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HomeMy WebLinkAboutORDINANCE NO. 600 MINERALS ON PROPERTYORDINANCE NO. 600 AN ORDINANCE DEEMING IT PROBABLE THAT THE HEREINAFTER DESCRIBED CITY PROPERTY HAS BECOME VALUABLE BY REASON OF MINERAL DEPOSITS UNDER- LYING SAID PROPERTY AND GRANTING A LEASE IN AND TO SUCH MINERALS WITH THE RIGHT TO EXTRACT THE SAME AS PROVIDED BY SECTION 50 -234, IDAHO CODE; AND AUTHORIZING THE MAYOR AND CITY CLERK TO SIGN SAID LEASE; THAT A COPY OF SAID LEASE IS HEREINAFTER SET FORTH; AND PROVIDING THE EFFECTIVE DATE OF THIS ORDINANCE. WHEREAS, it is probable that the following described city property situated in Madison County, State of Idaho, to -wit: Township 6 North, Range 39 East, B.M. Section 24: WISE;, NE a, less a tract described by metes and bounds as follows: Beginning at the SW corner of the NW;NE; of Section 24, thence North 300 feet; thence East 50 feet; thence Southeasterly to a point on the south line of the NWaNEa of Section 24; thence West 100 feet to the point of beginning. has become valuable by reason of mineral deposits underlying said property, and WHEREAS, Section 50 -234 Idaho Code, gives the City power to grant a lease in and to such minerals, with the right to mine and extract the same, provided that the surface of said property shall be in no wise interfered with or disturbed and further providing that the lease shall provide for such royalties and shall contain such other terms and provisions as the City Council may deem proper, and shall in no case be made for a greater period of time than twenty -five (25) years from the date thereof, and follows: WHEREAS, a copy of the proposed lease is as PRODUCER'S 88 -r'NCB OIL AND GAS LEASE ARIZ..EOLO..IDA., IOWA.NAN.,YINN., MO. .NONT..NEB..N.O..S.D..UTAN,NYD. T)OS AGREEMENT. made and entered into as of the —day of January IB79, by and between City of Rexburg a 7113iripal_Gj]rpnration_ hereinafter called "Lessor" (whether one or more) and Amorn Prnductinn C mpany, CPC irIt Y 17TP (511'1 III 7nO- Denver. Colorado 80202 , hereinafter called "Lessee," WITNESSEPH: 1. Lessor, for and in consideration of the sum of QnP and Iij) _ ------ - - - --- ---DOLLARS ($ 1 - 00---- - - - -), In hand paid. of the royalties herein provided, and of the agreements of Lessee herein contained, hereby grants.demises. leases and lets exclusively unto Lessee the land hereinafter described, for the purpose of Investigating, exploring and drilling for, producing, saving. taking. owning, transporting. storing. handling and treating oil and gas, together with all rights, privileges and easements useful for Lessee's operations hereunder on said land and on lands in the same field, including but not limited to the following rights: to lay D1De lines; to build roads; and to construct tanks. pump and power stations, power and communication lines, houses for its employees, and other structures and facilities. The phrase "oil and gas." as used In this lease, shall embrace all hydrocarbons, as well n other substances produced therewith. The said land Included in this lease is situated in the County of Mad is, on State of Tdaho and is described as follows, to -wit: Townshi 6 North, Ran a 39 East B.M. ect7on a, a, ass a vac described by metes and bounds as follows: Beginning at the SW corner of the NW4NE; of Section 24, thence North 300 feet; thence East 50 feet; thence Southeasterly to a point on the south line of the NW -14NE; of Section 24; thence West 100 feet to the point of beginning; Including all oil and gas underlying lakes, streams, roads, easements and rights -of -way which traverse or adjoin said land; and including all lands owned or claimed by Lessor as a part of any tract above described; and containing 2aAB_ acres of land, more or less, hereby releasing and waiving all rights under and by virtue of the homestead exemption laws of this state. This lease shall cover all the interest in said land now owned by or hereafter vested in Lessor. even though greater than the undivided interest (1f any) described above. For the purpose of calculating any payments based on acreage. Lessee, at Lessee's option, may act as if said land and Its constituent parcels contain the acreage above stated, whether they actually contain more or less. Lessee may inject water, gas or other substances into any zone or stratum underlying said land and not productive of fresh water. 