HomeMy WebLinkAboutNovember 22, 2013 AgendaAGENDA
CITY OF DENTON CITY COUNCIL
November 22, 2013
After determining that a quonim is present, the City Council of the City of Denton, Texas will
convene in a Special Called Closed Meeting on Friday, November 22, 2013 at 5:30 p.m. in the
Council Worlc Session Room, 215 E. McKinney Street, Denton, Texas at which the following
item will be considered:
1. Closed Meeting
A. Consultation with Attorney — Under Texas Government Code Section 551.071.
1. Consult with City's attorneys regarding a proposed standstill agreement
between and among, the City of Denton, Texas, Eagleridge Operating,
LLC, and Eagleridge Energy, LLC, j ointly agreeing to temporarily
suspend litigation of pending disputes until January 31, 2014, under terms
therein specified. The proposed standstill agreement would exclusively
constrain Eagleridge's drilling and fracicing operations to four previously
approved padsite locations, and impose additional interim restrictions
upon certain of those sites, during the term of the interim agreement,
allowing the parties to continue negotiations towards a more
comprehensive settlement of their disputes.
Following the completion of the Special Called Closed Meeting, the City Council will convene
in a Special Called Meeting to consider the following items:
A. Consider an ordinance approving or ratifying the standstill agreement referenced in the
closed session posting, above.
B. Consider adoption of an ordinance authorizing the City Manager or his designee to
execute a temporary access pernut (the "Pernut"), by and between the City of Denton,
Texas and EagleRidge Operating, LLC, a Texas linuted liability company
("EagleRidge"), granting a license to EagleRidge to temporarily access certain City
owned lands located in the James Edmonson Survey, Abstract Number 401 and the James
L. Harris Survey, Abstract Number 555, located generally 1,800 feet southwest of the
intersection of South Bonnie Brae and Vintage Boulevard, City of Denton, Denton
County, Texas, in connection with the overland transport of water for gas well
operations; and providing an effective date.
CERTIFICATE
I certify� that the abo��e norice of ineering ��as posted on the bullerin board at the Cin� Hall of the Cin� of Denton,
Texas, on the day� of , 2013 at o'clock (a.m.) (p.m.)
CITY SECRETARY
NOTE: THE CITY OF DENTON COUNCII, WORK SESSION ROOM IS ACCESSIBLE 1N
ACCORDANCE WITH THE AMERICANS WITH DISABII,ITIES ACT. THE CITY WII,L PROVIDE SIGN
LANGUAGE 1NTERPRETERS FOR THE HEARING IlVIPAIRED IF REQUESTED AT LEAST �8 HOURS 1N
ADVANCE OF THE SCHEDULED MEETING. PLEASE CALL THE CITY SECRETARY'S OFFICE AT 3�9-
8309 OR USE TELECOMM[JNICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1-800-RELAY-TX
SO THAT A SIGN LANGUAGE 1NTERPRETER CAN BE SCHEDULED THROUGH THE CITY
SECRETARY' S OFFICE.
Z:Uvliscellaneous\13WS stendstill agreement.doc
AGENDA INFORMATION SHEET
AGENDA DATE: November 22, 2013
DEPARTMENT: Legal Department
ACM: Anita Burgess, City Attorney
Vu�����ii�rii��ua��ll V�u:d���ru�n �
SUBJECT: Consider adoption of an ordinance of the City of Denton, Texas approving a
"Standstill Agreement" between the City of Denton, Texas and Eagleridge Operating, LLC until
midnight on November 22, 2013 with regard to certain disputes and issues over gas drilling in
the city to allow the parties an opportunity to engage in global settlement negotiations as it
concerns unresolved issues between them; and providing for an effective date,
RECOMMENDATION: This Standstill Agreement will be discussed in closed session.
"�n, ����„
� �� .
