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Amended by Ordinance No. 2006-173 06/20/06 JR
SAOUR DOCUMENTS\Ordinances\05\Airporr Ordinance Dan A Hughes.doc
ORDINANCE NO. a 40 = 24
AN ORDINANCE CLARIFYING, AMENDING AND RATIFYING THE OIL, GAS AND
MINERAL LEASE AT THE CITY OF DENTON AIRPORT DATED JANUARY 17, 2002; AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, Dan A. Hughes Company, "Lessee", of Oil, Gas and Mineral Lease of the City
of Denton Airport, dated January 17, 2002, "Lease", and the City of Denton desire to clarify, amend
and ratify the Lease to provide for the full development of the lease and to create in advance the gas
units in anticipation of completion; and
WHEREAS, Lessee and the City of Denton also desire to clarify, amend and ratify the lease
to provide for the unavailability of horizontal drilling rigs and the unusual amount of rainfall; and
WHEREAS, the City desires to authorize the City Manager to execute the Lease to clarify,
amend and ratify the lease with Dan A. Hughes Company at the City of Denton Airport to provide
for the above mentioned terms. NOW THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. Incorporation of Preamble. The above and foregoing preamble is incorporated
into the body of this Ordinance as if copied herein in its entirety.
SECTION 2. The City Manager or his designee is hereby authorized to execute a lease in
substantially same form as attached Exhibit A, clarifying, amending and ratifying the Oil, Gas and
Mineral Lease at the City of Denton Airport dated January 1, 2002.
SECTION 3. If any section, article, paragraph, sentence, clause, phrase or word in this
Ordinance or application thereof to any person or circumstance is held invalid or unconstitutional by
a Court of competent jurisdiction, such holding shall not affect the validity of the remaining portions
of this Ordinance, and the City Council hereby declares it would have passed such remaining
portions of this Ordinance despite such invalidity, which remaining portions shall remain in full
force and effect.
SECTION 4. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the k f d-daY of , 2005.
EULINE BROCK, MAYOR
ATTEST:
JENNIFER WALTERS, CTfY SECRETARY
i
EDVb
IM
)RNEY
MODIFICATION, CLARIFICATION & RATIFICATION
OF OIL, GAS & MINERAL LEASE
City of Denton Airport
STATE OF TEXAS
KNOW ALL MEN BY THESE PRESENTS THAT:
COUNTY OF DENTON
WHEREAS:
(a) By Oil, Gas and Mineral Lease dated January 17, 2002, a Memorandum of which is recorded in
Volume 5010 at page 858 of the Official Public Records of Denton County, Texas, The City of
Denton leased to Enexco, Inc. the 554.14 acres of lands therein described ("Lands") on the terms
and conditions therein set forth ("Lease");
(b) Dan A. Hughes Company has succeeded to all of the rights of Enexco, Inc. in and to the Lease
and has drilled and completed as a horizontal well capable of producing gas in paying quantities
the City of Denton - Airport #2-H Well ("#2 Well") on the Leased Premises;
(c) The Lease does not specifically define "Oil Units or Gas Units" in the context of horizontal
wells; and
(d) The parties desire hereby to modify the Lease to provide for the development of the Leased
Premises by the drilling of horizontal wells, to confirm the validity and existence of the lease as
to all of such Lands; and to effect the other modifications of the Lease as hereinafter set forth:
NOW THEREFORE, for the sum of ten dollars ($10.00) dollars and other good and valuable
consideration paid to each of the undersigned the receipt and sufficiency of which are hereby
acknowledged and the mutual covenants and benefits arising hereunder, the City of Denton acting herein
by and through its City Manager, Michael A. Conduff, duly authorized by resolution to execute this
Modification, Clarification and Ratification of Oil and Gas Lease, whose address is 215 East McKinney,
Denton, Texas 76201 ("Lessor"), and Dan A. Hughes Company, a sole proprietorship whose address is
208 East Houston Street, Beeville, Texas 78102 ("Lessee") have agreed to Modify, Clarify and Ratify and
by these presents do hereby Modify, Clarify and Ratify the Lease in the manner hereinafter set forth.
