HomeMy WebLinkAbout972682.tiffDEPARTMENT OF PLANNING SERVICES
Weld County Administrative Offices, 1400 N. 17th Avenue, Greeley, CO 80631
Phone (970) 353-6100, Ext. 3540, Fax (970) 353-6312
SECOND AMENDED USE BY SPECIAL REVIEW APPLICATION (USR 1002)
Application Fee Pail I I be Receipt # O-0 Date
Recording Fee Paid I I — Receipt # 1,9 Date
Application Reviewed by: —(1
10/3 /q 7
IO/3 /97
TO BE COMPLETED BY APPLICANT: (Please print or type, except for necessary signature)
LEGAL DESCRIPTION OF SPECIAL REVIEW PERMIT AREA:
SE'/.SW'/SW%, S34NEY.SWY.SW/, SW/SE'/.SW/, Section 11, Township 2 North, Range 66 West,
also described as Lot A of Amended Rec. Exemption No. 1313-11-3-RE1474
PARCEL NUMBER: 1309 11 0 00 004 and 1309 11 0 00 005
Section 11, Twp. 2N, Rge. 66W Total Acreage: 25 ac. Zone District: Ag Overlay Zone: None
Property Address (rf available) 16157 WCR 22, Ft. Lupton, CO 80621
Proposed Use: Natural gas processing/compressing, field office
SURFACE FEE (PROPERTY OWNERS) OF AREA PROPOSED FOR THE SPECIAL REVIEW PERMIT
Name: Cannon Land Company Address: 36 Steele Street, Suite 250
City/State/Zip: Denver, CO 80206 Business Telephone: (303) 321-7012
APPLICANT: Cif different than above?
Name: North American Resources Company
Address: 16157 WCR 22, City/State/Zip: Ft. Lupton, CO 80621
Business Telephone: (970) 353-1863
AUTHORIZED AGENT: (if different than above)
Name: William G. Crews, CPL
Address: 1223 28th Avenue, Suite 2
Home Telephone: (970) 352-4010
City/State/Zip: Greeley, CO 80631
Business Telephone: (970) 351-0733
DEPARTMENT OF PLANNING SERVICES USE ONLY
Case# 4v, )CIS C /rDo�
Floodplain: o Yes $No Geologic Hazard: o Yes ®<No
hereby state that all statements and plans submitted with the application are true and correct to the best of
my knowledge.
Rev: 1-27-97
n..e..
Signature: William G. Cr _
October 3, 1997 r
i
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EXHIBIT
1
ATTACHMENT
to
APPLICATION FOR SECOND AMENDED USE BY SPECIAL REVIEW 1002
North American Resources Company
October 3, 1997
This Application for Second Amended Use by Special Review 1002 consists of the application page
to which this is attached, along with the following which are incorporated herein by this reference:
SURFACE FEE (PROPERTY) OWNERS WITHIN THE SECOND AMENDED USR AREA AND
ADJACENT SURFACE ESTATES
Submitted herewith
AFFIDAVIT OF INTEREST OWNERS -MINERAL ESTATE -WITHIN THE SECOND AMENDED USR
AREA
Submitted herewith
COPY OF SECOND AMENDED GAS PROCESSING FACILITY LEASE
Submitted herewith
COPY OF GRANT OF EASEMENTS - Narco/Amoco
Previously submitted for Amended USR 1002
COPY OF GRANT OF EASEMENTS - Narco/PSCo
Previously submitted for Amended USR 1002
CERTIFICATE OF CONVEYANCES
Submitted herewith
COPY OF WELD COUNTY HEALTH DEPARTMENT SEPTIC PERMIT
Previously submitted for USR 1002
COPY OF WATER WELL PERMIT (COMMERCIAL -EXEMPT)
Previously submitted for USR 1002
SOIL REPORT
Submitted herewith
SPECIAL REVIEW PLAT MAP
Submitted herewith
PROPOSED USE By this Application, North American Resources Company ("Narco") seeks to
further amend Amended Use by Special Review 1002 (the "USR") to permit expansion of facilities,
both existing and those permitted under the original and first amended Use by Special Review, to
increase the size of the facility (from a maximum of 25 MMCF/day to 70 MMCF/day of gas
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processed), and to provide for the construction of a separate shop at the facility. With fractionation
equipment in place, the plant could fractionate and truck up to 8,000 barrels of natural gas liquids
per day.