�� �� " '`e r"� w � _
����t�� Burgess
Attachment: Ordinance
z:\ordinances\13\st�ndstiff approval ardinance.doc
ORDINANCE NO,
AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING A"STANDSTILL
AGREEMENT" BETWEEN THE CITY OF DENTON, TEXAS AND EAGLERIDGE
OPERATING, LLC UNTIL MIDNIGHT ON NOVEMBER 22, 2013 WITH REGARD TO
CERTAIN DISPUTES AND ISSUES OVER GAS DRILLING IN THE CITY TO ALLOW
THE PARTIES AN OPPORTUNITY TO ENGAGE IN GLOBAL SETTLEMENT
NEGOTIATIONS AS IT CONCERNS UNRE50LVED ISSUES BETWEEN THEM; AND
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, certain disputes have arisen between the City of Dentan and Eagleridge
Operating LLC as it concerns gas drilling in the corporate limits of the City; and
WHEREAS, the parties deem it in their respective best interests to attempt ta negotiate
the disputes between them; NOW THEREFOFLE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS�
SECTION 1. The preambles above are incorporated in this ordinance as though set forth
in full.
SECTION 2. The City Council of the City of Denton hereby authorizes the City
Manager to execute the "Standstill Agreement" attached hereto as Exhibit "A."
SECTION 3. This Ordinance is effective immediately.
...........
PASSED AND APPROVED this the day of ______ _________, 2013„
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
��s
�,, _.
� � �.
BY: ��,„��--�_u ` ����� �
���� N
STATE OF TEXAS §
COUNTY OF DENTON §
STANDSTILL AGREEMENT
This Standstill Agreement is expressly made subject to the authorized representatives of
Eagleridge and the City signing it before midnight on November 22, 2013. Until and unless this
Standstill Agreement is signed, there is no binding agreement between Eagleridge and the City
regarding the matters set forth below.
1. The City of Denton and Eagleridge agree to a stand down period from execution of this
Standstill Agreement until 11:59 pm, January 31, 2014 (the "Standstill Period") with
respect to those disputes and issues between the parties not specifically addressed in
this Standstill Agreement, to allow the parties the opportunity to engage in global
settlement negotiations regarding the unresolved issues between them. This Standstill
Agreement is intended only to address issues related to the gas wells as specified
herein. Nothing in this Stand,still Agreement is intended to apply to any other gas wells
located within the corporate limits of the City except as stated herein. Nothing in this
agreement is intended to prevent the City of Denton from enforcing operational
standards or requirements of its ordinances as they relate to gas wells, including those
specifically referenced herein.
2. During the Standstill Period, Eagleridge will not drill, redrill or frac (or continue to drill,
redrill or frac) any wells within the corporate limits of the City except for the following:
a) Bonnie Brae 4H (API 121-31934), 3H (API 121-31597), and 2H (API 121-
34424);
b) ACME Brick D1H (API 121-31340), and D2H (API 121-31976), D3H (API 121-
34428), and D4H (API 121-34429);
c) A redrill of one existing well on the existing pad site at Gamble-Boyd Unit 1
(API 121-32240); and
d) The Rayzor West Gas Unit 12H-1 (API 121-34382), Rayzor West Gas Unit 12H-
2(API 121-34383), Rayzor West Gas Unit 12H-3 (API 121-34384), and Rayzor
West Gas Unit 12H-4 (API 121-34385).
3. During the Standstill Period, Eagleridge will not drill any additional new well(s) on the
Bonnie Brae A and Bonnie Brae B pad sites or on the Joab A or Joab B pad sites (as such
sites are shown on Exhibit 1. In addition, during the Standstill Period, as part of the
discussions of a global settlement, Eagleridge will consider plugging and abandoning the
Joab B well. Further, with respect to the wells referenced in �2(b) above, Eagleridge
Page 1
1392.O1d\36536.8
agrees to the operational limitations set forth on Exhibit 2. To facilitate a global
settlement during the Standstill Period, Eagleridge agrees to use its reasonable efforts to
provide the City with copies of relevant public records Eagleridge may have in its
possession that evidence prior permit applications and regulatory approvals relating to
gas well sites located within the corporate limits of the City.
4. For the wells identified in paragraph 2 above, the City of Denton agrees to issue all
required permits (including, but not limited to, drilling permits and all operational
permits issued by the Fire Marshal or any other City official upon inspection and
compliance with the Fire Code) on a well-by-well basis within two (2) business days of
the City's receipt of an approved RRC permit for each well. Once issued, such permits
will not be revoked for any reason except the failure to comply with operational
requirements. The permits shall survive the failure of the parties to agree upon a global
settlement before the expiration of the Standstill Period. Each permit shall be
considered a"permit" under Chapter 245 of the Texas Local Government Code.