1. Lessor and Lessee agree that the Lease is ambiguous with respect to whether the #2 Well maintained
the Lease as to all of the Lands or only the north 512 acres of the Lands. In consideration of the
modification of the continuous development provisions of the Lease, the marketing covenants,
increase in the royalty interests of Lessor and other covenants and benefits deriving hereunder, Lessor
and Lessee have agreed to resolve such ambiguity by construing the provisions of the Lease so that
the #2 Well shall have maintained and shall maintain the Lease in full force and effect as to all of the
Lands for a period ending at midnight on July 1, 2005. Thereafter, such well shall maintain the Lease
only as to the Gas Unit established therefore as hereinafter set forth.
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU
MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS
INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR
SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
2.fhc Lands shall be divided into the tour (4) tracts described and designated as Tracts 1-4 on the
schedule attached hereto as Exhibit A.
;. IF on or before the elate set forth in Section I, Lessee commences the actual drilling of another
horizontal well on the Lands. then the Lease shall continue in force and effect as to all of the Lands so
Iong as not more than one hundred eighty (IRO) days elapse between the date the drilling rig used to
drill a well on the Lands is released and the date the actual drilling operations commence for a
subsequent well on the Lands with a drilling rig capable of drilling such well to its permitted depth.
4. Upon the expiration of the continuous development of the Lands in accordance with the provisions of
Section 3 above, this [-case shall terminate as to all Lands not then located in an oil Unit or Gas Unit
(as set forth in the Lease and modified herein for horizontal wells) Upon which there is located a well
producing or capable of producing oil and/or gas in paying quantities and, as to each such Unit this
Lase shall terminate as to all depths below a depth of one hundred feet (100) beneadt the deepest
horizon then producing of capable of producing in the well for which such unit was established.
5. With respect to a horizontal well drilled on any of Tracts 1-4, the tract upon which such well is
located shall be considered as the "Oil Unit" or "Gas Unit' for such well and it shall not be ncccssary
for the Lessee to designate such units as set forth in Section 13 ofthe Lease.
6. 'tract 2 shall be the Gas Unit for the #2 Well
7. With respect to am, Lands as to which the Lease terminates or is released, Lessee shall never the less
etain all of the rights granted in the Lease with respect to the use of such lands for the ingress and
egress to the Lands as to which the Lease has not terminated or been released. inclucling rights
perlaining to roads and pipelines. ` `
S. Wilt respect to anv well completed upon the Lands as a well capable of producing oil and/or gas in
paving quantities, Lessee covenants to use its best, diligent eflbrts to commence the sale of production
hom such well as promptly as is practicable. It is understood that wells drilled on Tracts 3 and 4 will
require more extensive pipeline construction to commence such sales.
9. With respect to that part of Tract 4 known as the "South Runway lixtension,` (being all of that part of
Tract 4 lying south of the south line of the William Smith Survey, A-1188 and containing
:ippioximatcly 40 acres), Lessee shall attempt to secure actual production from such lands by
soliciting the owners of oil and gas leases covering adjoining lands to form a pooled unit and drill a
horizontal well. Lessor shall cooperate in such efforts, particularly with respect to granting the rights
to pool such lands with adjoining lands. "file failure to secure the development shall not affect the
valiclity of the Lease as to 'tract 4. Lessee shall not be required to solicit such development if the
same would reduce the allowable for any well chilled on Tract 4 below the amount of production
which can be actually produced from such well.
10. Wilt respect to Tracts I. 3 and 4, the one -fifth (1/5) royalty fraction provided in the Lease shall be
nctcased and changed to one-lourth (1/4) in all instances where such fraction appears in the Lease.
Willi respect to Tract 2. the one-lifth (1/5) royalty traction shall remain unchanged.
If ally term or provision of this Modification conflicts with the provisions of the Lease, the terms and
provisions of this Modification shall prevail and control.
NAMIilicstion. Clsrilication and Ratincation Poge2ol7 AirPorl Ucis'c
hlughcs to Clly of Dcntoo Ucnlon County. Tcsas
For and in consideration recited herein. Lessor hereby ratifies, adopts and confirms the Lease
as the same as modified and clarified herein and does hereby grant, lease and let unto Lessee file Lands.
suhject to and in accordance with the terms and provisions of the Lease, as modified and clarified in this
agreement.
