HomeMy WebLinkAbout20201940.tiffBOARD OF COUNTY COMMISSIONERS
PASS -AROUND REVIEW
PASS -AROUND TITLE: Amendment #1 to Agreement for Oil and Gas Lease Management Project with
MineralWare
DEPARTMENT: Clerk to the Board DATE: January 19, 2021
PERSON REQUESTING: Esther Gesick
Brief description of the problem/issue:
As part of the MineralWare (MW) software implementation, we enlisted the services of MW in researching
potential suspended funds, meaning they are held in account as unclaimed funds typically because of a dispute
as to the ownership of such funds. While conducting research, it is not uncommon for oil and gas operators to
request an authorization prior to releasing information. MineralWare requested a Consent Form, and upon
review, the County Attorney's Office drafted the attached Amendment #1 to the original agreement.
What options exist for the Board? (include consequences, impacts, costs, etc. of options):
1) Authorize Chair to sign Amendment #1 (via the Consent Agenda since resulting from informal Bid
process) for repetitive use by MW when researching various oil and gas mineral interests.
2) Decline use of the standard authorization and require repeated individual requests for approval.
Recommendation: Option 1
Approve
Recommendation
Perry L. Buck
Mike Freeman
Scott K. James, Pro-Tem
Steve Moreno, Chair
Lori Saine
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Schedule
Work Session Other/Comments:
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AMENDMENT #1 TO AGREEMENT OIL AND GAS LEASE MANAGEMNT PROJECT
BETWEEN WELD COUNTY AND MINERALWARE
On June 29, 2020, Weld County entered into an agreement (the "Original Agreement") with MineralWare.
The Agreement is located at Document No. 2020-1940. Weld County wishes to utilize the optional service
of recovery of suspended and escheated funds pursuant to the Original Agreement. The parties hereto agree
to amend the Original Agreement as follows:
• MineralWare is hereby authorized to collect and distribute any information necessary to change the
classification of properties into pay status. MineralWare is authorized with determining and
changing the pay status of the suspended funds on behalf of Weld County. When a well is in a
suspense pay status, the money is sent to a suspense account where it is held until the
discrepancy causing the suspense is cured, or the appropriate time period has passed allowing the
operator to provide the money to the state's unclaimed property. Examples of common issues that
cause money to be directed to a suspense account include, but are not limited to: title, unsigned
division order, insufficient address, unsigned W-9, and questionable mineral titles.
• MineralWare will report producing wells that fall within Weld County acreage that MineralWare
does not have revenue data for. MineralWare researches this information using the MineralWare
platform, Weld County public records and information provided by the COGCC. MineralWare
then contacts the operator of wells that are not paying production to Weld County to determine
why. Similarly, MineralWare is permitted to inquire on specific dollar amounts being held in
suspense and collect supporting information that may pertain to the verification of such funds.
MineralWare will be paid a fix percentage of the suspended funds recovered on behalf of Weld
County pursuant to the Original Agreement.
All other terms and conditions of the Original Agreement remain unchanged.
CONTRACTOR: 5 M'S MINERAL MANAGEMENT, LLC, DBA MINERALWARE
BY: ��,
•
Pete O'Brien, Executive Vice President of Operations
Date I /i 5 /ll
ATTE doitrildh) G ••C O;t1 BOARD OF COUNTY COMMISSIONERS
Wel. o n Clerk to the Bo rd WELD COUNTY, COLORADO
BY
Deputy CI:V to th- Boa J, it
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Moreno, Chair
JAN 2 5 2021
4..o„so - 19�a
AMENDMENT #1 TO AGREEMENT FOR OIL AND GAS LEASE MANAGEMENT PROJECT -
MINERALWARE
APPROVED A(S�TOSUBSTANCE:
d4ettos) .1,10.4:14
Elected Official or Department Head
APPR VE�DjAAS�T FUNDING:
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Controller
APPROVED AS TO FORM:
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Count/Attorney
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BOARD OF COUNTY COMMISSIONERS
PASS -AROUND REVIEW
PASS -AROUND TITLE: MineralWare Engagement Agreement
DEPARTMENT: Information Technology DATE: June 9, 2020
PERSON REQUESTING: Ryan Rose
Brief description of the problem/issue:
The Clerk to the Board department manages Weld County's Oil & Gas leases, which are currently tracked via an
excel spreadsheet. A lease management system would enhance the process by organizing the County's assets,
track payments, due dates, and lease expirations, as well as assist in potentially recovering suspended and
escheated funds. The Board approved funding for the Oil & Gas Lease Management project (CTB-404) through
the 2019 budget process.
