HomeMy WebLinkAbout20241478.tiffWELD COUNTY SMALL -TRACT OIL AND GAS LEASE
Containing 2.98 acres, more or less:
Containing 2.98 net mineral acres, more or less:
THIS LEASE AGREEMENT, dated this 55 day of 7-VA1f� , 20 .-t(csed. Use Only), made
and entered into by and between WELD COUNTY, COLORADO, a political subdivision of the
STATE OF COLORADO, acting by and through the BOARD OF COUNTY COMMISSIONERS
OF THE COUNTY OF WELD, for its respective interests, c/o BOARD OF COUNTY
COMMISSIONERS, 1150 O STREET, P.O. BOX 758, GREELEY, CO 80632, hereinafter called
Lessor, and:
Kerr-McGee Oil & Gas Onshore LP
1099 18th Street, Suite 700
Denver, CO 80202
hereinafter called Lessee:
WITNESSETHl
WHEREAS, said Lessee has applied to Lessor for an oil and gas lease covering the land
herein described, and has paid a bonus consideration totaling $ 3,576.00 , calculated at
$ 1,200.00 per mineral acre, fixed by Lessor as an additional consideration for the granting of
this lease, and the following consideration:
WHEREAS, all the requirements relative to said lease agreement have been duly complied
with and said lease agreement 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 them, 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:
SECTION TOWNSHIP RANGE
23 4N 68W
DESCRIPTION OF LAND (attach exhibit if additional space is required)
SEE ATTACHED "EXHIBIT A" FOR LEGAL DESCRIPTION AND
ACREAGE
TO HAVE AND TO HOLD said land, and all the rights and privileges granted hereunder to
Lessee until the hour of twelve o'clock noon on the 5day of , 20x1 (aeries use
Only), as primary term, and so long thereafter as oil and gas, or either of them, is produced in paying
5 - a`{ 2024-1478
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Carly Kopp., Clerk and Recorder, Weld County , CO
■III HU��1�1�� 4 �tI��I�� M lh� rl4' '�G� �M�41� W h 111111 LEO3 8 t -k - k
Small -Tract Oil and Gas Lease
Page 2
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 (60) consecutive days, unless an extension in writing is granted by
Lessor; provided that such drilling or reworking operations are 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 (60) sixty days upon cessation of
production for the purpose of re-establishing the same, and provided further that such production
is commenced during such primary term or any extension thereof, or while this lease is in force
by reason of such drilling or reworking operations or 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 - 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.
2. ROYALTY PROVISIONS:
A. Lessee Responsible for All Costs/Expenses: Lessee shall account for any and all
substances produced on the leased land and shall pay to Lessor as royalty, in addition
to the rentals provided, the royalties described in paragraphs B through E below, which
shall be free of all costs of any kind. In this regard, Lessee agrees to bear one hundred
percent (100%) of all costs and expenses incurred in rendering hydrocarbons
produced on or from the Leased Premises marketable and delivering the same into
the purchaser's pipeline for immediate transportation to an end user or storage facility.
If a gas purchase contract makes any deductions for the expenses of dehydrating,
transporting, compressing, manufacturing, processing, treating, gathering or
marketing of such gas, then such deductions shall be added to the price received by
Lessee for such gas for the purpose of the payment of royalties to Lessor. Additionally,
royalties payable to Lessor shall never bear, either directly or indirectly, under any
circumstances, the costs or expenses (including depreciation) to construct, repair,
renovate or operate any pipeline, plant, or other facilities or equipment used in
connection with the treating, separation, extraction, gathering, processing, refining,
transporting, manufacturing or marketing of hydrocarbons produced from the Leased
Premises or lands pooled therewith. It is the intent of the parties that the provisions of
this Paragraph 2 are to be fully effective and enforceable.
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Carly Koppes, Clerk and Recorder, Weld County , CO
(Revised 3/2023)
1111 kUcirAft I V ur:ri n;yMiAi 1k...111111
Small -Tract Oil and Gas Lease
Page 3
B. Royalty Payment on Products: On products, Lessee shall pay Lessor a royalty
payment of twenty-two and one-half percent (22.5%) of the gross market value or
proceeds of sale thereof, whichever is higher.
C. Royalty Payment on Residue Gas: On residue gas or gas remaining after separation,
extraction or processing operations, Lessee shall pay Lessor twenty-two and one-half
percent (22.5%) of the proceeds of sale or of the market value thereof, whichever is
higher.