IN WITNESS WHEREOF this instrument has been executed by each of the undersigned on the
date such execution is acknowledged, but the same shall be effective for all pwposcs as of .lanuary 16.
2005.
LESSOR
CITY OF DENTON
M i ael A. :ondufP, City Manag'
ATTEST:
ILNNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
LESSEE
UAN A. HUGHES COMPANY
Q13y: _ 5V
Dan A.Ilughes.Sole
prictor
iModilic:niun. Clarification and Ratification Page3 of 7 iAirpori Lensc
ligehes to City of Demon Denton Con nlv. Texas
S I A'fE Or Tr-_-_xAS
COUNTY OP DENTON
7`0 iv
o hjs inst;-111A ��gi�cknowledgcd before me on this day of /%yo�j _ 3005, by R?iCIT VeT
f, as Lhe ,IIly � nager of the City of Denton, a municipality established under the laws of
'FeXas, on behalf of said city.
,P
My cnlnmission e>>ires: N< uy Public in and for the Stat of'fesas
`^ LINDA HOLLEY
r " Notary Public
�I State of Texas
My Comm. Exp. 72.OB•20o5
S'I'A } C
COUNTI' OP DEC
Phis instrument was acknowledged before me on this )'Jday of 2005, by Dan A.
Iiughes, owner of Dan A. Hughes Company, a sotle r xietorship.
My ' N< tary Public in and for V State 1 Texas
� KATHERINEA.YOUNG
_ NOTARY PUBLIC
STATE OF TEXAS
„� a My Commission Expires 11.1&2008
iModilmiuon. Can lical ion end Rotificatlon Page 4 of 7 Airport Leasc
I-luchce to Cily of DcnlO° Danon County. 'fcsas
EXHIBIT A
"TRACT l: Containing 138.54 acres more or less:
Commencing at the North West corner of the W. Smith Survey. A-1188 and continuing in an
easterly direction 1100 feet along the north line to it point.
Thence in a southerly direction 510 feet from the north line of the W. Smith Sorvcy. A -I I S8. Said point
being the Point of l3cginnin,.
Thence in an easterly direction to a point in the W. Neil Survey, A 970, being 430 feet from the north line
and 245 feet from the West line of the W. Neil Survey, A-970.
Thcnce in a southeasterly direction to a point in the W. Neil SUrvey. A-970, being 1231 feet east of the
western line of the W. Neil Survey, A-970 and 1535 feet south of the northern swvc_v line of the
W. Neil Survey, A-970. Said line being a common boundary line between tract I and tract 2.
l-hence in an easterly direction to it point 1847 feet cast fi-om the western line of die W. Neil Survcv.
A-970 and 1520 feet south of the northern survey line of the W. Neil Sorvcy, A 970. Said point
heing the most southeasterly point of (tact 2.
Thencc south to it point 1 131 leet north of the northwest corner of the .I. Bacon Survey. A-1540 located
on the east line of the W. Neil Survey, A-970.
Thence west to it point in the W. Neil Survey, A-970, heing 206 feet south of the south survey line of the
W. Smith Survey. A-1188 and 1987 feet west of the survey boundary between the W. Neil
Survey. A-970 and the.1. Hardin Suuvey, A-1656.
Thence in a northwesterly direction to it point in the W. Smith Survey, A -I 188, being the point of
Beginning.
TRACT 2: Contailltl 138.54 acres more or less:
Commencing at the NE corner of the W. Smith Survey, A-1 188 and continuing in an easterly direction
1216 feet along the north line of tile W. Neil Survey, A -970 being the Point of Bcginnine.
I'hcncc in an easterly direction 326 Feet to a point on the North lice of the W. Neil Survcv. A 970.
-I-hence in a southerly direction to it point in the W. Neil Survey, A-970, being 1541 feet cast from the
western line of the W. Neil Survey, A-970 and 697 feet south of the northern survey line of the
W. Neil Survey. A 970.
Thcnce in it easterly direction to it point in the W. Neil Survey, A 970, being 1879 feet cast from Tile
western some\, line of the W. Neil Survey, A 970 and 677 feet south of the northern Sill vev line
of the W. Neil Survey, A-970.
