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Home My WebLink About2003-285S1Our Documents\Ordinances\03Wickory Creek Elec Substaton Oil and Gas Lease Ordinance Best Bid.doc ORDINANCE NO. 07003 0�� AN ORDINANCE ALLOWING THE NEGOTIATION OF THE BEST BID FOR A CONTRACT FOR AN OIL AND GAS NON -DRILL SITE/POOLING AGREEMENT AT THE HICKORY CREEK ELECTRIC SUBSTATION WITH TRIO CONSULTING & MANAGEMENT COMPANY, L.L.C. AND ALLOWING THE CITY MANAGER TO EXECUTE A LEASE AS LONG AS THE LEASE IS IN SUBSTANTIALLY THE SAME FORM AS THE CITY'S STANDARD LEASE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, The City Council of the City of Denton has heretofore determined that it is advisable to lease for oil and gas purposes certain real property located at Hickory Creek Electric Substation, Denton, Texas; and WHEREAS, in compliance with Chapter 71 of the Texas Natural Resources Code (the "Code") the City published notice of its intention to lease such real property for oil and gas purposes once a week for three consecutive weeks in a newspaper with general circulation and published in Denton County, Texas; and WHEREAS, in compliance with the Code, the City Council of the City of Denton held a public hearing under Chapter 26 of the Texas Parks and Wildlife Code and Chapter 71 of the Texas Natural Resources Code; and WHEREAS, Pursuant to the Code, the City of Denton desires to negotiate the lease of the property for oil and gas well development with the best bidder submitted by Trio Consulting & Management Company, L.L.C.; and WHEREAS, Trio Consulting & Management Company, L.L.C. desires to enter into lease negotiations for the land at Hickory Creek Electric Substation for a non -drill site/pooling agreement for oil and gas well development and after negotiation, to enter into a lease for the land for oil and gas well development and to agree to pay to the City the agreed upon amounts; and WHEREAS, after negotiation the City desires to authorize the City Manager to execute the lease as long as the lease is in substantially the same form as the City's standard lease agreement for non -drill site/pooling agreements. 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 are hereby authorized to negotiate a non -drill site/pooling oil and gas lease agreement between the City of Denton and Trio Consulting & Management Company, L.L.C. in return for the payment(s) as outlined in Attachment A for the approximately 3.13 acres at the Hickory Creek Electric Substation. 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 day of 2003. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: AUG. 21 ' 03 (THU) 00:27 CITY OF I)ENTON PURCHASING 940 349 7.302 PAGE-2/5 ATTACHMENT "A" i CI17Y OF DENTON BID FORM GAS 'WELL DEVELOPMENT ON HICKORY CREiK ELECTP1C SUBSTATION PROPERTY NON-DRT.LIL SITE/POOLING AGREEMENT Description of property: The lease will be a non -drill site/pooling agreement. 3.13 acres, more or less, out of and part of the S. A. Venters Survey A-1315 and being flae :same land described that certain Warranty Deed dated Aigust 3, 2000 frorr: Gordon Meredith to the City of Denton, Texas and recorded in Volume 4647 Page 3452 of the Real Property Records of Denton County, Texas. Minimum Standards of the Bid: Please check each item that will be included in the lease. p A primary term of not more than three (3) years from date of execution. m A royalty to lessor not less than one-fourth (114) of all oil and gas; produced from said land. (If greater than 114, please specify. m The royalty to be paid at the highest price in the area. A statement by the Lessee that the royalty to be paid the Cityis equal to the highest price paid by the Lessee to any mineral owner in Denton, County; and that if the Lessee pays a mineral owner in Denton County, Texas a higher royalty percentage during the term of this lease, the $ essee shall increase the royalty paid to the City so as to equal this higher amount. m An annual delay rental of not less than ten and no/100 dollars ($10.00) per acre. (If greater than $10.00 per acre, specify.) _ (This 1..8 a 3 year Paid Up Lease) 0 Shut-in payment of not less than twenty and no/100 dollars ($20.00� per acre (if greater than $20.00 per acre, specify)_ to Bomrs money as specified by bidder. 