Res 091-2010 8/3/2010 RESOLUTION NO. 91-2010
Resolution Authorizing The City Manager To Execute An Oil And Gas
Lease With Carrizo Oil & Gas, Inc. For 40 Acres In The Lake Kickapoo
Area
WHEREAS TEXAS LOCAL GOV CooE § 253.005 provides:
TEw�,s Loca� Gov'T Co�E § 253.005 Lease of Oil, Gas, or Mineral Land,
(a) Except as provided by Subsection (b), a municipality may lease oil, gas, or mineral land
that it owns, in the manner and on the terms that the governing body of the municipality
determines, for the benefit of the municipality. A lease under this section is not a sale
under the law governing the sale of municipal land.
(b) A municipality may not lease under this section a street, alley, or public square in the
municipality.
(c) A well may not be drilled in the thickly settled part of the municipality or within 200 feet of
a private residence.
WHEREAS, Carrizo Oil & Gas, Inc. has offered the City a paid up oil and gas
lease with a primary term of 3 years and a royalty of 1/5 of proceeds, providing for no
surface use of the property by Carrizo:
WHEREAS, the City Council determines that the terms of the attached lease is
for the benefit of the City of Wichita Falls.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WICHITA FALLS, TEXAS, THAT:
The City Manager is authorized to execute the attached Paid Up Oil and Gas
Lease, subject to changes to form as approved by the City Attorney.
PASSED AND APPROVED this the 3� day of August, 2010.
AYOR
ATTEST:
City Clerk
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Ihc mcanings prt.rcnt�l by applicablc law or thc appmpriaic guvcmmrnlal ��uihunty, ur d no dcfinition is so prtscnbal, "��il wcll"
m�ans a wcll with an imtial gas-oil retio uf I�-�s tAan 100,000 cubic IttK per barrel and "gas well" mcanc a wrll wlth an initial gu-oil
ratiu nf 100,000 wbic I'cct or morc pre bartcl, I+a.v�d �ro a:4-ixwr pmductiun Ics� coMlucial wwk�r norm�al prtxlucmg conditions u.ing
slandanl Icasc scperator facilitiis or cquivalrn� tc�ling �yuipmrnt: and the �rnn "tumtontal cmnplction" means an oil or gas well in
which thc Mirir.nnlal compcmrn� uf the gmss canpltlion inlcrval in the resrnuir cxccals �hc vcnical compiornt th7a�C. In
czcn.ising i�c pnoling nghts hcreurnler. La+see sAall filc nl' ra:oni a writtrn da:larauun dcccnbing ihe unit anJ stating �hc clkctivc
dalc o( pcwling. Prtduction, dnliing ur rcworicing uperations anywherc un a unrt which inclwles all ur rny {+att of thc IeastJ premises
shall be trcattil as if il w�n pmducliun, dnlling ur rcworking operati�ms un thc kasaf prcmises, cxttpt ihat thc pnduclinn on whkh
Lassors myalty is culculated .hall tx that pn�ation o( the iaal unit pn�Jucuon which �hc nn ucrtvge cuvend by �h�s Iease and
mclud�d m the umt tx�ars lo Ihe total gmss acmge in the unit. but only io the extem such pmpmion o( anit p�vJucGon is sold by
Lcssa. In thc cvcnt a urot is tittmal hereund�K bcforc tha unrt wcll is dnilcd and comple�cd, xi that tht appiicuble qxiling aitcria arc
rnN yet known, ihc unit �hall M� bawd un the ��Img rntrna L.�xsm ez�ncts in g�Nx1 (aith u, a�ly u{x�o complc�ion nl thr wcll.
pmvideJ �hel wi�hin a rwsonabie iime ancr completion of thc wcll thc uni� shull Ac revisoJ if n��:�ssary to contiirm to the �ilmg
cn�ede �hat acWally czists. PcwGng m une ur nwrc ins4ux:�s shall nM ezhaus� l.csscis �xxding rights hcttvnJer anJ L s+ec xhali have
ihe rceurting right hul ixn thc ubGga�ion to revise any unit formal hrnvnJ�Y by expaasion or conlrocUOn or bHh, cithc7 beC�+rc or aRer
commenr,emmt uf pmefuction, in orda tn conform to the wcll spacing erc drnshy pattem prc.scnbal or pe�mitted by �he govemmmial
:mtMimy having jurixiic�ion, or to conform to any pmJuc�ive acrcage dttermination made by such govemmenwi authonty. Tu rcviu
u unit Ixrt.vn�ler, Lessce shall �ile ol'recurd a written dcelatation d�xcnbing the reviz�d umt anJ stating the c�Tec�ive da�e of revis�nn
Tu the oz�mt any pnrtion of the lea.ud premises K in�:ludal in or czclud�d fmm the unit hy vinue uf such mvisiun, ihe pmpmion und
pn�uction im whieh myalties arc payabie henvWn shall �hrrealltt hr aJjLLStid aecnnlingly. In the absetk.e uf pmeluction in paying
yuantitia fmm a unit, or upnn permanent cessrlion thenrif, L�ssee may terminate thc und hy 61ing of mcnrd a wnUCn dalarauon
dexenbing Ihe unit aml eiating tha �fa�e nf temm�a�ion. P�xding herewxltt +hall nut consulWr a crosstonvcyafu;c nf inliYrsts.