Thcnce in it southerly direction to a point in the W. Neil Survey, A 970. being 1889 feet east from the
western line of the W. Neil Survey, A-970 and 1503 feet south of the northern Sul -Vey line of the
W. Neil Survey, A-970.
Thence in it westerly direction to a point in the W. Neil Survey, A-970, being 1234 feet cast Thom the
western line of the W. Neil Survey, A-970 and 1541 feet south of the noathcrn survcv, line of the
W. Neil Survey. A-970.
Modilicelion. Clarification and Rntilication Pagc 5 ot7 Airport Lease
linghcs to City otDcolon Donlon Couuly. 'I erns
Thence in a northwesterly direction to it point in the W. Wilburn A-1419 survey, being 697 feet west fi,om
the eastern line of the W. Wilburn A-1419 survey and 872 feet north of the southern survey line
of the W. Wilburn A-1419 survey.
fhcnce in a northerly direction to a point in the W. Wilburn A-1419 survey, being 739 feet west from the
eastern line of the W. Wilburn A-1419 survey and 2473 feet north of the southern survey line of
the W. Wilburn A-1419 survey.
Thence in an easterly direction to a point on the east line of the W. Wilburn A-1419 survey, being 2498
feet north ofthe southwestcorner of the W. Wilburn A-1419 survey.
Thence in an southerly direction to a point on the east line of the W. Wilburn A-1419 survey, being 2289
I eet north of the southwest corner of the W. Wilburn A-1419 survev.
I hence in a easterly direction to a point in the T. Toby A-1285 survey, being 805 feet east from the
western line of the'1-. Toby A-1285 survey and 291 feet south of the northern survey line of the T.
Toby A-1285 survey.
Thence in a southeasterly direction to a point in the T. Toby A-1285 survey, being 1381 feet east from the
western line of the T. Toby A-1285 survey and 1666 feet south of the northern survcv line of the
T. Toby A-1285 survey.
Thence in a southerly direction to the Point of Beginning located on the northern line of the W. Neil
Survey. A-970.
,TRACT 3: Containing 138.54 acres more or less:
Commencing at the Southeast corner of the D. Davis, A-356 and continuing in a northerly direction
807 feet along the east survey line to a point. Said point being the Point of Beginning.
Thence in a northerly direction to a point in the W. Wilburn A-1419 survey, being 286 feet cast from the
western line of the W. Wilburn A-1419 survey and 1019 feet north of the northeast corner of the
survey line of the D. Davis, A-356 survey.
Thence in an easterly direction to a point in the W. Wilburn A-1419 survey, being 739 feet west from the
caslcrn line of the W. Wilburn A-1419 survey and 2473 feet north of the southern survey line of
the W. Wilburn A-1419 survey. Said point being the northeast corner of tract 2.
Thence in it southerly direction to a point in the W. Wilburn A-1419 survey, being 697 feet west from the
eastern line of the.W. Wilburn A-1419 survey and 872 feet north of the southern survey line oi'
the W. Wilburn A-1419 survey.
Thence in a southeasterly direction to it point in the W. Neil Survey, A -970, being 253 feet cast from the
west line and 427 feet south from the north line of the W. Neil Survey. A-970.
Thence in it westerly direction to a point on the west line of the W. Smith A -I 188, being the Point of
Beginning.
TRACT 4: Containin-, 138.54 acres, more or less:
Tract 4 shall contain the remaining acreage not previously described in tracts I, 2, or 3, and lying within
the boundaries of the 554.14 acre tract described in the lease.
TRACTS 1-4 ARE DEPICTED ON THE PLAT ATTACHED HERETO AS EXHIBIT A-1.
