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OIL AND GAS DIVISION ORDER
Date: March 10. 1997
Lease No.: 113642-011 & 113642-021
Lease Name: Schenk #2 & Schenk J 35-6 LVC
Effective Date: Pate of First Sales
To: Patina Oil & Gas Corporation
and Gerrity Oil & Gas Corporation
1625 Broadway, Suite 2000
Denver, CO 80202
Each of the undersigned, individually, for themselves, their heirs, successors, and assigns, hereby
represents, warrants, and guarantees to Patina Oil & Gas Corporation and Gerrity Oil & Gas Corporation
(hereinafter referred to as the "Companies"), its successors and assigns, that the undersigned is the legal
owner of the decimal interest, as set forth below opposite each undersigned's name, in the proceeds from all
oil, condensates, and natural gas which may be produced from or allocated to the following -described area or
well located in the County of Weld. State of Colorado, and more particularly described as follows:
Township 5 North. Range 66 West. 6th P.M,
Section 35: S/2NW/4
Commencing on the effective date hereof, the Companies are hereby granted and authorized to take
and receive all oil, condensates, and natural gas which may be thereafter produced from the above -described
area or well and, subject to the other terms and conditions hereof, to give credit therefor to the undersigned in
accordance with the division of interest schedule as follows:
Credit To
Address Decimal Interest
Weld County Board of County Commissioners
Owner No. 707740
P.O. Box 758
Centennial Center
Greeley, CO 80632
.00357190 ROY
Additionally, in consideration of the wells drilled or to be drilled on the above -described lands and the
payment to the undersigned of royalties on production from said wells, the undersigned agree, grant, and
represent to and with the Companies as follows:
1. Oil (including crude oil and condensate) shall become the property of the purchaser thereof
upon its delivery to the purchaser or to the purchaser's agent or carrier, and payments hereunder shall be based
upon the net price received therefor from the purchaser. Oil shall be graded and measured in accordance with
applicable rules, regulations, or standards generally accepted in the industry. In the event that the Companies
are the purchaser of such oil, settlements therefor shall be based upon the Companies' posted price for similar
oil in the field where produced and in effect on the date of delivery, or if no posted price is then in effect,
settlements shall be based upon the then prevailing market price on the date of delivery thereof in the field
where produced. If the oil is purchased by the Companies and resold to another purchaser accepting delivery
thereof on the premises, settlements hereunder shall be based on the net price received therefor by the
Companies. The Companies maydeduct from any price received for the oil the reasonable costs of
transporting and/or treating the same if incurred.
2. Natural gas, including casinghead gas if marketed with gas well gas, shall be delivered and
sold to and become the property of the pipeline company to whom the gas is agreed to be sold by the
Companies. Settlements to the undersigned shall be based upon the terms, conditions, and prices for said gas
as agreed to with the pipeline company less any costs of treatment, compression, transmission, or dehydration
thereof which are paid by the Companies.
3. Oil and natural gas produced and sold from the premises is or may become subject to orders
of certain regulatory authorities who could vary the terms of any agreement for the production or sale thereof.
To the extent that such orders do modify or change current sales or production arrangements, the provisions
thereof, as well as the provisions hereof, shall be so modified accordingly.
4. Settlements hereunder for oil and gas shall be made monthly by the Companies mailing or
delivering their check to the undersigned at the address indicated in an amount, less taxes required to be
withheld, calculated in accordance with the schedule of interest as herein contained. Settlements shall be
mailed no later than the 25th day of each month for oil and/or gas taken or sold during the second preceding
calendar month. If at any settlement date the amount payable to any of the undersigned shall be less than
Twenty-five Dollars ($25), the Companies may defer such payment and make payment when such settlement
amount has accumulated to Twenty-five Dollars ($25) but, in any event, not less than annual intervals.
