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HomeMy WebLinkAboutRES 07-319 RESOLUTION NO. 07-319 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the City Manager be and he is hereby authorized to execute a Memorandum of Geophysical Option Agreement, a Geophysical Option Agreement and an Oil, Gas and Mineral Lease, substantially in the form attached hereto as Exhibits "A," "B," and "C," with Samson Lone Star, LLC, of Tulsa, Oklahoma, for 500 acres of land, Tyrrell Park, in the Samuel Stivers Survey. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 9th day of October, 2007. �& MO/�®\,�i M y r Becky Ames - i� W � EXHIBIT"A" 500.00 acres of land,more or less,being a part of the Samuel Stivers Survey, Abstract No. 51, more particularly described by metes in bounds in that certain deed dated May 22, 1920 from W. C. Tyrell Trust to the City of Beaumont,being recorded in Volume 196, Page 416, of the Deed Records of Jefferson County, Texas. MEMORANDUM OF GEOPHYSICAL OPTION AGREEMENT STATE OF TEXAS ) KNOW ALL MEN BY THESE PRESENTS THAT: COUNTY OF JEFFERSON ) A Geophysical Option Agreement dated effective September 24, 2007 (the "Option Agreement") was entered into by and between City of Beaumont, a municipal corporation (hereinafter called "Grantor"), whose address is P.O. Box 3827 Beaumont, Texas 77704, and Samson Lone Star,LLC,a Texas limited liability company(hereinafter called"Grantee"),whose address is Two West Second Street,Tulsa, Oklahoma 74103,pertaining to that certain property situated in Jefferson County, Texas, which is more particularly described in Exhibit "A" attached hereto(the"Property"). Grantor owns oil and gas interests in,to and under the Property. Pursuant to the Option Agreement, Grantor has granted Grantee the sole and exclusive right, for a period of 18 months,to conduct seismic surveys and/or other geophysical investigations and explorations on the property,together with the exclusive option to acquire a lease to Grantor's interest in that property. A. fully executed copy of the Option Agreement is in the possession of Grantee at its respective address. This Memorandum is signed by grantor and Grantee as of the date of the acknowledgment of the signatures below,but is effective for all purposes as of the effective date stated above. NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON,YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. GRANTOR: City of Beaumont, a municipal corporation By Kyle Hayes, City Manager STATE OF TEXAS ) COUNTY OF JEFFERSON ) This instrument was acknowledged before me on this day of , 2007,by Notary Public for the State of Texas EXHIBIT "A" GEOPHYSICAL OPTION AGREEMENT STATE OF TEXAS ) KNOW ALL MEN BY THESE PRESENTS THAT: COUNTY OF JEFFERSON ) THIS AGREEMENT is made this 25h day of September, 2007,by and between City of Beaumont, a municipal corporation (hereinafter called"Grantor"), whose address is P.O. Box 3827 Beaumont, Texas 77704, and Samson Lone Star,LLC, a Texas limited liability company(hereinafter called the"Grantee"), whose address is Two West Second Street,Tulsa, Oklahoma 74103. WITNESSETH: 1. For and in consideration of the sum of Ten Dollars ($10.00) and other valuable consideration, for the agreements herein contained, and subject to the terms and conditions hereinafter set forth, to the full extent of Grantor's power and authority to do so, Grantor hereby grants unto Grantee the sole and exclusive right and option, for a period of 18 months expiring on February 10th, 2009 (herein called "Option Period"), to acquire oil and gas lease or leases, covering all or portions of that certain property situated in Jefferson County, Texas, which is more particularly described in Exhibit "A" attached hereto, together with the sole and exclusive right of Grantee or its designated agent, during said Option Period, to conduct seismic surveys and/or other geophysical investigations and explorations on said property, or portions thereof, for the purpose of exploring the same for the possible existence of oil, gas and other hydrocarbons, including Grantor giving Grantee, or its duly contracted seismic agent, all rights and permits necessary to conduct geophysical or seismic operations across said property, or portions thereof, including access to and use of any roads, rights-of-way, canals, etc., relevant to said operations. 2. Any lease or leases to be acquired by Grantee hereunder shall be in identical form and substance as the lease form attached hereto as Exhibit `B", providing for a three (3) year primary term, three-hundred and No/100ths Dollars ($300.00) per net mineral acre bonus, and a one-fourth(1/4 1h) royalty. 