for the life of production of and well.
20. SETTLF1TNT - Lessee shall not remove any machinery, equipment or fixtures place? on said land,
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 paid or satisfied. Any
machinery, equipment or fixtures left on this land for a period of more than six (6) months after the
expiration hereof, shall automatically become the property of Lessor.
21. OMER 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 even-
Lessee and Lessor may negotiate a provision for production of such discovery. -
22. WATER - This lease does not grant permission, express or implied, to Lessee for water exploration,
drilling, or establishing water wells without the written permission of the surface owner. If Lessor is the
surface owner, said permission shall not be unreasonably withheld. If Lessee desires to establish or
adjudicate any water right for beneficial use on the leased lard, 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.
23. DEFAULT - Upon failure or default of Lessee to comply with any of the terms and provisions hereof
including but not limited to the failure to comply with laws, rules and regulations governing Colorado oil
and gas operations, Lessor is hereby authorized upon notice and hearing, as hereinafter provided, to cancel
this lease as to all of the leased land so claimed or possessed by Lessee hereunder. In the event of any
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
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 cr 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 £n 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.
B 1294 REC 02245358 03/28/91 12: 45 40. 00 8/010
F 1016 MARY ANN FEUERSTEIN CLERK & RECORDER WELD CO, CO
(Rev. 11/86)
25. HOLD HARMLESS - 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 cr 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.
26. CONDEeiA"'ION - If the leased land shall be taken in any condemnation proceeding, this lease shall
automatically terminate as of the dace of taking. The award for such condemnation shall be paid to Lessor,
except for any specific award(s) paid to Lessee for severed oil and gas reserves, in which evert
XXXXXXXXXXX of such specific award(s) shall be paid to Lessor in lieu of royalty lost by virtue of the
condemnation. Improvements shall be removed by Lessee per terms in the SETTLEMENT Paragraph herein. If
only a portion of the leased land is taken by condemnation, Lessor may, at its option, terminate this lease
or terminate only that portion of the lease so taken.
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
caused by errors which may occur. Lessee shall notify Lesser immediately upon discovery of any errors or
discrepancy whatever.
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
limited to all artifacts of stone, wood or metal, pictographs, structures, and bones. A discovery of
anything o£ prehistoric or historic nature shall be reported to Lessor or the State of Colorado
Archaeologist immediately.
29. DEFINITIONS -
(a) "Gas" as used herein shall mean all gases (combustible and noncombustible), including but not
limited to all gaseous hydrocarbons, gaseous compounds, carbon dioxide, and helium.
(b) "Oil and gas" as used herein shall include all substances produced as by-products therewith,
including but not limited to sulfur.
(c) "'Paying euattities" as used herein shall mean and refer to quantities of oil and gas or of
either of them sufficient tc pay for the current cost of producing same.
30. REIRS AND ASSIGNS - The benefits and obligations of this lease shall inure to and be binding upon
the heirs, legal representatives, successors or assigns of Lessee; but no sublease or assignment hereof, or
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.
B 1294 REC 02245358 03/28/91 12: 45 X0. 00 9/010
F 1017 MARY ANN FEUERSTEIN CLERK & RECORDER WELD CO, CO
(Rev. 11/86)
�1 / o (en
\ N
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, toe day and year first above written.
BOARD OF COUNTY COMMISSIONERS
WELD COUNTY, CO 10
19/2/2/41
b .. ✓the $'oa g;a �i/vrLJ
LESSEE: Wilbanks & Associates,
� Inc.
BY-
Thccas E. Clark, Vice-President
STATE OF COLORADO )
) Ss.
COUNTY OF WELD ) /444
The"Vieqqllng instrument was acknowledged before me this �p% day of -�- ,
19 94 City ' 'L.� a.
WieMib,>��handiandroffinial seal.
aG: ..0
My r7 q
My COMmilSty paCtiizdd: 3' / - ( �.
'uF °` `&./41nGest./ Gl • 74/72/.7`914-4-v-e-,
k" Notary Public U
iA k
10
B 1294 REC 02245358 03/28/91 12: 45 ER W CO, COF 1018 MARY ANN FEUERSTEIN CLERK & RECORDER WELD CO, C
(Rev. 11/86)
a
OFFICE OF BOARD OF COUNTY COMMISSIONERS
PHONE(303) 356-4000. EXT. 4200
P.O.. Box 758
GREELEY, COLORADO 80632
C.