5. For the Gamble-Boyd Unit 1 redrill identified in paragraph 2(c) above, the Fire Marshall
is authorized to issue immediately (upon inspection and compliance with the Fire Code)
an above-ground storage permit.
6. The parties agree and stipulate that the issuance of permits for the wells identified in
paragraph 2 and Eagleridge's acceptance and use of such permits is without prejudice to
Eagleridge's position that it is not required to obtain some or all of such permits.
Further, the parties agree that the fact Eagleridge obtained such permits will not be
admissible in any litigation or other proceeding between Eagleridge and the City for the
purpose of showing or supporting an argument that Eagleridge was required to obtain
such permits for these wells or any other wells.
7. The parties agree and stipulate that the issuance of permits for the wells identified in
paragraph 2 is without prejudice to the City's position that Eagleridge is required to
obtain permits for wells that are not identified in paragraph 2 above. Further, the
parties agree that the fact the City issued the permits for the wells identified in
paragraph 2 will not be admissible in any litigation or other proceeding between
Eagleridge and the City for the purpose of showing or supporting an argument that
Eagleridge has vested rights under Chapter 245 or any other legal theory with respect to
any wells not identified in paragraph 2 above.
8. The public hearing from Eagleridge's October 31, 2013, appeal to the Board of
Adjustment will be deferred until after the end of the Standstill Period.
9. Eagleridge will not be denied the right to drill, redrill, or frac wells that Eagleridge
otherwise has the right to drill, redrill, or frac from the "Pittner" pad site (as shown on
Exhibit 3) or any of the pad sites identified in paragraph 2, as a result of any
development that is approved by the City (i) within the Standstill Period and (ii) within
Page 2
1392.010�36536.8
1,200 feet of the pad sites. The rights of Eagleridge pursuant to this paragraph 9 shall
survive (i) any termination of this Standstill Agreement and (ii) the failure of the parties
to arrive at a global settlement.
10. This Standstill Agreement must be executed by authorized representatives of the City
and Eagleridge by midnight on November 22, 2013, and if not, the offer represented by
this Standstill Agreement shall automatically terminate without further action by either
p a rty.
11. The Confidentiality and Nondisclosure Agreement of November 18, 2013, shall not apply
to discussions between and among the parties, occurring after 11:59 pm, November22,
2013.
AGREED TO THIS, the day of November, 2013, by the undersigned officers acting
on behalf of their respective legal entities.
EAGLERIDGE OPERATING, LLC,
as Operator and on behalf of EAGLERIDGE
ENERGY,LLC
By: Mark L. Grawe, Chief Operating Officer
and Executive Vice President,
Eagleridge Operating, LLC
THE STATE OF TEXAS
COUNTY OF DENTON
This instrument was acknowledged before me on the day of November, 2013, by Mark L.
Grawe, as Chief Operating Officer and Executive Vice President, Eagleridge Operating, LLC, as
Operator and on behalf of Eagleridge Energy, LLC
Notary Public, State of Texas
Page 3
1392.610\36536.8
THE CITY OF DENTON, TEXAS
:
THE STATE OF TEXAS
COUNTY OF DENTON
George C. Campbell, City Manager,
City of Denton, Texas
This instrument was acknowledged before me on the day of November, 2013, by George
C. Campbell as City Manager on behalf of the City of Denton, Texas, pursuant to delegated authority
specifically conferred by Ordinance 2013- of the City of Denton, Texas.
Notary Public, State of Texas
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
M
�;
.,,,�
� � �_ ��x
. ,
BY� ... � ����.m.
.
�..��.,� ��„�µ.�. � .....�
Page 4
1392.010\36536.8
Exhibit 1
Well Locations
Page 5
1392.010\36536.8
Exhibit 2
Operational Limitations
1) Eagleridge will perform reduced emissions completions as defined by the EPA (also
known as "green completions").
2) Eagleridge utilizes diesel electric rigs which are much quieter and well below the
maximum decibels of the current Denton Development Code (DDC) requirements.
3) During fracing operations, Eagleridge places oil collecting boats under all of the trucks
and equipment which is not required.
4) All gates are kept closed unless work is being performed on Eagleridge's gas well
locations or unless the landowner is performing necessary cattle operations, etc. Even if
unlocked, all wellheads and tank batteries have their own separate locked security fences
for protection.
5) All water is disposed of by a licensed and permitted water hauler with the RRC.