The original USR was for construction and operation of a natural gas processing and compression
facility in the SE%SW%SW% of Section 11, Township 2 North, Range 66 West, 6th P.M., Weld
County, Colorado. The first amendment was to permit construction of facilities to receive and
measure processed natural gas and liquids extracted in the course of processing, and to allow use
of the plant office by field personnel of Narco as well as plant employees. It included the Public
Service Company odorization facility on the east side of the plant and the Amoco receiving facility
on the west edge of the plant.
The facility removes hydrocarbon liquids, condensate and water from natural gas, recompresses the
gas, and transmits it off of the premises by pipeline. In the case of gas sold to Public Service
Company and certain other purchasers, the natural gas odorant is added at the plant before the gas
is pipelined off of the premises. The recovered liquids, depending on their type, will be, as before,
either pipelined or trucked off the premises. Fractionating equipment was originally approved in both
the original and first amendment to the Use by Special Review, but it has not yet been built at the
facility. To a non -industry observer, the process and fractionation equipment for the proposed
expansion is similar in overall appearance to equipment now at the site. Tanks to hold processed
liquids such as propane and butane will be built on the eastern part of the plant for holding until
picked up by transport trucks.
The principal equipment and buildings already built or expected to be constructed at the site, now
and as the need arises in the future, are amended to be as follows:
7 Compressors
5 Residue Gas Compressors
3 Natural Gas Fired Heaters
2 Regenerator Gas Heater
9 Condenser/coolers
3 Cryogenic Skids
2 Dehydrator Skids
24 30,000 gallon product storage tanks
2 15,000 gallon product storage tank
1 Flare Unit
1 210 -barrel (42 gal.) Condensate Drip Tanks
1 210 -barrel (42 gal.) Water Tanks
1 Office/Restroom/Warehouse Building
1 Control Room
4 Truck Loading Racks
1 Truck Scale with Control Building
1 30' x 50' Shop Building
1 40' x 60' Compressor Building
2 Inlet Pipeline Slug Bottles & Meters
1 Septic Tank System
1 Water Well - Commercial/Exempt (for restroom facilities)
2 Amine Regen. Skid
2 Amine Cooler
2 Slug Liquids Stabilizer Skid
1 Air Compressor Shed
2 300 -gallon Methanol Storage Facility
1 Natural Gas Liquids Metering Facility (Amoco)
1 Office/Control Room
1 Telemetry Station
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1 Meter Skid
1 Meter Prover Skid
1 Meter Equipment Shed & Equipment
1 Gas Metering Facility (PSCo)
2 Filter Separators
1 Quality Control Building with Instrumentation
1 Meter Building with Instrumentation
2 1000 -gallon Odorant Tanks
1 Gas Metering Facility for connection to KN line
1 Filter Separator
1 Meter Building with Instrumentation
Storage tanks for lubrication oil, glycol and other supplies used at the plant
Miscellaneous pumps and small process vessels
IMPORTANT NOTE: The sizes of all tanks listed herein are approximate, since plant gas
composition at the inlet may require larger or more tanks to properly process the gas and extracted
liquids. The list of equipment is for general guidance in evaluating this application and is not
intended to be inclusive or exhaustive. Equipment will be substituted or added as necessary for the
proper and economic functioning of the plant, and this Second Amended USR is intended to cover
such substitutions and additions provided they do not alter the purposes for which this Second
Amended USR is sought or exceed the 70 MMCF/day maximum plant capacity.
All skids and buildings will be located upon reinforced cement pads of such thickness as may be
required by good engineering practices and by the Weld County Building Inspection Department.
The equipment has been or will be connected by pipes and valves which will be assembled and/or
welded on the site. Incoming pipelines will be connected to isolation valves to ensure cut-off
capability in the event of equipment failure.
NEED; Narco has acquired substantial additional natural gas reserves in Weld County through its
purchase of the oil and gas wells formerly owned by Vessels Oil & Gas Company. Narco needs the
expanded facility to ensure that the gas produced from its wells, and wells of other producers in the
future, can be introduced into transmission lines in compliance with the gas specifications of
purchasers and end users and facilitate the greatest economic recovery for leasehold and royalty
owners. The liquids suspended in natural gas from the wellhead must first be removed before the
gas will meet normal industry transmission and user specifications. In addition, natural gas liquids
such as propane and butane will be extracted from the gas, temporarily stored in tanks, and trucked
from the premises. The plant will ultimately be capable of processing up to 70 million cubic feet of
natural gas per day. Amoco and PSCo both have their receiving equipment located on the plant
premises to avoid construction of unnecessary pipelines and to greatly facilitate communication
between the plant and the respective purchasers/transporters of refined products. Due to some
employees having duties both in the field and at the plant, the use of the office for both plant and
field personnel of Narco has increased communication and employee effectiveness. When the plant
size is increased, the plant will be in operation 24 hours a day.
EXISTING LAND USES: The USR area and surrounding land are located approximately four miles
north and three miles east of Ft. Lupton and, until construction of the plant, had been used for solely
for agriculture (pasture) and for oil and gas production. Zoning is A (Agriculture) at the site, which
is located on the north side of WCR 22 beginning approximately 660 feet east of (unbuilt) WCR 33.
All surrounding land is used for grazing, with the exception of the Panhandle Eastem Pipe Line
Company (now KN Wattenberg Transmission L.L.C.) gas compression facility which corners the
proposed facility to the southwest across WCR 22.
DISTANCES TO STRUCTURES: The closest structures are those located to the southwest of the
USR area at the KN gas compression facility in the NW% of Section 14. No occupied homes are
located within a mile of the facility.
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USERS. BUYERS. ETC: None. The facility will not be open to the public. Deliveries of supplies
such as methanol, glycol and lubricants, in quantities of approximately 1,000 gallons at a time, are
anticipated on a monthly basis. Other than employee's vehicles, the only regular traffic will be tank
trucks (which wiH average from three to five per day) to remove the natural gas liquids, condensate
drip and water.
EMPLOYEES AND HOURS: The plant is currently manned by approximately three plant employees
at a time during business hours, generally from 8:00 a.m. to 5:00 p.m. After expansion, the plant
will be manned on a 24 -hour basis, with two men on duty during evening hours.
Upon completion there will be at total of approximately 15 employees at this facility, including both
clerical and management personnel. However, the office building may at some time in the future
again serve as an office for Narco's field employees and field clerical personnel. Following the
acquisition of the Vessels properties, Narco's field employees have been officed elsewhere. The
Amoco and PSCo equipment is not now and is not expected to be manned in the future.
WATER; Water is provided for employee rest rooms from a water well (commercial -exempt) drilled
at the facility. Potable water is provided by commercial bottled water providers.
ACCESS: Access is via WCR 22, which is the only road adjacent to the USR area.
VEHICLES: As stated above, other than employee's vehicles, the only regular traffic will be tank
trucks which (which will average from three to five per day) to remove the natural gas liquids,
condensate drip and water. Such trucks typically carry up to 8,400 gallons. All men and equipment
will be accessing the site from WCR 22.
SEWAGE: Adequate sewage facilities (septic tank) have been installed to provide sanitary facilities
for personnel and guests at the plant under the original USR. These facilities are adequate for the
existing and future plant personnel.
FIRE PROTECTION. No additional fire protection services will be needed. Fire extinguishers will
be installed as deemed necessary, and isolation valves will be located at a remote location on the
facility to enable shut -down in the event of a fire.
ANIMALS: None.
WASTE: All waste and debris will be placed in commercial dumpsters and transported off the
premises.
STORAGE Storage of tools and office supplies will be in a small warehouse area within the office
building or in the proposed shop building. Storage of methanol (500 gallons), ethylene glycol (500
gallons) and lubricants (500 gallons) will be in separate above -ground tanks.
LANDSCAPING: None planned.
RECLAMATION: Upon abandonment of the facility, all buildings, equipment, concrete foundations
and other improvements will be hauled from the premises, the land will be restored to as near its
original condition as is practicable, and disturbed area will be reseeded with native grasses.
TIME TABLE: Construction: Approximately 180 days after commencement.
Operation: Until no longer needed.
COMPREHENSIVE PLAN. The processing of and transportation of natural gas, and office uses for
field personnel, have been demonstrated to be consistent with the Weld County Comprehensive
Plan. Similar USRs have been approved by the Board for facilities in A zones, and this facility, being
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located near to an existing gas compression facility, serves to consolidate like uses in the same
general vicinity and lessen the impact of the type of use for which the amended permit is sought.