2. Subject to the other provisions herein contained, this lease shall remain in force for a period of ten (10) years from the date hereof, called "primary term," and thereafter so long as oil or gas} eIs produced from said land 9 hereunder. tfy•S or Lessee is engaged in drilling or reworking operations on said land hereunder. En ��'e !) not 0 �xceed Z� rd e�d l frppfl� da e. 3. Royalties to be paid by Lessee are: (a) on oil. one -e g h (1 8 o that Dro uce and save o sa and, to e e Meted at the wells or to the credit of Lessor into the pipe Line to which the wells may be connected; Lessee may from time to time purchase any royalty oil, paying therefor the market value in the field where produced on the day it is run to the pipe line or storage tanks; (b) on gas, Including casinghead gas or other gaseous substance, produced from said land and sold or used, the market value at the well of one - eighth (1 /8) of the gas so sold or used, provided that on gas sold at the well the royalty shall be one - eighth (1/8) of the amount realized from such sales; (c) on other substances produced with oil or gas, and covered by this lease, one - eighth (1 /8) of their value at thI well. If Lessee shall discover gas hereunder on said land or on land unitized with any of said land, Lessee may at any time or times during or after the primary term and at Lessee's election. pay Lessor as royalty a sum equal to the rental hereinafter provided on the acreage then held by Lessee hereunder, whereupon It shall be considered for all purposes of this lease that gas Is being produced hereunder from said land for a period of one year; such year to commence on the anniversary of this lease next preceding such payment. of unless the this lease next afollowin which gs ch payment. Any c Anysuchnpayment may paid, which e made In the same manner arssprovided elsewhere in thisvlease for the payment of rental, and shall be in lieu of the rental covering the same period of time; but shall not be In lieu of any royalty based on actual production. Lessee may use, free of royalty. oil, gas and water developed from said land by Lessee, for all operations hereunder. 4. If drilling operations are not commenced on said land on or before _ -- -___. 4jle_. i) —. Year from this date this lease shall terminate as to both parties unless Lessee, on or before the expiration of said period, shall pay or tender to Lessor or to First. Security —___._ - Bank t._RexLu_ra Idaho 83440 _ or anor'sccessr. _- --- - -- _—...-_red 219 QA-- - - - - -- or any successor. the sum of iwn_hund a time thirty -.nine and Q$�.]_ may be Comm — DOLLARS (g ) which shall extend for twelve (i2) months the time within which such operations may be commenced. Thereafter, annually, in like man- ner and upon like payments or tenders, all of which are herein called "rentals." this lease may be maintained in force and such opera- tions again deferred for successive periods of twelve months each during the primary term; provided, however, that if any oil or gas shall be produced hereunder, or any drilling or reworking operations conducted hereunder, within a period of time three (3) months prior to any anniversary of this lease during the primary term. the rental accruing on such anniversary shall be excused and this lease shall continue In force as though such rental had been paid. Such operations shall be deemed to be commenced when the first material is moved In or the first work done. The down cash payment Is consideration for this lease according to Its terms, and shall not be allocat- ed as a mere rental for a period. Payments or tenders of rental may be made by mailing or delivering cash or Lessee's check or draft to Lessor or to any depository bank on or before such date of payment. if any depository bank shall fail or refuse to accept rental, this lease shall not terminate, not Lessee be held in default for failure to pay rental. unless Lessee shall fall to pay such rental for thirty (30) days after Lessor has delivered to Lessee a recordable instrument designating another depository bank. Any bank herein or here- after designated as depository shall continue as such and as Lessor's agent, regardless of changes In ownership of Lessor's interest. Lessee may pay or tender rental jointly to the credit of all parties having any interest hereunder. If Lessee shall, in good faith and with reasonable diligence. site to pay any rental but shall rail to pay. or incorrectly pay some portion thereof, this lease shall not terminate unless Lessee. within thirty (30) days after written notice of its error or failure. shall fail to rectiU' the Same. Lessee may at any time or times surrender this lease as to all or any portion of said land by mailing or tendering to Lessor or to the depository bank or by filing for record a release or releases, and be relieved of all obligation thereafter accruing as to the acreage surrendered, and there- after the rental shall be reduced in the same proportion that the acreage covered hereby is reduced. - 5. If at any time or times after the primary term or within three (3) months before expiration of the primary term. all operations and all production reworking operations hereunder shall cease production of oily cause this thin three (3) months after terminate shall commence or resume drilling c s. 6. Lessee shall pay for damages caused by Lessee's operations to growing crops, buildings, irrigation ditches, feed lots and fences. When required by the surface owner, Lessee will bury pipe lines below ordinary plow depth when crossing cultivated land. No well shall be drilled within two hundred (200) feet of any residence or bans now on said land without the consent of the surface owner. Lessee shall have the right at any time to remove all Lessee's property and fixtures, including the right to draw and remove all casing. Lessee shall drill any well which a reasonably prudent operator would drill under the same or similar circumstances to prevent substan- tial drainage from said land by wells located on adjoining land not owned by Lessor, when such drainage is not compensated by counter drainage. No default of Lessee hereunder with respect to any well or portion of said land shall Impair Lessee's rights with respect to any other well or portion of said land. 7. The rights of Lessor and Lessee hereunder may be assigned In whole or in part. No change in ownership of Lessor's interest (by assignment or otherwise) shall be binding on Lessee until Lessee has been furnished with notice, consisting of certified copies of all recorded instruments or documents and other information necessary to establish a complete chain of record title from Lessor, and then only with respect to payments thereafter made. No other kind of notice. whether actual or constructive, shall be binding on Lessee, and Lessee may continue to make payments precisely as if no change had occurred. No present or tuttue division of Lessor's ownership an to different portions or parcels of said land shall operate to enlarge the obligations or diminish the rights of Lessee, and Lessee's operations may be conducted without regard to any such division. If all or any part of the Lessee's Interest hereunder shall be assigned, no leasehold owner shall be liable for any act or omission of any other leasehold owner, and failure by one to pay rental shall not affect the rights of others — rental being apportionable in proportion to acreage. 8. Whenever, as a result of any cause beyond Lessee's control (such as fire. flood, windstorm or other Act of God; law, order or regulation of any governmental agency; of inability to Secure men, material or transportation) Lessee is prevented from complying with any obligation of this lease. Lessee shall not be liable for damages or forfeiture of this lease and Lessee's obligations shall be sus- pended so long as such cause persists. If by any such cause, all operations and all production hereunder we prevented after the expiration of the primary term. Lessee may at any time or times and at Lessee's election pay Lessor as royalty (in addition to any royalties based on actual production) a sum equal to one -fourth (16) of the rental hereinabove provided on the acreage then held by Lessee period of three months from the date lsuch payment is for all made. Any Such this or gas is the being nnerraascprovided elsewhere in this lease for the payment of rental. ;x7815 1 9. Lessee may at any time or [Imes unitize this lease and the lands covered hereby, In whole or In Dart, or an to any stratturi or stfctaowlth other lands and lessee In the same field, so as to constitute a unit or units, whenever, In Lessee's Judgment, reputed to promote or encourage the conservation of natural resources by facilitating an orderly or uniform well spacing pattern ;a cycling, Pressurs- malntenance, e- pressuring or secondary recovery. program; or any cooperative or unit plan of development or operation approved by the Seeretaq of the Interior of the United States. The size of any such unit may be increased by Including acreage believed to be but productive.. and any Increase or decrease din by Lessor's royalties eresulting dfrom bany such change r in h any such of unit fshallllnot beuretroactl e. Any such unit may be established, enlarged, or diminished, and, In the absence of production therefrom. may be abolished and dissolved, by filing for record an instrument so declaring. a copy of which shall be delivered to Lessor or to the depository bank. Drilling Of rework - Ing operations upon, or production of oil or gss from any Dart of such unit shall be treated and considered, for all purposes of this lease, an