D. Royalty Payment on Oil: At the option of Lessor, and with sixty (60) days' notice to
Lessee, Lessor may take its royalty oil in kind, in which event 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, Lessee shall pay Lessor for oil produced and saved
from the leased land, twenty-two and one-half percent (22.5%) the market value of the
oil at the wellhead, or the price actually paid to Lessee at the well by the purchaser
thereof, whichever is higher; and in no event 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 for 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.
E. No Refund of Bonus: 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.
F. Timing of Royalty Payments: All royalties payable under the terms of this lease shall
be payable in cash (unless Lessor elects to take such royalty oil or gas in kind) to
Lessor within one hundred twenty (120) days following the first commercial sale of
production and thereafter no more than sixty (60) days after the end of the month
following the month during which production takes place. Subject to the provisions of
Paragraph 16 of this Lease concerning shut-in wells, royalties shall be paid to Lessor
by Lessee and/or its assigns or by the product purchaser for oil and/or gas. Upon the
failure of any party to pay Lessor the royalty as provided in this paragraph, Lessor
may, at Lessor's option, elect to terminate this Lease by sending written notice to
Lessee. Lessee shall then have forty-five (45) days from the date of service of such
written notice in which to avoid termination of this Lease by making or causing to be
made the proper royalty payment or payments that should have been paid. If such
royalty payment is not made on, or before, the expiration of the 45 -day period, or
written approval is not obtained from Lessor to defer such payment, Lessor may elect
to terminate this Lease by filing a Notice of Termination with the Weld County Clerk
and Recorder. The effective date of said termination shall be the date said Notice of
Termination is recorded.
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Carly Koppes, Clerk and Recorder, Weld County , CO
(Revised 3/2023)
lIII liP.AilliMIOC TrikkLra!fhllAIPAl aii:Clfd III III
Small -Tract Oil and Gas Lease
Page 4
G. Effect of "Take or Pay Provision": In the event Lessee enters into a gas purchase
contract which contains what is commonly referred to as a "take or pay provision"
(such provision meaning that the gas purchaser agrees to take delivery of a specified
minimum volume or quantity of gas over a specified term at a specified price or to
make minimum periodic payments to the producer for gas not taken by the purchaser)
and the purchaser under such gas purchase contract makes payment to Lessee by
virtue of such purchaser's failure to take delivery of such minimum volume or quantity
of gas, then Lessor shall be entitled to twenty-two and one-half percent (22.5%) of all
such sums paid to Lessee or producer under the "pay" provisions of such gas
purchase contract. Such royalty payments shall be due and owing to Lessor within
sixty (60) days after the receipt of such payments by Lessee. If the gas purchaser
"makes up" such gas within the period called for in the gas contract and Lessee is
required to give such purchaser a credit for gas previously paid for but not taken, then
Lessor shall not be entitled to royalty on such "make up" gas. If Lessee is not producing
any quantities of gas from the Leased Premises but is receiving payments under the
"pay" portion of such "take or pay" gas purchase contract provision, such payments
shall not relieve Lessee of the duty to make shut-in royalty payments if Lessee desires
to continue this Lease, but such "take or pay" royalty payments shall be applied as a
credit against any shut-in royalty obligation of the Lessee. Lessor shall be a third -party
beneficiary of any gas purchase contract and/or transportation agreement entered into
between Lessee and any purchaser and/or transporter of Lessor's gas, irrespective of
any provision of said contracts to the contrary, and such gas purchase contract and/or
transportation agreement will expressly so provide. Further, Lessor shall be entitled to
twenty-two and one-half percent (22.5%) of the value of any benefits obtained by, or
granted to, Lessee from any gas purchaser and/or transporter for the amendment,
modification, extension, alteration, consolidation, transfer, cancellation or settlement
of any gas purchase contract and/or transportation agreement.
H. Recovery of Liquid Hydrocarbons: Lessee agrees that before any gas produced from
the Leased Premises is used or sold off the Leased Premises, it will be run, free of
cost to Lessor, through an adequate oil and gas separator of a conventional type or
equipment at least as efficient, to the end that all liquid hydrocarbons recoverable from
the gas by such means will be recovered on the lease and Lessor properly
compensated therefor.