Three demos were conducted with MineralWare being the only product to meet the requirements of the
department. The initial set up fee for this solution is $6,250.00, estimated monthly costs at $1218.75 for
approximately 775 wells, for a total estimated year 1 cost of $20,875.00
Karin McDougal has reviewed and approved the agreement.
What options exist for the Board? (Include consequences, impacts, costs, etc. of options):
Grant authorization for the Chair to sign the agreement which will provide services for a one-year term with auto -
renewal for each additional year, unless either party provides notice of intent not to renew.
Recommendation:
Weld County IT recommends that the Board grant approval for the Chair to sign the attached agreement.
Approve
Recommendation
Mike Freeman, Chair
Scott K. James
Barbara Kirkmeyer
Steve Moreno, Pro-Tem
Kevin Ross
Schedule
Work Session
Other/Comments:
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June 8, 2020
Ryan Rose
Weld County Government
1401 North17th Avenue
Greeley, CO 80634
Re: Engagement of 5 M's Minerals Management, LLC DBA
MineralWare ("The Company", we, us).
We are pleased to provide you with this Engagement Agreement. If you agree with
the terms and conditions of the Agreement, please electronically sign and date it at
your convenience. If you have questions, please feel free to contact us.
Scope of Engagement
The first step in managing a successful minerals business is getting your assets
organized and in a format that leads to good business decisions. With our
assistance you will be able to leverage our technology to manage your minerals
effectively and efficiently. Your heirs will also benefit from having your mineral
assets setup in a format that most non -oil and gas professionals can understand.
You have requested a quote on the following:
1. MineralWare — our proprietary minerals management software system. We will
organize your assets in our software and provide you with interactive maps of all
of your mineral properties. Your relevant mineral documents and data (deeds and
relevant origination documents) will be integrated into the maps. Offset well and
permit data, if available, will also be integrated and updated regularly.
2. MineralWare Revenue Management Module — check -stub detail including
revenue and deduction information will be tracked in MineralWare.
3. Mineral Management Services — optional services that include, but not
limited to: lease negotiation and consultation, acquisition of missing deeds and
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MINERALWARE®
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leases, marketing of mineral interests not currently leased, division order review
and analysis, production verification, file maintenance of related oil and gas
documents, recovery of suspended and escheated funds and due diligence and
title analysis.
Cooperation
To enable us to render the services set forth above, you agree to fully and
accurately disclose all relevant facts and keep us informed of all developments if
these facts change during the course of this engagement. As such, this agreement
shall serve as your consent for MineralWare to access revenue data on your
behalf. This consent includes, but is not limited to, revenue data directly from the
operator/purchaser, or any intermediary provider. We necessarily must rely on the
accuracy and completeness of the facts and information that you and your agents
provide to render the services that are within the scope of this engagement. We do
not confirm title of your mineral assets; we solely rely on the documents that you
present to us and the documents that we acquire on your behalf. If any in-depth
due diligence is needed, such services will be charged at the hourly rates
discussed below. We will not proceed with any extra services without your prior
approval.
Effective Date and Term
This Agreement will take effect and shall be binding upon and inure to the benefit
of the parties once all of the parties have signed this Agreement. The
Effective Date of this Agreement will be the date that you are granted access to
your MineralWare account. Once you are granted access to your MineralWare
account, the term of this Agreement will continue for a term of twelve (12) months
from the Effective Date. In addition, this Agreement will automatically renew on
each anniversary of the Effective Date for an additional twelve (12) months, unless
either party provides written notice to the other party of their intent not to renew this
Agreement under the same terms and conditions as set forth. Notice of intent not to
renew must be provided no less than thirty (30) days prior to the date on which this
Agreement is scheduled to renew. Notwithstanding the foregoing and in the event
of a breach of this Agreement, we reserve the right to suspend or terminate access
to
MINERALWARC
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your MineralWare account at any time during the term of this Agreement.