COLORADO
January 31, 1991
J . Michael Morgan
Lohf, Shaiman, and Ross, P.C.
900 Cherry Tower
950 South Cherry
Denver, CO 80222
RE: Denial of Extension of Oil and Gas Leases
Dear Mr. Morgan:
The Board of County Commissioners of Weld County, Colorado, is in receipt of your
January 24, 1991, letter. Your letter requests an extension o£ Oil and Gas
Leases for the following properties in Township 7 North, Range 63 West of the 6th
P.M. , Weld County, Colorado: All of Section 21; and the Northeast Quarter
(NE1/4) , South Half (S1/2) Northwest Quarter (NW1/4) , Southeast Quarter (SE1/4) ,
Southwest (SW1/4) of Section 15 .
The Leases for these properties expired on Sunday, August 5 , 1990. Mr. Dean L.
Cummins applied to the Clerk to the Board' s Office for six-month extensions of
the Leases on Friday, August 3 , 1990. Given that the Board of County
Commissioners did not meet on Sunday, the next available meeting when the Board
could consider the extensions was Monday, August 6, 1990. The Board extended the
Leases for the requested six-month terms , making the Resolution which approved
the extensions effective August 5 , 1990. This was done using the "nunc pro tune"
language. The Leases were extended to and until February 5, 1991 .
Mr. Cummins was advised by Bruce T. Barker, Assistant Weld County Attorney, on
or about Friday, August 3, 1990, and/or Monday August 6 , 1990 , that the Leases
were extended to and until February 5, 1991. Mr. Cummins did not attend the
Board' s August 6 , 1990, meeting.
Enclosed you will find a copy of the letter which Mr. Cummins sent to the Board
of County Commissioners dated October 12, 1990. As you can see, Mr. Cummins
makes no mention of the "nunc pro tune" language. Also enclosed you will find
a copy of a letter dated October 16 , 1990, from Gene R. Brantner, Chairman for
the Board of County Commissioners of Weld County, Colorado., and addressed to Mr.
Cummins.
Your letter implies that the Board of County Commissioners of Weld County and its
employees were negligent in two ways. First, you seem to believe that Mr.
Cummins was damaged by the fact that he did not receive a copy of the Resolution
until October 5, 1990. Second, you state that the "nunc pro tune" language in
the Resolution was "informal, " and therefore, ineffective. You believe that Mr.
Cummins should have been given a "new grant" of the expired Oil and Gas Lease on
August 6, 1990.
The Board of County Commissioners finds it inconceivable how Mr. Cummins can
argue that he was somehow deprived of two months of the extended Lease. The mere
fact that Mr. Cummins did not bother to stop by the Board' s Office to obtain a
copy of the August 6 , 1990, Resolution shows that Mr. Cummins was not concerned
about its contents. Your implication that the Board's employees were somehow
negligent in failing to send Mr. Cummins a copy of the Resolution is inconsistent
with your own client' s apparent lack of concern and due diligence.
Please be advised that the Board of County Commissioners extends all of its
leases only by Resolution. The Board has used this method of extending leases
for many years with no objections from oil and gas companies and/or their
attorneys.
In this case , it was and is now the Board' s opinion that the Leases were extended
from August 5 , 1990 , to and until February 5, 1991. The Board views both Mr.
Cummins' October 12 , 1990, letter, and your January 24, 1991 , letter, as attempts
to force the Board into extending the Leases beyond the February 5 , 1991 ,
expiration dates for no additional consideration. The Board will not extend the
leases further.
The Board finds that Mr. Cummins was informed of the extension on or about August
3 , 1990, and/or August 6 , 1990. He had ample opportunity to obtain a copy of the
Resolution and to object to any of the language contained therein shortly after
the Resolution was signed on August 6, 1990. He chose not to do so.
If you should have any questions regarding this letter or if you wish to discuss
this matter further, please feel free to call Bruce T. Barker, Assistant Weld
County Attorney, at 356-4000, extension 4391.