I. Excess Payments to Lessor: Any payment of royalty or shut-in gas royalty hereunder
paid to Lessor in excess of the amount actually due to the Lessor shall nevertheless
become the property of the Lessor if Lessee does not make written request to Lessor
for reimbursement within one (1) year from the date that Lessor received the erroneous
payment, it being agreed and expressly understood between the parties hereto that
Lessor is not the collecting agent for any other royalty owner under the lands covered
hereby, and a determination of the name, interest ownership and whereabouts of any
person entitled to any payment whatsoever under the terms hereof shall be the sole
responsibility of Lessee. It is further expressly agreed and understood that: (i) this
provision shall in no way diminish the obligation of Lessee to make full and punctual
payments of all amounts due to Lessor or to any other person under the terms and
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Carly Koppes, Clerk and Recorder, Weld County , CO
Ilical14VERSICI AI h'IRMAIVI.liik "Ill
(Revised 3/2023)
Small -Tract Oil and Gas Lease
Page 5
provisions of this Lease, and (ii) any overpayments made to the Lessor under any
provisions of this Lease shall not be entitled to be offset against future amounts
payable to parties hereunder.
J. Effect of Division Order: The terms of this Lease may not be amended by any division
order and the signing of a division order by any mineral owner may not be made a
prerequisite to payment of royalty hereunder.
K. Limitation of Sale to Subsidiaries and/or Affiliates: Oil, gas or products may not be
sold to a subsidiary or affiliate of Lessee as defined herein without the Lessor's prior
written permission.
L. Royalty Payable on All Gas Produced: Lessee shall pay Lessor royalty on all gas
produced from a well on the Leased Premises and sold or used off the Leased
Premises, regardless of whether or not such gas is produced to the credit of Lessee
or sold under a contract executed by or binding on Lessee. Should gas be sold under
a sales contract not binding on Lessee, Lessor's royalty will be calculated based on
the highest price paid for any of the gas produced from the well from which such gas
is produced. In no event will the price paid Lessor for Lessor's share of gas be less
than the price paid Lessee for Lessee's share of gas.
3. LESSOR'S ACCESS TO LEASED PROPERTY AND RECORDS
A. Records Generally: Lessee agrees to keep and to have in its possession complete
and accurate books and records showing the production and disposition of any and all
substances produced on the leased land 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 said books and records shall be retained by Lessee and made available in Colorado
to Lessor for a period of not less than five (5) years.
B. Access to Premises: Lessor shall have free access, at all times, to all wells, tanks,
and other equipment on the Leased Premises, including drilling wells, and Lessee
agrees to furnish Lessor, or Lessor's nominee, currently and promptly, upon written
request, with full well information including cores, cuttings, samples, logs (including
Schlumberger and other electrical logs), copies and results of deviation tests and
directional and seismic surveys, and the results of all drill stem tests and other tests of
other kind or character that may be made of wells on the Leased Premises. Lessor or
Lessor's nominee shall be furnished with, and have free access at all times to,
Lessee's books and records relative to the production and sale of oil, gas or other
minerals from the Leased Premises, including reports of every kind and character to
local, State or Federal governmental authorities. Lessor shall have the right, at its
election, to employ gaugers or install meters to gauge or measure the production of all
minerals produced from the premises, and Lessee agrees to prepare and deliver to
Lessor or Lessor's gauger or nominee duplicate run or gauge tickets for all minerals
removed from the premises. Lessee shall furnish to Lessor daily drilling reports on
each well drilled upon request.
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Carly Koppes, Clerk and Recorder, Weld County , CO
(Revised 3/2023)
WAR ri i1*LNriE LE kb BM
Small -Tract Oil and Gas Lease
Page 6
C. Gas Purchase Agreements/Gas Contracts: At least thirty (30) days prior to the
delivery or the execution of any contract for the sale, delivery, transporting or
processing of gas produced from the Leased Premises, Lessee shall provide Lessor
with a complete copy of each proposed contract for the purchase, transportation and/or
processing of such gas that Lessee intends to execute (each a "Gas Contract"),
whereupon, Lessor may object if the terms of said Gas Contract conflict with the terms
and conditions of this Lease. Lessee shall furnish to Lessor, within a reasonable time
after its execution, a copy of any Gas Contract or transportation agreement entered
into in connection with the Leased Premises, or if there is already a Gas Contract or
transportation agreement in effect due to Lessee's operations in the field, then a copy
of that contract. Furthermore, a copy of any amendments to the gas purchase contract
or transportation agreement shall be furnished said Lessor within thirty (30) days after
execution thereof; and on request of Lessor and without cost to the Lessor, Lessee
shall furnish Lessor a copy of the following reports: core record, core analysis, well
completion, bottom hole pressure measurement, directional survey records, electrical
and induction surveys and logs, gas and oil ratio reports, paleontological reports
pertaining to the paleontology of the formations encountered in the drilling of any wells
on the Leased Premises, and all other reports which pertain to the drilling, completing
or operating of the wells located on the Leased Premises. Such information shall be
solely for Lessor's use, and Lessor shall attempt to keep same confidential for twelve
(months after receipt, subject to its obligation to comply with the Public Records
requirements under Colorado law. Lessee agrees that it will not enter into any contract
for the sale, delivery, transporting or processing of gas produced from the Leased
Premises which shall extend more than two (2) years from the effective date of such
sales contract unless such contract has adequate provisions for redetermination of
price at intervals of no less frequency than one (1) year to ensure that production from
this Lease is not being sold for less than the then current market value.