Fees
We will invoice you, and you agree to timely pay, the fees associated with the
setup, maintenance, and use of your MineralWare account that are set forth on
the estimate attached hereto and incorporated herein by reference for all
purposes. After the initial 12 month term, the fees associated with the
maintenance and use of MineralWare account are subject to adjustment in
accordance with our current pricing policies, as they may be amended from time
to time. Notwithstanding the foregoing, fee increases associated with the
maintenance and use of the MineralWare account shall be limited to three percent
(3%) per year during the term of this Agreement. Fee increase notices will be
issued thirty (30) days in advance of the contract yearly renewal deadline.
Optional Services
Mineral Management Services
Should you ever need it, we will provide you mineral management services for a
discounted MineralWare Client fee of $150 per hour. We will provide you an
estimate in advance prior to starting any project. Mineral management services
include, but are not limited to, the following: lease negotiation and consultation,
acquisition of missing deeds and leases, marketing of mineral interests not
currently leased, division order review and analysis, production verification, file
maintenance of related oil and gas documents and due diligence and title
analysis. Please take notice that all of the services provided to you by
MineralWare, including, mineral management services, are provided to you by
MineralWare in a non- fiduciary capacity. This means, among other things, that
MineralWare cannot act on your behalf or enter into legally binding agreements
on your behalf, and any task that requires your signature must be executed by
you or your authorized agent.
Success Fees
If you authorize MineralWare to attempt to recover suspended or escheated
funds, MineralWare will charge and you agree to pay to MineralWare a
commission of thirty-five percent (35%) of total monies recovered that is due and
payable upon your receipt of the suspended or escheated funds or, in instances
I/4
M I N E RALWARC
where such commissions are limited by law to less than 35%, the maximum
commission allowed by law. If you authorize MineralWare to attempt to recover
suspended or escheated funds, you agree to allow MineralWare to research and
locate potential suspended funds on your behalf and authorize MineralWare or
associated parties to collect and distribute any information necessary to change
the classification of properties into pay status. Similarly, you permit MineralWare
to inquire on specific dollar amounts being held in suspense and collect
supporting information that may pertain to the verification of such funds. In the
event that you hire MineralWare to negotiate
leases and MineralWare is able to negotiate lease bonus terms that are superior
to an original offer, MineralWare will charge you and you agree to pay to
MineralWare a commission of thirty-five percent (35%) of only the total monies
negotiated above the original offer.
Invoices
All invoices are due 30 days after the date of the invoice.
Out -of -Pocket Expenses
You will reimburse us for incidental and out-of-pocket expenses that are directly
related to the services that we provide to you. These expenses include but are not
limited to postage and filing fees. We will invoice you at our cost with no markup.
Warranty and Limitation of Liability
All products and services provided by MineralWare under this Agreement are
provided on an as -is basis, without warranty. MineralWare expressly disclaims
any express or implied warranty, including any implied warranty of
merchantability or fitness for a particular purpose whether arising from
statute, common law, custom, or otherwise.
MineralWare, and each of its officers, directors, consultants, and employees shall
not be liable to you for any loss or damage, whether direct, consequential,
incidental, or otherwise, resulting from any act or omission arising from or connected
with this Agreement except for loss or damage resulting from our gross negligence
or willful misconduct.
M I N E RALWARE®
V4
Taxes
All fees and charges set forth in this Agreement do not include any applicable sales
or use tax. We will invoice you for, and you agree to pay, an amount equal to any
sales or use tax imposed by any local, state or federal taxing authority that we are
legally required to collect as a result of this Agreement.
If applicable, tax exempt entities are allowed to send documentation, so that a tax
payment is not added to fees.
Termination and Exclusive Remedy
Subject to your payment of the applicable termination charges set forth below, you
may terminate this Agreement at any time before the Effective Date by delivering
written notice of your desire to terminate to MineralWare. Upon receipt of written
notice, MineralWare will immediately cease all work with respect to this Agreement.
The termination charges shall consist of: (i) the set up fee set forth on the attached
estimate, and (ii) an amount equal to three
(3) months of the recurring monthly fees set forth on the attached estimate that
would have been payble to MineralWare under this Agreement had it not been
terminated. This Agreement shall be deemed terminated upon payment of the
termination charges.
Either party may, as its exclusive remedy, terminate this Agreement for cause by
written notice to the other: (i) in the event the other party becomes the subject of
any action as a debtor under the laws related to bankruptcy, liquidation,
conservatorships, or receiverships, if such action is either initiated by the other
party or not dismissed within 45 days after initiation; or (ii) in the event the other
party fails to remedy a material breach of this Agreement within 30 days from
receipt of written notice describing such breach in reasonable detail.
