HomeMy WebLinkAbout930316.tiff RESOLUTION
RE: APPROVE REQUEST OF WILLIAM G. CREWS, AGENT FOR H & C COLTON COMPANY, TO
WAIVE BIDDING PROCEDURE CONCERNING OIL AND GAS LEASE AND ACCEPT OFFER TO
LEASE MINERAL ACRES - N;SW,' S34, T5N, R66W
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, William G. Crews, acting as agent for H & C Colton Company, has
requested that the bidding procedure be waived concerning an Oil and Gas Lease
on the following described mineral acres:
Part of the NISWL Section 34, Township 5 North, Range
66 West of the 6th P.M. , Weld County, Colorado, as
further described in Exhibit "A" which is attached
hereto and incorporated herein by reference at this
point.
WHEREAS, after review, the Board found that William G. Crews, acting as
agent for H & C Colton Company, did show good cause for waiving the bidding
procedure on said Oil and Gas Lease, and
WHEREAS, William G. Crews, acting as agent for H & C Colton Company, is
offering to lease the above described mineral acres, containing 3. 717 mineral
acres, more or less, and
WHEREAS, the Board finds that the lease offer from William G. Crews, acting
as agent for H & C Colton 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 William G. Crews, acting as agent for H & C
Colton Company, 621 17th Street, Suite 2600, Denver, Colorado 80393, to waive
the bidding procedure on an Oil and Gas Lease concerning the above described
mineral acres, be, and hereby is, approved.
BE IT FURTHER RESOLVED by the Board that the offer of William G. Crews,
acting as agent of H & C Colton Company, as hereinabove stated, be, and hereby
is, accepted.
930316
r0173 (O : /7i'f2
WAIVE BID PROCEDURE - H & C COLTON COMPANY
PAGE 2
The above and foregoing Resolution was, on motion duly made and seconded,
adopted by the following vote on the 14th day of April, A.D. , 1993.
BOARD OF COUNTY COMMISSIONERS
ATTEST: /aid 41.ficuiet WELD� COUNTY, COLORADO
Weld County Clerk to the Board (� rz.-e_t_ ,
Constance L. Hairbert, Chairman
BY: '1 �{ kbP)-Q ' I
l v
Deputy Cle k to the Boa.. ____I W. H. Webster, Pro-IfTem
ecr `
APP AS TO FORM: / � --Z:
eorge Baxter
ounty Atto ney Dale K.
Hall I ,
././SiCa 1A ../A zy/4 2
arbara J. Kirkmeye
930316
WELD COUNTY OIL AND GAS LEASE
ARdJ.Ai.f1011 (Small Tract)
THIS AGREEMENT, made and entered into this 14th day of April , 1993 , by and between WELD COUNTY,
COLORADO, a political subdivision of the Sate of Colorado acting by and through the Board of County Commissioners
of the County of Weld, c/o Weld County Centennial Center, 915 10th Street, Greeley, CO 80631, hereinafter called
Lessor, and:
v+' O H & C Colton Company
o V
621 17th Street, Suite 2600
Denver, CO 80293
•-I Q hereinafter called Lessee.
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Q WITNESSEIH, that Lessor, for and in consideration of the sum of ($200.00) Two-Hundred and
C) no/100 Dollars , cash in hand paid, the receipt of which is hereby acknowledged, and the
p •3 covenants and agreements hereinafter described, has granted, demised, leased and let, and by these presents does
•• Mgrant, demise, lease and let exclusively unto the said Lessee, the land hereinafter described, with the exclusive
66 W right for the purpose of mining, exploring by geophysical and other methods, and operating for and producing
therefrom; oil and all gas of whatsoever nature or kind, with rights of way and easement for laying pipe lines,
O and erection of structures thereon to produce, save and take care of said products, all that certain tract of land
(� situated in the County of Weld, State of Colorado, described as follows, to wit:
a
Township 5 North, Range 66 West, 6th P.M.
• W Section 34
tD
SEE ATTACHED EXHIBIT A FOR DESCRIPTION
al a
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and containing 3.717 acres, more or less.