D. Lessee to Advise Regarding Well Status: Lessee shall advise Lessor, in writing, of
the location of all wells drilled upon the Leased Premises on or before thirty (30) days
prior to commencement of operations, and shall advise Lessor, in writing, the date of
completion and/or abandonment of each well drilled within thirty (30) days after
completion or abandonment.
4. MEASUREMENTS: All production shall be accurately measured using standards
established by the American Gas Association (AGA) and/or the American Petroleum
Institute (API) and all measuring devices shall be tamper proof as nearly as possible. Oil
royalties due within the terms of this lease shall be calculated on actual and accurate
measurements within API standards unless a different means of measurement, subject to
Lessor's approval, is provided.
5. PAYMENTS AND REPORTS: All payments and reports due hereunder shall be made on
or before the day such payments and reports are due. Nothing in this paragraph shall be
construed to extend the expiration of the primary term hereof. Oil royalty payments and
supporting documents 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
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Carly Koppes, Clerk and Recorder, Weld County , CO
(Revised 3/2023)
Illl NUPANIAIarK IV:PNONCOrrli tilNl M dalyh 11111
Small -Tract Oil and Gas Lease
Page 7
submitted prior to the last day of the second month following each month's sale of
production. All payments shall be made by cash, check, certified check, or money order.
Payment having restrictions, qualifications, or encumbrances of any kind whatsoever shall
not be accepted by Lessor. A penalty for a late payment shall be charged 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 governing 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
land herein leased and be relieved from further obligations or liability hereunder with
respect to the land so surrendered; provided that this surrender clause and the option
herein reserved to Lessee shall cease and become absolutely inoperative immediately
and concurrently with the institution of any suit in any court of law by Lessee, Lessor or
any assignee of 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.
9. ASSIGNMENTS:
A. Fee for Assignments: Lessee, upon payment of a $100.00 fee and prior written
consent of Lessor (which shall not be unreasonably withheld), shall have the right to
assign the entire leasehold interest of said Lessee in all or part of the land covered
hereby. Prior to written approval by Lessor 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. Partial Assignment: 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 and liabilities as to that portion so assigned.
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Carly Koppes, Clerk and Recorder, Weld County. , CO
(Revised 3/2023)
1III tMtkiiihili GI rki l 'l ill'.P IL' d IA "'Ill
Small -Tract Oil and Gas Lease
Page 8
C. Lessee to Notify: Lessee shall notify Lessor of all assignments of undivided
percentage or other interests. Said interests will not be recognized or 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 terms
or conditions hereof or to postpone the time therefore. Lessor shall at all times be
entitled to look solely to Lessee or his assignee shown on its books as being the sole
owner hereof, and for the sending of all notices required by this lease and for the
performance of all terms and conditions hereof.
D. Filing with Lessor: 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 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 demonstrates 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 not 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 or
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 shall be accomplished or
terminated by filing of record and with the Colorado Oil and Gas conservation Commission
a declaration of pooling, or declaration of termination of pooling, and by mailing or
tendering a copy to Lessor. Drilling or reworking operations upon or production from any
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Carly Koppes, Clerk and Recorder, Weld County , CO
1�f�141I�hfV��IN��ML�1bl��F���NkiI Ali II III
(Revised 3/2023)
Small -Tract Oil and Gas Lease
Page 9
part of such spacing unit shall be considered 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. UNITIZATION — COMMUNITIZATION: In the event Lessor permits the land herein leased
to be included within a communitization or unitization agreement, the terms of this lease
may be deemed to be modified to conform to such agreement. When only a portion of 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 terms of the lease
on that portion remaining in the unit shall be deemed to be modified to conform to such
agreement. Non -producing leases shall terminate on the first anniversary date of the
lease following the termination date of the unit or part thereof modifying the lease, but in
no event prior to the end of the primary 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 therefore, 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. SHUT-IN 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 therefore,
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 $2.50 per
acre of the lease per annum. The minimum amount of such shut-in royalty payment shall
be $240. Shut-in royalty payments shall not be reduced or proportioned when the Lessor
is not the sole mineral interest owner. 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 (5) 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. OPERATIONS: Exploration, drilling or production operation, including permanent
installations, shall be in compliance with all Colorado Oil and Gas Conservation
Commission and State of Colorado Regulations. Reports required to be filed with the
Colorado Oil and Gas Conservation Commission shall be made immediately available to
Lessor upon request.