Sincerely,
BOARD OF COUNTY COMMISSIONERS
WELD ORADO
on E. La , Chairman
BTB:GEL:r
!/ OFFICE OF BOARD OF COUNTY COMMISSIONERS
PHONE (303) 356-4000, ExT. 4200
P.O. Box 758
GREELEY, COLORADO 80632
I
C.
COLORADO
October 16, 1990
Dean L. Cummins
1223 28th Avenue, Suite 1
Greeley, CO 80631
RE: Extension of Oil and Gas Leases
Dear Mr. Cummins:
This letter is in response to your letter dated October 12, 1990, which
requests extension of two oil and gas leases executed by Weld County with Pan-
Canadian Petroleum Company as Lessee.
Enclosed please find a copy of the Board's Resolution dated August 6, 1990,
nunc pro tunc August 5, 1990. The Resolution extends the expiration date for
the two oil and gas leases to February 5, 1991. The leases cover land
described as the Northeast Quarter (NE}) , South Half (Si) Northwest Quarter
(NW ) , Southeast Quarter (SE}) , and Southwest Quarter (SW}) , Section 15,
Township 7 North, Range 63 West of. the 6th P.M. , Weld County, Colorado.
It is the Board's understanding that you were advised by Bruce T. Barker,
Assistant Weld County Attorney, on or about Friday, August 3, 1990, and/or
Monday, August 6, 1990, that the leases had been extended to and until February
5, 1991. Your October 12, 1990, letter states that you were first advised of
the extension as of October 5, 1990; however, the Board believes that you are
incorrect in your representation. In any event, the Board finds it hard to
believe that you somehow failed to contact the Clerk to the Board's Office soon
after August 6, 1990, in order to ascertain whether or not the leases had been
extended for your requested of 6 month period of time.
The Board hereby denies your request for an extension of the lease termination
date beyond February 5, 1991.
Sincerely,
BOARD OF COUNTY COMMISSIONERS
WELD COUNTY, COLORADO
line ifil.61/4--t-s
Gene R. Brantner, Chairman
BTB:GRB:rm
xc: Bruce T. Barker, Asst. County Attorney
LOHF, SHAIMAN & ROSS
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
900 CHERRY TOWER
950 SOUTH CHERRY
DENVER. COLORADO 80222
FACSIMILE (303) 753 9997
TELEPHONE (303) 753-9000
VIA FEDERAL EXPRESS J. MICHAEL M O RGA N
January 24, 1991
Gordon E. Lacy, Chairman
Board of County Commissioners
Weld County Courthouse
915 10th Street
P.O. Box 758
Greeley, Colorado 80631
Re: Request for Extension of Oil and Gas Leases
Section 21: E1/2, W1/2, Township 7 North, Range 63
West of the 6th P.M. , Weld County, Colorado
Section 15: NE1/4 , S1/2NW1/4, SE1/4 , SW1/4 , Township 7
North, Range 63 West of the 6th P.M. , Weld County,
Colorado
Dear Chairman Lacy:
We represent Dean L. Cummins, who has contractual agreements with
Pan Canadian Petroleum Company, lessee under two oil and gas
leases covering the above described real property. The leases
were granted by Weld County as lessor, and were to expire by
their terms on August 5, 1990.
Prior to expiration, Mr. Cummins, on behalf of Pan Canadian and
pursuant to the County's policy on extending leases, requested
lease extensions for a period of six months. The request was
accompanied by the required payment of $6, 604 . When informed
that the Board would probably not approve the extensions until
after expiration of the leases, Mr. Cummins' agent suggested
that, to be unquestionably effective, the extensions should
contain express language of grant and lease revival.
The Board acted to grant the extensions on August 6, 1990, nunc
pro tunc, August 5, 1990. Thereafter, Mr. Cummins was orally
informed that the extensions had been granted. However, despite
Gordon E. Lacy
January 24 , 1991
Page 2
repeated requests, written Resolutions granting extensions were
not delivered to him until October 5, 1990. He then found that
though the leases had previously expired, the documents did not
contain express language of grant or revival, but sought instead
to revive the expired leases through nunc pro tunc language.