M
N H
F1. It is agreed that the lease shall remain in force for a term of three (3) years from this date
CD and as long thereafter as oil or gas of whatsoever nature or kind is produced from said leased premises or on
ai acreage pooled therewith, or drilling operations are continued as hereinafter provided. If, at the expiration of
] the primary term of this lease, oil or gas is not being produced on the leased premises or on acreage pooled
p W therewith but Lessee is then engaged in drilling or re-working operations thereon, then this lease shall continued
o try in force so long as operations are being continuously prosecuted on the leased premises or on acreage pooled
ri therewith; and operations shall be considered 7-+ to be continuous)y prosecuted if not more than ninety (90) days shall
Or) Z elapse between the completion or abandonment of one well and the beginning of operations for the drilling of a
NN 4 subsequent well. If after discovery of oil or gas on said land or on acreage pooled therewith, the production
>I thereof should cease from any cause after the primary term, this lease shall not terminate if Lessee commences
additional drilling or re-working operations within ninety (90) days from date of cessation of production or from
C4 date of completion of dry hole. If oil or gas shall be discovered and produced as a result of such operations;
at or after the expiration of the primary term of this lease, this lease shall continue in force so long as oil
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or gas is produced from the leased premises or on acreage pooled therewith.
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Mi, 2. This is a PAID-UP LEASE. In consideration of the down cash payment, Lessor agrees that Lessee
shall not be obligated, except as otherwise provided herein, to commence or continue any operations during the
primary term. Lessee may at any time or times during or after the primary term surrender this lease as to all or
any portion of said land and as to any strata or stratum by delivering to Lessor or by filing for record a release
or releases, and be relieved of all obligation thereafter accruing as to the acreage surrendered.
3. In consideration of the premises the said Lessee covenants and agree to pay Lessor one-eighth
(1/8) of the proceeds received by Lessee, payable monthly, for the oil, gas and other hydrocarbons produced and
saved from the leased premises.
4. Where gas from a well capable of producing gas is not sold or used, Lessee may pay or tender as
royalty to Lessor One Dollar per year per net mineral acre owned by Lessor and covered by this lease, such payment
or tender to be made on or before the anniversary date of this lease next ensuing after the expiration of 90 days
from the date such well is shut in and thereafter on or before the anniversary date of this lease during the period
such well is shut in. If such payment or tender is made, it will be considered that gas is being produced within
the meaning of this lease.
5. If said Lessor owns less than the entire oil and gas fee simple estate in the above described
lands, then the royalties (including any shut-in gas royalty) herein provided for shall be paid the said Lessor
only in the proportion which Lessor's interest bears to the entire oil and gas mineral fee simple estate.
1 930316
Revised 3/93
Small Tract Oil and Gas Lease
Page 2
6. Lessee shall have the right to use, free of cost or royalty, gas, oil and water produced on said
Oscr 0 land for Lessee's operations thereon, except water from the wells of Lessor.
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7. When requested by Lessor, Lessee shall bury Lessee's pipe lines below plow depth.
NO
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8. No well shall be drilled nearer than 200 feet to any occupied building on said premises without
athe written consent of Lessor.
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O 3 9. Lessee shall have the right at any time to remove all of Lessee's machinery and fixtures placed
O a on said premises, including the right to draw and remove casing.
44 0
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10. The rights of Lessor and Lessee hereunder may be assigned in whole or in part. No change in
O ownership of Lessor's interest (by assignment or otherwise) shall be binding on Lessee until Lessee has been
U furnished with notice, consisting of certified copies of all recorded instruments or documents and other
V' a information necessary to establish a complete chain of record title from Lessor, and then only with respect to
O 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 difference parcels p
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portions or of said land shall operate
H bd 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 shall be liable for
M ,. any act or omission of any other leasehold owner.
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47)
z 11. Lessee, at its option, is hereby given the right and power at any time and from time to time as
N H a recurring right, either before or after production, as to all or any part of the land described herein and as
to any one or more of the formations hereunder, to pool or unitize the leasehold estate and the mineral estate
d' H
O U7 covered by this lease with other land, lease or leases in the immediate vicinity for the production or oil and gas,
Wor separately for the production or either, when in Lessee's judgment it is necessary or advisable to do so, and
irrespective of whether authority similar to this exists with respect to such other land, lease or leases.