;Modification. Clarification and Ratification Page 6o17 Airport 1-casc
Hughes to CitY of Denton Denton Coumv. Testis
3
D 0 A V I S
t 1. l ilY
A-31
I It t.M 36'EE
Dan A. Hughes Company
Development P7al
Cen'en County, iesas
.Bid•DY. AC A_.15ffi[l Jpy.P-::C
EXHIBIT A-1
i
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I
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1 F2R�
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I H A R D i N
Nluditicauuu. Clarification and Ketilicatiou Pugs 7 ul 7 Airporl Lcase
Hughes In City of I)Cnto❑ IJcnlon Countv.'I csas
City of Denton
City Attorney's Office
215 E. McKinney
Denton TX 76201
MEMORANDUM OF
MODIFICATION, CLARIFICATION & RATIFICATION
OF OIL, GAS & MINERAL LEASE
City of Denton Airport
S FATE OF TEXAS §
§ KNOW ALL MEN BY THESE PRESENTS THA"F:
COUNTY OF DENTON §
Ilya Modification. Clarification & Ratification of Oil, Gas & Mineral Lease of even date
herewith. the City of Denton whose address is 25 East McKinney, Denton. Texas 76201 and Dan
A. I-lu-ghes Company, a sole proprietorship whose address is 208 East 1-10uston Street, Beeville.
Texas 78102 have modified and clarified the terms and provisions of the Oil. Gas and Mineral
Lease dated January 17. 2002. a Memorandum of which is recorded in Volume 5010 at page 858
of the Official Public Records of Denton County, Texas, from the City of Denton to Enexco,
Inc.. covering the 554.14 acres of lands therein described.
IN WITNESS WHEREOF this instrument has been executed by each of the undersigned
on the date such execution is acknowledged.
LESSOR
CITY OF DF,NTON
13y: may
M hae . Conduff, City Maas ge
ATTEST:
.1FNNIFER WALTERS, CITY SECRETARY
Iv: /
J
APPROVED AS TO LEGAL FORM:
I EIWERT L. PROUTY, CITY ATTORNEY
11y
NOT I '17 OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON. YOU
MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS
INSI-I:UMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR
SOCIAL. SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
LESSEE
DAN A. HUGHES COMPANY
an A. Hughes, sole p prietor
STATE OP TEXAS
COUNTY OFDENTON
this instrun nt was acknowledged before ine on this �i lay of ? '�� o n. �csn�c �hA'y OOS, by.A�4irhncl
as the rty vlager of the City of Denton, a municipality established under the laws of
fcxas. on behalfofsaid city.
My co un� pi„ elr
1INDA HOLLEY
n Notary Public
N y State of Texas
�r......,.,
S I ATE OF TEXAS
COUNTY OF BEE
`Notary Public in and for the "(Cate of Texas
This instrument was acknowledged before the on this rlekday of 1
I-lughcs. Hughes Com 1n - _ OUS, by Dan A.
owner of Dan A. Hufi P1 y, a �I opnetolship.
i
otaty Public in and forte State Texas
KATHERINE AEYOUN
_ NOTARY PSTATE OF Gd. My Commission Expi-2008
iA9cinorundum or N9 od i lical ion Agreement Page t of2
Nuelles lu Cilr of Denton Airporl Lcase
I)cnlun Counlv.'fesas
UPON FILING, PLEASE RETURN TO:
The City of Denton
City Attorney'.s Office
215 East McKinney Street
Denton, TX 76201
11111111111111111
Recorded On: May 11, 2005
Parties: CITY OF DENTON
To
Comment:
Oil & Gas 20.00
Total Recording: 20.00
Denton County
Cynthia Mitchell
County Clerk
Denton, TX 76202
Instrument Number: 2005-55619
As
Oil & Gas
** Examined and Charged as Follows: **
Billable Pages: 4
Number of Pages: 4
THIS PAGE IS PART OF THE INSTRUMENT ************
Any provision herein which restricts the Sale, Rental or use of the described REAL PROPERTY
because of color or race is invalid and unenforceable under federal law.
File Information: Record and Return To:
Document Number: 2005-55619
Receipt Number: 192739 CITY OF DENTON
Recorded Date/Time: May 11, 2005 10:27A 215 E MC KINNEY
DENTON TX 76201
User / Station: J Smith - Cash Station 2
THE STATE OF TEXAS)
COUNTY OF DENTON)
I hereby certify, that this Instrument was FILED In the File Number sequence on the datehime
printed heron, and was duly RECORDED In the Official Records of Denton County, Texas.
C�.MrA`LL
County Clerk
Denton County, Texas