By letter to the Board of October 12 , 1990, Mr. Cummins sought
partial relief by requesting a 60 day extension to make up for
time lost by failure of County employees to deliver the
extensions. This request was denied by the Board for the stated
reason that Mr. Cummins had been orally informed of extension,
and that this was sufficient. For reasons stated below, we
believe as a matter of law that oral notification was not
sufficient to extend the leases.
Mr. Cummins' request for lease extension was and is motivated by
a desire to put together a deal which will result in exploratory
drilling during the extended term. Such drilling, if successful,
will be of benefit to Weld County by providing it with royalty
income. Despite diligent efforts, Mr. Cummins has not yet been
successful in putting together a deal which will result in
drilling prior to expiration of the term.
This failure is due, in large part, to the fact that the
extensions were not delivered to him until two months after
execution, and when delivered were in a form which raises
questions as to their effectiveness. In the first instance,
potential participants in the drilling deal were simply not
willing to rely upon oral statements that "the extensions are in
the mail". Uneasiness could also be caused by the informality of
the Resolutions, which purported to revive expired leases through
nunc pro tunc language, rather than through express grant and
revival language.
We have advised Mr. Cummins that hesitancy on the part of
potential drilling participants was justified. A general rule of
law provides that deeds, leases and other conveyances are not
effective until delivered. See: 51C C.J.S. , Landlord & Tenant, §
219 (". . . in order for a lease to be operative, there must be a
delivery of the instrument by the lessor. ") ; 2 Kuntz, Law of Oil
and Gas, §22 .5 (". . .transfer of an interest in oil and gas
requires delivery of the deed.") ; Larison v. Taylor, 266 P. 217
(Colo. 1928) , ("Delivery is essential to the complete execution
of a deed so as to pass title. ") . Based upon this rule, we
conclude that until the extensions were delivered to Mr. Cummins
Gordon E. Lacy
January 24, 1991
Page 3
on October 5, 1990, they were not effective, and those who dealt
with Mr. Cummins would have done so at their peril. Though
extensions of six months duration were requested, paid for, and
approved by the Board, Mr. Cummins received extensions which were
effective for only four months, but which have been virtually
useless to Mr. Cummins because of the disruption caused by
delayed delivery.
The Resolutions granting extensions are informal. They neither
expressly describe the rights granted nor purport to revive
expired leases. We would argue that, as a matter of equity, the
County should be estopped from denying the validity of the
extensions. However, as a matter of law, courts have held that
absent the same formalities required of the original lease, and
language which contains a "new grant", an expired oil and gas
lease is not revived. See Summers, Law of Oil and Gas, §302
(extension of an oil and gas lease ". . .must satisfy the same
requirements and be executed with the same formalities as the
original lease.") ; Williams and Meyers, Oil and Gas Law, §658 . 4 .
Uneasiness on the part of potential participants regarding the
effectiveness of the extensions would certainly be justified.
Based upon the above, we do not believe that Mr. Cummins actually
received the benefit of extensions which he requested, for which
he expended over $6, 000, and which the Board intended to approve.
Equity and fairness demand that Mr. Cummins be granted substitute
extensions which are both clearly effective and are for the
duration intended by both Mr. Cummins and the Board. Mr. Cummins
therefore requests, on behalf of Pan Canadian, that the County
execute new extensions which contain express language of grant
and revival, that such extensions be for a term of six months
from execution, and that such extensions be delivered to Mr.
Cummins immediately upon execution.
As explained above, if the foregoing request is not granted, Mr.
Cummins will not have received the benefit of extensions he
purchased and reasonably expected to receive. Consequently, if
substitute extensions are not granted, Mr. Cummins requests, in
the alternative, that his purchase price of $6, 604 be refunded,
and that the County's mineral interests in the two tracts
described above be sold and disposed of by the County, as
required by C.R.S. 1973 , Section 39-11-143 (4) (b) .
Gordon E. Lacy
January 24, 1991
Page 4
If you have questions or concerns regarding the above requests,
please advise.
Very truly yours,
�J
J Mi ae or n
cc: William H. Webster
George Kennedy
Constance L. Harbert
C. W. Kirby
Thomas O. David, Esq.
Donald D. Warden
Dean L. Cummins
Hello