Termination of this Agreement for any reason shall not relieve the customer of the
obligation to pay any fees that have become due prior to such termination and any
other fees that are payable to MineralWare in accordance with the terms of this
Agreement.
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Mediation and Arbitration
This Agreement and your engagement of MineralWare is govemed by the laws of
the State of Colorado. Any claim relating to this Agreement or your engagement of
MineralWare will be resolved initially by mediation in Weld County, Colorado.
Confidentiality
In the course of the engagement, we agree to keep the existence of this agreement
and the information you provide to us in confidence and not to disclose such
information to any third party without your prior written consent. Notwithstanding the
foregoing and except as provided below, you agree that we may use royalty check
stub data that we obtain during the course of the engagement to develop de -identified
analytical information, and we may share such analytical information with our clients,
customers, subscribers, and users; provided, however, that any such analytical
information cannot be used to directly or indirectly identify you or any user or
otherwise violate any of our obligations with respect to your confidential information.
Client Documents
After setup we will return original documents to you. We will maintain all other
documents that you provide to us in your client file. Upon the termination of this
Agreement, it is your responsibility to advise us of any documents you wish to be
retumed to you. We will retain any remaining documents in our files for a certain
period of time and ultimately destroy them in accordance with our record retention
program then in effect.
Governmental Immunity
No term or condition of this Agreement shall be construed or interpreted as a
waiver, express or implied, of any of the immunities, rights, benefits, protections or
other provisions, of the Colorado Governmental Immunity Act §§24-10-101 et seq.,
as applicable now or hereafter amended.
If this Engagement Agreement correctly reflects your understanding of the terms
and conditions governing your engagement of MineralWare, please electronically
sign and date this engagement letter in the spaces provided below.
PIO MINERALWARE®
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MineralWare
Attn: Spencer Albright
777 Taylor Street, Penthouse
1 Suite A Fort Worth TX
76102
(817) 735-8195
NA MINERALWARE
VII
NA MINERALWARE®
Fee Schedule
June 8, 2020
Pump Jack Plan
Land- $250.00/Month (1 or 2 Counties in one state)
Revenue- $1.25/property per month*
Setup- $5,000 (500 tracts or fewer - additional tracts over 500 will be charged at
$10/tract)
Additional Fees:
In the event that MineralWare orders revenue data prior to the Effective Date, as
defined above, MineralWare will invoice you and you agree to pay the per property
rate for the months that MineralWare has ordered revenue data.
`Revenue Module Minimum Monthly Fee - $100/month
MINERALWARE°
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014*.'44141 N•00 MINERALWARE
Scope of Work
Weld county
Setup Includes:
• Mapping of client owned tracts
• Paid on well identification
• Import and association of conveyance
• Documents setup of revenue module
Timeline - Account Creation/Setup Estimate: 6-8 weeks
1. Land Module Setup: Weeks 1-4
2. Revenue Module Setup: Weeks 5-6
3. Quality Control Check: Week 7
4. Customer Orientation/Walkthrough: 1 hour
Milestones - Account Manager will provide deadline and update you:
1. When Land Module is completed
2. When Revenue Module is completed
3. Account Manager will schedule Orientation/Walkthrough with you once Quality
Control has been completed
NA MINERALWARE®
V4
Billing
1. MineralWare One-time Setup Fee (Billed upon execution of Engagement
Agreement by all parties)
2. MineralWare Monthly Fee (Billed at the end of each month after the Effective
Date for access to your MineralWare Account during the following month + the
prorated amount of your first months access)
3. Revenue Management Module (Billed at the end of each month after the
Effective Date for access to your MineralWare Account during the following
month + the prorated amount of your first months access)
4. Mineral Management Service Fees (Billed Upon the Completion of the
Applicable Service)
MINERALWARE®
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GLOSSARY
Land Module - The Land Module refers to the MineralWare customer dashboard
that is a GIS map of the Client's interests demonstrating property boundaries,
permitting, wells, and other activity
Revenue Module - The Revenue Module refers to any services or dashboard
included in the revenue reporting MineralWare Provides
CDEX - CDEX is an acronym for Check Data Exchange. This is the electronic
record of check stubs which provides us data for creation of the Revenue Module.
GIS - An acronym for Geographical Information System. This is the system by which
Tracts and Interests are mapped for visual representation.
Tract - A GIS map of a continuous parcel of land that the owner has an interest in.