6) On all existing Eagleridge locations, Eagleridge has updated through the Fire Department
the Gas Well Operational permits and additional Gas Well Permits that were not required,
MSDS sheets and updated emergency response plans.
7) Eagleridge sets cement higher around the production casing than is required by the RRC.
8) Eagleridge is using sound walls to mitigate sound as required by the current rules.
Page 6
1392.010\36536.8
Exhibit 3
Pittner Pad Site
�.:: ; �IT���—..... .
�.°
��.� �
��
�;
Page 7
1342.010\36536.�
9 .g4��� _._ �` � mm�
� � � � %P��q� � «
� �����1 d����� Sw � (
� ������ ����� � �� �' I
U
� tldk � � ��� �.W'7 � � ���mm.
8 � ���g{y ��� �� � i m
�� w ���"��� � m .
� ��' ��� ����'�� "� � � � . �
I �r #� I�°..� ��`��m �� �
r�� .w� � �
`; � S" � I
� ` �'� a
����� ��� � * ' '�� I
i �����, ��� �„���� �� �I
,
�ra �� a` „ � r� �a �
� � �e� � ,
�_ ... ...._ m �_
�.,�i
Po
�o� �� i� � a
� � � � �4�
�����r��� �� �����,
� � � ��� � ��� ��
�„
�������'��� �� a�'� �
��°, � ���y� ��r
'� � �'�� � } ��,��v
�r������� �� �����������
�� �� �� �� � �
�� ������ �� ; ��������^,
�°����,^�94 �� � �'4"�"����'
�� "s �`� � a• �� "
����a���� �� � ���������
4 � �����
�'������,�x � :��� � ���������
a QAn ..
�
� l^A
�j � �
,���'", �I �..� � Q
o�„ i,.�.�
i �
,r � C,A
»:... { ~ . ��� s�a
rioiav�oz i 3rc�a�d
a
��� � � � �� t., � � �,� •.
iu � � �'
�4�� � ��a `�$ �$ a F�� ��9�"�
fi��'� ?� �t �s �� �}����'` �d���
a a, �` � �,�,� �� �
, �
�� a� � �� 3 ��a� o'
���� �� �� �E �� �*���� �
�.
� �.� b� �� g� �$ �'�� '� y o
�" M
�� � �� �' �� � � �� �� ��' p'
��� �� �� �� ��; �� ��� z 5
���"�� �� X� 4 '� s ���
n �
�� ry� ���� �e �� �� �� � ti�� � � � � �� � � +^`� a��� � � � �
e "� � a r, � s � � a � � ��er � $� � ;� �
g�� 9 ��p �"4' ,� k� �g �' ��;�� � � �� � ��' �� �� �� �� s�+ ����� � ,y a� �' ffi1
� �°� �����: ��` k� III�` �� ����^�pG �r, �� �� ,�i���� � � � ����' azpwa ^� � ���� � �Bal
����� ���� �� �� �� �� �, ����� �s xa �� � ��y�� ����` ����"� "����� �� �� �� � �� ���
� � i ti � � '� mM N� �a� � '�� �,a �" u � � ��f0 gk ' �� '� ��� '�'� �"� �'� ,� u
��� ����� � � ° �� ������ �� �� �� �� � � p���µ� �� �W� �� �� �� �� � �� ���
�" �� ���A�' � ,�'� �'r�. s��� +4� �'py;� ' � w� �� ��w �.��'�"" �S� wJ ���y� .,�,��� �k �'� '��� �� ��
���� � W� �; W �' �b :�� `� 9e �C .��� � �� �W � �� '�* ��� � �@� �� �� =,g "" �
� � ��a�� � �� ,�� �r� ,� ,��'� � ,u �a mu �� . g�, ��pp,;����ry ���� m�� � � ��� ����� �� ��
y��°Ax� �'�Po��" `��' ��� t�S� 9� ,����� 5 �yk �rl� R"�XP�� W64.�nYA F�`���3 iiV't��� �� tl��fi �'r� y4 �,��i
�$kg{� � '� � s 'a �� a,�r� ��� �a'�� r. ������� � a,
p; � � � � �� w �u� � ����� � ��� � �! � �. ���� �� y��
'9A i'W u � � k° tlw�'° �.� �. p� �u� '� � i k��' �'�'!!'� w P�w Mp+�� a,�i �� �p ,� a Y r � x�G �'
�� �� ��'�9� �` �� �� � q� � �� � �°� � � °� � � � � a "�'��r ��� �"� �� ���� '�� "��
s� �P a���, � .$ �� � �'�� ,� e u�+t' ��m � ,�4�a� wR�� �� � h�� , c re��� r'�
���� �� �� "�s �� �°,���� ������ �uu,��� ���,� �� �: �:��,� �1 ��
��
�
�� e � <;,, �
��u �yry�T;� a i, �'����s Xry
��� ���� y t Ki M : 2b �" i .