Consolidation of the Amoco, PSCo and KN receiving equipment at the plant site is an example of
industry cooperation to consolidate like uses, avoid taking more agricultural land out of production,
and prevent additional visual pollution.
At its November 10, 1993 public hearing on Amended USR 1002, the Board of Weld County
Commissioners found as follows:
The proposal is consistent with the Agricultural Goals and Policies as set forth in the Weld
County Comprehensive Plan. The Comprehensive Plan encourages the removal of mineral
resources as long as the removal of prime farm land is minimized.
The proposal is consistent with the intent of the Agricultural Zone District. The natural gas
processing facility is provided for as a Use by Special Review.
The uses which could be permitted will be compatible with the future development of the
surrounding agricultural area. The uses which would be permitted will be compatible with the
existing surrounding land uses which include dryland pasture, an electric transmission line,
and another gas processing facility.
The property is not located within any municipal Urban Growth Boundaries.
No overlay districts affect the site.
Since the purposes for which this Second Amended USR is sought are the same as those in
Amended USR 1002, the above findings should equally apply to this application.
AGRICULTURAL PRESERVATION; The land is not irrigated and a minimal amount of grazing land
was used for the gas plant. The proposed expansion to a total of 25 acres will take only 15
additional acres of grazing land out of production.
HEALTH AND SAFETY: The remote location of the facility should ensure that the health, welfare
and safety of the citizens of Weld County are protected. The facility will be constructed in
accordance with all governmental and industry standards.
COMPATIBILITY; The area surrounding the USR area should not be adversely affected by the
intended additional equipment. No homes or other occupied dwellings are located within one mile
of the proposed facility, which is surrounded entirely by land devoted to grazing, except for the
cornering gas compression plant. The facility, by being located near to an existing gas compression
facility, serves to consolidate like uses in the same general vicinity. The immediate vicinity is not
involved in growth from any towns or cities, and the site is ideal for the intended use due to its
remote location.
NO OVERLAYS• The USR area is not within a flood plain, geologic hazard area, or the Weld County
Airport overlay district or any other known overlay district.
WATER SUPPLY' Water required for the toilet facilities and maintenance operations is obtained
from the water well (commercial -exempt) on the premises. A permit has been obtained for such well
and was provided to the Weld County Planning Department.
PROOF OF INTEREST' A copy of the Second Amended Gas Processing Facility Lease between
Cannon Land Company and Narco is attached hereto as Exhibit C. Copies of the Grant of
Easements from Narco to Amoco and PSCo are attached hereto as Exhibits D and E.
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NOISE REPORT: Waiver is hereby requested. The plant will be in compliance with applicable
Colorado Revised Statutes governing noise.
SOIL REPORT: Copies of the soil type descriptions (Valent sand, 0-3% or 3% to 9% slopes; and
Elney loamy sand, 1-3% slopes) from Soil Survey of Weld County. Colorado. Southern Part
published by the Soil Conservation Service, United States Department of Agriculture, are submitted
herewith. The soil is adequate to support all necessary concrete foundations for equipment.
DRAINAGE PLAN• The Freese Engineering drainage plan submitted in connection with the original
USR will still be valid, since the additional equipment to be installed will be on cement foundations
which have their own collection system. Stormwater drainage from the new equipment, like the
existing equipment, will be piped to tanks at the facility to avoid any oil which may mix with
stormwater from running onto the land or entering waters of the state. The retention pond will be
enlarged as necessary to accommodate any additional stormwater drainage. A stormwater permit
was applied for in connection with construction under the original USR.
SURFACE OWNERS; A certified list of all surface owners of the lands within 500 feet of the USR
area is submitted herewith as Exhibit A.
MINERAL OWNERS: A certified list of the owners of the minerals under the lands within the USR
area is submitted herewith as Exhibit B.
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Second Amended U.S.R. 1002
North American Resources Company
Road File #
RE:
Other Case No.