7 Paymrnt Rulocuons. If L�ssur owns I�ss ihan ihe (ull mincral aWte m all ��r any part of'the Icasal ptemises, ihc myalu�, arnl
shut•in myalGcc payeble hereunder for any wcll on any part n( lhe IcaseA prcmisu�s ur InnJ p+�IeJ Iherewith shall he rttivad lo thc
pm{xirtion that l.acwrs inter�.w� in such part uf the IcaseJ prcmiscc kx�ars w thc full nvneral e+tate m sixh pae o( the Icasaf prem�sc+.
To tha c7etrnt any myalty or oiha paymrnt attritwmble tu thc mineral csute co�rraf AY ihe Icacc is payaMe to a�mame �+ihcr �han
l.tssor, such niyalry nr other paymrnt shall he dalucaxl fmm the curtuK�,nJmg amuum uth�Kwise payable to Laxtt hereunder.
X. Ownenhip ChanQes. 'The inlcrext o( either L.c_ywr or L��ssa may hc assignud, dcv�s�d or oth�rwisr tnns(ertnl In whole ur m �wn
6y ara andtor by Jcpth ur rnne, and �he nghts and ubligatiuns o( the parties hcrcunJtt shail utenl to thcir �pcctive heirs, devi.ea,
executon, aJministnion, succasors aiui as.aigm. No change in Lcssors ownership sYwll heve lhe elToct of raiucing the righ�s or
rnlarQing the obligations of Lcssa hercund��, a�xf no clunge in ownersh�p shall be Mndmg on Les.ace unul sizty days aller Is,.uY Ibs
be�ro (umiahod �he onginal or July amhrn�ic�ted copies of the Jocumrnts �stabGshing such change uf uwnership to the sati.(action ol
L�ssa or until Lcssnr has satisfiod the no�ification rryuircmrnts cuntainul m l.�s�cs usual form uf Jivision nrJer. in the cvrnt n(
ihe d�th of any perscm entided tu shut-in rvyalties IICICYf1(IQ, IA55�Y may pay ur terxicr wch +huain myahiw tn ihe cmlit o(
daalmt or dixedrn�'s �sute at the aJJr�s Jdignataf above. If at any �ime two or morc perums arc entiUal to shut-in myalties
lufeundor, l.�sce inay pey or trnda such shut-in myahia to such persons, rither jomqy, or +�parnlely in pmportion to the mterests
which pch owns. If Lasee t2nsfers its interat Ixvcumltt in whnk ur in pert, L�sstt shall he rclired of all nbligaUUns hen�aft�r
cnisung with n�sFxct to the trnnskrted intereats. and fuilurc uf �he tranxfcrce �o sa�iF(y iuch �Aligatiom with res{+at to the transkrtcd
iMCns�s, shall no� eRecl the nghts uf l-essce wi�h racpect to any in�crcats no� .u� tmnsferrod. If l.essee �ranyfm a(ull or unlividal
intrnxt in all or uny pnnion of tho ar� covoral by this Iease, the ohligation to pey or tender shut-in myalties hereunder shall bc
divided tmween L�xsce and the transfrrce in prt��nion to ihe n�K xnage inte+cs� in �hu I�re ihen heW Ay cach.
9. Rclense ol L�se. Lasee may, at any time anel fmm time tn time delrver to L�suir or file uf ru�nrtl a writtrn rcl�se uC this Icau as
to a full or unJividal in�ercst in all or any portion uf �he arca covercd by this Iease or any dep�hs or zonu� th�Teunder, and shall
ihrreupnn Ae rclievid of alI obligations thcreaRer ansing wi�h n�spect to the int�Ke.vt w rcieasccl. If LasKY rcleasa less ihan all n( the
intttcst or ar� covered h�YCby, Lcssee's ubligation to pay or �enSer shut-in myalti�s siwll be pmponionately reJuceJ in accnnlunce
with the na acrc�age interest rtyained hercunJtt.