O 14 Likewise, units previously formed to include formations not producing oil or gas may be reformed to exclude such
O r-I W non-producing formations. The forming or reforming of any unit shall be accomplished by Lessee executing and
M Z filing of record a declaration of such unitization or reformation, which declaration shall describe the unit. Any
f`'1 Z unit may include land upon which a well has theretofore been completed or upon which operations for drilling have
N K
O theretofore been commenced. Production, drilling or reworking operations or a well shut in for want of a market
U anywhere on a unit which includes all or a part of this lease shall be treated as if it were production, drilling
r-' or reworking operation or a well shut in for want of a market under this lease. In lieu of the royalties elsewhere
herein specified, including shut-in gas royalties, Lessor shall receive on production from the unit so pooled
H royalties only on the portion of such production allocated to this lease; such allocation shall be that proportion
CO N of the unit production that the total number of surface acres covered by this lease and included in the unit bear
r, to the total number of surface acres in such unit. In addition to the foregoing, lessee shall have the right to
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unitize, pool or combine all or any part of the above described lands as to one or more of the formations
PI Uzi thereunder with other lands in the same general area by entering into a cooperative or unit plan of development
or operation approved by any governmental authority and, from time to time, with like approval, to modify, change
or terminate any such plan or agreement and, in such event, the terms, conditions and provisions of this lease
shall be deemed modified to conform to the terms, conditions and provisions of such approved cooperative or unit
plan of development or operation and, particularly, all drilling and development requirements of this lease,
express or impled, shall be satisfied by compliance with the drilling and development requirements of such plan
or agreement, and this lease shall not terminate or expire during the life or such plan or agreement. In the event
that said above described lands or any part thereof shall hereafter be operated under any such cooperative or unit
plan of development or operation whereby the production therefrom is allocated to different portions of the land
covered by said plan, then the production allocated to any particular tract of land shall, for the purpose of
computing the royalties to be paid hereunder to Lessor, be regarded as having been produced from the particular
tract of land to which it is allocated and not to any other tract of land; and the royalty payments to be made
hereunder to Lessor shall be based upon production only as so allocated. Lessor shall formally express Lessor's
consent to any cooperative or unit plan of development or operation adopted by Lessee and approved by any
governmental agency by executing the same upon request of Lessee.
12. All express or implied covenants of this lease shall be subject to all Federal and State laws,
executive orders, rules or regulations, and this lease shall not be terminated, in whole or in part, nor Lessee
held liable in damages, for failure to comply therewith, if compliance is prevented by, or if such failure is the
result of, any such law, order, rule or regulation.
2 90ass
Revised 3/93
Small Tract Oil and Gas Lease
Page 3
13. 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. Lessee shall have the right at any time
to redeem for Lessor, by payment, any mortgages, taxes or other liens on the above described lands in the event
d' 0 of a default of payment by Lessor, and be subrogated to the rights of the holder thereof.
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M O 14. 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,
ato persons or property caused by or sustained in connection with operations on this leased land or by conditions
O W created thereby, or based upon any violation of any statute, ordinance or regulation.
O Z
OZ15. Upon failure or default of Lessee to comply with any of the terms and provisions hereof including
s W but not limited to the failure to comply with laws, rules and regulations covering Colorado oil and gas operations,
PLessor is hereby authorized upon notice and hearing, as hereinafter provided, to cancel this lease as to all of
O the leased land so claimed or possessed by Lessee hereunder. In the event of any such default or failure, Lessor
W shall, before making any such cancellation, send to Lessee by certified mail, to the post office address of said
d, a. lessee as shown by the records of Lessor, a notice or intention to cancel for such failure or default, specifying
O the same, stating that if within thirty (30) days from the date of mailing said notice, Lessee shall correct such
" 'a failure or default, no cancellation will be made. If such failure or default is not corrected with thirty (30)
LO
H ,y, days after the mailing of such notice, and if Lessee does not request a hearing on such notice within thirty (30)
(74 days, this lease will terminate and be cancelled by operation of the paragraph without further action by Lessor,
M a or further notice to Lessee.
M V
16. All of the provisions of this lease shall be binding upon the heirs, personal representatives,
cy)• z
N H successors and assigns of Lessor and Lessee.
p• El
17. Lessee shall not conduct operations of any kind upon the surface of the lands herein described
Qi without the express written consent of Lessor.
W
O W IN WITNESS WHEREOF, this instrument is executed as of the date first above written.