WELD COUNTY ROAD ACCESS INFORMATION SHEET
Weld County Public Works Department Date: October 3, 1997
933 North 11th Avenue, P.O. Box 758, Greeley, CO 80632
Phone: (970 )356-4000, Ext. 3750 Fax: (970) 352-2868
1. Applicant Name: North American Resources Company Phone: (303) 659-7740
Address:: 16157 WCR 22, Ft. Lupton, CO 80621
2. Address or location of access: 16157 WCR 22
Section: 11 Township: 2 North
Subdivision: N/A Block: N/A
Weld County Road: 22 Side of Road: North
Range: 68 West
Lot: N/A
Distance from nearest intersection: 660 feet,
3. Is there an existing access to the property? Yes � No # of accesses: 2
4. Proposed Use:
X Permanent ❑ Residential/Agricultural X Industrial
❑ Temporary ❑ Subdivision ❑ Commercial ❑ Other
5. Site Sketch
See attached plat from the proposed Second Amended U.S.R. 1002 which shows three accesses (two existing and one
additional) in detail. Lot A of existing Recorded Exemption No. 1309-11-3-RE1474 begins approximately 660 feet east of the
intersection of WCR 22 and unbuilt WCR 33.
OFFICE USE ONLY:
Road ADT Date Accidents Date
Road ADT Date Accidents Date
Drainage Requirement Culvert Size Length
Special Conditions
❑ Installation authorized ❑ Information Insufficient
Reviewed By: Title:
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2567334 B-1624 P-653 09/04/1997 04:21P PG 1 OF 6 REC D0C N
Weld County CO J/5, Suki Tsukamoto Clerk & Recorder 31.00
SECOND AMENDED GAS PROCESSING FACILITY LEASE
THIS AMENDED GAS PROCESSING FACILITY LEASE is made and entered into this 2nd day of
September, 1997, by and between CANNON LAND COMPANY, a Colorado corporation, 36 Steele Street,
Suite 250, Denver, CO 80206 ("Cannon"), as Lessor; and NORTH AMERICAN RESOURCES COMPANY,
a Montana corporation, 16 East Granite, Butte, MT 59701 ("Narco"), as Lessee.
BACKGROUND
Under date of January 15, 1993, the parties hereto entered into that certain Gas Processing Facility Lease (the
I nce ", which I ease is recorded in Book 1368 under Rec. No. 2319633 of the real property records of Weld
County, Colorado. The parties entered into that certain Amended Gas Processing Facility Lease (the
"Amended Lease") under date of July 10, 1997, which document is recorded in Book 1616 under Rec. No.
2558265, by which the parties increased the size of the lands covered by the Lease and restated the Lease.
Narco has requested that Cannon now amend the Amended Gas Processing Facility Lease to increase the size
of the leased area to 25 acres by adding the SW1ASE%SW'% of Section 11, Township 2 North, Range 66
West, Weld County, Colorado, to the lands covered by the Amended Lease. Narco has fully complied with
the terms of the original Lease and Amended I ease and the parties desire to amend and restate the Lease and
Amended Lease in their entirety. This second amended and restated lease shall be hereinafter referred to as
the "Second Amended Lease" and it shall, upon becoming effective, supplant and replace the original Lease
and the Amended Lease from that time forward.
SECOND AMENDED LEASE
1. Grant of cease• Cannon, for and in consideration of the covenants herein contained, the sufficiency of
which consideration is hereby confessed, hereby grants, demises, leases and lets exclusively unto Narco the
lands described below for the purpose of constructing, maintaining and operating a facility for the processing,
compression and transmission of natural gas (and liquids extracted from natural gas) produced from wells in
and around Weld County, Colorado, together with all rights, privileges and easements necessary or convenient
for Narco's operation of such facility, including, but not limited to, the right to construct pipelines,
fractionating equipment, compressors, control stations, access roads, power lines, office buildings and other
improvements;
Township 2 North. Range 66 West 6th P M
Section 11: SEASWS4SWIA, S1/2NEIASW'ASWS4, and SWIASEIASWIA, containing 25 acres,
more or less, and more accurately described by metes and bounds as follows: A tract
of land in the SW % of said Section 11 described as beginning at the SW corner of
said Section 11, thence N. 88°58'08" E. 662.91 feet to the True Point of Beginning,
thence N. 00°01'52" W. 990 feet; thence N. 88°58'08" E. 660 feet; thence S.
00°01'52" E. 330 feet; thence N. 88°58'08" E. 660 feet; thence S. 00°01'52" W.
660 feet; thence S. 88°58'08" W. 1,320 feet to the True Point of Beginning.