10. Ane�llary Righls. In explonng for developing, pmJucing and markcling all uii, gas ,ux1 other substarc�s cnvend hrreby on ihc
kasod premises or lands pa�led or unitval therewith, in pnmary ancUor enhanced rccovery. Lessre shall twve the right nf ingres amf
egress akmg with the nght m conduct such operatiuns on the Ieasul prcmises ac may be nasonably necessary (or such parp��scs.
i�luding !wt nol I�mital to ga�physical operat�ons, the dnlling of wells, and the conswceion and use o( macLs, carials, pipclines.
tanks. watn wells, disM�sal wells. mja:tion wells. pits, datnc and tcl��M,ne Gnes. �wa stauons, anJ otixT IaciGtiea dametl
ner�vsary by L.esstt Io Jixova. Droduce, stom, trrat an�Uor transport pn�lw;�ina L�.�sec mj+y use in such operations. Gre u( cost. any
oil. gae water aneVor �ther wt�slancd pmduced un the kawJ pmnisa. cnecpt waicr fmm L�..'�uifs well or ponels in expluring.
drvclopmg, pnnlueing ur madGing fn�m the Icasal prcmiscs or la�xls {xx+IcJ or uniti�.al thercwith, the aneillary rights gtantal hrmn
shall apply (a) to the entirc iwsed premiea dcacnbcd in Pamg�aph 1 abovr, notwi�hewnding any paRial roleases or o�htr pan�al
termination nf ihis laatie, am11b1 to any o�her IaiuLc in which L.essor now or herwiler tus authonry m grent sueh ngh�s in the vicini�y
oEthe Icacetl pretnisex or laexls pailed therewilh. When r�yucs�al by Le�xtt in wrning, Lcaax chall bury in pipclines hcbw onlinary
pluw Jepth nn cultivatal lands. No wcll shall be kxaecel las than 200 (eet fmm any huust or ham now on thc Iets�d pranrsa or
other lantls of Lisuir ac�d by L�ss« hercunder, wilhoul L�.�ssnrs consent, anJ �ssee shall pay for damage cauud by its operations tn
huildinge a� o�hn impmvnnems n,w on the icasul premises or such ah�K landc, and tn commercial timtfer and �mwing cmps
thermn. l�xs� shall ha��e the right at any Gme to rc�mwe its fiamr�, eqwpmcm and nutcrials, i�luding wcll casing, from the Icas�d
prtvnisis or such o�ha Iancis dunng the term of Ihix Irase or within a reasonahk time ihereafter.
I 1. Regula�ion anJ Dclay. L�sscNs nbiigauons wuler this lease, whethcr ezpru�x nr implied, shall Ix sub��et lo all apphcahle laws,
nila, regulatirnu and unlm of any ge�vemmental autMmry having jurivlicuun, includmg nxtrictior� i,n the dnlling and pmduction of
wrils. arnf agulaiion of the pnce or transpo�tatinn of u11, gas and o�ha subsunecs cov��rpi hercby. Wlx+n dnllmg, rcworking.
pn�ucliun or otha oprrations am prcvented or detaycd by such laws. ivia. regulaGons or orJers. or Ay inability to obtain n«asary
�nrmits, cquipment, servicrs, ma�enal, water, clalnciry, Fuci, accas or cascmmts, ur by lire, Oued, alverse w�ther cofxlitiorts, war,
snM��age, rebellion, insurnttion, nat..mke or letwr Jisputa, or by inab�liry �o obtain a saGsfac�ory marlcet for pmductiun or (allure nf
pumhastrs ur cartiers to wke or trancport wch pnxluction, or by any u�her cause rnn ru-�.ui�bly witliin Lc+see's cuntml, this I�sr
.hall nut tenninate l�ause o( soch prcvenG�m ur dday, a�, at Icssee's upuon, �he �i�d u( such prcventiun or delay shall Ix adJeel
tu tbc tcrm hrmd Lcssee +hall m�t Ix IiaMc fnr bruch u(any provisfons nr impliul covrnanls olthis laae when dnlling, prtnluclion
or ulher aperalions ue ui provcnhxl nr ddayed.