O W
ri
Cr) Z BOARD OF COUNTY COMMISSIONERS
01 Z
N WELD,COUNTY, COLORADO
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a (/ �� i 1fi ' 7 'P/
ATTEST:co
H f / iz
m ri Weld Coyi to the and
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W Ga By: r: •
LESSEE:
By: .
STATE OF COLORADO )
r ) ss.
COUNTY¢E.WEEt4 )
i ehlricrego{ng instrument was acknowledged before me this 14 day of 62 q , 199,3 by
-vr '` .}tress mtt,hand and official seal.
F °Sr
1{Y•.cgion expires ,�
41C(2812-
MM��'' of mil G�i,emu Jz,..�;j ,..1Notary Public
930316
3
•
Exhibit A
Oil and Gas Lease dated Janaury 18, 1993
Weld County/H & C Colton Company
The lands covered by this lease are situated in the County of Weld, State of Colorado, and are
o u described as follows, to wit:
O
▪ aTownship 5 North, Range 66 West, 6th P.M.
Section 34: A strip of land, 100 feet in width, running across the NYSWYa of said Section 34,
being the same strip, insofar as it crosses said NY2SWY4,described in that certain
o O Deed from County recorded in Book 1135 at Page 126. Notwithstanding the
o x specificity of the above description or descriptions in prior deeds, this lease shalt
o cover all lands owned by Lessor in said NY2SWY,.
The above tract contains 3.317 acres, more or less.
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930316
CREWS & ZEREN
PETROLEUM LAND CONSULTANTS
1223 28TH AVENUE.SUITE 2
GREELEY,COLORADO 80631
January 14, 1993 (303)351 0733 GREELEY
(303)659 7710
(303)351-086] FAX
Board of Weld County Commissioners
910 10th Street
Greeley, CO 80631
Dear Commissioners: HAND DELIVERED
H & C Colton Company is the operator of a well being drilled on a Codell/Niobrara spacing unit
consisting of the N'/zSW'/a of Section 34,Township 5 North,Range 66 West. It has been determined
that Weld County, by virtue of a reservation in a deed from the County to Richard C. Pirnie and
Nellie M. Pirnie recorded in Book 1135 at Page 126, owns the minerals under a strip 100 feet in
width running across part of the N'ANW'.
H&C Colton,under your small tract leasing policy, requests an oil and gas lease covering the small
tract, and I have previously delivered a Crews &Zeren check in the amount of$210 in payment for
the lease and fees. We believe that the total acreage involved is 3.717 acres, but due to the
irregularity of the section and survey discrepancies, this figure may be adjusted up or down prior to
division orders. I enclose a copy of a preliminary draft of a plat of the unit. Some corrections are
still to be made to the plat, but it does show the location of the County strip as esentially
encompassing Compo Road in the Dos Rios subdivision. No drilling or other operations will take
place on the strip under which the County minerals are located.
Bruce Barker and I have discussed some changes to your standard lease form which Colton requests
you approve in the enabling resolution. On Page 4(Paragraph 9),we have made changes to provide
that there are no restrictions on assignment, since a 3.717 acre parcel does not warrant the time of
everyone involved. We have eliminated Paragraph 10 on Page 4 entirely, since the Code11 and
Niobrara formations rarely produce 15 barrels or 90 MCF per day, and assignments of overriding
royalty commonly exceed an aggregate of 5%. In Paragraph 16 on Page 5, we have reduced the
minimum shut-in royalty to $10 from $240, since $240 would be excessive for the 3.717 acres
involved.
Thank you for your consideration of this request. If you have any questions, please let me know.
Cordially,
William G. Crews, CPL
Agent for H & C Colton Company
enclosures
WGC/mm
cc: Bruce Barker, Esq. - Weld County Attorney's Office
930316
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OFFICE OF COUNTY ATTORNEY
PHONE(303)356-4000 EXT.4391
TTT P.O. BOX 1948
GREELEY,COLORADO 80632
COLORADO
January 14 , 1992
William G. Crews
Crews and Zeren
1223 28th Avenue, Suite 2
Greeley, CO 80631
RE : Well in North Half Southwest Quarter, Section 34, Township 5
North, Range 66 West
Dear Bill :
This letter is to confirm our telephone conversation of Tuesday,
January 12 , 1993 .
On January 5, 1993, you provided to the Board of County
Commissioners of Weld County, Colorado, a "paid up lease" for
minerals in the North Half Southwest Quarter of Section 34,
Township 5 North, Range 66 West of the 6th P.M. , Weld County,
Colorado. The property consists of approximately 3 . 7 acres .