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Carly Koppes, Clerk and Recorder, Weld County , CO
(Revised 3/2023)
1111 KtERNIIGIIIKI.15, 1411CM 11111
Small -Tract Oil and Gas Lease
Page 10
18. NOTIFICATION: Lessee shall notify Lessor and 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
provisions of this lease, the laws of the State of Colorado, and the rules and regulations
thereto appertaining. A bond may be held in effect for the life of production of any well.
20. SETTLEMENT: Lessee shall not remove any machinery, equipment or fixtures placed
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. OTHER 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 event 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 land, any such adjudication or application shall be in the name of Lessor if
Lessor is the surface owner. The same shall apply to any non -tributary 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 forty-five
(45) days from the date of mailing said notice, Lessee shall correct such failure or default,
no cancellation will be made. If such failure or default is not corrected within forty-five
(45) days after the mailing of such notice, and if Lessee does not request a hearing on
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Carly Koppes, Clerk and Recorder, Weld County , CO
(Revised 3/2023)
IIIIVAANIIIPPAtill Ili PitIRIIIII
Small -Tract Oil and Gas Lease
Page 11
such notice within forty-five (45) days, this lease will terminate and be canceled 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. The granting of such extension shall be at the sole option of Lessor,
according to the following conditions:
A. Extension Limit: No lease term will be extended for more than six (6) months from the
original expiration date.
B. Extension Payment: The Lessee shall pay to the Lessor the sum of one-third (1/3) of
the original bonus amount.
C. No Change in Royalty: The royalty will remain the same.
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 or 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. CONDEMNATION: If the leased land shall be taken in any condemnation proceeding,
this lease shall automatically terminate as of the date 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 event 50% 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 Lessor
immediately upon discovery of any errors or discrepancy whatsoever.
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 of prehistoric or historic nature
shall be reported to Lessor or the State of Colorado Archaeologist immediately.
29. DEFINITIONS: For purposes of this Lease, the following definitions apply:
A. "Products" refers to any and all substances produced on the leased property, including
all oil and gas, found on or under the leased property.
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Carly Koppes, Clerk and Recorder, Weld County , CO
(Revised 3/2023)
1111 1111%14Vi 1' 1014,11111
Small -Tract Oil and Gas Lease
Page 12
B. "Market Value" shall mean for gas and products therefrom (i) the gross price at which
gas or products therefrom are sold pursuant to a Gas Contract, as defined in
paragraph 2C, or (ii) if not sold pursuant to a Gas Contract, as defined in paragraph
2C, the highest gross price reasonably obtainable for the quantity of gas or products
available for sale, through good faith negotiations for gas or products produced from
the Leased Premises at the place where such gas or product is available for sale on
the date of such a contract with adequate provisions for redetermination of price at
intervals of no less frequency than two (2) years to ensure that the production is being
sold for no less than the current market price. Included within the definition of "Market
Value"as used herein is the presumption that Gas Contracts are arms -length contracts
with purchasers who are not subsidiaries or affiliates of Lessee. "Market Value" shall
never be less than the amount actually received by the Lessee for the sale of
hydrocarbons.
C. "Affiliate" is defined as the parent company or a subsidiary of Lessee, a corporation or
other entity having common ownership with Lessee, a partner or joint venturer of
Lessee with respect to the ownership or operation of the processing plant, a
corporation or other entity in which Lessee owns a ten percent or greater interest, or
any individual, corporation or other entity that owns a ten percent or greater interest in
Lessee.