I'_ Bn-rch ur Ucl'ault. tio liugution }hall hc ini�ia�cJ by L.u.wr (or �magn, f�r�i•iturc or carccllauon with ns�t to any hrrach or
dr(ault hy 1�sne h�Yrunda, lor a�md uf at kast `NI days afttt LASSOr has grven l tisce wntten nut�ce fully d�.�+.nbmg �he brraeh ��r
delault. arxt iha� unly rf la�.sae latls tn nhn vly ihe hn7ch �,r default wi�hin such periexl In the evrnl Ihe matler is litigat�l and therc
is a final judicial JiKCnnlrution dwl a brcach �x dclault has �wwrreJ, this i�ase shall not be f�dcitccl or canccll� in whok nr in pa�
unl�ss Lu see i+ gi��en a rcasunable ume allrr ��id �uJiclal Jttrnnination lo r�yn�tly ihe brrach or Je(aull a�x1 L�ssee (a�lt lo do x�.
I t W'amnry ul Title. Le.x,r hercby wartanls anJ agms to defend litle a,m�cyid to L�rcec h�v�Undtt, aixl agrccs dutt L.xsec at
L:csres' nption rcuy pay anJ di.charge any tax�s, iramgaga or liens ezisting, le�i�d or ascased on or against the kasal premi4es. If
L�ssee cxemis�s such nption, L�ssee stwll be�ubmgatrd tn the nghts u( ihe party ro whom payment is made, and, in aJdition to ns
oth��r nghts, tnay reimhurse iiself out of any rtryai�iu� or shubin myalties uthcrwise payable to L�.�wn c�rtvnder. In the a�rnt L�ssce
is inudc awarc ul' any clalm inconsislent with Lcssols litic. Lcssce inay <LLS�CMI II1C peymrnt of myalties and shut•in n�yalG�s
henvndrr, wi�huut int��t, until L�ssee has lxti�n lumish�d .ausfxtury rvidrnce that .uch clahn has �ron rG.olvrA.
IN W ITNESS W HEREOF, Ihis Icase is excti:uleci to Fx� ciT�ttive as i�f the date tirs� wntten alxwe, hut u{xm ca�ution shall be hinding
un the signatory and the signatory's heirs, deviscxs, ea�;uturs, adminislrators, wcec�x�rs and assigns, whMher nr not this iease has
bcen cxccuted hy ali parties hcrcinahnve namecl as L.cxsur .
LESSOR 1 WHETHER ONE OR �10RE SS NO. OR TAX ID
CITY OF WIC{IITA fALLti, TEKAS
ey .
fitle:
ACKNOWLEDGEMEN'TS
STATE OF TEXAS
COUNTY 4F
This inslnimrnt was acknowloclgacl before me un the day uf __________ ���'�. bY
Notary Public lix the Stetc ul Texas
STATE OF TEXAS
COUNTI'OF
Tltis instrumcnt was acknowl�xlgal bcfore me on the _ day uf ___ __ __, ?��. hY
Notary Puhlic far the SWtc o(Trxas
STATE OF TEXAS
COUNTY OF _ _
This iastrument was acknuwl�dgctl bcforc mc uu thc ___ day of ----- �_, 2004, by
N��tary Pubiic tirr thc Statc of 1�cxas
ADDENDUM TO OIL AND GAS LEASE
Attached to that certain Oil and Gas Lease dated , by and between the
City of Wichita Falls, as Lessor, and Carrizo Oil & Gas, Inc., as Lessee.
The following terms and conditions will be incorporated into this Oil and Gas Lease and
if there is a conflict between these terms and conditions from the printed Lease form the terms
and conditions within this Addendum will govern.
1. There will be no use of the surface without the express written consent of the Lessor.
2. Without the express permission from Lessor, Lessee will use no water from Lessor's
surface.
3. The royalty payable to the Lessor upon production shall be 20%. If a Lease is granted to
the Lessee within the next calendar year and within one half (1/2) mile of this Lease tract,
having a royalty higher than 20%, the Lessee will pay the higher royalty amount to the
Lessor.
4. If at the end of the primary term, a part but not all of the land covered by this lease, on a
surface acreage basis, is not included within a unit or units in accordance with the other
provisions hereof, this lease shall terminate as to such part, or parts, of the land lying
outside such unit or units, unless this lease is perpetuated as to such land outside such
unit or units by operations conducted thereon or by the production of oil, gas or other
minerals, or by such operations and such production in accordance with the provisions
hereof. Notwithstanding anything to the contrary in this lease, this lease shall expire as to
all rights which lie deeper than 100 feet below the stratigraphic equivalent of the deepest
depth drilled in any well on the Leased Premises or on lands unitized or pooled therewith
during the primary term of this lease.
5. This lease is limited to oil and gas, including all substances produced as by products
therewith, including but not limited to sulfur.
6. The City of Wichita Falls does not grant a general warranty but will defend title against
defects arising by, through and under the City of Wichita Falls.
Signed for ldentification purposes: