Res 2627 9/16/1980w
RESOLUTION NO. X7
RESOLUTION ACCEPTING BID AND APPROVING OIL
AND GAS LEASE ON A TRACT OF 250 ACRES AT LAKE
KICKAPOO.
WHEREAS, by Resolution No. 2588 the Board of Aldermen
of the City of Wichita Falls determined that it is advisable
to lease for oil and gas the land hereinafter described, and
published notice of its intention to lease such land in
accordance with Section 71. 004 and 71. 005 of the Texas
Natural Resources Code, to-wit:
250 acres, more or less, out of the
S.P.R.R. Company Survey No. 1, Abstract
No. 440, Archer County, Texas, and being
all of said survey south of contour line
1, 050 feet m. s. l. , as shown by map prepared
by B. R. Stellar in June of 1944, and being
on Sheet 2 of 11 of said series of maps.
WHEREAS, at the meeting on September 2, 1980, the date
specified in such notice, the Board of Aldermen received,
opened and considered the bid submitted, at a public hearing,
in accordance with Section 71. 006 of such Code; and,
WHEREAS, the Board of Aldermen believes that the bid of
W. A. Lofton represents the fair value of the lease on such
property, it is the only bid on such property, and it should
be accepted.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF ALDERMEN
OF THE CITY OF WICHITA FALLS, TEXAS, THAT:
Such bid of W. A. Lofton is hereby accepted, that
certain oil and gas lease, a copy of which is attached hereto,
between the City and such bidder is hereby approved, and the
City Manager is authorized to execute the same for the City
of Wichita Falls.
PASSED AND APPROVED this the 16th day of September, 1980.
M A Y O R
ATTEST '
PRODUCERS 88 REV.-TEX. A•w
OIL, GAS RISITIKTNIVIVeL LEASE
16th Se tt nlLer 80THISAGREEMENTmadethis— _ day of_.___._.--- 19__ . between.
City of Wichita Falls, Texas
of-
Post Office Address)
herein called Ivor (whether one or more), and _..._._.._.__.._.-W A•_ Lo f t O n letsaes:
Six Thousand Three-Hundred Fifteen and No/100I. Lessor, In consideration of.__-__._.- Dollars (2
In band paid, receipt of which is here acknowledged, end of the royalties herein provided and of the agreements of the lessee herein contained, hereby grants. lease
and Leta exclusively unto lessee for the purpose of investigating, exploring. prospecting. drilling, mining •nd operating for and producing oil, gas. and all
other minerals, injecting gas, waters. other fluids, and air into aubeurfa.e strata. laying pipe lines. storing oil. building tanks, power stations. telephone lines.
and other structures and things thereon to prwluce, save, take care of, treat.. process. store and transport said minerals and other products manufactured there.
trom,and bowing and otherwise caring for Its employees.the following described land In._ Archer County. Texas. to-wit:
250 acres of land, more or less, out of S.P.R.R. Company Survey No. 1, Abstract
No. 440, and being all of said Survey South of contour line 1 ,050 feet m.s.1. ,
as shown by map prepared by B. R. Stellar in June of 1944, and being on Sheet 2
of 11 of said series of maps.
See. Rider Attached)
sad-Jae-leas-hereby-la+aw-nee-Delp--
t-also-sass.-sad-all-outer-lead-awaed-sae-el•ti sail--by feces-i s rise-bawiw_ass .urviy.ee-eserveyer-er.ia-adieining eurveysi-zed-adfeinier-
4be-La'eiss-shmee6bed--104 ap-4s-lie••beussdarlw-44-11w-eLuttinitaendowaerw Fur the purpose of calculating the rental payments hereinafter provided for. said land is
estimated to comprise _250..__.__ . acres, whether It actually comprises more or leas.
2. Subject to the other provisions herein rontained, this lease shall remain in force for a term of f 1 V`/ years from this date (called "primary term").
and as long thereafter as oil, gas, or other mineral Is produced from said land or land with which said land le pooled.
3. The royalties to be paid by leenee are: (e) on oil, and on other liquid hydrocarbons saved at the well, one-eighth of that produced and saved from
said land, same to be delivered at the wells or to the credit of lessor in the pipe line to which the wells may he connected; lessor's interest in either case shall
bear its proportion of any expenses for treating oil to make It marketable ae crude; (b) on gas, including caeinghead gee and all gaseous substancev. produced
from said land and sold or used oaf the premises or in the manufacture of gasoline or.other product the.efrom, the market value at the mouth of tee well of
one-eighth of the gas so sold or used provided that on gas sold at the wells the royalty shall be one-eighth of the amount realized from such sale; eteeeese
saiwad-awl-taarl.ota6.-aa witiht6.-s,iWas--iw-.M,lad-+a--av+lua-tea the av,sll-ee--tu r--eaeepr--that,-ow-sulphur-4he--royalle--
and (d) at any time. either before oe after the expiration of the primary term of this Iea;e. if there is a gas well or wells
on the above lend (and for the purl onee of this clause (d) the term "gas well" eha!I Include wells capable of producing natural gas, condensate. distillate or any
gaseous substance and wells classified as gee wells by any governmental authority) and such well or wells are shut in before or after production therefrom, lessee or
any assignee hereunder may pay or tender an advance annual royalty equal to the amount of delay retinae provided for in this lease for the acreage then held uuder
this lease by the party making such payment or tender, and If such payment or tender le merle, it ehall be considered under all provisions of this lease that gas Is
being produced from the leased premises In paying quantities for one (1) year from the date such payrneet or tender 1s made, and in like manner eubeequent advance
annual royalty payments may be made or tendered and It will he considered under all provisions of this lease that gas is being produced from the leased premises In
paying quantities during any annual period for which such royalty is paid or tendered; Hoch advance royalty may he paid or tendered in the same manner as pro-
vided herein for the payment or tender of delay rentale; royalty accruing to the owners thereof on any production from the leased premises during any annual period
for which-edvance royalty is paid may be credited against such advance neytneut.; and when there is a shut-in gun well or wells on the lensed premises If this lease is
not continued in force under some other provision thereof, It shall nevertheleee cootlnue in force for a period of ninety (90) days from the last date op'which • gas
well located on the leased premises Is shut in,or for ninety (901 days following the date to which this lease is continued in force by some other provision thereof. as
the case may be,within which ninety-day period lessee or any assignee hereunder may commence or resume the payment or tender of the advance royalty as herein
provided.
4. U operations for drilling or mining are not commenced on said land or on land pooled therewith on or before one (1) year from this date, this lease shall
terminate as to both parties, unless on or before one (1) year from this date lessee shall pay or tender to the lessor• rental of TWQ Hundred Warty
and Na/100 - - - - - - - - Dollars ($250...00..___. ) which shall cover the privilege of deferring commencement of such operations
for • per!od of twelve (12) months. In like manner and upon like payments or tenders. •nnually, the commencement of maid operations may be further de.
erred for successive periods of the same number of months. each during the primary term. Payment or tender may be made to the lessor or to the
City National bank of W l.chita Falls _Texas which book, or any successor therein,
shall continue to be the agent for the lessor end lessor's successors and annigne. If such bank (or any successor hank) ehall fail, liquidate, or be succeeded
by another bank, or for any reason fail or refuse to accept rental, lessee shall not be held In default until thirty (301 days after leaser shall deliver to
lessee • recordable Inetrument making provision for another method of payment or tender, and any depositary charge Is a liability of the lessor. The pay-
meat or tender of rental may be made by check or draft of lessee. stalled or delivered to said bank or leaner, or either lessor if more than one, on or before
the rental paying date.
6. Lessee is hereby granted the right to pool or unit i,e this lease. the hued covered by it or any part thereof with any other land, lease, leases, mineral eetiteae
or parts thereof for the production of oil, gas, or any other minerals. I!oit:: tee led for oil her.under shall not ex,end eighty acre, phis a tolerance of ten per cent
10%) thrieuf, and units pooled for gun hereunder shrill net exceed three hundred and twenty eert, plus a tolerance of ten per cent (105 ) Whereof, provided that
If tiny Federal or State law, Executive order, rule or regulation shall preecrihe • spacing pattern for the development of the field or allocate a producing allowable on
acreage per well, then any such unite may embrace as much additional acreage as may be eo prescribed or as may be used in such allocation or allowable. Lessee
shall file written unit designations in the county in which the premieee are !orated. Such units may be designated either before or after the completion of wells_
Drilling opperatione and production on any part of the pooled acreage shall be treated as if such drilling operatione were upon or such production was from the land
described In this lease whether the well or wells be located on the land covered by this lease or not. The entire acreage pooled Into • unit shall be treated for all
purposes, except the payment of royalties on production from the pooled unit. se if it were Included in this lease. In lieu of the royalties herein provided, lessor shall
receive on production front a unit so pooled only such ts,rtien of the royalty stleulated herein as the amount of his acreage placed in the unit or his royalty interest
therein on an acreage basis bears to the total acreage so pooled in the particular unit involved.
6. If, prior to discovery of oil, gas, or other miuernls un sold land re boil teuled therewith berme ehoutd drill and abandon a dry hole or holes thereon, or if,
after discovery of oil, gee, or other minerals, the production thereof should cesoo from any cause, this lease shall not terminate if lessee commences reworking or
additional drilling operations within sixty (60) days thereafter, or (if it be within the primary term) commences or resumes the payment or tender of rentals or
commences operations for drilling or reworking on or before the rental paying diet): next eneuiog after the expiration of three (9) months from dale of comple-
tion and abandonment of said dry hole or holes or the cennatlon of product'on. If n dry hole is completed and abandoned at nay time during the lest fifteen Ile)
month. of the primary term and prior to discovery of oil, goo, or other mincro on sold land or land pooled therewith, .eo rental payment or operations •are neces-
sary In order to keep the lease In force during the remainder of the primary term. If. at the expiration of the primary term, oil,gas, or other mineral is not being
produced on said land of land pooled therewith but Iceeee in then engaged in operations for drilling, mining. or reworking of any well or mine thereon, this lease
shall remain In force so long as drilling, mining, or reworking operations ore prosecuted (whether on the same or different wells) with no cessation of more than
sixty (80) consecutive days, and If they result In production, no long thereafter as oil, gas. or other mineral is produced from said land or land pooled therewith. in
the event • well or wells producing oil or gee in paying quantities should he brought in on rid ocent land and within three hundred thirty (930) feet of and drain-
ing the leased premised, lessee agree. to drill much offeet wells as a reaeonnhly prudent operator would drill under the same or similar circnmatencea. The Judg-
ment of the lessee. when not fraudulently exercised, in carrying out the porteees of this lease shall be conclunlve.
7. Lessee shall have free ure of oil, gas, and water from Bald land, except water from lessor's wells and tanks, for all operations hereunder, including reprete
siring. pressure maintenance, cycling. and secondary recovery operations. and the royalty shall be computed after deducting any so used. I•esnee shall have
the right at any time during or after the expiration of thin leave to remove all property and fixtures placed by lessee on said land, including the right to
draw and remove all casing.
8. The rights of either party hereunder may be aesigned in whole or in part and the provisions hereof shall extend to the heirs, executor., adminis-
trators. eucces•ore. and annigns. hut no change or divinlon In ownership of the land, rentals or royalties, however accomplished. shall operate to enlarge
the obligations or diminish the rights of Ieveee. Ni; such change or division In the ownership of the land. rentals or roc Morns shall he binding upon lessee for any
purpune until such person acquiring any interest hen furniehed lessee with the instrunnent or instruments, or certified copies thereof. constituting lets chain
of title from the original lessor. In the event of an assignment of thin Iesar ae to a Beg rag need portion of said laud, the rentals payable hereunder ehali he
apportioned as between the never/II lengehold owners ra(ubly according to the eirfnce area of ear+. raid default in rental enyuu•nt try one shall not affect the
rights of other leasehold owners hereunder. An assignment of this lease, In whole or in part, shall, to the extent of .meh nesignment, relieve and discharge
lessee of any obligation. hereunder, and, if leseee or assignee of pert or parts hereof shall fail or make default In the payment of the proportionate part
of the rentals due from such (ceaee or assignee or fail to comply with any other provision of the lease. such default shall not affect this lease in so far as
it covers a part of said lands upon which leasers or any assignee thereof shall make payment of said rentals.