D. "Costs" and/or "Expenses" shall mean all costs of gathering, production,
transportation, treating, compression, dehydration, processing, marketing, trucking or
other expense, directly or indirectly incurred by Lessee, whether as a direct charge or
a reduced price or otherwise, including fuel use attributable to any of the services listed
above. "Costs" or "Expenses" also include depredation, construction, repair,
renovation or operation of any pipeline, plant, or other facilities or equipment used in
connection with the treating, separation, extraction, gathering, processing, refining,
transporting, manufacturing or marketing of hydrocarbons produced from the Leased
Premises or lands pooled therewith.
E. "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.
F. "Oil and gas" as used herein shall include all substances produced as by-products
therewith, including, but not limited to, sulfur.
G. "Paying quantities" as used herein shall mean and refer to quantities of oil and gas or
of either of them sufficient to pay for the current cost of producing same.
30. HEIRS 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 by Lessor as explained in the ASSIGNMENTS
paragraph provided above.
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Carly Koppes, Clerk and Recorder, Weld County , CO
VIII NIF,JIVINtLiNiillifliAiiOAICYIIilit14,Ilk BIM
(Revised 3/2023)
Small -Tract Oil and Gas Lease
Page 13
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.
Where there is a conflict concerning ownership and/or title to the leased premises, the
Lessee shall provide evidence of ownership and/or title. Lessor relies on the evidence
provided by Lessee concerning title and ownership.
32. FORCE MAJEURE: Neither party shall be responsible for delays or failures in
performance resulting from acts or occurrences beyond the reasonable control of such
party, including, without limitation: fire, explosion, power failure, flood, earthquake or other
act of God; war, revolution, civil commotion, terrorism, or acts of public enemies; any law,
order, regulation, ordinance, or requirement of any government or legal body or any
representative of any such government or legal body; or labor unrest, including without
limitation, strikes, slowdowns, picketing or boycotts. In such event, the party affected shall
be excused from such performance (other than any obligation to pay money) on a day-to-
day basis to the extent of such interference (and the other party shall likewise be excused
from performance of its obligations on a day-to-day basis to the extent such party's
obligations relate to the performance so interfered with).
33. SURVEYS, ABSTRACTS, TITLE OPINIONS AND CURATIVE WORK:
A. If Lessee shall cause any of the exterior or interior lines of the property covered by this
lease to be surveyed, Lessee shall furnish Lessor a copy of such survey. Lessee shall
furnish Lessor, within a reasonable time, with a copy of all maps submitted to the Corps
of Engineers of the United States Army, Railroad, or other governmental or official
agency or department having jurisdiction, showing the proposed location of all roads,
pipelines, canals and drill sites on the Leased Premises.
B. 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. Therefore, if Lessee causes an abstract of title to be prepared covering the
property herein leased, or any portion thereof or if Lessee shall cause the title to be
examined or should obtain a title opinion or title certificate upon the property herein
leased, Lessee agrees to furnish Lessor a copy thereof within two (2) weeks of
Lessee's receipt thereof. Lessor agrees that neither Lessee nor the attorney or firm of
attorneys rendering the opinion or certificate shall be responsible to Lessor for its
correctness, the said opinion or certificate being furnished to Lessor simply for its own
convenience, information and personal use. Similarly, if any curative material is
obtained by Lessee, a copy thereof shall immediately be furnished Lessor under the
same conditions of non -liability on the part of the Lessee or the persons who may have
obtained or prepared the same.
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Carly Koppes, Clerk and Recorder, Weld County , CO
(Revised 3/2023)
DocuSign Envelope ID: 1C7A616D-BA4D-44D7-A30E-68464032FFC4
Small -Tract Oil and Gas Lease
Page 14
IN WITNESS WHEREOF, Lessor has hereunto signed and caused its name to be signed by the
CHAIR, BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF WELD, with the seal of
the office affixed, and Lessee has signed this agreement, the day and year first above written.
LESSOR:
ATTEST: ,,,,0
Weld Csounty Clerk to the Board WELD COUNT
By.
Deputy Clerk
to
STATE OF COLORADO
) ss
COUNTY OF DENVER
BOARD OF COUNTY COMMISSIONERS
By:
Chair, Board of County Commissioners
JUN 0 5 2024
LESSEE:
Kerr-McGee Oil & Gas Onshore LP
Company Name
DocuSigned by.
Cory Miller, Attorney -in -Fact
Printed Name and Title
rsk
The foregoing instrument was acknowledged before me this 10th day of
April
20 24 by Cory Mi 11 er, Attorney -in -Fact
Witness my hand and official seal.
r-DoeuSig�red by:
Aultur V ICrect.
"NOTICE OF INTENT TO ELECTRONICALLY
NOTARIZE"
ih-crairtlblic DAN 20144029917-994262
My Commission Expires: 7/30/2026
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Carly Koppes, Clerk and Recorder, Weld County , CO
VIII VIM11111
o2ooZ�_
( cased 3/2023)
Small -Tract Oil and Gas Lease
Page 15
EXHIBIT A
2.98 ACRES
LEGAL DESCRIPTION:
TOWNSHIP 4 NORTH, RANGE 68 WEST, 6TH P.M.
SECTION 23: That part of the W/2NW, NWSW, lying within the following described lands: Beginning at
the Southwest (SW) Corner of said Section which is center line Station 1826+480; thence South
89°49'30"E for a distance of 30' to the existing fence line and the point of beginning of the required
right-of-way; thence N09°30'00"W along said fence line for a distance of 5,266.4 feet to a point, which is
30 feet East of the Northwest corner of Section 23 and opposite center line Station 1879+14.4; thence
S89°50'30"E for a distance of 20 feet; thence S09°30'00"E for a distance of 1,914.4 feet; thence East for a
distance of 25 feet; thence S09°30'00" for a distance of 2,200 feet; thence West for a distance of 25 feet;
thence S09°30'00"E for a distance of 1,152 feet; thence N89°49'30"W for a distance of 20 feet which is
the point of beginning and which is 30 feet opposite center line Station 1826+00.
(Revised 3/2023)
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Carly Koppes, Clerk and Recorder, Weld County , CO
lIII PrJEVIACIWkilWililli liVill 'tNiihic! brill 16 Ill II
800) x038 PAGE 555 ,
center line Station 1879/14.4; thence South
Eighty-nine Degrees Fifty Minutes and Thirty
Seconds` East (S.89°50'30'E.) for a distance
of Twenty feet (20'); thence South Nine Degrees
and Thirty Minutes East (S.9°30'E.) for a
distance of One Thousand Nine Hundred Fourteen
and four -tenths feet (1,914.4.); thence East for
a distance of Twenty-five feet (25.); thence
South Nine Degrees and Thirty Minutes East
(S.9°30'E.) for a distance of Two Thousand Two
Hundred feet (2,200'); thence West for a dis-
tance of Twenty-five feet (25'); thence South
Nine Degrees and Thirty Minutes East (S.9°3O'E.)
for a distance of One Thousand One Hundred Fifty-
two feet (1,152'); thence North Eighty-nine
Degrees Forty-nine Minutes and Thirty Seconds West
(N.89°49' 30"W.) for a distance of Twenty feet (20.)
which is the point of beginning and which is Thirty
feet (30') opposite center line Station 1826/00.
Said strip of land contains 3.68 Acres. 7t . -1O c.Cxzs -‘S \tos..42A
L a
Grantors for themselves their heirs and assigns expressly
reserve the right to maintain, repair and reconstruct a water
conduit of concrete tile or other materials in the same lo-
cation as the line of concrete pipe now rebuilt and existing
North of the Little Thompson Creek only, but hereby waive and
QUIT CLAIM all right to maintain any conduit South of said
creek upon the lands herein conveyed.
To have and to holdthe same, together with all and
singular the appurtenances and privileges thereunto belonging
or in anywise thereunto appertaining, and all the estate, right,
title, interest and claim whatsoever, of the said parties of
the first part, either in law or equity, to the only proper use,
benefit and behoof of the said party of the second part, its
successors and assignes forever.
IN WITNESS WHEREOF, The said parties of the first part
have hereunto set their hands and seals.
Signed in the presence of:
a
C. n
E{lM1038 P*GE556
Or-A.Aft.e.P' `zn
712-
x
i4a�
STATE OF CALIFORNIA, )
:ss.
County of Los Angeles.)
The foregoing instrument was acknowledged before no
this 174 u day of = ' ^-��-v�,�, A. D. 1938 by
.Mabel 3. Miller and Eva Beauchamp.
.tness my hand and official seal.
;ommission expires:
7— _
n ENnjr• x 29, 19,
•
Notch y Public �.
f� ^
YUd3.t.IO
STATE OF IDAHO,
:as.
County of Twin Falls.)
The' foregoing instrument was acknowledged before me
NotAry Publics
3.
B .B?. !WM. PAGE 55 .?
STATE OF COLORADO, )
;ss.
County of Larimer.)
The foregoing instrument was acknowledged before me
this -day of , A. D. 1939, by Setie M.
Smith.
z�t
..45apf .my hand and official seal.