3. In the event Grantee should desire to exercise the option herein granted, Grantee shall, prior to the expiration or termination of the Option Period, notify Grantor in writing of Grantee's desire to obtain a lease under the terms hereof, enclosing a legal description of the property to be covered by each lease together with its check, payable to Grantor, in an amount equal to the total bonus payment or payments under such lease or leases, which shall be computed on the basis of three-hundred and No/100ths Dollars ($300.00) per net mineral acre for each and every acre to be covered by each such lease. 4. Promptly after receipt of the aforesaid notice and check, Grantor will execute and deliver to Grantee two originals of the oil and gas lease(s) covering the property included in each description enclosed with said notice, each such instrument shall be prepared by making the necessary insertions in the form attached hereto as Exhibit `B", and shall be dated as of the date of the aforesaid notice by Grantee. 5. Grantee shall use due care to avoid damage to the property covered hereby and to all timber, crops, wildlife, game, fish, animals, structures, facilities and improvements now or hereafter located thereon, whether or nor owned by Grantor. Grantee will repair all canals, ditches, dams, levees, roads, bridges, fences, pipelines and other structures, facilities and improvements on such property which may be damaged by any operation conducted by or for Grantee hereunder and will remove all debris resulting from any such operation. Notwithstanding the foregoing, Grantor and Grantee acknowledge and agree that the consideration paid hereunder shall cover and include payment for reasonable and customary damages, if any, to the surface of the above described property which may occur in the normal course of seismic and/or geophysical operations. Grantee further agrees that it will indemnify and hold Grantor harmless against any and all loss, damage, liability, cost or EXHIBIT "B" expenses, including fines, penalties and reasonable attorneys' fees, on account of injuries to or death of persons or damage to property of any kind, or the violation of any law or regulation, arising wholly or partially out of or resulting from any operation conducted by or for Grantee hereunder. 6. Grantor expressly reserves the full enjoyment and use of property covered hereby and all rights with respect to the surface and subsurface thereof for any and all purposes except to the extent granted to the Grantee. All of the rights retained by Grantor, and the rights granted to Grantee herein, shall be exercised in such a manner that neither shall unduly interfere with the operations of the other upon the property covered hereby. 7. Except to the extent that Grantee may have exercised, or is in the process of exercising, its rights and options hereunder, the rights and options of Grantee herein shall terminate at the end of the Option Period, without notice, demand or putting in default, and Grantee shall promptly, upon the request of Grantor, execute and deliver to Grantor a recordable release hereof. Provided, however, if while this Option Agreement is in force, Grantee is not conducting operations on the property covered hereby for reasons of(a) any law, order, rule or regulation (whether or not subsequently determined to be invalid) or (b) flood, storm, riot, war or insurrection, or (c) any cause, whether similar or dissimilar (except financially) beyond the reasonable control of Grantee, the option period hereof shall be extended until ninety(90) days after the removal of such delaying cause, and this Option Agreement may be extended thereafter as if such delay had not occurred; provided that this provision shall not operate to extend the option period beyond the date of three (3) years from the date of this Agreement. 8. This Option Agreement is made and entered into without any warranty by, or recourse upon, Grantor whatsoever, not even for the return of the consideration above. This Option Agreement, and all of the terms and provisions and conditions hereof, shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 9. Grantor and Grantee agree to execute any and all documents, leases, reasonable amendments to this Option Agreement and the like, which are necessary to effectuate the purpose and intent hereof. IN WITNESS WHEREOF, the parties hereto have executed this instrument in multiple original counterparts, as of the day and date hereinabove first written. GRANTOR: City of Beaumont, a municipal corporation By Kyle Hayes GRANTEE: Samson Lone Star, LLC, a Texas limited liability company By: Name: Title: Date: STATE OF TEXAS COUNTY OF JEFFERSON This instrument was acknowledged before me on the day of 2007, by Notary Public,State of Texas STATE OF OKLAHOMA COUNTY OF TULSA This instrument was acknowledged before me on this day of ,2007,by ,as for Samson Lone Star,LLC,a Texas limited liability company,on behalf of said company. Notary Public for the State of Oklahoma EXHIBIT"A" 500.00 acres of land, more or less,being a part of the Samuel Stivers Survey, Abstract No. 51, more particularly described by metes in bounds in that certain deed dated May :22, 1920 from W. C. Tyrell Trust to the City of Beaumont,being recorded in Volume 196, Page 416, of the Deed Records of Jefferson County, Texas. Producers 88(7-69)Paid Up With 640 Acres Pooling Provision EXHIBIT"B" OIL, GAS AND MINERAL LEASE THIS AGREEMENT made this day of between Lessor(whether one or more),whose address is:City of Beaumont,a municipal corporation,P.O.Box 3827 Beaumont,Texas 77704 and Samson Lone Star,LLC,Two West Second Street,Tulsa,OK 74103-1533 Lessee,WITNESSETH: 1.Lessor,in consideration of ****TEN DOLLARS AND OTHER VALUABLE CONSIDERATION**** Dollars,receipt of which is hereby acknowledged,and of the covenants and agreements of lessee hereinafter contained,does hereby grant,lease and let unto lessee the land covered hereby for the purposes and with the exclusive right of exploring,drilling,mining and operating for,producing and owning oil,gas,sulphur and all other minerals(whether or not similar to those mentioned),together with the right to make surveys on said land,lay pipe lines,establish and utilize facilities for surface or subsurface disposal of salt water,construct Roads and bridges,dig canals,build tanks,power stations,telephone lines,employee houses and other structures on said land,necessary or useful in lessees operations in exploring,drilling for, producing,treating,storing and transporting minerals produced from the land covered hereby or any other land adjacent thereto.The land covered hereby,herein called"said land,is located in the County of, Jefferson State of Texas, and is described as follows: NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. This lease also covers and includes,in addition to that above described,all land,if any,contiguous or adjacent to or adjoining the land above described and(a)owned or claimed by lessor by limitation,prescription,possession, reversion or unrecorded instrument or(b)as to which lessor has a preference right of acquisition. Lessor agrees to execute any supplemental instrument requested by lessee for a more complete or accurate description of said land.For the purpose of determining the amount of any bonus or other payment hereunder,said land shall be deemed to contain acres,whether actually containing more or less,and the above recital of acreage in any tract shall be deemed to be the true acreage thereof.Lessor accepts the bonus as lump sum consideration for this lease and all rights and options hereunder. 2.Unless sooner terminated or longer kept in force under other provisions hereof,this lease shall remain in force for a term of(3) years from the date hereof, hereinafter called "primary term"and as long thereafter as operations,as hereinafter defined,are conducted upon said land with no cessation for more than ninety(90)consecutive days. 3.As royalty,lessee covenants and agrees:(a)To deliver to the credit of lessor,in the pipe line to which lessee may connect its wells,the equal one-fifth part of all oil produced and saved by lessee from said land,or from time to time,at the option of lessee,to pay lessor the average posted market price of such one-fifth part of such oil at the wells as of the day it is nm to the pipe line or storage tanks,lessor's interest,in either case,to bear one-fifth of the cost of treating oil to render it marketable pipe line oil;(b)To pay lessor on gas and casinghead gas produced from said land(1)when sold by lessee,one-fifth of the amount realized by lessee,computed at the mouth of the well,or(2)when used by lessee off said land or in the manufacture of gasoline or other products,the market value,at the mouth of the well,of one-fifth of such gas and casinghead gas;(c)To pay lessor on all other minerals mined and marketed or utilized by lessee from said land,one-tenth either in kind or value at the well or mine at lessee's election,except that on sulphur mined and marketed the royalty shall be one dollar($1.00)per long ton.If,at the expiration of the primary term or at any time or times thereafter,there is any well on said land or on lands with which said land or any portion thereof has been pooled,capable of producing oil or gas,and all such wells are shut-in,this lease shall,nevertheless,continue in force as though operations were being conducted on said land for so long as said wells are shut-ins,and thereafter this lease may be continued in force as if no shut-in bad occurred.Lessee covenants and agrees to use reasonable diligence to produce,utilize,or market the minerals capable of being produced from said wells,but in the exercise of such diligence,lessee shall not be obligated to install or furnish facilities other than well facilities and ordinary lease facilities of flow lines,separator,and lease tank,and shall not be required to settle labor trouble or to market gas upon teens unacceptable to lessee.If,at any time or times after the expiration of the primary term,all such wells are shut-in for a period of ninety consecutive days,and during such time there are no operations on said land,then at or before the expiration of said ninety day period,lessee shall pay or tender,by check or draft of lessee,as royalty,a sum equal to one dollar($1.00)for each acre of land then covered hereby.Lessee shall make like payments or tenders at or before the end of each anniversary of the expiration of said ninety day period if upon such anniversary this lease is being continued in force solely by reason of the provisions of this paragraph.Each such payment or tender shall be made to the parties who at the time of payment would be entitled to receive the royalties which would be paid under this lease if the wells were producing,and may be deposited in the Bank at PAYMENT DIRECT TO LESSOR or its successors,which shall continue as the depositories,regardless of changes in the ownership of shut-in royalty. If at any time that lessee pays or tenders shut-in royalty,two or more parties are,or claim to be,entitled to receive same,lessee may,in lieu of any other method of payment herein provided,pay or tender such shut-in royalty,in the manner above specified,either jointly to such parties or separately to each in accordance with their respective ownerships thereof, as lessee may elect.Any payment hereunder may be made by check or draft of lessee deposited in the mail or delivered to the party entitled to receive payment or to a depository bank provided for above on or before the last date for payment Nothing herein shall impair lessee's right to release as provided in paragraph 5 hereof.In the event of assignment of this lease in whole or in part,liability for payment hereunder shall rest exclusively on the then owner or owners of this lease,severally as to acreage owned by each 4.Lessee is hereby granted the right,at its option,to pool or unitize any land covered by this lease with any other land covered by this lease,and/or with any other land, lease,or leases,as to any or all minerals or horizons,so as to establish units containing not more than 80 surface acres,plus 10%acreage tolerance;provided,however,units may be established as to any one or more horizons,or existing units may be enlarged as to any one or more horizons,so as to contain not more than 640 surface acres plus 10%acreage tolerance,if limited to one or more of the following:(1)gas,other than casinghead gas,(2)liquid hydrocarbons(condensate)which are not liquids in the subsurface reservoir,(3) minerals produced from wells classified as gas wells by the conservation agency having jurisdiction.If larger units than any of those herein permitted,either at the time established, or after enlargement,are required under any governmental rule or order,for the drilling or operation of a well at a regular location,or for obtaining maximum allowable from any well to be drilled,drilling,or already drilled,any such unit may be established or enlarged to conform to the size required by such governmental order or rule.Lessee shall exercise said option as to each desired unit by executing an instrument identifying such unit and filing it for record in the public office in which this lease is recorded.Each of said options may be exercised by lessee at any time and from time to time while this lease is in force,and whether before or after production has been established either on said land,or on the portion of said land included in the unit,or on other land unitized therewith.A unit established hereunder shall be valid and effective for all purposes of this lease even though there may be mineral,royalty,or leasehold interests in lands within the unit which are not effectively pooled or unitized.Any operations conducted on any part of such unitized land shall be considered,for all purposes,except the payment of royalty,operations conducted upon said land under this lease.There shall be allocated to the land covered by this lease within each such unit(or to each separate tract within the unit if this lease covers separate tracts within the unit)that proportion of the total production of unitized minerals from the unit, after deducting any used in lease or unit operations,which the number of surface acres in such land(or in each such separate tract)covered by this lease within the unit bears to the total number of surface acres in the unit,and the production so allocated shall be considered for all purposes,including payment or delivery of royalty,overriding royalty and any other payments out of production,to be the entire production of unitized minerals from the land to which allocated in the same manner as though produced therefrom under the terms of this lease.The owner of the reversionary estate of any term royalty or mineral estate agrees that the accrual of royalties pursuant to this paragraph or of shut-in royalties from a well on the unit shall satisfy any limitation of term requiring production of oil or gas.The formation of any unit hereunder which includes land not covered by this lease shall not have the effect of exchanging or transferring any interest under this lease(including,without limitation,any shut-in royalty which may become payable under this lease)between parties owning interests in land covered by this lease and parties owning interests in land not covered by this lease.Neither shall it impair the right of lessee to release as provided in paragraph 5 hereof,except that lessee may not so release as to lands within a unit while there are operations thereon for unitized minerals unless all pooled leases are released as to lands within the unit.At any time while this lease is in force lessee may dissolve any unit established hereunder by filing for record in the public office where this lease is recorded a declaration to that effect,if at that time no operations are being conducted thereon for unitized minerals. Subject to the provisions of this paragraph 4,a unit once established hereunder shall remain in force so long as any lease subject thereto shall remain in force.If this lease now or hereafter covers separate tracts,no pooling or unitization of royalty interests as between any such separate tracts is intended or shall be implied or result merely from the inclusion of such separate tracts within this lease but lessee shall nevertheless have the right to pool or unitize as provided in this paragraph 4 with consequent allocation of production as herein provided.As used in this paragraph 4,the words"separate tract" mean any tract with royalty ownership differing,now or hereafter,either as to parties or amounts,from that as to any other part of the leased premises. 5.Lessee may at any time and from time to time execute and deliver to lessor or file for record a release or releases of this lease as to any part or all of said land or of any mineral or!horizon thereunder,and thereby be relieved of all obligations,as to the released acreage or interest. 6. Whenever used in this lease the word "operations" shall mean operations for and any of the following: drilling, testing, completing, reworking,recompleting, deepening,plugging back or repairing of a well in search for or in an endeavor to obtain production of oil,gas,sulphur or other minerals,excavating a mine,production of oil,gas, sulphur or other mineral,whether or not in paying quantities. EXHIBIT "C" 7.Lessee shall have the use,free from royalty,of water,other than from lessors water wells,and of oil and gas produced from said land in all operations hereunder. Lessee shall have the right at any time to remove all machinery and fixtures placed on said land,including the right to draw and remove casing.No well shall be drilled nearer than 200 feet to the house or barn now on said land without the consent of the lessor.Lessee shall pay for damages caused by its operations to growing crops and timber on said'land. 8.The rights and estate of any party hereto may be assigned from time to time in whole or in part and as to any mineral or horizon.All of the covenants,obligations,and considerations of this lease shall extend to and be binding upon the parties hereto,their heirs,successors,assigns,and successive assigns.No change or division in the ownership of said land,royalties,or other moneys,or any part thereof,howsoever effected,shall increase the obligations or diminish the rights of lessee,including,but not limited to,the location and drilling of wells and the measurement of production.Notwithstanding any other actual or constructive knowledge or notice thereof of or to lessee,its successors or assigns,no change or division in the ownership of said land or of the royalties,or other moneys,or the right to receive the same,howsoever effected,shall be binding upon the then record owner of this lease until thirty(30)days after there has been furnished to such record owner at his or its principal place of business by lessor or lessor's heirs,successors,or assigns, notice of'such change or division,supported by either originals or duly certified copies of the instruments which have been properly filed for record and which evidence such change or division,and of such court records and proceedings,transcripts,or other documents as shall be necessary in the opinion of such record owner to establish the validity of such change or division.If any such change in ownership occurs by reason of the death of the owner,lessee may,nevertheless pay or tender such royalties,or other moneys,or part thereof,to the credit of the decedent in a depository bank provided for above. 