such operations upon or such production from this lease. Lessee shall allocate to the portion of this lease included in arty such unit a tractional Dart of all production from any part of such unit, on one of the following bases: (a) the ratio between the partici- pating acreage in this lease included in such unit and the total of all participating acreage included in such unit: or (b) the ratio be- tween the quantity . of recoverable production underlying the portion of this lease Included In such unit and the total of all recoverable production underlying such unit: or (c) any other basis approved by State or Federal authorities having Jurisdiction thereof. Upon production from any Dart of such unit Lessor herein shall be entitled to the royalties In this lease provided. on the fractional part of the unit Production so allocated to that portion of this lease Included In such unit and no more. 10. Lessor warrants and agrees to defend the title to said land, or to the undivided Interest therein (if any) specifically described In Paragraph I hereof. The royalties hereinabove provided are determined with respect to the entire mineral estate In oil and gas and or Lessor rce in whole Interest. the any tax, royalties ortgage paid Lessor shall be lien upon said land, or may proportionately. the same from[aN purchaser at any tax sale or adjudication, and may reimburse itself from any rentals and royalties accruing hereunder and shall be subrogated to such lien with the right to enforce same. I1. This lease shall be binding upon all who execute it, whether or not they we named in the granting clause hereof and whether of not binding upparties he heirs, executors, atdministrators, successors and shuns of Lessor and Lessee. shall Inure to the benefit of and be 12. Lessee, its successors and assigns, will conduct no operations, drilling or otherwise, on the surface of the land hereinabove described. and the surface of said property shall be in no wise interfered with or disturbed. IN "WITNESS WHEREOF, this Instrument is executed as of the date first above written. LESSOR SIGN HERE ATTEST: City of Rexburg a municipal corporation. RV. Bye City Clerk John C Porter, Mayor IDAHO j STATE OF watso, T/ ss ACKNOWLEDGMENT FOR CORPORATION COUNTY OF -- On this '� day of JA n up tT D., 9 before me, the undersigned, a Notary Public —� -- � don C. for e in and for the county and state aforesaid, personally appeared to me personally fty,..to be the identical person who signed the nafM of the maker thereof to the _ftjjj and foregoing instrument as its tyaiVr -P*esident and acknowledged to me that — executed the same as - tree and voluntary act and deed, and as the free and voluntary act and deed of said corporation, for the uses and purposes therein set forth. Given under my hand and seal the day and year last above written. My commission expires' -- Notary Public. 6.3 NOW, THEREFORE, BE IT ORDAINED BY THE P1AYOR AND THE CITY COUNCIL OF REXBURG, IDAHO: Section I: That the City of Rexburg give and grant to Amoco Production Company, Security Life Building, Denver, Colorado, a lease of the mineral deposits underlying the real property above described in said proposed lease, on the terms and conditions fully set forth in the said proposed lease, and that the Mayor and City Clerk be, and they are hereby authorized and directed to sign said Lease Agreement on behalf of the City of Rexburg, Idaho, and that said Lease Agreement continue in full force and effect for the term thereof, subject to the faithful performance thereof by the lessee. SECTION II: This ordinance shall be in full force and effect from and after its passage, approval and publication as provided by law. APPROVED by the Mayor and City Council this 17th day of January, 1979. firJ A /1A J ATTEST: v City Clerk, e gley. r. STATE OF IDAHO, ) (SS County of Madison. ) I, ROSE BAGLEY, City Clerk of the City of Rexburg, Idaho, do hereby certify: That the foregoing is a full, true and correct copy of an ordinance entitled: AN ORDINANCE DEEMING IT PROBABLE THAT THE HEREINAFTER DESCRIBED CITY PROPERTY HAS BECOME VALUABLE BY REASON OF MINERAL DEPOSITS UNDERLYING SAID PROPERTY, AND GRANTING A LEASE IN AND TO SUCH MINERALS WITH THE RIGHT TO EXTRACT THE SAME AS PROVIDED BY SECTION 50 -234 IDAHO CODE; AND AUTHORIZING THE MAYOR AND CITY CLERK TO SIGN SAID LEASE; THAT A COPY OF SAID LEASE IS HERE- INAFTER SET FORTH; AND PROVIDING THE EFFECTIVE DATE OF THIS ORDINANCE. passed by the City Council of the said City and approved by the Mayor on the 17th day of January, 1979. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of said City of Rexburg, Idaho, this 17th day of January, 1979. City Clerk. (Seal)