Interest - Any type of ownership or the right to revenue or resource produced in a
tract. There may be multiple interests in a tract.
Well - A Well is a boring into the Earth that is designed to bring hydrocarbons (oil, gas,
condensate...) to the surface
Property - Can be a single well, gas from a single well, oil from a single well, or an
entire lease.
WI - Working Interest. A percentage of ownership in an oil and gas lease granting
its owner the right to explore, drill and produce oil and gas from a tract of property.
Working interest owners are obligated to pay a corresponding percentage of the
cost of leasing, drilling, producing and operating a well or unit.
RI - Royalty Interest. Refers to ownership of a portion of the resource or
revenue that is produced.
NA MINERALWARE®
V4
ORRI - Overriding Royalty Interest is the right to receive revenue from the
production of oil and gas from a well. The overriding royalty Interest is carved out
of the lessee's (operator's) working interest and entitles its owner to a fraction of
production.
[All signatures on the following page]
BOARD OF COUNTY
IN
this
CO
"WHEREOF, the parties hereto have signed this Agreement
day of
2020.
RACTOR:
Date
Name:
SPeittEr 4164 -;j14 -
Title:
p(l.4l le. .�
WELD COUNTY:
ATTEST: ddrit4A) " " freita;tok
OMMISSIONERS
lerk to the B WELD �COUNTY, COLORADO
InLD���, ,_
Mike Freeman, Chair JUN 2 9 2020
D ': " • : STANCE:
on Officer
4002o - l gi4
New Contract Request
Entity information
Entity Name*
MINERA WARE
Entity ID
@00042377
Contract Name'*
MINERAL;;BARE ENGAGEMENT AGREEMENT
Contract Status
CTB REVIEW
❑ New Entity?
Contract ID
3740
Contract Lead*
MKERKSIEK
Contract Lead Email
mkerksiek @co..yeld.co us
Parent Contract ID
Requires Board Approval
YES
Department Project #
CTB-404
Contract Description x
THE CLERK TO THE BOARD DEPARTMENT IS ENGAGING WITH MINERALt1'.ARE TO UTILIZE THEIR OIL & GAS LEASE
MANAGEMENT SYSTEM TO HELP ORGANIZE THE COUNTY'S ASSETS, TRACK PAYMENTS, DUE DATES LEASE EXPIRATIONS,
AND RECOVERY OF SUSPENDED AND ESCHEATED FUNDS.
Contract Description 2
Contract Type*
AGREEMENT
Amount *
20.875.00'
Renewable
YES
Automatic Renewal
NO
Grant
NO
IGA
NO
Department
INFORMATION
TECHNOLOGY-GIS
Department Email
C hl-
InformationTechnologyGISc o
eldgov.COM
Department Head Email
CM-InformationTechnologyGlS-
DeptHead @weidgov.coin
County Attorney
GENERAL COUNTY
ATTORNEY EMAIL
County Attorney Email
C hf-
COUNTYATTORNEYicz HELD
GOO COM
Requested BOCC Agenda
Date*
07/0112020
Due Date
06/2712020
Will a work session with BOCC be required?*
NO
Does Contract require Purchasing Dept. to be included?
NO
If this is a renewal enter previous Contract ID
If this is part of a MSA enter MSA Contract ID
`dote: the Previous Contract Number and plaster Services Agreement Number should be left blank if those contracts are not it
OnEase
Contract Dates
Effective Date
07701.2020
Review Date*
0410112021
0112021
Termination Notice Period Committed Delivery Date
Contact Information
Contact Info
Contact Name
JASON FITZGERALD
SPENCER ALBRIGHT
Purchasing
Purchasing Approver
CONSENT
Approval Process
Department Head
RYAN ROSE
DH Approved Date
06"24;2020
Final Approval
BOCC Approved
BOCC Signed Date
BOCC Agenda Date
06,'2912020
Originator
MKERKSIEK
Contact Type Contact Email
PRIMARY JASON@MINERALWARE.COM
SECONDARY
Finance Approver
CONSENT
Renewal Date*
07101/2021
Expiration Date
Contact Phone I Contact Phone 2
817-769-1069
817-73.,-8196
Purchasing Approved Date
06124/2020
Finance Approved Date
06/29,x'2020
Tyler Ref #
AG 062920
Legal Counsel
CONSENT
Legal Counsel Approved Date
06124x`2020
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