As we discussed in our telephone conversation, the Board of County
Commissioners requires all oil and gas leasees to sign the Board' s
current lease form. A copy of that lease form is enclosed. The
Board does not allow for exceptions to this general rule on a
company by company basis . Therefore, it is my understanding that
you plan to come in to the office of the Clerk to the Board and
speak to Carol Harding about obtaining the form for the Board' s Oil
and Gas Lease.
If you wish to have the Board of County Commissioners consider your
form for paid up leases for small tracts (5 acres or less) , I would
suggest that you provide a blank form to the Board, along with an
930316
William G. Crews
January 14, 1993
Page 2
explanatory letter. The County Attorney' s Office will then assist
the Board in determining whether or not it is advisable to use the
form.
If you should have any questions regarding this letter, please feel
free to call me at 346-4000, extension 4389 .
Very truly yours,
Bruce T. Barker g '
Assistant Weld County Attorney
BTB/db
Enclosure
pc: SANKSOKKAft
930316
CREWS & ZEREN
PETROLEUM LAND CONSULTANTS
1223 28TH AVENUE,SUITE 2
GREELEV, COLORADO 80631
(303)351-0733 GREELEY
(303)659-7710 DENVER
(303)351-0887 FAX
January 5, 1993
Board of Weld County Commissioners
910 10th Street
Greeley, CO 80631
Dear Commissioners: HAND DELIVERED
H & C Colton Company is the operator of a well being drilled on a Codell/Niobrara spacing unit
consisting of the N' SW�a of Section 34,Township 5 North,Range 66 West. It has been determined
that Weld County, by virtue of a reservation in a deed from the County to Richard C. Pirnie and
Nellie M. Pirnie recorded in Book 1135 at Page 126, owns the minerals under a strip 100 feet in
width running across part of the N' SWV.s.
H & C Colton, under your small tract leasing policy, requests a paid-up oil and gas lease covering
the small tract, and I am delivering herewith a Crews & Zeren check in the amount of $210 in
payment for the lease and fees. We believe that the total acreage involved is 3.717 acres, but due
to the irregularity of the section and survey discrepancies, this figure may be adjusted up or down
prior to division orders. I enclose a copy of a preliminary draft of a plat of the unit. Some
corrections are still to be made to the plat, but it does show the location of the County strip as
esentially encompassing Compo Road in the Dos Rios subdivision. No drilling or other operations
will take place on the strip under which the County minerals are located.
Thank you for your consideration of this request. If you have any questions, please let me know.
Cordially,
William G. Crews, CPL
Agent for H & C Colton Company
enclosures
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930316
PRODUCERS 88-PAID UP WELD COUNTY OIL AND GAS LEASE
Rev.5-60,No.2 �.
(no warranty)
THIS AGREEMENT, made and entered into this day of January, 1993, by and between LD
COUNTY, COLORADO, a political subdivision of the Sate of Colorado acting by and through the and of
County Commissioners of the County of Weld,c/o Weld County Centennial Center,915 10th Street, eley,CO
80631,hereinafter called Lessor,and H&C COLTON COMPANY,a general partnership,621 17th treet,Suite
2600,Denver, CO 80293, hereinafter called Lessee.
WITNESSETH, that Lessor, for and in consideration of the sum of Two Hundred Doll ($200), cash in
hand paid,the receipt of which is hereby acknowledged,and the covenants and agreements h einafter described,
has granted, demised, leased and let, and by these presents does grant,demise,lease and I exclusively unto the
said Lessee, the land hereinafter described, with the exclusive right for the purpose mining, exploring by
geophysical and other methods, and operating for and producing therefrom; oil and a as of whatsoever nature
or kind,with rights of way and easement for laying pipe lines,and erection of structus thereon to produce, save
and take care of said products, all that certain tract of land situated in the Coun of Weld, State of Colorado,
described as follows, to wit: /
Township 5 North, Ranze 66 West, 6th P.M.