9.In the event lessor considers that lessee has not complied with all its obligations hereunder,both express and implied,lessor shall notify lessee in writing,setting out specifically in what respects lessee has breached this contract.Lessee shall then have sixty(60)days after receipt of said notice within which to meet or commence to meet all or any part of the breaches alleged by lessor.The service of said notice shall be precedent to the bringing of any action by lessor on said lease for any cause,and no such action shall be brought until the lapse of sixty(60)days after service of such notice on lessee.Neither the service of said notice nor the doing of any acts by lessee aimed to meet all or any of the alleged breaches shall be deemed an admission or presumption that lessee has failed to perform all its obligations hereunder. If this lease is cancelled for any cause,it shall nevertheless remain in force and effect as to(1)sufficient acreage around each well as to which there are operations to constitute a drilling or maximum allowable unit under applicable governmental regulations,(but in no event less than forty acres),such acreage to be designated by lessee as nearly as practicable in the form of a square centered at the well,or in such shape as then existing spacing rules require;and(2)any part of said land included in a pooled unit on which there are operations.Lessee shall also have such easements on said land as are necessary to operations on the acreage so retained. 10.Lessor hereby warrants and agrees to defend title to said land against the claims of all persons whomsoever.Lessor's rights and interests hereunder shall be charged primarily with any mortgages,taxes or other liens,or interest and other charges on said land,but lessor agrees that lessee shall have the right at any time to pay or reduce same for lessor,either before or after maturity,and be subrogated to the rights of the holder thereof and to deduct amounts so paid from royalties or other payments payable or which may become payable to lessor and/or assigns under this lease.If this lease covers a less interest in the oil,gas,sulphur,or other minerals in all or any part of said land than the entire and undivided fee simple estate(whether lessors interest is herein specified or not),or no interest therein,then the royalties and other moneys accruing from any part as to which this lease covers less than such full interest,shall be paid only in the proportion which the interest therein,if any,covered by this lease,bears to the whole and undivided fee simple estate therein.All royalty interest covered by this lease(whether or not owned by lessor)shall be paid out of the royalty herein provided.This lease shall be binding upon each party who executes it without regard to whether it is executed by all those named herein as lessor. 11.If,while this lease is in force,at,or after the expiration of the primary tern hereof,it is not being continued in force by reason of the shut-in well provisions of paragraph 3 hereof,and lessee is not conducting operations on said land by reason of(1)any law,order,rule or regulation,(whether or not subsequently determined to be invalid)or (2)any other cause,whether similar or dissimilar,(except financial)beyond the reasonable control of lessee,the primary term hereof shall be extended until the first anniversary date hereof occurring ninety(90)or more days following the removal of such delaying cause,and this lease may be extended thereafter by operations as if such delay had not occurred. 12. Lessor does hereby grant,transfer and convey unto Lessee a right-of-way and easement to drill and operate under the surface of and through the lands described hereto,or any other lands adjacent thereto, regardless of any depth limitations set out therein,one or more directional wells to be bottomed on lands other than the lands described, for the purposes of exploring,drilling,mining and operating for,developing and producing oil,gas and associated hydrocarbons under the terms of any oil and gas leases(s),now owned or hereafter acquired by Lessee,covering lands other than the lands,and to take any and or all other actions necessary or desirable in the exercise the rights granted herein This right-of-way and easement shall remain in full force and effect for the primary term hereto and as long thereafter as used by Lessee for the purposes herein granted. IN WITNESS WHEREOF,this instrument is executed on the date first above written. 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