2.. TERM. Subject to the other provisions herein contained, this lease shall remain in force until March 31,
1998, and for so long thereafter as Narco pays to Cannon the rentals described below.
3. Rental and Tax Payments*
a. The amounts of the annual lease payments ("rentals") shall be the amounts set forth on Exhibit A
attached hereto. The due date for rental payments shall be March 31 of each year, which shall be considered
the anniversary date of this lease. Except for the period from the date of execution of this Amended Lease
through March 31, 1998 (discussed in Paragraph 6, below), all rentals paid on March 31 of any year are in
payment of the next 12 -month period. By way of example, the payment due on March 31, 1998 shall continue
the lease for one year and cover the rental from April 1, 1998 through March 31, 1999.
b. Narco shall pay all ad valorem taxes assessed against all of the lands covered by this Lease, as
amended, for the 1997 tax year (due and payable in 1998) and all subsequent years that this lease remains in
effect. Narco shall ask the Weld County Assessor separately to assess the 25 -acre parcel for ad valorem taxes
and to mail the tax notice directly to Narco. If, however, the Assessor refuses to separately assess the 15 -acre
parcel or sends the tax notice to Cannon, then Cannon shall mail Narco a copy of the paid Weld County Tax
Notice for the property along with an invoice for the taxes attributable to the total 25 -acre parcel, and Narco
shall pay such invoice within 30 days after its receipt.
4. Manner of Payments' Rental payments may be made either by Narco delivering a check to Cannon, or
by Narco depositing a check payable to Cannon in the U.S. Mail, addressed to Cannon at the above address
or at such address as Cannon shall hereafter provide in writing to Narco, on or before March 31 preceding
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2567334 B-1624 P-653 09/04/1997 04:21P PG 2 OF 6
the 12 -month period for which such rental is being made. Thereafter, annually, in like manner and upon like
payments or tenders of the rentals, this lease shall be maintained in full force and effect.
5. Saving Clause: If Narco fails to timely make a required annual lease payment (or a real property tax
reimbursement as described in Paragraph 3.b), Cannon shall notify Narco by certified mail of such failure.
Should Narco, within 30 days of receipt of such notice, fail to mail or deliver the required payment to Cannon,
then this lease shall terminate as to both parties, subject to the rights of Narco to remove its equipment as
elsewhere described herein.
6. Permit Period Provisions. The parties recognize that Narco, prior to commencing expansion of its current
facility, must first obtain (I) an Amended Use by Special Review from Weld County, Colorado to permit the
expanded use for which this Amended Lease is granted, (ii) an amended or new permit from the Colorado Air
Quality Control Commission, and (iii) other required governmental permits, subdivision exemptions, licenses
and documents. Therefore, Narco shall pay Cannon the sum of $9,000 as consideration for the granting of this
Second Amended Lease and additional rental through March 31, 1998, but shall not owe Cannon said $9,000
unless and until all necessary permits, exemptions, licenses and documents have been obtained. Narco agrees
to promptly apply for, and diligently pursue, all such permits. In the event any permit which Narco considers
necessary for the expanded facility is denied, or if Narco elects not to proceed with expansion of the proposed
facilities on the subject lands, then (I) this Amended Lease, upon notification in writing to Cannon by Narco
of such election, shall terminate and be of no further force and effect, (ii) Narco shall owe Cannon the sum
of $3,000 as consideration for execution of this Second Amended Lease, and (iii) the original Lease shall
continue in full force and effect.
Within 30 days following the date on which Narco receives the last required permit, license or exemption
or document, Narco shall pay Cannon the $9,000 of the consideration and additional rental due for the period
from the execution of this Amended Lease through March 31, 1998.
7. Surrender of aa�•
� Narco shall not be obligated to commrence or continue any operations during the term
of this Second Amended Lease, but may at any time surrender this lease and be relieved of all obligations
thereafter accruing by recording and delivering to Cannon a release; provided, however, that Narco shall be
obligated promptly to restore the premises as near as practicable to their original condition and to remove all
of its equipment and fixtures. Narco shall remove and replace any contaminated soil, and shall reseed the
premises with appropriate natives grasses to ensure permanent vegetative cover. Narco shall be solely
responsible for ensuring that the leased land is restored in compliance with all applicable environmental
protection laws then in effect.