3.t3 _ .acres X $ low = total bonus money $3013100 For bonus raouey as specified in the bid and with the minimum to be $175.00 per acre. m A Development Plat or other drawing showing a drill plan and! drill sites must be submitted with this bid. The City reserves the right to award this bid based on both price and the most advantageous location of the drilling locations and sites] a The successful bidder shall pay the cost of the advertisement of the bid. -2- �. v❑ t'MW 00:27 CITY OF I:ENTON PURCHASING 940 349 7302 PACE.3/5 to Bidders shall submit information of the bidder's reputation and quality of the bidder's oil and ;gas seii,ices including but not limited to the bidder's financial ability to provide the oil and gas services, safety record, compliance history and any other relevant information that the: bidder submits to the city for the determination of best value. es The suixe,shil bidder shall comply with all requirements in the Code of Ordinances for the City ol'Denton, Texas. A copy may be obtained in the City Secretary's office or on the City of Denton's website, wam-c; of nton.com. The City of Denton's Gas Well Ordinances may be obtained from the City Secretary, website or City Attorney's Office. o A bidder's conference will he held on May 5, 2003. m An oil and GaS lease, and Tight of Way Use Agreement, if any, will be negotiated within thirty (30) days alter the successful bidder is selected. to The City shall allow the successful bidder to pool the lease, the land or minerals included in the lease., or any part of these with any other land, leases, minerals estates or parts of any of these to corm a drilling or spacing unit for the exploration, development, and production of oil .and gas. By submitting a bid, each 'bidder agrees to waive and does hereby waive any claim the bidder has or may have against the City of Denton, Texas, and the City's respective employees and representatives for the award of attorney fees, arising out of or in connection with the administration, evaluation, or recommendation of any bid, waiver of any :requirements under the Bid Documents, or the Contract Documents, acceptance or rejection of any bids, and award of the Bid. By submitting a bid, the bidder specifically waives any right to recover or be paid attorney's fees from the City of Denton, Texas, or any of the City's employee,; and representatives under any of the provisions of the Texas Uniform Declaratory Judgments Act (Texas Civil Practice and Remedies Code, Section 37.001, et. soil., as amended). The bidder agrees that this is the: intentional relinquishment of a presently existing known right, By execution and submission of this Bid, the Bidder hereby represents and wan -ants to the City of Denton that the Bidder has read and understands the Bid Documents and the Contract Documents and this Bid is made in accordance with the Bid Documents. Bidder acknowledges that it understands all terms within the bid documents, which include the waiver provisions, and that it had the right to consult with counsel regarding all of the above documents. By submitting a bid, each bidder agrees to waive and does hereby waive any claim the bidder has or may have a€;a:insc the City of Denton, Texas and the City's employees, -3- __. — w ,.nW VV:211 CITY OF ➢ENTON PURCHASING 940 349 7302 PAGE-4/5 agents and officers, arising out of or in any way connected with the following: 1. the administration, evaluation or recommendation of any bid; 2. waiver or deletion of any o f the requirements under the B id Documents or the Contaact Documents; 3. acceptance or rejectirm of any bids; and 4. award of the Bid or Lease. By submitting a bid, the bidder ac4owledges that the bidder understands all terms of the bidding documents and consents to the bidding process and the possibility of a negative assessment. By submitting a bid, the bidder aclalowledges and agrees that there was and is no disparity of bargaining power between the bidder and the City of Denton, Texas. The bidder agrees that this is the intentional relinquishment of the above listed presently existing rights. The City reserves the right to waive, delete or amend any of the requirements connected with this bid and to reject any and all bids. Trio Consulting B NKAgement, LLC of By., Bill Setaler, President -4- ---�. , w tinu.7 00:20 CITY OF HF:NTON PURCHASING 940 349 7302 PACE. 5/5 MAY-12-0E 10:;13 PM P R Rlt::E OR l-DUpDM WXPI.. 21.4 696 1767 P.09 Questions I:hat arose from the May 5, 2003 Pre -Bid: a A laettar el-om the Railroad Commission, or ftm the bidden bank stating that they ertl fiiliuuu""sll'y ats6lo. T[7'de'MU ba sUMi;1= fbt die mquiretnelnt 1'efaadt:ed in the lass b Uet on page 2. b. A, Development Plan is not required, but a drawing (must be legible) will wsceptable. ?here are no other ehangol; at this time. Please include this addendum with your proposal. Note, This addendum, #1 must be acknowledged, signed and returned uvith your bld response. Trio Gormult'Irog a Name. B111 5etzler owe. 5/12/03 Proul dent