Section 34: A strip of land, 100 feet in width,running across the /2SW'/a of said Section 34,being the
same strip,insofar as it crosses said N1/2SWV., desc ' d in that certain Deed from County
recorded in Book 1135 at Page 126. Notwithstandi the specificity of the above description
or descriptions in prior deeds,this lease covers a lands owned by Lessor in said N'/2SW'/<.
and containing 3.317 acres, more or less. /
1. It is agreed that the lease shall remain in force for a t rm of three(3)years from this date and as long
thereafter as oil or gas of whatsoever nature or kind is produce from said leased premises or on acreage pooled
therewith, or drilling operations are continued as hereinafter rovided. If, at the expiration of the primary term
of this lease, oil or gas is not being produced on the leased remises or on acreage pooled therewith but Lessee
is then engaged in drilling or re-working operations there n, then this lease shall continued in force so long as
operations are being continuously prosecuted on the aced premises or on acreage pooled therewith; and
operations shall be considered to be continuously proses ted if not more than ninety(90)days shall elapse between
the completion or abandonment of one well and the ginning of operations for the drilling of a subsequent well.
If after discovery of oil or gas on said land or on ac cage pooled therewith, the production thereof should cease
from any cause after the primary term, this lease all not terminate if Lessee commences additional drilling or
re-working operations within ninety(90) days fro date of cessation of production or from date of completion of
thy hole. If oil or gas shall be discovered and,I�roduced as a result of such operations; at or after the expiration
of the primary term of this lease,this lease shall continue in force so long as oil or gas is produced from the leased
premises or on acreage pooled therewith. /
2. This is a PAID-UP LEASE. I consideration of the down cash payment,Lessor agrees that Lessee shall
not be obligated,except as otherwise pr vided herein,to commence or continue any operations during the primary
term. Lessee may at any time or time during or after the primary term surrender this lease as to all or any portion
of said land and as to any strata ors atum by delivering to Lessor or by filing for record a release or releases,and
be relieved of all obligation there ter accruing as to the acreage surrendered.
3. In consideration of e premises the said Lessee covenants and agrees:
1st. To deliver t the credit of Lessor,free of cost,in the pipe line to which Lessee may connect wells
on said land,the equal one ighth(1/8) part of all oil produced and saved from the leased premises. Lessee may
from time to time purcha any royalty oil,paying therefor the market value in the field where produced on the
day it is run to the pipe ne or sold from storage tanks of Lessee.
2nd. To ay Lessor one-eighth(1/8)of the proceeds received by Lessee each year,payable quarterly,
for the gas from a well where gas only is found,while the same is being used off the premises, and if used in
the manufacture f gasoline a royalty of one-eighth (1/8),payable monthly at the prevailing market rate for gas,
but in no case all such market rate be deemed more than Lessee actually receives from the sale of such gas.
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3rd. To pay Lessor for gas produced from any oil well and used off the premises or in the manufacture
of gasoline or any other product a royalty of one-eighth(1/8)of the proceeds received by Lessee from the sale of
such gas.
4. Where gas from a well capable of producing gas is not sold or used,Lessee may pay or tender as royalty
to Lessor One Dollar per year per net mineral acre owned by Lessor and covered by this lease, such payment or
tender to me made on or before the anniversary date of this lease next ensuing after the expiration of 90 days from
the date such well is shut in and thereafter on or before the anniversary date of this lease during the period such
well is shut in. If such payment or tender is made, it will be considered that gas is being produced within the
meaning of this lease.
5. If said Lessor owns a less interest in the above described land than the entire and undivided fee simple
estate therein,then the royalties(including any shut-in gas royalty)herein provided for shall be/Paid the said Lessor
only in the proportion which Lessor's interest bears to the whole and undivided fee.
6. Lessee shall have the right to use, free of cost,gas,oil and water produced on said land for Lessee's
operations thereon,except water from the wells of Lessor.
7. When requested by Lessor, Lessee shall bury Lessee's pipe lines below plow depth.
8. No well shall be drilled nearer than 200 feet to any house or barn now on said premises without written
consent of Lessor.
9. Lessee shall pay for damages caused by Lessee;s operations to growing crops on said land.
10. Lessee shall have the right at any time to remove all machinery and fixture placed on said premises,
including the right to draw and remove casing. %
11. The rights of Lessor and Lessee hereunder utay 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 allyC'corded instruments or documents and other information
necessary to establish a complete chain of record tjtle 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 difference portions or parcels of said land shall operate to
enlarge the obligations or diminish the rights o ssee, and all Lessee's operations may be conducted without
regard to any such division. If all or any part this lease is assigned, no leasehold owner shall be liable for any
act or omission or any other leasehold owne2'.
12. Lessee, at its option, is here y given the right and power at any time and from time to time as a
recurring right,either before or after p oduction, as to all or any part of the land described herein and as to any
one or more of the formations hereu der, to pool or unitize the leasehold estate and the mineral estate covered
by this lease with other land, lea or leases in the immediate vicinity for the production or oil and gas, or
separately for the production or ither, when in Lessee;s judgment it is necessary or advisable to do so, and
irrespective of whether authors similar to this exists with respect to such other land, lease or leases. Likewise,
units previously formed to in ude formations not producing oil or gas may be reformed to exclude such non-
producing formations. The rming or reforming of any unit shall be accomplished by Lessee executing and filing
of record a declaration of ch unitization or reformation,which declaration shall describe the unit. Any unit may
include land upon whit a well has theretofore been completed or upon which operations for drilling have
theretofore been co need. Production,drilling or reworking operations or a well shut in for want of a market
anywhere on a unit w ich includes all or a part of this lease shall be treated as if it were production, drilling or
reworking operatio or a well shut in for want of a market under this lease. In lieu of the royalties elsewhere
herein specified,' uding shut-in gas royalties,Lessor shall receive on production from the unit so pooled royalties
only on the ports n of such production allocated to this lease; such allocation shall be that proportion of the unit
production tha the total number of surface acres covered by this lease and included in the unit bear to the total
number of su ace acres in such unit. In addition to the foregoing,lessee shall have the right to unitize,pool or
combine a r any part of the above described lands as to one or more of the formations thereunder with other
lands in t e same general area by entering into a cooperative or unit plan of development or operation approved
by any overnmental authority and,from time to time,with like approval,to modify,change or terminate any such
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plan or agreement and,in such event,the terms,conditions and provisions of this lease shall be deemed modified
to conform to the terms,conditions and provisions of such approved cooperative or unit plan of development or
operation and, particularly, all drilling and development requirements of this lease, express or impled, shall be
satisfied by compliance with the drilling and development requirements of such plan or agreement,and this lease
shall not terminate or expire during the life or such plan or agreement. In the event that said above described
lands or any part thereof shall hereafter be operated under any such cooperative or unit plan of development or
operation whereby the production therefrom is allocated to different portions of the land covered by said plan,then
the production allocated to any particular tract of land shall,for the purpose of computing the royalties to be paid
hereunder to Lessor,be regarded as having been produced from the particular tract of land to which it is allocated
an not to any other tract of land; and the royalty payments to be made hereunder to Lessor shall be based upon
production only as so allocated. Lessor shall formally express Lessor's consent to any cooperative or unit plan of
development or operation adopted by Lessee and approved by any governmental agency by executing the same
upon request of Lessee.
13. All express or implied covenants of this lease shall be subject to all Federal and State laws, executive
orders, rules or regulations, and this lease shall not be terminated, in whole or in part, nor Lessee held liable in
damages,for failure to comply therewith,if compliance is prevented by,or if such failure is the result of, any such
law, order, rule or regulation.
14. Lessor does not warrant title to the leased premises,but it shat1,upon request,allow Lessee access to
such abstracts and other title papers as it has in its files. Lessee shall/have the right at any time to redeem for
Lessor, by payment, any mortgages,taxes or other liens on the above/described lands in the event of a default of
payment by Lessor, and be subrogated to the rights of the holder thereof.
15. All of the provisions of this lease shall be binding upon the heirs,personal representatives,successors
and assigns of Lessor and Lessee.
16. Lessee shall not conduct operations of any kin4 upon the surface of the lands herein described without
the express written consent of Lessor.
IN WITNESS WHEREOF, this instrument is executed as of the date first above written.
BOARD OF COUNTY COMMISSIONERS
WELD COUNTY, COLORADO
ATTEST:
Weld County Clerk and Recofder
and Clerk to the Board
by: /
LESSEE: H & Ccelton_Cp
i by: / ;
William G. Crews,Agent
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STATE OF COLORADO )
) ss.
COUNTY OF WELD )
The foregoing instrument was acknowledged before me this day of January, 1993,by William G.Crews
as Agent for H& C Colton Company, a general partnership, on behalf of said partnership.
Witness my hand and official seal.
My commission expires:
Notary Public
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