8. Damages. The initial consideration paid for this Amended Lease includes payment for use of the
additional land and for damages to Cannon's land occasioned by the expansion of the existing facility;
provided, however, that Narco shall pay for or repair damages caused by Narco's operations to any structures
or similar improvements now on the lands covered by this Amended Lease and for any and all environmental
damages caused by Narco to the lands herein leased.
9. Fencing. Narco shall construct and maintain a chain link fence, at least six feet in height, around its
expanded facility on the leased land.
10. Taxes. Narco shall be solely responsible for payment of all ad valorem, personal property and similar
taxes levied against the property of Narco which may be constructed or placed upon the lands herein leased
to Narco. As discussed in Paragraph 3.b, above, Narco shall pay (or reimburse Cannon for) all ad valorem
taxes levied against the lands herein leased to Narco.
11. F ouuipment Removal. Narco shall have the right at any time before or after termination of this lease to
remove all or any part of its equipment, fixtures and pipelines on the leased lands.
12. Water Well; Upon abardomnent of the facility and if requested by Cannon, Narco shall transfer the water
well drilled by Narco on the leased lands, together with all pumps, plumbing, and electrical fixtures, to
Cannon, provided that Cannon first posts any necessary bonds and assumes all liability for such well and
equipment.
13. Compliance with I aws• All operations shall be performed in substantial compliance with all rules,
regulations and orders of the Environmental Protection Agency, the Colorado Oil and Gas Conservation
Commission, the Colorado Air Quality Control Commission, and all other governmental agencies having
jurisdiction.
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14. Indemnffi ation• Narco agrees to indemnify and hold Cannon harmless from and against all claims,
actions, causes of action, damages and injuries to persons or property, including without limitation those
relating to environmental protection, which may arise out of operations conducted by Narco or its assigns on
the leased lands; provided, however, that if Cannon, under the provisions of Paragraph 16, below, has
obtained reasonably satisfactory indemnity or bonding from the proposed assignee and consents to the
assignment of Narco's interest, then Narco shall be released from all liabilities contained in this Paragraph 14
arising from activities after the date of Narco's assignment. The indemnity of Narco herein contained shall
survive any assignment as to all claims arising out of activities under this lease prior to the date of Narco's
assignment.
15. Assignment by Cannon. No change in ownership of Cannon's interest (by assignment or otherwise) shall
be binding on Narco until Narco 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
Cannon, and then only with respect to payments thereafter made. No other kind of notice, whether actual or
constructive, shall be binding on Narco, and Narco may continue to make rental payments precisely as if no
change had occurred. No present or future division of Cannon's ownership as to different portions or parcels
of said land shall operate to enlarge the obligations or diminish the rights of Narco, and Narco's operations
may be conducted without regard to any such division.
16. Assignment by Narco• A material consideration for this lease is the financial stability and reputation of
Narco, and any assignment of this lease (except to a wholly owned subsidiary of Montana Power Company)
shall be expressly subject to the prior written consent of Cannon, which Cannon may deny only if the proposed
assignee fails to establish to the reasonable satisfaction of Cannon its financial and technical capability to
perform its obligations (including, but not limited to, those relating to environmental protection and indemnity)
under this lease. Narco's assignee shall assume all obligations hereunder and shall furnish an indemnity or
bond satisfactory in the reasonable judgment of Cannon, at which time Cannon shall then consent to the
assignment in writing and release Narco from all further obligations under this lease. Following approval of
such assignment, Narco shall furnish Cannon with copies of all instruments of transfer. Any attempt to assign
without prior written consent of Cannon shall constitute a material breach of this lease and shall be cause for
immediate cancellation by Cannon.
17. Processing of Cannon Royalty Gas, In the event Narco shall process gas for third parties (gas which is
not owned or controlled by Narco) at the facility it constructs on the leased premises, Cannon shall have the
option to build, at it sole cost, risk and expense, a line to deliver royalty gas of Cannon to the Narco facility,
and Narco shall process such royalty gas on the same or similar terms and conditions as granted by Narco to
third parties. In the event Cannon desires to exercise this option, the parties shall enter into a gas processing
agreement similar in form and substance to those which Narco has with other third parties. Cannon's right
to take royalty gas in kind must be established in each concerned oil and gas lease; this paragraph is not
intended oafford Cannon any right to take in kind. This option is personal in nature, extends only to Cannon,
and and may
yl not assigned to any other party; provided, however, that if Cannon builds a pipeline to the facility
royalty gas is being processed at the time Cannon assigns this lease, then Narco shall continue to process
such royalty gas as Narco is processing on the date of such assignment.