1 .Mj crAmuii.s s ion expires
STATE OF COLORADO,)
;ss.
County of Boulder.)
The foregoing instrument was acltnooledged before me
this /.7014.- day of
, A. D. 193, by Mildred
Reviles, William Theodore Butler and James A. Butler.
Witness my hand and official seal.
cam/5 Jnission expires: ; ,9Y0.
°' e•C:1
I! r ,
' otaryyrb'1 c
PAYMENT DOCUMENT
2000784510
OXY
Oxy USA Inc
P 0 Box 2647
Houston, TX 77252-2647
BOARD OF WELD COUNTY COMMISSIONERS
PO BOX 758
GREELEY CO 80632
RECEIVED
APR 222024
WELD COUNTY
COMMISSIONERS
DATE
04/17/2024
CHECK NO.
0100097671
80157486
DATE
INVOICE/CREDIT MEMO
COMPANY CODE
PO NUMBER
DISCOUNT
NET
4/10/2024
BONUS PAYMENT
.3.5-r3
041024
0201
3,576.00
�OVN\-,-S
THE ATTACHED CHECK IS IN PAYMENT FOR ITEMS DESCRIBED ABOVE
TOTAL >
$3,576.00
Section 23, T4N, R68W
LE0384-1
2.98 mineral acres
Township/Range
EJ Section
Parcels
1,000
Feet
Disclaimer
TTss pr 3ucl nas Dean dr.etopro sorer) rot Internal use on?, us Milo Count.
The GIS aataoase a:,pllcalonsand OM In the product Is suojecs to constant Onange and the acarac-,
ana completeness annoe De and is net guarantees, The deslgnaelon of tots or partxu of ;and uses in
me aatatlase Ooee not nary that Me Iota Or Aaron were legacy Created or teat Me iarn uses
comply aWl aoltucaas State or Local 13A' UNDER NO CIRCUMSTANCE SHALL ANN' PART THE
PRODUCT BE USED FOR FINAL DESIGN PURPOSES WELD COUNTY MAKES NO WARRANTIES
OR GUARANTEES EITHER EXPRESSED OR tMPLED AS TO THE COMPLETENESS ACCURACY.
OR CORRECTNESS OF SUCH PRODUCT. NOR ACCEPTS ANY LiASILITV ARISING FROM ANY
INCORRECT. INCOMPLETE OR MISLEADING tNFORMATION CONTAINED TrCREIk
DocuSign Envelope ID: 1 C7A616D-BA4D-44O7-A30E-68464032FFC4
KERR-MCGEE OIL & GAS ONSH0RE_ LP 1099 18, STREET #.700 DENVER, COLORADO 80202
P.C. Sox =7:3778 n DENVER, Coi_ORADo 80202
Kerr-McGee Oil & Gas Onshore LP
April 10, 2024
Board of Weld County Commissioners
P.O. Box 758
Greeley, CO 80632
Re: Lease Bonus Consideration
Township 4 North, Range 68 West, 6th P.M.
Section 23: Part of the W2NW, NWSW; Full legal description on enclosed Order for
Payment.
To whom it may concern:
Enclosed please find a Kerr-McGee executed Weld County Small Tract Oil & Gas Lease for your
review and approval. You will also find the following enclosed:
• Check covering the bonus considerations for the Oil and Gas Lease totaling $3,576.00.
• Copy of the Order for Payment
Should you have any questions, please do not hesitate to contact me directly at (720) 929-3040 or
via email at heather_dicroce@oxy.com.
Sincerely,
KERR-McGEE OIL & GAS ONSHORE LP
,-DocuSigned by:
Ac,A& r V &OGt,
Heatieriroce
Land Specialist
Enc. check: Bonus Consideration
*PLEASE KEEP AND SCAN IN TYLER*
Notes for Distribution Clerk
Please send the Lease to Recording
When the Oil and Gas Lease comes back from Recording, please be
sure to make a copy for our files and mail the original, recorded lease
to:
Please mail to:
Steve Miller
Kerr-McGee Oil & Gas Onshore
1099 18th Street, Suite 700
Denver, CO 80202
Please include the following in the mailing:
*Only the Original Recorded Lease and copy of resolution - DO NOT
SEND BACK-UP OR MAP, THAT STAYS WITH OUR COPY OF THE
LEASE.
Thanks.
Jess
Date sent to Recording b/Io/2V-1
Date mailed out GX25/24
By kar -0..,1^ H : _1ST AS
202H- I' -k7 r
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