���'�„��� �� i � � �'��� ���� �';
��� r r � � � �,�
� qN �
�r ¢�� y��M� ; i � ' � � e� �G '� "'' , f i
� ����m� (i I ,� .� u ��° ����� r
� r
��" �.F'.��'e ,P � "+�. .�"^ � ��: �.�� ���," m.������� ��"
�� �� � � �.. �. � , , y�� % ��. � � � r� ����� �
� �k � �
p���I � w k aa ��,y y��� 1 p
��� ag� �� �� kF�' �, T,.° j r1 t' ��` i�y '� Cli �� I'".
&& � � ��u �� � � � � � � �.,Gr. 4 r 1 � �"� � �� 4 4 � � ,� � �
�
� ������� � � � � ���
� ���� � �'��� ��� � � �� � � � z� �r � � ��,� . � � ��� ��
a a�5��' ������ �.�'�� �` �" �° 1 "� "� �° � � Y���r @��a�
,�@ ,
��. �� 'C. `� �'k. d3 m �.�'�'�, w �",t �'. � ' �'.,..::'�4,� cra ��.����
�,� '��v ��Ni�� ,.� �'��� .m��� �, � �.�8��
g" �, � � ��ry�,y� i� �b� y
,�I� r,����`�� �"�,^r��� ������ � �� ��x�° r � ,, ; '�
�
� �� w �����6 ���"���a� �m� � � �����'�p�'��� � �� ��
�� & ��r� � � % � � � � � � � �� �
��,�� k�" �����'�� ���� ��'��� � �rr�� °�����€� � � �� .�
,M '�� y � a�� ,��'��^�� .� � r?°.
���� ���5���p� �� ����x����� � ������� �� � <� x��� �
� � ��� ����'��S ��'�H� ,� ,,�,�� r� �' y ������a�� � �� �
� h� '� � ��� � �� ,H 1� d,,�� � 7 �� � ? �Nt�4 . �
�'��"2�R ��.n �E� � ,v�"� �& �n��"� � . �N� �'�+� ���.� z,� �; d�C �
�� � `� , ���, a 4 a ��k ,� � r C ��� � t� ��� ° �
� �p � ����������,������y"'�� �'� � ����� ?K'p��p �� ���'� �
��k � � �� �� °W� � � � � i � � � z * � � ,�
� � ��_ � &n� � a @ ,F� c � �
��m��d � � V1 �N k �, � �y� m; ,� � � y�� �,
��� {" � �' �"" �� '������In � �i���� � Y; �� �� F� r ti'�a� M p �,
g, � � � �
a���.a�ti��;'� ��t p � d�r '����^.� p ��"� � '� �a � � if� ��
�..�.��.��u�.�.�,�'l?'���,. �« ��fd wr� "� "h�t�i���tv�a•�a,�' � 1 q�.� �d
� . . ...�...�...,....�-�.. �m�wnr...i.iu....�._ 4 r�� °,I�.�,_. .
�� � �' � � �' � ,
,k
a
����� ��� a�� �,��� ����
'� �� J ���u�" a� ��m�p���
�+���t_� 1G �' ,��,�% « �"�� '�Me�.Y.
��u�����" ����� ����x�r��?A'
���w�{���� ����� ���a �'��-0�
� >s�ik�4 : w � � ����M±r'
a
�, � u� ri �. r 'p � � r; ,
� �'g v�„' � �� i
"�4�rA.� �Vy�sa .t,- . ..
� ��
��ti�����
4� � ��
������
� �� . � �;,a.,�
� "�.��N�;.�s.:
�8 ��,�, n
��
����p���
���i
�� 9.�e�
, �� :F,
ay�+, �i
Page 8
1392.010\36536.8
Vu�����ii�rii��ua��ll V�u:d���ru�n �
There is no agenda backup for this item.