5. The undersigned individually warrant that they are the owner of their respective interest as
herein set forth and that in the event of an adverse claim made thereto or in the event ownership of the
undersigned's interest is not substantiated by record examination, the Companies may retain any and all
settlements due therefor, without interest, until such claim or ownership of the interest is settled, fully
adjudicated or otherwise determined, or until the Companies are adequately indemnified therefor by the parties
claiming such interest. The Companies may, at any time, require the undersigned to furnish proof of its title to
its interest, including abstracts of title or other pertinent records or documents.
CONSENT AGENDA
03/17/97
2538837 B-1597 P-177 03/20/1997 02:23P PG 1 OF 2 REC DOC
Weld County CO JA Suki Tsukamoto Clerk & Recorder 0.00
970739
LE0018 —`
6. The undersigned shall notify the Companies of any change in the ownership of their interest,
and the Companies shall not be liable for, nor shall it be required to recognize, any change in ownership unless
and until the Companies shall actually receive a certified copy of the instrument changing such interest and the
transferee thereof executes and returns to the Companies such transfer order or amended division order as the
Companies may reasonably require. In no event shall the Companies be required to give effect to any change
of interest of the undersigned prior to the first day of the calendar month next following the month in which
the Companies are notified of such change, regardless of the effective date of the instrument transferring the
same.
7. The undersigned hereby represent, grant to, and agree with the Companies that the interest of
the undersigned and of the Companies in and to the oil and gas which has or which may be produced from the
premises is in full force and effect and that all payments required to be made and all acts required to be done
by the Companies with respect thereto have been performed. The undersigned hereby releases the Companies
from any and all claims and damages arising from the purchase and handling of oil or gas from the premises
and for making any payments for settlements so long as the same are made in accordance with the terms of
the division of interest schedule set forth on Exhibit "A".
8. In the event that the area or well described above, or any part thereof, is included in one or
more pooled or unitized units now or hereafter formed by order of any appropriate governmental authority by
agreement or otherwise, the undersigned and the Companies recognize and agree that settlement for oil and
gas shall be made in accordance with the production allocated to the premises above described without the
necessity for the execution of additional or supplemental division orders. To the extent that the premises as
described above constitute a previously pooled or unitized area, the same is hereby ratified.
9. The provisions hereof shall be binding upon and inure to the benefit of the Companies and the
undersigned, their respective heirs, successors, administrators, and assigns. No change in the ownership of
any interest herein described shall havethe effect of changing the binding nature hereof. This instrument may
be executed in counterparts with each counterpart considered to be a binding agreement of the signatories
thereto; and all counterparts, as executed, shall be considered to be one instrument.
10. Should it be determined from time to time by the courts, any governmental agency having
jurisdiction, or the Companies and the purchaser of production, that the prices or allowances, if any, being paid
to the Companies and the amounts being disbursed to the undersigned are in excess of lawful prices or prices
agreed to with the oil or gas purchaser, and a refund is then required, you agree to promptly refund such
excess amounts so paid to you, including interest thereon, if required. Additionally, the Companies shall have
the right to recover such excess amounts out of future settlements hereunder to which you are entitled.
rsigned have executed this Division Order in acknowledgment and consent to
the fored agreements.
Witnes
S
SS No. or Tax ID No.
Date: 03/17/97
Owner Sign Below:
Weld County Board of
Count Co mmissiopers
/ GeoE. Baxter, Chair
84-6000813
IMPORTANT: TO AVOID DELAY IN PAYMENT, YOUR CURRENT ADDRESS AND SOCIAL SECURITY
NUMBER OR TAX ACCOUNT NUMBER MUST BE SHOWN
2538837 B-1597 P-177 03/20/1997 02:23P PG 2 OF 2
COUNTY ATTORNEY
STAFF APPROVAL
This is to affirm the attached
Division Order or Authorization to
Receive Payment for an Oil and
Gas Well has been reviewed by
the County Attorney's staff as to
form, legal description, and
percentage of royalties, if
applicable.
BY:
DATE: c->
7-2
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