9. Lessee shall not be liable for delays or defaults in its performance of any agreement or covenant hereunder due to force majeure. The term "force rnejeure"
ae employed herein shall mean: any art of Cod Including but not limited to storms, floods. washoits, landslides, rind lightning; acts of the public enemy; wars, block.
ales. Insurrections or riots; strikes or lockouts; epidcmiee or quarantine r.gu!u.tione; laws. ails, orders or requests of federal. elate, tnuniclt,al or other governments
or governmental officers or agents under color of authority; freight ernharv''.n or failures; exhaustion or unavailability or delays In delivery of any product, labor,
service, or material. if hnsee I. required, ordered or directed by any faders!. state or municipal law, executive order, rule, regulation or request enacted or promul-
gated under color of authority to cease drilling oper adorn), reworking oiler atoms or producing operations an tin, land covered by this !name or if innate by force
m ajeure is prevented from conducting drilling operations. reworking operations or producing operations, then until such time as sorb law, order, rule, regulation,
request or force oiajeure Is terminated and for a period of ninety (901 days after much termination each and every provision of this lease that might operate to
terminate It or the estate eenieyed by it shall be suspended and inoperative and this lease shah continue In full force. If any period of suspension occurs during
the primary term, the time thereof shall be added to such term.,
I0. Lerpie heeeky.H44-itrn4 and agreee that lessee, at Its option, may discharge any tax, mortgage, or
other lien upon said land, arid In the event lessee does so, it shall he embrogeted to such lien with the right to enforce name •nd apply rentals and royalties
accruing hereunder townni eatinfeing name .Wit Ira.w'-M.e.4ww+.r,_el--la.ne-ss .5c ed e`-sirs•-w.r'sub`-M-ale-...~.s-.44-..fatlMrtn_at -M41e' It Is agreed that. If
lessor owns an Interest in said sand lens than the entire fee simple estate, then the ruvaltle:a and rental, to be paid lessor shell he reduced proportionately;
should any one or more of the parties. named above as lereors fell to execute this leant., it shall nevertheless be binding upon the party or parties executing
the same.
11. Lessee, Its/tile,ucceeeors and arntgne, shall have the right at any time to surrender this !race, In whole or In part, to lesnir or his heirs and assigns by
delivering or mailing a release thereof to the lessor, or by ',lacing a release thereof of record In the county in which said land is situated; thereupon lessee shall berelievedfromallobligations. expreerseel or Implied, of thin agreement an to the acreage.o surrendered,and thereafter the rentals payable hereunder shall be reduced In
the proportion that the acreage covered hereby is reduced by said release or releaser.
IN WITNESS WHleete0F, we sign the day and year first above written.
City of Wichita Falls , Texas
ATTEST: BY :
City Clerk Acting City Manager
RIDER ON W. A. LOFTON LEASE
Notwithstanding the other provisions of this lease, it is distinctly
understood that Lessee shall not conduct any drilling operations or make any
installations or lay any pipeline on the leased property until the loca-
tion of the well, installation of other equipment and any pipeline is
approved by the City of Wichita Falls and the drilling location, drilling
operations, installation and pipeline must meet the specifications design-
ated by the City to protect the water in Lake Kickapoo.
Notwithstanding the other provisions of this lease, Lessee shall not
have the right to use water from Lake Kickapoo free of charge.
Notwithstanding the other provisions of this lease, if the Lessee pools
part of the leased premises with other land, the drilling or spacing units
may not be more than the minimum number of acres on which an oil and gas
well must be located to comply with the rules or orders of the Railroad
Commission of Texas or any other federal or state regulatory body that has
authority to control or regulate the spacing of oil and gas wells. In any
unit pooled for oil or gas, said oil or gas unit shall be composed of no
less than 50 per cent acreage from the property herein leased.
Notwithstanding the other provisions of this lease, if, at the end of
the primary term, this lease is being maintained by production of oil or
gas on the leased property or land pooled with the leased property, or is
being maintained as otherwise herein provided, Lessee shall commence an
additional well within six months after the end of the primary term, and shall
thereafter carry out a continuous drilling program with an additional well
commenced within six months of the completion of the preceding well. When
development ceases by the failure of the Lessee to commence an additional
well within six months after the completion of the preceding well, this
lease shall automatically terminate insofar as it covers all the property
herein leased, save and except such part of the leased property as is
included within producing pooled units and such acreage around each producing
well on the leased property equal to the amount of acreage the Railroad
Commission of Texas allocates for the production of oil and gas for a proratioi
unit on the leased property, which, in no event, shall exceed 80 acres for an
oil well and 320 acres for a gas well. Each water disposal well, water
injection well and/or water supply well shall be regarded as a producing well.
There is no warranty of title, either expressed or implied.
Signed for Identification