18. Warranty and Subrogation:. This lease is executed by Cannon without any warranties of title, express or
implied. Narco at its option may purchase or discharge in whole or in part any tax, mortgage or other lien
upon the premises herein leased to Narco, or may redeem the same from any purchaser at any tax sale or
adjudication, and shall be subrogated to the rights of the holder thereof.
19. Powers of Attorney and Further Assurances. Cannon, and its successors and assigns, as a matter of
convenience, hereby make, constitute and appoint Narco, and any employees, agents or representatives of
Narco, as Cannon's agents and attorneys -in -fact, to do all things the Cannon might do, to obtain any necessary
permits, licenses, subdivision exemptions (or amendments thereof) and similar approvals or consents in
connection with activities conducted under this Second Amended Lease. A copy of this Second Amended Lease
shall be as valid as the original for purposes of proof of the powers of attorney herein granted. Cannon agrees
to promptly execute such instruments and documents as Narco may deem necessary or convenient to obtain
any permit, license, subdivision exemption or similar consent from any governmental agency.
20. Headings: All headings herein are for convenience and shall not be considered when construing any of
the provisions of this lease.
21. asinterpads, This instrument may be executed in counterparts each of which shall be deemed an original,
but both of which together shall constitute but one and the same instrument.
-3-
,3'72682
2567334 B-1624 P-653 09/04/1997 04:21P PG 4 OF 6
22. Binding .fF t This lease shall be binding upon and inure to the benefit of the parties hereto, their
successors and assigns.
IN WITNESS WHEREOF, this instrument is executed as of the date first above set forth.
ATTEST:
Mary M. Crowe, Assistant Secretary
STATE OF COLORADO
COUNTY OF ,/ep
) ss.
CANN
Brown W. . , Jr., President
NORTH AMERICAN
RESOURCES COMPANY
by:
James J. Benner, Vice President
raaeatess;' --
DBMS". ROSSMAN
NC '.RY PUBLIC
STATE `i= COLORADO
The foregoing instrument was acknowledged before me this day of September, 1
W. Cannon, Jr., as President and Margaret Cannon, as Secretary, iLm n , Coloradoby Brown
corporation, on behalf of said corporation. of Cannon Land Company, a
Witness my hand and official seal.
My commission expires:
//1./99
STATE OF MONTANA
COUNTY OF SILVER BOW
) ss.
Notary Public
The foregoing instrument was acknowledged before me this _ day of September, 1997, by James J.
Benner, as Vice President, and Mary M. Crowe, as Assistant Secretary, of North American Resources
Company, a Montana corporation, on behalf of said corporation.
Witness my hand and official seal.
My commission expires:
-4-
Notary Public
3'72682
2567334 B-1624 P-653 09/04/1997 04:21P PG 5 OF 6
22. Binding .ff rt• This lease shall be binding upon and inure to the benefit of the parties hereto, their
successors and assigns.
IN WITNESS WHEREOF, this instrument is executed as of the date first above set forth.
ATTEST:
Margaret Cannon, Secretary
ATTEST?C
*frs, hi t .y
7 is 1, :We
• k 49 t is, rowe, Assistant Secretary
STATE OF COLORADO
COUNTY OF
SS.
CANNON LAND COMPANY
by:
Brown W. Cannon, Jr., President
NORTH AMERICAN
RESOURCES CO
James J. Benner, Vice President
The foregoing instrument was acknowledged before me this day of September, 1997, by Brown
W. Cannon, Jr., as President and Margaret Cannon, as Secretary, of Cannon Land Company, a Colorado
corporation, on behalf of said corporation.
Witness my hand and official seal.
My commission expires:
STATE OF MONTANA
COUNTY OF SILVER BOW
) ss.
Notary Public
The foregoing instrument was acknowledged before me this g day of September, 1997, by James J.
Benner, as Vice President, and Mary M. Crowe, as Assistant Secretary, of North American Resources
Company, a Montana corporation, on behalf of said corporation.
W t ',bilk hand and official seal.
f My d i�0xpir:
-4-
Notary Public
J'7Z682
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